Good morning and good afternoon, everyone, and welcome to the FLS Q2 investor call. My name is Toni Laaksonen, and I'll be presenting today with our CFO, Roland Andersen.

We start the presentation with the Q2 highlights. First deep-diving to the market and commercial aspects, and from there we can say that with two business lines we saw excellent development in Q2.

The Service business line continued their strong commercial performance with their order intake, and we were growing +14% organically in Q2, which was excellent development and continued development compared to the previous quarters. Then with our pumps, cyclones, and valves, we demonstrated similar great development and we were gaining some shares from the market, and grew 18% organically in Q2, which was clearly ahead of the certain peers.

Then, on the other hand, with our orders, we saw some development now with the bigger, larger orders. The first one was now awarded during the quarter that came from South Asia for our Products business line, and it was around 300 million DKK.

In this case, we were awarded to the supply technologies related to an iron ore beneficiation project. A good order for us, and demonstrates that the market activity is building up, also with the bigger projects.

Then a few words on the financial highlights. Our revenue development was great throughout the business lines.

All three business lines demonstrated excellent revenue conversion in Q2, and we were growing organically by 16%. Then, on the other hand, this revenue conversion was showing up in our margins, and EBITA margin improved significantly, and we landed at the level of 17.3%.

Good development there, a three sorry, a 2% jump from the previous year, great development. Then one of the development areas for us is the cash flow.

With our cash flow, we were impacted by our net working capital. Net working capital was building up during the quarter, and therefore we didn't have positive cash flow, and we will come back to this topic later in the presentation.

Then strategic and corporate highlights. There we are developing well with our share buyback program.

It was launched, and we have been now progressing with the share buybacks according to the original plan. Then, on the other hand, we have been developing now the new team setup with FLS, and we made several executive appointments after the quarter.

Four positions and nominations were announced. Our general counsel was nominated.

Today we announced the chief people officer nomination. Then we also have a new position within the executive team called chief strategy and M&A officer, who will join us next year.

Then we as well announced the new president for the Service business line. All these announcements then support our new way forward and our growth plans.

Today we also informed about certain adjustments to our financial guidance, and we practically narrowed the guidance with our revenue growth so that we expect to grow between 0% to 4%. Previously it was -1% to 4%.

Then with the adjusted EBITA margin, we expect to land between 16% to 16.5%. Previously it was 15.5% to 16.5%.

Good development also from the strategic point of view. Then moving on to the sustainability aspects.

Here we had positive development with our safety, and we can be very happy about that one. Our injury rate improved during the quarter, and we have been seeing continuous positive development this year with our health and safety figures.

That's positive. Then with the other sustainability measures and KPIs, we were not trending that well, there were slight decline throughout the other KPIs.

Some seasonality impacted on this, for instance, related to the water consumption and emissions. Then, on the other hand, one update was done with our reporting practices, the Scope 3 greenhouse emissions are being reported annually from now on, therefore we have been taking that off from the quarterly reports.

Then a few words on the market outlook and how we are seeing the mining business development. As we have been stating previously, we see the same outlook with the bigger mining projects.

Most of them are very active at the moment when it comes to our customer base. There's more and more engineering activity, and the pipeline is building up.

Copper and gold prices are still at relatively high levels, which is then supporting the pipeline. Especially with these commodities, we are seeing a lot of major movement.

Based on this, we still expect that in the end of this year and next year, we are seeing larger greenfield projects being sanctioned, and therefore we believe that in the end of this year and next year, some of these projects will materialize and will be visible in our orders. Positive development in that sense, and the outlook remains as we have been stating previously.

Then, on the other hand, with the brownfield sites, we see positive development, all the miners are running their sites as fast as possible and trying to develop their efficiency. From our point of view, this is visible then with the Service business line orders and with our pumps, cyclones, and valves, there are smaller replacement investments taking place, upgrades, modernizations, and of course all these sites require services and maintenance, which is helping us then from the service point of view.

There is robust outlook for the services and PCV business lines in this respect, and we expect that the order intake development and revenue conversion continue in solid manner during the next quarters. Then when deep-diving into the business lines, we start from the Service side.

As mentioned previously in the call, order intake was very positive with our Service business line, we were up organically +14% in the quarter, and then 16% year-on-year. Then, on the other hand, when looking at the longer-term development, the first half was great for the Service business line, +17%, and now we have been having good order intake level throughout the last three quarters, very positive market development there.

Then the revenue conversion improved pretty nicely compared to Q1, we were up with our revenue pretty significantly compared to Q1 this year, and that demonstrated then that our supply chain worked well during the Q2, and we expect that the same continue within the next quarters. Of course, this revenue conversion helped us then to reach higher profitability in the quarter.

Great development in Q2 with Services. Then when looking at the margin, the margin was a bit lower in Q1 with our Service business line, but now when the revenue conversion improved, we jumped to the normal levels with this business line, a bit over 20%.

As we have been stating, the normalized level with Services is somewhere between 19% to 20%, this is something that we are expecting from this business line when moving forward. A very good quarter for the Service business line all in all.

Then our Products was converting revenue very fast in Q2, and that was a really positive outcome then from the Products side. They had their project portfolio well under control, and the deliveries were improved so that we were executing faster and faster throughout the quarter, which was then visible in our revenue.

Good supply chain management from their side, which was then visible in our revenue figures. Good development all in all in Q2, and as a result of this, our organic revenue growth is now on the positive side when it comes to the first-half figures.

Then with the order intake, we were up compared to last year, slightly up, and then the first half landed a bit lower than last year. All in all, we are seeing the same development here that we expect that during the end of the year, we are seeing the larger orders.

Our Products business line is heavily dependent on the larger orders when it comes to the order intake, and therefore we believe that the order intake will improve in the end of this year and then next year. Very positive side with the Products business line was the profitability development.

When the revenue conversion improved, we are also jumped to the black figures. Now we have the first-half results done with the Products, and the end result and outcome was that we are a bit above zero, which is an excellent achievement compared to the previous years.

This is excellent development from the Products side, and of course there are still fluctuation with the quarterly figures, but we are getting more and more towards the situation where we are continuously on the black figures with this product line. Then the third business line, pumps, cyclones, and valves, a very very positive quarter over here.

We are gaining the momentum and keeping it up with our orders, the order intake has been on a very good level and developing positively already throughout the last three quarters, and excellent development in that sense that we were growing close to 20% in Q2. Also the revenue conversion improved with PCV compared to Q1, and that was a great achievement from the business line leading to a fact that the organic revenue growth was 8% during the first half of the year.

All in all, a really good start for the PCV business line, and the outlook remains very positive here. Then, of course, when the revenue conversion improved, it also helped us with our margins.

The margins were in line with the expectations. There were certain mix-related things between our product and aftermarket deliveries, which were impacting on the margin slightly, but all in all, the margin was at the expected level.

Good development in DKK especially, the margin in DKK jumped from Q1 quite nicely. A positive story with the pumps as well in line with the Services.

Now we move on to the financials, and I hand over to Roland.

Thank you for that, Toni. As you say, 14% growth overall in order intake, and 17% growth nominally in revenue.

With cost in check, that means we can post an adjusted EBITA margin of 17.3%. After taxes and finances and few other bits and pieces, profit for the period of 441 million.

Gross margin stayed at a healthy level. That's clearly a positive mix on company level from the Product business line still only being about 20% of total revenue, but still a strong and healthy gross margin delivered by all three business lines.

Our SG&A costs are slightly up in Q2, but as a percentage of revenue, it's down to 17.8% for the quarter. All this higher revenue trickles through to the 17.3% EBITA margin, as also Toni touched upon.

Our net working capital is up, and it's predominantly driven by growth after three quarters of book-to-bill above 100. We're now starting to convert the backlog, significantly higher levels, to revenue.

That sits in an ongoing deliveries and work in progress, and to a certain extent, in inventories. If we look at our cash flows, our EBITDA earnings are up, but mitigated completely by the change in working capital.

That means that our cash flow from operating activities is minus 80, -84 for the quarter. Adjusting for CapEx and investments and a bit M&A, then our free cash flow is -135 for the quarter.

That also means that we are keeping our leverage at 0.6x that it has been for a number of quarters now, plus/minus, well below our capital structure target of 2x. We still have a lot of dry powder for M&A, and we continue to deliver on our share buyback program that, by the end of close of business yesterday, was a bit more than 40% completed.

On the back of a highly satisfactory first half, we are adjusting our financial guidance for 2026 a bit. Toni touched upon it, we're adjusting our gross margin for the total company from previously -1% to 4% to now 0% to 4%, and we're narrowing the EBITA margin expectations from previously 15.5% to 16.5% to now 16% to 16.5%.

If we have a quick look on the bridge, how the 0% to 4% is expected to play out, we now expect the Service business to grow 3% to 5%—I think previously we said 2% to 5%—Products unchanged, -5% to -15%, and our Pumps business is expected to do slightly better, instead of 4% to 7%, now 5% to 8% for the full-year organic growth. Our EBITA margin bridge is our adjusted margin, we adjust about a percentage point for predominantly ERP-related costs that we're currently rolling out.

On the positive side, OOI means other operating income, and this is predominantly the sale of the Valby headquarters in Q1, which leaves us to a reported EBITA margin of about 20% to 20.5%. Then we have just sent out the invite to the Capital Markets Day.

It's going to be on the 17th November, as and it will be held here in Copenhagen at our new headquarters. We expect that to be 4 hours, from 1:00 p.m.

to 5:00 p.m. I think the registers open for sign-ups as we speak, we hope to see a lot of you there.

With that, I think we give it over to Q&A.

Hi, Toni, Roland. Thank you for taking my questions.

I have three, please. My first question is just on the full-year guide where you've only nudged yourself slightly towards the top end.

Given the strong Q2 results, should we see that there was maybe some early deliveries which would mean that Q3 might be slightly softer than where we would expect it? Specifically thinking on Service where you'd previously communicated a more gradual pick-up through the year on sales and margins.

Thank you.

If we start with the margins, I think it's still a little wobbly. As our Q4 is typically the strong quarter, and in Q3 we know for a fact that the Product business line will not convert nearly as much revenue as they did in Q2.

It's a little bit swingy. We expect from the guidance slightly lower margin in second half from the total business, and it's a bit swingy.

Maybe the pumps will do slightly better, Products will do slightly worse, and then Products will be back in black numbers in Q4 as from Q4 as we have promised before.

Very clear. Then my second question is just on the net working capital where I understand that there was obviously a build to support the Service and PC&V sales for the remainder of the year.

Is it right to assume a strong unwind then in Q3, and then does that change any expectations for the full year?

We're not going to give you a number today, but we won't see an immediate unwind. There's a significantly higher conversion of the backlog into revenue, and for a while that will sit in work in progress.

I think also the inventory levels are up to a higher level to support both the footprint expansion in the Service business line, but to a certain extent also the same in our Pumps business. The unwind of working progress will happen throughout 2027.

Okay. Thank you.

Then my final question is just on PC&V. Just wondering if you could provide a bit more color in terms of the OE aftermarket mix in sales this quarter so we can better understand the margin performance.

With PCV, the roughly right split is normally like 30% to 70% as a guideline, 30% from the equipment business, 70% from the aftermarket. That was the outcome in Q2.

Sometimes the equipment content is a bit lower, and then of course that mix impact then of course might impact on our margin as we spoke in the call. Even slight changes there might adjust then the margin level 1% or 2%.

That was visible now with the figures. All in all, PCV great results, and now when the equipment business is as well building up, it will generate then aftermarket when moving forward even more.

Thank you very much.

Hi, Toni and Roland. Thanks for taking my question.

Maybe just following up on Chet's question, and I'll say it a slightly different way. The midpoint of guidance seems to imply 0% organic revenue growth in H2, and you delivered a book-to-bill of 1.1x in H1, and you've also got an elevated backlog and not a particularly tough comp.

I'm just wondering is there not, is there some other kind of headwind that we should think about for revenue growth in H2?

Ed, there was a little bit of a bad connection, but are you talking about growth or margin? I

talking about growth, revenue growth. Yeah.

The Product business is going to convert less revenue in Q3 than they did in Q2. Q2 was a pretty good revenue considering the backlog for the Product business, going to be less in Q3.

I think all business lines have a pretty tough comp in Q4. Basically all business lines delivered well revenue in Q4 and especially the Service business line.

I think you need to see if we hit the midpoint, then we have done quite well for Q4 also with the same growth numbers. That's how we think about it.

Okay. That's very helpful.

Thanks. Maybe just one more.

Obviously some pretty positive commentary on the potential near-term large-order FIDs. Is there any chance you can maybe just give us a bit more color in terms of regionally what this comment relates to?

Is this North and South America, and specifically maybe which countries would we see that

for? Maybe geographically we can talk about the regions.

Of course from our perspective, South America is among the biggest or the biggest region for us, and there we see quite nice activities, especially with the bigger projects. Then some activities as well in North America and in Central Asia and Africa, but the maturity is definitely coming from the South American side.

Okay. That's very helpful.

Thank you.

Yes, gentlemen. Good morning.

Thank you very much. I'll have three questions.

I'll ask them one by one. First one on the mining cycle.

Look, it was predominantly about brownfield projects up until now. Are you actually seeing a broader appetite for larger greenfields across customers from now on, or we are talking about those three, five big greenfields that we know about for a long time and finally they are moving towards FID?

On the project side, we are seeing both type of activities with larger orders, so that we have brownfield expansions, which we almost consider as greenfields when the customers are ramping up additional lines for their existing mine sites. These type of activities are taking place.

Then, as mentioned, especially in South America, we are seeing that there are certain complete, a greenfield project moving forward, and there is now more maybe support from the local governments in those respective countries to promote the mining projects and investments. This favorable environment, of course, is helping our customers, and at the same time, of course, the commodity price level is high, this combination is a pretty good combination when you are making the investment decisions.

That's great. If I can follow up on this, specifically for South America, are we talking about two, three large greenfields there that are moving forward now and getting support, or do you think it's a broader base of greenfields, let's say mid- to high single-digit number, which is potentially up for FID in the next 2 to 3 years?

I would say that it's a broader thing at the moment. There are several projects under development and under consideration and already in the engineering phases, and of course, any project which are in the engineering phase, and if we are involved, we have pretty good visibility what's happening with the project.

Perfect. That's super helpful.

Can I specifically ask also about your product orders? Excluding the large 300 million order that you booked, smaller base orders appear to be on the lower side this quarter.

Is there any particular reason for that?

Like mentioned, the Products business line is dependent on these bigger orders quite a bit, and practically it means that then the timing of these bigger orders might impact on their top-line order intake figure quite notably. Based on our outlook, even though that the total order intake wasn't that high, we are confident that there are no issues with this business line as the outlook for the end of the year is rather positive.

Understood. Thank you very much.

Final question to Roland, please. Can I go back to those working progress assets?

That was a very sizeable 500 million-plus increase this quarter. It equaled to what, 12%, 13% of your quarterly sales.

Could you give us some idea of what exactly you are building there? 500 million is bigger than perhaps the biggest project you're working on right now.

It's a number of things. Actually across the three business lines, we have a number of upgrade and repair projects there, and the reason why it sits there, because it takes a bit longer to complete than just 4, 6 weeks.

Then there's a few bigger projects under construction, orders that we entered into a year ago or a year and a half ago. Then to a smaller extent, also a few ongoing things on PCV.

It's a bit across the board. That's also why I can say with certainty we're not going to unwind it just in 2 or 3 months.

It's going to take time until this is being expedited out of the backlog and then normalizing a bit more.

Super helpful. Thank you very much, gentlemen.

Good afternoon. Thank you for taking my question.

Just two from my side. First would be on the outlook for the Service margin.

You've done a very good job in ramping up your consumables business. Do you see a negative mix impact in the coming quarters when consumables might be growing faster than the modernization spare part of your business?

Thank you.

As mentioned during the presentation, we still believe that with our future mix, we are reaching this 19% to 20% profitability corridor. Of course, quarter by quarter, there can be fluctuation, and this is then something that we expect to deliver with the full-year results from this business line.

Even though if the consumables business grows, we don't expect that our margin will slide. Then, on the other hand, of course, as you can see from our quarterly figures, if the business goes up, it has a positive leverage impact as our fixed costs will not go up with that pace.

Understood. Thank you.

Just lastly, more strategic. You now have a chief M&A officer.

Could you maybe flag a little bit on what is your appetite for M&A going forward? Are you interested in larger transformational M&A, or will you stick to purely bolt-on?

Thank you.

We have been building the pipeline this year for the M&A cases, and we are focusing on the bolt-on cases, and we are reviewing them in detail. Let's say that the pipeline has been developing positively.

Roland mentioned that we still have some dry power left and available for this M&A cases, the intention is that when the right target is there, that we would move forward. Late this year or next year, we would expect that we have some news around these topics.

Okay. Thank you.

Thank you. Also a few questions from my side.

The first question goes to this quite impressive order intake you had in Q2 within Service and PCV. To what extent do you believe this was based on market share gain and also maybe within Service a result of your investments and initiatives within your service setup and moving closer to customers, etc., etc.?

That would be the first one.

If I start from PCV, I would say that the growth has been now on a good level throughout several quarters, and we have been seeing positive order intake, double-digit order intake continuously. There, when comparing to the peers, I would say that we have been growing a bit faster, and our organic development plan which we have for the unit is paying off.

We have been expanding our supply chain with the unit, we have been improving our service coverage with the unit, and also expanding our sales network. All these organic activities are definitely helping us now to gain more order intake, so that has been positive.

Then when it comes to the Service business line, one aspect is that we have been increasing the service network, getting closer to the customers. That's helping us with our order intake, and then, of course, the one big positive driver there within that unit is the consumables business, which has been performing well, and we have been increasing our order intake relatively fast.

We have a clear plan how to develop that product area then forward in the coming years. Tony,

does this mean that all the initiatives you have done so far has been executed and we should expect more a growth in line with the market, or do you see further potential for the things you have already implemented?

The market development, we expect it to be positive. The expectation is that the mining market grows something like 3% to 4% somewhere there when looking at the copper demand, for instance.

The copper production is expected to grow with that pace, and of course, if the copper production grows with that pace, it's also helping us from the growth point of view. Then we come to the more detailed, forward-looking plans with the unit when we have the Capital Markets Day.

Fair enough. Then my second question goes to the pump area.

With these equipment orders you have received and grown quite nicely in the last couple of quarters, when should we start to see the aftermarket orders and revenue picking up?

It depends, of course, on the timing of the installation, but normally if it's a replacement case, the replacement happens within the next months from the order, and then after a few months, the pump will then generate aftermarket business for us. If it's a part of a larger, a brownfield expansion, then the delivery time might be a bit longer.

Normally with the pumps, we are talking about the replacement cases, then in a few months, the new pump will provide more services to us.

Would it be fair to assume that already in Q3 you'll start to see this effect and getting even stronger in Q4?

Maybe a bit longer in your spreadsheet there, that would be safe.

That was smooth and talking down expectations and not getting too carried away, or?

I was clarifying. That was the intention.

Fair enough. Thank you so much.

Good morning. Thanks for the time.

I would like to ask a couple more questions on your outlook again, please. Let's stick with Service.

Roughly, I think if my numbers are right, your orders over the last three or four quarters are up mid-teens in Service, your backlog is up above 10%. If I take the midpoint of your guidance for the full year and look at what you've achieved in the first half, you're implying a sort of average low single-digit growth in revenues in the second half, which seems hard to reconcile.

Maybe you could put some color on any specific features that would hold back the timing of the book-to-bill conversion and limit the conversion of the backlog and prior-quarter order growth into the second half.

That's a valid point, we have been commenting this in the previous call as well, but with the Services, we have in the mix certain bigger upgrades as well, and then as well certain mill liner deliveries. In these cases, for instance, the lead time is much longer from the order to revenue conversion.

We are talking about, in some cases, even 9 months or longer because the customers are ordering the parts for their next shutdown, and the shutdown might be such that it's 6, 9, or even 12 months out because they are advance-ordering. Then it practically means that we are gaining the orders this year, delivery maybe in the end of the year or even early next year.

That's causing some of this timing issue. Of course, when the backlog is building up, we have a pretty solid foundation then to deliver revenue this year and early next year based on that.

We need to remember that there are these bigger cases as well in the Service business line mix.

Thank you. That's helpful.

I guess, again, we could do the same math for both divisions, but I guess the book-to-bill conversion for PC&V is shorter. Again, you've been achieving high-teens order growth and the backlog is up again.

To the point that you're implying kind of mid-single-digit at the midpoint of second-half growth despite the strong momentum we've seen in the backlog, is it the same feature what you would spotlight for PC&V?

I think this is all in just so PC&V also have capital orders that follow the product sales, to speak, right? It can be a bit longer for the capital part.

That's one thing. Also, mathematically, both on Service and on PCV, we're up against a relatively high comp in Q4.

It's not just taking the growth numbers from H1 and then applying, it needs to be on top of a relatively high comp just as a reference point.

Thank you very much. My last question probably comes back to net working capital and cash flow from operations.

I heard you earlier, Roland, on limiting your guidance around cash flow. I think in the past, there's been a rough expectation you might come close to a billion for cash flow from operations.

Clearly that becomes a very big hurdle after the first-half cash generation. Is there anything that could swing contract liabilities in the second half or swing a containment of growth in contract assets that might help the working capital H2?

There may be a few things, but I think we don't expect it to unwind anytime soon. That also means that our CFFO expectedly won't hit a billion.

I think it'll be maximum 700 million or so for the remainder of the year. Then the unwind will only be visible sometime next year.

We've been caught surprised a little bit by the high backlog conversion, you can say, which is basically positive, but it means that we tie up working progress for a while longer.

Great. Thank you very much.

Yes, thank you. Also a couple of questions from me.

I'm super sorry, but it's also about your revenue guidance. If I take your full-year outlook and deduct your H1 revenue, you have to produce a revenue between 7.4 and 8 billion in H2.

Last year, you did 7.5 billion. Roland, I hear what you say about working progress materializing next year, not this year.

If I look at your backlog, it's up by 8%. If I look at the percentage of that backlog that you say should be converted into revenue before the end of the year, that is up from 32% last year to 48% this year, which means that backlog conversion should produce 2.1 billion more in revenue this year versus last year if the math is correct.

I also think when working progress is up by 43%, even if most of that is for next year, that also implies growth. I simply don't understand what I'm missing in this picture.

I can't make the numbers stack up. Please help me out.

I think you're right, Lars, that I think the 7.4 up to 7.8 or 9 or so, given constant exchange rate for the remainder of the year. No more than that, and So that's going to be the conversion that yields the organic growth guidance, and that means that it will take a while for us to unwind the work in progress.

It's not necessarily linked, but in this case, it is.

Roland, if I take your backlog by H1 last year, then 32% of that, which is what you said would be converted before the end of the year, was 3.4 billion in revenue, which means you produced 4.1 billion in revenue from things that were not in the backlog by the end of H1 last year. Doing exactly the same calculation for this year yields 5.5 billion in revenue from conversion of the backlog, you implicitly only expect to do 2 billion from things outside of the backlog.

Why is that revenue production from things that are not in the backlog so dramatically down this year?

Maybe I'll add one thing which relates then to the Products business line. Of course, with that business line, as we have been stating, we know the timing quite well and when the revenue recognition will happen, but of course there are certain uncertainties as well with the timing of the ramp-ups for individual equipment expansions and replacements.

That's of course impacting on our revenue guidance, and that was visible when we were updating now the business line-specific ranges. With Services, we did modifications to the revenue growth guidance, and the same with PCV.

There we are pretty confident that we are improving compared to the original guidance, and we can deliver. Of course this product side is then causing certain uncertainties related to the timing of the deliveries.

On that side, the timing of the deliveries is to some extent of course controlled by our customers. We didn't change the revenue guidance for the Products because of this reason.

That doesn't really answer the question. H2 last year, you generate 4 billion in revenue in addition to the conversion of your backlog.

This year, you only guide for 2 billion from that. Why so much less?

Sorry,

I think I need to look at the numbers more specifically, Lars. The delivery cycles are longer this year for SBL and also for PBL.

That's why it sits in work in progress, and that's part of this reason as well. I think that's what you're fishing for.

No, yeah, no, not really. I'm just fishing for the proportion of revenue that is not converted from the current backlog.

We know your backlog, that's 11.5 billion. You say 48% of that will be converted before the end of the year.

That's 5.5 billion. To reach your guidance, you need to make 7.5 billion, you need to produce 2 billion in revenue outside of the current backlog.

Last year, that number was 4 billion. It's a movement from 4 billion to 2 billion I don't understand.

Right, there's longer delivery cycles, right? I'll need to come back to you on this one.

With growth in the bigger upgrades in the Service business line and PCV partly related to that, that just gives us a longer cycle on the backlog conversion.

The 48% of 11.5 billion, that's 5.5 billion. It's numbers you disclose, Roland.

Exactly, but it takes longer. Yeah.

That's

a hard number, I guess.

Can I have a look at the numbers you're looking for and come back to you, Lars?

That would be amazing. I have a second question, that goes to Products, and looking further ahead than just this year.

How should we think about the margin development? If we assume the mining cycle becomes stronger, should we think about it in a way that gross profit will improve in line with order intake and then you'll have a relatively fixed OpEx base or what assumptions should I use if I want to calculate the margin a couple of years out?

This is definitely a topic which we will address more in detail when we have the Capital Markets Day. What I can say is that we have continuous improvement initiatives ongoing throughout the business lines to improve our supply chain, cost efficiency, and so on.

These continuous improvement initiatives will hopefully benefit us, and at least I don't expect that our margins would decline as such, but there might be some improvement opportunities through these activities in the long run. These expectations we will open up more when we present the Capital Markets Day materials, but that I can ensure that continuous improvement is happening all the time within all the business lines.

Is the incremental margin in Products double-digits?

Lars, we'll come back to that.

Yes. Yeah.

Okay. Fair enough, guys.

Thanks for taking my questions.

Hello, Toni. Hello, Roland.

Thanks for the time. I've got three, if I may.

I want to start on the product side and a follow-up to Vlad's question on the 402 million DKK of base orders. I think that's the lowest level since you introduced your new segment structure.

You mentioned in the commentary that the business needs to see more large project activity to grow, and I appreciate that point. I guess the question is a little bit more strategic, and about your positioning in the market.

Your nearest peer had very strong base orders in the second quarter, and I guess trying to understand if that 402 number is then comprised of four or five, shall we say, large package orders or if it's a broader set. How do we think about the base order math?

Are you trying to sell standalone equipment units, or is it more sort of packages you're trying to bring to market?

This is as well among the topics which we will address in detail, actually, in the Capital Markets Day. We will elaborate the more detailed plans that how we move forward with the business lines and how we are planning to grow their business when moving forward.

Offering development definitely is as part of this, and we will outline the plans that how we can take forward all the units. Like said, at the moment, we are to some extent dependent on the larger orders with our Products business, maybe unlike compared to our peers.

Then that might be a, let's say, a positive development opportunity for us strategically when moving forward. I would say so that we can comment on this very much in detail when we host the Capital Markets Day, but this is among the topics that we have on the list.

Okay. Maybe then turning to the margin in Products just briefly.

Were there any one-off contributors? I think there were some provision release in Q1.

No, not really. This was a pure volume thing.

The revenue number The At that revenue level, the business line is now currently in black numbers.

Very clear. Maybe just finally then on pumps.

Obviously you've seen the 12% growth last year, high teens this year in order intake. You've said that you're taking share, I guess interested to hear regionally whether there's any concentration to those share wins, and also I guess in what form you're taking share.

Is that for new projects, or is that field trials on existing installed base? Then, Toni, you kind of gave a steer on the revenue mix in Q2.

Perhaps you could just add a comment on the order mix. It sounded like that was more overweight than usual.

When it comes to the install-base development, we are following that very closely, and mostly we are seeing these replacement cases. Replacing existing pumps with our products, and that has been really driving then the market development when it comes to the equipment deliveries.

As we have been seeing this development now throughout the quarters, it also starts building up this aftermarket on top of it. The more we have install base, the more there will be aftermarket.

When it comes to the products on the pump side, it's mostly replacement. We have certain project deliveries as well in the mix when you look at the order intake in the long run, but the replacement business is the more dominant one.

Through that, we are seeing that the install base is developing well, and good development, for instance, in North America where we have a strong position through our factories and service centers, the same in South America. Positive development over there, and then we keep expanding in the other territories as well.

In Q2 specifically, we were a bit more equipment-heavy and product-heavy with our orders, which was demonstrating that we were winning a bit more cases than normally. Again, it should be then visible in the coming quarters in our order intake, not in Q3 of course, but starting maybe from the end of Q4.

Thank you.

Morning both. One question for me.

I can understand kind of why my peers are kind of saying that the outlook for the second half is conservative, but if we look out beyond that to 2027 and look at the way that the order book is shaping up, it does look to be down on a year-on-year basis, how much orders you got to execute in 2027. I'm just wondering, in terms of the business lines, is that purely within Products?

If that's the case, to what extent can orders secured in the third and probably fourth quarter contribute into 2027? Or is there anything within the PC&V and Service markets which is kind of running behind year-on-year?

Sorry. The line was pretty bad, could you still repeat the key question,

so? I can understand why my peers are saying that your commentary for the second half this year is conservative based upon your order book and the way that those orders are split.

If you actually look out to 2027, the amount of backlog for execution is below where it was last year. Is there anything in any of the divisions which is looking behind year-on-year as you look into 2027, or is it all just kind of within the Products division?

Okay. When it comes to the business lines, of course, the fact is that if we see an uptick with the Products business line with the larger orders, that will as well then drive forward our project-type of orders for PCV and Services.

Then the timing of the orders will then define that how the revenue mix develops, but of course, if larger orders materialize, it means that there will be more install base, which is eventually driving forward our revenue as well. Then it would have a positive impact throughout the business lines.

With most of the Products business line orders, which are larger ones, the lead times might be even 1 year or longer, and then the revenue impact will not be positive then next year if we capture the orders in the end of this year or early next year. Anyhow, the underlying demand for the brownfield sites, that remains positive based on our outlook, and then if there are greenfield cases, these larger cases, then that will even accelerate then our business when moving forward.

We don't see a huge jump for next year from the revenue point of view because these larger projects, they take time.

Okay. That's very clear.

Thank you for that.

Hello, gentlemen. Can you hear me?

Yes.

Yes.

Perfect. We talked a bit about this movement in net working capital, and I understand that it most likely will not decline before 2027.

Historically, you've been talking about a net working capital sales ratio of around 17%. Should we start to think about a slightly higher number given, yeah, the growth you're seeing in your Service business, or yeah, any thoughts on that?

I think we will be more specific on sort of a range number on the Capital Markets Day. I think 17 is probably in the low end.

I'll leave it at that now.

Okay. Great.

Then order intake in Service has been quite strong the last three quarters. I think you've been hovering around the 2.4, 2.5 billion, yeah, each quarter.

It's actually above, yeah, that run rate you have been talking about for a while. Any comments on what would be reasonable to expect the coming, let's say, two or three quarters here, or have you, yeah, changed structurally for the better?

Any thoughts on that?

There's been a lot of talk on our growth guidance. I think we stick to the 3% to 5% growth organically Q-on-Q, so that's going to give you the number you're looking for.

Okay. Then my final question is, do you have any news to share on this compliance case?

No updates on that one. We still continue the internal review on that matter, and then later on this year, we will then report the case and provide the materials to the authorities.

Okay. Great.

Thank you very much.

Thank you for joining the call. Great questions today, and we are looking forward to seeing you here in Copenhagen then in November, you are warmly welcome to the Capital Markets Day.

As mentioned today, you will get more information on our future plans then during that day, and our key management will be present then to meet you in person. Warm welcome, and thanks for joining the call.