Aebi Schmidt (AEBI) 2026 年第二季法說會：EBITDA 成長 22%，在手訂單接近 13 億美元

重點總覽

• 2026 財年第二季接單金額年增 16% 至 5.16 億美元，在手訂單餘額增長近 20% 至約 13 億美元。
• 淨銷售額有機成長 9.4% 至 4.96 億美元。北美市場成長 11%，歐洲及世界其他地區成長 7%。
• 調整後 EBITDA 成長 22% 至 4,200 萬美元，超越銷售額成長幅度。調整後 EBITDA 利潤率達 8.5%。
• 淨負債為 4.5 億美元，較 3 月減少 500 萬美元。槓桿率降至 2.7 倍，較 2025 年 6 月的水準降低超過 0.5 倍。
• 管理層確認了 2026 財年全年的淨銷售額及調整後 EBITDA 指引，但將年底槓桿率目標從原本的「2 倍或略低」調整為「2 倍或略高」。
• 收購 The Shyft Group 的年化綜效目標上調至 4,000 萬美元以上。管理層預期在 2026 年底前實現 3,700 萬美元，其餘約 500 萬美元將於 2027 年實現。

關鍵財務數據

業務與營運表現

北美市場創造了 11% 的銷售成長以及約 22% 的調整後 EBITDA 成長。箱型卡車 (walk-in van) 在手訂單的轉化為主要銷售動力，同時機場及市政產品的出貨量也有所提升。Royal 創下歷史新高的單季表現，特種車身 (service-body) 的產量較歷史平均水準高出 20% 以上。

公司與美國某戰略客戶簽署了一份為期七年、價值 9,600 萬美元的框架合約。該協議從箱型卡車延伸至廂式貨車 (cargo vans)。管理層澄清，該框架協議在季末並未計入在手訂單；訂單僅會在收到採購單 (PO) 後才計入在手訂單。預計收入認列將於 2027 年開始。

Joliet 改裝中心的市政車輛生產已完成產能提升，交付進度按計劃進行。愛荷華州的營運點已開始進行商業改裝，市政業務預計隨後跟進。管理層表示，目前的營運據點規模總體充足，但仍具備進一步精簡與降低成本的潛力。

歐洲及世界其他地區實現約 20% 的接單成長、7% 的有機銷售成長，以及 25% 的調整後 EBITDA 成長。優異表現得益於南歐與中歐的需求帶動、毛利提升、售後市場業務活絡，以及嚴格的成本管理。

獲得的主要重要合約包含一筆價值 1,100 萬美元的德國高速公路合約，以及成為英國某大型機場集團冬季維護與機場掃雪設備的首選供應商。公司還提到 LADOG 車輛向機場領域的交叉銷售，以及新款 Aebi Terratrac 推出後客戶的反響熱烈。

管理層營運指引

管理層確認了 2026 財年全年的淨銷售額及調整後 EBITDA 指引，不過電話會議中未提供具體的數字區間。該展望假設地緣政治動盪、關稅討論及通膨將持續趨於常態。

2026 財年底的槓桿率目標已從「2 倍或略低」調整為「2 倍或略高」。管理層將此修訂歸因於對安全庫存和更大採購批次的臨時投資，旨在保障供應連續性並緩解原材料成本上漲的影響。這些投資預計將持續到 2027 年初。

近期採行的調漲價格預計主要在 2026 年底和 2027 年初開始提振毛利率，因為龐大的在手訂單延後了價格調整反映在財報營收上的時間。

展望 2030 年，管理層的目標是年銷售額突破 30 億美元，調整後 EBITDA 利潤率達到 13% 以上。公司預期利潤率提升將呈現大致線性的發展，主要受惠於製造據點最佳化、售後市場成長、剩餘的併購綜效、定價策略、產品組合以及營運改善。

管理層表示，在尋求進一步併購 (M&A) 之前，降低負債仍是首要任務。潛在的標的領域包括受冬季影響較小的歐洲業務、商用車整合機會以及美國清掃車資產。

風險與關注事項

• 供應鏈中斷與原材料成本通膨暫時壓低了毛利率，並促使公司增加庫存投資。
• 管理層表示，與伊朗戰爭相關的能源價格上漲影響了部分原材料成本。
• 儘管公司採取「在地化生產與銷售」(local-for-local) 的營運模式，但關稅仍構成間接風險。
• 龐大的在手訂單遞延了產品漲價效益的展現，使短期利潤率面臨投入成本波動的風險。
• 底盤供應對箱型卡車行業至關重要。管理層正面看待福特 (Ford) 底盤生產轉移至 Blue Bird 的計劃，但將持續觀察 2028 年的推出時程以及客戶轉向 FCCC 底盤的情況。

分析師問答集錦

• 9,600 萬美元框架合約：這份為期七年的協議目前未計入在手訂單。預計收入將於 2027 年開始認列，只有在收到採購單時才會記錄為在手訂單。
• 福特與 Blue Bird 底盤過渡：管理層認為該安排有助於穩定底盤供應，並降低與 EPA 27 認證相關的更大幅度斷層風險。公司與 Blue Bird 保持密切聯繫，同時也在觀察客戶向 FCCC 底盤的轉移。
• 綜效發揮時程：管理層預計到 2026 年底將實現 3,700 萬美元的併購綜效。其餘約 500 萬美元預計主要於 2027 年實現，來源為自產 XP Service Body PRO 的生產與交叉銷售收入。
• 邁向 2030 年的利潤率路徑：管理層並不預期會有單一的一次性大幅躍升，而是預計透過多項營運與商業策略，朝向調整後 EBITDA 利潤率 13% 以上目標呈現大致線性的提升。
• 營運資金：營運資金佔銷售額比例改善了 2 個百分點至 23.0%。儘管有臨時的供應鏈投資，管理層仍以在未來兩年到兩年半內達成約 20% 為目標。

完整法說會逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Good day, and thank you for standing by. Welcome to the Aebi Schmidt Group Second Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Simone Grancini, Investor Relations Director. Please go ahead.

Simone Grancini

Thank you, Sharon. Good morning, and welcome to the Aebi Schmidt Second Quarter 2026 Earnings Call.

Joining me on the call today are Barend Fruithof, Chairman and Group CEO, who will provide the highlights of the second quarter and outlook and concluding remarks. Steffen Schewerda, CEO, North America; and Henning Schroeder, CEO of Europe and Rest of World, who will detail the performance in the respective segments; and Marco Portmann, Group CFO, who will provide a financial overview.

Today's comments include forward-looking statements subject to the safe harbor language contained in this morning's press release and in Aebi Schmidt's filings with the SEC. And as a reminder, all 2025 comparative figures referenced in today's material, like all figures prior to the July 1, 2025 acquisition, are presented on a combined basis for Aebi Schmidt and the acquired Shyft Group.

Accordingly, all year-over-year comparisons are based on combined 2025 financial information of both companies rather than stand-alone historical results.

And with that, I hand the call over to Barend.

Barend Fruithof

Good morning, everyone. Our second quarter 2026 results are another substantial step forward with significantly improved profitability.

As shown on Slide 5, order intake increased by 16%, order backlog grew 20% and net sales rose by 9% compared with the second quarter of 2025. Most importantly, we delivered a substantial improvement in profitability. Adjusted EBITDA grew by 22% and net income increased by $18 million year-over-year. In other words, profitability increased over proportionally compared to sales, reflecting production ramp-ups and other operational efficiency, the accelerated realization of acquisition synergies and strict cost control.

On Slide 6, I would like to briefly summarize some of our key achievements. First of all, we have now passed the first anniversary of The Shyft acquisition, and we are very proud of what we have accomplished over those last 12 months. In connection with the anniversary, we released our updated Group Strategy 2030, setting out a clear road map towards our ambition of becoming the global leader in specialty vehicles.

On the top line, we continued to build momentum across all major business lines in the second quarter, including securing important orders. In North America, we secured a landmark $96 million walk-in van frame contract, achieved a record quarter at Royal with our service bodies and continued to benefit from strong momentum in airport and municipal.

In Europe, we secured a major German motorway contract, expanded our cross-selling success with leading airport customers and successfully launched the new Aebi Terratrac in our agricultural business.

Turning to Slide 7. One year after the acquisition of The Shyft Group, I'm very happy with our progress. Comparing the 12 months before and after the acquisition, order intake has increased by 26%, adjusted EBITDA has grown by 22% and our EBITDA margin has improved by approximately 120 basis points. We have successfully integrated our operations, expanded our American footprint, simplified our brand architecture and increased our synergy target to more than $40 million on an annual run rate. At the same time, we continued to invest in innovation to strengthen our competitive position across all business lines. This progress reinforces our confidence in the long-term value creation potential for the combined company.

Slide 8 highlights our continued innovation across the group. We recently introduced multiple new products and technologies including the Cleango 550 compact sweeper, our next-generation Terratrac, expanded electric vehicle offerings and importantly, new airport equipment solutions. At the same time, in partnership with Yeti Move, we continue to develop autonomous airport operation solutions for our customers. Together, these initiatives strengthen our market leadership and support our organic growth.

And now I turn the call over to Steffen.

Steffen Schewerda

Thank you, Barend, and good morning, everyone. We are on Slide 10. North America delivered a strong quarter characterized by 3 elements: the top line execution, backlog conversion and overproportional profitability improvement. In Airport and Chassis, order momentum remained robust. This was supported by major project awards. We also continued the expansion of the AtlasCare service network through our partnership with Love's Travel Stops.

Within Goods Transport, we secured a significant 7-year $96 million frame contract with a strategic U.S. customer. This customer has been a partner for more than 2 decades. For the first time, the agreement includes cargo vans in addition to walk-in vans. We view this expansion as a clear sign of trust and a validation of the broader capabilities of the combined portfolio.

Our commercial business continues to benefit from healthy backlog levels. Royal had a record quarter. Here, service body production increased by more than 20% compared to historical averages.

In municipal, we secured multiple Swenson awards. In addition, we successfully completed the Joliet production ramp-up with customer deliveries progressing as planned. Overall, demand remains healthy, and our execution continues to improve across all major product categories.

Turning to Slide 11. Order intake remained strong, and you can see the backlog increased around 27% year-over-year. Sales increased 11% year-over-year. This was driven primarily by successful walk-in van backlog conversion. In addition, we continued to see strong airport and improved municipal output.

Adjusted EBITDA increased by approximately 22%, substantially outperforming sales growth. This reflects improved operating efficiency, completed ramp-ups and strong contributions from both Airport and also Royal.

Overall, we are pleased with the quarter and remain confident in the growth outlook for North America.

And with that being said, I hand the call over to my colleague, Henning Schroeder. Henning?

Henning Schroeder

Thank you, Steffen, and good morning. Europe and Rest of World delivered another strong quarter, driven by exceptional order intake momentum and continued profitability improvement. Our result reflects the strength of our market position and commercial execution.

In Airport, a major U.K. airport group selected Aebi Schmidt as its preferred supplier for winter maintenance and airfield sweeping equipment. In addition, we successfully cross-sold LADOG vehicles into the airport segment. This underlines the potential to penetrate new customer segments, expand the addressable market and unlock additional growth opportunities.

Within municipal, we secured a significant $11 million German motorway contract, strengthening our position with one of Europe's key clients. At the same time, we continue to benefit from increasing demand for electrified municipal vehicles.

In agriculture, the launch of the new Aebi Terratrac generated strong customer interest and highlighted our continued innovation leadership.

Across the region, we continue to see healthy demand levels and strong customer engagement.

Turning to Slide 14. Order intake increased approximately 20% compared with last year, supported by strong demand across Southern and Central Europe as well as several significant contract wins.

Net sales increased by approximately 7%, reflecting continued operational discipline and strong production performance.

Adjusted EBITDA increased by 25% for the quarter and marked another step forward in our profitability improvement journey. The key drivers remain higher gross margins, strong aftermarket performance and disciplined cost management. I'm proud of the progress our teams continue to deliver.

That concludes my comments, and I'll now turn the call over to Marco.

Marco Portmann

Thank you, Henning, and good morning, everyone. Turning to Slide 16. Order intake increased 16% compared with the second quarter of 2025 and reached $516 million. This performance was supported by growth in both our segments, particularly in Airport and Chassis, municipal and the continued recovery of walk-in vans.

Order backlog increased nearly 20% year-over-year to approximately $1.3 billion and provides good visibility for the remainder of 2026 and beyond.

Moving to Slide 17. Group net sales reached $496 million, representing an impressive organic growth of 9.4% compared with the second quarter of 2025. North America was the main driver with sales up 11% versus last year with walk-in vans as a major driver alongside growth -- strong growth nearly throughout.

Europe and Rest of World delivered a strong 7% organic growth through continued sales execution, further expanding its already strong market share. Overall, the second quarter demonstrates our ability to convert our substantial backlog into profitable revenue growth.

And looking at profitability on Slide 18. Adjusted EBITDA in the second quarter reached $42 million, representing growth of 22% year-over-year. Group adjusted EBITDA margin increased to 8.5%, reflecting an improvement of around 19 basis points.

Now given the ongoing geopolitical uncertainties and continued discussions on trade tariffs, which are triggering supply chain disruptions and material cost inflation, we continue to be very cautious in our spending. This tight cost management allowed us to mitigate temporary pressure on our gross margin and supported our realized adjusted EBITDA in this quarter.

Looking ahead, we also expect our recent sales price increases to improve gross margins, which were executed swiftly but are realized with some delay due to the substantial order backlog we carry.

Looking at our reporting net sales segments, North America benefited from improved operating efficiency, complete ramp-ups and stronger backlog conversion. Europe and Rest of World continued its profitability trajectory on a strategic path to expand realized margins. This demonstrates the earnings potential of our platform as net sales continue to grow.

Finally, having a look at our balance sheet on Slide 19. Net working capital improved year-over-year to $449 million despite continued strong sales growth, reflecting ongoing efficiency improvements and disciplined working capital management.

Net debt stood relatively flat at $450 million at quarter end, down $5 million from March with a leverage of 2.7x, down more than half a turn compared to the end of June 2025.

With our profitability and working capital improvements, we are well on track towards our leverage target of 2x by year-end 2026. However, temporary investments in securing our supply chain and protecting our margins, including avoiding outsized material cost increases will slightly impact us through year-end and into the first quarter 2027. Accordingly, we are slightly updating our leverage target for year-end 2026 from previously 2x or slightly below to 2x or slightly above at year-end '26. These temporary investments allow us to continue to support our strong and profitable growth while retaining our path to deleverage the balance sheet, consistent with our capital allocation strategy.

That concludes my comments, and I hand it back to Barend for the closing remarks.

Barend Fruithof

Thank you, Marco. Turning to Slide 21. We are pleased with our second quarter's performance and the continued progress across all areas of our business. Order momentum remains strong, further supporting an already strong order backlog.

Net sales continued to increase with an impressive organic growth. Adjusted EBITDA is growing significantly faster than revenue, demonstrating the benefits of operational improvements, realized synergies and disciplined execution. Based on this performance, we confirm our full year 2026 guidance for net sales and adjusted EBITDA. We remain confident in our ability to deliver profitable growth while advancing our long-term ambition of becoming a $3 billion revenue company with a mid-teen adjusted EBITDA margin.

At the same time, our working capital management continues to improve, supporting cash flow and deleveraging with more than 0.5 turn reduction in leverage year-over-year. We expect at least another 0.5 turn improvement by the end of 2026. That being said, our guidance assumes that geopolitical turmoil, tariff discussions and inflation continues to normalize.

As Marco mentioned, we faced temporary pressure on our gross margins due to unexpected supply chain challenges and material cost pressure. But with our resilient business model and cautious approach, we are able to compensate for these impacts with strict cost management. Additionally, executed price increases will mostly come through by year-end and early 2027.

Now beyond the second quarter update, let me also take a moment to summarize why we believe Aebi Schmidt is uniquely positioned for long-term value creation as shown on Page 22. Our investment case rests on 4 key pillars: First, we are a global leader in specialty vehicles. We have built long-standing customer relationships across our 2 home markets, supported by a portfolio of leading brands and a continuous focus on strengthening our product offering.

Second, we see a compelling growth opportunity today. We have a backlog of almost $1.3 billion, giving us strong visibility. At the same time, we continue to benefit from exposure to attractive end markets, the expansion of our aftersales business and additional opportunities to grow through M&A.

Third, we have multiple levers to drive profitability. We expect to further optimize our manufacturing footprint and improve operational efficiency across the group. These initiatives support sustainable margin expansion over time.

Finally, we have a resilient business model, our local-for-local operating model, geographically diversified platform and strong balance sheet helps us to navigate challenging market environments. These strengths support our 2030 ambitions to delivering over $3 billion in annual sales through organic growth, a market recovery and disciplined M&A while increasing our adjusted EBITDA margin to above 13% through synergies, pricing and mix and continued operational improvements.

That concludes our presentation. I now turn it over to our operator to open up the line for questions. Operator?

Operator

[Operator Instructions]

And our first question today comes from the line of Michael Shlisky from D.A. Davidson.

分析師問答

Michael Shlisky

The large order that you mentioned in the quarter, did you say it was a 7-year order or $96 million order, maybe that was. Was that all in the backlog as of the end of the quarter? Is that entirely for shipment in 2026? And how common is a $90 million-plus order? Is that something that would happen every quarter? Or is this just a very, very unusual onetime thing?

Marco Portmann

Mike, this is Marco. Just quickly repeating the question. We had a bit of an interruption in the line. So the question is the $96 million frame work order, whether that's on backlog by the end of the quarter, how much of that is realized in '26 and whether it's a normal size order or not, if I got that correctly? Yes, definitely.

Michael Shlisky

Yes.

Steffen Schewerda

Michael, this is Steffen. So this is -- yes, this is a 7-year order, $96 million. We will see the first revenue realization in 2027, okay? What is a little bit unusual is that it is not from the big parcel delivery companies. So we are broadening our portfolio here. So we are basically the segments, we see improved order entry from other segments as well. And on top of that, this is more than just walk-in vans. So there were cargo vans added. So we are broadening the portfolio here when we are offering to the customers.

Barend Fruithof

So Mike, and to add one point here, you asked also if that is booked into our backlog, which is not the case. So we have here a very cautious model. Normally, we don't book any frame contracts in our backlog. We just book it once we have received the PO.

Steffen Schewerda

Thanks, Barend. Yes. It's a general rule in our company.

Michael Shlisky

Got it. That's a very important detail. I really appreciate that. And then maybe my follow-up will also be on the walk-in van chassis area. I'm sure you've heard this, there was an announcement last week with about Ford transitioning a good portion of that -- of their walk-in van chassis business. It will still be a Ford powertrain, but most of the design, sales assembly will be handled by Blue Bird going forward.

Can you maybe share on this call, what are your impressions of that deal? Can you tell me what if anything might change at Aebi Schmidt in respect to how you upfit in the step van market? And from what you've heard about their transition plan throughout 2027 and 2028, do you look to see any temporary disruption on your step van business as they change over?

Barend Fruithof

So first of all, thank you very much for this question. So chassis supply remains a critical topic for our industry and for us, and we see the announced move to the Ford chassis production Blue Bird as positive. It stabilizes chassis supply and removes risk of a bigger supply gap linked to necessary EPA 27 certification.

So we have been in close contact with Blue Bird, and we deepen our relationship, and we see that as a support also going forward. What we have seen so far that some of our clients moved from the Ford chassis to the FCCC chassis. So we have to aggressively watch the situation, how that will develop because they have quite an aggressive plan to launch that new chassis in 2028.

But overall, we see that as a positive development also that we still have then 2 providers in the chassis market. So that is it from our perspective. And as you know, we have quite a good momentum in the walk-in van business. And as I said, we see big movement towards the FCCC chassis.

Operator

Our next question today comes from the line of Ben Sommers from BTIG.

Benjamin Sommers

So I wanted to ask a little bit on the 2030 strategic target that you guys gave. It seems like there's an M&A baked in there. Just curious kind of what you're seeing in that market? And just if you could talk a little bit about what's baked into that assumption.

Barend Fruithof

Okay. So thanks a lot for this question. So first of all, it's clearly our goal to first deleverage the company as we have also outlined in our presentation. And then we see a few areas where we can further grow our company through an M&A.

First of all, in Europe. So there, we are still being a bit winter dependent. So there we see opportunities more as we call it, into the summer business.

Secondly, the commercial business is still very much in transformation and consolidation. There we see some opportunities.

And the third point is we still believe that we should have a similar business model in the U.S. And there, we see some opportunities also in the sweeper area.

Benjamin Sommers

Super helpful. Then just kind of wanted to ask a little bit about production or manufacturing capacity. I know we mentioned the new upfit center in Iowa and with Chicago, that now fully operational, and we've had some strong backlog growth here. So just kind of how do you think about manufacturing capacity moving forward? And is there any specific markets that maybe you're targeting moving forward in North America?

Steffen Schewerda

Ben, this is Steffen. So the Joliet upfit center is operational and did ramp up very successfully. So we are on track with our customer deliveries. The one in Iowa, you were referring to, we started the commercial business, the commercial upfitting there that is operational.

Municipal will follow. So we start to utilize our upfit centers more and more for commercial and municipal on the combined base. Despite the geographical white spots, and we elaborated that in previous calls, we are working on, we are pretty well set with our operational footprint, but I want to say that there might be future and there is future potential for more rationalization and cost reductions when it comes to the footprint. Does that answer your question?

Benjamin Sommers

Yes. Super helpful.

Operator

Your next question today comes from the line of Matt Koranda from ROTH Capital.

Matt Koranda

Maybe just could you first unpack some of the temporary impacts that you're investing in, I guess, in the supply chain that are driving the slight shift in the leverage target at the end of the year?

Marco Portmann

Sure. This is Marco speaking, Matt. Well, look, I mean, we have seen that supply chain has been a bit distorted, not in the sense that you would see, let's say, like with pandemic times where things are not available. So that's not the case. We have seen that there's a high risk. There's alongside the high risk also quite a material cost inflation pressure, which was to some degree also a little bit unexpected, right? So because we talk about previously steel, alu lock-ins, how we have essentially also surcharged in certain areas to cover that.

But there are suppliers of suppliers to now come through with some price increases. And you see that also in the gross margin reflected. And to secure that position there, we have slightly increased our safety stocks. We have some elements where we buy a little bit in bigger batches than we would usually do just to get better discounts and things like that. And so that's a bit of a combination of measures that's just making sure that this pressure is countered and mitigated. And it will however lead to some temporary investments, as mentioned, for the next 3 quarters-ish, so basically until early 2027 is what we can see so far.

And despite progressing very nicely with the working capital efficiency, I mean, I should point out, right, if you look at working capital ratio to net sales, a year ago, we were at 25.0% in that ratio in that perspective. Now we are at 23.0%. So we made 2 full percentage points in progress in just a year. The midterm target, I should add as well, which we have given out in the equity story here is to get to 20-ish percent within another 2, 2.5 years. And so we feel we're well on track to that, but this is a temporary hiccup that we're going to take just to make sure the profitability stays where we need it to be.

Matt Koranda

Okay. Very helpful. And then for my follow-up, just looking at the long-term outlook, and the margin target in 2030, it looks like about 400 basis points of EBITDA margin expansion basically over the next 4 years if we're using the midpoint of your guidance this year. How should we think about the step-up through 2030? Is that a linear sort of step-up in progression that you envision? Or is there something a little bit lumpier that we should be taking into account, maybe synergies realized earlier in the period or anything else that we should be thinking about as we look at the track toward the 2030 margin target?

Marco Portmann

Yes. I mean, very good question. And look, the thing is in single measures, there are partly some step-ups, yes. But overall, because it's such a combination of measure, right? It's the operational footprint, it's the extension of the aftersales market. It is the continuation of the final synergies to come in. And I should add on synergies, as we spoke about also today, we have accelerated that further to some degree, we're now nearly done.

We expect to be at $37 million by year-end 2026 with roughly [ $5 million ] to come still in 2027. And the gist of it all, if you put it all together is that no, there's no big step-up through that next couple of quarters and years because the combination of the measures basically means that it's pretty much linearly going to develop until that 13-plus percent that we are giving as a midterm guidance by 2030.

Operator

Our next question today comes from the line of Dave Storms from Stonegate.

David Joseph Storms

Marco, I wanted to hold on that last synergy comment for a second there. I saw that you did increase that target to over $40 million. Could you maybe just help us understand where that's coming from, what that should look like on the ground and maybe any timing around that increase?

Marco Portmann

Yes, sure. I mean, look, we spoke about it before, right? So the initial target was $25 million to $30 million. We rather quickly were able to increase that in 2025. That was mostly driven from additional OpEx. So we essentially have additional potential identified in the organization, but also just with the base OpEx spending that was executed fairly quickly. Again, that's also part of what helps us now to mitigate a little bit that gross margin pressure we see.

And as just mentioned, right, we now expect to see $37 million realized by year-end. The piece that's still to come, that's now ramping up in the third quarter is the XP Service body PRO. That's the service body that we now produce in-house. That was a key consideration of our merger.

And then we also heard examples as well today in the call from Steffen. We see that the cross-selling is now also coming in, right? So that's the piece we expected last, the revenue synergies, the cross-selling synergies that takes its time, getting those new customers, so we are now a nationwide player. But it is coming in exactly as expected, and that's then the part that we expect to see really not just with the momentum and orders coming, but really with revenue and profitability in 2027 as the last piece of it. That's then the roughly $5 million or a big part of the $5 million for the 2027 final upside, how does that Shyft synergy -- merger synergies.

David Joseph Storms

Understood. Very helpful. Maybe switching over to the guidance. I think it was pretty well laid out what could push you on the lower end of the guidance being the geopolitical uncertainty, tariffs, inflationary pressures. Just thinking about what you can control in-house, where do you see the greatest leverage points to maybe push you on the higher end of that guidance going into the last few quarters of the year?

Barend Fruithof

Thank you very much for the question. So I mean, the tariffs at the end of the day, you cannot control. But with our resilient business model, which is based on a local-for-local model, I mean, we're not heavily impacted. So we are just indirectly impacted and our competitors as well. So there, we have some challenges because of our big backlog, and that leads then also a bit to a lower gross margin at the moment.

And we are more impacted to be very honest by the Iran war because energy prices went up and that impacted some of our material costs. At the same time, we started to increase our prices. And as I mentioned in my presentation, that will kick in by the end of 2026 and then also beginning 2027. So we will see definitely then also an improvement on the gross margin longer term.

Operator

This concludes the Q&A for today. And I will now hand the call back to Simone Grancini for closing remarks.

Simone Grancini

Thank you, Sharon. I thank everyone for joining today's call and your interest in the Aebi Schmidt Group. As always, please reach out to investor.relations@aebischmidt.com if you have any follow-up questions. And with that, Sharon, please disconnect the call.

Operator

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.