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.

Thank you, Mikko. So in summarizing the Q2 2026 earnings report, I'd say first, really pleased with the first half performance. I think we're on a good level, supported nicely by our double-digit order intake growth in Q2. It was, characteristically, it's quite similar to Q1 with the exception of three sizable orders, which provided the variance in Q2 versus Q1. and as mentioned positive book to bill in all three regions. Our increased order book as well as our target cost savings program of 20 million euros lower fixed cost should support nicely our H2 profitability. and then of course LaBrie will be consolidated into our results as Mikko indicated earlier starting with our October earnings call for Q3 2026. So with that I'll invite Aki back to the stage.

Thank you Scott and thank you Mikko. With that we are ready to take the Q&A and we can start from the telephone lines.

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 Michael Dopel from Nordia. Please go ahead.

Thank you. Good morning, everybody, and congrats on great, great results. I have a couple of questions on the demand side of things and looking at EMEA firstly very strong orders that was quarter and maybe you could talk a bit about that you know which segments were strong did you have any defense related orders in the quarter and how do you see the pipeline and sales funnels ahead we can start there

Yeah, sure. So thank you for the question, Mikko. And I'd say the demand overall environment was quite similar in Q2 as compared to Q1. So we saw a nice level of activity in the smaller and mid-sized order intake or orders, if you will. So continued steady improvement in terms of the activity there, both in terms of the upfront pipeline In terms of leads, lead conversion, but then also translating into one order intake. Main difference in quarter versus quarter sequentially were we had a few more larger key account orders in Q2 than we did in Q1, one of which was in defense logistics for approximately 15 million euros split between our lifting solutions as well as our delivery solutions businesses. In terms of overall percentage-wise, we were roughly 6% in the quarter on orders for defense and on the sales side about 7%, if you will. From a sector perspective, I'd give you exactly the same answer that I did in Q1 where Many sectors, good steady improvement and I'd say overall in Europe waste and recycling is probably the strongest. Special logistics is going along nicely as well. We still see construction as fairly soft. and of course in the Americas we have a nice development in terms of the offset of the ING acquisition for let's say the inflationary environment driven softness in the US market.

Okay, that's fair. Just a brief follow-up on the EMEA and looking at Germany specifically. I think you also mentioned replacement demand. In your opening remarks there, I think in Germany specifically, there have been many years of underinvestments there. I'm just wondering, you know, what are you seeing in that specific market right now and what do you expect going forward?

We do see, we saw some positive momentum in Q2 versus Q1. Thank you very much for joining us. But I'd say too early to tell if that's a trend yet or not.

Okay. No, that's fair. And then just finally on the U.S. market, maybe you could talk a bit about the dynamics you see in that particular market. So, I mean, looking at the truck quarters we've seen there in that particular market since the end of 2025, been quite a strong recovery, right? And I would assume that at some point in time that you start to flow and show also into your orders and deliveries as well. We haven't seen much of that yet. Just wondering, you know, what is your take on that and how should we think about that development going into the second half of the year, considering your kind of demand and order outlook?

Yeah, certainly. So you see, of course, nice recovery of order intake, significant increases in production capacity. And of course, the truck OEMs that are reported have reported quite strong results. What we do see, and now I'm speaking slightly out of school, but it is more skewed towards the largest classification of truck chassis. So let's say class seven and eight, if you will. So that does impact a certain Thank you very much for joining us.

Okay, that's fair. Thank you very much.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Panu Leighton-Mackie from Danske Bank. Please go ahead.

Hi, thanks for taking my questions. I have one which is actually kind of two-folded. So on the guidance, how much of the upgrade is due to kind of standalone high up performing better or kind of related to that one and how much is due to the LAPRI acquisition consolidation? And then the second part is that Could you run through the numbers of LAPRI consolidation, like what kind of comparable EBIT margin should we model for the second half? I mean, we know the reported numbers of the business, but can you remind us on the kind of So in terms of the outlook, as you look at the overall revenue profile to be

and certainly then the by far the majority of the outlook raised would be the continuing HIAB business of course just on a percentage allocation basis and just to restate some of the rationale there we have as we've stated before we're nicely a short cycle business so then as we progress through the year we start to get better visibility through The quarters ahead. So now that we're halfway through the year, we have much better visibility. We have a 33 million year overall positive variance in the order book. So that supports the case nicely, and that's legacy HIEP business. Then we have, in addition to the increased order book and the increased visibility, you have then the results of first half of the year at 14.3%. So then if you think about then the next variable of progressing according to plan relative to our cost savings program and with the visibility of that order book there's an expectation then that we should have a at least a slightly positive variance in the second half of the year on the continuing HIA business so that's the majority of the rationale and then of course the addition of LaBrie and the nice financial profile that they bring to the equation, serving a relatively stable and countercyclical end market segment, then those combination of those variables is what gives us the catalyst to then raise our outlook to the 14.5% comparable operating profit level. In terms of how then Libri would be consolidated into the results, we'll give those details concurrent with the Q3 report. And then as indicated earlier by Mikko, that should be 23rd of October this year. And then just to remind you a bit of the financial profile, let's say through 2025 and we'll share more details to follow with the Q3 report. So we had a revenue in US dollars wise of 491 million euros and then on a comparable operating profit basis was 17% comparable operating profit. And so we should see a relatively similar profile for Labrie that we share with the consolidated results for both Q3 as well as Q4.

Basically to add what we have provided in our interim report that we have currently modeled that the LABRI-related purchase price allocation amortization would be approximately 23 million euros for the second half of this year. and out of that 14 million euros would be reported in items affecting comparability and the other 9 million which is related to the kind of long-term amortization like brands technology and so on which could be amortized in 15-20 years even that would be booked above the comparable operating profit line So if you take Labri's, let's say, last 12 months EBTA, what we have been communicating at the closing, that has been slightly north of 20%, and then you deduct there the roughly 9%. 9 million, what Scott indicated earlier, that would convert more or less to that kind of 17%. What LAPRI has been reporting also historically, but then it was basically impacted by the US CARB goodwill amortization. And now this PPA amortization would be more or less replacing that US CARB. Goodwill depreciation. Of course, these PPA numbers, I want to emphasize here that these are preliminary numbers and the PPA allocation will be now defined during the second half of this year. And once it's completed, then also these numbers will get more accurate.

Thank you. So in simple terms, it's like around 70% EBIT margin where it will be consolidated.

At the moment with this purchase price allocation, amortization assumptions, yes.

Okay, thank you.

The next question comes from Michael Dopel from Nordia. Please go ahead.

Yeah, hi, thanks. Just a couple of brief follow-ups here. Firstly, on the service margins, now you mentioned, I mean, they were very strong in the quarter and you mentioned some of the reasons there. Just wondering, you know, how should we think about that going forward into the next quarter and the rest of the year? What is your thinking there? And also I related to profitability a second question. In terms of the cost savings, the 20 million that you expect, I think you said that you expect incremental benefits of that into the second half. So maybe you could just quantify a bit. What the benefits were in the first half and what the delta is going to be into the second half, please.

Yeah, the service margin. So as I mentioned in the services segment slides, we have been very much growing in services in the recurring services where the margins are somewhat higher than, for example, in the installation services. So depending a bit how the new equipment sales develop and how the Installation volumes will develop going forward. One should not necessarily take this quarter two as a kind of new normal. Comparable operating profit margin is also dependent on this recurring services versus installation services mix. And then what comes to cost savings, like I said, the cost savings program is progressing according to our plans. Most of the actions have been or a big portion of the actions have been implemented towards the end of So we had now, if we look at our fixed cost development, and you are not able to see that fully in our kind of external financial statements, but if we look at our fixed cost development year-to-date June this year versus year-to-date June last year, our fixed costs were roughly 6 million euros lower, as you could see also from those equipment and services cost bridges.

Okay, so I mean in the delta into second half compared to first half, how much should we expect in benefits here?

All in all what we have said already earlier that for the full year we anticipate 20 million euros lower fixed costs compared to 2025. Okay.

Maybe just a brief comment still coming back to my earlier comments or questions around demand. So in APAC, I saw that your orders were down a bit. Just wondering what you're seeing in that market or what you saw in that marketing Q2 and what you're expecting to do into the third quarter?

Yeah, in terms of that, sorry, was that APAC that you asked about me, Kyle? We saw slight softness both in Japan, slightly in Australia. Part of that may have been a shift that we're making that we will share more details about in subsequent reporting in terms of our go-to-market model there, and I'd say a slight negative variance in Korea as well. But overall, we see quite stable demand as characterized, let's say, in each of the last two or three different quarters. So we do expect for a bounce back in some of those areas that were soft in Q2.

Okay, that's fair. And then just finally on Labrie, I think you mentioned the synergy opportunities that you see there, both on the sales and on the costs. Would you care to quantify what you're expecting there in more detail?

Yeah, as mentioned before, I tell you what, Mikael, we'll come back to that with our Q3 report. and provide a bit more detail there you know as for us it's a it's a really a nice scope deal so we'll be on the conservative side in terms of our expectations around synergies just reiterating I think what Mikko shared following our Q1 discussion we expect somewhere in the low double digits worth of millions of euros of synergies roughly split between the cost synergies and the sales synergies side

Hmm, hmm, okay. Well, that's fair. Thank you very much.

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

Yes, hi, this is Tom. I would just like to get a bit of an update and more details on the cost savings. You said, you know, €20 million full year this year, but it sounds like You know, actual real savings in H1 were very small. And then, you know, what kind of rollover effect should we expect for next year from this savings focus on the second half?

Yeah, so I can start and take that and then I'll hand over to Mikko. But as we've previously communicated, what we Thank you very much. Thank you. And then, of course, given that we were seeking a 20 million euro impact within this year in the annualized impact, of course, would be approximately double that amount. Now, as Mikko talked about earlier, you'll see that when we announced the program in Q3, we hadn't yet had the closing of the ING acquisition. So you will see an offset in the overall fixed cost from the additional cost from the ING business. And then point number two, Tom, is that as Mikko discussed, I believe following our Q1 earnings call, We have already provided for an investment in our IM architecture and landscape of approximately 5 million euros and that will be another partial offset to the cost savings in the overall fixed cost profile that you see in the consolidated results.

So for 2027 the savings will be more or less 20 million euros as well, right?

Correct.

And what about other cost items? Could you just, you know, open up what you see, you know, talking to suppliers, you know, we have had, you know, weak demand sometime in the US, you know, we have a changing tariff landscape, etc. So open up a bit on all levels, basically.

Yeah, I think as we've I think as you think about the Middle East conflict we haven't yet seen impact to our demand as such but a bit of pressure likely on the cost side relative to logistics mostly in the form of fuel surcharges But overall, of course, as we also have discussed relative to the tariff situation, I think was the other issue that you raised, we have had a policy where we adjust our surcharges to our customers in the market affected concurrent with the impact that we would see in our offering relative to the import duty changes.

and basically all other kind of restructuring or library acquisition related costs those we have reported under the items affecting comparability 23 million euros year-to-date June and 11 million during quarter two.

And then a bit about the US demand. So if I understand you correctly, you see that, you know, The big recovery in U.S. truck orders focus really on large class 7 and 8 trucks. So I wonder just how large share of your things typically goes to these class 7 and 8 trucks and how much it goes to smaller trucks?

Yes, so probably the right way to think about it is that the U.S. market is a Aki Vesikallio, Johanna Pirinen, Magdalena Wojtowicz-Tokarz, Michael Bruninx, Mikko Puolakka, Scott Allen Phillips, Birgitte Jespersen Thank you very much for joining us.

But if you put some number on it, is it like 20% of your kind of sales that goes to large trucks in the U.S., or what is the number basically?

Well, let's say this way, that the delivery solutions is a bigger proportion of our overall revenue in the U.S., Tom, versus our lifting solutions.

Yeah, all right, so we cannot get any more kind of just number on it. It just helps to understand when you look at the different truck orders to understand, you know, and what about the lead time from trucks to your orders in the smaller products, in smaller, you know, trucks?

Yeah, we're nicely in sync in terms of lead time. We have the capability of meeting at this time any of the lead time outcomes that you see from the truck OEMs, so no issue there.

Okay, thank you.

The next question comes from Panu Leighton-Mackie from Danske Bank. Please go ahead.

Hi, thanks for taking my follow-up question. I just wanted to ask you about the Labry. As you have closed the acquisition three weeks ago, how has the business continued to perform after the kind of Q1 last 12 months figures that you have reported? So has it continued to grow? How have the orders developed, order book? So just kind of thinking how we should model it going forward now when it's part of HIAP.

Yeah, thank you for the question, Pani, or the follow up there, but allow us to come back to you on that in the Q3 report.

OK, thank you. Yeah.

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

Yeah, we have some additional ones from the web audience. So firstly, when looking at the stronger order intake, how much would you say is due to a recovery of the market in Europe and in the Americas, and how much is due to higher penetration in unpenetrated markets? So is it more like unpenetrated markets or market recovery story?

yeah good question um i think you that as we probably would say in each of our prior quarters you have a combination of the the market recovery that's uh uh that is um according to expectations relative to the replacement as we've shared in the past where roughly uh 95 of our demand or so is on replacement now whether that's our own or competitors but nevertheless it's It's roughly split that way. And then the balance on either penetrating new opportunities or acquiring additional market share. And of course, it's been primarily led in Europe. And of course, we've enjoyed a nice positive variance in terms of the top line from the ING acquisition.

Exactly. OK, I think that concludes our Q&A session and we will report and come back with the next results release on 23rd of October in 2026. Have a nice summer. And thank you. Thank you.

Thank you.