Good afternoon and a warm welcome from my side. My name is Olaf Scholz, Head of Group Investor Relations here at Krones.

In a macroeconomic environment marked by further uncertainties, Krones has confirmed their financial targets for '26 and also increased order intake and profitability in the first half year '26. This was the headline in the of the press release in this morning.

Now, Thomas Ricker, for the first time in his role as CEO of Krones, and Uta Anders will give you more details about the situation at Krones and also explain the figures of the first half year '26. After the presentation, you will have the opportunity to ask questions.

I think you also know how the Q&A session works here at Krones. Please use the function Raise Your Hands in Teams or send me just a short email, and then I will hand over to you.

Additionally, please be reminded that this meeting will not be recorded, and that is also not allowed to record the meeting. Please also deactivate any functions of recording at Teams.

I think let's start, and so I will hand over to Thomas Ricker. Thomas, the floor is yours.

Thank you very much, Olaf. Dear ladies and gentlemen, it's really a pleasure for me for the first time in my new role as CEO to present the half-year results 2026 of our company Krones, together with my colleague, Uta Anders.

As I mentioned already in the Q1 call, where I introduced myself, I'm very much looking forwards to future direct exchange and close cooperation with the capital market, and therefore with you. The current situation in the world is challenging.

Economy is globally slowing down, and the uncertainties in the markets are still on a high level. Despite that, Krones continued in the first half year with a positive performance, based on our resilient business models and our strong global presence, and we are confirming the full-year financial targets for 2026.

I will just jump over this summarize, because we will go in detail in the figures and in all these informations afterwards. The highlights for the first half year in 2026, also in a nutshell, because we will go more deep in the following presentation: order intake in totally at €2 billion 850 million, the revenue grows plus 1.8%, EBITDA margin on a level of 10.8%, and a free cash flow currently of -€31 million.

Going to the order intake, you have seen the figures. Even the second quarter was on a plus compared to the last year of around 3.5%.

In a sum, in the first half year, the grow of the order intake was by plus 4.5%. It's very important for us, the book-to-bill ratio after the 6 months at a level of 1.05.

In general, as I mentioned already, the uncertainties on the market are still on a high level. Despite that, we could manage it, and we have our global presence, we are more or less everywhere, and we are in close cooperation with our customers to handle their projects in the best possible way.

As you can also see, the strongest grows currently have been in North and South America, also in Eastern Europe. We have quite a stable situation on the order intake side in Europe and in Asia-Pacific, and currently a bit of a decreasing order intake compared to last year in Middle East, which is quite explainable, and in China, and we are expecting a catch-up effect also in the second half of the year also in that regions.

China in the first half year is always a bit influenced from the Chinese New Year, which is in February. Up to now, as said, we could manage the uncertainties and especially the huge cost pressure on the raw material side of our customers quite well.

The huge pressure on the cost side are mainly driven from the energy costs, and these are strongly influenced from the current situation in the Near East, in the Iranian war. The order backlog raised a bit up, and we are still on a very good level of around €4.3 billion.

The delivery times is stabilizing at really a very competitive level of around 30 weeks. The order backlog, in combination with the order intake also from the first half, ensures our production capacity utilization largely for the full year 2026.

If we come to the revenue distribution, it's still a very good, balanced balance between the emerging markets and the developed markets. A bit driven now from the developed markets, 52% in that area and 48% in the emerging markets.

What you can see here that North and Central America dropped down last year because of the shock of the tariffs, it's catching up again. That's good.

Also South America, I would say, is on a stable level if you see the absolute values. Europe and Middle East, following the order intake situation from last year, has a very strong development in the positive side.

The Eastern Europe, Central Asia, China, and Asia-Pacific regions are on a, I would say, stable and very good level from our revenue split. Far from my side, and then I would hand over to Uta.

Thank you, Thomas. As always, I will start with revenue development.

As you can see, speaking about year-to-date, we are at €2.715 [billion] as reported, and we have about €60 million FX effects included in here, mainly coming from the US dollars, and FX-adjusted, as you can see, €2.775 billion. This is a growth by 1.8%.

As you may recall, we had 1.4% in the first quarter, we have been catching up slightly towards our 3% to 5% growth guidance, which I will come to in a second. Quarter over quarter, you can also see that we had a slight increase and, as I said already, in the quarter about €10 million FX effects.

I mentioned that already, we confirm the guidance, 3% to 5% for the current fiscal year. We are well aware that the second half must be stronger than the first half in order to achieve that, but we have also shown, for instance last year, that we are capable of delivering that.

Also the production schedule confirms that all our production sites, all customer sites, installation and commission schedules, backlog, but also recurring revenue. That's why we are confident that we can confirm our growth guidance.

Coming to EBITDA, you can see for the fiscal year year-to-date, €292.8 million EBITDA, which is a slight increase compared to last year in absolute numbers. If I look at relative numbers, we increased by 0.2% percentage points from 10.6% to 10.8%, and this is true for the fiscal year year-to-date, but the same is true for the quarter, because also here we had 10.6% margin.

Also here, we confirm our guidance, 10.7% to 11.1% EBITDA margin range for 2026. EBT, €197.7 million, you can see yourself, it is a decrease compared to last year, which is still kind of, let's call it carryover effect from the first quarter, because here we had negative financial result, as well as higher depreciation.

You can see in the second quarter, we have increased slightly our EBT. All in all, also here, this in line with our expectations, as we are also writing it on the lower end on the left side of the page.

Moving on with personal and material expense, the picture is very similar to what we have presented already in the first quarter. Let's start with materially expense.

You can see yourself, it is in absolute numbers a decrease compared to last year, as well as in as a ratio, 45.1%, which is a result of the material cost reductions from last year. You may recall that we had also talked on the conferences about the cost agreements or the agreements we had done with our suppliers in 2025, which now carry through to 2026, and this is one reason, but also mix, but also price levels.

Those are the reasons for the low material cost ratio. We assume that this is going to be normalized a little bit throughout the fiscal year.

The same is true for normalization, but also similarity to the first quarter for the personal cost ratio. You can see yourself €29 million in addition, which is the result of, on the one hand, in average higher FTE numbers or employee number in comparison to same period last time last year, but also tariffs or merit increases, 32.9%.

As we have shown last year, we expect this go this to go down towards the more 30% throughout the fiscal year. Employees, actually there is not a lot to tell this time.

As you can see, we are at approximately the same level as we had end of the fiscal year, 21,249, 90 less. The reduction is mainly in Germany.

Stable development. Also if I look at the different employee groups which we always highlighted, it is very similar to what we had, and also that is in line with our expectations.

Now let's move on to the segments. For filling and packaging technology, I always tell you it is in line with group development, because it is the largest segment.

Speaking about revenue, €2.293 [billion] reported, €2.342 [billion] FX-adjusted. FX-adjusted, we show a growth of 1.8%, which is already very close to our 2% to 4% growth guidance, which we confirm.

Speaking about EBITDA margin, you see a nice development also this quarter, coming from 10.8% to 11.2% for year-to-date, and also here we are within our guidance of 11% to 11.5%, and we confirm both growth and EBITDA margin guidance. Process technology, the story is very similar to what we had seen the last years, only limited growth, but good margin or very good margin.

If you look at the year-to-date numbers, you can see that both in FX-adjusted, but also in reported numbers, we are below the last year, which is also related to delays of turnkey projects also in last year, but also at the beginning of this year. Higher or very good revenue in what we call units and components, pumps and valves, for instance, which is also the driver for the margin acceleration, the 10.6%, very similar to last year, above the guidance of 9% to 10%.

To summarize it, we also here confirm the guidance, 0% to 5% growth and revenue growth, and 9% to 10% EBITDA margin. Last but not least, intralogistics, nice growth, €60 million reported figure, €6 million adjustment for FX, we come to 9.7% revenue growth FX-adjusted, which is already on the upper end of the guidance, 5% to 10%.

On the other end, also due to mix issues, there is still some way to go to achieve the EBITDA margin of 7.5% to 8.5%. We are only at 5.3%, but also here to summarize it, we confirm the guidance for both revenue growth and EBITDA margin.

Moving on with equity, liquidity situation, starting with liquidity, as you can see yourself, we are holding a very comfortable liquidity situation with €1.304 billion, which is compounded by €405 million cash, I'll come to the free cash flow statement in a second, and free credit lines, as you can see, close to €900 million. That gives us sufficient room to maneuver for the growth we are expecting towards 2028 targets also, but also for everything which is going around economic volatility.

Equity, also here nice development, €64 million in addition equity, despite of the fact that we paid out €88.5 million dividends, we had a net income this quarter of €139 million. If I look at the ratio, also there nice development, up to 43.6%, 1.4% percentage points, and this is because equity increased by 3%, whereas the total assets and liabilities more or less stayed stable at €5 €5 billion, up to 43.6%.

Now let's come to working capital. Starting, first of all, with the middle part of the page, as you can see yourself, 18.5%, we are higher than we were last year.

Also if I look at absolute numbers, we are holding or we were holding end of June a working capital of €1.117 billion, which is an increase by €180 [million] compared to end of last year, which, as we will see on the next slide, is the main driver for the free cash flow development. Let's look at the different components of working capital.

Receivables, POC, you can see from absolute from relative numbers, but also from absolute numbers, very stable, 35%, 36%, and it's about €2 billion in absolute terms. Payables, they increased a little bit compared to Q1, where we have highlighted that in particular, and we are very similar to where we were last year at the same time, and we have about €770 million accounts payable, lower than end of December, but that's also normal course of the business.

Inventory, as you can see, and which we had already talked about in Q1, 13.5%, it is higher. Two reasons.

Reason number one, safety stock, as we have also highlighted in Q1 already. Reason number two is also a bit regional.

We are holding a little bit more inventory in North America, also to be able to deliver out of North America, and that's one of the main reasons for that. Last but not least, received prepayments, 15.8%, very similar to end of the fiscal year, but much lower than last year at the same time, and this is because, and I had mentioned that already, that with lower delivery times, we are moving faster also the orders, and then the down payments move from the liability side to the asset side.

That, all in all, the overall development of working capital, and as I said, it increased by €180 million, and we can see the €180 million, €181.1 [million] to be precise, also on the third line of the free cash flow statement for quarter two, not quarter two, year-to-date. Let's, first of all, look through the fiscal year.

I already reported on EBT, you can read it, other non-cash changes, mainly depreciation of about, €90 €100 million, and change in working capital I commented, other assets and liabilities, this is mainly income tax payments, close to €60 million. Then moving on CAPEX, that is a little bit different than last year.

We are higher in CAPEX this year than we were at the same time last year, 3.6%, and this is because we have quite some large investment projects which just pay out regularly. Other is not significant.

Free cash flow before M&A -€30.8 [million], and M&A activities, €8 million, that's the earnouts the earnout we paid out in the first half of the fiscal year. Financing activities, others, yeah, that's the dividend mainly, €88.5 million.

Then the change in cash, as you can read, and then coming to cash. If I just shortly compare last year to this year, I want to highlight two things.

The change comes mainly, the change in free cash flow, mainly from higher change in working capital, which we expect to normalize throughout the fiscal year, and more CAPEX. Those are the major changes.

Now I will take a slight detour, because I want to announce already something which we have closed in July. That's a small acquisition which we have done now in July.

We are actually in the closing phase right now. It is a very small business, €10 million revenue, you can read it yourself.

It's Wiro Precision, a tool company, and this is an addition to our Netstal MHT. Some of you may recall that we have talked about closing the loop, we have talked about advanced molding technologies as part of filling and packaging.

Here they are producing molds and tools for special purpose caps. It is closing a technology gap which we had in combination between MHT and Netstal.

Very small business, €10 million as said, 50 50 employees, margin accretive. You will see the payout in the third quarter of 2026.

Now let's go back to the presentation. This slide you also know, I I talked about the negative free cash flow, but I also talked about that we expect this to normalize throughout the fiscal year, same information as I had given to you in the first quarter, but also Q4 2025.

ROCE, 17.7%, very similar. You remember that I always talk about nominator and denominator.

What we see here is that the EBIT only increased by 1.9% for the reasons also mentioned already when I talked about EBT, and capital employed increased by 9.8%. We expect a certain normalization, in particular in working capital, but also an increase in EBIT, so that's why also here we expect not we expect, we confirm our guidance for 2026, 19% to 20%.

Far from my side, and now I hand over to Thomas again.

Thanks, Uta. Therefore, with all the figures shown, coming to the outlook, which we strongly confirm the guidance for 2026, based on our order intake situation, on our backlog situation, and especially also based on the schedule for our production and for the projects we have already in hands for the rest of the year, and we confirm the revenue grows in the guidance for the revenue grows in the range of 3% to 5%, the EBITDA margin in the range of 10.7% to 11.1%, and the ROCE in the range of 19% to 20%.

The outlook on the segments, as already mentioned from Uta, for the revenue grows and already also confirmed, I would not go in depth. You recognize that we have to have a stronger second half, which we confirm also that we are even in the segments fully in the guidance what we have placed for the 2026.

Last but not least, also our mid-term targets for 2028 with a revenue around €7 billion on the revenue side in 2028, an EBITDA margin in a range of 11% to 13%, and a ROCE bigger than 20% for the year of 2028. Also strong confirmation for that, whilst saying that when we have set the targets in 2024, the global situation have been quite a bit different, I would say a bit easier, and that means that the whole Krones team has to work even harder to get these targets for '26 and also for the mid-term targets done.

The key takeaways, more or less done already. The start was quite good.

The second half of the year will be stronger to come on the group level and on the segment level in our expected guidances. There is, for sure, uncertainties on the market.

Up to now, we managed it quite well, and this is our strong belief also for the future, for the second half. We have a good backlog, we have a good scheduled utilization of our factories, and therefore the targets for this year will be again strongly confirmed.

Far in an overview about the figures and short explanations, and we are looking forward to your questions.

Thanks to Thomas, and thanks to Uta for the explanations of Q second quarter or first half year '26, and also regarding the outlook. I think there are some questions, or I already see some in my email folder as well as in the Teams.

We start with the Teams. We start with Sven Weier from UBS.

Sven, your questions, please.

Thank you, Olaf. Thanks for taking my questions.

Good afternoon, and welcome, Mr. Ricker.

All the best for the new role. The first question I have is on the order intake guidance, right?

Because you confirmed the book-to-bill of slightly above 1, which implies an order intake for the second half maybe slightly above the level that you had in H1, which was a good level, especially in the first quarter. Now, you talked about prevailing uncertainties as a consequence of the Iran war, higher energy costs, which maybe cause some issues for some of your clients.

Was just wondering, if you could give us an update on the pipeline and how you feel about this book-to-bill guidance. That's the first one.

Thank you.

Thank you very much. As I mentioned already, there is for sure a lot of uncertainties driven currently quite through the Iranian war, and therefore through the energy costs, which have a direct influence on the raw material side of our customers, which is definitely understandable.

There is a lot of uncertainty because oil price and energy prices are going up and down very fast at the moment. Though this is not influencing what we see at the moment our pipeline, because our pipeline in all the segments is really robust for the next months and for the future, is still influencing, I would say, the decision behavior of our customers, that decision takes much longer even that they have taken last year and the years before, as said, is understandable.

I would say that's a bit also the uncertainty for us, but seeing the robust pipeline, seeing also the distribution of the pipeline around the world with a very good distribution, very good balanced, we are, I would say, very optimistic that we can manage the order intake side and therefore then also the growth side.

You also have a good start into July, so that gives you also comfort on orders? On

the July figures up to now confirming my statement from right now. Yes.

Thank you. Then I was just wondering, I think my understanding is that in order to achieve the full-year revenue guidance, you also still need to get some order intake in the second half for this year delivery, if that's right.

I was just wondering, the amount of orders that you need, is that round about the same level that you had in the second half last year, or how should we look at this in-for-out orders?

We are quite good utilized at the moment, and yes, there is a chance for single machines and for some new machineries also to be already delivered in this year. Especially on the service side, we have still longer chance to get orders in, which we also can then deliver, make to revenue this year.

I would say from that side, very satisfied with our statements for that year. A bit of an uncertainty also coming from customers, because we have also deviations in their projects driven sometimes from crisis situation or wars in that areas, that they have to slow down their projects.

There might be a bit of a question mark behind, but saying seeing the volume we have, seeing the outlook, and being the pipeline, again, strong confidence that we can catch up in the second half year and then being in our guidance.

When you look at the 3% to 5% revenue growth range for the year, would you feel a bit more comfortable at the lower end of the range, or do you think from today's point of view, you can still end up also at the higher end?

We are more comfortable towards the lower end.

Understood. I go back in the queue.

Thank you, both.

Thank you.

Thanks to Sven. I switch to my email folder, and I see also there's someone, Benjamin Thielmann from Bernstein.

Benjamin, welcome back. Your questions, please.

Hello, good to be back. Hi, Thomas, welcome from my side as well.

Three questions, if I may. First question, you mentioned it on one of the slides, is the solid order growth in North America, and I was just wondering where exactly is that coming from?

We know the story. Installed base in North America, especially in the US, is relatively old.

Are you growing there particularly because of a replacement of old machines, or are you growing with new customers, or is it a mix of both? Thank you.

That's the first question.

To answer, yes, it's a mix of both. The explanations we discussed a lot of times, and I would not say it's a kind of catch-up effect already, I would say it's coming a bit back to normality.

The reason for that, at least that's my explanation is, that it's a bit more certainty on the tariff situation since a few weeks or months, it's not going up and down and going and that's might be the reason that the one or the other customers are placing even more orders. Tariff situation is more or less unchanged up to now, and that might lead to a bit of a certainty on the customer side.

Again, it's not on a level what has been already, but you have seen the drop down in revenue and also in order intake last year, and I would say we are on a good way back. Hopefully it stays like that.

Very clear. Then next question would be, you mentioned it as well, that some customers could be hesitant in terms of investment behavior.

The CAPEX outlook for most of your big customers still looks good. Q2 order intake was I think the strongest Q2 since 2020.

It's clearly going well for you guys. I was just wondering in what regions or for what different types of lines and machines have you seen customers being reluctant to spend?

Anything surprising, maybe in Asia-Pacific? Oh,

as I mentioned before, I think Asia-Pacific is quite stable, including then also China, if we take that together. Not really surprising.

Maybe a bit surprising is that still the European regions at all stays on a very good level, also on a good investment level. As mentioned, Middle East is dropping down a bit, but also the expectation because of the crisis situation in that region was from our side even a bit higher, they keep it quite on a on a expected level.

As mentioned already in in the Americas, means North, Central, and also South America, we have quite a strong situation on the order intake, which is, let me say, supporting our overall good figure and good growth compared to last year.

Cool. Then last question, if I may, is regarding the working capital movements we have seen.

Uta, you mentioned it, inventory to sales went up by I think it was 100 bps because of a buildup of safety stock in North America. What is the reason for that?

You mentioned that you want to serve more from North America. Is this from North America to the North American market, or why is there that what I perceived to be sudden increase in inventories year-over-year?

It's what you said. It's from North America for North America to avoid the tariffs.

We probably have said last year when we talked about the mitigation measures for tariffs, one of the measures we mentioned is more local production, but also more local sourcing. This is now reflected in the working capital, actually in the inventory.

Local for local is the main reason for that.

Cool. I have a few more questions, but I go back into the queue and I come back in in a few minutes.

Thank you.

Thanks to you, Ben. The next question coming from Vitushan, Vitushan from Baader Europe.

Your questions, please.

Hi. Good afternoon, everyone.

Thank you for taking my question. I'm just bouncing back on the revenues.

It seems like you said that you are comfortable with the lower end of your guidance for 2026. In H1 revenue growth, adjusted for currency effect was around 1.8%, and for full year guidance remains at 3.5%, implying at least 4% of growth.

How much of that acceleration is already secured by the existing production schedule and confirmed by customer delivery dates? Also, I wanted to know how much still depends on project execution, please?

I relate a little bit what Thomas said earlier. Of course we have LCS business, service, spare parts, etc., where it's more or less in-for-out.

That's not secured, but also there we are confident. When we talk about when we look at the line business, what we call new machine, most of it is secured.

There is, as Thomas said, a bit new machine or new machine single machines which we can still take into order intake and deliver, but also generate POC, because POC is a major contribution. Everything which we are taking on now in order intake, we can generate POC from.

It is, I would say, a two million is a digit, a lower two-digit million, a lower two million digit number which still missing from order intake, from new machine business, yeah, from line business, to generate revenue for 2026.

Thank you. Just on the intralogistics business, revenue increased and we have EBITDA margin which decline, sharply.

Could you please elaborate on that momentum? Also, what's going to change compared to the first half to meet the guidance and targets within the segment?

Also, here,

we always say the word mix, yeah. I know that this sounds very, very easy, let's put very simple, let's put this way.

It is to a certain extent mix, we are generating recurring revenue from service, that's one hand. On the other hand, new machine business also has different profitabilities depending also upon what kind of line it is, where it is delivered from.

In the first half of the fiscal year, it was rather lower margins, yeah, but as expected. In the second half, we expect to accelerate then also if we look at higher margins, which is also confirmed by the backlog quality.

Thank you. Just a last question, please.

In maintaining both your full-year '26 guidance and also the 2028 strategic targets, what duration and intensity of the current geopolitical conflicts have you embedded in your assumptions? At what point would prolonged disruptions supply chains, material availability require you to reassess either the near-term outlook or the 2028 targets, please?

We have done the guidance or the 2028 targets back in 2024. Back in 2024, we had a completely different situation.

However, what we see, if we look at overall sentiment and overall growth drivers, they are intact. Beverage consumption and everything which we see there, there is an opportunity to achieve it, but it is much harder than it was in 2024, because we have all these additional conflicts which, to answer your question, we to that extent had not included when we set the targets for 2028.

Thanks. I will get back into the queue.

Thanks a lot.

Thank you.

Thanks to Vitushan. Next questions coming from Adrian Pehl from ODDO.

Hello, Adrian, your questions, please.

Yes, hi, everyone. Actually, I've got also a few, but I'll start with three questions.

On the point, Uta, what you said with respect to the lower material costs coming from 2025, I was just wondering, are you continuing with some measures? Probably you do this on an ongoing basis, but are there specific projects you can mention to continue to lower material costs, because on the other hand, looks like that you're doing quite good job here, but at the same time, we have the issue of personnel expenses keep growing.

There's just a compensation maybe, but not really growth coming from these two positions on profitability. Then the second question is I would phrase actually the regional questions that have been asked a bit differently, because when I look at the implicit Q2 China and Asia revenues, they have been quite up substantially.

However, I was just wondering if that was just a function of the low base that you had last year in Q2, or is this kind of a start of, let's say, more demand coming through in that region? Then maybe a question, the third one is kind of a broader update on Netstal.

My feeling was that the performance not been great recently, but maybe you could give us an update on how the asset, as part of the group, has performed so far and how what do you see going forward?

Let me start with material and personnel costs. Yes, you are right, we are benefiting from the lower material cost ratio.

You have asked for specific measures we have taken. I would not call them specific or measures we have taken, let's put it this way.

It's just the normal bargaining power we also have. We are usually doing, not usually, we are doing in summer price negotiations with our suppliers.

This is what we are benefiting from. We have also closed some hedging contracts, for instance for copper.

We talked about that already, and this is where we are participating or benefiting from in 2026. Also to a certain extent, it's also mix.

It's mostly the good development in material costs which we see in the actuals. Personnel costs, as I said, I expect this to go down further to 30%, to around 30% as we had seen also last year, because we are accelerating revenue.

Also we had seen or we had said that when it comes to employee development, the time of the large increases for FTEs is over for Krones, because we need to take also generate the efficiency out of the existing headcount. This is how I would phrase your question on material and personnel.

To your question about the region, I would like to give you the answer. As I said, I think it's currently quite stable in that region, which is in my opinion a success, because especially that region is also very, very competitive.

I would also say that our investments in that region, either in China and now also in India, where we invested in new production facilities, is paying off right now. We definitely want to and will participate on the growth and the extraordinary growth possibilities in that markets.

Forward-driven, yeah, that's a clear focus area or focus market from our side, therefore also the investments further in that area.

If I may start with Netstal, maybe you add then what I said. We have talked about that on the conferences also.

I would differentiate it into three buckets. Cooperation is great.

It's very good fit from a cultural point of view and also from how we drive business, so that's very good. The second I want to say is, yes, the injection molding market is much more not difficult is the wrong word, but much more under pressure now than we had assumed 3 years ago or 3.5 now when we have closed the transaction for Netstal.

That means the overall order intake for AMT, for Netstal, is not on the level which we had expected. Also, you may recall that we have talked also about that a big chunk of the volume growth we had forecasted was coming from North America.

Now delivering out of Switzerland into North America when the main competitor is sitting in Canada, that is a challenge, and that actually slowed down order intake by quite a lot, which is also a challenge for our 2028 targets, yeah, also to say that already. On the other hand, there are regions like Middle East, Africa, where the business was good, but overall less than expected.

Just my third point and then Thomas can add, is of course, with lower volume, profitability is not on the level which we had expected. You may recall that 2 years ago we had said they will be on Krones' margin level in 2026.

No, they are not. They are diluting.

Still the whole story, the equity story which we had talked about, yeah, and also closing the PET loop, is intact.

Uta, well said. I would say I would also stick on US, which was for sure one of our big growth market in that area, because Krones at all is quite well settled there, we have a lot of a customer base there.

The situation currently is in general the whole injection market is under very high pressure at the moment, and especially in US. That's the reason why maybe the growth actually is behind our targets.

On the other side, we are still continuing and we are trying we are finding the right solutions, because it is what it is. We have to find solutions with either more localization or even with pushing more in the system thinking, and that's also the reason why we acquired, for example, Wiro to have the whole system together, have the injection and again closing the loop from the raw material side to the molds, from the caps, from the preforms to the bottle, to even increase our competitiveness as a one-stop supplier for our customers.

Maybe just a very quickly follow-up on a topic we just discussed on the ramp-up in China and India. I guess there's nothing to worry about, so that's in planned CAPEX you spent was and in budget, I assume.

You can confirm that's all fine.

We confirm it.

Absolutely.

All right. Thank you, jump back into the queue.

Thank you.

Thanks to Adrian. Next question coming from Lars Cleff from Deutsche Bank.

Lars, welcome. Your questions, please.

Yes, good afternoon from my side as well, and wish you all the best for your new role. Two quick questions, if I may.

As you said earlier, lead times have stabilized at around 30 weeks, which, as far as I consider, is below your target range of 40 to 50 or 45 weeks. Is this a concern for you, or are you comfortable with it as long as the book-to-bill ratio stays at around 1 or higher?

I would say that's not a concern. That's a good figure at the moment, very competitive in the market, and gives us also a bit better certainty and also our customers, because even the long lead times years ago or maybe even last year has brought another big question mark on our customer side for doing their investments.

I think they can now justify quite well how their markets are developing, and then they are placing in the investment, and then they have a range of, depends where it is, but around at least below 12 months from the point of order placement to first sellable products or production on their side.

Understood. Thank you.

Then if I remember correctly, on the Q1 call you mentioned that given rising input costs, Krones was internally discussing the scope, timing, and mechanics of potential price increases for products which are scheduled for shipment this year. Could you provide us with an update on these thoughts?

I did not acoustical-wise, I did not understand, but yes, for sure, I think also that situation has stabilized. Especially on the freight and packaging side, I think this is a project individual calculation what we have, and therefore working close together with our customers, but in the end of the day, the price increases there have to be paid from our customers.

In totally, we are still focusing a lot on, as we call it, our pricing strategy and the pricing discipline, which is also necessary also with the changes coming out of materials, coming out of freight and packaging. I think currently, and the figures from the first half year showing that we have a quite good balance to manage that and even bring it in the market.

Lars, additional questions from your side? We didn't hear you.

Okay. Lars, take your time.

You can come back in the question later. I think next questions coming from Constantin Hesse from Jefferies.

Thank you very much for taking my questions. I've got only a couple left.

I'm just trying to understand a little bit better, this medium-term target of '28, it feels to me that it's probably rather that the base case feels that it's unachievable now that obviously things have become much harder out there. I'm just trying to understand what is still giving you the confidence of publishing this target, what basically what has to happen from a bull case perspective to get you there now?

Do we have to see an acceleration in Netstal again or what, because you obviously state that the fundamental growth drivers are there, right? You have beverage consumption going up, all of that is there, market share gains, potential in emerging markets.

It feels to me that we might actually see potentially a cut in that target coming up. I'm just wondering what gives you still the confidence to take you there?

The second question is if you could just remind us again on the ramp-up of the new capacities, when do these come online? Thanks.

Targets 2028, you may remember that I had always said it's about two handful of measures. If I look at those individual measures, the one where we have a question mark is Netstal.

Yes, for the reasons I said, if we don't get the orders out of the US, then there is a question there is an impact, let's put it this way, there is an impact. In everything else, and you remember the story that we had India, we need to have the capacity from India for local production.

We are on schedule there to achieve that, to answer to your second question. Also China, we will open that plant and then also come into production very shortly in the fourth quarter of 2026, so that is also ongoing.

You remember the installed base we had talked about, also there there is good development. Process technology and intralogistics being the major drivers, yes, of course we need to have the order intake in those two segments.

Intralogistics is developing well. Process technology had done also in the first quarter, second was more stable, let's put it this way, not extraordinary, but those are very important to achieve our targets.

That's why yes, there are, I would not call it question marks, that would probably be too negative. Yes, there are impacts which we had not seen back in 2024, but on the other hand, I would not take them back right now.

Understood. China online—

Also if I just may add, because we always forget that because it has been already some time ago, FX also played a role. You remember last year we have lost more than 100 or about €100 million just in FX, so that also played a role, and so that's why, the point, yeah.

No, absolutely. Obviously FX has come down quite substantially again, the question is where does it end the year, clearly.

Just to clarify, China Q4 '26, India mid-'27, is that correct?

Opening also is in '26, but then coming now I hand over to you. No, better.

We will say the same, but India is a bit different because it's a new plant. In China, it's an extension, we are quite more on, let me say, productivity.

India will take a bit longer to train the people, to get the supplier base done, and. I would say opening up also in India is in the Q3 '26 already, until we have, let me say, the positive effects out of it, it will for sure take in 2027, whilst the new plant in China is more or less productive from the first day of opening.

Understood, all of that is running smoothly. Obviously now the question mark, as you said, Uta, is on Netstal.

If I look at Netstal, I think back in '23, revenue was something around over €200 million. Can you give us a rough indication of that potential gap of orders that are basically driving that question mark, just to get a feeling for what's missing to get you to that €7 billion?

Sorry, we are just calculating, because we don't have all numbers in our head.

I would say you are more or less right with the volume you mentioned, and I would say it's substantial. The good thing is also that there is a really good pipeline, but also let me say the currently energy costs influence on the plastic raw material costs and PET costs is for sure also not a driver for the release of investments onto our customer side.

Again, there the market is quite stable, our I would say market utilization and our sales network all around the world will help us, and we try to catch up, but I would call it substantially.

It's substantially in the current situation already, plus we had planned growth.

It's substantial in the view of Netstal, right? If I look at that €7 billion target and obviously fine, a potential cut wouldn't be absolute a massive cut basically, it would be looking at something in the few hundreds of millions of a cut.

Not on a group level, you're right.

Understood. Thank you.

Constantin, thanks a lot. I see Benjamin again in the questionnaire from Bernstein.

Benjamin, your second questions?

Yes, thank you, Olaf. Two more questions for me, if I may.

Again on Netstal. I remember back then when you acquired it, you said margins are slightly margin dilutive.

I remember it was something around 10 to 20 bps on your back then group margin. Now, with volumes or intake being below expectations, I think, Uta, you mentioned it before, it is still margin dilutive compared to the standalone business.

Has that margin dilution basically is it still margin dilutive? That's the first question.

The second is— It is, and

actually it has increased a little bit also. The margin dilution has increased a bit, yeah.

All right. Then maybe one more question on the service business.

I know you don't give a split between new machine and services, but I remember back then at the CMD, I think it was in 2019 or 2021, you spoke about capture rate of the installed base growth. I was just wondering with order intake looking quite good in Q2, how does the service business look like?

Do you still capture a similar base or new machines with services than you did in the last 5 years because the regional revenue mix is changing? Is services going better than the new machine business?

Any color on that would be super helpful.

I would say no substantial shift on that between the services and the new machines. There have been a strong growth in the last years, for sure also our machine base outside is growing, but it's more or less also a linear growth then on the service side.

Okay. All right, perfect.

That's it from my side. Thank you, everyone.

Thank you.

Thanks to you, Ben. Next questions coming from Christoph Blieffert from BNP Paribas.

Christoph, your questions, please. Good

afternoon, thank you for taking my questions. A couple of follow-up questions, please.

The first one is on order intake. I'm struggling a little bit to understand why you highlighted rising uncertainty and delayed decision-making from your customers while reiterating the book-to-bill guidance for '26.

May I just want to phrase a little bit different the question, do you feel comfortable with the current consensus expectations indicating 4% year-over-year growth in order intake for the third quarter?

First maybe your second question, yes, I'm absolutely confident with that. The first question is, yes, I would say seeing the market potentials and seeing the project pipeline we have and comparing that with the past, there might be even higher chances to get the order intake up.

Means we have to fight even harder, and this is in my experience the reason that the discussion time, the final decision time on our customer side, and as I mentioned already, understandable because of their pressures either regional-wise, either crisis-wise, or either cost-wise how markets develop for them, leads to a very long decision. There might be more potential, and this is why we said this is, let me say, the balance between the market potential, the project volume, and then the order intake in the books.

Very clear, thank you. The second question is on pricing.

Have you already started to increase pricing to smooth input cost inflation, and can you give us some indication about potential price increases on the new machinery side?

With pricing, I would first of all start that even all in the past we are in a very competitive market. We have a, I would say, very good transparency on our cost situation, and therefore also on the pricing.

We have a lot of efficiency measures in place to at least cover some cost increases on our side. On the other side, your question, I think we balance what we see for the future, and the future is for sure when we deliver machines and when we are doing the services, which is around 6 to 10 months in advance, and therefore we have it also integrated in the pricing.

Up to now, that's only slightly changes. The slightly changes lead to that we can confirm our guidances on the other side our financial targets we have set for '26 and the following years.

Can you remind us when those hedges for some metals expire?

Oh, we need to take that question away. They also revolve.

Let's put it this way, I would answer this way. I don't have the exact, because we are revolving it, and I also don't have the term in my mind.

I think it's a year, but we are constantly revolving it.

This is clear. The last question is, can you share what is your best estimate for the FX impact on revenues if you assume stable FX rate for the remainder of the year?

What is the drag on revenue growth in terms of basis points?

If I look at, we had in the first quarter we had €51 million, now in the second quarter we had €9 million also because it's mainly coming from the US dollar. I don't have a crystal ball to see it first, because there are very different assumptions also from the banks on US dollar rates, but our expectation is that the impacts in the second half of the fiscal year will be lower than they had been in the first half of the fiscal year.

That's our expectation currently, or our assumption currently for our planning.

Thanks a lot.

Thanks a lot to Christoph. I see Adrian from Adrian Pehl from ODDO, you still have some questions?

Yes, I've got two very quick ones. Actually, one on process technology.

Just thinking about trajectory on the top line for this division, how can you support this segment to return to visible growth? Do you have to increase the scope of offerings?

Is it M&A that you are need? Maybe some clarity on the developments and how do you see it going forward would be helpful, obviously.

I guess this is still linked to a bit difficult situation on the brewery side. Having said M&A, I was just wondering if you could give us an update in general on your M&A strategy and developments going forward in terms of are there sufficient targets out there, are people reluctant to sell their businesses in tough geopolitical times, etc.?

Anything on that front would be helpful. Thank you.

I would start with the question about the process technology. The way forward is definitely planned with organic growth.

As you might know, we had a huge transformation already on the process side from, let me say, former times very strong link on the brewery technology. In the meantime, also developments in new areas, in new markets, in new fields, in alternative food, in proteins, in all that things.

This is, especially that year with a very strong order intake or with a very strong start in the year, is paying off right now. Brewery, as you mentioned, is still on a, I would say, weak level, and we don't expect a big growth coming of breweries, because alcohol and beer consumption globally is reduced also for the next year in the forecast.

This is our clear focus. This is also that the look back to our current order intake, also the visible projects we have already in hands, which is, because of the mix, also completely different scheduled time than the projects, gives us the confidence that we, first of all, will catch our guidance this year, and then we'll follow up also with a higher growth rates also on the volume side, whilst, and that's also very important, keep the profitability.

M&A?

M&A

in

totally, you can also so as we are always open to increase our competitiveness either on the technological side, on the other side maybe also of market access, and so on. There is currently nothing substantially in the pipeline.

There is a few targets we have, we follow up, but no even substantial contribution to the guidances or to the targeted figures in the mid-term plan.

All right. Thank you all, and Thomas, best of luck in your new role.

Thank you very much.

Thank you.

Thanks to you, Adrian. I have a look on my email folder.

I don't see any additional question there. I also ask you in the community if you have further questions, please raise your hands.

I think we are coming to an end to our Q&A session, and also to our call. Perhaps last words from your side, if you like.

I would say everything said. From my side, first of all, thanks a lot for your good wishes, which I take personally, but I especially will give it to my team and to the whole Krones employees all around the world.

As you see already, the Krones board team is already in the new, let me say, setup right now, and the whole Krones team is working even harder to get our targets for the future done. I thank you a lot for your questions and for your interest on Krones, and hope to see you soon somewhere.

Alles gesagt, Thomas.

Thank you very much.

Thanks, and now we would close the conference call. Thanks a lot.

Bye for now.

Goodbye.