Kalmar Oyj B

Good morning everyone and welcome to Kalmar's first quarter results webcast. My name is Karina Geber-Teir and I'm heading the investor relations at Kalmar. Today's result will be presented by our president and CEO Sami Niiranen and CFO Sakari Ahdekivi. The presentation will be followed by a Q&A. And as always, please pay attention to the disclaimer. And now over to you Sami.

Thank you very much Karina and good morning everyone. I'm pleased to share with you Kalmar's first quarter results which demonstrate solid performance driven by our focus on operational and commercial excellence. We managed to generate stable revenues and a resilient margin by successfully leveraging Kalmar's leading position in the market and driving excellence in our operations. We advanced our strategy towards sustainable growth and focused on building upon the strong foundation. Our orders received increased by 20 percent from last year and overall demand was favorable in Q1. Despite lower sales, we delivered a resilient profitability of 12.0 percent which was supported by the record high services profitability. We have continued our focus on growth and investments in sustainable innovations and we are proud to announce the launch of a five-year move to green R&D program including a 20 million euros funding from Business Finland. However, today there is an increased level of uncertainties in the market environment affected by for example the recent tariff announcements and geopolitical tensions. As mentioned, our orders received in the first quarter increased by 20 percent compared to last year and total 480 million euros following the good development from the previous quarter. Demand in ports and terminals remained stable. We saw some early market recovery signals in the beginning of the quarter in the US distribution and customer segment. However, there is an increased level of uncertainties in the market environment today. Europe performed strongly and remains our largest region in terms of orders representing 47 percent of our first quarter's order intake. Our order book was at the good level at the end of the quarter and 86 million euros higher than at the end of 2024. Then moving on to our sales performance. Our sales in the first quarter were 398 million euros. The lower sales levels we have seen are impacted by the lower orders in 2024. The services segment share of sales increased to 36 percent in Q1 which is providing resilience to our overall revenue. The softness in North America is visible in sales and Europe was clearly the largest region representing 45 percent of the sales. We have a well-diversified business with four strong customer segments. As mentioned our services share of sales was 36 percent in Q1. A core portfolio share of sales increased to 43 percent which is showing the strong interest towards our sustainable solutions. And we have a strong footprint in our three main markets which are Europe, the Americas and AMIA. With an installed base of 68 000 machines globally and a strong presence in over 120 countries for sales and services, our extensive reach remains a significant asset. This robust foundation fuels our active acceleration of future service growth through innovative offerings and digital solutions. Today we have over 1400 own service technicians around the globe and four factories which are located in Poland, the US, China and Malaysia. Since January this year they are all now decentralized and reporting directly to the divisions. The world today is different than a few months ago with an increased level of uncertainties related to recent tariff announcements, geopolitical tensions and the risk of a global macroeconomic downturn. It's still too early to draw conclusions on how all this will affect our industry, the demand environment and global trade in the short term. But we will monitor the situation closely and have made different scenarios and are ready to act swiftly as needed. Despite uncertainties we still see growth indications in the market indicators. The global GDP, global manufacturing and global retail output development are all expected to grow around two to three percent this year. But as late as yesterday we received the latest container throughput development estimates from Drury and the global container throughput is expected to decrease by one percent this year. Let's then take a closer look at our large base of over 14 500 connected equipment around the world. By following the running hours of these equipment we get a good view of the activity and demand in different regions. We see positive development trend both year on year and quarter on quarter which is indicating increased activity at our customer sites during the first quarter. However at the same time we have to remember that there are now more uncertainties in the market. The eco portfolio share of total sales has remained high and increased to 43 percent and eco portfolio share of order intake was 44 percent in Q1 which is demonstrating our customers strong interest towards electrical and hybrid solutions as well as sustainable service solutions. The fully electric machine share of equipment orders for the last 12 months was 11 percent and we continue to see significant potential for electric equipment. We have announced three orders from the quarter including 32 straddle carriers to APM terminals in Morocco, six hybrid straddle carriers to fourth ports in the UK and five reed stackers including a Calmar complete care service agreement to SSAB Öxälösund in Sweden. We are also happy to announce some actions towards sustainable growth. As I mentioned earlier a five-year move to green R&D program including a 20 million euros funding from Business Finland was launched during the first quarter. This program brings together over 250 ecosystem partners including industrial organizations, technology companies, research institutions and universities and the goal of this collaboration is to initiate and lead large-scale research and development projects, increase R&D investments and to build solutions that enhance the efficiency in heavy material handling operations and support its transition to a low carbon future. We also started the sale of our third generation electric terminal tractor in North America. This terminal tractor is fully designed and built in-house at our Calmar's Ottawa facility and our strong North American dealer network is trained and certified to support the new terminal tractor. Additionally we will expand our global delivery capability by starting production of electric empty container handler and heavy forklift truck at our Shanghai facility which is showing our ability to meet our customer expectations globally. Both our equipment and services segments performed well in the first quarter. The equipment margin is impacted by the lower sales volume and the services profitability continue developing positively. The order book has strengthened in both segments. So on my last slide here I would like to remind you about our performance targets 2028 which we are fully committed to. So thank you all for now and next I will hand over to Sakari.

Thank you Sami and good morning to all of you also from my side. What I will be talking about is to start off as we usually do just to recap on our financial profile and where we are with that then we'll dive a little bit deeper into the reporting segments then we will go through the balance sheet and cash flow highlights and then finish off with our guidance for the full year 2025. The financial profile as you remember is presented here in LTM figures. Our financial profile has remained strong which gives us an excellent possibility to develop the business and target growth as we move forward. Our order book is now at 1 billion 41 million euros and this is actually almost 140 million higher than what it was at the low point in Q3 of last year and we are now above end of 2023 levels in terms of order book. Gross profit levels have remained strong and comparable operating profit on an LTM basis is at 12.6 percent. Orders received is now higher than sales on an LTM basis thanks to the strong order intake both in Q4 of last year as well as now the first quarter of 25. We have continued our strong cash generation and our leverage is now standing at 0.1 times and our gearing is at 4 percent. I will come back to that. Return on capital employed is at 18.4 percent and we have a close to 100 percent cash conversion over the last 12 months. Now equipment orders have actually increased by 31 percent compared to the same period in the previous year. This was the second consecutive quarter of strong order intake in equipment and I could say that we saw positive growth signals in the beginning of the year across the board. Of course then the future looks more uncertain as we move forward but the beginning of the year was strong in terms of orders. Sales on the back of the lower order intake in 24 and the lower order book coming into the year is of course significantly lower in equipment than it was last year and I think this is important to understand that the volume of course has an impact on the profitability of the equipment segment. However, it's still at a good level at 11.6 percent. I think the important thing to understand here is as whereas the commercial margin has continued stable or even increasing, of course there's less volume and less margin but there's still a lot of contribution to cover the fixed costs which on at least a medium term are as per definition fixed and therefore the lower volume has an impact on the margin. But if we would look at this on the gross margin level this would be still an increasing picture. Services has seen very positive momentum. We have continued to grow the orders, sales are up and profitability is clearly up at 19 percent for the quarter supported by on the order side by significant contract renewals and upgrade projects but then on the profitability with good execution. And services is of course providing resilience to the entire CalMAR business. On the profitability at 19 percent this was supported by good commercial performance, execution and increased activity in our installed base. We have promised that we would come back to our 50 million gross efficiency improvement program in connection with this Q1 report. So here we go. The execution of our driving excellence initiative is ongoing and we are and continue to plan to reach the 50 million of gross efficiency improvements by the end of 2026. During the first quarter we have progressed the implementation and we have reached a run rate of approximately 9 million of annualized gross efficiency improvements so far. And the majority of these improvements are coming from our commercial and primarily sourcing activities. However driving excellence is of course much broader than that. The main components of the program are commercial excellence so this is around pricing, supply chain optimization and sourcing and then operational excellence which is mainly consisting of process optimization and continuous focus on competitive operational cost-based improvements and faster decision making. So quite a broad program all in all focusing on both external factors as well as internal. As said our return on capital employed enables strong long-term growth. 18.4 percent is the reported figure. However if this would be corrected for the items affecting comparability which were significant in 2024 the figure would be 3.6 percentage points higher at around 22 percent. The balance sheet is strong and we have continued to lower our leverage as well as our gearing. As said leverage now at 0.1 times EBITDA. On the financing side then we have nothing major maturing during 2025 and you see the maturity profile of our debt financing there on the right hand side of the picture. And gearing now is at 4 percent. Of course this is before dividends were paid out then in the beginning of the second quarter. So cash generation has continued strong. We generated 85 million of cash flow from operations before finance items and taxes in Q1 and the cash conversion rate was 97 percent for the last 12 months. And this was also the seventh consecutive quarter of positive cash flow generation. Finally as a reminder we have our guidance for 2025. We maintain the guidance and expect that comparable operating profit margin will be above 12 percent in the full year 25. Thank you.

Thank you Sakari and we'll get Sami back to the stage and I know it's a very busy day today so let's immediately start with the Q&A and I'll hand over to the operator right now.

If you wish to ask a question please dial pound key five on your telephone keypad to enter the Q. If you wish to withdraw your question please dial pound key six on your telephone keypad. The next question comes from Antikansenen from SEB. Please go ahead.

Good morning guys it's Antik from SEB. Thank you for taking my questions and I will start with the demand side of things. So I mean you mentioned strong equipment orders during the quarter. You referred to strong demand recovery early in the quarter with increased uncertainties but could you provide a little bit more color on how have you seen the run rate trending if you look at January February versus let's say March and April. Has there been already a concrete step down on the level of orders that you are taking or are you just referring to a bit of uncertainty how things are progressing progressing here?

Yeah thanks for the question. Yeah we are referring to a higher level of uncertainties definitely and of course if you look a little bit back Q4 Q1 we had a strong or intake in both quarters basically almost on the same level but of course going towards the end of Q1 as well as of course now in the beginning of Q2 of course the uncertainty level has increased. That's the fact and in certain parts of the world the customers are a little bit more in the wait and see mode of course because the situation is unclear.

Yeah just trying to kind of figure out what was kind of a realistic from as a run rate basis. I really seem to come back to the levels that we saw a year ago or and also kind of if the I don't know uncertainty and slowness isolated to the US market or is it also visible in Europe where at the same time you are seeing the utilization rates up quite a lot year over year.

Yeah I think it's too early to draw conclusions on how it will short term behave basically as we mentioned in presentation as well but when it comes to different regions areas of course the high uncertainties they are the highest in the US market. That's what we can see and of course when it comes to running hours that was very positive development in Q1 all over I would say but especially in Europe if you look at those numbers. So I think the US market is most uncertain at the moment and that is reflecting of course the customer behaviors as well and then Europe has been going very strong in Q1.

Okay and then the second theme that I had was with Q1 equipment deliveries out of the backlog. So just a question was this as you expected or does kind of the tariff environment provide some headwinds also for deliveries and when should we start to see equipment deliveries growing year over year basis now that you've had positive book to bill for six months and strong order growth.

Good question. No major headwind in Q1 when it comes to equipment deliveries and of course our lead time for our portfolio is between three and 12 months of course that gives an idea of course the backlog and the behavior there as well when we now have had the last two quarters on a good level in order intake.

Yeah maybe to add there so I think this was expected and no nothing kind of surprising there and it's coming from the fact that we had the low order intake quarters in the middle of last year and if you consider the three to twelve month lead time and an average of that that's roughly where the timing hits then.

Okay and then the final question for me is on the Excellence Initiative program and the savings. If I would try to model the improvements how should I kind of split the impact between the segments that you report services and equipment?

Well I would say that the improvements of course are coming from now in the Q1 as we said mainly from the sourcing side so I would say that probably a little bit more weighted towards the equipment segment.

Okay thank you very much. Thank you.

The next question comes from Pony Leighton-Markey from Danske Bank. Please go ahead.

Hi I have a few questions. Firstly going back to the demand discussion I understand what you are saying that there's more uncertainty but could you kind of quantify or be a bit more specific what does it mean that has the US market completely stopped or is it more that you see customers kind of taking more time to decide or kind of how big of a change is this compared to Q1 that you have seen in early Q2?

Yeah absolutely. So in the beginning of the year in February or Q4 reporting we mentioned a gradual improvement with terminal tractors in the US market so what we can say is that okay customers are more hesitating in that segment in that area right now and of course maybe slowing down the gradual improvement I would say going back to the mode that we that we were at last year for instance so that's what we see. It's not the complete stop of the sales even in the US but of course the customers dealers they are more in the wait and see mode. Of course when the tariffs and the price increases that we have implemented of course are affecting that market.

Maybe to add there that you know we've been referring to the inventory levels of the distribution market and the terminal tractors and that as such you know has more or less normalized so from the inventory side I think it's a more or less healthy situation but then the uncertainty is now playing into it.

And as latest last night I got message from the where we have a big event ongoing and the one word that describes it at the moment indecisiveness that there is a need to buy equipment but then there is kind of hesitation amongst the customers.

Okay thank you. Then on Europe you mentioned several times that it's strong. Kind of why it's so strong? Is it coming from the ports or is it coming from the other segments than ports and you see kind of some impact from the German infrastructure or what have you kind of driving industrial demand in Europe?

The growth and the good business sentiment in Europe it's coming from all segments basically. It's not only limited to ports. We have seen high activities in all the four customer segments. In Europe Germany not very much visible yet and the new packages that they have launched of course they haven't come into effect yet. So Germany has been quite slow actually but I think our strong service footprint as well has been performing well in Europe. So I think it's the mix between the equipment as well as services and then of course including all four customer segments. So we are happy with the diversity that we have of course with the four customer segments.

Okay and just to clarify so do you expect the good sentiment in Europe to continue and then it's more uncertain in the US or is it also in Europe that where you have seen kind of some change?

I think the uncertainty is everywhere basically but of course the highest uncertainty we can find in the US market for sure but the Europe has been performing well at least in Q1 and we will see in the next coming months of course what kind of business sentiment there will be in Europe but of course the wait and see mode is also seen in Europe with certain customers.

Looking at the running hours of our equipment as last Friday we were taking a closer look at the running hours and they're still stable so you cannot see a kind of a huge difference in those so that's why kind of the uncertainty is the message that we are trying to prevail here.

Okay thanks then the final one from me is on the tariff impact on earnings so could you kind of remind us what is the direct impact to you as you export products to the US so how do you expect to

our revenue in US? It's coming from the country basically it's coming from the terminal tractor business which is big business that we have there we have a factory in Kansas as well delivering machines to the US market and then of course our services business is remarkable also in the US so the majority of our business in US is coming and revenue is coming from the country itself but of course even for those products and solutions there might be some indirect effects from the tariffs but then of course what we are exporting and transporting to US from other countries from Poland our factory there is of course counterbalanced I mean forklifts reed stackers and then we have some horizontal transportation as trailer carriers as well but the biggest portion is produced and purchased from the country itself and that gives us of course resilience okay what kind of actions have we taken so far because of course we have seen cost increase from our suppliers so we have implemented price increases already for many of our products and they are they are actioned basically as of today and what what size of price increases we can give give some kind of you know range between five and ten percent and that is that is valid for both equipment as well as parts

of the product. The next question comes from Andreas Koski from BNP Paribas Exane please go ahead.

Thank you and good morning maybe I can follow on on that last question so do you think price increases of five to ten percent will be enough to offset the the cost increases for you related to the tariffs?

Yeah thanks for the question I think at this moment at this moment where we are I think pretty much so I think they will match the match the cost increases as well and of course but the market is and the business is uncertain as we can see but we try to be as agile as possible of course and so therefore we have taken those actions

already. So and then what

happens next and

depends then on on of course where the tariffs then go next and then of course then we need to react again should a different situation arise.

And do you import a lot of components and goods from China or is it mainly from Europe to the US?

The import part it's mainly from Europe as I said the majority of the business is coming from the country itself but then what is not produced or purchased in the US of course it's coming from Poland and then if it when it comes to China the exposure we talk about five percent roughly so the exposure to China is quite limited.

Thank you and then moving on to equipment you said that the revenue level of around 250 million euros was expected in this quarter we have a book to bill of close to 1.3 for the equipment business and the order intake has been about 300 for for two quarters in a row now so just remind me of the lead times here when should we expect a decent pickup in equipment revenues and did I understand you correctly that if we see a pickup in equipment revenue then at the revenue level of 300 or more that should lead to a margin about 13 percent.

Thank you. Yeah I think that I'm not giving you number per se but it it means of course that that the what I was trying to say there is that the low low level of revenues of course impacts the margin because even if our commercial margin i.e. the the pricing and or the margin between between pricing and and our sourcing is is stable or even improving if your volumes are really low then you have less that you can cover your fixed cost so it it will lead to a higher margin because then we have better fixed cost coverage when the volume is higher and then on the on the lead times you know the the shortest is the terminal tractors around three months and then we have the the straddle carriers at 12 months and of course we've had quite a lot of straddle carrier orders especially in q4 so that's of course a little bit longer before that that then hits hits the sales but at the same time in both in q4 and in q1 we had good order intake across the board.

Understood and then can I ask on the margin guidance of about 12 percent it is is that based on a revenue level of 1.6 to 1.7 billion or what kind of yeah revenue range do you look at when you give that guidance?

Let's say let's say we have guided on the profitability and said 12 percent which is the floor and that is still unchanged we haven't you know linked it directly to to any revenue but of course you know that's the market is uncertain we are we are taking actions of course to mitigate you know those negative effects and and and and but we we keep our guidance as as it is and of course it's it's you know very important that we are reacting reacting on the price increases that we are or or the cost increases that we are you know witnessing and and you know increasing all prices swiftly and and then of course a high focus on services of course and driving excellence as mentioned are very crucial of course and then keeping the cost control such so that is all you know behind the behind the guidance and

this 12 percent profitability as well. And as you are aware we we of course

don't give guidance on our sales number but but the LTM orders figure is a pretty good indication of what we are heading towards in in in terms of of of the sales of over the the next coming period so to speak whether it's exactly this year I'm not going to say but but any anyhow we have a good book to bill ratio and that of course indicates that sales will be higher at some point.

Yeah that's great and then lastly just on the APM order I think it was related to a modernization of the 32 straddle carriers so I just want to confirm that that is reported in service and not in equipment and and if you can give an indication of how large this order was that would be great thank you.

Yes it's reported in the in the services it's one part of our services portfolio and the size of the order now. I

think I need to come back to you not to say anything anything wrong on on that part but if it's okay I'll I'll confirm.

Okay that's great thank you very much. Thank you.

The next question comes from Mikael Doppel from Nordea. Please go ahead.

Thank you. Good morning everybody. Just coming back to the comment about the the running hours you mentioned Karina there checking last Friday you said it's what remains stable I mean did you refer to April thus far compared to March or something else and also any specific regions or globally just just to be clear on that comment.

Yeah well we we looked both at the regions and we looked kind of on a longer term what it looks like so if you look at the year 25 compared to to some other years so it's a fairly average year not the best one not the worst one so it's in in between there and looking we looked at the different regions and we couldn't really that's why I'm saying it's stable not a huge kind of huge change but that's why we always we come back to it's too early to draw any conclusions and but we are following that closely.

Okay so this was not a comparison of April compared to Q1 or March or something like that.

No no it was on a kind of yeah it's a comparison kind of looking on a kind of weekly basis at the the running hours.

Okay and the fact that you're saying it's too early to to say what's going on I mean that in itself could be an indication that you haven't seen much of a change in your sales funnels or your order intake into Q2. Would that be a fair conclusion to draw from that comment?

No I think we are one one month down the road basically after this after this you know big decisions in in the beginning of April basically so it's still early days of course but what we have seen is the hesitation and the news from last night from the from the US of course indecisiveness as well so that's what we have seen and of course we have we have you know order or not let's say the the order pipeline and the discussions with our customers on going every day and of course that is affecting those so but short term I mean for a couple of months ahead it's still too early to draw any any any further conclusions at the moment but of course there is a high level of uncertainty in different different parts and then mostly I would say in the US at the moment but of course affecting the whole globe as we can see from the news as well.

Okay and in terms of Q1 I mean the order intake was actually quite strong I would argue and and especially on the equipment side would you say that there were any elements of pre-buying now ahead of any any potential tariff increases or or did you see any indications of pre-buying basically?

No no no we haven't seen we haven't seen that in in Q1 but of course we have been very active with our proactive sales and trying to offer our superior solutions to our customers in different parts of the world and and we were successful I would say in all three regions but especially in Europe I would say that was really the pride spot in in Q1 and and I could even claim that with our efforts white spot strategies, territory management and so forth sales strategies I think we have been successful in winning some markets here as well.

I have asked that pre-buying question I think 10 times during the last week that is there and and the answer from the businesses is that that there is not yet any evidence of pre-buying.

Okay and then just the final questions I mean you mentioned in your remarks in the in the report as well that that the growth of the service business is a key strategic focus area. I'm looking at Q1 it looks fairly flat tissue where just for currencies year over year on the orders I'm just wondering you know what are the levers to drive growth now this year for the service business given as you mentioned yourself increased uncertainties and perhaps over throughputs and so on and so forth.

Yep growing service is one of our strategic builds and definitely a high priority area and I'm very happy with the performance that we had for services in Q1 if I overall look at the look at the numbers there and and and we need to keep in mind of course in Q1 and Q4 and last year as well when it comes to services that there are certain markets which have been slower like the US market has been slow and Germany which is our big market our big country as well for us that has been quite slow up until today so of course that is affecting the top line growth in services but I think we have very good actions in place we have very good activities in different areas modernization was mentioned but but really I think what is driving the growth is is coming back to the back to our installed base active installed base of 68 000 equipment that we have all over the world they remember the number from 2023 that was 65 000 then that time and now we have 3000 more so so really going to those machines customers proactively and and trying to sell our superior solutions I think that is the key ingredient for future growth as well and then we have different flavors we have the e-commerce we have the digitalization we have safety solutions for services and of course with the very high focus on service agreements as well yes strategically

I don't think short term anything changes we drive the same initiatives and I think maybe one thing if you're just comparing Q1 to Q1 Q1 last year was rather strong in order intake in service and yet we were a bit higher now and of course the was up six percent so quite good development there

okay and the target is to grow the service business this year as well in terms of orders yeah

and and what we what we have said and and we have nailed down our 2028 targets as I showed in the presentation as well 15 percent operating comparable operating profit and then then you know five percent or more annual growth basically over the cycle so that is very applicable and valid for our services as well so definitely this is now 2025 and we have few years to go to 2028 so definitely we want to be active every every single year and of course in these a little bit more turbulent times uncertain times that we are living at the moment of course services after market after sales business is very important for us and and many other companies of course as well and if the running hours stay on a decent level of course there is always possibility to to sell our solutions to those customers even though

not everybody might be buying the new equipment yeah we're particularly happy about the

margin development in services which has now been increasing quarter over quarter

yeah

yeah absolutely that and I think just squeezing one final one in maybe the sucker in on the on the pricing versus cost I mean you mentioned price increases you also have cost inflation how do you think about that equation this year just like to see a net benefit or is it more neutral

well it comes back to our driving excellence actually because a big part of that is is is our commercial improvements so both on the pricing side of course the tariffs now play an additional role in in that as well but then if you look at the savings that we've been generating in q1 in the run rate that's coming from our sourcing activities so there's a lot we can do actively ourselves in our sourcing so we're not just you know following the market there in terms of inflation and and so that's what I would say that with actively executing our driving excellence that's where we we

have the answer

yeah

and keeping the cost under control

at the same time

okay good

thank

you very much

the next question comes from Tom Scogman from Carnegie please go ahead

yes hello this is Tom Scogman from Carnegie I have a couple of questions first of all have you seen any cancellations and how are you protected with the advance payments and contracts in the US especially no

good question no we haven't seen any cancellations as such and and then when it comes to contractual terms and and commercial terms of course we have comprehensive contracts of course and we have the pre-payments or or or advance payments you know clauses for different kind of equipment as well

and actually if you look at the cash flow Tom in q1 advance payments were a big contributor to the the the working capital impact on cash flow being positive so yes that is a important factor in how we do business

we haven't seen cancellations but what would it mean if a customer wants to do a cancellation in q1 if you have in your contract now that the price goes up by 10 or 20 percent who knows how much it goes up a point of delivery and you have already made the machine and they have paid 10 percent and then it comes there what happens in practice yeah

of course we stay always close to our customers you know in good and bad times and and definitely there will be discussions on on that kind of particular case if that happens but case by case it will be handled of course and and and but the key is really that we have a very close collaboration with our customers so that is that is helping in these type of situations

okay and then the terminal tractors how large share of the components are sourced from the us that you make in the u.s. with terminal tractors

i would say the majority source from the u.s. is the majority for a for a for a diesel terminal tractor then then okay where some of the sub components might be coming from okay there might be different tier levels of course in this in the sourcing or supply chain chain but the supply chain process but the but but mostly mostly it's sourced from the from the u.s. market and it's

the vast majority in diesel yes

and as sami previously stated if you look at the diesel terminal tractor the level of uh parts that come from are sourced from china is about five percent of a diesel terminal tractor in u.s.

and can you explain to me just how this pricing is done i mean we know your delivery time is but it's i mean all suppliers have not adjusted their prices for components that are to the u.s. etc i mean this is like you know a moving target all the time how do you just deal with with the pricing you know to be able to sell something at all at the moment

yeah yeah that's a good question and very very valid no but we we are we are very professional with our pricing activities and not only today but also yesterday so we have very good people you know treating and dealing dealing with pricing of course and and understanding the situation then we have the collaboration between different functions in the company as well you know really transferring this macro economic view to the pricing team as well and then we will take actions and decide of course you know as we go but but it's quite dynamic as you rightly said and and moving target definitely but i think we need we have to nail down at some point okay now in the beginning of april there were some decisions taken so of course that gave us of course you know i would say a trigger to initiate some price increases because that's the fact but of course if tomorrow happens something else of course we need to react but but we have a task force dedicated to this to this one which is even enforced task force compared to a normal situation and

maybe to expand also from pricing to kind of keeping close to the customers and when the customers do an investment it's usually a huge investment overall in their operations and the machines and the services is one part of it so that's why it's really important to to look at it kind of beyond pricing also

but just to understand are you happy with like the it systems you have with you know they get new kind of prices on components including tariffs that they go straight into the you know sales people's knowledge somehow are you happy with your kind of how you deal with the new information get day by day now when when suppliers increase prices

i can say generally i'm and we are happy with our market intelligence and how it works and how it transfers down to the front lines as well so so overall but the you're responsible for it and

also also between you know the the the relation between our input cost and our pricing i mean there's there's a very clear communication there and of course still coming back to the driving excellence we are also working actively even in this environment then on our sourcing and our input cost which also plays into this in a positive way but pricing wise yes we need to be we need to stay active and react to the situation we that's what we're

doing can you provide an effects update and especially the dollar in a sense of pvc if you exclude the hedges and of course understand you have to pay beyond the hedges

yeah i mean of course through the through the translation there is there is impact and that's actually shown in in the in the interim report on page 11 where you see the the impact of of effects on the orders and sales and and there is is of course some impact on the translation

other transactional exposure you know beyond hedges

yeah there is is of course some of some of that as well and and generally speaking i would say that if the where the dollar weakens then then the that that tends to have some negative impact

on the but you cannot quantify you know give out any any number or something

not really

and then you didn't say anything about electrification what is the strategy here you know when when we know that batteries are usually imported from from china what happens do you take a break in this in the

had a good performance in cuban

then my final question is on on potentially setting up more production in the u.s. like it's quite asset-like assembly so the capex in need it should probably not be any any big but then you would have under absorption in polar and what about what about finding suppliers in the u.s. for this type of industry i know you have u.s. based competition so i guess there must be suitable suppliers in this industry in the u.s.

yeah let's let's say if you look at our global footprint as you can see here on the on the picture as well it's strong and and we are very happy to have a factory in the middle of the country in the u.s. of course what of a factory there on top of that we have some sub-assembly activities for counter balance i mean forklift and reed stackers in in different parts of the country as well so it's not only limited to our factory in in otava but what we have some other activities contributing of course to other divisions as well so so we are happy with the footprint there but of course constantly if you if you look at the whole world here of course we are analyzing what is the best setup you know to operate but but i think our base and foundation as of today is pretty good and then we are happy with that and then of course we have like we discussed on the on the suppliers in the there are several suppliers there of course for all terminal tractors and and of course the same thing there we are constantly analyzing you know to opportunities in different parts

of the world but also including the u.s. and potentially of course we could do more there if it makes sense

Thank you.

There are no more questions at this time so I hand the conference back to the speakers for any closing comments.

Thank you for a very active dialogue all the good questions and hope to see you soon and by the latest in our half year reports call that will be the 25th of July. Thank you all.

Thank you. Thank you. Bye bye.