Good morning, everyone, and welcome to TRATON's Q2 2025 Results Conference Call. My name is Ursula Querette, and I'm Head of Investor Relations at TRATON SE. With me on the call today is Christian Levin, our CEO, who is dialed in from Sweden. Dr. Michael Jackstein, our CFO and CHRO, is here with me in Munich. Christian will start today's presentation with the key results and highlights of the second quarter, and Michael will guide you through the financial performance and our adjusted outlook in more detail. As always, we will conclude the call with a Q&A session open to financial analysts, investors, and media representatives. Camilla de Wohnsau, our Head of Corporate Relations, is available to handle media inquiries. A recorded version of the call will be made available on our investor relations website as soon as possible after the event. You can also find our 2025 half-year financial report, which we published this morning, and the slides to this event on our IR website. Before we start, let me remind you of the disclaimer with respect to forward-looking statements on page three of our presentation. With that, I hand it over to Christian. Great. Thank you very much, Ursula, and welcome, everyone, also from my side. As many of you remember, back in Q1, we talked about a slow start into the year with declining deliveries, revenues, and margins, but we nevertheless maintained our full-year outlook. Now, in Q2, we see deliveries picking up by a good 9% over Q1, but year-over-year unit sales only grew by 1%. This, paired with a 2% drop in sales revenues, indicates ongoing market challenges and unfavorable mix effects. In fact, we're facing both a tough and uncertain environment. While we see first signs of improved transportation activities in Europe, registrations are still sharply down. Order activity is not yet high enough to signal a stable path back to growth. In North America, ongoing customer hesitancy is significantly affecting International, although direct impacts from the U.S. tariffs have so far been manageable. In South America, especially in Brazil, we face high dealer stocks, extreme interest rates, inflation, and increasing diesel prices. On the back of these challenges and more, we decided to lower our full-year outlook for TRATON. Michael will give you more about that in detail in a minute. At Konya, we decided to further reduce our global production capacity, which will lead to less output than originally planned in the second half of the year. Whereas MAN production in both Germany and Poland is back after the short-time work during the beginning of the year. Let's turn to the third KPI on the slide, adjusted return on sales. The year-over-year decline to 6.4% in Q2 is first and foremost due to volume effects. Good news, however, thanks to MAN's solid performance, we saw a better group margin sequentially Q2 over Q1. We saw a good net cash flow development at TRATON Operations in Q2, resulting in a net inflow for the first half of the year and actually being slightly better than what we saw in 2024. The last KPI on this slide is also a growth figure in incoming orders. They are up 11% thanks to a strong order intake in Europe, which year-over-year increased with 27%. This 27%, however, is lower than the 56% growth in European orders that were recorded in Q1. As we already mentioned back then, in March, we started to see a declining momentum in European orders on a month-to-month basis. This trend, combined with the decline in the North American market, led to our book-to-bill ratio again dropping below one. Let's move to the next slide and talk about more of the long-term transformation we're in in the TRATON Group. The transformation towards a sustainable world and the transforming transportation, as we say, as our purpose is continuing. In June, Scania launched its high-capacity charging solution for our heavy-duty electric trucks, capable of delivering up to 750 kilowatts. That's actually twice the speed of today's CCS2 standard. This so-called MCS, Mega Charging Solution, enables an 80% battery charge in below 30 minutes, which aligns perfectly with driver rest periods and makes long-haul electric transportation more viable and hence supports our electrification strategy in Europe. Also in June, MAN started the series production of its heavy-duty electric trucks, the ETGX and the ETGS, in our Munich facility. This marks an important milestone in our transformation towards zero-emission transport. With a range up to 500 kilometers in long-haul applications and already over 700 orders placed, MAN is now on track to deliver up to 1,000 units by the end of the year. This ramp-up is already supported by MAN's in-house battery pack production in Nürnberg, which I also mentioned back in our Q1 Earnings Call. Earlier in April, International also officially launched its all-electric Class 8 tractor at the ACT Expo in California. This E-truck is made for regional fleets and for so-called last-mile use cases from ships or trains to their next destination. It offers up to 300 miles of range, with advanced safety features, with ergonomic design, and with a tight turning radius. This launch is nicely completing the rollout of the S13 integrated powertrain because together, these innovations perfectly reflect our transformation, delivering zero-emission solutions while at the same time maximizing efficiency and customer value in our combustion engine platforms. Last but not least, Volkswagen Truck & Bus began circulating now its first electric bus model, the so-called e-Volksbus, amongst customers in the São Paulo region. Four units so far are operating in real-world conditions, supported by services and a trained dealer network to ensure customer readiness. This milestone follows the introduction of the so-called eDelivery truck and demonstrates TRATON's ongoing focus on sustainable mobility also in South America. Okay, let's turn to page number seven, where I have brought two examples for you from the second quarter demonstrating how we are also driving our internal transformation in TRATON Group. First, our TRATON Financial Services, which completed the rollout of our integrated financial services backbone in 14 strategic markets, just as promised in our last year's capital markets day. In all of these markets, we now have a dedicated financial services structure that directly supports the commercial operations of Scania, of MAN, of International, and of Volkswagen Truck & Bus, and enables solutions for the different local customer needs. More is coming. Further geographical expansion is underway, with the Czech Republic going live already on July 7. We then continue in selected countries among the already 67 where TRATON Financial Services have active operations and business prospects are strong. In addition, the teams are working on more diversified funding sources, including more local funding solutions. Our integrated platform will also enable electric vehicle financing and vehicle-as-a-service offerings, keeping us pushing the transformation of our industry. The second milestone is even more historic. July 1 marked the operational start of our group research and development. Here we bring together around 9,000 R&D employees from Scania, MAN, International, and Volkswagen Truck & Bus under one TRATON umbrella. As you can imagine, creating this unified organization was a monumental transformation. It involved not only legal and operational integration, but also a full alignment of strategies, processes, and methods across Scania, MAN, International, Volkswagen Truck & Bus. Now in place, this R&D powerhouse will enable higher efficiency and more customer value through more innovation. It will further develop the TRATON modular system, which you know is aiming at providing standardized interfaces across all brands' products using Performance App to differentiate our brands. This will avoid duplication of work and accelerate market entry of new products. Overall, these strategic moves in financial services and R&D will significantly contribute to our mission, transforming transportation together for a sustainable world. On page eight, we provide some early proof points of this mission. Still with highly volatile developments due to small absolute numbers. While battery electric vehicle orders declined by around 4% in Q2, deliveries increased significantly with 120%, mainly driven by electric bus sales. During the first half of this year, we have delivered to customers 1,250 fully electric vehicles, of which 840 are e-buses and 400 are e-trucks. As I mentioned before, with MAN's series production for e-trucks now in place, we are in a position to accelerate deliveries targeting up to 1,000 units by the year-end. Within the first half, MAN delivered already around 120 e-trucks and Scania 220. Whenever I can, including today, I emphasize the need for charging infrastructure for heavy-duty vehicles in the EU. I do this in my role as CEO of both Scania and TRATON, but also in my role this year as chair of the ACEA Commercial Vehicle Board. I also voice our industry's concern on penalty payments. Adjusted proposals are still under review, but I see an absolute must that heavy truck manufacturers also receive some form of relief. The market development is now dependent on factors outside of our control, what we call enabling conditions. These are typically, as mentioned, charging solutions, but also the customer total cost of ownership, which needs to come down below the one of fossil fuel use cases. Moving on and looking at page number nine. As I mentioned earlier, our declining European order momentum in Q2 versus Q1 this year, combined with a poor North American market development, brought our book-to-bill ratio below one. I think it is 0.91, to be precise, for the first half year. In Europe, we are seeing the first orders from the strong quarters in Q4 2024 and Q1 2025 translating into unit sales. Total Q2 unit sales in Europe were actually up by 3% to 36,600 units. Order intake was up by 27% to 31,400 units. Truck order intake even increased 44%, while bus order intake leveled out. In North America, high uncertainties prevail with respective negative effects on orders and deliveries. The only reason why our unit sales in North America were up by 5% to 18,200 vehicles in Q2 was due to last year's mirror supply issue. This had caused a major decline in our International truck sales in Q2. Order intake in North America was down by 15% to 9,300 units, also driven by Mexico. We already told you back in Q1 that due to the poor demand, we discontinued our second shift in our Mexican production plant. In South America, we continue to see a mixed picture. The market in Brazil faces many challenges, especially in the heavy-duty segment. The rest of South America is mainly growing, with most pronounced growth in Argentina, but also Peru. In total, unit sales in South America were down 8% to 16,600 vehicles and order intake down 7% to 16,300 units. On the back of the developments in the second quarter, we decided to keep our European and South American market outlook unchanged. As of June, registration of trucks above six tons in the EU 27 plus 3 had dropped about 16% compared to strong figures last year. We expect this development to partially reverse in the second half of this year, hence confirming the range for the European truck market development of -15% to -5%. We also believe that the decision of the new German government and several other European nations to increase investments into defense and infrastructure might create some positive momentum at least in the last quarter of this year. Registrations in Brazil were down by around 3% at the end of June, while most other South American markets performed better. Therefore, South America also remains within our original outlook with a range of -5% to +5%. However, coming to North America, we decided to lower our market outlook for trucks to a decline of -17.5% to -7.5%, with a midpoint of -12.5%. According to our market intelligence as of June, both Class 6-7 and Class 8 in the U.S. and Canada truck markets were so far down 5%. Mexico included, the development looks even worse. On top of that, poor order intake numbers we have recently seen suggest an even stronger market decline through year-end despite elevated inventory levels that are expected to meet the demand from retail. On a more optimistic side, an improved U.S. industrial output and pro-business policies such as deregulation and tax reliefs could also support the market towards the end of the year. With our new market outlook, we see Class 8 volumes in North America, including Mexico, now at around 275,000 units in 2025. With that, I stop the introduction and hand over to you, Michael. Yeah, thank you very much, Christian. And of course, a warm welcome from my side to all of you dialed in as well. As Christian has already addressed some of the factors influencing our Q2 unit sales development, let me give you a brief summary and some further explanation. In Europe, the increased truck order momentum from Q4 2024 and Q1 2025 is starting to translate into growing unit sales, especially at MAN. As order momentum has recently slowed again, there is no evidence yet for a sustained turnaround in the European market. The year-to-date unit sales in Europe mainly reflect replacement demand. In North America, with the ongoing uncertainty around U.S. import tariffs, we are now even below replacement levels for Class 8 trucks. Nevertheless, International recorded increasing unit sales due to a positive base effect resulting from last year's mirror supply issue. In contrast, in Mexico, we had a negative base effect due to Euro 6 pre-buy last year. On top of this, we saw negative unit sales effects from the U.S. trade politics. In Brazil, deliveries continued to decline, now also at Volkswagen Truck & Bus, which was partly compensated by other South American markets, as you just heard from Christian. On a positive note, our bus business grew across all regions except Mexico. Together, these factors led to a 1% increase in unit sales in Q2 to 80,000 vehicles. Total group revenue amounted to EUR 11.3 billion, which represents a 2% decline year over year. This decline is mainly due to unfavorable mixed effects in an overall challenging market environment. TRATON Financial Services, however, saw revenues increase by 14% thanks to our expansion strategy. Having said that, let's move to the next slide. The revenue decline, coupled with an overall underutilized production capacity, is the main reason for the lower adjusted operating result for the group. As shown on slide 13, our adjusted return on sales came in at 6.4% in Q2. This was 2.3 percentage points lower year over year. However, quarter over quarter, the margin slightly improved. Over the last month, our brands have implemented various cost measures with a key focus on adjusting production capacity. At International, as we have already said in Q1, we removed the second shift in Escobedo. Scania further reduced production capacity both in Brazil and in Europe. Volkswagen Truck & Bus has also initiated capacity adjustments, which will take effect within 90 days. MAN have actually increased their production levels. Short-time work was ended in the German locations following the encouraging order intake in Q4 last year and in Q1 this year. Production here has returned to healthy levels. At the group level, adjusted return on sales remains impacted by currency headwinds and higher investments in the China production facility besides the negative volume effects. At the level of TRATON Operations, the adjusted return on sales came in at 7.6%, which is 2.6 percentage points lower year over year. Let's start with the performance of Scania on slide 14. Scania's Q2 revenue mainly suffered from lower sales in South America, and here especially in the heavy-duty truck sector in Brazil. The low 9% margin is a result of negative volume and currency effects coupled with increasing expenses for the China project. The full focus at Scania is now on addressing cost issues. Besides the capacity adjustments I just mentioned, various short-term measures have been put in place. These include hiring restrictions, reviewed IT spend, decreased marketing activities, and postponement of projects, just to name a few. On the positive side, we have MAN managed to deliver stable revenues year over year thanks to the good order momentum seen in the two previous quarters. So MAN's adjusted return on sales came in at 7.9%. This is 3.3 percentage points higher over Q1 and just 0.6 percentage points lower than last year despite continued market pressure in Europe. A product mix favoring buses and vans also influenced this margin. Clearly, the successful realignment program supported the result, as well as MAN's ongoing cost management process. International's margin came in at 3.3% in Q2, which was higher both quarter over quarter and versus the low base in Q2 2024, which had been impacted by the mirror supply issue. The mirror issue also led to higher truck revenues at International year over year, although the North American market is in a weak state. Volkswagen Truck & Bus, like Scania, now also felt challenges from the Brazilian truck market in Q2. So revenues were down 13% year over year. Thanks to its flexible production system, Volkswagen Truck & Bus managed to contain variable costs and achieve the 12.9% adjusted return on sales in Q2 despite higher product costs and negative currency effects. TRATON Financial Services saw a 14% revenue increase in Q2 due to a larger portfolio volume. As the ramp-up of the financial services network comes with higher costs, the TFS return on equity decreased to 8.4%. Other reasons for the declining returns were higher funding and risk costs, which come with a larger portfolio, as well as increased competitive pressure, especially from the banking industry. Let's move on to the next page. The lower operating result of TRATON Operations in Q1 and Q2 also affected the gross cash flow, which came in at EUR 2.0 billion in the first half of 2025. However, thanks to an effective working capital management, the net cash flow of TRATON Operations turned positive within Q2 despite the EUR 1.2 billion investment spent. Net debt increased by EUR 1.2 billion as a result of the dividend payout of EUR 850 million and other net cash outflows of EUR 427 million at TRATON Operations and corporate items. Despite the challenging market conditions Christian and I described before, we still expect a better operating performance and improved net cash flow situation in the second half of the year, although lower than originally planned. This leads me to the last slide of my presentation, which is the adjusted outlook for 2025, which we already pre-released yesterday evening. I'd say we have clearly outlined the main reasons for the adjustments during our presentation. They are the continued uncertainties around the U.S. tariff politics, a persistently weak market situation in Europe, and economic challenges in Brazil. All this leads to greater than expected customer hesitancy. In particular, we lowered our outlook for the North American truck market and anticipate deeper year-over-year unit sales declines at International. Despite cost and surcharge measures, this will also impact International's return on sales. Scania has also taken steps to support its margin, but these measures will not fully offset the negative volume effects stemming from lower sales in Europe and in Brazil. Of course, we cannot plan the further development of foreign currency rates, but we assume that there will be a continued downward pressure on margins in the second half of 2025, especially from the Swedish krona. These additional facts explain why we have decided to lower our unit sales outlook for TRATON Group and also the revenue outlook for TRATON Group and TRATON Operations. Here, we now expect a decline between -10% and 0%. We also lowered our outlook for the TRATON Group adjusted return on sales to 6%-7%. For TRATON Operations, the range is now at 7%-8%. Despite the lower ranges, the new guidance assumes that a stronger performance in Europe will be required in the second half of the year to offset an ongoing decline in North America and Brazil. We also adjusted our net cash flow guidance for TRATON Operations, where the year-over-year decline mainly reflects the decrease in operating profit. We now expect the net cash flow of TRATON Operations to come in between EUR 1 billion and EUR 1.5 billion. Of course, we will do our best to manage working capital effectively throughout the second half of the year. The slight increase in our projected primary R&D costs is mainly due to currency effects. The adjusted outlook, which you see on this slide, assumes that International's tariff situation and USMCA compliance from mid-2025 will remain unchanged in the second half of 2025. It therefore remains subject to the effects of possible additional U.S. tariffs or USMCA regulation changes, which we cannot quantify at this stage. This includes the recently announced rates of 50% for Brazil and 30% for the EU, which are still under negotiation. Unfortunately, we are still confronted with a high level of uncertainty. I'm quite sure that you have a couple of questions for us. This is why I turn it back over to Ursula to kick off our Q&A session. Thank you, Christian and Michael. We have questions already lined up. Before we start, let me quickly re-explain how it works. The Q&A will be recorded, and a replay will be made available on our website later today. If you want to ask a question, please press Star one on your telephone keypad. If you want to cancel your question, you can dial Star two. If you need operator assistance, press Star zero. In respect of time, please limit yourself to two questions. Now, let's see. The first question comes from Hemal Bhundia from UBS. Thank you, Christian, Michael, and Ursula. Hemal Bhundia from UBS. Just two questions. First, on the answer range on sales and revenue. Could you help us understand what assumptions you're factoring in here, please? Specifically, how are you thinking about volume and pricing? Any regional specifics you could give would be great. I'll follow up on my second question after. Thank you. Sales and revenue impacts. You think on top of what we already said? Or in terms of how you think, in terms of how you're thinking about the volume and pricing drivers here, what you're embedding into your forecast? Okay. I think, Michael, that's for you. Let me start, first of all, saying when we look at the first half, that of course the volume decreased, so the lower unit sales played a significant role despite some other effects like FX effects and especially our investment in the China facility. Of course, the volume drop played the most significant role in the first half. In addition, there is an unfavorable mix effect included. Your question is leading or leaning into the second half of this year. Here, potentially, we have to differentiate a little bit. When we look at our regions, and you also asked for the pricing, I would say, first of all, it's quite obvious. Where we have a challenging market situation, this is always combined with also some pricing pressure, where you heard us saying in the past, and we continue to say that, that we believe that we have good arguments when we look at our product offering to sustain a good pricing level. Good extent is coming from our engine. We are still increasing, even though slightly, the percentage of the Scania Super Driveline. We increased the percentage of the S13 in the U.S, and we are just in the rolling out phase of the D30 of MAN in Europe. This gives us quite some confidence to sustain, let's say, a solid pricing level. When we look at the volumes, then again, differentiating a little bit when we look into the regions. As we were into during our presentation. We see, or we have seen, quite a good order intake momentum in the Q4 last year and in the Q1 this year, but then this slowed down in the Q2, obviously, which is one of the aspects also here why we lowered our guidance. You can translate this, of course, into also here, a little bit lower volumes in the second half than expected in Europe. In the United States, the situation is clearly different. Here, the order intake is quite weak. Taking into account the uncertainties, which is, of course, the buzzword that you're not only hearing from us, but probably from everyone, not in our industry, the uncertainties triggered the fact that the customers are really in a wait-and-see mode. This is why we see significantly lower intakes in North America. This is why we have adjusted our outlook for the North American market, and this also translates then into potentially lower volumes in North America. South America, quite a stable development to cut a long story short here. Okay, you had a second one, Hemal. I did. Thank you, Ursula, and thank you, Michael, for the explanation. On Scania margins, so Christian, could you help me order or quantify the headwinds that impacted Scania margins this quarter? And also, would you expect a similar run rate for Scania margins for the remainder of the year? And how should we think about Scania margins. Headwinds in relation to China? Thank you. Yeah, sure. Hemal, so. There was quite some headwinds, as you see, in the result of Q2, and we do expect quite a lot of that to remain throughout the year, hence also the new guidance. The really big issue is declining volumes and. Appreciation of the Swedish krona. I mean, these are the two main factors. If we start with a volume effect, it is really. Tied to our performance in Latin America. Two big markets, Brazil, which is our biggest market in the world, but also Mexico, which is a big market, has become a big market. We have seen. A really tough situation where it's really hard to keep up pricing, and we have, as usual. Decided to rather sacrifice sales volumes than to decrease pricing. It's an extremely competitive environment. Of course, coming on top of the. Tricky macroeconomic situation where interest rates were brought up to 15% from the central bank recently, and our customers are paying above 20% for their financing, as well as the general environment. It's very tricky. There, we don't see volumes really coming back as we had hoped for in the beginning of the year. We're rather taking a volume hit, and we're adjusting our production rather aggressively downwards as a result of this. Europe, we had. As Michael has explained already, higher expectations in the beginning of the year. It is an improvement, but it's also leveling out and not continuing to grow as we had expected. That is not going to support our volumes going forward. Pricing, we're keeping up. As we always do, everywhere, but you have also a mixed effect where we see, and you can take Brazil as an example again. The volumes we do, we do with lighter trucks. Half, we call them semi-pesados, so half-heavy trucks. Not as we did last year, basically only really extra heavy trucks, which then brings our margins down. You see similar development in Europe where we had less sales of V8s, less sales in the really profitable markets in the Nordics, for instance, and more in a little bit less profitable markets. We had a lot of headwinds. Will this change going forward? Yes, certainly it will. The question is only when. So far, I think it's hard to promise that this will happen inside of calendar year 2025. We are in a cyclical industry. We know markets are coming back. We know currencies are moving, and we know that customers are needing to buy a further zoner. All in all, to summarize, it was really volume, currency, and mix that brought down the Scania result to the level where we, of course, do not want to see it below double digit. Thank you, Christian. No surprises from China. The investments and the expenses you've made were in track. No, there is no surprise in China. I mean, we follow plan. We will inaugurate our factory in October. We will start to deliver the first 1,000 units in Q4 to customers. It is, of course, a heavy burden on the Scania result as we have more of the CapEx and OpEx coming into the last couple of quarters here before we actually are up and running and start to record revenues. It is according to plan, but it has a weight on the result, as this is, of course, a massive EUR 2 billion investment. Understood. Thank you. Thank you. The next one in the line is Klas Bergelind from Citi. Klas, please go ahead. Thank you, Ursula, hi, Christian and Michael. My first one is on the outlook in North America. One of your peers out there is talking about the big, beautiful bill potentially driving orders at year-end, that the EPA pre-buy should soon kick in, and that capacity out there is now more in balance, which can push up rates. When we listen to the carriers, it sounds pretty U-shaped still. I know second half recovery to be expected. I'm curious, Christian, on your thoughts and what you hear out there in the market. I think you said that the tax relief could support the market towards the end of the year, but curious about other drivers, what are you hearing on EPA, general willingness to invest, etc. Thank you. Yeah, sure, Klas. Yeah, sorry, Ursula. No, no, I just wanted to hand over, yes, to you. Yeah, I was fast there. No. We are perhaps a little bit more balanced or careful in our outlook for the U.S. Yes, I did say that. I mean, general business pro politics and tax cuts could benefit our customers. What we hear in the market is there is still a lot of uncertainty, and most of our customers are preferring to wait. You see really high inventory levels all throughout the dealer network, and that's not just ours, but the whole industry. On EPA, the expected pre-buy will certainly not happen this year. I think we can completely rule that out. There are even speculations on delays of the introduction, meaning that it could potentially not even happen in 2027. All of that is, of course, speculation, but it's fueling the uncertainty. Then we have this discussion about tariffs, which so far are manageable, as I said, and our customers are picking up the bill for the price increases we had to, and our competitors had to introduce in the market. This 232 discussion is, of course, creating further uncertainty. Yeah, I think it would be too early to say that we're through the most difficult period in the U.S. and hence our changed forecast on the total market, but also carefulness in our own performance this year. I hope I'm wrong. I hope there, and there are, of course, many things that can happen on the tariff side, for instance. The deal with Europe would, of course, very much bring positive fuel into the market, but it's not something we can cater in right now, and it's not something our customers are considering. I think uncertainty prevails, and I think we will continue to see lower order intake figures coming in, as you have seen from the industry association in April, May, and June. Therefore, our lower outlook. I hope that answered your question, Klas. Yeah, that makes sense. My second one is a shift into Europe on demand and production. I mean, it's obviously quite a big difference between Scania and MAN here. You have Brazil there in Scania, but even looking at Europe, it feels like Scania's orders are slowing more sequentially than MAN's, and you're taking down production for Scania, but not yet for MAN. Can we talk through the different geographies across Europe and between the two brands? I'm trying to gauge if this is just MAN coming from a lower level and with some sentiment boost from Germany relative to Scania. Thank you. Yeah, I think you are right there in the last part of your question. MAN is, of course, coming from short-time work, four days a week, and are now in the good position with a lower cost base to be able to accelerate and increase production, benefiting from a little bit stronger Germany, where they are, as you know, much more dependent and stronger than Scania. Whereas Scania is adjusting, which is, and I'm not going to give you the numbers explicitly, but we are adjusting slightly downwards, yet another step. It's really fine-tuning in Europe to make sure that we are not being caught again with underabsorption and unnecessarily high costs. To talk you through the geographies in Europe, we see. A bit of a comeback then in the Central European markets. Which is benefiting a bit more MAN than Scania, but actually benefiting both. And you see that both brands are increasing. Order intake in Europe, even if we have not seen that trend of growth continuing, we now see rather leveling out. We see a bit of hesitation in the Nordic markets, which is then hitting Scania more than MAN. We start to see some sign of improvements in the U.K., which is really promising, and that's benefiting actually both brands. We also see signs of life in the south of Europe, where we have a bit more problematic situation in France and a bit better in Spain and Italy. What we're all waiting for, I think, is to see a real comeback from the important Eastern markets, where orders are picking up, but where they are also leveling out there during Q2. I think to summarize, the delta is really MAN is coming from a lower production rate increasing. Scania had still a big order book, and we have slowly decreased production rate to fine-tune adaptations to a less favorable market, specifically where Scania is strong. Very helpful. Thank you. Thank you. Then we have Harry Martin from Bernstein. Next one. Thanks for taking the question. The first one I have is a question really, can we think about 2026 and what needs to happen with order intake? In Q2, orders obviously step back to 65,000 units. Would you expect that to pick up in the second half of this year? As you're thinking about planning for 2026, even just to grow unit sales, you'd need an improvement in that run rate order intake from the second half. Consensus has year-on-year growth in unit sales next year. It'd be interesting just to hear your thoughts about how quickly we need to see orders pick up ahead of 2026. The second one, just on the size of the full-year guidance range, a 10 percentage point range is clearly a wide one, especially when half of the year is known and you do have an order book for a few months. It's not the tariff outcome, as far as I understand. Can you help characterize how that range is set, the different scenarios on the up and down side, and what would have to happen to hit the top end of, say, the unit sales range? Thank you very much. Harry, maybe I can start. Certainly taking the second question, but maybe also start with the first one, and then I think Christian can also complement and add one or the other aspect. First of all, when you ask how 2026 would look like, then of course, this is a little bit the crystal ball question. That's for sure. Especially taking into account the uncertain environment we are in. As I said before. Uncertainty is certainly the buzzword to describe 2025. Of course, there are some arguments, some rational arguments, why 2026 could be better than 2025. But again, I mean, now we are speculating. The rational arguments, of course, are that pent-up demand potentially increases, the truck fleets are getting older. We see, at least comparing to the first half of this year, a more favorable interest rate environment. When we listen to the European Central Bank and to the Fed, it looks a little bit like the decreasing interest rate cycle is coming to an end. Nevertheless, the overall situation is more favorable. We talked about EPA pre-buy effects potentially, where we are quite clear, as Christian mentioned, will not happen this year, but there is the chance that this happens next year. And of course, but coming back to the uncertainties, if we see a more stable environment regarding the tariff politics, then of course, that can change things. We all have seen what the impact the deal with Japan had. So of course, if there is more certainty, if there is a deal with the European Union, and we see a different situation here coming from the US, then there are a couple of rational arguments for a better 2026. But again, those are rational arguments in a very uncertain environment. This is speculation. Christian, looking at you, if you would like to complement and add some. No, it's as you say, it's extremely, and I think it has hardly ever been as difficult to predict where is this market going now. But fundamentally, you touched on most of the things, Michael. You did not mention the real underlying transport demand. And I think that's what we need to see. And in the U.S, it doesn't look very nice right now. In Brazil and South America, it looks better. As you see, you see good harvests, you see the mining industry doing well. Then Europe, the big question mark is, of course, where is transport demand going? So far, it seems that European industry is keeping up pretty well. With the big investment packages announced by the EU, but also by the German government, my feeling is that we could see a rather positive development in Europe with transport demand picking up, thanks to GDP growth. That would, of course, fuel transport. Because in the end of the day, what drives our market long-term is always GDP growth, because that brings transport. Investments in infrastructure, investments in defense are both good, because they drive a lot of transport, as they are typically dependent on many layers of suppliers. So if I should have some kind of stomach feeling, is that topped up with the potential pre-buy EPA in U.S 2026, it could be a favorable year. But again, as Michael said, this is really speculation, because it could, of course, also get worse. I stopped there. Michael, do you very quickly want to say something about the 10% range guide? And then we have to hurry up to get the next five questions. Got it. I'll be sharp and on point. Harry, thank you also for the second question. I would say that the range that you mentioned, that's from our point of view, perfectly fine at this point in time. We are after the half year, so this is in line also with the guidance range that we had last year. You can assume that we are aiming here for the midpoints when you look at the new ranges. Maybe as a final comment, the ranges at this point in time also reflect the level of uncertainties that we have described intensively. There is certainly, if things go well, some potential to move to the upper end of the guidance. If things are even worsening, then we can find ourselves at the lower end of the guidance. Okay, thank you. Thank you. We have Alex Jones from Bank of America. Alex. Thanks very much. Just one from my side on free cash flow. I think at the midpoint, you've downgraded your post-tax cash flow guidance for the industrial business by about EUR 1.2 billion, whereas your sort of pre-tax EBIT guidance downgrade is lower than EUR 900 million. Can you explain why that downgrade is bigger on cash flow, whether there's any change within that to CapEx or modular system costs? Thank you. Sure. Maybe also then rather quick on that one. There is not really a linkage here to CapEx or R&D to start with your last remark. Let me phrase it like this. A good comparison is when we look at the previous year. When you look at the previous year, then you see that the planned net cash flow decline is largely in line with the decrease of the operating profit. This is the comparison to the previous year. Maybe to give a little bit of light on this, and this is the primary explanation, that we were at the beginning of the year a little bit more positive on the net cash flow. Again, if you put this into context with the previous year, then this is very much comparable and in line. That's the explanation. Thank you. That was your only question, Alex. Then we can quickly move to Nikolai from Deutsche Bank, Nikolai Kempf. Yeah, thank you. It's Nikolai from Deutsche Bank here. Two questions, and I will take them one by one. First, on International Motors, I mean, we've discussed the very soft order intake. We've talked about the high dealer inventory. Is there any possibility that International can be loss-making in Q3? Let me put it like this. We per se cannot rule out anything. The basis for this would be certainly additional effects that we have not factored in at this point in time. When we talked about our guidance. For a good reason, we explicitly said that we base that on what we know end of the first half of this year. I mean, let me just speculate and give one factor. If the outcome of the 232, also what you heard from Christian, if the outcome of that investigation would lead to tariffs here, just to phrase it, then in this case, we cannot outrule that also International or that International drops below the black zero. Let me also say, if everything else continues as we projected, then we do not see it. Again, coming back to the uncertainties and to a couple of unknowns. Theoretically and potentially, then also practically, things could happen that we cannot rule this out. Okay, got it. Yeah, a lot of known unknowns here. A second one on the cash generation. Previously, I think TRATON had to be net cash on the industrial side by 2027. With this lower cash generation this year, do you think this target could be at risk? Thank you. Yeah, Nikolai, thanks. You are referring to our Capital Markets Day. At the Capital Markets Day, we said that we aim to be net debt zero 2029. Of course, if there is a chance and possibility to reach that goal before 2029, potentially 2028 or 2027, you can imagine that I am not at all against this. We are working in this direction, of course. This is why we said that we put a focus on working capital management. We clearly put a focus on the net cash flow. We have said in also the recent calls that we have turned all our brands and TRATON as such into really a net cash-driven company. We have included the net cash flow into our bonus scheme, all aspects to clearly put a focus on this. Because as we said at the Capital Markets Day, of course, we want to bring the net debt level down. That is the outlook. We are still on the track, of course, to bring the net debt level down until 2029. At this point in time, and of course, I am a little bit biased now by this year, by the year 2025, taking into account what we have done now. Lowering the net cash flow guidance. It seems or it looks at this point in time like a challenge to achieve this goal then before 2029. Let's see. We might see then, as Christian and I were into, even though we do not have the crystal ball, we might see a better year 2026. Then also what I said right now might change. We are sticking to what we have said at the Capital Markets Day. Want to be net debt zero 2029 at the latest. If we see a good chance to achieve that further, we will go for it. We have a clear focus on that topic. Got it. Thank you. Thank you, Nikolai. The next one is Akshat from JP Morgan. Good morning. Akshat from JP Morgan. A couple of questions, please. The first one is, sorry to come back to Section 232. I just wanted to understand your strategy if we do go ahead. Could you just help us understand the implications for the business from a CapEx investment or a margin perspective and the actions that you could take to mitigate the impact? When we think about Section 232, should we also think about any OEM-specific investment credits or if you could be a part of a broader negotiation or deal with the Volkswagen Group? Could you just help us understand this better from your perspective, please? The second question is on the modular system. It's really encouraging to see the creation of group R&D functions and the further streamlining that you talked about. From an investment community perspective, what are the key milestones or next product development steps after the CB1 engine that we should be looking out for? Thank you. Yeah, thank you for your questions. Maybe I start with the first one. Even though the answer might not be to your full satisfaction, and then I hand over to Christian for the modular system. Let me just say about the 232 investigation. I would like to say the same as what we basically said at our annual press conference or in Q1 when we talked about tariffs, that we don't want to speculate. There are so many potential outcomes of the 232. Really, depending on the various options and outcomes, there are all kinds of possibilities to deal with that. I would not like to go into the many potential options. What I can say is, of course, that we can, let's say, foresee a couple of possible options, and we take that into account, and then we will adjust to this. Please let me leave it there. With that, I would hand over to Christian for the modular system. I think, Christian, you would like to take that one. Absolutely. I would, and I can talk a long time about it. To keep it a little bit short, nevertheless, I would say you're right. The first step was CB1 engine that is now also in MAN as the third brand. Remember that we have there also a common gearbox, included common aftertreatment system, common engine control system, i.e., the software module for the drivetrain, and partly also common axles, at least in the European space. Next step has already come, and that's the integrated motor and gearbox for our battery electric vehicles, which is now shared between Scania and MAN. Here we have come even further in coming to identical solutions. This will, of course, also find its way into our products in North and South America. We have an interesting development then happening on the electrical architecture and software side, where the so-called CSM7 system that was first introduced into Scania is going to be at least partly introduced into International. Which is a really good step to be able to also share the quite expensive but easily scalable software with an integrated or standardized interfaces. Then comes further steps, both on the electric vehicle side. Of course, to come to full benefit of the system, we need to have the interfaces standardized. You need to start to touch the big components, such as the chassis and the cabs. Here, of course, this involves big investments into CapEx, rebuilding factories, etc. We need to be here careful, taking this when it is logical to make upgrades anyway. We are for sure coming also to these components. You are going to see gradually TRATON moving in both on the heavy duty and on the medium duty side towards combining more and more of the chassis interfaces and the cab interfaces. Of course, mastering, which is, of course, a challenge, but mastering the product differentiation in markets, important markets such as Europe and Latin America, where we have more than one brand, where the modular system is perfectly designed to also cater for differentiation and still creating scale on the base components. A very, very interesting development ahead and fantastic opportunity for the new R&D organization, where we already start to see really positive effects from less double work and much more alignment on what and how are we actually going to develop these common performance steps and create a common modular toolbox where we gain then scale on one hand and cost and speed on the other hand. Most importantly, we can develop more solutions, more performance steps to the end customers. A lot more to come. We are just about started. Thanks for a super good and interesting question. Thank you so much. Thank you. We have two more analysts in the queue. Next one is Anthony Dick, and the last one then will be Hampus Engellau. Anthony, please go ahead. Yes. Hi, thank you. Thank you for taking my question. Just one follow-up on my side. It is regarding the inventory. You mentioned the high inventory levels. I was just wondering if you could share your inventory level in the U.S. and how that has evolved in the last quarters and also year on year. Christian, do you want to take that? What I can say, when we talked about inventory levels, we were rather talking about levels at the dealers. Let's hand it over to Christian. Yeah. No, so exactly. In the U.S., we are not working with captive dealerships. Hence, the only inventory we have are the industrial inventory. They are on a reasonable level. Nothing that sticks out. I was exactly as Ursula said. I was talking about inventory level at independent dealers, not just in International, but in the industry as such. They are rather on the high side. As we said, we believe that they are enough to satisfy the retail demand. The big fleets are currently not ordering or ordering very little just to cater for replacement needs. They will have to come down in order to trigger further retail sales. That is not something we're seeing happening right now. Thank you. Do you have a sense of how long that inventory destock process will last? Gosh, I think it will last towards the end of the year, but that's really guesswork. That could change so quickly if demand picks up and customers start to want to change their rather older vehicles again. Okay. Thank you very much. Thank you. Hampus Engellau, you are the last one. Please go ahead. Last but not least. Yes, thank you very much. Two questions for me then. Maybe coming back to International, if you could give us a little bit of flavor on how you feel your part of the market is developing in terms of how are you running on your market share strategy here. Also, if you would tell us what type of penetration rate you have on the S13 integrated powertrain on your order books and orders received. My last question is also related to the U.S, so that's why I'm taking them all at once. That's more curious to hear about what talks you have with your customers in the U.S on the EPA 27. What are they telling you in terms of what will be the case and how they will react and what they think about the new technology should we go there? Thank you. Okay. I can start and you can fill in, Michael. On the market share strategy, Hampus, it is unchanged. You remember we said from the very start, and we have repeated through our Capital Markets Days, that we believe that we should be worthy of a market share increase of somewhere in the range of 1-2% per year. Last year, we were not happy. We had the incident with the fire, and we had other supply bottleneck challenges. We did not, for the first time, live up to that promise or that plan, if you'd like. We're seeing year to date now Navistar International, sorry, being back above 15% market share. We're back on a growth trajectory. I think we were 15.4% exactly year to date May, which is a good development. Of course, with rather low volume, it also underlines the weakness in the total market. Our ambition is to continue to grow. You mentioned the S13 integrated powertrain, which is, of course, our best card to play in order to increase the sales in general. Performance is really, really good. I want to underline that coming back from discussions with customers, they really appreciate the performance of the S13. We continue to gradually but cautiously, with quality, increase production and deliveries. Penetration in Q2 this year was 40%, around about, in Class 8. If you translate that to our total sales, where we have a lot of Class 6 and 7, it's 14%. That brings us to basically the same level for the first half year. We've said that we want to reach 50% this year, and we see no reason why we should not be able to do that. I want to add here also, because I think it's important to understand the beauty of the modular system and that we manage to create product platforms that can move from different production sites. We have, of course, planned to take part of the core components to the S13 from the Scania facility in São Paulo as we will ramp up a little bit later our Huntsville production facility in the U.S. Now, with the tariff discussion, we have, of course, options. We can either ramp up faster in Huntsville and localize faster in the U.S., but we can, of course, also source from Europe, either from Nürnberg or from Södertälje. We can constantly shift here depending on both tariff and logistic costs. We really have created a global system around the CB1 that is already showing its benefits apart from them being beloved by customers. Lastly, you asked about EPA 27, right, Hampus? Certainly. Again, a lot of insecurity and actually frustration around this, both from us, because we do not yet really know towards what level of NOx we need to type approve our engines. We have them already in type approval process, but as EPA have not formally confirmed what level we need to achieve. That's why I say it's highly unlikely that there will be any pre-buy this year and why there could even be a delay of the introduction, because this is not making any sense. This is highly disturbing for us. It's also frustrating for customers because, of course, they are just as aware as we are about these swings of pre-buy. They know the technology will have a cost. They don't know how much, even if there were very extensive rumors about one particular supplier in the market with a very high price tag. There were rumors that this price tag would be up and towards $25,000, which would, of course, bring huge pre-buys into play. That has not been confirmed, and you cannot buy that product yet because of the delay, I suppose, or because it was just speculation. I don't know. This is deeply disturbing also for customers because it's really hard for especially the professional customers to plan their fleet renewal programs. We are in the position, as you know, selling a rather large amount of our trucks to really professional big fleet operators who are typically planning quite long ahead. They have been adjusting their planning over and over again because of this uncertainty. On top, they then got the tariff situation and the very erratic arrival of vessels into the U.S., which makes it even more hard to plan. A feeling of frustration combined with a wait-and-see attitude is what I can say from the customer base. Of course, you still have retail customers who are buying and who are just, they have to because their trucks are getting old or because they are in a niche that is unaffected by this overall trend. It is a really, really tricky territory to navigate out there. It is not pleasant for our dealers to be in this situation. We just all hope for clarity on the tariffs and clarity on the EPA 27 and, of course, on this 232 investigation. I hope that answered your three questions, Hampus. Otherwise, let me know. Thank you. Okay. Thank you. Actually, one more person reappeared in the line. Shaqeal from Morgan Stanley. Please go ahead. I hope that is then the last one. Thank you. Thank you very much for squeezing me in. Shaqeal from Morgan Stanley. First of all, thank you for a guide that is much closer to the reality of current global truck demand. Secondly, North America, the tone from your peers has been a bit different so far. They all still seem to rely on things improving in the second half with the usual TCO arguments. Now, given the ACT order trends, it is difficult to imagine a massive order inflection in September. Christian, where is the most risk in your view? If you think back to previous cycles, if there is one factor that could suddenly lead to improving demand, what do you think it might be? Yeah. You are right. I have also noticed a bit more positivism from our competitors in terms of U.S. I find that a little bit harder to agree with, given exactly what you say, the figures on order intake for industry and, of course, also our own figures are worrying. That is not where we want to see the U.S. total market developing. If there is the one thing that could really boost the order intake figures, I think it is the tariff closing, all these tariff discussions as outlined by the administration towards 1 August. I think that would bring a lot of relief to the business community. I mean, underlying, the U.S. economy is not doing bad, right? It is actually doing quite well. Our customers have an aging fleet. There is a renewal need. But there is not the risk-taking appetite as we see it right now. There is also, of course, the interest rate level. Where, of course, a decrease in interest rate would potentially then follow clarity on the tariff side. That in itself would, of course, also drive investment appetite. I think it is the tariff. If you want one, as you asked for one single thing, I think that would be the most important. I do not know, Michael, if you want to complement us. I know you think a lot about this as well. Yeah. No, I can only underline this. If you want to hear one, then it is certainty coming back to the U.S. regarding the tariff regime. That could potentially turn the market quite quickly upwards. Understood. Thank you, guys. Thank you all. With this, we are concluding our event. This afternoon, actually, we have scheduled two investor group calls. Before then, activities slow down for the summer vacation period. For any questions, as always, please contact the investor relations team. Enjoy the rest of the day. To those taking off time, have a great summer break. Bye-bye.