Good afternoon, ladies and gentlemen. I hope you can hear me. A very warm welcome to this video conference on the interim results 2026, and thank you very much for your interest and for joining. My name is Matthias Kümmerle . I am responsible for the group as CEO since April this year, and with me is Manuela, our CFO, whom I think you all know since quite a number of years. We'll run through this presentation as follows. I will start and give you an overview about the group's development during the last six months and Manuela will go a bit more into the details and show you the financial situation, and I will then conclude with an outlook for the rest of the year. After that, of course, we will have time for some Q&A.
Before we start, a couple of organizational aspects. The interim report, the press release, and today's presentation are all available on our website since early this morning thenn I would like to highlight that this video conference will be recorded, and this video will also be available on our website after this meeting. Finally, we have put you all on mute, and we kindly ask you to keep it that way until the Q&A sessions at the end. Let's try to share the screen. This is on me. Perfect. Let me start and share a couple of impressions with you from my first three months in my new role.
I've had the chance to visit quite a number of sites and had a lot of discussions with our employees the last couple of months, and I can say I'm really impressed about our teams out there in the units, the great expertise, the passion, and the customer focus. I'm also super excited to see the innovation pipeline that we have. On the picture here, you see our latest product, our compact sweeper, fully electric and equipped with the capability for full autonomous sweeping in the future. Even though those units are operating in different applications and industries, what we all have in common is that we are making very complex technology easy for customers to apply, and that we are applying automation wherever possible, and that we are increasing productivity for our customers while maximizing energy efficiency.
That fundamentally is what will help us in the future to maintain our strong market positions and further improve those positions. Going forward, that will be the focus. We will build on this excellent foundation, and we will drive for profitable growth, both organically and through acquisitions, where it makes sense. In parallel, it goes without saying, we are continuing to work on the cost structures and try to implement synergies. We'll have a couple of updates to you, current examples that we'll touch on later in this call.
As an overview, let me highlight a couple of key points in a nutshell. In four divisions, we saw a very pleasing order development in the first half of the year. However, the demand on the ag sector remained under pressure, and we'll see in a second this has reflected the order intake negatively of the Kuhn Group. Sales was slightly below prior year and combined with lower capacity utilization and a few reasons that we'll discuss, the weight has been on the profitability. Efforts to further improve cost structures and productivity are continuing. It is these factors, combined with uncertainty still with the political environment, that is causing us to adjust the outlook as we'll explain a little bit later.
Looking beyond the current year, the long-term priorities remain unchanged. I'm happy to say that we had a smooth transition to our new leadership team in two divisions that were discussed earlier this year. Where I'm concerned, I'm also happy to say that I enjoyed a very good introduction from my predecessor, and a big thank you also to all the teams in Bucher Industries for the fantastic support. Our financial position remains solid, with a strong cash position and an equity ratio of 66% at end of June and w e have been able to keep strong market positions, and some of the challenges in the markets that we'll discuss later on have nothing to do with a decrease of that position.
That's also the reason why we are continuing to invest in R&D to make sure that we are ready for the future. We are tackling areas where we have been structurally challenged. I will explain that in a moment. Also, in March, we completed the share buyback program and canceled those shares in June after the approval of the annual general meeting. Now, let us dive into some details, and I need some help to advance the slide. Very good.
As always, the slides that you'll see in this presentation all show comparable growth rates for order intake and for net sales. This means that they do not exclude FX or acquisition impacts. Overall, the order intake of the group was slightly below the level of the prior period. That is mainly driven, if you do the decomposition, by Kuhn Group, which after a previously strong preseason or end of last year, showed a decline again. All the other divisions showed a pleasing development on the order intake. Net sales for the group slightly declined. Due to the lower order books that we saw beginning of the year with Bucher Municipal and Emhart Glass, the overall sales is at this level more or less as expected. The other divisions remained at the prior year levels.
You have to help me. The lower capacity utilization and continued cost pressure weighs on the group's profitability. Also together with restructuring costs at one of our units under Bucher Specials and the absence from the gain from the property sale that was recorded last year in that period, this resulted in a lower operating profit margin and a lower gross profit in the first half of 2026. The average number of employees remained more or less stable compared with prior year period, but I have to explain something. The units, of course, that are suffering from low utilization have lower permanent employees. The reason why the average stays on this level is that we are operating with a number of temps, usually, which are helping primarily at Kuhn to fulfill the high pre-orders from the last season.
Cost-saving measures were consistently pursued and were appropriate. They are being further intensified. R&D costs slightly increased, both in percentage and absolute numbers and t his is basically a reflection of our strategy that we are not cutting down into the substance. We are really maintaining R&D to make sure that innovation continues to be driven forward. CapEx dropped slightly to 2.8% of net sales, compared to 3.4% in the first half of the prior year. On the right side, just one example of a number of innovations that were launched in the first half of the year. This is by Kuhn Group, the Gladiator, which is a tillage tool. It is preparing the soil in narrow stripes and not disturbing the soil in between.
Contains a lot of innovative features such as quick tool, free adjustments, low maintenance, and a very precise control of the depth of the tools. Let's take a closer look now at the situation in the agriculture industry. In crop production, the situation remains quite challenging. Commodity prices remain at low levels. That is visible on the left chart. At the same time, farmers are facing rising input costs and uncertainties around that. Since the tensions in the Persian Gulf, fertilizer, crop protection, and diesel prices have increased, this is putting additional pressure on the farmers' profitabilities. The extremely dry weather in the last weeks and months, particularly in Europe, are adding to the concerns, the specific topic in Brazil is that the very high interest rates are weighing on the equipment investments in that region.
As a result, crop farmers' margins remain under pressure and the investment appetite is low. After showing signs of recovery during the second half of last year, retail sales have weakened again in the first half of 2026. Dealers, that is also true in Europe, have become more cautious and they are focusing on inventory and balance sheet management. The picture looks somewhat better for dairy and livestock farmers. Milk prices, they have come down compared to the very high levels of the last years, as is shown on the right chart, they are stabilizing at still very healthy levels. At the same time, feed costs, they remain on reasonable levels, supporting farm profitability.
Also beef prices, this is not shown on this chart, they are also important indicator for the Kuhn Group, continue to be supported by relatively low cattle inventories and quite a resilient consumer demand. Overall, we can say crop production remains in a downturn, while dairy and livestock markets are holding up a little bit better. A broader recovery in the ag sector, which we were hoping for in 2026, will be postponed again. We will go into the details of what that means now for the Kuhn Group. The strong momentum that we saw from an excellent pre-order season in the second half of last year could not be sustained in the first half of 2026. Overall, the order intake of the Kuhn Group declined by 18% compared to the same period of last year.
Thanks to the high order book at the beginning of this year, sales still increased by 3% on a comparable basis, mainly supported by markets in Europe. The operating profit margin of 8.8% was below the prior year. That is primarily due to underutilization in some of our plants, in particular in Brazil, where the market is quite challenging, and also cost pressure on the personnel and the material side. At those production sites where arable farming plays a role, the division continues to work systematically on adapting the cost structures to the market environment. As an example, we have two plants in France that have filed earlier this year for temporary unemployment, which is a tool in France, similar to short-time work in other countries.
The market situation for Bucher Municipal remains quite stable, demand has been robust due to ongoing needs for maintenance and cleaning equipment in public infrastructure. Overall, the order intake was almost 8% higher compared to the prior year, mainly driven by compact sweepers, winter maintenance equipment, which has shown a very pleasing development this year, also refuse trucks in Australia. Sales has not followed that order intake yet. That is not surprising because we started the year at a much lower order book, we are at the moment still 3.6% below the same period in the prior year. This decline was, to a large extent, driven by the U.K., where the market has been challenging, while Continental Europe performed quite well.
The overall lower capacity utilization in the U.K. also impact from tariffs, we are still importing products from Europe to the U.S., has weighed on the operating profit margin, which has declined for the moment to 7.2%. On the Hydraulic side, the markets continued to develop quite positively, albeit from a still low base that we come from last year. The order intake for Bucher Hydraulics was 9% higher than last year, this demand came from a number of industries. We have construction machinery that did quite well. Mobile electric drives supporting electrification of city buses, for example, showed a very nice development and a lso material handling, which was low last year, showed good development.
Agriculture initially was doing okay, and the last two, three months showed a certain decline again, which is more or less in line with the experience that Kuhn has in the ag sector. Sales of Bucher Hydraulics was almost 8% higher compared to the previous period last year, and Europe, Asia, and also China and India contributed to that growth. The higher capacity utilization of that division had a positive impact on the operating profit margin, and this has increased now to 10.8%. Also to mention, we successfully took into operation our new building in Frutigen in Switzerland, which shows a very high degree of automation. Pleasing to say that we started an operation, still a small one, in Malaysia and another one in Mexico.
The reason for that is to be closer to our OEMs in those regions and to support them and participate in the growth of those markets. Turning to Emhart Glass, where we have seen that the market has been in a quite low cycle, and also this year, customers continued to be cautious with their investments still. Even though we saw an improvement in the last quarter, which results now in an increase in order intake compared to last year of almost 9%. We do believe, and that's the good news here, that we are crossing a trough year and that things will become easier again. This higher order intake goes across the section, s o it's on the machine side, it is parts, and it is service, which are showing now a slightly better development again.
Sales, however, is lagging behind, not surprisingly, coming from a very low order book, and is now still 25% below last year. It is the very low capacity utilization that we have suffered from in the first half of the year that explains the decline in the EBIT margin, which is now at 5%. A lot of cost-saving measures have helped us stabilize it at that level, and some measures which were implemented still in the first half of the year will show an impact in the second half of the year. Last but not least, turning to Bucher Specials. There we saw a mixed performance in the different businesses that we are serving in that division. Overall, order intake was 4% above prior year.
If we drill down into those businesses, we can see that Bucher Vaslin, serving the wine industry, is still suffering from a very low demand from the wine producers, especially in Europe. Orders at Unipektin, serving the fruit juice business, fell slightly, but that is coming from a very high figure in the prior year. That is still a very good story for us. Bucher Landtechnik and also Bucher Automation, t hey have been able to increase the order intake in the first half of the year. Overall, taking it together, sales remained 2.4% below the prior year, and it is basically the growing units that were not quite able to compensate the situation in the volume business. This is one of the projects I would like to highlight as part of a restructuring process at Bucher Vaslin.
We are in the process of consolidating two locations in France into one. Basically we have decided, unfortunately, to close one plant in the southern part of France and basically simplify and consolidate the setup. That explains a one-time cost, a restructuring cost of CHF 8 million this year, which is in the reporting period. That is contributing to this negative margin with Bucher Specials. Further, to increase synergies with other divisions, we have also decided to implement a change within Bucher Automation. As part of this initiative, it was decided that we are moving that part of the business that is focusing on controls solutions for the glass industry into Bucher Emhart Glass, and the other automation solutions, in particular for mobile automation, will be integrated into Bucher Hydraulics.
This will simplify processes internally, will strengthen the collaboration, and it will give us scale effects on the distribution and the sales side through the sales and distribution network of Emhart Glass and Bucher Hydraulics. Bucher Specials in the future will comprise the businesses of Bucher Vaslin, Bucher Unipektin, and Bucher Landtechnik, and automation integrated into the other divisions. With that, I would like to hand over to Manuela.
Thank you.
I ask you to go into a few more details.
Thank you. Starting from EBIT on this slide, let's have a look at the below the lines item in the waterfall chart. The net financial result was positive for CHF 4 million, driven by interest income, results from short-term investments, and low finance costs. As a reminder, we are almost debt-free. The income taxes amounted to CHF 21 million, resulting in an effective tax rate of 19.2%, down from 22% in the prior year period. The decrease was mainly driven by changes in the geographical distribution of our profits. In the midterm, we expect still a tax rate between 21% and 23%. Given the low result in 2026, I would assume for 2026 it will be more on the lower side of this range. The decline in profit for the year and earnings per share mainly reflected the lower operating performance.
Earnings per share also included a small positive impact of our share buyback program of around 4%. Let's move on to the net working capital on the next slide. Net working capital at the end of June was broadly stable year-over-year, both in absolute terms and in percentage of sales. However, looking at the last four quarters, we released net working capital substantially, supported in particular by lower inventories. Can be seen in the middle of the slides with a reduction of more than CHF 100 million in average net operating assets. This was also the main driver. Property, plant, and equipment remained largely unchanged as depreciation roughly balanced capital expenditure.
Main CapEx in the first half, as Matthias mentioned, included the new production and office building in Frutigen, and in that additionally, also a new customer service center in Germany for Kuhn Group. RONOA after tax stood at 12.7%. It remains above our cost of capital of 8%, but below our long-term target of 20%. The target of 20% is still a reasonable target over the cycle, and it remains a key focus area for us. That means we need to improve profitability. Matthias already mentioned some of the projects or initiatives, but we also need to optimize our capital efficiency in order to return to our long-term target of 20%.
Talking about our cash flows, here I start in the middle of the slide with the operating free cash flow amounted to CHF -73 million. Actually, nothing unusual for this time of year. It's reflecting the usual net working capital buildup in the first half of the year. A key driver was the seasonal reduction in customer advance payment at Kuhn, as we work through the capital or the backlog for the spring season. Free cash flow was additionally affected by the dividend payout, more than CHF 100 million in the second quarter , and the cash outflow related to the share buyback program. As a reminder, over the last one year, or in the last 12 months, we bought back around 410,000 shares in an amount of CHF 155 million. The share was canceled in June, and the share capital adjusted accordingly.
Overall, with this free cash flow, our net cash position stood at CHF 278 million, slightly below the prior year level, but still very strong. Assuming no major acquisition and the normal seasonal cash generation in the second half, we expect net cash to increase to around CHF 400 million. As I mentioned, it depends on acquisitions. The equity ratio remained high at 66%, underlying the strength of our balance sheet. Overall, our financial position remains very solid and supports the strategic focus and priorities Matthias highlighted, and gives us the flexibility to continue investing in future growth, both organically by strengthening our existing markets, and inorganically by expanding our market presence or entering additional niche markets. At the same time, also important, it allows us to maintain a consistent dividend policy over time. With that, I will hand back to Matthias, who will take us through the outlook.
Perfect. Thank you, Manuela. Despite some challenges that we are facing in the markets, I am convinced that we are very well-positioned. That is because of our strategy and our approach to be close to the markets, to have local productions wherever possible, and to be decentralized. If we look at the expectations for the full year in the different divisions, I will run through division by division. We can say that Kuhn Group, in the end, expects stable sales on a comparable level compared to last year, that the operating profit margin should also remain at the prior year level. That, in the overall guidance, is the main difference to the outlook that we suggested at the beginning of the year.
Turning to Bucher Municipal, we see that there we expect a slight decline in sales as expected on a comparable basis, and a slightly lower operating profit margin in 2025. That is as expected. Bucher Hydraulics anticipates a slight increase in sales, and also here, a slightly higher operating profit margin. Turning to Bucher Emhart Glass, we expect significantly lower sales compared with the prior year as expected, and also the operating profit margin is expected to be significantly lower compared to 2025. I can say that it will be higher than what we saw in the first half of the year because of the measures that I explained and the development of the market. We believe that here we have seen the bottom.
Finally, Bucher Specials. Specials anticipates a slight sales growth on a comparable basis, and the operating profit margin is likely to be lower than in the prior year due to the business situation at Bucher Vaslin and the restructuring costs that I explained. Taking it all together, for 2026, the group expects slightly lower sales on a comparable basis, and the operating profit margin is expected to be below the prior year level.
Also here, I can say that we believe that the H1 has been the trough and the bottom, and that it will be better than that. By the way, this is excluding the CHF 43 million from the sale of the property that we had as a special effect in the last year. With that, I would like to conclude the presentation part and the slides. I would like to now move to the Q&A part, assuming that there might be one or the other questions. I will track your hands as they might go up, and then ask for Renate's help to switch it on. We have Mr. Bamert. Let's see if we can-
Can you hear me? Hello?
We can hear you.
Perfect.
Loud.
Hello, everybody. You have to make up quite a little bit to get Kuhn Group a stable year. What makes you so positive for the second half that you can compensate for the weak first half?
The main reason that we are not more concerned is the fact that the second quarter usually is the lower quarter. What now counts is the preseason again. We are pushing very hard. Based on experience from previous years, we still think that this is possible. Taking this all together, yes, we believe that we can still hit the level of the previous year, which was relatively low. It is lower than the expectations that we signaled at the beginning of the year.
Okay. Thank you very much.
We have Mr. Billon.
Hi, good afternoon.
Good afternoon.
Thank you for taking my question. Could you give us more color on what is happening in Brazil, and how what is happening could reshape the farmer landscape going forward?
Yes, I will start with Brazil, and then you will have to help me again with the second part of the question, which I didn't fully catch. In Brazil, it's a similar dynamics as in the other regions, mainly the crop production. Brazil is a crop production market, and what weighs heavily in Brazil are the interest rates at the moment, and the fact that a lot of the equipment is procured on financing terms. High interest rates are somehow putting the limits to the investment mood. There is a bit of a mood in Brazil at the moment.
Everybody's waiting for the election somehow, waiting to see if that has an impact on the interest rates. That's probably the predominant effect that weighs even heavier in Brazil. Then the other one is Brazil is almost 100% exposed to imports on fertilizer and is basically dependent on the dynamics in the Middle East right now, which has a very significant impact on fertilizer prices. This is mainly a crop topic also. Now you have to help me again with the second part of your question.
Yes. The second question was about the farmers in Brazil. What will happen to those farmers, and do you think they will be able to not go bankrupt?
That's a good question. I believe they're hanging in there. I have no doubt that the cycle will turn again. We don't see a wave of bankruptcies, but we see that they are basically just managing their cash flows very cautiously, and they're basically running the equipment as long as they can. Luckily, they are still enjoying good harvests, or until now that has been the case, but they are just cautiously holding back investments, and they're prudent. We don't see a wave of insolvencies or anything like that. They're waiting till either interest rates or commodity prices start picking up again, which is the dominant driver of those cycles also in the past.
Maybe a second question, if I may. Do you feel that your customer are still investing in a fleet expansion and productivity, or is it largely a demand driven by a replacement need? Maybe in the type of equipment you are selling right now, or is that changed since the last cycle?
I would say there are a couple of underlying trends. For example, in some markets, consolidation of farmland. There is a trend that farms will get bigger still. That has been over many years the case in North America, and I think it's a similar situation in other markets, and that is a big driver of a trend going to larger equipment. The XL, the XXL vehicles. I believe with consolidation of farmland, that trend will continue. The other one is the pressure to increase productivity. We expect that newer technology, the big topic in the industry has been the spot spraying, where you basically very precisely spray only the locations on the field where you need. These are big cost savers, we believe the underlying requirement to improve productivity further, that will continue to drive this type of technology, more modern and larger.
That's clear. Thank you.
We have, I think the next one was Mr. Vogel.
Yeah. Hello, good afternoon. I got three questions, all related to the margins. If possible, I would ask them one by one. One and done, it's easier. The first one is with regard to Glass. You mentioned in your prepared remarks that you think about some sequential improvements in your Glass margins. Can you add a little bit more color there? What sort of level you're having in mind there? Do we talk about like 6%, 7%, more than that? A little bit more granularity. That would be my first question.
Yeah. What is happening here is some of the cost reductions that will show an impact, and it's a higher utilization in the second half of the year that will help. We expect that margins will be closer to the margins that we saw in the second half of last year again.
Got it. Second question is, just from my understanding, if I go across the implied margins for the second half versus the first half, is my understanding right that margins eventually, therefore, should go up a fair share in Municipal, and Specials, and of course, in Glass, but not so much in the others?
That's true.
I think that is correct. That is a correct interpretation.
Bear in mind that for Kuhn Group, the first half is almost stronger than the second half, given the seasonality. For Kuhn, it will be lower. We are now 8.8%. Last year, we won 1 percentage point higher than that, and we expect a similar range as we achieved last year with the 7.1%.
Got it. In that regard, you will also have a second half-year margin in Kuhn that is higher than the second half-year margin last year while you have the same top line roughly because of, again, footprint rationalization, or what's the underlying idea?
It has clearly to do also with all the measures that Matthias mentioned. We reduced some temporary workers, and it slightly depends also a bit on the sales volume. Given the first half year, we are still up 3 percentage points on a comparable basis. Then it depends a bit on the second half year. We also had already starting with higher material costs. Of course, they are more or less similar than the second half year that we already experienced last year. I would assume it's mainly also driven by some measures that we took over the first half year.
Got it. Then the last one, a bit of more of a technical question. With those things what you mentioned about specialists, that you reassigned some of the sub-businesses, is that some sort of impact on the margins of Hydraulics and Glass, or is that not much of an effect, essentially?
It does not have an immediate impact on the margins. In the midterm, it will. We are, of course, looking for synergies. We are going to be streamlining certain functions. Over time, there will be synergies and also margin impacts. Also on the top line, we hope that through the sales reach of the two divisions where it's integrated to, and the ownership that they will take, that that has also an impact on the top line.
Got it. Many thanks.
The reporting structure will change from the beginning of 2027, and we expect for Bucher Hydraulics, roughly CHF 13 million more sales, roughly. For Bucher Specials, obviously around a high CHF 60 million or something like that, lower sales and also an impact on profitability for Bucher Specials.
Got it. Many thanks. Happy to go back to the queue then.
Good. We have a hand up from Mr. Foletti.
Yes. Good afternoon. Thank you for taking my questions. I have a couple of questions, and then a request, if possible. I'm going to go one by one. The first question is maybe just an understanding question. You changed the guidance for Bucher Specials on the margin, saying it will be lower than last year. Is this due to the restructuring, i.e., if I add back the restructuring, the margin is better than last year? Would it be worse than last year also if I add back the restructuring?
No, if you add back the restructuring cost of CHF 8 million, the margin would be slightly better for Bucher Specials compared with the first half.
Okay. Thank you. I thought so, but I wanted to be sure.
Good.
Next question is, on the Landtechnik, you mentioned that it was growing, and I thought it's a little bit counterintuitive when we hear all we hear about Kuhn and understand the markets are different, but maybe you can explain why you think that Landtechnik was doing well in Switzerland when Kuhn was not doing so well.
I think it's coming from a number of years where Landtechnik has declined, and I think now it has stabilized on a relatively low level, and I would not read a lot of trends into that for a very small market like Switzerland.
Right. Okay, good. I have a more general question. When we look at the order backlog now, CHF 867 million for the group, let's say we have some sort of okay pre-ordering season. You build up some backlog now in Q3, Q4. I have the impression that, I don't know, of course, we don't know what happens in Emhart. There could be some swing factors there, but I don't have the impression that you can, I don't know, double that order backlog from between now and the end of the year. Like reach, say, CHF 1.5 billion-CHF 1.6 billion. I wonder if you don't have that, will you be able to grow next year?
We'll have to discuss next year as time progresses, because maybe a notch too early, because you're absolutely right. Next year will still be influenced by what happens in the next couple of months. I would postpone that question to the next call.
Okay, good. I mark that down. I ask again after the Q3. Thank you. My request. Sebastian just asked you about the effects of moving the Bucher Automation business into the two divisions. We know that the previous year, used to make half of the business with Emhart, so this is going to be deducted because it's an internal consolidation. Can you just please provide adjusted figures when, let's say, before the end of the year so that we can compare? Otherwise, we going to fight-
Yes.
...throughout next year to understand all this.
Alessandro, we will do that, I'm not sure of the end of the year, clearly beginning of the year. Otherwise, you can also reach out to Jin, Investor Relations, who can guide you through.
Absolutely. We'll provide that transparency.
Thank you very much.
Thank you. We have another hand from Mr. Vogel again.
Yeah, I just have a couple of follow-ups, if I may.
Yeah.
First thing is on capital allocation. As you said, the share buyback is finished. A decent cash pile is still left on the balance sheet. Assuming there would be no M&A or suitable M&A target around the corner, what are your next steps or thoughts in that process?
The overall strategy remains the same. Priority number one is that we want to grow organically, so we will continue to invest that cash into the businesses organically. You are right, M&A does play a role, and we are scanning this landscape and looking for opportunities. We are continuing also to invest into our footprint and into the plants. There will be CapEx going forward that is not only R&D, renewal expansion CapEx. Obviously the other one is to give some returns to the shareholders through dividends. These are the typical tools which we are trying to balance to make sure that it's a good approach for the business in the long run and for our shareholders.
Dividends mean then special dividends to have it a bigger go, or would it be more like a payout increase? If you continue small steps, it may take a while.
It is to follow the dividend policy and review year by year what is appropriate based on the business results and the situation with our shareholders. We will be assessing that and making sure that this all stays in a healthy balance.
Got it. Maybe one follow-up then on the rest. On the CapEx side, given your initial target, I guess, for this year was more like CHF 150, if I'm not mistaken. year- to- date, the runway is lower than that. Is the idea that to sort of cover up, so to say, in the second half, or is it most likely that this number might be a bit smaller this year? Any thoughts there would be great.
Normally we spend 1/3 in the first half and 2/3 in the second half. Given the last 10 years, that's a usual pattern for Bucher Industries. We expect for the full year around CHF 140, maybe slightly below this CHF 150 that you just mentioned. It depends a bit then on the shifts in this or next year. I would say CHF 140, CHF 150 is a reasonable number.
Got it. I go back to the queue. Many thanks.
Okay, we have Alessandro Foletti again.
Yes, thank you again for taking my question. I wanted to ask a bit of a more color on Emhart, really, what is going on there. You mentioned that you see some recovery in service, components, inspection machines, I have an impression like the big investments are still outstanding. What needs to happen? Do you have a view on what's the capacity utilization of your clients? Maybe also regionally, if there are differences, America, Europe, Asia.
Yeah. I think the biggest part of the answer is that the investments after COVID that the industry did were massively too high, that the overcapacity has basically been slowly wearing out now, it is reaching now a more stable balance again between production capacity and demand of glass. After there has been some consolidation in the industry and some plant closures that were not profitable anymore. The industry has basically been in the process of correcting that, we see now the first signs that this is stabilizing so w e believe it's not going to rebound very sharply.
We don't expect that we will reach those post-COVID levels again within a year or two. That will probably happen more gradually because now we're on a more balanced situation again. However, w e do believe that the investments are now coming back, not only on service and parts, also that projects which were held back, that they are being released again. The increase of order intake now in the last couple of months also contained a couple of larger machine projects again.
Okay.
It is coming back. Not a super sharp rebound, but we do believe that we'll be in much more normal waters again starting next year.
Okay. Good. Thank you very much.
Mr. Billon once again.
Yeah. Another question on Kuhn Group. Do you expect some news from Europe or for the U.S. for big plans to help the farmer? Do you think it could be a catalyst for the farmer sentiments in the coming months?
You are absolutely right. Those factors played important role. What we have seen in the U.S. last year was that a substantial part of the subsidies that were granted did not make it to the farmers, and this is better this year. There have been payments to the farmers, and that has supported their mood a little bit, which shows that your question is absolutely relevant. What is happening in Europe, I don't know exactly what the plans will be in the next couple of months. I think in general, European farmers, they do get quite a lot of support. Also the Swiss farmers. I cannot really comment on the probability that this will change substantially within the next couple of months. I would assume it is more or less on a stable level.
Okay, that's clear. Thank you.
The momentum is slowing down. Let's double-check all the screens, Renate, if there is any more.
Alessandro.
There is one last question from Alessandro. Go ahead.
I take the opportunity if nobody else wants to jump in. You mentioned something about your clients and dealers in Kuhn, etc . Is this decline in orders also due to some movement in the stock levels, right?
Yes.
When we're coming down from the peak, we had a few quarters of destocking. Towards the end of last year, you said, okay, that level has reached normality, so maybe they are ordering again, and now they say, oh, they're cautious again. Are they again destocking, or do you know if the stocks at the dealers are kind of normal, or what is happening there?
Yes, stocks coming from a very high level in the last two years, I think stocks are more or less on normal level. Sales in the first half of the year were a bit lower than expected, so they have been more cautious in placing orders with the suppliers.
Oh, okay.
They have started to focus very much on their cash flows and their balance sheets.
I think this is mainly related to Europe, but I guess this-
This is a bit European topic, yes.
..in the U.S., the steel is a little bit elevated.
Okay. Good. Thank you.
Now you have triggered interest again.
Yeah.
There was Mr. Meyer once again.
Yes. Hello.
Hello.
Just to be sure. Usually at Bucher, the first half-year is better than the second because of the seasonality at the Kuhn Group. You say this time is different, the second half-year will be better even on the basis of the net profit. Is that right?
At the moment, the half-year margin will not remain on that level. If you look at the guidance and if we compare what we had end of last year, we expect that we will end up on a similar level with our margins. The sales, we believe, will also stabilize and be a little bit lower than half-year because it was + 3%, and that in the end of last year will be in the same range like the previous year.
What I have not mentioned explicitly, what will help, we are pushing and trying to moderately increase our sales prices. What we have seen in the first half of the year is more or less contracts that were negotiated last year. In the next season, we are now, like most players, trying to implement some sales prices, so that will also stabilize the top line. I'm not sure if I answered your question.
Yeah. All right. Thank you.
Yes, it's normal. The first half is better than the second half due to Kuhn. That's right. This will also happen this year, there is nothing changing from the past year. Kuhn will still be stronger in the first half than in the second half. It's also implicitly included in our guidance overall. In the first half on a group level, we achieved this 7.1%, and last year, excluding the profit from the real estate gain, we achieved around 8%.
In the guidance is now that we will below this 8%, means somewhat between the 7% and 8%. As mentioned, I think Matthias also explained that we believe we reach the bottom with the 7.8%, so it will be somewhat in between, but lower than last year. Means that we need a stronger half for Bucher Emhart Glass in terms of profitability, a stronger for Bucher Specials, and the others more in a usual pattern.
Mr.-
Okay. Thank you
Mr. Balmert once again.
As we have a little bit of time left. In this difficult agricultural machinery environment, you have a lot of competition, in particular when it comes to smaller equipment. How fierce is the competition? How much pressure do they put on prices? If you do more innovative stuff, self-driving stuff, and all these things that you showcase, and also bigger machines. I s the competition less tough in those areas? Are you moving to the, let's say, more consolidated areas of agricultural machinery?
You're right, competition is there. When suppliers have more to sell than what customers want, that naturally puts pressure on the market. I would not be able to say in general terms if it depends a lot on the segment and the type of product. I think in general, you can say that Kuhn has a very strong position and a very high market reputation with everything that comes to hay and forage equipment, where I think we are considered as a technology lead. We have the best reputation, and that applies to large and also to small equipment. There I wouldn't make the distinction between large and small.
On the crop production side, where you go to the XL and the XXL and so on, there you probably tend to move into the turf of the big players that see those segments, in some cases, as their flagship segments. Maybe there the competition tends to be a little bit higher. Since those are also very differentiated and very high-tech products, there the margins tend to be slightly higher. I think it is difficult to give here a simple answer to that question, and we would really have to go and look at those different segments and regions more specifically. I would simplify it, say, hay and forage, our pricing power is quite strong, and I would not make a big distinction between large and small. With the crop production, as you move into those flagship areas of the large players, the competition might be a notch higher.
You would say the European automotive industry is not the blueprint for the future of the agriculture machinery industry?
I would not say that at all. Yes. I think these are quite different dynamics, and also the role that China is playing in automotive compared to agriculture at the moment is fundamentally different.
Okay. Thank you very much.
Good. I suggest we wrap up. If there are more questions, please don't hesitate to reach out to our investor relations team. We're very happy to continue that discussion, I would like to thank you all for participating and for your interest. I wish you a very pleasant summer and all the best and looking forward to see you next time. Bye-bye.
Thank you very much. Bye-bye.
Thank you too. Bye.