Kion Group Ag Unsp/Adr

Ladies and gentlemen, welcome to the Keyon Group Quarter 3, 2026 update conference call and live webcast. I am Chloe, the conference call 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 and 1 on your telephone. For operator assistance, please press star and zero. The conference 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. Good afternoon, ladies and gentlemen, and welcome to our update call and our webcast on the Q3 2026 results. Please refer to our update call presentation on our IR website if you're joining by telephone. I'm going to start with a quick summary of the third quarter and some recent business developments, and Christian will then take you through the detailed Q3 financials and talk about our outlook for 2026, which we updated on October 14th. Then I'll be back with some key takeaways and we'll start the Q&A session. Let's start on page three. Order intake was 2.7 billion euros, 1% lower versus last year. This was driven by ITS, where order intake in EMEA fell behind our expectations as well as market growth, especially in the value in the economy truck segments. In contrast, we're showing outperformance in APAC, particularly in China, which shows that we can succeed in a very competitive market environment. It also shows that we need to further leverage our existing capabilities in China, even more to reverse the developments in demand. Revenue was up 5% to 2.8 billion euros, driven by both segments. Adjusted EBIT increased 7% to 203 million euros, driven by IAS. And the adjusted EBIT margin was 7.2%. Free cash flow was positive at 99 million euros and included cash out for M&A. With physical AI, Kion is creating measurable value in real supply chain operations. Artificial intelligence, digital twins, autonomous vehicles, and technology partnerships help customers deploy automation faster, improve safety, At GXO's site in Epignoy, France, Kion has integrated autonomous vehicles into daily warehouse operations. The deployment reduced on-site implementation time by more than 60%. And with further new AI capabilities, we expect to further reduce implementation time beyond that point. Keon used AI-powered digital twins and simulation technologies to test, validate, and optimize autonomous systems before the physical deployment. This cuts commissioning time from weeks to just a few days. Keon is working with NVIDIA on AI-based safety concepts using the NVIDIA Halos blueprint to support safe operation of autonomous vehicles alongside warehouse staff. We're collaborating with NVIDIA, Accenture, and other partners to combine expertise in simulation, computing, spatial intelligence, perception, and autonomous operations. At a Rossmann regional warehouse, Keon delivered the robotic case picker in October 2026. The AI-enabled autonomous truck identifies, picks, and stacks packages in a challenging commissioning environment. Following strong pilot results, Russman is increasing the onsite fleet.

So let me take over then. Let's go to slide six for the key financials for the ITS segment. Order intake in units in the third quarter of 2026 increased by 13% and was mainly driven by warehouse equipment and regionally by APEC and Americas. Order intake in value terms was 1% lower year-on-year. Service growth of 5% almost entirely compensated for the mixed-driven 9% lower new truck orders. Revenue increased 1% year-over-year. Service growth of 4% more than compensated for the 3% lower new truck revenue. Adjusted EBIT reached 163 million euros mainly due to lower capacity utilization and adverse currency exchange effects, offsetting savings from the efficiency program and lower expenses for long-term incentive programs. The adjusted EBIT margin was 8.3%. I will now continue on page 7, which summarizes the key financials for IAS. Order intake showed a slight increase of 1%, driven by a 7% growth in services, which benefited from a double-digit increase in modernizations and upgrades in particular. Orders from the PurePlay e-commerce vertical more than doubled and accounted for 61% of business solutions orders. IAS also grew its orders in the general merchandise and apparel verticals. Overall revenue increased by 16% year-over-year due to higher order intake in recent quarters and driven by a 22% growth in business solutions. Service revenue increased by 8%. Adjusted EBIT showed a strong increase of 39% year-over-year to €66 million and the adjusted EBIT margin increased by 120 basis points to 7.4%. Higher revenues as well as lower expenses from long-term incentive programs contributed to the increase in profitability. Now let's quickly run through the key financials for the Group on page 8. Order intake reflects the development in the two operating segments. Revenue growth of 5% was driven by both operating segments. Adjusted EBIT increased 7% to €203 million corresponding to an adjusted EBIT margin of 7.2%. The profitability improvement was driven by the IAS segment and slightly lower expenses in the corporate services and consolidation line. Page 9 shows the reconciliation from adjusted EBITDA to group net income. The only thing that may stand out here is the asymmetrical development in the earnings before and after tax. This is due to the unusually low tax rate in the prior year quarter. Last year, there was a benefit from a one-time revaluation of deferred tax liabilities resulting from Germany's federal government's decision in June 2025 to reduce the corporate income tax rate starting in 2028. Let's now continue with the free cash flow statement on page 10. The cash flow in the quarter reached 99 million euros. The increase in networking capital is due to higher trade receivables in IAS from outstanding milestone payments. A large part of these receivables are expected to be paid by the end of this year. Free cash flow included 53 million euro M&A cash out, especially for the 70% stake in Smart Innovation NB and the strategic expansion of the portfolio of product solutions for warehouse automation and supply chain robotics. Moving on to page 11, which shows the development of net financial debt and our leverage ratios. Please let me remind you that beginning June 30th, 2026, the calculation of industrial net operating debt was adjusted and Dedux the $495 million financial debt used for the refinancing of the leasing business that is included in the net financial debt. We had a slight decrease in net debt and in the INOT as of September 30th. Leverage ratios remained unchanged compared to the level as of June 30th. Slide 13 then lays out our updated guidance for fiscal year 2026 which we published on October 14th. For ITS, we have lowered the midpoint of the guidance range based mainly on the order intake in the third quarter and its expected impact on Q4 revenues as well as on the adjusted EBIT. We expect revenue between 8.1 and 8.3 billion euros and adjusted EBIT between 690 and 740 million euros and the full year 2026. For IAS, we have narrowed the guidance brackets based on better visibility on the remaining weeks of the year. We expect revenue between 3.35 and 3.45 billion euros and adjusted EBIT between 230 and 250 million euros for the full year 2026. For QIUN, this results in narrowed guidance ranges with lower midpoints in all outlook metrics. Please note that although the slide on the housekeeping items in the appendix, you will find that we have made a minor adjustment to our full year expectations for non-recurring items. With that, I hand back to Rob for our key takeaways.