Aebi Schmidt Group — Q3 2026 Earnings Summary

Financial Performance:

• Net Sales for Q3 2026 reached $493 million, a 4.6% increase year-over-year compared to Q3 2025.
• Gross Margin was 19.2% in Q3 2026, a decrease of 80 basis points from Q3 2025, primarily due to high inflationary pressure and delayed realization of sales price increases.
• Adjusted EBITDA for Q3 2026 was $44.2 million, up 4.9% year-over-year, representing 9.0% of Net Sales, unchanged from the prior year quarter.
• Net Income improved substantially to $10.8 million in Q3 2026, an increase of $9.6 million compared to $1.2 million in Q3 2025.
• Net Debt decreased to $446 million at the end of Q3 2026, a reduction of $22 million (4.8%) from the end of Q3 2025.
• Leverage ratio improved to 2.66x at the end of Q3 2026, down from 3.24x at the end of Q3 2025.
• Net Working Capital stood at $465 million at the end of Q3 2026, an increase of 3.0% ($13 million) versus Q3 2025.

Guidance and Future Outlook:

• Full-year 2026 Net Sales guidance was updated to a range of $1.95 billion to $2.00 billion (previously $1.95 billion to $2.15 billion).
• Full-year 2026 Adjusted EBITDA guidance was updated to a range of $170 million to $180 million (previously $175 million to $195 million).
• Full-year 2026 leverage guidance at year-end is set at less than 2.5x (previously 2.0x or slightly above).
• Management expects leverage to further improve towards year-end driven by usual seasonal strong fourth-quarter cash flow.
• Sales pricing measures are expected to drive margin recovery in 2027.

Business Segments and Product Lines:

• Order Intake in Q3 2026 was $528 million, up 2.0% year-over-year.
• Order Backlog as of September 30, 2026, grew 16.4% to $1.3 billion, extending into 2027, driven by strength in Airport, Municipal, and Walk-In Van solutions.
• North America Net Sales grew 7.9% year-over-year, supported by improvements in Municipal operations and outstanding performance in Walk-In Van operations.
• Europe and Rest of World (RoW) Net Sales decreased 3.6% year-over-year, with weaker RoW demand partially offset by strong core European markets.
• North America Adjusted EBITDA increased 8.4% ($2.9 million) to $37.2 million, supported by synergy realization.
• Europe and RoW Adjusted EBITDA decreased 10.6% ($0.8 million) to $7.0 million, with disciplined cost management mitigating supply chain disruption effects.

Market and Competitive Landscape:

• Order Intake growth was driven by North America despite softness in select end markets.
• Demand from China and the Middle East was weaker due to geopolitical conflicts.
• The company navigated a challenging environment marked by cost inflation, geopolitical uncertainty, and supply chain disruptions.

Risks and Challenges:

• Ongoing high inflationary pressure continues to impact gross margins.
• Geopolitical conflicts are causing weaker demand in specific regions (China, Middle East) and supply chain disruptions.
• Supply chain disruptions have impacted Europe and RoW performance.
• Forward-looking statements are subject to risks including macro-economic and political environment stability, inflation escalation, and supply chain disruptions.

Management Commentary and Tone:

• Chairman and CEO Barend Fruithof described the performance as solid despite a challenging market, noting quick responses via accelerated synergy realization and cost measures.
• CFO Marco Portmann emphasized a focus on increasing profitability, maintaining strict cost discipline, and executing sales pricing measures for future margin recovery.
• Management highlighted the transformation of the combined organization is advancing at a remarkable pace through an expanded leadership structure and optimized operational footprint.

Other Key Points:

• The company announced a planned acquisition of O.J. Watson Company Inc., a municipal and commercial upfitter based in Denver, Colorado, which generated approximately $28 million in Net Sales in its last fiscal year.
• The acquisition will provide Aebi Schmidt with a direct presence in the Rocky Mountains.
• The company employs approximately 6,000 people and operates production facilities and service centers across Europe and North America.
• The company hosts an earnings conference call and webcast for investors and analysts.