Good day, and thank you for standing by. Welcome to the GEA Group AG pre-close call Q1 2026. At this time, all participants are in a listen-only mode. After the speakers' presentations, there will be a question- and- answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Oliver Luckenbach. Please go ahead. Yeah. Thank you very much, operator, and good afternoon, ladies and gentlemen, and welcome to our Q1 2026 pre-close call. As said, my name is Oliver Luckenbach. I'm the Head of the GEA IR team, and I'm joined by my deputy, Rebecca Weigl, and my colleague, Eduard Biller. Please keep in mind that we operate under our new organizational structure from 1st of January 2026, and will report our Q1 2026 results in our new divisional setup. That's Pure Flow Processing, Nutrition Plant Engineering, Pharma & Food Applications, and Farm Technologies. To help you model this new divisional setup, we have published an Excel file beginning of March with eight quarters of pro forma figures for the fiscal years 2024 and 2025, which you can find in the download section of our homepage. If you can't find it, please do let us know, and we are happy to send it to you. As today's call will contain forward-looking statements, it will be conducted according to our disclaimer. I will not read the disclaimer, but please be aware of the cautionary language that is included in our safe harbor statement, which is part of our presentations you can find on our GEA internet page. We will now address topics which we also discussed during recent conferences and road shows, and afterwards, you will have time to ask questions. Topic number one, guidance. We confirmed our group guidance for fiscal year 2026, which we released with our full year 2025 results in March. We expect organic sales growth of between 5%-7%, EBITA margin before restructuring expenses between 16.6%-17.2%, and return on capital employed between 34%-38%, so it's unchanged. Topic number two, customer industries. On the food side, the business is performing good. Beverages look softer compared to the past. Dairy processing, here the pipeline continues to show activity across both projects and components, so it's an ongoing good market development. Dairy farming, the general market sentiment is positive across almost all regions with the exception of China. Pharma, here we see a promising pipeline. On New Food, in 2025, we saw first improvement with order intake almost doubling, and we are actually optimistic that this positive development continues so that we can make further progress in 2026. Topic number three, order intake. 2026 will be again a good year for GEA in terms of order intake. We have a lot of interesting, also larger orders in the pipeline, but as you know, it is difficult to predict when they will be signed and booked. Q4 2025 was a record quarter with an order intake of EUR 1.8 billion, including nine large orders with a total volume of EUR 440 million. This is not the new normal, especially as large orders are lumpy. However, given the healthy development in base orders and an overall strong service business, Q1 2026 will be more in line with the order intake in Q1 2025. Here to remind you, in Q1 2025, our order intake was slightly above EUR 1.4 billion. Translational FX effect is expected to be negative in the first quarter of 2026. In the fourth quarter of 2025, it was -3.3%, and it's likely to be of similar magnitude also in the first quarter in 2026. Coming to topic number four, sales. As already stated during our full year conference call, we expect organic sales growth in Q1 2026 to be below the guided range of 5%-7% for the full year 2026, with an acceleration during the year, given the fact that we have received many large orders in the second half of 2025, particularly in the fourth quarter. Therefore, we expect an organic sales growth pattern similar to last year, where we started the year with an organic sales growth below the original range and accelerated organic sales growth in the following quarters. Also here, the translational FX effect is expected to be negative in the first quarter of 2026. In the fourth quarter of last year, it was also -3.3%. Also here, we expect it likely to be of a similar magnitude in the fourth quarter of 2026. Now it's topic number five, EBITDA margin before restructuring expenses. Our EBITDA margin guidance of 16.6%-17.2% for the full year 2026 clearly indicates that we want to make further progress with regards to our profitability in fiscal year 2026, and therefore you can expect that we already want to show some progress here in the first quarter of 2026 over the same period of last year. Just to remind you, our EBITDA margin before the restructuring expenses was 15.8% in Q1 2025. With that's it from my side, and I will now pass over to Rebecca. Thank you, Oliver. Hello, everybody. Just some housekeeping information from my side. First topic is topic number six, cash flow. Just as a reminder, for CapEx, we stated that we expect CapEx of around EUR 240 million for the full year 2026. In terms of net working capital to sales ratio, our target corridor of 7%-9% of sales is still valid. However, keep in mind that due to seasonality, there has always been a sequential uptick in net working capital in the first quarter from the level in the fourth quarter. We don't expect that it will be different in 2026. Therefore, the net working capital ratio in Q1 will most likely be higher than the record low of 3.2% reported for the fourth quarter in 2025. Now coming to topic number seven, restructuring expenses. As promised and stated several times, 2026 will be the last year with an adjustment for restructuring expenses. From January 2027 onwards, we will no longer adjust our EBITDA for restructuring expense. As a reminder, in 2025, we had EUR 48 million of restructuring expenses on EBITDA level. Topic number eight, additional financial information. Depreciation, amortization, we gave an indication that for fiscal year 2026, we expect around EUR 250 million. For the financial results, we expect - EUR 30 million. The tax rate is expected to be between 28%-30% in 2026, and the R&D ratio is expected around 3% of sales. That's it from our side. We're now happy to answer your questions. Dear Sarah, may I ask you to open the Q&A? Thank you. If you would like to ask a question, you'll need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, you can press star one and one again. Thank you. The first question today is from the line of Sven Weier from UBS. Please go ahead. Yeah, good afternoon, team. Thanks for doing the call. I have a few follow-up questions, if I may. The first one is just, Oliver, on your order intake commentary, because you said it's going to be around on the level of the previous year. Is that already taking into account the currency effect? Yeah, exactly. Last year it was a little bit more than EUR 1.4 billion, and what we are guiding for is a reported number, which is likely to be at a similar level. Yeah. Okay. Organically, you're kind of up mid-single-digit on the back of that. Low- to mid-single-digit, yeah. The second question I had was just regarding your margin commentary. If we assume that, as you said in Q4 already, the year is going to be more back-end loaded in terms of organic growth, especially on the big projects. Shouldn't Q1 then have a disproportionately positive effect from mix? Because you obviously probably have service growth higher than OE, and even within OE, you probably have the higher margin stuff coming first before the big-ticket projects come later this year. Is that fair or am I missing something here? Yeah, it's hard to comment on this at this point in time. As you know, we haven't seen the full figures so far. It then very much depends on the composition also of sales. What we can say is what we have seen so far is that we can make the comment I've just made, that we expect here an improvement in the first quarter this year over the first quarter of last year. By how much, then we need to see at the end of the day. Yeah. Last question I had was just, was wondering what was being said recently by management on M&A. We all saw that obviously the Syntegon deal has been PE and not you. That probably means that bigger M&A question mark is out of the pipeline, and if that's the case, how should we think about renewal of a buyback? Thank you. Yeah. M&A remains a topic for us, that is clear. I think what we have just mentioned is also clearly telling a story, so to speak, that we are not prepared to overpay for any kind of target. We do our homework, and if it's feasible, if it's manageable, if it makes sense, then we will do it. As we also say in our world, do not expect any stupid things. Yes, if we are not finding anything, I would say during the course of this year, then for sure, also the topic of share buyback comes back. It's nothing we are against. It's actually something we have done. We bought back more than EUR 700 million in 2023, 2024, and a little bit in 2025. That is then also something that could come back. Yeah. Understood. Thank you, Oliver. You're welcome. Thank you. We'll now take the next question. This is from Klas Bergelind, Citi. Please go ahead. Thank you. Hi, Oliver and Rebecca. Coming back to order intake, obviously a very strong quarter for larger orders in the fourth quarter. During the call, and now you're also saying that you have a lot of interesting larger orders in the pipeline. Still in periods of increased macro uncertainty that we have now because of the Middle East situation, we typically see more hesitations, right, around larger order decisions. Is that something that you're seeing now already in your discussions with your customers, or are they more hesitant, or is it too early to tell? Thank you. Yeah. Thanks for the question, Klas. It's a disaster what's going on there, I think that is clear. So far we really haven't seen anything with regards to hesitation. We're actually even discussing a large order in the region, and it's nothing that the customer asked for a break or anything like that. It's continuing. On the other side, we also know that these projects, as we have seen with the Baladna order, sometimes it can take 1.5 and up to two years. That's very hard to predict. So far, no, despite the fact that there's so much uncertainty, we cannot see it in discussions with customers, at least not so far. Yeah, that is the comment we can make as of today. Maybe to ask this in a different question. Obviously, you show this slide that your direct Middle East exposure is tiny, but I'm thinking the indirect exposure, looking at your customers. For example, Farm Tech, you had amazing orders the last couple of quarters, but feed costs are now likely going to go up and perhaps energy costs, diesel and so forth, that the farmers might impact the investment decisions. When you look at the indirect exposure, is there anything that sort of makes you worried in terms of that things could slow at the customer end because of what we see from a supply chain point of view, the indirect effects coming out from the conflict? Thank you. I think that it's a fair question, Klas, and I think nobody has really the crystal ball here. What we can say that we don't have any production sites here. We don't have any major suppliers sitting in the region. Also in terms of our own, say, procurement strategy, we have a very high share of local for local procurement. Actually more than 80% of our procurement is always done locally. That means we are not really heavily dependent on global supply chains or on logistic routes. Therefore, we haven't heard anything in that direction, and feel actually quite relaxed here. In terms of what you're saying, what's the implication on customers going forward? We would say probably if energy prices are further rising, it will probably lead to further pressure on the customer side to think about how to produce more energy efficient going into the future. I think that could actually be an opportunity for our equipment on that side. I think it's really too early to tell. Yeah, I know, absolutely. I was thinking about higher fertilizer prices, feed crops, et cetera, becoming an issue, but I guess it's too early to tell. My final one was also sort of linked to Sven's questions on the sales guidance. It's quite clear that you will have new machine sales accelerating through the year. Shouldn't we have that sort of margin expansion being more geared to the first half, and then we should have less margin expansion in the second half? Are you still of the view that you will have better operating leverage on new machine sales offsetting that potential mix issue that we might have in the second half? Yeah. It's always a debate and discussion we are having also on road shows and conferences. Yes, if you think about it, and that is for sure, and on the one side, we do still see good demand development of our service business. That is the answer number one. On the other side, if you think about capacity utilization, the more larger orders, the better our capacities are utilized, then this should also have a positive impact, for sure. That's also what we have clearly communicated, that we cannot, most likely not, deliver another year of 100 or 110 basis points of margin improvement. Because we also want to grow our in-machine business stronger, because then this will be the base of future service business we can generate in the years to come. Overall, we feel very comfortable with the guidance I've given you for the full year. Quarter- by- quarter, we now just need to see how Q1 was, and then we can maybe continue our debate afterwards. Perfect. Thank you. You're welcome. Thank you. We'll now take the next question. This is from Sebastian Künne from RBC. Please go ahead. Hi. Thank you for taking my question. It's relating to the UHT business and connected is, of course, dairy processing. What we see in Europe is that the prices for raw milk are coming down quite sharply now, and there was some overproduction in the last couple of months. Do you see a risk that the milk-feed ratios come down sharply to raise the two classes question here, milk-feed ratios coming down, under production, and then more cautious investments by the dairy processors further down the line? Or do you think this is just a distortion that we see in Europe might relate to Middle East crisis? Thank you. I think in terms of, let's say first dairy farming, when you talk about the milk-feed price ratio, what we are hearing from our colleagues, and that's what Oliver stated earlier in terms of the views on customer industry, that actually what we are hearing from them that the general market sentiment is still positive across most of the regions, with the exception of China. From their perspective, it feels like what you're referring to, that this is not yet having an influence. In terms of dairy processing, you probably could argue that actually lower raw milk prices is an input factor for them, so it should be rather attractive then for investment. Honestly, Danone or Nestlé or you name them, they don't plan their CapEx according to the current milk prices. They plan according to CapEx expansions in general, whether they need additional capacities, whether it's innovation, whether it's actually investment into more energy efficient equipment, et cetera. I would say the current raw milk price for dairy processors for their CapEx decision is not really a relevant parameter. Okay. Thank you. One brief question on the U.S. market. The oil price is going up, that might reduce the relative cost for biofuels, ethanol, and biodiesel. Do you already see more interest from this type of customer group that's basically finding alternatives to fossil fuels, or would you say it's currently too early? Thank you. Not so far. It's interesting thought. What you are saying, I understand it, but to be honest, at least we haven't heard anything so far internally. Could be, yeah, maybe a positive trigger going forward. Okay. Thank you very much. You're welcome. Thank you. Thank you. Next question is from Max Yates, Morgan Stanley. Please go ahead. Hi. Good afternoon. Thanks for doing the call. Just my first question is, normally on these calls, you've tended to actually give the large order announcements that you've had in the quarter just so we can sort of calibrate them. Is the fact that you haven't given any, does that mean you haven't had large orders this quarter or have you booked some, and if so, how many and how much for? Yeah. To be honest, it's very early in April. We are shortly after the Easter break. Many people are still in the Easter break. I wouldn't expect zero large orders, but the exact number is hard to predict. We also need to check then our internal files. The overall statement, that order intake should be around about the level of Q1 of last year, that is still valid. Yeah, it shouldn't be zero large orders. Yeah. Okay. Could I just check, doing this call, obviously, where do you have firm visibility up to? Just because companies normally when they communicate on these calls, have you seen February numbers and you don't know what March numbers look like? Have you seen two weeks of March? I'm just trying to get a sort of calibration of the comments that you're making, where are they really up to in terms of the quarter? No, for sure. We have no detailed numbers now in front of us. We have a very granular monthly reporting, and then we get some indications from our colleagues, and then we put together our picture. As you know, we are in relatively stable markets and so on and so forth. We have good visibility. So far with this information we had at this point in time, I think we gave all information that was possible at this point in time, but for sure there's nothing final at this early stage. We have a very good footing for our comments we are making. Yeah. Okay. Just one final one, and it was a bit of a clarification on what you said on revenues. Yeah. Obviously, I heard the sort of comment that the Q1 revenue growth was below the range. When you talked about and referred to it about last year, were you just saying that it would follow a similar shape to last year, i.e., the revenue growth would accelerate through the year? Or were you actually saying Q1 revenue growth will be similar to the Q1 revenue growth of last year? No, very good question. Thanks for clarifying. No, that was not our intention. It was just, let's say, the pattern, so to speak. Last year, it was 0.9% in Q1, but then it accelerated during the course of the year. From today's point of view, again, it's very early in the year, also Q1, not 100% finalized, as you know. We would expect a similar pattern, but not trying to tell you that it should be 0.9% in Q1 of this year. Okay. Just, sorry, very final one. Just on your large, because obviously, what is about to happen is we will get a spike in inflation and some form of inflation shock. When it comes to hedging your large contracts, particularly these sort of longer-dated ones like the one that you've signed in Algeria, can you give us a reminder of what you're able to hedge and what are the kind of unhedged costs where it's more difficult to pass these through to customers? I guess I'm thinking about some of the larger buckets, electricity price, well, some of the buckets of cost, electricity prices, freight, raw materials, and wage inflation. In terms of the large orders, usually the way it works is that when we bid for an order, we of course get all the quotes from the suppliers, et cetera, which is where we base our cost calculation on. The moment we receive such an order, so when we get it awarded, we basically turn around to our suppliers and lock these prices in. That's the back-to-back contract, if you want to call it that way. On top of that, we have in many contracts, price escalation clauses. Therefore, for these long-term contracts, as you can also see that, with the high inflationary environment where we have been in, we have been quite successful actually in dealing with that due to these price escalation clauses and these back-to-back contracts. Okay. Things like electricity prices and freight, you would be able to pass on in those escalation clauses? I'm not an expert. What is exactly all included in there, honestly? If I think about, for example, when we also had a look at that in terms of tariffs, that's all paid by the customers. I think we actually are, I would assume, a pretty good position here in passing these things on to our customers, as we did that in the past. Yeah. I think if I remember right at that time when we had to face a very high inflation, I think around about 90% or the vast majority of the freight cost was also paid by our customers. Yeah. Okay. Fantastic. Thank you very much, both. You're welcome. Thank you. Next question is from Adrian Pehl from Oddo BHF. Please go ahead. Yes, good afternoon. Thanks for taking me. Actually, one question on the supply chain. Obviously, since the war, unfortunately, has now taken us a bit longer. What about the supply chain in particular? Obviously, I'm not too concerned about any metals you might be procuring. On the other hand, obviously, there might be some disruptions on the semiconductor chain, which might mean some influence on whatever kind of controllers or whatever you need. Did you see something there? How is the general shape, and how is the status of your supply chain? Do you see any issues on that? Just a second quick one left from my side is actually, Rebecca, you were saying something on D&A and financial result. I just didn't get it entirely. Was that something you just repeated the full year guidance, or did you say something on Q1 with those two elements? Thank you. Yeah. Regarding the additional financial information, that's exactly just the repetition of what we have in our material since March. The additional guidance. Nothing new. Just really housekeeping to make sure that everybody is aware of these numbers. Regarding your first question on supply chain, maybe I kind of start. We are hearing very clearly no issues on that side. That does not mean that something can come up, but at the moment, in terms of how we are procuring, as I said earlier, we have more than 80% local for local procurement. Mm-hmm. Therefore, we actually are not seeing any impacts here yet. In terms of the shift onto semiconductors, I haven't heard anything here internally that there is an issue coming up. No, so far, so good, so to speak, but it's a very volatile environment. We also follow this closely, as we always did during these kind of more volatile times. We have dedicated teams following this, and, as Rebecca said, there's no new information or anything that makes us any headache today. Again, it's volatile times. Yeah. All right. Can you remind us how it was with the supply chain crisis some years ago? Did you see some impact, or have you been able to, I don't know, redesign some components quickly enough to be able to deliver, or how was that? In the past, it was mainly related to some electronic parts, which was a problem. There was also some boom up in the market, but then it was, let's say, the more sophisticated electronic components that have been impacted so far. Nothing to be worried about so far with regard to GEA. At that time, it took us a little bit longer than to ship, so to speak, all our products. Again, nothing hurts so far, so it doesn't seem to me that we are anything close to such a situation right now. Yeah. No impact at GEA. Yeah. That's clear. Thank you. You're welcome. Thank you. Take the next question. This is from Rizk Maidi from Jefferies. Please go ahead. Hi, Oliver. Hi, Rebecca. Thanks for the time. Just a quick clarification. I'm not sure I got this right. Sorry, my line was a bit bad. Your commentary on order intake being at the same level as last year, is that ex large orders, or is headline ex large orders or including them? No, it's actually all in what I said around the level of last year. There was a specific question, I think it was from Sven. Yeah Asking for the, is it a reported number, organic number? No, it's a reported number. That is our best guess as of today. All in. Perfect. Yeah. Yeah. Understood. Yeah. Secondly, maybe along the lines of the questions that were asked before, I remember, when we started to see now lending rates going up a bit, and I think your business tends to be a little bit sensitive to that. Maybe if you would just give a comment there on whether the percentage of your customers that use lending to finance their equipment, and how do you see the current situation with lending rates creep up a little bit? Thank you. I think, when we have seen these spikes in interest rates in the past, where we had this period of rising interest rates, the customers who were most impacted from that were the dairy farming customers, because for them, they need to get access to financing to buy their equipment. That's the, let's say, the customer group I have in mind was a bit more sensitive to interest rates and to higher interest rates, put it that way. I think with the other ones, I guess it's then more a mix of the general environment, whether we see postponements or anything like that. As Oliver just said, so far we haven't heard anything in that direction. Okay. Thank you very much. You're welcome. Thank you, Riz. Bye-bye. Thank you. I'll take the next question. This is from Sven Weier from UBS. Please go ahead. Yeah. Sorry, guys. I just feel I wanted to follow up on two points here, and first one being on the importance of milk prices and the milk-feed price ratio, because that's an evergreen with you guys. Shouldn't we just dump that out of the window, because at the end of the day, the orders are driven by subsidies and food security aspirations of certain countries, and in fact, subsidies really account for the majority of the CapEx covers. Should you not ask us to forget about the milk price entirely? Yeah. Sven, thanks for helping us here. No, because so often we are getting the question, and we also did our internal analysis, and we couldn't really find any relation between the ratio and our order intake or sales and so on. Sometimes it seems to be there, sometimes not. There are many other impacting factors, and so far we are really happy with the development we are seeing for sure here and there, especially with regards to smallholder farmers. There might be an impact. They need to come to a decision. Do we want to go for holidays this year or buy a new milking robot or not? This might be here and there, but again, there's no clear relationship we can see here. Yeah. I would probably argue the harder the times for the farmers, the subsidies will probably only go up rather than down. Yeah. Absolutely right. In Europe, there's probably not a farm who can survive without any subsidies. Yeah. The other question, just to follow up on the question regarding energy costs and freight costs. On the electricity side, I remember you guys saying in the COVID inflationary times that I think already then it was a relatively small item of your P&L, and I think you've also rolled out solar power quite heavily in some of your factories. Is that still fair that this is actually a relatively small cost item in the P&L? Yes. Yeah. In general, energy is really a very low-cost item. I think we actually had. About EUR 35 million last year, with the majority for electricity and then gas. That is nothing that is really hurting us. Even if it would double, we are talking about here EUR 20 million-EUR 25 million, which would be around about 2% of total EBITDA. Again, we are also increasing prices, so that's not a huge issue for us. Yeah. Yeah. Actually, to my knowledge, majority of our contracts for this year are actually already fixed. Yeah. For 2026. That said, anyhow, it's more than half. The logistics cost isn't so high because, as you said, you are 80% local for local at the end of the day. Yeah. Sure. Okay. Thanks for the clarification. Thank you. You're welcome, Sven. Thank you. There are no further questions at this time, so I will now hand back to the speakers for any closing comments. Yeah. Thank you again. Yeah, the analysts and investors, thanks again for participating in today's pre-close call. With the end of this call, we start our quiet period and are already very much looking forward to talking to you again on the 11th of May, the day of the release of our Q1 2026 numbers. Before this publication, however, we will have our AGM on the 29th of April. With that, all the best from the entire IR team. Stay healthy and talk to you again in May. Bye-bye. Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.