Aebi Schmidt Holding AG (AEBI) Earnings

Management highlights

• Core Achievements & Strategic Milestones - Launched a new unified company brand architecture post-merger, completed key facility ramp-ups, and built a record $1.3 billion order backlog to support future revenue conversion - Announced a strategic partnership with Yetimove, a leading autonomous driving solutions provider, to develop autonomous mobility solutions for airport ground operations; North America holds exclusive regional rights to the technology - Secured large, multi-million dollar order wins across both segments, demonstrating strong demand momentum across airport, municipal, and commercial end markets • North America Operational Updates - Integration of the acquired Shift Group commercial truck business is progressing well, with solid order momentum across all sub-segments: airports, chassis, municipal, and a recovering walk-in van market - Spartan RV Chassis received the NUMAS 2025 Supplier of the Year Award for industry-leading quality, innovation, and customer service - European operational experts are supporting long-term ramp-up of the redesigned walk-in van business, with production improvements already delivering month-over-month efficiency gains • Europe and Rest of World Operational Updates - Strong growth driven by new product launches (Clingo Compact Sweepers, Klinko 550 municipal vehicle) and continued market share gains for the LADOC product line, with particularly strong street cleaning demand in Southern Europe - Expanding local product footprint in the APEC region to grow emerging market share, and investing in technician capacity and pricing optimization to sustain after-sales profitability growth - Multiple large tenders for civil and military airport equipment are currently underway or anticipated, positioning the segment for continued order growth • Financial Operational Highlights - Working capital increased a typical seasonal $26 million from end-2025 to $449 million (up $4 million YoY), with inventory investments for expected growth offset by receivables collection efficiency gains - Net debt increased $18 million to $455 million, driven by seasonal working capital needs, while the leverage ratio held stable at 2.88x, on track to hit the 2.0x year-end target - Merger synergies are expected to continue materializing throughout 2026, supporting margin improvement goals

Guidance

• Management reaffirmed its full-year 2026 guidance, with no upward or downward revision from prior targets - Full-year 2026 net sales are projected in the range of $1.95 billion to $2.15 billion - Full-year adjusted EBITDA is projected between $175 million and $195 million - Year-end 2026 net leverage is targeted at or below 2.0x • The company expects 45% of 2026 full-year revenue to be realized in the first half, and 55% in the second half, resulting in a 22% increase in revenue from the first half to the second half, with a sizable step-up in revenue starting in Q2 2026 • The gap between the low and high end of the revenue guidance is primarily driven by uncertainty around the recovery trajectory of the soft commercial segment; the strong backlog in airport, municipal, and now walk-in vans supports visibility for the core of the guidance range • North America is expected to return to significant year-over-year growth starting in Q2 2026, driven by record backlog conversion, new facility ramps, and continued synergy realization

Segment performance

Consolidated Group: Q1 2026 net sales totaled $456 million, a 7% year-over-year (YoY) like-for-like increase. Adjusted EBITDA reached $33.1 million, a 6% YoY increase, with an adjusted EBITDA margin of 7.3% (up 40 basis points YoY). Total order backlog grew 23% YoY to $1.3 billion. North America Segment: Net sales increased 3.6% YoY (after excluding $26 million of 2025 Blue Arc sales), contributing approximately 67% of consolidated Q1 2026 net sales. Adjusted EBITDA margin decreased 40 basis points YoY, pressured by new facility ramp-up costs and walk-in van production conversion preparations. Order entry grew 8% YoY, driving total backlog up 29% YoY. Key order wins included a $50 million three-year truck body contract, $45 million in state DOT awards, and a $30 million U.S. airport contract. Europe and Rest of World (ERW) Segment: Organic net sales grew 16% YoY, contributing approximately 33% of consolidated Q1 2026 net sales. Adjusted EBITDA tripled YoY, delivering a 201% YoY profitability increase, driven by improved pricing, higher new business volumes, and strong after-sales contribution. Key order wins included a landmark 40 million euro Paris Airports contract covering 29 machines and a 20-year service agreement. After-sales was a core profitability driver, supported by elevated post-snowfall demand in Central Europe.

Risks & headwinds

• Geopolitical uncertainties create ongoing market headwinds that could impact demand, particularly in the commercial segment • Soft demand in the commercial business segment creates uncertainty around full-year revenue realization, which is the primary driver of the range in the full-year revenue guidance • Component, commodity, and freight cost increases could pressure margins, though management notes these risks are already factored into current guidance and mitigated by long-term supplier contracts and prior pricing adjustments • Walk-in van production ramp-up has created near-term profitability pressure in the North America segment, with margin improvements only expected to materialize starting in the second half of 2026

Analyst Q&A

• Q: What is AB Schmidt's role in the Yetimove autonomous airport partnership, and what is the expected near-term EBITDA impact? /

  A: AB Schmidt will fully integrate Yetimove's autonomous technology into its airport ground vehicles, and take full ownership of the complete end system for airport customers, rather than only providing basic upfitting. Financial impact is only expected in the mid to long term, as the product is still in multi-year development; only prototypes are expected to deploy at airports in the short term.

• Q: How is the walk-in van production ramp-up progressing, and can we expect meaningful margin expansion versus prior cycles? /

  A: European experts have been brought over to support long-term ramp-up, and production improvements are already complete, with large efficiency gains expected through Q2 and Q3 2026, supported by strong order entry. Management confirms that after a multi-year depressed market, walk-in van margins will improve meaningfully and recover over coming quarters, as production efficiency improves and market demand strengthens.

• Q: What is the timeline for converting the current strong backlog to revenue across key segments? What drives the range between the low and high end of full-year revenue guidance? /

  A: Municipal backlog conversion is already ramping up at the new Chicago facility, with much higher revenue expected in Q2. Large airport orders will mostly convert to revenue through the end of 2027 and into 2028, while walk-in van orders for 2027 have already been received. The range in guidance is driven by uncertainty around the still-soft commercial segment; stronger-than-expected commercial recovery will push results to the high end of the range, while slower recovery will keep results toward the low end.

• Q: Is the current recovery in walk-in van order demand structural and sustainable, and will EBITDA improve sequentially with revenue growth throughout 2026? /

  A: Walk-in van demand recovery, which started in late 2025, has broadened across the entire customer portfolio, and management now confirms it is a structural, sustainable recovery after a multi-year depressed post-COVID market. Sequential EBITDA improvement will track sequential revenue growth throughout the year, as production ramps and backlog converts. Costs from recent commodity and freight price increases are already factored into guidance and mitigated by long-term supplier contracts, so they will not materially impact full-year EBITDA.