Jost Werke Se

Welcome to the Joost Werke SE Earnings Call H1 Q2 2026. I'm Moritz, the course call operator. I would like to remind you that all participants will be in a listen-only mode and the conference has been recorded. The presentation will be followed by a question and answer session. If you would like to ask a question from the webinar, you may click the Q&A button on the left side of your screen and then click the raise your hand button. If you are connected via phone, please press star followed by one. For operator assistance, please press the operator assistance button on the bottom left side of your screen or star one, star zero on your telephone keypad. At this time, it's my pleasure to hand over to Joachim Dürr, CEO. Please go ahead, sir.

Yes, good morning, everybody from Norwegenburg and a warm welcome to our earnings conference for the first half year and the second quarter of 2026. I'm very happy to report that we have a record First half year in 2026, our sales grew 12% to 857 million and our adjusted EBIT grew 21% to 88 million, which calculates to a margin of 10.3%. I'm very happy with the strong quality of our growth. Organic sales went up around 9% driven by all three regions and all our business lines. The hybrid integration is fully on track. We are creating the cross-selling synergies and they are ramping up. And with our profitability, we are back into our strategic corridor between 10 and 12% in terms of adjusted EBIT margin. And we're winning new customers worldwide. Our market share is growing across business lines consistently and we are executing our Ambition 2030 strategy. So let's look at the financial numbers a bit more in detail. It shows our strength and our resilience for the Q2. So sales were up 13% to $440 million in the second quarter of 2026, paired with an adjusted EBIT growth of 19%, up to $44 million, and an adjusted EBIT margin growing half a percentage point to 10.0%. Free cash flow was up in Q2, 17 million, despite the working capital increase that we needed to drive the high business growth that we've had. We had high capital efficiency with a return on capital employed up 3.5 percentage points to 16.3%. Our leverage improved to 1.81 times and is now back in the strategic range between one and two times. adjusted net income grew 19% to 25 million in the second quarter of 2026, and that calculates to an adjusted earnings per share up 7% to 148 due to the larger number of shares that we are circulating compared to last year. So H1 2026 posts the strongest first half in JOS's company history and was supported by a strong organic growth. And with that, we confirm Looking at the market environment that we had in the first half of the year in Europe, Middle East, and Africa, the truck and trailer market grew slightly, 5% to 10%. Tractor market, very slight growth between 0% and 5%. Hydraulics, also very slight growth. Our organic growth in that market environment, a strong 5.6%, and I'll explain a little further on the next slide, what the main drivers are. But it's mainly been our ag and transport business. In America, we had no support from the markets, not in North America and certainly also not in Brazil. So market declined between 15 to 10% on trucks and 10 to 5% lower on traders. Also in agricultural tractors, down 5 to 10%. Hydraulics more than stable slightly positive our performance in America's region plus nine point nine percent on an organic basis without the M&A effect and that is mainly driven by UA customers also some market shares on on traders in North America and cross-selling synergies that we were able to generate Asia Pacific region market in that region for truck and trailer fairly strong 10 to 15% market increase on agricultural tractors 5 to 10% on hydraulics 10 to 15% our performance up almost 15% 14.6% to be exact we're benefiting from the growth of our Chinese customers in the export business and also with the growth that we see mainly in India. And as promised on the next slide, I will go a bit more into detail on the organic growth that we are seeing in our business lines. So if we split down the organic sales development by regions and business lines, if you look at the total sales in half year 2025 of 764 and the eight of this year, 69 million euros is organic sales, 39 is Heva that is in effect the one month additional that we had in January because we closed 1st of February last year, and we had a negative 15 million FX effect. So looking at the organic growth that we are seeing, transport grew 6%, If you compare that to the reported number, it's an FX difference. There's nothing else included but FX. The same on agriculture. So 6% growth in transport. New trailer business in North America is one of the drivers. A strong export business in China where we're growing with our Chinese OEMs that we supply and a growing demand in India that we see. We see a robust demand in Europe, Middle East, and Africa. in Europe. So that ramp up plus the market share gains gave us those 6% growth in transport. If you look at agriculture, the biggest growth, 22% organic. That's a ramp up of our organic projects that we have in South America and in APAC. It's also the dealer business, especially in the US that is picking up. and the strong demand in Europe, Middle East, and Africa for our agricultural loaders and our implements. So that's a really impressive 22% that we were able to grow here in our agricultural business. If you look at hydraulics, of course, the report is 20% that includes the one month of January. If we look at only the organic growth, there's 6%. and that is cross-selling synergies that we have in the US and demand in Brazil and the US. It's also new products, EPTOs and digital tipping systems that are gradually ramping up in APEC and are systems that give us upselling potential and cross-selling synergies in Pacific Americas and South Africa. So as I said, very happy with the organic growth that we're seeing on top of the positive M&A effects of the Hiva acquisition. So let's go to the next slide, please. You've seen that it has changed a little bit, a bit more weight in Americas and in APAC in our sales by destinations. Europe, Middle East and Africa is 46%. and America's and APEC 27%. So a very good setup to also participate in the growing markets that we see in North America and in Asia especially. If you look at where we earn our associated EBIT, it's almost a third, a third, a third between those regions. And Oliver will explain you a bit more on that distribution. and also on business lines, you can see that for us, transport business is about 50% of our business, but we're also benefiting from the growth in infrastructure with our hydraulics business and the stronger agricultural business that is 20% of our weight. With that, I would like to hand over to Oliver to give you a bit more detail on the financial numbers. Yeah, thanks Joachim.

Hello and welcome from my side to all of this year's first top gear call. As usually, I will jump into the three regions before coming back to the group. A bit different to normally, I would focus more on the half-year numbers for one specific reason. You might remember that last year with the half-year numbers, we showed the grains business as discontinued operations and that had an effect that we had to consolidate all of the sales numbers. for the second quarter, the full half year numbers of cranes. And that's an artificial effect of the prior year numbers. But I will come to that point once we are reaching the group figures. When we look into EMEA for the first half year, we have seen an organic sales up by almost 6%, as Joachim has shown. And as he said, yeah, with strong growth for EMEA across all business lines and driven by, let's say, a large extent by a product portfolio. that we are offering here. There is an M&A impact of roughly 10 million in EMEA for the first half year, and that's why the reported growth jumps up to 9%. The strongest growth comes from the Yoast aquaculture product. We have seen continuously, following already the improvement in the second half of last year, a demand for our aquaculture product. and then what helps now is that also transport and hydraulics is starting to recover the order intake in general remains very solid we don't see at the moment direct demand impact negative diamonds demand effects from the Iran conflict so far and overall the ethics 0.5% points in EMEA. When we look into the EBIT margin for the first half year, went up by 9% to 24.4 million and the adjusted EBIT margin reached 6%. Driven for sure by scale effects from the growth, but also definitely by realizing synergies and also by a mix towards the off-highware products. Keep in mind the region here is the group costs, right, and with the larger group. this is also increasing that always a little bit of burden for the EMEA margin and besides that grains effect that I mentioned already in the introduction there is another effect and that's also a structural effect that's going to be continued for the EMEA region we have started beginning with the second quarter to shift certain highly profitable sales not for the sake of highly profitable but in general as part of the business model change into the regions those sales were rooted previously via IWA International which is a Dutch company so concentrated in the EMEA region into the regions definitely following our steering model like we have it in the US legacy so to speak that overall reduces the costs for the group so it's for the benefit of even further synergies it allows us also to legally consolidate certain legal entities in Europe, but that has the offset effect for the EMA region that certain profits are now shifted into the Americas and the impact region, where on the other side you see the profits that impact for the group is a zero impact. And on top, but we also slightly see this in the second quarter Here the region is being burned a little bit by higher input cost to see rising logistics and trade costs long supply chain You know that we are shipping costs from China from India into Europe So our markets here and that comes with the higher cost So that's a little bit but overall a very successful first up here fully in line with our internal expectations for the region in here Now coming to America's strong first half year, very strong organic growth despite challenging markets in both the US and the world. As mentioned, sales went up organically by 10%, reported by almost 12%. We see the synergies are ramping up. We have really a well-oiled machine, I would say, in America at the moment. and although the U.S. markets have remained challenging in the first half year, we could show a very nice growth. From a sales perspective, 225 million sales in the first half year represents an all-time high for sure and also what we see now in the special interest business and that's in focus for the second half, I believe also from your questions, we see the sequentially improving now and we see a strong in America for the second half. The market definitely started to recover and that should support a very nice America sales here in 2026.