Bucher Industries Stock

So very good. We're still 1 minute early. So as a good Swiss company, we'll still wait for a minute, maybe less.

There we are. It is 2:00. Thank you very much for joining us here in the room, first of all, and for those of you who are at the screen, thank you very much for joining us at least online. I know the weather outside is very, very tempting, but I hope we have some good news that will be interesting for you as well. It is a hybrid presentation. So in other words, we have people watching us, and it is being recorded, and it will be available on our website later. If you have questions, I will first address the questions that are here in the room. And then afterwards, I will address the questions which are online. You will have to raise your electronic hand so that we can see who has a question but that we do during the Q&A session.

Today, with me are -- let me see if I can work out the electronics here. There we are. So as usual, Manuela is going to join the presentation later and explain some financials. And then it's Matthias job as the future CEO, the CEO as of the General Assembly in April to give an outlook. If I try to summarize last year's results, what we can see is that the markets where we are active have stabilized overall. There is some recovery visible, especially in Europe. We see more demand also in the agricultural sector, which is good. We have 2 divisions that managed to grow their order intake, which is basically Kuhn Group and Bucher Hydraulics. Then the sales still fell if we compare it to 2024 based on the lower volume or lower order book that we had at the beginning of the year. And it was only Bucher Municipal as a division that managed to increase their sales year-over-year.

The EBIT margin reflected the lower activity that we had in our facilities, the reduced volume, and we profited from the sale of a property here in Switzerland. So that compensated somewhat the situation, which is what is a very nice highlight is the strong cash flow that we generated last year, and that will then result into nice requests to the general assembly. And also a good result is the fact that we managed to reduce the CO2 emissions once again. So we look for the long term, then we can see that we have a very solid financial position. We are holding about CHF 500 million in net cash positions, and we have a high equity ratio of 66%. And we are proposing also for that reason, the continued dividend of CHF 11 at the general assembly despite the share buyback, which is almost accomplished now. And then finally, the last point, which is important, we have established a new management team, a new management team with Matthias being my successor, but also within the divisions with Bucher Municipal and Bucher Emhart Glass, we have 2 good, very capable successors.

If I come to the numbers, then you can see that, that order intake I spoke before was a stronger focus on the European market that increased by about 7% year-over-year. And if I show you these numbers now, they're always corrected for exchange rate and for acquisitions. So these are really like-for-like numbers. So 7% on the order intake that went up. It was mainly Kuhn Group and Bucher Hydraulics that increased there, whereas the glass forming machinery business suffered most, but in aggregate, 7% up. The sales, however, still based on the lower order intake at the beginning of the year, declined by about 6% last year. It was only Bucher Municipal that managed to increase their sales. The good news, though, is that especially with the fourth quarter of last year, finally, we reached a stage where we were showing positive sales for the whole group again.

If we look at profitability, then you can see the group's EBIT margin reached 9.7%. That is a bit higher than the 9% we had in 2024, but we did benefit from the sales of a property that we had here in Switzerland. We cleared that property and now we got it into the market, and that netted in a profit of CHF 43 million. Profitability otherwise was, of course, impacted by the lower volume that we had. And if we look at the cost elements, then we see that our personnel costs in percentage of sales had a tendency to go up despite measures that we took to reorganize or adjust capacities, especially in the United States. FTEs declined by about 4% year-over-year. In some areas, we had to reduce them, but there are other factories where we are already building our employee base again so that we can prepare to produce a higher output. Then we continue with some key elements, and that is, of course, the R&D cost. The R&D cost did not go down. We basically maintained almost CHF 140 million, not quite CHF 134 million in percentage of sales. It's where it should be, in my opinion, somewhere between 4% and 5%.

The 4.6%, I think, is a good value. And we did continue to also invest into buildings, IT and of course, modern machinery. As you can see here, the CapEx did get reduced from about CHF 150 million, which was a high level, down to about not quite CHF 120 million. I can show you some examples. For the R&D side, what I'd like to show you is in the middle picture, the new tine cultivator that we introduced, especially for the European market. The tine cultivator is a tool that you use after the harvest. It really has the job of putting the residue or mixing the residue with the soil so that the decay can start happening. It's a natural way of kind of reducing the residue and getting back some fertilizer or some nutritions actually into the ground. We were very successful with that. That's one element. And we have a lot of other products that we, of course, introduced into the market.

And what you can see is, of course, that tine cultivator, it's called the Highlander that is towed by a green tractor, the John Deere tractor. We -- it's a bit in the dark, but you would see otherwise hydraulic components and these components are from Bucher Hydraulics usually. And that is one of the reasons why we expanded our buildings in Frutigen, and that is the picture on the right side, where we are going to be delivering into a new generation of John Deere tractors, and we have created that capacity to do so. Another achievement that we made is we reduced our CO2 footprint by another 13% year-over-year. So we're down to 60,000 tonnes or 61,000 tonnes. When I started, it was 93,000 tonnes in 2021. So I think we are on a nice path to continuously bring it down. We invested into renewable energy that we brought. So the energy mix was better, but we also invested in solar cells. And then, of course, lower activity does help also to reduce the CO2. But all in all, in the last 4 years, we reduced 35%. I think that's a very good achievement.

Every year, when you look at the annual report, we have kind of a topic. This year, our topic of the annual report was where do we create value for the society. And we just brought some examples that I would like to explain to you. I mean the first question would be, could you imagine a life without milk? Maybe the milk, yes, but can you imagine a life without cheese? The pizza without cheese? I mean, at Swiss, of course, we cannot imagine at all or the chocolate without milk or milk powder or a toast without butter? That is, of course, one of the elements where you suddenly notice how important milk is to our society, at least to the diet that we know. And that is this part of the story. And producing milk is very labor-intensive. So you need to take care of your cows on a regular basis every day. If you don't do that, of course, milk production goes down and eventually, they'll start complaining.

So finding the labor that wants to work in the stable is the next challenge that the farmer has, especially in the milk industry or dairy industry. And we have developed this robot that goes out to fetch the silage, puts some other ingredients into the food stuff, then it mixes it. There's a mixer inside that robot and then it has a belt that feeds that food mix basically to the cows. And then on top of it, it has a brush because the cows start sweeping out the food mix too far away, they can reach it. The robot will then sweep it back right in front of the cow. And that machine does it all day long, just drives back and forth and keeps feeding the cows very, very regularly, like this the milk production is just optimum. And that is a machine that is pretty successful. It's getting installed in more and more places into dairy farms.

We take another example that is probably very prominent today. As you can see, I mean, obviously, first of all, our sweepers have the job of cleaning the streets again when there's gravel on the road, maybe from the winter time or so old leaves. That is one job that has to do with safety. But of course, a clean city is something where people like to be. It attracts a good society. And then I think sweeping goes right beyond just having a clean road, but also providing comfort to the inhabitants of a city, such a sweeper can do about 25,000 square meters per hour. So it has to be high performing continuously. What we see more and more through these cities, we have electric buses. I think it makes a lot of sense. There's a lot less noise for electric buses.

It's easy to kind of run them, and we had invested into a company about 5 years ago that produces these inverters. So with an electric bus basically have the battery available, now you have all kind of systems that need to be powered by electricity. That can be the steering that needs power steering, that can be the compressors that drive the dampening or the tilting of the bus for the -- when the passengers are entering.

It can be something simple like air conditioning or the USB power plug that is available in the buses today. And we have these inverters that go into these buses. It is a successful business as such. So whenever you sit in electric bus, enjoy the quietness somewhere in the background, there are our inverters working. There is no doubt for us -- and it's also, I think, well depicted on the right side that glass is one of the best containers for liquids and for drinks. It is just the purest form about PET, a lot has been written, even aluminum cans, they have a plastic liner inside. It's not really aluminum that touches and it is just not quite as healthy as what glass can offer. So there, we are proud of producing almost -- or more than every second bottle in this world is produced on one of our machines, and that's really globally. So a lot of people sitting together enjoying the bottle of beer or eventually wine, they will be profiting from our glass machine.

And then finally, apple juice is another beverage that people like very, very much. We have invested into a facility in Poland. About 3 years ago, they produced the containers where all this apple juice or the concentrate can be stored. We have the filters that go right in front of it, and we have the presses that is our origin that we sell to go with it. So basically, we have the full chain for apple juice production. And again, we see people enjoying it. Just some examples how Bucher is creating comfort and a better life for people in this world. I would like to continue now with some details on the divisions, and I'll start off with Kuhn Group.

And of course, we have another nice product, which I cannot refrain from praising because we did get a medal for that at the Agritechnica show in Germany last year, and that is the GMD 15030 that's a disc mower and it has a reach of 14.5 meters. So it's driving along with some 20 kilometers an hour. It's cutting at 14.5 meters. It's highly efficient. But the specialty about it, of course, because you have such wings, you have to have them flexible because they have to adapt basically to the terrain. Otherwise, you would not be cutting the grass nicely. And then the other part that is interesting because at the end, he has to drive home. So we have to fold this together from 14.5 down to 3 meters in width and 4 meters in height. That's the allowable size that is available in European regulations, and it does so very, very well.

If we look at farming last year, it's kind of a mixed picture. The picture that was a bit more pessimistic is on the left side, where you can see the grain prices. Down below it is more corn and wheat. And if you compare it year-over-year, you can see we were at a very low level for the farmers, particularly in the United States, and they were suffering. Income for farming was bad last year. You can also see the green line, that's the upper one on the left chart. And you can also see that dip, which is most likely the dip that happened when China decided not to buy any soybeans anymore from United States. That happened right around midyear because of the tariffs and then after a while, Trump renegotiated and then they started buying again. And these are all these elements that happened. But there's no doubt, crop production last year was a very difficult task and hardly profitable for the farmers and they're suffering.

The milk price was better, dairy was actually a good business last year. In the United States, it started coming down. It continues, but it's still at a fair level in Europe, milk price is still at a good level. And one element that we don't depict here is meat price, livestock. That was at a very, very high level, and it remains there. And so these farmers are doing well, but the crop producers have problems. Here, you can see the farm income as it is projected by the USDA. And you can see 2025 wasn't really an improvement over 2024 and 2026 is expected to remain about the same. And these levels here are just not sustainable for farmers. Now the United States government has noticed it, and obviously, farmers are Trump fans. So they expect more subsidies to happen in 2026 or more to come, and they were more promised. Now 2025, there were some promise as well, but the problem is at the moment they had promised it, they had the government shutdown, so they didn't pay. So that delayed as well.

So a challenging year for these crop producers overall, a bit less challenging in Europe. If we remember a year ago, we said that one of the biggest challenges that we had was that the dealers were overstocked. They had too much in their inventory. They were not selling quick enough, and it took a while for them to reduce that inventory to the level where they would start ordering again. And we have reached the level now. The dealers in Europe are at normal levels. They are ordering again the material that they need. The ones in the U.S. are getting there. They were -- that happened a bit slower over there. So that was one element why we see more revival in Europe happening. If I take some other areas, I mentioned the United States being challenging, Brazil, there, what we see is the subsidized credits that farmers can get from the Brazilian government are at interest rates that are not attractive for the farmers.

So it is available the money, but they don't really want to use it because the interest rates are high. And at that moment, they're holding back with investments. That is basically the part. So all in all, Kuhn Group's order intake rose by impressive 20%, albeit from a rather low level. The order book reached 6 months of sales, which I think is a fair level. And sales, of course, still reflected the low order book of the beginning of the year and it fell by 7% year-over-year. So the lower utilization of our factories and sites led to an EBIT margin, which was on the low side for Kuhn at 7.1%. They were also having to pay tariffs. They were most impacted by the tariffs overall from our divisions. And then we had capacity adjustments also in the United States that needed to be done so that we can face the lower level of demand, at least over there.

If I change over to Bucher Municipal, this is our latest baby in the line of compact sweepers. It's the smallest one, too, the VR17e is fully electric, 4-wheel steering, very, very maneuverable, is ideal, of course, for more pedestrian areas. What is interesting, it has actually a full drive-by-wire setting or electronics. And that is what we need. We want to do autonomous sweeping. So we need to have the controls and they will have to have a digital control or digital access to all these elements of the sweeper. And a matter of fact, it's in Duisburg, where we are testing the sweeper fully autonomous, no driver in it for now testing purposes, obviously, but with the intention eventually to come out with a product that can fulfill this requirement.

Then if we look at Bucher Municipal, which I think is a very nice story. So the order intake, we had mentioned it came down a bit. Compact sweepers like the one before went pretty, pretty well. There was also momentum for the sewage cleaning side. Then the truck-mounted sweepers had a bit more trouble selling. Likewise, the winter equipment or refuse collections, they were a bit more under pressure. All in all, the order intake declined somewhat by 3.4% year-over-year, but at a solid level. The reach of our order book is 5 months, so that's still good. The sales remained high at about 3.4% above previous year, mainly driven by United States and Europe and less by Australia and Asia.

So as a result of very solid sales, but also as a result of the restructuring and the continuous organization, the EBIT margin almost finally reached 9.4%, I think a very good value. I would continue to the next division, which is Bucher Hydraulics. This is a system integrator that we bought in Finland. There's quite some machinery being built in Finland. Forestry is one good example and then also defense or offshore marine. And this company was a good system integrator for all these applications. We're very happy that we could buy this team that produces solutions for these applications as mentioned, and it is doing actually pretty well. So I mentioned that we saw a little bit of a revival was hydraulics. It's a good sign. There were different applications, different regions that helped to do so, construction and started picking up again, agricultural machinery, also our tractor manufacturers are starting to come back to life, but there was also industrial hydraulics that was going upwards.

There was mainly one application that was on its way down still, and that was material handling. That is the facility that we have over in the United States that was suffering. Then we look at the order book altogether, it decreased by 4%. And the sales, of course, were still an effect of that lower order book that we had at the beginning of the year, and that also decreased by about 4% altogether. So the lower capacity utilization did challenge us here and there. Then we also had some acquisition costs for -- also the new system integrator that I mentioned before. And we had to also open up a new facility in Mexico or in Malaysia, just to be closer to customers. And for that reason, our EBIT margin kind of sank by about not quite 1 percentage point to 10.1%. I will continue to the next division, which is Emhart Glass. There, we acquired a company that is active in the engineering of glass manufacturing plants, a complete specialist, but it is the first company that a glass customer would address when he has a new project in his mind, and that is one of the reasons why we like to have them.

So they do all the engineering and the specification for the machinery that is required in the glass manufacturing plant. And of course, they will then also specify our machines in the future. It's good, but it also gives us an opportunity to sell more of the infrastructure that is needed to run our machines. So we will eventually expand that business beyond just glass forming. And then another side effect, which was very pleasant with the acquisition of this company, we also found a new member of our management team, and the successor for Matthias Kummerle. If we look at the overall results, then it is clear that our customers were suffering substantially last year. Glass consumption was still lower. Energy prices was a challenge for them. They were adjusting their capacities, closing older plants. And what we also see is alcoholic beverages, which is a driver for glass is coming down. The consumption of alcoholic beverages is coming down.

So overall, there was less demand from our customers. Order intake went down as well for forming machines, but as well also for inspection machinery and altogether by 15.4%. The one element that stayed stable was, of course, service and spare parts that continues. There we continued with solid success. Sales were significantly lower also based on the order intake by 18%. The operating profit margin despite that reduction remained at very respectable 12.6%. We did adjust our production planning to that lower demand, and we did some activities as well. One of them is to shift the production from -- of inspection machinery from the United States over to Germany. That is Bucher Emhart Glass coming to Bucher Specials. There you can see presses. These presses are normally used to press apples and then produce apple juice. But there is a side application that we have been serving only halfway successful in the past that is pressing of sludge and the sludge, which comes basically from water purification plants.

And we received a big order at the end of the year from Hong Kong. Hong Kong is reshuffling their sewage system, and they want to have these presses so that they can dry the sludge better than with current technologies. And we're going to be building them this year and then delivering them in 2017. They will be installed in caverns for Hong Kong sewage system. So maybe a breakthrough of a new technology. But Bucher Specials overall was challenged last year, especially the wine production was a very difficult topic. We see clearly that wine consumption is going down. That is one element. And then the markets where we are very strong in France suffered particularly because there were tariffs on their French wine. So there was less consumption in the United States. And almost everywhere in the world, they're reducing the vineyards, the surface of vineyards. European Union is actually paying money if you start reducing your vineyards.

So that is going on, and that was very challenging for one of the units, which is called Bucher Vaslin. The other unit that does mainly juice production, which is Bucher Unipektin, apple juice, orange juice and also beer filtration, that was doing very well last year. And then we have the trading business for tractors here in Switzerland, Bucher Landtechnik that remained at the low prior year level but was solid. And then finally, the last unit of this Bucher Specials, which is the automation side, which has a high degree of internal customers, Emhart Glass being one of them and then Bucher Hydraulics being the other. That unit was also challenged just by lower demand and had to go through some restructuring. All in all, the order intake was stable, as you can see, but the sales did fall 9%. The profit margin improved somewhat from 2.3% to up to 3%, but still at a low level. That, in short, is the explanations to our divisions, and I'll hand over to Manuela to explain the very positive financial data.

Thank you, Jacques, and good afternoon from my side. We talked a lot about the operating results. So now let's come to the net profit of the year. And in between, we have the net financial result and the income taxes. Net financial result, in our case, a positive number. The net financial result was driven by interest income and the result of short-term investments, mainly in Brazil. As a reminder, we have a substantial high net financial liquidity, and we are almost debt-free. The effective tax rate was slightly below 20%, slightly lower than expected, mainly due to special effects, the property gain was with a lower tax rate, and then we also benefited from R&D impact or R&D credits.

So midterm, we still expect the tax rate to be in the range of 21%, 23%. The net working capital, it was a highlight. We could reduce net working capital significantly by CHF 180 million, mainly due to a reduction of inventory and higher customer prepayments at Kuhn Group from Europe or in Europe. Net working capital in percentage of net sales of 18.5% compared to 22.8% last year. This is a meaningful improvement year-on-year and shows our focus on the cash conversion. There is still some way to go. Over the last couple of years, our average was between 17% and 18%, and that's a number that we also would like to achieve over the next 2, 3 years. The reduction in average net operating assets is mainly attributable to the net working capital reduction. As we continue to invest in our production facilities, modernization, digitalization is a key topic and also ensures our long-term organic growth.

The return as a result with 16.2% is still above our cost of capital of around 8%, but below our target over a cycle of 20% and includes the effect from the property gain is roughly 2.5 percentage points. Here on this graph, I would like to start right in the middle with our operating free cash flow, and it was clearly a highlight of 2025. The operating free cash flow of CHF 365 million exceeded the already high prior year, mainly due to the substantial reduction of net working capital here on this chart with CHF 130 million. And even without this impact, it's the highest operating free cash flow over the last 20 years of Bucher Industries.

As a result, on the bottom, the free cash flow slightly above CHF 100 million. And in between, Jacques mentioned the acquisition that we did over the years. And then we have the dividend and treasury shares or the share buyback program with CHF 234 million. The impact is roughly half-half. So dividend payment around CHF 112 million and the rest is applied to the share buyback program. As a result of this strong free cash flow, we achieved a net cash position close to CHF 500 million in the middle. And we still have a comfortable equity ratio of 66%. And this solid financial position ensures our flexibility, but also our stability for the whole group and creates optimal conditions for our -- for the future growth. And when it comes to our capital allocation priorities, first, it's organic growth, investing in CapEx, innovation.

So R&D is key also in the future. Second, is scan the market for acquisition opportunities to complement our businesses to generate future growth. And last, with such a strong balance sheet, it also allow us to continue to pursue a consistent dividend policy. And another nice chart over the years, over the last 10 years, we were able to increase our dividend per share. And the Board for the year 2025, the Board of Directors will propose a dividend of CHF 11 per share. This takes into account our results of 2025, including the property gain, the outlook 2026, future investments and also further the dividend policy or consistent dividend policy. Overall, we are also in the final stage of our share buyback program. Yesterday evening, we achieved close to 4%. We paid around CHF 150 million over the last year. It's a bit earlier than expected. So our Board will propose at the next AGM, the capital reduction this year.

And before I hand over to Matthias, some nonfinancial numbers. The heart of our company is the people, and it's right in the middle, the employees. We still have around 14,000 employees of headcount around 400 trainees worldwide, 100 in Switzerland. So it's also key to further invest in skillful employees and in our training. So the average hours of training per regular employee also increased by 14%, has mainly to do with also the introduction of ERP programs and additional trainings. And other key target is to reduce the number of occupational accidents on the bottom. Here, we were able to reduce it by 13%. And within the group and the group management, we have a commitment to further reduce this number with a new target that we also introduced during 2025 to reduce our lost workday rate.

So to summarize, for a sustainable value creation, it's important to work on both sides. On one hand, on the profitability. Our focus is to remain on actively managing the cost within business units with still lower capacity utilization. And at the same time, we are also well positioned to capitalize on those where we are seeing signs of market recovery. So profitability, managing costs. And on the other hand, our invested capital, it's our aim to return the net working capital as a percentage of sales to the long-term average, this 17%, 18%. And at the same time, we remain committed to investing thoughtfully in future growth, guided by our capital allocation priorities, as I just mentioned before. And with that, I would like to hand over to Matthias with an outlook.

Thank you, Manuela. Good afternoon also from my side. It's a pleasure to be here, and thank you very much for coming this afternoon and for joining us. I haven't had the pleasure yet to speak with all of you. So please allow me to briefly introduce myself before we go into the outlook. So my name is Matthias Kummerle. The name comes from Germany, born in Germany, grown up in Switzerland. I have a technical background, studied at ETH Zurich mechanical engineering, then ended up in Lausanne at EPFL for a PhD, finally complemented my studies a few years later with an MBA, had a number of years with Hilti in Liechtenstein first and then a couple of years in China, a country which I'm still following with a great interest.

And since 15 years now, I've been with Bucher Industries. I have headed the R&D effort at Emhart Glass for 10 years. And the last 5 years, I had the pleasure of heading the division. And now from April on, as it has been mentioned before, I have the pleasure to take over from Jacques as CEO at the next general assembly. And I'm looking forward a lot, of course, to continue building on what Jacques and the team have built in the last years and to working with the management team. As you know, Bucher Industries has a very long history of entrepreneurship of decentralized responsibilities and management and I think also a very disciplined capital allocation process, as Manuela has mentioned.

And I want to continue that culture and basically continue driving with the teams along those lines. Now coming to the outlook. I have to admit looking into the future has already been easier in the past with all the uncertainties that we have going on at the moment. The whole planning cycle is challenging. The most recent events in the Middle East are not really making it easier. Nevertheless, I will walk you through the assumptions that we are applying at the moment and what that means for the expectations for this year. So overall, we expect that the recovery in demand that we have seen in the second half of last year will continue. This will be most pronounced with the Kuhn Group and also with Bucher Hydraulics. But again, the uncertainties are still quite large and elevated, and we have to also live with the possibility of headwinds, which might have an adverse impact on the investment mood of our customers and also on the cost side.

Walking through the divisions -- this one here. And starting with the Kuhn Group, we can say that based on the higher order book with Kuhn Group, we expect an increase in sales. And when I speak about sales, I always mean comparable basis compared to last year. And in addition, also the operating margin is expected to be higher than the prior year. The improvement in volumes and also the high discipline that we enjoy with Kuhn Group on the operational side will support the profitability as the demand continues to normalize. With Bucher Municipal, we expect a slight decrease in sales on a comparable basis once again and also a slight decrease in the operating margin compared to '25. Overall, the demand should stay intact. We are not worried about the demand. And we also expect the continuation of the benefit from efficiency measures that have been going on. However, the order book going into the new year is substantially lower than what we had a year ago, and this limits a bit the near-term visibility and also weighs on the year-on-year comparison.

Bucher Hydraulics. There, we anticipate a slight increase in sales. And correspondingly, we also expect a slightly higher operating margin. As mentioned, the order intake has improved, especially in Europe. And while we remain cautious about the overall situation, the trend is clearly more supportive than in the prior years. Bucher Emhart Glass, obviously, I know that division the best at this moment. There we expect on a comparable basis a significantly lower sales and also a significantly lower operating profit margin. And that has to be put in light with a strong increase in sales that we saw in the last year -- towards end of the last year, which supported in the previous year, the profit margin and the sales. And because of that, we really start the year now with a lower order book, and that will weigh on the Emhart. But we are hopeful that we'll see during the course of this year a trend to the positive again. But the visibility is not the best yet.

Finally, Bucher Specials. There, we anticipate a slight sales growth and also the operating profit margin is expected to improve again. And that is supported by the higher capacity utilization that we expect. And also some ongoing efficiency measures. If we put all that together, we can say that Kuhn Group and Bucher Hydraulics and to some extent Bucher Specials they have to compensate in '26 for the shortcomings of Bucher Emhart Glass. And overall, we expect a comparable sales compared to '25 and also a similar operating profit and that is excluding the property gain that we had in the last year. We believe that this picture contains a quite balanced view of the risks that still are there and of the upside potential.

So the risks, as I have mentioned before, there are still uncertainties with the trade situation with tariffs and so on. The cost side is difficult to anticipate. On the other hand, on the upside, it could be that agriculture in Europe or also in the U.S. might pick up a little bit faster than we believe at the moment. So overall, the picture, we believe, is quite balanced. And with that, we approach '26, I would say, with a cautious optimism. Before we go into the Q&A, I would like to mention a couple of words about the management team. I'm in a very fortunate situation that I can start working with an extremely experienced management team, which has also -- which is fully aligned also with the culture and the values of Bucher Industries. There is Manuela Suter, responsible for finance as our CFO, whom you know very well. We have Thierry Krier responsible for the Kuhn Group. We have Frank Muhlon driving Bucher Hydraulics. And we have Stefan During responsible for corporate development and for Bucher Specials.

I have known these colleagues since a very long time from my term on the management team, and I'm super happy to be working together with them in the future and to have their experience on board. And then as Jacques has briefly mentioned, we have for Bucher Municipal, Martin Starkey, an internal successor who took over from Aurelio Lemos beginning of this year. Martin has been heading the truck-mounted sweeper divisions during the last years, has an automotive background and is a huge asset on our management team. And last but not least, Daniel Schippan, who took over from me at the beginning of the year running now Bucher Emhart Glass.

I have known Daniel since many years from the glass industry. He has a very strong entrepreneurial spirit, is strategically quite visionary and I'm convinced that he is the right person to take Emhart Glass through these still difficult times and also bring it back to a growth path. Last but not least, an announcement that you saw as part of the communication packages this morning. We have a change on our Board. It is Urs [indiscernible] our Chairman of the Board, who for personal reasons, has decided not to stand for reelection at the next general assembly. Urs has been on our Board since '23.

He has been Chairman of the Board since 2024. And again, for personal reasons, he's not available anymore. And it is Stefan Scheiber, who is being proposed by the Board to be elected as our Chairman. Urs, you know him most likely from Buhler, has had a career there as CEO served for a very long time, a very seasoned international manager. And Stefan has been on the Bucher Board since '22. He knows our company very well. He is in line with the culture. So we are happy that also here, we have a very good solution that will guarantee a seamless continuation. And with that, I would like to hand to Jacques, who will open the Q&A.

We'll, of course, do that as a team. I'll try to answer more 2025 questions together with Manuela and then outlook will be a bit more the topic of Matthias. So who's going to break the ice here in the room? Any questions concerning the past year? [indiscernible] please?

Yes, I have one question. It's all about capital allocation because you -- the dividend remains unchanged, CHF 11. And you said number 1 is organic growth; number 2 is acquisition. Number 3 is giving back. As you don't give back more money to investor despite the 20 years record operating cash flow, I'm wondering whether you are growing much more organically? Or are you investing much more into M&A? Or did you treat the shareholders badly?

The money is still there. It won't be lost. So I don't know if it's -- we're not trying to -- I think one element is if we start growing, then we will need more cash. That is known. So one part will eventually go back into that element. I know we're still conservative, but eventually, we will need it over time.

But you guided flat sales growth, so you don't need more money.

Let's see what happens.

In a downturn, we were always able to manage or to reduce the net working capital. I would say we are now quite on a high level of net cash. For next year, we expect an operating free cash flow between CHF 100 million and CHF 150 million. So again, a positive number, but clearly below this year. But yes, you're right. But there are future growth. So we have R&D CapEx, we expect around CHF 150 million next year, also slightly higher than this year. And last acquisition was always on our agenda for the last 10 years.

I can just build on that. It is very clear that with the situation, acquisitions will play a role as we go forward. So we will be obviously continuing to look out for acquisitions that make sense. So that is going to be part of the strategy also in the future.

Next question, please.

How do you see net working capital, for example, as a percentage of change developing for the next 2 years?

Right now, we are around 18.5% of sales. Over the last years, it was more 17%, 18%. So I think that's a number that we would like to go again, means for next year or for 2026, we will see a slight reduction, obviously, not to the extent that we had during 2025. I would say, around 0 depends a bit on the movement to CHF 30 million, something like that, but it's hard to say. It depends also a bit on the growth that we will see during 2026 or how it develops depending on the businesses.

I have also another question. Can you remind me of your CapEx plans for the next 2 years?

The CapEx plans. As mentioned before, for 2026, we expect around CHF 150 million, but overall and a good number is always around 4%, 4.5% of sales when it comes to capital expenditure.

I have one, maybe to continue on M&A. It sounded, Mr. Kummerle, that you might want to be doing more acquisition in terms of numbers and maybe also in terms of size? And if yes, can you give an indication what would be your ambitions in which areas and geographies?

I mean I can make a couple of general comments, maybe not as specific as you might expect. But in general, I see -- well, the strategy overall is not going to change. So we continue investing in organic growth, and that will be complemented with M&A. And I think it's clear if M&A shall be a growth driver also in the future of our business, the size of the acquisitions needs to be on a certain level. So obviously, we will be building a pipeline and working on a funnel to also have objects which would serve a growth target. And we are in the fortunate situation that with the current balance sheet, we are able to propose those type of propositions to our Board.

I would say the type of acquisitions, I mean, that is an ongoing discussion. I personally believe that in areas where we already have a relevant position in fragmented markets, we have a very good chance to further strengthen our position. That is going to be a high priority, but we will be also considering pushing a bit more into geographies where we may not have such a strong position yet or in businesses with a very strong position already to also consider adjacent activities. So I would say that's in a nutshell, what we expect, but it's a bit too early here to go into more details.

Okay. Can I ask a question on Kuhn maybe. When I look at the charts that you have presented, Jacques, it seems that the rebound in farmer income or -- farmer income is really driven by the subsidies. So is that coming, first of all? And can you give a bit of an indication about the geographies, if they are coming or not? And then maybe related to that, how is the mood because in the U.S. has been very volatile in the last months. Once up, once down, once up, one down, you never -- you don't know where they are standing. Maybe they don't know themselves either, actually.

Well, I think, I mean, the main drivers for farm income are, first of all, of course, weather and yield. The second element then is price of whatever they sell, the commodity that they sell. Then you have the costs for input and finally, subsidies. So there are multiple elements, not just subsidies as such. It's true in the United States where crop production is not very profitable at the moment. The biggest impact on a better income would be subsidies at this time. That's for sure.

Now the mood in farming in the United States is no good, at least I'm talking about crop production. Dairy livestock is not a problem, but the mood in farming in crop production is not good at the moment. And I don't really see that it has been up and down. It basically has been down for a while. So that's the part. But that's talking about the United States. And then there are other areas where you might see either maybe a relaxed agricultural policy or less regulations that helps a bit for the self-confidence of the farmer and then the investment attitudes. That's one element, and that is different from country to country. European Unions, although they have been protesting, they're a bit worried about regulations as well. But overall, it is improving the situation, and they're seeming to buy more.

Can I ask you a last one maybe here on -- always on agriculture. I don't know if it's relevant. But in Switzerland, we have seen the farmers throwing away milk. Is this something that happens also outside Switzerland? And if yes, how can the milk prices stay high? This is something I don't understand.

I would not at all overrate that media coverage that is one action that is not relevant.

Yes. But it was not only the throwing away the milk. It was also a lot of additional cheese production because there was just too much milk available.

Yes. But that's Switzerland and I mean we're looking at the global scale here. I mean...

It's only Switzerland.

Yes sometimes. The dairy farmer overall has been doing pretty well. And of course, the milk prices are getting a bit more under pressure now, but it had not very much to do with the milk. Mr. Bamert, you were in action -- somewhere else.

Walter Bamert from Zurcher Kantonalbank. I have a question regarding the component for John Deere that you mentioned. John Deere has an ambitious growth program for excavators in the U.S. There are 2 questions I have. One is, can you benefit from those new factories and the new offering there? And the second one is when I see what John Deere is doing with closing the gaps, I ask myself, is it also a risk that they would get into implement. I don't know what John Deere already produces in terms of implements and if that would be an attractive business for them to produce on their own.

I'll maybe answer the first question, and you can take the implement question at that moment. So the first question is we are -- the John Deere business that we have is agriculture. It's not the building construction side. There might be some small applications, but it's -- the main part is tractors that we're supplying to. So the excavator is not a very important topic for us at this moment. Are they competing with us in implements? That's yes.

I mean the answer is yes and no. I mean they already have implements. So it's not that they're only focusing on tractors, even though that is the biggest part of their business. And on the implement, it's typically more the big, big and few flagship products, which are also the brand shapers. And the big gorillas like John Deere are typically not the ones who have the breadth of the offering like Kuhn, also going into the midsize and the smaller ones. And that's, I think, where companies like Kuhn can really make the difference and can bring a very strong position with the dealers. and the big companies like John Deere, they are struggling to have the complete offering. So it's a yes and no answer.

I have a question regarding Emhart Glass. I'm wondering how long are these investment cycles, if I may say. I mean you were mentioning that there's a lot of investments being done, maybe overcapacities around consumption going down, efficiency going up. So it looks like a kind of a textile machinery business almost. Just give us a feeling what's the fair assumption to say, well, at a certain point, all these fillers or glass...

Yes. So in the past, I would say a typical cycle was 3 to 4 years, 3 years, a typical one for a longer one. This one here is a bit longer and a bit deeper to what we have seen. And we believe that it's still to a large part due to an extreme amount of overinvestment that happened after COVID. And so we are still seeing -- we are still in that downswing and it's going to come back up. There is no doubt about that.

The only thing that is on top of that is that in the last 2 years, there has been a little bit a shift from glass into aluminum cans. So that adds a bit of an additional element, which we have not seen in the past. But looking globally, we have no concern that we will be back on a typical growth trajectory that we have seen in the past, which is typically 1% to 2% or 2% more in the long run. And with the global footprint that Emhart has being also present in China, in India and emerging markets, we are not concerned. So it's a question of -- it's a question of...

You don't think that you're not as good positioned as in the past.

We don't believe that it will shoot back to the post-COVID level anytime soon, but it will be back on a stable trajectory. That's the assumption.

And the product extension you did or the acquisition you did, I can't remember the sales. So is that something that helps at least to dampen the cycle? Or is that not -- in that case, because the investment is the same, it's plant. It's like the equipment you put into these plants. So does it accelerate the cycle going forward?

The additional sales from that acquisition is relatively small. was around CHF 7 million to CHF 8 million, the sales on top. The bigger impact that we expect is that we can offer a more complete product to the industry. And there, we expect an amplification of the effect that we get a bigger scope in the different projects and that we get a bigger share of the cake inside the glass plant.

Okay. Maybe last question coming back to Kuhn. You had good order intake in Europe, if I may say. So I'm wondering whether we kind of are a little bit on top of the investment cycle in Europe? Or what's the risk that we will see next 12, 18 months? Lower order intake or lower demand from Europe?

I mean the indications that we have at the moment with the level of the dealer stocks, which are on a normal level at the moment, but not on the other side of the curve yet. We don't see an immediate risk yet that we're already overshooting. So we are working with the assumptions that we have mentioned before.

Maybe if you look into the past, the downturn of agriculture started mid of 2023. And since then, we had a quarter-over-quarter reduction of demand until basically Q3 of last year. And it's pretty clear, I think it looks like now it's stabilizing. And if anything, I would more assume it's a pent-up demand that will eventually drive the business. But of course, for me, it's easier to say than for Matthias.

Any other question? Mr. [indiscernible], once more and then I'll start looking at the online numbers here or the...

How do you see the demand backdrop in hydraulics over the next few quarters? Are there any observations in the key end markets that support this view?

I mean we play in different segments. So what has been -- or what is supporting the statements that we made is developments in agriculture, in construction and in general industry, there also in Europe, we have seen a positive momentum again. What is not working yet is on the -- in the U.S., particularly on the transportation side. So those are leveling docks in logistics centers and so on. That segment has been still relatively weak. So that's, I would say, if you go into the applications and the segments, the picture that we have.

The Material Handling segment is more exposed to U.S. I think that has also a reason why it's still lagging and then we have agriculture and construction. And we are still coming from a very, very low base. I think that's also need to take into account. However, over the last couple of months, it was really a steady improvement also in order intake that we could see in particularly in construction and agricultural segment.

But again, the signs are not super strong, as I said. So it's -- I also cautious optimism that it continues like that.

If there are no more questions here, then I would address [indiscernible].

So my question is about Emhart Glasses. Could you give us more details on the competitive landscape in this division? And do you have a different strategy versus your competitor? And do you think you might have a stronger recovery than your competitor?

I didn't quite get which...

Yes, okay, glass. I'm happy to take that. So the -- I would say the industry within this glass business is relatively consolidated. So suppliers of those forming machines, there you have 4 players, which are relevant, of which Emhart is the largest one. And then you have the other big segment, which is inspection machines. There Emhart Glass is #2 and our competitor is leading the pack, even though the size of that segment is substantially smaller. And I would say the competitive advantage that Emhart has had is that we have a lot of credibility with our history, with the R&D, with the technology. And also I can say with Bucher Industries behind. It's a very long-term oriented business. It's very much relationship driven, and that's what has helped Emhart Glass in the last, I would say, 15 years to continuously build the market share and to be perceived as the clear #1.

And typically, if somebody does not work with Emhart Glass it's because of pure price. So what Jacques said, I think is true. It is on a global scale, every other bottle that we drink of will have been produced at an Emhart Glass machine. Now will the recovery come faster for Emhart Glass? I think what we will see is that the service and the parts side that's typically reacting earlier, that will pick up again. So we hope to see these signals during this year. And then I think with this combined business of this acquisition that we had, we have our foot in those projects probably earlier than anyone else. I think we have a very good chance to benefit of an upswing also when they start investing in CapEx again.

I think we can say over the last 10 years and the cycles that we have been living through Emhart Glass has always emerged even stronger than before. Market shares over time have been rising. That story could continue.

Thank you, Mr. [indiscernible]. And any other questions from the online participants? I don't see any hand raised. And at that moment, it was my 19th presentation, half of them more or less for BELIMO and then the other half for Bucher. And a lot of the faces I see here have been continuously showing up. I appreciate that very, very much. I had an incredible amount of time. And I'm also very proud that I can hand over a very, very solid company with a lot of potential to the team that deserves it. So thank you very much for showing up. And of course, we'll still be around sharing a glass of wine with you. And at that moment, we will close the session and also turn off the online recording. Thank you very much also for those who joined us online. Thank you very much.

Thank you.