Wacker Neuson SE

Good afternoon, everybody, and welcome to the Q1 2026 earnings call of the Wacker Neuson Group. My name is Peer Schlinkmann, Head of Investor Relations and Corporate Communications.

Thank you for joining today on the occasion of the release of our Q1 2026 results. As usual, we will first start with the operational and financial results of the first quarter of 2026 and give additional insights on the recent developments as well as our outlook for 2026.

Following this, we are happy to answer your questions in a Q&A session. If you are not able to follow today's call via the webcast, the presentation slides are also available for download at wackerneusongroup.com/investor-relations.

Please note that the entire call, including the Q&A session, will be recorded and a replay will be made available on our corporate website by the end of the day. And now I would like to hand over to our executives, Karl Tragl and Christoph Burkhard, who will, as usual, lead you through this call.

Thank you, Peer. This is Christoph Burkhard, CFO of the Wacker Neuson Group.

Welcome, everybody, to our earnings call, and thank you for joining.

Dear all, a warm welcome from my side, too, and thanks again for joining today's conference call. I am Karl Tragl, CEO of the Wacker Neuson Group.

I would like to start the presentation with a brief overview of our key financials for the first quarter of 2026. Six weeks ago, we presented our figures for the fiscal year 2025, including our guidance for 2026.

And we gave a first feedback on our start into the new year. As expected, our first quarter of the year was much stronger than the first quarter in the previous year.

Our revenue amounted to EUR 591 million and therefore, increased significantly, almost 20% compared to quarter 1 2025. Our order intake kept growing in quarter 1 2026, and our book-to-bill ratio in the first months of this year also remained above 1.

Supported by higher revenue and unchanged operating costs, our earnings before interest and taxes, the EBIT grew to EUR 42 million. This means that profitability growth exceeded revenue growth, resulting in an EBIT margin of 7.0%, which is 4.5 percentage points up compared to quarter 1 of the previous year.

Our net working capital ratio in Q1 2026 decreased by 2.1 percentage points compared to previous year and amounted to 30.7%. Due to investments in net working capital, our free cash flow was slightly negative and amounted to minus EUR 3 million.

Christoph will explain the financial details in more depth later. Now let's have a look at the development of our regions.

Revenues in Europe, representing 80% of [indiscernible] rose by about 27% to EUR 472 million. We recorded significant demand increases in our key markets.

Furthermore, our brands, Kramer and Weidemann with a focus on machine solutions for the agriculture industry grew by an astounding 65% compared to quarter 1 in 2025. In the Americas, revenue reached EUR 108 million.

While this represents a nominal decline of 2%, revenue actually grew by 8% when we adjusted for currency effects. In Asia Pacific, revenue rose to approximately EUR 12 million, amounting to an 8% increase.

And adjusted for currency effects, the growth in this region amounted to 12%. This was driven by increased demand in Australia, partly offset by lower demand in China.

In summary, despite headwinds in some markets, we made a strong start into 2026, supported by recovery in Europe and our solid order book. I will come back to our outlook at the end of our presentation.

Now how does this regional development translate into our business segments? The business segment compact equipment accounting for 60% of group revenue reached EUR 356 million in revenue, which translates to a substantial growth of 40% year-over-year.

Demand for tele handlers, wheel loaders and excavators increased significantly compared to previous year. Light equipment accounting for 19% of group revenue remained essentially at the previous year's level.

However, it increased by 6% adjusted for foreign exchange effects. Accounting for 21% of our group revenue, our services business declined slightly.

This was mainly due to lower rental revenue in the DACH region compared to previous year's level. This was due to adverse weather conditions and the delayed start of construction projects from economic stimulus programs, which are releasing the funds slower than initially planned.

I will now hand over to you, Christoph, for more insights into our financials.

Thank you, Karl. Not surprisingly, our net working capital ratio went moderately up in Q1, hand-in-hand with increasing activity level following the low year-end level.

But year-on-year, with 30.7% after this first quarter, we do look at a significantly lower ratio compared to Q1 2025 with 32.8%. Overall, we do see a more balanced working capital development than previously.

We are convinced that our progress in having an integrated S&OP process across all entities within our decentralized group is clearly contributing when managing the seasonality of our business as well as with regards to the overall optimization of inventory levels. And just to illustrate this, in 2024, hence 2 years ago, after a first quarter with similar revenue number, inventories were 20% higher in absolute numbers than today.

Now moving to net debt. We do see a very similar pattern, which again is not a surprise, acknowledging the interdependence between net working capital and indebtedness.

Our net financial debt after Q1 amounted to EUR 196 million, showing only a minimal increase compared to year-end 2025. Compared to previous year, net debt decreased significantly by 34%.

Now repeating the comparison that I did with the net working capital levels 2 years ago, the net debt level today is less than half of the level we had after Q1 2024. This all translates into a current leverage ratio of only 0.6, staying on the same level as at year-end 2025.

Free cash flow with minus EUR 2.7 million was about neutral. And I would expect from now onwards a gradual positive contribution throughout the remaining year.

And last but not least, to complete the picture, our equity ratio remained at 62%, underscoring the robustness of our balance sheet. And with this, back to you, Karl.

Thank you, Christoph. Sounds good.

I would like to conclude now with our outlook for 2026 and key topics currently shaping our industry. Since our last earnings call in late March, the general business drivers have remained largely unchanged.

Global economic and geopolitical environment is still defined by uncertainty. Factors such as subdued investment momentum, trade conflicts and rising protectionism continue to cloud planning certainty.

A situation further intensified by the war in the Middle East since early March. While indicators for the construction industry continue to point towards a moderate recovery, sector remains more subdued.

Hence, we are seeing remarkable differences in our end markets. Nevertheless, by efficiently leveraging the increased volume in quarter 1, we significantly improved our profitability.

Consequently, we view the remainder of the fiscal year with cautiously positive expectations and confirm our guidance for full year 2026, which means that we expect a slight market upturn in 2026. With great trust in our customers, employees, investors and in our strategic actions, this should enable us to achieve a moderate increase in revenue and a higher EBIT margin compared to previous year.

Specifically, this means that we anticipate revenues between EUR 2.2 billion and EUR 2.4 billion and an EBIT margin in the range of 6.5% to 7.5%. We plan to invest about EUR 70 million to EUR 90 million in the course of the year, and we aim to keep our net working capital ratio below the strategic target of around 30% by the end of 2026.

Let me summarize the key takeaways of today's presentation. We had a strong start into the year 2026.

We confirm our guidance for the full year. Our John Deere cooperation is moving forward as we have planned.

And we continue to focus on innovation. We have already new machines in the pipeline, and we constantly enhance our solutions.

Our strong balance sheet is finally the foundation to execute our plans and to drive future growth. Ladies and gentlemen, thank you for your continued trust and for joining our earnings call today.

We are looking forward to our Annual General Meeting taking place in a couple of days on 13th of May in Munich. Before we open the floor to your questions, I want to express my sincere gratitude to the employees of the Wacker Neuson Group.

Their dedication and hard work remain the true engine behind our value creation for customers and shareholders. Nobody is perfect, but a team can be.

Thank you for listening. We are now ready for the Q&A session.

And first of all, my apologies. I was just getting the last lines from your presentation hopping in from another conference call.

So if my questions have already been answered, please spare with me. I was wondering if you can elaborate a little bit on the order intake situation, your book-to-bill in the first quarter and then especially concluding from that one, is there the expectation that your own production in the second quarter is likely to accelerate compared to the first quarter, which would actually imply giving from the ramp-up of your inventories?

Or is the inventories already, let's say, produced trucks?

Karl Tragl speaking. The order intake is, as we had explained, we are seeing in the last 3 months a book-to-bill ratio of larger than 1.

This is always fluctuating, but it's above 1. And asking the production volume over the year, it's generally the case that we have a production volume in quarter 1 and an increase in quarter 2.

And then we have to adjust to the order situation and also the timing of the orders. So I cannot generalize this answer in terms of going that way or the other way.

Generally, there's a higher production volume, but we have to adjust it to the timing of the orders.

Okay. But I would still conclude from your answer that it is quite feasible to see a higher production volume in Q2 versus Q1, right?

And from the situation...

I would not -- Stefan, I would not be right to confirm that because we want to adjust to market demand. Market demand is currently on lead times a couple of months.

So we have to adjust to that, and we can easily jump up after 2 months now, and it can easily go down a little bit. So we are -- as I said, generally, the trend is should go up.

But we -- and this is our -- what Christoph has explained, this is currently our source for a good working capital ratio that we keep very flexible in production.

You can hear me?

Maybe you can give some more clarity and insight to the mentioned book-to-bill above 1 because above 1 can mean a lot, so that can mean 1.1 or 1.5 or 2 or everything which is above 1. So that would be helpful.

And then the second question would be on light equipment. Besides the FX effect, do you have any explanations why light equipment is that much lower in growth rate than the rest or the big equipment.

And then in terms of the rental business, that's my third question. You mentioned that especially in the DACH region, the start into the year was weaker also due to weather conditions.

But do you, for example, since March and also now in April, see a pickup in the rental business?

Lukas, Karl Tragl speaking here. So in the first quarter, our book-to-bill ratio was around about 1.3.

So we are talking normally always in the range between 1.0 and 1.5 fluctuating. That's what we talk about at the moment.

The light equipment situation on the one hand, we have to adjust it for currency effects. That was the reason why we have explained that.

And we have to take into account that we have high market shares in light equipment. We are, in many respects, market leader there.

And we have significant opportunity in some areas of the compact equipment like excavators, where we have smaller market share. So if business picks up and we gain market share and also due to the higher sales volume per unit, 1 unit light equipment is in the small thousands and 1 unit compact is in the small 10,000.

So this is 3 effects leveraging each other and therefore, multiplying up in giving this effect that way. As far as the rental business is concerned, we had an awful start in terms of weather conditions this year and also comparing to the previous year in 2025 with uncertainty at the beginning, the company started to rent rather than to buy generalized.

And this year, it's just the other way around. companies start to buy again more and rent a little bit less and both together is giving this slight effect.

We are talking on small single-digit percentage growth or declines, but this we can clearly see. And we saw a picking up of rental business in the course of the months from a very weak January, February up to a much stronger March and April.

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

I'm hesitating to talk about it because we just have the clear numbers for the first quarter. That's what we have published.

So I do not want to comment on it. I'm sorry for that.

Yes. Thank you, operator.

Ladies and gentlemen, as we can see, there are no further questions on the line. This brings us to the end of our conference call.

As usual, if you have any further questions, please do not hesitate to contact me or the entire Investor Relations team via phone or e-mail. If you would like to meet in person, please let us know or check our website and financial calendar for all relevant roadshow days in the coming months.

Thank you again for joining our call, and we wish you all of you a pleasant summer. Have a great day.

Thank you.