Renk Group Ag U/Adr

Welcome to the RENC Group AG FY 2025 call. Please note that this call will be recorded. During today's call, webcast participants will be in listen-only mode while we conduct the question and answer session. If you wish to ask a question, we ask that you please use the raised hand function at the bottom of your Zoom screen, or if you've dialled in, please press star 9. Further instructions will follow at the time of the Q&A. I now like to turn the call over to Christian Weiss, Investor Relations. Please go ahead.

Thank you very much, operator. Good morning, everyone, and welcome to our financial year 2025 conference call. With me today are our CEO, Dr. Alexander Sage, and our CFO, Anja Menzipje. Alexander and Anja will take you through the highlights of 2025, our financials, and of course, the outlook. Afterwards, we will open the floor to your questions. But now, I will hand over to Alexander. Please go ahead.

Yeah, Christian, thank you very much. Ladies and gentlemen, also from my side, a very warm welcome and many thanks for joining today's conference call. Before we go into many details, let me summarize the key messages up front. Rank has once again proven that we can perform. We delivered what we promised. We walked our talk. First, we have fully delivered on our 2025 guidance on revenue and adjusted EBIT. Massive kudos to all 4,400 Rankies worldwide for this tremendous effort. Second, we are proud to say that 2025 was once again a year of new all-time highs, record order backlog, record revenues, and record adjusted EBIT. Clearly a proof of our strategic focus and above all operational excellence and execution. Third, and this is important to emphasize, We deliver this performance despite facing several external headwinds. Exchange rate movement with the weak US dollar. tariff affects a weak industrial market and most significantly the Israel export embargo. Our results in 2025 are therefore even more remarkable and I think they speak very clearly for the resilience and the strength of our business model. To sum it up, a very strong year. Having said this, let's move now into more details. Let me start with the highlights of the past 12 months by walking you through the four key takeaways on this slide. RENK has again demonstrated strong execution in the Q4 2025 year-end race. We can perform when it counts simply. As a result, and as mentioned before, we have clearly achieved our 2025 guidance on revenue as well as on adjusted EBIT. We recorded a strong 2025 order intake of roughly 1.6 billion euros plus 9% year-on-year versus 2024, which leads to a book-to-bill ratio of 1.2. Let me be very clear here. This is a new all-time high in order intake despite the fact that we had a shift of approximately 200 million of expected defense-related order intake from Q4 2025 into 2026. these are not lost contracts they just shifted purely due to minor delays in the final contract negotiations they have a budget they are approved and they will come in 2026. so the underlying demand momentum is even stronger than the headline numbers implies our total order backlog reached a new autumn high of 6.7 billion up from 5.0 billion at year end 2024. This corresponds to approximately five times our 2025 revenues and providing a very high level of visibility going forward and underpins our confidence for the years ahead. Our defense business was once again the main growth driver in 2025. Defense revenues grew by 24% and defense-related order intake by 4%, which should be put in context with the before-mentioned project shift. Let me also briefly walk you through some of the key order intakes from 2025, where the majority of the program should be very familiar to you. Starting, of course, with the contract where we realized approximately 254 million as order intake. Then our large transmission and engine business with an international customer in the range of 130 million. various international naval programs of approximately 110 million for the full year, VTA or Augsburg spare parts for MBTs, IFVs and APCs in the range of 90 million for 2025, including the first orders from a frame contract for spare parts between Bank Germany and the Ukrainian MoD during Q4. Furthermore, and not shown here, we also realized the service contract with the Ukrainian MoD and Rank America during Q4. And finally, the K2 platform for Poland, which continued to be a very successful platform and driving our order intake also during 2025. Ladies and gentlemen, slides to summarize the group performance for 2025. And as you can see in the five orange boxes at the top, all presented financial KPIs are showing a very positive development. We already talked about the order intake performance, so let's move directly to the revenue. where we realized with 1.366 billion euro or approximately 1.4 euro plus 20% year on year, which is the result of our focus operational execution and conversion of our order backlog into revenues. The adjusted EBIT is with 230 million plus 22% above 2024 level. The adjusted EBIT growth is once again outpacing revenue growth, and this despite low double-digit EBIT headwinds due to the factors mentioned before, which indicates the operating leverage in our business model, the quality of our growth, and our disciplined cost management. The adjusted EBIT margin improved to 60.9% or 30 basis points. And last but not least, we will propose a dividend of €58 per share for 2025 at the upcoming AGM in June. An impressive increase of 38% year-on-year, reflecting our confidence in the business and our commitment to deliver value to our shareholders. Regarding the end markets, we are currently at a defense business share of 74%, which will further increase in the coming years to approximately 90% plus, driven by our sector strategy. Finally, and looking at the revenue split between new build versus aftermarket, we see our typical current range of aftermarket business between 35% to 40%, which is depending, like always, on the specific product mix quarter by quarter. You will see later in the outlook for 2026 that we will have a special focus this year on our group-wide aftermarket strategy in order to further drive this important, sustainable and highly profitable business segment on the short term, but also on the midterm towards 2035 to levels north of 40 to 50%. Let's move now to slide number three. As you know, our defense sector is the core of our business and the main driving force behind our crew performance. On order intake, let me repeat the approximately 200 million of order intake, which shifted from Q4 2025 into 2026. Adjusting for this effect, order intake growth would have been at approximately 19%, close to 1.37 billion, instead of the reported 4% growth of 1.17 billion. The mentioned shifts include a larger international amputee program in the lower three-digit million euro range, two naval programs from international customers, and finally a German Navy R&D project. On the revenue side, our defense business once again grew with plus 24% strongly, fully reflecting the ongoing ramp up of our production output and the strong execution on our existing backlog. Ladies and gentlemen, now let's move on and have a quick look at our segment performance, starting, of course, with our largest and most important segment, vehicle mobility solutions. VMS continues to be our strongest growth driver in 2025. On the revenue side, VMS realized significant growth in 2025, both in Q4 and in the full year, exceeding current market expectations. As you know, we had a planned temporary slowdown in Augsburg during Q3 in order to implement our new modular production line. By Q4, the new line was simply up and running and the global ranked team delivered an outstanding performance in the year-end race. The order intake was for 2025 with 1.129 billion and a book-to-bill ratio of 1.3 high and plus 11% compared to 2024, which was driven by ongoing and widespread demand for our high-performance mobility systems across various land vehicle programs. Let me now turn to slide five in our marine and industry segment. M&I also delivered a very solid performance in 2025, mainly driven by the naval side of the business. Revenue came in at 380 million Euro plus 15% versus 2024. Our strong naval business realized a new all-time high for the full year and could overcompensate missing revenues from our industrial part of the business, which was impacted by the GDP-related overall weak market environment in 2025. Strong execution on ongoing projects and the successful integration of our new U.S. operations, RAMI, We are key for this performance, and we are prepared to fully leverage our strategic positioning in the largest Navy market in the world, the U.S. market, for future strategic programs such as the FFX 3-day program. Regarding the order intake of 307 at 27 million Euro plus 6% versus 2024, you should please keep in mind the mentioned shift of three naval projects from 2025 to 2026 in the range of a mid-double-digit Euro figure and missing order intakes from the industry business due to the mentioned market challenges. Last but not least, a few words on our slide-bearing segment. 2025 was a very challenging year for our slide bearing segment due to a weak industrial market for the entire year and operational challenges during Q3. However, we managed to stabilize and improve our production and realized, finally, Not only a very strong Q4, but also a solid full year 2025 with slight revenue growth and very solid results on the adjusted EBIT line. Anja will talk more about this. One fact I would like to highlight. December 2025 was the strongest month in the slide-bearing segment, entire history in terms of revenues, which is a great indicator for the execution quality of our team in the final sprint of the year. Now let's move to the last slide of my introduction, our total order backlog. For 2025, we have reached a new record level of 6.7 billion in total order backlog, plus 34% compared to year-end 2024, which corresponds to approximately five times our current LVM revenue and providing us with an extraordinary quality of visibility for the years to come. Our fixed order backlog has continued to grow, driven by the strong order intake and including our strong conversion of existing orders into revenues. The soft order backlog has grown strongly, mainly driven by German but also international programs. Having said this, I would like now to hand over to Anja for a deeper look into our full year 2025 financials. Anja, over to you.