Kion Group Ag Unsp/Adr

Ladies and gentlemen, welcome to the QION Group Quarter 1, 2026 update call and live webcast. I am Chloe, the course call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star then 1 on your telephone. For operator assistance, please press star and 0. must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Rob Smith. Please go ahead.

Thank you, Chloe. And good afternoon, ladies and gentlemen. Welcome to our update call and webcast on the first quarter of 2026. Please refer to our update call presentation on the IR website if you're joining by telephone. I'm going to start with a quick summary on the first quarter of 26 and talk about some recent business highlights. And then Christian's going to take you through the detailed Q1 financials and reiterate our guidance for 2026, and I'll be back for some key takeaways, and we're looking forward to the Q&A thereafter. Starting on page three, please. Dion had a positive start into 2026, in line with our expectations. Order intake was 3 billion euros, driven by both segments. Revenue was slightly below the prior year order level. Adjusted EBIT was 205 million euros, corresponding to an adjusted EBIT margin of 7.4%. Both ITS and IAS segments contributed to the increased profitability. And free cash flow was positive at 47 million euros, and included the cashed out for the efficiency program and higher incentive payments. On page four, let's talk about the exciting things that are going on at Kion right now. In the context of our strategic collaboration with NVIDIA and Accenture, Lighthouse Physical AI projects moved from simulation last year into live warehouse operations. showing how advanced AI is turning into measurable value for customers. At the GTC conference in San Jose, California with NVIDIA in March of this year, we showcased two core applications, an autonomous industrial truck supporting day-to-day warehouse operations and AI-based safety-certified human detection enabling automated trailer loadings. We've deployed these at a warehouse of GXO Logistics, the world's largest pure-play contract logistics provider, in their warehouse in Epinoy, France. This pilot makes an important step forward in demonstrating physical AI solutions and how they deliver clear, tangible value for our customers. Another highlight in the first quarter was the Logi Mat in Stuttgart, where we presented a true milestone in intralogistics. the first market-ready, serial-produced solution for the autonomous loading and unloading of trucks. We demonstrated how the receipt and dispatch of goods practically takes care of themselves thanks to the new product called the AXL IGO from Still, leaving employees hands and minds free for more value-added tasks in the warehouse. In addition to these two great milestones, we also made an exciting addition to our startup automation portfolio and deepened our technological footprint in warehouse automation through an M&A action. With a strategic equity investment in Ziku Robotics, a leading provider of pallet storage robotics based in China, we marked the next step in building an ecosystem of automated technology partners. The partnership brings together Kion's extensive experience in industrial trucks, inter-logistic solutions, and orchestration with Ziku Robotics Innovation and Warehouse Robotics, a six-way pallet shuttle, and high-density storage technology. Through an expanded portfolio of automation warehouse solutions, Kion will deliver warehouse offerings that provide higher efficiency, better space utilization, and greater flexibility. and the investment is already bearing fruit. Last year, we jointly unveiled the next-generation pallet warehouse solution, the AI Smart Warehouse. The solution integrates Ziku Robotics' latest pallet handling robots, high-speed lifting systems, and AI intelligent software platforms. I'll now hand it over to Christian, and he'll take you through our detailed Q1 financials.

Thank you, Rob. Let's go to slide six. for the key financials for the ICS segment. Contrary to our earlier expectations, order intake increased by 11% year over year to almost 73,000 units. The increase contains significant pre-buying activity in the later part of March, following a price increase announcement becoming effective on April 6th, 2026. is a good example of our agile pricing strategy where we regularly review the appropriateness of the current pricing. This price increase was announced to cover expected increases in material and energy costs resulting from the war in Iran. New orders in value terms increased 4% year-on-year. The slight decline in the service business was substantially more than compensated but a 12% growth in the new truck business, which also points towards a good product mix in the quarter. Revenue was down 5% year-over-year driven, but a 9% decline in new truck revenue, which was due to the lower order book at the end of 2025 compared to the end of 2024. Adjusted EBIT was 183 million euros, and was comparable to the prior year level. Savings from the efficiency program and lower share price driven expenses for the long-term incentive programs were offset by the continued insufficient fixed cost absorption. The adjusted EBIT margin increased to 9.1%. I will now continue on page 7, which summarizes the key financials for IAS. For the fifth quarter in a row now, order intake showed year-over-year growth. The increase of 26% was driven by a 56% growth in business solutions. Main verticals contributing to the growth were purely e-commerce, 3PL, and food and beverage. Order intake in services was slightly down due to the positive one-time effect in the spare parts business in the prior year quarter. The order book increased 23% year-over-year due to the increased order intake as well as to a lesser degree positive foreign currency effect. Overall, revenue increased by 12% year-over-year driven by a 30% growth in business solutions. The sequential development follows the order intake development with approximately six months time lag. The trusted EBIT increased strongly Year-over-year, 46 million euros, corresponding to an adjusted EBIT margin of 6%. Higher revenues, deferral reduction in legacy projects, improved project execution, as well as lower expenses for the long-term incentive programs contributed to the increase in profitability. The sequential decline in adjusted EBIT is a result of the sequentially lower revenue. Now let's quickly run through the key financials for the group on page 8 then. Order intake reflects the growth in the new business in both operating segments, which also had a positive impact on the development of the order book. Revenue in IES continues to benefit from the order intake recovery since the beginning of 2025, offset by the expected revenue decline in the ITS new drug business. Adjusted EBIT increased to €205 million, corresponding to an adjusted EBIT margin of 7.4%. Profitability improvement was driven by both operating segments, supported by savings from the efficiency program, lower expenses for long-term incentive programs, and slightly lower expenses in the corporate services and consultation line. Page 9 now shows the reconciliation from the adjusted EBITDA to group net income. Non-recurring items in the first quarter included only 5 million euro expenses relating to the efficiency program. You may recall that we said that out of the total expenses of 180 million euros, 169 million euros were expensed in 2025 already, and the small remainder will follow this year. PPA items were in line with the usual quarterly levels. Net financial expenses improved year over year, mainly due to the lower interest expenses on financial liabilities and the improved net interest result from the rental and leading business, partially offset by costs in relation to foreign currency and interest hedging activities. REITX earnings therefore increased to 141 million euros. Tax expenses of 49 million euros in the quarter corresponded to a tax rate of 35%, and thus are in line with our full year expectations. Please refer, as usual, to the slide in the appendix with the unchanged housekeeping items. Accordingly, net income attributable to shareholders reached 19 million euros, corresponding to earnings per share of 69 euro cents. Let's now continue with the free cash flow statement on page 10. Free cash flow in the quarter reached positive 47 million euro despite the cash out for the efficiency program as well as high incentive payments. Lower capital expenditure is in line with our full year expectations as the larger footprint projects of the last years are coming to a conclusion. The increase in net working capital is seasonal and should reverse again over the course of the year. There was no material cash outflow yet for mergers and acquisitions in the first quarter of 2026. Moving on to page 11, which shows the pretty stable development of net financial debt and our leverage ratios. In March of this year, we successfully placed a corporate bond with a total volume of 500 million euro using the public capital market under our established EMTN program. Despite the challenging environment, the issue attracted a great deal of attention from investors. The unsecured bond, which matures in March 2031, was issued at a price of 99.487% and has an annual coupon of 4.125%. From Q2 onwards, the proceeds from the bond will be used to refinance existing liabilities in the short-term rental and leasing business to create opportunities for future growth. Slide 13 lays out our guidance as presented with the full year 2025 results. Since we provided a detailed walkthrough of our guidance at the full year 2025 update call at the end of February, we will skip it here in the interest of time. For those of you who are interested in the explanation, please refer to the transcript which is posted on our investor relations website. The geopolitical risk have heightened since we published our full year 2026 guidance at the end of February. In effect, the war in Iran started just two days after our results publication. We have limited direct impact as our revenue in that region is around 1% of total yield revenue. However, we do see potential impact from higher material and energy costs and vulnerabilities in the supply chain. Many capital markets participants have drawn parallels to the situation in 2022 with the start of the war in Ukraine, which was also characterized by inflation and supply chain disruptions. We here at Kion had learned many lessons in 2022 and expect the measures we developed to increase our agility and resilience in volatile times to serve us now in 2026. The April price increase in ITS is one such measure. The inclusion of price adjustment clauses in the terms and conditions and contracts is a further measure, as is the building of safety stock and developing additional supply sources for key affected components. We therefore confirm our outlook for fiscal year 2026 for the group and our two operating segments as of today, subject to the condition that no additional significant burdens arise from the current geopolitical situation. On one hand, these could result from significant disruptions to our supply chains, for example, due to trade barriers or shortages of important components, or from a decline in demand due to a significantly reduced willingness of customers to invest. On the other hand, the guidance assumes that the steps carried out to counter cost increases will have the anticipated impact. And with that, I now hand back to Rob for our key takeaways.