Welcome to Kalmar's Pre-Silent Call. My name is Carina Geber-Teir. With me hosting the call, I have Sakari Ahdekivi, our CFO. As you probably noticed, we are recording this call, please keep that in mind. With these few words on a sunny day from Helsinki, I'll hand over to Sakari.
Thank you, Carina, welcome to the call also from my side, and thanks for taking the time on this nice summer day. Now I'm not able to change the slide, we keep going to the agenda. All right, the agenda for the day. We, as usual, will do the recap of where we left off after the first quarter. We will cover the orders booked and announced during the second quarter. We'll talk about the latest on the market indicators that we follow, we'll finish off with a Q&A. Let's cover what happened in Q1. Basically, what we had was, first of all, steady sales growth. We had some headwinds in our services business, as you might remember. The overall stable demand came in the middle of well-known geopolitical instability, but nevertheless was pretty strong at EUR 451 million.
That was compared to a very strong comparison period in the previous year of EUR 480 million. Slightly less than in the first quarter of the previous year, but still on a good level. We also talked about, before the first quarter, about demand being similar to the previous six months, if you take the average of Q3 and Q4 last year and you compare that with Q1, you end up pretty much on that number. The sales on the back of earlier strong orders grew 5% in reported numbers and 10% in constant currency. Pretty good growth in sales to EUR 420 million. Our eco portfolio sales was in a good level. However, our fully electric order intake was soft in Q1. Overall, Kalmar profitability improved despite the operational shortfalls that we experienced in our services business during the quarter.
Our Driving Excellence continued to show good results, execution there continued as planned. Finally, we had a good operating cash flow. We had a strong cash flow in Q4, even with that, we continued to have a strong cash flow also in the first quarter. Our balance sheet obviously remained strong. Still a little bit more detail on the orders. Sequentially on a stable level, 2% down in constant currencies, which to me is more or less a flat result. If we look at the comparison, as I said, it was a strong comparison period, both on the equipment services side. Still, historically, if you look at the last eight quarters shown in the graph, this was a pretty strong quarter overall.
Moving on to the next slide. The order intake increased, especially in the Americas and APAC, whereas in Europe, Middle East, and Africa, we saw quite a big decrease in percentage points. However, that was due to some sizable orders in the comparison period in the previous year. Americas grew both as a result of gradual recovery of the distribution end market as well as other areas. In APAC, it was Oceania which was the reason for the good orders development. All right. If we look at sales in constant currencies grew 10%. We had growth both on the equipment side as well as services. However, it was more pronounced on the equipment side at 7%. The services share of sales was at 35%, pretty similar to what we have seen before. Sales by segment and market area.
By market area, we had growth in all areas, the same applies to the segments, even though that's not shown on the slide. In EMEA, 7%, Americas, 2%, and APAC, 9%. Pretty steady development across the board. We said that we had mixed performance in Q1, why did we say that? Obviously, we were happy with the profitability development on our equipment segment business, 12.6%, as well as also on the orders received, more or less. However, when we look at the profitability of the services segment, 16% obviously is not where we would like to be, we experienced some headwinds there with demand for our parts business, especially in North America, and that was the main reason for that. There were a few other reasons, tariffs and FX, to mention a couple of the others, but the main thrust was around the demand in parts.
Finally, we reiterated our guidance for 2026, we expect a comparable operating profit margin to be above 12.5% for the full year 2026. We have had some orders releases related to orders booked during the second quarter. However, it's not a super long list. You see them here on the slide. Maybe the thing to point out here, and what's nice to see, is that two of the three orders shown here were related to electric equipment. six Kalmar Electric Empty Container Handlers in Brazil, in Latin America, which is a very competed market, of course. It was nice to see a win in that region and in the electric equipment side.
The other electric one was the two Kalmar Electric reach stacker in the Netherlands. To the market indicators. Here we can say that this picture is relatively stable regardless of what indicator you're looking at. This is now updated with the May numbers, for example, for the container throughput. Global GDP, very slight dip in 2026, then quite steady for the years to come, the change from previous, very slightly downwards but not significant. When it comes to the container throughput here, the 2026 number is very slightly up, but again, this doesn't bear a lot of significance. The number for 2027 is slightly down as well, but still showing 3% growth. Global manufacturing, very similar to previous, 3%. The global retail, slightly down for 2026 and then level with previous for 2027 and 2028.
Maybe a tad lower than before, but still not something that really moves the needle. For the demand outlook, this is as per our Q1 results publication in May. We expect total market demand for the next six months to remain at similar level as in the previous quarters, and we continue to reiterate that view. However, of course, trade tensions and increased geopolitical instability could affect our markets and customer demand during this time. Of course, the other thing to always remember is that the large orders are a bit lumpy, and they may or may not fall into a certain quarter, so that also then, of course, causes some fluctuation in our orders received.
As you know, we have announced changes in the Kalmar leadership team, the new team as of the 1st of October, is shown here on the slide. Katri Hokkanen will be joining us as Chief Financial Officer in my place on the 1st of October. I will continue as CFO until that day and then remain with Kalmar until the end of the year. We also have a new President of Services, and that is Tamara de Groot , and she is also joining us. She is actually joining us slightly earlier already at beginning of September. The other familiar faces remain as before. We have a hand up. I don't know, Panu, if there's.
Panu has his hand up, we can start the Q&A, I think immediately. There was only the short note on that. Please keep in mind our Capital Markets Day on the 2nd of November. We will come back with the formal invitation quite soon during the summer. Keep that note in your calendars. With that said, I would now open up for the Q&A, Panu, since you were the first one, please go ahead.
Thank you. I have two questions. Firstly, on the U.S. spare parts situation, can you update us on how the demand has evolved during the second quarter, what about your own price hikes to compensate for the increased costs?
Yeah, of course. Thanks, Panu, for the question. Of course, we continue to adjust our prices to mitigate the tariff impact, part of usual normal business, and of course, the aim is to fully compensate. It always depends a little bit on the market conditions and other things, to what extent that is successful, but that's the aim. On the demand situation, I think the same applies pretty much to the spare parts in the U.S. as overall. When it comes to our services business and how we see that, I think we don't expect an overnight miracle there, but we do expect to improve the services performance gradually.
Okay, thanks. On the equipment business, as you said, the order announcements, number of them has been maybe lower than in some of the past quarters. Is this an indication of the equipment orders for Q2, or how have the unannounced orders developed during the quarter?
Yeah, I'll have to fall short of giving you exact guidance on that. It's always important to remember that we're not always able to announce all the orders due to customers' wishes. Of course, there's also often a time lag that we may be announcing orders then later than during the quarter, even if they fall in the quarter. It's not a direct indication, but I guess you can read something into it.
Okay. Thank you.
Okay. Any further questions? Mikael, please go ahead.
Yep. Hi there. Thanks for taking the time. A couple of questions at this point. First, coming back to the U.S. spare parts situations, maybe you could talk a bit more about what's really driving that. Where is the weakness specifically? Is this a distributor destocking thing? Is this something else, some specific customer segments? Maybe just to talk a bit more about that. Then I would also like to ask about Europe. You showed the kind of weak year-over-year orders in the quarter, but that was mainly due to timing of larger orders, right? I guess if you could talk a bit about how you see the demand evolving in Europe across service, across equipment, across the various countries.
Yep, sure. Thanks, Mikael, for the questions. When it comes to the U.S. parts, the best indicator for the demand in the U.S. is the Cass Freight Index. That has remained, I'm mainly talking now historically about Q1, if you look at that's pretty flat, that's usually a good indicator for our demand as well. That's the main thing going on there. I don't think it's a destocking thing as such. It's an overall market activity thing. Then when it comes to Europe, I would say that demand situation has remained similar. It's the same comment as for overall com.
Okay. Thank you very much.
Welcome.
Any further questions? Tom, your turn next.
Tom, you're on mute.
Muted.
We still don't hear you, Tom.
Sure. Try once more. Unfortunately not. Okay. Tom has some issues with his microphone. Anybody else while he's sorting out his techs? Okay. Mikael, is it a new hand from you?
Yep. It is. Let's fill in a couple of here while Tom sorts his technical issues out there. Firstly, I wanted to ask on the overall service business growth outlook and the capture rates and everything you try to do there to grow that business. Maybe you could talk a bit about that. How is that evolving now? Have you improved your spare part capture rates? Have you been able to, through self-help, keep that business growing, for example, in Europe? Despite the weakness in the U.S., maybe you could talk a bit about how the things are evolving in the service business overall.
I think, Mikael, you're getting into quite a lot of detail here, which I'm sure we'll have to come back to then when we actually report the quarter. I would come back to what I said earlier about the European demand that also applies to service, that we don't see any big change there compared to the past.
Of course, here it's maybe good to remind you all that since spare parts is such a big part of the services overall, and U.S. a very important market for us. The impact, if the U.S. market, and when the U.S. market has not been performing completely well, then that has an impact on the total services.
When it comes to capture rate and those things, of course, we don't even have the numbers for the full quarter yet. We'll have to come back to you on that.
Could you give some numbers on, Carina, what you said about the spare part? How big share of the total is that? How big share is U.S.?
Yeah, we haven't given detailed information on that. If you look at spare parts alone, it's more than half of the services. When you add maintenance agreements that include spare parts, that then brings an additional layer on top of that. That's why both the maintenance, including the spare parts and the spare parts alone are in there. That's where you get the lion part of the services.
The U.S. is the largest market for spare parts for us.
Okay.
The recent capture rate that we have disclosed is 31%.
That's the most recent figure.
Yeah.
That is for what period?
That was the full year 2025. 31%.
Okay. A question on the tariff landscape. What are the latest developments there from your point of view? Has anything changed there?
Carina, do you want to take that?
Yeah. If I'll take that. I think the latest changes on the tariff landscape are the Section 232 aluminum and steel tariffs. There have been changes. If you look overall, slightly positive for us. The overall picture on that is still somewhat fluid because it changes also quite often. One week there is one news and then the other one. The good thing with the tariff, how they have been evolving lately, is that the work of admin burden has clearly reduced now when you have an overall tariff rate. We think that it's moving in the right direction.
Coming to the complete outcome of when some of the reimbursement and so forth is coming into play, it's too early to say. A slight overall positive impact.
Okay. Just finally on the Middle East situation. I think last time you said that you actually saw this triggering some ordering in some other ports and it was not all negative. How do you see that situation impacting your demand currently?
I would say that the impact directly from that is either neutral or not very big in any case, in any direction overall. There was, of course, in Q1, as we described, some shift of demand away from the Gulf, towards the other ports in the region.
Okay, good. Thank you very much.
Thank you.
Tom, are you still online and have you solved your technical issues? No reply from Tom. Anybody else, or should we call it about half an hour into the hour? Thank you all for joining. I hope to see you all online when we report our Q2, which is the 22nd of July. Have a very nice and hopefully sunny summer until then. Thank you all.
Thank you. See you in July. Bye.
Bye.