Welcome to TRATON's Q2 and H1 2026 results call. My name is Ursula Querette, and I am Head of Investor Relations at TRATON SE. With me on the call 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 Q2 and cumulative H1. Michael will then guide you through our financial performance in more detail. As always, we will conclude the call with a Q&A session open to financial analysts, investors, and media representatives. To register for questions, please click the blue Q&A button on the webcast and follow the instructions. If you want to enter the queue via phone, please dial one of the country-specific numbers and enter your individual pin followed by the hash key. To register your question, you need to press zero one on your keypad. To cancel the question, press zero one again. Please note that this call, including the Q&A session, will be recorded, and a replay will be made available on our website later today. You can find our 2026 half-year report, which we published this morning, and the slides to this call 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 am handing over to Christian. Great. Thank you very much, Ursula. Welcome also from my side to everyone on the call. Some of the Q2 headlines that we present today are most probably already familiar to you. We published our unit sales on the 10th of July and then had to publish our adjusted return on sales figures in an ad hoc release on July 13th. I think today is more about putting these figures into a context, our improving top-line momentum, demand signals behind that, and how all of this plays into our outlook for the full year of 2026. Let's start with our top line. After a rather slow start of the year, our Q2 unit sales increased with 4% up to almost 83,000 units. This reflecting a slight year-over-year improvement in Europe and better sales momentum in South America, where we are already supported by the very first MOVER incentive program deliveries. North America, however, is still lagging as the recent order improvement has not yet been translated into deliveries. For the H1 of this year, unit sales were down 1%, compared against a relatively strong last year period where tariffs had not yet impacted deliveries negatively. Sales revenues increased by 4%, up to EUR 11.8 billion in Q2, well in line with our unit sales. As a result, we were able to bring our half-year sales revenues back to a flat year-over-year level, despite the slow start of Q1. For profitability, Q2 adjusted return on sales improved up to 8.1%. This was clearly above last year and higher than originally expected, hence the pre-release. Why is that? Mainly due to the earlier recognition of U.S. tariff refunds at International, but not only, also supported by several operational improvements. Bringing the half-year adjusted ROAS up to 7.0% and pulling forward part of the profitability support that we originally expected in the H2 of the year. Like in Q1, the very highlight of the quarter is the strong increase in order intake, up 44% year-over-year in Q2, after a plus already of 18% in Q1, summing up to a 30% improvement in the H1 of this year. Let us turn to the next page and dig a bit deeper into the demand development. There we have it. We continue to see strong demand signals across all of our key regions. Order intake, again, exceeded deliveries, confirming an ongoing recovery in the truck cycle. The book-to-bill ratio ended up in Q2 at 1.2. In Europe, truck order intake increased by 23% year-over-year to around 29,200 vehicles. This was partly supported by a weaker prior year comparison, but also by a strong brand level improvement. Scania up 30% and MAN increased orders by 17%, despite the German home market still being behind our expectations. In North America, truck order intake almost tripled to 22,700 trucks, with International Motors accounting for the vast majority of the increase. This, of course, reflects improving U.S. fleet economics, strong freight rates, and some EPA '27 pre-buy activity. At the same time, deliveries remained below last year as our order conversion is coming through gradually. In South America, demand continues to be supported by the second tranche of the MOVER Brazil program, boosting our Q2 truck order intake by +20% to around 16,500 units. Despite the ongoing macroeconomic challenges, especially in Brazil. This order growth was mainly supported by a strong increase at Scania, while Volkswagen Truck & Bus remained broadly stable compared to the same period of last year. First trucks from the tranche one of the MOVER Brazil are now being delivered, which also supported our delivery figures in the region during Q2. By the way, the second tranche of this program of approximately EUR 3.5 billion, by the way, has now also been fully utilized ahead of expectations. Overall, the recent demand pattern clearly points to a back-end loaded delivery volume in this calendar year. This also is supported by the fact that unit sales were still down year-over-year in the H1, while the comparison base becomes easier, of course, in the H2 of this year. Okay, let us switch slide. As just discussed, the truck cycle is moving upwards, especially in Europe and in North America, where ordering tick again clearly exceeded unit sales in Q2. This gives us increasing confidence for growing deliveries in the upcoming quarters. At the same time, one should remember that our markets, the tariffs, the overall geopolitical uncertainty, have not at all disappeared, our approach remains cautious. Looking at our main regions, starting with Europe, registrations are developing within our market outlook, while order momentum remains solid. Based on this, we leave our outlook range with a midpoint growth of 2.5% unchanged. In North America, the picture has become more encouraging. The order trend is firmly established. Against this increase, we decided to narrow the North American market outlook range towards the upper end. This lifts the expected midpoint to a growth figure of +5% from a +2.5% beforehand. Looking only at Class 8, it could grow even more by 9%, equal to 282,000 trucks. In South America, the macroeconomic challenges remain, but deliveries continue to be supported by the MOVER order intake increase. With this mixed picture, we leave our outlook range unchanged, with a midpoint remaining at -5%. In China, registrations developed very strongly in the H1 of the year. While we do expect some cooling down in the H2, the strong year-to-date development allows us also here to narrow the outlook range. This brings the expected midpoint up to 0% from previous -5%. Overall, the updated market outlook reflects a clear upward cycle, while still taking into account the remaining uncertainties that exist across all our regions. Let me now turn to how we are translating this improving market momentum also into stronger operational performance through targeted initiatives at both brand and TRATON Group level. Let's change slide. Starting with electrification, Scania is strengthening our European BEV capacity with a planned EUR 70 million investment in the French Angers factory, while MAN is closing a portfolio gap in the BEV portfolio by launching the new 16-ton MAN eTGM. Continuing with digitalization and efficiency at International, we have launched My International to simplify fleet management and enhance uptime, while Volkswagen Truck & Bus is advancing production digitalization and automation in our Brazilian Resende plant. On services, TRATON Financial Services is broadening its insurance offering while continuing to ramp up its geographical footprint. Latest new addition is Norway for MAN Financial Services. Finally, at TRATON Group level, our first green bond and green loan issue, totaling EUR 850 million, support investments in battery electric commercial vehicles, and ultimately further help our future BEV growth. All taken together, these initiatives show that we are very actively improving our business, not only benefiting from a favorable market cycle. Please change the slide again. Building on the recent green bond issuance, let me update you on the BEV transformation. Also here, we saw a clear acceleration in the Q2 of this year. Battery electric vehicle deliveries increased with 67% year-over-year, up to 1,050 vehicles, an even stronger rate than the +38% we saw in Q1. For the H1, this brings BEV unit sales up to 1,907 vehicles, up 53% year-over-year. In Europe, our BEV ratio- Excluding the van, the MAN TGE, continued to increase from 1.9% in H1 last year to 2.6% in the H1 of this year, supported by growing customer interest and, as mentioned, a broader product and services offering. Incoming BEV orders also continued to grow in Q2, but at a more moderate pace than deliveries, which is mainly explained by North and South America. In Europe, charging infrastructure remains the key enabler, but unfortunately also a bottleneck for BEV adoption. We did, however, see further progress during the quarter. Milence secured a EUR 120 million financing facility to further scale its pan-European public charging network, including now Megawatt Charging System technology. TRATON Charging Solutions continue to expand across to public charging across Europe through Scania Charging Access and the MAN Charging Go. While our depot charging initiatives such as Erinion support customers for charging mainly at their own operating locations. Important building blocks are being put in place, but to support a broader BEV adoption in Europe and to meet the CO2 requirements, the roll-out of charging infrastructure and stronger support for battery electric vehicle TCO needs to accelerate and accelerate significantly. To sum it up, the truck cycle is moving upward, our market outlook has improved, and our Q2 profitability was stronger than expected with an adjusted return on sales of 8.1%. Beyond the cycle, We continue to execute on initiatives that strengthen our operational performance and future growth, including the continued acceleration of the battery electric vehicle transformation. With that introduction, allow me now to hand over to Michael for a closer look at our financials. Over to you, Michael. Thank you, Christian, and a warm welcome from my side as well to all of you. As Christian already mentioned, the top-line development clearly improved in the Q2. Unit sales increased by 4% year-over-year, driven by a 3% increase in European unit sales despite a 9% decline in Germany, a 13% increase in South America, supported by Scania and Volkswagen Truck & Bus in Brazil, with first deliveries under the MOVER Brazil program. This was partly offset by a 9% decline at International in North America, where the recent demand inflection is not yet fully reflected in unit sales. Sales revenue also increased by 4% year-over-year in the Q2, driven by higher new vehicle sales and improved vehicle services business and continued growth at TRATON Financial Services. Overall, Q2 shows a clear acceleration in top-line momentum. Given the slow start in Q1, this is not yet fully reflected in the cumulated half-year figures, but it clearly supports our expectation of a stronger H2. Turning to the next page to profitability. Here, we also aim for a stronger H2 versus the H1. However, as flagged in our ad hoc release, part of the expected H2 earnings support materialized earlier than anticipated, driven by the tariff-related catch-up effects at International. From Q2 onwards, International recognizes the full amount of minimum expected Section 232 tariff refunds as a receivable. This reflects the increased likelihood that at least around half of the import value will qualify as U.S. content. This new booking logic was also applied retroactively to the Q4 2025 and the Q1 of this year. In addition, we booked a one-off receivable for expected recoveries related to IEEPA tariffs, as we now have a basis to reclaim amounts already paid. Taken together, this resulted in a positive catch-up effect of around EUR 120 million in the Q2, bringing International to an adjusted RS of 5.6% in the quarter. Beyond this timing effect, profitability was also supported by solid operational performance. Higher unit sales, especially at Scania and Volkswagen Truck & Bus, helped improve fixed cost absorption. Price mix effects, some foreign currency tailwinds, and continued cost discipline across the Group also supported profitability. As a result, adjusted return on sales for the TRATON Group reached 8.1% in the Q2 and 7% for the H1. Compared to our original phasing, part of the expected H2 earnings improvement was effectively pulled forward into the Q2, while the underlying operational performance also improved. At the same time, we should not overlook the headwinds. R&D activity is increasing and will continue on a high run rate, especially as we invest in e-mobility and our TRATON Modular System. In addition, we saw first input cost pressure related to the Iran war, and of course, tariff costs remain a burden. Let's now look at the performance of our segments on the next page. Overall, TRATON Operations increased sales revenue by 4% and achieved an adjusted return on sales of 9% in the Q2, supported by solid volume growth, operational improvements, and the tariff-related catch-up effect at International. At Scania, the main takeaway is strong earnings leverage. Sales revenue increased by 7%, driven by higher unit sales in China and Brazil, while earnings grew by 27%, bringing the adjusted RS to 11.6%. A strong vehicle services contribution, product mix, and renewed currency tailwinds supported the development. These effects helped offset the continued impact from China operations and higher R&D activity, which remains a clear margin headwind. At MAN, the focus is resilient growth despite a difficult home market. Sales revenue increased by 4%, even though Germany clearly held back the overall development. MAN still grew European unit sales thanks to a dedicated effort from its sales team and continued to build parts momentum, albeit from a low base. Adjusted RS came in at 6.7% in the Q2, while a better fixed cost absorption supported profitability, higher R&D activity, and first Iran-related input costs weighed on earnings. At International, the main point is timing. Sales revenue declined by 7% as the recent order recovery has not yet fully translated into unit sales. Earnings benefited from the tariff-related catch-up effect, while tariff costs remained a headwind and vehicle services was softer in the Q2. As already pre-released, the adjusted RS was 5.6%. At Volkswagen Truck and Bus, Move Brazil was the key driver. Sales revenue increased by 22%, but also supported by higher bus sales from government tender wins in Brazil. Profitability was held back by negative price mix, with adjusted RS coming in at 10.9%. Finally, at Trade and Financial Services, the focus is on scaling the business. The increasing portfolio volume drove revenue up by 21%. Profitability in the core financing business improved, while ramp-up expenses and elevated risk costs partly offset this development, so return on equity came in at 8.7%. Turning now to net cash flow, TRATON Operations reported - EUR 269 million in the H1. This mainly reflects the weaker operating performance at the start of the year, the usual first-half working capital buildup, and the full cash burden from Section 232 tariffs. Last but not least, ongoing investments. At corporate items level, the June dividend payment of EUR 465 million was more than offset by the two Sinotruk placements, with total proceeds of EUR 523 million. Overall, with negative net cash flows both from trading operations and corporate items, net debt increased by EUR 351 million compared with the year-end 2025. Looking ahead, in line with our usual seasonal pattern, we continue to expect stronger cash generation in the H2 of this year. Let me conclude with our updated outlook for 2026. Based on the stable revenue development in the H1, the improved market outlook, especially for North America, and the overall positive order momentum, we are narrowing our guidance range towards the upper end. We now expect year unit sales and sales revenue to develop in positive territory between 0%-7% growth. For adjusted return on sales, we achieved 7% in the H1. This gives us a solid basis for the full year, we are therefore raising the lower end of our guidance range to our previous midpoint of 6.3%. The upper end remains at 7.3%, while we continue to aim for a stronger H2. If this materializes, however, the gap versus the H1 would be smaller than originally planned. There are three reasons for this. First, part of the expected H2 earnings improvement at International from tariff effects was already pulled forward into the Q2. Second, we expect additional Iran-related input cost pressure, which was not reflected in our original guidance, but we have been pointing to this risk since the Q1. Third, R&D expenses will continue on a high run rate in the H2. In terms of quarterly phasing, Q3 should be seasonally weaker, especially due to the holiday effects at MAN and Scania. We expect a strong Q4 in terms of revenue and margins, in line with the usual seasonal pattern, and this year, supported by the high order backlog we have built up. That said, geopolitical risks remain an overarching uncertainty. For net cash flow of trade and operations, we are maintaining our guidance range. While we expect cash generation to improve significantly in the H2, higher primary R&D expenses will weigh more on cash flow than on operating results due to capitalization. Cash refunds from tariffs could provide additional support, but the timing remains uncertain. Overall, our Q2 and half-year financials show that our business has gained momentum. Order intake is stronger. Our truck market outlook is confirmed or has improved, our H1 profitability gives us a solid basis for the full year. That is why we are narrowing our guidance ranges towards the upper end, while still taking a prudent view on tariff costs, cash flow, and geopolitical uncertainties. With that, I'm happy to hand it back to you, Ursula. Thank you, Michael and Christian. Before we start with the Q&A session, let me remind you that you need to click the blue Q&A button in the webcast and follow the instructions if you want to ask a question. Please ask your question once I announce your name and activated your session. In respect of the time, please limit yourself to two questions. Let me take the first question, which comes from Harry Martin from Bernstein. Hi, can you hear me? Yes. Perfect. The first question I wanted to ask about is the very strong order intake. It is pretty strong across the board. It looks like there is clearly a market share gain story here, as well as just the market strength getting better on the cycle. Can you reflect on how this is being achieved? Is there anything here that's price-driven, or is this all product improvement and better TCO for the fleets? How are you doing this better than the competition? That's the first question. The second one, just on truck pricing. It doesn't look like new vehicle average selling prices increased in the Q2, despite some of the improvements in the cycle. Does this get better in the H2? With that raw material inflation, what is the assumption on price cost on the orders in the order book with the outlook on raw materials? Thank you. Thank you, Harry. Christian, do you want to take the question on order intake and market share? Absolutely. Actually, we're not seeing particularly strong market share gains, with a few exceptions. If we start in Europe, Scania has actually lost a bit of market share, focusing on keeping pricing up and, on your second question, seeing increased gross margins as a result. MAN, according to plan, is regaining market share. They have the better product lineup now, with the Common Base Engine and driveline in their products, and we see them climbing up a little bit. In Brazil, Volkswagen Truck & Bus is maintaining very strong market share. Scania has also here focused on keeping up the premium pricing position and has lost market share. In the U.S., we have also slightly lost market share. We started to build order book and increased production, I think, a little bit later. We have not gained. We're rather flattish or perhaps we have lost a little bit. We could mention China, where volumes are increasing thanks to the NEXT ERA. Also Scania is now benefiting from the production plant in China for Southeast Asian exports. There we see good volume increases. No, we're certainly not jeopardizing our pricing positions for any of the brands, rather the opposite, and market shares have not been increasing on the average. With the good buildup of order books, let's see how this plays out in the H2 of the year. I stop there and hand over to Michael for the second part of the question. Thank you very much. Thanks, Harry, for the question. I think actually not too much to add. Christian already covered a lot. Maybe where I can complement a little bit more specific to the second part of your question, to the pricing and especially to the higher input costs, I can say that, yes, because of the higher input costs, MAN increased prices in June. We are looking at this, I think the key message was already mentioned by Christian, that if we look at increasing prices, this is primarily based on our product offering, which is quite strong, as Christian was into with regards to the MAN product offering to the CBE, where we started the D30 production last year, where we are increasing penetration. This is typically the basis for higher pricing. Let's see, maybe final comment to complement in the U.S. We were into the good order intake momentum. If that continues, typically if there is strong order intake, there might be also optionality for some pricing optionalities in the H2 of the year. Let's see. Thank you very much. Thank you. Next questions come from Alexander Jones from Bank of America. Alexander. Great. Thank you. Morning. Two questions, please. Firstly, I guess Daimler Truck overnight announced that they have completed negotiations with the U.S. Department of Commerce on a tariff deal, quote-unquote. Could you give us an update on where your discussions with them are, and what level of U.S. content you think could be achievable under that framework on Section 232, please? Secondly, EPA27 final rules, proposed rules, came out a couple of weeks ago and suggested a way to comply without complying, if you will, by paying some penalties. Does that change your plan at all for 2027, and how you think about how the sort of market landscape might evolve into next year, given you previously highlighted an advantage with your new engine? Thank you. Okay, Michael, you start, right? Thanks, Alexander. Let me start with the first one. I think handing over maybe to Christian for EPA27 question. With regards to the first question, I can say yes. I've seen the ad hoc release of Daimler Truck. You will certainly understand that we will not comment on this and don't have there more insights beyond what was written there. When it comes to ourselves, we are still in talks with the U.S. administration, and this is pretty much what I can say at this point in time. We continue the good talks now in the Q3. At this point in time, I cannot give an indication here. On the EPA27, you're right, there is now a proposal that needs to be discussed, which, as you put it neatly, allows you to continue to work without actually achieving the emissions level in the EPA27 regulation, well, with the penalty. No, it does not change our position. I still think that we are in a very favorable place. Let's see how this finally plays out. We have, with the strong order intake, basically already sold out our 2026 production. We now start discussions with customers for 2027 orders, which is, of course, bothersome in a situation where EPA27 is not totally clear. We have optionality. We have the youngest engine platform in the world, which was from the beginning conceived for EPA27. With very small increases, we reach that level, so we're ready to deliver that. We can, of course, also choose to continue with the current platform if that is financially more viable. Still exciting times in the U.S. to see where this finally ends up. We are five months to the legislation. This is, of course, a very unusual situation. I think, again, we have really good optionality, so we are not going to end up being losers in this game. I stop there. Thank you. Thank you. Let's turn to Daniela Costa from Goldman Sachs. Hi. Good morning. Thank you. I wanted to clarify regarding the tariffs, because, I guess in the presentation, you mentioned Section 232 and IEPA, but on the question before, when you were asked about the negotiation on content from one of your peers, it became a little bit less clear to me exactly what are you including today. Just first maybe the clarification question on when you mentioned in the presentation Section 232, this is because you are assuming now you will have higher content from the U.S. allowed, right? It's related to those negotiations with the administration, or am I wrong? I'll ask the question. Thank you, Daniela. Happy to take that one. There, of course, with regards to what we have booked, I can be very clear. You recall what we said during our annual press conference in Q1. We basically always said, and this is still the case, that 100% of our vehicles are USMCA compliant. To be USMCA compliant, you have to have a little bit more, or roughly 50% U.S. content. That gives you the indication. We said at the annual press conference and in Q1 that we took a prudent approach, so we booked a receivable of roughly 50% of the roughly 50% U.S. content. That was the practice so far. What have we done now? Now we are assuming the level of the USMCA compliant U.S. content, meaning roughly 50%. This led then to the tariff-related catch-up effect. To give you a ballpark figure, we booked the receivable in Q1, and again, that was 50%, roughly, of the roughly 50% U.S. content. That was in the ballpark of EUR 30 million, as we said. You have to double this, which leads then to an effect of EUR 30 million in the quarter in Q1 and in Q2, makes EUR 60 million, But we already started to pay tariffs for 232 in November and December. Which adds another EUR 20 million. Roughly the effect linked to the catch-up of 232 is roughly EUR 80 million, the rest comes from- IEPA tariffs, where we also came to the conclusion to meet the virtually certain criteria under accounting standards that the reimbursement procedures now are in place to reclaim here an amount. To be very clear, my comment first to Alexander's question was linked to the negotiations, where I can just say we are still in negotiations, but when it comes to what we have booked, we have assumed here the U.S. content under USMCA, which is on a level of roughly 50%, to be very clear. Okay. Maybe following up on that, if we were to take the EUR 120 million off, we would have seen you slightly loss-making, but closer to breakeven. Obviously, having potentially higher content and not having what you had in the last couple of months, are you confident that your underlying profitability in International, If you don't get the negotiation, doesn't end up successfully, you'd still think you can be more than breakeven underlying for the year? How should we think about the potential upside from the negotiation? Let me start first of all with a clear answer. That is, in short, yes. We believe that the H2 should be better than the H1. You are fully right. In Q2, we had the extraordinary effect. Why are we confident that the H2 is supposed to be better than the H1? This is very much linked to the really good order intake that started basically in December last year and continued now in the H1 of this year, Where we are confident that we will translate this order intake momentum then into unit sales in the H2 of the year. In addition to this, you might recall that we also have done some homework, meaning that we have, in a way, restructured the indirect area. We have a clear focus here also on costs. In combination of all of that, we are positive that the H2 should be better than the H1, indicating that we should be clearly above the breakeven RS that we achieved last year. Yes. Got it. Thank you. Thank you, Daniela. Next question comes from Klas Bergelind from Citi. Hi, Christian and Michael. Klas of Citi. I just want to start on the Scania margin. I'm trying to understand how the margin would look like without the China impact. You also have the impact from R&D in there. If you could say to what extent the China investments and underutilization will abate into next year, and how we should think about the R&D pace into next year. Trying to understand from where we are today, and if you would see less of an impact from China and R&D, to what extent that can boost the margin. Thank you. Okay. You want me to start, or Ursula? I was looking at, because it's a mix of Scania. Yeah Michael. Maybe you can start. We do it together. Yeah. Start. You can do it. I'll take the first part of it, then you chip in, Michael. Good question, and I cannot give you 100% clear answer, Klas. Of course, we have said from the start that underutilization or under absorption in China will, of course, be an issue until we reach some kind of normal level of production, and then we need to be above 20,000 units. We're aiming at 10,000 this year. We're filling up pretty well. We have really good reactions on the NEXT ERA. We are negotiating with the first bigger fleets for more substantial orders, but also retail orders are coming in nicely. We see more and more opportunities using the Scania product from China for exports, to even more markets than we initially anticipated. We're on the way, but it's going to weigh on our result, this year and potentially also next year. The R&D costs, here is where I will need Michael's help, are indeed high. They're higher than what we expected. They are on one hand, of course, fully explainable by the fact that we are investing heavily into electrification and the digitalization. It's also an effect of creating the group R&D, where we're now sharing the R&D costs across the group. A little bit hard to see exactly where that's going to end up this year. We have said that we are long-term aiming at coming in and around 4%-5% of our total turnover on a group level in R&D expenses. I think I hand over to you, Michael, see if you want to complement on the R&D side. Happy to do so. I think the China part is super well covered, then maybe just to complement a little bit on the R&D side. It goes without saying in general, we spent quite a significant amount for R&D, for a very good reason. We're in the transformation. We've developed our TRATON Modular System. In addition, we go for electrification, autonomous driving. The software-defined vehicle. The R&D spend is there for a good reason. Being aware of this R&D spend, we are super clear here as the management team, and this is a continuation of what I said already in Q1 and during the annual press conference. We put really an extra focus on our cost work. Just to complement here, yes, R&D spend is significant, I really want to underline that in all our brands, clearly here also including, because you asked about Scania, we see the positive effects from the cost work to offset here partially the R&D spend that we do for a very good reason. You have to see that in a way together. Let me just add maybe one component, which is FX effects. You know that for quite a long time we had tailwinds from FX effects, then this turned last year and also at the beginning of this year into headwinds. We have seen slight tailwind again. FX effects can also play a role in the one or other direction. What I really want to outline is, we put clear focus on cost work in the entire TRATON GROUP. Scania is doing a super good job here, and we see the positive effects reflected also in the margin. Great. Thank you. My second one is on the cost inflation. You said a low triple-digit million EUR annual amount growth before Michael. Has that changed? Is the impact now higher? If you could try and help us with when you will reach a full run rate or a full annual effect, whether that's going to be Q4 or also into the H1 of 2027. Thank you very much. My understanding is you are relating the question to the input cost effect from the Iran war. No, I can confirm what I said already in Q1. We still anticipate or calculate with the low triple-digit million EUR effect. Maybe I can complement and say that we saw the first effects now already in Q2. That was only a double-digit million EUR effect, clearly below EUR 50 million. There is then more to come in the H2 of the year. There was what I was into also during the presentation, where I said, once we calculated at the beginning of the year, expectation for the H1 and H2 of the year, then this Iran war effect with the higher input costs, or also to some extent, higher energy costs, this doesn't play a big role. I would also reiterate what I said in the Q1 call, that's potentially a low double-digit million EUR impact. We see that this will have an impact in the H2 of the year. Nevertheless, as we were into, we clearly have the ambition still to deliver a better H2 than the H1, despite these input costs from the Iran war and despite the pull-forward effect of the tariff-related effects. Thank you. Okay. Thanks, Klas. Next question come from José at JP Morgan. José. Thank you. A bit more of a medium-term question. When we think about International and the longer-term targets towards high single-digit margins, double-digit margins, can you comment on the path towards this margin recovery? A little bit around market share, pro portfolio, and utilization of the new facility in San Antonio will be great. Then question two, can you comment on how much capacity does Scania have in China, and how you want to utilize this capacity? Because obviously, it's definitely more than the 10,000 units I think you were mentioning. How do we think about one, two-year term of fulfilling the total license production capacity you have in China? Thank you. Thanks. Michael, do you want to take the margin recovery question and then Christian, China? Yeah. Let me start there in the U.S. with International and the sales you were aiming a little bit for the midterm perspective here. I understood that you had basically three topics, market share, portfolio utilization of the production facilities. Also the long-term target or the midterm target, what we announced at our capital market stand in October 2024. With regards to our market share, I can underline and continue what we said before. We have seen historic market share of roughly 25% that dropped to roughly 10%. International then regained market share. We were at a level of 15% now for quite some time. A slight drop here at the beginning of the year. Ambition is clearly to catch up in the H2 of the year, and then let's see if we manage to slightly grow market share. You know our philosophy, we will not Let's call it in brackets, buy market share. We rather develop our business slowly but sustainable, but we have certainly not given up on the target to gain market share slowly but steadily. Since you asked for the midterm perspective, yes, super clear answer. We want to gain market share. Of course, you have to have a basis for this. The basis is, of course, on the one-hand side, our S13 engine, where we see really high customer satisfaction and a penetration rate that is, in the meantime, significantly higher than our old captive engine. That's one basis. I believe that we indicated that we are also looking into, let's call it a cab update, since the cab that we are having right now, even though we developed a little bit in there, is quite old. There is something to do in the upcoming years, we should have a good basis coming from the product side to further increase market share, and this is our ambition. With regards to the utilization of the production facilities, that is clearly on a good level. I recall it correctly, since 2022, we have the San Antonio plant up and running, we invested in the United States, not only with the new facility in San Antonio, we also produced the S13 engine in our Huntsville plant in Alabama. We invested substantially in the United States and created jobs there. We have a good utilization rate in San Antonio. Considering the overall situation, we are also considering establishing a second shift there in San Antonio. There is a clear path forward. When it comes to the margin target, I have, of course, to make the comment that when we announced this target, we had no idea about the tariff situation. It goes without saying that this is, of course, then midterm significant challenge to reach the target. At this point in time, for a good reason, we have not taken it away. That is still the ambition. You might recall that when it comes to the brand targets, we always said that they are not linked to a specific anchor year. That does not mean that we aim to achieve that in 2029, like the group target that is clearly linked to 2029, and this is also a top-of-the-cycle target. Let's see how things evolve. Our ambition is clearly midterm, that was your question, increase the market share, and also increase the margin substantially, moving towards the double-digit RS area. If I may add, this is, of course, a very comprehensive strategy, which is building on, you mentioned the cab, Michael, we're gradually introducing TRATON Modular System, which means two things. It means that we're improving product performance, which can be translated into market shares, but also into bigger, better pricing. It's also, which is more important long-term, building a portfolio of captive components where we can benefit the service market. We're working very focused with a lot of effort to build up the portfolio already based on the Common Base Engine and the gearbox, but with more components to follow to capture that service market business, which is so much worth in the U.S. Again, we will have the choice between increasing market shares faster, but then we will also have the option to increase pricing. I think midterm, we should definitely see a good success coming out of International. If I follow on with the China question for Scania. I mentioned the 10,000 this year, but if we look based on Klas question to when we start to really make money from this investment, we probably need to be up at least towards or beyond the half capacity utilization. The license is for 50,000. Let's say that we need to be somewhere 25, 30 to really make good money. The split that you asked for would be approximately half of that volume NEXT ERA, the China for China product. The other half would be Scania products, where of approximately half would be for China, and the other half would be for the Southeast Asian markets, including the Pacific and partly Middle East. That's how we're planning. Super. Thank you. Okay. Let's turn to Hemal Bhundia from UBS. Wait, I need to put you live. Okay. Hemal? Hello? Let's take Nicolai first. Maybe Hemal comes back on the line. Nicolai Kempf from Deutsche Bank. Hi. Morning. Can you hear me? Yes. Great. Yeah, it's Nicolai from Deutsche. Well done for a good quarter. Two questions from my side as well. First one, you've mentioned the commercial measures at MAN that you will put in place, so raising prices. Do you expect to do the same for Scania, just to offset high input costs and giving that Scania lots of different market share? Do you think that's enough market power to absorb that? Second one, appreciating that you narrowed a guidance for profitability in the upper half, but this has not been the case for free cash flow. Can you just highlight some reasons why free cash flow was not narrowed in the upper half? Thank you. Yeah. Again, I think first Christian, commercial measures, and then Michael for cash flow. Oh, Christian? Oh, thank you. Now you can hear me, right? Yes. Okay. Thanks, Nicolai. Yeah, we obviously have a strategy at Scania to always be the price leader, which we typically are successful with in all our main regions. That means that we try to stay ahead of the pack, which means that we have already performed two price increases this year, one in the beginning of the year and one in May. That more than well has offset the higher input costs so far. Actually, we have broadened our gross margins, which is a very good proof point that we're doing exactly the right thing. Now the question is, has that come at an expense of lower market share? Looking to Brazil, I would say the answer is clearly yes. Looking to Europe, I'm not sure. Why am I not sure in Europe? Well, because we have also been quite careful to increase production capacity. We have taken that in small steps in order not to end up with under absorption. The strong market has taken us a little bit by surprise. We thought after the announcement or after the war, rather, war starting in Iran, we thought that the market would soften, and this has not been the case, luckily. Hence, we have not been able to deliver really the volumes that order intake would have provided. I think that explains the minor market share loss in Europe. In Latin America, it has been really hard to keep up pricing. We have new entrants coming in from China. We have a rather tough market climate with high interest rates, we have persistently kept up our price level, knowing that we have a lot of value to offer through a superior product, and we will not give up on that position. We have indeed seen, in both Argentina and Brazil, the two biggest markets, that we are regaining market share in the last couple of months. I'm hopeful that we're going to see that trend continue. Last word, let's remember, we're not aiming to have a particularly high market share in Europe with Scania. We think that having MAN as the sister brand in the group, we should not exceed the 18%. We should stay in the 16%-18% range and rather grow MAN as the mid-priced value brand in the group to cover a maximum part of the European market. Good. I stop there. I think I covered it. Otherwise, let me know, Nicolai, I hand over to Michael for the cash flow guidance. Thanks. Thanks for the question, Nikolai. Before maybe I come to the guidance, let me just have a look at the net cash flow situation. As we said in Q1, we had this slow start into the year, with a net cash flow negative - EUR 250 million. When we look at Q2, we already see quite a substantial improvement to - EUR 18 million, nevertheless. Combined, we're at a level of almost -EUR 270 million net cash. We have quite a race ahead of us to bring the cash in. We are, of course, confident to do that in the H2 of the year, like we did the last years. This is the typical pattern. Nevertheless, our guidance range is between EUR 900 million and EUR 1.7 billion, there is a way to go. Of course, part of the net cash flow situation in the Q2 was linked to the buildup of inventories, translating then into working capital. It goes without saying, thanks to the good order intake momentum, we had to build inventories. A little bit the question mark is, of course, what will we do in Q4? This is, of course, linked to the question, will the good order intake momentum continue in the entire H2 of the year? Let's see what exactly happens then in Q4. I'd say, coming back to your question, we have to bring substantial cash in in the H2. We are confident to do that with regards to our guidance range. There is one thing that I was into also during the Q&A session, which is our R&D spending. Here, this plays a role, of course. As I said, R&D will continue to be on a high run rate and will weigh more on the cash flow than on the profit, because we capitalize also here a substantial amount. We will not have the effect in the P&L, but we will have the cash-out effect. Maybe one last comment, just for the sake of completeness to mention it, as I was into, We're still in negotiations with the U.S. administration, we don't know and we cannot say yet if there are cash refunds coming from the tariffs that we have paid. The timing here remains uncertain, this is why we have not calculated that in, this could be a potential if the cash refunds are coming then in the H2. We're confident with the guidance range, that we left that unchanged to a good extent, linked to the R&D situation with the capitalization as I was in touch. Got it. Thank you. Thank you, Michael. It seems that we have lost Hemal, but there's still Shaqeal from Morgan Stanley, and then we have two questions from the media. Shaqeal, please go ahead. Good morning. Shaqeal from Morgan Stanley. Clearly orders in North America have been strong for some time, and we'll see deliveries pick up in the H2. We now have people talking about a multi-year upcycle, but unlike previous cycles, the freight volumes haven't materially improved. Christian, does this concern you at all, and are you seeing any changed customer behavior, given things are slightly different than usual? Okay, thanks, Shaqeal. Yeah. Yes, you're right. Yes, it slightly worries me, even if I don't worry easily. Of course, the underlying economy in the U.S. is, I think, slightly worrying. It's running at double speed, right? The economy that is important for us is the movement of people and goods, and that's not where the U.S. is doing particularly well right now. What we see, and as you rightly point out, the recovery now is, it is replacement, but it's also an effect of lacking Mexican drivers. A lot of smaller companies going into Chapter 11 bankruptcy or just stopping business, because the transport volumes are not increasing as the GDP growth would indicate. Is this going to change, with even more tariffs and with other ways to try to stimulate the Made in the U.S.? Let see how that develops. So far, one would've loved to see what we start to see in Europe, that the transport demand is coming back and the volumes go up rather than just supply and meeting demand on a lower level, and then replacement need creating demand for us. I think in the end of the day, it is about real GDP growth in areas such as construction, consumption, industry, defense, because that's what's going to really move the needle. You ask if it's changing customer behavior. We see a professionalization, if you could call it. We see that the bigger fleets are more active than the retail customers. The ones who are better in planning, are doing more of the order placement. That in itself is not a bad thing. We have a more structural market to meet. How this plays out long term, of course, I have no crystal ball, that's a few comments. I hope that's helpful. Thank you very much. Thank you, Shaqeal. We have received Hemal's questions in written form. Again, U.S. questions. He is asking Christian, "I heard you say that 2026 production for North America is booked out, and you're starting to discuss 2027 orders. If so, I'm just curious on what you can tell us on customer engine preferences based on recent conversations, and how you're thinking about pricing for 2027 orders. You mentioned that you have the youngest platform in the space. Would it be fair to say the step up in terms of cost from producing your S13 engine to an EPA 2027 compliant engine would be relatively low?" That's the question from Hemal, from UBS. Thanks, Hemal. On the first one, I cannot really answer you. It is true that we have placed the orders for 2026 already, and we are holding back a little bit on 2027. Again, as I said on the previous question or from one of your competitors, we are confident that we will have a good proposal. On the CBE one, yes, it is the youngest or freshest engine platform generation in the world of heavy trucks, at least currently. I of course do not know what our competitors might have up their sleeves. With that, it is reasonable to believe that the additional cost that we have to put onto that engine is competitive. There, of course, I do not know where our competitors stand, and that will show when deliveries start during next year. I know that we have brilliant engineers on the engine side. I know that we were well ahead of time scheduled with the EPA 2027 solution. I know it is a very flexible solution that can be used in the U.S., but also for upcoming Euro 7 in Europe and China 7 in China. I have a lot of confidence that we will have a very competitive product going into U.S. next year, January. I stop there. Okay. Thank you. We covered Hemal as well. We have one question from the media left now. It is Simon Eibach from Reuters. Yes. Hello. Can you hear me? Yes. My first question would be with regards to the German home market of TRATON. You mentioned earlier that their defense spending is one of the things that would move the needle. How come that the German fiscal stimulus is not translating into higher orders there? My second question would be with regards to South America. Is the uptick in orders there purely driven by the government financing program in Brazil, or are there other forces at play as well? Thanks. Okay. I guess I start, Ursula. Yes. We are, in a way, as puzzled as you are why the German market, where we had great expectations after the announcements of the two packages from the German government, that should have led us into a strong market. Both defense and infrastructure are typically driving transport demands. I cannot answer exactly why this is not yet coming through. I prefer to see this as something we have, in a way, in the bank. It will eventually have to translate into more transport demand. What I hear from the colleagues in the commercial side in Germany is that the money is not trickling through, the procurement processes, public procurement is slow, that there is already some overcapacity in the industry. I also keep hearing that some of the money is not going to what it was supposed to, which would, of course, be a very bad thing for us. Let's hope that's not true. There are many reasons, but I think it's more a question of time. This will boost the transport demand in Germany. There is absolutely no doubt in my mind. We start, actually, to see the very first signs coming, but they are not enough to grow the market. In South America, one has to make the difference between Brazil and the rest. Why? Because Brazil is significantly bigger than all of the other markets, actually bigger than all of them together if we exclude Mexico. What is driving the good order intake is a good development in most of the smaller markets, where there is really good market momentum supported by, for instance, investment into mining industry and into agriculture industry. That's not really true for Mexico. It's not true for Brazil. Mexico, particularly because of the tariff problem with the U.S., whereas Brazil is more homemade problems with a very high interest rate where central bank is above 14%, which translates into costs for our financing for our customers in and above 20%, which is really high and which makes them hesitate to take an investment decision. With that in mind, we did discuss with the government, all of us in the industry, that they needed to do something in the interest rate. They have done so before because Brazil is notoriously with too high interest rates. They moved, they introduced this Move Program, number 1 and number 2. That is, from my point of view, in Brazil, the only reason why we see a stronger order intake, which also now, as we said, starts to translate into strong deliveries and stronger registrations. With the very high interest rates prevailing, let's see after the elections in the fall what happens, it is difficult to see a really strong market in Brazil, despite underlying, for instance, agricultural harvest, et cetera, being good. We should see a stronger market. Our customers hesitate as long as the interest rates are on this level. The proof point that it is the interest rate that is the problem, you can really see in the speed which these two programs have been consumed. The second one, which contained almost EUR 3.5 billion, we thought would last into September, or maybe even October. We are mid-July, and it's already sold out. That shows that there's an appetite for trucks, there's a need for trucks. At interest rates without subsidies, it is very hard to invest. I stop there. Michael, anything to add on the last question here from Simon? No, I think perfectly covered. Nothing to add. Thank you. Okay. Thank you. With that, there are no more questions in the queue. We are concluding our event. Thank you for joining us today. For any more detailed questions, please contact the investor relations team. For those who haven't been on holiday yet, have a nice summer holiday. Enjoy the rest of the day, and goodbye. Goodbye. Thank you. Thanks. Bye-bye.