Ladies and gentlemen, welcome to the VINCORION Q1 2026 Quarterly Analyst Call. I am Matilde, the call's call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Anneke Hoijtink. Please go ahead, madam.
Thank you. Good morning and welcome to VINCORION's Q1 2026 results presentation, our first earnings call as a listed company. My name is Anneke Hoijtink. I will guide you through today's session. With me today are CEO Kajetan von Mentzingen and CFO Dieter Holst. Kajetan will begin with a strategy and business update, followed by Dieter with a financial overview and closing remarks by Kajetan. We will open the line for questions. Before we begin, I would like to refer to the forward-looking statements disclaimer on slide two of the presentation, which we encourage you to read. I will now hand over to the CEO, Kajetan. Please, the floor is yours.
Thank you very much, Anneke, and a very warm welcome to all of you in the call. It's a very exciting time for us. I think it's needless to say that the first quarterly reporting after a successful IPO is an exciting time for a company. This time it's especially exciting because we're coming with very good news. Our first quarter was a very successful first quarter, and that makes us proud because this first quarter was managed by the team in parallel to going public. Going public was a lot of work for the entire organization, and so we're especially proud that despite this additional workload, we have a record start in the year. What does it mean?
Once again, we have been able to raise our backlog, we have raised our backlog by more than EUR 100 million, and we're now at EUR 1.2 billion, which gives us a very good long-term visibility. With regards to revenues, we announced it already last week, we grew by more than 40%, which is the highest revenue we have ever achieved in a first quarter in the history of our company. The EBIT is as expected and as guided at 18%. Our site development plans are progressing, and our roadmaps are on track. We are on track to deliver a successful 2026 because we laid a very good foundation in the first quarter. Let's have a look at our segments. Just for the ones who haven't heard it, we have three segments: Vehicle Systems, Power Systems, and Aviation.
In Vehicle Systems, we develop and deliver energy systems and weapon stabilization for armed vehicles. In Power Systems, we make power generators and energy storage modules for ground-based air defense, as well as Tactical P ower Systems for field camps. In Aviation, we develop and deliver rescue hoists and heating systems for the commercial aviation. When you're looking at the growth rate for the various segments, you can see that the strongest growth we saw in Vehicle Systems. T his is related to the ramp-up that we experienced in these systems, so 61% year-on-year growth for Vehicle Systems, 43% year-on-year growth for Power Systems. As we already anticipated and expected, we're currently flat in Aviation. That is a pause of our growth. That's not a stop of our growth, so we're expecting the growth to pick up next year again. What are the operational highlights?
The operational highlights is that we could really increase the output of our factories. We increased our production capacity. At the same time, we had also engineering highlights, which we are very proud of. For Tactical Power Systems, we finalized the development of our Tactical P ower Systems. We have frozen the design, and we have the approval by the customer that it is as requested, and we're now ready to start series production, starting while we are talking with the pre-series. For rescue hoists, we are extending our network. We have signed an agreement with an organization in Norway that will help us develop the rescue hoist in order to fit it on other helicopter types, as well as strengthening our maintenance network. It's a Norway-based company which will help us set up a worldwide network of maintenance, repair, and overhaul services.
What is it we did in our operations in order to achieve our ramp-up? We talked about the site development plans we have in place for all the different sites in Wedel, Altenstadt and Essen. These site development plans are well on track. We are deploying our roadmaps as planned. We continued our industrialization, we are going from a pure workshop organization and structure. We have continued to deploy additional flexible pulse lines in order to enable a steeper ramp-up, so that's working. We have simplified our supply chain, trying to minimize logistical flows and the movement of parts. Of course, we have increased additional partners and onboarded additional partners in order to put the growth on various shoulders, not just on ours, and to help us multiply even faster.
If you ask me, I think VINCORION is still a very compelling investment opportunity. Last quarter, we have again proven that we can, and we are outperforming a structural supercycle in the defense industry. We're growing faster with very high profitability. We're doing so because we have our products embedded in the winning platforms and the leading platforms, which are at the heart of the European rearmament right now. On these platforms, we are still a sole-source supplier, fully integrated and developed when the platforms were developed. With all the growth that we are delivering and with all the revenues that we generated in the first quarter of 2026, we are building decades of aftermarket business. We are financially solid, and with the order book of EUR 1.2 billion, we still have a tremendous revenue visibility, so we can continue preparing our growth.
Last but not least, our team. I told you there is a new pride in our organization. You can imagine how this new pride was excelled with the IPO and the celebration in Frankfurt. Our team is fueled with lots of energy, ready to continue to deliver the growth. What that means in detail, I'm going to ask my colleague Dieter to explain to you, and he's going to give you an overview of the financial figures. Thank you very much.
Yeah, thanks a lot, Kajetan. Also, good morning and welcome from my side. I will now share with you our strong Q1 financials and our great start into the year 2026. Let me put first that we are very well on track to deliver on our guidance. I start with the financial snapshot. The fixed order backlog, as part of our total order backlog, is with EUR 560 million at record high level, 80% above previous year's Q1 and another 18%+ versus end of last year. The order intake in Q1 added another EUR 149 million to the fixed order backlog. Q1 delivered outstanding revenues of EUR 69 million and a growth of 40% versus Q1 2025, demonstrating that the ramp-up is well underway. Adjusted Q1 EBIT with EUR 12 million is by 29% above previous year's Q1.
Margin of 18% is very solid and well above full year 2025. The year-on-year margin variance reflects, for example, the building up of structures for capital market requirements and intense R&D activities in Q1. The adjusted Q1 net income came in at nearly EUR 7 million, delivering about 10% margin, with an effective tax rate in Q1 at 29%. Our free cash flow is impacted by tax payments, including catch-up for years 2024 and 2025, inventory build-up to supply growth ahead, increasing levels of receivables from higher revenues, and IPO-related one-offs. As you know, our record total order backlog, that stands at EUR 1.2 billion as of Q1 2026, contributes strongly to our growing revenues and profits. The total backlog represents 4.5x sales of the last 12 months. For the original equipment isolated, the ratio is even at 8x LTM sales.
Starting with the already presented fixed order backlog of EUR 560 million, the total order backlog further comprises of frame order backlog of EUR 460 million, predominantly for a major aerospace customer, soft order backlog of EUR 251 million based on public information from OEMs and/or governments. The total order backlog provides a strong multi-year revenue visibility and, with that, a perfect base for the ramp-up planning and execution. Looking at backlog and revenues. For total order backlog, we show the development Q1 versus end of last year 2025. Since Q1 2025, data are not available in the structure that comprises of fixed frame soft backlog. In that comparison with December 2025, our total order backlog has increased up to EUR 1.2 billion by 10% or EUR 100 million. As mentioned, fixed order backlog Q1 versus Q1 2025 grew by 80%.
The Q1 revenues increased by 40% or EUR 20 million compared to Q1 2025, fueled by original equipment demand in Vehicles and Power Systems. The growth proves our ability to successfully implement on-the-plant ramp-up. The total gross profit and EBIT is shown here. We delivered 39% growth in adjusted gross profit, equivalent to + EUR 6 million year-on-year, driven by higher revenues. Gross margin was stable at 29%, consistent with Q1 last year. We will look at the segment mix in more detail on the next page. Adjusted EBIT increased by 30% or + EUR 2 million year-on-year. The EBIT margin was very solid at 18%, though moderately below last year's Q1. While gross margin was stable at 29%, the structure required to operate as a public company is now fully in place with related admin costs. In addition, Q1 reflected higher R&D activity, representing a phasing effect.
Overall, fundamentals are intact, and our performance is fully on track to support our full-year EBIT guidance. Looking at revenue and gross profit by segment, you see both have delivered strong growth. As already mentioned, our gross profit margin remains stable compared to Q1 2025. We see strong revenue growth momentum from original equipment, increase in Vehicle and Power Systems. Aviation is flat due to FX effects, but growing by 6% on constant currency basis. There are different GP margin dynamics across the segments. While Aviation and Vehicle Systems are going up, driven by product mix, Power Systems are weaker due to lower aftermarket share in Q1; however, catching up in months to come. Let me now walk you through the key elements of our free cash flow performance.
Free cash flow in Q1 2026 was -EUR 7 million, primarily driven by EUR 6 million of tax payments, mainly a catch-up effect for 2024 and 2025, and EUR 1 million of IPO-related consultancy costs. Excluding these effects, FCF was close to break even, broadly in line with Q1 2025 and reflecting typical seasonal cash trajectory. Let me point out two more important elements of our cash performance. First, changes in net working capital with a swing that is driven by the business phasing. Q1 2025 benefited from unusual high levels of cash collection. This was due to a significant revenue backloading towards year-end 2024, which we have actively been managing to avoid for year-end 2025. Q1 2026 had a much more regular cash collection, as the revenues towards year-end 2025 were more balanced.
The change in net working capital in Q1 is very much driven by increased inventories to deliver on the growth ahead, as well as increased receivables due to the significant revenue growth. Second point is CapEx and R&D capitalization. We are executing on the required investments for capacity expansion to enable the ramp-up and continue the capitalization of development costs, predominantly for the electrical rescue hoist. As a key takeaway, and to wrap this up, our free cash flow guidance remains fully intact and unchanged. Back to Kajetan.
Thank you very much, Dieter. Let's have a look at our strategy. Well, there is not so much new I can tell you about our strategy because our strategy remains the same. We are executing our strategy as we explained it during the various meetings in the course of the IPO. Currently, what we see is we're growing with the market. We're not growing because of additional products. That is a growth that will come on top later with the deployment of our Tactical Power Systems and the ramp-up of our Tactical Power Systems and the ramp-up of the electrical rescue hoist. We are preparing the ground in order to come with new innovative business models for the aftermarket, where we are expecting first results coming very soon.
Of course, we are preparing the longer-term future with positioning ourselves, for example, for the next helicopter platform for the electrical rescue hoist or for the bridge technology. Our strategy remains the same. We're just executing it right now, and that is exactly in line with the growth that we have shown to you. What does that mean for our guidance? As mentioned, it's the same. We're expecting this year revenues in the area of EUR 280 million-EUR 320 million with an adjusted EBIT margin of 18%-19%. Midterm, we're expecting, based on the 2026 figures, an average growth rate of 15% and an adjusted EBIT margin of 20%. Our margin remains the same. We have a very good start into this year. What are the three things I would like you to remember from this call?
First of all, we had the best start ever into this year. Second, we have increased the visibility towards the future with a EUR 1.2 billion order book. We have proven in the first quarter that our ramp-up activities are working, and we are going to continue driving them. Thank you very much.
Thank you, Kajetan and Dieter, for your presentation. I would now like to hand over to the operator again, who can open the floor for questions. Operator, back to you.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. You'll hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only headsets while asking a question. In the interest of time, please limit yourself to two questions. Anyone who has a question may press star and one at this time. The first question comes from the line of Lasse Stüben from Berenberg. Please go ahead.
Hi, good morning. The first question would be on the revenue phasing for 2026. You obviously had a very good start to the year in the first quarter. I know you mentioned during the IPO process that you're looking to kind of smooth the revenue generation through the year. If you can just generally help us on how we should think about the phasing of revenues and then also in terms of the phasing of EBIT, if there's anything we should be aware of, given you had some of the one-offs in Q1 and whether we should expect margins to sort of grind up through the year. Then the second question would be if there's anything you can share in terms of kind of recent developments on order intake or any conversations you're having with customers, just in the context of what's happening in Iran and elsewhere.
Thank you.
Let me start, maybe with regards to the revenues, and Dieter is then going to go into the margin and EBIT share. Yes, you're right. Our target is to have a smoother distribution of revenues throughout the year. Our industry is very well known for having this hockey stick, and that's something that is extremely difficult from an operational perspective. That's why we want to get rid of this hockey stick as much as possible. We see a smooth increase of our revenues quarter by quarter. Please don't take the 40% and multiply and assume that we're going to make the 40% now, additionally every quarter. That's not our plan. We stick to our guidance. We don't want to now raise expectations. It's according to our plan, balancing it out.
Of course, we're going to see a slight increase throughout the quarters, but not to that extent. Yeah. Second, Iran and the Middle East crisis. Well, first of all, what I was talking about, pride of our teams. I think the Middle East crisis shows really the importance of our systems in the security structure of the world because it was the Patriot systems that protected many countries, like, for example, Dubai. If it wasn't for these Patriot systems, Dubai would look different today. It gives us purpose. It doesn't give us immediate revenues. What we see is that we are limited to the OEM growth here. As long as Raytheon is not significantly increasing the production line for their radars, we will probably not see a significant increase of new systems being shipped there.
We would be ready, but we do not want to speculate here. I cannot give you any precise numbers. For me, really, if we look at the Middle East crisis, I'm very happy that we can see how our systems are protecting lives. It gives us purpose, but not immediate revenues or other entries.
Okay. Lasse, concerning the margins, we expect margins going up with growing revenue levels in the course of the year. I feel comfortable.
Very good. Thank you very much.
The next question comes from the line of Christoph Blieffert from BNP Paribas. Please go ahead.
Good morning, and thank you for taking my question. The German government is apparently about to hike the earlier planned budget in 2027 by a high single-digit EUR billion amount. I was just wondering to what extent you might benefit here. Secondly, it would be helpful if you could give us the FX- adjusted revenue growth rate for Aviation, please. Thank you.
The second part of the question was the FX of the revenue growth of the Aviation segment, right?
Yeah, correct. I think I've mentioned it. It's 6% if you restate for the currency effect, the underlying growth.
We now have a question.
To keep it flat, the revenues are flat, and the output was 6% higher.
Yes, 6% higher revenues if you restate for the currency effect.
Exactly. With regards to the changes in the budget of the German government, at the moment, we are only putting in our soft order book the systems where we already have an approval, or we already have an official statement. For all the other changes, we are ready, but we do not want to speculate what would come to our systems. That really depends on what this money is spent for, which main platforms are going to board with this money. If it's going into the platforms that we are serving, then we will benefit from it. I cannot speculate on it. It's too early.
Thanks a lot.
We now have a question from the line of Sven Sauer from Kepler Cheuvreux. Please go ahead.
Yes, hello. Good morning. Thanks also from my side for taking the questions. The first one is a bit on the follow-up on the smoothing of the EBIT. I was wondering if you could give us a bit of a heads-up on the quarter-by-quarter basis from 2025, because when we look at the Q1 2025 EBIT margin, it was at 19.4%, but the full year 2025 margin was at 16.5%. Maybe you could provide some color on which quarter in 2025 actually led to the full- year margin falling so much. The second question will follow soon. Yeah.
Yeah. I can tell you what was somehow a kind of burden on the margin in 2025. I think I explained it also in our analyst conference. We have had some startup losses into the SEA project. We have made a conscious decision to invest into the SEA project, and that was a burden on our margin overall. This was mainly booked in the second half year.
Okay. Thanks for that. On the second question, there was news in early March about this European EDF-funded SENTINEL project, European Fuel Energy Program. I was wondering if you could clarify if this was already included in your IPO guidance or in your TPS roadmap that you provided, and if this project generates any R&D or revenue in 2026 and 2027, and how it relates to the Bundeswehr TPS program.
I would say the revenues we are generating with SENTINEL are really minor. Yes, it might have been included, but it would be really difficult to find, let's say it like this. The revenues coming from this project are really minor. For us, it's important from a more strategic perspective. We are working together with various industry partners from Europe on the next generation of energy storage for military purposes. We are taking a leading role here because it's not just that we're delivering subsystems into this project, but we are also acting as a system integrator and as a German industrial lead. For us, that's the strategic positioning in defining the technology of the future jointly with our European partners. It's not yet a revenue stream. The revenue stream is our Tactical Power Systems where we are that is the technology of today.
With the SENTINEL project, we want to develop the technology of the future.
Great. Thanks. I will go back in the queue.
The next question comes from the line of David Perry from JP Morgan. Please go ahead.
Yes. Hi, Kajetan von Mentzingen and Dieter. Congrats on the IPO and the good start to the year. A couple of things. Orders were very strong in Q1. Can you just give a bit of color on what some of the big orders were and what is the outlook or target, if you have one, for the rest of the year on orders? Could you also just comment on Aviation? In the IPO, you talked about the non-core activities. Just what actually is the plan there? Are there any timeframe or anything we should be looking out for? I'll start with those two.
The order entry that we saw in the first quarter is mainly in Vehicle Systems, the Howitzer, the Puma. It's mainly those two. We had some really big contracts that were signed. They were part of the soft order backlog when we talked last time, and they have now just materialized, mainly Vehicle Systems.
Do you have a target for the year?
We are not guiding on a target on order entry. Let me explain you why. At the moment, with an order book of EUR 1.2 billion, my first priority is to deliver, not to get more orders. If there is a contract coming in November or in March, at the moment, that's not what keeps me awake at night. We need to deliver on our ramp-up, and that's our operational priority. We're not guiding on order entry. With regards to the radome business, at the moment, there is nothing we can share concretely. Yes, it's not in our absolute core competence, but we have no news that we could share with you at this stage.
Okay. Thank you.
Thank you.
We have a follow-up question from the line of Sven Sauer from Kepler Cheuvreux. Please go ahead.
Yeah, thanks. I have read an article on I'm not sure how to say it in English on the German draft, the GKV-Beitragssatzstabilisierungsgesetz , which aims to stabilize the statutory health insurance contributions. The rescue services were included here. Yeah, in this article, it said that the air rescue operators argue that this would not cover their real cost inflation. I'm wondering if you see this as a risk that, yeah, these operators would not have budgets for new helicopter equipment, such as the ERH or the rescue hoists.
At the moment, we don't see that this is a risk. Well, first of all, we already have firm orders in place. We have very clear guidance from our customers on how much they're expecting for the years to come. I don't see a major risk. The helicopter market is also not a pure German market. It's an international market where we have really a very resilient market view.
Okay. Thanks. One organizational question just for us in the future, investor relations contact, is that going to be Anneke in the future, or?
We are currently in a selection process because we want to insource the investor relations in the VINCORION.
All right. Thank you very much.
Thank you.
Once again, to ask a question, please press star one on your telephone. We have a follow-up question from the line of Lasse Stüben from Berenberg. Please go ahead.
Hi. Just one final question on the ERH. Is there anything sort of any update we need to be aware of here? Are we still on track for kind of a Q4 launch for that product? Thank you.
Yeah, of course. As I mentioned already before, you cannot really say much before you have flown. We are planning to fly during summer. So far, we are not aware of any major difficulties that would block a very first delivery at the end of this year.
Okay. Thank you.
We have a follow-up question from the line of David Perry from JP Morgan. Please go ahead.
Yes. Hi. Thank you. I was sticking to the two questions from before. It seems to be time. Can you comment a little bit on the aftermarket trends in the first quarter, what growth you saw? What percent of sales were aftermarket? My last one would be, are you able to sort of tighten up a little your thoughts on free cash flow for this year? I know it's going to be very low because of some specific issues around provisions and capitalized R&D. I think the only thing you said in February was it wouldn't be negative. I just wonder if you're able to give any more guidance on that.
Yeah. Let me start with the cash flow. I would see the cash flow at break-even, perhaps positive on a lower number, on a one-digit number. I see clearly now signs that we could reach, as I said, positive numbers. If you're looking at aftermarket, yes, I think I've also mentioned it. This share in Q1 was lower. Nevertheless, we stick also what we have explained in the analyst presentations. There will be a kind of pause for the high share of aftermarket sales because we are filling the pipeline with original equipment. It will come back delayed. We will come again to a share of approximately 50% of our aftermarket. For the next years, in midterm, it will go down.
Nevertheless, we will not see any damage on our margin by that because the new product launches and the OEM will be launched right from the beginning with attractive margins. Okay. Thank you.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Anneke Hoijtink for any closing remarks.
Thank you very much. Thank you also all for joining this call. If there are no further questions, thank you for your participation. Hereby, I close this call. Goodbye.