Renk Group Ag U/Adr

Good morning, ladies and gentlemen, and welcome to the Rank Group AG9M 2025 Results Analysis Call. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Christian Weiss, Investor Relations.

Thank you very much, operator, and good morning, good afternoon, good evening, everyone, everywhere, wherever you are joining us today, and welcome to our nine-month 2025 precise congruence call. Joining me today, our CEO, Dr. Alexander Zagelis, and our CFO, Anja Metsidje. Alexander and Anja will take you through the highlights of the quarter, our financials, and the outlook. Afterwards, we will open the floor to your questions. But now, I will hand over to Alexander. Please, go ahead.

Thank you very much for those international words in order to consider that we are a global community. Ladies and gentlemen, also from my side, a very warm welcome and many thanks for joining today's conference call. Today's presentation consists, like always, of three parts. Firstly, we will provide a quick review of the highlights and financial performance of the first nine months of 2025. I will take over this part by myself. Secondly, we will guide you then through our key financials in more detail, including Q3 figures. Anja will take over this part. And thirdly, taking into account that we are only one week away from our 2025 Capital Market Day here in Augsburg, we would like to comment only very briefly on our guidance for 2025, on upcoming key order intakes for the rest of the year, meaning Q4 2025, as well as we have a little look on the first half of 2026, as well as our main focus points for the last quarter of this year. Now, ladies and gentlemen, let's move into the presentation. Let me start with the highlights of the past nine months. First, and very important takeaway, the top line remains strong and we are seeing ongoing growth in the order intake. For Q3 year-to-date, order intake expanded strongly to more than 1.2 billion, corresponding to a solid book-to-bill ratio of 1.3 times. On the right-hand side of the slide, you can see the main driver for this positive order intake development, and some of them I'm sure are quite familiar to you, but I will nevertheless make a little run through this program. Starting at the top, three framework agreements with our HMPC transmissions. In total, year-to-date, at $235 million, where $56 million came in during Q3. various international Navy orders, 105 million in total, with new contracts in Q3, including a larger contract for Rami, our former synthetic earring system. VDA spare parts, mainly for Leopard users, but also IFV, with approximately 75 million, therefore 15 million during Q3, booked. K2 Poland, where we do continue our success story and booked a further contract with $50 million during Q3. Following one of our latest press releases, we already booked another batch of the K2 during the first week of October. We also should not forget the two larger contracts for an international customer during the first half year 2025, with a total order intake of $130 million for transmissions and engines. Regarding specifically Q3, we also booked a second batch of transmission for the NHX programs, for the Baltics, or to be more precise, for Latvia, as well as engines for the Turkish Fethi now. Not unexpected and as a logical consequence, the total order backlog continued to grow in the third quarter, reaching a new record level of 6.4 billion and providing increased visibility for the coming years. looking next to the main driver of our group performance, our defense business. During the first nine months of 2025, the defense business grew by 48% in terms of order intake and 25% in terms of revenue compared to the same period last year. A major highlight of the third quarter and a very important milestone to prepare for increasing capacity requirements but also efficiency gains was the launch of our modular production concept here in Augsburg. Our COO Dr. Henry Schiller will provide more details on this during next week's Capital Market Day. Finally, the launch of our two new transmission concepts during Q3, the 076 transmission as well as the 406 transmission, was just as important as the new modular production concept in demonstrating the focus execution of our next-gen mobility roadmap. Going on the next slide, slide number two, which summarizes the group's performance for the first nine months of the current financial year. Overall, all presented financial KPIs continue to show a very positive development to new all-time highs. Starting from the left to right, and as already mentioned before, order intake increased significantly worthwhile to mention that looking at the last four quarters, we're talking about Q4 2024 up to Q3 2025, we recorded order intakes of over 1.8 billion, a very strong performance indeed. Revenue grew year-to-date, September 2025, by 19% to 928 billion. As mentioned during the pre-close call, Revenue in Q3 was somehow softer due to the planned and needed production changeover in Augsburg. In line with previous quarters, adjusted EBIT increased over proportionally by 25% to $141 million and was driven by operational improvements, resulting in a further improved adjusted EBIT margin by 0.8 percentage points to 15.2%. Furthermore, no major changes in our revenue allocation year-to-date regarding our two sectors, so talking about defense and civil, with approximately three-quarters of our business related to defense and also our new business versus aftermarket ratio. On the next page, you can see a quick before and after comparison of the main changes in our final assembly line for land transmissions in outskirts. On the left side, you can see the old, somehow chaotic-looking assembly area, while the changes are clearly visible in the picture on the right side. Clear back and loading of the entire parts logistics, lean and clean. The modular production concept will not only provide us more flexibility regarding the different transmission types, but also will increase capacity, realizing higher efficiency gains, and defines a new standard within the rent production system. Started approximately 12 months ago, we finally managed the changeover in our production and again as planned and with a planned reduced output during Q3 and therefore we are more than happy to present it to you if you want live and in color during our upcoming Capital Market Day in Oxford. The execution of our so-called next-gen mobility roadmap is key in order to secure our leading market position regarding market share and technology. The newly developed 076 transmission was launched in September during the defense show in London, and is specifically designed for light track platforms between 10 to 20 tons, including future track UGVs, and showing a superior mobility of up to 90 kilometers per hour, plus a compact and lightweight design below 800 kilograms. The modular 406 transmission is setting new performance and modularity standards for future MPT platforms and was introduced to the market during a media roundtable in August. Very important to note that both transmissions are fully prepared for drive-by-wire and autonomous applications by digitalization. Let's move quick on to slide number five. As you all know, our defense sector is the core of our business and the main driving force behind our crew performance. The top line is strong and order intake increased during the first nine months by 48% to $932 million, while in the same period, revenue grew by plus 25% to $690 million, converting order backlog into revenue. Well, let's move on to slide number six, if I'm correct. Yeah, it's six. And having a quick look on the segment performance and starting with the VMS segment. VMS remains the largest and most important segment in terms of order intake, revenue, and, of course, adjusted EBIT. For the first nine months of 2025, we achieved an order intake of 904 million and a strong book-to-bill ratio of 1.6 times. Revenue climbed to 579 million, representing a year-over-year revenue growth of 25%. The going live of our new modular production concept was mentioned before, and we can furthermore summarize that all relevant customer projects are performing according to schedules and deliverables. Let me continue now with our M&I sector. The performance was very solid, particularly in Q3. The financial performance was mainly driven by the naval business, while the industrial business continues to suffer from the GDP-dependent, weak overall market environment. Order intake for the first nine months amounted to $255 million, and revenues rose by plus 18% to $268 million. Positive to mention that also our newly integrated RAMI, Rank America Marine Industry, formerly the Cincinnati Deering System, contributed to this positive development, not only with a new contract for the so-called ship-to-shore connector for the U.S. Navy, but also with a solid aftermarket revenue contribution. Last but not least, a few comments to our slide-bearing segment. The trend from the second quarter has emerged to a certain extent, and similar to our industrial transmission segment, slide damage is also suffering from a difficult and GDP-dependent weak overall market environment. As already mentioned in the pre-closed call, we were facing certain operational issues, which were mainly related to problems with stuffing during Q3 and affecting the output levels. We are working to resolve this, having launched a recruitment campaign, and we are positive to regain momentum and return to its usual strength as we move into next year. Now coming to the last slide of my today's introduction, our total order backlog. For the first nine months of 2025, we could grow our total order backlog to a new record level of 6.4 billion which is approximately €1.4 billion above financial year 2024 level and corresponding to approximately five times LTM revenue. Compared to the end of 2024, we could also increase the fixed order backlog by almost €300 million, driven by Dimensions' strong order intake, which more than compensates for increased output levels from our operations. Our soft order backlog increased to 3.2 billion compared to 2.2 billion at the end of 2024 and is also including first-term programs but also international programs. Having said this, I would like now to hand over to Anja in order to have a deeper look into 9M and the quarterly figures. Anja, over to you.