Alimak Group AB (publ) (ALIG) Earnings Call Transcript & Summary

Welcome to the Alimak Group Q2 2025 Report Presentation. Now I will hand the conference over to the speakers, CEO, Ole Kristian Jodahl; and CFO, Sylvain Grange. Please go ahead.

Thank you, and welcome to this Quarter Two 2025 Call for Alimak Group then. And as always, I have Sylvain with me here. So turning page and a short recap of the group, global industrial company focusing on vertical access and working at height solutions. Around 3,000 employees, truly global business. We are supported by some fundamental global trends for our business, urbanization, more happening at height to [indiscernible], health and safety, it's, of course, a very important factor. But also I would highlight automation, robotization as our machinery makes -- are movable and makes a possibility for these new technologies to operate from our systems. We do have a leading market position in our niches, which gives us a strong position. We have existed for a long time. So our global footprint and a large installed base, which is also a fundamental piece for our Service business. And overall, a solid balance sheet, good cash conversion and financial position to invest. Turning page. New Heights strategy, something we launched then back in 2020. It's a simple but also a powerful strategy that has served us very well with a decentralized divisional structure where all the results and the business is happening with simple and to the point strategy and strategic drivers. And that program was now first part was up to '25, and we are now working on the next step up to 2030. And we are then planning to have a Capital Market Day on November 25, where we will talk more about that route to 2030. Turning page and our financial and sustainability targets, as you have seen with us, and we are en route to deliver on these. Turning page into Q2. And yes, after a strong Q1, we are again delivering strong performance and continued margin improvements in quarter 2. So we are off, I would say, to a very good start of the year, the first half. Order intake was down 4% in reported figures, but still an increase of 4% in constant currencies. And the revenue were down 1%, but an increase of 7% at constant currency. So here, we have a 8% negative currency impact. We continue to see increased earnings and margins. So we reached an EBITA -- adjusted EBITA margin of 18% in the quarter, up from 17%. And also here, we saw a huge currency impact of 7% in the quarter. And if you look year-to-date, order intake is now 10% organic, and we report a 17.7% EBITA adjusted margin for the first half year. So a strong start to the year. We signed after the end of the quarter, July 8, an agreement to acquire Century Elevators permanent industrial elevator business in the U.S. It's a business with a turnover of close to SEK 100 million and margins in the vicinity of the Group margins. And this is something that will strengthen and be part of our Industrial Division in the group, and they have a position then and business in U.S. and Canada. We also delivered cash flow improvements in the quarter, and we are now at a leverage ratio of 1.74, down from the 2.29 a year back. Turning page, a little bit more details in the quarter. Order intake was SEK 1.720 billion, down 4% and 4% up in constant currency. We saw strong performance in Industrial and Facade Access, while we had a decrease in Construction, Wind and HSPS divisions. Revenue was SEK 1.791 billion in the quarter, down 1% or up 7% in constant currencies, and we saw positive contribution from Industrial and Facade Access. And also here, if you take the currency into account, it's a negative impact of SEK 134 million. So it would have been SEK 1.925 million if currencies of last year. EBITA at SEK 322 million, up from the SEK 307 million, giving a margin then of 18%, up from the 17%. And important to note also, this is the first time ever that the Group is touching the 18% mark, which, of course, we are happy with. And it's supported by improved margins in Industrial, Wind and Facade Access. And also here with the currency impact, that's SEK 23 million in the quarter. So else it would have been SEK 345 million. Turning page, Service. The order intake was down in the quarter, 10% or 2% at constant currencies and SEK 661 million versus SEK 733 million last year. And it's Industrial and Construction division that's reporting a little bit lower order intake, but nothing more to take into that, that it's timing effects, and it's, of course, something that we continue to drive and focus on equally as before. Revenue was up 5% and 12% at constant rates to SEK 694 million, up from SEK 660 million, especially strong performance in the Wind division. Turning page into Facade Access. Order intake was SEK 451 million in the quarter, up 24% or 35% at constant currency. So good order intake, but also towards a little bit lower comparable. We saw strong North America order intake as especially on the infrastructure side, nuclear energy, we took orders and also on the service side with refurbishment, retrofit and replacement giving us nice orders while the main BMU market, Building Maintenance Unit market is still soft in North America. Europe also contributed positively in the quarter. Revenue was SEK 500 million, up 1% or up 9% at constant rates, and we saw organic growth in all regions. EBITA at SEK 56 million, up from SEK 50 million, giving a margin then of 11.2% versus 10%. And the expansion is due to what we have been doing for a long time, pricing, project execution, but also still then negatively impacted by a low factory utilization due to, again, the soft BMU market, but also soft margins because of losses on some legacy projects that are in the final stage. And as we have said, these are expected to be finished more or less by the end of the year. Turning page and a little bit more on the business update. We are having an organizational change. So Philippe Gastineau, who has been then Head of Facade Access division, he has decided to leave the Group. And I first of all, I would like to thank Philippe. He has been instrumental in -- he was the CEO of Tractel, and he has been instrumental in integrating Tractel into the Group and starting off a very good solid strategy and execution into Facade Access. So that's why we see these great improvements. And I wish him all the best for his new role that he's picking up. And we have then Herve Ros, which is currently Head of Facade Access division in North America that will then take on the role as the new EVP for Facade Access. And of course, I'm very, very happy that we have internal candidates and Herve is not only an internal candidate, a very strong and perfect person for this role. We are also focusing on, of course, the margin uplift. The division is still not delivering the margins that we are sure should be there. And due to that also the BMU market is remaining to be soft, we have decided to take out some more fixed costs. So we are launching a restructuring program focusing on Europe and where we also will see planned or we plan to do a capacity reduction in our factory in Spain. And the restructuring cost is SEK 60 million with an expected annual saving of SEK 30 million as of next year. And this one-off cost will be recognized in the second half of 2025. I also would like to highlight that if we look into a little bit more the geographies of this business in North America, where both Alimak and Tractel had a very strong base from before, we see a very successful development. We are driving new initiatives and the business is developing extremely well, and we also have margins into that business, which is well above Group average. While in Europe and Asia Pacific, Middle East, Africa, it's still where we have way too low margins and where we now put extra effort, of course, to ensure we can lift. But this also means that we have comfort in that we will lift the margins to what -- to levels which is respectful for this group. Turning page and into Construction. Order intake was SEK 327 million, down 28% or 21% at constant rates, and it's basically affected by volatility in demand between quarters and regions, but also the fact, of course, that the construction market still remains soft globally. So it's a fight day-by-day to win orders and be close to customers and make things happen. But overall, I think we are doing well. We saw weaker order intake on the rental side in Germany, Benelux and Australia and also on the used business, somewhat in U.S., but driven by also high comparables. Order intake for mast climbing work platforms was good, and that's also where we have a very strong commercial focus and have a lot of expectancy for the future. Revenue was SEK 407 million, down 4% or up 3% in constant rates. And we saw strong revenues from mast climbing work platforms in Australia and Europe, but somewhat lower revenues in hoist and rental in North America due to some project delays. EBITA, SEK 68 million, up from -- sorry, down from SEK 71 million, giving a margin of 16.7%, up from 16.6% -- yes, and it's driven by the revenue, but also happy to see that we deliver a small margin uptick and a decent margin level in these difficult times for the construction business. Turning page. So we continue to invest in people, product development and operational efficiency. And I think this is important to note. We are -- even though this market is challenging, we employ more people front end. We have employed salespeople, we employ business development people. So we continue to drive very aggressively. We invest in product development and in our product range, and we also drive operational efficiency everywhere, taking out costs where that could be done. And this is all the things that contribute to us holding up this business in challenging times. We launched the new Scanclimber Mast Climbing Work Platform in the quarter, a small very neat machine can take 2.5 tonnes, very cost-effective design and something that can go for the global market. And we have also invested significantly in France. We have upgraded our rental facility in France, north of Paris. And of course, taking into all sustainability standards of today, we have developed a new training center there for our customers and our own people. And it is because we believe in France, we have a strong presence in France, and we want to continue to grow there. Turning page, HSPS, a bit softer quarter, but again, due to challenging market conditions, order intake was SEK 316 million in the quarter, down 10% or 4% at constant rates. But also important to note, we are still 4% up year-to-date first half. Lower order intake was due to some slow construction sector, but also primarily in Central and Southern Europe. But also offset by good things. We continue to focus very heavily on our Elevator segment. It's a very important segment for us, and we are close to our customers, and we take market share in that business. Revenue was SEK 321 million, down 9% or down 3% at constant rates and following the same trend and as order intake due to the closeness of book-to-bill. EBITA at SEK 55 million, down from SEK 69 million giving a margin of 17.2% versus 19.5%, and this is then driven by the somewhat lower revenue, but still also relatively resilient, I would say. Turning page, business update. So here, we also focus on investing and driving things forward. We have new management in this division. So we are focusing even more now on product development, driving operational and organizational efficiency and changing somewhat. But also we continue to drive our specific focus into verticals, customer segments. So -- and as I was alluding to on the previous page, Elevator segment, it's important to us, and we take share. We focus on all parts of the world now. And we also drive really our focus on confined space. Some nice success stories working with our end customers. We have fall protection systems installed on transformers in Germany and Poland. And we also got a nice business with retrofit of height safety systems for high-voltage transmission infrastructure in Germany. Turning page, Industrial and very happy to see we continue to develop very, very strongly with this business. Order intake was SEK 481 million, up 9%, 16% up at constant rates. And actually, it's 22% up year-to-date organic, very strong. We see strong performance primarily on new equipment orders within oil and gas, but also government and public and multiple heavy industry segments. The aftermarket business was, as I already was alluding to, a little bit down in the quarter, but it's due to lower refurbishment and timing of orders. Revenue was SEK 399 million, up 10% or 17% at constant rates. And yes, it's driven by higher equipment deliveries, but also good aftermarket performance in the quarter. EBITA, SEK 105 million, up from SEK 82 million, giving a very strong margin of 26.3%, up from 22.7%. And also considering that we are continuing to invest in sales resources and product development and services, so still on the move forward and upward. Turning page. We acquired, as I was saying, the -- or signed an agreement to acquire the industrial part of Century Elevator on July 8, turnover of USD 9.7 million or SEK 100 million, and they are operating and close to our group margin. They will give us a strengthened position in U.S. and Canada, and it gives us then access to a complementary cost-efficient elevator design because this business has been the exclusive distributor of Pega, Czech brand elevators in the U.S. and Canada. And this is something that we will continue. In addition, they also, of course, did service around 20% of the business was service. So we see a very nice opportunity to, of course, also grow service with this business. And we get along with the business, a nice set of very high talented and skilled service people. So of course, we will continue to grow that piece. And then we see also, of course, some overhead cost synergies. Another positive thing, we bought this from BrandSafway, which is one of our biggest customers in North America on the -- they are on the rental side, on the construction side, and we have agreed also that we will work even closer together going forward. So I think also that's something I'm very happy to see. Turning page and Wind. Order intake was SEK 158 million, down 22% or down 15% at constant rates. But also here, I think it's important to note, timing effects, et cetera, is still up 4% year-to-date. But it was negatively affected by the U.S. tariff uncertainties that we have been seeing. You all have, I'm sure, picked up on what's happening in U.S. And so far, this tariff uncertainties in Q1 affected the willingness to decide on new investments. We also had somewhat high comparable year-over-year with China. Revenue was SEK 179 million, down 8% or down 2% in constant rates. And the service training, safety offerings partly offset somewhat lower equipment sales than in Americas and Southern Europe. EBITA at SEK 38 million, slightly down then from SEK 39 million, but a record margin for the Wind business of 21.4%, up from 19.8% and a good share of aftermarket and also that we have been able to mitigate the tariff effect. So that's something we are, of course, very happy with. Turning page. We continue to see growing opportunities in the Wind market. We take share and we work very close with the Chinese OEMs, and we expand with those. We also -- India is becoming a more important market. And there, we also take very nice orders, and we see that this is a market we need to be very close to going forward. And then, of course, we continue to invest and drive our aftermarket business. And in the quarter, we were also rewarded for our innovation. So we received this EOLO Innovation Award for a patented service lift concept that we have developed. To say a little bit more about U.S. and the Wind market, we have now also, as you know, gotten this Big Beautiful Bill, which will take away tax incentives for the renewable energy in U.S. in the coming years. But it's still valid for all projects that start up this year, it's said, and to be finished by 2030. So what we see is that -- and when we talk with our customers is that the market looks to be very stable and solid for us, at least in the next couple of years, '26, '27. So we really have no worries about the U.S. market neither in the next coming 2 years. And then we are turning page and into the profit and loss summary, and then I hand over to Sylvain.

Thank you, Ole. Good morning, everybody. Once again, we are pleased to see an adjusted EBITDA growing by more than revenue. It's almost becoming a habit. It's a 5% growth for adjusted EBITDA versus an almost flat revenue. And this comment applies to both the quarter, Q2 2025 and the first semester versus same period last year. And we trust this is a testimony to the strength of our business model and the continuous improvement in operational efficiency, and I'll give some more color around that on the next slide. There were no items affecting comparability in the quarter. Below EBITA, the amortization charge is consistent with Q1 2025 and our expectations. It's coming down versus Q2 2024 as a result of Tractel-related intangible assets now being fully amortized. Finance net is down as well due to the reduced debt and lower interest rates. That's in line with our expectations, which is around SEK 40 million per quarter this year. Taxation rate in the quarter is up versus Q2 2024. That's really a factor of the evolution in the country mix. But at a level of 25.7%, we are close to the average of 25% we foresee. So higher adjusted EBITA, No IAC, lower amortization charge lead to a significantly higher EBIT. It's a 16% growth in the quarter. And combined with the lower finance net despite a slightly higher taxation rate, we grew the net result by 28% in the quarter. Next, please. So I'm now coming to the key EBITA drivers, gross margin and operating expenses. This has been a strong quarter from a gross margin point of view with an improvement in all divisions except Facade Access, where we saw a small degradation. It's interesting to see that we have managed to fully mitigate the adverse foreign exchange rate development and the new U.S. tariff. This has implied adjustments to our supply chain, some customer price increase whenever this was needed. And those -- we believe those swift actions have been enabled by our agile decentralized operating model, which is proving its value in those relatively challenging times. Operating expenses are -- as a percentage of revenue are coming down in the quarter. That's the second driver to the EBITDA growth. And the operating expenses for all divisions, except Industrial, were either flat or down in the quarter despite some cost inflation, such as labor or some voluntary cost increases, as mentioned by Ole, typically product development, digital. And as we have said in the previous quarter, Industrial division has expanded its cost base. That's primarily a factor of growing sales organization, which is being built to support the sales growth. So overall, as a Group, we continue to very actively work on our cost efficiency. We reduce the costs we don't need and we spend wherever we need to fuel our profitable growth strategy. Next, please. So as I said, result for the period was up 28%, SEK 184 million versus SEK 143 million in Q2 2024. Excluding IAC, the net result was the same, SEK 184 million, but versus SEK 154 million in Q2 last year. This is a 19% increase. The EPS was up by the same percentage, 28%, so SEK 1.74 versus SEK 1.35 with the same number of shares. Adjusted for IAC and acquisition-related amortization, EPS was SEK 1.98 in the quarter versus SEK 1.78 last year. This is an 11% increase. So moving to operating cash flows. We continue to focus highly on cash generation, and that allow us to keep rolling 12 months cash flow on a good level, as you can see on the right-hand side graph. We have increased cash flow from our operation in the quarter versus Q2 last year. So it's SEK 182 million versus SEK 164 million. Although we have increased working capital in the quarter due to the effects of contract phasing in Facade Access division primarily. And we believe those effects will be reversed mostly in the second part of this year. So overall, not a bad quarter, although we think we can do better, and we'll continue to drive those improvements in the future. So net debt in the quarter was slightly up SEK 2.6 billion versus SEK 2.4 billion at the end of Q1 2025. The increase is due to the dividend payment around SEK 300 million in the quarter and the revaluation of the euro loan and those negative effects were partially compensated by, of course, the positive operating cash flows. The leverage is 1.74 at the end of the quarter. This is slightly up versus Q1 2025, but still well in line with our financial target of being below 2.5x. And our focus on cash generation will contribute to future deleveraging. Our capital allocation priorities remain unchanged. We will continue to invest in organic growth. I mentioned several examples of expenses related to that. As we have said for some time, we have the financial muscle to make acquisitions. We are very pleased we have signed and soon closed the Century acquisition, and we continue to work actively on future acquisitions. And of course, we are committed to delivering dividends according to the policy, which is 40% to 60% of our net earnings. So of course, it's a Board proposal in the end and AGM decision. And finally, regarding ROCE, we are pleased to see another sequential increase. This is an important metric for us. We are now at 26.8%, excluding goodwill, 11%, including goodwill. That consistent increase over time is driven by the improvement in profitability and of course, the underlying recurring improvement in performance. On that, I'm pleased to pass the baton again to Ole.

Thank you, Sylvain. And yes, we turn page to the summary. So strong quarter, I would say, and a strong start to the year, the first half. We continue to deliver on the New Heights program, which serves us well then, as you have seen, with the 4% order intake growth and 7% revenue growth in constant currencies in the quarter. But also, as I was saying, on a year-to-date basis, we have a 10% order intake growth organic, and we are at 17.7% adjusted EBITA after the first half year. We continue to take actions to improve profitability and take out cost or structure we don't need. So -- and that you also see now in Facade Access, we do something more. And we also do have this solid financial position that we are talking about, so which allowed us to make this nice acquisition, which is then due to close end of the month. So it should be part of the Group from 1st of July -- sorry, from 1st of August. Then this also financial position allow us to continue to drive this. So we are working on our acquisition funnel. And I think we will see a good activity also on this going forward. And we continue to invest in all divisions to drive profitable growth. I think also what's nice to see when you look into the divisional result and as a Group, we do very well. We continue to lift, but you also see that it's potential in all divisions to also absolutely do more. And we are working also, of course, on the future, as I was saying. So on November 25, we are planning to have a Capital Market Day, where we will give more details about that. So with that, I would like to thank you, and we move over to Q&A.

[Operator Instructions] Next question comes from Sofia Sörling from DNB Carnegie Investment Bank.

This is Sofia from DNB Carnegie. Can you hear me?

Yes, Sofia. We hear you well.

Okay. So my first question is related to the Facade Access division. So I noticed this order intake, you mentioned that the infrastructure projects are rolling in. What about the profitability level here in this type of infrastructure projects? Should we expect that these are in line with your EBITA margin target for Alimak Group or should we expect that these orders have quite of a lower margin level? That's my first question.

Yes. I think very clearly, you can expect that they will support -- continue to support our business with -- where we have taken most of this is in North America. now where we also do have a margin on the Facade Access business, as I was saying, which is well above the group average. So absolutely, we expect to have good margins, and we do have good margins on that business.

Okay. And a follow-up question. So in terms of complexity and length of the projects, do it differ significantly or not at all compared to the other orders within Facade Access that could actually -- I mean, make it more difficult to set pricing for these type of orders in your view?

No, I wouldn't say it's not big of a difference, but maybe if anything, it's maybe a little bit shorter in some of them. But typically, I think you would see also 1 to 2 years of time between order and delivery. But it could also be shorter, but not so often, which is when they are much longer. But again, it depends so much what it is. So if anything, I would say slightly shorter than the BMUs.

All right. Okay. And maybe a technical question here, but. Yes. Sorry, did you have something more in the answer?

No, I was just trying to say, which gives us even more control over it, of course, when it's shorter time.

Yes, definitely. Yes and somewhat of a technical question, but this one-off item of SEK 60 million in the second half of 2025, is it expected to be like a split of this cost into Q3 and Q4 or is it rather closer to the latter part of the second half of 2025 or how should we think about this cost?

No, you would see it in both quarters. So we will start to do some of these things now. And as soon as we are back after vacation or it's going. And so -- I can't give you an exact split between the quarters and the months, but it will happen throughout the next 6 months.

Okay. And could you give some more details on what type of capacity costs that you are taking out there?

It's a little bit related to everything. It's a mix of things that we are looking at across Europe, but also, of course, a significant piece in the factory where we also try to take down fixed costs. So it will involve both on structure and also people.

Okay. And yes, let's go to the Wind division. So you mentioned this U.S. tariff that was fully mitigated during the quarter. Do you believe it will be possible to mitigate this ahead as well or I mean, what is the investment appetite among your customers here? What do they -- do you think demand will come down now due to this or?

Yes. No, but that was actually the thing, yes, that -- so we believe so. With a Big Beautiful Bill, and that's the policy change that you see. And that's the biggest impact, the way we see it because that will take away the tax incentive for renewable energy in the coming years. But it has a lag. So it's not coming into effect until the end of this year, which means that all projects that have started by the end or during 2025 will still get the tax grant. And when we talk to our customers, they plan to start more than enough projects this year so that we don't foresee any drop in volumes, rather maybe the contrary for us in the next couple of years in North America. And then when it comes to tariff situation, it's related to some aluminum and stuff that we need there, but those things we have basically already mitigated. So we don't foresee the tariffs per se to impact our business -- Wind business for now. It's more been this uncertainty of the investment climate, which now seems to be stabilized when the Big Beautiful Bill was sanctioned, even though it's not positive news long term, it's positive news, it seems like almost in the next 2 years. And then you could also believe, which I think most people believe by that time, the Senate will look different and most likely the climate from '28 and forward would also look different again. So not major concern.

I see. And yes, on the HSPS division, you mentioned it's somewhat of a softer demand here. Could you say anything about the specific order trend during the quarter? Has it been different compared to Q2 last year? Yes.

Yes. We saw a little bit softer market, a little bit across the board in the quarter, but we also know that we have a lot in the pipe. So it's nothing fundamental. And orders are flying in beginning of this quarter. So it's -- we don't have a general major concern about this. It's more a timing again. The market was very volatile and with the geopolitics and everything around us. So everyone is cautious. And these products we mostly sell through distribution, and that has been somewhat slower in the quarter. But we have no major concern about that. And -- but at the same time, we also drive a lot of changes in that business to really fundamentally dig into where we can find good growth and profitable growth going forward. So we are making a lot of changes there to the better. So we see a lot of potential, absolutely.

Okay. And within this division, overall, how do you experience the competitive landscape here at the moment? Any aggressive price pressure, et cetera?

No, I wouldn't say it's that because where we have our products, most of it, we are competitive. We have an edge, we have a position and customers are loyal to because it's related also to health and safety and comfort around good solutions. So that's the problem. It's more the market thing. We are strong in the niches where we operate, but it's also so huge this area. So we are also very, very small in the niches where we operate. So it's a lot of opportunity that we are digging more into.

The next question comes from Andreas Koski from BNP Paribas Exane.

Three questions, please. The first one is on Construction and the order intake, which was relatively weak in this quarter. And I'm sorry if you've already elaborated on this, but I was a bit late on the call. But can you talk a little bit about the underlying demand situation in construction? Is the weakness mainly related to larger project businesses or do you see underlying weakness from, let's say, rental companies or your own rental business or what explains the relatively weak order intake in construction for this quarter? And what do you expect going forward?

Yes. it is some timing effect. This market has been soft, as we all know, for a long, long time. And then the willingness to invest in our machines because most of our machines goes to either rental companies or to construction companies. And of course, they don't invest in this type of new machinery unless they have to, in principle, when the times are difficult. Then they -- rental companies have their yards -- a lot of these machines in their yards. And of course, they don't renew. So maybe they delay renewal programs when it is like it is now. So we are a little bit lagging in that cycle. So when the construction market really starts to come back, then we expect, of course, these things to kick in again, but also with a little bit lag. Then -- we also have our own rental, as you know, and as I also said now that we saw a little bit lower order intake in our own rental in this quarter, but we have had good order intake in Q1 in rental. So that also comes with some swings between months and quarters. So not something that we are fundamentally seeing any trend changes on, not at all. So it's more this thing that the market still continues to be very challenging and the willingness to invest in new machinery when the market is weak, it's not there to that extent. But of course, machines also go to industrial projects, it go to infrastructure projects, and these things are still moving. So there is a baseline thing there, and we are convinced we take market share. We have also won a lot because we installed globally our used concept. So instead of -- in places where it's not possible to sell new, we have been selling a lot of used, which is -- you could say, yes, it doesn't load your factory. No. But it ties these customers to us because they choose our concept, which is something that is a choice they make for a long time. So it's also very good for us to do that. So -- and we know multiple competitors are struggling. They are in bankruptcy and have gone bankrupt. So overall, we still feel that we do a good job. But the market remains very, very challenging, and it's a fight day-by-day for everything we win here.

Yes. And how to think about your backlog in Construction because I remember Q4 '23 and when you had weak orders and then in Q1 '24, your revenue dropped quite significantly in Construction Technique -- or in Construction, sorry, and that impacted your margins quite meaningfully. Should we be worried that something similar could happen this time around?

We feel relatively comfortable going into Q3 that -- because the order intake we have has given us a decent volume in the factory or the factories. So that should be relatively okay. But it's also depending on the mix and so forth in the quarter, but we are not overly concerned and do not believe that we should fall back to the levels that you referred to.

Yes. Yes. And then on Industrial, which continues to be extremely strong. I mean, another quarter with very strong organic order growth. Is this mainly driven by your expansion into new applications, et cetera? And can you see those kind of solid double-digit growth rates continue for several quarters or even several years or how to think about the very strong performance in Industrial?

We plan and we work and we believe that we have seen a lot of growth in this business for a long time. Absolutely. The thing is that we are exposed to some nice segments for the time being also, which is mining and energy and stuff where we see we are also now -- since we drive this dedicated division, which didn't exist really 5 years ago, but really we'll focus on segment-by-segment, we are also -- as soon as there are new things like data centers, they need cooling towers which are 3 floor high and then you need lifts and systems like this. So we are on to also these new things that pop up. And we are -- since we have this segment focus, we are also challenging and helping customers to maybe choose these systems instead of ladders, where they typically have had that manual type of thing and now have lifts instead. So this is the way we proactively work, and we take market share and gain position. And so we feel very positive about the market. We said also now governmental things, the investments into the military that has already started to come, we also see that because that means sites or structures at multiple floors where they need our means. So there is a lot of opportunity.

Yes. And the aftermarket business.

Maybe also one more thing is that these platforms that we're having, which is especially the mast climbing work platforms, it's a technology which will also allow because it's centimeter-by-centimeter moving up or down and they are wide. So these machines will allow robots or automation to actually be used at places where you don't have -- where you never have thought about that today. So that's also structures and ways we are working on. So we see a lot of potential also in that respect going forward.

Yes. And the aftermarket business is an important part of the Industrial divisional business area. Do you see the same kind of growth rate on the aftermarket side or is there a risk that equipment is growing much faster now and that is a lower margin business and over time, this will lead to a negative mix effect or how do you think on the margins, I mean, how to think about that?

The margin side, I would say you shouldn't be overly concerned about. We also secure that we have good margins on the new sales. So we are getting out, I would say, good margins in both ends. But also at the same time, when you look at service, I think this is also the strength of actually what we have done, the change we did back in 2020. Then at that stage, Service division was a separate type of animal supporting all divisions. Now this sits in every division. Each division have their own service setup. And this means that, for example, in Industrial, we are close to the customers because segment-by-segment, this also varies. Maybe in one segment, you sell the new machinery to one type of -- maybe an EPC or a developer, while the service contract goes to the direct end user itself, which is 2 different parties, but you are aware of it, so you can go after it. In other cases, it might still be the same sell. So you sell both the machine and the service contract as one go. So -- and this structure that we're having now, that allows us to really strongly focus. And of course, wherever we sell a new machine, we are also doing whatever we can to make sure we get the service contract.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Yes. Thank you. When I look at the screen here, we do not have any written questions. So unless they pop up very quickly, I think we or at the end?

The next question comes from Jenna Xu from Berenberg.

I just had a follow-up on what was asked about the Wind division earlier. You mentioned that because of the uncertainty that we're seeing surrounding -- in the tariff situation, it had an impact on the order intake this quarter. But given that the Big Beautiful Bill is slated to come into effect, I was wondering if this means that we might see the possibility that projects that were planned for '26, possibly even '27 will be pushed forward into '25, and we would see like a very good second half of the year for the Wind division. Just curious on your thoughts on this.

Yes. But I think you're absolutely right, but it will not affect us in the same manner. But projects will be because that is what this Big Beautiful Bill is saying, that if projects start in 2025, they will get the tax credit or the tax benefit. So that means that from what we understand from our customers that they will try to start all everything -- that will secure our volumes for '26 and '27 because it doesn't mean that they will all be installed and delivered in '25. So it's just that projects are getting kicked off. But we will have -- so what it means for us, the way we see it is that we will have a good '25. We will have a good '26, and we will have a good '27 order intake-wise and revenue-wise in U.S. for Wind. No real change, but maybe slightly better than what we foresaw actually half a year or a year back because they are pushing some things forward, yes.

Yes. Could you just remind us quickly like what are the lead times like for the Wind division?

The lead times, but that varies a lot. Sometimes we get the orders early, but it more has been 6 to 12 months, but could also be shorter. So it varies, but on average, plus/minus 6 months.

Okay, great. And last question on the margins. We've had another stellar record quarter for the Wind division margin. And I know you said previously like it would be very good if the Wind division could have margins of 15% and up, but we're at more than 21% now. So where do you see this going forward, particularly since there's also a huge focus right now on driving that aftermarket and that training and service opportunity?

Yes. I haven't changed my view heavily. First of all, I'm very pleased, of course, with the margin that we are seeing and the performance that we have in that division, the consistency and the structure, the way of working. So it's remarkable. But at the same time, we shouldn't forget what type of industry they are in and the market how it operates. So that maybe say 15% is very conservative, but that they should have -- be in the vicinity and/or north of the group target, but that we should start to expect a lot over 20%, I doubt over time because of these market dynamics. But that said also, it's not that we put limits to this. We just try to do as good as we can every day. And that's what we see this team is doing. And that's why it's also constantly developing. So -- but pragmatically and realistically, considering the business environment that, that business operates in, I don't think it's likely that you will see something fundamentally different to where we have seen over the last year or so.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Yes. I see now that there still is no more written questions here. So unless it's something popping up. No. So I think with that, I would like to thank everyone listening in and also for the questions received. I would like to thank our dear employees driving the Group forward to new heights every day, customers, partners being close to us and loyal. So thank you all. I wish you all a great summer until next time. Thank you.