Jost Werke Se

A very good morning here from Neue Eisenberg and a warm welcome to our Q3 earnings conference for Joost Werke SE. So I would like to start with the highlights of the first nine months and the third quarter of this year. In the third quarter, we were able to accelerate our profitable growth despite the challenging market environment. This was supported by market share gains. We had organic growth opportunities we could implement and of course by the M&A of the Hiva Group. The Hiva Group PMI post-merger integration is fully on track. We see already a ramp up of the synergies and we advance further with new cross-selling opportunities that we have identified. We were able to obtain market share gains across all regions. and in all business lines. And that is because we could successfully combine our local for local approach in operations, selling and production with the global strength of our business lines. The market demand in Europe, Middle East and Africa has strengthened somewhat over in the Q3 compared to a weak Q3 in 2024. However, the demand in the US has been contracting further due to the tariff concerns of our customers. With that performance, we can confirm our outlook for the fiscal year of 2025. Let's go a bit deeper into the financial highlights. Our operational model and our strategy proves its resilience and the strength in this challenging market environment. Our sales in the third quarter of 2025 went up by 56% to 383 million. This was of course supported by the Hiva merger and acquisition effect, but also by an organic growth of 10% that we had across all regions. Our adjusted EBIT grew by 40% to 37 million in the third quarter, and the adjusted EBIT margin reached 9.7%. that had a negative FX impact, so a constant currency that would have been 9.9%. Our good operating performance and the realization of first synergy effects from the UI integration resulted on a nine-month basis in 110 million adjusted EBIT, which is almost the value that we had for the entire fiscal year 2024. and the adjusted EBIT margin on those nine months of 2025 reached 9.6%. Also adjusted earnings per share increased 14% to one euro and 11 for the quarter three. This increase was also supported by an organic growth and of course the contribution of the EVA acquisition. Leverage has improved to 2.44 in the Q3 which means that we have been reaching the targets to be below 2.5 times leveraged by year and faster than we initially expected. So we're very happy about that. Of course, big help came from the free cash flow that was very good in Q3. It grew by 144% to 56 million. And the driving factors also here were the strong EVA contribution, improvements in working capital, some factoring, and some positive timing effects. Give you a little bit more detail on what we are doing on the Hira integration. We showed it already in previous conferences that our target is to reach 20 million positive impact in the run rate by the end of 2026. And here a bit more detail. So one part An important part of those synergies is additional sales that we generate through cross-selling synergies. We are successfully offering our Hiva products to Yoast customers in various countries. We have good success there in Australia, but also in North America, where we see additional sales being generated by using that sales channel for the existing Hiva products. But vice versa also, the Yoast products are gaining access to new customers by leveraging Hiva dealers using the Hiva network in APEC and also in Americas. We see that especially in Canada and in some of the Asian markets. So we expect the total effect of 8 million additional EBIT generated through additional sales that we find with these cross-selling synergies. And then another big lever, of course, is material costs, logistic costs, production costs. The sales of the crane business has been signed, so that carve out is ongoing and is certainly helping. But on the logistics costs also, we have a consolidation enclosure of first sites and warehouses that we have already implemented in Australia, in South Africa, and also in Europe. And we see the first effects out of that. So over 50% of the purchasing and logistic contracts have already been bundled and we are in the process of renegotiation. So that's we expect here in effect and that should be the biggest effect of the entire 20 million. Here this effect should be 8 to 10 million by the end of 2026. And of course, we are also trying to optimize and we will optimize our structure selling general and administrative cost. We are streamlining in our management and reporting structure worldwide. We're advancing very swiftly on this one and we will have the structure implemented. The majority of that structure implemented by the end of this year. We have savings from combined IT services contracts and license fees. but also the combination of shared service centers for accounting and auditing reduces those fees. But we're also integrating our marketing organization. We are running combined trade shows. We've just been, I've just been on a trade show with the Agritechnica for the last three days. We had the Wuhan show last week and we're already at these shows as one company, partially with one stand for Heva, Yoast and Cricket. So also here we expect around 8 million. 5 million out of those 20 million, we will already see by the end of 2025. Looking at the market development in Q3 versus the Q3 of last year, in Europe, Middle East and Africa, we have increasing markets. I already mentioned that it has been a weak quarter last year, Q3 and Q4 in Europe. In America, the tariffs take their toll. There's a lot of uncertainty that our customers sense with their customers. So production rates on trucks, but also on traders is going down. And in APEC and the transport business, you can say it's more or less flat, a little better in trucks and a little weaker in traders. The tractors are still negative compared to last year. However, it's not hitting us so much because this is mainly the large tractors that are being impacted by this downturn on the dealer business. We see already a slight coming back of the market. So this is the official numbers for the markets, but our dealer channel is actually improving a little bit versus last year. And on hydronics, you can say across, we have more or less stable markets, a little weaker, In America, there's also a slight impact on the tariffs, but in the rest of the world, we see infrastructure still on a very solid basis. This resilience, it comes also from a nice distribution of markets, products, and customers. And we've shown this slide before, but I think it shows very well that we are not dependent on any specific customer groups or any specific market. If you look at where our sales are being generated, you can see that it's 47% in Europe, Middle East and Africa, 27% in Americas, 26% in APEC. So already a very nice distribution. If you look at it from an adjusted EBIT contribution, You can always say it's a third, a third, a third. 31% in Europe, Middle East and Africa. Americas with 30% plus 2% with the joint venture in Brazil and APEC region with 37% of our adjusted EBIT. So also that adds to our resilient business model. And if you look at the applications, we have about 50% in transport, still 53%. and the growing agriculture business and hydraulics business with 18% and 29% respectively. Yeah, with that, I would hand over to Oliver for more financial details on our performance.

Thanks, Joachim, for the overview. Yes, and then indeed, let's go into the financials as usual. First, a little bit more focusing on the quarterly results by region and then summing up into the group. Starting here with Europe, we have seen organic growth and the first synergies that improved also our profitability. The sales contribution by EVA in the third quarter has been 36 million, leaving then the rest of the growth with almost 30% of organic growth in the third quarter. This is driven by stabilization both in transport and agriculture. And also the general overall order intake gained a little bit of a momentum. However, we still need to say that the situation in India is somehow fragile, right? We need to stay flexible and need to be close to the customer group, especially in the DACH region, right? the whole effects from the infrastructure program are yet to come somehow. We had only minor FX effects in sales by 0.3% points. So that sums then up to an almost 41% of reported sales growth from 129 to 182 million euros in the third quarter. Looking into EBIT, also there a nice growth from 7.3 million to 11.4 million. driven by a margin increase on the one side. I mentioned that also in Europe, we see the first synergies that are going to be realized. We are consolidating sites and warehouses. And on top, where we helped for a year is that we have a profitable business in agriculture, especially in EMEA. And that business has been organically grown by 25% compared to the third quarter of last year. That obviously helped to improve the profitability in EMEA as well. Please remind me that, as in the past, the EMEA region carries, let's say, the big, big share of the headquarter costs, and that is also after the hybrid acquisition still the case, as the headquarter there is in the Netherlands. So that's then the overall impact on the margin, but nevertheless increased compared to prior year. So that's the quick summary for EMEA. If we now go into Americas, we have seen growth in Americas in the third quarter. This is driven by our diversified model within the region and also, as Joachim mentioned, selective market share gains. The Hiva contribution to the growth was 30 million, which led to a reported sales growth from 77 million euros to 107 million, so by almost 39%. However, even in America, we achieved an organic sales growth of 6%, which is partially driven by a very good situation in our trailer business and aftermarket business in North America on the one side, that helped us to compensate also the margin effect from the truck downturn. And on the other side, a very successful quarter for our business in Brazil, an acquisition that you might remember we did in 2023, which is strongly growing versus prior year also by new projects and new customers with very solid margins. And that indeed then turned into a strong quarter from our point of view also in terms of EBIT for the region, absolutely wise growing from 9.8 million to 10.9 million to a margin of 10.3%. And that despite the high dilution that we will have and still have in the region here, but we are fully on track to realize the synergies there. And you have mentioned that we are benefiting here on both sides with regards to cross-sell effects. And so we are happy with the results here in Americas as well. And yeah, I'm looking forward for a prosperous 2026. Then going to APEC. APEC has seen a very strong reported sales force in the third quarter from 40 million to 95 million. So more than doubled. 55 million of that growth has been driven by hyper acquisition. As you know, EVA is especially in China, a very, very strong player with high market shares and is currently benefiting also yours, but especially EVA. from a very strong export business. So we have gained a lot of business with Chinese customers. These Chinese customers are very successful now in the global market, so not only domestic, also in their export markets. And Hiva is growing with that customers, but also organically. So without the Hiva effect, we have grown by almost 7% in the region. And this is, somehow by still solid transport business for Yoast. Again, also here driven by export business, but also by a ramp up of our agriculture business in India. So very successful here. We had strong FX headwinds of almost 11% points. That's because of the strong Euro, but nevertheless have achieved almost 100 million Euro. of sales in the region for the third quarter looking into EBIT now again very strong like in the second quarter growing absolute wise the EBIT from 7.7 million last year third quarter to almost 14 million now in this year's third quarter so the strongest region by far now in terms of EBIT and EBIT has grown by 80 percent we see the first synergies are ramping up as you already mentioned across all, let's say, cost line items in Cox, in SG&A, but also on the sales side with regards to cross sales activities. So overall, from a region point of view, Alpac has been very, very strong in the third quarter and also looking short term going forward. We still see a good momentum, especially in China for the moment. Then summing up for the total group, We see an organic growth in all regions and then together with the M&A contribution has boosted sales and earnings in the third quarter from 246 now to 283 as Joachim mentioned. Impact from Heva standalone is 121 million in the third quarter leaving us with 10% of organic growth in such a geopolitical and worldwide environment. I think that's quite an amazing result and underlines the resilience of our business model and the exposure to various markets, to all the big customers worldwide, including the new ones in China and in India helps us to balance that, so to speak, challenging environment very well. On top, we have seen a momentum increase in the agricultural business worldwide by now 18% year over year increase. And we need to see, Joachim was just on the architechnica, seems to be that we have definitely reached the bottom through the summer period in agriculture. So also there, we are slightly optimistic for the next months that this is going to continue. When we look into EBIT, EBIT has grown by 40% from last year, 26.5 million, now to 37.2 million. So a very decent margin of 9.7%, so almost close to our strategic quality of 10%. Again, in such a complicated environment. And if you would adjust this for the negative currency effects, both in sales and in EBIT, that would have been a constant currency rate of EBIT by 9.9%. So we are very glad and positive to show this number here. We see in all regions the ramping up of the synergies, as we mentioned. On the other side, here and there, the situation remains fragile from the market point of view. We need to stay flexible. And I think we are well set with our business model to deal with whatever is upcoming over the next months. And one last point to mention here, basically in all regions, but especially in North America, We have seen a very high market share for our aftermarket business that stabilized the margin here as well. So that's regarding sales and adjusted EBIT. If we now look into our adjusted net income and adjusted EPS bridge, we start with a net income of 22 million for the nine months impacted for sure by the finance results, which is increasing definitely versus prior because of the higher debt load in the interests. We also had a little bit higher taxes in the third quarter. There are some timing effects partially are related to our PPA charges here and there. There is a phase out definitely going to be expected over the next months. We need to look at this at the end. Adjusted for both, we stand within a reported EBIT of 58 million and then for sure as usually we adjust the PPA charges that have significantly increased compared to prior year because we do now incorporate the purchase price allocation of IVA. So that sums up to 41 million. That's a high especially this year because we have in the first 12 months of the consolidation Special PPA charges, there's one detailed slide in the slide deck as well, that will phase out until the end and then this DNA PPA charge is going to be significantly reduced from next year onwards. Then we add 11 million exceptionals for the first nine months. These are to 95% related to the integration of fever and then from a cost point of view, layoff costs consolidation costs advisor costs etc so all related to the integration of eva we are still fully in line with our overall guidance that we would expect between 12 to 24 million integration costs of eva in the first two years so this is the 11 million and for this year we are fully aligned summing up then to an adjusted EBIT of 110 million and then again if we do our retroactive calculation of finance result and the adjusted tax rate elevated to this, we are ending up with an adjusted net income of 63 million, which we are very happy to announce, which is already then higher than last year, despite the higher, significantly higher finance result. In adjusted EPS, that means then 44.17, an increase from the 4.04 last year. And I always like to mention also the adjusted net earnings to sales ratio, which reached again about 5%, which I think is in the current environment still a very solid number. So then showing here again the details of the PPA charges. I mentioned it basically already. That's probably more for the readout material. One important point, the last bullet point on the right side is what I said. This year's net income is affected by that. Within the first year, especially PPA charges, all that sums up to 31 million. We expect that this is going to be lower by almost 20 million from January next year onwards. Coming now a little bit to capital efficiency and balance sheet figures. We have seen on ROSI by end of September of 14.3%. That's already for the first time now sequentially improved ROSI. In the second quarter, we had 13%. So that's a good signal. Also showing the effect of the synergies and the EBIT growth. There's still a way to go for our overall target, mid and long-term target. But also here we see that we are quite fast I'm happy to announce that 14.3% showing that we see already that the EVA M1A is value accretive and it's managed in a capital efficient way. Equity ratio has decreased from 40.4% end of last year to 21.3%. That's obviously clear from the financing of the EVA acquisition. On the one side that's probably 70% of the effect and the other 30% of the effect is that still by end of September we see an impact of almost 50 million currency translation in our balance sheet. We have and that's somehow then the other side of our diversified model all over the world. We have net assets all over the world and as you know the euro currency has increased its value to a lot of currencies worldwide so we see here a translation effect but it's only a translation effect so to speak. Regarding leverage I'm quite happy to announce that because of a very strong cash flow in the third quarter we were able to get the leverage number already below the 2.5 threshold 2.5 times EBITDA threshold That has been our target for end of this year. We have now reached already the end of the third quarter. And I'm confident that we can maintain at least that level until the end. That for sure underlines our strong ability to generate cash flow. And Hiva again is also here contributing to that. Next page. Here you see the free cash flow as a result for the first nine months has been now 105 million. So the operating cash flow is improving through the acquisition and our organic growth. On top, as you have mentioned, we have now a higher business volume and that also gives us opportunities here and there for better working capital management. We are harmonizing factoring programs between Yoast and EVA, so that has positive impacts here as well, resulting in a conversion rate of 1.7 for the first nine months, which I think is a good result despite the challenging environment. Looking into CapEx, we have spent so far 28 million, which is 2.4% in terms of sales. So also here fully in line You may remember from our guidance that we want to stay below 3% this year, so I think we are well underway here. Nothing special to mention. Regarding working capital, that's the vice versa consequence of the working capital management. I think we did good in the third quarter. Working capital has been 62% and it's already below what is our target for the year and helping to improve our balance sheet. Next page, please. So that's it. From my side, handing back over to Joachim.

Yeah, thank you, Oliver. So let's look how the rest of the year is, what we expect for the rest of the year. From a market point of view, this is not much different, obviously, than the slide you saw before. This was the nine months. This is now the full year. So there's no expectation that the market environment will change. A quick summary of this is, that Americas mainly driven by US and Brazil are much weaker markets than the year before. And also that's the egg markets on the tractors remains weak. If you look at those numbers, we have been able to uncouple our development a little bit of that driven by market share gains that we have by new contracts that we have, especially in the egg sector. by increasing sales channels, as I've already mentioned, and also by some positive pricing effects where we could implement the tariff pricing on our products. So that's why we're not fully hit by this market development, but certainly the expectation is that we will also not get a lot of help from the markets in the remaining quarter. As I mentioned, we are a bit uncoupled and that's why we are happy to confirm our outlook for the year 2025. And you all know that outlook sales, we expect to be up by 40 to 50% versus prior year, mainly driven by the Hiba integration. And in 2024, we had 1.069 billion euros in sales. Our adjusted EBIT should be up 23 to 28% versus prior year where we had 113 million euros in adjusted EBIT. Adjusted EBITDA also up between 23 and 28% versus prior year. The base is here, the 148 million from last year. Our capex range will be around the 2.9. Last year we were at 3.1. and working capital we expect to be below 18.5% of sales. Last year we ended 15.3%. So let's summarize the quarter. We had a strong quarter in a challenging market environment and we think that is proving our Just Strategy that we announced in the Ambition 2030 that we showcased you in the Capital Markets Day in September of last year. The diversification across the end industries, across the customers and our regions that strengthens our resilience and our profitability. The EVA PMI integration advances swiftly and we have a clear focus on the core business and on delivering the synergies that we are expecting. We are achieving organic growth in all regions and all business lines, despite the weak market environment. And that is supported by market share gains and new contracts with new OEMs. Our local for local approach, our operational flexibility and our strong market access worldwide limits the impact from the tariffs and from the regional market downturns. And therefore we could confirm our outlook for 2025 for our continuing operations. With that, I would like to conclude the presentation. Thank you for your interest and we're open for questions.