Good morning everyone. Welcome to the VBG Group presentation of Q2 2026. It's me, I will give you a summary of quarter two and Fredrik will give you all details and then we will make a short discussion about the future. It's been another volatile quarter with new tariffs and new political tension, especially in the Middle East. Still revenue increased by 8.7% compared to the second quarter of 2025, and adjusted for currency and acquired volumes, sales increased by 8.3%. 75% of the growth was related to volume and 25% related to price adjustments. All divisions showed growth together with all three geographic markets, North America, Europe, rest of the world. In summary, the third best quarter revenue wise. interesting is that the side-by-side segment within mobile thermal solutions increased with 19 and the defense segment within truck and trailer equipment with 60 compared to the second quarter last year ring filler power transmission our third division showed growth in all industrial verticals and we see a clear trend that the european truck oems increase their volumes we see also a limited impact revenue wise due to the tension in the middle east it's mainly the sales related to the semi-trailer segment that is affected very important for us is that that the order intake increased with 11% in the quarter compared to Q2 2025, which indicates a good demand in the coming quarter. The group delivered an EBITDA margin of 10%. It's worth to comment that the new tariffs and commodity price increases in mobile thermal solutions had a negative effect on the operating result in the second quarter. And as mentioned in a press release in the end of April, we reserve 19.3 million sec for restructuring cost in the division ring for the power transmission. And now to the details, Frederik. Please go ahead.
Thank you, Anders. I will change the picture. The second quarter was characterized by a strong, continued strong demand across the group. Organic growth reached 8.3% and all divisions contributed positively to sales development. Overall sales increased by 8.7% to 1.48 billion SEC. EBITDA amounted to 149 million and the EBITDA margin declined to 10%. The lower margin was mainly driven by three factors. Restructuring provision relating to the consolidation in Germany. higher raw material cost, and the impact from changing U.S. tariffs that temporarily outpaced our price adjustments. Excluding the restructuring provision, the underlying profitability would have been stronger, of course. Cash flow was lower than last year due to the higher working capital requirements, mainly inventory and receivables driven by growth in sales and preparations for the move of the Toronto facility. Let's go through each and one of the three divisions, starting with truck and trailer equipment. Truck and trailer equipment delivered another very strong quarter. organic growth was 3.1 percent despite the relatively tough comparison quarter that included larger one-off orders in both U.S. and China. Demand remained strong in the Nordic markets and in Australia while European trailer markets showed signs of recovery. The defense segment continued to grow rapidly, increasing by approximately 60% during the quarter. EBITDA increased to 82 million and the EBITDA margin reached 20%, demonstrating the strength of the business model and the operational leverage. Going over to Mobile Thermal Solutions. Mobile Thermal Solutions reported strong demand and a double-digit organic growth of 10.2%. sales increased to 783 million and growth was particularly strong in the side-by-side segment which continued to perform very well profitability was impacted by raising raw material prices and new updated implementation of u.s tariffs during the quarter although we have implemented price increases there are temporary timing lag before the full effect is reflected in earnings and And this is really tough when the environment keeps changing all the time. We saw encouraging signs towards the end of the quarter as pricing actions started to take effect. Ringfeder Power Transmission. Ringfeder delivered its strongest sales quarter ever. Sales increased by 23.5% to 285 million sec with an organic growth of 11.1%. Demand was particularly strong within automation, aerospace and defense related applications, while Malmedy continued to develop according to plan. EBITDA was impacted by 19.3 million in restructuring provision relating to the consolidation of production into Dobran in Tjeckia. Excluding this item, profitability would have been stronger, of course. product mix during the quarter was also negatively affected margins. Importantly the consolidation supports future efficiency improvements and strengthens the division's long-term competitiveness. Could you please change pictures? Okay, one of the VBG Group's key strength remains our geographical diversification. North America represents approximately 50% of the sales, Europe 36% and the rest of the world 14%. This balanced exposure reduces dependency on any single market and creates resilience in a volatile environment. Another important stabilizing factor is our aftermarket business, which accounts for roughly one quarter of the regroup revenues and contributes recurring demand throughout the business cycles. Cash flow before investments or KPGs was weaker than last year due to increasing working capital requirements. Higher sales levels drove receivables while inventory increased as part of the preparation for the Toronto facility move. During the first half year we continued to invest in our long-term growth agenda the Toronto facility is progressing according to plan and represent the majority of the group capital expenditure even after these investments and three acquisitions completed during last year we maintain a strong financial position with a significant financial flexibility for future growth in initiatives. ROC declined to 26.6 percent mainly due to the increased capital employed relating to the Toronto project. The facility has not yet contributed to earnings but will support future capacity and efficiency improvements once fully operational during fourth quarter 2026. uh to summarize we deliver another quarter with a strong organic growth across all divisions increasing order intake and continued strategic progress in both toronto and robbroni while profitability was impacted by temporary factors during the quarter we continue to invest for future from a position of financial strength with that i hand it back to you anders
thank you very much frederick so looking ahead i do anticipate continued market volatility and new political tension but we have an organization that is agile and responsive to changing conditions overall while changing tariffs remain a challenge the largest impact was as frederick mentioned the commodity price increases for mobile thermal solutions especially copper aluminium and plastics we are committed to offset these cost increases with price adjustment and cost takeouts and as frederick mentions mentioned we see progress in the end of the quarter and coming into detail it was the adjustment of of the tariff uh section 232 on the 6th of april which which meant that products with a higher volume than 15 percent of steel and aluminium got a tariff of 25 percent it was changed then on the first of june down to 50 but still had an impact on the other hand we are committed to capitalizing the strong order book going forward and as mentioned the order intake increased by 11 during the court we will also finalize the building in toronto during quarter three we we see that we have the keys to the building in in the middle of october and as we announced in april we will consolidate ring for the power transmissions production facilities and build a new building in dobrany czech republic not far away from the existing building that we have dobrany czech republic and this is part of our strategy to be more efficient, to increase capacity and strengthen our long-term competitive edge. So, with our financial strength and our decentralized organization, we are prepared for what lies Through our cash-generating divisions, we are committed to complementary acquisitions as well as investing in organic growth. this will lead to continued sustainable profitability so by that we end the presentation and we are open for questions if you wish to ask a question please dial pound key five on your telephone keypad to enter the queue if you wish to withdraw your question please dial pound key
Operator
six on your telephone keypad the next question comes from gustav berneblad from nordia please go ahead.
Yes good morning it's Gustav from Nordea. Good morning Gustav.
I thought maybe just to start on the order intake here you come at 11 percent year-over-year can you just give us a bit more color on whether it is equally sort of split between the different segments or if it's more tilted towards any of them good morning just first of all the the as you all know the currency effect is much smaller compared to quarter four 2025 and quarter one but still the 11 percent is not a currency it is not taking care of the currencies so to say but when it
comes to the order intake it's i would say evenly distributed a little bit more on the ring for the power transmission side from a presented point of view yeah okay that's that's very clear and then if we just jump into um mobile thermal solutions here and then the margin um as you say you implemented price increases you announced it in q4 uh it is gradually coming here into effect you could see end of the quarter here. Should we expect to see you compensating fully for the increased cost in Q4 or is that too early?
I would say like this, first of all it's like going to the amusement park and hit the frogs. i mean you you bang one frog but later it pops up on another place and it's literally the same when it comes to the tariffs here we were surprised that it was changed during the quarter when we had a good trend and then the the impact but we continue as mentioned with price adjustments and cost takes out and we saw a good progress in the end of the quarter we see that it will take another quarter before we have covered the lag. So, practically if nothing else happens during quarter three and quarter four, we see that we have good progress into quarter four.
But are you implementing further price increases now in Q2? or yeah absolutely and they will when they will have an effect in in quarter three when when all here i mean order book will will when you increase prices the order book will will gradually implement these price changes that's perfect um and then i was just wondering if it's possible for you to say you know if we just um i mean assume a similar mix in mts that we're seeing today
uh but then see that you are compensating fully for for for the increased cost here do you expect that to be enough for you to come back to double digit margins in mts we see that we will come back to double digit margins in in the end of the with the the same product mix that we have today and and the price adjustment and cost takes out that we have now that's very clear and if we take a view on the on the longer term margin here for mts uh and also i guess like including also the the new toronto facility what what type of margins can this business potentially run with
if just ballpark or if you can just reason a bit about it or anything i mean our long-term view on on this division that is to come back to an ebit a margin of 15 of course it will not happen from this quarter or next but the long-term view is a 15 percent ebit margin on this division okay perfect and if we just jump to truck and trailer equipment here uh i think you know very impressive margin um and i mean just looking at the organic growth three percent year-over-year but still you you raise the margin by 270 basis points so can you just help us dissect a bit what is driving the the margin and and just how sustainable is it going forward yeah if we look at truck and trailer equipment it's for sure the draw bar coupling range that is driving the profitability now and the and the growth and of course we can see uh good signs uh when it comes to the order intake and generally the the demand on on the oem side in europe when it comes to the uh truck business and uh it's overall good cost control and good delivery performance and and a stable market going forward and as men frederick mentioned uh also i mean we had the comparable figures from last year was kind of tough because we had uh two spot orders which to China and US which amounted to 25 million okay so it sounds like it's you know good cost control but also
a good mix effect here if we look just year over year correct great great and just one last question sorry on the defense sales here you say it's growing 60% year over year I mean is this you know related to more one-off orders or is this basically reflecting the underlying market for for your specific niche it's definitely an underlying good market and it's not related to any project orders or one-off things it's an underlying growth and that we can see that the the defense sector is
uh plus double digits now in revenue for the division truck and trailer equipment oh that's very interesting is it possible to say more specifically what double digits could be quite quite big variations it's a little bit more than double digits just more than double digits nah it's like i mean somewhere between 11 12 to be more exact yeah Ah, that's perfect.
That's great. Thank you very much for taking my questions.
Thank you, Augustin. Thank you.
Operator
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
So by that, we thank you very much for the attention and we wish everyone on the Northern hemisphere a great summer enjoy the the summertime and we will come back in october with our quarter three report thank you very much thank you
