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.

There's a slide that FX has been in the top line of 2.9 percent points.

That's because of the Euro value versus the USD and the Brazilian REI also affected a bit from yesterday's average calculation. When you look into the adjusted EBIT margin, adjusted EBIT for the first half year went up from 22 to 27.2 million euros, a margin step up of 120 basis points. Again, driven by the synergies, driven by the market share gains that Joachim pointed out, we've seen a strong ramp up of profitable projects in South America. paired with the business model change that I was introducing in ZMEA, which also has a slight positive effect in Americas, increased that margin to above 12%. And when we look here in the second quarter, it's even above 13%. And what we see at the moment is that we are probably able to run that ratio also going forward. Again, it seems to be a well-oiled machine here at the moment. Super team, congratulations to our teams over there. When we go then to a pack also super strong organic growth with almost 15% Basically across all business lines and all sub regions We see still a very strong business in China with our Chinese customers Increasing their expert shares right and we don't see that stopping and So that definitely is a statement for our impact story. Sales went up from 187 to 223, also a huge record in our history. And the growth rate in the second quarter was the first quarter's even slightly higher, also undermining that India seems on a recovery track. And we're expecting that to continue also into the second half. Regarding FX, there's a slight headwind that mainly comes from India and also what we see is a little bit of an ongoing weakness in the Indonesian mining market. However, that's going to be of temporary nature when we hear and analyze the press and the news coming from over there. The government is already actively working on incentive programs, so that might be a probably more at the end of the year, beginning of next year, regarding the sales numbers in the APEC. When we look into the adjusted EBIT, strong growth absolutely from 26.4 to 34.4. That's increased by 30%. Margin reached 15.4%, very strong. That's driven by the synergy ramp up. As you know, the EVA business has a higher share in Asia than compared to the other regions, so that means also the synergy potential in the APEC region, and we are realizing that. But also, we are seeing a very high capacity utilization, especially in the transport plants that we have in the region. And that also helps us to increase the margin from 13.7% to 15.7% in the second quarter. Again, there's a slight positive effect from that business model change. However, most of the increases of quality and structure the only let's say little bit of a flip side that we see at the moment is India compared with the high growth there and compared with the well impaired with the high capacity utilization we see higher supply chain costs there which should be mainly of temporary nature but it's driven by the business member so that's the regions when we sum that up for the group yeah just to repeat very strong growth second quarter and full half-year quarter organic growth is 8.9%. We should say very strong in light of the current environment and the numbers that we see around us for an industrial company, I would say. The positive M&A effect is 39 million, as Joachim just showed. And excluding that, we see the strongest growth, definitely, in the business and agriculture with 26% transferred up by 4% 26% and even the business line hydraulics is the 6% of energy flows absolutely on the right path to contribute to your ambition strategy. When you look into the EBIT margin, EBIT went up 21% from 72.8 to 87.9 for the first half year. So that's 21% and also for the second quarter it went up by 18%. So I think very successful. We have a certain seasonality in our business. The first quarter is normally strong for various reasons. We see the same pattern this year. And on top, I want to mention a small footnote here. When you look into the second quarter numbers last year, they are a little bit artificially high in terms of the margin as the full crane sales from February to June last year has been decontaminated in the second quarter last year. If you want to compare apples to apples, you probably would need to compare a 9.1% last year's second quarter to 10% this year's quarter. So that's a 90 basis point step up, fully in line with our expectations, I would say. So very successful. And then let's go a little bit into some balance sheet and cash flow numbers. First here, the adjusted net income bridge that you know. So that $88 million adjusted EBIT we have just talked about. net income and we had our taxes, finance results coming up with a reported EBIT of 63 million for the first half year. And then we do our adjustments, as you know, that's mainly predominantly more than 17%. The PPA amortizations, that's 18 million. We have 7 million exceptionals. So compared also to the first quarter, we see that's further going down, ending up then with the 88 million and then you end up with that 53 million adjusted net income, which is then 80% higher than last year, and turning into an adjusted EPS growth of 10% for the first half year, even with the higher number of shares circulating. I would say also quite successful sharing, showing our value creation through that six months. Next page. One little detail regarding that exceptional. You might remember when we announced the deal, We said, for sure, we want to realize that synergies in a range of 23 to 28 million on a full year basis, that comes with a certain amount of integration costs. We estimated that those integration costs should be at the end between 12 and 24 million. We have reached now 18 million since we announced the deal, so pretty in line with that guidance, so to speak, in terms of the integration costs. A little bit with the buffer for the next six months year, and they are still you want to do some integration work So it's probably more to the upper half What we disclose And also this nice period of less than under a year, so that's some details Let's go now to the capital efficiency and balance sheet figures. When we look into our monthly development, so versus end of last year, further sequential step up of 60 basis points now reaching 16.3%. And I would say 16.3% after only one and a half years after the biggest acquisitions of, within our history, right? It's quite a nice showcase for efficient capital allocation. We are very proud of that number. versus the end of half year one last year. That's a step up of three and a half percent points. Equity ratio, I mean, as you know, we did the capital increase end of February, driven by that and driven by the net income, despite having paid off 25 million dividends, shows an increase by almost six percent points up to rounded 27%. And together now with the net debt leverage of 1.81, I think we are feeling now comfortable back in our strategic corridor to further execute our Ocean 2030 strategy, which, as you know, is a combination of organic rules, which I think we demonstrated with that number here and are going to demonstrate further, and potential M180s. I think we are now back in a situation where we can definitely further execute on this, as we promised, next page. is cash flow figures. You might remember from the first quarter results that we're a little bit burdened by the growth and then the driven working capital increases that slowed down, turning now into a significantly positive free cash flow in the second quarter. And for the first half year, that means then almost 60 million. Yes, that's definitely less than last year. but that's somehow the price for that strong organic growth. For the second half, I expect that this working capital is going to be reversed at the growth rates, so to speak, are then more on a stable basis that incremental working capital growth should then stop. So yeah, definitely tailwind for the second half. In terms of our capex spending, we are well underway. We gave a guidance of a maximum of 2.8% sales in CapEx for 2026 with 2.2% per half year. I think we are well underway, giving us also a little bit of flexibility. There's opportunities to further invest into automation and efficiency projects. I mentioned that in the one or the other location, we are already very close to capacity limitations. But with that headroom, no problem at all. And networking capital ratio, we remain the same discipline like now for the last, I would say, two years, more or less. And with 17.4% in present sales, we showed an efficient networking capital management for the second time, so to speak, in this year. It's definitely a paperless rose if you look into the numbers. But that has, for one reason, to do with already in May. We don't believe that this Middle East conflict is over on short notice. I think that's now proven by the development and with this that we have a little bit of buffer for our business. I think that's it. And with that, I hand over back to Joachim for outlook and summary.

Yeah, thank you, Oliver. So let's look at what we expect from a markets for the remainder of the year. For Europe, more or less, it continues to be a market that is bottoming out with a slight recovery. We expect for truck and trailer a slight growth from 0% to 5%. The same is true for agricultural tractors and for the hydraulics business. The biggest change to the previous assumptions you see in America is a strong increase in the expectations for truck a slight increase for trailers, truck mainly driven by the EPA 2027 pre-buy effect and also quite honestly by a pent-up demand because production rates have been far lower than the long-term average. So we believe that with the momentum we've seen in the last weeks that we may even exceed the perspective that you see here for the Class A trucks in North America. As we mentioned, trailer slight increase, tractors more or less the same as we've seen so far, and also hydraulics only a slight increase. For Asia and Pacific, we expect the growth story to continue, and the Chinese truck OEMs, they are growing, they export to the Global South, And we're benefiting from that with our market share that we have with these global OEMs. The demand in India has been growing and continues to grow. And we expect that to also continue throughout the year. And the same is true for tractors. And on hydraulic, we see the market growing even stronger so that we believe that we can benefit with our hydraulic products from that. How does that translate to the overall business? You know, based on the strong first half year and based on the market outlook, we feel very comfortable with the outlook that we've given and the guidance can be confirmed. So we expect to grow single digits in sales to grow mid to high single digits in adjusted EBIT. And with that, we will improve our EBIT margin above last year, where we had the nine point five percent. will be around 2.8% of sales, and our working capital will be in the range between 17.5 and 18.5% of sales. So what should you take away from this call? For the first half year, sales were up 12% to 857, and adjusted EBIT up 21% to 88 million, with the margin improving 8%. 0.8% is points to 10.3% well inside our strategic corridor of the 10 to 12%. The diversification that we have within the commercial vehicle industry is delivering organic growth of around 9% organic growth in H1 in all regions and in all business lines paired with market share gains also across all business lines. The rolling last 12 months figures confirm the profitable growth. Those 12 months figures are 1.627 million in sales. So from last year, 1st of July until 30th of June of this year, adjusted EBIT at 160 million and adjusted EBIT margin of 9.8%. So we see the rolling LTN numbers grow quite nicely. Capital efficiency is high, rosy, up to 3.5 percentage points to 16.3%, showcasing an effective capital allocation. Free cash flow up 17%, closing the gap to prior year. And despite the fact that we allowed a working capital increase in order to allow the growth in sales and also to protect our supply chains to a certain degree, And as Oliver mentioned, we should have a little bit of support here in the second half year with the ability to release some of that working capital. With that, our synergies are supporting our growth and our profitability. And we are very comfortable with our outlook for 2026 and can confirm that. So thank you very much. And we're now looking forward to your questions.

Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question from the webinar may click the Q&A button on the left side of the screen and then click the raise your hand button. For written questions, please click the Q&A button and the text button and type your questions. If you are connected by a phone, please press star followed by one on your telephone keypad. You will hear a tone to confirm that you have entered the queue. If you should move yourself from the question queue, you may press the lower your hand button from the webinar or press star and two on your telephone. Anyone who has a question makes you up now. One moment for the first question, please. And the first question comes from Nicolai Kemp from Deutsche Bank. Please go ahead.

Yeah, good morning. It's Nicolai here from Deutsche Bank. And let me start by saying congrats to a strong quarter. A couple of questions from my side, and I can take them one by one. Let's start with the U.S. And given the strong Class 8 orders we saw over the last months, we also share your view that H2 will be much stronger. I'm just not sure how much is related to the market based on higher freight rates and how much is driven by the EPA 27 kind of a pre-buy effect. And the reason I'm asking is, If it's turned by the freight rate, it would maybe point to an underlying improvement. If it's turned by the EPA pre-buy effect, then there could be kind of a, not a big cliff, but it could be slowed down again in 27. Start here.

Yeah, Nikolai, thanks for the question. You know, that's the million dollar question, obviously. But I think we have both. We have and that's why I mentioned the pent-up demand. I believe that we have the pent-up demand in North America because build rates especially of class A tractors have been quite a lot lower than the average. The vehicles are used and the new vehicles give you a benefit in fuel consumption. Some of them will actually be electric in the future also that will be a driver. So I think we have a combination of both. and I now believe more in pent-up demand that will continue in 2027 than I did maybe three months ago so so yes there is a certain EPA 2027 but that's not the only driver one because the regulations is not as strict as it used to be some of the OEMs will actually continue with the existing engines of just announced that they will continue with the existing engines until 2027. So not all of that is EPA driven. It is a base demand that is increasing due to the pent-up demand that has been generated.

Okay, understood. Then moving to Europe. Yes, you mentioned a bit of pressure with higher freight rate, high input costs. I assume you will raise prices to offset these?

Yes, we typically have that effect when freight rates and energy costs goes up. In the aftermarket, we can relatively quickly adjust the prices. If we believe that it's a consistent price increase, then we will do that relatively quickly. in the OEM contracts, we have trailing price elements with the OEMs that we have agreed, so that means the pricing will be adjusted after three months, six months, partially after 12 months, but we've recalculated, or we've agreed that 12 months will go to six months, so we had a few OEMs where we had 12 months adjustments, but we're now with all OEMs to three or six months adjustments. So that means it can take until it's in the calculation and until it's then being paid more than six months until you see that effects. And therefore the answer is yes, it will be driven into the prices, but we will have this delay that we typically have. And you probably remember when costs went down, we had a positive effect because we benefited even though we are experiencing the lower cost already. Now we're having to a certain degree to assume those higher prices until the higher cost until we can forward it to the higher prices.

Makes sense. And last one, a bit of housekeeping. Did notice that your tax rate was elevated in H1 at 40, 34%. Is that the full year run rate or or should we expect a lower run rate for the income tax rate for the full year?

To be honest, it's difficult to assess from my point of view our tax rate based on report. I'm assuming you are linking that to reported net income. I would recommend that you give Omi a call afterwards. From my point of view, All these PPAs adjustments that you have seen in the net income, which as an example, which we are, I think it was 17 or whatever for the first half here. These are not tax deducted. So at least you should add those 17, right? Then ending up probably with 50 or so. And if you then do your math, I think you'll come to a much better ratio, which is relatively typical for a corporate between 25 and 30%. To a certain extent, you are right. We are seeing higher tax rates in China at the moment, and that's a structural impact that's going to continue.

Okay, that's it. Thank you.

Then the next question comes from Jasmin Steilen from Bärenberg. Please go ahead.

Many thanks for taking my questions. I have also three, if I may, and we'll also take them one by one. So the first on your guidance, I'm fully aware of the historic seasonality with H1 being stronger than the second half. However, even adjusting for the divestment of the Tipper business, your sales guidance, at least at the lower end, looks or implies for H2 significant deterioration of the 9% organic growth rates we have seen in H1. could you walk us through the assumptions also as you became more optimistic on your industry outlook for trailer in Americas, but also for hydraulics in Americas and APEC, that would be very helpful.

Yeah, I'll try to start and then I'll hand it over. I'll let the CEO do the math. As I mentioned, we are very comfortable with the guidance at this point in time. But if you look at the last 12 months figures, you see that we had 6% of sales growth in the last 12 months. And we will compare to a second quarter or to a third quarter and the fourth quarter of last year that have been structurally better than the first two quarters. So we will not see the same growth. Of course, you're right, we expect that organic growth to be consistent and to also flow through. So with that, looking at the last 12 months numbers and the outlook, we're certainly at the upper end and quite comfortable with the guidance we have at this point in time. But we would like to reassess the situation once we have all the call-ups for North America. We get the call-ups updated typically after the vacation period. And some of the announcements that we had from the our customers that we've seen in the press they have not yet translated into the EDI call-offs that we have so we'd like to see those and then reassess if we are still in the guidance amount and then just let me add with some numbers right for sure we are not talking about the lower end of the guidance but let's talk about the typical seasonality and the midpoint of the guidance if you just

do that seasonality math you would and just for the sake of disclaimer just doing math had nothing to do with our guidance you would end up with 1645 or so I just did this morning and when you done exclude I don't know eight or ten million for from the potential sale of the tipper business is that closest end of September or beginning of October you end up with 1635 or something when you that compare when you compare that with the consensus I think we are really comfortable with that. And that basically is the basis for us at the moment to say we are fine with the consensus, but for us that shows from a current point of view, fair assumption of the outlook, which is probably in the middle of, a little bit up of the midpoint of our guidance. And as you are in session, we will reassess that around the IAA, et cetera.

Okay, perfect. Thanks very much. Then my second question is on the agribusiness. So we have seen SEMA business monitors stabilizing on the reduced levels, and I'm aware that your exposure is more on the livestock than arable or harvesting equipment. However, we have heard kind of some negative noise from pig farmers, for example, that seems to struggle. Could you share your view on the order intake or any indications you receive from your agri customers in Europe currently?

I mean, it's a market that has a lot of drivers. But what we see in Europe is that the dealers are continuing to buy and I cannot confirm that we see any weakness. Of course, the SEMA index is an indication, but it's not necessarily that drives the farmer to the dealer to buy more implements or to buy a new loader. So we as I mentioned we expect as we've shown in the guidance that a slight increase in Europe of the of the market between zero and five percent and and that is what we also hear from our dealers and yes your SEMA index can be fluctuating But we combine that with what we hear from our sales people that visit the dealers and visit some of the large farmers. And that's our view, the 0 to 5%.

Yeah, and I mean, on top of probably market fluctuation, and we have a growth now in Europe, which might affect the one or the other, right? We see a strong growth in our implement portfolio. And that's probably also a little bit of a capital expectation that the farmers do at the moment, right? even if in case they are not super certain about the recovery of the whole industry so to speak they invest in the infinite because they need to they need to do the work on the farms right and they have replacements and we have a nice portfolio ramped up part of our ocean strategy and you're seeing here double digit organic growth in that implemented portfolio continuously and that that comes with a very good margin yeah and the harvest so far has not been bad yeah so

Serial harvest in Europe has been quite well, despite the lack of water, but that was not impacted. So we'll see later in the year when we talk about corn, there may be a negative impact, but that also does not necessarily translate into our sales because they still need the equipment.

So basically you assume that the Demand you currently see from the dealers is underlying demand from the farmers and not a rebuild of the stocks at the dealer inventory level. So my question is, do you expect kind of solid development continuing also into 27 or might we see a risk of destocking again?

I believe that the stock levels that we see at the dealers right now is appropriate for their selling level. Last year, they were reducing the stocks, they were building up stocks, and we probably benefited to a certain degree in the first half year with that. That's why we have this strong growth in agriculture. But what we have considered in our guidance and in the market overview that I gave that assumes more or less stable stocks, and I think that is the right assumption. for the business that the dealers expect.

Okay, perfect. That's all very clear, and I'll step back into the line. Thank you.

Thank you, Yasemin. I think we have some written questions, right, or written posts.

If you would like to ask a question from the webinar, please click the Q&A button on the left side of the screen and then click the raise your hand button. For written questions, please click the Q&A button on the text button and then type in your questions. If you are connected via phone, please press star followed by one.

Yes, we have a written question from Sebastian Ubert from MPCM. Can you stay at above 10% margin in the quarters to come this

his first question and then do you still see just finishing 2026 at the upper end of the guidance like you flagged with Q1 in the second one I can at least start you may have but in general that's our goal and underlying so to speak that should be the case but keep in mind and I mentioned that we have a seasonality in our business and that's also going to happen in 2026 so just based off that we So that's a topic, but the underlying runway of the business, especially driven by the synergies, should support that. What was the second part of your CEO's finishing of the guidance? As I mentioned a little bit, we just were talking about the sales guidance and the consensus is around 6%. Our guidance is that EBIT will grow higher than sales. So yes, that by itself implies that we are with the profitability guidance probably at the upper end of the corridor at the moment.

I don't know if you. No, nothing to add to that. I think we've talked about the guidance. And yes, we can confirm we're very comfortable with it and certainly at the upper end.

OK. There are no further questions right now that I see on the written or on the line.

Great. Then I would like to thank you for your interest and your attention for our record first half year. And we're looking forward to see you either at the IAA or then at the next call of our Q3 numbers. Thank you very much.

Ladies and gentlemen, the conference is now over. Thank you for choosing Coruscall and thank you for participating in the conference. You may now disconnect your lines. Goodbye.