Konecranes Stock

Good afternoon, and a warm welcome to Konecrane's Capital Markets Day 2026. My name is Ruusa Vallin, and I'm the interim Head of Investor Relations at Konecranes. Before we go into today's agenda, I would like to remind you about the disclaimer. We will be making forward-looking statements in all our presentations today.

Here, we have our agenda for today. The presentations will be started by our President and CEO, Marko Tulokas. He is followed by our business area presidents Fabio Fiorino for Industrial Service and Jussi Rautiainen for industrial equipment. After Jussi, we will have a Q&A with the first 3 presenters.

Then we will have a short break and continue with Tomas Myntti, Business Area President, Port Solutions, and the presentations will be concluded by CFO, Teo Ottola. Finally, we will have a Q&A session with all the speakers. It will be possible to ask questions here in the audience in Helsinki and also through the chat function in the webcast and you can always send your questions during the presentations from the webcast chat. So with that, I will give the stage to Marko. Go ahead, Marko.

Thank you, Rose, and warmly welcome on my behalf also to the Konecranes Capital Market Day and event. So I'd like to start by elaborating why we actually called in this event. We at Konecranes, we are very confident about our performance as well as the opportunities that we see in the marketplace.

That is why we decided to clarify our strategy as well as raise our ambition and our targets, and also answer some of those questions that you might have had for us in the recent quarters. So how are we going to explain the strategic narrative today. I will start by explaining why our position is strong in the marketplace and what is the Konecranes legacy. As well as then how do we see the world today and what opportune we see in it. And then we move on to the targets and ambitions for the company and also how we aim to achieve those targets, so the strategic focus areas for the company in the years to come. Then I'll hand it over to the business area President starting from Fabio talk about their actions, the way they see their own business and how they actually aim to achieve the targets that we have set for the business areas.

In the interest of time, we've decided that we will focus on specific examples of those actions in the business areas to give you a little bit deeper flavor with what we are actually doing and what we aim to do in the next coming years. And then we will move on to Teo, who will talk about our financials, our capital allocation principle as well as then in our approach to M&A. As Ruusa said, we will have 2 Q&A sessions today. First one, right after the industrial presentations. And then if we forgot a question, then you have a second chance in the end of the presentations when everything else is done. So I hope you enjoy the presentations and the discussions today. I'm pretty sure that I will absolutely.

So let me start. I'll start by discussing where we're actually coming from Konecranes where we are heading to. This company has a strong foundation, and we've had a consistent evolution for the 3 decades that the company has been independent and publicly listed. And in the first decade of the company, we established a strong operating logic of Konecranes, which is still very much true and fundamental to our success today. Those principles are the multichannel distribution model, the go-to-market approach that we have chosen.

The service life cycle approach as well as then our investment leading proprietary technologies, what we call core of lifting, those principles not only very much core to our success, but also something that differentiates us in many ways from our competition today in this market. Then we move on the second decade to add scalability on top of the solid foundational principles.

And by that, what I mean is that in order to scale the company, continue to globalization as well as then the consolidation in this marketplace. It was absolutely necessary to formalize the go-to-market model, modernize the branding of the company. As well as create that scalable process and system architecture. So we did a very large investment in the systems in the so-called one Konecranes program that really laid the foundation of consolidating and collecting the operational and asset data in the marketplace.

And our continuing investment leading technology took the shape of connectivity and digitalization. So we started connecting our assets and took the steps to start in really digitalizing this fairly physical world that we operate in. And then on top of that, on the third decade, we continued the consolidation and the M&A long track record of Konecranes by the acquisition of Terex MHPS, which is so far the largest acquisition of the company. That really established the leading position the broadest offering in this industry as well as then the widest presence in the whole marketplace.

Secondly, that investment into the systems and collection of all that data allowed us with that scale to start leveraging that operational excellence in the so-called Konecranes Way program, which really is one way fundamental also for the good operating performance that we have today. And building on top of the Konecranes core of lifting leading technology, the connectivity and digitalization and the investment into those scalable processes and systems, we were able to start leveraging the data that we have collected and turning that to the knowledge for ourselves and, of course, for the benefit of our customers. And all of this is very important. Than on the for decade that coincidentally started last year, we can continue to accelerate this industry's transformation to automation, automization and rate-driven customer value where we as Konecranes fee that we are very much in a pivotal and core position to do so.

And in the end, that is how you really create a true life cycle partnership. And in our minds, the key and the permanent and the most important differentiation in this marketplace. And every decade, those 3 decades that we have been independent, we have doubled the company side, that is roughly 8% CAGR growth for the last 30-some years. That gives us also that additional confidence to set our targets high going forward on the [indiscernible].

So as long as we stay and we will stay true to our foundational core. We will continue to invest in systems. We will continue to drive transformational technology as well as reinvent ourselves and we are absolutely committed and confident to set those new higher targets. And next, I'd like to zoom in to the last 5 years. And in those last 5 years, the strength of our model, combined with the structure of efficiency actions that we have actually built in the recent years have produced those known great results and the solid margin improvement that we have seen in the company's performance.

That strong position, the improved agility, self-help and that structural choices creates and lays a foundation for growth going forward. That certainly is secondly, very much supported by a very strong balance sheet, which may not necessarily be optimal as a balance sheet structure, but it certainly gives us the ability to maneuver in the marketplace going forward.

On the same time frame, our life cycle approach has created strong shareholder returns. And that consistency and visibility to our future, rightfully, of course, needs capital allocation principles and transparency and that we have been aiming to answer now with our reverse capital allocation policy, which they will talk about a bit later today. And that concludes my history lesson and looking backwards into the mirror. So what I'd like to move on now where we are today.

And moving on to the present and future of the company. And today, Konecranes is a global leader, a clear runway to grow across multiple growth vectors. In Industrial Service, we are clearly the only global player with uniform worldwide offering. We've done the investments. We've collected and we have access to the data. Now it's a question of how we harness that data -- and with AI, we have a brink of that massive opportunity to really leverage that data for growth and for efficiency and particularly in industrial service that is well visible.

In Industrial Equipment, the portfolio that we have today is clearly leading in the marketplace in terms of breadth and depth. We have leading technology, and we have a supply chain that is well positioned globally. And I can comfortably say that we have reached market reach that is unparalleled in this marketplace.

So we have presence in more than 50 countries with industrial equipment and industrial service and we have more than 1,000 partners in 100 or so countries with 6 very strong household brands in this industry. And in Port Solutions, we are clearly the most comprehensive offering. We have leading technology. We have also a very wide presence, and we have a very targeted customer approach to our very large strategic accounts. And we are the best in alternative.

All of our businesses are leading or have a very strong market position. And our competition is local, regional or niche segments typically. That creates and gives us the competitive differentiation opportunity. And we have a lot of market runway. As you see, although we are leading in the marketplace, there is a big significant market existing there. There's also significant consolidation room remaining in the marketplace.

Now these upgraded financial targets that we just recently launched, they reflect acceleration and our increased ambitions and why so? Because we have a strong track record. We've done sustainable improvements to the company's operating model product portfolio and our processes as I just shortly a while ago described. We have mid- and long-term drivers that are solid and good. There are organic growth opportunities on multiple dimensions.

And there is a consolidation opportunity that exists, and it's not exhausted. And last but really not least, we have a very strong team in Konecranes from the leadership of Konecranes to the first front line. So therefore, we are very confident to increase our ambition to the sales growth of 7% and a comparable EBITDA margin range of 15% to 17% reached by latest for year 2030. Our financial targets cannot be decoupled from the sustainability commitments. Our people are the ones that make this plan work, and it's our responsibility here to make a working place for our organization that is safe, fair and inclusive. We are absolutely committed for the decarbonization and circularity in the world. We'll do our own part, but we also help our customers and the value chain participants to do their part with our offering and our approach in this industry.

And we run our business in a responsible way, and we expect the same responsible practices throughout the value chain. And if you look at our remission reduction progress and targets and the benchmark year here is 2019, we've had good progress. So in our own Scope 1 and 2 emissions, our progress is 54% last year to our target of 60% in 2030.

And in the scope 3, the value chain emissions, we are now 20% down compared to 2019 and 50% target is what we have for 2030. That's, of course, a little bit of work to be done together with our customers as well as the value chain. We are committed to do our own part there. What we've now added, we have announced a reduction target of 90% for Scope 1, 2 and 3, the whole value chain by 2050.

And are on our way to an incident-free environment, which must be, of course, the ultimate goal for safety. Our target for 2030 is below 3 total recordable incidents, whereas where we are today at 5.2% and certainly not a number that we can be yet happy with, but we are very determined to improve.

I believe and we believe in growth in this business and for Konecranes why is that? First of all, if you look at where we are and the market we play in, the consumption of goods and the related industrial investments, so nominal CapEx growth or the flow of material which is, of course, container throughput is the key indicator.

We've seen 3% to 5% growth in the last years and the expectation is between 3% and 4% growth for underlying market growth in the next coming years. In this industry, we see mega trends, which we believe favor us and particularly, relatively speaking, whether they are technological developments of automation, autonomization or the cybersecurity-related security concerns, which are particularly relatively speaking, favorable for a company like ourselves who has the scale and ability to address those concerns for ourselves, for our value chain and for our customers.

Secondly, this is the geopolitical megatrend and the related nearshoring, which changes the locations of manufacturing investment and consequently, also the flow of materials, hence, investment into ports and terminals. And the sustainability and electrification trend, which drives electrified equipment and circularity, also the life cycle approach that Konecranes is very well known and where we have a big commitment on, I'm happy to also say that in quarter 2, we launched the last product in Konecranes trains with the electrical electrified propulsion, and that would be the reach stacker of the lead trucks. So we have a full portfolio that we can get that this electrification rent.

And beyond the mega trends and the underlying market growth on top of them, of course, we have a lot of own actions. First of all, even if we have a large global presence, there is a lot of room to expand our geographical presence. Whether it is in the global south or global North grow in segments where we may have not been as active in the past, for example, intermodal terminals to extend our offering for an extended range of products or new products or new features and fill those remaining gaps that we may have in our product offering today.

And we can enhance our service and equipment and technology capabilities with smart offering, knowledge-based packaged products for service and industrial equipment offering. And of course, our unparalleled and solid operational and customer asset data is something that allows us with the help of AI to sell more, to sell faster and improve our efficiency.

And then Fabio will shortly elaborate this how we harness AI to help us to do this. So that was the growth part. So now we're going to move on to the efficiency opportunities that we have in this business and for Konecranes. So the margin improvement opportunity. And first and foremost, of course, it comes from growth. So we see notable operating leverage with growth. But beyond that, what is specifically, definitely needed for going forward is focused on organizational agility.

Efficiency is important and it has been particularly important in the past, but in this today's world, an agile organization that is able to learn, adapt and execute and transform faster is very important, then we are really and doing our own actions to drive organizational culture, but also the actions to practically improve upon.

Exploiting our unparalleled data with the help of AI, as I just said, that also helps us in the operational efficiency side for service, which is the obvious example there. But it's also the same sales processes, project management and our supply chain efficiency as well as all those back office supporting functions that most companies like ourselves have.

And we also have a real function in supply chain today. It is well set up relatively speaking, and it serves us well in this sort of a geopolitical environment. But we have an opportunity, and we will continue to transform that supply chain so that it actually serves and caters for the needs, changing needs of the market, which means investment in other areas in terms of additional capacity. And it means increasing the level of automation in other areas and particularly in the developed markets.

And it's also something that we are comfortable to say that although we've done really well in terms of operational efficiency improvement and margin expansion, we are not efficient enough yet. So there is room to improve in terms of capacity utilization in manufacturing processes and what manufacturing technologies we use, our delivery performance. We need to be faster also going forward in deliveries as well as in our process alignment or overhead of the company, and we will continue the decentralization approach that we adopted roughly 2 years ago, almost 3 years ago.

And with that, this profit and what we are committed with all of the actions and notably, of course, with the growth that we are aiming to achieve. Now for us to achieve those accelerated targets, we are doing the following things: so we focus on 4 strategic focus areas or you may say, must-win battles in the next years to come.

We continue and accelerate our investment into technology. Stepping up the core of lifting in terms of intelligence, adding connectivity and digitalization helps us in that way of accelerating our customer path to that automated -- autonomous and when the material handling world moves more towards this sort of integration in terms of automation and autonomy, we play our part in that. And that, of course, means that we have to not only develop our own technology, possibly acquire some of them but also partner closely with other players in that space.

Furthermore, we've talked in the past quite a lot about simplifying our platforms and streamlining those. And we are well on our way on that road map. But we also must make sure that we strengthen the modularity of architecture. And that's important because we need to be able to gather to many different customer segments that are in different speed when we consider this automation trend.

And we have a segment that has rudimentary and significant segments through the very basic lifting needs. And we want to be able to cater to all of those segments efficiently and that requires the modularity of software modularity of physical groups and modularity of the end products.

Secondly, our emphasis on life cycle value generation continues to be a very critical component in our success. We have the data. We know the products. We know the processes and like I said, this is a easy in the marketplace. Now using that data so that we can optimize service, optimize the uses of the products, but also optimize productivity and over the optimal solution for our customer is something where there's a lot of room to create opportunity and create offering an opportunity that is not known or realized before.

And in the end, that serves that purpose of creating trusted customers and differentiating with those lasting customer relations. When we know the customer and when we know the industry and when we know what the customer needs, then of course, our ability to support the customers in their endeavors is the right thing to do and being there before the customer actually realized that the need is our aim.

Another thing that is a special thing that we have and, like I said earlier, is the presence. So our broad presence in more than 100 countries with 1,000 or so partners is something that helps us to address different needs, different segments in the marketplace, but it also helps us to increase the hit rate of the opportunities.

The good thing there is that there are still white spots countries where we do not have a presence and where the market is attractive. A very good example of such was the MFK -- announced MFK acquisition in Japan that we are now working on to close as we speak.

We can continue that we have in our place our density in the north -- in the Global North as well as grow and win the race in global South. That is, of course, helped by our ability to segment our offering and use the modularity of our architecture to offer different solutions for the customers, but it's also something that where our partners are in an important role. We want to empower also our partners to win. That is from the market space, but also offering them more and more connected solutions with digitalization as well as then in the end also so that taken over a life cycle offering to their customers.

And we have improved in terms of efficiency, but we are not there yet. For the performance, it is important that we have right people, we support those people. We empower them, but we also make them accountable for that success. And for speed, we need consistency, clarity and working processes and that's why driving safe, consistent and lean ways of working efficient end-to-end processes are things where I and we believe that we have a runway to improve upon.

And of course, in today's world, with the help of AI adoption that we can use that for creative innovation and efficiency. It's a tool to grow and innovate, but it's a tool also to improve our efficiency and very much so. Now as I approach the end of my first session here, I'd like to simplify what we are actually changing with this strategy.

We have a healthy business with a solid foundation. We focus on growth in our 3 existing business areas. These business areas are performing well, but there is also both organic and inorganic growth room to grow across multiple growth vectors, whether they're organic or inorganic.

And as a company, we have improved, but we can be significantly better in how we operate and even more importantly, much faster and more agile. And when we focus on our core we accelerate the growth across those multiple vectors. And when we improve our efficiency, we are confident that on our model's ability to generate cash.

And therefore, we have also clarified our capital allocation principle for more transparency and predictability. And there will talk shortly more about the capital allocation as well as our M&A approach. But before that, I will turn it over to our business areas, and we're going to start with industrial service. We have opportunity in all these businesses. There is solid profitability developing all 3 of them and significant remaining runway for growth. And Fabio, please, it's your turn now. So thank you very much for now.

And welcome to Capital Markets Day on my behalf as well. It's great to be back. I'm Fabio Fiorino, I'm President of Industrial Service, the theme for today [Technical Difficulty] for service will be capturing the full potential of our industry-leading life cycle services. So maybe a short in chart of the business or a recap for most of you. We certainly do have that there's plenty of room to grow. We certainly have the largest and most extensive service network. The only global network, as Marko mentioned, we service all types and makes of industrial cranes and hoists.

We deliver the next generation of digital services. We also have a diversified agreement base that under [Technical Difficulty] here paying 75% to 85% of the overall service volume, and that provides a lot of resilience to our business as well. With all that said, we still have significant runway across multiple markets and customer segments. And we will dwell into that a little bit as we go on.

The long-term growth drivers and trends are certainly supportive to the business again, companies seek to improve safety, productivity, sustainability, and of course, that is what we deliver. Outsourcing continues to be another trend. The aging population continues to drive that, and we are certainly there to support our customers as they outsource their services. Digitalization, automation is certainly a big topic as becomes more prevalent into our customers' operations, they, of course, need more advanced services, higher skills in maintenance service and so forth.

So that, again, another positive trend for us. Artificial intelligence creates a lot of opportunities in many areas, and we will talk a little bit about that as we go through the presentation. Our own industry is also consolidating to some extent, mostly in the front lines in certain areas, and that can create some opportunities for us expansion. Yes, over the last 5 years, but also if we go back all the way probably probably with 2012, start of my tenure, we've been averaging [Technical Difficulty] being close to 100 basis points of expansion on an annual basis. So we're very proud of that, and we believe there's still runway there.

So consequently, given the strengths that we have in the marketplace, the attractive growth opportunities and the strong operational leverage that our business provides, we have updated these targets. Net sales growth of 7%, as was shown for business have industrial service and a comparable EBITDA margin of 23% to 25% to be reached at the latest the year 2030.

So how are we going to get there? We certainly have a clear path and ambition to achieve these financial targets. First and foremost, service is a people business. So we are going to continue to take care of our people and of course, the planet.

As was mentioned before, the agreement base underpins a large portion of the business to drive the overall growth of the business. So our focus will continue to be to grow that agreement base. And in addition to that, we are going to also focus on growing the installed base. Not only is that done through industrial equipment, new equipment sales, but we could also do that through the service organization, and I'll explain that a little bit later as well.

We will increase our presence in selected markets as well as other customer segments, and we're going to unleash AI-driven productivity throughout the organization. So if we now talk a little bit about the focus area of with end-to-end productivity falls really well under that theme.

We can apply AI and AI assistance throughout the entire end-to-end process, starting with sales and marketing to the back [Technical Difficulty] of our customer assets, the field operations as well as customer insights. And I believe in the last CMD, we gave you some good examples, some of the initiatives that we were working on. And I'll have a few examples and updates on those here in a second.

We are also investing into the infrastructure and the architecture. In the back end, that will help us to further develop AI and also improve the overall performance of our systems and capabilities. Here's an example that we're really excited about how to use our data to drive speed and efficiency in sales.

One of the [indiscernible] this end-to-end process is identifying the correct repair parts, spare parts and what labor does it take to repair that piece of equipment. As you know, we're dealing with hundreds of thousands of pieces of equipment. They range from all sorts of brands or sources of capacities, applications, some of them going back decades at age so it's not always easy to identify that in an efficient and correct manner. So if we can use AI to support that identification to be able to create the quotations, it certainly unlocks a lot of value, a lot of benefit.

And we are now able to launch an AI assistance. So you see an example on the screen for our field where the technicians will get a recommendation based on the finding that they have of what the part would be, they were able to accept or give a feedback. Also, there will be a recommendation on the on the repair hours. Okay, we're only able to do this because of all the data that we have been able to collect in our back end over hundreds of thousands of pieces of equipment and all the work that we have done over the years.

So the data really drives and it enables us to do this -- the tool can also be used, of course, in our inside sales folks or other sales roles, but it's best to capture it right at the crane when the technician is doing the work. It will increase the speed and accuracy of our quotes there will be less need for technical support. So there's efficiency savings there. And of course, we can -- like many AI tools, we will continuously improve and add different options and models, et cetera. So we're really excited about this one.

Another thing we launched not too long ago, you may have seen the press release, I think it was last week. We have added an AI assistance to our customer portal. Where you can provide insights at the asset level, at the fleet level or even at their whole relationship level and we have a lot of information a lot of data that's accessible through our customer portal, whether it's inspection reports, recommendations, maintenance histories, spend, all sorts of things that we can access through our customer portal. And that's very open-ended questions like it's showing on the screen. What open issues do we have, what are the recommendations for improvements. Which assets are the most critical, which ones are causing the downtime, et cetera, you could imagine anything you could maybe want to ask you.

And then if you're feeling only, you can have a conversation with your crane. So that's an added benefit. But we've been using this internally for a while, making sure we hone it and getting a lot of feedback from our entire population. So again, great tool. If you're a salesperson and you're about to go see a customer, you want to do a business review, you can easily ask the right questions and bring the right recommendations and insights to our customers. So again, very excited about that one.

Another great example of winning with technology. As you may know, we have tens of thousands of Konecranes assets. Well, our ambition would be why not take that up an order of magnitude, perhaps the 2 orders of magnitude. But in order to do that, we would need an affordable, easy to install universal sensor that would work on all types of brands of equipment. And guess what? That's exactly what we're working on.

So being able to have a sensor, we can easily install in any type of equipment that can capture what's going on with that equipment will really support the growth of predictive maintenance, of course, which will drive agreement-based growth. There could be initial revenue stream from all these equipment retrofits, perhaps recurring revenues, subscriptions and repairs it could create an opportunity to develop alternative revenue models now that you have so many connected assets. So it really opens up a broad scale connectivity extends the range of features and value-added services. So again, we're working on this. Hopefully, next year would be a good target to get this out into the market. Very exciting again.

If we switch gears a little bit and go now into the theme of growing life cycle value, we continue to develop the offering across the entire life cycle. That's something we do on a continuous basis. But focusing on growing that agreement base. What we've been doing is creating and honing our service programs to be more differentiated to be able to have programs that target different segments there is to simplify, there's this large agreement focus, these large customers with the critical assets, multiple plants, et cetera, which is a fantastic segment for us. But there's also a mass market segment, smaller companies with less assets, maybe the lifting equipment is not as crucial or as critical.

And we want to be able to address both segments because there is opportunity for growth in both. So I'll talk about that a little bit and give you a little bit more of a -- more flavor and color to that. We also continue to expand our existing agreements.

We want to make sure we cover all the assets our customers have. I want to make sure we cover all their locations, make sure we we provide all the services we have across all their assets and locations. So that's another area for growth that we continue to focus on. The other important one and that is to continue to improve our customer retention, reduce churn and having this differentiated service programs will also help in that area.

I mentioned before, we also want to help ourselves by growing the installed base, not only does the installed base growth or new equipment sales but it could also grow through retrofits and modernizations. And as you have seen, we have also been releasing new products, lifting equipment and components, et cetera, that can be used not only in the new equipment side or industrial equipment side, they can be used in our retrofits and modernizations. So that also will help us to spur those types of services as well.

And last but not least, there's the equivalent parts. Those are parts that we sell under our brand for third-party equipment. And we continue to expand that offering. So that's another way of capturing the installed base more at the part of component level rather than at the, let's say, the [indiscernible] level.

So as promised, let's talk a little bit about the service programs. Again, we are creating differentiated or targeted service programs that are tailored to the customer segments. It's important to note that the service program shapes the customer experience, the sales and the service delivery. So it kind of drives the end-to-end depending on the program that you pick. And of course, it also drives the price and the cost.

So we now have redefined our condition program. It's called inspection maintenance program. It's really a deal for those that have light lifting equipment or some industrial cranes. Some of the smaller companies, small to medium companies, what I would call it, say, the mass market. And then for the larger customers, those that have critical production equipment or those that have very large installations, multiple installations, we have our care program and our commitment program.

Our commitment program is for on-site maintenance. That's where we put our people on site on a permanent basis. They were -- it's much more customized or a much more integrated approach with our customers, very dedicated on-site personnel. We work very closely with our customers and also very closely with the systems and sometimes integrating and being able to send data back and forth with our customers. It's also an important part of that program. And that's really something we target with these large accounts as well.

Building on that and maybe helping you visualize what we're talking about. So if we look at the -- that condition program, that really targets this mass market that currently in our agreement base 54% of the assets cannot qualify in that segment. So more than half of the assets would qualify in that area. And that condition program hits about 4,000 on average per agreement. So that gives you kind of size of scale. And of course, there are repairs and other things that ensue from that.

But the renewed condition program should allow us not only to reduce churn in that customer base, but also to go after that whole segment in a much more effective, cost-effective way and efficient way for us and that matches the customer needs of that segment.

On the flip side, we have the more -- the large customer segment, those with critical assets, large installations, again, where the commitment and care programs come in. We have -- and those average around 24,000 to 25,000 per agreement. And the spin on those is much greater because they're critical equipment, process equipment, a lot more production-related type equipment in those. Not only are we looking to have these more, let's say, tailored programs for that segment that help us to get a share of wallet there are those customers, as you can see in the bottom that are only a [ 10,000 ] per agreement, but there's no reason why they should be at '26 or more.

But this also allows us to go get more -- to focus on our customer acquisition with programs that are tailored for these segments. And our goal is to grow this segment by acquiring more and more customers. And that's really where, let's say, the large monetary volume lives. But we are -- at the same time, we did not want to ignore the mass market segment because depending on geographies and locations, that is also important as well.

So now let's talk about deepening customer reach, broadening our customer base across channels. As you well know, Konecranes is the brand that we use for the end user. Market, both our direct channel, both in industrial equipment and industrial service. Here, we want to expand and develop markets using bolt-on acquisitions. And bolt-on acquisitions really vary in size. The a company that has a single location a dozen technicians or what have you, to something -- to a company that covers most of a country or beyond.

So there are now some opportunities or some bolt-on acquisition opportunities that could be significant, and we would seriously consider those. We could also use M&A to new market entry. The MFK example is, of course, a good one. Now there's also the indirect channel, and you see the brands on the screen. We talk about those a lot in industrial equipment, but they're also important in industrial service. We do want to support these partners as well. And they are an important part of the business area. There's -- whether it's spare parts, training, digital services and other ways that we can monetize that relationship through the service side as well. They complement the open markets and also white spots.

And here, you could see it quite well on the map. We look at from this geographic perspective, there are probably about 50 so countries where we had direct and indirect presence kind of the bright red that you see on the map. But there are also countries where we're only present in direct, it's kind of the purple color you see on the map. If you put it all together, you can see we have quite a good coverage and not only for industrial equipment, but also for industrial service. It works for both the indirect and the direct channel.

And that we said, I think Marko mentioned 50 direct or so and you get to about 100 when you add everything in, in terms of countries. If we kind of go around the world, where are the opportunities North America continues to provide significant opportunity just by sheer size, openness and dynamism of that market. So we're certainly an area that we're bullish on.

At the same time, Europe continues to provide opportunity throughout. In particular, Southern and Eastern Europe, I would say, have the highest available market share. We are usually stronger in the north, traditionally. Japan, South Korea, again, significant open addressable markets, M&A and indirect channel opportunities as well, again, with the MFK announcement applies there.

China is an interesting market. It is a developing service market. It provides some targeted opportunities in various segments, not an easy one per se. The global South, there's a lot of opportunity to lead the development in these markets with the differentiated offering, also direct channels in certain countries.

So there is opportunity throughout the world, and then we're pretty confident we can capture it. So in summary, the global trends certainly support our growth ambition. There are attractive opportunities for both organic and inorganic growth, as you saw and certainly, we have a strong operational leverage and continuous improvement culture that will continue to drive profitability. So well, thank you very much, and I will pass the baton to my colleague.

On everyone, and welcome. I'm Jussi. It's been my first year in Konecranes leadership team and my first -- but I've been working in Konecranes for over 20 years, always in the port side of the business, in different roles, always close to our customers and, of course, going through all the layers of the organization. So I can say that I'm born and raised in Konecranes. And standing here today, I'm proud but also a bit moved to share you our targets and contribution to the strategy.

We are the market leader. And if we explain shortly our unique setup, it is to combine the local proximity to the customers and global scale. And how we set it up is that service sales deliveries would place as close to the customers as possible. Then in a supply where we need a bit more volumes, we have centralized them into the regional level.

And then processes and technologies for the maximum scale we have them globally. Fabio already explained the dual channel approach we have, that is really important for the equipment business as well. The main conclusion we made in the strategy work was that despite being market leader, we have runway to grow in the core business where we are.

Where we're coming from. This is the last 5 years, I would say, the last or previous strategy period where the focus was clearly on improving the profitability and we delivered that. And there were decisions that intentionally prioritize the profitability and then compromise something on the top line. And as we can see from the result, the top line is flat.

This slide splits our industrial equipment path into tree. It sounds how we digested in the first phase, some of those large acquisitions and improved profitability, mainly streamlining in technology and supply. And what we're doing right now and the period of time ongoing now, I would call a pick year or pre years that the focus is to renew our offering, the flagship products we have plus add something what Marko referred as a segmented offering.

And then we are geared up for the pod itself, when the portfolio and offering renewal is completed. Myself, I think it was very a good time for me to join the industrial team at the year of these [indiscernible] while we were working both on acorporate strategy and renewing our BA strategy that helped us to align them well together. It helped me to gain a lot of insights during the year, but it's also a new phase in our strategy when we have those, I would say, fundamentals in place and the base direction well in place, we are gearing up for growth we didn't need to turn the strategy upside down.

I would rather say that we added some growth flavor, and we sharpened the focus a bit how to really deliver the growth. That was what it was all about. I'm putting more attention now on those new flavors. But as I said, it doesn't mean that we apandon what we were doing before. We had exactly doing the right things. We are following this path that was planned before but I purposely put some attention to those new flavors so that you get some novel ideas what comes with the new strategies.

This is the target. We are aiming for a 6% annual growth and improving the profitability by 2030 to the range of 10% to 12%. So the growth helps us also to improve the profitability and the targets are not conflicting but well aligned. How we're going to do it and what is our contribution to those strategic focus areas that Marko explained. We start with the win with technology. What is our contribution to that?

And the upper part of the slide tells that the foundation, which remain unchanged. So -- no any smart or intelligent equipment can be done if you don't have reliable, robust, safe, physical-based product. That's kind of a precondition for adding any intelligence to the Konecranes.

And the added intelligence must be modular. So the different customer needs can be tackled without adding the complexity to the to the technology, plus customer has always choice during the lifetime of the equipment to add the intelligence to the products. That's kind of a foundation that we've been talking before.

We're proceeding quite nicely with all the initiatives related to those ones. And then the addition of what we call air advantage. And the background of that term is that naturally as a part of the strategy work, we analyzed the wider picture of intralogistics, technology development opportunities there. And based on that, we sharpened the focus to say, let's utilize the air borne visibility and access to the extent that we haven't done before or that wasn't before even possible before certain technologies, including AI, came to the pictures.

I have a next slide showing examples so that you better understand what I mean by that airborne visibility and access. But we also concluded that the collaborative train is another part of that. It's not always crane alone that delivers the ideal material flow and there's a need to integrate with the material handling equipment that are crown based or pedestal mounted.

And in those cases, we believe in collaborative crane. That means we integrate with those technologies. We don't need to do everything by ourselves, but also in corporate level, we can collaborate with the technology providers and customers ideally.

The example of this air advantage. Maybe this sounds in the beginning, a bit of a simple thing, but -- this is where we are today, and this is a one industry example. It's a waste-to-energy plant, it's a picture taken from the crane downwards to the waste bunker. And the crop takes the waste to the furnace where we burn that and turn it to energy.

And there's always some parts that doesn't belong there. Cash bottles, batteries, bicycles, something that either disturbs the productivity or is even dangerous for the process. So how we utilize the airborne visibility is that the crane can scan the bunker and identify all the objects that doesn't belong there. And whether it's automated or semi-automated or manual then remove those parts from the process and let the process run smoothly and safely.

The next level, what is mentioned here, what we're piloting. That's kind of a reality in action today what we're piloting now with one of our customers is that we also scan the whole waste at a bunker and with the colors, we saw what are the, we call it here caloric value, I would think heat value would be a better term heat value so that it constantly picks up waste from the area that keeps the burning process as stable as possible.

So if the point was just to move waste from place A to B, there would be a lot of Crown best equipment to do that shop. But when it's more than that, the air advantage, the airborne visibility and access gives you an upper hand. And this is a one industry. But then there are other applications for the other industries where the same air advantage can be utilized. Whether it's about the scanning, whether it's about the detecting, whether it's about supporting the people or washing assembling. I think only the imagination is the limit with the new technologies put together with that what we call Air advantage.

Then moving to the Growlifecycle value. okay, the same structure. The foundation is there. The foundation will be there. So we have a full portfolio of life cycle offering, and we have the customer proximity, and we have the equipment connectivity that's the base, the foundation that will remain there.

But what we add on here, where we put more focus is the integrated industry partnering. It sounds obvious that when you have an application like in a previous slide, the waste-to-energy example, you have to be close to the customers. You really need to know the process what is meaningful, what the customer needs to improve their process, what can we do to help them improve the process.

And that requires kind of a dimension that is very well covered in a port serving one single industry. But in industrial equipment side is a bit more fragmented, but it's not less important. So -- we need to work with a clear industry dimension in our operations.

Operating model must reflect that. But then been of a kind of a new annual or something combined to the air advantage is what we call anchor product. And I used this CPR part as an example to explain you the anchor product. I started my career selling these large Koliacantry cranes to the shipyard. That was my first job. And that is the product that is most critical for the production of the shipyard.

If it's down, the whole shipyard will be soon down. If you see what is the lifting capacity of that cola, it tells you pretty much the outcome of that or output of that shipyard, how productive they are. So it's definitely the most critical product of the shipyard, and that's what we call anchor product.

And the anchor product, the benefits of that, if you have the anchor product there, first, it really integrates you not only to the individual customer, but to the community that is built around the industry. Second is that it's a great tool for co-innovation with the customers. We often use the cola for testing something. And when we made it work there, we scale it for the more standard and more kind of volume products.

And the third one is, of course, that ideally, you can increase the share of the wallet when you have the critical product with the service agreement, the opportunity to sell more all those 200 trains that large-scale shipyard is having is an at least improved opportunity.

This is very much linked to the previous win with technology and air advantage. Not to confuse you with the strategy, these things are related to the segment of our business that are what we used to call process cranes, delivering industry-specific applications.

The largest portion of our volume is coming, what we call standard equipment that are delivered across industries. The service is also across industries. So even the volume and as the volume is there on a standard side, the industry-specific solutions because of this anchor product thinking, all the benefits of that is not less important, even volume-wise it's not comparable to the standard side of our business.

AI, we have that example, Fabio also thought about it. That's important part of the same package. Deepened customer reach. We have, like and also the regional supply regionally centralized supply is also a unique setup. That helps us to deliver faster to the customers, but it's also a resilience issue so that in the turbulence of geopolitics we are there where we need to be without limitations.

What we do here and as a part of this strategy analysis, it's -- it was obvious that we've been very successful in our strongholds in the Western markets. But we haven't yet delivered our full potential in global South. Marko mentioned the global south already. Fabio mentioned that, but that's the area where we see competition that is intensifying very rapidly.

We see new competitors arising, and we must open our focus to win a global salt. We have, like I said, we have the Dalane approach. We have the supply, meaning that we can do things fast, we can do things without massive investments. The main building block we're missing is the segmented offering.

And that's one of those prettier topics that we are going to deliver so that we can cover and really deliver the full potential of global south. We recognize that there are some areas where we have difficulties to either access or the grow the business with the speed we want to do. And then we use targeted acquisitions to make that happen and the Japan MFK was a prime example of that.

Summarizing, the presentation and our contribution to the strategy. When we utilize air advantage, meaning airborne visibility and access we combine that with deep industry knowledge and the latest technology available, we create something that I would call air superiority.

And that's for the industry-specific applications. Then extend the market reach leveraging our dual channel approach will be critical, especially on a standard side. And then like I said, the unique setup we have, combining this local customer proximity together with the global volumes -- that's not only a unique concept, but it's going to be a winning concept, when we make it totally seamless. Thank you.

First Q&A. And in this Q&A, let's focus on the first 3 presentations. [Operator Instructions] But we can start from the questions from here in the ones in Helsinki. [Operator Instructions]

Antti Kansanen,SEB. A couple of questions to Fabio actually. And if we start with the kind of the service growth opportunity and think about it from a profitability perspective, if you look at your main regions, obviously, U.S. or Americas and MA are the biggest ones. Is there a big discrepancy in terms of, let's say, profitable growth opportunities or structural profitability differences between them. If you think about where you want to grow? How much is that of an importance? .

I don't know if it's a significant difference. Certainly, the North American markets are more dynamic and things you could do there you could operate faster than doing changes and other things. And working hours are longer and things like that, so they kind of help a little bit the profitability, but it's not a huge difference. The other difference you will see as you head to maybe the global South or you're looking into the east is the labor rates, right? The labor rates are not the same as you head into these other areas.

So the number of euros that you get for per hour are obviously less. So when you talk about gaining an agreement with ex hours in, let's say, the West is obviously much higher than you would if you're in the global south or what have you. But -- that would be the -- probably one of the main differences. Material pricing is not that much different, but there are some regional differences. But I don't know if I hopefully answered your question, Antti.

Yes, yes, that's good. And then if you think about bolt-on acquisitions and whether it be a private equity or a family-owned business, how will that kind of -- how do you intra and how will that impact your profitability? I mean, are these guys running at a similar type of margins as you guys? Or when you take it over, will you kind of reorganize how the business is done? How much you need to do to kind of step them up to your level? .

The main thing that we're looking for when we're looking for a bolt-on is really the customer base and the technicians are very important. And of course, key personnel, right? We want to make sure that we look for the best of the best when integrating. But really, it is a true bolt-on by definition. We bring these companies onto our model and onto our platform. We have a quite already quite efficient end-to-end process, infrastructure business model ways of working.

So really, we can easily onboard the customers and the technicians and utilize our backbone and infrastructure. So meaning we could pretty much remove most of the fixed cost that's where the synergy lies as well as improve usually the productivity of the operations.

That's maybe I get the a little bit. It is obvious. I mean, to your question was that they don't do they come at the same margin level then fair to say that the most likely will not -- so of course, it takes -- as Fabio described, we have a very rigorous model. We made the investments to all the system markets, excellent data that helps also to integrate them quickly, but it certainly takes some time to reach the same levels.

Of course, first, in terms of the operational efficiency on the back office processes, removing the overhead removing part is the easier part. But when you start replacing the installed base of those targets or competitors' assets with our assets, which eventually will also some proprietary parts that takes, of course, more time. So it's a gradual step-by-step approach.

But with our model, we are confident that it makes sense. But it's certainly something that we have to take a very careful look at case by case when we assess the value of those companies, the potential synergies that we would track -- that is also one reason why the range of the service profitability is what it is. I mean, because if you would take within this time frame, one larger such an acquisition which may be possible, then of course, that may have a dilutive impact in the beginning of the during that time frame.

We model those very carefully when we look at the acquisitions. But certainly, you look at a stand-alone, it doesn't have the profitability that we do. But once you put in the synergies and you rebuild these overheads as well as target the operational efficiencies then you get it to the level that we are. But it takes time, as Marko said, it doesn't happen -- and certainly, it happens faster, but it take time. And depending back to your original question, depending where you are, you can move quicker than other places.

Okay. And then last one for me is coming back to the growth target, 7% for services. And I mean, obviously, recent year, it hasn't grown at that clip. So what do you think is the main challenge or what is holding back growth, right? Now not maybe just from a cyclical perspective now and but looking at the next strategy period, which would be the main challenge or where you really need to kind of succeed in. .

Yes, look, and we have focused over time more on the profitability and service, of course, and there are the cyclical issues of the last 1.5 years or whatever you want to call it. But the -- we have also taken that time to really invest in this segmented offering that I'm talking about, differentiating our programs. And it's not only about the offering and how you define it, is really how it drives the whole end-to-end process and the end-to-end cost and efficiency of how you deliver these services.

In order to be able to match the -- both the offering and the cost to the customer segment. And that has taken us time to develop that and make -- and also drive that segmentation and full understanding how do we apply this? And we've been also piloting different things. So now we're at a stage that we're ready to go full speed.

With that, where we have, I think, a good model for the large customers that works well with them that we can bring our top resources and advanced services and everything else that we can bear to those folks that but also have a model, let's say, leaner and more efficient to address the other markets.

So we are now ready to really accelerate that. The other part of the growth, I think we're a little more let's say, oriented and focused on the M&A side. So that's another piece, of course, that we can certainly accelerate. But looking for more organic than inorganic, but certainly, that inorganic piece will be accelerated as well.

Maybe a follow-up on where we are right now. I mean looking at the leading indicators. I mean, I'm pointing up, but it feels that it's very much story of kind of 2 different sites that you have this defense AI data center ratification driven stuff that is growing at a very rapid pace and then a long list of industries, which are kind of still I don't know, struggling, but the low growth. If you look at your clients in your service installed base, is there a big discrepancy on -- and is that kind of holding back growth a little bit because it's obviously time before you convert those new growers into the service base. .

Well, for sure. So first of all, if you look at the telematics data, the telemetry data, as Marko mentioned, there is less utilization of equipment. And capacity utilization hasn't really crept up that much, not in Europe nor in Americas. And there are some key industries for us, like automotive, let's everybody knows, especially in this continent that's struggling, there are others.

So it is maybe a tale of 2 cities from that perspective. And the good thing is that we are diversified, we can deploy our resources quickly from where the business is at. But that mix doesn't change overnight, right? I mean, so as the hot industries ramp up and they first start with adding capital and new equipment. It does provide some modernization opportunity as well and other things as well for the service side but it's not at the same speed that the capital investment.

So there is a little bit of that for sure. The mix is different from where when it's new equipment is a new investment. So the mix change is faster than it does in service. Hopefully, that answers that.

Thank you, Antti. Any more questions from the audience? Yes.

Yes, see. This is [ Jose Mikron from OP ]. So mentioned AI. So I would be interested to know what sort of tangible benefits from AI, do you see today? And is there anything visible in your financial statements today?

And maybe if we start you from you, Fabio and Jussi, Mark0 can complement that.

Yes. I mean today, it's hard to pinpoint a monetary value, but you could certainly see the benefit in in speed and efficiency in certain areas like the examples that I put there. We've been doing predictive maintenance for a while and that we see monetary value for sure how much we track, how much volume we get from predictive maintenance on a daily to monthly basis. So there are some real tangible ones.

There are others that -- like we just launched this customer insights on the portal that will take time to see how efficient our salespeople can be? How much does that help to improve the customer experience, which translates then into satisfaction and retention so there are some things that will take time as customers adopt it, and these things get rolled out.

But you could certainly see at the individual level, at the unit level, the we've launched other tools for our technicians, for example, for to doing troubleshooting and to be able to get information for what they're working on and things like that. You could see that productivity improvement. And I think it's the same thing over the years. We've been -- we've done a lot of continuous improvement activities.

And there are pieces of the puzzle, and they start to add up and they start to build momentum. And I think those are the reasons why we continue to be able to expand the margin. And as these get rolled out and they get more and more adopted and part of the mainstream, it will continue to build and support that momentum that'll just take over from the previous activities.

Yes. Just to maybe just slightly -- and I know you said that use first, but I got to commented because it's exactly like Fabio said -- it is both -- if your question was also that where is it visible? It's also both top line as well as in the efficiency and in the margin that's where we see the efficiency. And we do see that the efficiency and it is measurable. But it is not that easy always to distinguish like Fabio said that what really comes from the use of AI and what is otherwise related to our process efficiency improvement access. But I can say that it is visible and it is tangible but we're also not ready to disclose that figure.

Sure. Understood.

Continues pretty similar answer, but the quickest wins. What we're seeing is, of course, in our internal processes where you can make it more efficient the second part that is now a lot of focus is that how about in sales how we can create more decentralized systems where the salespeople, even customers are more independent to do the process, for example, configurator, whether our salesperson uses that or a customer uses that so that how it can be done scalable way in the regions and close to the customers.

And then the third pillar that is probably always the most difficult one is that the physical AI. How do we get that into the products, how we make the products more I would say, more productive but also able to do things that they were not able to do before, beyond lifting what was the example of this waste to energy. But that's usually taking the longest time to do that physical layer.

Really interesting. Maybe a quick follow-up here. Do you think AI makes you more competitive since all your competitors are adopting the same tools as well?

Maybe I'll start and then the other guys can complement. First of all, well, my answer is yes. And -- while others are and maybe doing it, first of all, I remind that, of course, our competitive landscape is quite scattered but -- and they may not have always the same resources that we have, but most importantly, but Fabio also said it's taken us 15 years to collect all that installed base as the data that is at the tip of fingers of all of our technicians and that has required first that large investment into the distal architecture that is harmonized and uniform across the planet and putting all that data there.

And that is the source and that is the foundation for utilizing or harnessing that use of data. It is not that difficult to develop those AI tools in the end. But if you don't have that access, and then we would air to claim that no one else has that. That is the thing that makes us comfortable that we have a bit of an edge there not only a bit.

No, I mean, I think it's well said. It's really about -- the foundation is the data. right? I mean you could apply eye to anything and get garbage. So but the foundation is the data, the quality of the data, the whole ecosystem that we have developed and talked about for the past decade or more. So you need that strong foundation to be able to apply these tools, Otherwise, you're applying them on air basically. So yes, anybody can get AI out of the box, but what you -- it's the application. I think that matters

Sure. Understood. And you mentioned winning global sale a few times. So I would be interested to hear how price sensitive are those customers in the global South? And if I mentioned Chinese competition. How does the market look like in global start? How sort of a price sensitive are the customers? And what are the sort of -- your competitive advantages there?

And maybe you should start this one.

Yes. We mentioned the segmented offering and that doesn't -- definitely doesn't definitely mean that we would go head-to-head with the price only. So the same competitive advantages, including life cycle care and everything are there. But we recognize that the needs are different. And to a certain extent, even standards of the cranes are different. And while building this segmented offering, we need to close some of the gap in a price and get closer to that, but that's not the main point in the development or winning the global south.

And I will still take 1 question from the chat for this session. So question here is that how would you split the growth target for the group into organic and acquired growth? Is there a similar split for all the divisions?

No. I mean, it is, of course, a question of timing, and this kind of -- you can realize the different opportunities. But I would say that it is slightly more organic than it is inorganic, but it's certainly more inorganic than in the last 5 years, and that is, of course, the plan and the intentions. There isn't, of course, that much difference between the BAs, all of them help authorities existing.

Yes. Thank you very much. This will conclude our first Q&A session. So we will continue later on with a Q&A with all the presenters. So there is still an opportunity to ask more questions from all the presenters. We will now take a break. So we'll take a 15-minute break. So let's come back then trying to find the clock. Let's come back then past for Helsinki time. So thank you very much.

[Break]

Now before we continue, I will again remind you about the disclaimer as we will be making forward-looking statements. So now we will continue with Tomas Myntti from Port Solutions. And then finally, CFO, Teo Ottola, will conclude the presentations, and we will have another Q&A with all the presenters. So Tomas, the stage is yours.

So welcome back from the break and to the exciting world of Port Solutions. So my name is Toma Myntti, and I'm the President of the business area. The theme for us in this vision to capture growth. And to start off, let's recap of what Port Solutions is about and what it is that we do. We are the Western leader in cargo handling and with the widest and deepest offering in container handling. What we mean by that? If you look at the customer operation in a port seaport, ship comes to the key containers need to be unloaded. We have the cranes, the equipment to do that. It's the mobile harbor cranes, it's the ship to shore cranes.

After that, the containers are transported horizontally across the [indiscernible]. And again, we have different equipment to do that. We have AGVs, straddle carriers, printers, rid stackers. At the yard, the container yard, then we manage the stacks again with different equipment, straddle carriers, RTGs, rubber-tired gantry cranes, automatic stacking cranes and again, empty container handlers and reach stackers.

And then in the end, at the land side, the containers are transported over to the next mode of transportation, be that train or truck or something else. And there, we have the rail-mounted gantry cranes and again, the rid stackers. In addition to the container handling, we also offer bulk handling solutions and also general cargo.

And not to forget, we also have a range of heavy forklifts for industrial use. Those are the equipment. In addition, then we offer layers of automation and software to handle the traffic and tying it all together and then bringing the life cycle value to our customers, we have the port services who then offers inspections, maintenance, spare parts, modernizations and consultation across the offering that we have.

So with the sales at EUR 1.5 billion in 2025 and the market position depending on the product line between first and second and sometimes third -- and with that market size that you saw already Marko talk about, we do see a lot of runway for growth for us also here in our basic business.

Now if you look at the past performance, it's been very strong in the last 5 years and posting a 10% plus CAGR growth, which is, of course, quite significant. You see a big jump already from '22 to '23 and then we kept that level and kept growing. But in addition to that, we've also year-on-year had a very good profitability growth.

That's thanks to strong sales execution and also we've invested a lot in project excellence and operational excellence overall, which has paid off then in these kind of numbers. How did we do the growth? Where did it come from? And where do we see the growth coming from also going forward.

Now the megatrends that Marko mentioned are all valid for Port Solutions as well. In addition to that, there's a couple of trends that particularly also work in our favor and are specific to the ports business. The underlying growth comes from the expected growth -- annual growth of the container throughput through the globe.

In addition to that, we see there's a small number of global terminal operators that operate about 75% of all container traffic in the world. They keep consolidating. So there's a lot of consolidation happening in our customer base. And all of these big players are our customers and have been for a long time.

In addition to that also, you can see or let's say, the geopolitical trends are very, very present in the ports world, where we see then changing material flows going from more globalized world to regionalized and also local material flows developing. What that means is that there will be investments around the world in new terminals, smaller, bigger and larger. And that's where also our wide offering comes into play.

So depending on what concept the customer is using to handle the terminals, the different level of equipments are needed, and that's where our offering is valid. What that means for us that where we look for the growth, continued growth is in an already strong market position that we have in our core business, we still see more growth in there.

So all those equipment and services that I showed, those will continue to grow. In addition, we see a boost for our service business. So all the offerings that Fabio talked about are also valid for us. The market is slightly different that when we talk about the market, we talk about the addressable and nonaddressable market.

Quite a lot of the service and daily maintenance is still done by our customers themselves. So the so-called closed market from our point of view. And we see that there's a trend though that more and more of that is also outsourced. So there is room to grow. When it comes to geographic and segment expansion, as we've seen, we are well established around the world, but there are white spots. So there are still areas in the world where we can increase our presence.

And when we talk about the segment expansion, there is, in particular, the inland and intermodal terminals that present a very good -- our market share is not so high there that there's room to grow. We already said 1.5 years ago in the CMD that we want to strengthen our market position in large cranes. large cranes -- well, they're all large cranes, but very large cranes, so meaning ship-to-shore cranes and large rail-mounted gantry cranes.

We have been and are investing a lot both in productization and especially in the supply chain for us to be very efficient and able to deliver these cranes in different parts of the world. And that market is still one of our strong targets for growth and continues to be a focus area. In addition to that, there's also the mobile equipment portfolio, which is lift trucks and mobile harbor cranes to some extent, where also we've concluded all our product lines have now electrified solutions as well.

And we are building, continuing to develop our go-to-market strategy, both with our direct sales, but also to a very strong partner network that we have. So all these together, represent several different possible parts for us to grow. And hence, Next slide. We are then very confident in saying that our target for the next 5 years is also CAGR growth of 7% on sales and a profitability bracket of 9% to 12% on the EBITDA margin to be reached no later than the year 2030.

So we've increased the upper range of the profitability target. We still left the lower end at 9%, which it was before as well. The reason for that is that we expect the growth to come -- the mix to change in the products. So with larger cranes with larger steel structures, the margin will be smaller initially, at least, and also some of the investments that we are making in growth may have a short-term impact also on the profitability upfront. But we are very confident on raising the target on the upper limit.

Now then going into the strategic focus areas. I'll ask you to take a good look at the picture in the background. And remember it because I'm going to refer to it on my next slide. I'll give you a few seconds that are -- so when we go to the strategic focus areas and the win with technology, what areas we are focusing in particular on a business area level, which are relevant for all our business units. The first 1 is Power Technologies and electrification where we -- there's a strong trend all our customers around the globe are looking for ways to reduce emission.

And of course, we are there to support in this trend as well. The picture you saw on the previous slide was 2 fully electric mobile harbor cranes, which were inaugurated last week. So the picture was last week. So these were inaugurated in tonnages terminal in Antwerp. And then those are the 2 out of 6 totally that they have invested in and the fully electric offering was a major decision point for them.

They are very, very leading edge hold Catena company's leading ag in sustainability, and it's a very important driver for them in their whole business model. So those 2 cranes, fully electric came with true Connect remote monitoring and also a long-term multiyear full service agreement. So it's also that aspect that I want to bring up.

But that's an example of how we win with technology. Automation is another trend that is continuing. And then we have still a big part of the market is manual but the automation is winning ground. And there are several levels of automation. There is smart features. There's operator-assisted technology. There is remote operating and there is a fully automated solutions.

And that, again, developing those across the BUs and across our product lines is a focus area for us. Fabio and Jussi talked about AI and the connectivity, Internet of Things, with the same trend is very relevant for us. For ports in addition to that are connected with that is the topic of cybersecurity, which is a concern from any of our customers. So those really go hand-in-hand. And we developed -- we spend a lot of time and money on developing our cyber secure solutions, both from the group level on the ways of working and the processes and really doing design security by design and developing that into all our product lines, both on the product level, of course, and process level.

So that's very, very important to remember core of lifting together with Industrial Equipment brings us scale benefits of scale also from the heart of the lifting operation, if you like. But this is what we say when we say a widest and deepest offering the widest comes from the range. The deepest comes from the technology that goes deep into how the equipment work, both mechanically and software-wise.

And very important then is the product compliance. So we are emerging directives and regulations coming both from EU and around the world, which machinery directive, Cybersecurity Act and so on, which we make sure that we applied to or align to and comply with in all our business lines.

Then if you -- when we go to the next slide, which is grow life cycle value. So we very much are going to talk about the performance-driven life cycle value for our customers. So it's the same strength in the life cycle value creation in both the equipment development, how we create a more sustainable and more maintainable equipment and then more efficient as well to the whole same, exactly the same life cycle that Fabio talked about and that we have in Industrial service.

When it comes to the combination of service and equipment and long-term relationships, we want to emphasize commitment to perform. What we mean by that is, for us, in ports, the equipment and services we provide are always critical to our customers. The essential part of the product ships stand and that's not a good situation. So we commit to be there for our customers with our customers really developing the processes together with them. That's what we want to say with commitment to perform, but with building a partnership with measurable outcomes. So we also signed up for 4 outcomes together.

Then deepen customer reach to be able to do that, to be able to provide those services and the support, of course, we need to be close to our customers. So we also invest in expanding our network, both our own current own presence, be it our sales network or port services but also together with our partners, partners in this case, understood also, as you see on the map, you see a lot of red dots and they're all the same color.

And we did that on purpose to say that we provide that support either through direct port solutions or together with our industrial service colleagues or with a third-party partnership be that a distributor, for instance, in the [indiscernible] case or an agent or a service partner, but to provide the same level of service regardless which channel we use.

Our customers, I say, the global customers, global terminal operators are present in different parts of the world. and they need that support regardless of where they are, and we want to grow with them lately added quite a lot of focus on South America where we see a lot of the growth happening at the moment in addition to a strong hold in Europe and the U.S. or North America. But we also see growth in South America -- in Africa and also in Asia Pacific.

So the growth is really visible around the globe. Then performing with agility. I want to talk about the performance and the agility. Performance, meaning that this is where a big part of the improvement is coming also from a profitability with really continuously improving our global processes and a scalable operating model that is sometimes overlooked, and it sounds somehow [ mundane ] but it's not. It's easy to say that we have global processes and very efficient processes, but they are hard and take a long time to put in place and with the systems to support it.

And that is truly one of our advantages compared to many of our competitors. And that allows us to give the same level of support and to our customers across the world, and we need to keep focusing on that. Now another thing we're doing is continuously developing our supply chain. So it is global. But we're investing now also in regional supply chains to be able to support different needs in different parts of the world.

And that supply chain is a combination of our own factories and a large subcontracting network, which is a concept that we have had in place for decades as well and we know how to do that, and it's very productized. And that's something also that is very hard to copy.

And as was mentioned also previously, the productized offering and adaptable modular platforms is also a way to be more agile and faster. So all this, we like to say why we do that. All of these actions is to improve our responsiveness to our customers, whether that's in a sales phase or exploration phase or in the delivery phase or in the support phase. That's what the customers get from this. It's an improved responsiveness.

And when you tie all that together, we are positioned to capture future further growth with that widest and deepest offering that fits different concepts, different places in the world better than anybody else can supply. We will continue our investments in growth, be it that in automation development, electrification, services, new areas like intermodal or the supply chain. And we see, as you saw all the areas that we possibly see the opportunities for growth. And all of those will give us even more resilience in a changing geopolitical world. And thank you for that. And with that, I'll hand over to Teo.

Thank you, _Tomas, and good afternoon, everybody. In this section, we will be summarizing a little bit the group financial performance between '22 and year-to-date '26. And we will also be taking a look at how things may be different going forward into the next period. .

And when talking about the financial performance, so of course, it will include growth. It will include profitability. It will also include cash uses which will then basically take us to the capital allocation, what Marko, for example, already was referring to. But let's start with the growth. It's a busy slide, a lot of percentages.

But on the left-hand side, we have the net sales growth, CAGR of the group since '22 until the rolling 12 months at the end of September '26 and when we take a look at the growth CAGR, so we have 5.6% CAGR growth with reported currencies and 6.9% with comparable currencies.

Now if you remember that what was our previous target setting regarding growth. So it was that we would like to grow faster than the market, and we define market as nominal GDP growth. Nominal GDP growth during this period has been somewhere between 5% and 6%, probably very close to 5.5%. CapEx growth, which is, of course, very relevant for us as well has been a little bit lower 4%, and then container throughput growth, which is a real growth, not a nominal growth, has been growing roughly 4%.

So now if we compare our actual growth to the market growth, one can say that we have been growing in line with the market. We reported currencies or then slightly above it with the comparable currencies. And of course, from the internal point of view, comparable currencies makes more sense to compare these things.

Then taking a look at the next period. Now we have been discussing that the sales target -- sales growth market is 7%. CAGR, if we compare that to the expected market growth made 4% to 5%, a little bit less than what the past period has been probably largely driven by lower inflation expectation than in the previous period.

CapEx roughly around the same level, container throughput may be a little bit lower there. But if you compare these 2 numbers, our past performance from growth and then the target of 7%. So obviously, you can see that these are basically the same number, [ 6.9 and 7 ] . But there are a couple of things that one has to take into consideration here.

So first of all, '22 as a year is an easy comparable. Many of you remember that we had delivered challenges as a result of which sales was fairly low. The other thing is that if you take a look at overall 3 BAs, the growth has not been balanced between all of those in the past. Some have grown less, and somebody has been growing a little bit more. And then when you combine into that one that the underlying expected GDP growth rate will be maybe lower than what it has been in the past.

And if you put all of those together. So then the conclusion is that the new target or the current target of 7% is actually more aggressive than what we have had earlier and what we have been able to do earlier maybe as well, if you take a look at it in a neutral view.

And this is, of course, the reason why we have been hearing today from all of the BA presidents how we are going to tackle the growth, how can we actually make sure that we will be able to get to the targeted 7% growth. Then obviously, profitability is an important thing there as well.

We have been showing in the quarterly calls, EBITA bridges -- so we have built more EBITDA bridges for this session as well. Please take a look at the left-hand side first. This is our, let's say, realized EBITDA improvement. We reported 9.5% in rolling 12-month basis at the end of September this year. The improvement is good between those 2 time lines.

If you take a look at the 6.9% growth that we have generated with comparable currencies, so maybe about 4.5% of that is pricing. And the remaining, say, 2.5% of that is underlying volume improvement. And this underlying volume improvement, according to our estimate, has brought maybe 1.8 percentage point improvement to the EBITDA margin as a result of operating leverage.

Of the pricing, maybe 0.5 percent point is something that is gained in net of inflation terms. So we have increased prices more than what the inflation has been -- this is supporting a gross margin, obviously. But if you deduct 0.5 percentage point or maybe even a little bit less from 2.6. So of course, the improvement clearly primarily comes from somewhere else. And it comes primarily from our own actions.

We have had optimization program in the industrial businesses. We have been having project management excellence that has been touching many of the project businesses and a very large number of other activities that have contributed to the margin improvement.

The third one there, which is the fixed cost. So this is a negative number here. And of course, the reason why that is so is that this volume assumes that all of the volume all of the profitability comes in with the gross margin level. So there is no fixed cost increase included. But in reality, of course, our sales is 30% higher now than it was in '22 and maybe at least 1/3 of that is underlying volume improvement.

So of course, the fixed costs have increased to some extent within that period.

But we have been quite rigorous in fixed cost containment when you take a look at it from this angle. On the right-hand side then, we are, in a way, a little bit estimating that how this could look like going forward. And now we have a more aggressive growth market, and the assumption is that the bigger part of the profitability improvement that will then according to the target somewhere between 15% and 17%, latest in 2030. So a bigger part of the improvement than previously would be coming from underlying volume improvement.

There is also gross margin improvement included in the picture. So the idea is to improve there as well. And then on the fixed cost side, obviously, when the sales grow, so of course, the fixed cost will be growing as well. Wireless from the gross margin, why more from the volume. So of course, when we make organic growth actions, we may need to have some costs upfront when we made acquisitions, so there was already a discussion within the Q&A that will the acquisitions come with a lower or higher margins than our existing businesses.

And maybe it is a good idea to be prepared that it will come with a lower margin, which will be sort of impacting at least temporarily these numbers. And of course, also, if we make acquisitions also the fixed cost burden will come with it before the synergy activities kick in. Then if for one or another reason, the volume doesn't come in. So then, of course, we have similar kind of levers that we have been using also earlier.

So we can, in a way, improve the gross margin with the kind of activities that we have been having also before because we have been able to do it in the past, why wouldn't we be able to do similar things going forward. as well. We have booked this in the monetary way as well. So of course, not very easy to do on this long-term basis, but of course, this maybe gives you an idea the additional complexity with the monetary bridge is that you will need to assume you will need to have an inflation there.

And in this case, the inflation from to '22 to '26, we have estimated roughly [ EUR 60 million ] from the profit point of view. And of course, here, the volume shows a larger euro number than the margin because when the volume improves, so it also increases the top line as a result of that, the margin dilutes a little bit. But the overall picture regarding this one is the same as it is with the margin, maybe with the exception that the inflation has to be included there.

And of course, there is probably inflation going forward as well even though maybe the percentage will be a little bit -- a little bit less than before. We have -- this is maybe not a bridge, but we -- maybe you can call it a bridge as well. We have built a third one here. And this is now then moving more into the cash flow and the uses of cash.

Here, we have selected a little bit different time frame. This is from '22 to '25 because the dividends are easier to handle on a full year basis. The number EUR 1.7 billion there is -- this is the amount of operative cash flow that we have generated between '22 and '25. When we think that how we have used that amount of money, so one could maybe say that only 10% of that has come into own 5% of that has gone into the M&A, 30% of that has gone into dividends.

Dividend payout ratio actually has been a little bit higher -- but also this operating cash flow is more than our net profit has been -- our net profit has been maybe EUR 1.2 billion or so during this time, which, again, in a way, underlines the cash-generative nature of the business. But of the cash flow, the dividends have been 30%.

And -- and the vast majority of the cash usage has been in debt repayment. And of course, it is clear that we want to and we need to change this going forward. when we take a look at the situation maybe during the next period. So one could say that we will probably be using a little bit more money on CapEx. No major change is needed there, but to some extent, more because now we have been investing much less than what the depreciation level has been. So maybe a modest increase in that one.

We have a dividend policy now, which is linking the dividend payment more directly into the net profit. So this would probably increase the payout ratio on the path going forward. And then we would like to do more M&A to be able to boost the growth also in an inorganic way. How successful we will be with the acquisitions. That, of course, is something that, that future will tell.

And that's why then we have taken also the share buybacks there so that in case there is cash after these other needs of the cash flow, we will consider share buybacks like we are now starting a buyback pretty soon after the today's release of the Q3 numbers. This slide is a little bit more deeper into the dividend policy. Like I said, the new dividend policy links the dividend payout more closely to the earnings, 40% to 60% of the earnings it may create more volatility.

But then again, it is directly linked to the performance of the company. The dividend payout ratio that we have here, 51% for the average between 21% and 25%. So it is actually in the midpoint but you can see from the picture that if you take a look at the cumulative way, so then the payout ratio has been lower because our payout has been lower in the years when the profits have been high, and the other way around when the profits have not been so high.

So of course, the new policy would be behaving a little bit differently if we had applied that in the past. The other thing then, which is linked to the capital allocation is the inorganic growth opportunities. And here, we are trying to categorize and open up a little bit that what kind of acquisitions we could be doing going forward.

There are probably different kind of classifications 1 can figure out. We have here selected 3 different categories: market share expansion complementary offering and technology. Market share expansion is maybe mostly like more of the same, something that we are already doing, it may be a geographical expansion. MFK has been mentioned now a couple of times already. That's, of course, a very good example of that one.

This could be happening in services or in equipment. Complementary offering and vertical integration might mean something that we take more of the value chain. So for example, components that we are using, we could be buying something that is a component producer. So upstream or downstream integration. Horizontal expansion could maybe be categorized as a bigger share of the customer's wallet. We may be missing products we may have products where the relative market share in our terms is lower than in the other products, and we could be acquiring those kind of things.

Technology would then maybe be -- could be categorized by helping us to differentiate from the competition. So something that is critical for us to be able to provide to the customers what they need now or particularly going forward.

Now when we take a look at the past, so here, we are saying that since 2016, we have made 14 acquisitions. 14 companies have been acquired, of course, within this time frame, MHPS is included, and that's the big bulk of all of that. And obviously, that has been both market share expansion as well as complementary offering, maybe even technology to some extent.

And then [indiscernible] in the Netherlands, we are here putting in it in a way that it would be complementary offering and market share expansion. But basically, most of the other ones have been in the market share expansion category. There is one example in the technology category and then those couple ones, Pinemont and MHPS that go into 2 categories.

When we take a look at the acquisition pipeline, so the potential targets and candidates for acquisitions that we have. So there are the biggest number of potential candidates continues to be in the market share expansion, followed by complementary offering, and then there are maybe only a few in technology area currently. This does not necessarily tell anything about in which order any of the acquisitions might be taking place.

But it is just in a way, telling that how the pipeline of the acquisitions at this point of time. Looks like. I will then summarize my part with this slide, which is then on the capital allocation priorities and how those are. So of course, we want to make sure that we have enough funds available for CapEx needs, be it and technology needs or production machinery within the operation, we have a written dividend policy based on which we will be distributing the dividends.

We want to do acquisitions more than what we have done in the past. If we are -- if we cannot do that or there is excess cash anyways. So then we will be considering share buybacks as we now, for example, are starting to do. And that was actually the last slide of the presentation, and then we are -- I think we are ready for the Q&A session. Thank you.

Indeed, it is time for our final Q&A session with all the presenters. [Operator Instructions] And I will now start this Q&A with a few questions from the chat. And Firstly, we have a question to Fabio. So this is related to the service profitability. And the first part of the question is, is the profitability very different in North America if we are comparing it to Europe.

Yes. So first of all, there is some good internal healthy competition between the 2 regions that helps in boosting that profitability. But the -- the answer is a little more complex. The -- certainly, North America benefits from especially the U.S. with a single large market. You can do a lot more things that are centralized. There're a lot more working hours, including into overtime, et cetera.

There are some things that just help the operations there. In Europe, you're going to get more variability between the countries. And I won't go into the what those differences are. But -- and also Europe, on the positive side, I think for in our case, benefits, I think, from a probably bigger installed base. Both that we have built over the years and also acquired. So there are some things that kind of pluses and minuses on both sides and they didn't give you a straight answer, but I think give you enough hints to make up your own mind.

And then there is a continuation to that question that were about in the global South, that do you have lower density there? And would the larger acquisitions support that density or what would be there.

I mean the global South is such a vast territory and it also varies country by country. There are some countries that we have some pretty good density and especially in certain industries whether it's mining in some areas that we have some good share, et cetera. So it really varies. The larger acquisitions are certainly more available in North America and Europe than in the global South, especially for service.

Okay. Thank you. Then there is another question in the chat. I will soon take also questions from the audience. And I think this will be perhaps first Teo and then maybe, Marko, you can complement. So the question is, how critical will you be with the valuation multiples in acquisitions? And is it an alternative to acquire companies with clearly higher valuations than our own, if it's strategically important.

No, there was in the question also the stay topic. So of course, when we are evaluating the acquisition target, so we are taking a look at the traditional ways of evaluating so there will be DCF, there will be multiples there will be, let's say, return analyzes ROCE versus VAC, et cetera. All of those strategic connection will need to be taken into consideration. .

But I think that what will then eventually be the most important one is that we will need to be able to be quite convinced that we can get because now when we are primarily focusing on acquisitions that are within the core businesses. So it is essential that and with those synergies, we can then make sure that we will get the margins to the level where we want them to be.

And we also can then make sure that the multiple after the is lower than our own multiple because -- it would probably be a little bit foolish to say that we are not going to buy anything but the multiple is higher than ours because all of the acquisitions will need to be reviewed on their own merits. But it is extremely important that we are happy with all of the financial aspects of the acquisitions, including margins and including valuation, which then after synergies in shouldn't be higher than ours.

Thank you. And another question still from the chat that how far outside from the current product scope you are looking? So -- would you look at companies with either customer connection or product expansion, sorry, so maybe also the and maybe use again, complementing all the gentlemen.

Sorry, could you repeat the...

Yes. So how far outside the current product scope are we willing to take a look at?

Yes, this is, of course, it's a very difficult definition to make. But I guess that when we are taking a look at the core businesses with its industrial lifting and then, of course, the Board's material handling -- so what core basically means is that those acquisitions are within that area or directly supportive of that one.

But it definitely can be products that we do not have today. but they would be serving the same in a way, value stream that we already have. And it could be component suppliers that are delivering to us because if we feel that there is a critical in a way, important for us or the technologies that help us to complement or make sure that our offering will continue to be relevant going forward as well. This is maybe for the BA heads to comment, deny or verify.

Confirm. And like shown in the presentation, the focus of our strategic analysis that we stay in the core. There's runway to grow in that core. And when we need beyond that, for example, the Crown-based equipment, there's the option to collaborate, and that's the core message in the strategy slide.

Yes, maybe just not to add or change that as just to kind of confirm it. It's obviously -- so that we have as they are showing in several dimensions, opportunity to also look at inorganic growth in where we are playing today. And not that where we are playing today, of course, when we look at those synergies, it has to either have a synergy that we can use because of our strong life cycle approach and because of our service.

So our service has to be able to cater to the same customers. It has to be complementary technology or competitive product to the same customers where we operate a very critical technology. And vice versa, I mean, if you look at material handling space more broadly, and just to rule out because it's the approach, I guess, it's just a about saying what we don't do and what we actually do is that if you look at the material handling space more broadly, the changes that you see in how you handle material today, it is evolving quite a lot in the coming years, we were quite sure -- but our role in that is like us very well put it is just to make sure that we interact in that value chain of material and make sure that we create the interfaces. And if that requires also that we acquired some technology that is necessary to be there, that's absolutely what we should do. But it also means that we do not -- we are not -- or a larger adjacency in that space. That's not approach at the moment that for the time being in this current operating environment.

And then there's another question here still on the M&A topic and maybe address to dust what about Port Solutions? And will you go for terminal tractors. .

Quite specific well, we also are looking for bolt-on service acquisitions, and there's a good pipeline of those. And then as Teo said, every case will be then evaluated was the strategic fit where the synergy opportunities and what is the -- what is the valuation. And if it makes sense, we're also very willing to add to our product spread as well, including terminal tractors.

At this point, let's take questions from the audience, so please raise your hand if you would have a question. Over there.

It's an Retimer from Danske Bank. I have 2 questions related to ports actually. So firstly, on the growth in the large cranes that you mentioned and it was discussed earlier at earlier CMDs, so how do you see the pipeline for STS crane orders as we haven't seen that many so far? Is this like a timing issue? And how big part of the 7% growth target is that part of the business?

The pipeline is very good. There's been -- the market on STS cranes is very active. If you look at the last year and year and half from the U.S. in particular, but globally also. But in the U.S. particularly, there hasn't been that many orders overall. So the market there is, of course, with the current tariff environmental customers are also looking at what is going to happen and what is the future.

So we see a quite large pent-up demand in the U.S. and but also, it's not only the U.S., it's globally also quite a big requests for new STS cranes, but decisions are taking their time and we've used the time to get ready, both in the supply chain and with our products. So looking optimistically into the future, but I cannot comment on any specific case.

And -- what I listed on what is the percentage of the growth, a listed several areas of potential growth for us, and they're not all going to happen at the same time. And this is a 5-year plan. So hard to give exact percentage of which what comes from which area.

Okay. Secondly, on the mobile equipment in Port Solutions. So how do you see electrification in that area. Is that changing the competitive landscape? Is that maybe a challenge for growth? Or do you see it as an opportunity? .

I see it as an opportunity. And the end as mentioned also is that all our customers are looking for ways to reduce emissions. That's still not a very large percentage of the lift trucks sold this year is still electric or there's still a large percentage that is diesel, but the trend is going that way. We see a way of competing is the growing the life cycle value. So it's not just about initial price, it's about total cost of ownership or actually value over the life cycle. So with also like with the other equipment as well, we compete with that full offering and not just initial price.

Okay. Maybe a final question just on the targets. I think this was already asked, but I just wanted to clarify, like inorganic and organic out of the 7%. So how was it like Halpin half or was the organic? And how does it split the divisions just kind of directionally in which one is the organic growth portion the highest than in which do you think the M&A will play the highest role if you can kind of think of it like that.

Of course, I'll iterate my question from earlier -- or I am sorry. It is, of course, most likely that most of the growth is organic. But of course, we don't have anything against that it is inorganic as the bigger share -- and it's, of course, a timing question much. There is not really that much of a split in terms of the different business areas that we will be aiming.

We have a healthy M&A funnel in all the areas, as they said, mostly on the market share expansion area. And of course, we address those opportunities carefully and individually. But to keep in mind that beyond just having good opportunities and we are having a strong balance sheet to support that ambition. It's a question of how fast you can integrate and to make sure that you can actually do it.

And that's equally important when we pace ourselves for that growth. And therefore, there might be also one reason why organic growth is easier to do, if anything, is easy in these sorts of things, but it's easier to do than inorganic.

Any further questions from the audience, go ahead. .

Thank you, Antenna SEB. I want to continue with very similar questions than on the Board side. And if you look at kind of the electrification of the mobile equipment side and you look at the direct competition coming from the Chinese side. And you referred to a better kind of a lifetime value. So how are you -- what is kind of the core lifetime value kind of where you benefit in terms of them maybe providing a cheaper CapEx or price point or even kind of leading into some of the electrification products that they're offering. .

Is when you look at the mobile equipment and the way they are used, it's a resource that sometimes the need of it fluctuates and then having the right equipment available at the right time is very important for our customers. and managing a fleet like that either through our partners or through ourselves like the way we're doing with the Pinempineman acquisition is a good example of that where we have a fleet available for which is used by several customers in the port of Rotterdam, for instance.

So it's more like a service, getting that service and then making sure that the lifetime and the productivity of the equipment are there, so through service and programs like that.

Okay. And then on the large crane side, I mean, obviously, some of the geopolitical trends benefit the Western supplier in your, let's say, stronghold markets -- how do you look at kind of the global south and kind of a potential to grow with your board offering there the whole port offering.

A big part of growth for us already comes from the global South, and it's true our large key customers. Of course, another trend that we see is because they are spreading out and consolidating and expanding in the global south also in their terminals. And what we've seen happening is lately also is that they make large by a big number of equipment and then distribute them to the different terminals around the world. So the long-term relationships we have with them and being able to supply the same kind of equipment and with the same kind of service and operations is a benefit for us. But obviously, there is harsh competition around we're not saying that. But this is -- we can play to our strength.

Yes, that maybe I'll just a minor note on that. And I think we discussed in the previous quarter when it was discussed about the ports business volatility of the order intake. -- that what Tomas just said, the trend that this particular global terminal operators tend to buy bigger lots and then distributed to different ports is in many ways, relatively speaking, working in favor provider or a supplier like ourselves, who has a broad offering has everything that everything can be offered and is cybersecured and so some security taken well care of and so forth. But it also will likely and possibly increase further the lumpiness of the business because you just have bigger orders. Just so that, that notice put into these costs.

And if I can add to that also in also in -- not only in Europe and the U.S., I mean automation is also a trend and being able to provide those solutions around the globe is also 1 benefit for us. We still -- and that's why we also work on modularizing and productizing our products even further to also be faster and more cost-effective also, of course, on the cost structure.

And how should we think about growth through that lumpiness? I mean you are referring to, I guess, it was 3% growth. But if you look at kind of the shipyards, they are filled up with container ships and they will be delivered and need to fit somewhere and the ports are in some places already congested. So if you look at kind of your clients and their kind of -- what are they thinking about their capacity investments?

We see this a lot of activity on investments in the ports around the world. So we see our customers increasing the capacity. We have plans to increase the capacity quite around the globe real.

And of course, just the throughput growth is aspect of that. But just as was explained earlier, of course, our customers, they need to seek for productivity increases and efficiency and that comes through harmonization of equipment across different ports as well as investing into automation and smarter equipment and so forth. So it is, of course, the throughput of container traffic is one driver there, but it's -- the investments are not only tied to that, the CapEx into.

And there's also -- because the material flows change, so where the cranes are being used also changes a little bit. But then in addition to new cranes, we also see good potential for modernization projects. So that's an opportunity for our service business, in particular also to modernize older equipment with modern -- more modern technology.

And last 1 is coming back to Fabio on the growth on the Industrial Services agreement base. Can you comment anything on kind of the capture rates that you get when you are delivering your own brand, Konecranes equipment or the potential to grow the agreement base from that versus kind of tapping to the existing base? Or your competitors' equipment and so.

Sure. So I mean, we'll take the growth from every area we can't. So -- but that is obviously an important one. What we've always said is that we capture 55% to 65% kind of after the warranty period. It is certainly an area that we can focus on improving, but there is so much runway. There's also a lot of equipment that gets bought not by the end user gets bought by general contractors, EPCs, et cetera.

So you kind of have to go after the fact of the end user who actually cares about the maintenance and so forth. But it is an important area, right? I mean, for sure. but there's also a lot more other equipment that is sold by the -- sum of all competitors and what's out there. So there's plenty of opportunity, both within our own and with competitor equipment.

Thank you, Ani. Any further questions from the audience? If not right now, I will take a few questions from the chat still. And -- this one, I think Marko, you can start. Others can complement. So the question is, what are the top 3 synergies or arguments for keeping the stable, high-margin business of industrial equipment and service in the same company as port solutions that has more lumpy orders and lower margins, but maybe further growth opportunities.

Well, I hope that also came through somehow today in terms of the technology that we develop together. I mean, if you look at, for example, uses airborne superiority or visible. There's a lot of the same technology that we use in the port equipment. So we -- there is a technology research and innovation synergy that we put a cut across these segments. .

We do use some of the -- we do have some overlap when it comes to the service offer, not only in terms of how one can continue to develop the port side of the service were maybe less out there to say even less developed and the capture rate or the share of the service not as big, we can cross-pollinate learnings from the service side as well as then use the industrial service organization to support the port side of things. And then thirdly, we do see manufacturing capacity also and in my beginning of my presenters, I was talking about the core of lifting. So that's something that definitely is very much in the core of Konecranes operating logic and the foundation. And that the same logic applies with same complementary, even with same manufacturing locations for both of the industrial and port business segments.

So you asked for 3, I'm not going to even go for a fourth. So I'll let my colleagues complement this if they want.

Well, summarized, I mean, there is -- especially on the service meant the concepts that we use as same as with industrial. And as Marko pointed out, the footprint around the globe is much larger. And then the synergies on the core of lifting technology, where we do get the scale benefits and then from the working with the industrial equipment and using similar or same technologies.

Then -- still a question on the -- maybe both for ports and industrial equipment, continuing a little bit. Maybe we touched on this already. But the question is on the automation that can you describe that how much -- what is the share of automation in port solutions? And how is that developing as you have been discussing that already for quite some time? And then also touching upon on how is that how does automation development look for industrial equipment.

Okay. So automation is a very interesting area and a very large area as well and it did -- we've seen the demand go up a lot in the last few years. And it's good to remember that if you look at the automated ports of port using automation, more than 65% of the world use some technology from Konecranes. So we're very well positioned there. Now when you talk about automation, it's good to understand what you mean by that and still a big part of the operations are manual.

But then -- and will remain so in many places if the drivers are not there to go for automation drivers being lack of real estate, lack of labor need for more efficient use of the real estate, but where it is then we see that development going on. But then there's levels of automation. There is this manual. There is smart features. There is operator-assisted functions. There is remote operations and there's full automation.

And autonomy of --

And yes. And then more and more when you go into then -- if you go full automation, you really need -- you have a fenced area and then it's often then greenfield development or expansion of existing. But when you go to brownfield, then it's a mixed mode operation. And then there's a need for autonomous equipment as well, not just automated but we have them in the fully automated too, but then you get into mixed mode traffic and how does the autonomous equipment work with manually operated and how do you handle all of that.

So it's a very multifaceted approach and then difficult to say, give a number of what is the percentage of automation in our numbers because they are tied to the equipment that are automated. But that is the trend. And I think as Jussi pointed out very well in his presentation, to be able to do any level of automation, you need a very stable equipment and robust equipment underneath. So that's the first thing that you need.

And it varies a lot based on the industries and ports can be considered here as one of our customer industries. And that's the most advanced when it comes to the utilization of automation and all that spectrum of automation that you mentioned. We also, on the industrial side in another industries are heading towards more automation and that spectrum. And most likely, we're going to see that in those industry-specific applications, those anchor products that I mentioned, where that development will be faster than in those more standard across industry products.

Thank you. And still continuing here from the chat. One more question for Jussi that for industrial equipment that what will be now -- as the growth has not been that fast in the past couple of years, maybe for several reasons, but what will be now different going forward?

I think the slide where we split the path into 3 parts, tells the story pretty clearly that there was that period of time when we were digesting the -- some of the acquisitions, and we were simplifying, streamlining, compromising the top line in order to improve profitability. That was clear. Then after that streamlining, we started the bridge phase of the development, which is basically renewing the offering, and we're proceeding on schedule with that target. When we get that fully done and we eliminate some of the kind of overlaps we have before the new generation launch is really completed, that will be a strong backbone for that. And then we went through some of these growth segments in a presentation, global salt being one of them, which again comes with the new offering with the segmented offering that we're doing during these years.

Thank you. At this point, asking any questions from the audience? If not, I think that would conclude our Q&A at this time. And I would still like to hand over to Marko for final words for the event.

Well, first, I'd like to thank you all for your attention. And I hope with this relatively short afternoon that we spent together, you got not only an overview of what we do, but also some details or a glimpse to what makes this so exciting for all of us and particularly also for me. And it's not so because I would be somehow strangely interested about cranes and lifting and they are fantastic pieces of equipment. They are beautiful and everything. And I'm sure that my colleagues here would give testament to that also.

But it's particularly because it is a very exciting industry to be to see what our customers do with the equipment as well as then the services that we offer to them and where they are going and to imagine how we can help them in that path. And that makes it very exciting. And that's why we're also very committed to those targets that we have today shared. And why do we feel that we are so well positioned? So as we stated and explained today, there is underlying growth in the market that is supporting this.

The megatrends and particularly relative speaking, they speak for us. And we have a lot of actions across multiple growth vectors, whether there's the geographical growth, the product offering that we have, the customer segments that we cater to. And there is a lot of efficiency vectors that we can also gain efficiency from. And we have a long list of targeted actions and very deliberate actions that we are going after to realize those opportunities. So we have a strong position in the marketplace. We continue to invest in technology and M&A as well as the processes. we have efficient, consistent and transparent capital allocation model.

So that's why we are well positioned for the growth in the future. We at Konecranes, we aim to be the customers' partner of choice. We have the life cycle optimizing approach. We have -- which is the long-term winning approach as we very much are convinced in this company. We have the knowledge, we have the capacity and we have the capability, and we certainly have the people. And that's why this is also so exciting and a fun place to be because it's just fun to see what kind of -- it's captivating to see what excitement my colleagues actually have for this business. And we have the capability to help our customers lift their business performance. And for that and for to get there, we have 4 focus areas.

We want to continue to win with technology, grow our life cycle value. We will deepen our already existing large customer reach, and we will perform with even more agility. And with that, I will thank you for all your attention and the great discussions we had. I'm really looking forward to the great excitement to the next years together. So thank you.

Good afternoon, and welcome to Konecranes' Q3 Interim Results Webcast. My name is Ruusa Vallin, and I'm the interim Head of Investor Relations at Konecranes.

Before we go into today's agenda, I would like to remind you about the disclaimer. We might be making forward-looking statements. And as our agenda today, our CEO and President, Marko Tulokas, will start the presentation, and Teo Ottola, CFO, will continue. After the presentations, it's possible to ask questions. And today, our webcast is a bit shorter, 30 minutes as later on, we will be continuing with Konecranes' Capital Markets Day 2026.

The stage is yours, Marko.

Thank you, Ruusa, and good afternoon, everybody. As Ruusa was already saying, today, we are going to be a bit shorter than usual. But I will also start, as usual, by focusing on the key points of the quarter for Konecranes. So of course, a very significant milestones that we updated our financial targets in the quarter. That includes our dividend policy as well as our capital allocation and long-term climate ambitions.

If looking at the quarter, I would categorize it as a great quarter for Konecranes. Our demand activity continued strong particularly within the Ports business. And on the Industrial side, this particular quarter, the way it was specifically on General Manufacturing, Power & Mining segments. However, as it is particularly in the Ports business, the order intake is -- has some volatility and it's somewhat difficult to predict the order intake timing and that also happened in quarter 3. So, even though we have a lot of activity in the funnel, our order intake in the Port Solutions was somewhat muted, and that meant that we also fell short of last year's quarter 3 in terms of order intake.

But I'm very happy about the quarter, particularly when it comes to the delivery performance, and that is also thanks mainly to Port Solutions where we caught up very nicely after a somewhat slow half of the year. And that was -- as we discussed in the quarter 2 report, that was very much as planned, and that was what we saw already in the [indiscernible]. That is just the timing of the port deliveries for this year. So a very good delivery performance on the third quarter of the year. And that also meant that we had an excellent result, and that was driven by volume as well as the solid performance.

And I'll move on to the actual numbers now. So orders were really down due to Port Solutions, but we had some growth in Industrial Equipment and Industrial Service and particularly, we had a very good mix on all three business areas when it comes to the order intake. Our sales grew 10% in comparable currencies compared to the last year's quarter 3. So, we caught up very well as planned. And also the Service business started to improve the delivery performance on the third quarter.

That also meant that our order book continued to strengthen. Our profitability was very good. Although not quite as nice as the record-breaking 2025, so we had 15.6% margin on the third quarter of this year, which we consider to be a very good achievement from the team. The decrease in relative terms of the margin was mainly driven by higher positive one-offs in the comparison period. Our underlying performance generally speaking, was strong.

As already said, order intake not really as strong as previous year quarter, particularly because of Ports timing of orders, we saw increase in Industrial Service and increase in Industrial Equipment and increase in the EMEA region, but decreased in the Americas and APAC and again, in Americas, particularly driven by the Port Solutions timing of orders.

Our deliveries improved in all regions. And our Port Solutions and Industrial Equipment factories performed very well. So we have no major supply issues. The only remaining issue, particularly in Industrial Equipment side that the customer acceptance issue still exist, although we do see some improvement in those also.

Now I will move on to the Konecranes updated financial targets, which do reflect our increased ambitions. And this is for those who are not maybe listening later to our Capital Markets Day presentation today. So we revised our strategic ambition as well as our targets and has increased our targets. This reflects our confidence into our operating model, the performance that we've seen in the last years as well as our mid- to long-term opportunities that we see in the marketplace. So our absolute -- we set an absolute growth target that 7% for the Konecranes Group, as well as 7% for Industrial Service and Port Solutions.

Industrial Equipment, 6%. The main reason for that is that in that particular business, we have some areas where we are or some business lines where we are somewhat more selective still than maybe in the others, and that is why the Industrial Equipment is slightly lower target. The same we did for the profitability target. So we have had good progress in our efficiency, in our margin development in general. We were well in the range of the previously set targets. And although we have not really seen a downturn yet. We are also confident that our ability to grow, efficiencies that we have built into our model, our renewed product offering and efficiency of that as well as the runway of improvement potential is all there. And therefore, we are confident to say that apart from a global unforeseen shock or crisis, we believe that we can perform in a normal downturn, so that by 2030, we are in that range of 15% to 17% on a group level.

I'm very happy personally as well as committed as is the whole Konecranes team to these new targets that is very inspiring and an important thing for all of us. So now we're going to move on to the financial.

So Teo will join me on the stage for that.

Thank you. Thank you, Marko. And let's continue to the profitability side. more in detail. So like Marko already pointed out, so the EBITDA margin for the quarter was very good, 15.6%, but still about 1.1 percentage points lower than in the exceptional good Q3 of '25. We did improve in Port Solutions as well as in Service, but there was a decline in Industrial Equipment.

And when we take a look at it from the group perspective, so like Marko pointed out regarding the one-off. So we actually had positive one-offs in this quarter, roughly in the amount of EUR 8 million as a result of tariff refunds in the U.S. but we actually had maybe EUR 10 million to EUR 15 million one-offs in the third quarter of last year, so a larger number. And those were positive as well. And if we back out both of these from Q3 this year and Q3 last year, so we are looking at a negative margin difference of roughly 0.5 percentage point. So excluding the one-offs, the difference is not as big, but it is still a negative in Q3 this year versus the year before.

And this negative 0.5 percentage point roughly comes from the mix and then also to some extent from, let's say, operational issues in comparison to the situation a year ago.

And maybe we can take a look at that more in detail with the help of the bridge on the right-hand side. So despite the decline in the EBITDA margin, the euros, EBIT euros actually rose to EUR 172 million. When we take a look at pricing, so that was maybe 2.5%, maybe a little bit more in a year-on-year comparison, which leaves us about 7%, 7.5% underlying volume improvement. And this obviously creates a very nice operating leverage, positive contribution to the result. Net of inflation pricing was on the positive, but very little. So no meaningful impact there. And then like I said, the mix was negative. And then also the performance was negative, partially as a result of lower positive one-offs and partially as a result of operational issues, particularly in the Industrial Equipment.

Fixed cost actually rose by EUR 5 million, but that -- this is basically inflation, not much more, not really anything else. And then, for a change, we have an FX translation impact slightly on the positive side. So very good underlying volume, no meaningful impact from the net of inflation pricing, negative mix, negative performance as a result of one-offs and operational topics and those basically explain the profit difference between these two quarters.

So just couple of comments, few comments for each BA, starting with Service. So here, order intake 1.2% higher than a year ago with comparable currencies. It's a bit unfair comparison this time as we had a very good number of modernizations in the third quarter of '25. If we excluded those, so we are looking at 5% plus growth actually within the field service and spare parts, which is on a good level.

Then regarding sales, 2.4% growth in a year-on-year comparison. There is a small technical topic here as well. We have moved one unit from Service to Port Solutions as a result of which Service is selling less internally. And if we were to exclude this one, we would be taking a look at roughly 4% growth in sales year-on-year. So a pickup in the sales like Marko already explained. You can, by the way, see the other end of this internal sales as lower group internal sales in Q3 this year versus Q3 last year.

Then taking a look at the Industrial Equipment. So there may be focusing on the sales. We have a decline in sales by roughly 1 percentage point in comparable currencies. We have had a little bit, let's say, delivery delays. These have been primarily as a result of the customer delays, but there also have been issues that are, let's say, originating from our own business and own doing. And these then have been visible also in the margin. So as a result of lower volumes, obviously, the fixed cost absorption has been on a lower level than what it was a year ago.

We have had a little bit cost overruns as well there. And then on top of that, are also the lower positive one-offs this year versus last year is visible in the Industrial Equipment margin as well. Of course, 10.9% is by no means a weak margin. But of course, again, when you take a look at the more than 14%, one year ago, so it was exceptionally good.

Then Port Solutions. And there, we obviously have a decline in the order intake as a result of the timing. Taking a look at the underlying activity in the Ports business, that continues to be good. We had good orders in Port Service, lift trucks as well. But of course, the timing of the bigger orders is something that is impacting the number quite a bit.

On the other hand, timing was now better for sales. We have almost 30% growth in sales in a year-on-year comparison which is then, of course, also visible in the EBITA margin. Margin is improving but only by 0.2 percentage points. So with this high volume that may be considered, let's say, not a very big improvement. But at the same time, we need to remember that the mix is, of course, now much weaker from the margin point of view than what it was a year ago. And then also within Ports, the quarter last year was operationally very clean, solid and good.

Then finally, from my point of view, a couple of comments on the balance sheet. Net working capital to start with that one. Net working capital did not really increase from the level of Q2, but it didn't really decrease either. So the work in progress continues to be on a high level. There is nothing extraordinary. So there are no deviations in the commercial terms or anything. So this is probably mostly a timing topic. But it is, of course, true that we are slightly on the wrong side of the target of 10%, of rolling 12 month sales. But like I said, nothing extraordinarily -- extraordinary in this or behind this number.

From the cash flow point of view, the third quarter was better than the previous quarters as a result of the net working capital development. And we have now, at the end of the third quarter, we have a net cash position of roughly EUR 100 million total.

And then with these comments, I will hand over back to Marko.

Thank you, Teo. I'll use a couple of slides again to iterate the demand outlook and our demand outlook and it's obviously unchanged. So we -- within the Industrial Customer segment, we expect the demand environment to remain on a healthy level. As you saw from my first -- or heard from my first slide comments about the quarter highlights. This time, we had quite a lot of activity in general manufacturing and mining on top of the Power and Aviation, Defense earlier, that is just the sign that in that -- what is part of the Konecranes, model strength is we cater to so many Industrial Customer segments that we see.

Also positive signs and rotation that helps us to naturally hedge the demand environment. At this time, we also saw improvement into other segments compared to the previous one. So this is a good thing, generally speak.

For our Port customers, the container throughput continues to be in a very high level. And as we've several times already said today, the -- besides the longer-term prospects remaining good, we also have good customer funnel activity. But as it is always the uncertainty to the -- whether it's related to geopolitics, trade policy tensions or to the nature of the Port Solutions business, volatility in order intake that still remains. And of course, that creates the -- usually, if not even more challenges today in terms of the timing and predicting the order intake. But the outlook in general remains unchanged.

And then as it comes to our guidance, financial guidance, we iterate our financial guidance and our sales to remain at the same level to increase and our EBITDA to remain at the same level. So we remain confident, thanks to our good order book and stable profitability development. But of course, as I said earlier also, that is realistic to say that there is uncertainty in the environment, but we remain confident nevertheless.

With that, I'd like to thank you all for this shortened quarter 3 webcast. And I welcome also Ruusa, back on stage for the question and answer.

Yes. Thank you, Marko and Teo for the presentations. It is time for the Q&A, and I would like to remind everyone that let's now focus on Q3 in this webcast and continue with the strategy topics later on this afternoon. So operator, please open the lines.

[Operator Instructions] The next question comes from Daniela Costa from Goldman Sachs.

I have two questions and they both relate to Service. So I will ask in one go. First, I guess, the margin today is sort of quite record high compared to past. Can you sort of separate from this? Is it or you would say, is any of a concentration of the one-off, maybe tariffs in there or something else that you would say it's not sustainable, we shouldn't think about this as doable level of margins going forward on a more continuous basis?

And then second, also on Service. I believe in last couple of quarters, you were running a little bit ahead of your desired levels in terms of churn on the Service installed base. Just wondering how that's been progressing?

Maybe since we had that margin question. Teo, your forecast, by the way, mentioned about the good service margin in your presentation, now is your chance to iterate.

Now, it's the chance. And the margin indeed is a good one. But, the question is a good one as well because there is, to some extent, one-off impact there as well. So part of the tariff refunds is in Service, a small part, something probably between EUR 1 million and EUR 1.5 million, is allocated or is within Service. Other than that, there are no major one-offs, one way or the other in the Service profitability.

And again, Daniela, your second question, what about the churn, right? And by that, you mean the attrition rate in the Service profitability?

Yes.

I mean our target is -- we normally -- target roughly 90% level. We are well on our way. We've actually improved in the agreement-based attrition. There's nothing unusual that in that we see today. So it is as...

You're in that level now because I believe you were sort of a bit ahead of that in the last quarter?

No. I mean we are actually, if I may recall correctly, I don't have the number 88% level, 87%, very close to that. So not really a big change there.

So we have been saying that the targeted level would be to be above 90% or 90% or above. Now for the past quarters, we have been on a little bit weaker. Well, there may be somewhere 86%, 88% like Marko noted. No significant change now in the third quarter in comparison to the second.

The next question comes from Panu Laitinmaki from Danske Bank.

I have three questions. Continuing on the Service topic, so the growth picked up from previous quarters. So what are your expectations going forward? Is this kind of return to better growth? Or was it one quarter? Or what do you expect?

As Teo was already kind of dissecting the Service growth, of course, just to iterate that for everybody, particularly last year, we had maybe unusual high number of modernizations for the quarter, which was not the case. This month the underlying field Service and Parts order intake was good and the order intake side sales is, of course, in Services, it follows quite closely. And of course, that is an encouraging development. And what we said about the market environment, it has been somewhat challenging in Service in general, when it comes to customers' willingness and ability to take on service work.

There are some cautious signs of improvement there. And therefore, there is reason to be cautiously optimistic about the Service development going forward. But as you know, we don't really guide on individual BA order intake for as such.

Maybe we could take here one discussion topic regarding the overall market environment because this is something that we have been discussing every now and then, not only Service related, also Industrial Equipment related. So now what we have been seeing is maybe a little bit more positive sentiment to some extent. I mean, the number of new cases that are coming to the funnel. So this is rather going up and down. The decision-making times are unfortunately still quite long, but there is more material coming to the funnel. And the funnels, of course, they are -- they continue to be in good shape.

Then when we take a look at the connected equipment. So the usage of those connected equipment is not up year-on-year. So if there is a deviation, it's rather a little bit to the worse. And this is a little bit similar as it was towards the end of the second quarter. So there is -- not all of the signals are pointing in the same direction. So unfortunately, we will need to repeat that same message that we said at the end of Q2 as well. So it's a little bit unclear that where the overall environment is...

And particularly, mixed between -- also between the Equipment investment and the Service activity, and that is -- there are different less fact-based but also less fact-based assumptions and why that actually is. Just on that activity on the customer side when we measure with our remote connection, actually it was up in September, but that is more to do with the fact that we had, of course, coming out of the holiday period sequentially.

You partly already answered to my second question. I was going to ask about Industrial Equipment, you now mentioned data centers and talked more positively about the Power. So, is this like a meaningful acceleration in those segments that makes you more optimistic there?

Well, we look at the power generation, specifically, we believe, of course, that I mean it's both directly and indirectly, of course, it drives demand first in the Equipment, eventually in Service over time. And of course, the Service, there is quite a big delay when those new investments actually turn into Service work. But for Power Generation in general, I mean all other users or ways of generating power except solar power actually consume different sizes of cranes. So in general, there is a bigger demand for power generation capacity, then that reflects into lifting Equipment needs.

And that is one source for demand and order intake in Americas, but also in EMEA in the last months and also visible in our funnel.

Okay. Just finally, on the Industrial Equipment deliveries or delays, the revenue hasn't grown as much as the orders lately. When do you expect this to improve in Q4? Or will it take longer?

Well, Teo was mentioning that -- well, okay, if I address the order intake topic and the discrepancy, the book-to-bill ratio this discrepancy. Of course, in Industrial Equipment, we have different types of products with lead times from roughly three months all the way to two years. And of course, when we have those bigger orders, they tend to take a longer time to realize. So that is not as is in Service. It is not clear the connection between order intake and sales.

But Industrial Equipment, let's say, delivery challenges, it's nothing to do with our own factories or actually, our factories performed very well. So we have very little actual supply chain issues at the moment. We have -- at what Teo was mentioning, we have some internally borne issues in Industrial Equipment that are more related to handling of the orders, that is a mid- or short-term challenge that we are well on our way of realizing, partly driven by the kind of strong activity in Industrial Equipment that we have to get our kind of processing of orders in in the same speed.

So that's more a question that -- that should not take too long to recover. The customer borne slowness, which is related to the customers' ability to receive the equipment either because they do not have the need for that equipment, hence they postponed the order that they have already placed or because they are not ready to achieve the [indiscernible] which is often to do with the slowness of the construction or other equipment that would be for supply chain related reasons.

That's something that is not so much in our own hands. And of course, we can help the customer to realize and we can do certain actions to speed up the handover. But that is something that is more customer bonding. And that it's more difficult to predict than when that actually rectified or corrects itself in that situation.

[indiscernible], that answered your questions.

The next question comes from Antti Kansanen from SEB.

A couple of follow-ups on the previous topic from me as well. I'll start with the tariff refund. You mentioned how much was in the services side. So how was the rest of it between segments?

Industrial Equipment is the biggest, roughly EUR 4 million and then Ports is about EUR 2 million and then Service a little bit, maybe a bit more than EUR 2 million and then Service a bit more than EUR 1 million. So that gives the roughly EUR 8 million.

Okay. That's clear. Then the second topic is maybe coming back to the growth on the Services side. And I mean, after Q2, there was a bit of a discussion on why the growth on sales was kind of a lacking the agreement base and order side and there was a bit of a mixed signals back then, why the agreement-based customers are not taking in kind of service work. So would you like to return to that topic? I mean it's obviously some improvement on the third quarter. So are we any wiser on what's happening in there?

Well, it may be somewhat wiser. And of course, you saw from the speed that we were able to realize that, that environment, that certainly improved to some extent. But as Teo was saying, it is true that one can see that the actual activity, the manufacturing activity, the capacity utilization of customers hasn't really significantly improved, although there are some slower signs. And of course, we do our own work to accelerate our sales activity to sell more to those customers. It's a little bit partly due to our own activity level also. And that we have, of course, actively done. But the rest is up to the customers and there is only somewhat smaller changes at the moment. On the other hand, like we said in the quarter 2, this the type of thing that eventually, the customer has to do. So it's more a question of time.

Maybe one can add to that so that actually, the agreement-based invoicing was more or less in line with what it should be in this quarter. So I mean, the thing that we obviously did not repeat itself, but maybe there is some catch-up to be done from the previous quarter still to that, so that it did not rectify all of the, let's say, gap that we had earlier. But then like we have been discussing also in connection to the second quarter. So of course, the bigger thing was that the discrepancy between order intake and sales was that, we were just building order book for Service as well as a result, for example, the product mix that we have, so replacement orders that we have got in the in the Service business. The order book did not really move significantly from Q2 to Q3, which is also then visible in the sales. And this 4%, excluding the technical items, is roughly there ,where it on a quarterly basis, maybe should be. But some catch-up to be done from the previous quarter, yes.

Okay. And then I'll squeeze in one more. I mean coming back to the overall Industrial demand. Maybe to better understand how narrow is the strong demand that you are seeing on the Industrial Equipment side? What I'm trying to get here is that we have PMIs going up, but is it kind of a few industries that are doing extremely well? You are flagging Power, Defense is probably one but then there are a multitude of kind of things, especially in Europe that are structurally kind of struggling Automotive, Forestry, things like that. And those are much more represented in your agreement and Service base, and that's kind of holding back. Would you kind of think that is giving you these mixed signals?

Yes, if you want to have more is Service angle here, I understand in your question still as it comes to the -- Yes. I mean, of course, it is -- I mean, I guess you're reading the -- with your experience, you're reading the situation well. I mean, of course, what I was saying earlier about the activity on the Equipment side that was, of course, applicable for both of the business areas, Service and Equipment, but it's particularly visible first in the Industrial Equipment when there is improving activity.

And we had solid order intake growth, particularly in the -- maybe I can't say new segments, but a bit more than in the previous quarters in Mining and General Manufacturing, in addition to what we mentioned earlier this year, which is Power, Defense and Aviation. And it is true, like I said, that there is particularly in Europe, certain segments, you mentioned Automotive and Pulp and Paper, and they are certainly so, that are somewhat muted.

Now of course, if you put that to the Service context, then for that activity -- to turn into that new activity turn into Service work it takes, of course, a bit more time for the new Equipment to turn into Service activity. those customer segments that we mentioned are also consuming service work, except maybe a bit less for Power.

On the other hand, Pulp and Paper and Automotive are big users of the Service work. And that, of course, may be one explaining factor why it has been a bit more muted on Service side. Generally speaking, of course, our ability to cater so many customer segments and so many places across the world helps us to kind of mitigate the fluctuations for these segments that might be in a downturn, and that's now been visible also this year, particularly, in relative terms to our competition.

For the questions. And now we are unfortunately at the end of our time for this webcast, and we will continue the discussion at our Capital Markets Day 2026 in about one hour. So thank you very much for the discussion. Any left over questions, please send them over, and we will get back to you. And I hope to see you, everyone in about one hour at our Capital Markets Day. Thank you.

Thank you.

Thank you.

Hello all, and welcome to follow Konecranes' Q2 2026 Results Webcast. My name is Linda Hakkila, I'm the VP, Investor Relations here at Konecranes. And today, with me as our main speakers, we have our CEO, Marko Tulokas; and our CFO, Teo Ottola.

Before we continue, I would like to remind you about the disclaimer as we might be making forward-looking statements. As per usual, we will first start with a presentation from our CEO. After that, our CFO, and then we are happy to answer your questions in the Q&A session. But now without any further comments, I would like to hand over to our CEO.

Thank you very much, Linda, and good afternoon from my behalf also. I'd like to start with some key topics of the quarter and start with commenting the customer activity. And I'm happy to say that we had a continued very strong and good customer activity throughout the quarter. That despite the continued geopolitical uncertainty, which has resulted some apprehension with customers and the timing of the orders as well as some volatility in supply chain.

Regardless of that uncertainty and apprehension, we had good demand, particularly in the Ports business segment as well as in defense, power and aviation in the industrial side to name a few. And because of that, our quarter 2 orders actually were very strong, and that resulted also in the highest order book that we have had in 3 years. This, of course, is a very good quarter 2 for us.

Now the uncertainty in the environment reflected maybe more on the sales and the delivery side, but our volumes remaining on the previous year level or actually slightly below, and that is mainly due to the expected timing of the ports order book. Our ability to execute and apply cost control resulted in a solid result, particularly in such a volume environment.

And also, I'd like to say that I'm really happy and particularly happy that we had good M&A activity in the quarter. So right after the end of the quarter, we were able to announce the recent planned acquisition of 70% majority interest in MFK, which is Mitsubishi Electric Corporation's wire rope hoist and gear motor business in Japan.

And of course, that is a very important milestone for Konecranes and in our expansion plans for our geographical presence. Japan is the third largest crane, crane service and wire rope hoist in the world. And of course, for our mid- to long-term plans, this is, of course, a very significant win. Very happy about that.

So now let's move on to the quarter financials and more specific comments. So we had good orders from all 3 business areas, 2 great orders for Port Solutions, 2 larger ones. I'll talk about that a little bit later. Navy order for Industrial Equipment and the Defense segment as well as solid growth for industrial service, both in the agreement base as well as in the orders.

And that resulted in an order intake growth of 13% year-on-year with comparable currencies. And consequently, to an order book that is 15% higher than the previous year at EUR 3.4 billion and the best order book that we have had in 3 years. And that, of course, gives us good prospects for the second half.

Our sales is still behind previous year. That is predominantly a ports deliveries timing issue. But there was also some industrial service and port service-related customer apprehension that reflected to -- from the agreement-based invoicing and resulting spin. But also, we've seen some developments towards the end of the quarter that are improving that development. Too early to say.

Solid margins, particularly if one considers the volume environment, 1.6% behind previous year, but that was predominantly impacted by the volume environment. Now moving on to our demand environment. And if you look at the 2 key indicators here, the capacity utilization and the purchase manager index or the confidence indicators, looking at first, the 2 largest regions, the EMEA and U.S. or EU and U.S., the capacity utilization has been flat roughly the last 12 months with some slight increase in the previous couple of months.

Funnels. Our own funnels are solid. Customers are hesitant to some extent. But as I've said -- as I was saying earlier, we do see solid activity in several customer segments in the industrial side. This capacity utilization related apprehension is more maybe visible in the service work and how much service workers customers actually place or order against the order book that we have and hence, that reflects somewhat to the delivery side in service.

Looking at the manufacturing confidence and the PMI expansion, that shows actually for the second quarter in a row in all 4 key market areas that we operate expansion. That has not all translated into demand for us yet. But generally speaking, that describes a more positive while still cautious environment. And China, although there is a clear slowing down or decrease in the purchase margin index still shows expansion. And that for us shows as an active market, although at the same time, very intense domestic competition.

Now I would next look at the Port segment. And here, the good activity level continues. So when we look at the container throughput index, that continues to be on a very high level historically, and we saw another 3% increase year-on-year in the container throughput.

And of course, the long-term drivers, they remain the same. The automation trend that we've seen, the geopolitical trends that drives also replacement of logistic flows and therefore, also the ports and terminals, the electrification and sustainability trend as well as then the demographics, which drive both automation and the outsourcing trends.

More on a current note, particularly if you look at the current geopolitical environment, and particularly this situation of crisis in the Middle East. The impact of that is somewhat, but in a smaller way in sales side and in the sales delays. But when we look at the demand environment, in fact, that is in the short and midterm, also having some potential positive opportunities.

We see some realignment of investments because of the change in the logistic flows and most recently is, of course, the announced plans in UAE that there would be a new terminal on the East Coast of United Arab Emirates because of the situation. And that's a good example of what these sorts of things actually may result in particularly in this industry.

And also the other thing is that our customers in this industry are the shipping lines and terminal operators, they are doing financially very well and very much continue the consolidation and investment into the terminals and in this business. And that, of course, is a positive driver for us.

Now looking still a bit more in detail to the volume development. As I said, orders were solid from all 3 BAs and particularly in Port Solutions, we saw a good order intake increase. We had 2 large orders, one from YILPORT, which was announced and the other one was an unannounced larger order. But besides that, we also had a decent order intake in Port Solutions in the other segments, too.

In the Industrial Equipment side, one large defense segment Navy order in the United States, but I can also say that we have continued to see solid component distribution business development also in the second quarter. And in the Industrial Service side, 5% growth in orders and 4% in agreement base, which, of course, is a positive thing.

We see an increase in Americas and Asia Pacific, but some decrease still in EMEA that maybe reflects the demand environment too. And on the sales side, Industrial Equipment saw actually growth, and the slowness has been in Industrial Service side, particularly in EMEA and in Asia Pacific.

And of course, as I said already a couple of times, the Port Solutions, it's the timing of deliveries issues. And most of that, of course, is planned and well known in advance. These volumes, of course, they resulted in the clearly high order book compared to the previous quarter and what we had last year. So we have a 15% higher order book than previous year at the same time. That's best in 3 years. All business areas increased.

And of course, we have a confidence building order book for second half deliveries since we have EUR 200 million higher order book for the second half of this year compared to the previous year at the same time.

And on this section, finally, I shortly again touch upon the -- our progression towards the financial targets. We saw a slight decline in the 12-month rolling comparable EBITA development in Industrial Service, Port Solutions and the group volume, whereas Industrial Equipment continued to gradually improve.

What I can, of course, say is that, well, we are well within the target range that we have set up for ourselves until 2029, as also communicated earlier. Now at this stage, I'd like to turn over to Teo, and then I'll come back a bit later also for 2 more things or 3 more things actually.

Thank you, Marko.

Thank you.

And let's move more into the numbers. And let's start with the group profitability slide. So as we already saw, so we had a decline in the group comparable EBITA of 1.6 percentage points to 12.7% now in the second quarter of '26.

When we take a look at it by BA, so we had actually an improvement in Industrial Equipment, we had a decline in Port Solutions and Service. And when we take a look at the business areas where we had a decline, so the main reason for the decline was the underlying volume development, which was downwards.

If we unpack the EBITA a little bit more with the help of the EBITA bridge on the right-hand side. So first of all, we note that the decline in euros was EUR 20 million. If we go more into the details and take a look at the pricing impact, so we had maybe 2% to 3% higher prices now than a year ago. When we combine that with the fact that the sales declined in comparable currencies by 2.8%. So we are actually looking at an underlying volume decline of 5% or even slightly more, which obviously flows into the EBIT development as well as a negative item.

Then when we take a look at the inflation, so actually, the inflation was roughly in line with the price increases that we had, so somewhere between 2% and 3% on a weighted average basis. And we did not now in this quarter have a really net of inflation gain or loss. So we were basically able to cover the inflation with the price increases, but not really more than that. This is as such okay, but it is, of course, a little bit different than what we have been having in the previous quarters because we have had quite many quarters where we have had a net of inflation pricing gain. And this time, that was not the case.

When we then take a look at the other elements, so mix impact was not really meaningfully big. So it was a fairly small one. We had a small negative from the execution, so from the performance in a year-on-year comparison. And then when we take a look at the fixed costs, so the delta in the bridge, minus EUR 7 million. So this is basically inflation and that much we were able to, of course, then compensate with the pricing.

As said, we were able to cover for the inflation, but nothing extra on top of that one. And then the overall end conclusion is that basically what comes through to the EBIT is then the volume impact. And the other topics are then more or less netting each other out. So it's the underlying volume development, which is behind the profitability development.

Then when we move into the businesses and start with the service. So the order intake was roughly EUR 400 million. That is an increase of a little bit more than 5% in comparable currencies. We had increase both in field service as well as in parts. When we take a look at the regions, we had an increase in the Americas and EMEA, but a decrease in APAC.

Again, taking a look at the regions, one can say that the Americas region order intake was very strong now in the second quarter. Then the agreement base continued to grow, again, higher than 4% growth year-on-year in comparable currencies, very good news there. And then the order book is higher than a year ago. It's also higher than at the end of the first quarter. So both sequential and year-on-year growth from the order book point of view.

Sales, minus 1.7% in comparison to the situation a year ago. Now despite the fairly good order intake, so we have some slowness in the sales. And like Marko already pointed out, so it comes partially from the -- maybe a bit lower-than-expected invoicing regarding the agreement base and also then that our order book is now a little bit higher than what it has been.

So part of it is in the order book in a way and part is in the slower than, let's say, normal invoicing from the agreement base. We, however, feel that this is primarily a timing topic and the sales performance will recover going forward to the second half.

Then when taking a look at the comparable EBITA margin, 21.2%. This is a decline of 1.4 percentage point year-on-year. Here, the reason is the same as for the whole group. So it is basically the underlying volume, which is causing the decline in the service EBITA margin.

Industrial Equipment then, very good order intake in the second quarter, more than 18% growth in a year-on-year comparison. So we had good growth in components. We also had good growth in process cranes, but a slight decline in standard cranes in a year-on-year comparison.

And then again, taking a look at the regions. So Americas was strong here also like in service as well. Also APAC grew, but EMEA was more or less stable in a year-on-year comparison. Then of course, the sequential comparison is interesting and important as well. There, we had a decline in standard cranes as well as in components, but process cranes were more or less flat in a sequential comparison.

It's worth noting that component order intake despite declining a little bit in a sequential comparison, still continued to be on a very good level. Here, too, the order book increased both in a year-on-year comparison as well as in the sequential comparison.

Net sales grew by 8.6% in year-on-year comparison. We actually here had a growth in all business units. Some delays from the customer deliveries point of view but nothing major and sales growth is there. So then when we take into -- take a look at the comparable EBITA margin, 6.9%, 0.6 percentage point improvement. So this is, of course, then a different story than in the service.

For example, volume increased and supported the EBITA. Also pricing gave a small positive here within Industrial Equipment. But then on the negative side, on the other hand, we have the FX, so euro-dollar in particular, which is impacting us, which is in a worse position from our point of view than a year ago. And then also from the execution point of view, it was not a completely clean quarter. So there was a little bit of that also included in the numbers.

Then Port Solutions, also here, actually excellent order intake, the growth, 17% year-on-year, like Marko already pointed out, we had 2 large orders that were received in the second quarter. Activity overall was good in RTGs, lift trucks also port service in a year-on-year comparison.

Then when we take a look at the sales, we have a clear decline, almost 13% in a year-on-year comparison. Again, repeating what Marko already mentioned. So this is primarily an order book timing topic. So the deliveries are scheduled for a later time. This was the main reason a couple of deliveries probably could have been going to within the Q2 and slipped to Q3.

Additionally, unfortunately, we were not able to deliver the pending Middle East case that was there pending already at the end of Q1. So that was a little bit less than EUR 50 million impact. But like I said, this, we had already at the end of Q1. But we haven't really seen any major new delays as a result of the conflict in the Middle East.

Then when we take a look at the comparable EBITA, 10.8%, 1.9 percentage point down in a year-on-year comparison. So of course, the decline is primarily as a result of the lower volume. The profit was supported a little bit by a U.S. tariff refund. So we have applied for refunds. We have received also refund. It was a little bit less than EUR 2 million for Port Solutions in this quarter, and this was a tariff that we actually originally paid last year and now that we have got a refund. So it is, of course, helping our Q2 result then this year.

Then a couple of comments on the balance sheet and cash flow. And here on the net working capital side, we have actually now for the first time in 2 years, we have a situation that we are on the wrong side of our target of being below 10% of rolling 12-month sales. This is because of the inventories. So it is the work in progress primarily, which is causing this. So of course, the sales are a little bit on the low side.

And of course, the flip side is then that the goods are in the inventory. So that is the reason behind that. Advances from customers are on a somewhat higher level, but it is obviously not enough to compensate for the buildup in the work in progress or the contract assets that we now have there. And this is, of course, also a timing topic. But we are, like I said, on the wrong side of the -- of our own target in this quarter.

This then, of course, impacts our free cash flow as well. So the second quarter free cash flow was not good on the negative. And when we take a look at it on a rolling 12-month basis, so we are now very close to a situation that we have cash conversion at about 100% at the end of the Q2 on a rolling 12-month basis. The cash flow is then, of course, reflected on this slide.

So on the right-hand side, we can see the net debt. So net working capital development has impacted this one. A bigger impact, however, comes, of course, from the dividend payment that was taken care of in the second quarter, and now we are in a small net debt situation at the end of the second quarter. When taking a look at the rolling 12-month ROCE, so we are there 22.5% with on a comparable return on capital employed basis. With these comments, I will then hand over back to Marko.

Thank you, Teo. Talking about our demand outlook. So we reiterate our earlier demand outlook. And in our industrial customer segment, we do expect that our demand environment remains to be healthy, as I was explaining earlier.

And then for Port customers, container throughput is on a high level. And as already earlier described, the long-term prospects are remaining very good. However, the uncertainty has not gone anywhere, and that is, of course, related to the geopolitics and the tariff policy that has also not changed and is almost equally as volatile as it was before. And that, of course, keeps the uncertainty in the demand outlook.

And from a financial guidance point of view, we reiterate the guidance of net sales expected to remain approximately on the same level or to increase from previous year and that our comparable EBITA margin is expected to remain approximately on the same level. So that means that we remain confident, thanks to a good order book and stable profitability development, but at the same time, realistic about the uncertainties in the environment.

And with that, I have one more message, and that is that we have at Konecranes worked to further sharpen our strategic priorities and ambitions. And I'd like to tell you more or we'd like to tell you more in connection with our quarter 3 results on October 23.

So you are very welcome to join us either virtually or in Helsinki, and we will then share more of these strategic priorities and ambitions and welcome a discussion with all of you. And with that, I am happy to close this section and move on to the Q&A with Linda.

Thank you for the presentations, Marko and Teo. Now we will start the Q&A session for today. So operator, we are ready to start taking questions through the conference call lines.

[Operator Instructions] The next question comes from Daniela Costa from Goldman Sachs.

I have 2, and I will ask them one at a time. But first, I just wanted to understand on the service margin a little bit better because is there any impact also from mix? Or how should we think about the fact that parts went up and field services went down? I would have thought that is mix accretive.

But then from the other hand, we also had Asia doing better than the rest of the world. And maybe extending that to -- you mentioned the order book a bit when you were going through the explanations, I didn't quite get it, but what's been the trend of margins in the order and agreements book?

Maybe you want to take?

If we start with the service question and the mix impact there. So yes, it is correct that the spare parts have been doing and we're doing now from the order intake point of view and sales point of view, also a little bit better than the field service.

The difference also this time as in so many other times within the service is not so big that it would be significantly impacting the margin structure so that the mix typically doesn't have a huge impact within the service. This was undoubtedly a small positive, but nothing so much that it would be clearly visible in the margin.

Then we take a look at the gross margin in service and compare it to the situation a year ago, so it is very -- these 2 are very close to each other. Of course, now we need to remember that we have been having a little bit, let's say, additional cost burden as a result of the Middle East conflict because some of the cost items like fuel has been on a higher level than what it was earlier. But we have been able to mitigate that cost increase quite well within our -- with our own actions.

And hence, the gross margins there are basically more or less unchanged. So it is the volume drop that actually causes the decline in the profitability within service.

And the other question was about the order book margins. And I guess that is for service as well as elsewhere, the order book margins are roughly on the same level where they have been. in the year-to-date numbers, right?

That is correct. And of course, within service, the order book is maybe then more focused or it's more on the modernization side. So it's not maybe less the spare parts and the field service part. But by and large, of course, that is correct.

And now, by the way, when we take a look at the order intake now in the second quarter for service, so -- and like I said, it was quite good, more than 5% growth. This was not because of the modernization. So we didn't have more modernizations now than a year ago, actually the other way around. So modernization order intake was somewhat lower than in the second quarter of last year.

Got it. And just on the free cash flow, you had all these very large orders towards the back end of the quarter. Is it -- are we missing the advances from these recent large orders? And is that why the free cash flow was negative? Or sort of can you delve a little bit into what caused it?

Timing of the order intake is basically what caused it. So these came very much towards the end of the quarter. And then the advanced payment in a way, schedule was not in place to the extent that maybe it would have been if this had been done 2 months earlier or 1.5 months earlier. So this is the basic example in that one.

So there hasn't been any major significant shift within the contract terms from higher advances to lower advances or anything like that. So that -- so the advanced payments continue -- have been and they continue to be part of the way of doing business in these kind of deals where a cancellation would be a problem for us because of the tailor-made cranes.

The next question comes from Panu Laitinmaki from Danske Bank.

I have 2 questions. Firstly, on the guidance. So you keep it unchanged. You are behind last year after the first half. So could you talk about kind of drivers in the second half that enabled you to kind of reach the guidance, especially given that the margin comps are pretty high?

And then the second is on services. So I didn't fully understand the kind of comment that you had good orders, but then lower sales. So customers are -- could you explain the thing with the kind of lower delivery from the agreement base? And is this improving going into Q3 already?

Maybe I can start on that. On the confidence for the second half, particularly, and that's, of course, predominantly related to the stronger order book. So our order book is roughly EUR 200 million stronger.

And unless we see a deteriorating delivery environment compared to the situation that there is today, then, of course, that gives us confidence that we should be able to deliver the second half. And of course, the delivery -- as was also stated or explained by Teo as it relates to service, of course, that is something that drives the profitability also very well.

And that, of course, is predominantly the reason why we are confident on the second half guidance under these current assumptions and conditions. And the other question was about the service margin?

Service sales probably.

Yes, service sales, yes, sorry, yes. That service sales topic, I mean, you were referring to how come the service sales is behind or the book-to-bill to the orders is what it is.

Of course, that is, to some extent, there are elements there that may be not easy even for someone like us to explain. But the key reason is that, of course, customers, when they have such a environment where they either may be very loaded with the project, which is the case with some of customers or in some cases, have additional capacity or uncertainty themselves, they may hold back on the agreement-based orders or sales that they have already ordered in.

Hence, when they order less, then, of course, that is something that also results in a spin later or the sales that we would get from that inspection visit. And that, of course, why there is a lag or a snowball that we maybe push ahead of us or will push ahead of us in service.

Of course, the orders are there and the agreement base is there. So eventually, the customer will need to do that maintenance and that service and replace that part. And that, of course, why we are also confident from the service side that this will -- now that once we're back on growth track with the orders that will turn into sales.

One way of taking a look at the same with the -- in light of the numbers is that when we take a look at the agreement base growth, which has been 4% or more, and then we take a look at the invoicing from the agreement base. So it is growing less. So in a way, there is a delay in delivering the agreement base. And that delay is something like now was stated so that we feel that it is temporary and it will be fulfilled over time.

But now it has been -- there has been a mismatch within the growth of the agreement base and the agreement base related invoicing. But there is, of course, the other explanation as well. So if you take a look at the order book for service, which typically is fairly modest, but now it has been growing.

And for example, if we take a look at the order book for service at the end of Q1 and compare it to the end of Q2, so we have a higher order book. So some of the orders that have been done now, for example, retrofits that -- for which the quarter was quite good. So they have not been delivered. But of course, the order book will be delivered at a given time going forward. But of course, now the Q2 sales was maybe a little bit lower than what we would have wanted to be.

Okay. Can I just ask as a follow-up? So how should we kind of interpret this that you have been talking about a bit cautious service market for a while, but now the order intake trends were clearly better. So should we kind of understand that it's been an inflection point and it's getting better? Or is it still kind of softish given the sales dynamics that you explained?

It is a bit, let's say, market that is like I were describing cautious. So there are elements there that give confidence, but I would say that it's probably just to be on the conservative side to say that it is a bit too early to say, but the outlook is more positive than it was a few months ago. And there are elements there that could turn this much more positive going forward.

And if we take a look at the data that we get from the claims at the customers, so what we have been seeing is that the utilization rates seem to be going in the right direction, so up in the beginning of the year, so Q1 or so when we have been -- when we take a look at it now, so it's still on a higher level than year-to-date.

But then again, I mean, the last couple of months have not been superb in a sequential comparison. So there's maybe a little bit conflicting messages. So as cliche as it is, so one needs to say that the uncertainty is there. But then again, when we take a look at the behavior that we had from the order intake point of view, for example, in the Americas now in the second quarter. So both service and equipment were strong from the order intake point of view. So there are also good signs in that.

The next question comes from Mikael Doepel from Nordea.

Just a follow-up on this last one. So you mentioned that in terms of the service business, there are elements that are looking more positive than 2 months ago. Could you just clarify what elements are you actually referring to?

I believe that is -- as was stating that we see the activity in the so-called TRUCONNECT or the connected crane that is on a year-on-year basis is higher, but slightly lower in the last month's comparison. But in a year comparison between quarters, it is positive. So that's one small signal.

And of course, when we look at our sales funnels, they are on a rather healthy level. The uncertainty comes from things like that, okay, when does the order actually placed and when it gets delivered. And that, to some extent, it's the same on the service side.

There are not very clear signs that one could immediately be able to interpret that we are going in one particular direction. So it is the funnel value. So they are stable on a fairly good level when we take a look at the number of new cases that have come to the funnel.

So it is very stable in comparison to, let's say, what it was some months ago, if there is a difference within service. So it's maybe slightly to the positive. But what can one, I mean, conclude out of all of this so that in the big picture, it seems the overall environment seems pretty stable. And then there are these regional differences like now Americas looked much more positive than EMEA, for example, from the service point of view. And I guess the same applies to the equipment as well.

Okay. So it's fair to say that you -- I mean, in terms of the sales funnel, I guess, what you're talking about now is not only service, but broadly speaking, sales funnel that you see those as solid across business segments and regions?

Summary level, yes. So that is with differences. And I mean just on the service side, still maybe if you look at the modernization, there is quite a bit of modernization activity.

One of those things that in the last quarters, we have been in the funnel, I mean, because you can only -- you can only go so long without doing a modernization or replacement. That is also one sign when you are saying that what are the reasons why we believe that there would be a good trend. But again, that is only one sign.

Good. Then just a final question on the -- I mean, I guess, Teo, you mentioned the pricing net of cost inflation in the quarter was fairly neutral and it has been slightly positive, I guess, in the couple of past quarters. How should we think about this equation going forward? I mean, what are you seeing out there?

I could assume that maybe there is some increased cost pressures out there on logistics and other things. But at the same time, I would also assume that you're adjusting your pricing. So how should we think about this going forward? And also not really related to this, but in terms of the tariff refunds, what do you expect on that front into the second half?

Yes. If we start with the pricing. So I guess that it's the same commentary as we have been having earlier as well. So we feel that we will be able to price inflation in. So there can be, of course, certain delays if there are abrupt chokes to the system, either from the freight point of view or from the fuel point of view.

But as we can see now within the second quarter, we have been able to handle those, for example, now fairly well. And then we are cautioning that one should not think that we would be automatically be able to make net of inflation pricing gain going forward. So the -- our commentary is that we will be able to push inflation into the customer prices, but not necessarily much more.

If that is the case, that we can increase value added to the customer and can increase pricing more. So that's very good. But let's not count on that on a short and midterm basis. Then regarding the tariff situation. So of course, I mean, this goes in phases in the U.S., like you most likely know.

And of course, we will be applying for more refunds if the system allows that. So we will be following how it is done, and then we will be applying more as we go. But there are, of course, uncertainties related to this one as well. So time will tell in that how it will go impactice.

[Operator Instructions] The next question comes from Antti Kansanen from SEB.

Just a couple of follow-ups left from me. First is on the commentary of having EUR 200 million more from the backlog for the second half. Is this comment predominantly for the Port segment? Or is it divided also for the industrial side?

Because it is divided by everybody, but of course, mostly ports where that is coming from, but all the business areas have a stronger order book. And if you look at service and also Industrial Equipment, the throughput times are generally speaking, shorter than ports, so for all of them.

And maybe coming back to the previous question on the pricing in the backlog. I mean, you mentioned that perhaps we shouldn't expect you to be able to price net of inflation gains.

But if you look at kind of that order backlog that is now set to roll out on the second half, are you fully covered for this kind of inflationary pressures that have this year hit, you mentioned fuel and perhaps some raw materials as well. Is there a concern that there might be a temporary kind of net of inflation headwind coming on the second half? I understand that you price in new orders with good pricing, but the existing backlog?

One could maybe formulate it so that in the big picture, we think that we are quite okay. But of course, if there are now from this onwards, let's say, during the second half of the year, again, a new shock on something as a result of whatever takes place in the world. So then, of course, it can be that there are temporary issues for us.

And the reason for that one is the same as we -- I think we discussed in connection to the Q1 as well, so that in those agreements and cases that we have in the order book, so it is difficult to get the price escalation there because it's already been agreed.

And if there are cost items that are unhedged, like fuel and freight, at least to some extent. So then that may be more difficult to cover on a short-term basis. But like I said, based on the current situation, we don't see a massive risk from that point of view. But if something unexpected happens, so then, of course, it may have an impact.

Okay. And then the very last from me is on the Industrial Equipment profitability on second half of last year, which is, as it was referred earlier, quite a challenging comp in margins are a bit of an outlier.

And if I remember correctly, you then flagged some temporary pricing gains from the tariff landscape. So could you maybe walk us through a little bit what's a reasonable expectation now on the second half versus what you did a year ago on the Industrial Equipment side?

Yes, of course. I'll start again. So of course, there was some tariff tailwind. I think it was EUR 2 million a quarter level in Industrial Equipment. And of course, that is no longer a tailwind, but it's neither a headwind on this year.

And of course, this -- my understanding also the currency is working against us a bit still in Industrial Equipment. Other than that, whether we had anything more specific than rather just good volumes last year and good execution that I have to ask Teo, from.

We had some like the R&D grant we had -- so -- but I mean, I guess that it is fair to say that when we take a look at the tariff situation, so the tailwind that we had from that one, that's not going to be there most likely unless there are again changes that we do not know of today, but that is maybe not there.

On the other hand, then when one takes a look at the FX, which has been for an industrial equipment, a little bit of a burden now in the second quarter, in particular, but also Q1. So this one, based on the euro-dollar rates now should not be going in the worse direction. It should be going slightly to the better direction now in the third quarter. And then, of course, the fourth quarter is still open, not fully hedged.

Okay. So -- and then there's obviously the volume impact, which should be perhaps positive also for the Industrial Equipment from the backlog, which helps you to offset some of these last year's tailwinds.

Yes.

There are no more questions at this time. So I hand the conference back to the speakers.

It seems that there are no more questions. So this concludes our Q&A session for today. I want to thank you everyone for following our event today. And before we close the call, I would like to remind you that we update on October 23. But thank you once again, and have a lovely day.

Thank you very much.

Thank you.

Hello all, and welcome to follow Konecranes' Q1 2026 Results Webcast. Apologies for the small delay. We had some technical issues here at the studio.

My name is Linda Hakkila, I'm the Head of Investor Relations here at Konecranes. And with me today as our main speakers, we have our President and CEO, Marko Tulokas; and our CFO, Teo Ottola. Before we continue, I would like to remind you about the disclaimer as we might be making forward-looking statements.

As usual, we will first start with our presentations, both from the CEO and CFO. And after that, we're happy to answer your questions through the conference call lines. But now without any further comments, I would like to hand over to our CEO.

Thank you, Linda, and good afternoon, everybody.

I'd like to start by describing the first quarter operating environment and some of the key parameters to this first quarter.

First of all, as we all have obviously seen that there's quite a lot of geopolitical uncertainty. And this first quarter, it, of course, continued in the form of the conflict in the Middle East. This has created some uncertainty and apprehension amongst our customers, but also some supply chain discrepancies. But what we are very happy about that, what I'm very happy about that we managed to end the quarter with very good orders. If we look at our demand environment in general, there are many segments that held very, very well, where others also slowed and the same is valid for the different regions and business areas.

What I'm particularly happy about is that our relative profitability held very well, improved and actually was the first -- the best quarter 1 ever in Konecranes' history despite the lower volumes of this first quarter. So that really speaks for Konecranes team's ability to execute price and apply cost control also under such circumstances.

And in the next coming slides, we'll talk more about that. So again, if you look at this order intake development, that was really a good start to the year, and that's considering the environment very satisfactory. So our order intake grew almost 4% year-on-year with comparable currencies. At the same time, sales volumes, we are less happy about. There are a few reasons for that, to be specific, and we'll talk more about that. But as a result of these 2 things, of course, our order book grew to a very satisfactory EUR 3.2 billion. That is actually the highest level in the last 3 years, and it is a good starting point for the rest of the year. So our order book is, in fact, EUR 100 million higher in the end of quarter 1 this year as it was previous year for the deliveries -- for the 2026 sales.

Also, what we are very happy about that our comparable EBITA margin increased to 11.6%. That is the highest ever quarter 1 margin, as I already stated. It improved in the Industrial Services and Port Solutions, but slightly decreased in Industrial Equipment and particularly in Industrial Equipment because of the lower volume in quarter 1. These improvements were mainly driven by very good execution, favorable mix as well as pricing and applying cost control.

Now let's move on to look at the key operating environment parameters for first quarter, and there's 2 things that I'd like to talk about here, which are the most obvious one. And the first one is the conflict in Middle East, and the second one is the U.S. tariffs, which have been with us now for the last 4 quarters.

I'll start with the Middle East conflict. First and foremost, Konecranes operates in 4 countries in Middle East. We have roughly 180 Konecranes team members in that region. That is approximately 1% of our whole organization or our workforce. And the most important thing for us, of course, is the safety of our team members. And I'm really happy to say that our team has been safe and out of harm's way the whole duration of this conflict.

Konecranes sales to Middle East is less than 5% of group sales. And the impact on the first quarter to our sales related to this conflict is approximately EUR 50 million or somewhat less than that. We also have seen some freight and fuel costs rising, but that has been for quarter 1 result, a fairly limited impact. And we are managing those cost pressures either with our long-term hedging arrangements as well as our pricing actions and logistical rearrangements.

Secondly, related to the U.S. tariff situation, there's also been some changes. So the Section 232 tariffs, they do remain in place. But as -- I'm sure many of you have seen and heard in the -- from the other calls also, there is changes to the calculation methodology. And at the same time, when there are changes to the reciprocal tariffs, replacing the 15% with new tariffs of 10%. As a net effect of those -- both changes, our analysis shows that the net effect is negligible or nonmaterial.

And finally, the tariffs to the Chinese-made port crane port equipment, there is no material change, and they do remain in place. So in that respect, our operating environment opportunities have not changed. Now moving on to our demand environment in the next coming slides. And I'd like to start with the Industrial Service and Industrial Equipment as usual.

So when we look at our usual key indicators and to start with the capacity utilization, what is -- what can be seen here is that for our 2 largest regions, Europe and U.S., the manufacturing capacity utilization has been approximately flat for the last 12 months with some improvement in EMEA and a slight decline in the U.S. and that also reflects somewhat how our funnels look. But I can generally speaking, say that our sales funnels in the Industrial business remain solid, and we see good activity in many segments. But it's obvious, and it's necessary to say that particularly in such a situation, the customers' hesitation and, let's say, somewhat nervous reactions to these changes or different news is, of course, visible. And the decision-making, therefore, is slower or more difficult to anticipate than maybe usually it would be.

Now if you look at the same environment from the manufacturing demand indicator or the confidence PMI point of view, it is obviously the same picture, a fairly flat development in the last year. What is noteworthy here is that EMEA is showing expansion. It's actually the 4-year high and also now showing confidence or expansion in the EMEA region. That is, of course, good news and long waited. And as I said earlier, our funnels also in that respect are in good order.

The other thing I'd also like to say about this, of course, there's been some, let's say, decline in the Indian manufacturing PMI visible in this slide also as the graph on the top. From our point of view, the India market is -- continues to be a very solid market and the manufacturing activity is very buoyant and there are good funnels in place. There is no material change to that from our point of view.

Now moving on to the Port Solutions. Container throughput index, the main indicator here continues to be on a good level. In fact, it's actually for the first part of this year or first quarter of this year has been a very good solid development with the container throughput with minor decline in -- or slowing in the growth rate in the last month of previous quarter, and that can be contributed to the Middle East story, but it is still a very positive sentiment. And as always, here, it is important to remember that the long-term drivers for this container handling business and the investment to container handling is very positive. So there is the automation trend, the geopolitical trend of repatriation of volumes, the consolidation trend in the industries and the sustainability, electrification trends and then, of course, demographics, which all drive long-term positive demand or investment in the container handling industry.

Looking at the volumes, once again, as I stated, a solid order intake. That is an increase, particularly in Industrial Equipment. We did have one large process crane order Industrial Equipment. Also, there is some decrease in Industrial Service, but we continue to expand our agreement base, which is, of course the most important thing is our growth engine going forward. And we had a good quarter in Port Solutions, but didn't quite make the same level as we had last year first quarter, which is also a very, very solid quarter.

Increase in the Americas region and Asia Pacific, but slight decline in EMEA regionally looking at things. And on the sales side, it was a slower quarter, and that was actually in all business areas and in all regions. And there are basically 3 core reasons for this. First of all, seasonality, typically, quarter 1 is a slower season, particularly -- slower quarter in -- particularly in the industrial business side, timing of deliveries reflecting to our project businesses, imports as well as the process crane and industrial side. And then, of course, the Middle East impact, which was somewhat less than EUR 15 million. And these 3 contributed to the somewhat slower volumes in first quarter compared to last year.

But I'm also very happy about that the book-to-bill ratio continues to be positive and has been more or less for the last 1 year. And that, of course, means that we have a very strong order book that is on its highest level in 3 years since quarter 3 of 2023. at EUR 3.2 billion. It's an increase in Industrial Equipment and Port Solutions and a slight decrease in Industrial Service, and we had also sequential growth of this order book of 6.3% from the previous quarter.

And finally, such a solid developing quarter 1 for our profitability, particularly when we had somewhat lower volumes is something that builds confidence on us also that we are very well on track further for our financial -- long-term financial targets, as you see from this particular graph.

So I'd like to now ask Teo Ottola to join me next, and then I'll come back shortly for the demand outlook and the guidance.

Thank you, Marko. And let's actually continue with the profitability where Marko already started. So our comparable EBITA margin improved from 11.1% to 11.6% in a year-on-year comparison. Despite the improvement in the margin, the comparable EBITA in euros declined by EUR 3 million. And we can next take a look at some of the factors behind these changes with the help of the EBITA bridge that you can see on the right-hand side of the slide.

So if we start with the pricing, so pricing impact in a year-on-year comparison was something like 3% or so -- and when we combine that information with the fact that the sales declined by almost 5% in comparable currencies, we are actually taking a look at quite a significant underlying volume decline in a year-on-year comparison, which is obviously creating a negative impact to the EBITA comparison against Q1 of '25.

On a more positive note, so the pricing -- net of inflation pricing impact continued to be positive. Also, product mix was more favorable now than what it was a year ago, but particularly performance, so execution was better than what it was a year ago, and this creates a positive delta to the EBITA bridge. The difference primarily comes from Port Solutions, actually, when it comes to the execution.

Further, when we take a look at the fixed costs, so fixed costs were well under control, like Marko already mentioned, we actually had slightly lower fixed costs in Q1 now in comparison to the situation a year ago. However, then the currencies, and this is the translation impact that we are seeing here, translation impact was negative in the amount of roughly EUR 5 million in a year-on-year comparison.

So as a summary, the EBITA was burdened by lower underlying volumes. But then on the other hand, it was supported by good execution, good cost control and net of inflation pricing. Then we can move to the business areas, and let's start with the service as usual. Service order intake with comparable currencies was almost 1% up in a year-on-year comparison -- in this slide, we can very clearly see that now in Q1, the FX differences have been quite big. So the order intake declined by almost 4% in reported currencies.

Now the bullet points in the slides, so they are with reported currencies as they should be. But of course, now that the FX differences are big, so this skews some of the underlying development. For example, now in service, when we take a look at the different parts of the businesses, so we actually grew both in parts as well as in field service when we take a look at the situation in comparable currencies, of course, more in parts than in field service.

And then correspondingly in the regions, when we take a look at those, so with comparable currencies, we grew in the Americas as well as in EMEA, but there was a decline in APAC. Agreement base continued to grow nicely, 4.6% year-on-year with comparable currencies, whereas the order book was slightly down.

Going into the sales. So we have roughly similar underlying, let's say, comparable currencies growth as in the order intake, a little bit less than 1%. And again, there, when we take a look at the regions, so actually, we had growth in the Americas, stable in EMEA and decline in APAC when we take a look at the comparable currencies. And of course, the Americas, in particular, looks different when we take a look at that with the reported currencies.

EBITA margin improved by 0.2 percentage points to 20.4%. This despite somewhat sluggish volume development. The reason is primarily operational improvements that we have been able to do over the past 12 months or so. And in practice, it is visible as very good cost control in the Service business. Then Industrial Equipment, where we had good order intake growth, 11% in comparable currencies. If we take a look at that by business units, so we had very good growth in process cranes.

We had a decline in components and standard cranes in reported currencies. And then again, when we go and take a look at the same with the comparable currencies, so both of these were pretty flattish in a year-on-year comparison. Sequential comparison, which is also interesting in many cases. So sequentially, we actually grew in all of the major BUs, so in comparison to the fourth quarter.

Regions year-on-year, we did well in the Americas. APAC grew as well, whereas there was a decrease in EMEA against fairly tough comparables. Order book grew by approximately 10% in a year-on-year comparison. Sales or completely flat in comparable currencies, no growth, no decline. When we take a look at that with the bit by business unit. So we had a decline in process cranes, but then the other 2 main business units were more flattish from the sales point of view.

Comparable EBITA margin declined by 0.4 percentage points to 4.2%. The main reason behind that is the lacking volume. So there was no volume growth. This was partly offset by positive net of inflation pricing and cost control, but obviously only partly as the EBITA dropped both in percentages as well as in euros. Then Port Solutions, where the order intake declined by 3.8% in a year-on-year comparison with comparable currencies.

We had good order activity in the ASC, RMG cranes when we take a look at the more short cyclical product categories. So lift trucks, for example, year-on-year, we had growth in the order intake. Q-on-Q, it was a little bit down. And then again, on Port Service, year-on-year growth and in a sequential comparison, flat to slightly down in comparable currencies.

Sales came clearly down by 13% in a year-on-year comparison. This is primarily as a result of the order book timing, but it is also partially as a result of the Middle East conflict and the delays in deliveries as a result of that. So the group level delays in deliveries were something like EUR 15 million in the first quarter as a result of the crisis. Vast majority of that is visible in the Port Solutions. So it is partially explaining, but the timing of the order book is clearly a bigger factor here.

Comparable EBITA margin improved very well, 1.6 percentage point to 9.9% despite the underlying low volume. So we had very good execution during the quarter, as already mentioned, which was more than offsetting the negative development in the volumes. We also had a little bit, let's say, onetime gains in a way, provisions that were canceled in a way during the first quarter, but a clearly bigger explanation is the underlying good execution in the Ports business.

Then a couple of comments on the balance sheet and cash flow topics. Net working capital, that continues to be on a good level, a little bit higher than at the end of the year, -- sorry, 7.6% of the rolling 12-month sales, well within our target area of being below 10% of rolling 12-month sales. We had a little bit more inventories at the end of Q1 than at the end of the year. Consequently, also the cash flow -- free cash flow for the quarter was not as good as it has been during the previous quarters. But still, when we take a look at the rolling 12 months free cash flow, it is on a good level and cash conversion continues to be clearly above 100%.

Then EPS, the EPS numbers have been adjusted for the share split. The return on capital employed is on this slide as well, which continues to be between 22% and 24%, depending on whether one takes a look at the reported official return on capital employed or the comparable one. And on the right-hand side, we then have the net debt or in this case, net cash. Actually, we had net cash in the amount of EUR 185 million at the end of Q1. This one is missing the dividend payment that was -- that took place in the month of April and the dividends roughly, let's say, in the ballpark of EUR 180 million, a little bit less than that.

And with these comments, I will then hand over back to Marko.

Thank you, Teo. Now looking at our demand outlook. Our demand outlook remains unchanged, as I already said earlier. So the environment generally for industrial customer segments remains on a healthy level. And our port customers, container throughput is and was on a high level, and of course, the long-term prospects for container handling, as also earlier stated, they remain good, and there's no material change as a result of the recent developments due to these things.

But of course, the uncertainty related to geopolitics and trade policies is not at least nothing less than it was a quarter ago. So it does remain high. And that, of course, we have to keep in mind when we look at the demand and that translating to our order intake.

Now -- our financial guidance, we reiterate our financial guidance. So we expect our net sales to remain approximately on the same level or to increase in '26 compared to '25 and our EBITA margin to remain approximately on the same level compared to last year. So that means we remain confident about the future, but realistic about the uncertainties in the environment.

And with that, I thank you all. And now we move to Q&A. I welcome Linda back here.

Thank you for the presentation. And now we are ready to start the Q&A session. So operator, please, you can open the conference call lines.

[Operator Instructions] The next question comes from Daniela Costa from Goldman Sachs.

I actually have 3 questions, if possible. Maybe I'll ask them one at a time. Just the first one, just to go back to, I think you've mentioned the sort of up to EUR 50 million impact on the revenues from the Middle East. Shall we expect that to be all resolved and to deliver on those revenues entirely within 2Q?

Just to be clear, it's EUR 15 million, 1-5, not 5-0. I'm not sure what you mean there, but 1-5 and maybe Teo, you can continue from there, right?

Yes, 1-5. EUR 15 million, and like I said, the majority of that is within the ports and smaller amounts within the other 2 business areas. We are expecting at least majority of that to be delivered during the second quarter. The bigger cases that we have there, so they have not been delivered as of now, but the expectation is that during the second quarter, that would be the case that they will be delivered.

Got it. And then just to follow-up on service on being sort of slightly weaker year-on-year, given what we have seen. I think you mentioned you had it in our presentation, the PMIs and manufacturing capacity utilization has not really deteriorated in any region. And you put pricing through, which I guess is also reflected in there. So was there any specific subsegment?

Do you think there was also some expectation on servicing, and that's coming back in Q2? How should we think about the underlying reason why this is weaker now?

I won't comment on the Q2, but I'd say, I mean, of course, the quarter 1 picture when it comes to service was, I mean, of course, as you correctly stated, there is some positive development in the PMI indexes. And also, we do see higher activity in the customers when we measure through TRUCONNECT or remote service connections compared to last year. But it is somewhat early to say that increased activity has not been yet reflected in -- or the increased manufacturing activity and therefore, also the needed service is not really reflected directly in the volumes yet.

And then just finally, I mean, you've -- I think in the remarks have said it wasn't a very big number. But nonetheless, you mentioned the whole freight and fuel costs within the statement. Can you just remind does that in your like pass-through clauses, we know you kind of pass through for raw materials, but do the clauses include any of these and it's just more a matter or a lag of time or freight and fuel costs are kind of dealt with that spot and they're not in inflation clauses that you pass on to customers?

Okay. So if we start with the freight, which is actually a much bigger topic for us from the cost mass point of view. So we have project deliveries and then we have other freight costs. And if we take a look at the project deliveries, so in most of those cases, the pricing has already been agreed when the when the, let's say, transportation has been ordered. But then when we take a look at the rest of it, which is clearly a bigger part of it. So we do not have generally those kind of pass-through clauses that we would automatically push forward.

So in case there are very sudden changes, so it is, of course, possible that it will burden our cost base. But then over time, of course, this will be taken to the customer prices. And then at the end of the day, it is a question of the pricing power then like so many other inflatory topics.

When we take a look at the fuel or energy, so we are not really hedged against fuel changes, but we are primarily -- or for the most part, we are hedged against the other energy costs, so electricity and gas and those kind of. There, we have hedges in place. The fuel, there are, in some cases, surcharges that we can use, but there is maybe the same thing as well so that over time, these kind of changes will then be taken to the contracts and we take it from there.

The next question comes from Panu Laitinmäki from Danske Bank.

I wanted to ask about the guidance for flat or higher sales. Could you talk about the assumptions behind that and especially the higher sales, where would that come from? Like I understand book-to-bill was positive in Q1, but how do you see the delivery from order book for the remainder of this year compared to what you had a year ago, for example?

As I stated also earlier, the order book starting this year and also at the end of quarter 1, it is positive compared to last year and about EUR 100 million in the end of quarter 1. So of course, we have more to deliver this year. There is, of course, the uncertainty related to the prevailing situation and how fast we can push the deliveries out. And we have in most of our businesses with at least a quarter or 2 to sell and the sales funnels are quite robust. So there is, of course, all the opportunities to also exceed sales or then if there is further headwinds, then, of course, we're confident that we can stay on the same level as we had last...

Maybe additionally on that, so the sales funnels continue to be in good shape. The number of new cases has been during the first quarter quite okay. The order book is there. It is higher than what it was a year ago. And then, of course, what we don't know is that if there are disturbances, geopolitical stuff or other that how it will be impacting to the future order intake. But like I said, the funnel values and the number of new cases, at least regarding the Q1 have been in a fairly good shape.

Okay. Then secondly, on the tariffs, so you said that I understood that the change in 2022 tariffs doesn't change much for you. But how should we think about the impact on your P&L, especially going to the later part of this year as a year ago, you mentioned like tailwind from tariffs that you increased pricing before you got any impact on the cost side.

So how should we think about tariffs impacting your profitability going forward this year?

Yes, you're correct. We were stating more or less 3 quarters last year that there has been tailwinds in tariff, but we also said at the same time that we expect that to level off towards the end of the year and this year, and that is more or less what has happened. So we don't really see a tariff tailwind nor do we see a significant headwind at the moment either this from the tariff specifically.

Okay. Maybe a final one on capital allocation. I guess this is a topic that we discuss often, but do you have anything new to update us on the M&A pipeline or thoughts around that?

No. When we have new to update, you will hear some with the others also. But I mean, just jokes aside, of course, it's something that we continue to work on, and it's a timing-related issue when we are able to materialize in that situation hasn't changed. It continues to be in our focus.

[Operator Instructions] The next question comes from Mikael Doepel from Nordea.

So a couple of questions here. So firstly, on the demand outlook, maybe you could talk a bit more about that. I mean we are already into the second quarter of the year. The war continues. You mentioned some uncertainties. Maybe you could just provide a bit more color on what you see here? For example, with industrial customer segments, what do you see there?

Anything that sticks out in any way now heading into Q2 compared to Q1? And also on the port side, I mean, short-cycle orders were down sequentially. I think they were up in Q4. How has that been trending into Q2? Just trying to understand. Are we -- are you seeing kind of incremental or sequential weakening now given increased uncertainties? Or would you say that things are holding up fairly well?

Well, starting from the industrial business side, adding color to what was earlier said about Teo and myself that the funnels are in a healthy level. That is -- but what I said earlier about some, let's say, hesitation or nervousness, there is changes to how the customer behave, maybe on a shorter notice than there was earlier. But that is just something that with our tools and the presence that we have, we are confident because we have the ability to react to such changes quite quickly.

Maybe the segment related or industry-related picture, I mean, there isn't really a big change in terms of how it looks between the quarter, but it is also visible that the defense segment, the power segment as well as the aviation, what we also have discussed earlier were quite robust on the first quarter also.

And the defense segment related opportunities visible in the funnel, they have materialized and started to materialize in the fourth quarter and the first quarter of this year. So the segment differences, I stated in my first slide, they are maybe even more kind of far apart or more differentiated from each other than it was before.

On the industrial side, we discussed -- Daniela was asking about the service earlier. I hope that addressed that service-related question. But now if we move to Port Solutions picture overall, as stated earlier, there is no big material change in the demand picture as several times, of course, earlier discussed, these are rather big projects. And that, of course, is something that influences the how these orders actually appear in the quarterly order intake.

But from a funnel point of view, there are a number of bigger and smaller opportunities in the heavier or larger port equipment side, but also in the short-cycle business that we have on the lift trucks side, too. So it is not really that way a lot different picture.

Okay. And then I think there, you mentioned that the pricing was still positive net of inflation in the quarter. And I think you've been talking about this kind of effect fading away, but it's still there. So just wondering how do you see this trend from here? Should we expect that positive effect to remain? Or how do you view it?

Well, our standard answer to this one is that we should not expect at least any big net of inflation pricing gain going forward. We did have that now to some extent, still during the Q1. And I think that it's good to separate here the tariff impact and the other pricing impact.

So now like I guess, Marko already pointed out, so the -- we did not have a tariff-related tailwind now in the first quarter, but there was other, let's say, pricing, net of inflation pricing impact that was positive, maybe not to the extent that it was during the last year, but to some extent anyways during Q1. And even if the -- we would not advise to expect a continuous net of inflation positive impact. So the idea, of course, continues to be that we will be pricing inflation into the customer prices, including, of course, also the inflation that may arise as a result of the recent developments that there are. The timing of those is then, of course, something that requires a little bit management.

And then maybe one of the things to -- regarding which is pricing related to some extent is then the euro-dollar FX rate. So that one is obviously very, let's say, difficult to price in. And we are not actually, in a way, putting that into the same basket of pricing. So the FX, particularly in the IE side, industrial equipment side now had a negative impact to the margin in Q1 versus a year ago.

Okay. That's clear. Then just finally, if I can ask on the competitive environment that you see out there. I mean we are hearing some -- at least some of your peers talking about increased China competition and presence listening to some of your Chinese peers being quite vocal of increasing their production in EMEA and elsewhere. Just wondering how you see this impacting your business and your position? And what's your take on those kind of developments overall?

It's, of course, I mean, this is not a new thing. This is something that has been a topic for quite a long time, and we are very acutely, of course, aware of that and making our actions also to counter such a development from the Chinese competition. When it comes to the recent development, it's obvious that pressure in the home region or possible limitations to deliver to some parts of the world create new pressure to those that are still available for the Chinese competition. And that has changed the balance of the competition to some extent.

But that's not uniform in any way between different segments that we operate in, and it's not in any way significantly more or accelerated in the last months or quarters, as far as we see, this is a steady development. And as we've discussed in these calls, but also in the individual ones, of course, our approach is not only to make sure that our technology stays competitive. We are close to where the innovation happens, including China, but also make sure that our life cycle approach as well as our market reach with our distribution channels, well-known brands, they stay in good order and continue to be a competitive advantage that, of course, differentiates us positively from the Chinese competition. And in the end, those are the most important things as far as I am concerned.

So shortly, I mean, long answer to your question. Yes, there is pressure from the Chinese competition as there is also from other areas, but it is not in any way significantly increased, and we are aware of it, and we are taking our actions to counter...

There are no more questions at this time. So I hand the conference back to the speakers.

Thank you very much, operator. Thank you, everyone, for following our event today and sending your questions. Before we close the event, I would like to remind you that Konecranes will publish its Q2 results on July 24. But until that time, have a lovely spring.

Thank you.

Thank you.

Hello all, and welcome to follow Konecranes' Sustainability Webcast. My name is Linda Hakkila. I'm the Head of Investor Relations here at Konecranes, and I'm today with our main speaker, Anniina Virta-Toikka, who is the VP of Sustainability.

Today, we will first start with our presentation, and after that, we are happy to answer your questions. Please note that you may provide or send your questions through the chat functions throughout the event. And please also note that the focus of this event is on sustainability.

Before we start with the presentation, I would like to remind you about the disclaimer as we might be making forward-looking statements, but now without any further comments, I would like to hand over to Anniina.

Thank you, Linda. Warmly welcome from my behalf as well. So today, we will be focusing on how sustainability creates long-term value. The focus will be a lot on environmental issues, but we will cover the whole ESG agenda, of course.

Let's start from the big picture. So sustainability has been and is still one of the key megatrends that are driving businesses the same thing for Konecranes as well. We have identified sustainability being one of the key enablers on doing our strategy, and it's integrated heavily. We create value for our customers by supporting them with their environmental targets. We fulfill their supplier ESG-related requirements, and on the other hand, our strong investments to build inclusive culture to create fair employer practices is an engaging factor for our current people and for the future talent.

Our sustainability agenda is built or aligned with the United Nations Sustainable Development Goals, and for these 9 goals, we can create some positive value. When it comes to sustainability agenda of Konecranes, it's built around four sustainability commitments. We are committed to deliver safe and secure material handling solutions. We are targeting for the megatrend of decarbonization by ensuring that we support our customers in reaching their targets as well as we have the most extensive service offering that extends the lifetime of the equipment. We are also focusing, of course, on our own operations.

On the other side of the social responsibility side, we're committed to create fair, inclusive and diverse and engaging working environment, ensuring that we respect human rights in the whole value chain. And as an overlying foundation of everything that we do is the fourth commitment. We expect the high ethical standards from ourselves and also from our business partners. This includes, for example, strong governance model that we have in place.

So far, in recent years, we have been celebrating our success on numbers, and last year was not any different. The biggest highlight from last year was our upgraded climate targets introduction. So we reached the SBTi target for our own operations 8 years ahead and now upgraded the target, more on that in the later slides. When we talk about the total recordable incident rate, the number was 5.2. It decreased from last year. But on long term, the target is to reach lower than 3 by 2030. So there is still some room for improvement, but we are in a positive track currently.

From the emission perspective, since year baseline 2019, the emissions from own operations, being the Scope 1 and 2 emissions, have decreased already by 54%. From the value chain Scope 3, the emission reduction is minus 20%. If we compare years '24 and '25, both of these decreased by 1 percentage, so last year was not equally good as previous ones. The reason -- main reasons are the increased gas consumption in our manufacturing sites due to the really cold winter in Germany, as well as from the value chain, this is so dependent on the annual sales mix.

On a really positive note is the inclusion index result that indicates a really strong inclusion among our employees. We have, again, been recognized a lot. One of my favorites is a recognition in the Financial Times, European climate leaders, where we were fifth time last year. Continuing about the ratings. From the CDP, we received last year, our second A rating, which is the best rating. On MSCI, we continued in a AAA class. And from EcoVadis, we upgraded our results to the platinum level and currently are among the top 1% of the companies entering that supplier sustainability questionnaire.

Sustainalytics, which is measuring the ESG risk, the risk level remained low, and we were among the top 3% on our industry. So brilliant results from that perspective. We continuously utilize these ratings as a benchmark to see how these external ratings are recognizing and valuing our policies, processes and progress. And so far, it has been really good, but we continuously continue to improve.

Then jumping to the environmental side for a while. First, starting from our climate action. In year '25, Konecranes total climate impact was a bit over 3 million tons of CO2. From that, a bit more than 1% of the emissions is generated by our own operations, Scopes 1 and 2. This includes the energy consumed in our manufacturing and the fuel consumed by our fleet. So nearly 99% of the impact comes from the value chain, which is quite equal to many of our peers.

The biggest emission category on our side is called use of sold products. This includes basically the emissions from the old equipment that was sold during '25 and how much energy they are utilizing during their whole long lifetime, that converts to 1-year emission. So the sales mix is really relevant. The second biggest category is called purchased goods and services, and there one individual most important category is the steel-related raw material purchases. And these two shares from this chart are within our target setting boundary.

In 2020 Konecranes committed to science-based targets, and as mentioned last year, those were revalidated. So our current targets are from the value chain to cut half the emissions before the end of 2030, from own operations to reach minus 60% absolute reductions and on top of that, we have additional target to reach carbon-neutral manufacturing by 2030. We have also committed to set the long-term science-based targets. And how to reach that? We, of course, have our transition plan, which is divided to two sides. For the external market transformation and the activities that are more in our hands.

The most significant or most sizable thing in the transition plan is the customer industry's decarbonization. And as our offering, in the industrial side has been fully electrified already for decades, now we are more talking about the ports and terminals environments. We're still the -- it's largely operated by diesel-powered equipment. So to reach our targets, we need to ensure that these customer industries are decarbonizing, which means basically continuously electrifying their operations. The trend so far has been really positive globally, but to reach the targets it needs further acceleration. We strongly believe that, that happens and our numbers at least so far look good.

The other industry where we expect some decarbonization is, of course, the steel-related industry or steel manufacturing industry. If that doesn't move forward so quickly, it doesn't put our target setting to a risk due to the fact that there is already low emission steel available. And this is the steel that is manufactured from scrap material in a manufacturing site that utilizes renewable energy sources. Last year, 1.4% of the steel raw material that Konecranes purchased was validated to be from these kind of sources.

Third, industry where we expect the change to happen is, of course, the energy market and especially the electricity market. And when this happens, it helps us to lower the emissions from the use of sold products and also the emissions from our own operations. The own actions I will cover in the next slide.

So the biggest thing, of course, is our offering. We do have offering that supports our customers in creating their low carbon targets. And for this, we are talking about -- mostly about the electric and hybrid equipment offering. But not only that, we are also ensuring to utilize in the product design, so-called design for environment principles, where we continuously want to improve the energy efficiency of the products as well as focus on the smart material selection, for example.

Here also, the megatrend of automation is supporting the electrification as we need electrified equipment to be able to automate the operations. The other thing where we create value and helps us to reach the targets is maximizing the life cycle value of the customers' equipment with our circular solutions. So our service offering is the most extensive in the market. And the whole idea is, of course, the extend the equipment lifetime, improve the productivity, safety and security also at the same time.

We, as a company, have a unique position because we are the ones who are designing the equipment, manufacturing or subcontracting it and then servicing it. So it means that our work is to maximize the whole life cycle value. Then the third category is decarbonizing our own operations, which is so far moving nicely forward. So the result is already on minus 54 percentages. There, the biggest share of the emissions are coming actually from our global vehicle fleet. And there, the biggest emission reduction action is electrifying the fleet, and that's moving as planned.

Currently, we are still in some -- perhaps some delays in the U.S. market where, for example, the infrastructure has not improved heavily on the charging side, as well as the offering of the vehicles that we particularly need for our operations is not where we thought it could be already at this moment, but we have been able to compensate that in other regions and moving nicely. One thing to share from our manufacturing side is our special case. Our manufacturing site in Sweden, in Markaryd, is currently operated completely fossil-free. There emission reduction since 2019 has been already 99 percentage.

So this is clearly creating value and this represents the value in numbers. So 40% of group net sales in '25 consisted of solutions that were extending the product life cycles. So this included the basic maintenance, modernizations, retrofits, and spare parts sales, 40% of the group net sales. And then when we talk about our Eco portfolio on the equipment side, we cover fully electrified and hybrid equipment. And as mentioned already earlier, the offering in the industrial equipment side is -- has been for decades fully electrified. So that's why we cover 100%. The focus on that -- on those equipments is then more to ensure that we continuously improve the energy efficiency and seek for low emission materials. For example, last year, we launched a first crane girder box that was manufactured from low emission steel.

On the Port Solutions side, 62% of the equipment sales was fully electrified and hybrid offering. There, we also had new product launches of fully electrified offering that going forward will enable us to reach our target. 62% represents a longer-term trend where the share of sales of Eco portfolio clearly increases.

Then moving to other topics in the ESG field. So now we're talking about safety and security. Safety and security are super important topics for all of our customers due to the industry where we operate in. In material handling industry, we are talking about equipment that are carrying loads or we talk about working at heights. So it's a severe thing to take into consideration.

Konecranes has some technologically advanced equipment innovations like our smart features that are not only increasing the safety of the customer operations but also securing predictive and uninterrupted operations. We do have a systematic management of the product security and cybersecurity as we are more and more connecting data to equipment and people together. We want to ensure that every single one gets to go home safe every day.

For that, we do have standardized procedures for our own employees. We take this seriously. We ensure that the safety culture is there. We need to ensure that there is never a job so urgent that it can't be done safely. We need to stop and pause and think and do it safely.

In other side of the social side, so we are responsible over to -- we have the responsibilities to our 16,500 employees globally. Based on their voice, based on our voice, we see the inclusive culture being at the company, which makes me especially proud that the company that operates in 50 countries has been able to create such an inclusive culture. One highlight from last year is that by the end of last year, we were paying a living wage for all of our employees. Living wage is a voluntary standard, that in many areas is a bit higher compared to standard minimum wage. And this measures per location, a minimum volume amount of money that enables a good living for a person.

We were rewarded with the first position in the Nordic Business Diversity Index for large cap by Impaktly last year. By the end of last year, 23% of our top management were females.

Last but not least, the high ethical standards. So we are following a strong governance on sustainability. We're also, of course, following strong governance on compliance and ethics topics in general. So we do have a governance model that we follow on the decision-making and with basic communication and ensuring that responsibilities are [ kept ]. Since '23 onwards, Konecranes have had ESG-linked incentives for the top management. Currently, we have these in place for both short-term and long-term incentive systems. We are embedding sustainability, compliance and ethical requirements to our business processes. So we do have integrated these topics directly to our policies and to multiple processes.

And one big thing that has been a focus area for past few years is the collaboration with suppliers. And there has been multiple reasons why this has been the focus point. One being that there has been a lot of emerging regulation on this topic globally as well as there are the most significant risks lie within the supply chain. One great tool that we have for the managing of suppliers is our Supplier Code of Conduct that was launched 2018 for the first time and updated last year. Currently, the coverage of fulfilling that is 78 percentage. So from our total supply chain, which covers more than 20,000 suppliers, 78% have signed or are committed to follow our Supplier Code of Conduct. And of course, this is only part of our sustainability due diligence. That includes the questionaries and audits, et cetera, as well.

We are coming to an end. So to conclude, how does Konecranes create long-term value through our sustainability work? Of course, the key thing is our offering. So we continuously are meeting the customers' decarbonization needs with our equipment offering. We have the most extensive life cycle services that are extending the equipment lifetime of our customers' operations as well as improving operations.

We are progressing with our own emission reductions. We are moving from fossil power to renewables, bringing more resilience to our operations as well. And we are extending the high sustainability standards to our value chain where, for example, the work with -- that we do with the suppliers is an excellent example.

That was my presentation. Thank you so much.

Thank you, Anniina, for your presentation. Now we will start the Q&A session. Maybe we'll start the discussion by discussing about carbon border adjustment mechanism, CBAM. So there has been a lot of discussion around CBAM. How do you expect it to affect Konecranes?

When CBAM was introduced some years ago, starting to focus on the -- so the focus is -- the aim is to tax the carbon-intensive raw materials, and it first focused on certain steel and aluminum raw materials. So it has been impacting us slightly the past years because we have been -- we had, had the obligation to report how much we import. We have a global supply chain, meaning that we are not so dependent on the imports to the EU on this matter. So the impact so far has been really limited.

Now EU made a draft proposal to extend the regulation quite significantly. It would mean that not only raw materials are included, but certain components and some ready-made products as well will be there. Let's see how it proceeds. But so far, based on our analysis, the impact towards us would be quite neutral. Of course, we expect that it would perhaps increase the prices and then the question is that how evenly we can offset that going forward.

Thank you. Then a question about inclusion and diversity. So what kind of activities Konecranes is doing to improve inclusion and diversity across the different levels of the organization?

Brilliant question. Our inclusion and diversity action plan is really expansive. I think that the biggest thing that we do is we are localizing these programs. We focus on the gender balance. We focus on offering more opportunities for females like having the female -- we had in the history, the female mentorship. We have a coffee and culture. Coffee sessions where we are opening the topic.

We don't only talk about, of course, the gender. We talk about the other aspects as well. The inclusive culture is a big thing. In the recruiting, we have -- we are taking it really seriously. We need to ensure that the recruitment processes are being equal, equal to all. But the local activities are making the biggest change currently.

Okay. Then next question about emissions. So Konecranes recently upgraded the near-term Scope 1 and 2 emission targets for the end of 2025. What are the main levers enabling this acceleration? And what progress have you seen so far?

Good. So we upgraded the emission targets for our own operations due to the fact that the old target was already set. And at the same time, as we are actually targeting for carbon-neutral manufacturing, it didn't make any more sense to have that target that was set. So currently, we are on minus 54% of the absolute emission reductions, targeting for minus 60%. As mentioned already, the biggest impact comes from our vehicle fleet. So there, of course, we are more locally doing the electrification actions where feasible.

We have progressed really well in downsizing the cars at certain levels. On our manufacturing sites, the biggest impact has been moving to fully renewable electricity in all of our manufacturing sites. Now we have continued with substituting other energy sources like district heating or utilizing the HVO with the diesel-driven lift trucks that we have. These things will continue. As always, the low-hanging fruits have been collected and now the biggest thing is the electrification of the fleet.

Great. Then moving to the next theme about Scope 3 emission reduction. Given that we are only 4 years away to 2030, how confident are you to achieve your Scope 3 emissions?

One commitment that we have done is that we have committed that by the end of this year, we would have a full electric offering, meaning that for every single product type, we would have the electric offering available. We're confident that, that will happen. There are only a few versions that are not globally yet available.

Then the question is how attractive these are for the markets. And as mentioned, so far, the electrification of these important industries has progressed positively forward. And we do believe that it continues, but with our own actions, we will not reach the target, we need the markets to transform.

Thank you, Anniina. This concludes our session today. So I want to thank everyone for following our event and wish you everyone a lovely day. Thank you.

Hello all, and welcome to follow Konecranes' Q4 2025 Results Webcast.

My name is Linda Hakkila, I'm the VP, Investor Relations here at Konecranes. And with me today, as our main speakers, we have our CEO, Marko Tulokas; and our CFO, Teo Ottola.

Before we proceed, I would like to remind you about the disclaimer as we might be making forward-looking statements.

As per usual, we will first start with presentations, both from our CEO and CFO. And after that, we will start the Q&A session. We are happy to answer your questions through the conference call lines. But now without any further comments, I would like to hand over to our CEO.

Thank you, Linda, and good afternoon from cold, but very sunny Helsinki. I'd like to start with some general statements.

It was a really very strong year for Konecranes, and I'm very, very proud of our team and very proud to be part of the Konecranes team, particularly in a year like 2025. Konecranes has a very sound business model. We've been executing our strategy. And that, of course, in this sort of environment has really improved -- shown that an improved resilience in our results.

There was a very uncertain environment last year. We focused on executing our strategy and focused on the most important things. The year started on uncertain terms, but we acted fast and early, whether it's on pricing, focus on execution or tight cost control.

Towards the second half of the year, the market environment stabilized and particularly in the delivery side, it was visible, and that helped us to finish the year strong. And now when we look at towards 2026, we have a good order book in place, the structure is solid and our strategy for 2026 has a very good road map in place. So I'm really confident for year 2026.

So now let's look at how the year turned out and then also how the quarter 4 look like. Throughout the year, the demand environment stayed positive overall. There was a lot of positive development in many customer segments and Konecranes' broad presence in different customer sectors and geographies, of course, helped us in this sort of volatile environment.

Our orders were very strong, particularly in Port Solutions and Industrial Equipment. So we grew almost 12% in 2025 in comparable terms compared to 2024. The demand on industrial service instead was quite a tough demand environment. But even in this environment, we were able to strengthen our agreement base. We took very good care of our pricing and also made sure that we adjusted our cost base to the prevailing conditions.

We also took care of our margins and our cost structure, good execution in our project business, and we continue to roll out our products according to our strategy. And that, of course, meant that we were able to complete the year with almost 1 percentage point improvement in the comparable EBITA at 14%, record high level.

Moving on to quarter 4. And in quarter 4, our orders were also very good. So we continue very solid order intake and also sales. But it's also noteworthy that both decreased against a very strong comparison quarter of -- quarter 4 of 2024. So orders were down 4% and net sales roughly flat in comparable terms. Quarter 4 in 2024 had a very strong order intake in Port Solutions, but also in Industrial Equipment, where both actually had the second highest quarter of all time in Konecranes. And that makes quarter 4 of '25 also very satisfactory for us. Our order book continued to strengthen, and it was 3 percentage points higher or 7 percentage points in comparable terms.

Our profitability improved and increased to 14.1%. It was really very good project execution in Industrial Service, Industrial Equipment and in Port Solutions, Port Solutions with very good margins, but with slightly lower volume. And we kept our cost control intact and had a bit of pricing and tariff tailwind, but less than we had in quarter 3. And of course, the order book improved, and that means a solid start for 2026.

Now if you look at the market environment in general, how is the best way to describe it? Maybe one way to say that the market and the customers have maybe used -- got used a little bit to the uncertainty. So there is a cautious positive development in the capacity utilization rates as it is visible in this Industrial Service and Equipment slide, which shows the capacity utilization rates in the 3 main market areas. And our own funnels and our customer demand, how we see it. European sales funnels are good on solid level. There are some signs of improvement. But of course, customers continue to be rather cautious around this type of volatile environment.

In the United States, the previously very strong industrial equipment funnel has somewhat flattened down. But on the other hand, on the service side, we see some signs of improvement. So customers are starting to do the service that they may have put on hold temporarily during the kind of tariff-related uncertainty. It's, of course, too early to say how this actually pans out during this year, but we are optimistic in general about the market environment or continue to be so.

And in Asia Pacific, the market continues and the funnel continue to be on a stable level, but the tough competition continues, particularly from the Chinese competition.

And then if we take a look at the Port Solutions segment, here, the container throughput index, as we have discussed before, is, of course, the main indicator, and that continued to be on a very good level overall. Maybe there is some flattening in the growth rate, but it's still very positive.

Our funnels continue to be good. There are big and small cases in the funnel. And of course, it's good to remember here that besides the obvious container throughput traffic indicator, there is the long-term prevailing trends in port solutions that are, of course, driving investments. So that comes from the automation trend, the prevailing consolidation trend in that industry, change in the traffic routes driven by the repatriation and changing manufacturing locations. So of course, we continue here to have a kind of positive general view on the market as we have had also last year.

So reiterating again a bit more about the quarter 4 development against the strong comparison period and how the past 2 years have gone, as you see here, of course, the order intake in quarter 4 was slightly down from previous year quarter 4. But last year, the order intake was actually very good and better than previous year in the first 3 quarters. There was a decrease in quarter 4 in all business areas, some increase in Europe and some decrease in Americas and APAC. And actually, the same profile is true for the sales side of things.

Next is time to look at the order book situation, and we have had a solid above 1 book-to-bill ratio throughout last year, and we've been strengthening our order book throughout the whole last year since quarter 4 of 2024. So we have a particularly strong order book situation in Port Solutions. It is positive in Industrial Equipment with also a positive mix, but it's also a bit down in Industrial Service.

Now here, you see the profitability development over the last 2 years and again, comparing the quarters to each other. This is really a very strong progress and very strong execution to our strategy. There is increase in Industrial Service and Industrial Equipment in quarter 4, some decrease in Port Solutions. And like I stated earlier, that's mainly driven by the volume.

So Port Solutions continued to have good margins and good execution. And they also had a very good quarter 4 last year. Some less tariff tailwind, but still some visible in quarter 4, really good cost management and slightly weaker mix in Port Solutions, but we are very happy with this 14.1% outcome to quarter 4 last year. And that, of course, really helped us to reach this almost a percentage point year-on-year full year improvement on profitability.

Now then it's time to take a look at the -- how we track in our profit improvement progress or process. This is actually the third consecutive year in all 3 business areas where we consistently improve our profitability. All 3 business areas are well within their defined profitability -- midterm profitability ranges. And we've done this under rather challenging demand environment. But at the same time, of course, it is true to say that we have not really had a challenging downturn in terms of volumes. So as you will see here, there has been pressure on the volumes, and we've shown continuous good profitability improvement. And of course, with additional volumes, then this is -- we are confident that this continues to be a good story.

And now I would like to hand over to Teo, and then I'll come back in after a few slides to talk about the demand outlook and a couple of other things.

Thank you, Marko. And let's take a look at some of the business area numbers in more detail.

But before going there, as usually, so let's take a brief look at the comparable EBITA bridge between Q4 '24 and Q4 '25. So we had close to 1 percentage point improvement in the EBITA margin in a year-on-year comparison, and this translates into roughly EUR 5 million improvement in EBITA in euros. And let's unpack this now next a little bit.

So pricing impact year-on-year was roughly 3% -- and then when we combine with that information, the fact that the sales decline -- there was a sales decline in comparable currencies. So we are actually taking a look at the underlying volume decline of some 4% or so, which obviously is not good from the profit and profitability point of view. However, net of inflation pricing, mix and then particularly good execution, so project execution, for instance, then we're all working in a positive manner. And as a result of that, the net of those -- all of those impacts is positive by EUR 13 million, as we can see as a combination of volume, pricing, mix and variable cost on the slide.

And then fixed costs continued to be very well under control. So only EUR 2 million increase in fixed costs in a year-on-year comparison, whereas then the translation impact as a result of the FX differences was a clearly negative number, minus EUR 7 million. And as a result of all of these then combined, so we end up with the improvement of roughly EUR 5 million in a year-on-year comparison.

Then moving on to the business areas, starting with Industrial Service. So we had order intake of EUR 380 million. So this is actually a decline in reported currencies, but an improvement of more than 2% in comparable currencies. So like already mentioned in connection to the bridge, so actually, the FX differences continue to play a big role now in the fourth quarter as well.

Taking a look at the different parts of the businesses. So Field Service declined in the order intake in a year-on-year comparison, whereas Parts business cut up. And then when we take a look at the regions, so EMEA did well. So there was an increase, whereas then Asia Pacific and Americas both saw a decline in the order intake. Agreement base actually grew by 4.4%, like Marko already also mentioned. Order book decline of 7%. That's a big number. But in reality, that is almost all, let's say, everything actually is in relation to the currency changes.

Net sales, 3.5% higher year-on-year in comparable currencies. The story is very similar to what it is in the order intake. So Parts did better than the Field Service and of the regions, EMEA did better than Asia Pacific and Americas. Comparable EBITA margin, 21.9% on a very good level, 1.3 percentage point improvement year-on-year. The improvement did not obviously come from the volume as the net sales increase is roughly in line with the pricing change. It actually more came from pricing, from good execution as well as then efficient cost management in general.

Then moving on to the Industrial Equipment. So there, we have an order intake increase in comparable currencies of roughly 1%. However, when we take a look at the external orders, so this is down slightly by almost 1 percentage point against fairly tough comparables, fourth quarter of '24 was very good from the Industrial Equipment order intake point of view. Of the business units, we had growth in components in a year-on-year comparison. We had a decline in process cranes and standard cranes as well, a slight decline. One could maybe also say that this was flattish in a year-on-year comparison.

And of the regions, again, EMEA did fairly well, so increase there, whereas then we had a decline or decrease in the Americas and APAC. In a sequential comparison and taking a look at the business units, so components orders actually rose also in a quarterly comparison, so the component orders in the fourth quarter were very good. We had a decline in port cranes as also in a year-on-year comparison and then standard cranes were fairly flat in a sequential comparison, similar to what it was in a year-on-year comparison as well.

Here, our order book rose by 2% and of course, with comparable currencies, even more. Net sales up 3% roughly, taking a look at the total volume or then the external volumes, both roughly 3% up. The sales mix was such that it was a little bit more favorable from the margin point of view now in the fourth quarter of '25 than a year ago. And then when taking a look at the comparable EBITA margin, 11.7%, excellent improvement of more than 2 percentage points in a year-on-year comparison. Again, good execution, pricing and of course, also the already mentioned mix supported the profitability in the fourth quarter.

And then Port Solutions order intake, EUR 406 million. This is a decline of roughly 11% in a year-on-year comparison, of course, against very tough comparables. So also here, the fourth quarter of '24 was very good from the order intake point of view. When we take a look at different businesses within Port Solutions, so Lift Trucks actually had good activity as well as RTGs, Port Service, quite flattish in a year-on-year comparison. And then when taking a look at sequentially, particularly the business units that are more short cyclical like Lift Trucks and Port Service. So Lift Trucks had an increase also in a sequential comparison, so Q4 was higher than Q3, and Port Service was relatively on the same level in fourth quarter as in third quarter. So flat exactly like in a year-on-year comparison as well.

Net sales declined by as much as 7% in a year-on-year comparison. This was, of course, as a result of the order book timing and as such, as expected already earlier. Order book, however, is clearly higher than what it was a year ago, thanks to good order intake that has been there basically throughout the whole of '25. Comparable EBITA margin, 9.2%. So this is a decline of 0.5 percentage point. So this primarily obviously comes from the lower volume. So sales was lower than a year ago. Mix did not help here. So in ports, it was rather negative than positive in a year-on-year comparison, but this was partly offset by very good execution and project execution in the fourth quarter within the Ports business.

Then a couple of comments on the balance sheet side. Let's start with the net working capital. As usual, net working capital has continued to be on a very low level. So there is no meaningful change from the third quarter. Obviously, the structure is a little bit different. Inventories have turned into accounts receivable, but otherwise, very much on the same level. The improvement in comparison to a situation a year ago comes from accounts receivable as well as advanced payments.

And then on the right-hand side, we can see the free cash flow, which continues to be on a very good level, record levels actually also for '25 and the cash conversion continues to be clearly above 100%. Then consequently, of course, as a result of the cash flow, our balance sheet from the net debt point of view looks very strong or actually, we have net cash in the amount of more than EUR 160 million at the end of the year.

And then finally, from the balance sheet point of view, so the return on capital employed on comparable terms, 22.1% at the end of '25.

And then I will invite Marko back to talk about the outlook for '26.

Thank you very much, Teo. There is the outlook for '26. But before that, some other additional things, of course, our solid progress, very nice development, strong cash flow and balance sheet has 2 outcomes. Our Board of Directors is proposing to the AGM a share split with 1:3 ratio. That is, of course, due to the high price and to enhance the liquidity of the shares.

And we also have the Board proposing to the AGM that we increase our dividend from the previous year EUR 1.65 level to EUR 2.25 per share for [ 2025 ], which is very much in line with our stable to increasing dividend policy.

And now to the demand outlook. Although there is a volatility, of course, in the marketplace, we expect several sectors to keep the demand up. And in the industrial customer segment, we expect the demand environment to remain on a healthy level. And for the port customers, the container throughput continues to be on a high level as we saw before. And there is, of course, these long-term prospects in that business in general, the long-term drivers and then is, of course, supporting a strong container handling demand in the future. So the outlook continues to be good.

But at the same time, of course, it is good to keep in mind that this uncertainty related to geopolitical decisions, the trade politicians and the tensions, they do remain high. And of course, they may have positive and negative impact to our demand picture that may also come quite quickly. But generally speaking, we have a positive outlook on the margin.

And then finally, let's look at our financial guidance. So we have a starting order book that is better as already was elaborated also by Teo and myself earlier. The demand outlook is stable. So we are confident that realistic picture on the demand environment, and we are conscious about the market uncertainty also. So we expect our net sales to remain approximately on the same level or to increase in 2026 compared to 2025. And as you saw, our margins have been developing very well in '25. And we expect these margins to remain approximately on the same level also in 2026 compared to 2025.

And with that, I thank you all very much, and we can move to the questions and answers. Thank you.

Thank you, Marko and Teo, for the presentation. And now we will start the Q&A session. Operator, we are ready to take questions.

[Operator Instructions] The next question comes from Daniela Costa from Goldman Sachs.

I have 3 questions, if possible. First, I wanted to ask you to -- if you could give some color on how you see the mix in Port Solutions going forward. I know you mentioned here it was slightly disadvantageous. I don't know if it's just one-off this quarter or given the nature of equipment, maybe more larger equipment, is that something that will continue? And then I'll ask my other questions right after.

The ports mix going to next year, of course, it is approximately flat, the mixed or neutral, the impact as I see. And I guess that is also your conclusion also.

That is actually my conclusion also. And I think that what you are referring to with the larger equipment. So of course, we have been talking about that, that potential mix might be weaker going forward in case the product -- let's say, the demand moves more towards the, let's say, heavier equipment. However, that has not happened to the extent that we would be expecting a deterioration in the mix for this year.

Got it. And then I guess we have seen in some regions quite a steep move on things like steel prices. Can you talk us through a little bit how we should think about that given the lag between orders and sales, the pricing that you're putting out at the moment? Do you expect that to be a headwind in the shorter term or not really you can pass it all to?

So your question was particularly about steel prices, right?

Yes.

So the steel prices throughout 2025, they have been approximately flat, and there's actually a slight positive or from our point of view, positive. So in that way that there is actually a somewhat lower quarter 1 steel price rates than there was in quarter 4 of 2025. The outlook is -- or the forecast is that there would be a minor increase in steel prices in 2026. But of course, only time will show that how will that materialize.

Our approach has been and it continues to be so, as still is for many of our products, a reasonably significant cost component that we will pass on the steel cost in our prices, and that's how all our pricing systems and our configurators have been built.

Finally, there is some regulatory developments in the market and the CBAM is one of them that, of course, eventually the CBAM regulation, although it is no direct impact to our products and so forth, that may drive steel costs up in the longer term, but that's not in the immediate visibility at the moment.

Got it. And then a final one, just in terms of like you have obviously very strong free cash flow. It looks like a decent size comes from the payables within working capital. Can you talk a little bit about sort of exactly what that is? And how should we think about payables going forward?

I'm not quite sure that what your question was. I mean, are you talking about capital allocation of our balance sheet in general?

Free cash flow.

Yes, of course, I mean if you're referring to the dividend policy only or to the question of other means of distributing the cash.

No. I'm just actually asking about free cash flow. Within your cash flow statement, there is a big positive of payables in the working capital. Yes.

Maybe commenting on net working capital as a whole. So now at the end of '25, we are on a very beneficial level. And we are clearly, let's say, we are several percentage points better than our, let's say, midterm target is, which is that we should be below 10% of rolling 12-month sales in net working capital. Now we are clearly below that. So the situation is very beneficial from the net working capital point of view.

And if the question is that, is that something exceptional? Or will it stay here or will it even improve? So one could maybe say so that this is, let's say, maybe in the midterm perspective, this is on the better side of the average. So maybe the overall in a way, level on a long-term basis could be even a little bit higher for net working capital. But definitely so that we aim to be below the 10% threshold of the rolling 12-month sales.

And then, of course, we will need to allow volatility in both directions as we are now seeing a very good situation. So it may be that in some quarters, we are seeing a little bit worse situation. So the payables, accruals and advanced payments, all of the combination of all of that is very important, but I would still stress the importance of the advanced payments. So this is a lot of customer project timing related, how the net working capital develops from one quarter to another one.

The next question comes from Antti Kansanen from SEB.

It's Antti from SEB. A few questions from me as well. I'll start with the guidance of flat to growing sales and especially on the Port Solutions side, how much of the backlog that you currently have do you expect to convert to revenues during '26? Or if you don't want to give the number, how does that compare to situation a year ago?

We maybe not give the direct number for the first question, but if we take a look at the overall order book, now that we have at the end of '25 for '26 and compare that to how much order book we had 1 year ago for '25. So the difference is now more than EUR 100 million.

For all [ 3PAs ].

For all 3PAs. And then, of course, it is fair to say that the ports business is a clear majority of that, particularly now that the FX differences are impacting so much to the order book of the service business. So that basically it is the same number or maybe even slightly more for ports than what it is on the group level. But this is, of course, with reported currencies. So if you take a look at comparable currencies, Marko showed both numbers. So then, of course, that number is higher. So it's about twice as high, not for ports, but for the group.

Yes, sure. And I was also thinking on the guidance, if we talk about, let's say, on the lower end of it that your sales will be on the same level as in '25. Would that imply actually that volumes would be down, I don't know, clearly. But anyways, one would assume that there, you talked about the net price impact on Q4, one would assume that the positive pricing continues through '26. So how should we think about that volume pricing trend in the backlog?

Of course, like we were saying earlier, the starting point is positive with a stronger order book. And of course, we have a stable funnel that we look with positive mind. So there is all the reason to be positive about the demand environment and the volumes also. But at the same time, there are some question marks. Teo mentioned one of them is, of course, is the currency rate. And of course, then the other one is related, of course, to the general development of the market environment overall.

But what we are trying to say with our guidance that, of course, we have a good starting point for the year, and we look at the volume development positively. But being appropriately, let's say, cautious about it also in this environment.

But logically, of course, you are right. So I mean, if the sales were flat in a year-on-year comparison and the order book for this year is EUR 100 million more than what it was for last year, so of course, then it would mean that the in and out volume would be lower, which could be, let's say, depending on various things. But of course, now we need to remember that what we are saying regarding the overall market outlook is that the sales funnels in the various businesses. So they continue to be good. I don't know. They continue to be stable and on a good level.

Yes, that's clear. Then the second question was on profitability. And maybe a reminder on the tariff-related pricing tailwinds that were kind of notable on previous quarter and still there on Q4. How should we think about kind of impacts of those going forward, maybe fading away? Any guidance on that?

Well, they repeated also in quarter 4 after being visible in quarter 3 and quarter 2, but not to the same extent. So as we have also said before, the expectation is that they will go away or deteriorate over time. And of course, it actually continued throughout the whole year, and there was a positive sign to us. We expect that you will not see the similar kind of positive tailwind going forward. But also it should not have a significant negative impact to the margins either.

Okay. That makes sense. And then the last question, and I guess, Marko, you almost started to answer on the capital allocation side. And I mean, obviously, there's a clear increase on the ordinary dividend. But I mean, balance sheet is getting stronger and stronger and capital allocation has been a bit of a discussion point. So any updates on further distribution, buybacks, anything like that?

Yes, I was so eager to start answering that question already. So I was preempting that. But no, I mean, of course, that our approach has not changed there. Of course, we have several potential means for the use of that cash, and we are working on all of them. And one of the obvious one is the potential acquisitions. And as we've said before, that has been a big part of Konecranes' history, and it continues to be so in our future also the inorganic part of the growth. And so we have a funnel of different size of opportunities that we are actively exploring.

And it's more a timing question that when we can realize those. And for that, for sure, we want to have maneuvering room and the increase in the dividend that was announced today, of course, that is, in our view, no way jeopardizing those -- that maneuvering room that we have going forward, given the available cash and then, of course, our ability to leverage the company.

Would you like to add something to that?

No.

The next question comes from Mikael Doepel from Nordea.

So a couple of them. I'll take them one by one. So if we can start to talk a bit about the net of inflation pricing. I think you mentioned it was positive still in Q4 of last year. How do you think about 2026? I mean if we put tariffs aside, how do you think about pricing net of inflation?

Maybe since you are going through the bridge, you may want to continue on this also.

Yes. The basic commentary here is the same as it has been. So we believe that we will be able to push cost inflation into the customer prices. And then, of course, the tariffs may change, the currency rates may change. But if we take a look at the overall underlying inflation, so the idea is that we will be pushing that into the customer prices. And in the past years, we have been able to do that in some cases, maybe a little bit even more than the cost inflation. So we believe that we can balance the situation from that point of view, but maybe it is not a good idea to expect a continuous net of inflation price benefit in '26 or further.

No, that makes sense. And talking about costs and just a follow-up, do you have any meaningful cost efficiency measures ongoing now that could support margins into this year? Anything tangible you could mention on that side?

Maybe 2 things I will mention. First of all, the topic that we have discussed also in the past is the ongoing industrial equipment cost efficiency program that we earlier announced that will continue until end of 2025. And on that note, we can say that we are still continuing that and we expect that to continue to bring us some benefits also -- additional benefits also during this year.

The second topic is -- or the second answer to that is that when it comes to adjusting our cost structure to the prevailing market conditions, that is what we did early last year also that in all accounts, whether it's the SG&A or cost that we have on the group level or, for example, in service, the costs that are directly related to customer projects. And that is business as usual for us and that we've done in 2025, and we continue to do the same in '26 if the market environment and demand so requires. But beyond those 2 things, we don't have anything specific to discuss about right now.

Okay. That's clear. And just finally, I think you mentioned in your opening remarks, you talked about the industrial service business and saying it was a bit of a tough environment within that business. Can you talk a bit about what you see there specifically happening across the regions, across the customer segments and how you expect 2026 to develop?

When we look at Industrial Service in general, if I start from just the market activity and how it looks, one thing that we've discussed earlier and we also can measure is how our remote connections also with what we call the TRUCONNECT product, how much activity the customer is having with our cranes business and then, of course, means that how much manufacturing or production activity there is and those productivity rates are down last year, the whole year, and they also ended with a negative sign that somewhere 6% to 7% compared to the previous year in terms of the general use of the cranes.

That's a fairly good proxy or explanation also to how much -- how the productivity and service develops for those particular customers, and that has a correlation to how our service business is actually developing. So that tells more that there is in this sort of environment where the customers have uncertainty of which direction the world is going that they have the tendency to hold back on not urgent or not critical measures. They want to do the things that have to be done to make sure that the equipment is productive and safe. That was a phenomenon last year and had certain impact to the service business. But it is obvious that you cannot do that for a very long time. So those equipment has to be taken care of. So that is something that usually returns.

The other positive aspect is that we kept on increasing our -- or improving our agreement base, which is essentially the growth engine for service and very important, so that grew more than 4%, 4.5% last year. And that is what we consider and I consider very important as a service core.

And then finally, I would say to that, and sorry for the long answer, easy to get excited on the topic. On service side, there is a lot of positive demand drivers like there is in the ports demand side in the long term. And whether it is the demographic trend of having less people doing this sort of thing or the automation trend that's also prevailing in some of the segments there, the outsourcing that similarly to ports actually is prevalent in many of the industrial segments and many others that also in the long term are drivers for demand in Industrial Service as well as in the efficiency drivers too.

If I may add to a little bit additional color on...

I thought I answered the whole thing already because...

That was very good, but I would maybe add one more thing. And I think when we have previously been saying that actually the differences between regions tend to be bigger than between customer segments in our demand. So now it may be that there start to be relatively big differences in demand pictures between different customer segments.

And there are maybe a couple of indications of that one. And one of them is that the thing that we have been discussing also earlier that, for example, in North America or in the U.S., there has been a little bit slowness on the service and equipment business on the other hand, has been maybe even surprisingly strong, so which would, in a way, maybe indicate that some of the segments are doing well and they are buying equipment and some others have maybe a little bit more issues with the utilization and they are maybe saving on nonessential service.

And also then this fact that our service spare parts are doing better than the Field Service may be an indication of the same thing. I mean, of course, the tariff thing, et cetera, can impact the spare part pricing and inflate that a little bit, but that doesn't explain the whole thing. So these kind of changes may be there happening a little bit because of defense and because of power and those kind of specifically, let's say, buoyant segments currently.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you, everyone, for following our webcast event today, and thank you for asking such a great questions. [Technical Difficulty]

Hello all, and welcome to follow Konecranes' Q3 2025 Results Webcast. My name is Linda Hakkila. I'm the VP, Investor Relations here at Konecranes. And with me today, as our main speakers, we have our President and CEO, Marko Tulokas; and our CFO, Teo Ottola.

Before we proceed, I would like to remind you about the disclaimer as we might be making forward-looking statements.

Here, you can see our agenda for today. We will first start with a presentation from our CEO, and he will give us a market update and guide us through the group performance. After that, our CFO, Teo Ottola, will guide us through the business area performance and talk about the balance sheet topics.

Before we start with the Q&As, our CEO will still summarize the main points of the quarter.

But now, without any further comments, I would like to hand over to our CEO.

Thank you very much, Linda. I'd like to start by saying that I'm extremely pleased with our performance in quarter 3 and throughout the year 2025.

Konecranes' team delivered a very strong quarter in continuation to our solid half year performance. Under the prevailing market conditions, this is an excellent achievement. This is -- with this kind of market uncertainty, an order intake, a growth of 23% year-on-year is a very good starting -- start for the quarter 3 or is a very good quarter 3. Our demand environment has remained stable despite the market uncertainty and our sales teams have been able to close well despite the timing-related hesitation.

Our orders are up now by 23% year-on-year in comparable currencies and our order increased more than 7% -- order book increased, sorry. The order intake increased in all business areas. Our sales amounted to nearly EUR 1 billion in the third quarter. This means a decrease of 5.5% year-on-year in comparable currencies.

Despite the decrease in sales, we reached a record high EBITA margin of 16.7%. That is an increase from second quarter level of 14.3%. Our profitability in the third quarter was supported by good execution, as well as some one-off items. We will go through the performance by business area later in this presentation.

The next, I will again go through some words to our general market environment. Let's start with our Industrial segment. In general, our demand environment remained good despite somewhat weaker macroeconomical data. The capacity utilization rates are the best macro indicators that describe these conditions for Industrial business area. And from the data, we can see some weakening year-on-year, but still our order intake in Industrial Service and Industrial Equipment grew in quarter 3. That was really driven by good activity in our standard equipment business, as well as some significant modernization and process crane projects.

At the same time, within our industrial customers, we have seen somewhat cautious behavior, both in timing of new orders, as well as delay in project delivery acceptance. Our operating environment continues to be impacted by geopolitical tensions and volatility, especially related to tariffs.

Now let's then talk about the market environment for Port Solutions. And in Port Solutions markets, we continue to see good activity. The Container Throughput Index, which is the main indicator here, continued at a strong level in the third quarter compared to the historical readings. It is now up by 3% year-on-year. And as we say in our demand outlook, the long-term prospects related to container handling or container traffic remain good overall.

Now we will now next take a look at our sales and order intake development. In the third quarter, the group order intake grew by 23% year-on-year in comparable currencies, and that is an increase in all 3 BAs. Looking at geographical markets, we saw some improvement in our order intake in Americas and APAC region, as well as some weakening in EMEA. Our sales in the third quarter decreased both in reported terms and comparable currencies, which was mainly driven by the lower order book in Port Solutions. And in the third quarter, we saw a decrease in net sales for Industrial Service and Port Solutions, but very strong delivery performance in Industrial Equipment after a less strong quarter 2. On a group level, we saw a decrease in net sales in all regions.

Moving on to the order book. And our order book reached its highest level since quarter 1 of 2024 and amounted to over EUR 3 billion at the end of the third quarter. We saw an increase in Industrial Equipment and Port Solutions, while there was a decrease in Industrial Service. Our book-to-bill has been positive throughout the year. And looking back to our long-term performance, our order book continues to be on historically good level.

And then finally, looking at the EBITA margin development, which reached also a record high level. In the third quarter, we generated EUR 165 million of EBITA. This translates to very strong EBITA margin of 16.7%. And this performance came from really solid execution, as well as some one-off items. And EBITA margin increased year-on-year in all BAs. Industrial Equipment reached its all-time high margin of 14.1% in the third quarter. And Industrial Service and Port Solutions also had very good margins of 22.7% and 11.8%, respectively.

Then let's move on to the performance towards our financial targets. Last year was very good for us, and our performance has continued strong also this year. This graph shows the rolling 12 months figures for our sales and EBITA margin and progress towards our long-term financial targets. Our group sales remained flat whilst our comparable EBITA margin increased when comparing the last 12 months to full year 2024. The group profitability in the rolling 12 months, we are at the lower end of our profitability target range of 13% to 16%. Of course, we consistently continue to work towards those targets. While increasing our EBITA margin, we also aim to continue to grow our sales faster than the market.

In Industrial Service, our steady progress over the last 5 years continues and the sales in the rolling 12 months remained relatively stable, but our EBITDA margin increased to 21.5%. We are already today well in line with our target range, but naturally still closer to the lower end of the bracket. And in Industrial Equipment, sales in the rolling 12 months remained flat. And also our EBITA margin for the same period decreased compared to full year 2024. That is mainly due to the weaker H1 and particularly the weaker quarter 2. While the quarter 2 performance for Industrial Equipment left room for improvement, our performance in quarter 3 was, in turn, exceptionally strong. Also here, we will continue to work to strengthen the over-the-cycle performance of the Industrial Equipment business.

Then moving on to the Port Solutions. We have continuously improved our financial performance during the last 3 years, as you can see from the graph, and we will also continue to so in -- we continue to do so in quarter 3. Our sales increased in the rolling 12 months compared to 2024, which is already a very good year. And our EBITA margin for quarter 3 remained at a high level, which resulted in an EBITA margin of 10.8% for the rolling 12 months. Needless to say that I'm very pleased with this progress.

Now, I will hand it over to Teo Ottola, our CFO, for some time, and then I'll return back in a moment.

Thank you, Marko. And let's move on in the presentation. Actually, before going into the business area numbers, so let's take a look at the comparable EBITA bridge between Q3 of this year and Q3 of last year. As we have seen, the margin improvement is large in a year-on-year comparison. And when we take a look at the euro, so this turns into EUR 22 million improvement. And if we unpack this next a little bit.

So first, starting with pricing. So our prices were somewhere between 2% to 3% higher than a year ago, maybe closer to 3% than 2%. But nevertheless, this improvement or increase in prices is somewhat less than what we have been having in the beginning of '25. When we combine this price increase to the fact that our sales declined more than 5% in a year-on-year comparison. So actually, we are looking at quite a significant underlying volume decline in the third quarter in comparison to the situation a year ago. And this, of course, creates a negative operating leverage impacting the profits as well. But there are then several positive things supporting our profits.

First of all, net of inflation pricing, so that was slightly positive in a year-on-year comparison, even though the positive impact comes primarily as a result of tariff-related price increases, so we have increased prices in line with the tariffs. But then as a result of the inventory turns being slow, so actually, the benefit comes first and then the cost will be flowing in a little bit later in terms of material consumption.

In addition to that one, we had a clearly better mix now than a year ago. But the biggest explanation of all is very good execution that we had. So the performance of the business was excellent, particularly in the project execution, which is visible primarily in the ports, but also in the other business areas. When we combine into this one that our fixed costs actually were lower than what they were a year ago, we were able to create this improvement in the EBITA despite lower sales.

When we take a look at the performance a little bit more in detail, so we can note that our performance this time was helped by some one-off type of levers, things. One of them was that we actually received an R&D grant in Finland in the amount of roughly EUR 4 million that was booked in the third quarter. This is, of course, visible in the fixed cost, and that is one of the reasons why fixed costs are now lower than what they were a year ago. I already mentioned the tariff-related price increases and the tailwind that we got there. So that was less than EUR 5 million, but several millions anyway. And then we had also some provision releases within the Industrial businesses. And altogether, these are, let's say, roughly EUR 10 million or so.

Then the next one I'm going to discuss is not like a one-off topic. It's normal business practice. But as a result of the good project execution within Port Solutions, in particular, we were able to release provisions and that impacted positively our result in the third quarter. So normal business as such, but this quarter was better than average definitely from that point of view. So they are some of the topics explaining the profitability and the profits within the third quarter.

Let's then move into the businesses and start with Service, as usual, maybe here worth noting that exactly as in the second quarter, so also here, the FX impact is quite big. So let's more focus on the numbers with the comparable currencies. In Service, order intake grew by almost 9%, 8.7%. This is clearly higher growth than we have had in the first half of '25. This growth was actually supported by some large modernization orders that were already mentioned by Marko as well. But even if we excluded those ones, or the delta as a result of the modernizations, we still would be having growth even if the majority of the growth is created by these modernization orders. When we take a look at the field service, so actually, our order intake declined in a year-on-year comparison. And in parts, it was an increase.

Then taking a look at the regions, we had increase in the Americas and EMEA, but a decrease in APAC, and it's worth noting that the modernization deals took place primarily in the Americas.

Agreement base continued to grow more than 5% with comparable currencies and order book was slightly lower than what we had a year ago.

Net sales grew only by 1.2%. And this is, of course, less than the price increases have been. So the underlying volume actually was lower than what we had a year ago. There, the reason is basically the slowness of order intake in the field service, and we had a decline in sales in field service within the Service. Spare parts were basically stable in a year-on-year comparison. And then from the region point of view, stable in EMEA, whereas decrease in the Americas and Asia Pacific.

Comparable EBITA margin improved by more than 1 percentage point to 22.7% despite the somewhat sluggish sales development. This was primarily driven by very good cost management within the Service business, but to some extent, also by pricing, which was partially in relation to these tariff-related price increases and the timing tailwind there.

So then Industrial Equipment, very good order intake, close to EUR 350 million. That is as much as 26% growth in external orders when comparable currencies. When we take a look at this by the business units, so we had actually growth in process cranes and components, but we had a decline in standard cranes. And then of the regions, decrease in EMEA, whereas the other 2 regions saw growth.

Then the sequential picture, which is important as well. So in comparison to the second quarter, actually, we saw sequentially a significant increase in process crane orders. Components were more or less flat in a sequential comparison and standard cranes declined slightly. Order book is higher, clearly higher than what we had at the same time 1 year ago.

Sales grew very nicely, 6.3%, again, with external sales in comparable currencies after a little bit, let's say, lower first half. We had increase in standard crane and component sales, but a decrease in process cranes, which then also, at the same time, meant that the product mix was somewhat better than a year ago.

Then when taking a look at the margin, so excellent EBITA margin, 14.1%, a very big improvement in a year-on-year comparison, of course, driven partially by volume. So the underlying volume improved here in Industrial Equipment quite a bit. There were also some of the one-off items that we already discussed. For example, the R&D grant is mostly visible in the Industrial Equipment. But then also good execution otherwise, as well as the optimization program that we have been running has been giving benefits also for this quarter. And the mix also was slightly better than a year ago.

Port Solutions, good order intake or excellent order intake here as well, more than EUR 450 million, that is 36% growth in a year-on-year comparison. We had very good order intake in yard cranes. This would mean primarily RTGs and ASCs. If we take a look at the regions, Americas and APAC improvement, EMEA, a decline. And here also, again, taking a look at a little bit of the sequential topic, but also the so-called short-cycle product categories within Port Solutions. So lift trucks, there we had year-on-year growth in the order intake, but sequentially down. And then from the port service point of view, we had growth both year-on-year as well as sequentially.

Sales was clearly down by almost 19%. This was, of course, known from the point of view that the order book was lower for the third quarter than a year ago. So order book overall is in good shape, 10% higher than a year ago, but the same thing continues now for the fourth quarter as we had for the third quarter as well. So we have less order book for the fourth quarter now than what we had 1 year ago for the fourth quarter. So the order book is more beyond this year or beyond the current year than what we had the situation 1 year ago.

Comparable EBITA margin developed very well, 11.8%, 2.2% improvement. This is, obviously, not driven by volume because the volume declined very much, but primarily because of the very good execution, supported by some of the provision releases, like I said, and then also the product mix, particularly in Port Solutions was clearly better than a year ago.

Then next, a couple of comments on the net working capital, cash flow. We actually had net working capital of only EUR 285 million at the end of the third quarter. That's only 6.7% of rolling 12-month sales. This is very well in line with our target of being below 10%. If we take a look at the, let's say, delta to the situation a year ago, it is primarily inventories where the decline has come. And then in sequential comparison, it's maybe more accounts receivable. This net working capital development, together, of course, with the good result meant a very good free cash flow on record levels, this one as well, more than EUR 200 million, which is then, of course, consequently leading to this slide where we now actually, during the third quarter, have moved from being in net debt situation to being in net cash position, not much, but negative gearing anyways at the end of the third quarter.

On the right-hand side, we can then see the return on capital employed, which is 21.7%, and this is a comparable number, but also the reported number is more than 20%.

We have added actually a slide on the U.S. tariffs as well because that, of course, continues to be a relevant discussion topic. On the right-hand side of the slide, we have the Konecranes exposure. So these are the numbers that we have already given earlier. So the internal volumes from Europe to the U.S. is EUR 180 million or less than EUR 180 million. And then on top of this internal volume, we obviously then also have deliveries of fully assembled port cranes and lift trucks. We are, of course, subject to the normal reciprocal tariffs of 15% in, for example, in the complete cranes. But then many of our components, particularly spare parts are also subject to so-called steel derivatives where we are then subject to a 50% tariff. And also the tariff codes added now to the steel categories in August was impacting us as well so that we have now more components and parts within the 50% category than what the situation was before.

What we have done is that, we have increased prices, more or less, in line with the tariffs. We are, of course, monitoring the situation. We are monitoring what the competitors are doing, how the customer demand is developing. We are discussing with the suppliers to be able to define the steel content of the components because, of course, that can help us to, in a way, get the tariff, particularly the steel derivative tariffs on the right level if we can prove that what is the share of actual steel in the components.

So all in all, we have been able to manage the pricing well. This most likely will become somewhat more challenging going forward so that maybe not all of the tariff increases are possible to put into the customer prices. We do not expect this to be having any major impact on the margins, but the situation may be in the future, a little bit more tighter than what it has been so far.

This actually was the last slide that I had, and now I invite Marko back to the stage.

Right. Yes, let's see how this works. So we had some issues with the first slides earlier. So now this should be now working again.

So now let's look at our demand environment, demand outlook. So our demand in the industrial customer segment has remained good and continues on a healthy level. However, the demand-related uncertainty and volatility, due to these geopolitical tensions and trade policy tensions remain, particularly in North America. This translates into higher uncertainty, both in the timing of the order, as well as some postponement of maintenance activities within industrial customers or Industrial Service customers that, of course, may impact also the delivery performance or delivery acceptance of customers.

Our sales funnel remained on a strong level and funnel development during the quarter was stable. Comparing against the previous quarter, the numbers of new sales cases is slightly down.

Then to our port customers, the global container throughput continues on a high level and long-term prospects related to global container handling remain good overall. And our pipeline of orders is good and contains projects of different sizes.

And I'll reiterate our financial guidance for this year. Our net sales is expected to remain approximately on the same level in 2025 compared to 2024. And we continue to expect that our comparable EBITA margin is -- to remain approximately on the same level or to improve in 2025 compared to last year.

Now, before we start the Q&A, I'd like to go over 3 themes that we are leveraging to build on our strong foundation and to -- continue to drive the long-term profitable growth. Historically, looking at in the long-term -- long run, these have been and are the fundamentals behind our success, and they are the ones that are still very relevant today and will continue to provide us further runway also into the future.

First of all, our Konecranes customer base is diverse and global. Our dual channel market approach gives us the most comprehensive access to customers globally and to different segments. Our broad product and service life cycle offering continues to give us an advantage when catering to the customers' wide needs and create stability against customer segments demand volatility and helps us to address specific customer segments within those markets. This approach to the market, our offering and our customer excellence culture is critical, but personally this -- but it's also personally something that I'm passionate about and I want to continue to foster.

And then secondly, I would like to emphasize the life cycle approach of Konecranes. Developing a service and life cycle approach over decades has been and is very much in the Konecranes' DNA. We are not only providing equipment to our customers, but also taking care of them during the lifetime. That long-term customer relationship and focus on servicing all makes and moves -- feeds our service -- sales funnel continuously with equipment and service products. That -- this cornerstone in our operating model has served us well, but it continues to provide us further runway for growth and efficiency. The life cycle approach is naturally our way of doing business, but it's also the only sustainable way to operate in today's world.

And thirdly, it is the technology leadership. So Konecranes has been the innovator in this market and reinforcing our technological leadership continues to be crucial. So focusing on technology innovation and development allows us to differentiate our offering versus our competitors. It creates more value to our customers and helps us to leverage the life cycle approach even more in the future.

So in conclusion, we have a strong foundation and great teams in place to build on our success and drive for expansion and growth. And I thank you very much for your attention.

Now we move on to the Q&A. So Linda?

Thank you, Marko, for the presentation, and thank you, Teo also. So now we are ready to start the Q&A session, and we will first start taking questions through the conference call lines. So, operator, we are ready to start taking questions.

[Operator Instructions] The next question comes from Daniela Costa from Goldman Sachs.

I want to ask on 2 things. First, I guess, starting with the growth in Industrial Equipment, given you mentioned sort of like the capacity utilization figures in the beginning, which haven't sort of yet started any big recovery. Can you talk about sort of what drove -- was there any particularly -- particular verticals? Was there some prebuying on the components? Or what has -- or market share gains or something, what has kind of caused really the strength there and how sustainable you see that going forward? That's first. And I'll ask the other one after.

Yes. I mean, maybe the key reason there or the main point is to say -- you refer to the segments or the verticals. And, of course, that is -- although the general capacity utilization may not be yet more on the contraction, not reinvestment level, but there are several verticals that are quite strong at the moment and drive demand. I'd just name a few. The obvious one, I guess, on everybody's lips is the defense segment. So that has been, of course, a topic for quite a while already. And in the third quarter, we not only saw more opportunities in the funnel, but we started to also see quite a few actual orders in that segment. That is a clear example.

There are other areas where the long-term investment trend for other reasons than just productivity or capacity utilization are strong and maybe aviation is another example of where there's quite a lot of investment activity. And there are a few others. And that, of course, is one of the key reasons why we continue to have a solid order intake there.

And then, of course, finally, I would also say similarly in the Port segment, when we talk about larger investments or bigger projects, particularly in the process crane side, they tend to take quite a while to decide and for the customers to make the investment decision and then place the order. And therefore, it is not always exactly easy to forecast or predict. And secondly, not always exactly in line with the macroeconomical indicators.

And the second one just on Port Solutions. I think in many calls before, you've talked about sort of the opportunity or on the whole STS situation in the U.S. with replacement of Chinese cranes and tariffs there. But the U.S. is just proposing an even bigger scope of what they could be putting in terms of tariffs on China. I know about a year ago, you said that you were building the supply chain domestically there for the STS. Can you talk a little bit about, let's assume, this 100% on STS and the 150% in the remaining port equipment would go through? Where do you stand now in terms of building the capabilities to supply and to get a share of this opportunity domestically? And are there any side effects elsewhere in the world where you're seeing any increase in competition from the Chinese? Just give us a picture of how this has changed given the scope seems to be changing of what will be included there?

Maybe I'll start and then you complement in case I forgot some part of the question. First of all, the recent development in those tariffs that was early -- announced in early October, they're, of course, not yet, in our understanding, completely clear on what is the scope of application. And secondly, what is actually how much tariffs are being applied. So there is a certain uncertainty and, of course, what will be the final solution. And that, of course, is for us and also the market, something that needs to be and must be clarified in the end.

But that doesn't take away the essence of your question, which was that have we been preparing? And the answer is that, yes, we continue to prepare for the possibility to manufacture in the States. And we have been looking, mainly based on subcontractors and utilization of our own existing facilities and the industrial team that we have in the States, which is more than 2,000 people today in several manufacturing sites. So we have an opportunity to explore that, too. But that is the local U.S.-made scope. There is that, let's say, gradual up parcel or move to that direct -- to that eventual outcome, which means that there are products that would be manufactured in Europe or other parts of Asia. And there, we have even more activities going on and readiness for supplier as it is already today.

I recall that your last part of your question is that, do we see increasing activity elsewhere? Then to some extent, might be the right answer, and that is maybe more towards the other parts of Asia as well as in the Southern Hemisphere.

Yes. Maybe to add on this competition elsewhere topic that, of course, if we talk about the STS', so we will need to remember that the market share for the Chinese competitor is also globally very high. So that this, of course, in a way, it may increase the competition elsewhere, but the market share already is there for the competition also outside of the U.S.

And then if one takes a look at the RTGs, so there the situation is that the, let's say, our relative market share in the U.S. is significantly bigger than what it is for STS'. So there, on the other hand...

And it would be the same elsewhere also.

Yes, and would be the same elsewhere. So that these 2 products are from this geographical split point of view, a little bit different.

Yes.

The next question comes from Panu Laitinmäki from Danske Bank.

I have 2. Firstly, on the margin outlook. So, obviously, Q3 was strong and had some one-off positives that you mentioned, and it was above your long-term target. But how should we think about kind of Q4 and going forward, given that you kept the guidance where the low end of having margins at the same level as last year would imply quite, let's say, lower margin for Q4, if I would read it kind of directly? So, yes, could you explain how should we expect margins to develop going forward?

Maybe you start with this, Ottola.

Okay. I can. So, yes, the short answer to the question that do we expect the fourth quarter margin to be equal to the third quarter margin? So no. So we are expecting fourth quarter to be lower than the third quarter. Third quarter was high. And, of course, there are these topics that we were discussing, there is about EUR 10 million or so, let's say, clear one-offs, one can say the product mix was very good. So this is maybe not a one-off, but doesn't necessarily repeat itself as such. And then the productivity or efficiency or execution, whichever word we want to use, was particularly good in the third quarter. So maybe from that point of view, Q3 was a little bit of exceptional.

Other than that, of course, unfortunately, other than what we have in the guidance and what now concluded between, let's say, our expectation on Q3 versus Q4, we are not -- or we have -- we do not communicate more on that, unfortunately.

Okay. Maybe another one is on the order intake outlook. So, I mean, it's a bit mixed if I listen to you, you say that there are less new cases coming to the pipeline and you flagged increased uncertainty in the market. But on the other hand, we saw pretty good orders in Industrial Equipment and you mentioned these strong verticals. So, I mean, what should we expect going forward? So is it kind of driven by these strong verticals better than the macro implies? Or are you seeing some pressure from macro going forward?

Yes. Of course, when we look at these new sales case trends and so forth, that tends to fluctuate a bit month after month, so that's maybe something not to put too much attention. But generally speaking, the -- and it's good to remember that we operate in so many customer segments that quite well kind of evens out these fluctuations in the different segments. And now we are held with certain strong segments that are making up for that, let's say, general somewhat more fluid picture. But what can just be simply said that our sales funnels in the industrial side, and I understand you were more referring to that are stable and they are on a good level on average.

And maybe to build on that one, I mean, like you pointed out, so the sales funnels are basically stable and the number of new cases is slightly down. I mean, if there's nothing major there. But actually, the average size of the case is slightly up. And that's why the funnel as a whole looks fairly stable despite all macro discussion and topics that there are.

The next question comes from Antti Kansanen from SEB.

It's Antti from SEB. A couple of questions from me as well, and I'll start with something that Teo, you said on the EBITA bridge that you flagged that you had maybe a temporary benefit from tariff-related price hikes. So I didn't fully understand what you mean by why would you benefit first? And what were you referring then on the cost impact that might come later? So a bit more clarity on that one, please?

Yes. The reason is that, when we are increasing the prices at the time when we start to import the goods to, for example, in this case, to the U.S. So first of all, we have old inventory in the U.S., which is with the old prices. That's one thing. And then the other thing is that, when you are using average price in the inventory, so it tends to be so that the material consumption comes through at a different time when the sales number actually comes. And this may create a mismatch, which we are here also seeing. So that's good when it works like this. But then the reality is that, as we have not tried to gain anything on the tariffs as such. So, of course, the disadvantage will be coming a little bit later. It can take a while, depending on the component that we are talking about. In Service, it will come quicker. In Equipment, it will come a little bit later, but it will balance itself over time.

Okay. But it doesn't sound like this would be a kind of a major driver for any margin fluctuation that we're seeing, for example, on the Industrial Equipment side, which was obviously a big step-up from the second quarter and maybe there will be a bit of a step down, but this is not a massive driver on the margin?

The overall number, like I said, is less than EUR 5 million, and it is split basically between Industrial Equipment and Service. So from that point of view also, it's not a massive driver. Plus it will not probably vanish in 1 quarter.

Right.

So it will take a little bit -- it's like a rolling in a way, impact because of the average price that we, in practice, have from the inventory management point of view.

Okay. And maybe a second kind of clarification, the EUR 10 million or so that you're kind of flagging as say, EBITA one-offs this quarter. That's mainly on Industrial Equipment, impacting mainly the Industrial Equipment division. Am I correct?

That is correct. So actually, the tariff-related price tailwind that we just discussed is more in Industrial Equipment than in Service, exactly because of this thing that the impact comes through quicker in Service and slower in Industrial Equipment. And the R&D grant, which is the other big topic is primarily within Industrial Equipment.

Okay. And then the second question, maybe this is a similar topic, but project execution on the port side. If I remember correctly, I mean, the previous quarter margins on the ports were very good as well compared to the history. I didn't remember that you flagged mix back then, but that was also kind of a good execution and now continues on the port side. Is there something that we should maybe see as kind of a structural improvement, something that we can extrapolate going forward? Or are we still kind of wait and see whether this is sustained?

Well, I'll start again then. First of all, in the ports execution, I mean, always one thing that happens, these are big projects. And when you deliver a big project, of course, you make certain provisions for that project risks. And this execution in this particular quarter, some of those provisions were released. And hence, that's also relative to the sales. So the volume impact wasn't as big. It has some mix impact. But the underlying reason is the same that our project execution has been on rather conditions. There isn't or hasn't been recently any significant, let's say, difficult projects. That, of course, in the nature of the business cannot guarantee that that would not happen at all. But I think our project management capabilities already over the last few years have been improving kind of consistently. And in that way, we are kind of confident that we can do that quite well now. But it doesn't remove the fact that, I mean, in that sort of business that there is some risk involved also.

Yes. The main point from our point of view is, of course, to be able to have this improvement trend so that, of course, every now and then a quarter is better and then maybe also worse. But when the trend is in the right direction from the project execution point of view, so then things are good from our point of view. From the mix point of view, there probably isn't anything structural that would need to be taken into consideration. We have, of course, consistently been saying that we want to grow more in port services than in other areas there. But as long as we have good order intake from the Equipment point of view, so this will not be visible in 1 quarter or maybe even in 1 year so that this is a much longer sort of project to change that structure.

Okay. Then last one for me is on the order side. I mean, I guess there was a couple of bigger ones that you flagged both on Industrial Services, on the process crane side, obviously, on the ports as well. Was this a bit of an active quarter in terms of big projects? And is there something explaining the timing? Or am I just reading too much into it? You also mentioned that the average case size is growing. So was this a particularly active big project quarter for some particular reason or just a coincidence?

I mean, coincidence is maybe not the word that I would use, of course, it's part of a consistent and continuous work and working on the funnel and the timing of the orders because the customer-related reasons sometimes, of course, happens. It's not entirely under our control for sure.

Maybe I'll answer that mainly related to the process crane business, and you see that the process crane business orders particularly was good. And in that case, I'd say that we had, in the same quarter, several quite successful larger projects, whether it is in power or aviation, or to some extent, also elsewhere. So that is maybe a slightly larger than usual quarter, but that doesn't take away that both in the ports and in the industrial process crane side, there are still further opportunities in the funnel also. This is just timing-wise, particularly in process crane good quarter.

I would say that it would be a little bit difficult to find the connection between the decision-making timing and something that has happened in the world from the macro point of view or even from the macro point of view to us so that coincidence is not the right word, but there is probably not a big scheme behind that would explain this timing.

If you find, please least let us know.

I'll do that.

[Operator Instructions] The next question comes from Tom Skogman from DNB Carnegie.

This is Tom from DNB Carnegie. Sorry for asking about the margin guidance, but I mean, the January to September margin is already 1 percentage point higher than it was 1 year ago. So is there any reason you did not change the guidance in group that we should be aware of as a risk element for Q4?

Maybe, Tom, since they asked the previous related question also, you can start on this, too.

There is -- we are not expecting anything dramatic in the fourth quarter that would be somehow deviating from the normal course of business significantly. I guess that it is rather that we would be saying that the third quarter was a little bit on the higher side because of the topics that we have been discussing. So fourth quarter -- this year's fourth quarter, like many other years' fourth quarters as well. So it is a combination of primarily of mix and then, of course, the underlying volume. And this balance is then, of course, very important from the margin development point of view as well.

Okay. If then looking at kind of building blocks for 2026, I would just like to get a bit of clarification when I do my own EBIT bridge. So to my understanding, there is no cost-cutting kind of program ongoing for next year. So what do you -- what would you like to guide when it comes to fixed costs? And this modularization of products, is that kind of rather a negative or a positive next year as you have indicated you have both the new and the old generation of products in manufacturing next year?

I didn't quite get the last part, so I'll let Teo answer that. But the first part when it comes to the fixed things, we first -- we don't guide the fixed cost per se, but there is some tail end of this industrial restructuring program also remaining. And, of course, when it comes to fixed cost, we are closely observing the demand environment. And we have also, during this year, made adjustments to the organization as needed based on the demand environment.

I guess the other question, if I understood Tom correct, was that is the product renewal/launch in Industrial Equipment going to be a positive or a negative for '26 in comparison to '25?

Sorry, Tom, I didn't quite get that. So yes, first of all, those launches are now progressing basically to the second launch year. And during this year, the launch has been towards the second half proceeding all the time better. So I mean the amount of products that we are converting is catching up is probably a good way to say it. So that is proceeding quite satisfactorily, I would say. And now we have in all 3 regions, the new viral posts available also. So in that sense, the readiness is there.

It is -- as I think I explained also last time when you have a new product, you run in manufacturing for some time, you will run 2 products in parallel. And that, of course, has the tendency to increase manufacturing cost. And secondly, you have some product cost, variable cost-related timing to catch up with the old legacy product that has been in the market for quite a while. In both accounts, we have still next year, some costs on the new product that are higher than the existing product. But we are moving ahead quite well on that, and we are -- we have been kind of preparing for that for the most part. So I wouldn't take that as a very significant consideration.

Okay. And then the big tariffs on RTG cranes, I don't understand why we discussed so much the STS cranes. I mean, isn't the RTG crane the big opportunity for you in the U.S. I mean, that is much more high-margin products than STS cranes and the Chinese companies have been very strong there as well. And in that product, you have already set up to deliver quickly basically.

Yes, that is true. At the same time, it is -- although we don't exactly comment on the competitors' market share in the region, but the Chinese competition in this case is not as big on the RTGs as it is on the STS. That's maybe the main reason to your -- or the main answer to your questions.

But do you expect kind of a clearly increased market share in RTG crane orders in '26 and '27 if the current tariffs are holding up basically?

No, I think, like I said, the Chinese competition where this is facing, of course, is not big on RTGs in the same way as they are on STSs. That's probably as much as we can say on that market topic.

You don't want to disclose at all what -- I understood that the Chinese have not 50% of the market, but 30%, 40% of the market in the U.S. Isn't that right?

Not in the RTGs. Not on the RTGs.

Okay. Then finally, on electrification, it's like a big theme. Do you have -- all companies that operate within electrification show pretty good growth at the moment. But what of these ones are big end customers to you that you see that they are expanding and ordering cranes from you?

Did you say -- I think the line is a little bit bad. Did you say what are the big customers...

Electrification -- just generally, electrification is a very strong sector when we look at the engineering. And you have a lot of sales -- I mean, it could be Hitachi, it could be ABB or Siemens or whatever, but what type of products do you see strong demand?

Okay. So you're asking our demand from that segment that benefits from the electrification. Sorry, I misunderstood. I understood our electrification of the products now I heard that, of course. Yes. I mean, of course, that is one demand driver that when the whole world is more moving towards electrification, automation and in that way, more sustainable, then that drives demand in different ways, more directly and indirectly. And this indirect demand that is coming from the investments to the more sustainable machines and so forth is driving also demand in these customer segments.

They are, however, generally speaking, not as large or as big crane users as many others. But it is true that we -- you can see that positive demand in also in those segments and in some cases, also quite large pieces of equipment. So, I guess, the answer to your question is that, yes, that is certainly a one demand driver also.

And what about gas turbines? They are investing massively at the moment, for instance, the gas turbine manufacturers.

Gas turbines is one way, of course, I mean, besides wind and nuclear and hydro and a number of other things are one way of generating the electricity. We have seen it historically also that demand moving from one technology to others. And now it is more maybe on that gas and, of course, the wind and nuclear and so forth. So that is true.

But on the other hand, it is then being -- there is a reduction on the other side at the same time in the other technologies. And those are typically the users for those sort of equipment for gas turbines, there are other large pieces of equipment or bigger projects because of the technology involved.

The next question comes from Mikael Doepel from Nordea.

Just a follow-up on the order intake here. So, I guess, what you're saying is that you had a few big orders in the quarter across the key segments -- basically across all segments actually. But you're also saying that you have a fairly good pipeline of projects, both in Ports and Industrial. Just trying to get my head around looking at the numbers in Q3, EUR 1.1 billion, how would you describe that? Is that normal in your view? Or is it exceptionally strong? Or how should we think about the level of orders in the quarter and when we think ahead from here?

I mean, you're referring to quarter 3 now or the following quarter…

Yes. Exactly.

Yes. I mean that was the same topic that we discussed a moment ago. So I would maybe reiterate, first of all, the really strong funnel is maybe not what we said earlier. So we have a stable funnel and there are opportunities, large opportunities also in the funnel as there has been on the first half of this year. So that hasn't per se changed. And it's a timing question when those actually realize. That is not something extraordinary. They have always existed there and it's just more -- are kind of timing-related topic that when they actually mature and so forth and now particularly for the industrial side of things. So it is -- it was a good quarter also from a bigger project point of view and hence, the large order intake. But as it was stated by Teo also earlier, we had a rather stable order intake in the other -- very stable order intake in the other areas, broadly speaking, too, and growth in the agreement base and growth in basic service, too, which is in that way, many way, the very important thing also or most important thing.

Okay. And on that topic, actually, I missed what Teo said in the beginning on Industrial Equipment when you talked about the sequential order intake increase. If you just could repeat that, please, in Industrial Equipment?

Yes. Sequentially, we actually had a very big increase in process cranes. So in the heavier side, we were more or less flat on the components. So -- and then the standard cranes were slightly down. So standard cranes were actually down both sequentially and year-on-year, whereas then process cranes this time have done well in the third quarter. So it was up both year-on-year as well as Q-on-Q.

With not a very good year last year.

With -- maybe against easier comparables, that is correct. And components, which is maybe the most important one, taking a look at it from the demand point of view, has been, let's say, up year-on-year and flattish sequentially. So, I mean, very hard to conclude anything significant from that one either.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you very much for all your questions. We have covered a lot of different topics, but I would still have one question left here in the chat.

So, can you please talk about the ship-to-shore cranes opportunity? Where can you produce outside of China? And do you need any additional CapEx to start new production? Or is it possible to use the existing plants?

Well, for the STS cranes, we have and we have had also the possibility to produce those products also in this time zone in several places. And there are 2 locations in APAC and Southeast Asia, where we have also working on a subcontracting-based model to produce STS cranes. So that is nothing new as such. So that is a typical thing for us that we have to make sure that we have several kind of channels in place all the time. Now because of this situation, we have been, of course, accelerating those activities or those projects to find the subcontractors.

Thank you, Marko. I think this concludes our session today. So I want to thank you all for following our webcast, and I want to thank Marko and Teo and wish you all a lovely evening. Thank you.

Thank you very much.

Thank you very much.