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

We have presented this morning our preliminary figures for the fiscal year '25. Krones continue profitable growth in '25, and we forecasts also a further revenue and profitable growth for '26.

Next to me is Christoph Klenk and Uta Anders. They will give you more details about these figures and also additional information.

We will also talk about the '26 targets. After the presentation, you will have the opportunity to ask questions.

I think you also know how the Q&A session works. Please use the function Raise Your Hand 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 we can start with the presentation, and I will hand over to Christoph Klenk, CEO of Krones.

Olaf, thank you. Warm welcome, ladies and gentlemen, on behalf of Uta and myself to our preliminary figures for 2025 and of course to how we see 2026, and looking forward then in of course answering your questions.

I will skip, as always, I would say the beginning of the slides, because this has been actually working as a summary for you that you can see all in a condensed way. Even over the numbers I will skip because we go in detail anyway.

I can say, if you see here the numbers, at the end of 2025 and seeing the results, we are extremely happy. Before I continue, I want to extend a big thank you to the Krones team globally.

So 21,000 people having made this success possible, because we're dealing with 160 countries around the globe, and quite complex lines and businesses. Once somebody is failing, some projects are failing totally.

Everybody is important in our team, and that's why we are so thankful that we have achieved those numbers with the team together. Before I go ahead, we had various challenges in 2025.

I just want to name them, not all of them, because then we would stand here an hour, but at least three of them. Is Middle East, because we all forgot that in the beginning of the year Middle East was pretty much under pressure with the strike of Israel and the United States in Iran, which actually affected the whole region.

Of course, we had the tariff issues during the year, and should not forget that FX issues will affect and has effect our businesses as well. On the other side, we had the highlight with drinktec.

You have been all being invited to that, seeing the line and what we are doing with that into the services we are delivering. Of course, with ProLeiT, Netstal acquisition, and the, let me say, combination of the Netstal machines and the Krones machines.

That's the highlights, and again, thanks to our team that all those things has been working out. Numbers you see here, and these are the green tick marks that we have actually achieved what we have promised, and that's the most important thing for us, for Uta and myself, that we once again have been robust in the statements we have made and that we have been achieving our targets.

From this on, jumping into more details, order intake. We have said all the time that order intake will be around 1:1 with the book-to-bill ratio, and this is actually what we have achieved.

Yes, we have been, and this is very obvious, we have been short 100 million with order intake in comparison with the sales we have done, but nevertheless, I would like to put that into context what we have seen in 2025. I said in the beginning, the beginning of the year, Middle East was a bit shaky because of what I have said earlier.

Then of course, we had the tariff issue, which I'm reflecting later on when we go to the split into the regions, how this affected North America, but this has been two challenges. Number three, and this is on the positive note, this is very important for us, that we have maintained price stability.

For those of you knowing us for a longer period of time, in particular those times before COVID, pricing was all the time an issue. Since, I would say, let me say, the markets are a bit more under pressure than before, for us it was very important that we kept a very close eye on pricing and we kept price stability.

Some of those, let me say, actions have been that we have been losing some of the orders just to make sure that the signal into the market is crystal clear as the remark I wanted to do here. If we look through 2026, because Uta and myself, we have agreed on that once we go through the presentation here, we give you all the time, let me say, the view in 2026.

Of course, you will see a summary at the end. As you have seen book-to-bill ratio in 2025 around 1, which is actually 0.98 if you put it exactly on it, the 100 million short I'm just saying.

We are looking about a book-to-bill ratio slightly above 1 for 2026. That means we will be higher than sales, and we will have in order intake a higher growth than we will have in sales.

That's the statement we are doing, and this is based, of course, always on, let me say, our interviews we have done with our customers by late 2025. I would say what we see right now in the market looks good for Q1 to confirm what I have just said.

That's for order intake, and I assume you will have later on certainly more questions to that. Order backlog, yeah, that has decreased slightly, but only slightly, and this has been on purpose, because our point was our delivery times have been too long.

Fortunately, we have been able to decrease that to around 40 weeks right now. In particular, let me say, orders we are even going further down.

We have shortened that, and we can say that as of today, we don't lose orders because of delivery times. We have been arrived into the competitive landscape again on where we should be, and that's important for us that this is not a reason that we are going to lose orders.

On the other side, it actually provides a very nice and stable fundament for the, let me say, economical development of Krones in 2026. We are well booked into the third quarter.

Very important for us because that gives us the visibility on our statements. Not more to say again.

By first purpose, we are happy to decrease that because we need shorter delivery times. Now, from the market perspective, how do we see things?

Number one, we see customers behaving slightly different than what we have seen in the past. I would assume that might be something for Q&A later on, once you want to know more details about that.

Basically, if you look to the split of the regions, and this is actually sales, it's not order intake, you might see that on the left-hand side that North and Central America, in terms of percentage, is going significantly down. However, if you look to the absolute numbers, we maintain a quite stable level on sales in North America, and it's roughly, it's easy to calculate, it's 1.2 billion.

All three numbers are reflecting 1.2 billion, and that has to do with the growth of the other regions. Of course, I named it earlier in the beginning, based on FX reasons we have in that.

That's one thing. If you look to pure order intake, North America 2025, that was decreasing in fact by 10%, of course, in the second half of the year, influenced by the tariffs.

Important for you to know, we plan on, let me say, the levels we had seen the year before last in terms of order intake for 2026, because what we see from our customers, since the shock of the tariffs have been going away, the business cases are still, even including the tariffs, intact. I think we can talk certainly more about that in the future or in the Q&A.

Second, what is to remark here, even as South America looks pretty good in sales, we have missed the targets there. We had higher expectation to South America.

This was not going too well, to be honest with you. This is one critical aspect for 2025.

If you look to Asia-Pacific, that has been going down into sales and in order intake. That as well a critical development in 2025.

Now the good news comes: for all of the three markets, North America and Central America, South America, and Asia-Pacific, we do assume that 2026 will perform better, and we are looking into achieving our targets for 2026. This, again, because many project has been postponed, are still active, not lost, and that's the reason why we have hope into those markets, and we will see, from our point of view, a good development in 2026.

Remarkable, Europe and Middle East, Africa, both of them, in sales and in order intake, have been growing significantly. In particular, Middle East and Africa have helped to overcome the shortage in order intake in North America.

Even China, from the order intake numbers, is an increase in 2026. Sales is declining a bit in the sense of generating revenue, but we are on a good pass in terms of order intake.

Last but not least, you see Central Asia and Eastern Europe is doing quite well as well, even good on track here. That's from, let me say, the markets, the order intake, and where we are with that.

With that, I'm going to hand over to Uta.

Thank you, Christoph. Good afternoon to all of you also from my side.

As always, I will start with revenue development. You have seen it already in our press release, but let me just give you some additional comments also from my side.

We said 7% growth, we are within our guidance of 7% to 9%. Christoph has mentioned it earlier already, in that 7% is a 99 million effect just coming from currency translation.

That was mainly in Q3 and Q4. We didn't see it so much at the beginning of the fiscal year.

That's why also we didn't put too much emphasis at the beginning of the fiscal year on it. If you look now at the whole fiscal year, 99 million is quite an effect.

If we took that out, we would have recorded a growth rate of 8.9%. Q4, we had always said for both order intake and revenue, Q4 will be strong with 1.556 billion.

It was strong, 9.7% growth compared to 2024. Also they're within our expectations.

As Christoph has mentioned, we will highlight already on the individual slides our expectation, our guidance for 2026. Our expectation for 2026 is a revenue growth of 3% to 5% and, this is important, adjusted for currency translation effects.

It's the first time that we are guiding this way, we also saw, as I said earlier, 99 million is quite a high number for '25, and we expect a similar number for '26, so that's why we believe it's only fair to take that out in our guidance or guide this way. Moving on with EBITDA, 602.3 million.

We are not so much into superlatives, but let's say it's the highest number we have ever recognized, we are proud on behalf of our team that we have achieved that. You can see 12.2% growth, absolute numbers growth compared to '24.

Speaking about margin, you can see the 10.6%, a 0.5 percentage point compared to 2024, and we are with that within our guidance of 10.2% to 10.8%. As I'm sure you all have calculated, Q4, which was an 11% margin, versus a 10.3% Q4 2024.

For 2026, the headline of our press release has stated it already, we continue growth both in top line, but also in margin. That's why our expectation, our guidance is 10.7% to 11.1% for 2026.

Moving on with EBIT, very similar development to what I had said already for EBITDA. If we look at the absolute number, 424.1, 7.5% margin.

I already want to say it at this point, I'm sure a lot of you have calculated the difference between EBITDA and EBIT, which is a little bit in terms of growth lower. We had higher depreciation in '25, and also the interest result was a little bit lower, because we had special effects in '24.

I'm sure we'll come to that also later in the Q&A. Personnel and material expense, yeah, starting with personnel costs.

You can see that we have increased it by 125, that's logical, because of the additional FTE, which we will see in one of the next slides, but also the overall cost increase in payroll per person in general. Important for us, and you know that we have highlighted that also throughout the course in the fiscal years, 30.1%, very close to our 30%, which is an orientation for us as personnel cost as a result of total performance.

Material costs, yeah, very positive development, as we can see. Overall, we only increased material costs by 110 million, and that brought us then also down to 47.8% material cost ratio, well below all other years, which is just the result also of the good work of our purchasing team.

I already spoke about employees very shortly. You can calculate it yourself.

We have an increase by 962 coming to 21,339 employees. What makes up the difference of the 962?

A quarter of it is service technicians. Then we have some, but that's not three-digit, mid-two-digit increase because of M&A.

You remember we have bought CSW. The rest of the increase is across the globe, as I always say, and also across the functions, also with focus on digitalization and IT.

Important for us also is, looking at the ratio of the German workforce in total, that is 55.0% compared to 55.5% last year. Also to mention, you can read it in the headline, 1,600 employees in the United States.

Now coming to the segments. For Filling and Packaging Technology, the story is always very similar to Krones in total, because it is the largest segment.

With our 4.774 billion revenue, we had a growth of 7.2%, also here impacted by FX. We have met the guidance, 7% to 9%, which is important for us, and we also here had a very strong fourth quarter, 1.294 billion revenue.

Looking at absolute EBITDA and margin, you can see 517.8 and a margin of 10.8%, also here well within our guidance, which we had given of 10.5% to 11.0%, and Q4 was 11.2%. Speaking about guidance, yeah, for 2026, we expect revenue growth by 2% to 4% adjusted for currency translation effects and an EBITDA margin of 11% to 11.5%.

Moving on to Process Technology, 514 million revenue, it's a growth by 1.2%. Our guidance was 0% to 5%, we have met our guidance here as well.

Very slight currency translation effects, but as I said, not major. Coming to EBITDA, you can see it, 52.9, another positive development here.

Also if we look at the margin, 10.3%, our guidance was 9% to 10%, a very positive development also because you know that on the growth side, we are lacking turnkey projects, but that on the other side is beneficial also for the margin. Speaking about guidance, same guidance as we had it for '25: 0% to 5% and 9% to 10% EBITDA margin.

Intralogistics, 376 million revenue, you can see 44 million more than 2024, which is a growth by 13.2%. Adjusted for currency translation effects, it was 14.9%, very, very close to our 15% to 20% guidance which we had given.

Looking at EBITDA and margin, yeah, also if we look longer term, a very positive development here. Overall 31.6 as an absolute figure, but also 8.4% as the number, which is also a result you remember that we had said on the CMD that we are having smaller projects, but also new products which we brought into the market, also then with higher margins.

For 2026, growth of 5% to 10% and EBITDA margin of 7.5% to 8.5%. Far for our P&L.

Now let's look into our balance sheet and everything which is related to that. I want to start with cash and liquidity.

You have seen it already on the first slide, we had a very good cash flow in the fourth quarter again. Overall, a very good cash flow of 283 million, which brought us then to a cash of 549 million, which was above our expectations.

With free credit lines and used ones, you can see the number 1.437 liquidity, very solid to manage global economic volatility, as also the headline states. Now coming to the right side of the picture, you see that we have increased equity by 206 million to 2.128 billion.

The 206, of course, is the result of 299 million net income, paying out the dividends of 82, and then a small miscellaneous change brings us to the 2.128, and it's an increase by 11% compared to December '24. Because the total of assets and liability only increased by 6%, we increased our ratio to 42.2%.

Of course, very good cash flow is reflected in stable working capital development, 17.3%, very much in line with what we had last year, '24, below our 20% or also 18% which we have as a hallmark also for the future. Then looking where it comes from, received prepayments, you see that with 15.6%, this is 2 percentage points lower than we had it end of '24.

If we look at the overall number, it is still about 900 million as we had it also '24. Now looking at inventory, also stable here as an absolute number, and that's why also the ratio decreased slightly to 12.5%.

700 million approximately is the absolute number. Our accounts payable, yeah, 15.5%, on the level as we had at '24, and here we had an increase in the absolute number, which of course then leads to a stable ratio.

Receivables contract assets as last number, slight decrease 1 percentage point. If I look at the overall number, also a slight increase close to 2 billion we are here now.

If I look at the total working capital, you don't see that number on the slide, 80 million increase. We see that number on the next slide as change in working capital.

Let's start first of all with free cash flow in general. We have mentioned that already a few times throughout this call, 282.9 million, above our expectations, because we had a very strong fourth quarter again, as we have it usually.

If we look where does the free cash flow before M&A come from, of course first of all, earnings development, other non-cash changes, which is mainly depreciation, and then change in working capital I already mentioned. Other assets and liabilities, the bulk in that is tax payments, 111 million, income tax payments.

Some of you may wonder why that is so much higher than it was in '24. '24 we had some consolidation effects from Netstal included, so that's why it's not 100% comparable.

Cash flow from operating activities, very solid, very good with 446, and CapEx 185 million, 3.3%, slightly below our 4%. Then other, which is smaller things bringing us to our free cash flow without M&A.

M&A activities in 2025, you remember, Q3 CSW acquisition, that was the largest in here. Then financing activities other, that is mainly the payout of the dividend of 82 million and then some lease payments.

Then you can read it yourself, change in cash, bringing us to our cash of 550. Free cash flow as an overview over many years, and also then slightly shown what our expectation for '26 is, yeah.

We're always a little bit more cautious. Christoph is smiling, because it's always a kind of discussion on how high is the bar, and I'm sure that some of you will also measure the bar and have a number there.

What is our message here? Our message is here, we also expect for '26 a solid and a good free cash flow.

That's our message. Last, but not least, for '26 '25, of course, ROCE, 19.1%.

It's logical. EBIT increased by 13%, average capital employed increased only by 8%, so that's why our ROCE increased by 0.9 percentage points to 19.1%.

Also to give you the absolute numbers: EBIT 417 million, and average capital employed close to 2.2 billion. Yeah.

Far for the actuals. Now let's just summarize one more time the outlook for 2026.

I have mentioned all those numbers already throughout the call, but one more time here as a summary: 3% to 5% revenue growth, important is the asterisk adjusted for currency translation effects, EBITDA margin 10.7% to 11.1%, and ROCE 19% to 20%. Of course, we have the usual disclaimers, and actually we have added here also reliability of forecasting revenue is impacted because of the volatility of exchange rate.

That's why we have adjusted it in the revenue growth guidance. For the segments, also here the summary one more time.

I have mentioned all of them already throughout my presentation, so that's why I will not read them out one more time. That is everything from my side for the presentation.

Yeah.

Right. Let's have a look on the mid-term targets, and since we have this morning several interviews with newspapers and journalists, I thought I should give a bit more of a taste on it, because if you look to the planned revenue in 2026, you might ask the question, is that target still valid?

I can say it's still valid. I just want to give some highlights on that.

As we stay with always here, we are not talking only with our customers about their 1-year investments, we are even talking about their 3-years investments and how markets might develop into the future. No security on that, but at least we have a pretty good understanding about possible investments in the different regions.

That's one thing. The investment cases are pretty robust.

That you see when you see what, let me say, hurdles we had in the world economy, in the geopolitics in 2025, and still the order intake was good. Then we have our basic growth drivers intact.

I don't want to repeat that in detail. It's growth of world population, in particular in Asia and Africa and Middle East.

It's definitely escaping from poverty in many areas of the world of people. Then it's in the mature economics, it's definitely product varieties and differentiation, so that helps us a lot for new lines.

It's cost pressure of our customers, because new lines will simply have a better cost structure than old lines. Then there is, of course, our new factories coming up in China and in India.

If we say new factories, that has to do we can actually better compete with local competition. We are still, for example, in China, the number one in terms of revenue, but we have, let me say, growing competition.

We need to get on the price levels of our Chinese competitors where we can get really close to and have a bigger scale of, let me say, equipment being built in China. Same is true for India.

On those two factories, we have hope, and they have to deliver contribution of it. Then the most important one is innovation.

If you look to what you have seen on drinktec, there's this new line type, but it's not, let me say, a machine or a line because of it's a new line, it's about getting more share of the lifecycle revenue of our customers. Of course, we're going to take more responsibility, but if you look to the utilization of our installed base, that is a significant proportion on the growth we have.

If you look to all of that, that's quite a big proportion which is coming along. I have to add, we all the time had some acquisitions being built in.

They are, let me say, on reasonable scale, 30 to 70 million. That's the ideal sweet spot for us in the sense we do acquisitions, so that might be not overwighted into what we are going to see until 2028, but nevertheless, it's part of it.

Then there is one other big thing. Uta referred to that already, that's the FX.

Because if you look to that, and if we would see the FX effects in 2025 and 2026, we are close to 6 billion with the guidance we have given for 2026. If you look to all of those factors, I think this is a reasonable number.

If we see then around 7 billion being possible in terms of revenue, that will be, let me say, a reasonable number from our point of view. Certainly, for the time being with the FX effects, more difficult to achieve, but nevertheless, I would say for the time being, we have no reason to see that our fundamental underlying, let me say, factors out of the markets would not work.

That's the statement I wanted to do here and to express that very clearly. I would say with that, we are through our presentation.

Key takeaways, that's the summary of the presentation. I wouldn't say that we are going to refer that once again.

I would move directly on to Q&A. Thanks for listening.

Thanks to Uta, thanks to Christoph for these informations about the actual figures and the outlook. I already got on my list Adrian Pehl from ODDO with some questions.

Adrian, your questions, please.

Yes, thank you everybody. I think you can also see me now.

Actually, first of all, a question on what you mentioned in terms of the dynamics in China. I just wanted to make sure to get that right.

Basically, the development that we saw throughout 2025, is that rather a function of the investment cycle of Chinese customers or would you say that you have been losing share? I hear you that the situation on the order book side is improving, but how do you see your market position going forward in China?

The second question is linked to a little bit the slide obviously that you showed on the free cash flow development. Just want to make sure on the CapEx side of things, what should we expect for 2026, and how's the phasing of the CapEx given that you are ramping up your capacity throughout the years?

I'll start with these two, and then I jump back into the queue.

Right. First, to where we are in China and if we look closer to the market, how do we have to see the market there.

To give general questions of the Chinese market is very difficult, because you need to see it different in the different, let me say, beverage categories, and we have to see it, of course, different in the, let me say, various products we have in the Chinese market. It's a different view, but if I look into general, I would say China has had over the last 5 years a bit an up and down.

We have been on higher investments level, then it has been bit going down, it had been a bit going up. If you look to a long run, it's pretty stable.

I would say the investment patterns of our customers is on a very comparable level. Now if you look to the future, China is right now, in terms of investments, dominated by aseptic bottling lines.

The Chinese market has some specialties, and if I look back the last years, Krones has a bit of a shortcoming because we didn't have aseptic lines localized. What we deliver out of China is PET lines for water and CSD, which was working well, everything included, from, let me say, the beginning to the end.

Now the next step, and this is becoming true in 2026, are aseptic lines out of China, because the market is significantly growing. Historically, we have been the biggest supplier of aseptic lines over the last 20 years in the Chinese market.

They have around 250 systems installed in the market. Then it has been going down a bit, and then it has been going up.

We had the disadvantage of what I just said, no local production, but this is coming up right now. I would say, if I look to the future, there's a better fundament on which we sit in terms of the local supply we can supply out of the market.

We have strengthened our technical, let me say, ability in China in addition. I would say there is a good potential for the future.

Second, we have been working on the other side of the product portfolio, that we get a bit of, let me say, more simple products out of the Chinese operation to begin I have to say to begin to serve the market better. Now, if you look to the order, let me say, behavior of our customers, this is quite competitive market, and then I would say this is changing because we have seen customers being good 5 years ago, they have lost really market shares and others have taken them.

Fortunately, because of the long term we are already serving the Chinese market and good customer relationship, we don't care too much which customer is at the moment investing or not, because we have access to all of them. We have a specific program in place to get customers on board which we didn't know yet because there are new customers.

We are having a team observing the local competition in detail just to understand what we need to do in order to get with certain customers an order, which is not all the time only the product, it has a lot to do with the services we supply around the product. Hope that gives you a taste where we are in China.

May I take the CapEx question? Adrian, it is what we have communicated also throughout the conferences.

We stick to our 4%. That's also the bottom-up plan we have.

We have mentioned all the projects we are currently undergoing. Christoph talked about the strategic importance of India, but also of China.

We spoke about the US, that's where money goes into when it comes to CapEx, but also here in Germany, investing into a new warehouse here at our headquarters, but also investing more automation into our machining facility close by. Those are the big tickets, and they end up at 4% as we had planned it all the time.

Thank you.

Mhm.

Thanks to Adrian. The next question I just see a phone number starting with 44.

That's

somebody from the UK, that

must be UK number, yeah. It's a UK number, and then next is 7407.

We skip to the next one, which is Vitushan from AlphaValue. Vitushan, your questions, please.

Hello, everyone. Thank you.

Thanks for taking my question. Just regarding the outlook provided, I was just wondering of the composition of it.

Is it possible to split it a bit? I understand that is communicated in local currency, and thereby can you elaborate a bit more on how much I would say it could come from pricing and how much from volumes?

Also if M&A is explicitly part of the strategy for 2026? As well if you could get some color on that.

The next question will be on the EBITDA margin. You're enhancing them, and is it possible to elaborate a bit more regarding the drivers implying the improvements, notably the cost optimization measures?

I've seen in the presentation that personal expenses were increasing relative to total performance, while material expenses were decreasing. Can you please shed some light on this as well?

Is this trend going to be the same for the coming year or not? Thank you.

If you look to the, let me say, more details split of the 2026 perspective we give. Number one, we do not see significant changes on, let me say, the markets we are going to serve, okay?

I would say the composition will be pretty much the same, and that's the reason why we see once we see currency on the same levels as of today and the changes that currency impacts, and that's what we actually stated, might then be very comparable. If you look to the composition of, let me say, our segments, even this composition will be pretty much the same.

With the growth of what we have said, this will be pretty easy to calculate. If you look now to our main segment in terms of machines and services, which we do not separate there, even there the composition will be the same.

There might be small gainings in terms of the life cycle because that's important for us, but that's the beginning, it will be pretty small. I would say even this composition would be pretty much the same.

If you look to pricing, there is very little in terms of pricing included. We keep prices stable.

Even on those areas where we had historically, I would say, better and fast price adjustments, which is the spare part and lifecycle business, even there prices are pretty stable because customers do not accept that we are rising pricing for the time being. We are fighting, and I said that in the beginning, we pay strong attention that pricing is not eroding.

That's our target. If you look to sales in total, there's no pricing effects being included.

I hope that gives you for, let me say, this category a point. If you look to the strategy to 2026, if you look to the overall situation, we have been, let me say, driving the company significantly by growth in a pretty large scale over the last 4 years.

Yes, that's a bit less then in the past, but if you look to 2026, we have big initiatives in the markets that we go more in specific cases of the market that we strength. For example, if I name it processing, that we say we are going to attack certain markets stronger.

We have, for categories of processing, different sales forces being in place which are coming just to make sure that we maintain the growth. Same is true for intralogistics.

If we look to our core business, it's about what I said, that in 2026, the factories in China and in India are going to be started up. That's an important factor to serve the markets closer.

Of course, as always, we are building stronger footprint into life cycle around the globe just to make sure that we are going to harvest on the installed machine base and getting more share in the service section. I would say that's my summary.

Okay. Thanks, Uta.

Good M&A is something which we certainly look into, which might be as well part of it. Did I read it right, what you said?

Good. Good.

Then we go to the

Then let's look at margin expansion. 10.7% to 11.1%, actually it's compounded by various developments.

Let's look at payroll. I mentioned earlier staying around 30% is important for us.

Despite of staying at around 30%, we expect, as an absolute number, an increase in payroll just because of, for instance, collective bargaining agreements, which is around, but that's just an approximate number, 3%. Then on the other hand, and I have communicated that also throughout our conferences, we expect decrease in material costs.

Why are we certain that we can achieve that? Because already last year, 2025 in summer, we have actually closed quite some deals in terms of securing steel, for instance, and we are not only securing that for us, Krones, but we have also secured it for some of our suppliers, which then gives us a leverage also on some of the supplies we get.

That is important. We have also hedged copper.

That's the two major components of our cost base. Then we will not have a drinktec in 2026, which also has a certain effect.

It was, yeah, around, but it's just an approximate number, 10 million last year, '25, we will not have that high amount in 2026. As a fourth lever, we will have only a moderate increase in FTE in 2026 compared to 2025, very moderate.

Then last but not least, we have always talked about the strategic measures we are executing to secure our margin, to secure our performance. We have spoken earlier about CapEx.

I have spoken about our machining plant, and there we are increasing the level of automation, which helps us also then to increase operational efficiency, just to name five reasons why we are five portions why we believe that the EBITDA can increase as a margin. Does that answer your question?

Thank you. Thank you for your answers.

I will get back into the queue.

Thanks to you. The next question is coming from Lars Cleff from Deutsche Bank.

Lars, your questions, please.

Yes, thank you very much. Good afternoon.

Two quick ones, but I guess the first one you already answered. Looking at your organic growth guidance for this year, 3% to 5%, if I understood you correctly, you said pricing is stable, so that it will be fully and solely be driven by volume effects.

Correct?

Correct.

Perfect. Then, more and more of my companies are worried or starting to get worried about chip prices rocketing, potential supply chain bottlenecks.

Would you see that as a risk for your company as well? If chip prices stay on this extremely or far elevated levels they are currently, or some of them are currently trading on, would you be able to pass on the additional cost to your customers?

I would say we, as a management, and this is maybe one of the learnings out of the last 5 years, that you worry all the time about your supply chain. Nevertheless, I would say we see no hurdles at time being that we are not capable of, let me say, getting those components on board which we need for our production.

Out of this learning from the last 5 years, we have a totally different view on supply chains, because our arrangements Uta said that earlier that we are going to hedge material and making deals on a much longer period than we have been doing that in the past. We have included our suppliers, and this is even to the chip question, even for all the suppliers because we don't buy any chip direct.

If we buy chips, they are either in the PLCs, which we get delivered from Siemens and others, or in other electrical components, which we get supplied, again, from Siemens, from B&R, and so on. What we have is we are sitting with them and to look deeper into their supply chain.

I would say the fact that we have been all the time concerned that the Taiwan Chinese issue might come up, that we have secured supply chains in, let me say, different quantities and different time periods than we have been doing that in the past. This will help us over pretty long period.

If things go south, that we can a, maintain pricing; and b, can maintain supply. I don't want to go more in detail into what we have done there, but it's at least beyond one business year.

That's the important message we present here. Second, and this is another learning, once pricing of certain components goes out of the frame, like a chip pricing would go up, and we can explain that to our customers.

We have gained significant experience in translating material cost increases, once they are reasonable and can be not compensated by other sectors of material costs, that we can translate that into pricing. This is still a, let me say, a procedure which we every 6 weeks controlling procurement and sales.

Is there anything which we need to translate? Because that was one of the learnings out of the, let me say, supply chain crisis.

Once we look early into that and address it early, we can manage even, let me say, significant price changes in the supply chain reasonably. I hope this gives you a taste on how we are going to manage that.

I wouldn't say that we are fully protected to all of this, because we all know that prices might come up, but at least we have prepared in a reasonable manner for such kind of incidents which might happen.

That is helpful. Thank you very much.

Welcome.

Thanks to you, Lars. Then good afternoon to Christoph Blieffert from BNP.

Christoph, your questions, please.

Good afternoon. Thank you for taking my questions.

Can you give us some idea about the revenue contribution for the new Chinese and Indian factory, please, in '26?

Very simply, India will be very low, because this are actually, most probably for the time being what we see today, two lines, which are built in India and being then shipped to customers. If you look to the overall revenue, it's small.

It's more for, let me say, if you look to order intake in India and the agreements we are going to do with our customers, and this will actually pay off 2027 and 2028. For China, today we are doing a low three-digit number revenue in China locally.

I would say this is going to be extended by 10% to 20% in 2026. Why is that?

Because the factory goes into operation by July. I would say until we have it in really full speed, it will be October.

Nevertheless, we are doubling the capabilities in China for 2027. This is what I'm said earlier, that we are even going to localize our aseptic business there, which is a significant proportion, which can even add then another, let me say, 50% to what we are going to do in China.

It will be quite a significant proportion. I think there will be a chance in one of the next meetings to show you some slides how this looks like.

This is a factory which is really big. At the end, we are talking about increasing our head count in China until 2020 mid-2027 from today roughly 1,000 to 1,500.

Small in 2026.

Small in 2026.

Okay. Thank you for that.

Yeah.

You have been highlighting the negative FX impact of again some 99 million in '26. Is this based on the current exchange rate levels?

The 99 million is '25. That's what we have highlighted.

This was just the difference between the average exchange rates '24 to '25, translated them with the same exchange rates. Actually, most of it comes from the US dollar, about half of it,

a

significant portion. And '26, yeah, we expect a similar level.

Does that answer your question?

Similar level means again

Like we had it in '25. Like we had it in '25, yes, around 100 million.

Okay. If the exchange rate remain on the current level, would you have to adjust your 2028 targets?

That's a good question, because we can answer that when we know how the exchange rate will remain, let me say, later than 2026. I told you earlier, we are keeping this target of around 7 million in place, okay?

How much we might be short because of FX effects, I can't tell you today. We are with the statement we believe in the growth of our market.

There are potentials which we can actually lift ourselves, it's not only market related. Since I have been explaining that, we would not make the statement at all that we are, for the time being, skip any of those targets.

There are many unpredictable things in front of us, but we have seen that world economy is for us in our markets quite stable. We believe we have talked that up and down, we still believe in that target and we stay with that, even with the FX effects in place for the time being.

Thanks a lot for the insight.

Please allow me that do not take the notions in for the time being. I have to be really careful, because there anybody is interpreted.

We stay with the targets of the around 7 billion in 2028, that's important.

This is understood.

Yeah. Good.

Thanks.

Thanks to you, Christoph. Now we identified the number from UK.

Constantin Hesse from Jefferies, hi.

Constantin,

your questions, please. Hello.

Hello, Olaf.

Can you guys hear me okay?

Yes.

Yes.

Amazing. Good stuff.

Thank you so much for taking my questions. Sorry, I had some issues with Teams.

All right, I have three questions. I would love to start with the medium-term guidance one.

I already heard that on the call, you talked about order intake in Q1 looking good. What I want to understand for '26, because clearly there has to be some kind of growth cadence into that about €7 billion figure in '28, meaning that order intake clearly has to be above 1x or book-to-bill this year.

What I want to understand is what visibility and are you actually seeing a pickup in order intake where you could today already give confidence that '27 we could see an accelerated growth relative to what we're seeing currently, obviously assuming no further FX headwinds?

Visibility is certainly not up to 2027. If I might explain that, what kind of visibility we have and how we deal with that.

We have three measures. Number one, discussion with our customers to understand those or our own analytics, that's one package why we actually look into the markets and how we think that we see investments coming.

Then second, we have the more short-term view, which might go, let me say, until end Q2, beginning of Q3. This is how many quotes we have out and how the pipeline looks like.

Saying that, this includes as well that we look into how much is the lost order rate we have, because it's important, is there enough volume in the market and we are losing because of other reasons, or is the market, let me say, as such not intact. What I can say as of today, and this was true even for 2025, volume is not an issue.

If my sales colleague would stay here, he would say, "Christoph, volume is no issue at all, just pricing is the problem." This is my second statement, we want to maintain pricing, this is all the time a bit of a, let me say, a different balance we need to keep.

Number three, short term, why I say Q1 is okay, we are middle of February, we know the orders we have already on hands, we know what is out there, and we know what we usually gain or lose. I think this is something where we are usually pretty good in predicting that.

But 2027 is staying significantly on the measures we have in our own hand. What I said earlier, the factories we are going to build, the innovations we see, the life cycle we want to extend, the processing where we see big potentials in the market that we can grow further, and even intralogistics, which has been doing great for us, where we can grow on.

We have then, let me say, Netstal, what we call it advanced molding technology, where we see options and in some smaller, let me say, growth areas where we are going to grow. If we put it only on what we know from the market, this would be not enough for us to see really the case.

Yes, order intake of course has significantly increased in 2027, that's no doubt about. This is something we have in mind once we look into the statements we have just given.

Fair enough on '27, but then just rephrasing the question, keep it simple. Q1, Q2, Q3, which is what you have visibility on, you're confident that book-to-bill is above 1.

As confident as you can be with all the history and, let me say, the know-how we have. We have not yet the orders for Q2 and Q3 in our hand, but again, pipeline is good.

We have been, I would say, any week in discussion: is that sound what we have planned to? Can we stick to it?

Are there reasons why it should not work? From all what we know, things are looking pretty good for the time being.

A promise I wouldn't give, too long being in the business, because we all know that Iran and the Middle East is, let me say, under pressure for the time being, for us an important market. I would predict that there is a reasonable reason or let me say, it's reasonable that there will be a strike, which would be then serious for our business.

That might be some of the downside, but if things would go normal, yes, I'm quite confident that we are going to get our order intake.

Understood. Thank you.

Second question, just on cash levels. We're reaching close to 550 million in net cash.

I'm wondering is there, in terms of M&A pipeline, is there anything potential coming up that could be larger? If not, at what level of cash would you start considering returning cash to shareholders?

We have proven over the period that we have been using the cash for possible M&As. I would say on the other side, we're really very careful in terms of our cash positions, because we all know that this is something very comfortable once you have it, in particular once times get being more shaky.

I can say we are working on M&A projects. However, we do speak only in case they are just before becoming true.

This are things which might come up, and we have, sorry when I say that, not yet considered to pay extra dividend to our shareholders, because we believe the reinvestment in the company is going to happen. We see things which could be done in the market in terms of M&A, and let's see how this continues through 2026 and 2027.

I don't think we come into the question whether we have to give our cash to pay it out to the shareholders.

Also with the profitable growth, we believe our forecast shows that the payout per dividend is going to increase. That is the lever where we believe that this is beneficial for our shareholders as well.

Understood. Then just curious around the free cash flow development.

I know what you've said, that you're being conservative for 2025 for 2026, sorry. Just to understand the dynamics of it, because from today's perspective, because you basically confirmed the '28 guidance, I would assume that orders start accelerating in '26 in order to have the book to grow in '27.

Looking at the free cash flow development, what is holding you back from generating a free cash flow that is similar or even above 2025?

We're going to invest further 4% of revenue. That's also what we plan for 2026 and also the years beyond.

For working capital, I mentioned earlier a level of about 18%, which is an absolute increase also for 2026. Of course, we're going to generate good levels of cash flow from operating activities, and so we expect a good level.

Why is it in our expectation lower than it is for 2025? You may remember that for 2025 our expectation actually was a bit lower as well.

That means we have generated more cash flow. You can cash flow only generate once, there's maybe also some small effect from '26, but overall, we expect a very good cash flow development for '26 as well.

Some, as my colleague may say, also conservatism in here, but we believe it's going to be a good one as well. We don't guide it.

It's of course indirect part of our ROCE guidance, but the free cash flow, we don't guide, we just give an indication on the expected development.

Understood. Thank you so much, Uta.

Christoph, can I just ask very quickly, you said Iran obviously is an important part of the business. If there is potentially a strike there, is there any idea that you could give us in terms of what the potential impact could be?

When I look to Iran, I'm looking more to the countries, let me say, aside from Iran, like Saudi Arabia and Israel. I do not talk about Iran, that's from a business perspective, not important.

I was more looking to the uncertainty which bring death to the region, because if you look to our Israeli and Saudi Arabian friends and customers, if such a strike would going to happen, they are concerned whether their countries would be attacked. That's the reason behind it.

I would say our customers are in this region quite robust to whatever weaponized conflict they are going to see. Nevertheless, a bit of an uncertainty might be if, let me say, such a counterattack of Iran might jeopardize those areas.

I would say it's limited to those being around Iran, but if I really can't figure out what the impact would be, I can't tell you. I would take it around.

If you look to, we have digested a 10% decrease in order intake in North America because of the tariffs, and we have been able to compensate that in other areas. I would see that other, let me say, areas of the world, and I would name Asia in particular, have a big potential for 2026.

Again, I wouldn't promise it, but I would see potentials to compensate in other areas as well. That's the reason why we still stay pretty sound on our statement, book-to-bill ratio will be slightly above 1.

Understood. Thank you so much.

Welcome.

Thanks to you, Constantin. The next questions come from Sven Weier from UBS.

Good afternoon, Sven.

Good afternoon. Thanks for having me.

I'm sorry, I have to follow up on the revenue guidance, and I'm probably the only person on the call who hasn't understood it yet. The 3% to 5% guidance that you give, is that already after the 99 million, or do we have to deduct it?

The real guidance is 1%

to 3%? The 99 is '25, but I said it's a similar number for '26, and the 3.5 is not after the 100, the similar number, you have to deduct it.

Good. That's what I thought, but just wanted to confirm that.

Then the other question also on currency, because you said US is down 10%. Is that an organic figure or is that including the negative currency effect?

Because otherwise, I guess you would be kind of

Including.

Organically, you've been actually quite flat in the US despite all the trouble.

It's half half. If you look to the numbers on order intake, what I just said, a big proportion is tariffs, but certainly a proportion is currency, yeah.

Nevertheless, this is not so You have to look into currency is an order intake not so big issue. It's just the translation effect which we usually have once we translate P&Ls from the US into Germany.

Because on the orders, we are dealing with the numbers we have in the quotes, very simple. We don't translate them, because if we quote bottling lines to the US, we have here a euro quote.

If we count, we have not a US count. Once we quote out of the US, of course, it's US, and we do not translate that at all.

It's just the number we see. Order intake has not so huge big effect of FX than actually the sales has, because we don't have the, let me say, exact translation.

It makes sense. Final question from me is just if you could share what kind of beer exposure do you still have left?

We all can obviously see the issues that the beer makers have, and it doesn't seem to be getting better, a generational issue, I guess. Has it become quite small already, or what's left in beer?

I have to say compliment how you phrase the question in the sense of what beer percentage we have left. Beer exposure, this is really good.

2025 was really bad on it. If you look to it, I think it would have been around 20%, maybe beyond a bit below that.

Interestingly, we have received this year quite good orders from the beer industry. If you look to purely Q1, this would be on old levels, maybe between 25% and 30%.

All in all, we do expect that beer is I would say on a 22% to 25% level in our portfolio. It's still decreasing, since intralogistics is growing, and we have been actually in processing not growing at all in the beer.

That has become a pretty small business in the processing. I would say, and I can say the number, that's pretty easy, we have around 120 million in the processing business being exposed to beer, not more anymore.

Where we are coming from, I would say 300. That has been compensated all by other, let me say, activities outside of beer.

In the core, I would say it's pretty stable, because bottling lines are more replaced than brewhouses.

What is the nature of the order that you got? I'm just curious.

If these guys invest, what are they still investing? Is this an emerging markets order or developed markets?

To be honest, it's all over the place. We have orders from Europe, where we have very old equipment being replaced from well-known breweries, but it's as well in Asia, where we have received orders.

There is still some orders out there in South America, where we believe those orders are going to materialize the next 3 months as well. It's all over the place.

I have to say, maybe that's interesting for you and the audience, that in particular the German brewers have been quite active in ordering equipment and getting on better cost level. I would say they have a lot of courage in to what they're going to do.

In particular in Germany, investments in breweries have been pretty good in 2025, and the same looks like for 2026, even if you look to the market development, which is not so good. All over the globe, it's, I would say, a lot of hesitation for investments into breweries.

Is that around also a lot of energy efficiency and those environmental topics, let's say?

I would say it's more economical reasons that they in many cases bring two lines down to one with higher speeds, higher efficiency, getting better, let me say, economics, because they have less people in. That's more the investments scheme we see right now.

There is still some very old equipment out there, in case you look to bottle washers, which have in their case, they are 25 years old, they have a significant amount of energy consumption, where they're just because of energy reasons go to reduce that energy consumption, or for pasteurizers, if they are old, they are horrible in terms of what they consume in water and heating.

Understood. Thank you.

Welcome.

Thanks to Sven for the question. Additional question, I think I see from Adrian, Adrian Pehl.

Yes, right. Thank you.

Actually, a very quick one on intralogistics. Obviously, you want to grow the business still quite substantially, you achieved 8.4% margin in this segment last year.

I was wondering, why should we assume that the margin is not going to see more momentum on this one? Is that due to mix, or how should we see this?

Yeah. Intralogistics from, let me say, profitability standpoint, in let me say, and I would call it commodities, which I call high-bay warehouses, has been over the years under pressure.

What we did, and this we stated as well on our capital market, is that we looking into, let me say, more advanced order picking systems, and that we have moved, let me say, the portfolio significantly. Then we have, let me say, a momentum that we are exploring new markets in Asia, while we have on the other side the mature markets in the US.

I would say, if we look in comparison with, let me say, comparable product portfolio structures, we are doing pretty well in terms of the profitability. We wouldn't see intralogistics necessarily being in the short run on the same profit levels than we see the core.

That's a fact, and I wouldn't say anything wrong in case I would make the statement that's going to immediate in the right direction. I would say the profitability we see we are quite happy with, was quite an effort to be there.

I would say we can grow certainly further and this adds on the margin, because even our service business is growing. This is not parts in this particular point, this is more software upgrades and helping customers out with crews running their installation.

There's a bit different business model. Again, if we grow an installed base, I think we have better chance in grabbing the aftermarket business, which is highly profitable in that section.

In the long run, I see a good development in terms of profitability as well, but it will be not in the short term.

All right. A very last follow-up actually on the service share in general for the group.

I take it that actually the service share increase is probably more pronounced as of 2027 as well, and more or less I think the line of communication so far has been 2025, 2026, rather not a significant increase on the service side, is that correct?

Yeah. If we talk about significant, it's a question of what is significant.

We are growing our service business, it's still growing. It has a very solid fundament.

If we look to the first two months, things are in line. Is it, let me say, that you see a huge momentum in sales?

No, it's a kind of a very constant development, and we would see that even over the period of 2027, 2028. In life cycle, there is no, let me say, big jump, it's more an evolution rather than really than explosion what you might see.

Even with the new lines we bring up, we are going to ship eight of those by the end of the year, beginning of next year, which we are harvesting on. If it's really completely having scaling, we stated that all the time, it will be 2027 to 2028.

Perfect. Thank you.

Welcome.

Thanks, Adrian, for the question. Let me check the channels, or ask the community any further questions from your side.

I don't see no hand raising, also no mails from my mailbox. Christoph, Uta?

Then I can say only thank you very much. We are beginning of the year.

As always, there is a, let me say, a realistic optimism we see. You have certainly heard from the statements we have made, we are, I would say, as we have been always quite, let me say, committed to the numbers we have given.

A lot can happen, of course, but nevertheless, we manage that and compensated that with the markets we have. We are looking with realistic optimism forward, and even looking with a realistic optimism to our 2028 numbers.

Thanks a lot for staying with us and having your questions. Was a pleasure, as always.

Thank you.

Thank you very much.

Thanks to you.

Thank you.