Earnings call transcript: JOST Werke Q2 2025 shows strong sales growth

JOST Werke AG reported its Q2 2025 earnings, revealing a 31% increase in sales, primarily driven by mergers and acquisitions. The company’s adjusted earnings per share (EPS) came in at €1.41, slightly below the forecasted €1.45, while the stock price rose 1.75% in pre-market trading, reflecting investor optimism about the company’s strategic direction and future growth prospects. With a market capitalization of €901.71M and a P/E ratio of 16.9x, JOST Werke demonstrates solid market positioning. According to InvestingPro analysis, the company maintains a FAIR overall financial health score of 2.49 out of 5.

Key Takeaways

• Sales increased by 31% year-over-year, driven by M&A activity.
• Adjusted EBIT grew by 10%, with a margin reaching 9.5%.
• EPS of €1.41 missed the forecast of €1.45 by 2.76%.
• Stock price increased by 1.75%, indicating positive market sentiment.
• The Huber merger integration was completed, with synergy targets set.

Company Performance

JOST Werke AG demonstrated robust sales growth in Q2 2025, with a 31% increase attributed mainly to successful mergers and acquisitions. The company’s diversified business model and strong market access have helped mitigate regional demand uncertainties, positioning it well against industry trends and competitors. The company’s trailing twelve-month revenue stands at €1.24B, with a healthy gross profit margin of 27.94%. InvestingPro subscribers can access detailed financial health metrics, including profitability scores and extensive peer comparison tools.

Financial Highlights

• Revenue: Not specified, but sales up 31% year-over-year.
• Earnings per share: €1.41, a 3% increase year-over-year.
• Adjusted EBIT: €37 million, up 10%.
• Free cash flow: Declined to €5 million.
• Leverage: Temporarily above threshold at 2.78.

Market Reaction

JOST Werke’s stock price increased by 1.75% to €52.30 following the earnings announcement. This positive movement suggests investor confidence in the company’s strategic initiatives and future growth, despite the slight EPS miss. Currently trading at €60.52, the stock sits just 0.91% below its 52-week high of €65.43, reflecting strong market sentiment. Based on InvestingPro’s Fair Value analysis, the stock appears slightly undervalued. Analysts maintain a strong buy consensus with a potential upside of 34%.

Outlook & Guidance

The company projects a sales outlook increase of 40-50% for 2025 compared to 2024, with adjusted EBIT expected to rise by 23-28%. The CapEx ratio is targeted at 2.9% of sales, with working capital aiming to stay below 18.5% of sales. These projections indicate a strong growth trajectory. The company’s EPS forecast for FY2025 stands at €6.83, supported by a solid current ratio of 1.45. Discover more detailed forecasts and financial metrics with InvestingPro, including exclusive ProTips and comprehensive research reports available for over 1,400 stocks.

Executive Commentary

CEO John Lindbergh stated, "We believe we had a solid Q2 in a rough market environment, proving that our business model has become more and more resilient over the years." CFO Oliver highlighted the company’s net working capital management, stating, "We are managing a net working capital ratio of 75% at the end of the first half year."

Risks and Challenges

• The company’s leverage is temporarily above the 2.5 threshold, which could pose financial risks.
• The decline in free cash flow to €5 million may impact future investments.
• Market contractions in the Americas and mixed conditions in APAC could affect sales.

Q&A

During the earnings call, analysts inquired about the contribution of agricultural contracts, which are expected to bring in low double-digit millions. The company also addressed the stability of the North American market in H2 2025 and the health of dealer stocks in the agricultural sector.

Full transcript - JOST Werke AG (JST) Q2 2025:

Josh, Chorus Call Operator, Chorus Call: Ladies and gentlemen, welcome to the JOS Berkeley Half Year twenty twenty five Results Conference. I am Josh, the Chorus Call operator. I would like to remind you that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by Q and A session. If you would like to ask a question from the webinar, you may click the Q and A button on the left side of the screen and then click the right hand button.

For recent questions, please click the Q and A button and then text and type your question. For operator assistance, please press the operator assistance button on the bottom left hand on your screen. At this time, it’s my pleasure to hand over to John Lindbergh, CEO. Please go ahead. Thank you very much, and good morning from Morissenburg here in our headquarters, and a warm welcome to our earnings conference for the 2025 and 2025.

We had challenging global markets, but growth was able to continue its growth plan driven by the merger and acquisition of Huber that we have taken, but also driven by some local market share gains. The Huber post merger integration is fully on track. The first synergies are being implemented and the exit of the noncore cranes business has been prepared in the second quarter of this year. We have signed the sales of those agreements this Monday on 08/11/2025. We are also glad to report that we have some market share gains in agriculture in the APAC region and also in South America, where we were able to sign new long term contracts with our agricultural OEMs.

The market demand in Europe, Middle East and Africa was stabilized in the second quarter with order intake slowly increasing. However, the demand in The U. S. Slowed down dramatically due to uncertainties based on the tariff policy and the economic policy of the new administration. We’ve also been able to place a promissory note loan of $320,000,000, and we’re very happy with the attractive conditions that we were able to obtain.

Let’s go to the financial highlights, and they show the resilience of our business model. Our sales in Q2 were up 31% on mainly supported by the EBA M and A, and that effect already excludes the cranes business that is considered operations that we will discontinue. The organic sales were slightly down by minus 3% compared to 2024. The adjusted EBIT grew 10% to €37,000,000 and the adjusted EBIT margin reached 9.5%. This was supported by a solid operating performance and also had a positive effect on the classification of the train business as discontinued operations.

HUYA contributed positively also to an adjusted EPS in Q2 twenty twenty five, offsetting the sales driven organic decline of the earnings. And as a result, our adjusted EPS in Q2 twenty twenty five increased 3% to €1.41 versus the 2024. Our leverage calculates to €2.78 which is temporarily above our target threshold of 2.5 due to the dividend payments that we have done in 2025. We expect the target to be below the 2.5 threshold again by the 2025, end of this year. The free cash flow declined to €5,000,000 That is mainly because of higher working capital.

Driving factors here are the EVAR consolidation, the growing activity level in Europe and also a stock increase to make our supply chain more resilient and to protect the supply chain, especially towards North America. Looking at the market. The market, as I said, were not supporting. Can see here that Europe, Middle East and Africa on truck and trailer were slightly positive compared to Q2 twenty twenty four. However, on tractors and hydraulics, we had a contraction.

North America contracted significantly based on the uncertainties, mainly on the tariff. And APAC is, if you want to say, a mixed bag with some light in the truck business, some shadow in the trailer business and tractor and hydraulic more or less around zero. Within that market environment, we operated quite resilient, and that is also because we have, meanwhile, business model with a wide range of end markets and a wide range of products and customers. If you look at our sales by destination, we sell less than half in Europe, Middle East and Africa, meanwhile, and the rest was distributed quite nicely between Americas and Asia Pacific. And if you look at the applications, you can see that a little more than half is transfer application and the rest is hydraulics and also agriculture where we expect them to grow so that we will be beyond 20% also in agriculture in the future.

So meanwhile, a very nice setup and a very resilient setup. With that, I would like to hand over to Oliver to give us some more details on the financial performance.

Oliver, CFO, JOS Berkeley: Thanks, Joachim. And as always, let’s start with the regions. And within the three regions, will focus a little bit more on the isolated second quarter results and then we’re coming to the group focusing a little bit more on the two point five year results. So let’s start with EMEA. As Joachim pointed out, we have seen in the second quarter a slight uptick of the demand.

The reported sales were increasing by 21%, which is, of course, driven by the M and A of HUBA. And all those numbers and all the numbers on the next slide, just as I go from the beginning, are from continuing operations, excluding the sales that we had from the cranes business. And if we do this without the HEVA effect and at constant currency, we see an organic growth in the year, which is by almost 4%. And that’s the case because both transport and agriculture demand has stabilized a bit through the second quarter and the order book has gained some momentum. However, we need to point out the whole situation remains very fragile and basically changes also from time to time for me to really be cautious going forward.

However, the momentum is better than the week before. And if we then go to the down to the EBIT, we also see that profitability compared to the second quarter last year has increased in the EMEA region. And this is driven both from slightly higher fixed cost absorption effect and also significantly by the categorization of the freight business without discontinued operations of cranes business. That helps a lot. And by that, the margin increased then from 5.4% last year to 5.8% this year.

Good signal is also that still it’s the case that we don’t use short time work in the European plant anymore, which should help us also in the next going ahead. Next page. If we then go to Americas, also here, you have mentioned reported wise, the sales are increasing, driven by M and A. So almost 8% reported sales growth. However, if you look on at constant currency without the acquisition, you got minus 11% decline.

And this is basically driven by both, not trend for the of the market are significantly down versus prior year. The good thing is on the EBIT side, we still show with 11% a very decent margin in light of all the assets that we have there, which are not only the tariff discussions and then the underlying market downturn is also the FX effect. As we all know, the U. S. Dollar has weakened a lot of the euro currency, and that’s put pressure on both sales and EBITDA, as we pointed out here.

So that’s why we are still happy with 11 EBIT margin in this region. We also should note prior year, very high margin in the Americas region was partially driven by, let’s say, a special situation for for two for two reasons. One is we had a very solid agricultural business in the second quarter last year with very high share of of premium loader sales on the one side. And on the other side, we were benefiting from sharp decline in material prices while selling prices still remain very high cost as material delay in material actions to the customer. We benefited last year.

So so overall, in light of the decline of the business in Americas, I would say we we congratulate all the teams there to a very solid contribution to the overall result. If we then go to our third region, which is APAC. Yeah. You’re talking again. It’s a little bit of a mixed picture here.

The reported sales grew sharply by more than 100%, which is driven by the high factor, high value acquisition. I have a very strong position in China, but also in India. But also here, we exclude the acquisition effect and the FX effect, we see a decline of minus 10%. That means it’s although China as a as a single country region is doing better than we anticipated before, and that’s helped us also in the overall reported organic numbers. But we see a decline of the activities in India and also in selected other countries, especially in Australia and South Africa.

Where you have a very strong position and so that’s a little bit of a burden. When you look into the EBIT and EBIT margin in in APAC, we’ll go back. You see also almost doubling of EBIT numbers, which are driven by m and a. And despite the expected dilution of incorporation of Hyva, we see a solid EBIT margin of almost 14%. And this is not only driven by still a very good China business.

We also see that the first synergies really are implemented and and and start to incorporate in in those numbers. And this is especially true in the APAC region as as you know, high bar business is in APAC the biggest one. So we would have expected anyhow that the first synergy starts to realize there. So that’s about regions. Let’s go to the group.

Overall, we say a very solid result in light of all the economic topics around us here. So the sales from continued operations grew by 31% in the second quarter and for the full half year by 28%. If you exclude the M and A and FX effect, it’s minus 3.2% for the second quarter and minus 6.5% for the first half year, which really say, especially the second quarter, we did quite well. And we are able to here and there, especially in the agricultural segment, benefit from price market share gains, especially in the APAC region, but also partially in South America, as Jochen pointed out. So that helps that with an organic decline of only 3% in the second quarter, we believe we did quite well in the overall economic environment here.

When you look into the EBIT and EBIT margin, there, you see this increased by almost 10%. And the margin is at 9.5%. That’s partially driven by the classification of the cranes business as discontinued. But even excluding that, we were close to 9% for the second quarter and for the full half year around 9%, 9.1%, which is a strong result, again, in light of the tariff discussions and so on and so forth. We still see overall that the direct tariff impact are, let’s say, as we always communicated, probably in the range of a mid single digit number.

And we still strongly believe that within the second half year, we should compensate here and there. However, as we always pointed out, the indirect impact from economic downturn in The US, that is probably the bigger risk for you as a company. And we see it materializing that that The US economy is really at the moment going down. We need to see what that will bring for for the second half of the year. However, also in in Americas, we we see a very strong aftermarket at the moment That’s that’s that’s like the margin is at very decent levels again.

Then an extra slide that we don’t know from before, just for your reference, we also showed you the bridge for the region and for the total group. How would sales numbers have looked like in case we would incorporate the French business as as continued, which is not the case anymore. Right? So and again, regarding the half year margin, we we we report 9.5 excluding cranes and 9.1 including cranes business, which is a very solid development for the first half year and then fully in line with our expectations that we had at the beginning of the year. Next page is then our usual net income and adjusted EPS bridge.

Reported net income declined for several reasons to €20,000,000. The biggest impact here are for sure noncash and pure accounting items, so to speak, resulting from from the purchase price allocation that we do with the Hyva acquisition. And on top, we have we have to incorporate special PPA items for 2025 driven by inventory step up and order backlog capitalization that we need to do, which for the full year will roughly amount to €20,000,000 So there is a significant portion incorporated in those numbers. If we start from that €20,000,000 add up the expense taxes and the finance results, we end up with a reported EBIT of 40,000,000. Then comes this just mentioned PPA effect on top and roughly 6,000,000 of o five and integration costs, more than 100% related to the hyperintegration, layoff costs, restructuring costs.

Whatever we do there and fully in line with our expectation, we are then seeing a an an adjusted EBITDA of 73,000,000, And then we normalize the finance result and the tax rate ending up with an adjusted net income of 46,000,000 or 3.06 earnings per share, which is exactly more or less the same like last year. And that underlying somehow that, yes, we see an organic decline that has a volume impact on our P and L. But on the other side, there is right from the beginning, our positive contribution of of the highlight position into into the full P and L. That’s a quick update. I don’t want to go into the details.

The slide that has been shown also with the Q1 presentation, it shows the acquired assets and liabilities at their value assessment at the date of the acquisition on for thirty first January twenty twenty five. There have been some changes here and there because the valuation is still ongoing or what’s been ongoing after the q one reporting is now almost final. Two major topics have been incorporated, and you see then the result of the goodwill position. One is we we will start from beginning of this year to to a regular depreciation of trademarks, which will be trademarked, also the cricket trademark. The details are also laid out in our half year to report.

And the other effect is related to the classification of the French business as discontinued operations. So we had thought for that reason, we also had to anticipate the ten day view and value adjustment of especially the inventory of that business unit. And that has been incorporated in those numbers. Besides that, it’s just, yeah, minor effect. So that was the balance sheet effect from the acquisition.

If you go into the p and l effect, most of them are already described. We have expensed roughly 14,000,000 of new PPA charges from the Hyder acquisition and on top is roughly 7,000,000 inventory setup. PPA that I mentioned before, fully in line with our expectations, slightly higher just because we have now incorporated trademark depreciation. And I promised last time to give a quick outlook for the full year once these adjustments have been made. And as mentioned here on the last bullet point on the right side, we expect now for 2025, the full year net income impact from the higher PPA of roughly 28,000,000 for 2025.

And then going forward, 2026, probably around 15,000,000. That’s the basis of or based on the latest valuation status. It’s almost final, and we shouldn’t expect any further material deviation from that picture. Next slide. Coming quickly to cash flow and also after that to our balance sheet KPIs.

Joachim already mentioned free cash flow in

Josh, Chorus Call Operator, Chorus Call: the second

Oliver, CFO, JOS Berkeley: quarter was depressed by working capital topics, especially driven by a slight increase of the activity that we did in in EMEA and also the incorporation of of inventory that we had to secure in light of the tariff situation and safety stock discussion. For the full half year, it means still 49,000,000 free cash flow, which is still a conversion rate of 1.1 and therefore half our threshold of one point zero, which should be fine with that for the moment. CapEx ratio stays well below our target at the moment, 2.3%. We communicated that it could be in 2025 up to 2.9%. So also, we are managing somehow also the situation.

It’s not that we are canceling, let’s say, smart projects. Whatever we can whatever we need to do to improve our P and L going forward, we will do. However, in light of the economic totality and the pressure situation, we we do a capital spending. That’s for sure. And also when we look into the net working capital factors, we see that despite the situation as of course describing in the second quarter with EMEA and the safety cost discussions, we are managing a net working capital ratio of 75% at the end of the first half year, which is very below our full year guidance of 85%.

So we should see a very stable for the year and also. If we then go to our capital figures, we see ROCE decreasing from last year by 4.1 percentage points down to 13%. Again, we in line with our internal models after the acquisition of Daimler and D. Solutions EBIT has an impact possibly on ROCE. Nevertheless, our goal is for sure once the full finish potentially has been reached, but we are back in our corridor, which is about 17.5%.

Equity ratio is for two reasons at the moment depressed and has been going down versus end of last year down from 21.3%. The big effect is the dilution in the financing of the VIBA acquisition for the extension of the balance sheet. But on the other side, and as you all know, this was especially an effect on the second quarter, The devaluation of the USD versus the euro had a huge FX translation effect in our equity because we we hold big positions in USD net assets. Our own US business are also US in hybrid businesses denominated in USD. And that has had for the full half year an impact of minus almost minus €60,000,000 just pure translation effect, so it’s noncash, etcetera.

However, it it shows up in the equity ratio and has stand alone impact of almost 3.5. So without that, adjusted for that, it’s almost 25%, and then we will slightly better than 34. Initially leverage, already mentioned by Joachim, is at the moment at 2.778. Also in line with the expectations, we always see a slight uptick of the leverage in the second quarter driven by the cash out of the dividend. Nothing else this year, and we stick to our target by end of this year to remain below the 2.5 threshold.

That’s from my side. And with that, I’ll hand over again

Josh, Chorus Call Operator, Chorus Call: to you. Thanks, Arthur. So let’s see how we see the rest of the year. Looking at the markets going towards Europe, Middle East, and Africa, we see a slight market upturn like we’ve seen already in the Q2 for truck and trailer, slight contraction in tractors and slight uptick in hydraulics. So overall, I would say for Europe, Middle East and Africa, slightly positive.

In Americas, it will continue weak. We’ve had a very weak first half year, and we expect that the second half of the year will be more or less equally impacted by the uncertainty caused by the politics of the new administration, especially the tariff politics. While in APAC, we see a little positive a few positive trends, both stabilizing and slightly positive outlook for the TTEC market. Based on that market outlook and based on a solid half year one performance, we’re happy to confirm our outlook for the fiscal year 2025. The numbers that I will show here are for the continued operations.

So sales will be up 40% to 50% versus prior year. Last year, we had sales of 1,069,000,000.000. Adjusted EBIT will be up 23% to 28% versus prior year. The same for the adjusted EBITDA. And you see the numbers of last year here was €113,000,000 for the adjusted EBIT and €148,000,000 for the adjusted EBITA.

CapEx ratio, we are targeting 2.9% of sales. And working capital, we target it to be below 18.5% of sales. So certainly, the outlook for 2025, including discontinued operations, also remains unchanged. And we I would like to add that we’re probably at the lower end of that range right now because of the market contraction, but we’re still very comfortable to confirm this outlook for 2025. So let’s come to the summary.

We believe we had a solid Q2 in the in a rough market environment, proving that our business model has become more and more resilient over the years. The EVAR PMI integration is well on track, and we’re focusing on our core business and the EVAR core business to generate and to continue our profitable growth story. The disposal of the cranes business has been successfully secured in Q2, and we’ve been able to finance the fleet. We expect closing within 2025. Slight upside potential for European, Middle East and Africa and also for our agricultural business.

But certainly, tariff uncertainties will continue to affect Americas and the weak Indian market will also slow down the recovery in Asia Pacific. Our local for local approach, our strong market access worldwide and our high customer diversification limits the impact of those uncertainties, tariff uncertainties and the shift in regional demand. And so it’s very confirming for our overall strategy. And as I said, we’re happy to confirm our outlook for 2025. So with that, I would like to thank you for your attention, and we’re open for your questions and remarks.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question from the webinar, may click the Q and A button on the left side of the screen and then click the write your hand back. For recent questions, please click the tuning button and then text button and type your question. If you would remove yourself from the question queue, you may press the lower your hand button from the webinar.

Our first question comes from Jose Gonzalez with Halco Fassar. Please go ahead.

Oliver, CFO, JOS Berkeley: All good. Are you all here?

Josh, Chorus Call Operator, Chorus Call: Yes. Can you hear me now? Yeah. Perfect. I just have a few questions.

Do you mind I go by one by one? One by one? Yep. Okay. So the first time is on regards these long term new contracts in agriculture.

It sounds promising. Can you give us a reference of roughly of how much it can contribute next year and the year after? Well, I I’ll tell you a little bit about the background. So for us, it’s it’s very confirming that our strategy to be global tier one for those global agricultural groups, be it DNA, be it ECHO, be it ZONEER, that that strategy is being confirmed by our customers. So we’re we were able to enter into long term contracts.

I you know, you can you can calculate the size of those contracts, you know, once they’re all active as a low double digit million number. But, of course, there will be contracts running out and there will be phasing in. So I, you know, I don’t have a number, and I also would not like to share a number for the next year of what that new contract will be. But we certainly see our ag business on a very good path and also on a growing path, as I mentioned, because of those long term contracts and also because of an underlying market that we expect to come back. Okay.

So we said already low double digit next year or we should be prudent with the I yeah. I would say you can expect that for next year. Amazing. So then on on on Ophiba, it will be very helpful if if you can send with us more or less the contribution in adjusted debit just for the concierge a good idea of how the the synergies are are impacting already. Maybe you can give us the synergies.

Yeah.

Oliver, CFO, JOS Berkeley: Regarding regarding EBIT, I think last time we we said forward that the run rate was around 6%, something like this, which is more likely higher than than already last year. That has been confirmed in the second quarter. And if you just exclude then the the crane business on a continued basis, it’s already above the 7%, probably between 78% run rate of adjusted EBIT margin. And regarding the synergies, they are starting now to to to be in the. Right?

So and I would still stick to the to the calculation that we set the run rate of 2025 should incorporate roughly 45,000,000. I’m off the for 2025. Okay.

Josh, Chorus Call Operator, Chorus Call: Thank you. But then it’s very very useful. And and, of course, on regarding synergies, you were commenting. I don’t know why I I thought that in the previous call, we commented about a potential of ’27. Could be the case?

Who yeah. Yeah. Who do you

Oliver, CFO, JOS Berkeley: expect one to realize? I’m just talking about the isolated effect in 2025 that is to be found in the p and l. We still stick to the range that initial target was about 20,000,000. We somehow decide that last call to probably 23 or slightly more. I don’t expect too much.

There might be a slight impact downwards from from the discontinuation of the great business because, obviously, there’s purchasing volume related to the great business. But still, definitely, the run rate once we have fully implemented our synergies should be above the 20,000,030 plus.

Josh, Chorus Call Operator, Chorus Call: But that’s that’s the size of the run rate at the 2026. So that’s volume in the communication.

Oliver, CFO, JOS Berkeley: So no changes here regarding phasing and and and the moment.

Josh, Chorus Call Operator, Chorus Call: Okay. So the 20 is a run rate at the end of ’25? ’26. Six. Six also.

Okay. Okay. Okay. Yeah. Perfect.

And and on the on the on the aftermarket, there are a few comments that that was quite strong in Q2. Can can you indicate that more or less how much for the group? How much was for the group in

Oliver, CFO, JOS Berkeley: in Q2? Definitely, you’re about 30%. And you might recap ’24. It was around 27, something like this. But I’d say the very useful contribution here was that especially in the Americas region, and they are especially North America.

It was in some months, not the whole full half year, but in in most of the month, close to 40% even. And and and that’s been overall contributes to the overall group market and aftermarket share being jumping over 30%. But especially in US, I don’t know.

Josh, Chorus Call Operator, Chorus Call: That’s fair enough. Perfect. And lastly, on the on the outlook, so you commented that you were expecting the same trend to continue in North America, but this means h two is going to be similar to h one or did you have a client? Because looking to the production rate, that’s some of the sets that, like, SDR and ACTR are guiding for the second part. I believe that the production rates are going to go down, but I don’t know if you’re dealing with them.

Are you expecting more or less same volumes in the second part in North America or some decline? Well, you’re right. The cost of our customers, they may be slightly down at this point in time. But but I would say, overall, we are calculating that the second half year is more or less on the same level than the first half year. Okay.

Perfect. The benefit of one of agriculture. So ’25 was a little bit below initial expectations of of the recovery now because of the stock being low. How do you see ’26? I mean, is there any substantial change that you buy to be more positive for next year?

I see some of the interest for for the perception of the company since you are improving. Although, the data from some correction in in July. So I was I was wondering how you see next year and how far the stocks are at the dealer. Is there anything you can say with that? Yeah.

Dealer stocks are are certainly being reduced. The dealer stocks are are much more healthy right now as they compared to what they’ve been last year. And so the new orders will translate into into new production of tractors and also into new production of loaders much bigger than they did in the past, not because in the past, they would sell off the dealer stock. So that is as a much healthier base. So I I expect a stabilization for the agricultural business and in our case, supported with the market share gains, especially in in APAC and in in America.

Perfect. Thank you very much. All you are looking, and have a great a great rest rest of all you. Okay? Thank you, Simon.

Thank you. Bye bye. Bye bye. The next question comes from Jasmine Stellman with Berenberg. Please go ahead.

Jasmine Stellman, Analyst, Berenberg: Hi. Hello. Can you hear me?

Josh, Chorus Call Operator, Chorus Call: Yeah. Perfectly. Hello.

Jasmine Stellman, Analyst, Berenberg: Oh, perfect. Hi. So thanks for taking my question. Have three topics, if I may. So first, on the portfolio pruning.

So congrats to this this photo of the cranes business. That was really a very positive surprise. Is it fair to assume that the disposal is free of debt and EV should be in a very low double digit euro million amount just reflecting a significant discount to as the easy multiples, for example, of Peisinger? And does the disposal contract include any earn outs or guarantee application, or is it all set with the closing? That’s my first question.

Oliver, CFO, JOS Berkeley: Yep. No. I I can do that. I can do that. I think your assumptions are quite clear.

So we will hand over three of that. And, yeah, EV is a very low double digit number. And I think at least we get a positive purchase price of a single digit euro number for equity purchase price. That’s what we expect to be incorporated in in the fourth quarter. Your question regarding pricing, I would

Josh, Chorus Call Operator, Chorus Call: say that’s probably a little bit

Oliver, CFO, JOS Berkeley: of a difficult comparison because, obviously, the cranes business unit isn’t in the same shape like pricing now. That’s why we sell them. And if you, I mean, multiply six times zero or 10 times zero, it’s still zero. Right? So we we are quite okay.

For us, it was more important. It was clearly identified right in the beginning as a non core business unit. And to be honest, we are happy that that with such an accelerated speed, we can now concentrate on on the other two businesses that we acquired this season by acquisition. Yeah. Mhmm.

And then second question was? How much earn out? How much earn out? There is a a portion of earn out, and we will report this once once we have been fully incorporated in into the number. It’s probably 60 probably two thirds is fixed and one third of is is is somehow in learn out of performance.

Of that, 60 degrees is just equity that you’ve got to go.

Jasmine Stellman, Analyst, Berenberg: Perfect. Very clear. Then on Agri, you mentioned 4% organic growth in EMEA, but attributed to both Transport and Agri. What was the development at Agri’s standalone in in the second quarter in EMEA?

Oliver, CFO, JOS Berkeley: In EMEA?

Jasmine Stellman, Analyst, Berenberg: Yeah.

Oliver, CFO, JOS Berkeley: Seven. Around 7%.

Jasmine Stellman, Analyst, Berenberg: Okay. Okay. Yeah. Very encouraging number. Somehow.

Yeah. Mhmm. Yeah. And, I mean, you mentioned already that Nothing. That’s fair to

Oliver, CFO, JOS Berkeley: say it’s very fragile situation Right? So it seems to be the case that at the moment for the farmers, the the overall environment starts to improve interest. It seems to be really at the bottom and probably are not falling further, but I get certainty that that we have reached the lower end of interest rates in Europe. Inflation is between 1.7 and now 2%.

So since the the the investment environment confidence that is increasing. However Yeah.

Josh, Chorus Call Operator, Chorus Call: And and and on top of that, I think one of the other reasons, especially in Europe, was that the OEMs, agricultural sector OEMs, were very rigid in their pricing, and they had very ambitious price positioning based on the the cost increases that they have. And I think they’re more flexible in the negotiation right now. So that I think will also help the market to come back because the the farmers are able, financing is getting more accessible, and also there’s more flexibility on finding a transaction price that both sides can live with.

Jasmine Stellman, Analyst, Berenberg: Okay. Perfect. And maybe the last one on truck and trailer market in North America. I mean, you mentioned already that h two should be kind of comparable to the first half. Could you share some color on the current trading or discussions you have with your customers with regards to extended holidays?

Or do you expect how do you expect the business development after the summer holiday season? And might there be a risk for further cost measures to safeguard profitability

Josh, Chorus Call Operator, Chorus Call: Yeah. So from from an outlook, I would say the first half year, we had more or less weekly adjustments downwards in the call up that we’ve seen with with our weak customers in North America, I expect that to be a lot more stable. They’ve now adjusted to a level that they believe in. And so I expect that we have a more stable business environment at a low level similar to the level that we seen in q one in half year one. So and in terms of cost flexibility, I mean, we’ve always proven that we are able to adjust our our operational cost and also to a certain extent our costs to a certain level.

We are personally at a level right now where we it gets more and more difficult to reduce structural costs. But at the same time, we have the synergies that we already talked about with the Heba integration, and that is also a synergy that we will find in all regions, and that will help us compensate some of that.

Jasmine Stellman, Analyst, Berenberg: Yeah. Perfect. Thanks. Very clear. I’ll step back into the line.

Oliver, CFO, JOS Berkeley: Thank you, Kopin. Thank you.

Josh, Chorus Call Operator, Chorus Call: The next question comes from Nicholas here. And I assume that this is part of them by one more month of consolidation of fever and then the recovery of Europe as well as the APAC routine. Right? I would say it’s a

Oliver, CFO, JOS Berkeley: fair summary. Yeah. Yeah. Definitely. Yeah.

There is a technical effect from the acquisition, but also the growth rates should be higher also because the comparables have been much lower. And that’s the

Josh, Chorus Call Operator, Chorus Call: good part exactly. You know, if you the comparable base from last year is much lower for the second half year than for the first half year. So those are the three factors that should be correct. Okay. Got it.

Thanks. And then on the German infrastructure program, so far from the truck or m p part that hopes are high, but so far, it this has not materialized in the actual number. So it’s more like a start of 2026. Would you share this view? Yes.

I would I would share that view. That that view has been changing. So Not all of you. That But, no, the the view of the of the OEMs and of the industry has been changing. In April, when it was announced, but May, there was there was a lot of hope and that’s and then reality kicked in and to a certain degree.

I think right now, there is not too much hope that this will have a significant impact soon, but I’m sure it will at one point in time have an have an impact. So if you’re talking about sentiment in the industry, you know, I would share that view that right now everybody’s questioning on how how is it actually going to impact that. So if you want, on a positive spin, that’s some upside potential because it’s right now not reflected in in the outlook that our customers Exactly. But but I I want

Oliver, CFO, JOS Berkeley: to mention that again, even our first guidance or the guidance that since it’s just issued March has never incorporated any effect on the infrastructure program.

Josh, Chorus Call Operator, Chorus Call: We were we were always a

Oliver, CFO, JOS Berkeley: little bit cautious in saying, will this really have an Yes or no. And I I think it’s proven, you know, really very difficult to see something here. Yep.

Josh, Chorus Call Operator, Chorus Call: Okay. Got it. And my last one, I mean, I I think the sale of the cranes business is appreciated. Any other measures we can expect or that you plan to maybe lower leverage at a faster rate?

Oliver, CFO, JOS Berkeley: In general, we are still in the process, let’s say, of PMI of the two year PMI phase, and part of the two year PMI phase is very clear on the long term portfolio. And as you know, Viva is not only producing the assets as well, but for the time being, you know, there is no other thing on on the table. You know? We are doing smaller portfolio things that clean up as always also in the old world, and that’s probably the main focus for the next six months.

Josh, Chorus Call Operator, Chorus Call: Yeah. Yeah. No. No. That’s I mean, don’t expect any significant changes in our portfolio right now.

As Oliver said, we have continued portfolio reviews. We’ve, like, taken out some non core products out of our transport portfolio recently, and we do that continuous update and review of our entire portfolio. But right now, with the business that we have as the case is continued business, that’s the business we’re committed to and that we are going to invest in. And on top of that, that’s the business that we also need to generate the synergies that we want to generate. As we mentioned, the €4,000,000 to 5,000,000 that you would see at the run rate P and L this year and €20,000,000 that we have committed for the run rate end of next year.

Got it. Thank you. Ladies and gentlemen, this was our last question. I hand back over to Johann for any closing remarks. Okay.

Well, thank you very much. I think that, you know, in the in a very difficult market, we were able to prove that our business model became more and more resilient over the years, and we’re very happy that we could demonstrate that in the q two and also in the outlook that we’ve given. And we thank you for your interest and your questions, and wish you a wonderful day. Bye bye. Bye bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.