Kalmar Oyj B

Good afternoon from Helsinki and welcome to our second quarter 2026 earnings call. It's July, which is supposed to be the peak of our summer, but it's very chilly outside today. The Finnish summer is short, but at least we have not much snow. So while we might be missing on the sunshine outside, we are happy to shed some light on the Kalmar result for this quarter. My name is Karina Geberteir and I'm heading the Kalmar investor relations. Today's result will be presented by our CEO Sami Niiranen and CFO Sakari Ahdekivi. We will have a Q&A session at the end of the call. And I would like to remind you that this webcast is recorded. It will be available on Kalmar's Investor Relations website later. And please pay attention to the disclaimer as we will be making forward looking statements. We are now ready to start the presentation, so I will hand over to you, Sami.

Thank you. So thank you, Carina, and good afternoon, everyone from Helsinki. It's my pleasure to present Kalmar's second quarter 2026 results. I'm starting with an overview of the quarter. Overall, our performance was steady with strong sales growth and cash flow. And this goes for both segments and for different regions. Customer demand remained relatively stable and our order intake was in line with the comparison period at 449 million euros. and our sales grew by 14% to 480 million euros. Our eco-portfolio sales grew strongly by 27% and there was also improvement in the order intake for fully electric equipment. I will revert to this in a bit. Our comparable operating profit improved and in our services segment the performance improved sequentially. Our driving excellence initiative continued to deliver results. Sakari will cover this in more detail in his part of the presentation. Operating cash flow for the quarter was strong and our balance sheet remains strong. Looking at 2026, we keep our guidance unchanged. We expect Kalmar's comparable operating profit to be above 12.5% in 2026. Let's now have a closer look at the orders received. As I mentioned, overall demand for our equipment and services was relatively stable across different end customer segments. Orders received were essentially on the same level as in the second quarter of 2025. Order intake was resilient, although there were fewer sizable orders than in the second quarter of 2025. received orders for the equipment segment were in line with the comparison period and in services order intake decreased slightly. We'll have a look at the geographical breakdown of orders received on the next slide. At the end of June, our order book was a little lower than in the second quarter of 2025. Changes in currencies had no impact on orders received in the second quarter and direct impact of the ongoing conflict in the Middle East remained limited. Here you can see the geographical split of orders across our reporting segments. EMEA 43%, the Americas with 39%, and APAC 18% of orders received. In Americas, the gradual recovery in the distribution and customer market in the US continued, and our order intake grew by 38% year on year. On the other hand, services customers are still cautious. In EMEA, order intake decreased 20% year on year because there were sizable orders in the comparison period. And in APAC, order intake was on the level of the comparison period increasing in Oceania. Looking at the overall demand environment, customer demand has been remarkably resilient in these times and remained relatively stable across different customer segments. In the second quarter, our sales grew by 14% compared to the second quarter of last year, thanks to several successful project deliveries in both segments. In the equipment segment, sales grew by 17% year on year and in services by 10%. Services share of sales remained approximately on the same level as in 2025 at 33% of total sales. Let's then have a look at the geographical distribution of sales. As you can see, there was strong growth in EMEA. This was driven by sizeable order deliveries throughout the equipment portfolio, but also by services. In Americas, gradual improvement in the equipment segment continued and sales grew in North America. In APAC, although sales grew in Oceania, it was offset by a decrease in equipment sales in Asia. Then to our Eco-portfolio that contains our low carbon solutions including fully electric and hybrid solutions as well as sustainable services. In the second quarter the sales of our Eco-portfolio reached a record level and was 233 million euros and this is a growth of 27% year on year. Eco-portfolio share of sales is already 48% of total sales. In the second quarter, we secured a number of notable fully electric equipment orders. And fully electric machine share of equipment orders for the last 12 months was 10%. And in the second quarter, it was 12%. Let's then have a look at the profitability in the second quarter. In absolute terms, comparable operating profit improved year on year. And as you can see in the graph on the right, this was mainly driven by the growth in volumes. Comparable operating profit margin was 12.4%, which is a bit lower than in the second quarter of 2025. This was mainly due to the product mix in the equipment segment. Moving on, this slide gives an overview of our well diversified business with four strong customer segments. The services segments share of sales was 33% in Q2, which is providing resilience to our overall revenue. Eco-portfolio share of sales grew to 48%, which is showing the strong interest towards our sustainable solutions. The current macroeconomic uncertainty driven by geopolitical tensions leads to increased volatility in economic data, making it difficult to provide long-term forecasts. IMF has slightly downgraded the 2026 forecast and global GDP is still expected to increase 3.0% in 2026. Drury upgraded its 2026 and 2027 forecast following the U.S.-Iran peace deal. The forecast for 2026 is now 3.0% and for 2027 4.2%. Oxford Economics has released an update regarding their manufacturing and retail forecasts. And key takeaways for the 2026 outlook are as follows. In manufacturing, the 2026 growth forecast has been slightly revised downward to 3.0%. The growth rate is expected to slow slightly compared to 2025 levels. Metals output is expected to increase 1.9% in 2026 and wood and wood products to decrease minus 2.9%. And in retail, the 2026 forecast has been downgraded to 2.4%. Building on the external market estimates from the previous slide, let's look at the current demand outlook for Kalmar. where we anticipate that the total market demand for the next six months remains approximately at the similar level as in the previous quarters, with the caveat that trade tensions and geopolitical instability could have an impact on our markets and the demand from our four end customer segments. Next, an update on the status of Kalmar's connected fleet. In the second quarter, our connected fleet activity stayed on a stable level. Our installed base has grown steadily to over 70,000 machines from 68,000. At the end of 2025, we had over 16,800 connected equipment globally compared to 14,500 equipment at the end of 2024. And then I'm very happy to see our actions to develop our electric portfolio resulting in concrete orders. Here you can see the new orders announced and added to the Q2 order book. We received orders from customers in China, the Netherlands and Germany for a total of seven Kalmar electric reed stackers and signed a six year frame agreement covering the potential procurement of up to nine machines from Port of Helsingborg in Sweden. We also received orders for a total of nine Kalmar Electric empty container handlers from customers in Brazil and France. Beyond our electric portfolio, these orders announced and added to our Q2 order book perfectly showcase our well diversified business. Firstly, we received an order of 10 Kalamar hybrid straddle carriers and 12 hybrid Kalamar auto strut machines for Patrick terminals in Australia. We also signed an extension to Kalmar Care Service and Maintenance Agreement with Holmein in Sweden and secured our first customized training simulator order from SSAB Special Steels in Sweden. Moving into a short summary of financial highlights before handing over to Sakari. All in all, despite continued trade tensions and geopolitical uncertainty, we maintained a steady performance across both segments and in the different regions. orders received in the quarter were essentially in line with the comparison period at €449 million, which is a resilient result given that the prior year included several sizable orders in EMEA. Sales in the second quarter grew by 14% to €480 million, and both the equipment and services segments contributed to this growth. Comparable operating profit held up well in absolute terms and increased by 9% to 60 million euros, representing a margin of 12.4%. The improvement was driven mainly by higher volumes. And the services segment showed an encouraging early recovery, and we remain focused on growing services, improving spare part capture rates, and building recurring revenue, all of which are key levers for reaching our long-term targets. And here is a reminder of our performance targets for 2028. We remain committed to our strategic priorities and driving sustainable growth by leading the industry with innovations towards automation and electrification, expanding our services business and presence, and pursuing operational excellence to ensure long-term value creation in line with our 2028 targets. And here is a reminder about the forthcoming changes in our leadership team that we announced in the spring. As you know, Sakari Arekkivi will leave his position as the CFO as of 30th of September, 2026. Katri Hokkanen has been appointed CFO and a member of the Kalmar leadership team no later than 1st of October, 2026. Sakari will remain with Kalmar until the end of this year to ensure a smooth transition. There will also be a change in the services division. Tuomas Malmbori will step down from the role of president of services and a member of the Kalmar leadership team. And Tamara de Kreuter was appointed president of services and a member of the Kalmar leadership team as of 1st of September, 2026. So she will be joining Kalmar soon. I look forward to the energy and experience she will bring as we continue to grow this essential part of our business. Tuomas Malmbori will remain with Kalamar until the year end to ensure a smooth transition. So once again, I thank both Sakari and Tuomas for their contributions for Kalamar and the future growth of the company. So I will now hand over to Sakari. So thank you for listening.

Thank you, Sami, and good afternoon also from my side to everyone on the lines. I'll start with our traditional slide and to show our financial profile, which has remained strong, providing us a solid basis for future growth. Our order book has stayed healthy at around 1 billion euros. Our orders received for the last 12 months were approximately 1.8 billion euros. Due to the good operational execution and successful management of costs, at the end of June, our comparable operating profit margin on an LTM basis was 12.7%. Our balance sheet continues to be strong. At the end of June, our leverage ratio was zero, which is well below our long-term goal of a maximum of 2x. And our return on capital employed was 24.1% at the end of June. Finally, our cash conversion on an LTM basis was 99%. Let's then dive into the segments and starting with the equipment segment where we had stable development. Order intake was on the same level as in the comparison period, although we had fewer sizable orders in the quarter compared to the comparison period. And there was some slowness in the customer's decision making, which we experienced during the quarter. It's also good and also pleasant to note that we received several notable orders for fully electric equipment during the second quarter, as Sami explained. And finally, the equipment segment sales grew by 17% year on year to 321 million euros. In terms of profitability, the equipment segments performance can be described as resilient. Comparable operating profit margin increased driven by higher sales volumes and the majority of tariff impacts were successfully mitigated, although there was some impact still left. And then the comparable operating profit margin was somewhat below the previous quarters, and especially the comparison quarter of Q2 25, which was perhaps exceptionally high. The main reasons for the slightly lower COP margin was product mix and also some cost headwinds. Most notably freight costs and also to some extent oil products, EV components and then also tariffs still. Then looking at the services segment. There was a small decrease in orders received in the second quarter compared to last year, same period. This was because there were no larger orders for bigger service projects in the period in the second quarter this year. Also, the customers in the US have remained cautious with their orders. Sales, on the other hand, increased by 10% year on year and totaled 158 million euros. The services segment showed signs of early recovery in terms of profitability, thanks to cost optimization and sales growth actions. Comparable operating profit improved by 11% year on year and amounted to 27 million euros. This was thanks to volume growth and a successful mitigation of tariff impacts. And the comparable operating profit margin of the services segment was 17.0%. Then a brief look at the tariff landscape. There was a ruling by the US Supreme Court that the tariffs imposed under the IEPA were unlawful. Consequently, we have started to receive refunds, but the refunds had no impact on the second quarter result. Also, the tariff rate for forklifts and associated spare parts is lowered to 15% from the earlier 25. We continue to monitor this landscape closely. As in the previous quarters, our responses to tariffs have included mitigating actions with price increases, supply chain actions and other operational excellence initiatives in our operations, as well as some documentary requirements. Then a reflection on our driving excellence initiative. As you well remember, our target is to reach 50 million euros of gross efficiency improvements by the end of this year. And the initiative is proceeding very well. And the status at the end of the second quarter is that we have achieved approximately a run rate of 49 million euros of annualized gross efficiency improvements. So we are very close to the target already at this stage. As we have said before, the majority of the improvements secured originated from successful sourcing activities. Then a quick look at our return on capital employed. ROC in the second quarter reached 24.1%, and as you can see from the graph, there has been a stable upward trend since the beginning of 2025, and we are very close to our target of 25%. Our balance sheet was further strengthened during the quarter. Our leverage was zero, well below our long-term target of two times, and our gearing stood at 1.8%. The decrease in interest-bearing net debt, which improved our leverage ratio, was primarily a result of solid cash generation from operations. Our maturity profile of our loans remains unchanged. Our liquidity position is strong at 480 million euros and it includes an undrawn 200 million euro revolving credit facility, which will mature in 2030. On this slide, you can see our quarterly cash flow, which remained strong also in the second quarter, and our cash flow from operations before financing items and taxes amounted to 82 million euros. And as said before, our cash conversion for the last 12 months was 99%. And finally, as Sami already mentioned in the beginning of his presentation, our guidance for 2026 remains as follows. Calamar expects its comparable operating profit margin to be above 12.5% in 2026. And here you can see a summary of our half year report and maybe to still lift up a couple of highlights. Orders received in line with the comparison period. Comparable operating profit increased. And guidance remains unchanged. That will conclude my presentation. Thank you for your attention and let's now move over to Q&A.