Interpump Gp Unsp/Adr

Conference Operator, welcome and thank you for joining the Interpump First Quarter 2026 Financial Results Conference Call. As a reminder, all participants are in listen-only mode and after the presentation there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Fabio Marazzi, CEO of Interpump. Please go ahead, sir.

Thank you. Thank you. I'm Fabio Marazzi, Interpump Group Chief Executive Officer. Good afternoon or good morning, depending on your time zone, and welcome to this Interpump First Quarter 2026 Financial Results Conference Call. Before starting, I would like to inform you that Elisabetta Kunjaska, former head of investor relations, recently left the company and that, starting from June 1st, the new head of investor relations will be Mr. Federico Pavese, joining us after a long experience in CNH and Pirelli, to whom I formulate my best wishes for his future within Interpam Group. As usual, I must draw your attention to the disclaimer slide inserted in the next part of the presentation. that I hope you are able to download from our website. I will start the Q126 presentation, as always, with past and future numbers. Past numbers. On organic basis, in the first quarter of 2026, we had a 2.2% organic growth. Positive number for the fourth consecutive quarter. And a minus 2 EBITDA, with a 60 basis point EBITDA margin dilution, mainly explained by the different contributions from the two divisions, with a stronger hydrolysis and a weaker water-jetting performance. Future numbers. Both the results of the first quarter 26 and the sales evolution for the month of April are slightly better than our expectations, but considering the very uncertain geopolitical scenario, we prefer to confirm our 2026 organic sales guidance, that is, between minus 2 and plus 3%. hoping for more visibility and a better outlook in the future months. In terms of profitability, as usual in May, we are also providing more precise indications, and despite the headwinds coming from a tougher product mix, we are expecting an NVIDIA margin for the full year between 22% and 22.5%, confirming once again our most important goal and focus, that is to protect our profitability in every market environment. I will add more color on our 2026 expectation in the second part of my speech. Now, let's focus with more details on most important first quarter financial KPIs, sales, EBITDA and cash generation. On sales, the first quarter 2026 confirms trends that have been ongoing for more than a year. The hydraulic division is recording a sequential and very comforting acceleration in demand. while waterjetting is facing a very tough comparison phase with the first part of 2025. This evolution is absolutely consistent with our expectations, summarized in the 26th budget, and once again it is the clearest possible evidence of the beauty of the diversification that has always characterized intercom groups' business. Going into details, we feel that hydraulic division touched the bottom at the end of 2024 and that we should now expect a continuation of the sequential improvement that we have seen in the last four quarters, also during the remaining part of this year. Among the most important categories, agriculture, air-moving machine and construction are on fire with a double-digit growth with others, for example, adapters, industrial vehicles, after several strong quarters were less positive. In the water jetting division, food and beverage, by far the most important market application and chemical, were the most affected by the tougher comparison basis with the same period of last year that we have already mentioned. Cleaning, the second most important application field, performed very well with a 14% organic growth in the quarter. In terms of geographies, the most important countries where we operate, Europe and US, recorded a very positive performance, with a 7% organic growth. While the poor performance in Asia, and in China in particular, was driven by the first part of the mega-order that Amelman delivered in this area in the first quarter 25. Complementing the view for the quarter, it's important to underline the very good commercial environment The very good commercial environment, both in terms of projects under discussion in the water jetting division and the strong water intake in the quarter, with a book-to-beer ratio above 1.5 times. Moving to EVDA, I would like to come back to what I mentioned in my introduction. For quarter 26, we protect profitability, despite the important headwind coming from the different business links which was characterized by the stronger contribution from the relatively less profitable division, hydraulics, in comparison with the water jetting one. The good sales evolution in the pure mobile hydraulic certification fields, the one that suffered the most in the past, allowed to achieve good operating leverage in companies like Valvoil and Y-Drive, and to improve overall performance in the companies that were hit the most during the past three years downturn. offsetting in the meantime the weaker contribution of companies more focused on adapters of industrial vehicles. Switching to water jet indivision, sales evolution, excluding the mega-orders delivered in the first half of last year by Amneman in China, is confirming the good long-term trend seen in recent years concerning the higher attention paid by the industrial operators towards the environmental impact of their economic activities. The very interesting order intake in Q1 2026 and the number of projects under technical discussion in this field are just confirming these trends. Moving to cash generation now. Free cash flow in the first quarter went up by 10% from 29 to 32 million euro. In wings a good improvement already reached in the last couple of years. Therefore, it's important to focus on the different components. Cash flow from operating activities was aligned with the one of last year, while the 45% capex decrease from 35 to 19 million euro more than compensated the trade working capital increased absorption explained by a stronger top line. Summarizing, another quarter of inventories lower absorption and CAPEX reduction is a clear evidence that ROOP is delivering its commitment to improve these KPIs after the extraordinary peak of 2021-2023. We believe therefore that the first quarter 26th generation result is satisfying and in line with our goal to repeat and possibly exceed the excellent levels of Flickr slow generation of 2025. To complete a video overview, it's important to highlight that the group was able to offset the impact of U.S. having increased prices or having recovered them to customers. And the newly acquired companies did not have any dilutive effect. To conclude this discussion on profitability, I would like to draw your attention once again to the long-term stability of our EBITDA margin, which, in my view, perfectly exemplifies the strength of our group. Thanks to our diversification and operational flexibility, we have demonstrated an excellence and resilience in margins in years marked by extreme volatility. The few industrial companies can match. Moving now to acquisition, as usual, we would like to provide a short updating on M&A. No new acquisitions in this quarter, but several interesting ongoing discussions and discussions with potential counterparts. We are very satisfied of the integration process of the three companies acquired in four quarters of last year, namely Tutta Hydraulicos, Borgia Sali and Pharma, which are perfect examples of the add-ons opportunities that we are looking for, considering the perfect match between our industrial and commercial strategy, the financial profile of these companies, and respect of our M&A and financial criterias. Now the usual overview on most recent market trends and 2026 expectations. April was characterized by a further acceleration of the top line growth thanks to the less tough comparison basis in water jetting and the continuation of the positive trends recently seen in hydraulics. Both the features of the projects under discussion and the very good ordering take for the month with a B2B ratio once again close to 1.1 make us confident regarding the good evolution to be expected for this second quarter of the year. After this necessary digression, let's go back to 2026 expectations. First quarter results and daily phase evolution are a clear support for our February guidance that we are confirming today, despite the severe geopolitical tensions that are characterizing this world. and a very low visibility regarding the foreseeable future. On an organic basis, we are expecting a turnover variation between minus 2 and plus 3%, and a positive perimeter change impact of around 2%, with reported sales in line with 2025, considering the negative FX impact that was around 3% in the first four months of the year. As usual, with higher visibility given by a quarter of reported data, we are adding the profitability guidance to the sales guidance. An immediate margin between 22 and 22.5%, despite dead winds coming from a different contribution from the two divisions, with a stronger hydraulics and a weaker water jetting, that is, as you know, the most profitable division. In terms of cash generation, as explained before, First water results are clear evidence of the group's commitment to proceed in the normalization process of both trade working capital and CAPEX. Therefore, we confirm the goal to consolidate and hopefully improve the cash flow generation achieved in 2025 to a new record high number. If we are able to deliver these results in February 2027, we will be once again very proud as they would once again confirm the two fundamental milestones of the group strategy, diversification and business model flexibility. We are now at your disposal for any questions you may ask.

Thank you. This is the Coruscant Conference Operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. We will pause for a moment as participants are joining the queue. First question is from Matteo Bonizzoni, Kepler Schober.