Koenig & Bauer AG (SKB) Earnings Call Transcript & Summary

So good afternoon, and welcome today's call. Thank you for joining and taking the time on a busy Capital Markets Day, where many are publishing the figures to listen in and get an update on where Koenig & Bauer is after the first 6 months of our financial year. To put it bluntly, we're quite satisfied with Q2. It was a great recovery after a weak start in Q1 on the sales and profitability side, where we were slightly behind prior year. Thanks to a very strong Q2, we were able to fully recover and on nearly all KPIs you can look at throughout the day and throughout the report, we're now better off than where we were 12 months ago. But starting at the beginning at the top line, I think the greatest news and the most important thing for the German machinery equipment makers is that we have a fantastic order intake and a record order backlog despite all of the continued and ongoing issues throughout the world and an overall generally weak global economy, the continued burden of the U.S. tariffs and disruptions due to wars and supply chains and energy costs, our order intake in the first half of this year was the highest we've seen now in 8 years at EUR 709 million, leading to a record order backlog as of June 30 of over EUR 1.1 billion. So it's a tremendous effort from our sales teams, from our sales and service units throughout the world, a vote of confidence from our customers and despite the headwind we see throughout the world still ongoing, a fantastic result. And this is the most important thing and gives us very, very good vision or insight into how the rest of the year will go and gives a lot of confidence when I get to our guidance that we're going to be able to confirm everything that we have committed to you in the past months. I mentioned as well, it's not just about order intake and record order backlog. It's also that our earnings had a very strong turnaround in Q2. My CFO colleague, Alex Blum, will, of course, go into it in more detail. But we had significant Q2 earnings with an operating EBITDA of nearly -- or more than nearly EUR 20 million higher than prior year, higher than -- prior quarter, sorry, and are now after 6 months ahead of where we were this time last year. And that's, of course, important. In addition, it wasn't just about earnings and not just about profitability and EBITDA. It's also about cash flow. We had very strong performance in both working capital management as well as our general cash flow management so that -- contrary to prior year, we now showed a very strong positive cash flow in the quarter and a significant increase both quarter-on-quarter and year-on-year. But as mentioned, my colleague will go into this in more detail. So order intake, order backlog, earnings, cash flow, no matter where you look, it was a strong Q2 and helped us to close out a strong H1 compared to prior year. We're also working hard on strategic initiatives going forward, how can we get Koenig & Bauer more fit for the future. Our impact initiatives, which we have announced earlier this year are really gaining momentum. A lot of it is about competitiveness. It's also about competitiveness in our biggest segment, the Paper and Packaging segment. We're working on a lot of cost-down measures, manufacturing cost reductions, structural cost reductions, but we also announced a price increase as of July 1, 2026. of around 3% throughout the portfolio in that segment for most of the portfolio, which is going to help us as we push this through into the market and into our awards going forward to help compensate some of these price pressures or cost pressures and improve profitability in the segment going forward. That all leads to -- if you add all these things up, again, order intake, earnings, cash flow and also our hard work on structural costs and pricing efficiency and pricing discipline. This all gives us confidence that throughout the rest of 2026, we're going to achieve our full year targets. Despite this weak start of the year, our full year target remains intact after this strong quarter. And our focus in the next half of the year is going to be on executing and preparing ourselves for 2027 and the years coming. So that's the introduction. That's the high-level picture. I think it's -- no matter where you look, you're finding a positive trend and good news. If we go into more detail, particularly on the order intake and the revenue side, again, a very strong recovery and a very strong performance in both segments. Paper and Packaging, we see, of course, the market consolidation with the insolvency of one of the 4 big players in our offset market. that helps our market dynamics as one of our competitors has ceased production of new machines. This, of course, gives us some tailwind in this market. We're seeing sustained high demand in a lot of our key markets despite all of the challenges, a lot of the key accounts continuing to remain a little bit hesitant to place large orders, but we are seeing strong and robust order intake. The VDMA average at plus 14%. We were able to beat by nearly 3 percentage points, which is great news also on the sales side, 1.4% higher sales after the first half of the year compared to an overall German machine equipment making trend of minus 14%. So if you think back 12 months ago, 18 months ago, we've been talking about strong order intake and strong order backlog for quite a while. So now we're seeing that other companies are also seeing some increases, but we're actually profiting from our strong order intake last year to show a slight increase in sales, which is very much against the trend we're seeing in the overall market. Special & New Technologies, we see a countercyclical resilience. So I'll talk more about this in the next slide, but not only driven by banknote business awards, we're seeing year-on-year pickup in Digital & Web, in MetalPrint and in particularly in Banknote Solutions. So overall, the market dynamics, Koenig & Bauer is outperforming the industry trend, and there is some good tailwind for us going forward. If we go into that a little bit more in detail on the next page. Banknote I think one of the quotes in our press release is that the death of banknotes has been greatly exaggerated. It's been anticipated by people that aren't within the industry that banknotes will continue to decline as digital payments become more popular, and that simply is not the reality. We see that global uncertainties that regulatory measures are strengthening across the globe, the relevance of cash. We have a very strong order backlog in our important Banknote Solutions business unit in Africa, in Latin America, strong order intake again in Q2, and that helps us in the segment. But I repeat, the S&T order backlog is not just driven by banknote solutions, but banknote is the strongest contributor year-on-year by far. And despite this strong order backlog, we also continue to see a strong, robust pipeline of future products going forward. And this is driven by a lot of different things. There's cash and the value of euros in circulation has actually risen the last 6 years by over EUR 1.5 trillion, up 28%. So cash continues to be a major method for storing value for stockpiling despite all of our digital payment methods. We see a massive need for safety net and resilience, whether it's blackouts in Spain or wars or other issues that a lot of countries are recognizing the need for sustainable cash management, sustainable cash availability at all times. And not just that, it's also about data protection and privacy. There is no data tracing with cash transactions. 60% of consumers just in the Euro area have privacy concerns about digital payments. And we see this in our order backlog. We see it in our order pipeline, but we also see it in facts on the ground. Two examples at the bottom of the slide. It's not just about new countries in Africa and Latin America that are investing in their own cash production facilities. It's also about first world European countries issuing the next series of euro banknotes. Despite 20 years ago, the Central Bank in Europe announcing that they didn't expect to ever do another series. Since then, they've done 3, and now there's a decision to launch another series of redesigned euro banknotes. Sweden, which was long famous for announcing their target for the end of cash and a full digital society in 2026, just recently passed a law, complete U-turn on their policy, mandating cash acceptance throughout the country in B2C transactions. So massive trends and it's very important business for us. And I think the message is this is not a short-term one-off 1 or 2 projects. we see a real renaissance in the future of banknotes going forward despite anything anybody on this call may think from their daily lives about the reduction of cash in the world. It's important as this is obviously one of our largest business units, I think it's important for the capital market and for our investors to understand that this business is very healthy and healthy going forward. We've also talked in the past about spin-offs from our banknote business where the reputation as being a trusted provider, a trusted supplier for security features, for security applications has allowed us to spin off one of our digital business units, Vision Protection with our product protected at print, so how to apply security features to things like packaging, whether it's pharmaceutical or luxury goods or other products. And we announced this around a year ago, and this slide is serving to just keep you reminded that it is an important initiative of ours, and it is moving forward. Our certified protection of print providers is growing month by month. We have at the bottom, you see very strong companies, whether it's in India or in Asia that have now partnered with us for certifying themselves for producing protective packaging in their facilities, including also a large company in Europe that is double certified for the pharmaceutical sector, again, how to add more protection to packaging, particularly in pharmaceutical industries to protect from false and fake and counterfeit medicines that is a major issue in this industry. So a lot going on, on the banknote and the spin-off world. And that's, of course, not all. We're also pushing forward in our impact initiatives. We've picked out just 6 or 7 examples of initiatives we're working on. This is something we're living really every day, week by week in our management meetings in how we structure our priorities, our investments, our initiatives, our focus along these 6 pillars of our strategy, whether it's intelligence or go-to-market or people or resilience issues, competitiveness or investments in new technology. This is going to continue to follow us in the coming years. And it's not just a slogan, it's really things we're working on. Six examples on the next 2 pages. On the intelligence side, we announced again our continued partnership with Siemens for our machine electronics and our machine PCBs and dryers for creating a new product-oriented IT infrastructure in our -- linked to our mechanical engineering. This was strengthened again in the summer with an announcement. And with Siemens, we have one of -- we are one of only a very, very small handful of industrial companies strategically partnered with Siemens for getting their latest IT and electronic hardware and software into our machines, plan to launch -- target to launch in drupa 2028. On top of that, we talked already at the general assembly, our partnership with RobCco, a German-based, Munich-based scale-up robotic company that is very innovative in the use of no-code robotics, but also modular and efficient robotics with zero barrier automation. Also here, a strong example of our intelligence pillar for our strategy. Also here, speed, rolling out our first customer installation in Q1 2027. It's also about go-to-market. We mentioned Digital 1.0, so our existing digital printing portfolio, where we are the pioneers in industrial digital printing. One of our big initiatives, VariJET 106, so the Sheetfed digital printer that we partner with [indiscernible] Dorstan. We have now the second serial installation at a company in Poland that ran great. I was at the customer just a couple of months ago, an efficient fast installation with a ramp-up and operational start. This product is ready for ramping up in the months and quarters in years to come, and that's part of our go-to-market strategy. Three or more examples on the following page. On the resilience side or adaptability side, we announced earlier this year in January that we intended to close our Frankenthal facility by the end of May, and we closed the facility at the end of May. We didn't just announce it. We executed. We closed the doors on May 31. That led, of course, to a nonoperating extraordinary effect of around EUR 6.7 million, but very necessary for us and I think for many companies like us in Germany to reduce our structural costs, become more efficient in our footprint. And in our overall structures within Germany and within Europe. And if we decide to do something like close the plant, this is how to do it efficient and executing on time. On the people front, we announced that we invested in a U.S. customer training center. One of the big major issues in the United States and across many countries throughout the world is the lack of skilled workers capable of running, operating, repairing our machines. We invested in a U.S. customer trainer where we will be selling training services to our customers where they can send their employees to our facility for week-long, month-long training sessions for skilling up the labor force specifically for our customers, a dedicated training press at this customer training center as an answer for our customers to help them moving forward. And also in people, it's about management changes. We announced earlier this year that we have decided not to divest our Koenig & Bauer coating subsidiary that was under strategic review, whether it made sense to divest or partner or to continue operating under our ownership. We decided at the end of that process to keep Koenig & Bauer Coating within the Koenig & Bauer Group as sole shareholder, but we also recognize we need to revamp and attack this market in new ways and with a new focus, and we promoted internally a new CEO for this division, Benjamin Zierold, who formally and has been with the company for over 20 years and grew up mostly in the banknote solutions industry with the discipline it comes from that highly profitable segment. So also here an evidence that we're not just talking about impact and talking about initiatives. We're working along these pillars to bring Koenig & Bauer into the next stage. And we'll keep pushing and keeping you updated on what we're working on and why we're working on it. And it's not just me, it's also my colleague, Alex Blum, who will hand over -- I will hand over to and he can talk about a couple of other highlights and then move into the figures. So Alex, the stage is yours.

Thank you very much. Good afternoon, and welcome to the call. It's my pleasure also to present the next highlight. We had the great honor to deliver the first newspaper rotary press to the Augsburger Allgemeine, a pretty well-known newspaper in Germany. And it is for 2 reasons, a very important event for Koenig & Bauer. First of all, as you know, newspaper rotary presses are the basis, the foundation of Koenig & Bauer. That is clearly a tradition even though they do not play a role in our current business. It is always nice to see that sometimes one or the other presses of such a caliber are ordered by customers, and we are able to install them. And the second reason is one of our major competitors with regard to newspaper rotary presses is directly located in Augsburg. That's why it was a special honor for us that the traditional newspaper, Augsburger Allgemeine was choosing Koenig & Bauer for the first time for an installation of rotary press in their home city, Augsburg. With regard to order intake, as my colleague, Stephen already has mentioned, it was a fantastic first half of first half year 2026 for Koenig & Bauer. We've been able to increase our order intake by nearly 17%, up to EUR 709 million. And that is a fantastic success in these -- in today's times, which, of course, are still critical with regards to all the global crisis. So we have not only that we can keep our intake stable, we are able to grow our order intake. And that is one of the most important foundation and basis of the business and our company. Also with regards to the 2 segments, Paper and Packaging and Special New Technologies, both segments have been able to grow their order intake compared to the first half of the year 2025. That leads us to the historic high order backlog. And you probably remember a backlog above EUR 1 billion is not the natural state for Koenig & Bauer. This is still -- it's always a very good backlog, even though we saw in the recent past, a lot of quarters where we have been able to achieve a backlog of above EUR 1 billion. Now with -- after the second quarter, we've been able to increase our order backlog to EUR 1.1 billion, and that is a historic high for Koenig & Bauer and once again, one of the key anchors in volatile markets. Revenues still are fairly flat, only a small increase by 1.4%, but also with regard to the nature of our business, there is a lot of seasonality. And during the year, the revenues are always lower than they are in the second half of the year. So this is in line with our expectation. Very good for us. We have a strong book-to-bill ratio of nearly 1.3, and this is demonstrating clearly that we are able to grow also operationally our business. Having a look at the revenue split by region, and there are 3 interesting statements. First of all, let us start with the negative one. If you look at the bottom line of the revenue split, if you look to Germany and rest of Europe, you clearly see that there is a decline in revenues that we've been able to generate compared to last year. And I think, unfortunately, this is not a surprise if we take into consideration the overall situation, economic situation of Europe and our home markets in Germany. Above that, the red column it's a very positive news because this is reflecting North America. And last year, in 2025, revenues have been decreasing in North America due to all the and custom policy discussions that we have and the high amount of uncertainty after the new President has published its tariff and trade policy. But the very good news is that in 2026, America came back, and we've been able to increase our revenues again in this year. And another very positive news for Koenig & Bauer is that in Africa, Latin America, in this region, we've been able to grow our revenues by around 40% as well. It is still a fairly small region for Koenig & Bauer, but it is definitely a promising region with regards to future growth perspective. And that's why we are very, very satisfied and proud that we've been able to step in this region more successfully and that we are able to grow our revenues within Africa and Latin America, a new important growth market also for Koenig & Bauer. Earnings. Our earnings with regard to operating EBITDA grew by over 20% compared to last year. We achieved EUR 14.1 million operating EBITDA, and that is a very good result as it shows even in difficult times that we are able to walk our talk and strive to be always a little bit better than in the past, even though there is no tailwind from markets or global economy, we are able to do our homework internally as Koenig & Bauer and increase profitability slowly but surely. On the right-hand side, you find the split of our operating EBITDA to our 2 segments. And the very positive news is that the S&T segment had a very strong result in the first half year of 2026 with EUR 11.8 million. Unfortunately, Paper Packaging is negative and is under pressure. We have already described this phenomenon in the past. Unfortunately, the overall offset market, there is high pressure with regard to margins, and this is affecting our profitability. If we look at our main competitors, this is not a development and phenomenon, which is only true for Koenig & Bauer. It's unfortunately a global development, which is true for all of our competitors with regards to sheetfed offset printing market. This is the key focus of our further management attention. We need to turn around also the profitability in the Paper Packaging segment as we have done it successfully in the past with the S&T segment. Let us have a special look at the stand-alone second quarter 2026. And there, you see a strong increase in profitability by over 38%, up to EUR 17 million in quarter 2 alone. And that was really a very strong and successful quarter even after the first quarter, which was lower than last year. It was important for us to turn around the story and to show that after the first 6 months of the year, we achieved a better profitability than in the last year. Also with regards to the 2 segments, positive message with regard to Paper Packaging is that the second quarter for Paper Packaging was again positive with EUR 6.8 million. But nevertheless, it will be the key -- one of our key focus areas for us as management for future. Cash flow, another very positive development. We achieved a positive cash flow in second quarter of EUR 17.8 million. Compared to the second quarter 2025 with minus EUR 55.3 million, this is a huge increase. And it is also something which is due to the seasonality of our business, not always the normal case. You know that the last quarter is by far the strongest one. And you also see this if you have a look at this table for the quarters of 2025. The last quarter is the one where Koenig & Bauer is generating its cash and it's generating its main profits. This is this is definitely -- this kind of seasonality is the nature of our business. However, it is positive to see that we've been able to manage a very good cash situation even though in the first half of the year 2026. And how this was done, you can find on the next page in the middle, we've been able to decrease our net working capital by EUR 70 million -- by EUR 60 million. And we achieved a net working capital ratio of 21.4%, which is a very good KPI for the machinery business. And -- this is the main reason why we've been able to create such a strong cash position or such a strong free cash flow also compared to the last year. And the reason for the strong net working capital is, first of all, the classical working capital with special regards to inventories, but also with regards to prepayments from our customers that we've been able to receive. Both have been influenced very positively in the first half of 2026. And therefore, our net financial position decreased also from minus EUR 210 million last year to minus EUR 149 million this year. Let us have a special look at the segments and a little deeper look at the segments. First of all, positive news with Paper Packaging is a growth of order intake in Q2 by 15% compared to the quarter -- the year-on-year quarter comparison. And also if you have a look at Q1 in 2026 for Paper Packaging, it was stronger than the Q1 2025. So with regard to order entry, Paper Packaging is doing a very good job. With regard to profitability, and this is the bottom line, you see the pressure. And even though the second quarter have been quite successful, if you combine first quarter and second quarter, you see that we are below the profitability of last year. And as said before, this is a special focus of us to bring back more and stronger profitability also to the Paper Packaging segment. Fortunately, we are in a good position as the order intake is pretty stable. So we have a very good backlog, and we have a very good basis for our homework that we need to achieve. Special & New Technology also has a very successful order intake, especially strong in Q2 this year with over EUR 200 million. So this is definitely a highlight. And also, as Stephen already has said, of course, one of the main drivers is the banknote business, but it's not the only driver. We also see very good progress within D&W, Digital & Web, and also with metal. So there are other business units also contributing to this positive development of the S&T segment. And also with regards to profitability, you find on the bottom line that each quarter was better than the quarter in the period before. So there we find -- there we see a strong increase in profitability and the strong growth of our operating EBITDA. Pro forma reporting of the Digital & Web, as said before and as promised, we will -- as this was always a very special business units within Koenig & Bauer, we want to keep the transparency. We want to provide the transparency to you how Digital & Web out of the S&T segment is developing. And there, you see that also order intake is growing, not to the extent that we have hoped for, but it is growing. It's definitely heading in the right direction. And with regard to profitability, you see a strong increase compared to the first quarter -- first and second quarter 2025. It is still negative with minus EUR 0.7 million and minus EUR 1.1 million, but it is developing within our plans, within our expectations, and it's clearly heading in the right direction, even though, of course, we are not yet there where we want to be and where we need to be with regard to profitability. But positive tendency and a positive result after the first half year 2026. That brings me to the outlook for the rest of the year. And we promised the guidance with a stable business performance with group revenues of EUR 1.1 billion and an operating EBITDA of around EUR 80 million, and we clearly can confirm our guidance with the first half results as presented today. One of the basis for this -- for our guidance is our strong operating resilience supported by our high order backlog with over EUR 1.1 billion and with a very positive growing order intake. So let me allow me to summarize the 3 key takeaways from our perspective that are really important. First of all, earnings turnaround and positive free cash flow has been achieved especially in the second quarter. So we also can show that we walk our talk and that despite the crisis that we live in and the uncertainties that we live in that we are able to deliver and increase profitability. Second, we have the historic high order backlog, and that clearly secures our capacity utilization and also is offering us enough time to do our homework to conduct to conduct our strategy, our impact program with the measures defined in order to achieve our strategic goals. And last but not least, we see a good resilience over our segments. If one of the segment isn't performing that strongly, it can be compensated successfully by the other segment. And that's what we clearly see also in these days, and it is offering a great advantage to us as Koenig & Bauer as we are more resilient than maybe other companies that only are bound to 1 or 2 markets. Having said that, I just want to remind you that we will be present at the conference in Frankfurt beginning of September, The Equity Forum, and very happy to see one or the other of you in person. So we will be there and also present Koenig & Bauer and maybe we have the chance to have -- also have a personal chat or discussion, which I would -- I'm looking very much forward to it. That's from my side. Thank you very much, and I'm handing back to Stephen.

Thanks, Alex. And I think you summarized everything already. So I'll just leave it at this last slide, just reminding you about our impact framework and the fact that this is the way we want to talk about our business and all of the many, many different initiatives we have ongoing to improve profitability across the very broad business and the broad portfolio that we have. We are leaving no stone unturned to use an old analogy. And I think you see it in our performance. It's a process. It's not one big shot that's going to fix everything, but it's a steady pushing on all of our buttons that we can push to improve Koenig & Bauer and bring it into the future. We're confident we're on the right track, and we're confident we're going to bring the rest of this year to a good close and look forward to the continued discussion with all of you in the various forms. And I will close out the meeting with that and hand back over to the operator for Q&A. We, of course, have a few minutes left in today's call and are happy to answer any questions you may have. Thank you.

[Operator Instructions] First question comes from Stefan Augustin from Warburg Research.

I would be interested in general, if we look at the different market segments in Print and Packaging, like if we look at the different formats and the regions, what do you see especially right now as the development there? That would be the first question. The second one would be then which product and Digital & Web was actually successful in the second quarter with respect to the order intake you made? And do you have a pipeline of more VariJET 106 to be delivered in 2026? That would be the first part of my question.

Okay. Then maybe I can take those. First starting with the markets. I mean, Koenig & Bauer in a lot of different branches within printing and packaging. If I start -- I don't want to go through all of them, but the broad trend is there's no clear country or region or part of the world that's doing better or than others where we say that's the motor and that's really stable and back on track. We had -- if you take the example of maybe Italy last year, where Italy had a strong performance because of subsidies, those kind of singular countries that are just outperforming the rest. That's not the case. It's really a mixed picture across the globe. As Alex Blum already presented, Germany and Europe remain the weakest. That's something that shouldn't surprise most of you on the call. We do see some good recoveries in the United States. We have good order intake. We -- but on the same note, we have through these mega mergers at a lot of our large customers. On the other hand, also in these markets, a continued reluctance for major CapEx decisions as the market consolidates within our customers. Middle East was strong, and now it's weak again, but we are placing orders there despite the ongoing conflict between Iran and the United States. Middle East, we're getting orders, but not as many as we would hope. So it's a very mixed picture. I would say that of all of our businesses, it's still true that Kammann or glass printing and plastic hollow container printing, it remains the weakest. They're still profitable. They're still getting some orders, but the glass industry and the plastic container industry is really under pressure because of the high energy costs for glass production as well as petrochemicals for plastic container production. So that remains our weakest segment. But again, across the board, we're really happy with the development in these difficult times. There's almost no business unit where we really see a downward spiral. There is no where we see downward spiral. Most of them with the exception of this common glass printing are showing year-on-year progress. And Kammann, to remind you, is only about 4% of Koenig & Bauer, so it's not that significant for the group. We're able to make progress in nearly all our businesses despite the crazy times we're still living in, and that's what makes us confident that we're doing something right. And eventually, maybe we'll get lucky with some tailwinds in some of our markets, but we're not relying on it. We're really just cutting costs and focusing on doing what we can do. Digital & web, it's a mixture in the first half of the year between our CI Flexo business, our RotaJET business, the HP business. And of course, our newspaper service business is still strong. It's not one thing, but we are seeing progress in the CI Flexo world, where we, after transferring from Italy to Würzburg. Have really stabilized the business, stabilize the products and not only stabilizing our manufacturing costs, but also the pipeline itself looks quite good for helping us to build the factory in Würzburg. It's not full yet, but we think we're on a good path. And your last question regarding the VariJETs, there's no installation scheduled for 2026, but there's a pipeline in various stages that we hope is going to give us a lot of tailwind into 2027. And I don't want to make putting numbers on it, but there's a strong interest in the VariJET. It's typical for our industry for customers to wait and see. They want to see successful installations. Tamir for me was the really first serial installation for our standard VariJET machine. We had 3 machines before that, but the beta -- 2 of them were our beta machines and one of them was a highly customized customer-specific VariJET for a specific application. The Tamir Tir was really the first standard application of our VariJET technology at a customer. And again, the installation went great. The customer was greening year-to-year when I visited and happy with the performance, and we're ready to scale. So we'll let you know when the pipeline fills, but we're really now -- even if we announced as a true of 2024, I would say the go-to-market for the VariJET is really just now starting where the customers can really see now the standard installations. Our demo machine in Radebeul is up and running, and I'm confident for 2027.

Good to hear. A follow-up maybe if I can, with respect to the price increase you -- that will be mainly effective likely in 2027, given your normal backlog pass-through. It's not long ago that you announced it. How do you -- can you elaborate a little bit on the acceptance by the customers on that announcement?

It's too early to tell, but I think it's something that they understand. I mean the inflationary pressures on our business are there. The margins in our industry are low. And I think it's something the customers, if we explain it correctly, understand and it shouldn't affect our order intake. We hope, of course, that our competitors will have the same necessity as what we see on the market. That's something that's still to be seen. We announced the price increase effective July 1. So it's only about 5 weeks old. And you're right, it's affecting orders that will be -- or offers that we will submit after July 1. So it will affect order intake starting in Q2, Q3, Q4 this year and revenue certainly not in this year, more in 2027. But customers don't like price increases, of course. But we've gotten used to it in the last 5 years post-COVID with the high inflationary pressures we had, due to energy costs, due to inflation in general. And we're confident that the market can absorb it, and we see it as an absolute necessity to relieve the pressure on our offset, particularly on offset businesses and allow us to earn money and hopefully also be able to continue to invest in innovation in these sectors. And we're confident in the future of offset, but we need these few percentage points to help relieve the pressure on the business.

And the next question comes from Patrick Speck from Montega AG.

Congrats, first of all, on a very strong performance in Q2. My first question is more and more industrial companies are reporting supply chain issues recently. How significant do you see this risk for Koenig & Bauer, especially in the second half of the year?

We have no major concerns at the moment. Alex, do you want to comment on that, but I...

I can just confirm it. We don't see any supply chain issues until now. And honestly, we don't expect any also in the further course of the year. So this is pretty stable. Of course, we have close interactions with our suppliers to be ahead of potential developments. And -- but thank God, no bad issues have been seen so far.