Hiab Corporation Balances Headwinds With Margin Upgrade

Hiab Corporation ((FI:HIAB)) has held its Q1 earnings call. Read on for the main highlights of the call.

Hiab Corporation’s latest earnings call painted a cautiously upbeat picture, as solid order intake, strong cash generation and a robust balance sheet helped offset weaker revenues and compressed margins. Management acknowledged cyclical pressure in the U.S. and FX headwinds but stressed that cost actions and strategic initiatives are already improving profitability, supporting an upgraded margin outlook for the year.

Order Intake Growth and Regional Book-to-Bill

Hiab reported organic order intake growth of 7% in constant currencies, with total orders reaching EUR 402 million, or EUR 419 million on a constant currency basis. All regions delivered a positive book-to-bill ratio, led by the Americas where orders rose 15% to EUR 166 million, while EMEA edged up 2% and APAC remained broadly flat, supported by a EUR 15 million contribution from ING.

Sequential Margin Improvement and Upgraded Outlook

Comparable operating margin improved sequentially to 13.5%, even though it remained below the 16% achieved a year earlier due to softer volumes. Encouraged by the early impact of efficiency measures, management tightened full-year guidance and now targets a comparable operating margin above 13.5%, signalling confidence that profitability will continue to recover through 2026.

Strong Cash Generation and Balance Sheet Strength

Operating cash flow in the first quarter reached EUR 75 million, translating into an impressive cash conversion of 186% despite lower revenues. Net cash stood at EUR 219 million and gearing at -23%, giving the company ample flexibility and theoretical capacity to raise more than EUR 700 million in debt should attractive opportunities or needs arise.

Services Growth and High Profitability

Service revenues came in at EUR 117 million, or about EUR 123 million in constant currencies, marking roughly 5% growth once FX is stripped out. Services remained a profit engine with comparable operating profit of EUR 28 million and a margin of 23.6%, underpinned by a high share of recurring revenue estimated at around three quarters of total service sales.

Equipment Orders Strength (Ex-FX)

Equipment orders climbed to EUR 284 million, up 10% year on year in reported terms and about 14% in constant currencies, confirming healthy underlying demand. Lifting equipment orders advanced across all major geographies, positioning Hiab for future revenue recovery once current order book dynamics and market timing effects abate.

ECO Portfolio Momentum

Sales from Hiab’s ECO portfolio surged 23% to EUR 176 million, representing 46% of total sales and underscoring the company’s push toward lower-emission solutions. This mix shift not only supports long-term sustainability ambitions but also strengthens the competitive positioning with customers increasingly seeking greener equipment.

Implementation of New Operating Model & Cost Program

The new operating model announced earlier in the year went live at the start of April, forming the backbone of a EUR 20 million cost-savings program. Management said the plan is progressing as expected, with the bulk of the financial benefits anticipated in the second half of 2026 as organizational changes and production relocations fully flow through.

Strategic Innovation and Partnerships

Hiab highlighted continued progress on its sustainability roadmap, including validation of its science-based targets toward net zero by 2050. On the product side, the company showcased a lightweight DEL lift gate co-developed with partner MYCSA and Spanish customers, demonstrating how collaboration is driving innovation tailored to operational needs.

US Distribution Expansion

Despite the current softness in the U.S. delivery equipment market, Hiab has pressed ahead with expanding its dealer network, activating 16 new distributors over the past two years. The company now has coverage across the 48 contiguous states and is working toward a target of around 20 to 22 distributors to sharpen its go-to-market reach when demand normalizes.

Inventory and Working Capital Improvement

Inventory levels declined slightly in the quarter, but the main cash flow gains stemmed from reductions in net working capital, particularly lower accounts receivable. Additional support came from the collection of VAT receivables, helping to translate earnings into cash and reinforcing the already strong balance sheet.

Revenue Decline

Group revenues fell 7% year on year to EUR 383 million, largely reflecting a EUR 114 million lower opening order book and weaker equipment sales in the U.S. Rolling 12-month revenues now stand at EUR 1.528 billion, converging toward order intake and highlighting a more normalised backlog after the post-pandemic boom.

Profitability Pressures Year-over-Year

Comparable operating profit dropped about 22% to EUR 52 million, pulling the group margin down to 13.5% from 16% a year earlier as lower volumes reduced fixed cost absorption. Management pointed in particular to softer U.S. sales as the main drag on profitability, although sequential improvement suggests the worst margin pressure may already be behind them.

US Delivery Equipment Weakness and Market Uncertainty

Demand for delivery equipment in the U.S. remained subdued, with sales down sharply amid what management described as a cyclical trough. Customers are delaying investment decisions in the face of tariff volatility and geopolitical uncertainty, creating a sluggish order environment even as Hiab continues to build its distribution footprint.

Foreign Exchange Headwinds

Currency movements, and especially a weaker U.S. dollar, weighed noticeably on reported performance, shaving around 4% from group results compared to constant currency figures. The FX drag reduced both sales and profits, masking some of the underlying operational strength evident in order growth and margin trends.

One-off Restructuring Costs

Items affecting comparability included EUR 11 million of restructuring charges tied to the ongoing cost-savings program, including headcount reductions and production relocations. One notable move involves shifting ZEPRO production from Sweden to Poland, an example of how the company is reconfiguring its footprint to improve efficiency over the medium term.

Lower Equipment Sales and Margin Impact

Equipment revenues declined 9% to EUR 266 million, or 6% in constant currencies, reflecting the weaker U.S. market and the smaller starting order book. The equipment segment’s comparable operating margin slipped to 12.1%, as lower volumes hurt gross profitability through poorer fixed cost absorption despite ongoing pricing and efficiency efforts.

Order Book Reduction vs Prior Year

Hiab entered the year with an order book EUR 114 million below the prior-year level, which naturally constrained near-term revenue potential. By March 2026 the order book was still about EUR 40 million lower year on year, suggesting a leaner backlog that is more closely aligned with normalized demand patterns.

Installation Services Decline

Installation services, which are project-based and non-recurring, declined in the quarter and offset some of the growth in recurring services. Management noted that a rebound in equipment sales would be necessary to drive a recovery in this attached installation revenue, given its close linkage to new equipment deliveries.

Guidance and Forward-Looking Outlook

Hiab refined its 2026 guidance and now expects a full-year comparable operating margin above 13.5%, incorporating around EUR 20 million of planned cost savings that should mainly materialize in the second half. The company assumes EMEA will continue to grow and that the U.S. will at least stabilise, while administrative costs stay broadly flat aside from modest investments in processes and systems later in the year.

Hiab’s earnings call underscored a business balancing cyclical headwinds with clear operational progress and financial strength, offering reassurance to investors focused on resilience. While revenue and margin comparisons remain challenging, rising orders, expanding services and a strong ECO portfolio lay the groundwork for profitable growth once U.S. markets recover and the cost program is fully realised.