Konecranes Plc Ord

Hello all, and welcome to follow Conecranes' Q2 2025 results webcast. My name is Linda Häkkilä, and I'm the new VP Investor Relations here at Conecranes. With me today as our main speakers, we have our new president and CEO, Marko Tulokas, and our CFO, Teo Ottola. Before we proceed with the presentation, I would like to remind you about the disclaimer as we might be making forward-looking statements. Here you can see our presenters and agenda for today. First, our CEO will give us an update on the market and group performance. After that, our CFO will guide us through the business area performance and balance sheet topics. After that, we are happy to start the Q&A session and answer your questions. But now, without any further comments, I would like to hand over to our CEO.

Thank you, Linda. A warm welcome also on my behalf. It is my great pleasure to deliver the first quarterly report as CEO. I am particularly excited to deliver a report after such a strong quarter of continued Solis performance. As this is my first quarter as the CEO of Konecranes, I would like to say a few words about the big picture and remind you all about our growth focus strategy before I start talking about our strong performance in the second quarter. We hosted our Capital Markets Day in May and we raised our financial targets. We aim to grow our business faster than the market, defined as the nominal GDP growth, and are well positioned in the global landscape with our unique offering. We have three business areas with clear strategic agendas and a strong position in the marketplace, well placed to reach our financial targets. Firstly, we have industrial service with its continued agreement-based growth agenda and inorganic expansion strategy. Secondly, industrial equipment with its efficient and renewing product portfolio sold globally through broad dual-channel go-to-market approach. And thirdly, we have port solutions with its broadest and deepest offering and with significant service automation and electrification opportunities. Our previous EBITDA margin target range was 12 to 15%, but in May CMD, we increased it to 13 to 16%, reflecting our confidence for the future. We aim to reach these targets as soon as possible, but no later than 2029. Now looking at our today's earnings with a record high EBITDA margin of 14.3%, I can say that we are firmly progressing towards our target. But now let's look at the most recent performance. Year 2025 started off well and our performance continued strong in the second quarter. Our demand environment remained good despite all the tariff related uncertainty and macroeconomical volatility. Our orders were up by over 17% year on year in comparable currencies. And our order intake clearly increased in industrial equipment and port solutions, while it decreased in industrial service. And our sales amounted to 1.05 billion euros in the second quarter. This means an increase of over 5% year on year in comparable currencies. And I'm really pleased to present that we reached again the record high EBITDA margin of 14.3% we had last year. And looking at the sequential development, our EBITDA margin clearly increased also from the first quarter of 11.1%. Our profitability in the second quarter was supported by good operating leverage. We continued to benefit from our global business model, which provides us resilience, particularly in this type of market environment. And year on year, we benefited from higher volumes, but there was also somewhat an offsetting impact from weaker mix. Profitability improved industrial service and port solutions, while it decreased in industrial equipment. We will go through those performances per business area later in the presentation. Next, I would like to say a few words about the market environment. Now, let's start with our industrial segments. In general, our demand environment remained good despite somewhat weaker macroeconomical data. The capacity utilization rates are the key macro indicators that best describe the operating conditions of the two industrial business areas. From the data, we can see that some weakening is there year on year, but still our order intake in industrial equipment grew clearly. However, within our industrial customers, we have seen somewhat cautious behavior. both in timing of new orders, as well as delays in project delivery acceptance. Our operating environment continues to be impacted by geopolitical tensions and volatility, especially and obviously related to tariffs. Now, within our port solution segment, we continue to see very good activity. The container throughput index, which is the main indicator here, continued at a very strong level in the second quarter compared to the historical readings. It is up 7% year on year. And as we do say in our demand outlook, the long-term prospects related to global container handling remain good overall. Now, let's then take a closer look at our sales and order intake development in the next slide. In the second quarter, our group order intake grew by 17% year on year in comparable currencies. This was mainly driven by port solutions where our order intake increased by almost 42%. This is a very good achievement, but it's important to keep in mind that quarterly fluctuation is a very normal feature in the port solutions business or in the port segment. Now looking at the geographical markets, we did see some improvement in our order intake in EMEA or Europe, Middle East and Africa region as well as APAC. And we did see some weakening in the Americas. Our sales in the second quarter increased in both reported terms and comparable currencies, as you can see from the slide. The improvement in sales was mainly driven by the excellent performance of the board solutions. The regional sales development followed the same pattern as the order intake, with EMEA and APAC outperforming the Americas. In the end of the quarter, our order book amounted to 2.9 billion euros at the end of the quarter and remains on a good level. We did see some weakening in year on year reported terms, but in comparable currencies, a slight increase. Industrial equipment remained flat while there was a decrease in industrial service and port solutions. And our book to build has been positive throughout the year 2025. Looking at things from a longer term perspective, our order book continues to be on a good level historically. And now let's then take a look at our comparable EBITDA margin development, which yet again reached a record high level. In the second quarter, we generated 150 million euros of EBITDA. This translates into an EBITDA margin of 14.3% and that good operating leverage from higher volumes was supporting our profitability while our mix was somewhat weaker. EBITDA margin increased year on year in industrial service and port solutions and decreased in industrial equipment. Due to the excellent performance, Port Solutions EBITDA margin reached its highest quarterly level ever and amounted to 12.6% in the second quarter. And industrial service also delivered a very good EBITDA margin of 22.6%. And then let's move to the next slide into our performance towards our financial targets. The year 2024 was a very good year and our performance has continued strong also during this year. This graph shows the rolling 12-month figures for our sales and EBITDA margin and progress towards our financial targets. Our group sales continued to grow, the last 12 months being higher than the full year of 2024. And then we look at looking at our group profitability in the rolling 12 months. We are at the moment at the lower end of our updated new target range of 13 to 16%. And despite the slight decrease in the rolling 12 months, we firmly continue to work towards our target. While increasing the everyday margin, we also aim to grow our sales faster than the market. Now looking at the different business areas separately, industrial service, we see a very nice positive development with both our sales and EBITDA margin in the recent last five years. Our sales in the rolling 12 months remained relatively stable, but our EBITDA margin increased to 21.2%. We are already today well in line with our updated target range, but naturally closer still to the lower end of that range. In industrial equipment, sales in the rolling 12 months slightly decreased. Also, our EBITDA decreased to 7.7%, and that was driven by the lower volumes. We have seen some cautious behavior within our industrial customers, particularly in the Americas, and that is also reflected in these figures. Our target EBITDA margin range for this business is 8% to 11%, and I'm confident that we will reach this target without strategic actions within the indicated timeframe by 2029. The long-term profitability outlook for industrial equipment is positive, and that is one of the reasons why the target level was increased in the CMD, Capital Markets Day. Order intake for industrial equipment was strong in the second quarter and we received multiple large equipment orders from the aviation and aerospace, energy and metal sectors in all regions, while our component business remained stable. Then moving on to DuPont solutions. Board Solutions was the highlight of the quarter. We have continuously improved our financial performance during the last three years. And as you will see from the graph here, our sales has increased in the rolling 12 months compared to 2024, which was already a very good year for Board Solutions. And our EBITDA margin continued to improve and reached its highest level ever. This resulted in an EBITDA margin of 10.1% in the rolling 12 months. And our EBITDA margin target range for this business is 9% to 11%. And we are well in line with that already now. Now we're moving on to the demand outlook. And our demand outlook within the industrial customers segments has remained good and continues on a healthy However, that demand related uncertainty and volatility due to the geopolitical trade policy tensions remain, particularly in North America. This translates into higher uncertainty in the timing of orders and with some postponement of maintenance activities with industrial customers. All sales funnels remain on a stronger level and funnel development during the quarter was stable. comparing against the previous quarter, the number of new sales case is slightly down. And then to the port customers, the global container throughput continued on a high level, and long-term prospects related to the global container handling remain good overall. Our pipeline of orders is solid and good, and it contains projects of many different sizes. And then I'll move on to my last slide. I will reiterate our financial guidance for this year. Our net sales are expected to remain approximately on the same level in 2025 compared to 2024. And the comparable EBITDA margin is expected to remain approximately on the same level or to improve in 2025 compared to 2024. Our performance in the first half of the year has been good, despite the prevailing uncertainty related to current geopolitical situation and tariffs. And before I hand over to our CFO, Teo Ottola, I would like to say that Konecranes is well positioned in the current global landscape with its clear competitive advantages. We have an excellent team in place. Our strong balance sheet provides financial flexibility. And the market continues to provide opportunities for expansion and growth. So thank you very much. And Teo, over to you.

Thank you, Marko. And let's move on. Actually, before going into the business area numbers in more detail, let's take a look at the comparable EBITDA bridge between Q2 of this year and Q2 of 2024. So the improvement from a year ago Q2 versus Q2 was in monetary terms 3 million euros and in margin there was basically no change as Marko already pointed out as well. There are more differences within the BEAs and we can take a look at those after a while but before that we can maybe unpack a little bit the group level EBITDA bridge. So the pricing impact in an year-on-year comparison was roughly 3%. And when we take into consideration that our sales grew more than 5% with comparable currencies, so we actually had underlying volume improvement, creating operating leverage and supporting our profits. Net of inflation pricing continued to be slightly positive, like in Q1 as well, but less than, for example, one year ago, but still a positive impact, whereas mix impact was clearly negative in the comparison to the one year ago. When we take a look at the fixed costs, they have been very well under control. And this increase of fixed cost of 3 million that we can see here, so it is actually less than the inflation. So this has been done very well. On the other hand, then now the FX changes are very big in a quarterly comparison and the translation impact. is creating a big negative variation from the Euro terms into our profits in a year-on-year comparison. So to sum up, the underlying volume has been up, which has created positive operating leverage. That has been largely offset by the effect changes, so strengthening euro, that is. The net of inflation pricing has been slightly positive, but that has been more or less sort of impacted then negatively by the product mix. And then fixed costs under control. So this is basically the summary of the EVIT-A bridge. Then on the business areas themselves, so now particularly regarding industrial service and industrial equipment, so the stronger euro has created big differences between comparable currencies and reported currency numbers, so that's why we are talking maybe even more than usually of the comparable numbers in the report, particularly regarding service and industrial equipment. But starting with industrial service, our order intake was 381 million euro. That is down 1.7% year on year with comparable currencies. We had actually declined both in field service as well as in parts of the regions. APAC did well, there was growth, but when we take a look at the Americas and EMEA, the order intake volumes came down. Agreement base continued to grow by 4.5% in a year-on-year comparison with comparable currencies. Order book had a decline also with comparable currencies. Then sales 386 million euros, that is up 2.1% in comparable currencies, but a decline with reported currencies. And if we take a look at the situation with reported currencies, we had a decrease in field service and in parts of the regions, the volumes were flat in Europe, but we had a decrease both in the Americas as well as in APEC. It's good to remember that now that when we take a look at the growth of 2.1%, so it is actually less than the price increases have been. So in service business, the underlying volume was slightly down in a year on year comparison. Comparable EBITDA margin, 22.6%. This is an improvement of half a percentage point, which is a very good achievement given that the underlying volume has been down. The profitability has been positively impacted by pricing, net of inflation pricing, but also good cost management. And cross-margin in a year-on-year comparison was more or less flat in the second quarter. Then moving into the industrial equipment. So here we had order intake of 318 million euros. That is up almost 9% year on year. And when we take a look at that by business units, so we had in an year on year comparison increase in process grains as well as components. but the standard grain orders declined in a near-and-near comparison. Of the regions, EMEA and APEC saw increasing volumes, whereas Americas was down. And then in the sequential comparison, so in comparison to the first quarter, we had a decline both in standard grains as well as in components, whereas process grains were roughly on the same level and even a little bit higher than what we had the volume in the first quarter. Order book is more or less flat with reported currencies and when we take a look at the book to bill so it continues to be above one also for the second quote. Sales 300 million and this one is down by almost 5% in a year-on-year comparison. We had decrease basically in all of the main business units. We also had a decrease in all of the regions. We have continued to have delivery challenges there, so that we have been having delays in deliveries. These have largely been as a result of the customer delays, so customer sites have not been ready. But there are also some topics that have been up to our own performance. Comparable EBITDA margin was 6.3%. This is clearly down in a year-on-year comparison, of course, primarily driven by the underlying volume decline, but also the performance or execution was not necessarily exactly as smooth as it was one year ago in the second quarter. Cross-margin, naturally down with this profitability from the situation one year ago. Then boat solutions, excellent set of numbers, like Marko already pointed out. Our order intake was 436 million euros. That is more than 40% growth year on year. We had good order intake across different product categories. Automation related RTHGs, mobile harbour cranes had good order intake in the second quarter. Of the regions, Americas and EMEA improved. Asia Pacific was down. When taking a look at the so-called short cyclical business units like lift trucks, we had an order intake increase both year-on-year as well as Q&Q. Then when we take a look at port service, the volume was more or less flat in an year-on-year comparison and somewhat declining in a Q&Q comparison. Sales also very good, 408 million euros. That is 18% growth in a year-on-year comparison. The deliveries went very well during the second quarter in the ports business. Comparable EBITDA margin on a very strong level, 12.6%, more than 2 percentage points higher than a year ago. Excellent profitability. Of course, primarily driven by the underlying volume improvement as a result of the operating leverage. But we also had good execution across the business units within both solutions. And gross margin here, flat in a year-on-year comparison. And then when we go into the balance sheet and cash flow topics, let's start with the networking capital as we usually have done. So networking capital at the end of the second quarter was 354 million euro. This is 8.2% of rolling 12-month sales, well in line with our new target of being below 10% of the rolling 12-month sales. And as you can see, the trend also has been quite good the previous quarters. Now regarding the second quarter, one has to note that that quite a lot of that is as a result of the currency changes. And then on the other hand also from the liability side, so actually accounts receivable and inventories were a little bit higher than what they were at the end of Q1. But the cash flow nevertheless was very good in the second quarter, 180 million, and the rolling 12 months number is high, and our cash conversion continues to be nicely above 100%. And then as a last slide before the Q&A, gearing and return on capital employed. So our net debt amounted to 166 million at the end of the second quarter. It's a gearing of only 9%, which is in line with the numbers that we have been having during the past couple of quarters. And return on capital employed also actually more or less in line with the Q1 number at about 22%. And with these comments, we can then move into the Q&A.

Thank you for the presentation, CEO and CFO. Now we are ready to start the Q&A session, and we will start by taking questions from the conference call lines. So operator, we are ready to start taking questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Daniela Costa from Goldman Sachs. Please go ahead.

hi good afternoon thank you for taking my questions um i have two questions the first one just relates to your your guidance for the full year for sales to be more or less same level as last year given what you've done already in the first half and also how your orders had been improving over the last um 12 months um how do you get to sort of what i guess is a mid to high single digit decline implied for the second half in your guidance can you talk through sort of what are the things that we need to think about that are the headwinds into the second half. That's my first question. The second question is just a follow-up on if you could add up any help in terms of how to think about the FX impact for the full year. On the back of, obviously, you commented on Q2, but given what we've seen on currencies so far, if they were to stay where they are, what would be the headwind for the full year? Thank you.

Maybe I'll take the first one and you continue on the second. So I understand your question is that, and it's a natural and obvious one since we performed in terms of the sales volumes, net sales well in the first half, that how come is our full year guidance still more or less little flat sales and there is a good reason for that and that is that our order book at this time of year compared to the last year at the same time is significantly more than 100 million less than it was last year at the same time and since we have been growing in the first half of the year more than five percent with comparable currencies it is an obvious conclusion that the second half is is therefore going to, can be lower. And of course, there is the market related concerns that we were alluding to earlier, and that is for the customer's delivery acceptance particularly true. That is the simple answer to the first question related to volume.

Maybe I build on what Marko said regarding the order book that much that even though now the order book as a whole is more or less on the same level as it was earlier. So when we take a look at the order book that we have for deliveries for the second half of the year, So that is more than 100 million less than what we had one year ago for the second half of the year. So this creates the underlying, in a way, negative delta into the H2 sales, as you, I think, pointed out yourself as well as a reason for the timing issue. Regarding the FX, there is of course translation and then there is transaction impact. When we take a look at the translation impact, the rule of thumb that we have been using earlier as well probably is valid still. When you take a look at the impact on sales, the impact on profits is roughly the same. in percentages. And now that we have the EBITDA bridge, so you can always actually see the translation impact also from the bridge. This time it was 8 million, which is maybe even a little bit more than the overall currency changes to sales. And sometimes, of course, it varies a little bit depending on where we are making in relative terms. better profits and lower profits, but the basic rule is that you can basically estimate it based on that one, but of course one has to make an estimate on the currencies, which is then of course very difficult. Then when we take a look at the transaction impact, so that is impacting our margin, not only the reported Euros, So there the volume to be used as a base can probably be referred very well to the volume that we have been using as an exposure for the tariffs between EU and the US. And there we have been talking about the volume that is less than 180 million. So less than 50 for spare parts in service, about 100 million for industrial equipment, and then some 30 million or so for port service, particularly for spare parts there as well. And the same sort of amount of transactions can be used as a basis for transaction impact. So every 10% change in euro dollar would be some 15 plus million. The hedging rates that we have been using for the second quarter have been good. So the hedging rates will be somewhat weaker for the third quarter and for the fourth quarter than what we now have been using for the second quarter. Without going more into details regarding numbers, but the level now in the second quarter was very good.

The $15 million you mentioned is pre-hedging or post-hedging?

That is post-hedging because it is the underlying volume. So this is the impact that will come through after the hedging. And now when I'm saying that the Q2 hedging rate was good, so it means that basically we have not really seen that negative impact in our margin yet because we have been well hedged. And we will be hedged for the third quarter as well, but to a lesser extent. And then, of course, even less to the fourth quarter.

Got it. Thank you very much.

The next question comes from Antti Kansanen from SEB. Please go ahead.

Hi, guys. It's Antti from SEB. Two questions for me, taking them one by one. The first is I wanted to clarify something that you talked about on the conference call. referring to delays in project delivery acceptance and some caution overall within the industrial clients in the US. So could you talk a little bit a lot more about this? What is causing these delays and this kind of a hesitancy?

Yeah, so you'll give your second question then later. So I'll start with that first. And that's good because I like them one by one. I'll otherwise forget the first one. But good. So thank you, Antti. What is meant by that, of course, there's two reasons for that, and that is not only a US topic, it's somewhat visible in Europe also, but it's of course partly because customers have other equipment that they need to complete their site that might be congested because of logistical delays in customs, cannot be cleared from the customs or still on the ocean somewhere and so forth. So they have complications to complete their deliveries because the logistics chains are not maybe working as perfectly as they would normally. And second reason is that there are some customer segments or I guess in US it's more broad whereas in Europe it is most certain industrial segments where they may not need the facility to be taken use as early as they might have done beforehand so they are in fact slowing down the completion of the delivery and as grains industrial equipment is typically one of the last things that gets put into a facility and commissioned then that has an impact on the delivery acceptance. Was that an answer to your question?

Yeah, that answers the question. But I mean, I guess when you talked about that, you have a less kind of backlog expected to be delivered in the second half compared to a year ago. So you don't really expect that this slowness that we've been seeing on the delivery will kind of

of the offset on the second half that you are not seeing kind of postponement from first to second half that this is more kind of an ongoing theme that continues throughout throughout this year or am i reading it correctly i get your point first of all what we were referring to the more than 100 that's more reports related uh or industrial equipment and secondly industrial equipment it is it is very difficult to see that in advance so we can't really estimate of what you're asking is that that will actually be less in the second half than it has been the first and of course from all the kind of unknown decisions or decisions that will be still made, they will have an impact one way or another. So we can't make an assumption there at the moment. And therefore we have not that we would, you know, get some additional sales or upswing from speeding up of deliveries. That is the honest answer.

Okay, and then the last question for me is related to the port solutions Q2 EBITDA margin, which is obviously particularly strong here. So I just wanted to dig a little bit deeper into it. Is there something, I don't know, a little bit kind of a one-off in nature in terms of having a very rich sales mix or having an exceptionally strong execution or something that you wanted to flag out so that we do not extrapolate too much into coming quarters?

Execution has been good, but not exceptionally good. One could maybe say so. It is not like a very exceptional quarter from that point of view. But it was better execution than a year ago, for example, in ports. Unlike in industrial equipment, we were referring to the other direction. And then from the mix point of view, it was not particularly good. But the volume and the smooth sailing from the margin point otherwise are the reasons behind the margin improvements.

Yeah, because I was thinking, Teo, maybe you already said that kind of the short cycle lift truck business is showing some signs of coming back. And I would assume that that's been quite poor also on Q2 delivery. So wouldn't that be a kind of a further support for margins and mix going forward if that business becomes kind of stronger?

Structurally, it would be a, let's say, mix improving, but not to a massive extent. It would be an improvement, but not so necessarily that one would see that in the numbers.

All right. Thank you very much.

The next question comes from Ponu Leighton-Maiki from Danske Bank. Please go ahead.

Hi, thanks. I have two questions. Firstly, on the service order intake. So the growth turned negative to minus 2%. Could you talk a bit about why was this and what do you expect going forward? And also regionally, I can understand the US softening, but maybe a bit surprising to see Europe down as well. So do you think this is a change in the bigger trend?

Maybe I can start and then you continue if you so so. First of all, it is obviously related to what we were discussing about the industrial equipment and that is visible also in the kind of the planned service order intake site that the customers are a bit more choosy in North America, particularly, but also in Europe that what they actually order and because of uncertainty in the market or because of actual less requirements, they may not be ordering as much as they have in the past. But I'd still like to say that there is a noteworthy that we have an increase in the agreement base, which was more than 5%, if I remember. So the underlying service, which is the most important thing, that is agreement based growth, that is there. And that was 5% year on year and 1% sequentially. So that is, of course, a positive thing. But you can see that at the moment there is with some customers apprehension due to order service?

It is a good question that why there is some softness in EMEA as well. When you take a deeper look at that, you notice that, or we noticed that there is, for example, spare part related decline in EMEA, which may be a temporary topic, whereas the field service in relative terms has been doing better. It's maybe too early to say that if this is any kind of a trend or not. But yes, it is obviously a valid question to be followed up in the coming quarters.

Okay, thank you. Then the second question is on the ports orders, which were really good in Q2. So you pointed out that it's always kind of volatile between quarters, How do you see this going forward? How optimistic are you on the kind of coming quarters? And do you think the Q2 was kind of only about timing or is it already reflecting maybe positive market share developments for you, given the tariffs and everything that's happening?

What I said earlier is that there is good opportunities of different sizes in the funnel, and the underlying market, the container traffic throughput index is increasing, so there is good long-term perspectives, but the timing is of course a question, and as you know, we don't guide the order intake as such on a quarterly or an annual level more detailed than that, but there is opportunities in the funnel. Quite a lumpy business, as we've several times stated, so you can't really draw conclusions based on one quote.

Okay, thank you.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Mikael Doppel from Nordia.

please go ahead thank you and good afternoon everybody i had two questions please i'll take them one by one so so firstly coming back to the guidance as you pointed out uh sales will probably decline year over year in the second half but margins were actually also down a bit in in the first half and you're going to reflect the improving margins just wondering If volumes come down, then what's going to be the key margin driver for the second half compared to the first? Let's start with that one.

If we take a look at the second half in particular in comparison to last year's second half and this year's first half, so there are a couple of positive things. One of them is the product mix. So we are expecting that from the margin point of view, the mix will be better as a result of, in relative terms, lower share of port sales in comparison to, for example, service and also industrial equipment, because port has been having a very good first half now. The other one is then execution slash productivity. So we now have been referring to both Q1 and Q2 to some extent, lower productivity, of course, particularly in the industrial equipment. But we are, let's say, expecting that the productivity will be better from that point of view in the second half. Then there are also a couple of, or at least one negative lever, which is the currencies that we already talked about, so that the hedging rate will be somewhat weaker in the third quarter and in the fourth quarter than what it now has been. But at least these three are there that are impacting in different directions in comparison to the previous first half.

Okay. No, that's clear. Thank you. And then secondly, there's been some news about the U.S. banning the SDS imports from China. I'm just wondering, you know, has this impacted your discussions with potential new clients in any way? What are you hearing from the ground currently on this topic? And also, do you see this spreading potentially in the other segments of Ukraine as well?

Yeah, I can take that or start again. It is obviously something that is an underlying and ongoing discussion with the customers as well as more broadly. But the fact is that it is too unclear or unknown what is actually the policy related to that. And then good to keep in mind that particularly when you mention SDS grains, these are very large grains, very large projects, multi-year deliveries, and even the global capacity is somewhat limited to go about in a massive scale renewing that American fleet of SDS grains or even the underlying annual demand is quite a feat and it takes some time. So although that is certainly not only a talk, but there can be an opportunity, it is something that is not imminent and immediate.

Great, thank you very much.

The next question comes from Antti Kansanen from SEB. Please go ahead.

Yeah, hi, thanks for taking a follow-up. It's a very quick one on the port side, where you mentioned that the backlog for second half deliveries is down, I guess, more than 100 million. How would you face the backlog then for, let's say, 26? Do you expect growth year-over-year basis on what comes from backlog, or is it kind of stretching longer into 27, 28 and forward?

Without going into the specifics, so one can maybe now that there is a gap in the order book for the second half of this year, so I'll maybe summarize by saying that that 26 looks quite okay from the deliveries point of view, based on the order book that we have now. There are of course deals beyond that as well, but not to an exceptional degree, one would maybe say.

And would you also wanted to comment anything on the backlog margins, given that we are now seeing this kind of a strong margin coming through on board. So would you be optimistic that 26 looks good from that front as well?

At least we have not tried to do any major change from the margin point of view so that the overall conclusion is that our order book margins are in line with the margins that we are delivering with at this point of time. And the idea is to be able to keep it that way, also including the tariffs. which are, of course, maybe from the complete grain delivery point of view, not having direct impact to us that much because it's usually the customer who pays the import duty. But of course, both that as well as the FX then has an impact on the competitiveness of our offering, which to a large extent comes from EU. That has to be taken into consideration, but hasn't really now impacted our order book as of this point.

Okay, thank you.

There are no more questions at this time, so I hand the conference back to the speakers.

Thank you, operator. As it seems that we do not have any further questions on the conference call lines, I'll be taking one question through the chat function. So could you please give us an update on your most current views on the opportunity in the United States related to the legislation restricting Chinese access to the markets?

I mean, this is somewhat a similar question that was earlier asked about the SDSM. I mean, that's a good and very valid topic to... to ask and therefore it's good to repeat also. And of course, a slightly different angle, but I assume that the person who asked the question is also mostly referring to the heavier end of the equipment and chips or grains. So I repeat that there is an opportunity, but there is no visibility at the moment when and how it actually will be taking into effect. And even if it would, then of course, the timing and the scale of the whole conversion from the Chinese products to Western-made product would be a multi-year exercise and it's a very large in scale also from a supply chain point of view. So this is not, although it is a relevant question and an opportunity in the long term, it is not something that is imminent.

Thank you very much. It seems that we do not have any further questions. So this concludes our Q&A session for today. I want to thank you everyone for following actively our webcast. And before we close the event, I would like to remind you that Konecranes will report its Q3 report on October 23rd. But thank you and have a lovely summer.

Thank you.