Ladies and gentlemen, welcome to Wacker Neuson Group Q3 2026 results. The conference will be recorded. At this time, all participants have been placed on a listen-only mode. The floor will be opened for questions following the presentation. Let me now turn the floor over to your host, Peer Schlinkmann, Head of Investor Relations.
Good afternoon, everybody, and welcome to the nine months 2026 earnings call of the Wacker Neuson Group. My name is Peer Schlinkmann, Head of Investor Relations and Corporate Communications. Thank you for joining today on the occasion of the release of our nine months 2026 results. As usual, we will first start with the operational and financial results of the first nine months 2026 and give additional insights on the recent developments, as well as our outlook for the last six weeks of 2026. Following this, we are happy to answer your questions in a Q&A session. If you are not able to follow today's call via the webcast, the presentation slides are also available for download at wackerneuson.com/investor-relations. Please note that the entire call, including the Q&A session, will be recorded, and the replay will be made available on our corporate website by the end of the day.
Now, I would like to hand over to our executives, Karl Tragl and Reinhard Frisch, who will lead you through this call.
Thank you, Peer. Good morning, everyone, and thank you for joining us today. As this is my first earnings call as CFO of Wacker Neuson Group, I would like to briefly introduce myself. I have been with Wacker Neuson Group for more than 20 years and have held a variety of finance leadership roles during that time. Since September 1st, I have been serving as Chief Financial Officer and member of the Executive Board of Wacker Neuson SE. While I am new to the capital market side of the business, I know the company, our operations, and our industry very well from my previous responsibilities across the group. I am very much looking forward to engaging with all of you and to building a close dialogue with our investors and analysts in the years ahead. With that, let me hand over to Karl for the business update.
Thank you, Reinhard. Dear all, a warm welcome from my side too, and thanks again for joining today's conference call. I am Karl Tragl, CEO of the Wacker Neuson Group. After a strong first half of the year, business developed essentially as expected. We saw stronger order intake in September in some regions, following the seasonal slowdown in July and August. For the first nine months, group revenue increased by almost 14% year-over-year to EUR 1.85 billion, and EBIT reached EUR 150 million, corresponding to an EBIT margin of 8.1%, an improvement of more than two percentage points compared to the previous year. In the third quarter, revenue grew by 7% to EUR 590 million, while the EBIT margin improved slightly to 7.7% compared to previous year. Profitability in the quarter was influenced by several positive and negative one-off effects.
One-off costs related to ongoing optimization measures across the group, including organizational sales structure consolidation, rental fleet reduction to increase capacity utilization, as well as personnel adjustments. On the positive side, we benefited from tariff-related refunds in the U.S. Overall, these one-off effects essentially balanced each other in the third quarter. Therefore, the EBIT margin in total reflects the underlying operational development in quarter three. Once again, we would like to highlight our continued progress in working capital management. Despite the higher business volume, our net working capital ratio improved further to 28.2% and remained below our strategic target of 30%. Furthermore, our free cash flow remained strong and reached EUR 127 million after nine months, a solid three-digit million euro level as we had expected. Overall, the first nine months demonstrate our operational improvement versus previous year and our financial discipline in a still mixed market environment.
With that, I would like to hand over again to you, Reinhard, for a closer look at the regional, the business segments, and the financial development.
Thank you, Karl. Let us first take a look at our regional performance. Europe remained our largest region and delivered revenue growth of more than 13% year-over-year. Demand grew significantly in markets such as France, the U.K., Sweden, the Netherlands, Spain, and Czech Republic, while demand in the DACH region remained more subdued. The Americas continued to perform very well, with revenue increasing by almost 17%. The U.S., Canada, and Mexico all contributed to this development. Demand remained particularly strong for compaction and worksite equipment products. Asia-Pacific remained the weakest region and continued to be affected by subdued demand across several markets. Let us now turn to our business segments. Looking at our business segments, all major product areas contributed to growth. Compact equipment remained our largest business segment and delivered growth of around 18% year-over-year.
Demand for excavators, wheel loaders, telehandlers, and dumpers remained healthy, particularly across Europe. Light Equipment grew by roughly 12%. The main growth drivers were compaction equipment such as plates and rollers, and worksite equipment, including generators, light towers, especially in North America. Services increased by around 4% compared to the previous year and continued to benefit from stable demand for maintenance and repair services. Let's now move to our net working capital development. Working capital remains one of our key priorities. At the end of September, our net working capital ratio stood at 28.2%, below our strategic target of 30% once again. What is particularly encouraging is that we achieved this improvement while continuing to grow the business significantly year- over- year. Inventories remained broadly stable compared to the end of June and were nearly unchanged since the beginning of the year.
This development reflects the continued focus on inventory management and our improved forecasting of sales and operations planning across the organization. We are well on track to meet our strategic net working capital target of below 30%. Let us now take a look at our financial position. Our balance sheet remains very solid. Net financial debt declined to EUR 130 million at the end of September, while our leverage ratio improved further to only 0.4 times EBITDA. At the same time, our equity ratio increased to 64% and continues to provide a very strong financial foundation. The first nine months of 2026 were characterized by comparatively low level. During the third quarter of 2026, we invested EUR 40.1 million. Nevertheless, we expect to significantly increase our investment level in the fourth quarter while still maintaining a three-digit million EUR free cash flow level at the year end.
After nine months of 2026, our free cash flow amounted to EUR 127 million. This reflects the continued improvements in our working capital management. Overall, our balance sheet provides significant financial flexibility as we continue to execute our strategic priorities. With that, let me hand back to Karl.
Thanks again, Reinhard. Innovation remains an important building block of our long-term growth strategy. This autumn, we are proud to introduce the new EW135 wheeled mobile excavator, which is further strengthening our position in the margin-attractive 13-15 ton segment. This machine combines high lifting capacity, excellent stability, and greater operator comfort, and supports the increasing digitization of construction sites through MiC 4.0 attachment connectivity. We also launched the new WL750p and WL950p wheel loaders. The P stands for performance and reflects our focus on productivity and efficiency. Both machines offer significantly improved hydraulic performance, travel speed up to 40 km per hour, and advanced assistance systems designed to support operators and improve productivity further on the job site. Together, these product launches further strengthen our premium offering and reinforce our focus on efficiency and customer value. Let me now turn to our outlook for 2026.
While order activity improved slightly during September, the overall market environment remains mixed. In construction equipment, the latest CECE survey points to a somewhat more cautious assessment of current business conditions and market expectations. At the same time, more than half of the participating companies still expect revenue growth in 2026. In agricultural machinery, overall sentiment weakened further, with the CEMA index declining again in October. At the same time, livestock equipment remained the only segment showing positive feedback. While this segment is not a one-on-one comparison with our business, it's probably the closest external indicator for customer groups that rely on material handling equipment in daily farm operations, which are core markets for our brands, Kramer and Weidemann. All in all, therefore, we have refined our guidance for the current financial year. We continue to expect revenue in the range of EUR 2.3 billion-EUR 2.4 billion.
For the EBIT margin, we now expect a range of 7.0%-7.5%, compared to the previous range of 7.0%-8.0%. While this narrows the upper end of the range, it translates into a midpoint adjustment of 25 basis points and reflects both the softer market environment during the third quarter and the impact of the mentioned one-off effects. For investment, we now expect approximately EUR 70 million, while our target for net working capital remains strongly below 30%. Before moving to the Q&A, we want to provide an update on our Strategy 2030 and planned actions over the next years. As announced earlier this year, we have used the past months to update and further refine our Strategy 2030 framework. The reasons are straightforward.
Following two stagnating market years in 2024 and 2025, we wanted to reassess the path towards our long-term ambitions by preserving the core strategic direction of our group. With regards to revenue, we already communicated at the beginning of this year that we now see a target level of approximately EUR 3.5 billion by 2030, rather than the previously communicated EUR 4 billion. Apart from this adjustment, our key financial ambitions remain unchanged, including an EBIT margin above 11% and a net working capital ratio below 30%. Most importantly, the strategy has once again been translated further into specific actions across our subsidiaries and our operating entities. Progress is monitored through clearly defined milestones and governance structures. As previously, we intend to provide you with a regular update on the progress going forward.
Our updated strategic levers can be split in six value drivers and four enablers that support the execution. This slide provides a detailed description of each lever and enabler. Therefore, I will focus on a high-level summary of the strategic framework. Levers one and two focus on strengthening our leading market position in light equipment and gaining further market share in compact equipment, particularly in Europe. These initiatives are supported by targeted group product innovation, next-generation electric drivetrain and battery solutions, as well as expanded modular product platforms. Lever three targets the expansion of higher-margin lifecycle revenues through services, spare part sales, and aftermarket activities, as well as digital solutions. Lever four focuses on accelerating growth in the Americas, supported by the continued expansion of our John Deere excavator partnership and our own route-to-market initiatives.
Lever five addresses growth opportunities in Asia and selected international markets through localized engineering, cost-efficient manufacturing, and expanded sales partnerships. Finally, lever six focuses on cost operations and footprint optimization. We continue to see significant opportunities through productivity improvements, procurement initiatives, and manufacturing optimization, and the increased utilization of our best-cost locations. All six value drivers have been translated into numerous entity-level action plans. On the right-hand side of the slide, the four enablers provide a foundation for successfully delivering these value drivers. They focus on accelerating innovation, reducing time to market, scaling digitization and automation across the value chain, advancing our sustainability roadmap, and strengthening our position as a best company to work for by attracting, developing, and retaining top talent globally. How do our six value levers translate into our financial ambitions for 2030?
Starting with revenue, we expect to grow from the guided revenue for 2026 of approximately EUR 2.35 billion at midpoint to around EUR 3.5 billion by 2030, corresponding to a revenue compound growth rate of around 10%. Levers one and two are expected to contribute approximately EUR 400 million-EUR 500 million of additional revenue through further market share gains in Light Equipment and compact equipment, with EMEA as the key contributor, as already mentioned. Lever three focuses on increasing lifecycle revenues through services, aftermarket, and digital activities, and is expected to contribute a further EUR 200 million-EUR 300 million. Levers four and five are expected to contribute an additional EUR 400 million-EUR 500 million to our top line, in particular supported by the continued expansion of our John Deere partnership, further growth in the Americas, and selected opportunities in Asia Pacific.
Turning to profitability, we target an EBIT margin of more than 11% by 2030, representing an improvement of around four percentage points compared to the midpoint of our current 2026 guidance. The expected margin expansion will be driven by a balanced contribution from product mix and pricing improvements, increased utilization and the sustainable benefits of the structural cost reduction measures under lever six. Let me summarize the key takeaways of today's presentation. First, after a strong first half of the year, business developed largely as expected. Following a weak summer, we recorded stronger order intake in September in some regions. Second, one-off costs related to cost optimization measures and the mixed end market environment resulted in a refinement of our EBIT margin guidance, while our revenue outlook remains unchanged.
Third, disciplined working capital management continued to support a strong financial position and free cash flow at a solid three-digit million euro level. Fourth, with the update of Strategy 2030, we have translated our long-term ambitions into specific action plans that are already being implemented and closely monitored across the Group. Ladies and gentlemen, thank you for your continued trust and for joining us today. Before we move to the Q&A session, I would like to thank all our employees across the Wacker Neuson Group for their dedication and their hard work. Their commitment remains the key driver behind our operational performance and long-term value creation. No one is perfect, but a team can be. This team spirit continues to be one of the greatest strengths of our company. Thank you for listening.
Operator, we are now ready to start the Q&A session, and we are very much looking forward to answering your questions.
Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press star, nine, and pound key on your telephone keypad. If you would like to revoke your question, press star, three, and pound key. You can also use the dial-in function in the webcast and raise your hand if you would like to ask a question by phone. I repeat, to ask a question, please press star, nine, and pound key. The first question is from Stefan Augustin from MPCM. The floor is yours.
Yes, thank you. Taking the question. The first one is on, let us say, the implications for Q4. You stated the orders picked up in September, but the thing is this week, looking into October, do you have already, let us say, from your own sales still feedback on what happened in October? Last year, you kept up a bit the production to, let us say, have some inventories ready for pickup beginning in Q3. I would assume that at this point in time, you would rather reduce your production volumes. Is that-
Stefan, sorry to interrupt you. We hear you not very well. Could it be that you are on your cell phone and you do not have a very good connection?
That is possible.
Now it is much better.
I go out and now it is better?
That is already much better, yeah. It would be nice if you could repeat your question. Thank you very much.
Yes, sure. The first one is, do you have any feedback from your sales channels so far on what happened in October? Is it correct to assume that unlike last year, where you kept the production running in Q4, you will probably lower it this time, not to build up inventory for 2027 and the start? That would be the first two to start with, and then I have one on the Strategy 2030 planning.
Stefan, Karl speaking here. First of all, the order intake structure in October is continued to be mixed. There are some regions which are performing pretty well, and there are some regions which are performing weaker. There is an unchanged picture, what we call a mixed market environment. I cannot say how we are going to start into the year, because with our two to three months of lead time, which we have at the moment, November is very decisive for how we get started in the first quarter. The decision how we are going to move into the first quarter will happen in December, and then we can see whether we can retain where we are, whether we have to lower it, or we might have to increase it in some areas which are performing very well.
All right. Thank you very much, Karl, for the answer. The second is then on the Strategy 2030 target. I got this, as I had not seen the figures somewhere else, I just repeat them. For the first two levers, we have EUR 300 million-EUR 400 million more sales for the aftermarket, EUR 200 million-EUR 300 million, and for North America and Asia growth, it is EUR 400 million-EUR 500 million. Is that correct?
Yeah. Let me just see. The first one and two are amounting to EUR 400 million-EUR 500 million, and the other one is EUR 200 million and EUR 300 million, and then EUR 400 million-EUR 500 million.
All right. Thank you very much for the clarification. Can you elaborate a little bit when you expect or do you think this is all gradual into 2030, or do you see some of those, let's say, lines coming a bit quicker and some a bit later? Is that possible to give us more detail here on the program?
Yeah, I will try to do my best to explain the numbers which we have, and promise next time we will have a chart on that. As far as your question is it a gradual development or is it, I don't know, a little bit slower in the one phase or stronger in the other phase? I mean, that's very difficult to answer. I'm now in machine building industry for more than 30 years, and as you know, there are always years where a steep increase and there's years where a slower increase, and there is stagnation. Stagnation is behind us. That's something I'm very sure. We still have, as I explained in my presentation, that we have, like in agriculture, still some cautious statements.
On the other hand, we have our stable partnership with John Deere, which is positive, because there we now have introduced the three and the 4 ton in U.S., and I saw it personally a couple of weeks ago, looking very, very promising. Because we are substituting existing volume of the previous partner for John Deere, we will have a very steady or continuous growth on that part. Then we have this data center story, which is at the moment a very booming one. Then we have some weaker ones affected by the U.S.-Iran story and the Ukraine war. It was a long story for telling you, I don't know which phase now will be the gradual and which one will be the booming part.
What we have improved strongly, which I'm really proud of, is that our S&OP process, so the discussion between sales regions and production units is on a monthly basis. It's a very thorough one. We have shortened our lead times internally in the factories, so we can react. We have a very good communication now with our supply chain, so we can react as soon as it's going to pick up strongly, and we are preparing for a gradual improvement the coming year.
All right. Thank you very much.
Moment, there seems to be no more questions. I repeat, if you would like to ask a question, please press star, nine, and pound key on your telephone keypad. You could also use the dial-in function in the webcast and raise your hand. I wait a moment to see if anyone raises any questions. Stefan Augustin is back on the line with a follow-up question. Please go ahead. Floor is yours.
Yes, okay. I have two small ones still. On the rental fleet, you said you reduced the amount to have a better capacity load here. So at this point in time, you are already where you want to be, or should we imply a bit further cuts on Q4? When I look into the service business, is then, let's say, the rental part in the service one of the weaker elements, that is for the top line development? Lastly, on your implied, let's say, one-off volumes for Q4, could you outline a little bit what kind of scope you are thinking of?
Reinhard Frisch speaking. First of all, with respect to the rental fleet, for sure, we want to bring the rental fleet level down also in Q4, to optimize the rental fleet utilization, so to speak. You are right. Besides the rental business, we also have a service business, but it is included in one number. Let's say that the rental business contributed revenue of approximately EUR 165 million in the first nine months of 2026. This is percentage-wise 9% of the total revenue. So the development compared to last year is more or less a flat one.
All right. Thank you for that clarification. The one-offs, Q4.
Thank you very much.
Can you repeat that question, Stefan Augustin? The Q4 was especially on the rental fleet side, or was it in total what we still expected in terms of one-offs in Q4?
The remaining one-offs from your optimization measures that still come in Q4.
Yeah. Stefan, what I want to say to that is that's one of the reasons why we have taken the 25 basis points down on the midpoint, because we still have some one-offs on the negative side. We only have a very small number on tariff paybacks, but we will have further topics on the prepare ourselves for the next year. We have another slice on the rental fleet, which we are planning. We are also planning further adjustments on the personnel side, and we are working on our sales regional structure, on our sales companies, and further optimization there, which you also will have to book in the fourth quarter. One of that is we want to deal with Russia and prepare there for next year as well. So, that's what we are planning. Okay?
Mm-hmm. Do you have a ballpark number for, let's say, everything there, excluding rental fleet? Because that one is a bit harder to judge, I guess.
Yeah. Honestly, we have explained on a pretty detailed level now what we're doing. I don't think that we have, Peer, if I can you I want to communicate this.
We talk about a lower single-digit million number.
All right. Good. Thank you very much.
Thank you, Peer.
There seems to be no further questions. I repeat again, star, nine, and pound key if you would like to ask a question. I wait a moment. There seems to be no further questions.
Okay. Thank you, Reinhard and Karl, for answering the questions today. This brings us to the end of our conference call. As usual, if you have any further questions, please do not hesitate to contact me or the entire investor relations team via phone or email. If you would like to meet in person, please let us know or check our website and financial calendar for all relevant roadshow dates in the coming months. Thank you again for joining our call. We wish all of you a pleasant rest of the year and a well Christmas season. Have a great day. Bye.
All the best. Bye-bye.
Bye-bye.