Good morning from Graz and a warm welcome from our side. It's my great pleasure to host the Q2 earnings call and webcast with you today.

With me, I've got the CEO, Dr. Joachim Schönbeck, and our CFO, Vanessa Hellwing.

As usual, we'll guide you through the Q2 highlights and key CEO messages, followed by the financial performance, followed by an update on our business area performance, the outlook, and we will then conduct a Q&A session. Now, it's my pleasure to hand over to Dr.

Schönbeck for his initial remarks.

Thank you, Matthias. Good morning to everybody and thank you for joining us in this early call and thank you for your interest in ANDRITZ.

We are happy that we can report good results for Q2. We moved to another record order backlog after the very strong order intake in Q1 this year.

We had a very solid Q2. Growth was driven by Metals and by Pulp & Paper and we could see in Metals strong demand increase from the steel industry and we could also see first signs of stabilization from automotive.

With the solid backlog we have, we are confident for the next quarters to come. The revenue growth accelerated, supported by disciplined execution of our order backlog and a further increase of our service revenue share.

We had a very good growth in profits and profitability. We had a significant increase in EBITA, 15% up to €182 million, and we had an expansion on the operating margin from 8.4 to 8.9% EBITA margin in Q2.

This was driven by improvements in three out of the four business areas. Also three out of the four business areas are in the half-year results inside the 2027 margin corridor that we have given.

The guidance for 2026 for the full year is confirmed. Going to the details, we have a good order intake, €2.3 billion.

It's down 3% from previous year, but last year we had several large orders and the €2.3 billion are very very solid, no large orders included, we are quite happy with that result. Revenue on a €2.1 billion, 8% up, that is very good.

As I said, comparable EBITA to €182 million, 8.9% EBITA margin. Net income up 7% at €109 million.

Looking to the first half-year, order intake accumulated to €5.9 billion, book-to-bill at 1.5, very very good, drove order backlog up to €12.9 billion. For the first half-year, we are on EBITA €330 million, 8.6% EBITA margin compared with 8.3 in the previous year.

Net income up to €201 million, that's up 5% from the previous year. I would say overall, that is looking good.

Project activity now remains at high level. We have the seventh consecutive quarter with an order intake above €2 billion and we do see that the markets remain active on that high level.

Book-to-bill 1.5, I already mentioned, I would say we are well-prepared for any uncertainties to come. Going through the details of the order intake, you could see that in Q2, order intake growth was supported by Pulp & Paper and Metals.

Pulp & Paper 16% up to €880 million, very solid activity, mainly driven by paper and textile, order for a paper machine from Algeria, and in Metals, very nicely up, €573 million for the quarter, mainly driven by higher demand from steel industry, but as I said, we also could see good first signs of stabilization. Hydropower dropped in Q2, no large order booked.

Looks a bit difficult, minus 27, but if we look to the first half-year, we are up 82%, I would say it's more a matter of timing of bookings than of lack of performance. Environment & Energy down in order intake in Q2 10% to €300 million.

We definitely see a very cautious investment climate across several industries, many of that related to uncertainties also in this energy transition. However, project pipeline remains very active.

Therefore, we would see this probably more a transient problem. Going to the revenue, nice increase, 8% up in the quarter, 9% in Pulp & Paper and Metals, 16% in Hydropower.

Here you can see now the effect I was referring to in the last quarters that Hydropower, due to the long execution time of the projects, needs a certain time to convert the backlog into revenue. This is starting now and I would say the machine is rolling.

Environment & Energy, due to the reasons I just mentioned, down 2% in Q2, also down 2% for the first half-year. In total, in the first half-year revenue grew by 5%, so that's, I would say, we are on a good track there.

If we look to the order backlog, €12.6 billion, good record level. 50% is now in Hydropower.

I would say that is also proof that the backlog will remain for a bit longer, as the execution times in Hydropower are the longest of our businesses that we have. Looking into the EBITA, EBITA margin, nicely up, comparable EBITA and margin from €303 million to €330 million in the first half-year, and the margin up from 8.3 to 8.6%, definitely improved in order execution despite the high backlog.

The low margin legacy projects are phasing out and, for sure, the restructuring efforts are now bearing fruit. We have accounted in the first half-year for €18 million of non-operating items and that's on the majority the restructuring costs we have in Metals and some of the rightsizing we are still doing in Pulp & Paper and Environment & Energy.

The service business is growing as we like to see it. Record high on service share, 46% for the first half-year, which is an extremely good value, one percentage point up compared to previous year, 6% year-on-year growth in service.

I would say we are growing organically as we are building more service centers close to our customers, but also through dedicated M&A activities that we executed last year. On the ESG side, we are happy that our performance is recognized by the external rating agencies, we could see improvement from MSCI, from ISS ESG, and from Sustainalytics.

As we have reviewed our carbon dioxide emissions with Science Based Targets initiative and we had redefined our ESG targets along their guidance. You could see that we are basically on track in all dimensions with all KPIs.

You could see two ticks means that we already at the target level of 2 2030, we need to keep it, or on others when you only have the one tick, we are on track. With six of our KPIs, we already in the target range and with four, we are on a good track.

The others, we only have annual values and we will report that with our annual results. That is from my side so far.

I hand over to Vanessa, our CFO, and to have a detailed look to our financial performance.

Thank you, Joachim. Ladies and gentlemen, warm welcome also from my side.

With many details already shared by Joachim, I will keep my general comments brief and focus on the key takeaways. We delivered a strong second quarter with accelerated revenue growth, improved EBITA margins and net income, and at the same time, our order backlog reached a new all-time high, providing a solid foundation for future growth.

Overall, the first half of '26 reflects strong operational execution and demonstrates thereby us the strengths of our business model. From a CFO perspective, first half-year confirms that the growth we achieved comes with very strong financial quality.

Operating cash flow increased to €291 million, this is 72% above last year. We also increased our net liquidity position by 15% to €593 million on a year-on-year perspective, maintaining a strong financial position.

At the same time, we reduced our financial debt position, also to manage our interest result, which obviously is rather long-term with respective lagging effects, we'll come to that later. Return on capital has recovered to 18.5% following the M&A-driven temporary decline from last year '25, that is still well above WACC, implying substantial value generation.

Operating net working capital improved sequentially for the second consecutive quarter to €874 million. Having reached a new record order backlog, the increase in prepayments is still outpacing the increasing need for trade working capital, also this we will see later.

Let me now walk you through the EBITDA to net income bridge on the next slide. Our usual earnings bridge shows that the higher revenue base translated into a strong EBITDA increase to €404 million and further improved EBITDA margin of 10.5%, which is compared to last year with 10.3%.

Depreciation increased slightly due to M&A and increased capex spending, but it remained relatively stable as percentage of revenue. IFRS 3 amortization remained flat and we would expect around €55 million at year-end from status quo.

The financial result was lower than prior year and this is due to lower interest income on slightly lower gross liquidity as well as at the same time higher interest payments on our financial liabilities. In addition, we faced higher expenses also for leasing.

As a reminder, first half '25 last year included a positive €8 million valuation effect related to our Armis investment, while a total positive one-time impact for the whole financial year '25 amounted to €36 million. Consequently, we would encourage the analysts to consider these effects when modeling the numbers for the financial year '26.

While the tax rate remains stable at 25.3%, net income increased to €201 million and the net profit margin remained solid at 5.2%, which is confirming a resilient profitability despite a lower financial result. Moving to our EBITDA to free cash flow bridge, starting from EBITDA of €404 million, the main operational improvement in operating and free cash flow generation came from a significantly lower net working capital outflow, -€114 million last year compared to +€4 million this year.

Income taxes paid and interest received remained broadly stable and reduction in provisions and other items reflect the normal project lifecycle, the maturity of the projects, and expiry of respective warranty periods. Summing up, these effects result in a strong improved operational cash flow of €291 million.

Capex went up year-on-year by €33 million to €131 million, that was spent on growth, service, digitalization, and innovation. After that, free cash flow reached €160 million, a very satisfactory level and significantly above the prior year period where we reported €70 million.

In first half of '26, there were no M&A transactions and the M&A capex of €38 million fully reflects the residual outflow of the deals that were closed in '25. Coming now to the working capital development, we saw an increase in operating net working capital in the course of last year '25, reflecting a larger service share and the consolidation effects from our acquisitions.

We can now report the third consecutive decrease in operating net working capital in absolute and relative terms from Q3 '25 onwards, reverting back to a level of 11% of revenues currently. While operating net working capital management remains in focus going forward, I will now explain the moving parts in contract trade working capital and on the next slide.

The more detailed working capital overview here on this slide shows the diverging movements. On the contract working capital side, you see another sequential increase in prepayments and contract liabilities in Q2 alongside the good order intake reported.

The trade working capital remained flat sequentially and decreased slightly as percentage of sales, influenced by typical seasonal buildup in Q1 and Q to Q3, as well as the high service business and the general strong order intake. Structurally, the shift from larger over time projects towards more mid-sized and complete the contract orders leads to an increase in work in progress.

Disciplined inventory management will definitely remain central. However, with ongoing geopolitical influences, I can let you know from my CFO focus, it's much more important to minimize the order execution risk than minimizing inventory to the very limits.

Overall, you can see we remain in a really good shape. As you can see here on the next slide, quarterly operating cash flow remains volatile, as quite typical for our project business.

Q2 operating cash flow of €202 million was supported by better operating profit and lower net working capital outflow. The longer-term message is that higher top line, good margins, and well-managed cash conversion are sustaining a structurally strong cash generation profile.

Moving on to our strong financial position, our balance sheet remains one of our key strengths and provides significant strategic flexibility. While net liquidity increased by 15% compared to the first half '25, it decreased from €713 million at year-end '25 to €593 million sequentially, driven by also the dividend payment of €265 million in Q2 and higher capex.

Operating cash flow remains strong at €291 million in the first half '26. We also reduced our gross liquidity by repayment of financial debt position in Q2, and keeping please in mind our €500 million revolving credit facility, which is untapped for now.

That means ANDRITZ is well positioned to continue executing its capital allocation strategy while maintaining a very strong financial profile. Return on capital recovered in first half of '26, reaching 18.5% after the acquisition-related temporary dilution in '25.

Higher operating earnings combined with a stable average invested capital supports the increase. This confirms recent capital development is translating now into satisfactory returns with ROIC remaining above WACC and firmly supporting a strong value creation profile.

To summarize, the first checkmark is on long-term profitable growth. Strong development in order intake, another new record in order backlog, and a book-to-bill of 1.5, this is supporting the revenue trajectory while margin improved further.

The second checkmark here is on financial discipline and flexibility. Operating net working capital improved again sequentially.

Operating cash flow increased significantly while the net liquidity remains solid. That brings me to the third checkmark that sits on value creation.

ROIC remains significantly above the average cost of capital, implying substantial value creation. While we have recorded accelerated growth sequentially and a step-up in profitability in the second quarter, I really would like to also remind you that the higher Hydropower share is leading to a longer backlog conversion.

Many thanks for your attention here and I will now hand back to Joachim to provide an update on the business area performance and outlook.

Very good, thank you, Vanessa. Let's have a quick view on the business areas in more detail.

Pulp & Paper, I would say, overall very good development. Order intake up 16%, revenue up 9%, EBITA up 12%, and EBITA margin from 10.2 to 10.5%.

That's all looking very good. Order intake has been driven by paper and textile that was suffering for a long time, we're happy about that development.

This upstream integrating trend in China in the pulp industry remains solid intact. We also believe that there are more projects to come.

Revenue is now accelerating, the order intake from the previous quarters is now executed. Good growth in service business, service share a very nice level of 59%, it's really good, and also market has a positive outlook.

Metals, I would say, you considered your problem child, also improving good. The activities that management is doing is definitely bearing fruit.

We are up now 9% in order intake, we are 9% up in revenue, we are up 37% in EBITA, and EBITA margin increased from 5.3 to 6.6% for the comparable EBITA margin. Order intake, I would say, solid demand from steel industry, a big stainless steel complex in Turkey, a large processing line in India were definitely the, I would say, the highlights, but we also can see stabilization on the automotive side, increased project activity.

Our view that we might see the end of the trough towards the end of the year remains positive. We have a nice grow in service share from 28 to 29% on a 9% increase of the revenue, and that will further stabilize our profitability.

We are now for the first half, we are in the margin corridor for 20 2027. I would say that's good development.

Hydropower, as is working in a, I would say, really exciting market, even though order intake is now down for the second quarter 27% to 5 €570 million. We had several large orders booked in the Q2 of 2025 and this is why, I would say, this drop is more administrative drop than a real drop.

If you look to the full first half-year, we are up 82%, and as I said in our last call, that some of the bookings we were able to book prematurely to what has been planned on the project side. The revenue is nicely up 16% compared to last year and the EBITA is up 47% to 30 €35 million, and the EBITA margin is now at 9%, up from 7.4 for the Q2.

We are profiting from the high demand on renewable energy, but also the grid solutions now play more and more a very decisive role and industry has realized that a lot of work needs to be done as the amount of the unsteady renewable energy from wind and solar is increasing. Also turbogenerator business is developing well.

Several mid-sized orders, maybe worth to mention, Straumsfossen hydropower plant in Norway from Hafslund, Norway's largest energy provider, I would say, showing the good and solid partnership we have there in this country. The profitability is moving nicely up and we are for the first half-year, we are now in our margin corridor we have announced for 2027.

Looking into Environment & Energy, order intake dropped by 10%. We definitely see a subdued investment climate across several industries.

I already mentioned that before. However, we see active project pipelines in many areas, we are not too pessimistic for the mid-term outlook.

Now we have to see where, I would say, this demand is not temporarily, but more long-term, whether we have to take some actions to reduce our capacities. The revenue declined because of the lower order intake.

However, in clean air and feed and biofuel, we have solid development. I would say, even though with the decline in the revenue, margins are still satisfactory despite the decline, and still within our corridor for 2027.

What is a few words to our external effects we do not have under full control. Happy to report that we have no adverse impact from the increasing trade barriers as well as from the war that are going on.

I would say our teams are working hard and apparently very effectively to keep these impacts still low and financially to a very limited amount. We are happy that the FX exchange is stabilized and we did not have any more FX headwind in Q2 for the first time since several quarters.

I think that is good news. However, despite the good Q2, we confirm the guidance for 2026.

Project activity will remain stable on the high level that we have reported. The revenue will be between €8.0 and €8.3 billion, and we expect the comparable EBITA margin being between 8.7 and 9.1%.

We also confirm our mid-term targets for 2027, revenue between €9 and €10 billion, and comparable EBITA margin above 9%. We have discussed that, and would like to end that in the first half-year, we have reached to have three of our business areas in the margin corridor that we have announced for 2027, we are confident to get that going.

This is where I want to end. Thank you for your attention.

If there is anything you like to ask, we are happy to provide the answers. Thank you very much.

Yes, hi. Good morning and thanks for taking my question.

I'll start with a couple and then come back later. The first one I have is on pipeline for large orders.

I think you define large orders as more than €100 million volume and there was no large order in Q2 and despite that you had a very good level of order intake. The question is that when we look at for the rest of the year, next couple of quarters, can you talk about the pipeline for large orders, how does it look versus, let's say, last few quarters that we have seen?

That's the first one.

On the large orders, we can say that we are working on large orders with our customers. However, we are not in control when they really get into force.

There are large orders. As I said, we will not repeat the Q1, I would say, accumulation of these large orders, we don't expect that.

I would say the key takeaway should be that even without the large orders, we have been able to sustain a very good order intake solidly above the 2.3 solidly above the €2 billion threshold. I think that's a very good sign.

Thank you. My second question is on 2027 revenue target.

We have seen good order intake and you have been flagging about increased duration in backlog, particularly coming from Hydropower segment. We have six more months or five more months from today to close the year, and you guide at bottom at €9 billion revenues for next year.

The question is, do you think you can get there organically with the portfolio that you have today, or do we need to see any incremental M&A to hit €9 billion mark? If you have to do any M&A, any commentary on what could be the potential timing that we should be looking for?

Thank you.

On M&A, as I said, we do not plan for that, and we believe that we reach the €9 billion revenue target, and I would say a normal small M&A activity is always part of our business model.

Good morning. Thanks for taking my questions.

First one is on the Metals business where you saw nice sequential improvement in the order intake against the previous quarters. I was just wondering, are you confident to maintain that run rate, or is it also a bit like you had it in Hydro and Q1 that that was a bit of pulling forward?

That's the first one. Thank you.

Project activity in Metals is good, and this is not an accumulation of events, we see that the market will continue on a good level, yeah.

Good. Second question is more like a strategic question.

We all see that Valmet is considering a potential breakup of the company. I was just wondering, when we look at your business portfolio in terms of potentials for spinoffs, how do you look at the situation?

Do you consider all the four divisions and the structure of the company as being core and no changes will be made?

That's what we do. We believe that we are the best owner of all four business areas.

If we come because we are assessing that on a regular basis, if we come to the conclusion that we are not, we definitely will investigate that and then we will let you know in due time.

My understanding obviously is when I think about the pulp and paper automation business, right, it's an integral part of your Pulp & Paper division, while Valmet seems to want to spin that off. What do you see as the biggest advantage as having that as an integral part rather than a separate business?

We are running our business model in all business areas that we provide integrated solutions, including mechanics, electrics, automation, and also digitalization. We think that is a good model and we see from the trust our customers place with us that they also confirm that.

Do you see that as an opportunity to win market share once the business is spun off from Valmet and they don't have it integrated anymore?

We always try to win market share, regardless what our competitors are doing.

Sounds good. Thank you, Dr.

Schönbeck.

Hi, yeah, good morning. Let me follow up on what Sven has just touched, maybe not only focusing on Pulp & Paper, but from shareholder perspective, it definitely makes sense not to sell parts of the company completely, but so that is floating individually.

Since when seeing the sum of the parts reveals actually a sizable discount in valuation when valuing the business lines separately. Is it also not a worth thought to keep the majority of this?

Yeah.

As I said, we are reviewing that regularly, and if we believe that somebody else is a better owner than we are, we will sell it. We have done this last year with our OTORIO joint venture because we have developed the products we wanted to have on cybersecurity, but we also understood that we were not the right platform to scale it.

We sold that to Armis. Armis has then been acquired by ServiceNow, and what we have developed as a product still is a valuable value proposition from ServiceNow.

I think that's what we do, and rest assured that we will review this on a regular base, and if we come to that conclusion, that we will act accordingly.

Yes. Another topic, can you maybe give us a flavor of how the margins develop within Hydro roughly when thinking about Syncon and turbos and the normal hydro business like equipment, services, how do they compare in general and how did they sequentially develop?

The business model of the three products basically that you mentioned is a bit different. The, I would say, the normal hydro business is very long project business, execution times between three and five years, usually large orders over a long time, while Syncon business and turbogenerator is a bit shorter cycled.

This is where the differences are. On the margin improvement, all three main product lines contributed on a fair balance.

Okay. The last one, you booked some restructuring charges now in the second quarter.

What should we expect for the second half-year in this respect?

I trust that we will stay on the run rate because we will finish the main restructuring activities in Metals by end of this year, latest Q1 next year. I would say take or less the same run rate we have in the first half-year.

Thanks

a lot.

Welcome.

Good morning, Patrick Steiner. Basically, one question left from my side.

If you could help us understand this a bit to Environment & Energy, you saw the low order intake, a bit lack of momentum. Can you give us a bit more information which parts of the segment performed below your expectation, and if you think that this was a temporary downturn, or, in your view, if there's more to come in terms of rightsizing the different businesses of the segment?

Thank you.

We see weakness in order intake, we see in the new technologies we have developed for the green transition, green hydrogen and carbon capture. I would say here we have a very solid project pipeline.

We also have a very, I would say, solid level of letter of intents, basically contracts that if the customer make a go decision, will be awarded to us, but the go decisions are pending. In separation, we can see across several industries that investments are postponed and shifted, especially I would say special impact comes from chemical industry where on our customer base in Europe, the high energy prices and the outlook is definitely, I would say, subduing the investment climate.

That's I would say the others, the pumps, in feed and biofuel, and in clean air, I would say that there we see not a significant growth, but a stable market.

Thanks. It's very helpful.

Thank you.

Good morning, thanks for taking my questions. I have two, please.

The first question is on packaging, containerboard market. I'm just wondering when you expect an uptick in client demand for new machinery business, but also for services following the pronounced downturn we have seen over the most recent past?

Secondly, on Hydro, could you give us some insight on the revenue or order intake contribution from pump storage to annual performance, that would be helpful. Thank you.

On the packaging and board, I would say the market situation has bottomed out, but we do not see signs of increase. That's I would say we see utilization rates of our customer increased, I would say in Asia more than in Europe, but frankly speaking, not to the level that huge investments are foreseeable in the near future.

Can change rapidly, but that's the current assessment. I would say Europe and US is a little behind.

Utilization rates seem to be still a bit lower than what we see in Asia. On the hydro business, I do not have the number at the moment to give you the revenue share of the pump storage.

What we could see over the past three quarters was that pump storage increased in order intake proportionally to the rest of the group. As revenue builds up a bit later, I would say it is growing, but I cannot provide you a value.

Our IR team can reach out to you and provide you some more background information on that.

Thanks for that.

Yes, hi. I have a follow-up on automotive end market.

I think in your prepared remarks, you talked about some stabilization in that market. Maybe you can talk about which customer group are we talking about, because when we look at these European carmakers, they're still lowering their guidance and seeing very significant Chinese competition in many markets.

If you can give us some more clarity on which type of customer groups you see more activity going forward in automotive?

Basically, we see it in all customer groups. We see it in North America, we see it in Europe, and we see it also in China.

In China, still the local market is active. We also see the Chinese manufacturers moving outside China into Europe and around Europe, but we also see with the European carmakers, even though they are still in restructuring, it looks like they have made their plans on their capacities, on the volumes, on the models they want to place.

This is when project activities with capital goods suppliers like us start, and this is now what we see, these discussions start. We know this will finally go into, sooner or later, into investments.

That is what we see. We believe that our estimate that towards the end of this year, we will have reached the end of that tunnel is a fair assessment.

Thank you. Then maybe one more on US.

We have seen that some companies have started to benefit from refunds of IEEPA tariff, that reciprocal tariffs that was turned down by the US Supreme Court early in the year. I'm just curious if there is any benefit that you may have seen in Q2 or you are expecting in second half that might benefit your margin or cash flow.

Thank you.

Sorry, I'm not sure I really got the question. Can you please repeat?

This was the IEEPA tariff in the US that President Trump put in place last year, reciprocal tariff, and these tariffs were deemed illegal by US Supreme Court early in the year and then companies have started filing for refunds. We have seen some companies in capital goods sector have seen benefit already and some are guiding for benefit in the second half.

I don't know how much tariff you paid in the US, but just curious if there is anything we should expect on your performance this year.

Fortunately or unfortunately, we will not see any benefits from that. The goods we have imported to the US, they have been subject to the tariffs, and all the tariffs were duly paid by our customers, and we have then asked for refund to the US government, which has been granted, but we passed it on to our customers.

Therefore, you will not see a net impact on the upside or downside in our balance sheet.

Thank you.

Yes, thank you very much. Good morning.

Congratulations for you testing your all-time high share price again this morning. I guess, well-deserved given the performance.

Two questions, if I may. Order momentum remains very strong, with the backlog at a new record.

While I appreciate that group revenue conversion is slowing due to Hydropower, in H1 you have already reached 47% of your '26 sales guidance at the midpoint. Would it therefore be fair to assume that you're currently aiming more towards the upper end of your '26 sales guidance range?

I'm not in the details of this accounting there. The band is so narrow, when we end in there, this is what we assume, yeah.

In today's world, being in a project business that we are doing, I would say, being more precise would be a misleading, yeah. I would say we stay with that range.

Fair enough, thank you. Then secondly, I note that you explicitly highlighted the positive valuation effect from Armis on your '25 EBITA.

Excluding this, I calculate a negative margin impact of around 50 basis points. Is that what you're trying to tell us, that we should rather take 8.4% as a starting basis to forecast profitability for this year?

The hint was simply that last year we had a €36 million one-time impact positively, which is not repeated this year. This is what you should consider when modeling your numbers for this year,

yeah. Perfect.

I'll go back into the line.

Thank you.

Many thanks to our C-suite for the elaborations and for your interest in ANDRITZ, and we'll return back to you for the Q3 results. Many thanks for participating.