Olaf Scholz: So good afternoon, and a warm welcome from my side. My name is Olaf Scholz, Head of Group Investor Relations here at Krones. In a macroeconomic environment marked by further uncertainties, Krones has confirmed their financial targets for '26 and also increased order intake and profitability in the first half year '26. This was the headline of the press release in this morning. And now Thomas Ricker, for the first time in his role as CEO of Krones and Uta Anders will give you more details about the situation at Krones and also explain the figures of the first half year '26. After the presentation, you will have the opportunity to ask questions. I think you also know how the Q&A session works here at Krones. Please use the function, raise your hand, in Teams or send me just a short e-mail and then I will hand over to you. Additionally, please be reminded that this meeting will not be recorded and that it is also not allowed to record the meeting. Please also deactivate any functions of recording at Teams. So I think let's start. And so I will hand over to Thomas Ricker. Thomas, the floor is yours.
Thomas Ricker: Thank you very much, Olaf. Yes. Dear ladies and gentlemen, it's really a pleasure for me for the first time in my new role as CEO to present the half-year results 2026 of our company, Krones, together with my colleague, Uta Anders. As I mentioned already in the Q1 call, where I introduced myself, I'm very much looking forward to future direct exchange and close cooperation with the capital markets and, therefore, with you. The current situation in the world is challenging. The economy is globally slowing down and the uncertainties in the markets are still on a high level. Despite that, Krones continued in the first half year with a positive performance based on our resilient business models and our strong global presence, and we are confirming the full year financial targets for 2026. So I will just jump over this summaries because we will go in detail in the figures and in all these information afterwards. The highlights for the first half year in 2026, also in a nutshell because we will go more deep in the following presentation. Order intake in totally at EUR 2.850 billion, the revenue growth plus 1.8%, EBITDA margin on a level of 10.8% and the free cash flow currently of minus EUR 31 million. Going to the order intake, you have seen the figures, even the second quarter was on a plus compared to the last year of around 3.5%. In a sum, in the first half year, the growth of the order intake was by plus 4.5%. And it's very important for us, the book-to-bill ratio after the 6 months at the level of 1.05. In general, as I mentioned already, the uncertainties on the market are still on a high level. Despite that, we could manage it. And we have our global presence. We are more or less everywhere, and we are in close cooperation with our customers to handle their projects in the best possible way. As you can also see, the strongest growth currently have been in North and South America. Also in Eastern Europe, we have quite a stable situation on the order intake side in Europe and in Asia Pacific and currently, a bit of a decreasing order intake compared to last year in Middle East, which is quite explainable and in China. And we are expecting a catch-up effect also in the second half of the year also in that region. China in the first half year is always a bit influenced from the Chinese New Year, which is in February. So up to now, as I said, we could manage the uncertainties and especially the huge cost pressure on the raw material side of our customers quite well. And the huge pressures on the cost side are mainly driven from the energy costs, and these are strongly influenced from the current situation in the Middle East and the Iranian war. The order backlog raised a bit up, and we are still on a very good level of around EUR 4.3 billion. The delivery times is stabilizing at really a very competitive level of around 30 weeks. And the order backlog in combination with the order intake also from the first half ensures our production capacity utilization largely for the full year 2026. If we come to the revenue distribution, it's still a very good balance between the emerging markets and the developed markets, a bit driven now from the developed markets, 52% in that area and 48% in the emerging markets. So what you can see here that North and Central America dropped down last year because of the shock of the tariffs, it's catching up. Again, that's good. Also South America, I would say, is on a stable level if you see the absolute values. Europe and Middle East, following the order intake situation from last year, has a very strong development in the positive side. And the Eastern Europe, Central Asia, China and Asia Pacific regions are on a, I would say, stable and very good level from our revenue split. So far from my side, and then I would hand over to Uta.
Uta Anders: Thank you, Thomas. I mean, as always, I will start with the revenue development. I mean, as you can see, speaking about year-to-date, we are at EUR 2.715 billion as reported, and we have about EUR 60 million FX effects included in here, mainly coming from the U.S. dollars and FX adjusted, as you can see, EUR 2.775 billion. This is a growth by 1.8%. As you may recall, we had 1.4% in the first quarter. So we have been catching up slightly to our 3% to 5% growth guidance, which I will come to in a second. Quarter-over-quarter, you can also see that we had a slight increase. And as I said already in the quarter, about EUR 10 million FX effect. I mentioned that already, we confirm the guidance, 3% to 5% for the current fiscal year. We are well aware that the second half must be stronger than the first half in order to achieve that. But we have also shown, for instance, last year that we are capable of delivering that. And also the production schedule confirms that all our production sites or customer sites, installation and commission schedules backlog, but also recurring revenue. So that's why we are confident that we can confirm our growth guidance. Coming to EBITDA. You can see for the fiscal year year-to-date, EUR 292.8 million EBITDA, which is a slight increase compared to last year in absolute numbers. If I look at relative numbers, we increased by 0.2 percentage points from 10.6% to 10.8%. And this is true for the fiscal year year-to-date, but the same is true for the quarter because also here, we had 10.6% margin. Also here, we confirm our guidance, 10.7% to 11.1% EBITDA margin range for 2026. EBT, EUR 197.7 million, you can see yourself. It is a decrease compared to last year, which is still kind of, let's call it, carryover effect from the first quarter because here we had a negative financial result as well as higher depreciation. You can see in the second quarter, we have increased slightly our EBT. But all in all, also here, this is in line with our expectations as we are also rising it on the lower end on the left side of the page. Moving on with personnel and material expense. The picture is very similar to what we have presented already in the first quarter. Let's start with material expense. I mean you can see yourself. It is in absolute numbers, a decrease compared to last year as well as a ratio, 45.1%, which is a result of the material cost reductions from last year. You may recall that we had also talked on the conferences about the cost agreements or the agreements we had done with our suppliers in 2025, which now carries through to 2026. And this is one reason, but also mix, but also price level. So those are the reasons for the low material cost ratio. We assume that this is going to be normalized a little bit throughout the fiscal year. The same is true for normalization, but also similarity to the first quarter for the personnel cost ratio. I mean, you can see yourself, EUR 29 million in addition, which is the result of, on the one hand, in average higher FTE number, so employee number in comparison to same period last time -- last year, but also tariffs or merit increases. 32.9%, as we have shown last year, we expect this to go down towards the more 30% throughout the fiscal year. Employees, actually, there's not a lot to tell this time. As you can see, we are at approximately the same level as we had end of the fiscal year, 21,249, 90 less. The reduction is mainly in Germany. But stable development. And also if I look at the different employee groups, which we always highlighted, it is very similar to what we had. And also that is in line with our expectations. Now let's move on to the segments. For Filling and Packaging Technology, I always tell you it is in line with group development. I mean, because it is the largest segment. And speaking about revenue, I mean, EUR 2,293 million reported, EUR 2,342 million FX adjusted and FX adjusted, we show a growth of 1.8%, which is already very close to our 2% to 4% growth guidance, which we confirm. And speaking about EBITDA margin, you see a nice development also this quarter coming from 10.8% to 11.2% for year-to-date. And also here, we are within our guidance of 11% to 11.5% and we confirm both growth and EBITDA margin guidance. Process Technology, yes, the story is very similar to what we had seen in the last year, only limited growth, but good margin or very good margin. And if you look at the year-to-date numbers, you can see that both in FX adjusted, but also in reported numbers, we are below the last year, which is also related to delays of turnkey projects also in last year, but also at the beginning of this year but higher or very good revenue in what we call units and components, I mean, pumps and valves, for instance, which is also the driver for the margin acceleration, the 10.6%, very similar to last year, above the guidance of 9% to 10%. To summarize it, we also here confirm the guidance, 0% to 5% revenue growth revenue growth and 9% to 10% EBITDA margin. Last but not least, Intralogistics, nice growth, EUR 60 million reported figure, EUR 6 million adjustment for FX. So we come to 9.7% revenue growth FX adjusted, which is already on the upper end of the guidance, 5% to 10%. On the other end, also due to mix issues, there is still some way to go to achieve the EBITDA margin of 7.5% to 8.5%. We are only at 5.3%. But also here to summarize it, we confirm the guidance for both revenue growth and EBITDA margin. Moving on with equity, liquidity situation, starting with liquidity. I mean, as you can see yourself, we are holding a very comfortable liquidity situation with EUR 1.304 billion, which is compounded by EUR 405 million cash, I'll come to the free cash flow statement in a second, and free credit lines, as you can see, close to EUR 900 million. So that gives us sufficient room to maneuver for the growth we are expecting towards 2020 targets also, but also for everything which is going around economic volatility. Equity also here a nice development, EUR 64 million in additional equity despite of the fact that we paid out EUR 88.5 million dividends. So we had a net income this quarter of EUR 139 million. If I look at the ratio also there, a nice development, up to 43.6%, so 1.4 percentage points, and this is because equity increased by 3%, whereas the total assets and liabilities more or less stayed stable at EUR 5 billion, so up to 43.6%. Now let's come to working capital. Starting, first of all, with the middle part of the page. I mean, as you can see yourself, 18.5%. So we are higher than we were last year. And also if I look at absolute numbers, we are holding or we were holding end of June a working capital of EUR 1,117 billion, which is an increase by EUR 180 million compared to end of last year, which, as we will see on the next slide, is the main driver for the free cash flow development. Let's look at the different components of working capital, receivables/POC. I mean, you can see from absolute -- from relative numbers, but also from absolute numbers, very stable, 35%, 36%, and it's about EUR 2 billion in absolute terms. Payables, they increased a little bit compared to Q1, where we have highlighted that in particular, and we are very similar to where we were last year at the same time, and we have about EUR 770 million accounts payable lower than end of December, but that's also normal course of the business. Inventory, as you can see and which we had already talked about in Q1, 13.5%. So it is higher, 2 reasons. Reason number one, safety stock, as we have also highlighted in Q1 already. Reason number 2 is also a bit regional. We are holding a little bit more inventory in North America also to be able to deliver out of North America, and that's one of the main reasons for that. And last but not least, received repayments, EUR 15.8 million, so very similar to end of the fiscal year, but much lower than last year at the same time. And this is because -- and I had mentioned that already that with lower delivery times, we are moving faster also the orders and then the down payments move from the liability side to the asset side. So that's all in all, the overall development of working capital. And as I said, it increased by EUR 180 million, and we can see the EUR 180 million, EUR 181.1 million to be precise, also on the third line of the free cash flow statement for quarter 2, not quarter 2 year-to-date. Let's first of all, looks through the fiscal year. I mean, I already reported on EBT. You can read it. Other noncash changes, mainly depreciation of about EUR 100 million. And change in working capital, I commented other assets and liabilities. This is mainly income tax payments close to EUR 60 million. And then moving on CapEx. That is a little bit different than last year. We are higher in CapEx this year than we were at the same time last year, 3.6%. And this is because we have quite some large investment projects, which just pay out regularly. Other is not significant. Free cash flow before M&A, minus EUR 30.8 million and M&A activities, EUR 8 million (sic) [ minus EUR 8 million ]. That's the earnout -- the earnout we paid out in the first half of the fiscal year. Financing activities, others, yes, that's the dividend, mainly EUR 88.5 million and then the change in cash, as you can read, and then coming to cash. And if I just shortly compare last year to this year, I want to highlight 2 things. The change comes mainly -- the change in free cash flow, mainly from higher change in working capital, which we expect to normalize throughout the fiscal year and more CapEx. So those are the major changes. And now I will take a slight detour because I want to announce already something which we have closed in July. That's a small acquisition, which we have done now in July. We are actually in the closing phase right now. It is a very small business. I mean, EUR 10 million revenue. You can read it yourself. It's Wiro Präzisions, a tools company. And this is in addition to our Netstal, MHT. Some of you may recall that we have talked about closing the loop. We have talked about advanced molding technologies as part of filling and packaging. So here, they are producing molds and tools for special purpose caps. So it is closing a technology gap which we had in combination between MHT and Netstal. Very small business, EUR 10 million asset, 50 employees, margin accretive. And you will see the payout in the third quarter of 2026. And then now let's go back to the presentation. This slide, you also know, I mean, I talked about the negative free cash flow, but I also talked about that we expect this to normalize throughout the fiscal year. So same information as I had given to you in the first quarter, but also Q4 2025. ROCE, 17.7%, very similar. You remember that I always talk about nominator and denominator. What we see here is that the EBIT only increased by 1.9% for the reasons also mentioned already when I talked about EBT and capital employed increased by 9.8%. We expect a certain normalization in particular in working capital, but also an increase in EBIT. So that's why also here, we expect that we expect to confirm our guidance for 2026, 19% to 20%. So far from my side. And now I hand over to Thomas again.
Thomas Ricker: Yes. Thanks, Uta. And therefore, with all the figures shown coming to the outlook, which we strongly confirm the guidance for 2026 based on our order intake situation, on our backlog situation and especially also based on the schedule for our production and for the projects we have already in hand for the rest of the year. And we confirm the revenue growth in -- the guidance for the revenue growth in the range of 3% to 5%, the EBITDA margin in the range of 10.7% to 11.1% and the ROCE in the range of 19% to 20%. The outlook on the segments, as already mentioned from Uta for the revenue growth and already also confirmed, so I would not go in depth. You recognize that we have to have a stronger second half, which we confirm also that, that we are even in the segments fully in the guidance what we have placed for the 2026. And last but not least, also our midterm targets for 2028 with a revenue around EUR 7 billion on the revenue side in 2028 and EBITDA margin in the range of 11% to 13% and a ROCE bigger than 20% for the year of 2028. And also a strong confirmation for that whilst saying that when we have set the targets in 2024, the global situation has been quite a bit different, I would say, a bit easier. And that means that the whole Krones team has to work even harder to get these targets for '26 and also for the midterm targets done. So the key takeaways, I think, more or less done already. The start was quite good. The second half of the year will be stronger to come on the group level and on the segment level in our expected guidances. There is, for sure, uncertainties on the market. Up to now, we managed it quite well, and this is our strong belief also for the future for the second half. We have a good backlog. We have a good scheduled utilization of our factories. And therefore, the targets for this year will be again strongly confirmed. So far, in an overview about the figures and short explanations, and we are looking forward to your questions.
Olaf Scholz: Thanks to Thomas, and thanks to Uta for the explanations of second quarter or first half year '26 and also regarding the outlook. I think there are some questions, or I already see some in my e-mail folder as well as in the Teams. We start with the Teams. We start with Sven Weier from UBS.
Sven Weier: Welcome, Mr. Ricker. All the best for the new role. The first question I have is on the order intake guidance, right? Because you confirmed the book-to-bill of slightly above 1, which implies an order intake for the second half, maybe slightly above the level that you had in H1, which was a good level, especially in the first quarter. Now you talked about prevailing uncertainties as a consequence of the Iran war, higher energy costs, which maybe caused some issues for some of your clients. I was just wondering if you could give us an update on the pipeline and how you feel about this book-to-bill guidance. That's the first one.
Thomas Ricker: Thank you very much. So as I mentioned already, there is, for sure, a lot of uncertainties driven currently quite through the Iranian war, and therefore, through the energy costs, which have a direct influence on the raw material side of our customers, which is definitely understandable, and there is a lot of uncertainty because oil price and energy prices are going up and down very fast at the moment. So this is not influencing what we see at the moment, our pipeline, because our pipeline in all the segments is really robust for the next months and for the future. It's still influencing, I would say, the decision behavior of our customers. That decision takes much longer, even that they have taken last year and the years before. As said, is understandable. So I would say that's a bit also the uncertainty for us. But seeing the robust pipeline, seeing also the distribution of the pipeline in -- around the world with a very good distribution, very good balance, we are, I would say, very optimistic that we can manage the order intake side and therefore, then also the growth side.
Sven Weier: And you also have a good start into July, so that gives you also comfort on orders?
Thomas Ricker: The July figures up to now confirming my statement from right now. Yes.
Sven Weier: And then I was just wondering, I think my understanding is that in order to achieve the full year revenue guidance, you also still need to get some order intake in the second half for this year delivery, if that's right. And I was just wondering, the amount of orders that you need, is that around about the same level that you had in the second half last year? Or how should we look at this in for/out orders?
Thomas Ricker: We are quite good utilized at the moment. And yes, there is a chance for single machines and for some new machineries also to be already delivered in this year. Especially on the service side, we have still longer chance to get orders in, which we also can then deliver or make to revenue this year. I would say, from that side, very satisfied with our statement for this year. A bit of an uncertainty also coming from customers because we have also deviations in their projects, driven sometimes from a crisis situation or wars in that area so they have to slow down their projects. There might be a bit of a question mark behind, but seeing the volume we have, seeing the outlook and seeing the pipeline, again, strong confidence that we can catch up in the second half year and then being in our guidance.
Sven Weier: When you look at the 3% to 5% revenue growth range for the year, I mean, would you feel a bit more comfortable at the lower end of the range? Or do you think from today's point of view, you can still end up also at the higher end?
Uta Anders: We are more comfortable towards the lower end.
Olaf Scholz: Well, I switch to my e-mail folder, and I see also there's someone, Benjamin Thielmann from Bernstein. Benjamin, welcome back. Benjamin Thielmann Thomas, welcome from my side as well. Three questions, if I may. First question, you mentioned it on one of the slides, is the solid order growth in North America. And I was just wondering where exactly is that coming from? I mean, we know the story, installed base in North America, especially in the U.S., is relatively old. Are you growing there particularly because of a replacement of old machines? Or are you growing with new customers? Or is it a mix of both? That's the first question.
Thomas Ricker: Okay. So first of all, to answer, yes, it's a mix of both. And the explanations we discussed a lot of times, and I would not say it's a kind of catch-up effect already. I would say it's coming a bit back to normality. And the reason for that, at least that's my explanation, is that it's a bit more certainty on the tariff situation since a few weeks or months. So it's not going up and down and going -- and that might be the reason that one or the other customers are placing even more orders. Tariff situation is more or less unchanged up to now, and that might lead to a bit of a certainty on the customer side. But again, it's not on a level what has been already, but you have seen the drop down in revenue and also in order intake last year. And I would say we are on a good way back. So hopefully, it stays like that. Benjamin Thielmann Okay. Very clear. And then next question would be, you mentioned it as well, that some customers could be hesitant in terms of investment behavior. I mean, the CapEx outlook for most of your big customers still looks good. I mean, Q2 order intake was, I think, the strongest Q2 since, I think, 2020. So it's clearly going well for you guys. I was just wondering in what regions or for what different types of lines and machines have you seen customers being reluctant to spend? Anything surprising, maybe in Asia Pacific? As I mentioned before, I think Asia Pacific is quite stable, including then also China, if we did that together. Not really surprising. Maybe a bit surprising is that still the European region that all stays on a very good level, also on a good investment level. As mentioned, MEA is dropping down a bit, but also the expectation because of the crisis situation in that region was, from our side, even a bit higher. So they keep it quiet on an expected level. And as mentioned already in the Americas, means North, Central and also South America, we have quite a strong situation on the order intake, which is, let me say, supporting our overall good figure and good growth compared to last year. Benjamin Thielmann Okay. Cool. And then last question, if I may, is regarding the working capital movements we have seen. Uta, you mentioned it, inventories to sales went up by, I think it was 100 bps because of the buildup of safety stock in North America. What is the reason for that? You mentioned that you want to serve more from North America. Is this from North America to the North American market? Or why is that, what I perceive to be, sudden increase in inventories year-over-year?
Uta Anders: It's what you said. It's from North America for North America to avoid the tariffs. So we probably have said last year when we talked about the mitigation measures for tariffs, one of the measures we mentioned is more local production, but also more local sourcing. And also -- and this is now reflected in the working capital, actually in the inventory. So local for local is the main reason for that. Benjamin Thielmann Okay, cool. I have a few more questions, but I go back into the queue and come back in a few minutes.
Olaf Scholz: Then the next question is coming from Vitushan. Vitushan from Baader Europe. Vitushan Vijayakumar I'm just bouncing back on the revenues. So it seems like you said that you are comfortable with the lower end of your guidance for 2026. So in H1 revenue growth, adjusted for currency effect was around 1.8%. And for the full year guidance remains at 3.5%. So at least, I mean, 4% of growth. So how much of that acceleration is already secured by the existing production schedule and confirmed by the customer delivery dates? And also, I wanted to know how much still depends on project execution, please.
Uta Anders: I mean I relate a little bit to what Thomas said earlier. So first of all, of course, we have LCS business, so service, spare parts, et cetera, where it's more or less in for out. So that's not secured, but also there we are confident. When we talk about -- when we look at the line business, what we call new machine, most of it is secured. There is, as Thomas said, a bit new machine, not new machine, single machines, which we can still take into order intake and deliver, but also generate POC because, I mean, POC is a major contribution. So everything which we are taking on now in order intake, we can generate POC from. So it is, I would say, a 2 million digit -- so a lower 2-digit million -- yes, sorry, sorry for stuttered in German, a lower 2 million-digit number, which is still missing from order intake from new machine business, yes, so from Lime business to generate revenue for 2026. Vitushan Vijayakumar And just on the Intralogistics business, so revenue increased. And we have EBITDA margin, which declined, I mean, sharply. So could you please elaborate on that momentum? And also what's going to change compared to the first half to meet the guidance and targets within the segment? Also, I mean, here -- I mean, we always see the word mix. I know that this sounds very easy, let's put it very simple, let's put it this way. But it is to a certain extent mix. I mean we are generating recurring revenue from service, that's one hand. On the other hand, new machine business also has different profitabilities depending also upon what kind of line it is, which -- where it is delivered from. And so in the first half of the fiscal year, it was rather lower margins, yes. But I mean, as expected and in the second half, we expect to accelerate then also if we look at higher margins, which is also confirmed by the backlog quality. Vitushan Vijayakumar Okay. And just a last question, please. So in maintaining both your full year '26 guidance and also the 2028 strategic targets, so I mean what duration and intensity of the current geopolitical conflicts have you embedded in your assumptions? So at what point will the prolonged disruptions, supply chains, material availability require you to reassess either the near-term outlook or the 2028 targets, please? I mean we have done the guidance or the 2028 targets back in 2024. And back in 2024, we had a completely different situation. However, what we see if we look at overall sentiment and overall growth drivers, they are intact, beverage consumption and everything which we see there. So there is an opportunity to achieve it, but it is much harder than it was in 2024 because we have all these additional conflicts, which, to answer your question, we, to that extent, had not included when we set the targets for 2028.
Olaf Scholz: Next question is coming from Adrian Pehl from ODDO.
Adrian Pehl: Actually, I've got also a few, but I'll start with 3 questions first of all. On the point, Uta, what you said with respect to the lower material costs coming from 2025, I was just wondering, are you continuing with some measures? I mean, probably you do this on an ongoing basis, but are there specific projects you can mention to continue to lower material costs because on the other hand, it looks like that you're doing a quite good job here? But at the same time, we have the issue of personnel expenses keep growing. And so there's just the compensation maybe, but not really growth coming from these 2 positions on profitability. And then the second question is, I would phrase actually the regional questions that have been asked a bit differently, because when I look at the implicit Q2 China and Asia revenues, I mean, growth-wise, they have been quite up substantially. However, I was just wondering if that was just a function of the low base that you had last year in Q2? Or is this kind of a start of, let's say, more demand coming through in that region? And then maybe a question, the third one, is kind of a broader update on Netstal. My feeling was that the performance has not been great recently, but maybe you could give us an update on how the asset as part of the group has performed so far and what do you see going forward?
Uta Anders: And let me start with material and personnel costs. Yes, you are right. We are benefiting from the lower material cost ratio. And you have asked for specific measures we have taken. So I would not call them specific or measures we have taken, let's put it this way. It's just a normal bargaining power we also have. I mean, we are usually doing -- not usually, we are doing in summer price negotiations with our suppliers. So this is what we are benefiting from. We have also closed some hedging contracts, for instance, for copper. We talked about that already. And this is where we are participating or benefiting from in 2026. But also to a certain extent, it's also mix. But it's mostly the good development in material costs, which we see in the actuals. Personnel cost, I mean, as I said, I expect this to go down further to 30% to around 30% as we had seen also last year because we are accelerating revenue. And also, we had seen, or we had said that when it comes to employee development, the time of the large increases for FTE is over for Krones because we need to take -- also generate the efficiency out of the existing headcount. So this is how I would phrase your question on material and personnel.
Thomas Ricker: To your question about the region, so I would like to give you the answer. So as I said, I think it's currently quite stable in that region, which is, in my opinion, a success because you know that especially that region is also very, very competitive. But I would also say that our investments in that region, either in China and now also in India, where we invested in new production facilities, is paying off right now. So we definitely want to and will participate on the growth and the extraordinary growth possibilities in that market. And forward driven, yes, that's a clear focus area or focus market from our side. Therefore, also the investments further in that area.
Uta Anders: And if I may start with Netstal, maybe you add then what I said. I mean, we have talked about that on the conferences also. I would differentiate it into 3 buckets. First of all, cooperation is great. So I mean, it's a very good fit from a cultural point of view and also from how we drive business. So that's very good. The second I want to say is, yes, the injection molding market is much more -- not difficult is the wrong word, but much more under pressure now than we had assumed 3 years ago or 3.5 years now when we have closed the transaction for Netstal. So that means the overall order intake for AMT, for Netstal is not on the level which we had expected. Also, you may recall that we have talked also about that a big chunk of the volume growth we had forecasted was coming from North America. And now delivering out of Switzerland into North America when the main competitor is sitting in Canada, that is a challenge and that actually slowed down order intake by quite a lot, which is also a challenge for our 2028 targets also to say that already. On the other hand, there are regions like Middle East, Africa where the business was good, but overall less than expected. And just my third point, and then Thomas can add, is, of course, with lower volume, profitability is not on the level which we had expected. You may recall that 2 years ago, we had said they will be on Krones' margin level in 2026. No, they are not. They are diluting. But still the whole story, the equity story, which we had talked about here, and also closing the PET loop is intact.
Thomas Ricker: So, Uta, well said, I would say. I would also pick on U.S., which was for sure, one of our big growth market in that area because Krones had always quite well settled there. We have a lot of customer base there. And the situation currently is, in general, the whole injection market is under very high pressure at the moment, and especially in U.S. So that's the reason why maybe the growth actually is behind our targets. On the other side, we are still continuing and we are trying -- we are finding the right solutions because it is what it is. We have to find solution with either more localization or even with pushing more in the system thinking. And that's also the reason why we acquired, for example, Wiro to have the whole system together, have the injection and again, closing the loop from the raw material side to the molds, from the caps, from the preforms to the bottle to even increase our competitiveness as a one-stop supplier for our customers.
Adrian Pehl: Maybe just very quickly a follow-up on the topics we just discussed on the ramp-up in China and India. I guess there's nothing to worry about. So that's in plan. CapEx you spent was in budget, I assume. So you can confirm that that's all fine.
Uta Anders: We confirm it. Yes.
Thomas Ricker: Absolutely.
Olaf Scholz: So next question coming from Lars Vom-Cleff from Deutsche Bank.
Lars Vom Cleff: Wish you all the best in your new role. Two quick questions, if I may. I mean, as you said earlier...
Olaf Scholz: I am sorry. May I interrupt?
Uta Anders: Now it's better.
Thomas Ricker: Now it's better.
Olaf Scholz: Now it's better, I think. Once again, please.
Lars Vom Cleff: Better now?
Thomas Ricker: Now it's good. Thank you.
Lars Vom Cleff: Perfect. So first of all, Mr. Ricker, all the best in your new role and best wishes. As you said earlier, lead times have stabilized at around 30 weeks, which as far as I consider, is below your target range of 40 to 50 or 45 weeks. Is this a concern for you? Or are you comfortable with it as long as the book-to-bill ratio stays at around 1 or higher?
Thomas Ricker: I would say that's not a concern. That's a good figure at the moment, very competitive in the market and gives us also a bit better certainty and also our customers because even the long lead times years ago, or maybe even last year, has brought another big question mark on our customer side for doing their investment. I think they can now justify quite well how their markets are developing and then they are placing in the investments and then they have a range of, let me say, depends where it is, but around at least below 12 months from the point of order placement to first sellable product or production on their side.
Lars Vom Cleff: Understood. And then if I remember correctly, on the Q1 call, you mentioned that given rising input costs, Krones was internally discussing the scope, timing, and mechanics of potential price increases for products, which are scheduled for shipment this year. Could you provide us with an update on these thoughts?
Thomas Ricker: Okay. Sorry, I did not -- acoustical-wise, I did not understand. But yes, for sure, I think also that situation has stabilized. So especially on the freight and packaging side, I think this is a project individual calculation, what we have, and therefore, working close together with our customers. But in the end of the day, the price increases there have to be [ paid ] from our customers. In totally, we are still focusing a lot on, as we call it, our pricing strategy and the pricing discipline, which is also necessary also with the changes coming out of materials, coming out of freight and packaging. But I think currently, and the figures from the first half year showing that we have a quite good balance to manage that and even bring it in the market.
Olaf Scholz: Lars, additional questions from your side? We didn't hear you. Okay. Lars, take your time. You can come back in the question later. I think next question is coming from Constantin Hesse from Jefferies.
Constantin Hesse: I've got only a couple left. I'm just trying to understand a little bit better. So this medium-term target of '28. It feels to me that it's probably -- it feels to me rather that the base case feels that it's unachievable now that obviously, things have become much harder out there. So I'm just trying to understand what is still giving you the confidence of publishing this target. Basically what has to happen from a bull case perspective to get you there now? Do we have to see an acceleration in Netstal again? Or what -- because you obviously stated the fundamental growth drivers are there, right? You have beverage consumption going up, that is there, market share gains potential in emerging markets. But it feels to me that we might actually see potentially a cut in that target coming up. So I'm just wondering what gives you still the confidence to take you there? And the second question is if you could just remind us again on the ramp-up of the new capacities, when do these come online?
Uta Anders: So I mean target 2028. I mean, you may remember that I had always said it's about 2 handful of measures. If I look at those individual measures, the one where we have a question mark is Netstal. Yes, for the reasons I said. I mean, if we don't get the orders out of the U.S., then there is a question -- there is an impact, let's put it this way, there is an impact. And everything else -- and you remember the story that we had India, we need to have the capacity from India for local production. We are on schedule there to achieve that, to answer to your second question. Also China, I mean, we will open that plant and then also come into production very shortly in the fourth quarter of 2026. So that is also ongoing. I mean you remember the installed base we had talked about. So also there, there is good development, Process Technology and Intralogistics being the major drivers. Yes, of course, we need to have the order intake in those 2 segments. Intralogistics is developing well. Process Technology had done also in the first quarter. Second was more stable, let's put it this way, not extraordinary. But those are very important to achieve our targets. So that's why, yes, there are -- not call it question marks. That would probably be too negative. Yes, there are impacts which we had not seen back in 2024. But on the other hand, I would not take them back right now.
Constantin Hesse: Understood. So China online...
Uta Anders: And also, if I just may add because we always -- I always forget that, because it has been already some time ago, FX also played a role. I mean you remember last year, we have lost more than EUR 100 million or about EUR 100 million just in FX. So that also played a role. And so that's why, I mean -- the point. Yes.
Constantin Hesse: No, no, absolutely. I mean, obviously, FX has come down quite substantially again. So the question is, where does that end the year, clearly.
Uta Anders: And it's a challenge, Constantin. It's a challenge, yes, but we have a chance to achieve it.
Constantin Hesse: Okay. So just to clarify, so China, Q4 '26, India, mid-'27. is that correct?
Uta Anders: Opening also is in '26, but then coming -- with that, I hand over to you.
Thomas Ricker: You know better. We were saying the same that India is a bit different because it's a new plant. In China, it's an extension. So we are quite more on, let me say, productivity. India will take a bit longer to train the people to get the supplier base done. And so I would say opening up also in India is in the Q3 '26 already until we have, let me say, the positive effects out of it. It will for sure take in 2027, whilst the new plant in China is more or less productive from the first day of opening.
Constantin Hesse: Understood. So all of that...
Thomas Ricker: Those plants in the third quarter.
Constantin Hesse: Okay. So all of that is running smoothly. So obviously, now the question mark, as you said, Uta, is on Netstal. So if I look at Netstal, I think back in '23, revenue was something around over EUR 200 million. So can you give us a rough indication of that potential gap of orders that are basically driving that question mark, just to get a feeling for what's missing to get you to that EUR 7 billion?
Uta Anders: We are just calculating because we don't have all numbers in our head.
Thomas Ricker: But I would say you are more or less right with the volume you mentioned, and I would say it's substantial. The good thing is also that there is a really good pipeline. But also, let me say, the currently energy costs influence on the plastic raw material costs and PET cost is for sure also not a driver for the release of investments on our customer side. So again, there, the market is quite stable. Our, I would say, market utilization and our sales network all around the world will help us and we try to catch up, but I would call it substantially.
Uta Anders: It's substantially in the current situation already, plus we had planned growth.
Constantin Hesse: It's substantial in the view of Netstal, right? So if I look at that EUR 7 billion target, and obviously, you're fine. So a potential cut wouldn't be a massive cut, basically. So we'd be looking at something in the few hundreds of millions of a cut.
Thomas Ricker: Not on a group level, you are right.
Olaf Scholz: I see Benjamin again in the questionnaire from Bernstein. Benjamin, your second question? Benjamin Thielmann Yes. Two more questions from me, if I may. Again, on Netstal. I remember back then when you acquired it, you said margins are slightly margin dilutive. I remember it was something around like 10 to 20 bps on your back-end group margin. Now, with volumes or intake being below expectations, I think, Uta, you mentioned it before, it is still margin dilutive compared to the stand-alone business. Has that margin dilution then basically -- is it still margin dilutive? That's the first question.
Uta Anders: It is. Benjamin Thielmann And second is -- it is. Okay. It is. Actually it has increased a little bit also. The margin dilution has increased a bit. Yes. Benjamin Thielmann All right. And then maybe one more question on the service business. I know you don't give a split between new machine and services. But I remember back then at the CMD, I think it was in 2019 or 2021, you spoke about capture rate of the installed base growth. I was just wondering with order intake looking quite good in Q2, how does the service business look like? Do you still capture a similar base or new machines with services than you did in the last 5 years because the regional revenue mix is changing? Is services going better than the new machine business? Any color on that would be super helpful.
Thomas Ricker: I would say no substantial shift on that between the services and the new machines. There is -- there has been a strong growth in the last year. So for sure, also our machine base outside is growing, but it's more or less also a linear growth than on the service side.
Olaf Scholz: I think the next question is coming from Christoph Blieffert from BNP Paribas.
Christoph Blieffert: A couple of follow-up questions, please. The first one is on order intake. I'm struggling a little bit to understand why you highlighted rising uncertainty and delayed decision-making from your customers while reiterating the book-to-bill guidance for '26. I just want to phrase it a little bit different, the question. Do you feel comfortable with the current consensus expectations indicating 4% year-over-year growth in order intake for the third quarter?
Thomas Ricker: So first, maybe your second question, yes, I'm absolutely confident with that. And the first question is, yes, I would say, seeing the market potentials and seeing the project pipeline we have and comparing that with the past, there might be even higher chances to get the order intake up. So it means we have to fight even harder. And this is, in my experience, the reason that the discussion time, the final decision time on our customer side, and as I mentioned already, understandable because of their pressures, either regional-wise, either crisis-wise, or either cost-wise, how markets develop for them, leads to a very long decision. So there might be more potential, and this is why we said this is, let me say, the balance between the market potential, the project volume and then the order intake in the books.
Christoph Blieffert: Very clear. The second question is on pricing. Have you already started to increase pricing to smooth input cost inflation? And can you give us some indication about potential price increases on the new machinery side?
Thomas Ricker: So with pricing, I would first of all start that even all in the past, we have -- we are in a very competitive market. So we have a, I would say, very good transparency on our cost situation and therefore, also on the pricing. We have a lot of efficiency measures in place to at least cover some cost increases on our side. And on the other side, your question, I think we balance what we see for the future, and the future is for sure, when we deliver machines and when we are doing the services, which is around 6 to 10 months in advance. And therefore, we have it also integrated in the pricing. But up to now, that's only slightly changes. But the slightly changes lead to that, that we can confirm our guidances on the other side, our financial targets we have set for '26 and the following years.
Christoph Blieffert: Can you remind us when those hedges for some metals expire?
Uta Anders: We need to take that question away. But they also revolve. I mean, let's put it this way. I would answer it this way. I mean I don't have the exact because we are revolving it. And I also don't have the term in my mind. I think it's a year, but we are constantly revolving it.
Christoph Blieffert: Okay. This is clear. The last question is, can you share what is your best estimate for the FX impact on revenues if you assume stable FX rate for the remainder of the year? What is the drag on revenue growth in terms of basis points?
Uta Anders: Yes. I mean if I look at, we had -- in the first quarter, we had EUR 51 million. Now, in the second quarter, we had EUR 9 million or so because it's mainly coming from the U.S. dollar. I mean I don't have a crystal ball to see it first because there are very different assumptions also from the banks on U.S. dollar rates. But our expectation is that the impact in the second half of the fiscal year will be lower than they had been in the first half of the fiscal year. That's our expectation currently, or our assumption currently for our planning.
Olaf Scholz: I see Adrian Pehl from ODDO, you still have some questions?
Adrian Pehl: Yes. I've got 2 very quick ones. Actually, one on Process Technology. I mean, just thinking about the trajectory on the top line for this division, I mean, how can you support this segment to return to visible growth? Do you have to increase the scope of offerings? Is it M&A that you need? Maybe some clarity on the developments and how do you see it going forward would be helpful. Obviously, I guess this is still linked to a bit difficult situation on the brewery side. But having said M&A, I was just wondering if you could give us an update, in general, on your M&A strategy and developments going forward in terms of are there sufficient targets out there? Are people reluctant to sell their businesses in tough geopolitical times, et cetera? Anything on that front would be helpful.
Thomas Ricker: So I would start with the question about the Process Technology. So the way forward is definitely planned with organic growth. So as you might know, we had a huge transformation already on the process side from, let me say, former times, very strong link on the brewery technology. In the meantime, also development in new areas, in new markets, in new fields, in alternative foods in proteins and all that things. And this is, especially that year, with a very strong order intake or with a very strong start in the year is paying off right now. So brewery, as you mentioned, is still on a, I would say, weak level, and we don't expect a big growth coming of breweries because alcohol and beer consumption globally is reduced also for the next year in the forecast. So this is our clear focus. And this is also the look back to our current order intake, also the visible projects we have already in hand, which is because of the mix also completely different schedule time than the project, gives us the confidence that we, first of all, will catch our guidance this year and then we'll follow up also with a higher growth rate also on the volume side, whilst, and that's also very important, keep the profitability.
Uta Anders: M&A?
Thomas Ricker: Yeah. M&A in totally you can also -- as you know, we are always open to increase our competitiveness either on the technological side, on the other side, maybe also of market access and so on. There is currently nothing substantially in the pipeline. There is a few targets we have, we follow up, but no even substantial contribution to the guidances or to the targeted figures in the midterm plan.
Adrian Pehl: Thomas, best of luck in your new role.
Olaf Scholz: Well, I have a look on my e-mail folder. I don't see any additional questions there. I also ask you in the community, if you have further questions, please raise your hand. Well, I think we are coming to an end to our Q&A session and also to our call. Perhaps last words from your side, if you like.
Thomas Ricker: So I would say everything said. So from my side, first of all, thanks a lot for your good wishes, which I take personally, but I especially will give it to my team and to the whole Krones employees all around the world. As you see already, the Krones Board team is already in the new, let me say, setup right now, and the whole Krones team is working even harder to get our targets for the future done. I thank you a lot for your questions and for your interest on Krones and hope to see you soon somewhere.
Uta Anders: All has been said, Thomas.
Olaf Scholz: [ Okay. See you. ]
Thomas Ricker: Thank you very much.
Olaf Scholz: Thank you. And now we would close the conference call. Thanks a lot.
Uta Anders: Bye for now.
Thomas Ricker: Goodbye.