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VRT · Forward model · Europe, Middle East & Africa · Bear case

What has to happen in Europe, Middle East & Africa

Model as of

This page changes Europe, Middle East & Africa inside the complete VRT model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

VRT forward model
Horizon
Consolidated fair value $78.46 all other verticals held in this portfolio case
Final-quarter revenue $475M 13% of company revenue
Explicit segment contribution $1.56B EBITDA less segment capex, before corporate items

The Q2 timing miss was demand. Americas sequential growth halves, EMEA's promised H2 recovery slips a year, and the multiple compresses toward a mid-cycle electrical-equipment stock. What this case does NOT assume is a collapse in the installed-base services book, a loss of the net-cash balance sheet, or a return to 2024's margins. It says 2026 was the peak growth year for the AI-factory content cycle.

Europe, Middle East & Africa

Basis quarter$484M
Final quarter$475M
Implied CAGR0%
Final revenue mix13%

The recovery geography: 15% of the basis quarter, organic still down 2.4% in Q2, reported up 1.7% only because of FX and a $5.6M acquisition. Q1 at $321M was the trough. Management has pointed at the second half of 2026 for a return to growth since Q3 2025, and the Q3 organic guide is finally mid-teens. Opening sequential growth is that catch-up, not a new European AI-factory cycle.

Last four quarters
2025 Q3 $444M Reported
2025 Q4 $502M Reported
2026 Q1 $321M Reported
2026 Q2 $484M Reported
Power and thermal products into EMEA colocation and enterpriseServices and sparesThermoKey heat-rejection, closed 12 June 2026
Sequential growth +14.7%/qtr decaying toward +1.5% 14.7% underlying; Q3 seasonality preserves the prior ~$551M regional recovery target.
Europe, Middle East & Africa

Latest: $475M (2031Q2E)

Period Value
2024Q1 $382M
2024Q2 $423M
2024Q3 $442M
2024Q4 $546M
2025Q1 $404M
2025Q2 $476M
2025Q3 $444M
2025Q4 $502M
2026Q1 $321M
2026Q2 $484M
2026Q3E $529M
2026Q4E $606M
2027Q1E $566M
2027Q2E $612M
2027Q3E $617M
2027Q4E $664M
2028Q1E $591M
2028Q2E $616M
2028Q3E $605M
2028Q4E $638M
2029Q1E $559M
2029Q2E $576M
2029Q3E $560M
2029Q4E $586M
2030Q1E $511M
2030Q2E $525M
2030Q3E $509M
2030Q4E $532M
2031Q1E $463M
2031Q2E $475M

Assumptions & reasoning

  • Q1 2026 $321.4M was the cycle low (organic −29.4%). Q2 $483.6M is a rebound, not a run-rate. The 14.7% underlying opening rate combines with the lower Q3 factor to preserve the prior ~$551M recovery target.
  • Adjusted operating margin 25.7% in Q2 against 16.6% in Q1. That is operating leverage on the volume rebound plus the EMEA restructuring announced in Q3 2025. Terminal 26% assumes the mix holds rather than a new step-up.
  • ThermoKey closed 12 June 2026 and contributed $5.6M of Q2 acquisition sales. It is not a material line yet and is not split out.
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