Steyr Motors Stock

Ladies and gentlemen, and welcome to the Steyr Motors AG Publication of Half Year Figures 2026. The conference will be recorded. [Operator Instructions]

Let me now turn the floor over to your host, Julian Cassutti, CEO; and Bjorn Krausmann, CFO.

Thank you, and good morning from our side. Before going into the details regarding our figures, let's give you, and for those of you who don't know exactly our company, a short overview what we are doing, what Steyr Motors is doing.

Steyr Motors, we are the global leader for customized diesel engines, especially in special military and civil situations. We have an outstanding product portfolio, especially for B2B customers for the military vehicles industry, for aggregates, especially for main battle tanks in the defense industry, but also for locomotives in the civilian industry, but also in the marine industry and also here both for the civilian and for the defense industry. We only serve B2B customers, but the final customers are all either MoDs or the respective governmental institutions, so B2G business, but only through our B2B customers.

As just said, we only produce and completely customize diesel engines for the military vehicle industry and for the civilian industry. We also now have, but we come to that later on in the outlook, new kind of product applications for -- especially for the so-called USV and UGV market, the unmanned industry, which will be one of the main growth drivers in the next couple of years, but also a complete new -- newly designed, newly developed product, the so-called M12, the Mobile Power Unit. And also here, we will present much more details in the next couple of minutes.

So now I hand over to Bjorn Krausmann, the CFO, to present the respective figures. And then, we will present also strategic remarks regarding the respective outlook.

Thank you, Julian, and good morning from my side. So let me just give you a brief overview regarding the key financials for the first half year. As already announced, the business development clearly fell short of the expectations we had for the first half year due to significant delays in the defense segment. So we had sales of EUR 22.8 million, which was roughly at the same level of '25, but a clear shortfall in profitability. So our adjusted EBIT was at EUR 0.1 million versus EUR 3.4 million we had last year for the same period.

The reason -- or the main reason for the drop in profitability was clearly a shift mix within our client portfolio for the first half. Last year was clearly impacted by major high-margin projects in the defense industry, but also civil sector. So for example, we had licensed manufacturing with an Indian client, revenues with the Spanish vehicle clients in the military sector, but also locomotive engines from Siemens in the civil sector, all with pretty favorable margins. And this led to a very positive H1 '25, whereas '26 was clearly largely determined by marine engines in the civil sector with generally lower margins.

At the same time, we also saw moderate growth of costs, notably within personnel, which is related to the integration and consolidation of BUKH, of course, but also selective hirings we did in the second half of '25 and the first half of '26. So we'll come to our new guidance in a few minutes. But based on our current outlook and sales pipeline, we clearly expect a rebalancing of our mix in the second half of '26 and going forward. And so also to get back on a more profitable track, of course.

As you can imagine, the underlying business development as well as the milestones in '26 also had an impact on our cash flow development and resulted in an overall outflow of EUR 7 million. To highlight, the cash flow from operating activities amounted to minus EUR 4.7 million. Main driver here was the increase of working capital, especially with inventories. We have long lead times for some raw materials, which are needed to fulfill orders in the second half of '26, but we also had a buildup of inventories related to delayed projects in the first half.

Regarding the operating results, adjusted for nonoperating items, we were more or less balanced. So at EUR 0 or minus EUR 0.1 million, but working capital was clearly the driver here.

We also had an investing cash flow, which amounted to EUR 4.9 million, which was related mainly to our BUKH acquisition. So the effect from the BUKH acquisition in our investing cash flow amounts to EUR 2.9 million. We then also have the capitalization of development projects of EUR 1.2 million and the CapEx of EUR 0.6 million, mainly for software and tools needed in production. Just a side note on the acquisition amount, this also includes a positive effect from our capital increase of around EUR 2 million, which was used as part of the purchase price financing.

And lastly, the financing cash flow, which contributed EUR 2.6 million. We see here major inflow from bank loan, which was related to the BUKH acquisition and amounts to EUR 4 million and then outflow regarding the dividend payments we did in '26 of EUR 1.3 million.

So these are the figures just in a nutshell. Let's now have a closer look on the underlying reasons for the business development in the first half year. Main reason, as we already mentioned, was significantly slower market momentum in the defense sector. So project and call-up decisions are currently delayed more than we originally expected across the market.

So this is a development we also see in large OEMs and systems partners on whose production and procurement plans Steyr Motors at the end depends as a supplier. In concrete terms, this led to revenue recognition or lack of revenue recognition of around EUR 10 million in the first half year, which means that the corresponding sales are postponed to later reporting period.

And this underscores a little bit the project-related planning uncertainty of the defense business, where we see shifts in public procurement permitting and acceptance processes. One additional effect is certainly that we see in the defense business strong seasonality. So in general, the second half of the year is generally stronger with the fourth quarter, in particular, accounting for a significant share of annual revenue and earnings recognition.

As we said, we saw a delay and therefore, a reduction of revenue in the defense sector. At the same time, we grew our civil business. This is, of course, mainly related to the BUKH acquisition we did in the first half year at the end of Q1. With the acquisition of BUKH and its first-time consolidation in Q2, we set a very important strategic milestone for us in the civil segment. So it extends our product portfolio in the commercial marine sector and also gives us access to attractive international sales markets, especially in Asia and South America, where we didn't have a strong footprint so far.

First half of the year was the implementation of the new holding structure, which sets for us a kind of organizational basis to efficiently map further growth and integrate at the end additional products, markets and companies in the future. So this is mainly important if we look at potential future M&A transactions or international cooperations and will facilitate the integration of these.

So let's maybe now move after these key developments and the key figures in H1 to the change in guidance, which has been already communicated. So in order to take into account the delays in public procurement approval and acceptance processes, which we clearly experienced over the last time, which was also for us a learning process, we decided to conservatively adjust the guidance for the full year and to take into account potential project postponements and future project postponements.

And so we expect a revenue growth of 15% to 25% for '26 compared to previous year, and an EBIT margin of 8% to 12%. So depending on the realization of and then phasing of certain projects, of course. And these delays, we would also expect that they have an impact on the planned values for '27, which have been communicated so far and a quite ambitious target.

So from today's perspective, we think that this will not be achieved in the originally expected time frame. And -- but what is really important, we believe that the underlying market drivers and the expected market demand, this remains intact, and that's also the feedback we get from our clients and from our pipeline and what we see in the second half and what we see in the midterm.

So some projects which got delayed compared to previous planning include a project to equip the K2 main battle tanks for the Polish MoD as an end customer, but also DPM for Siemens locomotive for a Scandinavian end customer as well as an engineering project with an Indian customer. So from today's perspective, these projects cannot be realized in '26 or '27 in the original time frame. So corresponding sales contributions will, therefore, be postponed by 1 or 2 years according to our current picture.

So I will hand over to Julian now, who will also give you a bit more insights regarding our order backlog and current developments on the client side, which will also have then an important impact, of course, on the future picture and future strategy of our company.

Thank you, Bjorn. So what has been just announced and positively is the development of the order backlog and the project pipeline. The order backlog now amounts to EUR 310 million until 2030. We now have, and in addition to the almost 500 boats for the Navy SEALs, which have been already communicated, the project pipeline includes also a tender for 1,000 vehicles from one of our major Spanish customers, which will be equipped with Steyr engines. And for both projects, the production will be started beginning of 2027.

For instance, and just to highlight and emphasize that we at Steyr Motors are mentioned in the official tender of the Navy, of the Pentagon. Here, it's clearly said that a Steyr Motors engine will and should be included in those almost 500 boats, which again underlines the concreteness of future orders starting 2027.

But also the already known and in March this year signed new KNDS framework agreement for 500 new Leopard 2 main battle tanks, where we supply the APUs for such main battle tanks until 2034, will contribute to the basic utilization of our production capacity, especially starting beginning of 2027. This means that the Steyr Motors Group has a strong foundation for sustainable and profitable growth, but also a high level of visibility for revenue recognition in the coming years, especially starting 2027.

The highly specialized and high-performance products of the Steyr Motors Group as well as the ability to deliver those engines significantly faster than the competition meet clearly the current needs of the defense market.

Also, what we want to highlight in the weeks leading up to the publication of the half year figures, there have been market rumors about a potential takeover of Steyr Motors Group by Red Cat Holdings from the U.S., which is why we, as a Management Board, informed about this in a corresponding ad hoc announcement. Red Cat out of the U.S. has expressed clear interest in Steyr Motors, but the concrete talks broke off. However, the attention around Red Cat shows the strategic attractiveness of Steyr Motors significantly. The combination of a technological niche position, robust order backlog and short delivery times makes us fundamentally attractive to respective market participants.

However, our focus remains on the operational implementation of the outlined growth strategy, especially regarding the just announced programs, for instance, regarding Spain, regarding U.S., but also regarding some other projects, which I will highlight in the next couple of minutes.

For the second half of 2027, we expect stronger revenue recognition. Demand in the strategic core markets remains very high. However, due to the delays in the call-off and execution of individual programs, our revenue and earnings realizations have been partially postponed to the second half of 2026 and to the future reporting periods, so 2027.

In the commercial marine business, we expect further revenue contribution from our acquisition in Denmark, the BUKH Group, which will enable us to position ourselves as a full range supplier in the selected market segments. We are now also able to process projects quickly and serve our customers with short delivery times. New orders can be implemented in additional production capacities without further investments.

In general, the market for highly individualized diesel and power systems differs significantly from the classical engine market. We are not operating in a high-volume business, but in a specialized niche market characterized by short delivery times, high technical requirements and long-term customer relationships.

In contrast to pure manufacturers of serial engines, we at Steyr Motors, therefore, define ourselves not only by quantities, but also by clearly customized tailor-made product development, so-called customized engineering and rapid integration into the selective customer platforms. This clearly differentiates us from classical series engine manufacturers. Therefore, we at Steyr Motors Group have the most important criteria for successful positioning in the niche market.

First of all, top products, which are highly customized. Secondly, a secured supply chain according to our customer requirements. And thirdly, customized development and support with our teams on site to make the vehicle or the respective boat operational. And last but not least, a relatively fast processing implementation and delivery of orders in comparison to our competitors.

Let's now move on to the respective implementation of our growth strategy in the next couple of months and years. Clearly, due to the increased defense budgets in the company's key target markets, we as Management Board expect above-average market growth in our relevant sales regions.

In addition to the implementation of already planned orders, the development of new markets and [Audio Gap] are to provide significant support for the growth strategy. We expect additional strategic defense future markets of the so-called unmanned systems, so the USVs and UGVs, and also in the field of the so-called power generators, our newly designed newly developed product.

We have identified and we want to highlight, therefore, 4 growth segments of the strategy -- of our strategy. Firstly, the international market development and the diversification. We continue our international expansion and diversification of our customer base. New target markets are being tapped in a targeted manner and existing customer relationships are being further expanded. Possible new strategic partnerships and also selective acquisitions can support implementation where they meaningfully complement product portfolios or a specific market access.

Secondly, a clear focus on the growing unmanned sector, the so-called USV and UGV market. This market segment for the unmanned systems is rapidly gaining in importance for mission-critical missions. We are very well-positioned here with the engines -- with our engines, and there are concrete negotiations with different customers about short-term production of over 1,000 engines each, which can already be reflected in the 2027 sales figures. And this would clearly represent excellent growth opportunities here.

So it's -- we can clearly confirm that it's not only Red Cat as a strategic interest, but also we are in discussions with other concrete customers regarding the production of, in some cases, at least 1,000 engines each, and this would even start in 2027. And this, as just announced, as just said, would represent an enormous growth for us, for Steyr Motors.

Coming back to these 4 pillars. Number three, the expansion of our product portfolio with our so-called M12, the mobile power generator. Here, it has to be said that the demand for mobile energy generators is increasing significantly. So as armed forces have a constant growing energy demand and require a reliable and mobile energy supply. For instance, for drones, anti-drone systems, for drone charging systems, those are the main examples where our power generator can be utilized.

This means that generators have become part of the basic equipment of modern armed forces. Therefore, this market segment is one of the cornerstones of the modernization of military infrastructure. As just said, especially for the increasing integration of drone and anti-drone defense systems. Therefore, with the addition of the M12 power generator, we as Steyr Motors are in an excellent position regarding this new market trend.

The current product is currently tested by a Western NATO force. We expect feedback in the next couple of weeks, next couple of months, whether we can secure a very concrete order of at least 1,000 power generators as a total production outcome and this production would also start in 2027. So also here, a very concrete with a very concrete customer negotiations about a potential massive ramp-up of the respective new product, the so-called power generator.

Again, coming back to the 4 pillars. Number four, we want to become not only an engine manufacturer, but we want to become a supplier of entire powertrains, especially in the marine industry, in the marine sector. As you all know, the marine market offers an attractive growing environment.

While the global market for marine engines is growing slightly, the market for high-performance boat applications is developing much more dynamically. And this is the market where we are in. This increasing demand for powerful, compact, and reliable drive solutions opens up attractive opportunities for us in the international civilian market.

Therefore, the acquisition of the BUKH Group in Denmark will create strategic growth in the field of civil marine applications. But also, as we now know, the receipt of U.S. order to equip the almost 500 Navy SEALs boats with engines from Steyr also shows that we will continue to grow strongly in the defense marine market.

Our aim is clearly to gradually develop from a pure engine manufacturer to a provider of the complete marine solution system. This means to a complete drivetrain provider. The necessary competencies can be built up organically through strategic partnerships or where strategically sensible, also through selective M&A acquisitions.

To sum it up, let's present some key messages where we want to focus on. So first of all, we clearly see that the structural market growth is still intact. However, as we also now have announced, there are and there have been some short-term delayed market implementations.

The general market continues to show attractive structural growth. Short-term postponements and delays in the defense business do not change the long-term market opportunities and the strategic growth story. The strategic separation of the civilian and the defense divisions in our corporation and our company, allow us the respective opportunities on the market to be exploited in the best possible way.

Still so far, we clearly have to emphasize that all of our projects we have been reporting and also discussing internally, no single project has been canceled. However, of course, some projects, and we've just mentioned several projects, have been delayed to 2027. But still, the market itself is fully there. There's a strong market demand and no project has been canceled.

But in several major projects, especially in Western Europe but also in some cases in India, there have been some postponements, some delays, which we now see clearly in our H1 sales. However, we've highlighted several projects, for instance, in Spain, for instance, in the U.S. with Navy SEALs, but also clear opportunities with our power generator, clear opportunities regarding the USV, the unmanned market. They show in addition, clear opportunities at the latest starting in 2027.

Second key message, clearly, the high visibility due to our order backlog. The high order backlog creates a strong base for further business development and offers a high level of visibility for the coming periods. One of the most important orders in this regard is the KNDS framework agreement until 2034, also a concrete order opportunity with the Western European vehicle manufacturer. This means 1,000 vehicles in the next couple of years, but also the order from the U.S. -- from the U.S. Navy SEALs to equip almost 500 new boats with Steyr Motors engines in the next couple of years.

Thirdly, third key message is the consistent strategic transformation from a pure engine manufacturer into a provider of mission-critical drive and energy solutions. We at Steyr Motors are gradually developing from a pure engine manufacturer into a provider of mission-critical drive and energy solutions. We have acquired the BUKH Group in Denmark, and this underlines the strategic orientation and shows -- clearly shows that we at Steyr Motors are able to drive the transformation forward through targeted M&A activities.

Also, and again, we want to highlight that the launch of our power generator, the newly designed -- newly developed product, the so-called M12 power unit serves as a significant growth market with high demand. And also here, again, we have to highlight and emphasize that this new product so far is not included at all in the respective business plans and guidance and the respective guidance in the next couple of years as this newly designed, newly developed product would add to the respective guidance, would add to the respective business plan.

Key message number four, the attractive niche position where we are in. With a technological know-how, long-standing customer relationships in our core markets. And clearly, we offer reliability with our respective products. Those factors, as well as the high degree of customer specialization create relevant barriers to entry and form the base for our sustainable margin and also profitability potential with the respective volumes in the next couple of years starting in H1, but clearly with a clear ramp-up starting in 2027 with the respective examples what we've expressed and outlined in the last couple of minutes.

To name, again, some examples is the orders from the Spanish MoD, from our Spanish customer for the [Audio Gap] defense marine market, but also additional opportunities in the USV market with very high potential volumes starting 2027 and also our new product, the power generator, the M12. Also here, very concrete discussions with potential customers also for high volumes with more than 1,000 of the respective generators, but also starting here in 2027.

That's from our side, the presentation of the figures and also some expressions, some highlights and background regarding the future outlook. Now we are happy to answer your questions.

[Operator Instructions] So the first question is from Patrick Steiner from ODDO BHF.

Patrick Steiner speaking with ODDO BHF. I do have a few questions, and I will take them one by one, if possible. So the first one on the new 2026 guidance. I mean, if I've read correctly between the lines, this is indicated to be a bit more on the conservative end in your view, but still implies revenue growth of 30% to 50% year-on-year in the second half of 2026. Can you therefore please explain to us the main drivers of this expected revenue growth for the second half of the year? And if possible already give us your impression of the operating development of the third quarter?

I'll start and then Bjorn will go into some details. In fact, of course, compared H2 with H1, clearly, H2 will have a significant growth. There are several main reasons. And maybe to answer your second question first, clearly, Q4 will be much stronger than Q3. This is what we clearly see right now and what we clearly see regarding the concrete purchase orders. To give you some examples, the KNDS, the APUs for the Leopard 2 main battle tank, it will clearly be much more volume than H1. Also some spare parts for KNDS. This will also be clearly a sales and profitability driver for H2.

Also clear, as a matter of fact, we have the consolidation of the BUKH business, which we did not have in Q1. Therefore, of course, as a matter of fact, even with a stable business for BUKH, we will, out of accounting reasons, have to consolidate more revenue in H2. But also -- and Bjorn will give you some more details with some other major customers. H2, what we see clearly right now regarding the concrete purchase orders will be stronger.

Also what we've just uploaded in our new investor presentation, the order backlog for H2 for the remaining months is EUR 32 million. And if you add this up to the just announced H1 figures, of course, you can clearly see what you've also just outlined, Patrick, that the lower end of the now guided range can be clearly reached just by H1 figures plus the order backlog.

And -- but of course, we clearly believe that some opportunities still can be realized in H2. And therefore, the lower end of the now guided range is, in our opinion, really a very conservative a very conservative outlook, a very conservative guidance for this year. But Bjorn, please.

Yes. Julian already mentioned a couple of customers, and we said, there will be a shift from our expectations also back to more military customers, and that's what we see. Of course, especially regarding USV market, U.S. Navy, et cetera, we know these things are in the pipeline. They will come with a high profitability. But as we [Audio Gap] last time over the last month and there can be always a shift and the phasing effect. So things might shift from Q4 to Q1 next year, whatever, and that's why we -- of course, we want to take a conservative approach here and not to have too ambitious targets, which might then may not be reached.

All right. So if I understand correctly, you can confirm that you already see some kind of revenue momentum year-on-year in the third quarter and you're quite upbeat about the order backlog conversion of the EUR 32 million within 2026. Is that correct?

That is, in general, correct, yes.

Second one, on Page 15 of the H1 results presentation, you've outlined the revenue bridge to get to the EUR 140 million of sales by 2029. I see no figures or estimates for EBIT development, also not in the press release. So is this EUR 40 million EBIT target, is it also just postponed until 2029? And if not, what kind of operating profitability should we expect for 2029?

In general, what's the key messages here because, I mean, given our business model, of course, if we have in 2026, a delay and therefore, the guidance cut, then of course, as all of our respective programs are ramping up, then, of course, also, as a matter of fact, as a clear consequence, the 2027 targets will have some delays. And therefore, we now clearly say from a conservative point of view -- from a conservative perspective, still our targets, as we've just also announced and expressed, we don't know any single projects which have been canceled.

But really different major programs, different major projects have been delayed. There have been postponements. Therefore, we now clearly say our targets, our initial targets, which we had for 2027 are still valid. However, there will be a delay of one or at the latest 2 years. Therefore, we've just announced and including in our investor presentation, which can be found in the Investor Relations section of our homepage. There's a bridge how we can reach those initial targets, revenue targets.

Of course, in the next couple of months, we will announce a concrete guidance for 2027. This is clear, including a concrete profitability guidance also here. In general, what we can confirm the initial guidance for 2027 is clearly still possible. So far, we've only uploaded and we've only announced the revenue target, the revenue bridge, but clearly, as just said, we will publish also the respective profitability in due course. And in general, of course, yes, our initial targets are still valid, but there will be clearly some delays of 1 or, at the latest, 2 years.

Okay. You have mentioned during the presentation that you were in concrete negotiations with customers for short-term production of around 1,000 USV engines each for 2027. And also, you were talking about the potential of the mobile power unit. Could you maybe give us a ballpark range about your expected sales numbers in terms of units of mobile power units and USV engines for '26 and '27?

Well, this is -- this would be quite a broad range. As just said, we are in both fields, so concrete for the mobile power unit and for the USV, with different customers in concrete negotiations for respective contracts. And this would imply if we, hopefully, in the next couple of weeks can sign or in the next, let's say, 1, 2, 3 months can sign such contracts. This would mean, in the best case scenario, that we have a minimum quantity of 1,000 USV engines produced in 2027, and also production of 1,000 generators.

But the range -- it's quite a range. I mean, it can be, let's say, a couple of hundreds each. Next year up to so far 2,000 in total. It clearly depends on the concrete outcome of the negotiations with those concrete customers and maybe there will be some other customers coming in the next couple of months. So the concrete range is now, let's say, a couple of hundred to 2,000, but this is quite a broad range. But so far, we cannot -- we are not in the position to give a concrete figure as it all depends on the concrete negotiations in the next couple of weeks.

All right. Fair enough. Last one from my side. The 1,000 vehicles with Urovesa and the 500 boats for the Navy SEALs, is this already in the backlog or not yet?

Yes. This is in the backlog now.

It is in the backlog. And it was in the backlog in Q1 already as well or not?

I mean, there was -- yes, to some extent, there was Urovesa in the backlog, but this has been extended now.

The next question is from [ Ivan Novak from Austria Presse Agentur ].

I have one question regarding your liquidity. Your cash and cash equivalents fell sharply from EUR 7.3 million at the end of 2025 to just EUR 300,000 as of the end of June this year, while your operating cash flow turned to a negative EUR 4.7 million. Given these tight liquidity levels and your heavy reliance on factoring, how do you plan to secure operational funding for the next quarters? And does this cash constraint limit your capacity to ramp up production for the new M12 power unit?

As outlined before, I mean, the main drivers in the first half, as you said, I mean, it is operating cash flow, which contributed EUR 4.6 million negative. This was mainly due to buildup of inventories. And as I mentioned, I mean, this is already due to the buildup of inventories from delayed projects in H1 and also projects which can be bundled, which should be fulfilled in the second half.

So I mean, we don't expect such a huge ramp-up in inventories again until the end of the year. It depends, of course, on the project. And of course, I mean, we expect, as we outlined that H1 is a clear shift back to profitability with also more military clients. So this should also create a positive operating cash flow on this side.

Second point in the first half year was, of course, that we had this financing -- this investing cash flow, which was negative due to the acquisition of BUKH. Of course, not financed by a loan, but this contributed also a lot to the negative outflow in H1 because we also had one-off effects regarding consulting costs, et cetera, which were also related to the transaction. So clearly, for the second half, we expect a positive cash development, which will also support us.

And second point, I mean, yes, we use factoring, which gives us a certain flexibility. But as you can also see in our balance sheet, I mean, we have quite limited loan funding so far. So I mean, our financing structure is also quite conservative. We have the EUR 4 million bank loan now, which is clearly related to the BUKH acquisition.

And we also -- we have a revolving facility, which is currently used only temporary and to a certain extent, but which gives us also a lot more flexibility. So I would say we have flexibility because we have, of course, existing short-term facilities, but also the perspective that we can build up more long-term loans if needed. So -- and given the positive outlook we see in H2, this will also provide us with a positive cash impact.

And the next question is from Lukas Spang from Tigris Capital GmbH.

I would take my questions one by one. The first one is related to the BUKH acquisition. Can you share the inorganic revenue effect in the first half of the year, please?

So from the BUKH acquisition?

Yes.

So the BUKH acquisition in Q2, so what we consolidated is EUR 1.8 million revenue effect. If you take the full year -- the full half year for BUKH, it would be around EUR 3.6 million. So they have quite...

EUR 3.6 million?

Yes.

But only EUR 1.8 million, only half of it is consolidated, starting April 1.

Then coming back to this revenue bridge you showed us in the presentation. You now also included some EUR 20 million of strategic M&A, which were not part of the outlook before. So why is this? Because you have now 2 years more of time, but included also EUR 20 million of additional M&A effect. Just for understanding.

Well, based on our strategic pillars and cornerstones, which we also gave some insights in the last couple of minutes, especially regarding our intended plan to not only be a pure engine manufacturer, but to offer the whole propulsion system, the whole system itself around the engine. It's clearly the possibility to develop this in-house. We have the capabilities clearly in-house.

But there are also some, let's say, interesting external M&A opportunities out there, which we've already have identified. And therefore, we clearly see that from a major ramp-up, EUR 20 million could be M&A targets as a sales portion, which we strongly believe this is only a small portion out of this clear bridge. And as just said, we have identified several potential targets. It's not a must-have, but it could be, from a strategic point of view, useful, as we then could be faster in the development into an offering of the whole propulsion system and not only of the engine itself.

But shouldn't this EUR 20 million come on top of the EUR 140 million as before? Because the previous outlook 2027 was pure organic.

No, it's part of the bridge from 2025, EUR 48.5 million to EUR 141.3 million.

Okay. Then on the order backlog, the EUR 310 million, can you split between fixed call-offs and forecast and frame contracts? Or you call it fixed call-offs, contracted and forecasted?

Well, for those around about EUR 310 million, we have clearly communicated that -- the fixed call-offs and contracted is around about EUR 200 million, although the vast majority is contracted and fixed call-offs. And also, you see the concrete distribution for the years 2026 and 2027 regarding fixed call-offs, contracted and forecasted. And in general, the EUR 310 million, approximately EUR 200 million is fixed call-offs and contracted. So yes, this is what we've announced and that you can see that the contracted and fixed call-offs is clearly the majority out of the order backlog.

Yes. And then last question regarding cash development in the second half of the year. Can you share how much prepayments you maybe expect in the second half of the year?

Sorry, which payments?

Prepayments. Advanced payments from new orders.

I mean usually, there are no big prepayments received from new orders. I mean, it might depend. I mean, of course, if we do any larger engineering projects, et cetera, with cooperation with clients, there might be, of course, premium payments. Also if there are issues with solvency, we will, of course, ask for prepayments. But in general, this is not the case for us.

Currently, there seem to be no further questions. No, sorry, there is one more question from Adrien Brasey from AlphaValue.

Adrien Brasey from Baader Bank, AlphaValue. Just one on my side. How should we expect CapEx to develop going forward? Any adjustments to be expected?

Yes. In general, of course, CapEx development might be adjusted depending on the needs for new clients. But currently, our expectation is that we stay in the same range about last year. So about -- last year, we had about EUR 1.5 million. So that's probably the range we also expect for this year.

Thank you very much. And currently, there are no questions. So I give back the word to your host.

So if there are no further questions, from our side, thanks for your attendance and for your continued interest in Steyr Motors. As last words from our side, we -- unfortunately, we had such delays, which we commented on in the last couple of minutes. However, the business case itself is fully intact. We have the market demand, which is still there. We have our projects, we have our opportunities in addition to that. We have our new product, the power generator with concrete negotiations, with concrete customers of at least 1,000 products.

We have the new market applications in the unmanned industry with the USVs and the UGVs and also here in the USV industry, we have concrete negotiations with concrete customers for at least the production of at least 1,000 engines for next year. So in general and also with our base business, for instance, our Spanish customer with 1,000 vehicles in the next couple of years, the order for the U.S. Navy SEALs for almost 500 boats. There's a strong base. There are new opportunities with new products and new applications. And also we have a strong order backlog.

So therefore, in our clear belief, our clear outtake for that is that the business case itself is -- we strongly believe in that. However, we had such delays, but we strongly believe in the business case. And we now have -- and we now will deliver the respective results in the next couple of months and the next couple of years.

So thank you again for your interest and taking the time for our H1 presentation. Thank you from our side.

Thank you very much.

Good day, ladies and gentlemen, and a warm welcome to the second day of the first Deutsche Boerse Scale Summit. My name is [indiscernible], and I'm very pleased to welcome you on behalf of Deutsche Boerse. This new format brings together investors and high-growth scale issuers to enable a direct exchange on strategies, positioning and investment stories. Each presentation will last 20 minutes and will be followed by a 10-minute Q&A session. We warmly encourage you to actively participate in these discussions. And with that, I am pleased to welcome CEO, Julian Cassutti, who will guide us through the presentation on Steyr Motors AG. And with no further ado, I'd like to hand over to you, Mr. Cassutti.

Thank you. Thanks for the introduction and also a warm welcome from my side to Steyr Motors' presentation. So we've prepared, of course, a short presentation, and I suggest before the official Q&A, let's go through the presentation. So what is Steyr Motors? What are we doing? Steyr Motors, we are -- we define ourselves as global leader for customized diesel engines in special, especially, military, but also some civil applications. Here, on this very first slide, you see some final applications. We are producing, as just said, diesel engines, and we only have B2B customers. But the final customer is, in most cases, the government, the MODs, the Ministry of Defenses, and therefore, you can see here some final applications of the products where our engines are built into.

So for instance, our engines are built in the Leopard 2 main battle tank produced by KNDS. They are built in the Panther, the KF51, the main battle tank competitive product produced by Rheinmetall or our engines are built into military vehicles, like you see here on the left of the slide for the instance -- for instance, for the Spanish MOD, for the Australian MOD, just to give you some examples on the vehicle side, but also our engines are built into boats, into defense boat applications like you see here on the left bottom of the page, such as 7-meter Ribcraft boats produced for the U.S. Navy Seals. And here, also our engines are built into. And here, this also shows our technical USP because our -- why are our engines used on a worldwide scale in Australia, in the U.S., in Germany and so on? Because our engines are -- have a superior power-to-weight ratio.

This means, and this is perfectly explained with the picture of the boat for the U.S. Navy Seals. Just by using our engine, 2 more soldiers, 2 more Navy Seals. So 20 soldiers instead of 18 soldiers can be on such a boat just by using our engines and everything else being equal. And therefore, of course, weight matters in the defense industry, and this is the main technical reason besides other reasons, of course, why our engines are built into and why our engines are needed. So -- but let's move on, just to give you some examples of the final applications of our products. We can see in some more details this here. Here, we have the classification where our engines are built into. We have here engines for the military vehicles section on the left.

We have also engines for the marine industry, as just said, for instance, for the boats for the U.S. Navy Seals, but also some aggregates, so-called APUs, for instance, for the main battle tanks for KNDS and Rheinmetall, but also for our largest civilian customer, this is Siemens. They are producing locomotives, including our APU. And those locomotives are produced for the Finnish railway system and because our engines, our APUs, are cold start capable up to minus 50 degrees Celsius. And therefore, Dutch locomotives produced by Siemens are included, our engines, just because this cold start capability up to minus 50 degrees Celsius. Also worth to mention, as just said, we only produce B2B.

The final customers are the Ministry of Defenses worldwide. But B2B customers, customers worldwide like KNDS in Germany, Rheinmetall in Germany, BAE Systems in the U.S. or U.K., Thales in France, Mahindra in India, just to mention -- General Dynamics in the U.S., just to mention some of them. And Siemens, as just said, is the largest civilian customer for producing such locomotives. The final customers, that means the MODs, the Ministry of Defenses worldwide, more or less each and every MOD worldwide relies on our engines in the end, U.S., U.K., the German Bundeswehr, the Austrian Bundesheer, Navy Seals and so on and so on. So our engines are on a worldwide scale in use cases. And this is, therefore, of course, for us, an exceptional example that our engines are clearly -- have clearly USPs in comparison to other diesel-producing corporations.

Also here, to mention the value chain, we not only produce the engines, our USPs, we develop together with our customers with the -- and including the MODs, such specific engines. And this explains also our business model. This means in the engineering phase, when we completely customize these engines because in the military industry, you normally don't have standardized vehicles, standardized tanks, whatever, you have customized vehicles because each and every specification is unique. And therefore, also, you need to have customized engines. So we produce and develop such customized engines. Such engines are built into the main battle tank or the respective vehicle or boat. And then the Ministry of Defenses, they certify such vehicles, including the engine.

And this clearly means a strong advantage for us because once a vehicle or tank is certified, then the logical consequence out of it is that we are, from a legal point of view, single source supplier because once our customers, our B2B customers want to change the engine, they lose the certification for the complete vehicle, for the complete main battle tank. Therefore, this is clearly -- they don't clearly do that. And therefore, we have long-term frame contracts and as a single-source supplier because we are legally protected by the certification given by the respective Ministry of Defense. And this, of course, for us, we've just signed -- just to give you an example, we've just signed a couple of -- 3 months ago, a new frame contract with the German KNDS, main battle tank producer, the frame contract is up to -- until 2034.

So -- and here, it is written that we can produce and will produce 500 engines for 500 new Leopard 2 main battle tanks in the next couple of years. And this, of course, as you all know, gives us stability regarding stable cash flow, stable revenues in the next couple of years, which is, of course, also from an investment perspective, a very strong signal for us and for the Steyr Motors AG story. But let's move on, some more details. And also, I want to highlight new applications and new products. What is now also in the mass media more and more common and what you could read and watch in the last couple of weeks is the so-called marine drones, so the so-called USVs. A couple of weeks ago, it was in the media that in the Middle East region, some U.S. soldiers have been rescued by unmanned surface vessels, a so-called USV. And this is clearly what we see here at Steyr Motors.

This is clearly the most impressive growth what we can -- what we see in the last couple of months. And also upcoming, this will be the most impressive growth driver for us because -- these USVs, unmanned surface vessels, marine drones in the end. This new kind of applications for our engines will have tremendous growth. The U.S. administration just announced that until end of September, they want to invest USD 300 billion more and mainly for drones, anti-drone systems and explicitly for USVs. So we have active customer relationships with international customers for producing engines for such kind of USVs, several active customer relationships. And they are all -- and already until now, until year-to-date, we have produced everything what we had in the books and what we have planned for the complete year, full year 2026 regarding USVs. And we now got many, many new orders.

So that in the end, until end of this year, at least best estimate is at least we will triple the output for 2026 regarding the engines for these USV applications. In the next couple of years, several customers tell us, okay, we want to produce at least 1,000 of such USVs. Can you scale up? Can you ramp up fast? Because the demand for such kind of new boats, new USVs is increasingly very, very strong. And therefore, this is clearly the most impressive growth driver for us this year and especially for the next couple of years. But also -- not only this USV topic, but also we have a new product, the Mobile Power Unit. I come to that on the next couple of slides. This is a power generator, mobile transportable power generator.

We are actively testing this new product currently with the German Bundeswehr, with the German MOD, together with a well-known German drone manufacturer. And our power generator is used and will be used as a charging system for such kind of drones or anti-drone systems which run by battery or electrical and our power generator can be used next to the battlefield because it's transportable, it's light. Also here, our clear product advantage is that the power-to-weight ratio comes into -- is relevant here.

And therefore, we -- as just said, we are actively testing this product at the moment with the German Bundeswehr together with the German well-known drone manufacturer. And we strongly believe that in the next couple of months, we will get respective purchase orders for that. And the good thing for Steyr Motors, for you as investors, these opportunities regarding the power unit, the power generator are not at all in the business plan included, not at all in the order backlog included. So each and every euro we earn regarding that kind of new product is or will be on top because so far it's not included in the order backlog -- not included in our business plan.

Yes. Here are some technical details. We can skip that. But it's also what we see so far, what I can clearly confirm the customer feedback and the final customer feedback, so the feedback of the respective MODs worldwide is very, very positive, very, very strong. Pricing for that, we could sell this product each for around about EUR 70,000. So also here, from a margin perspective, very strong product, which -- as just emphasized -- and I want to emphasize that once again, which is each and every euro will be on top as it's so far not included in the order backlog.

Yes, you can also find such respective details in our investor presentation on our homepage. But so far, don't want to go into more technical details. So maybe 1 or 2 additional comments regarding our recent acquisitions in Denmark. We've acquired the Danish corporation called BUKH. It's a marine diesel engine producer. And it was acquired or it has been acquired by us because in the end, it's also a top line case. And if you see the kind of products they offer, they offer product engines from 24 to 700 horsepower. Steyr Motors' core business, the clear focus is from around about 100 to 300 horsepower. So completely logical step that we broaden our product portfolio and also regarding sales, regions, geographies, of course, it's a strategic fit that we are more focusing on the U.S. and the rest of Europe and BUKH is focusing more on Asia and South America.

And what we see so far, we bought that quite cheap. So they are generating around about EUR 10 million revenues a year with around about 10% EBIT margin. We paid rather cheap. So around about 5x for that kind of business, which is quite cheap given the profitability and also this profitability is so far on a stand-alone base. So -- but we clearly see we strongly believe in sales synergies here so that we are more than confident that we can increase the margin, the EBIT margin, in the next couple of months, next couple of years. So all in all, in our opinion, a very accretive deal for us given the sales synergies.

Yes, some highlights what we have achieved so far. I mean the major highlight or one of the major highlights is the new frame contract with KNDS for the production of 500 new KNDS main battle tanks, Leopard 2. But also the way going forward, of course, the USV market, the marine drone market, which will be the most impressive growth driver for our business in the next couple of months, next couple of years. And also one last thing, we've just entered and for those investors who have attended the defense show in Paris, the Eurosatory last week, you could see the respective vehicle -- unmanned vehicle, so-called UGV vehicle, where now also our -- one of our engines are built into -- is built into. And this will also be, of course, in the next couple of years or decades, the complete unmanned defense industry will, of course, ramp up massively. In my opinion, in the USV market, the marine unmanned market, will be the highest -- the market with the highest momentum, but also UGV and of course, air drones will become more and more important. And now we are -- with all of our products with the engines, with the power generator active in the air and the sea and also now in the -- at land in the UGV market.

What we have achieved in Q1, which is always the weakest quarter. We've achieved around about EUR 12 million of revenues, EUR 11.7 million with an adjusted EBIT margin of -- or adjusted EBIT EUR 0.9 million. This means 7.5% -- margin by 7.5% on a percentage scale, which is or more importantly, in my opinion, is clearly the order backlog, so more than EUR 300 million order backlog until 2030, thereof around about EUR 200 million legally binding. So not soft order backlog, but EUR 200 million out of those more than EUR 300 million legally binding until 2030.

Besides that, just given the time and besides that, there are concrete other opportunities beyond order backlog. I've just mentioned that our new product, the power generator, the power unit is not included in the order backlog at all. And currently, there's a live testing at the German Bundeswehr. So there will be revenues in the next couple of months, next couple of years. And each and every euro we will generate with that is not included in the order backlog. So therefore, of course, there are other opportunities even beyond order backlog.

Also KNDS, we met the management team of KNDS last week in Paris. They clearly confirmed that there will be a further Leopard 2 main battle tank ramp-up with the German Bundeswehr with the German government. And this, of course, will also generate, as we are single-source supplier for the APUs, this will also generate additional revenues for us. And given the volume, which is promised by the German government, this will be additional EUR 70 million in the next couple of years, additional revenue for us. So yes, I think that's it from my side so far. Current situation at Steyr Motors and some figures. So given the time, I'd say, let's skip the rest of the presentation and move on to some questions.

[Operator Instructions] We have actually already received a question -- 2 questions. One from [indiscernible] asking, how much of your current growth is driven by a temporary defense spending cycle? And what part of your revenue could be lost once today's exceptional military procurement wave normalizes?

Well, what is temporary defense spending, I mean, everyone can ask themselves what is temporary. I mean Mr. Papperger, CEO of Rheinmetall, just gave an impressive interview saying that -- and I'm completely in line with his opinion, he clearly said the next 10 years, we will see a massive ramp-up, especially in Europe because of this rearming Europe situation. And then if there is no major war, we will have, starting 2035 to 2045, 10 years of stabilization. And this is absolutely in line with my personal opinion with our planning that despite the public opinion that we've already reached the peak.

We believe that we have just started in this whole rearming Europe because what we see so far, especially in Europe, we have -- we are facing a tender in Spain for 1,000 vehicles. We are facing a tender in Austria for 800 new vehicles. We've just signed the contract for 500 new main battle tanks with Leopard 2. There will be an additional ramp-up. So the official or the public opinion is we've already reached the peak. My personal opinion and also alongside with many other industry insiders, we truly believe that we are at the beginning of a super cycle, which will last until 2034 around about.

The next question asks, what is your current production capacity? And are there specific engine types where you are already facing bottlenecks? Additionally, how would your operations respond if demand were to increase by another 30%?

Very good question because -- and this is also one of our clear USPs. At the moment, for this year, we project to produce around about 2,000 engines, customized engines for this year, the total capacity at our facility in Steyr. And now we have additional capacities in Denmark caused by our recent acquisition. But stand-alone Steyr in Austria, the capacity is up to 10,000 engines a year. So there's a lot of additional capacity and also the very good signal next year, we project to produce around about 3,000 to 3,500 engines. And we don't need to buy any new machine. There will be no CapEx for this ramp-up from 2026 to 2027, no expenses.

The only thing we need to add some more blue collars, but there will be not many blue collars. And therefore, this is also the main reason of our highly increasing margins in the next couple of years because of the volume effect. Because if you don't need to invest, if you don't have any additional expenses regarding new machines, whatever, then, of course, the more we sell, the higher the top line, the higher the margin caused by the volume effect. And we are in the defense industry with -- in comparison to automotive industry, low volumes. All of our suppliers are used to automotive volumes. So for instance, Bosch, MAHLE, whatever.

So there will be no bottleneck regarding our suppliers and also in our region in Upper Austria, in Steyr, many, many corporations around us. It's an industrial hub. So far, we have not faced any issues, any bottlenecks in recruiting new people. So we are totally prepared for the additional ramp-up. And this also given our competitive landscape, one of our clear advantages that we can -- if we want, we can deliver very, very fast in comparison to some of our competitors.

Another question asks, is your projection for 2028 still valid? And which numbers do you expect 2027 and 2028?

At the moment, there is no official -- we can go to that slide here. There's no official 2028 projection out there. The only -- we have a midterm guidance. We are in the preparation of a, let's call it, Vision 2030, which will be published in the next couple of months. But what we have published so far is the guidance, midterm guidance 2027. Here, we project revenue of EUR 140 million with highly increasing EBIT, what I've just explained, mainly caused by the volume effect with around about EUR 40 million of EBIT. That's -- those are the official guidance numbers, which have been published.

The next question asks, what are your key technological differentiators that will ensure a sustainable competitive advantage in the coming 3 to 5 years, especially compared to Asian competitors?

Well, first of all, as a matter of fact, of course, Western European or North American defense corporations rather rely on European or North American defense corporations as suppliers and not Asian ones. This will become more and more relevant in the defense industry. Secondly, our key USP is not the production of diesel engines. Our key USP or given our whole value chain is that we -- together with our customers and the final customers, we completely -- we do the complete engineering service to completely customize an engine. If you go to a competitor, be it DEUTZ or an Asian competitor, you can buy a standardized engine with no service. We offer completely -- the complete opposite.

We offer a service that we, for instance, in some cases, up to 2 years, we completely customized an engine. And we are also supporting our customer, our B2B customer in making the vehicle or the boat run. So we send teams to the U.S., to Australia, whatever, supporting our customers in that -- in the end, the vehicle is running. And this is the complete opposite of large-scale competitors producing diesel engines because they offer standardized engines and no service for that. And therefore, this is the clear advantage we see. And in addition, the technical USP, the power-to-weight ratio, our engines as explained within the example of the U.S. Navy Seal Ribcraft boats, our engines are much lighter and in addition, more powerful so that more soldiers can be in a vehicle or a boat. And this is in the defense industry, a clear advantage.

Due to time, I will admit one last question, which is, why doesn't the share price reflect Steyr's performance? News look good, but the stock price falls constantly.

Well, I have a personal opinion. But in the end, if you see the -- some of the defense players, especially in Europe, be it Rheinmetall, they peaked at more than EUR 2,000. Now the share price dropped significantly as well. This is, in our opinion, the main reason that, of course, the whole defense industry stock-wise or capital markets-wise is no longer in a peak situation. From an operational point of view, we cannot understand that because from an operational point of view, from a market environment point of view, the conditions have never been better than today or in the next couple of months.

We will see huge demand for -- especially for such unmanned systems, drones, anti-drone systems, USVs, what I've explained in the last couple of minutes and also additional Leopard 2 ramp-up and so on and so on, all the details I've just explained. So from an operational point of view, we cannot understand it at all. But also what I've just said, given other examples, for instance, Rheinmetall, you can see the same -- you can face the same situation that the share prices unfortunately have dropped.

Thank you very much, Mr. Cassutti, for the answers. And with this, we come to the end of this roundtable. Thank you for your interest in Steyr Motors AG. And if you have further questions at a later time, please feel free to contact Investor Relations. A big thank you also to you, Mr. Cassutti, for your presentation and your time. I wish you all a successful day and hand over to you once again for the closing remarks.

Thanks again from my side. And as just said, any further questions, just send it over to our Investor Relations. We are more than happy to answer it, and thanks for your attendance and participation. Thank you.