Wacker Neuson Se Namen Ak

Good afternoon everybody and welcome to the Q1 2026 earnings call of the Wacker Neus. My name is Pär Schlinkmann, Head of Investor Relations and Corporate Communications. Thank you for joining today on the occasion of the release of our Q1 2026 results. As usual, we will first start with the operational and financial results of the first quarter of 2026 and give additional insights on the recent developments as well as our outlook for 2026. Following this, we are happy to answer your questions in a Q&A session. If you are not able to follow today's call by the webcast, the presentation slides are also available for download at bakanoisgroup.com slash investor minus relations. Please note that the entire call, including the Q&A session, will be recorded and the replay will be made available on our corporate website by the end of the day. And now I would like to hand over to our executives, Karl Drage and Christoph Burckhardt, who will, as usual, lead you through this call.

Thank you, Peer. This is Christoph Burckhardt, CFO of the Wacker Neusen Group. Welcome everybody to our earnings call and thank you for joining.

Dear all, a warm welcome from my side too. And thanks again for joining today's conference call. I am Karl Drage, CEO of the Wacker Neusen Group. I would like to start the presentation with a brief overview of our key financials for the first quarter of 2026. Six weeks ago, we presented our figures for the fiscal year 2025, including our guidance for 2026. And we gave the first feedback on our start into the new year. As expected, our first quarter of the year was much stronger than the first quarter in the previous year. Our revenue amounted to 591 million euros and therefore increased significantly, almost 20% compared to Q1 2025. Our order intake kept growing in Q1 2026 and our book-to-bill ratio in the first months of this year also remained above one. Supported by higher revenue and unchanged operating costs, our earnings before interest and taxes, the EBIT, grew to 42 million euros. This means that profitability growth exceeded revenue growth, resulting in an EBIT margin of 7.0%, which is 4.5 percentage points up compared to quarter one of the previous year. Our networking capital ratio in Q1, 2026 decreased by 2.1 percentage points compared to previous year, and amounted to 30.7%. Due to investments in networking capital, our free cash flow was slightly negative and amounted to minus 3 million euros. Christoph will explain the financial details in more depth later. Now let's have a look at the development of our regions. Revenues in Europe representing 80% of growth by about 27% to 472 million euros. We recorded significant demand increases in our key markets. Furthermore, our brands Kramer and Weidemann, with a focus on machine solutions for the agriculture industry, grew by an astounding 65% compared to quarter one in 2025. In the Americas, revenue reached 108 million euros. While this represents a nominal decline of 2%, revenue actually grew by 8% when we adjusted for currency effects. In Asia-Pacific, revenue rose to approximately 12 million euros, amounting to an 8% increase. And adjusted for currency effects, the growth in this region amounted to 12%. This was driven by increased demand in Australia, partly offset by lower demand in China. In summary, despite headwinds in some markets, we made a strong start into 2026, supported by recovery in Europe and our solid order book. I will come back to our outlook at the end of our presentation. Now, how does this regional development translate into our business segment? The business segment compact equipment, accounting for 60% of group revenue, reached 356 million euros in revenue, which translates to a substantial growth of 40% year over year. Demand for telehandlers, wheel loaders, and excavators increased significantly compared to previous years. Light equipment, accounting for 19% of group revenue, remained essentially at the previous year's level. However, it increased by 6%, adjusted for foreign exchange effects. Accounting for 21% of our group revenue, our services business declined slightly. This was mainly due to lower rental revenue in the DACH region compared to previous year's level. This was due to adverse weather conditions and the delayed start of construction projects from economic stimulus programs, which are releasing the funds slower than initially planned.

I want to hand over to you, Christoph, for more insights into our financials. Thank you, Karl. Not surprisingly, our net working capital ratio went moderately up in Q1, hand in hand with increasing activity levels following the low year-end level. But year-on-year with 30.7% after this first quarter, we do look at a significantly lower ratio compared to Q1 2025 with 32.8%. Overall, we do see a more balanced working capital development than previously. We are convinced that our progress in having an integrated S&OP process across all entities within our decentralized group is clearly contributing when managing the seasonality of our business, as well as with regard to the overall optimization of inventory levels. And just to illustrate this, in 2024, hence two years ago, after first quarter with similar revenue number, inventories were 20% higher in absolute numbers than today. Now moving to net debt, we do see a very similar pattern, which again is not a surprise, acknowledging the interdependence between net working capital and indebtedness. Our net financial debt after Q1 amounted to 196 million euros, showing only a minimal increase compared to year end 2025. Compared to previous year, Net debt increased significantly by 34%. Now, repeating the comparison that I did with the net working capital levels two years ago, the net debt level today is less than half of the level we had after Q1 2024. This all translates into a current leverage ratio of only 0.6, staying on the same level as at the end 2025. free cash flow with minus 2.7 million euro was about neutral and i would expect from now onwards a gradual positive contribution throughout the remaining year and last but not least to complete the picture our equity ratio remained at 62 percent underscoring the robustness of our balance sheet and with respect to you carl thank you crystal sounds good i would like to conclude now with our outlook for 2026

and key topics currently shaping our industry. Since our last earnings call in late March, the general business drivers have remained largely unchanged. Global economic and geopolitical environment is still defined by uncertainty. Factors such as subdued investment momentum, trade conflicts, and rising protectionism continue to cloud planning certainty. Situations further intensified by the war in the Middle East since early March. While indicators for the construction industry continue to point towards a moderate recovery, sector remains more subdued. Hence, we are seeing remarkable differences in our end markets. Nevertheless, by efficiently leveraging the increased volume in quarter one, we significantly improved our profitability. Consequently, we view the remainder of the fiscal year with cautiously positive expectations and confirm our guidance for full year 2026, which means that we expect a slight market upturn in 2026. With great trust in our customers, employees, investors, and in our strategic action, this should enable us to achieve a moderate increase in revenue and a higher EBIT margin compared to previous year. Specifically, this means that we anticipate revenues between 2.2 and 2.4 billion euros and an EBIT margin in the range of 6.5 to 7.5%. We plan to invest about 70 to 90 million euros in the course of the year. And we aim to keep our networking capital ratio below the strategic target of around 30% by the end of 2026. Let me summarize the key takeaways of today's presentation. We had a strong start into the year 2026. We confirm our guidance for the full year. Our John Deere Corporation is moving forward as we have planned. And we continue to focus on innovation. We have already new machines in the pipeline. and we constantly enhance our solutions. Our strong balance sheet is finally the foundation to execute our plans and to drive future growth. Ladies and gentlemen, thank you for your continued trust and for joining our earnings call today. We are looking forward to our annual general meeting taking place in a couple of days on 13th of May in Munich. Before I open the floor to your questions, I want to express my sincere gratitude to the employees of the Wacker Neusen Group. Their dedication and hard work remain the true engine behind our value creation for customers and shareholders. Nobody's perfect, but a team can be. Thank you for listening. We are now ready for the Q&A sessions.

The first question is from Mr. Stefan Augustin from Babock Research. Please go ahead. The floor is yours.

Thank you. And first of all, my apologies. I was just getting the last lines from your presentation, hopping in from another conference call. So if my questions have already been answered, please spare with me. I was wondering if you can elaborate a little bit on the order intake situation to build in the first quarter and then especially concluding from that one. Is there the expectation that your own production in the second quarter is likely to accelerate compared to the first quarter? Which would I actually imply giving from the ramp up of your inventories or the inventories already?

Let's say produced trucks Funny this contract speaking and the order intake is as we have explained we are seeing in the last three months a bill ratio of larger than one and This is always fluctuating, but it's above one. And asking the production volume over the year, it's generally the case that we have a production volume in quarter one and an increase in quarter two. And then we have to adjust to the order situation and also the timing of the orders. So I cannot generalize this answer in terms of going that way or the other way. Generally, there's a higher production volume, but we have to adjust it to the timing of the orders.

Okay, but I would still conclude from your answer that it is quite feasible to see a higher production volume in Q2 versus Q1, right? And from the situation that you have.

I would not. Stefan, I would not be right to confirm that because we want to adjust to market demand. Market demand is currently only times a couple of months, so we have to adjust to that and we can easily jump up after two months now and it can easily go down a little bit. So we are, as I said, generally the trend is should go up, but we, and this is our, what Christoph has explained, this is currently our source for a good working capital ratio that we keep very flexible in production.

All right, understood. Thank you very much.

Thank you, Stefan. Yes, hi, good afternoon, gentlemen. You can hear me? Hello?

Yes, we can hear you.

You can go ahead. Okay. Hi, good afternoon, gentlemen. Maybe you can give some more clarity and insight to the mentioned book to build above one because above one can mean a lot. So that can mean 1.1 or 1.5 or 2 or everything which is above one so that would be helpful and then the second question would be on light equipment and besides the FX effect do you have any explanations why light equipment is that much lower in growth rate than the rest or than the than the big equipment. And then in terms of the rental business, that's my third question. You mentioned that especially in the DACH region, the start into the year was weaker, also due to weather conditions. But do you, for example, since March and also now in April, see a pickup in the rental business?

Karl Zeiger speaking here. So, in the first quarter, our book-to-bidder ratio was around about 1.3. So, we are talking, normally, always in the range between 1.0 and 1.5 fluctuating. That's what we talk about at the moment. The light equipment situation, on the one hand, we have to adjust it for currency effects. That was the reason why we have explained that. And we have to take into account that we have high market shares in light equipment. We are, in many respects, market leader there. And we have significant opportunity in some areas of the compact equipment like excavators where we have smaller market share. So if business picks up and we gain market share and you also due to the higher space volume per unit, one unit light equipment is in the small thousands and one unit compact is in the small ten thousands. So this is Three effects leveraging each other and therefore multiplying up and giving this effect that way. As far as the rental business is concerned, we had an awful start in terms of weather conditions this year and also comparing to the previous year in 2025 with uncertainty at the beginning. The company started to rent rather than to buy, generalized, and this year it's just the other way around. companies start to buy again more and rent a little bit less and both together is giving this slight effect. We are talking on small single-digit percentage growth or declines, but we can clearly see and we saw a picking up of rental business in the course of the months from a very weak January, February up to much stronger March and April.

Okay. And following the book to build, you mentioned, is that also a level you saw in April?

I'm hesitating to talk about April because we just have the clear numbers for the first quarter. That's what we have published. So I do not want to comment on it. I'm sorry for that.

Yeah. Okay. Thanks. No problem. That's for my part. Thanks for the understanding.

Thank you. At the moment, there seem to be no further questions. Please remember, if you would like to ask a question, please press star nine and a pound on your telephone keypad. Okay, so Mr. Schlinkmann, there seem to be no further questions in the queue at the moment.

Yeah, thank you, operator. Ladies and gentlemen, as we can see, there are no further questions in line. This brings us to the end of our conference call. As usual, if you have any further questions, please do not hesitate to contact me or the entire Investor Relations team via phone or email. If you would like to meet a person, please let us know or check our website and financial calendar for all relevant roadshow dates in the coming months. Thank you again for joining our call and we wish you all of you a pleasant summer. Have a great day. Thank you.