Ladies and gentlemen, welcome to the Q3 2026 report. I am Sergen, the Chorus 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 zero . The conference must not be recorded, broadcast, or transcribed. At this time, it is my pleasure to hand over to Felix Zander, Head of Investor Relations. Please go ahead.
Thank you very much for the introduction. Good afternoon, ladies and gentlemen. Herewith, I would like to welcome you on behalf of Vincorion to our investor and analyst call today. Our CEO, Kajetan von Mentzingen, and our CFO, Dieter Holst, will present our latest developments, strategy, and financials to you. Afterwards, there will be a Q&A session. I would like to ask you to limit yourself up to three questions. Thank you. Now, I am handing over to you, Kajetan. The floor is yours. Thank you.
Thank you very much, Felix, and a very warm welcome to everybody on this meeting. Today, we have good news. We delivered a record Q3 result. From January to September 2026, we almost generated the same revenues as in the entire year 2025, EUR 238 million end of September versus EUR 240 million during the full last year. This is why we confirm today the increased guidance for 2026 for both revenues and the adjusted EBIT margin. In the first nine months, our revenue increased by more than 40% compared to the same period in 2025. This is due to a more balanced phasing in revenues throughout the year. In the same period, our fixed order backlog continued to grow. Since the beginning of this year, it increased by more than EUR 200 million. Our growth is efficient.
We can see that our very attractive EBIT margin is shown, and we are also increasing our guidance on this. We can also see this in an improved working capital ratio. Of course, we did not stop with the financials. Also in our ESG roadmap, we are making progress. I am proud to say that in our last ESG audit, we ranked amongst the top 10% of our peer group. The growth dynamics are especially visible in Vehicle Systems and Power Systems. Especially in Vehicle Systems, we see our soft order backlog converting into fixed orders, and we see our industrialization roadmaps delivering the expected results. A year-over-year growth of 59% in Vehicle Systems and 47% in Power Systems speaks for itself. This proves again that we are deeply embedded in the most demanded platforms of today and that our industrialization efforts pay off.
In Aviation, we were also able to grow.
However, we faced FX headwinds, especially in commercial aviation. Let's now come to our new kids on the block, the Tactical Power Systems and the Electrical Rescue Hoist. For the Tactical Power Systems, we have now a design approval for power generation modules for all the three different power classes. We are expecting first revenues for the pre-series this year. Let's come to the Electrical Rescue Hoist. I'm proud to say that on the 24th of September, we delivered the first flight hoist to Airbus. However, during a vibration test, we had a technical finding which may require a design loop. The good news is that we have identified the root cause that still needs to be confirmed, and once the mitigation is clear, we will provide you an update. This may have an impact on schedule. However, the business case remains intact.
In the past, we very often stated that we will outperform the market, and this is what we are proving quarter by quarter. Two reasons. First, we are in the most demanded platforms for European rearmament. Second, we are at the heart of modern warfare. We generate, we manage, and we store electrical power in vehicles and in the battlefield. All modern warfare trends, be it unmanned of the battlefield or the increase of communication, have one thing in common. They need more power. They need more energy. This is why we are in a pole position to continue outperforming the market as we did in the past, also in the years to come, because we power our customers' mission. Now, Dieter, I will hand over to you in order to go through the financials.
Thank you very much, Kajetan. Yeah, good afternoon, everyone, and thank you for joining us. Let me now take you through our financial performance for the January to September period. You will see, our strong financial performance continues, reflecting the sustained momentum of our business. Our financial snapshot demonstrates the continued growth transformation of our business. The slide is structured with the Q3 key metrics on the left and the nine-month year-to-date on the right. Following two outstanding quarters, Q3 order intake was strong with EUR 130 million, bringing our year-to-date to a record EUR 460 million order intake. Our pipeline remains filled for further growth in revenue. Q3 revenue reached a remarkable EUR 87 million, up by 40% year- on- year, bringing our year-to-date revenue to EUR 238 million, an increase of 41% +.
Maintaining this level of revenue growth, particularly in Q3, which is typically a softer quarter, is for us a significant achievement. This reflects our continued efforts for a more balanced distribution of revenue across the quarters. Adjusted Q3 EBIT reached EUR 18 million, up 38% compared with Q3 2025, bringing our year-to-date EBIT to EUR 46 million, or +35% year- on- year. Our strong adjusted EBIT margin of 20.5% in Q3 has brought the year-to-date EBIT margin to 19.5%. The year-on-year margin variance of 1 percentage point reflects higher OpEx, predominantly from costs related to being a listed company, but also supporting future growth in sales and R&D. The adjusted Q3 net income came in at EUR 12 million, bringing the year-to-date to EUR 29 million and a margin of 12.2%. Moving on to free cash flow. We generated a slightly positive rounded EUR 1 million in Q3.
Year-to-date FCF, however, remains negative at -EUR 5.5 million. Compared to the prior year period, year-to-date, FCF is down by -EUR 12 million. We will take a more detailed look at our cash flow performance later during the call. Let us now turn to our order backlog. Our total order backlog at the end of Q3 2026 stood at EUR 1.2 billion. Compared with half-year one 2026, this represents a slight decline of EUR 26 million. At the same time, we expanded our fixed order backlog by EUR 42 million from EUR 615 million at half-year one to EUR 657 million now at the end of Q3. Our soft order backlog changed by -EUR 75 million versus half-year one, which is mainly due to the signing of contracts related to Puma second batch during Q3. This moved then to the fixed order backlog.
Our frame order backlog, which mainly reflects long-term agreements in aviation, is slightly up by EUR 7 million versus half-year one. The total backlog represents 3.9 x sales of the last 12 months. This order backlog provides multi-year revenue visibility, enabling us to plan our capacity ramp-up and resource allocation well ahead. Let us now turn to order entry and revenues. Our Q3 order entry amounted to EUR 130 million, bringing our year-to-date total to EUR 460 million, representing 95% growth year-over-year. Customer demand remains very robust, and we are successfully converting market opportunities into firm orders. As you may remember from previous calls, our key priority is securing high-quality contracts rather than focusing on the timing of order entry recognition.
Building on the strong revenue performance in half-year one, we sustained the momentum in Q3, with year-on-year revenue growth of 40% and delivering 41% growth for the year-to-date. The 41%, or +EUR 70 million increase in year-to-date revenues until September versus prior year, was primarily driven by strong original equipment deliveries in our Vehicle Systems and Power Systems segments. This performance again demonstrates our ability to successfully execute on the planned production, ramp- up, and meeting strong customer demand. With EUR 460 million in order intake and EUR 238 million in revenue, we delivered a book-to-bill ratio of 1.9x, underlining the continued strength of demand and our conversion into sales. With that, let me move from our top-line performance to our bottom-line results. For the first nine months, we increased our adjusted gross profit by EUR 20 million, or + 41% year-on-year, to EUR 70 million.
This represents the same growth rate as in revenues. The adjusted gross profit margin was 29.5%, nearly in line with the prior year level. Adjusted EBIT reached EUR 46 million, corresponding to an adjusted EBIT margin of 19.5%. The - 1 percentage points decline in adjusted EBIT margin year-on-year, despite stable gross profit margins, was driven by higher operating expenses. These reflect additional corporate costs for being a listed company, as well as increased resources for the sales and engineering functions to enable future growth. We delivered +EUR 12 million adjusted EBIT year-over-year, or + 35% growth. You may ask why we report a guidance of 18.5%-19.5% EBIT margin for the full year when nine months year-to-date stands at 19.5%. The reason is that we have backloaded OpEx in Q4, such as self-funded R&D and IT project costs.
Let me now provide some details on our segment performance. Our 41% year-over-year revenue growth in the first nine months was primarily driven by strong momentum in our defense platforms. Vehicle Systems grew by 59% and Power Systems by 47%, reflecting strong execution and continued demand for original equipment. The Vehicle segment saw strong demand for weapon stabilization systems, particularly for the Leopard 2 and Puma, while the Power Systems segment saw high deliveries for the PATRIOT air defense system. Aviation delivered 5% growth despite FX headwinds, with underlying growth of +9% at constant currency base. Turning to the chart on the right, adjusted gross profit grew 41% in the nine-month period, same level as revenues. Gross profit margin stood at 29.5%, nearly on last year's level.
Vehicle Systems achieved a gross profit margin of 30%, up 2 percentage points year- on- year, driven by favorable mix effects and operational efficiencies. Power Systems achieved a margin of 34%, in line with the prior year level. You may recall from our half-year one call that margins in the Power Systems were temporarily below the prior year due to phasing effects in the aftermarket business. This has been now caught up. In Aviation, the gross profit margin are at 19%. The year-on-year decline is driven by adverse FX effects, as already explained under revenues. We manage our segment profitability very closely and keep our costs under tight control for being competitive while safeguarding an attractive margin profile. Let us now turn to our cash flow performance. In the third quarter of 2026, we generated positive free cash flow of +EUR 1 million in round numbers.
However, our year-to-date FCF remains negative at -EUR 5 million. Our leverage improved to 1.75x from strong EBITDA. In half-year one, we were at 1.9x. I will now walk you through the key drivers of our year-to-date free cash flow. Our year-to-date free cash flow of -EUR 5 million is -EUR 12 million below the prior year period. Of this year-on-year variance, -EUR 8 million are related to tax payments reflecting catch-up payments for prior years, as well as the transition to regular tax prepayments. Let me highlight two other important aspects of our cash flow performance. First, we are making further progress on our net working capital to last 12 months sales ratio. It has improved from 48% in the first nine months period 2025 to 43% this year. Growth-driven increases in inventories and receivables were softened by significant advances.
In absolute terms, the change in net working capital amounted to -EUR 25 million year-to-date 2026, compared to -EUR 13 million in the prior year period. Looking at the quarterly development on the left-hand side, you will notice that we have recorded in Q3 2025 a positive net working capital change of EUR 2 million, compared to a -EUR 5 million in Q3 2026. The main reason for the EUR 7 million difference was the EUR 5 million higher inflow from advance payments in Q3 2025 compared to Q3 2026. Let me answer an obvious question before you are asking. We do expect net working capital changes to make a positive swing in Q4, bringing full-year free cash flow to a positive amount. Second, we are executing on the investment required to expand our capacities and deliver the ramp-up.
As well, we are continuing the capitalization of development costs for the Electrical Rescue Hoist. To wrap up on our cash flow performance, our full-year 2026 free cash flow expectation remains intact and unchanged. With that, let me move to our guidance update and my closing remarks. On revenue, we have raised our guidance range to EUR 323 million- EUR 333 million. Before, it was EUR 280 million-EUR 320 million on the basis of a very strong operational performance year-to-date and the outlook for Q4. On adjusted EBIT margin, we increased the guidance to a range of 18.5%-19.5%. Range before was 18%-19%. Now for my CFO's concluding remarks. Vincorion is delivering profitable growth. We have a strong order backlog providing good revenue visibility, and we have increased our 2026 guidance for revenues and profits and feel comfortable to fulfill.
With that, I hand the call back to Felix Zander to open up the line for your questions.
Thank you very much for your presentation, gentlemen. Now, operator, I'd like to hand over to you to open the floor for the Q&A. Thank you.
Ladies and gentlemen, we will now begin the question- and- answer session. Anyone wishes to ask a question may press star and one on your telephone. You will 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. Anyone who has a question, may queue up now. The first question comes from Lasse Stüben from Berenberg. Please go ahead.
Hi, good afternoon. The first question I have is around the order pipeline you are seeing. Can you talk in general what that pipeline looks like? I know you commented that you are focusing on profitable orders and not just timing, but I am just wondering, have you seen any changes in the pipeline in the past quarter or so? The second question is just on the OpEx run rate. Would you say that Q3 has now hit a normalized level of where you would expect OpEx to sit going forward? Or should we expect OpEx to tick up again in the fourth quarter, as I think you alluded to in your comments on the EBIT margin? Thank you.
Yeah, Lasse, thank you very much for this question. Let me start with the composition of our order backlog. What has changed? I told you soft order backlog changed by EUR 75 million. One major portion of that is that we have converted Puma EUR 78 million. That was very important. We have also +EUR 27 million generator for Boxer added. We have Meggitt, Eurofighter eliminated as within the soft order backlog. We have other soft order with Schakal, with additional Boxer, with additional Eurofighter, and so on. There is a lot changing within the composition. Overall, I would say that are normal changes, that are normal transformations, and so the general composition of our order backlog has not changed.
Maybe just to add on this, you know that our frame order book is mainly Airbus and aviation at the moment. We see a trend that we will see also frame orders more in future for the defense platforms with our defense customers. That might be something that is changing, because up until now, we have always just made contract by contract for project by project. We are heading towards stronger frame contract agreements with some clients that might be visible in not too long time.
Does that answer your question concerning the order backlog?
Yeah. It was more around the outlook for the order intake, just generally how you are seeing that develop in terms of future order intake pipeline for various Vehicle Systems or Power Systems in air defense.
Well, yeah, we are positive regarding the expectations for order entries also in the last quarter and at the beginning of next year. We are going to have solid order entry. I do not want to give you a number, Lasse, because we do not want to guide on order entry, because if something is coming in the last quarter this year or in the first quarter next year, it does not really make me worried. For me, the important thing is that the things are coming, and I see that there is still a lot of orders to be placed in order to secure us a solid order entry way above a book-to-bill ratio of 1.0x .
Understood. Makes sense.
Yeah.
Coming to your question concerning Q3 OpEx, whether this is a kind of normal level. I would say, since we have plans to grow this company further, and you have seen it also in our midterm guidance, I think we have not reached a normal yet. For sure, we are looking at the net sales ratios of our OpEx. For sure, we want to bring it further down. At the same time, we still have an effect that we, as I said, will grow this company. Sometimes you have to do also a kind of advance investments also within your structures. From that perspective, yes, we will increase efficiency, OpEx efficiency further. Nevertheless, I think we cannot say there is already a kind of normal for a quarterly OpEx level.
Okay. Thank you very much.
The next question comes from David Perry from JPMorgan. Please go ahead.
Hi, Kajetan, and Dieter. Hope you're both well. Three questions, please. First one, just very high level, since the IPO, I was just wondering if there are any changes in your view of the medium-term growth of the different segments. What I'm really leaning to here is, it seems like some experts think demand for Vehicle Systems may be a bit lower, whereas demand for Power Systems, air defense may be a bit stronger. You may agree or disagree, so just be interested to have your view. Second one, on the ERH, just wondered this delay, is there an extra cost? Is that material? Is that something we should put in our models? And then lastly, we've had a couple of calls from other defense companies the last few days where pricing seems to have been quite a big theme.
I just wondered if you're seeing any pricing, any change in the pricing discussions you're having with customers in defense. Thank you.
Thank you very much, David. Let's first start with changes in the medium growth for the different segments. I would say that the growth that we projected on the different segments was reasonable, and we had reasons to define it as such. That has not changed. I wouldn't make a change in our growth trajectory for the different segments since the IPO. We stick to it. Regarding pricing, yes, we have discussions with our clients because they're expecting price reduction. I mentioned before the topic of frame contracts. How does this work? In the end, we are currently negotiating frame contracts with our clients in order to fix the prices for the years to come. We have to somewhere share benefits of our industrialization improvements or our higher economies of scale that we can generate in our platforms, and that all goes together in the price discussion.
Our ambition is, of course, that we are not diluting our margins with these type of price discussions, but we have to somehow find the right balance. We will probably give you an update by the end of the year where you can see how that then materializes. Regarding the Electrical Rescue Hoist, the costs, we first need to have a full confirmation of the root cause. The root cause is identified, but you can only close this matter when you are able to reproduce your problem by simulating the root cause. As soon as we have that, we will be able to see what kind of impact that has on maybe recurring costs or non-recurring costs. At the moment, it's too early to say.
Is that baked into your current guidance, the higher guidance you gave a few weeks ago?
Yes. Yes, that's already included in the guidance.
Okay. Thank you very much.
Thank you.
The next question comes from Mira Wiegratz from Deutsche Bank. Please go ahead.
Hi. Thank you for taking my questions. I have two, if I may. First one on Q4 OpEx and margin. Can you quantify the backloaded OpEx in Q4? How much of it is a one-off, and how much is a new run rate we should also carry into 2027? With aftermarket phasing now normalized, is the Q3 Power Systems gross margin of about 35% sustainable? Then on cash beyond Q4, you expect positive 2026 free cash flow. Roughly how large is the Q4 working capital swing? For 2027, how should we think about cash conversion given that the tax catch-up payments drop out and the advance payments were lower this year as well?
Yeah. Concerning OpEx for Q4, I am not sure whether we can really distinguish what is running cost and what is project cost. We are a company in transformation, so there is not a certain pattern that we can say, okay, within that backload, this is underlying, this is somehow our running cost, and this is project cost. We see, and that is also what we are doing every year, we are looking this time of the year at our year to go. We look not only at our top line year to go, but also we look at our expenses. We find out where we stand in our projects, and that is the reason why we say we have this backload in our cost. There is a certain swing, clearly, that we can have at the end of the year.
It depends very much on the projects we are realizing in our R&D, in our IT. There we are, as you know, doing very targeted investments. From that perspective, I cannot tell you what the underlying.
The next question comes from Sven Sauer from Kepler Cheuvreux. Please go ahead.
Yes, hello. Thank you for taking my questions. I have two. The first one is on the full-year guidance. The last time we spoke was on mid-August, on the Q2 call, and then there you already not raised it, but said you are coming in the upper- end of the guidance. Then, I guess, six or seven weeks later, you raised the guidance again. I was just wondering if you could identify what triggered this guidance range, what you saw in October, what you did not see in mid-August. The second question is a follow-up on the ERH. Understand that you cannot quantify the costs, but do you still expect the first deliveries in 2027?
Thank you very much for your question. What happened since mid-August until October, I think it was the performance where we still saw a lot of risks in the summer break. It is holiday period, holiday season, and of course, we aimed for this high result, but there was still a lot of risk in it. Over the period of summer, we were able to mitigate the delivery risks and to catch the opportunities. With the strong performance over the summer period, by the end of September, we were certain that we would not be hit in these months.
It was just the better performance and the closure over summer that then led us to the fact that we said, okay, now the last quarter, we can really pull through and feel confident that we are not having too many risks in the pipeline to not achieve this increased guidance which we are seeing now. That was the simple reason. I wanted to see first the August results and the September results, because historically, these months are always weaker, and they were super strong this year. Regarding the Electrical Rescue Hoist , I do not want to give up 2027. That remains, of course, our ambition. But as I said already several times before, this is aviation certification at a very high level of safety. Our ambition remains 2027, but let us first confirm the root cause, and then we can confirm this again.
Great. Thank you.
I would be shell-shocked if we do not do it. That is for sure. No, we will. We have to do it.
As a reminder, if you wish to register for a question, please press star and one on your telephone. There are no more questions at this time. I would now like to turn the conference back over to Felix Zander for any closing remarks.
Thank you very much. Thank you for your question and discussion. Now, I say goodbye and hand over to Kajetan again to his final remarks. Thank you.
Thank you very much, Felix. Thank you very much for participating in this call. If I could only wish that you remember three things after this call, I want you to remember that Vincorion delivers. We have made very high promises during the IPO, during our last quarterly calls, and we deliver on our calls. We have increased our guidance. We have overperformed throughout the quarters, so we do deliver. Our industrialization efforts and what we were planning pay off. At the same time, we are really diversified. You see at the various platforms that we're serving that we are in the heart of European rearmament, and that is giving us a lot of assurance that we can outperform the market.
Last but not least, we see it throughout all the exhibitions, all the customer talks, that we are at the heart of modern warfare, that energy is needed everywhere we are looking. There are huge market opportunities still lying ahead of us. This is not the end of the game. Thank you very much, and I'm looking forward to talking to you very soon again, hopefully again with such good news.
Ladies and gentlemen, the conference is now over, and you may now disconnect your lines. Goodbye.