Ladies and gentlemen, welcome to the Kardex half year results 2026 conference call and live webcast. I am Shari, the conference call operator. I would like to remind you that all participants will be listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Alexandre Müller, Investor Relations. Please go ahead.
Thank you. Good morning, ladies and gentlemen. I welcome you to our presentation of Kardex half year results 2026. My name is Alex Müller. I'm responsible for investor relations, and I'm joined by Jens Hardenacke, our Group CEO, and Thomas Reist, our Group CFO, who will present the half-year figures. After the presentation, we will have the Q&A session. I would also like to remind you that the slides from today's presentation, as well as our press release and the half-year reports, are all available on our website. With that, I would like to hand over to Jens, please.
Thanks a lot, Alex. Dear ladies and gentlemen, also from my side, a warm welcome to the Kardex Media and Analyst Conference for the first half of the year 2026. Let me start with our key message. The first six months of 2026 were mixed. On the one hand, we are clearly not satisfied with our profitability in the first half of the year. On the other hand, the demand for Kardex intralogistics solutions remains very strong, and our booking development was significantly better than we had expected only a few months ago. As we communicated seven and a half weeks ago, we had to adjust our expectations for the full year 2026. At that point of time, it had become clear that we would not achieve the communicated full-year EBIT margin range. The reasons for these developments are visible in the numbers we published this morning.
While especially bookings, but also net revenues developed positively, EBIT declined sharply compared to the prior year, mainly driven by the temporary underperformance of automated products, a changed sales mix on Kardex Group level with a higher share of standardized systems, and continued significant growth investment in sales and marketing, research and development, and IT. It is important for me to say this very clearly. We are not satisfied with the EBIT development in the first half of the year. Kardex has delivered excellent results in the past year, and especially last year, we were able to present very strong half-year numbers. Against this high benchmark, the profitability development in the first half of 2026 is disappointing. At the same time, we should not overlook the many positive signals in our business.
Bookings increased by 20.8% to EUR 571.5 million and reached a new record level for our first half-year period. This growth was driven primarily by standardized systems and shows that our strategic direction is right. Customers continue to invest in warehouse automation, Kardex continues to win attractive projects across the business units and across regions. Net revenues increased by 6% to EUR 440.5 million. This growth was again supported by the increasing contribution of standardized system, especially Kardex AS Solutions. The higher share of standardized systems is in line with our strategic ambition to grow our solution portfolio and to accompany customers from the first steps of automation to more advanced integrated warehouse solutions.
This mix shift also had a negative impact on the gross profit margin at group level in the first half of the year, as especially Kardex AS Solutions is still in the ramp-up and investment mode. Automated products had a weak start into the year. The comparatively lower order backlog at the beginning of 2026, longer lead times for increasingly complex projects, and customer-driven delays resulted in the lower net revenues and underutilization of production capacity. These two effects had a direct negative impact on profitability. In addition, we continue to invest in our ERP landscape and in targeted marketing activities to strengthen future growth. Despite disciplined cost management, the EBIT margin of automated products therefore fell to an unusually low level in the first half of the year. Standardized systems developed very positively in terms of bookings and net revenues.
Demand was particularly strong for Kardex AS Solutions, and the integration of Rocket Solution further broadens our portfolio. Kardex Mlog was impacted by a very strong comparison base from the previous year, but the overall momentum in standardized system remains encouraging.
We also see that the order sizes in these segments are increasing with particularly strong momentum in the U.S. The opening of a new sales office in Korea is another example of how we are expanding our international reach. All in all, the first half year was clearly not as strong as we had originally planned, and we were transparent about this when we published our profit warning. The fundamental demand for Kardex solutions is intact. Our bookings are much stronger than expected. Our backlog is at a record high level, and our strategic investments continue to support our long-term growth path. With this, I would like to hand over to my colleague, Thomas, for more details on our financial results.
Thank you, Jens. Hello, everyone, to this conference call. I have the pleasure to guide you through the financial situation of Kardex for the first half year 2026. As always, starting with the overview of the key figures. Key figures development of the last five years, the years 2022 to 2026. Starting with the bookings. As mentioned by Jens, the bookings increased very sharply by +26% compared to the first half 2025. This is supported by both reporting segments, automated products increased 7% versus H1 2025 and standardized systems even 61%. Very substantial increase also if we compare the increase with the previous years and also with the CAGR over the period shown here on the slide. What I also want to mention is that when we compare first half 2026 with second half 2025, even there we see an increase of 8.4%.
Looking at the net revenues, here the increase is not so sharply, +6% compared to the previous years. This is rather a weak increase, also very substantially below the CAGR. If you have a side look to the GDP growth rate of 3% worldwide, 6% is not too bad. 6% is quite a substantial increase in relation to the GDP growth rate. What we also have to mention is that the mix has changed. Jens mentioned it before. While standardized systems increased substantially by 43% compared to last year, automated products decreased by 11%. This also leads me to the EBIT and EBIT margin comparison of first half 2026 versus the first half of the other years.
There we see quite a substantial decline of the EBIT down to EUR 30.1 million, a decrease of almost 40% compared to the previous period of the last year, 2025. Also the EBIT margin went substantially down to 6.8%. This is not satisfactory. Jens mentioned it, that we are not satisfied with these figures. Nevertheless, one has to mention that this is the fourth-best result Kardex has established in history. We all know Kardex now is playing in another league. Looking at free cash flow, here we have a slightly positive free cash flow of EUR 1.9 million in the first half 2026. Further details will follow on one of the next slides. Now I would like to guide you through the income statement of the year, compared with first half 2025. As mentioned before, bookings went up sharply, +26%, reaching EUR 571.5 million.
This is mainly due to standardized systems I mentioned before. They increased the volume by more than EUR 100 million. This has also an effect on the mix, respectively, the share. The share of standardized systems increased by 10%. Last year they represented 35% of total bookings volume, whereas this year standardized system represents 45%. Looking at the order backlog, here a sharp increase as well, 42% more than previous year, reaching an order backlog of EUR 727.2 million. A substantial increase in our visibility of the backlog, which went up from last year of around six months to now roughly nine months. Net revenues increased by 6% to EUR 440.5 million. The difference between bookings and net revenues very obviously leads to a very strong book-to-bill ratio of 1.3.
I mentioned it before, also here the mix changed on net revenues side. Also here a shift of 10 percentage points. Last year, standardized systems represented 32% of net revenues, now increased to 43%. This has an impact on the gross profit margin. Here we see a slight decline of 34.1% to close to 30% gross profit margin. This is clearly based on the net revenues mix mentioned before, and because of the underutilized factories in the automated products segment, namely Kardex Remstar. OpEx increased by 9%. Here we continue our investments in IT, our ERP landscape. We invest in digitalization. We invest in innovation, namely R&D, and in our growth initiatives, namely sales and marketing. EBIT, as guided, went down by 40% compared to last year, reaching EUR 30.1 million and reaching EBIT margin of 6.8%.
This is a decline of EUR 19 million in absolute figures compared to last year, and very clearly and substantially below our financial guidance for the full year, which is on a group level of 10%-14% EBIT margin range. Looking at further details in the income statement. Here I can report a turnaround in financial results, so to say. We have established a positive financial result in the first half year 2026. This is based on the positive contribution of the asset management, but from the interest gains. What is to be mentioned here on that slide is the tax rate, which went up quite substantially from 25.6% to 29%. This is mainly due to Rocket Solution. You will know Rocket has not yet reached the breakeven point, contributed negatively to the result for the period, and this leads to an unfavorable tax mix.
The guidance on the tax rate, therefore, slightly increases. We expect the tax rate for the coming periods between 24%-28%. Have a look at the balance sheet and the developments here. Here we compare the situation by the end of June 2026 versus the beginning of the year, and very obviously, cash and cash equivalents went down by 22%, quite substantially, but this is normal. After the AGM, we distribute our dividends. This year, this was EUR 50.3 million we distributed to our shareholders, having an impact on the cash equivalents, as well as on the equity and equity ratio. Equity ratio went down from 53.6% to 47.6%. Also to be mentioned here is our investments. This is visible in the non-current assets, the property, plant and equipment went up by EUR 6.3 million compared to last year.
Not here on the slide, but to be mentioned is the increase in intangible assets here, the investments in our software. Digitalization landscape contributed EUR 5 million on the balance sheet. Again, I mention that every year, but it is worthwhile to be mentioned on our balance sheet, we have no interest-bearing debt, we are purely equity-financed. This is to be mentioned, and to be mentioned is our strong return on invested capital, which is 31%, slightly down compared to the first half 2025. There we reported 37.6%. Cash flow statement. Here, I mentioned it before, free cash flow amounted to EUR 1.9 million for the first half year 2026 compared to the first half 2025, a decrease of EUR 6.5 million. This is mainly coming from the lower result for the period. Mentioned this before on the income statement, and slightly negatively impacted by networking capital.
Here we invested Net Working Capital. this is because we had a positive bookings momentum in the second quarter of the year, leading to higher accounts receivable because we raised invoices for the prepayments and also the accounts payables went up because the projects started. I would like to guide you through the segment reporting, starting with the biggest segment, Automated Products, which is consisting purely of the business unit Kardex Remstar. Here, bookings increased by 7%. On the geographical mix, mainly APAC contributed to this positive momentum. APAC net bookings increased by 40% compared to last year. A very strong comeback of the APAC region. U.S. contributed 8% growth on the bookings level. Also here, positive momentum. Jens mentioned it before, and we mentioned it also at last call, that namely a U.S. government contract went down, also other positive contracts we could book.
The EU region also positively contributed. This by roughly 2.5%. Order backlog went up by close to 12%, reaching EUR 340.7 million, the visibility also went up by now close to 6.5 months compared to close to six months, in the previous period. As the net revenues went down by roughly 11%, here almost all regions contributed to this negative development except of APAC. APAC was the only region contributing positively to the net revenues growth. Here, a plus of 4% can be reported. Due to the lower net revenues, the book-to-bill ratio increased quite substantially, reaching 1.25, which gives us a very positive momentum for the second half of the year. Gross profit went down by 14%. Also, the gross profit margin went slightly down from 39.5%-38.2%.
Here, I mentioned it several times, this is the underutilized factories contributing negative to the profitability, partially compensated by a higher share of the LCS business. This we will see on the next slide. OpEx increased by 5%. Here, same as on group level, IT, R&D, and sales and marketing. Growth initiatives contributed most. EBIT went down by 42%, reaching EUR 26.4 million. Two main reasons, as mentioned before, lower volume and underutilized factories, leading to the EBIT margin of 2.5%, which very obviously is below the target range of 14%-17% on a yearly basis. That we are cost-conscious is very visible when we look at the employees development. Here we increased by 16 FTEs compared to the first half of 2025, an increase of 0.7%. Despite the fact that the bookings went up by 7%, we are very cautious by increasing our sales force.
Having a look at KPIs, KPI development, net revenues and EBITDA margin, I mentioned already. I will not go into further details, but to be mentioned is the development of the functional share. What I mentioned before, because of the lower performance of the new business area when it comes to net revenues, the share of LCS business increased from 31%-36%. The geographical mix I mentioned before. Also here we see a change. The EMEA regions picked up from 65%-68%. APAC region picked up from 8%-9%, increased the share, and by the lower share of the Americas region from 27%-23%. Here it gets very obvious that the volume went down. The bookings were not as good as we expected in last year. The U.S. government contracts were missing.
They now are missing in the net revenues also in the first half year. We also see here an FX effect, from the US dollar to the euro. Shifting the reporting segment, going to the standardized systems reporting segment. This consists of three business units. This is called Mlog, AS Solutions, and Rocket Solution. Going into the details, success story continues, one can say in the standardized systems reporting segment. Bookings went up very substantially, 61% more than previous year. This means EUR 100 million more volume when it comes to bookings, and main contributor is the sales engine AS Solutions, being close to 120% above previous year. Order backlog +80%. Both business unit groups, Mlog plus Rocket, as well as AS Solutions contributed positively.
They have increased their order backlog compared to last year. Also net revenues here both areas, Mlog, Rocket, and AS Solutions contribute positively, +42.6%. The book-to-bill ratio in this reporting segment is very substantial, 1.36. Very good situation for the order backlog and for the periods to come. OpEx increased quite substantially, 22.2%. We have to invest, especially in the AS Solutions organizational setup. With this high growth volume, we also have to invest in people, organization, and structures. The 22.2% is a substantial increase, but very substantially below the volume increase. Main areas we invest is the sales marketing organization and innovation, namely R&D. Gross profit margin went slightly down from 22.7% to 18.7%. This is due to some larger orders we had, but it is also timing effect.
We are in the project business, it really depends what kind of projects we can close. In the H1 2026, the mix was not so favorable. This is the reason why the gross profit margin went slightly down. This is also the reason why the EBIT is slightly below previous year's EBIT of EUR 5.4 million. Went down to EUR 5.2 million, reaching an EBIT margin of 2.7%. What I would like to share with you is another success story. We sold in June the biggest AutoStore project in France for all the AutoStore integrators. Our new customer, Madrigall, located in Paris, is a leading French publishing group. They distribute books and all the kinds of literature. They consolidate their two logistics centers into one highly automated distribution center with the core element of one AutoStore installation. This is representing 300,000 storage bins.
To give you a picture, what does that mean? This represents an area of 72,000 sq m if we place every bin aside of each other. This again is an area of 10 soccer fields. A huge installation we are going to establish for our customer, Madrigall. The volume of the contract is between EUR 25 million-EUR 30 million. Very successful story we can share here. Looking at the key figures also for that reporting segment. The net revenues increase is substantial, 43% up. We could not beat the increase from the year 2023, but there we were at another level. EBIT and EBIT margin with EUR 5.2 million, quite a solid result. Not the best we ever had, but nevertheless a very solid result. EBIT margin of 2.7%. The functional mix also shifts to new business.
This is very clear because AS Solutions business is contributing most regarding net revenue growth, 84% increase to 87%. Also, on the regional mix, we see the impact of AS Solutions business. We doubled the Americas business from a share of 11% to 22%. This is an overview over the financial situation. Thank you very much for the interest. With that, I would like to hand back to you, Jens, for the outlook.
Thanks a lot, Thomas. Let us come to the outlook for the second half-year 2026. As mentioned before, the first half-year was not satisfactory from profitability perspective. The second half-year is expected to be significantly stronger. The most important reason for this is the record high order backlog at the end of the reporting period. This backlog gives us a much better starting point for the second half-year, especially for automated products where the weak starting backlog was one of the main reasons for the temporary underutilization and the lower profitability in the first half-year. Based on our current visibility, the board of directors and group management expect full-year 2026 order and revenue growth in the range of 15%-20%, with an EBIT margin of 8%-10%.
This is below the original expectations and below our group target margin range for the full-year, it also means that we expect Kardex to return to the targeted EBIT margin range of 10%-14% in and for the second half-year. The profit warning was a necessary step because we saw that the original full-year target could no longer be reached. It does not change our confidence in the business model of Kardex, and it does not change our view on the attractive long-term growth opportunities in our markets. The structural growth drivers of our industry remain fully intact. Reshoring labor shortages and automation continues to drive demand for intralogistics solution. Still today, a large majority of warehouses worldwide are operated manually.
Companies are under increasing pressure to automate their warehouses to improve efficiency, to address the shortage of skilled labor, and to make their supply chains more resilient. Kardex is very well positioned to benefit from these trends. With automated products from Kardex Remstar, we offer the entry point into warehouse automation. With standardized system from Kardex AS Solutions, Kardex Mlog, and now also Rocket Solution, we offer more advanced and integrated automation solutions. This portfolio enables us to support customers along their entire automation journey, from the first automation step to complex integrated warehouse solutions. We also see increasing opportunities from acting more strongly as One Kardex. Customers increasingly value a partner who can offer different technologies, strong service capabilities, and integrated solutions from one hand.
We are therefore leveraging more sales synergies across our business units and expect this to create further profitable growth opportunities in the years to come. We will continue to invest in sales and marketing, research and development, and IT. These investments temporarily impact profitability, especially in a year like 2026, where revenue conversions in the first half year was not as strong as expected. They are necessary to further strengthen our market position, improve our operational scalability, and create the basis for continuous profitable growth. To summarize, the first half of 2026 was clearly challenging from a profitability perspective, and we have taken the necessary step to adjust our full year expectations. At the same time, our bookings are at a record level. Our backlog is very strong, and the outlook for the second half of the year is positive.
Kardex remains on its accelerated growth path, and we confirm our communicated midterm financial targets for 2029 to 2031, including the group EBIT margin target range of 10%-14%. With these comments, I would like to hand over to the operator to start the last part of the Kardex Media and Analyst Conference, the question and answers.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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 has a question may press star and one at this time. The first question comes from the line of Vijayakumar, Vitushan, Baader Europe. Please go ahead.
Hi. Do you hear me?
Yes.
Okay. Well, good morning, everyone. Thanks for taking my question. Just two or three on my side, please. To start, regarding the revenues and EBIT, compared to the estimate, it seems like, obviously, you will need a better than expected performance during the second semester on these two figures, and obviously should be driven by the strong backlog. Do you have any visibility on the margins of those projects in the pipeline? If you can give us some flavor on that, and also if you can tell us in which regions you're expecting the best momentums for the second half. I would like to take them one by one, if it's fine for you.
Okay. Yeah, thanks for your questions. With regards to the margin, we think that they would be at the same level as they are for the time being. There's no big changes. We saw that there was margin pressure in the, already starting the second half of last year for all business units. We see currently that it remains stable. We see also, for example, for AS Solutions, we also have, as you have seen before, as Thomas presented this, also some bigger projects, and these bigger projects normally comes along with a little bit lower margin.
There's no real changes compared to the first half of the year. If you ask for where does the momentum come from for the second half of the year, we basically believe that the trend that we currently see continues. A stronger push from the Americas and from APAC, and a still difficult market environment for Europe.
Thank you.
If I may add here one aspect, not to be confused. The EBITDA effect or the lower profitability is not necessarily coming from lower margins in the projects. Yes, there is certain shift, there is competition in the market, but this is not the main contributor for the low profitability. It is low volume leading to an underutilized factory situation. When the net revenues go up, also the profitability will go up. Just to not confuse these two things.
Yeah, sure. Thanks. The last question, please. Like you highlighted, continued geopolitical tensions and trade uncertainties. While maintaining the new full year 2026 guidance. What impact from the Middle East conflict is currently embedded in your assumption? Particularly regarding the freight cost, component availability, and also customer investment decisions and project execution, please.
Well, we are not so strong in the Middle East region. Therefore, we don't anticipate any negative consequences for us with regards to bookings and net revenues. It's generally what we see, that there are price increases, that there's some insecurity also with regards to supply chain, with regards to availability of containers. This is why we mentioned this. For the region itself, we don't anticipate big risks for Kardex.
Okay. Well, thanks. Thank you for that.
You're welcome.
The next question comes from Lasse Stüben, Berenberg. Please go ahead.
Hi. Good morning. I had a question on the margin trajectory you're seeing in automated products. You obviously had the weaker start to the year, but looking into H2, you should obviously have a material step up in revenue. I'm just wondering, you mentioned you'd be within the target range, I think, for the group, for H2. Just wondering what kind of step up we should be expecting, in the automated products margin. Any color you can give there. If there's actually any limit to what you can deliver in terms of revenue, because you clearly have a very big backlog. I'm just wondering if you have any capacity issues. The second question would be just on the EBIT margin, in standardized systems, at 2.7% in H1.
Are you still happy with the kind of 5%-8% range for the full year? That does mean you need a bit of a step up in the second half. Just wondering if you have visibility on that already. Thank you.
Thank you, Lasse, for the question. Very well summarized. The margin situation at automated products, this is coming from the revenue. Very weak start. We mentioned it as well. Low backlog, longer execution time for the projects. This led to the situation that we had a very weak start, which then also affected the profitability. The outlook for the second half of the year is quite positive. I mentioned it before, the backlog increased by 12%. We have higher visibility, and we know exactly which orders will be executed in the second half of the year. We have certain constraints when it comes to factory utilization, but we are not there. What we predict is that we come back to the financial guidance also for Remstar during the second half of the year.
This means that the net revenues volume will increase quite substantially compared to the first half of the year, and this leads then to high profitability. This is a very clear view we have on the second half of the year.
Perhaps to add to this, Lasse. If you see the last couple of years, we always for Remstar, for automatic products, we had for the last four years a book-to-bill ratio below one. Therefore, we really struggled at the beginning of the year with our backlog. Now, if you compare the backlog for new business for automated products from now to beginning of the year, we increased the backlog by almost 25%. Therefore, we now see that the factories are full, especially the Bellheim factory. Therefore, this is now on automatic. Now we basically broke this circle of book-to-bill ratios below one. Now we are, with Thomas mentioned, is 1.25 of book-to-bill ratio. Now we are confident just to realize the backlog that we will get back to the target range.
To your second question, Lasse, you raised the question, are we happy with the margin of standardized systems? No, we are not. The 2.7% EBIT margin is not within the target range, but we are not worried. What do we mean with that? We are very confident that we get to the target range from 5%- 8% for the standardized systems. We also see the ups and downs in the project business, not that we lose money, but it's depending on the project execution time. At which stage a project stands. We have our projects under control, very much under control also to be said. We are not worried about this 2.7% EBIT margin we are currently representing. We are also looking forward a bit, a couple of years into the future.
We are very confident, we said that several times, and we stick to that we see a very positive momentum and also the potential that the target range can be increased in a couple of years from now. Hope that gives the answer to your question, Lasse.
Perfect. Maybe I can ask just one follow-up, just on standardized systems. You mentioned it in the presentation, you had a very strong development in the U.S. I'm just wondering, what is driving that specifically for you? AutoStore, generally, has had a bit of a harder time recently, obviously. Just wondering what's driving the strength of your business in the U.S.
This is not only valid for the U.S., what we are looking for. If you also ask, are there any industries for AS Solutions who are particularly strong? Not really. What we are focusing on is the customers that have the potential for multiple sites. Here, especially in the U.S., we are successful to have identified a couple of customers with whom we could do contracts not only for one project, but then for three or four or five projects. That is one of the reasons, this targeted approach in the U.S. to go for customers where we see the potential for multiple sites.
Great. Thank you very much.
Welcome.
The next question comes from the line of Sebastian Furgal, UBS. Please go ahead.
Hello, and good morning. I have two questions. I would ask them one by one. The first one is regarding also the guidance for the full year and for the second half. To better understand it there, what would be the scenarios to bring you to the upper end of the guidance, and what would be the scenarios that would bring you to the lower end of the guidance?
Difficult to say. The guidance is now between 8% and 10%, so the range is not too big. We have a plan, what we can realize from the projects that we have in our backlog. Here we have a clear view that with what we have in our backlog, we have very high possibilities to get within the range, or we see it as almost certain. It depends a little bit how strong then also the booking momentum in the beginning of the third quarter will be. Because whatever we book in the third quarter for Mlog and also for AS Solutions has high probability to also become net revenues in the full year. This drives a little bit the question in where in this range we will end up. Basically, it depends on booking momentums in Q3.
Normally, at the beginning of Q3, we have holiday season, where it's not so strong. At the moment, we see very positive signals all over the world. This will basically drive where we end up.
Yeah, probably to add here also, qualification. Sebastian, you're probably looking also for qualification of the range. I personally see it as very balanced. 9% ± 1%, this is quite a balanced view on the target range we have given.
Got it. Second question is also on the margins, this time more specific on standardized systems. Just to have a little bit more granularity on the 2.7% of H1 in terms of the building blocks that brought you there. Was it pretty much only the projects, or was it also a little bit of the consolidation of Rocket Solution? Was it more of a competitive backdrop? Was it really just only project size that were coming in? If you can add some additional color there, that would be appreciated.
Yeah, sure. The consolidation of Rocket for sure plays a very important role. We don't want always to emphasize that because we decided to integrate Rocket, we stick to it. It is a good addition to our solution portfolio. Yes, it has put pressure on that reporting segment. Even more than the project execution, to be honest. Nevertheless, in the end, it's a mix of both.
That will follow up there, that will continue, I assume, from Rocket angle also in the second half? Do you expect some larger step-ups into the direction of break-even or beyond potentially for that business?
The expectation in the second half of the year is that the negative contribution of Rocket is a bit slower. It goes down with the increased volume we have in Rocket Solution, but it still contributed negatively in the second half of the year.
Got it. If I may put in one small question regarding the CapEx side of things. You initially guided for EUR 45 million, if I'm not mistaken. You had a bit of a slow start, so to say, into this number. Are you still fine with it, or do you think that this year could be actually a bit lower than that?
It could be lower. In our plan and the agenda and the roadmap, it's still the EUR 45 million. It might be that certain delays lead to the situation that it slightly goes down.
Got it. Many thanks. Happy to go back to the queue.
Thank you.
The next question comes from the line of Walter Bamert, ZKB. Please go ahead.
Okay. Hello, everybody. Can you hear me?
Yes, we can hear you.
I come back to the automated products. You have a backlog of EUR 314. You had an order intake of EUR 314. You talk about increasing order momentum, so that plays well for the orders in the second half. Is there any reason you can give me not to put at least EUR 314 revenues into the second half?
Well, hi, Walter.
Hello.
It's a very specific question. Normally we don't guide that specifically. As I said, in the end, it's the customers who accept the projects. Is it exactly EUR 314? It's one of the scenarios, for sure. We cannot guide that specifically. In the end, when you do the calculation, you probably end up very closely to that EUR 314, yes.
Okay. When we get very closely to this, we will all of a sudden have a very lot of gross profit contribution.
I didn't get the question, Walter.
We have much more gross profit contribution from automated products.
Correct. That's true, and therefore, we expect that we get back to the range.
Okay. You said the booking momentum maintains very strong at automated products into the second half.
Yes, we are positive with this. We saw, and you notice also from when we presented the numbers at the beginning of this year for the full last year, that we had a weaker second half of the year, and we also had a weaker January and February. Since March, we see a strong increase of what we have seen the seven months before. Since March, we are very positive. This month also looks very positive. We expect that this momentum that we have will also continue and carry us through the next couple of months.
Okay. You had OpEx of EUR 100 million in the first half. Is that basically stable at that level going forward? Will that increase further, or are there one-off items in there which will go away in the second half?
No, there are no one-off items. We expect that we have a side effect, so no substantial ups or downs to be expected in the second half.
Also into the coming years, that's a good figure for the overhead cost, for the IT cost, and so on.
For the upcoming years, we will have a negative impact on depreciation. Depreciation will go up as we invest currently quite substantially. This will increase the cost level. Just based on depreciation, we will further increase the labor force accordingly with our growth initiative, mainly in the standardized system segment, not necessarily in the automated products. You can expect further cost growth in the upcoming years.
Okay.
As always, we are looking at profitable growth. This meaning that the growth expectation of the OpEx level is below the volume increase.
Okay. My last question is regarding the project development. Is it correct to assume once you close a project that typically that should lift the margins a little bit if that is correctly executed, and you tend to be conservative with revenue and profit recognition over the lifetime of a project?
This is correct. We have to distinguish between CCM or POC projects. POC, we apply for larger projects. This means that we recognize revenue in the course of the project. Also there we see a small dip when everything goes well in the project execution, because we only in the end realize the risk pot. We have a risk pot in the projects to cover uncertainties we have in the course of the project. Different to the CCM project, CCM projects, we recognize revenue only at the very end of the projects. With these projects, you see the whole profit margin only at the very end of the project execution.
Is it correct to assume the second half should rather benefit from this effect?
That's the right assumption. Correct.
Okay. Thank you.
Welcome.
The next question is from Torsten Sauter, Kepler Cheuvreux. Please go ahead.
Yes. Hello, can you hear me?
Yes, we can.
Yes, we do.
Perfect. Hello, everybody. I have a couple of technical questions. They are somewhat interrelated, maybe I give them to you in one paragraph. Firstly, can you help me again with the revenue bridge? How much was the organic ForEx and M&A? Tying into that, can you give me a feel for the Rocket Solution contribution this year? I know you're a little bit opaque on profitability, what does it need for Rocket to be no longer dilutive? Let me say it like that. Thirdly, could you clarify again, I didn't fully pick it up, the old and the new tax guidance, please. Thank you.
Hi, Torsten. Here's Thomas. Let me start with the first question. This is the revenue bridge. There is hardly any M&A, so all the volume is organic. What we have on the revenues side is a EUR -7.2 million FX effect. This means that the organic growth, let me quickly calculate. It's EUR 42 million. The majority is organic. We have a negative impact on FX, and this is the revenue bridge. Rocket was the second question?
Yeah. Here, first of all, we will not give details on the contribution, but we can already see that or we expect that in the course of 2027, Rocket will reach its breakeven.
I must admit, Torsten, I have not understood the third question. Can you repeat that again?
Yeah. I think there was also a bit of a misunderstanding on my part, but you said something about the future tax corridor that you're expecting, which is higher due to the Rocket losses. Can you remind me of the old and the new corridor, please? Thank you.
Okay. Now I heard it. Yes, the tax corridor was last year, 24%-27%. I increased it slightly from 24%-28%, just because of the negative contribution of Rocket. Only a slight change of the guidance.
That's just for the current fiscal or for future periods? I mean, this is high. Yeah.
Yeah, that's for the periods to come. You can count on the year 2026, 2027, 2028. We will probably then give a new guidance.
Thank you.
It's 2026, 2027. Yeah.
Okay, Torsten.
Yes. Can I ask a follow-up? It's a small one, actually, but I'm curious. You said you were entering slightly larger projects in Mlog and also you're tapping different geographic markets. Can you give us a feel for why the risk profile of this project business isn't changing? How should we feel about questions like inflation escalation or what happens in case of a shortage of a component or delays? Is this business keeping, defending its current low-risk profile?
Yeah, Torsten, this is Jens. I would like to answer this question. What we do and what we do differently from some of our competition is we are not doing any one-offs. We don't do any specialized project for single customer requests. If we do something new on the technical side, then we do it with the expectation that we can multiply this several times. That in generally reduces the risk. If we do an AutoStore project of EUR 25 million volume or EUR 5 million, it basically stays the same because it's basically the same technology and the same risk profile. It's just for a bigger size.
When it comes to our internal calculation, yes, we always have when the project lasts, for example, for two, three years, then we have for our internal calculation, we always have a risk or an inflation part of this. We also have back-to-back contracts with our suppliers. For example, we also have work with certain indices. When we see that there's a huge amount of steel in there, then we work with a steel price index, and vary the price accordingly. Therefore, we think that the risk profile stays the same, stays low. We also see this when we look at our comparison with calculated margins before the project and at the end of the project. At the end, what was asked also before, we see that we have a positive contribution.
That means that we don't use our full risk pot, and we think that it stays the same, because at the end, the risk profile of the project stays the same. For all the things that cannot be foreseen, we have put some provisions in our project sheets.
Very clear. Thank you.
Welcome.
The next question is from Constantin Hesse, Jefferies. Please go ahead.
Hi. Thanks for my questions. Sorry, I joined a little bit late and, just wondering. If I look at, obviously there is a big increase in activity in the second half to deliver these numbers, and there is some comments in the presentation, like for example, customer-driven delay, sorry, longer lead times for increasingly complex projects. How comfortable are you with execution in the second half around these projects? Would be my first question. My second question is just, I heard there were a few answers on order momentum, but I just wanted to clarify, right? If we look at Remstar, 7% in the first half, do you expect an acceleration in the second half, or do you expect similar momentum? Similar question for standardized systems. Mlog was a little bit weaker in H1. Do you expect an acceleration there?
I'm assuming the AS Solutions momentum is probably something that is going to be a little bit weaker in the second half 2026, order momentum-wise, right? Because it was clearly a very big acceleration in the first half. Any information you can provide here would be great. Thanks.
Okay. Hi, Constantin. Starting from your first question, how confident are we, also with regards to the comments that we gave, for net revenue realization in the second half of the year. We are very confident, because we have a good overview of the second half of the year. When we talk about the first half of the year, there was some insecurity because we had a bigger part of wins and dues. That means projects that we haven't won, at the beginning of the year and that we needed to win and realize within the first half of the year. Now we have a much better situation.
We also see how many of these bigger projects come in the second half of the year and when they will come. We have a lower percentage of wins and dues that we have to do for automated products. Therefore we are very confident because I think your question targeted mainly on automated products.
Correct. On execution. Yeah, on execution.
Yeah. We are very confident.
Great. Thank you.
With regard to your second question with bookings, we have a 7% increase, but until March of this year, we were still behind the bookings of last year. The first half year of 2025 was, until now, the strongest booking half year that we had for Remstar. Followed by a weaker bookings in the second half of the year, and still, even with this weaker bookings in 2025, we increased our bookings in total for Remstar by 10% for new business. Now we have a different situation. Two weaker month in January and February. We caught up from March to June. Finally, for the first half year, we were 7% better than in the first half of the year 2025. We expect for the entire year for Remstar that there will be an increase in the range of low two digits compared to 2025.
When we look at the other business units, Mlog, we saw they were a little bit weaker in the first half of the year compared to last year, but also based on good bookings in the first half of 2025. We expect that the second half of the year will be stronger because we already have a couple of also verbally agreed bookings, that will come in this month or next month. We expect a stronger second half of the year. With AS Solutions, you may be right. We had such a strong first half. It will be difficult to beat this in the second half of the year.
Yeah. Can I just ask, on AS Solutions, I'm not sure if you answered this, but was there a one-off in there, or was it really just sustainable strong momentum?
There was one big project, as we have mentioned, in France, all in all, it was still a very good and solid mix of small and mid-size and big projects.
Understood. Great. Thank you.
You're welcome.
The next question is from Tobias Fahrenholz, ODDO. Please go ahead.
Yes. Hi, gentlemen. Not much left, but could we maybe follow up a bit on pricing? What has been the concrete impact in the first half, and are there any additional price increases to be expected in the second half? What do you see here for the two divisions, and could you maybe also comment to which extent rising prices could have led to some pre-buying the first half? Thanks.
Hi, Tobias. Here is Thomas. Price increase. I'm not sure whether you talk about cost or price. Price, our end customer price will go up for Kardex Remstar reporting segment or business unit. We increased our prices by, in average, 5%. This will have a slightly positive impact, but also costs are expected to increase, namely steel and transportation. We see there are trends that also our cost base goes up. This has an impact on automated products, Kardex Remstar, but we expect a slightly positive impact on the cost-price ratio for the second half of the year. When we look at the other reporting segment, this is a project business. This is a bottom-up calculation, and we always calculate based on the existing cost level base, and there we will not have any margin dilution to be expected in the second half.
Did I answer your question, Tobias?
Yep. Thanks.
You're very welcome.
The next question is from Laura Bucher. Octavian, please go ahead.
Hi. Good afternoon. Thank you for taking my questions. I have really just one now. It's on Net Working Capital. I mean, you're growing the business, and margins are not there yet. I mean, that's all fine. I want to get your vision on Net Working Capital profile for this year, and once you reach, let's say, your cruising altitude level. I'm interested in free cash flow conversion post margin normalization. I mean, where do you see Net Working Capital intensity and free cash flow generation levels realistically?
Yeah, thank you for the question. Net Working Capital is very difficult to predict, to be very honest. This isn't because of the standardized systems reporting segment picking up such substantial element of the overall business volume. It really depends on the project execution, project lifetime situation. When I look on averaged Net Working Capital intensity, I would rather expect that it goes down in the second half of the year. The intensity. Why is that? Because we have a very strong order intake in June, and assuming that we have a better distribution in Q4, this will slightly go down. Again, when we have a very strong December again, and all the orders are coming in December, then I will have the exact same picture.
I am aware that this is not a very satisfactory answer to your question, but this is the best I can give. Sorry for that.
No, that's fine. Then on free cash flow, do you have an ambition on a group level, let's say two years from now, of what you think you can and want to deliver?
Yeah. Free cash flow is quite heavily impacted by our investment activities for the time being. It's at the lower end, to be honest. When you look a couple of years back, we provided always very strong cash flows in the past years, and this is also our vision that we go back, probably not to the same net revenue free cash flow ratio as before, because we were a bit, also, to be honest, bit under-invested a couple of years before. That's the reason why we now invest more into the organization. This will stay on a higher level than if you look back five or 10 years from now. Nevertheless, we want to go back to a strong cash flow organization.
Okay, thank you.
You're very welcome.
There are no more questions at this time.
Okay. Thank you very much. Ladies and gentlemen, that concludes also today's conference call. Thank you very much for your interest in the company and for taking the time to join us today. If you have further questions, you can always call us up or write us an email. Thank you very much, and have a good day. Thank you.
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