Hiab Oyj Unsp/Adr

Welcome to HIAP's second quarter 2026 results call. My name is Aki Vesikallio. I'm from the investor relations team. Today's results will be presented by CEO Scott Phillips and CFO Mikko Puolakka. 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 look at the highlights of the quarter. Book-to-bill was again positive in all three geographical areas and that was the second consecutive quarter. Our sales were at the comparison periods level, however comparable operating profit increased to 61 million euros. We also specified our outlook floor for full year, comparable operating profit margin from 13.5 to above 14.5. A milestone acquisition of Labri Environmental Group was announced in 1st of June and just in the beginning of third quarter the acquisition was completed. Let's then take a view on today's agenda. First, Scott will present the strategic development and group-level topics. Mikko will then go through reporting segments, finance sales in more detail, and the outlook for 2026. After Mikko, Scott will join the states for the key takeaways before the Q&A session. With that, over to you, Scott. Thank you, Aki.

And good morning everyone from my side. First, I'm pleased to have the opportunity to share with you how we're progressing relative to deploying our strategy and highlight some of our key investments, if you will. Starting first with some of our innovations building on our core portfolio. Pleased to share with you that we continue to introduce pioneering innovations within the on-road load handling solution. A few of which are highlighted on the page. Starting from left to right, I'm proud to announce that we've introduced a new range of Multilift Optima. Hook Range, this gives us a new solution that should allow us to expand our market share in critical geographies, in particular in the EMEA region, giving us a great solution between the 20 and 25 ton carrying capacity range. So great work by the team from our Multilift organization. Then second, in the middle of the page, Proud to announce that we were awarded both first and second prize in Germany from the VAK organization, delivering innovative solutions that allow for more sustainability within critical resource water management and waste management. So at the IFAD event in Germany, our Hayab Whisper Plus was awarded first prize. And second prize, we also were awarded from our Multilift Semi-Automated Driver Support Solution, our L2 solution for Multilift demountables. And this is our third award that we've received over the last three years, so really proud about that. And finally on the page, really pleased to announce that we've rebranded our government business operations in HIAB Defense Logistics, which better characterizes the focus of the business. And concurrent with this, and during the Eurostari event, which I was fortunate enough to attend myself, We introduced two new innovations concurrent with the event, starting with our high up 1622 ATF loader crane. Now this combines a heavy duty lifting carrying capacity at the same time in a low profile, allowing for a much longer outreach. And this matches nicely with our HIAB JMIC top handler, which is designed for handling these type of containers, which are a standard in defense and military logistics. So excellent work in the quarter by the teams all the way around on the innovation front. Now in addition to the innovations, I'm pleased to announce that we invested in growing in a critical segment for us in line with our strategy, and I'll come back to that in just a few minutes. So pleased to announce that we were able to close the acquisition of Libri Environmental Group, which is the leading provider of refuse collection vehicles in North America, and this is a major milestone for us. In terms of both growth in North America and as I mentioned a few seconds ago, growth in waste and recycling. Now a bit of highlights about the company itself. It has an excellent financial profile if you think about the sales within 2025 of 491 million U.S. dollars. Comparable EBITDA margin of 23% or 113 million U.S. dollars. Comparable operating profit margin of 17% and came into the 2026 with an order book of 435 million U.S. dollars. 100% of the sales are in North America. And in addition to an excellent lineup of innovative solutions in refuse collection vehicles and a great financial profile, I think perhaps I'm even most proud about the fact that also this organization comes with a fantastic team led by Michael Easterbrook. So a warm welcome to Michael on the HIAB leadership team. He will become our fourth business area president leading environmental vehicle solutions. And in addition to Michael, he has a terrific team all the way around. So we're really excited about this acquisition. Now, much like Hiab, Labrie competes on a multi-brand strategy with four different brands, three of which are equipment, one for aftermarket. The equipment brands are side loaders under the Labrie brand, Witki for front loaders, Leech for rear loaders, and Labrie Plus for the aftermarket and service and parts. Now there's a great opportunity that we think the combination of the two companies to expand coverage in terms of selling to the install base, but currently the business has a revenue profile of approximately 90% equipment, 10% parts and services. And in terms of the customer profile, the majority of the sales are to municipalities and independent regional customers. Then there's a segment of national accounts as well as rental companies. The solutions serve two different applications, one of which is dominant in residential and the other in commercial. Now, a bit of details about the transaction itself. As Aki highlighted on his opening slide, the purchase price was a little bit over a billion U.S. dollars, which represents a multiple of 9.2 times. The financial impact will be significant for Hiab, and we expect the deal to be both margin and growth accretive. with increased cash generation and it gives us much more diversification within the critical waste and recycling end markets and we expect a synergies case of course both on the sale side as well as the cost side in terms of financing it was a hundred percent cash consideration facilitated by a 900 million euro debt facility. And had the acquisition been completed at the end of Q1 2026, then the resulting financing would have resulted in approximately a 70% gearing. Now we'll provide more detail about this concurrent with our Q3 earnings call. And we still expect our long-term target for gearing to be below 50%. This should be supported nicely by strong cash generation. And of course, as I said earlier, the closing occurred on July 1st. Now in terms of the strategic fit, we've put this into our profile that we shared with all of you back in 2024 in our Capital Markets Day. So in terms of our six dimensions in what we seek to be an attractive investment choice, this acquisition we feel ticks nicely all six of those dimensions. So a great fit within the overall offering and competitive positioning of YUB. So now I will switch gears a bit and go into the overall development of the group level financials, starting with order intake, of course. Now our orders received for the quarter were 437 million euros, and that's up 16% versus the comparison period of 377. And from a first half perspective, our order intake is up nicely by double digits, 839 million euros versus 755 million last year. Organically in the quarter, orders received were up 13%, and our order book is up nicely by €33 million to €589 million versus €556 million, so that's 6% positive variance year over year. Now, as you see in the organic order intake development, currencies had a negative impact of €4 million, but ING was a nice offset to the softness in the U.S. market. and so ING Cranes orders received amounted to 17 million euros in the quarter. Additionally, our profile in the quarter, a little bit dissimilar to the first quarter, was supported nicely by a few key count larger orders and one of which we announced earlier in the quarter was 37 million euro truck mounted forklift order from a U.S. home improvement segment customer. And as Aki mentioned earlier, we had sequentially for the second quarter in a row, positive book to bill in all geographies. Now looking into the details geographically, 50% of the order intake was in MIA, 44%, so up 2% year over year in the Americas. And APAC was then the remaining 6%. Now in terms of the figures, EMEA represented €220 million of order intake versus €188 million the prior comparison period. That's 17% positive variance and for the first half, a nice 9% positive variance of €426 million versus €391 million in the previous comparison period. In the Americas, we had a nice increase of €191 million versus €159 million, so a slight recovery in those end markets. And for the first half of the year, 18% positive variance, primarily driven by the second quarter, €357 million versus €303 million. And in APAC, we had 11% negative variance quarter over quarter and a negative 7% variance for the first half of the year. Now, characterizing the operating environment, we still continue to see a gradual market recovery continue in EMEA, supported largely by the replacement cycle, not yet so much by the construction segment, but all other segments are nicely, steadily recovering. In the second quarter, we did see a positive variance in U.S. market. So we see a modest recovery within the quarter. Again, still a quite uncertain environment. And we had a positive book to bill in APAC, which is really nice to see. And of course, balancing that out on the negatives, we still see with the gradual recovery and the good results within the figures, we still see a high level of geopolitical and trade tensions that still exist, which is having an impact on customer decision making. Now moving into our sales, sales were roughly at the comparison periods level, however increased nicely sequentially. So we had no change from a relative perspective in terms of the sales quarter over quarter. So 403 million euros and 402 million euros the year before. For the first half of the year, we were negative 3%, primarily driven by quarter one, of course, 786 million euros versus 814 million euros. On an organic level, within the quarter, we were negative 3% variance. Our share of services increased slightly to 30% versus 29%, similarly for the first half of the year. Now we had a nice impact from ING Cranes of 15 million, which had four percentage points positive impact. Currencies hit us negatively by one percentage point in Q2. And then as I mentioned earlier, our share of services increased nicely. So on a last 12 months basis, our rolling 12 months sales level is at little over 1.5 billion Euro. Now looking in geographic split of our sales for quarter two, EMEA represented 54%, which matches, of course, prior periods order intake development versus last year at 50%. In the Americas, similar story with the decline in the order intake in prior periods. Our sales are 40% versus 43% in the prior period. And in APAC, we had a slight decline. Numerically speaking, in the quarter, we had a 7% positive variance in EMEA, a negative 7% negative variance in the Americas, and a negative 4% variance in APAC. For the first half of the year, a relatively similar story. In EMEA, we had a 6% positive variance, 419 million euros versus 395 million euros, or up 6%. In the Americas, 316 million versus 368, or a negative 14% variance. and we were up slightly in APAC on rounding, 51 million versus 51 million or up 1%. I'm really pleased to report from an ECO portfolio perspective, boosted primarily through our lifting solutions and services business. We had a 17% positive variance in our ECO portfolio sales in the quarter, 181 million euros versus 155 in the prior comparison period. On a percentage basis, that's 45% versus 38%. And on the first half perspective, a similar variance year over year, 357 versus 297 million euros are up 45% versus 37%. Now in the Americas our sales decline came 100% from the U.S. as we've talked about in prior reporting periods and this is partially offset nicely by our ING acquisition in Brazil. Now turning your attention to our residual earnings based on the sales results. As you can see over the time series, we've continued to have quite a nice development coming from a base of 12.2% for Q2 of 24, 15% last year. And then as you look into the quarter this year on a comparable operating profit basis, 15.1%. Now this reporting period, we're introducing our comparable EBITDA as well as the comparable EBITDA percentage. As we move into consolidating the earnings of Libri, then we'll continue to provide this view of our profitability as well. So looking into the comparable EBITDA for the quarter of 62 million euros or 15.4% on a comparison basis, and that's up slightly year over year, 2%. For the first half of the year, we're negative 10%, 14.6% versus 15.7%. Now looking into the comparable operating profit, a similar variance if you will, 61 million euros this year Q2 versus 60 million euros on relatively the same sales last year or positive variance of 1%. That's 15.1 versus 15 percent and for the first half of the year we had a negative 11 percent variance 112 million euros versus 126 million euros or 14.3 percent versus 15.5. Now our increase was primarily driven by two of our three business areas lifting equipment and our services business. Now that was driven primarily by the low order intake in the U.S. delivery equipment business in 2025, which had negatively impacted sales, which then translated into a negative variance in comparable operating profit. But we see within delivery equipment excellent performance across the board, in particular in our Demountables business. As well as a nice development both in our tail lift as well as our truck mounted forklift business and holding nicely despite the softness in the sails that was driven by the order intake development in prior periods. Now, consequently, our operating our operative return on capital employed decreased. Now, this is mainly driven by the lower last 12 months comparable operating profit and items affecting comparability. And Mikko will give you a bit more detail into that later in the presentation. Now, turning your attention as we have done in each of our prior reporting periods, how are we doing relative to some of our longer-term target profile that we shared in our capital markets in 2024? Relative to our 7% across the cycle CAGR, our rolling 10-year average has now decreased sequentially to 4%. On the comparable operating profit basis, our target at 16, we're at 13% in the last 12 months. Trending positively, of course, in the last two quarters and our return on capital employed target of above 25%. And we're right on that level following Q2's results. So with that, I'll turn it over to Mikko Puolakka to give you the view on the segments.

Thank you Scott and good morning also from my side. Let's first have a look on the equipment segments, financial performance during quarter two. The equipment segment's auto intake was 310 million euros, really nice 21% growth in Q2 and 15% for the last six months. The Q2 growth was equally big both in lifting and delivery equipment. Lifting equipment order growth was supported mainly by the ING grains acquisition, while then in delivery equipment growth, the growth was supported by the previously mentioned 37 million euros truck mounted forklift order in the US. Equipment grew clearly in EMEA and in Americas. The APAC order intake declined for equipment. Thanks to the positive book-to-bill in Q2 as well as in Q1, the equipment order book is now 49 million euros higher than what we had in December. So that sets a good starting point for the second half of this year. Quarter 2 sales for equipment was 281 million euros and sales declined slightly. Delivery equipment sales declined in the US as Scott mentioned earlier and this is due to the lower order intake what we saw especially in the second half of 2025. This decline in the delivery equipment was mostly offset by the sales growth in lifting equipment, mainly coming from the ING acquisition. So both businesses then balanced each other, resulting to a flattish sales development. Comparable operating profit for equipment segment was 38 million euros or 13.6% margin. There was a small decline from the comparison period. And I would say that this decline is mainly attributable to the previously mentioned lower sales in delivery equipment in the US. As described earlier and what can be also seen on the right hand side bridge chart, the slight decline in profitability in the equipment segment is due to the lower sales in delivery equipment. The lower sales impacts also the cross-profit margin due to lower production overhead utilization. Part of the lower gross profit margin in equipment is also due to the mixed effect. As you recall from the previous page, the US sales decline was offset by the ING grain revenues, which started from 1st of January this year. IMG Cranes has at the moment a lower margin compared to the rest of HIAP due to the lower share of service business compared to the other HIAP businesses. We had a small one million euro negative impact in equipment segment coming from the currency translation and I would say that the most of the volume impact was actually offset by the lower fixed costs supported by our cost savings program which we basically have been working since the beginning of this year. Services had an all-time high quarter in terms of sales and also in terms of profitability. Sales was 123 million euros. This is a 4% increase. And if we would eliminate the currency impact, the growth was 5% in consistent currencies. The growth came from recurring services, spare parts and maintenance very much in line with our services growth strategy. The installation services sales was slightly lower versus the comparison period. Services delivered a very strong profitability, 32 million euros for the quarter. This is 26.1% margin. Also in services as you can see from the chart on the right hand side the profitability was very much driven by the top line growth. It's also good to note that the service sales growth has come now during the last quarters from higher margin recurring services rather than the slightly lower margin installation services. So this has had also a positive mix effect on services cross-profit margin as can be seen on this chart. There was also a small, less than 1 million FX impact in services during the quarter. And as you can see also from the chart, services has very well managed the costs. And if we count all those previous bridge elements together, those are resulting to this 26.1% really nice comparable operating profit margin in quarter two. Next, let's have a quick look on HIAP's total financials and a couple of notes about our consolidated Q2 financials. Sales were 403 million euros. In comparable currencies, sales grew 1%. There was a small decline in equipment sales and this has been offset by services growth. Our cross-profit margin has been impacted by lower utilization, especially in delivery equipment, as a result of lower volumes in the US. Like also Scott mentioned, we have now introduced in the slides the comparable EBTA margin to better illustrate the future profitability of combined HIAB and LABRI without the purchase price allocation amortization. The comparable operating profit for Q2 improved slightly from last year. I would say that the negative impacts coming from FX single digit million amount and then the lower utilization were basically offset with the volume growth mainly coming from services and then lower fixed costs. Cost savings program has been progressing according to our plans and I would say that most of the impacts start to become then visible now in the second half of 2026. We have booked 11 million euros items affecting comparability during quarter two. Six million of this is related to cost savings program. Nine million is related to LAPRI transaction costs. and then we have had a positive one of item which we also report in items affecting comparability that was 4 million gain from an asset sale and all these negative and positive elements in the one of costs are in net 11 million euros. Our year-to-date items affecting comparability is 23 million euros. Out of this, 9 million is related to the library and the rest is related to the cost savings program. Going forward our intention is to report the LABRI order book related purchase price allocation amortization in items affecting comparability as that will be amortized in roughly two years time. The rest of the LABRI purchase price allocation amortization will be then above the comparable operating profit. Our cash flow was 25 million euros. This was weaker than in the previous quarters what you have seen. I would say that the main reasons for lower cash flow is coming from the networking capital. Networking capital increased in quarter two. Inventories grew in lifting equipment to support volumes in the second half, while then in the other networking capital the growth is mainly related to growth in accounts receivables in delivery equipment due to the timing of invoicing for the deliveries. So basically those accounts receivables we anticipate to collect then during quarter three. When we look at our balance sheet metrics, the net cash decreased from 219 million euros in March to 155 million euros in June. And this is basically due to the 75 million euros dividend payment which we made in April. The library acquisition related that 900 million euros was raised on June 30 and the purchase price was paid on July 1st, 2026. So now you will see in HIAP's interim report 1.3 billion euros cash at the end of June and then Basically on the other side of the balance sheet in the corresponding liabilities the 900 million euros debt. The real effects from the LABRI acquisition for example on our gearing will be visible when we report the Q3 interim report in October. The average interest on our interest-bearing debt was 3.4% at the end of June. We have today decided to specify the outlook for 2026 and this is due to a couple of factors. Firstly, we have now, after six months, we have a better visibility for full year 2026. We have two quarters behind us now. Our year-to-date comparable operating profit was 14.3% and also the order book has increased to 525 million euros. Secondly, as mentioned already earlier, impacts from the cost savings program, which has started in early 2026, are gradually becoming more visible in the second half. And then thirdly, the consolidation of Labri's financials into Hayab's financials from July 1st, 2026 onwards. So these are the main reasons for us specifying the outlook. And based on the specified outlook, we estimate the 2026 comparable operating profit margin to exceed 14.5%. This outlook assumes the consolidation of the library from July 1st, 2026 onwards. And as mentioned earlier, the library's order book related purchase price amortization will be reported as items affecting comparability, i.e. this is excluded from the comparable operating profit, so below the comparable operating profit line. The outlook of higher than 14.5% comparable operating profit would be HIAP's all-time high full-year comparable operating profit margin. So another step towards our long-term targets. And with those words, I would then hand the presentation back to Scott for the final remarks, please.