Inficon Aktie

Well, it's 9:30 by my watch. So good morning, and welcome, everyone. My name is Bernhard Schweizer, Investor Relations contact at INFICON. I have the pleasure of hosting this webcast. Thank you for joining INFICON's conference on its first quarter 2026 results. With us today are Oliver Wyrsch, CEO of INFICON; and Matthias Troendle, CFO of INFICON. We would also like to welcome our future CFO, Dimitrij Lisak, on this webcast. Dimitrij will take over from Matthias on July 1 this year. He will present the first quarter financials in greater detail.

The management team will first present the results and then take your questions. During management's prepared remarks, you are kindly asked to turn your microphones and cameras off. You should have received by now the press release on the Q1 2026 results together with the links to the accompanying presentation for this conference. All these documents are available for download in the Investors section of the INFICON website. [Operator Instructions]

I would also like to inform you that we are recording this web conference in order to archive the audio file later on the INFICON website. The oral statements made by INFICON during this MS Teams session may contain forward-looking statements that do not relate solely to historical or current facts. These forward-looking statements are based on the current plans and expectations of our management and are subject to a number of uncertainties and risks that could significantly affect our current plans and expectations as well as future results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Having said all that, I would now like to hand over to Oliver Wyrsch. Oliver, please.

Thank you very much. Welcome, everybody, to the earnings release first quarter 2026. Very pleased to welcome you here today. About the agenda, we have the usual structure. I will first tell you a couple of key messages and highlights of the quarter, talk about the different markets and the full year expectations. After that, I will hand over to our CFO, Matthias Troendle; and our future CFO, Dimitrij Lisak, for more details on the financials.

About the Q1 2026 results. We saw a very strong quarterly sales results and strong order momentum with a book-to-bill ratio well above 1, a solid underlying profitability with one-off restructuring costs. The Q1 sales reached USD 181 million, growing plus 14% year-on-year and nearly on the same -- or nearly on the same level as the last quarter, which is seasonally normally the biggest one. So this quarter is the second biggest of all times, which if you take seasonality into account, is a fantastic achievement. The orders are particularly in semiconductor continuously increasing and also have increased during this first quarter, and that's why we reached a book-to-bill ratio well above 1.

If you look at Semiconductor and Vacuum Coating market, this delivered a growth of plus 24% year-on-year and grew even on a high comparison of Q4, another 1.5%. It's an accelerating market development here. The General Vacuum continued its positive momentum, delivering another solid quarter of plus 20% year-on-year and also an increase of over 1% quarter-on-quarter. RAC also increased by nearly 3% year-on-year and 11% on Q4. Challenging market environment, but I believe our strong position gives us here the continuous opportunity to further grow. Security and Energy is a cyclical market. It is down again versus Q4 currently, but with very good outlook.

If you look at the operating result, gross margin, we reached nearly 46%, which is above previous quarter. It reflects the improved operational and efficiencies. There is still some tailwinds in FX and tariffs. But there is also with the one-off costs, clearly then a move in the right direction. Based on last year's difficulties, we have been with our improvement plans, making great progress. If you look at the operating income of USD 29.4 million or 16.3% margin, that is a solid profitability, in particular, when you look at about 3 percentage points one-off restructuring costs, which are related with our reconfiguration. The operating cash flow is solid with USD 22 million in Q1.

The production reconfiguration that we talked a lot about last year, which was accelerated due to the trade disputes is concluded. And with this new setup, we are very confident in this ever-changing world and geopolitical difficult situation that we can go and react also to future changes. We have also the -- discussed efficiency measures implemented, and this is related with the one-off restructuring costs. And these are the efficiency measures that we have triggered also based on the configurations and the changed environment related with FX and tariffs as well. We continue our investment in leading-edge R&D. Actually, this part of the market is truly on fire, so much going on, so much exciting innovation partnerships working. I believe also our approach last year proved to be right to work closely with the customer, especially also during the trade disputes, our partnerships have strengthened, and we have clearly made a step forward in these partnerships to even further work together on the next generation of our customers' products. The CapEx is in Q1 at USD 3.8 million. That is a timing question is relatively low. For the full year, we would estimate it at around USD 30 million.

If you now jump into the worldwide markets. You can see we have -- we could say, show growth in all of the 4 regions that we are reporting. The most exciting certainly is Asia Pacific. That's where most of the AI-driven Semiconductor manufacturing is happening, but also China has shown good development. And especially also Europe, there is semiconductor driver, but there is also the advanced industrials in Gen Vac, a driver in there. Americas is probably the least exciting one, but it's a tough comparison also with Q4. If you look at the development over the last quarters. We're optimistic, but it is less dynamic as the other regions because many of these AI-driven initiatives materialize for us in Asia.

If you then jump into the end markets. First, our biggest market, semiconductor and Vacuum Coating. We have a strong leading position, and you can see how we are able to grow over multiyears even in different cycles and geopolitical uncertainties. And the industry up cycle, we expect to further accelerate. We have just seen quite an acceleration again in Q1 after already good momentum last year in the second half. If you compare, the growth is 23.5% above Q1 2025 and a sequential growth of 1.5% with a tough comparison. And we have built out our #1 position, are continuously building it out. There is about 80%, 90% where we are #1. So we're continuously working on this. We expect for this year strong growth and see, obviously, the mentioned industry upside still gaining momentum.

If you look at it a bit more specifically, the HPC, the leading logic development already has started some time ago with HBM or memory DRAM accelerating also for some time now. But now we see it really going beyond that broader also in more mature nodes into power, into IoT and other places. So that is now a truly broad momentum building up. We have a very strong pipeline at INFICON with new products, new applications, a lot of design-in wins. Again, I want to strengthen -- I want to stress that our strategy last year to stay close with the customers in difficult times proved to be the right one. All these partnerships have further strengthened and actually give us even more opportunities when we think not only midterm or not only short term, but also midterm. So there's a lot of interesting product upgrades in the works and being launched as we speak on these new tech nodes, gate-all-around or the smaller tech nodes also in memory and so on.

If you then jump in the next end market, automotive refrigeration, air conditioning, we have a very strong position there. I think we -- even in a difficult market, that is in part consolidating with strong headwinds, we were able to show sustained growth over the last years, including also this quarter, quarter-on-quarter, plus 11% year-on-year, plus 3%, good order intake. I think here it's important to see that a part of the market is still slow. The EV transition has been soft. Also the underlying automotive market has been soft, but there is recovery signs, which is positive to see. The consumer battery has been continuously more resilient and also growing. Then you have the RAC portion of this market breaking down in different sub parts, which one is related with the automotive market, which is rather the slower end.

Then you have in the middle, the continuously growing HVAC market, which is its core growing continuously, but it is accelerated for us for some time through this new refrigerant regulations through to climate change. But the most exciting one now developing more and more is this data center supply with air conditioning on a whole new level where a new market is just about to form with new products and new requirements, and we have first product launch also from our end. Also in this market, strong R&D pipeline, very close with the customer, lots of momentum, a lot of exciting new stuff coming.

Then we jump into general market, General Vacuum, our next market. Strong sales growth. This is a broad market with about 20 submarkets in it. We rigorously test them and check them if they are in line with our overall growth and profitability and technology synergies requirements. And we have a couple of smaller markets in here that push us forward, big science, space, robotics, a few more. We also have broad positive development in industrials. We have a clear #1 position here in vacuum instrumentation that we further build out. We also work here on different channel partners, which we have expanded, which is an exciting long-term development as well.

And maybe the last note is the slow part in this market is probably the portion around solar. And I think last time we spoke in the full year results, we were expecting this to be recovering after 2026. Most recently, actually, there have been a couple of positive signals. I'll be in China next week again. So I'll get the latest and greatest from the market. I believe there could be some reason for optimism that we have a recovery sooner, but we'll have to still watch that closely.

Then we jump to the last market, Security and Energy, again, cyclical market depending on very long qualification cycles with governments. Generally, defense market is growing really fast. We are growing with it. The activity is high. So we are staying committed to this and are also excited about this, but this quarter, Q1, Q1 was a bit slow. As you see, Q4 was much bigger than the others. So this shows also this attractiveness, but at the same time, also the cyclicality. The products, we have a very strong product, specifically with the HAPSITE line, which we continue to show in the market a very strong performance. that, I jump to the expectations for 2026. INTICON raises the full year 2026 guidance. The orders have developed strong in Q1. The semiconductor industry itself, the momentum is accelerating, which really gives us a lot of optimism. Hence, in spite of geopolitical risks and the trade disputes ongoing, we raised the guidance for 2026 to sales of USD 710 million to USD 750 million and an operating income of 18% to 20%.

And with that, all my reminder, as always, if you're interested in INTICON, go have a look at our different channels. You see a bit under the hood what's happening, exciting technology developments new innovations, openings and so on. Lots going on, actually, a very exciting time, I believe, another growth expert, another big belief in many technologies. So we are quite optimistic looking into the future. I want to share that with you.

And then I conclude my part and would like to hand over to Matthias currently, our CFO; and our future CFO, Dimitrij Lisak, for some financial details.

Yes. Thank you, Oliver, and good morning, everyone, to our Q1 call. As you know, and as communicated in December, we will -- I will hand over the CFO role to Dimitrij soon. Dimitrij will be the new CFO of INDICON starting July 1. Therefore, Dimitrij will take over the financials today and walk you through the financials. And yes, for me, it's to say I would like to thank you for your interest, support and also sometimes the tricky questions over the last nearly 18 years. As I'm on finance, it would be exactly 17.83 years. And then yes, it was a pleasure meeting and working with you. Thank you very much for that. I'm very sure INDICON is in good hands with Dimitrij, and you will enjoy working with him. I'm pretty sure.

With that, I hand over to Dimitrij. Dimitrij, it's your turn, please.

Thank you very much, Matthias, for the nice words and for the introduction. And welcome, everyone, also from my side. I'm pleased to guide you through a little bit more in detail for the quarter financials, the guidance and the corporate calendar. Well, first of all, Q1 was a quarter strong on both sales and orders as well as the further improved operational efficiencies and a strong cash generation, while we actually kept investing into the future and into new technologies in R&D.

Going for the main highlights, book-to-bill, as mentioned, was well above 1. We generated sales of $181 million, which is an increase of 14.4% versus prior year, a gross margin of 45.9%, which is an increase of -- sequentially of around 1.6 percentage points and compared to last year, a decrease of roughly 3.5 percentage points. We generated an operating income of $29.4 million, which results in 16.3 -- 16.3% operating margin. This is a decrease versus prior year of 7.8%. And this number includes the one-off cost and one-off impact already mentioned before of around 3 percentage points as well as certain headwinds from FX and from tariffs that remain in the operating income.

The equity ratio remains very strong at 74.1%, underlining the overall financial resilience of our business. And the operating cash flow as well as the net cash increased and continues to be strong. Operating cash flow at USD 21.7 million, which is $3.6 million above the comparing quarter and net cash of $96.5 million, which is a growth of 10.5%. Finally, CapEx at $3.8 million, which is $1.4 million lower than last year. Here, as previously mentioned, this is more a seasonality topic and a timing topic because we actually expect the CapEx to be higher than in 2025 at around $30 million.

Moving to the sales. Overall sales growth was 14.4%, growing in all regions and 3 out of 4 markets. Specifically on the regional side, the most exciting the strongest growth came from Asia Pacific at 30.5%, China at 6.7%, Europe at 22% and Americas with a very slight decrease of 0.2%. And looking at the markets, the strongest growth came from semi with 23.5% in an accelerating market, followed by General Vacuum growing at 20.3% year-over-year and ROC auto increasing by moderately by 2.7% year-over-year, while Security and Energy, driven by seasonality and more temporary effects declined by 59%.

Operating expenses remained under tight management and tight control. While R&D costs actually increased by 10.9%, reflecting mainly investments into the future into the upcoming product launches as well as an FX impact, the SG&A costs increased by 17.8%. Here, it's worth noting that a significant part of this increase is resulting from the one-off restructuring measures we mentioned before as well as unfavorable FX impacts. If we take out these 2 impacts mentioned, we're actually structurally reducing our SG&A costs. And finally, on the operating income and gross profit performance. So gross profit margin, as mentioned, reduced by 3.5 percentage points to 45.9%, which is also at the same time, an increase of 1.6 percentage points sequentially versus the previous quarter, while operating income generated operating income reduced by 7.8% and generating a margin of 16.3%.

Let me summarize the key drivers behind this performance. First of all, the operating income is -- the underlying result is structurally very solid and clearly reflects the improvements in the operational efficiencies we've been working on in the past months. There are certain negative effects that remain from tariff and impacts on the cost. But at the same time, the effect of the capacity duplication is actually reducing significantly and improving. And we were also able to mitigate partially the FX impact with our relocation efforts and with our restructuring, basically reducing the footprint in the euro and Swiss franc. Finally, as mentioned, the significant impact in this quarter resulted from one-off restructuring costs. These costs actually came in both in COGS and in OpEx, and this is related to the previously initiated production and cost optimization.

The income tax increased by 21.8%, reflecting overall a slightly higher tax rate of 22.5%, mainly due to timing and mix effects, while the net income decreased by 7.3% and the margin reaching 12.8% net sales, mainly driven by the lower operating income. The balance sheet remains consistently solid. I mentioned the cash flow increased both on operating cash flow and net cash. Operating cash flow generating USD 21.7 million, which is a 19.7% increase versus Q1 '25. And net cash generated USD 96.5 million, which compares versus USD 81.2 million in the reference period Q4 2025. Overall, also the -- what's positive to highlight is the inventory turns. So our inventory turns actually improved. Our inventory remained more or less flat versus prior year, while accounts receivables increased mainly due to the strong invoicing in the previous quarter as well as in Q1. This had an effect on overall accounts receivables, but also a slight increase of DSO and with this leading to a net working capital of $241.5 million.

Coming to the full year 2026 guidance. As mentioned, we are raising the full year '26 guidance, both for sales and operating income. This is based on a strong order intake and solid market -- solid outlook in most markets, specifically an acceleration in the semiconductor market and the mentioned improved operational efficiencies. This means that the new guidance will be for sales of USD 710 million to USD 750 million and operating income 18% to 20%.

And with this, I conclude the financial update, and I would like to highlight the next event on the corporate calendar. We will have the upcoming analyst visit in [indiscernible] on the 27th of May, the Q2 '26 media conference on July 30, followed by the Q3 media conference 27th of October and the last analyst visit of the year in Baltus as well on November 19.

With this, I conclude the financial update, and we are happy to take your questions.

Thank you, gentlemen. The first question comes from Martin Comtesse.

I would just like to understand the margin profile a little bit better because there's been $5.5 million in one-off costs in the first quarter. Can I just confirm that the increased guidance on EBIT margin for the full year is on reported and the underlying EBIT margin because it would basically assume that for the next 9 months, you would return to 20% EBIT margin if you were to reach the midpoint of that new guidance. Just so we're talking the same numbers. And then maybe also if you could help me understand a bit better where these $5.5 million one-off costs really put in the first quarter and if there's any more one-off costs expected as the year progresses?

Yes, Martin, obviously, an expected question. I will give a few high-level explanation and then Dimitrij can ask a bit more on the financial side. Yes, we don't plan on reporting different operating income numbers. So the guidance is the guidance of the operating income as we reported. And hence, the logic is relatively clear, but just to confirm it, yes, it's one-off costs now. It's all bundled together. Obviously, this is a large program across all the different locations, across different functions that we have based on longer-term strategy and then this acceleration last year and then we have added some more aspects to it as well, right? And triggered was this additional program basically by last year April, where the trade is escalated. And then we really went into a review of these plans and then expanded it further and accelerated it. And of course, there is also the efficiency measures in there. As you remember, we had these 3 buckets, FX, tariffs and under absorption. Under-absorption was because of the duplication of production lines, meaning when we move from one place to the other, you cannot immediately switch off the old line, right? You want to have continuity for the customer. So this is something we've been working on with high priority. And I think we made good progress. And so this is the back end of this, obviously.

So the idea for me is for the outside, but particularly also for the inside in the company to turn the page with this. And now we go full on into growth mode. There is no reason to not be very optimistic, as I mentioned, because the markets are exciting, the technology are exciting. The technologies we're working on with our customers are exciting, but also what happens inside of our R&D, the whole acceleration, we already write a lot of lines of code. automatically agent is spreading everywhere. So it's one of the most exciting times for different reasons, right? And then you have the upcoming new technologies down to space and content technologies and so on, while already semi is exciting with the new technology. So I would like to move on to the growth mode after this, and that's an answer to what you said. If you want to look at what's remaining of these 3 buckets from last year, I would think we're around residual value of 1 to 2 percentage points there. Some of it will stay, right? The FX, we can only influence so far and the tariffs, they will be going down, but they have been around the floor and not everything will be gone even with refunds and whatever we can do. So we continuously work on this, but it's going to be -- the improvement is going to be a bit slower there. But we can already show improvements also there, obviously, right, as you can see when you do the math. I hope this helps. Maybe Dimitrij, if you add more.

I think well summarized just 2 things to your question of what the split is. So actually -- or what the one-off costs are affecting, they are affecting both OpEx and the gross margin. So we have effects in both areas. And the rest actually, Oliver mentioned, I think it's -- aside from this -- from the one-off effect, we also have some remaining effects that we had in the previous quarters, but these are gradually reducing, while I would say tariff stays is the most prominent one. But the other effects, especially under absorption, we are managing very closely, and we see quite a positive development there in reduction.

Yes. And maybe that is a reference where you see. Gross margin, as we often said, right, is not the best measure for INFICON as we have a big mix in the product portfolio. But you can see that's why we spoke about this too. You can see the improvement, which clearly shows how we address the under absorption.

That's very clear. If you allow me a very quick follow-up. Can you maybe just also give a bit more color on the development of the semi market in China in particular? I know you're going there next week, but I'm sure you what's going on the ground.

I've been there already a couple of weeks back. And obviously, we all tell that we have a large team there. So yes, I think there's good reason to be optimistic. Certainly, the 15 5-year plan is a course correction where we believe that in China, the market forces will be led to play more. And some of the players that are not profitable or viable will go and be allowed to shut down. What that means is we probably have a little bit more closer market development there in semi, but also outside in other technology space where we are -- as we know it from the West, we also see that we actually with our setup are very well positioned to compete with Chinese companies that there is actually no big difference with our footprint. And so the market itself certainly is not going to go back to this growth rate before COVID. But I think the tech markets are quite resilient. The building global players there that will also come out of China or we see some of this in automotive, for instance, and also in semi.

The strong partnership we have with them for a very long time, I would say, for more than a decade, some 2 decades remain. So for us, we're committed to the Chinese market. It's a good market. We have these good partnerships, and they also have nice growth. Some of this growth is, of course, also still replacement of U.S. American players. This is due to geopolitics largely. I think for us, we are in a very good position where we are and how we set ourselves up to profit from it and again, see the market also optimistic. The development quarter-to-quarter is a bit harder to say. Many of these projects are a bit chunky and they move around. It depends on planning and approvals. So I would not exactly look at quarter-to-quarter, more long-term trends, and those are good. That helps.

The next question comes from Michael [indiscernible].

Hope you can hear me. So congrats on the good results, really surprisingly strong. I was wondering if you could -- I mean, I have 3 things that I would like to raise. First of all, maybe you can give us a little bit insight in your thought processes 1 month ago, it sounded a little bit different when you were presenting. I mean you tried to be at least cautious in your guidance, and you were a little bit cautious in how you talked about the market, but now it looks a little different on the positive side. So maybe just a little hint on what changed in your thought process there. And overall, a bit a broader question on the semiconductor market. I mean you were growing really strongly. Of course, you report in U.S. dollars, but still much better than some of your, let's say, broader peers in Switzerland, Comet, VAT. Just trying to understand what drives that? I mean, obviously, we see a really strong -- I would say, a strong recovery in mature etch. Texas instruments is really strong. I mean we see it also in the European chip stocks. Is it coming more from the mature side? Or is it really memory partially where you're not super exposed? Or is it more leading edge? And then within that, would you say it's more OEM or chip maker driven? I'm just trying to understand what makes you grow so much more. So maybe these 2 things, and I'll leave it with that.

All right. It's good. Okay. Let me go one by one through your sub-questions there as well. So I mean, first of all, I want to stress the reconfiguration, and I believe how we went through last year paid off for this year. I'm a big fan of ripping up the Band-Aid early, then move on and look into the future quickly refocus. So I think that's what we did last year with the production reconfiguration. But also then when you accelerate the long-term strategy, moving also, I mean, I can say we're moving percentage-wise our footprint towards Asia, obviously, right? That's also a one-off cost is -- represents some of this. What we also have done is we have strengthened our supply chain and our production footprint, and that's why we can also deliver a Q1 like this. Not everybody was able to react like this, there is already some sand in the supply chain. You know that the air freight, helium, aluminum. So we need to continue to monitor that and stay close to it as we ramp, right? So we already made quite some investments in inventory and some more is coming as a plan there and also in CapEx to go and capture the ramp and taking into account potential bottlenecks on the other end. So that's the work though that we have done, but we have seen and now I'm getting to this other part question that you have.

In Q1, we needed to still figure a few things out and see if it works and align with some of the customers and the projections. This happened in Q1. Then there was Lunar New Year, which always gives a bit -- throws a bit of the projections because it gives a temporary slowdown and then an acceleration. We saw a good Q4, but we couldn't really see if that is now a one-off or is this going to be a trend. So I think all of this added together led us to go and doing this raise of guidance. Look, we are rather a company that first proves what we can do before we make big promises. I guess that's our plan, and we continue to do this also as we look forward. So we try to do the hard work and then go and impress people with good results. And when we have, of course, big curveballs coming our way like last year, then it's more work before we can then show good results. So I'm optimistic for this year for sure. So that's on the topic of what changed.

Maybe on the semi, more color it's pretty broad-based now. As I mentioned earlier, HPC started already some time ago, a couple of quarters really. And then also memory started a couple of quarters. I want to stress again, the times are over where we're not exposed to memory. These customers buy the same sophisticated sensor packages as logic customers now. As you can also see the development even on litho, what kind of tools they buy, this is different now. And then the sophistication down into packaging, and there is also some logic in each HBM package. So this has really changed now. I believe the change has started probably 7, 8 years ago, but now I would see memory customers equally important. Naturally, the leading edge in terms of node is still with logic, but the sophistication is a similar level, while maybe different in nature, right? It's in memory.

So for us, then you asked OEM chip makers, we have this 50-50 split roughly. Each trend -- each large customer has their own kind of waves, heps and waves. So that's fluctuating, but the overall trend is roughly that. And OEM, those who won big orders, there's always winners or losers in the expansion projects. I think everybody wins. But the question is rather growing 20%, 30% or are you growing beyond that or below that, right? That's a bit where the spectrum is this year, but fantastic, obviously, if you think about these numbers and these projections. So I would say OEM equally because we have the sensor package for the OEMs equally comprehensive as we have it for chip makers. It is a bit more sophisticated part.

And I believe regionally, we discussed a little bit already. China is its own ecosystem to some degree or more and more, I would say. We are committed to China. We're well entrenched. And I think we're optimistic. We have a good footprint there for a long time. We don't need to go and build anything. We're just expanding and we're localizing where it makes sense. We also have more innovation collaborations there. So we're optimistic there. But I mean, most exciting was really Asia Pacific region for us for obvious reasons. There's a lot of leading semi players there, memory and logic. Yes. So as it happened, I was last year -- last week in Japan. Also, there is a lot happening. So there's also a little bit of a trade war there with China. It's complicated also Asia, but we're navigating also this footprint. So I think there's reason for optimism in all regions. Yes, that's roughly the summary. I'm thinking now, did I miss any of your dimensions that you wanted to talk about? Yes, exactly. leading versus mature nodes, and that is definitely now starting. That is probably the last one we saw. And they buy simple sensors, smaller sensor packages and more software, and that is a good dynamic to see. I think that is a bit earlier days, to be honest. I still see mixed results from some of them over the last quarters. And I believe now we can be optimistic how it develops further also with their expansion projects. So that's probably roughly all the dimension I hope, Michael.

Yes. No, it's perfect. Sorry for asking such a broad question. So I'll leave it with that, and I wish you guys all the best, also to Matthias, of course, looking forward to seeing you soon.

Next questions come from Jorn Iffert.

And first of all, I wanted to quickly thank Matthias and wish you all the best. Hopefully, you will see each other at some point in time again. And then 2 to 3 questions, if I may, on the business. The first one would be, please, on your overall capacity. And is there a risk, I mean, that you could run some supply chain bottlenecks, not getting enough electronic components like you see in 2022? Or is this something which you're preparing going on inventories now in the next 1 or 2 quarters? And also, I mean, are you able to have around $250 million quarterly revenue capacity, for example, end of the year, you can manage this? This would be the first question, please. Second question on Europe. If FX adjusted, maybe it's still around double-digit growth, maybe around 10% plus/minus, still pretty strong in a weak industrial environment. Is this mainly the indirect semi sales via your OEM partners? Or how you describe this? And the third one is really just to double check, this 300 basis point margin impact from restructuring. This is now really -- that's it. You have everything in Q1, and I assume a lot of noncash is in there in Q1, but you don't expect more in Q2 from this point of view.

All right. Thank you, Jorn. You're breaking up a little bit, but I could hear you fine, I believe. So I think 2 and 3, definitely, Dimitrij will have some additional details for you. Yes, on capacity, there has been a lot of discussions in the last 2 quarters, 3 quarters probably on that, but it really accelerated in Q1, and we formalized, finalized and kicked off additional projects in Q1. So this is all kind of connected with also our more optimistic outlook for the year and the customers' discussions and also how we navigate the supply. And there's -- one is production, right? That's tool, that's clean room, that's people. And then there's also a supply chain, which is certainly a topic of concern. There is a certain fear that there could be a similar situation back a couple of years ago in the COVID times where the demand went up and the supply was constrained. And we are certainly taking our learnings from that. I mean, the last 3 years, we really spent a lot of time on hardening our supply chain, make it more resilient.

And I believe we are much better prepared. And we definitely take actions in that direction, PCB. We remember still what happened there on the PCB supply front, right? And we have made quite significant actions on this side to be able to navigate this because now is the time, I think after we built a strong foundation for growth last year with the configuration, the strong customer partnerships and now to really go and make the step ahead and not only grow with the market, but take an extra chunk. That is the plan. So for us, this is a big determination to supply in a ramp. Hence, these investments are in there. I believe, yes, we can go and supply that. We are not done actually the expansion project designing and kicking off and implementing. So it's accelerating actually currently still. So I'm optimistic that we can provide this level of output. But again, I will make this disclaimer of the geopolitics and how some of the logistics are constrained, right? So there is quite an amount of uncertainty, obviously, for everybody, not specifically for us. I think for us, it's almost a little better because of our footprint. But it's a bit hard to say, right? Do we have every angle covered. So maybe that on capacity. Then do you want to add something? Maybe, you can talk to the FX, Matthias. Maybe you talk to the FX. Maybe we talk to the FX you had, I think, a little bit of a market question there as well, how Europe developed.

I apologize. That was -- if I FX adjust Europe, it's still around 10% growth in the quarter, which is pretty strong. My question is, where is this 10% growth coming from? Is it coming from your OEM partners, which has senior exposure? Or where exactly would you attribute this?

There, but some of it is beyond that also in other industries. It's not only European semi, it's also the advanced industries in Europe. There's obviously not every piece that we sell in Europe goes to Europe, right? So that's -- there's partners there that integrate our sensors. But maybe if you want to say a few words about.

Yes, just to add to this, I think that the growth in Europe is quite broad in this quarter. So it's same but also in the other markets. Security and energy, a bit less exciting for this quarter. But other than that, actually, to your question, the growth is actually coming from -- it is quite broad and is coming from almost all the markets. And you had a question on the restructuring costs. So a few words to this. We previously mentioned that we had this, call it, initiatives running, right, on the one hand, the product reconfiguration, but also then the efficiency improvements. And for us, with this quarter, these initiatives and the costs from these initiatives are booked in and concluded. Now we have the disclaimer that Oliver mentioned, of course, geopolitical situation and other factors, but this is another story to talk about. If you talk about the initiatives we discussed earlier in the earlier calls, these are concluded.

Yes. I think maybe -- I mean, we talk about what's not in there is I think there's a restructuring, the reconfiguration, the capacity expansion. This is all rip up the pandemic, move into full on growth mode. But there is inflation tiers also when you think about the supply chain, right, the constraints, energy prices or oil prices feeding into different pieces of the supply chain. I think that's something we all watch closely together, right, what's happening there. In an extreme situation, we'll have again something like a couple of years ago where everywhere is inflation, everybody needs to renegotiate, that's burning a little bit through time and money for renegotiations and realignment and all of it with everybody ending up at the same margin roughly at the end. We hope that this is not going to be too expensive. Right now, there is still reason for optimism, but it is a bit related with how geopolitics develop now, right? Is there a little bit of untensing resolution, specifically in the Middle East? Or how is this going to work out. But yes, look, our guidance is our guidance in the sense -- it sounds trivial sentence. But in the end, we factor this all in, and I believe that's where we end up with as our realistic scenario the full year guidance.

We have next question coming from Craig Abbott.

First of all, on General Vacuum, I just -- I know you don't publish specific figures per segment. But maybe from a color perspective, you said orders developed well again. But I just wonder, I mean, could you confirm if that book-to-bill in General Vacuum was also again above 1? And just the second part of that question, which end markets in particular performed so strongly within that General Vac? I know you gave us some color in your initial comments, but -- and do you expect that to like continue heading into Q2 and Q3? And then I have one more follow-up.

Dimitrij, you can also add some maybe. So I mean, generally, yes, this is a broad market with some market curated and selected depending on technology synergies and also a financial profile. It has to have a certain growth. It has to have a certain profitability that is comparable to the semi market, some are also above, right? There's markets that grow faster. So battery was for a long time like this, solar also for some time. So this is all in this market. About half of this market is done with channel partners. So to serve the advanced industries, that is an easier way. So some of the transparency is not 100% for us. But certainly, we try to go and steer this into the right direction.

The book-to-bill is positive, but it's not, of course, comparable with what we see in semiconductor. I think though, a lot of the AI trends lifts also other industries. And sometimes as we're all kind of realizing now, it's going through different corners and then pulls up industries that you would not even think that are closely related because of this whole infrastructure impact that this data center build-out has. So I believe there's a good amount of that in there. But in some of the tech markets, they have their own development, right? I mean I said a very early market would be maybe quantum technology and carbon capture. But then at the other end, there's markets that are more established like life science.

And then solar would be one of those, and I made my comments about solar. I think we are more optimistic now than some quarters ago or also in the full year reporting, if you compare directly, there's a bit more optimism again. And then there's the smaller markets like robotics or space that they all have very good momentum. And that's actually, I would say, somewhat independent of the data center build-out. Robotics, obviously, you can say it's the next stage of AI, physical AI, but it's a bit independent still. So not a positive. So wherever there's sensitization. So I'll try to give you a little bit more color there. I hope that helps. Do you want to add something?

Great words on your -- on the book-to-bill question. So you said it yourself. I mean, we don't disclose every single detail of this per market and for the book-to-bill performance. But overall, what we can say is that -- also for General Vacuum, we saw that the order performance grew. So the order intake grew, maybe not as much as in semi, but we definitely see the growth versus prior year.

Okay. And then in semi, you kind of alluded to this a little bit earlier in your commentary, but we certainly -- you hope to gain market share. But I just wondered, in addition to the strength in the WFE CapEx trends that we continue to see, are you already seeing market share gains as you compare with your direct competitors in particular your most important competitor in that area?

I would say, yes. I mean that's a continuous development and then we're very determined there, laser-focused on doing that. But I think when you look at the CAGR in our markets where we -- in all markets, can outperform the market. if you just look at the last 5 years, it's 10% plus, right, which is clearly not the market development itself there. So it's above. And I believe that comes from the fact that more things are measured, which are not measured or have been measured in the past. And things are more sophisticated, meaning with a higher price of sensor, which has maybe more analytical capabilities, more sensitivity or is a multi-sensor different sensors and then you all more software. So that is a very strong trend that we see continuously actually as well. So it's a bit both that as an explanation. Was that the second question, Craig?

That was my second question.

We have Craig on the queue. At this time, it's Craig McDowell.

The first one, just following up on the General Vacuum needs. Obviously, the channel partners there. Do you get any stocking happening in number? And maybe you could speak to your distributors as well. And then secondly, on the security and a weaker Q1 than maybe we were expecting, but it seems like you've raised the FY '26 guide from decreased to flat on revenue. What's going on in the next 9 months to get us back to flat for the full year?

All right. I'll quickly try to answer this too. On Gen Vac, largely, it's not stocking. There might be some of it in it, right? And you are right, maybe we do not have the full visibility. But I would say at this point of the time, also when you consider that there are some of these industries ramping because of AI or other technologies that I mentioned, I would say there is not a large effect, if at all. So rather smaller effect or no effect.

And then on the SME, yes, we had to realistically look at our pipeline. The timing is difficult, right? And when we realistically look at the pipeline and decrease didn't make sense. So we need to be more optimistic midterm, we are very optimistic for midterm anyway, but we need to also -- this year, we reflected a little bit of how the pipeline developed over the last most recent time and how this will materialize. So obviously, we cannot disclose tenders or proposals or timing of it or our estimation of when they're going to hit, but that's based on this basically on the sales funnel that we see or the project funnel.

We have a next question from Martin Marandon-Carlhian.

The first one is on the semiconductor division. I mean, looking at the strong growth in Q1 and comments on book-to-bill, should we assume that we see a similar kind of growth in that division this year? So I guess, outperforming WFE by a few percentage points? Or are there some elements of comps or cyclicality from quarter-to-quarter that we have to take into account as well? That will be awesome.

The first one. Okay. Yes, there is definitely cyclicality. There's underlying, right, we have a big cycle, the ramp coming. And you can argue is this several ramps or how big is it compared to the past ones? It's a little bit hard to say at this point. We can certainly say it's quite steep and it's accelerating and there's a lot of optimism. There it's a chunky business, though, how it materializes for us, particularly the chip maker side of things because you need to imagine that these chip makers talk to us about the whole build-out plan over a longer period of time. And then the timing is moved, not the actual project, right? So it's not that suddenly somebody sends a big order that's not what typically happens. We design it into a certain technology node during the R&D process. And then it's defined of how many -- how big is this production going to be.

And then there's different expansion phases that can change and move around. And those have been most recently pulled in, being pulled in. And sometimes what happens otherwise is typically no cancellations is they get stretched out on the time line. So it's definitely chunky. We see a bit of a slower Q3 normally seasonally and a higher Q4 typically seasonally as well, whereas maybe Q1, Q2 are a little bit in the middle, to say this. So there is still a lot of volatility in there. I think largely upside risk, I think, as we've seen most recently, that's why the transition from when we just spoke recently full year results to now, we have seen a lot of this kind of moving in. And so we don't know how this is going to continue. This is normal actually, even in a ramp, where there can be sort of slowdowns or one customer wins over another one, a big bid, who makes for a certain phone, the display or the chip, the memory chip or that chip or the other one, all of this is kind of in the mechanics of that to maybe give a bit of color on how it works on the -- it is then projected, right, in different scenarios. And then basically the realistic one.

Okay. Great. And the second one and the final one for me is just on the General Vacuum division on the solar business. I understand that you see this market still being in overcapacity this year. But let's say the ramp happens in '27 or '28, but let's say it's '27. Do you think it will be a steep ramp or more of a gradual one if you look at past cycles on that division?

I wish I knew I can almost say there because that has been a bit unpredictable. This overcapacity trend in China has been making it much harder also to predict. And now I mentioned this 15 5-year plan, which tries to go and rectify this also that maybe there's fewer players with stronger players. At the same time, on the demand side, there is increasing demand. while capacity is consolidated and the increasing demand, there's everything in there from just the base demand and large expansion projects, more sustainability push up to data centers in space with solar power. So -- and that is actually -- that is not so hypothetical. So I have to go next week and specifically look at it, and we are monitoring it. Yes, it could be moving into '26. It's not going to be soon in '26, right? I think it could come sooner.

But the shape of it, it's very hard to tell. Also, solar has sometimes had quite some acceleration. So it depends a little bit on tech nodes as well, right? So there's a few smaller improvements there and then a bigger step coming TopCon, [indiscernible]. Everything is kind of not too far away. So it's interesting times actually on that end, too. It's much smaller, right compared to semi. But yes, there's a reason for optimism, I think, at this point. It certainly goes up one way or another over the time line in some shape or form. I know this is not great market, but it's just not so easy to say. I mean that is -- we have analytics and you all have all the great analytics, and we probably look at similar kind of projection and scenario there soon. I hope this helps a little bit.

There are no further questions at this time. So gentlemen, maybe you want to add some closing remarks.

Yes, if I may. Today may be a little bit longer because I would also personally like to thank and also in the name of the company, our CFO, Matthias Troendle, for so many years, 18-plus years of really fantastic work. It was a big pleasure to work with you before, our CEO, but especially also in CEO times, had some stormy times for sure. You always are a rock in a storm, which is great when you have a CEO like me who has million ideas and has a little action. So we did a great, I think, teamwork there. And that was just a lot of fun. I also very much appreciate it next to your really broad knowledge, also your really sharp analytics. You know where to go, where it hurts. And then pull it out. That was extremely helpful in sometimes of a super very confusing data in the market and everywhere else. So that was just fantastic. So a truly exceptional CFO, a huge, big thank you for all you've done for the company, but also for me, it was really a great work, but also it was a lot of fun. So I really enjoyed that. We all meet each other still, obviously, right? But also in the name of the company and me want to do this in a topic sitting like here, big thanks and all the best for the future. We, for sure, stay in touch.

And maybe from my side to add 2 words, Matthias, also to you, a big thank you for the smooth and very constructive professional handover and for actually handing over a finance function that is well oiled and a super strong balance sheet. So I'm also thanking for that. And I wish you also from the bottom of my heart, all the best for the future.

Thanks a lot. Thanks for the nice words. And yes, I'm still here, right?

We know you have.

Thanks a -- thanks a lot.

Thank you also. And yes, with that, I would also like everybody -- to thank everybody for their big interest and the support over all these times in the calls and good and the bad times. Yes, stay tuned. You heard from Dimitrij what's up next. There's plenty of ways to hear from us and interact with us. We're looking forward to see you again. Have a wonderful day and talk soon.

Thank you, everyone.

Good morning, and welcome, everyone. My name is Bernhard Schweizer, Investor Relations contact at INFICON. I have the pleasure of hosting this Microsoft Teams webcast. Thank you for joining INFICON's conference on its fourth quarter 2025 results.

With us today are Oliver Wyrsch, CEO of INFICON, and Matthias Troendle, CFO of INFICON. The management team will first present the results and then take your questions. [Operator Instructions] You should have received by now the press release on the Q4 and full year results, together with the links to the accompanying presentation for this conference as well as the annual report 2025 and the invitation to the Annual General Meeting of Shareholders.

All these documents are also available for download in the Investors section of the INFICON website at www.inficon.com. [Operator Instructions] I would also like to inform you that we are recording this web conference in order to archive the audio file later on, on the INFICON website.

The oral statements made by INFICON during this MS Teams session may contain forward-looking statements that do not relate solely to historical or current facts. These forward-looking statements are based on the current plans and expectations of our management and are subject to a number of uncertainties and risks that could significantly affect our plans and expectations as well as future results of operation and financial condition.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Having said that, I would now like to hand over to Oliver Wyrsch. Oli, please.

Thank you very much, Bernhard, for the introduction. Welcome, everybody, to our earnings release conference call Q4 2025, full year 2025. It's great to have you all here. First, quickly about our agenda. I will first talk about the markets, the general developments of the quarter, the year and our full year expectations. And after me, I'll hand over to our CFO, Matthias Troendle, for more details on the financials.

Let's dive right in. Many of you know us already quite well. But for those that know us a bit less, a quick summary of who INFICON is and what our strengths are our positioning. We are around USD 674 million revenue, 1,730 employees. We are a world leader in most of the markets.

We are focusing on measuring and data analytics and data science for smart manufacturing in semiconductor, but also other high-tech markets that we select based on attractive growth and profitability profiles. We try to constantly evolve. We have a long pipeline on organic growth opportunities and can, therefore, innovate close together with our customers constantly on new measurement opportunities, new data analytics opportunities to push smart manufacturing forward.

You see this also in the result where the markets have most recently gone flat or down. And the general CAGR of semiconductor is around 5% to 10%. We have been able to overachieve on that with an annual compound growth rate for the last 5 years of 11%. This comes mainly from this innovation drive together with our customers to find constantly new products, new applications to measure and to add additional services with measurement of data analytics software and to push smart manufacturing forward.

With this, I jump in one quick picture on the semiconductor industry, which I find quite relevant. Yes, so far, the semiconductor industry was in the average growing 5% to 10% per year, but something has significantly changed in the last 6 to 12 months. We believe this is based obviously on available research from different sources, and we picked one of the ones that is quite well known here from McKinsey.

We believe that the semiconductor industry is not going to grow to $1 trillion by 2030, but quite significantly above that. We might even reach that goal already this year or next year, and we are rather looking at an opportunity of $1.6 trillion by 2030, which then changes also the growth rate.

So we would think that there is going to be an acceleration of the market itself above 10% growth per year. So we will, of course, also continue to operate the same way and look forward to also be able to overachieve on this new market growth.

With this, I jump into the results of 2025 full year. We have achieved a new record sales. It's [indiscernible], a small step up. But what is important is that we have been continuously growing in a time where the last 2, 3 years, in particular, the main markets that we have, semiconductor was actually slowing down, but we could still show growth, whereas the market in some areas significantly contracted. And that is through our diversification across different semiconductor and other high-tech markets.

We have also been able to see the book-to-bill growing last year, full year, and this is continuing into this year. Sales and operating margin were hit last year by different trade disputes effects, but we delivered the full year in line with the communicated guidance with a significant improvement in Q4.

When we look at the markets, I will go into this a bit more detail in a minute. Semiconductor is roughly stable. This is driven through large expansion projects that on the time line move back and forth. So that is a roughly flat development, I would say. While, of course, under the hood, there were quite a good number of movements between the different geographies and accounts depending on their expansion plans.

We see in that, and I'll get back to this, a significant acceleration that already started last year after there was because of trade disputes, a slowdown first and then an acceleration, which continues this year.

The General Vacuum end market has been showing a strong growth of 12% year-over-year in all regions except Americas. RAC/Auto showed a continued growth over many years now. It is a bit slower, 2%. I'll get into that in a couple of the subsegments. They are a little bit slower. Security & Energy developed depending on the timing of the government programs, a little slower last year, and we also don't expect this year a significant acceleration yet.

However, you see in Q4, there was a significant other rollout phase. This is the typical chunkiness that we see in this business. Long term, we are very optimistic in this area as well. Operating result, we have been able to achieve 16.7%. There's some lingering temporary impact still of the trade disputes, the capacity duplication from moving production around globally, then negative foreign exchange and the effect of the tariffs.

The efficiency measures that we have started last year have shown traction and have continuously improved after a difficult second and third quarter. We have been able to deliver robust cash flow of USD 90 million in 2025 and propose a dividend of CHF 2. This is a balance between the pressure on the profitability last year and that we further continue to invest in R&D and also CapEx.

We have also recently announced a land purchase here in Balzers and do also expansion in all different locations. So this is taking all of this in account at the same time, shows a really high payout ratio. Regarding organization, we have the reconfiguration largely concluded. This avoids the substantial trade dispute impact. And now we feel very well positioned for future geopolitical uncertainties.

When we look at R&D, we continue to invest there. There's a lot of high dynamics going on with our key account and a lot of exciting new technologies developed jointly. So we continue with 8% of sales there for 2025. The full year CapEx was at USD 22 million. For this year, we expect this to be quite a step higher. There's land purchase in there, but there's also further capacity expansion going to be needed, especially for semiconductor.

If I then look at the geographic overview, you can see that we have significant gains in Asia Pacific and in China, Europe and Americas slower. I think Asia Pacific, the main drivers there was due to AI, first, high-performance computing and more and more now also high-bandwidth memory. And then we have seen slowdown and re-acceleration in China last year with growing China in the last quarter again. The impacts on Europe and Americas are largely the U.S. trade restrictions in semiconductor and the timing of the security and energy orders.

If you now jump into the different markets. Semiconductor and Vacuum Coating, we have a very strong position. We keep that strong position. We build it out further. You can also see this strong multiyear performance in quite a challenging environment that I mentioned earlier already. You can see that we have had a nearly 12% CAGR over the last 5 years without actually showing any slowdown as the general industry had in large parts of it.

Now it's already a changing momentum for some time. The industry up cycle has started. It gained momentum. We have seen a higher order intake in Q4, and we continue to see this developing positively and expect a significant acceleration through 2026 and from there onwards. Though trade tensions and the geopolitical risks are significant and they remain in place.

We expect for this year, strong growth due to the ramp. When we look at the performance, strong sequential growth of plus 21% compared to Q3. That's a slight decrease full year. But again, that's a bit the timing of the expansion projects. The orders that's significant there are really accelerating significantly. We have further expanded our position also with further applications working together with our key accounts.

The positive dynamics around AI investments that have been relatively narrow last year have intensified and broadened and go now beyond logic clearly. And especially memory has a very strong dynamic, but it also goes already beyond into other sectors. So we really see this as a broader ramp now.

The investment in leading -edge nodes continue as they have, and this also drives the increased use of our sensors and also an increased use of higher-value sensors. The strong pipeline with INFICON that develops further. I'm really proud of what we have achieved together with our partners, our customers in terms of new product developments and what is coming now in terms of new tech nodes, we are well prepared for and already have completed the R&D.

When we then jump over to our second end market, Automotive, Refrigeration, Air Conditioning, we remain in a very strong position. You also here see the continued multiyear growth in a quite difficult environment with some of the markets contracting. We have a strong development in Asia, Americas, Europe is slower. If you look at the growth, you see a full year plus 2%.

We have a strong order intake in this challenging market. Q4 was a slower sales of minus 2%. We expect for the year flat to growth. This depends much on how the markets develop here. EV, one of the key markets here is temporary still in slowdown. I believe the energy transition was in parts even going backwards for some time.

I believe this is again moving forward, but the transition is slow and the market itself is also still slow, while of course, we see now some recovery signs in all geographies. The consumer battery sector is a bit more resilient. Midterm, we see very, very strong growth opportunities driven by the energy transition, also by new refrigerant regulations and a new important topic that emerged recently, the data center build-out.

If we look at that sector, RAC was already a strong market for us, steady growing, not high numbers, but steadily growing, specifically in the aftersales service, the service tool business, but also beyond that and what is most exciting now that the data center build-out seems to be creating a whole new HVAC market that has a totally new interesting dynamic.

New products are required for that, that we already have in development. And I believe that is going to be an interesting additional drive now that this data center are built out with new semiconductors, but also with entirely new infrastructure.

Also here, I believe we have a very strong R&D pipeline that we work on together with our customers. If you look at ELT, Stratus, all the different product lines here, also LDS, right all at the forefront of the market.

Then we jump over to General Vacuum. After 2024 was slower, we remember 2023 was really high sales because of catch-up of the COVID shutdown, in particular in China. Now we're back into growth for 2025 with a full year growth of plus 12%. We have a broad industrial market that we address here. We have also a number of private label partners. It's a multi-brand strategy with long-term channel partners. We have a strong position in all of these submarkets. Generally, we have seen positive development, in particular, in China and Europe last year.

There's also a couple of smaller markets that are exciting, developing well, fit right into our growth profile and profitability profile like Big Science, Space and Robotics. But there's also in particular one market that still is slow and in consolidation, the solar market. We believe this is not going to go recover earlier than 2027.

With that, I conclude and move on to our last market, Security & Energy. We are in a very strong position there with leading products. However, this market has entirely different development, a bit independent from the general economic development and is dependent on government programs and relative long qualification cycles.

So the recent order activity is high. I think there's a lot of interest. There's a lot of dynamics, specifically in Europe with the increased defense budgets, and we are seeing also this additional tenders. We had a first interesting chunk that we delivered in Q4. That's why you see this 116% quarter-on-quarter increase. In general, it's still in a slower cycle, which will continue this year, but the order activities, as mentioned, are very encouraging. We also opened up new applications. And in general, the defense market is growing significantly. So we look very optimistic into the future on this market as well.

And with that, I come to a couple of product highlights for 2025. As mentioned a couple of times, we are not a company that works on one big product with one big bang. We believe in constant iterative innovation close together with our top customers, our innovation partners. So there's a constant product launch, a string of product launch ongoing.

And here, a couple of highlights of 2025. You see the Ultra Clean Porter for gas supply, high-purity. You see another generation of Transpector APX. This is our mass spec for all the new HPC and HBM application, Impact Manager for analysis on the different tools, the health of the tool and the health of the of the wafer.

You see Gemini for Big Science application with new magnets. Then on Electrolyte, the leading -- also leading edge product for electrolyte leak detection, the D-TEK Pro ultra-sensitive, definitely a big step ahead in a market where we are leading already, Zevision on thin film measurement and then also another AI product that we launched, it's called Ask INFICON, where you can talk to our software about the numbers that you measure with our instruments and of a tool to understand what is going on and create custom statistics. All of these products are industry-leading by quite a bit, and we wanted to share some of them with you. There will be more updates of this, of course.

On sustainability, a quick word. We have been continuously working on this, in spite of all the distractions most recently geopolitically, and we have achieved a continuous reduction of absolute greenhouse gas emissions despite nearly 70% sales growth when you compare 5 years, and we'll continue to do that.

Now I come to the expectation 2026. Again, I mentioned, orders are very strong and they accelerate in the semiconductor market. The up cycle is clearly gaining momentum. It's broadening, it's deepening. It's really exciting what's happening. We have a number of new products out there for the next tech nodes. So we believe this is going to be a very strong positive dynamic.

At the same time, geopolitics and trade disputes really add more uncertainty than we have seen in prior years. So this will also be hard to understand what exactly the timing of the economical development will be. Generally, we remain confident. We have seen these positive signals. We see also orders incoming, and we see this acceleration specifically in the semiconductor.

And with the new configuration that INFICON set up last year, globally, we are set up also for absorbing new trade war shocks if there was any coming in the near future. The efficiency measure, as you can see from the improved Q4 profitability of 17.5% have been taking effect. They will be ongoing for the rest of the year. There's going to be some back and forth as we work this out of the system and go back to the 20-plus percent EBIT as we have been before.

If you want to stay in touch with us and understand what's going on, please check out our online channels. There is always news where you see new factories opening, new repair centers, new innovations or any kind of culture development or otherwise when we interact with the public. And with that, I conclude my part and would like to hand over to our CFO, Matthias Troendle, for more details on the financials.

Thank you, Oliver, and good morning, everyone. This time, I will cover financials Q4, but also as well, I will comment quickly the 2025 results in addition to the normal set, also the dividend and of course, some comments on the outlook for 2026.

So let me start with the highlights for Q4. As already mentioned, book-to-bill ratio was above 1, fourth time in a row, which is good. We saw a substantial and strong increase versus previous year, but also versus previous quarter.

Sales did grow by 3.7% and reached a new record level with $184 million. The gross margin still under pressure with 44.4% drop versus last year, but showed some good improvement versus the previous 2 quarters. As a result, our operating income ended at $32.2 million or 17.5% of sales.

From a balance sheet point of view, equity ratio, very strong 74%. Operating cash flow with a solid number of $26 million. Net cash improved clearly against Q3, but also against the previous year by $6 million. And CapEx was at a, I would say, medium level at $5.7 million for the quarter. From a fiscal year point of view, we have a similar picture for the highlights. Sales at $673.7 million, slightly up. The book-to-bill also for the full year above 1. And the gross margin ended at 44.9% and operating income at 16.7% of sales or $112 million.

The CapEx was with $21.8 million lower than in 2024, and we generated cash flow from operation of nearly $90 million. From a sustainability point of view, we ended -- or in average, we ended the year with 1,731 people. Energy, we have a level of 90% certified green electricity, what we use and the CO2 emissions ended at 2,053 tons, which is roughly 20% below the reference period of 2020, despite -- which is good, I think, despite a revenue increase in the same comparison period of nearly 70%.

Now let me go a little bit into the details. As communicated this morning, and just mentioned, we achieved revenue of $184.2 million, which compares to $177.5 million last year, and this is an increase of 3.7%. Oliver did already comment the market developments compared to last year.

Q4 sales to the General Vacuum market increased by 27% and delivered another strong quarter. Sales to the Security & Energy end markets surged by 53%, mainly driven by sales into the Americas.

Refrigeration, Air Conditioning and Automotive sales were nearly flat with minus 2% and Semiconductor and Vacuum Coating market declined by 7% versus last year, but recovered strongly with a plus 21% and growth in all regions against previous quarter Q3.

Let's take a look at the regional distribution. Good news is all regions did grow. That's very positive. Europe was the strongest year-over-year contributor with 8%. China and Asia Pacific did grow by 4%, respectively, 2% and Americas was mainly flat.

Let's go to the expense. R&D costs did increase by 16.6%, driven by continued focus on development activities and related investments as well as some -- we also had some favorable impacts in Q4 last year, which drives this strong increase of 16.6%.

SG&A costs increased by 3.6%. If we exclude the currency impact -- the negative currency impact, SG&A are actually decreasing. Now let's take a look to the margin situation. Q4 margins have been under pressure and declined compared to previous year Q4. Gross profit reached 44.4%, which is 2 percentage points lower than last year, but we could improve the margin by 1.3 percentage points compared to previous quarter Q3.

The operating profit margin for the fourth quarter reached 17.5% compared to 20.3% a year ago, a reduction of 2 percentage points. What were the main reasons for that? We had several temporary impacts, negative impacts direct and indirect coming from trade-related disputes, which were tariff impacts due to increased base level base tariff levels.

We had additional costs due to strategic capacity applications and reconfiguration of our production and also negative foreign currency impacts on gross margin and OpEx from the headwinds of the exchange rates. All impacts account for around 3 percentage points compared to the previous -- preceding to the 2 preceding quarters, Q2 and Q3, we saw a gradual improvement in Q4 across these metrics.

Income tax and net income. Income tax expense for the third quarter was at $6.6 million, which represents a tax rate of 20.7%. This is clearly higher than Q4 last year, where we had some favorable impacts from U.S. tax regulations in our books. The net profit is at $25.3 million or 13.7% and of course, lower due to lower operating income and the higher tax rate.

Let's move on to the balance sheet highlights. Net cash ended at $81.2 million in Q4, which is about $6 million higher than end of last year and is about $21 million higher than previous quarter Q3. The turns for inventory is stable at 2.4. DSO, days sales outstanding is at a good solid level at 48.5 days.

The working capital ended at $229 million. And with that at 31% of sales and about $14 million higher than end of last year. The increase is driven by -- mainly by the changes in inventory and accounts receivables. The accounts receivables increased, thanks to the record high Q4 sales level.

And in the inventories, we also had some negative impact from foreign currency. The operating cash flow is $26.1 million and slightly lower than Q4 last year. The balance sheet, as already mentioned, showed a strong equity ratio of 74%. That was my comment on the balance sheet in Q4, now we -- the fiscal year did finish, a few comments on the full year results.

On that one, revenue ended at $673.7 million, a new record level. It only beat the previous record level by $2,000, but it's something, I would say, right? And the previous record was 2023. So basically, we had 3 years at a relatively high level, no major dip in there.

As you can see in the chart, we were able to grow in the General Vacuum market by roughly 12% and in the RAC market by 2%. Semi decreased slightly by 3%. And as expected, Security & Energy ended lower in 2024.

From a regional point of view, China, our largest sales region did grow by 1.2%, reaching $191 million or about 28% of our global sales. While sales to the Semi & Vacuum Coating market did decline in China, all other 3 end markets showed a strong double-digit growth rates.

Asia Pacific surged with a plus of 19%, which was mainly driven by strong sales into the Semi and Vacuum Coating market and General Vacuum market sales. North America with a 23% share of global sales did decrease by 12%, mainly driven by the low Security & Energy sales. And Europe had also a share of 23% and did drop by 3%. Here, we see a mixed picture of General Vacuum and Security & Energy growing, while Semi and Vacuum Coating and RAC was a little bit lower.

Turning to the cost for the full year. We spent $55.4 million on R&D for the full year, an increase of 7.4%. The ratio of -- this is a ratio of 8.2% of sales after 7.7% of sales last year. In SG&A, costs increased by 4.7%, mainly driven by unfavorable foreign currency impacts, while we keep our cost control tight.

Margins, also here, we have a similar picture. The gross margin clearly decreased and reached 44.9% for the full year, showing a reduction of 2.2 percentage points compared to previous year. After a strong start in the first quarter, Liberation Day came early April and our second and third quarters were significantly impacted by the negative effects of trade conflicts, tariffs, exchange rates fluctuations and excess capacity. Q4 then improved slightly by -- or improved then by 1.3 percentage points.

Operating profit thus reached $112.3 million or 16.7% of sales. This compares to the $136 million record level from previous year with 20.3% of sales. Year-on-year tax rate -- tax expense decreased by approximately 10% to $21.1 million, which gave us a tax rate of 19.7%, which compares to 17.3% in the last year, which was, as already mentioned, a little bit impacted by changes in the U.S. tax legislation.

The net profit reached $85.8 million or 12.7%. This compares to $112.8 million or 16.8% in the previous year, a decrease of 24%. Also here, a few key balance sheet data. Operating cash flow for the full year was at close to $90 million and about 23% lower than previous year, mainly driven by the lower net income level. Capital expenditure decreased by 23% to close to $22 million and the working capital equity ratio I already commented.

Now let me close with the outlook. During 2025, the order intake continuously exceeded sales and thus improved a solid or provides a solid base for the upcoming months. In addition, we expect an upturn in the semiconductor market for the current year and beyond. Certain risks and uncertainties connected to the ongoing trade disputes and unfavorable effects from foreign currency remain.

Profitability expected to strengthen gradually, while some pressure on operating income margin might remain. Based on that, we expect sales for the current year in the range of $680 million to $720 million with an operating profit margin of 17% to 19%.

And now my final -- nearly final slide. The dividend once a year, we talk dividend. Based on the performance of 2025 and the consideration of future investments and growth plans, the Board of Directors has decided to propose to the Annual General Meeting of Shareholders scheduled for April 22, a distribution of an ordinary dividend of CHF 2.

This is a 4.8% decrease compared to last year, but represents a clearly increased payout margin with 73%. This also means we will return approximately $63 million to our shareholders. The payout is expected to be -- to take place on April 28. With that, I would like to close the presentation.

Next event, this is really the last slide is our AGM in Rapperswil-Jona, April 22. And then 2 days later, we see us again with the Q1 results on April 24. The next analyst visit here in Balzers in Liechtenstein and this is on May 27 schedule. So now this was really the last slide. Now we are ready to take your questions.

Thank you, gentlemen. We have a couple of people wanting to ask questions. The first questions come from [indiscernible] Laura, please.

I actually have one question. I would like to -- can you hear me?

Yes.

Okay. Great. First, I would like to understand the building blocks to your $680 million to $720 million top line guidance, particularly to the lower end. I mean that's a 1% to 7% local currency growth. And to me, it just seems rather conservative. I mean if we look -- if we simply look at the semi segment, right, in the past, the end market was growing, what, 5% to 7%, as you said it yourself, and your Semi market -- your Semi segment was growing 11-plus percent. So there was already an outperformance there.

And now the addressable market for semi is growing 13% a year. So if I assume that you will grow at least in line with the market, then you're saying that on the lower end of your guidance, you're expecting a double-digit percentage -- a low double-digit percentage decline in your other segments, which I don't know, it doesn't seem very aligned to what you say in your slides. And also on the higher end, there will be only a 1% growth. I mean, to be honest, I think all of the guidance is conservative, the lower and the higher end. So just trying to understand what have you considered in either case.

Yes. Thank you, Laura. I mean, we, of course, expected this question. Look, last year, at this point of time, there wasn't a Liberation Day yet. We delivered 20% [indiscernible]. And we saw an acceleration for the semiconductor ramp, not as steep as we see it now, but we saw these indicators. And then the following 2 quarters, we all know what happened. Q2, Q3 was very difficult for INFICON and for many in the industry and beyond the industry, obviously, right, because of this trade dispute escalation.

So I guess where we are at is we're just trying to be a little bit cautious and understand these risks well and these uncertainties, and I believe they are significant. I mean, we started the year already with a number of negative surprises. We do not know how the year is going to develop.

But of course, if you would take out uncertainties and risks, there is a significant upside potential, of course. We could imagine much higher numbers. But I believe where we are at this point in March this year, that is how we see the corridor with taking also significant risks and uncertainties into account. I hope this answers the question.

Naturally, we are very optimistic around the semiconductor ramp. But the timing maybe is already one of the uncertainties that is not so clear. Again, it's much stronger than last year. That's for sure. Also, the order increase is significant. The projections of our customers are significantly higher. So that is all good reasons for very high optimism.

Okay. And then if I may, just one more. Just looking for some comments regarding supply chain availability, also regarding freight rates and so on. Like how ready are you guys and how ready is the supply chain? Or should we expect any hiccups?

Yes. We have done significant work on our supply chain since the last large crisis 3 years ago and have reconfigured our supply chains globally and also the manufacturing footprint. And as we talked a lot last year, specifically in Q2, Q3, we accelerated all of these programs. So I believe we have a very strong setup. But again, I will say the same thing that there's so much uncertainty these days. It's hard to see.

Nobody would have seen this Middle Eastern escalation as we have seen. Maybe we're just about to take an off-ramp there, that will be very positive. But there is also negative scenarios there, which will impact global logistics quite significantly. I think we remain optimistic, and we are also confident about our position and how we can develop this year, while at the same time, also make sure we can go and respond to difficult scenarios.

And I believe we have, again, significantly strengthened supply chain and global footprint. Not to forget that we really changed our strategy the last 5, 10 years from innovating in 3 main competency centers, that being Lichtenstein, Germany and U.S., we now innovate much closer with our customers and much more in Asia.

And the same goes through then the whole company, right, as I mentioned, down to production and supply chain. We have worked on all of these pieces to be ready for the future, but not only to respond to trade uncertainties, but mainly actually to be at the forefront of innovation and really drive this forward.

That is about this exceptional customer intimacy we have, and we want to further use that and strengthen that with innovating in Taiwan, in China, in Korea, in Japan and so on as well as we do already in the U.S. and in Germany and Switzerland and Europe for a very long time.

Next question comes from Michael Foeth.

Two questions from my side. The first one is regarding the opportunity you mentioned around data center build-out in HVAC. It's obviously happening already in 2025 and 2026, there is massive CapEx on data centers and yet you are guiding only for flat to growth.

So it somehow can't really connect the dots and try to understand where the opportunity really lies for you unless there is a massive decline in the rest of the business. So if you can comment on that.

And the second question would be to Matthias, if you could please provide some sort of bridge for the EBIT margin from 2025 to 2026 along the points that impacted the margin in 2025 to understand how it's developing and how we should interpret the path back to 20% plus margins.

Yes. Thank you, Michael. Yes, your question on RAC/Auto market, right? Yes, you could be significantly more optimistic there. That's true. The data center is a new segment, and it's a growing segment. It's an exciting segment. And we have developed the first products last year that we launched for this totally different dimension and performance of this new HVAC systems.

That is still relatively early. I mean there's all the reason there for optimism, but the significant growth still has to come, right? The whole industry has to -- is turned on its head. Old players struggle to catch up. Some new players enter. Everybody needs to innovate at a whole different pace for that industry.

Semiconductor has a different pace than HVAC industry, and that is kind of now injected into this market, certainly exciting. Yes. And this RAC/Auto end market breaks down in other segments. That's why it's, of course, in between, there is a battery in there, which I commented on the EV transition. It's going forward again.

And I believe the midterm development will be strong. There's some policy issues there in all the regions, as we all know, that's public knowledge. And the auto market itself is struggling specifically in Europe and in the U.S., but also now in China a bit. So there is some positive signals there, but there's no reason for extreme optimism in that segment.

I believe then the new refrigerant business, that is a steady growing one, right? That's all about climate change and adapting to the new regulations where we are at the forefront with our product, and that will continue to grow. So you've got a mixed bag there of a little bit of everything, I think. The data center is the exciting new thing. And then there is some things that are a bit still in the rebound starting phase, and then there is the steady growing one in the middle.

Again, to your question, is that too conservative or not? Yes, you could maybe think that. And yes, we have, of course, scenarios where we see this grow more or much more. But I think we -- it's just also a good time to be a little bit cautious with where we're going. We're certainly ready for ramps, specifically in the semiconductor area, we are ready with our supply chain and our manufacturing. We're definitely pushing on innovation.

But at the same time, you need to also manage the expectations and the scenarios in a realistic fashion, right? We need to see a few more signals maybe on the geopolitical side for easing of tensions that would really give then room for a very positive outlook. I hope that helps, Michael. And now you had a second question on the...

Let me try to explain a little bit, Michael. We -- as we commented, I think there were 3 main items in there putting pressure on our margin, the tariffs the capacity, duplication and the FX as 3 big points, I would say, and as I said, it was around 3% in Q4 and a little bit higher for the full year.

So can we work on FX? No, not really. There are limitations in there. What we can do. Of course, we have this topic on our list to limit and ideally optimize a little bit the exposure. But then we have the tariffs, and yes, we worked on that. Therefore, we had a few transfers and relocation of products as well to minimize these impacts.

But also here, it's somehow limited what we can do. We can work on capacity, on capacity duplication, on efficiency on top of other topics like pricing and really working more efficient. And these are the -- this is, I would say, the main topic where we need to emphasize and ialso optimize our workforce and where we are and how we do things. That's the main focus.

And yes, the guidance we gave was 17% to 19%. And if you take the average, it's 18%. We closed the year with 16.7% and Q4, 17.5%. So there's, I believe, a good chance, right, to reach it and to work on the projects and topics I just mentioned. Some of them are worked to a huge degree concluded and finished, but there is still some work to do and to optimize.

Yes. And I would just like to emphasize that when you reconfigure globally innovation and also manufacturing supply chain, that also means reducing headcounts in some areas, reducing headcount we do this in a human-centric in a legal way.

So that is connected with plans, agreements and severance. So this takes a little bit of time, right? So there is -- this is not fully done yet. I think we show very positive development in Q4. But this year, there will be still some left to do. But we see the path to this 20% already now when we take out this special effect.

So we are confident on the one side that we are on the right track, but we also see that there is some more to be done. And then again, I reemphasize there have been multiple shocks in the last 12 months that were very unexpected and very painful. So we're a little bit cautious on that end as well on the bottom line of what might come and what might cost us, right?

There's also good reasons for some inflation, some economic slowdown. You all are very strong in analytics. So you know that as good as we know, what is potential risks that will emerge. I hope that helps, Michael. We hope that it's going to be a fantastic year and will be a lot of fun. We could certainly -- we could use it after all this extra work with not so much extra fun on the top and bottom line last year, right? That is certainly what we would hope for and I think it's a good chance to also materialize.

Next questions come from Jörn Iffert.

The first one would be pleased to follow up on the margin topic. Can you please tell us, I mean, in this 300 basis points, or if I compare Q4 with 2024 average, it's still a 250 basis points impact on the gross margin. What here really is FX, which is likely staying?

And what is the duplication costs, full-time employees, which will be reduced, which can be offset. So I want to figure out if the revenues would remain flattish, what is the margin support at the end of the day incrementally in 2026 versus 2025, [indiscernible] to better get a crap on this one. Maybe to start with this, if it's okay.

Yes. I mean I can start and maybe you want to add some. Yes, we have these 3 buckets, as Matthias outlined, as we outlined also in prior calls of tariffs, capacity and FX. I think the capacity is the biggest bucket of those. If you look at full year, just because we opened up new locations and then needed to ramp up and down the old ones, and there was a time overlap.

And this is now happening. I believe there, we can largely reduce at the same time, it's also a ramping coming for some of the product lines. This will all be buoying anyway then. But the tariffs we had at one point of time, I think a 2 percentage point impact and that went down to about half.

I think there is some more room there for improvement through further configuration, also some paperwork, some approvals, some things like that, which just take a little bit longer, but are less high impact. And then FX, yes, there is another percentage point in there, I think roughly right, maybe a little bit less depending. And -- but that one, yes, we have to take it to some degree. But at the same time, we also take measures on this as part of our long-term strategy that we now accelerated.

And what that just factually means is, of course, going to be in this FX disadvantaged region, we rather reduce headcount where we rather add them in new locations. This is a lot about building up our Asian footprint as well, which serves different goals, right?

The main goal is innovation and collaboration with our customers, as I mentioned earlier. And some of it is local for local production and sourcing. And -- but then, of course, also rebalance a little bit our footprint. Maybe you want to add some more color on...

I think the numbers. What I said previously and Oliver just commented, I think this is correct. We have these 3 buckets. And when we take a look to the full year, right, you can -- we can say that this amounts -- these 3 items to roughly 3.2 to 3.5 percentage points of impact, right, of course, in different quarters with different values, but for the full year around that.

Big influence is, as mentioned already, capacity application, shifting -- shifting production, looking at efficiency at people at overcapacity and so on and reduce it. And this is where we can work on tariffs a little bit and FX also a little bit because, as Oliver just explained, right, due to the shift, we might be in a better position and a little bit better hedged. But that's the main explanation, I would say, I can.

And then the second out of the 3 questions, if I may, on the semiconductor end market, what do you currently see between OEMs and end users? And what do you see in the sub-technologies, lithography etch deposition and vacuum intensity developments incrementally here for your business?

I would say now it's really pretty much across the board acceleration. And it has accelerated last year. I think we mentioned something 10%, 20% year-on-year, '25 on '24. And then it has really further accelerated and it is accelerating as we speak.

It's chip makers and tool makers for us. There are some individual dynamics, honestly, right? So some need to catch up, maybe they invest extra, some catch up unsuccessfully and they can't invest that much and then some are just on fire. I think we know all these names. This is pretty much in line with what their CapEx announcements are. We are entrenched in all these top players for a long time. So we supply directly.

And memory has now exact the same sensor density as logic, leading logic, honestly. There is so much dynamic there. They buy the same tools. I mentioned earlier, the product launch of the next generation of the APX that is the product that goes in both sides.

And there is also a dynamic on litho and there is also a lot of dynamic in China, which is also in part a replacement of the U.S. OEMs, we believe. So there's different dynamics, but it's really quite pretty much across the board, I would say.

What we see now is in the second tier market is maybe the one that you could exclude a little bit from being that exciting just yet, but they get pulled in because power communication, analog chips, this is all getting pulled with a little bit, let's say, on the time line, probably a little bit placed a little further behind as the leading logic came before memory and then memory had next to the general DRAM cycle on top also the HBM cycle.

So that is a bit different. It's extra hot. But then the other semiconductor markets also accelerate now. It's quite exciting to see. It could be a super exciting couple of years coming. Definitely, this and next year could be extremely exciting.

And then the last question, maybe a shortcut question for the guidance. With these potential risks which might come up and geopolitical uncertainties, understanding that the guidance is conservative, but what does it mean for Q1?

For Q1, with the order intake being pretty strong book-to-bill above 1, it should be a pretty strong start to the year on sales. Is it fair to assume?

Yes. I think -- I mean, generally, we don't give guidance on quarters, but you have the benefit of getting a guidance for the year, which, of course, in the beginning of the year, that's what we're all contemplating here.

Yes, it should it be higher or should it not be higher? It will get better over the year. And it will definitely be very good at the very end of the year. Sorry, jokes aside. But yes, Q1 starts out with good order entry, but there is also all kind of timing issues there. It's a seasonality in there. I believe it will be good.

But if it's exceptional, if it's accelerated, this is not the point of time to go and talk about that. I think we talk about that in about the month. Again, there's also going to be lingering effects of supply chain of cost of severance and all kind of -- we need to see how it really puts itself together, right?

So we don't have that yet. We can talk about it. Again, I would say quarter 1 or not, the year is going to be a good year. We're going to go back to significant growth. I want to reemphasize that Q4 was a record quarter of all times.

I think hardly anybody in this space had that. And the whole year was also a record. I know it's razor thin, but it is 1. So that means we are just building on where we are, and we will build quite a bit further this and next year. I'm pretty sure that we're going to go and create quite some excitement as the year goes on. But that will be another call.

We've received some questions in writing. The first 2 questions come from Craig Abbott. And he asked, how confident are you on still getting back to the 20% operating profit margin and in what time line?

I would say we are 100% confident that we get back there because we can track what the pieces are and what the growth trajectory is. Midterm, it's really logical and easy also go beyond.

What the timing exactly is that refers back to what I said earlier with all these uncertainties. It's -- we know better how geopolitics develop and global economy than you that we don't. We work in different scenarios as we have last year.

And there is very optimistic and exciting scenarios in there where this is very soon because if you have this ramp coming and a couple of other markets on top of that also ramp, this is a no-brainer, right? And then it is very good.

But we don't know if that is really going to materialize like this. I think we have to watch a bit the dynamics of the next months and quarters of how geopolitics develop. And is there going to be another stopper like last year? -- in the semi ramp. I believe it's less likely. But again, we are in March. So I don't know how the full year will unfold. Maybe, Matthias, if you want to.

No, nothing to add. I think that's exactly the situation.

Great. Second question blends into this as well. The question is the guidance includes a cautionary statement that some margin pressure continues. Where in particular, are you seeing this pressure? Is it more a cost issue or a pricing pressure?

I would not say that's a pricing. I think pricing, we're working through that. I made a couple of statements last year about that, that we are taking a partnership approach there. So we work together long term with the key accounts that we work with, the large semi players, and they also want us to be successful.

So there's always solutions that we work out and they work itself through the system. So that will help also over time more and more anyway. I don't think there is anything that we should consider sticks around forever. I believe when we look at the numbers I just mentioned, and Matthias can add some also. tariffs, we reduced, we halved it and we're further trying to reduce capacity will definitely reduce.

There's a ramp where there's a high volume where we now, of course, in some places, carry extra capacity that is ready for the ramp. And in other places, we have it in the wrong place. So that's this kind of working it out of the system, the efficiency measures. And then the FX will stay around for probably some time because of the -- how the currencies have developed, specifically U.S. dollars versus Swiss francs and versus euro to some degree.

But we're also working on that because they expect this to be long term and have respective measures. Those take a little longer, right? So because then you really need to go and reduce your cost base in one currency and transform it somewhere else.

That's a renegotiation of contracts, changing organizational headcounts, that's this kind of thing, which is just legally not even possible to do immediately, right? So that needs to be step by step.

Yes. I agree that the pressure will not -- most likely not come from pricing issues. It's more around these 3 blocks or at least 2 blocks, right, capacity tariffs, one thing, we need to work on it and what we do with regards to efficiency and people and other people and so on, this might create some pressure on that one and tariff on FX, we already mentioned now 2, 3 times.

There were limits, but still, they -- of course, they give some pressure on our result and prevent us for bigger numbers and better numbers to a certain degree and for a certain period of time. So it's more this capacity efficiency and maybe also digitalization topics where we want to use for efficiency gains as well.

Thank you. Morowitz has the following question for you. How did the start of the year go? Has the momentum in orders continued and has profitability also improved?

Yes. I mean that is maybe the same answer as for Jorn. We don't guide on the first quarter. Again, in a month, we'll give you the exact numbers. What I also mentioned before already, we see the orders accelerated last year. Throughout the year, accelerated in the second half of last year, and they continue to accelerate.

That means book-to-bill is actually going higher. And I think the projection is interesting. What we talk about now is with customers about our build-out of capacity and where and for what product lines, that is extremely encouraging. I believe also there, we have made big steps from reliability of -- and also the collaboration closeness that we have with these big players to be more assured of what then truly happens and what needs to happen.

And it's in a very collaborative approach where we build out together with them on the joint plans and joint decisions. And we have taken a few already I mentioned earlier, the CapEx will certainly be quite a bit higher this year. Last year was just $22 million. This year will be, for sure, over $30 million. It might be even $40 million.

So we'll see how this is going to go, but that is still a bit earlier in -- for affecting the immediate quarter. But the preparations, they're running hot already. So in some product lines, this has really accelerated the last couple of months. I would say, the last 6 months, we have seen a continuous acceleration.

To the degree that you could say and maybe that's the reason why I showed this slide at the beginning of the $1.6 trillion Semi market in 2030, that might be really a step change. We have been in a good market with ups and downs, but a good average growth, but that would be that step change. We could actually -- from all the indicators we have, we probably say that is exactly what we see as well. But again, right, so that is part of scenario planning. I hope that helps.

Thank you. [indiscernible] also has a question that looks kind of into the future. He would like to know, could you give more detail on the growth for each segment you're expecting to reach your top line guidance of plus 1% to plus 7% in local currency?

I mean we don't guide in percentages there. We mentioned strong growth in Semi. I believe I gave quite some color on this. There could be a lot of upside potential, specifically if you look at the horizon of 6 to 24 months. The timing is a bit the question, right? And is there another stumble stone or slowdown or something.

And then when you look at Gen Vac and RAC/Auto, I believe I also gave some colors, right? There's submarkets there that have different dynamics that you need to add up. So we believe they will all they will both be able to grow. But we don't know if there are slowdowns, stumble blocks, and that is where this flat comes in, right?

So we would, of course, in a realistic scenario, say they grow. But they're obviously not going to grow 20% plus. That would not be an expectation we would have. But as you've seen also Gen Vac has grown last year 12% full year. So that's possible.

And I believe RAC/Auto has been growing every single year, even though it's been very difficult 2 to 3 years in many of the submarkets it. So we'll continue to develop like that. Security & Energy, it's heating up. The pipeline is filling. Again, the defense budgets are increasing. There could be other chunks like we just saw in Q4 happening, and then it's all quick, quick as soon as we win such a rollout phase. But it's just not a year yet where we see the very big programs rolling as we know from the past.

And they will come, but they're not here yet. Hence, we're a bit cautious there in giving you a growth outlook. And that's why we called it decrease. I hope that helps. We don't give more detailed numbers. It's also not necessarily an accuracy we would have, right, that we can give you exact percentage numbers.

Thank you, Oliver. There are no further questions at this time. So Oli and Matthias, any closing remarks?

Yes. Thank you very much. Thanks, everybody, for tuning in today and for the good questions. Look, it's been a tough year 2025. I think 2026 has all the hallmarks to be a super exciting year.

So we look forward to that. We have a very strong position in innovation with leading products. I mentioned a few. So let's see how it goes. It will be certainly quite interesting, I believe. Stay tuned. And we talk again soon. As I mentioned, there's AGM upcoming, there's analysts upcoming, and there is a Q1 earnings release upcoming shortly. Thank you very much, and have a wonderful day.

Yes. Thank you very much.

Good morning, and welcome, everyone. My name is Bernhard Schweizer, Investor Relations contact at INFICON. I have the pleasure of hosting the webcast of our third quarter 2025 results conference. With us today are Oliver Wyrsch, CEO of INFICON, and Matthias Troendle, CFO of INFICON. The management team will first present the results and then take questions.

[Operator Instructions] You should have received by now a press release on the Q3 results, together with a link to the accompanying visuals for this web conference. All documents are available for download in the Investor section of the INFICON website, inficon.com. I would also like to inform you that we record this web conference to archive the audio file later on the INFICON website.

The oral statements made by INFICON during these sessions may contain forward-looking statements that do not solely relate to historical or current facts. These forward-looking statements are based on current plans and expectations of our management and are subject to a number of uncertainties and risks that could significantly affect our current plans and expectations as well as future results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Having said all that, I would like to hand over now to Oliver Wyrsch. Oliver, please.

Thank you very much, Bernhard. Welcome, everyone. Great for having you here today, and welcome to our earnings release in Q3. About the agenda, we have the usual agenda. First, I will tell you a bit more about the markets, the key messages, about the target markets developments and about our full year expectations. And then I will hand over to Matthias Troendle, our CFO, for more details on the Q3 results.

So certainly, stormy times these days. But at the same time, it's the time for making bold moves, we believe, and it's not the time for hunkering down. And we actually have quite a lot of optimism here. And I will tell you in the next couple of slides, why we see it that way, even though, of course, it's also a bit rough going [indiscernible]. The Q3 results, we have an ongoing positive order trend with the third consecutive quarter with a book-to-bill above one. In a quite demanding environment in all our markets, we show continuous resilience despite the market weaknesses, and we have temporary profitability impacts due to the trade disputes ongoing.

If you look at the orders, we can see that they increased substantially year-on-year, and they're up in all end markets and all regions, except Europe, with resilient sales year-to-date, roughly flat. And shipping these days is also a little bit disrupted at times through these trade disputes. So for us, we looked at this as a flat development and also Q3 sales of $164 million. We look as a good results. We had a tough comparison with last year. We'll get back to that when we have large semi orders out of China chip maker that we delivered.

If you look at the segments briefly in our overview, we have growth of semiconductors in all regions, offset by a weakened market in China. Regarding sales, resulting in flat year-to-date, minus 1%. The broad ramp of the industry, we believe, is further delayed due to these disputes and negative investment developments where projects delay further on the timeline. They don't go away, but they've, move out further. So we believe ramp is rather second half '26 or even partially In '27.

General Vacuum is growing in 2025 with another good quarter, plus 7% year-to-date, plus 6% quarter-on-quarter. Solid Q3 RAC auto results, I will talk more about that. Growth, even though the market is partially in consolidation, plus 4% year-to-date. Security & Energy is in a usual cyclical downturn where we have government program timings mostly defining these cycles. We have, however, already received first larger orders again from the next program wave.

If you look at operating results, operating margin at 14%. The key factors there are lingering temporary impacts from the trade disputes. One key thing there is the capacity duplication. I'll get back to that in a minute. Negative foreign exchange effects. That's mainly the strong Swiss franc versus the U.S. dollars and the tariff impact. Efficiency measures are in execution around all that. So regarding the capacity duplication, what is that, as you know, in Q2, we showed how we move the production. This reconfiguration is largely concluded now, and we have adjusted to the new trade world in that sense. What we though still have is we have capacity in the former production location that needs to be ramped down over time.

If you want to look at that in a big picture, then you could say we have still too much capacity in the West as we have ramped up in a real fast pace in the East. Now it's about ramping down the capacities in the West that we do not need anymore because we supply our customers directly out of the East. Then when we look at the FX impact, these affect part of our locations. It's an effect, we're also working on ramping down.

It's basically similar measures, right, moving around headcounts and capacity. And tariffs, I believe we have been able to reduce quite significantly versus the last quarter through these measures, though there's some that still remain, and some few ones will even stay for foreseeable future.

If I continue here, we will go into this -- all these topics in more detail through the presentation. Operating cash flow at a robust USD 27 million. And then when we look at the organization, as I mentioned, the production reconfiguration is concluded. But of course, still some of this duplication needs to be managed, which we are with high priority working on. With this new setup, we avoid the substantial trade dispute impacts. This is barriers and tariffs, other factors that we are able to avoid like this. And I believe we are very well positioned now for future different scenarios. There's a lot of uncertainty, of course, and I believe we're positioned for all of these different scenarios.

We continue to invest in leading edge R&D with 8% of sales. I think this is a key point when we look at our orders. I'll get back to that also in a minute. When we look at CapEx, this is a little bit slower than before. I believe we have the CapEx -- when we move production capacity, we typically don't need so much additional CapEx because we're moving tools and so on. So we're looking at about USD 20 million, USD 25 million for CapEx. When we look at the overall pictures and also tie it together while we push forward with leading-edge R&D and are really optimistic there is -- we're winning for 3 factors really. And that's also why we could show orders different than many others in these industries where we have really interesting R&D pipeline where we're winning new business.

We're opening up new applications that weren't possible to be centralized before. There was no measurement possible before. So that's also a harsher environments with all the leading edge logic, for instance, or leading edge memory. There's clear market share gain and there is also a couple of interesting smaller markets that we focus on that we find are equally interesting as the semi market, good growth, good profitability and they actually show strong resilience in this more difficult economic time. So 3 good drivers for why our orders are up. And I believe this is the time for bold moves for INFICON, really move forward and focus on the customers.

So if we dive into the different perspectives here, worldwide markets and sales, we made 1 change for you, a little bit increased transparency in the sense we show now 4 regions. I think it's quite relevant to show these 4 regions. That's how we internally think. That's how we structure our innovation, organization and also production and supply chain. So we're looking now at Asia Pacific, China, Europe and Americas. If you look at the development there regarding sales, you can see 2 regions are down in Q3, 2 regions are up. All in all, you can see a positive trend, especially in Europe and Asia Pacific, and China and America is a bit slower. There is some reflection of the U.S. trade restrictions in that.

If you then jump into the different target markets, starting with Semiconductor and Vacuum Coating, we are in a very strong position. As I just mentioned, I believe now is the time where we really expand our footprint there in the market, opening up new publication, gaining market share. And the innovation pipeline is on fire. I think it's also in the slower times the time where you can with your customers truly innovate on the next generation of products or the one after of their products. And that's really what we see these times. When we look at the general market developments, the broad industry ramp, as I mentioned earlier, we believe, is delayed through to the trade tension which constrains the growth and delay the investments.

That is the timing that we cannot influence. That's the industry. Some subsegment, though there are, of course, already ramping, but it's too narrow, specifically the 1 around AI, that is HPC and HBM, certainly, very interesting. That's a few players that play well and there's a few others that's trying to catch up. That's where CapEx investments happen on a larger scale and where we see an acceleration, but it is still too narrow, when you look at other submarkets within the semiconductor market there is everything from being really quite hot and ramping to slowing down again.

And I think also what is interesting as opposed to maybe also other cycles is it's a bit back and forth. So we see things like last year in China, we had an acceleration in chip makers investments that we then also shipped. That is also why our comparison year-on-year on the Q3 is tough because we shipped that all in Q3. Then we saw a slowdown of this chip maker business in China, but an acceleration of the toolmaker in the first half of this year, we shipped that too and now we see again that has slowed down, but a bit of an uptick again in China. So there's so much -- this is an example, so much going back and forth, the visibility is really quite low.

So when we look at the market outlook for semiconductor we look at this flat to slow. And the main reason for that is actually, we are trending flat to last year, and I think if we have shipped everything, we could be even a little bit ahead. But the last year's Q4 quarter was really quite huge, an absolute record quarter because we shipped so much also for the chip makers, that $100 million to repeat that, that will be not so easy. It's possible, but that's why we are saying flat to slow on this.

All in all, really optimistic about what's happening in the partnerships with our customers, where we work on the next generation of our products, a lot of new wins across the board. Quite exciting technology updates, and you'll know, you will hear more about that in other formats as well.

If we then jump into RAC Auto target market, I think also here, we expand our already strong position. This is a market that overall is not growing necessarily, at least part of it, especially the EV part of it has just passed through rock bottom and is now picking up slowly. But we clearly gain market share there with our leading edge products. I think we are at least a generation ahead there. And we're also winning in the East, which is very important. That also shows how localized we can operate, innovation and manufacturing. So here, we had a growth of, as you see on the chart on the right, of 30% in 2023, but you could sustain that level and grow ever since in 2024 and also this year, we show growth with year-to-date, plus 4%. So I think we expanded this market.

Important next to auto and EV that again is past the rock bottom and seems to be solely picking up in spite of all the headwinds from policy to consumption. Two other things are also important. One is the build of data centers is something where we profit from clearly, obviously, on the semiconductor end market, but we also profit from it here because why air conditioning market is a key supporter of these data centers, a very key ingredient to build large data centers, and that's where we see a really strong dynamic now emerging just over the last couple of quarters. And the other one is a bit of a longer-term one. The new refrigerants due to the climate policy changes that drives our new sensor growth, that's also new innovations from us that are able to detect these new refrigerants. That drives that market as well.

So all in all, a really strong R&D pipeline. I think ELT is strong. Stratus is strong. There's a couple of other strong products here. What also is a factor here is specifically for the handhelds, our competition is American. We were able to relatively quickly move now in Q2 our production out of China, everybody manufactures in China, and now we're supplying globally out of Malaysia, and we see market gains there too because of this really fast reaction. Yes, it cost us. We got a big thing, right? We see it in the operational income, but we also see the benefits on it already now emerging in these gains. Okay.

Then we move on to the next target market channel, General Vacuum, quite excited about that. I think we show continued sales growth after 2024 was slower. And remember, 2023 was COVID opening and shipping of all the backlog, so a bit of an outlier. But now in 2025, we see continued growth. And you see, year-to-date, the plus 7% year-on-year, significantly up quarter-on-quarter up. I think this shows also the strong position that we further expand. This is a bucket of many smaller markets, maybe 20 or so that we carefully select regarding our position, what we can contribute the growth potential, the profitability potential, and I think now is also the time of this smaller industrial -- advanced industrial markets or also big science markets or life science markets, which show strength where we can further expand our position, but they also grow.

One thing is missing still is the solar market, which is an interesting part of this basket of markets. We believe this is still in consolidation. There's a lot of overcapacity, specifically in China. And it's very likely that the recovery really only comes end of '26 or even slips partially into '27. Nonetheless, I think there's a lot of reason for optimism as we also hear build out our strong positions across the submarkets.

The last market, Security & Energy, as I mentioned, we have #1 product here. But this is driven by this large government programs, big ones in the U.S. but also across NATO and also in the East. We have been rolling out a couple of programs over the last couple of years, you see the massive growth that we've shown from '22 to '24. This year was expected to be slower, but we have already seen good order entry again. So the first pieces are coming. This is not a full new cycle. I think we are still working on the new programs, and they will come in. But it's a good sign of how dynamic this is. And of course, with the security situation, defense budgets go up all around, specifically in Europe. Plus, specific new HAPSITE generation is able to go into a number of new applications, explosives, narcotics, environment testing.

These are all additional submarkets that we are adding over time. Remember here, the qualification period is really multiple years. So this all takes a lot of time. I think we show good progress. But until you truly see it in the numbers for these new markets that will still take some time. But we have first really interesting wins. And then when we move to the expectations 2025, I think there's reason for optimism for us regarding our market position, how we expanded our order situation and also the market outlook.

Orders remain strong. The third consecutive quarters that are above 1, quite significantly above last year. Year-to-date, across multiple dimensions, what is difficult is still the outlook. I described it before with the example of China, but that goes across different submarkets, different geographies. It's a back and forth. It's murky. It's changing quick. It's volatile. I think for us, it's key that we're well positioned that we expand our position and then whatever submarket then we'll start to ramp, we are part of the game. And we can show that already now, I believe, and will continue to do so.

So the uncertainties are there, but we also have prepared ourselves over Q2, in particular, but also Q3 to be positioned with our global footprint for innovation, for manufacturing to be really close to the customer, react fast and supply product but also innovate together in all 4 regions, which I'm very optimistic about for the future no matter what exactly the impact can be. Efficiency measures though, are required, right? I told you but broadly, it's a ramp down in the West and the ramp-up in the East, but that doesn't go entirely -- that goes a little bit in parallel, right? So that's the time where we are in, where there's certain inefficiencies.

So when we look at the full year guidance, we narrowed it to USD 660 million to USD 680 million of sales and an operating income to 16% to 17%. I think this gap to 2020 is our benchmark. 20% is where we're going to go back to. Our business model is 20% plus, and we have a path beyond that. There's three major factors if you look at the full year. One is this duplicated capacity that we are rapidly reducing. One is FX, which is largely Swiss bank, which we are also addressing, but it will probably not go fully away. But we are addressing it with also moving. And the third one is tariffs and tariffs we have already halved from the last quarter, and we further worked on this as we optimize the stream of the goods across the INFICON world.

And with that, I finish with our typical picture here. follow us If you want to have more insight what's going on at INFICON on different dimension, I think there's 2 or 3 interesting most recent post that we made. One is the expansion of the clean room in Longmont, exciting new expansion for our American customers and to supply them more closely and faster and ramp there. That's a product that we do there that ramps real quick. Actually, that's part of the new market gains that we make.

Malaysia, you know about that, but you can also see that we are investing into further global service, always stay close to the customer, especially in difficult stormy times that's when you gain. So we expand global service and repair capacities, especially also in these times. So we continue to invest in that. And you also see leading edge product development across the board from big science, like they're close to Chicago and Fermilab. I actually personally know this experiment quite well. It's a super exciting experiment where they challenge the standard model of physics.

And then also, of course, in a more broader sector where we lead the thinking around how smart manufacturing needs to look in semiconductor fabs where we're taking over the lead of the global semi org's special industry group that develops the future vision of that. So across the board, I think, really interesting news about, yes, it's also been a difficult quarter, a lot of extra work impacts on the bottom line, but I think the optimism is well justified.

So with this, I want to close and move over to our CFO, Matthias Troendle, who'll give you a few more details on the financials.

Good morning, everyone. Welcome to our Q3 conference call. As usual, I will guide you briefly through the financials and also comment the guidance. So let me first start with the highlights for Q3. In Q3, the book-to-bill ratio was above 1 for the third time in a row, which is very good. And we also saw a substantial order increase year-over-year and in all end markets. Our sales showed a slight decrease with 4.9% versus Q3 last year. The gross margin just addressed by -- and commented by Oliver dropped clearly to 43%, hit by temporary impacts from trade-related disputes and reached 43%. As a consequence, operating income reached $22.9 million or 14% of sales.

From a balance sheet point of view, investments and capital expenditures reached $6.1 million, slightly higher than last year and also slightly higher than in the previous quarter. The cash flow ended with solid $26.7 million, driving the cash to a level of $60.5 million, which is $9 million higher than Q3 last year, and the equity ratio increased by 4 percentage points and reached strong 69%.

Now let me go a little bit more into the details. As you have seen and as commented, we reached sales of $163.9 million compared to Q3 last year, which represents a slight reduction of 4.9%. Compared to previous quarter, this is slightly lower by 2.1%. Oliver did already comment the end market developments compared to Q3 last year, sales to the General Vacuum market increased for the third time in a row and did grow by 20%. Refrigeration, air conditioning and automotive sales developed well with a plus of 9%. The Semi & Vacuum Coating declined by 14% versus strong and actually the second-best quarter last year, and sales to the Security & Energy market dropped by 52%.

When we take a look to the regional performance, which we have expanded and modified and we did breakdown Asia into Asia Pacific and China, and we'll do this also for the future. We see that Asia Pacific surged by 23%, where sales to most markets did grow strongly. China decreased 22%, mainly due to slower Semiconductor business. Europe increased by 4% and Americas were slow due to weaker Security & Energy business.

Let's go to the operating expense. R&D costs decreased by 5.3%, driven by some efficiency gains and while we still continue to focus on our development activities and the related investments. The SG&A cost did increase by 4.8%, but this increase is mainly driven by foreign currency impacts and costs stayed tightly managed.

Now turning to the margin situation. Q3 margins have been under pressure and declined. The gross profit margin reached 43%, basically the same level as Q2 and decreased by 4.4 percentage points versus last year Q3. The operating profit for the third quarter reached 14% compared to 20.3% last year, a reduction of 6.3% in percentage points. What are the main reasons for that. We had several temporary negative impacts direct or indirect related from trade disputes, which were tariff impacts due to increased base tariff levels, which is mostly related to shipments from Asia to the U.S. as well as from Europe to the U.S. These are the main drivers. Cost due to strategic duplication efforts reconfiguration of the production when we had negative impact on the gross margin and operating expense from persistence from headwinds from the exchange rates.

Main drivers here, as Oliver mentioned, the euro and the Swiss franc against the U.S. dollar. And on top, we had, of course, some other efficiency measures we had to implement, which did drive this down. All impacts together did account for around 6% -- 6 percentage point.

Let's talk to the income tax. Income tax for the third quarter was at $7.1 million and which represents a tax rate of 47 -- 24.7% compared to 21.2% in Q3 last year. The net income reached $17.3 million or 10.6%. This is due to the lower operating income and somewhat higher tax rate.

Now let's move on to the balance sheet highlights. Our net cash reached $60.5 million, which is about $14 million lower than end of last year, but about $9 million higher than last year Q3. The turns for inventory developed stable with $2.4 million and the DSO ratio reached 48 days, a good and comparable level to Q4 last year. Our working capital, which consists of accounts receivables, inventory minus accounts payables closed to $224 million or 34.2% of sales and with that ended about $9 million higher than end of last year and about $4 million lower than previous quarter Q2. The increase in inventory -- the increase is mainly driven by the change in inventory for the working capital, which is also impacted to a certain degree by some unfavorable currency movements. Our operating cash flow reached a solid level of $26.7 million improved against previous quarter by $8 million and slightly lower than Q4 last year. And the balance sheet, as already mentioned at a strong equity ratio of 69%.

So those were my comments on the balance sheet and Q3 results. Just let me finish with the guidance. As you can see here, we show revenues and operating income or sales and operating income. We are positive on the order situation and in general, with the assessment of our various end markets which we serve. Certain risks and uncertainties definitely are connected to the results and the ongoing trade disputes and the unfavorable FX impacts might remain. Based on that, we updated and narrowed our guidance for the full year of 2025 and expect revenues of $660 million to $680 million with an operating income margin of 16% to 17%.

With that, I would like to close the presentation. The next events are our Analyst Day here in Balzers, Liechtenstein on November 20. And then we see us again in March with Q4 and the full year results for 2025. And now we are ready to take you questions.

Thank you, gentlemen. The first questions will come from Jörn Iffert.

I would take -- or I would have 3 questions, and I will go back in the queue. The first one, similar to Q2, the margins were maybe a little bit short of market expectations. Can you give us a margin bridge? What exactly was the duplication cost, tariffs, you mentioned was around 100 basis points and what was FX? And what is the path out of this? When do you expect margins, gross profit margins to go back to this 46, 47 percentage points? This is the first question, please.

Okay. Let's do it one by one, then I'll start, and then Matthias can add a little bit. So for Q3, specifically, it moves around, maybe as a first comment, right? So Q1 is very different from Q2 and Q3, again, is very different from Q2 and Q4 will also be different. So this is all moving around. So what is exactly happening? So in Q3, we have the tariffs at about 1 percentage point, and they're talking now operating income margin, yes. And then 2.5% is this capacity duplication. And then about 2 percentage points is the FX impact. And then there's a few more smaller items, smaller than 1 percentage points for the restructuring, right? There's severance and there's things like that when you were moving around your organization.

So when you look at the full year, we would say that we end up with about 3 equal shares, probably the capacity duplication could be still a bit bigger than the other ones, but the 3 shares will roughly be the tariffs, the capacity duplication and the FX. And there's a few other things still for the reorganization that will be those smaller. If you look at Q3 over Q2, I think that's also an important factor. In Q2, we said we have about 2 percentage points tariffs. That went down to 1. So that shows we are working through this at a very accelerated rate through this reconfiguration and it's all bureaucracy in place, and I'll tell you also bureaucracy is complicated. These times, nobody has clear answer, so there's a lot of back and forth. But we're working forward and have made really good progress. So we have that.

And the capacity duplication, you could hardly see in Q2 yet, obviously, because we did it during the Q2. So that was about 0.5 percentage points at the time. And the FX was about 1.5% in Q2 and decreased a bit. I think it works itself through the system. Also when we look at next year, 1 scenario is -- could be exciting in the second half, a nice ramp in semi and a couple of other markets ramping, one scenario, the other scenario is we end up in a stagflation maybe in U.S. and other places, inflation goes up, growth slows down because of hesitation for investments. So there might be more on that, we will see. So -- but to kind of roughly bridge you from Q2 to Q3 to full year, that helps you maybe on the opening.

I think maybe, Matthias, if you want to get a few more points on margin maybe...

Not much to add. The tariffs, we -- the impact of tariffs is going down in comparison to Q2. This is -- on the one hand side, a little bit driven by this escalation period in April, May. So the tariffs have been high in Q2 in April, May, especially, but there will be also worked on many items. And of course, we implement certain structures which did help to minimize it to a 1 percentage points level. And the biggest swing basically is in FX and capacity duplication. As Oliver mentioned, FX was 1.5% roughly in Q2. Now we see a more 2 percentage point level.

Was the impact foreseeable? Yes, I would say, but the level and the actual scale of the impact was a little bit higher than what we expected actually in Q3. I must say, for FX. And then we have a set of different other measures, which roughly account for 4.5%. So in total, about 6%, from a year-to-date point of view, at least 6% comparison is in the range of 3.5% plus/minus a little bit. So year-to-date impact is in that area of 3.5%.

Maybe a general word, Jörn, because you also asked where we're going from there. So while we're not giving guidance for next year, of course, but we are the 10%-plus operating income company and the system hasn't changed. This, for me, it sounds maybe too optimistic to you, but I'll explain you why. This is noise in the system for me because we are moving now and making gains but we have to go and do it quickly. I think this is the time where we do the bold moves and not hunker down and protect our margin. I think now is a time where we can actually really make these moves.

We have customers which I tried to outline, and now it's also a bit more in the system still, right? We're ready for a ramp actually in different markets, not only semi, but it isn't coming yet. It isn't broad enough. But when it comes, we will be ready for it. And this will lift the whole system up. So I have no real particular reason for pessimism or we don't on our profitability either.

But I think where I'm truly get excited is what can you achieve in the stormy times in this difficult times of the agility. And that's what we really try to play. And that's also the reason for our optimism. I think let's see what happens in the year from now, how far we get into this. I think it's quite exciting. But we'll see, right? Whatever scenario it is, if it's a ramp, it's clear, it's fun. It's like strapping like always, when you have a semiconductor ramp. If not, we'll play this play -- this game where we go and gain market share where we R&D a lot and then pushed forward like this. I hope this answers your question.

And I would move on maybe with the next two questions, I will take them together. Second question is on China. Semiconductor business was down. You explained there's some lumpiness but that order accelerate already? And have you monitored any changes on market share that you lost some market shares, for example.

And the third question would be the leading indicators like the memory chip price, I mean, going through the roof. This usually would indicate that supply is tight. You are saying the opposite side. Your vacuum peers are saying the opposite. But how do you explain then the materially increasing chip price at the end of the day when supply is too much?

It's a good question, Jörn. I think this time around in this cycle, it's just a little bit harder to understand what these signals mean. And some of the signals are there, but you don't see the effects of it. And I think it's because they stacked other factors on top or around it that blur the whole effects. I mean, again, if you take liberation day out and run that scenario, there wouldn't have been a liberation day. In Q1, we saw the signals that there will be a ramp in the second half for semi. Yet it isn't here. And it came and went in some pieces. And I think the only one that is continuously growing is this narrow AI ramp around HPC and HBM, which is a few key players. I think you all know them and a bunch that want to catch up. And then there's a whole other half that or more that doesn't really participate and has a bit back and forth.

The other factor that is also in there, and I think it's important that you guys know that we're starting to participate in that market, too, is the fabless market, which is obviously only software because there's no real hardware unless they're mandating certain hardware from their foundries. But when you really look at the semiconductor market, their revenues increase mainly in the fabless sector, right? So fabless has not so much to do with building manufacturing, right, unless you go and sell software, of course. So there's also this trend that maybe is important to outline.

Now you asked us about China. China is back and forth and more than before, volatility. I tried to describe this earlier in the call as an example. Yes, the orders are up again. They have been up and down and up depending on different sectors, different players. I also know the warehouses, they're well filled. Not everything is installed, hard to read these times. I can only say that we are really close to these customers in China. It's very dynamic. It's exciting.

The R&D is also exciting there. But the outlook, the visibility is difficult. I think what we've seen is that there's also no reason for complete gloom on the Chinese economy, even though there's a lot of overcapacity. And also, I think there's a little bit of a hoarding going on some points of the time that we've seen in the last 1 or 2 years, but there is also a reason for moderate optimism there across the board in China.

I mean, we show also now actually interesting growth. I think it's probably a bit more market share growth than market growth than we show, and it's a bit more dynamic in the market that are not semi to be honest, just now in this most recent quarter. But generally, as we stated, all orders are up across all end markets. So different variabilities quite -- some really made a jump versus last year, and some a little bit more moderately. Yes. I think hopefully, that helps. And I answer both of your questions there, Jörn.

The next questions come from [indiscernible].

I would have two. On the first one, so this year, you have book-to-bill above one. Last year, you had probably a much higher backlog. And when we look at this major order you got in Security & Energy, could you maybe give us an indication of how big this order is? And if we adjust for that, would the book-to-bill still be above one?

Yes, yes, clearly. This is just one factor. I think this is not actually the biggest piece in it at all. Honestly, the biggest pieces are, as I mentioned, in RAC, Auto and Gen Vac across multiple markets in there where we really see a nice continued growth, especially in this year. Semi goes through this trough because of the stacking of the programs. It's a bit hard at times to deliver. They have really these massive cycles. And that is just the first nice step. So we're talking a single digit, higher single digit, something. So that's -- it comes in pieces as always.

What is exciting is also it comes from new places. So this is interesting because we are or we launched this product with the idea to go address more markets, right? I think the defense market, chemical warfare detection, we're squarely on, we're the leader. But then there's other markets that are related to this and are very similar organizations, and we see now that we're making inroads there. But again, this is really an early indicator and this will go over time. But how you receive these orders. It's -- the timing of it is a little hard to predict. This is about approval levels moving through and so on.

But I mean, important for you to know is that the main drivers are actually the other markets. And I would also want to stress also Semi is up. It's not massively up, but it's up. So we couldn't ship everything that came in with the orders -- you need to know Q2 was really busy with moving products around, supply chains reorganization. When you move a product from one region to the other, you have to rebuild the whole supply chain, meaning you go for every piece or every part of your product, you go out there in the market and you try to find a new supplier, you need to qualify it.

There's a little bit of quality issues back and forth. We have high tolerance as always, high accuracy pieces. So this is a lot of work to be done. So there's noise in the system, right? But like I stated in the beginning, now it's not about hunkering down and protecting the margin. That's what we believe. I think now is the time to move fast, bold and go right in there because we see already the first effect, specifically, I mentioned this move from Shanghai to Kuala Lumpur of the handheld leak detectors, where we now play full on this advantage in the market that we can supply from a different place. And the supply chain is up.

I hope this explains a little bit -- gives you a bit color of what happens behind the scenes. So I think we could show really good sales for that, that we have actually a lot of new production sites with new people and new suppliers and everything, right? So if you look at how you ramp up a location, that is extreme speed. I'm extremely proud of how the team navigated this and built this up.

I mean, some other players in the field right now are calling out places to find a plot of land to maybe build a factory in a new region. We're there. It's running. It's a little noise, okay? But we're doing it. And the customer really appreciates it. Through these crisis or storm, we have been always right there with them. There is no supply delay. There's solutions. We do pain sharing, we find innovation solutions, we just push right through. So I think that's where my optimism is coming from.

All right. And then maybe on my second question. Unfortunately, it's again about the margin, but congrats on the book-to-bill. So let's assume the operating part goes away, maybe you get up to 18%. But there is also the mix factor, right? I mean in China, historically, I'm assuming you've had better than average margins or at least this has been the story. And this seems to be going down and you have General Vacuum and other segments that are outgrowing. So you are a 20% EBIT margin, but looking forward, is that really sustainable, assuming this muted outlook persist in Semi?

I mean, the ramp will come. That is sure. And now the question is when it comes, and that we cannot influence, but I can assure you when it happens in 1 of the subsegment as we described over the last year, we are entrenched in most of these segments, quite deeply so then we will go and profit from it.

Regarding mix, I will not worry so much about China. China can have good margins and bad margins. It depends very much on the customer there, let's say, maybe how mature they are. Early days, it's a lot about price. This is the same thing. This is an RGA. This is an RGA who is cheaper. And then when you really try to push up the yield, and that just is still actually happening, yields are not as high there at all in the fabs. Then you can really want to push it up, then it comes down to the actual capabilities of these sensors. So we have both. I wouldn't worry about this, frankly.

I'm more worried about, honestly, the inflation coming next year and then we'll have to work through that, which will be a lot of wasted time again where we renegotiated all the prices with suppliers and customers. But about overall margin that we go back to 20% that's I'm not worried about, because I know how the mechanics work, how the pricing works, how our outstanding market position is. And in the end that's how we can price, right? When we have true innovation that stands out versus competition and then we can price it the same or better as in the past. I believe we're making actually really strong progress on most of these innovations with our customers.

Especially these days, you need to remember in slower years, there is more capacity, more tool time to go and test out things. And most companies, even the ones that are really suffering a bit, they are actually making these investments on the next-generation products. So we do have all these R&D projects ongoing, especially now at a higher pace. Hope that helps, [ Nish ].

The next questions come from Craig Abbott.

Yes, I appreciate you still feel very confident about the business model, midterm getting back to 20% plus is very encouraging. But if we just look real short term for a moment, the midpoint of your new guidance range for this year implies actually a pretty steep increase in Q4 sequentially, both for the top line as well as for the operating profit margin. You've talked us through the bridge factors. Thank you for that. But I'm just wondering how much visibility you have at this stage given all the moving parts in your end markets. How much visibility do you have that you really will, excuse me, will really be able to achieve that new margin guidance for this year?

Yes. Thank you, Craig. Look, I have to say visibility is much lower than in prior times. So there's upside potential, there's downside potential. That's probably what I can say. But we have solid models of how we work through this. We have orders in-house. We know margins. So we can build out a lot of these different scenarios and understand what happens. I think that at this point, the way we see it is this 3, 4 percentage points on the bottom line come from these 3 areas to almost equal parts, right, affects the duplication, tariffs. And I think that's roughly what the different models showed us. So we have, I think, the big strong confidence, but I have to say that it is much lower. There's a lot of unforeseen impacts out there in the market and in the supply chain that is difficult.

One other thing we didn't talk about, by the way, is in Q3. At the back end, we also had the Moon Festival and the typhoon, which was not a great combination because then the ports were closed for some time right at the end of the quarter. So a little bit of revenue also got stuck in China and Asia because of that. That's just one example that comes on top of the other things. Typhoon happen every year, and the revenue is going to come to us the quarter later. But it is many things these times that are unforeseen, I have to say. It's a different world somehow that we live in. Never it was really fully predictable, but it's more difficult this year very much in particular. Maybe if you have some more comments, Matthias on the...

Yes. Maybe when we take a look to Q4, I think -- and then you compare what we guided, the Q4 should be a pretty good quarter from a top line perspective and also a better quarter than Q3 from a profitability point of view. About visibility, I think it's, I would say, as usual, right? So we don't have 9 months of backlog, and we feel safe and secure on the top line. The backlog is at a normal level since quite some time. And -- but yes, we do the forecast to the best of our knowledge with our salespeople and customers and production facilities.

So of course, there's a range in there what we can achieve potentially and -- but we also know, as Oliver said, that our risk also on the output side, so what can we deliver when. And so that's one question mark, of course, but we have a range in there and it could be a very good quarter. And that's what we're planning for, actually, when you can calculate it back when you want and then you see it that it should be very good. And yes, it includes certain risks but also some opportunities.

Yes. The problem is not actually sales and orders. I think it's about execution for sales, maybe. But it is about these additional factors that just work itself through the system, and we work on all of them to reduce them dramatically. And as you've seen in tariffs, we have halved them in a quarter. But that is not entirely predictable. The bureaucracy isn't even predictable, right? So yes, Craig, I would like to have more clarity. And we normally don't give a range, right? You see it in that, too, at this point of time in the year but that's a little bit reflecting of where we think we're going to be landing.

One more word on Q3. Again, I would stress that last year, Q3 was a very strong quarter. So I think Q3, given the seasonality, I see this as a good sales quarter, even though a few things got stuck because of supply chain and typhoon and Moon Festival and so on. So there's no reason to think that Q4 should be particularly bad. Q4 is always a strong quarter. Internally, we joke around sometimes and call it the Hollywood finish. It's really at the back end of it. With good planning together with the customer, it goes swoops all out, there's a lot of trucks going from our factories always in December.

[ Michal Inaun ] now has the next question for us.

Yes. Good morning, everyone. Hope you can hear me Camera should come online any moment. Yes, here I go. I have just a couple of questions. Actually three, two around Semi and one is around more the RAC market. And on the Semi side, I'm sure you're not giving me an answer, but I'm just wondering if the Semi book-to-bill is also above 1 in Q3 or not.

And then the second, it's pretty simple, and the market starts to be really cautious on China. I mean starts have been already before, maybe it's now easing a little bit even. But the China wafer fabrication equipment 2026 seems down. I was just wondering what would be the impact for you? This is mostly probably also Western OEMs that struggle. I mean, we heard it from [ Lam ] yesterday. So I would like to understand what impact that would have on your business in China if wafer fabrication equipment spending would be down?

And the third one. I was pretty surprised now positively hearing about -- I think you were talking about A2L refrigerants in the U.S. and the regulation. I remember I've asked you about it a couple of quarters ago, and you were a bit hesitant on that, but I was just wondering where do you see there INFICON play a role? Because what we have seen in the recent quarters is a ramp-up particularly on the sensor side, included in the HVAC systems in the U.S. So I was wondering where is your role in that business and where do you see that potential.

There's quite a number of questions. Let me go one by one. Semi, yes, all end markets are up. So yes, also Semi. But the most exciting up right now year-to-date is RAC Auto and Gen Vac. So Semi is back and forth it's what I described. And actually, when you look under the hood, there's 10 -- 5 to 10 submarkets there, they're all moving around. And the only one that's consistent is HPC, HBM for a couple of key players, and we know them mainly in Asia into three particular places. So yes, I hope I answered that one. Otherwise, get back to me.

So for the China, no, you maybe need to give me some clarification because you're asking about China slowing down or are you asking about trade barriers that our U.S. customers would have and if we can still keep the market then?

I mean, it's actually a bit a combination. Yes, because wafer fabrication equipment overall is seen down also, let's move the restriction aside. Overall, the wafer fabrication equipment spending is seen down for China 2026. If that was the case, how would that actually impact your business? Do you think you can still grow in China with the Chinese OEMs, although the overall business would be down?

Yes. I mean, what we've seen a shift over the last 2, 3 years is that the China business moves to Chinese OEMs. And -- but we're as a trench there as in the U.S. for us. We are in China for 30 years, we manufacture there, we innovate there. So hey, I think the American customers are fantastic partners and it's great to work with them. But we can also work with OEMs in China. And the future is that way that you need to work with them, too. They have good innovations. They grow really fast. And this year was the year of the tool makers in China.

It's a bit unclear how it's going to go from here on out because the first half of the year was really dynamic positively. But as I mentioned earlier, there is no reason to have real pessimism. But it is obviously over the times when China just plowed ahead. These tech sectors we are in, though they always have a bit better dynamic than the rest of the market. So different tech sectors. I'm not only talking about Semi submarkets. I'm talking about others too, right? Yes, there's a mix.

So we're optimistic there. I mean, in the end, we ship it to the U.S. or to China. And yet, honestly, it all ends up anyway in China and even U.S. customers, you don't get to the U.S., and you ship actually also to Asia for their manufacturing there.

All right. So now you had a last question about refrigerant right, Michael?

Yes. Correct.

So yes, I think maybe we have this discussion already a year or 1.5 ago. Then you put me on the spot. And at the time, I wasn't exactly sure how much it is a driver already. We saw the regulations, we monitor them. But now I think it has really developed in a good tailwind across the board. But it's -- the new thing now is the data centers that come on top. And we couldn't see it either. I think I remember this about a year ago is like do we participate or are we not.

And at the beginning, why it's had is it goes through channel partners. So we would also supply an OEM typically, and then it goes somewhere else. So you need to have these conversations with them when you map out the future business together and innovation road map, what do you need and where you're selling this to and so on. And then over time, it materializes for us. But we first see the positive dynamics.

So the refrigerants have broadened and you ask what are those. I think one key factor, but it's not the only one is certainly the handheld leak detectors that are growing actually steadily quarter-over-quarter, I think probably for 8 quarters. So don't take me up on this exactly, but, right, Matthias, I mean, they have just been plowing through and building up. And interesting enough, these guys have been very affected by this tariffs and trade barriers. We moved around the production, and now we're really ahead of the competition because we can supply and they can't or with difficult trade barriers and tariffs on top of massive extent. So I'm actually quite optimistic there, too, for future because of this move specifically.

There are no further questions at this moment. So may I invite you, Oliver, to share your closing remarks with us?

Absolutely. Thank you very much, everybody, for the interest, for showing up, for coming here. It's great to always have such a big crowd, good questions. You are big supporters of us, also give us good impulses in these discussions. I would just close with this. Yes, we have some noise in the system. We don't like it at all. We go back to this 20% plus. But I think the bigger picture here is important. In a storm, you can do bold moves and really move forward, and I think we are, and we'll show you. Well, over the next quarters, we'll show you what's happened. It doesn't matter what scenario happens. They all want to ramp, if it happens a little bit later, also okay for us.

So with that, please take it with a little bit of optimism in this complicated stormy times. And then we meet again soon for full year next year when we will then tell you about the full story of the year. And with that, big thanks, have a wonderful day, and talk soon.

Thank you. Goodbye.

Good morning, and welcome, everyone. My name is Bernhard Schweizer, Investor Relations contact at INFICON. I have the pleasure of hosting this webcast of our second quarter 2025 results conference.

With us today are Oliver Wyrsch, CEO of INFICON and Matthias Troendle, CFO of INFICON. The management team will first present the results and then take questions. [Operator Instructions]. You should have received by now a press release on the Q2 results, together with the link to the accompanying visual for this conference and the full half year report. All documents are available for download in the Investor Relations section of the INFICON website, inficon.com. I would also like to inform you that we record this web conference to archive the audio file later today on the INFICON website.

The oral statements made by INFICON during this session may contain forward-looking statements that do not relate solely to historical or current facts. These forward-looking statements are based on current plans and expectations of our management and are subject to a number of uncertainties and risks could significantly affect our current plans and expectations as well as future results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Having said all that, I would like to hand over now to Oliver Wyrsch. Oliver, please.

Thank you very much, Bernard, for the introduction. Welcome, everybody, to the earnings release July 30 of Q2 2025. Let me jump to our agenda today.

First, I will tell you, as usual, a couple of key messages, the figures of the quarter, the review of the target markets and the full year expectations. Afterwards, I will hand over to Matthias Troendle, our CFO, for more details on the financials.

First, the overview of the 2025 Q2 results. INFICON continues on the growth path is a sequential growth in all regions and all markets, except for security and energy with a positive order trend again with a nice step-up in orders. We have continued is temporarily in Q2, the profitability got impact trade disputes. So when you look into more details, we increased the sales to USD 167 million. This is a plus of 6% quarter-on-quarter. The orders increased substantially with the continued book-to-bill ratio above 1 and we continue to have economic risks and uncertainties due to trade disputes.

If you look at the segment's high level, semiconductor continues to grow quarter-on-quarter plus 7%. Good orders, it's still low visibility and a lot of dynamics. We believe, though, that a recovery is continuing. At the same time, the broader semiconductor ramps that we are looking for most likely has now shifted into 2026. When we look at general vacuum, we continue on the growth path in 2025 after another good quarter quarter-on-quarter.

For RC auto sales, we continue to grow in recent quarters in a difficult market, consolidating EV and battery markets plus 7% quarter-on-quarter. The security and energy markets after strong growth here up to the 2024 record sales were another plus 21% on the full year. And we have a slower 2025. This is mainly due to the timing of government programs.

When we look at the operating result, the main impact here is the trade disputes. The operating income ends up at USD 25 million or 15.1% for Q2. The temporary impact of the trade disputes include on available tariffs, mainly in April, May, the accelerated relocation costs, some FX cost impact and some volume mix effects. I think in general, we can say we had to a little bit reflect and for us, it's an easy answer of what the decision is for us for this Q2 regarding market development and focus on our customers versus managing short-term cost impacts.

For INFICON, this is in our DNA. It was a clear decision. We stepped up our relocation efforts to reconfigure the global footprint. And really pushed these projects, some of them x2, x3. I will talk some more about it in a minute. And we're then able to transfer most of the products and lines within a quarter, which is, of course, much faster than this usually goes. We also decided to work together with the customers, our long-term partnerships are absolute priority for us. And hence, we also had to go and absorb some of the tariffs. With most customers, we find some good solutions. These discussions are still ongoing on how we navigate this difficult times. But we also then decided Q2 will absorb this extra impact in order to be adapting fast and then move forward and over strategy to rather gain market share in these difficult times, which is very well possible if you adapt fast to the new rule of this new trade world, I believe we have very good opportunities there.

Anyway, going back to close this sidebar for a minute, going back to the overview cash flow, robust at a stable high level of USD 18.7 million. And then regarding organization and future investment, the continued investment in R&D 8.3% sales and also capacity of USD 5.1 million. We still think depending on how the market develops, CapEx expectation roughly comes in at this USD 25 million to USD 30 million.

If I now look at the global regional development, you can see some interesting development in Asia with a very strong quarter, significant growth year-on-year, in Europe and especially America is slower. We have seen in Europe and Americas, rather sideward trends, but they wish some good positive signals for sure. If you then jump in to the target markets -- first, of course, semiconductor vacuum coating. We remain to be in a very strong position continuous growth in a really challenging environment, the low visibility.

We believe the recovery continues, but the ramp the broader ramp is probably delayed into 2026 after the most recent developments. The trade disputes definitely impact growth negatively causing investment delays, moving off projects even some cancellation, but mainly it's moving and delaying of projects.

If you look at the Q2 sales, they increased by plus 7% quarter-on-quarter and year-to-date plus 7%, which is also a nice development forward. We remain in #1 position for most of our product lines with the pressure measurement premium line and closing up to number one. Currently in position two. Good -- making good gains there in most regions, to be honest, in terms of design-in wins. The market expectation for 2025, flat to growth.

Again, the visibility stays low, but there is a reason for moderate optimism. As the recovery continues and we hopefully see our most realistic scenario, a little bit of a calming down of the trade tensions a bit more steady waters for the second half. And then the ramp looks like most likely will fall into 2026. Overall, the drivers are strong in this market. They remain strong, mid and long term. And what we see is a broadening trends, but still a narrow trend around AI investments. HPC is certainly interesting, also HBM. While memory, in general, is also dynamic this year. We still see a lot of investment in future nodes there and also an increased use of advanced sensors for these future nodes.

So this investments in leading-edge nodes, the advanced chip design are continuing, the pace is not actually slowing down. Advanced packaging is a bigger and bigger topic, but all kind of dimensions has been worked on. Exciting times in terms of R&D and in terms of new innovation and partnerships we have with our customers, there's a lot going on in the R&D pipeline while on the general economic front, it's a bit confusing with lower visibility, I believe insight and the technology road maps, there's a lot of exciting stuff happening, and we are right in the middle of it with all kind of new innovations in the pipeline.

Jumping to automotive, refrigeration, air conditioning market, strong position. Clearly, we have a continued multiyear growth in a very difficult environment. There's consolidation. Good development in Asia, America is around flat, Europe slower. So we see continued sales growth, plus 7% quarter-on-quarter, year-to-date plus 2%. And we remain #1 in our SE battery markets and we're making market share gains in a market that is generally not growing. We have seen some good positive signs, specifically in Q1 on the automotive market, but it hasn't really fully materialized. It's still relatively slow. While we think we might be past the trough. There is no real acceleration.

Similar on the EV side, there is some positive signs and some development. We believe that probably in 2026, there is really an acceleration. Also here, the visibility is low. What is going to happen next policy landscape is also a little bit confusing also here. The trade disputes make it a bit more difficult to understand what the development exactly is going to be. So battery, I just mentioned, the consumer battery market is still more resilient and stable and with growth midterm outlook in the whole market, we see positive. Of course, the EV transition, we believe will come back. But also on the RAC side, we make continuous growth, specifically in the subsegment of the handheld after-sales service products, good growth over years. which is driven -- the whole RAC side is driven more by new refrigerants and the new regulations future sustainability.

So when you look at the chart on the right, you see over the year, we have a CAGR of 10% in a really difficult last 1, 2 years. For the last 5 years, a 10% CAGR. I think we have shown great deciles and growth and market share gains also in this market. When we move on, general vacuum after the quite slow 2024. We still remember '23 was opening up of COVID, the backlog reduction that went into the first quarter of 2024 and then we had a couple of slow quarters in 2024. But now we're back on the growth track with good Q1 and also good Q2. It's a broad industrial market that is addressed through multi-brand strategy with long-term talent partners. So there's different submarkets in here for each one, we build out our position or have already a very strong position as a most complete full liner for vacuum instrumentation, we are in #1 position overall.

So continued growth with plus 6% quarter-on-quarter and plus 19% year-on-year. We have good order improvements quarter-on-quarter and year-on-year. So this should continue like this. We see one more point. It's important we see not yet recovery of the solar business, which is part of the nice dynamic we see in '22, '23.

In terms of market development here, we saw probably only start to recover in 2026 as it looks right now, mainly to the overcapacity and the consolidation in the market there, mainly in China.

Overall, we have a strong position, also a good market development and R&D pipeline here in their respective submarkets. If you jump into the last of our target market, security and energy, strong position with the leading product also here. The cycles as most of you know, are largely dependent on government programs. They have their own dynamics. It's a good diversification factor in that sense versus the other end markets. So we expected this year to be slower after a 5-year growth, 9% CAGR. And now the next phase and the next timings of these programs is still in the initial phase, this is a normal process. Overall, the security budgets due to the global security situation are going up, specifically in Europe. We see these positive trends. So we have growth in Asia and Europe. We also have with a flagship product in this segment, the new hub sites a lot more applications that we can go in, which is also in the works. But same here. qualification process is relatively long on the time line, but we made very good gains. So we're optimistic here too, while 2025, certainly will be a slower year.

And with that, I come to a special topic around worldwide footprint. As I explained already in the last earnings release of Q1, we have had the last years a plan to adapt our footprint to the most recent geopolitical and economic situation and trends. So there is factors in there where the U.S. economy and the China economy derisk or decouple and similar trends in other parts. So one of the reasons why we opened up the Malaysia factory not exactly this anticipation of this. What we have in general, as you know, is a decentralized system of competency centers then can be adjusted relatively fast. Each one of these units has a fast reaction time is adaptable. And I think we could now really show our strength in Q2. The benefits will come over time, clearly, right, because now we needed to just show what we can do by readjusting this in accelerated time frame. So some of these projects, I was asking a team can you do this in 1/3 of the original time frame, and they have delivered. It was truly impressive. So the Malaysia factory has really added product lines now. Because of this, it was already planned, but most of them needed to be accelerated.

The China factory, similar thing. There was product lines moved there. The same in Cologne and the same in U.S. all of those with major relocation projects that we have all accelerated and have largely concluded in this 1 quarter, which you normally would expect this to be a number of quarters for such projects. So this is on, hence, also this impact on the operating income. The largest part, though there is and Matthias will say a few more words about this is around the unavoidable tariffs, we are committed to our customers, we deliver and we found solutions in many places of how to deliver and how to observe cost, but when we want to serve customers we serve customers. So a large part of this is about 2 percentage points is on available tariffs have mainly occurred in April, May, they already largely disappeared in June through the conclusion of this relocation projects.

And then we had some extra cost for this acceleration of the relocation, about 0.5 percentage point. And then about 1.5 percentage points around FX cost impacts, which we also see trade war related, which we have been starting to compensate more aggressively with cost measures. These programs are ongoing and take effect, but you will not see this yet in the Q2 numbers, obviously. These are being implemented and that will be seen in the following quarters.

So -- and then there's one more effect about volume and mix. Some of the volume got stuck, some of the shipments we agreed to the customer not to ship due to temporary really high tariffs that we had over 100% for certain constellations. So some of the volume got slowed down and it was also some of the volume that was high in margin. So there was a bit of a shift there too in terms of volume and mix. All right.

With that, I jump to the expectations, 2025. So overall, we see ourselves continuing on the growth track in spite of this difficult environment. So we had a good order entry again in semi, RAC auto and GV markets. The trade tensions stayed. They add uncertainty risk across all markets and the impact on profitability in future.

So we also see some positive momentum in the markets for signals, good things. However, through this additional uncertainty, we believe also there's a little different delay on investments. So semi ramp, most notably, will probably move into 2026.

Automotive was another example. We also believe there is rather an acceleration next year and similar solar. So there's a few of those that just on the time line moved.

In general, we believe this year is rather transitionary year. Unfortunately, again, we've seen some good Q1 signals. And I believe this trade disputes have just slowed this down a bit and muted it, but it's moving more on the time line than it disappeared or anything. So we get -- we end up with a guidance for 2025 based on all of this of sales of $660 million to $690 million. So we reduced the upper range, while the midpoint is in a similar area. The operating income we reduced due to this Q2 profitability impact around the trade dispute and so on. We reduced to 18 percentage points for the full year.

And with that, I conclude. The reminder, as always, if you want to know more about INFICON and all the good stuff we do, if you go to the moon, there's more space happening, there's more semi innovation happening is more automotive innovation happening. There's also other things that happen with our brilliant engineers and other things in the company follow us online. There is a lot to be seen there. And with that, I conclude my part, and I would like to hand over to our CFO, Matthias Troendle, for more details on the financials.

On our second quarter call. As usual, I will cover the Q2 financial performance, quickly talk about the guidance and also cover the half year results. Let's start. Let's start with the highlights for Q2. The order situation improved compared to the previous quarters and the book-to-bill ratio was above 1. The sales showed a slight increase versus Q2 last year and did grow by 5.8% versus the previous quarter Q1.

The gross margin dropped really and hit by temporary impacts from trade-related disputes and reached low 43.1%. And we achieved an operating income of $25.3 million or 15.1% of sales. CapEx $5.1 million and ended on a similar level like in the previous quarter and also like in the last year. Cash flow ended with a solid $18.7 million and net cash did grow and ended by $38.5 million after the $68 million dividend payment in Q2 in April. And our equity ratio reached -- increased slightly and reached 65.3%.

Now let me go a little bit more into the details. As you have seen in the press release, we achieved sales of $167.4 million compared to Q2 last year. This represents a slight increase of 0.3%. Taking into account the positive currency impact of 2.2% and we posted an organic decrease of 1.9%. Oliver did already comment the end market developments compared to Q2.

Sales to the general Vaccum market increased for the second time in a row and did grow by 19%. Refrigeration, Air Conditioning and Automotive remained stable, and the Semi & Vacuum coating declined by 2.3% versus a strong quarter last year. Sales & Security & Energy dropped by 8%.

Compared to previous quarter, Q1, the picture looks a little bit better. We can report that sales did grow by 5.8%, and we had increases in all markets with the exception of the market for security and energy.

Looking at the regional distribution of sales on the right-hand side, you see that Asia developed well by 15%, where sales to all markets did grow, but especially general vacuum showed a strong improvement. Europe declined and Americas was slow due to weak security and energy business.

Let's go to the operational costs. R&D costs did increase by 6.3% due to our continued focus on development activities and related investments. SG&A costs did increase by 3.1%, but this increase was mainly driven by foreign currency impacts and the cost stayed tightly managed.

Now turning to the margin situation. Q2's margins have been under pressure and declined. The gross profit margin reached in Q2 43.1% and decreased by 4.1 percentage points compared to Q2. And the operating profit margin for the second quarter reached 15.1% compared to 20.2% a year ago, a reduction of 5.1 percentage points.

So what were the main reasons for that? We had several temporary negative impacts, whether direct or indirect related from trade-related disputes, which were cost peaks due to the tariff escalation, especially in April and May and increased basic tariffs as the main factors. Transition costs due to necessary acceleration of ongoing production relocation versus the second one. The third one was impact on sales volume, some temporary order deferrals and also swings in mix.

The SG&A operating expense increase was largely driven by the foreign currency impacts. As Oliver mentioned, we gave some indications of what the share is. So the tariff portion is around 2 percentage points of the transition cost and relocation cost about 0.5 percentage points impact. sales volume around 1%, and the operating expense foreign currency impact around 1.5% impact. So all impacts add up together for nearly 5 percentage points.

Now let's go to the income tax. The tax expense for the second quarter was at $3.4 million, which represents a tax rate of 15.5% and is slightly lower than Q2 last year where we recorded $6.2 million. Net profit reached $18.3 million or 10.9%. This is driven by the lower operating income and negative foreign currency impacts, partially compensated by the lower tax rate.

Now let's move to the balance sheet highlights. Our net cash reached $38.5 million, which is about $36 million lower than end of last year and about $24 million better than the previous year in Q2. The lower level compared to end of 2024 is mainly driven by the $58 million dividend payout we had in April this year. Returns for inventory remained stable at 2.4% and our DSO ratio had with 47.6 days, a good and comparable level to Q4 and also the previous quarters.

Our working capital closed up to $229 million or 34.2% of sales and the debt ended about $14 million higher than end of last year. The increase is driven by the change of inventory levels, which also is impacted by some unfavorable foreign currency impact. Our operating cash flow reached a solid level of $18.7 million, nearly unchanged to Q2, but -- Q2 last year, but could not reach a relatively high level of Q4 last year.

The balance sheet shows an improved structure with 65% equity ratio of the 64% in Q2 last year.

So these are all of my comments on the balance sheet and Q2 results. Now I come to the guidance. After the operational adjustments we made in the last month and the -- our assessment of the various markets and credibly improving order patterns and some positive dynamics. We updated and narrowed the guidance and expect now revenue of $660 million to $690 million for the full year of 2025. With an operating income margin of around 18%, including the trade and tariff impact.

Finally, I quickly want to comment our last year performance. And here, I can say the net sales for the first 6 months reached $325.7 million compared with $321.2 million for the same period last year. Representing a 1.4% increase or adjusted for currency effects as a plus of 1.2% organically.

Similar to the sales development in Q2, the first half of 2025 showed growth in all end markets, except security and energy. Semiconductor did grow by 6.6%, mainly driven by Asia. Refrigeration air conditioning in automotive increased by 1.5% and General Vacuum recovered from last year's swap and gained 1.1%. Security and energy declined by 33% due to the meeting large public sector orders.

The gross profit percentage decreased to 46.2% after 47.2% last year, and the operating income reached with $57.2 million or 17.6% after after $65 million last year or 20.2% last year. Both gross margins and operating income have been impacted by the temporary tariff impacts we just discussed.

The operating cash flow developed nearly stable compared to the first half of last year and reached $37 million, and the balance sheet shows, yes, as mentioned, 65% equity ratio after 64% last year. As mentioned in our press release, the complete half year report of 2025 with more details is available in the Investors section of our website.

With that, I would like to close the presentation. The next events here are here is basically our Q3 conference call in end of October. And then we have followed by an analyst visit in Balzers here in Liechtenstein in November. So we are now ready to answer your questions.

Thank you, gentlemen. We have a nice year of people wanting to ask questions. The first questions come from Jörn Iffert.

Taking my questions. It's a couple of questions, subquestions, please, on the margin development, if you allow me, and then one follow-up on the premium market. But maybe I would take the margin question step by step. The first one is, just -- I mean, you mentioned of this 500 basis points, 200 basis points of direct tariff, then 50 basis points were the capacity relocations. And then you mentioned 100 basis points volumes where these deferrals of higher-margin products. And then you also mentioned 1.5 percentage points operating expenses, SG&A due to FX. Is this just to summarize, isn't that correct?

Correct. Yes.

Okay. And then second question, pricing power. I mean many companies in Switzerland immediately priced the tariffs to the customer. Why has you decided not to do it?

Yes. And that's what -- I mean I earlier mentioned, there's a bit of a decision that I think you can make with your customers. I think we repeatedly talked about pricing power. And we see it is a bit different. Yes, we have pricing power, but this is a short-term thinking. I think for a year or 2, you can price when you locked in when you designed in easily. But that's -- what you do when you overdo this is you will be replaced one way or another, over time. So you really think long term in terms of your strategic partnership, and we have a strong relationship with all players in semi, chip makers and OEMs.

So for us, the first step is not going to the price tool and increase it. For us, the first set is having a discussion and find out what do we do? Some things we didn't chip. Some things we changed the shipping route, but we couldn't do it just yet in April, right? So there is a couple of tariffs that we just had to absorb, we'll have post discussion on this after. But what we will not do is a thing like we're not shipping you if you don't pay an extra for tarrifs or things like that. We have trust in this relationship that we continue.

So our approach is probably slightly different. We very strongly believe this is the better approach long term. So there is always in a situation like this where you have very long time, and you need to move fast you make fast decisions. Not every decision is 100%. But I think we have actually strengthened our very strong foundation in the market with how we behave and how we navigate and then how we communicated in Q2 .

And the second out of third subquestion to this topic, please. Where exactly were the tariffs occurring? Is it from the U.S. to China? Is it to China to U.S? Are these the main routes?

Yes. I mean, the tariffs that really bite were the ones between U.S. and China, right? And then of course, from China to the U.S. Historically, we have our China factory for 25 years, not -- everybody has had the China factory is very established also our footprint and our connections to Chinese customer. We talked about that in prior earnings releases. We had to reconfigure it. Not everything was already moved out. Not everything we could avoid shipping. So that's where some of these things or some of these tariffs were incurred.

And the same from the U.S. to China, we are very committed to the Chinese market. I think we can show how we grow in this market, how we make wins. We have a very good position actually there going forward compared to Western competition and also against Chinese. We've shown that, especially in the auto market. So there also, not everything was ready even though it was in our strategic plans.

Hence, also, we have this 0.5 percentage point, accelerated relocation costs that we just felt, hey, now we're going to just do it. We steer the whole company towards this for a quarter. And now we can also go back to business and building long-term business up with R&D partnerships and developing customers and all these strategic topics. So we just to the sense of ripping off the Band-Aid fast and then move straight back to building up long term. That makes sense.

And maybe the last subquestion, looking forward, looking at the second half, I think your guidance implies already a material sequential margin improvement, again, closer to the 19%, around 19% in the second half. So does it mean the tariffs more or less have disappeared under the recent deals we have seen? Does it mean your relocation capacity is finished already, that you subsectors anymore? And does it also mean you find some the sales volumes, which were delayed are now being shipped again in Q3 already. And also, do you see the margin improvement going close to 19% already or in Q3?

A little bit yes to all of it, but to be specific, yes, these projects, we really push them. And as I mentioned earlier, when I was talking about the global footprint, we have been successfully to relocate the largest part of it. All the big flagship products are now in the new location.

Often, it's two locations now, right, because that's how you serve the global market. There's more trade barriers and other export regulations in different places. That's a little bit of development of the recent years, hence also our strategy there to develop this footprint. So yes, that's what we've seen going away. And regarding tariffs, we've already seen this improvement in the recent months. So April was the main hit and May a bit less than June as a further improvement.

So given that, yes, I would say. Also the shipments that couldn't be shipped for this or the other reason right, when you change the product line. It's complicated to do the whole customs. SAP needs to move there. There is hiccups and bumps. So these have been worked through largely, but a few more things remain. I think we are now in a very good position for this scenario that we've seen.

What we don't know is how this trade disputes continue. They're clearly not gone. There could be a scenario where you say it's a bit of a more cold situation less volatile in the second half. So you can settle in a little bit to where you're going. But not everything is yet announced, right? So we notably have the Swiss deal with U.S. is not announced. I think the European agreement has been outlined, but not fleshed out. There is ASEAN countries that have not all been negotiated.

I'm not the one you should ask about this kind of analysis. I can only share with you our thoughts how we see it. So I see a clear improvement in the second half based on our realistic scenario, right? We always have at least two or three scenarios. So I believe that's where we will land also based on the most recent months. Matthias, If you want to add?

I only can agree with what you said. And so we expect certain belief for it on this -- on the tariffs, that will they disappear? No. There will be some, but the heavy uplift, I would say, due to this April 2, I think liberation day reciprocal tariffs, right, I think this is definitely lower to be expected, and then we need to wait where and how the final agreements will be, right, going forward? Will it be about 15% for Europe, yes or now and when and how is the transition period.

So there should be some relief definitely also some relief on the relocation cost and impacts, they will not stop. There are still certain activities. We said it's nearly or largely completed what we started in Q2, but there will be steady some, but there should be some improvement in some relief, definitely.

I just want to stress that the core of INFICON is strong. And actually, I believe we have gained points with our customers how we navigate in Q2. So you will have to take my word for it for now, but let's see how it develops into the future. I think this was a very good move. We have gotten very positive feedback of how we navigated this and also the speed of how we adapted and changed around our configurations in accordance with the discussions with our customers.

And of course, also suppliers are always very important in this when you strengthen your supply chain. This was a chain in the last 2, 3 years. I think this really showed we have a whole different company here that can adapt to extreme scenarios in a really short time. Anyway, back to you, Jörn, you said you have a few questions.

No, sorry, I don't want to occupy the line, I go back in the queue and maybe follow-up later.

The next question is come from [indiscernible].

Maybe the first one on the orders since we've covered a lot of margin. I mean, it's above 1 which maybe is a bit of surprise looking at VAT ASML. And certainly, the positive, you're also right. You've seen a substantial improvement year-over-year sequentially. Can you maybe break that down a bit? I mean, how high is the debt improvement? Just give us a bit more color on that? That will be my first question.

Yes. Yes, probably as to do it by end market. I mean, first of all, I would say this, the security and energy market is a bit of a diversification factor for us, right? It grows nicely. We've shown that in the last 5 years because it's all dynamic. It helped us last year, certainly as it had a higher share, clearly, and it is slowed this year.

So if you were taking -- energy on the same level, right, if you remove it from this general economic development, then you could say we had a good growth this year when you look at these sectors, which just shows the resilience and the strength of INFICON also in difficult markets, it shows also our clear focus to go for market share long-term partnerships, building this out, building on it, this is all something that comes over time. And Security & Energy will also come when the timing of these programs are clear.

You can imagine, when you look at the Security & Energy market, there's a bit of a confusion. In terms of investment, a lot of money is allocated based on very clear how to spend and where to spend and what problem needs to be adapting in half. So maybe that as an overall picture. If you go through each one.

I think semiconductor -- in Q1, we felt this is the year where we have -- where we see a broader up-cycle. It looked like it. I think this Q2 trade disputes were muting this upside dynamic and delaying it. Hence, we would see it now next year. And it's still mainly dynamics are on these leading edge nodes, which a lot is connected with this data centers, HPC and HPM. Well, of course, also memory is a bit of the recovery, it's a bit going sideways again, right?

So this is also we see some acceleration and deacceleration in the different submarkets for sure. There is some hesitancies in the investment projects and everybody looks at their investment projects under the timing and price or 3x these days.

But overall, semiconductor, as I said, the dynamic of how we work together with the customer, the opportunities that we see -- when I look at the broader strategy, we see gains of how we access more market and where we can get market share over time. So I think positive trend, it doesn't entirely connect back to a cart normally, right? This is more of something that you need to look at bigger time spends.

Maybe Matthias can also say a thing in a minute about the market. Just quickly when you go through automotive, there we saw good positive signals also there in Q2. Now it's a bit muted again. However, it's kind of stabilizing on a lower level, maybe with some positive signals. And next year, we will see some more dynamic. I think the orders come from share gains at this point. There's still -- especially in the battery market, a lot of dynamics of what is the latest technology, what's going to be the next step and so on. On the RAC side some of it is connected with the auto.

But on the RAC side, we have more of a continuous growth that we've seen over the last years and also will continue into the future. There is, as I said earlier, especially this after-service handhelds, they have seen very good growth with always a couple of new submarkets opening up, new applications, more automation.

There's also some robotics aspect to it. So there is a bit more of a steady growth on that end for it, whereas the other extreme is battery, which is more step and more volatile. And then when you look at general vacuum, yes, this is a market with 20 submarkets in it and about half of it we serve through private label.

Private label has really recovered. The general industrial market has recovered versus the trough last year. And I think we are on a level where this can continue like this. All of these statements, we cannot predict if there's another escalation of this trade disputes. But the way we see it, the realistic scenario, right, that kind of view on it, we would be optimistic there. You see also our outlook statements per segment there. Yes, I hope this help and giving a bit more color. Do you want to add some more numbers maybe?

Number, I know maybe a few more comments. So the honest developed bends as we said, and they grow the second time in a row. So from Q4 to Q1, we have growth in Q1 to Q2, we had growth -- I think that's positive. And when we look at the previous quarter, I think we had also here in 3 out of 4 markets, we had positive order development majority really in Semi and Vacuum Coating of the order increase from Q1 to Q2.

And when we take a look, where does it come from, it was mainly Asia and Europe, where we had good developments while the U.S. was more or less stable. And -- but also we had in GV -- on General Vacuum on RAC. We had a little bit of growth compared to Q1, which is also good. The only market, similar like the comments for the sales side is security energy, whether the order pattern is weak, really, RAC, and it doesn't show really strong development in these days. But Semi very good, I would say, in the GV and RAC be a good development as well. And Semi, as I said, coming from Asia and Europe mainly.

Maybe this helps a little bit to size. And the book-to-bill above 1, the second time, while revenues are increasing from Q1 to Q2 is also not that.

Yes, it also made that jump up, right? Obviously. Is that helpful? Hopefully.

That's helpful. And maybe just on some of this reconfiguration. I mean if we go to your factories, right, normally, you show these machines and you say it takes 1 year for certain stuff to get trained. I mean you now say that reconfiguration is largely completed and you have this 50 bps of an impact.

I mean how certain you are that this is really over now? Because I can imagine you also would have to order some machines. I mean the CapEx really hasn't increased year-over-year. I mean, is this really largely completed? .

Yes. I mean some of this CapEx is not something right if you look about a period of depreciation and then you have it already somewhere in your budgets, the impact is not so high. I'll let also Matthias comment on it.

Yes, for this reconfiguration that we needed to do based on this new landscape in Q2, yes. But again, the big disclaimer is, I do not know how these trade disputes will continue, what escalations we have. And also -- my fear is rather actually not this because then we'll just adapt to it. And we've just shown how we can do that. Maybe there's another configuration needed. At this point, -- we don't see a big step like this again needed, right?

The biggest one was this decoupling U.S.-China theme, not only but this. So we rather look now into next year and there's concerns about inflation and more economic slowdown. When these effects of Q2 will work itself through the system, there could be supply chain concerns. We don't know more than all of you.

You've got great research departments, right? So we're just trying to understand what then that next step will be. I believe our footprint is fit. We showed it. We've proven it. We can speed it up and we will absorb and then move on. This is not going to -- the core of INFICON has not changed.

We could go and do some math of what hypothetically the all big would be without the trade disputes, it's a new point because, yes, there is no alternate reality. In the alternate reality, we gave you the guidance what we think for this year.

The new reality is this, the new playbook is this. I believe many of the effects other companies will still see. We just try to be really proactive and forthcoming with information, but also proactive in the implementation. So quick rip off the band aid move on is the general INFICON way for things like that. So maybe help...

Lot of uncertainty and a lot of low visibility. Maybe just let me add one comment. You asked why is CapEx low and you did many things and largely complete. This really depends on what kind of projects and product lines you transfer, some are more CapEx intensive, some are less. And also sometimes you see that you transfer internally, right, some of the production equipment from location A to B.

So this is not really a CapEx. And then you have tools, instruments, you have people costs and maybe training and setup costs, which are impacting the P&L and not so much more at least in the moment of CapEx -- that's one thing. And regarding your question, is it really largely completed, I would say all the projects and tasks we initiated, they are largely completed. Will this be the final end stage? We don't know yet.

As Oliver said, we only know what we know today. Will there be the need eventually to do something else, right, in the next coming months and to think about the structure could be, we don't know yet. I only can say we are ready and we are watching this, right? And if decisions are needed to make, we do it, right? But the projects we talked about, they are largely completed.

I think one point I want to stress again what Matthias just said, which will help to illustrate that we don't actually have growth this year. I mean we have growth from INFICON, but the market itself hasn't done this ramp. And as you all know, we have been preparing second half last year to do this ramp, right, where there will be real growth, right?

So it's cool growth, 7%, all that good, but we're talking about a ramp, 20%, 30%, sometimes even more. So we are ready for that still, not all activated, not all staffed, still same thing. But of course, you can then -- when you move a product line, you take that product line from one place and ship it over to somewhere else. It doesn't need more equipment. Plus we would even have more equipment from this ramp if we needed it.

But again, this acceleration of this semi ramp isn't happening this year, it looks like. It's just good solid growth on this basis where we are that we're currently showing. So you don't need necessarily a lot more CapEx, if that makes sense, right?

Because also the buildings there -- when you think buildings, we need to think 2 ramps or 3 ramps ahead, meaning 5, 10 years plan. So we have the buildings. We have the location that's part of our long-term strategy. So this is about what you put in there and what you're really making there, they are more a mix of what happens in the building, if that makes sense.

Next question comes from Martin Comtesse.

Good morning, everyone, I would just like to go back quickly to the margin implications. Can you help me -- can you just elaborate a little bit on the negative FX component of 150 basis points where that comes from? And is it likely to persist at the current level also in the second half. That will be the first one. And then I might follow up with another one.

I think let me try to explain a little bit the FX impact on the first and then Oliver can add. Well, it's relatively simple, I must say. We -- as you know, we have some exposure on the Swiss franc side, and we also have some exposure on the euro side. And when we take a look to the currency development year-over-year, I think we had 11% change in currency, Swiss franc versus U.S. dollar, 11%. That's a big number, right, Q2 to Q2, and we had about 7% change in euro, which is the other currency where based on our European business and the Cologne business, especially where we have also a certain exposure. And these 2 currencies mainly drive the currency impact we talk about.

That's helpful. I'm just trying to -- what I'm trying to get to is basically what Jorn already mentioned earlier. If we take the midpoint of your new guidance, you're basically implying an 18.5% margin in the second half. So a meaningful step-up from Q2, 350 basis points or so.

So if I look at the individual moving parts, 150 basis points FX, which is likely not going away in the second half. We all don't have a crystal ball, but for now, we would expect currencies to stay where they are. Accelerated relocation, 50 bps is going to be done mostly. Sales volume, okay, done, but that still leaves me with quite a difference for you to move from 15% to 18%, 18.5%.

And I did understand that you will likely continue to price or share the gain with your clients in terms of the direct tariff impact, which was 200 basis points. So what I'm just trying to get to is how quickly can you get back -- realistically get back to the 48% to 49% gross profit margin?

And is it likely that you will also have a negative impact in 2026. I understand we don't know where tariffs are going, but let's assume for now tariffs are going to stay where they are -- where they were in Q2. Will there be below 20% margin next year? And where does the recovery in these 4 individual moving parts come from in the second half?

Yes. I think I will take general and then maybe Matthias can give some more positive numbers. Hey, look, the INFICON model is still at 20% plus of [indiscernible] and the one where we continuously try to further improve nothing of this has changed in long-term strategy.

Nothing of the strategic initiatives have changed on the growth side or on the efficiency side, operating efficiency, utilization other automation, nothing of this has changed. We know that this is going to go away because there are clear one-off effects that we can identify. So the building blocks in it.

In terms of FX, I mean, strong Swiss franc is never really good for Swiss companies. We have seen that in the past. We are much less exposed. If you look at our Swiss location, as you know, is just 1 of 3 big ones or 1 out of 11 competence centers. So we're much more diversified. That's why we also typically are -- have a much higher natural hedge on FX.

When you specifically look at, for instance, Swiss franc development got compared Q1 with Q2 and also Q4, it's a bit of an up and down. So yes, I know we kind of ended up at this very strong Swiss franc overall. But the dynamics are still higher than the situation will generally suggest in Q2. So there might be improvement on it.

But I would also say on short term, more identified, but in general, long term, we try to manage this strength of this currency, specifically the Swiss franc, for instance, also the euro to some degree with this relocation and cost optimization. So I don't know how quickly this will materialize or how quickly the effect will go reverse.

But I look at this with a relaxed perspective. I think this is manageable. We've seen this before. Again, we do not have a one concentrated location or two big locations. We are more diversified than that. If you compare the profile of our cost with the profile of our revenue, it's relatively balanced. The only thing is there is not many customers in Switzerland for semi, for auto, right? So that's the one thing that we need to watch a little bit. But again, for that, we also have this reconfiguration projects longer term. And we stepped it up a little bit because we do expect it to be a bit stronger in comparison.

So I think we can work through that. I would not worry about 2026. I mean -- the last 3 years were difficult to estimate, so how do I make a statement for next year at that age as well beyond a couple of months, right? But if I look at next year, I really can look at it optimism in spite of everything that happens in the world.

We're taking also pushing -- there's a lot of new innovation from the space to quantum computing to all these new tech nodes in semi. We are right there. We're right plugged in. There's a lot of new application and sense technology coming online.

Data analytics is on fire, oh my God this new products that we're making there and the stuff that's happening. All markets look like they grow next year versus this year. This is not guidance. This is just a general feeling of how the development is based on what I said earlier.

Hey, there's reason for optimism even though we're in the middle of a storm, frankly, because underlying factors haven't changed actually. I think they could even you could even say they have improved. So no reason for negativity or too much, we have to navigate it. That's what we're doing here at INFICON, but we are as excited as ever about our business and about our opportunities, frankly.

Isn't it a great time to leave? I mean all the stuff we do you just have a brand-new project I cannot talk about the moon and all this stuff in tech with AI. You can read my LinkedIn. I did my own coding project, we have two bots this summer. Super cool stuff.

Anyway, sorry, but you asked me about what's in the future, I'm excited about it as much this is a bit miserable. I get it. But this is not going to the core, it's not changing anything, it's not going to knock off anything, which just plow through. Rip-off the Band-Aid, move on, it's fine, execute further. Actually, rather more opportunities than less, frankly, when you compare to Q1. And you look at a long term perspective, yes.

That sounds very good, but you know how dull we are at the capital market and always just look at pure numbers.

You guys -- when we talk about the tech stuff, I see sparkles in all of your eyes. I know we both have, right? We have to do numbers and we also talk about the exciting stuff in the industry. But again, I want to stress not that too much go off of attention. There's optimism to have for next year, I think. That should be the general statement. And while trade dispute settles down, the big drivers, they have actually accelerated. So yes. So everything is a little later. That's all.

Just a small follow-up here. Do I understand correctly that the 200 basis points, the majority of that direct tariff impact is something that you would expect to see go away already in the course of the second half? Or is it...

It already has. The impact is mainly in April and then it was a little in May and yes, then it will further improve in June. Again, who knows, right? And when we do sudden movement in policy, there's going to be some kind of bump and scratches and bruises, but it's a temporary nature of it. So I think this is not -- in a realistic scenario, you don't see this anymore this year. So this has been largely around this decoupling logic I explained...

Maybe a quick last one, if I may. The lower sales guidance on the lower half of your initial guidance, is that exclusively to do with the delay in the semi ramp-up? Or does it also have any other sector impact?

Semi is certainly a big thing, right? Also why we clicked off the upper part there, we just don't see this upside. I mean if you look at how we try to communicate with you, we try to communicate early and what we know. And so we already in full year presentation, so 2 earnings release back, we talked about this year maybe not being as exciting as we all hope for, with a full fat semi ramp in the middle of it.

And I think then in Q2, we continued this. So this is basically a bit of a confirmation on a little bit the lower end scenario of the ramp is just not really materializing this year. And so that is the main factor. And there's some others, right? I mean, automotive in Q1, we saw good signals, as I mentioned, and there was a few other things. At one point, even we felt solar maybe it's also going to happen next year.

So that's just why this whole guidance now is on a similar comparable level with like last year. I mean you see the resilience in it. And you could say we're doing a growth if you take out the SME market, which has its own dynamic, right? That's a little bit's what I tried to explain earlier in the discussion with [inaudible] but it's not broad-based, right? So I hope that helps.

Next questions come from Michael Foeth.

Just 2 quick ones for me. The one coming back to your last answer. There are a lot of fab projects out there in semiconductor. And I'm just trying to understand what's triggering this delay that you're seeing. I mean you're not the only ones, obviously, the whole industry is seeing more specifically from a fab project perspective, if you can help us what is triggering that delay specifically? And what makes you confident that the ramp is going to come in 2026? That's the first question.

And the second one would be if you could give some granularity on your semiconductor sales in terms of the demand from OEMs versus end users and sensor sensor solutions versus software and fab card. That would be helpful.

All right. Yes. Let's do it one by one. So first, about the fab projects. Generally, they're all still there. And generally, everybody is planning to implement them and many are in implementation, right? Obviously, we have good orders out of Asia, China and outside China.

With the big players that you know well. Don't need to catch up. Some are plowing ahead at the front. It's a mix. And then in China, there's a bit of a different dynamic always. You see a lot of displacement of OEMs of Western OEMs there, good growth, also more resilient than we maybe thought. So -- but on the fab projects, this is just some investment delays mainly, very few cancellations. I mean the most notable one is probably Intel and Magdeburg.

There's a long time coming, right? We kind of had to expect this. And then there's also some financial troubles that some others got into. That is mainly where maybe a cancellation happens. All the other projects, the assumption is this is going to come. It just shifts a couple of quarters. generally in the average, right? This does not mean every project is moved, but in the average, a little bit further, some come just a quarter later. That's a bit of flavor.

And you see this also with the top spenders in CapEx that they look at the project twice. I mean wouldn't anybody understand that we do that as well at INFICON for our microscopic CapEx projects in comparison that we look at it twice in this time. Why? Because there's a lot of uncertainty. Do I need this capacity really? When do I need it and so on, right? And where do I need it?

So let's do another round of discussion, and that's what we exactly also see with our customers in both actually, end users chip makers and tool makers, we see these effects. Again, I believe this is rather a delay. Actually, most of it is delaying and a little bit wait and see until this trade dispute settles down, I think. But all of them are super confident on midterm plans, R&D projects, everything strategic is full on plowing forward.

Frankly, nothing has changed. I think, again, the underlying drivers are there. Consumption is not super exciting, maybe you could say, and that's something that also makes things a bit slower, maybe another factor. We have one super exciting application, obviously, with AI really finding proper applications now and really shows first productivity gains.

And that's something that will further expand, but it is still narrow at this time, right? It's not broad-based for everybody in the semi space. All the OEMs and all the chip makers are not profiting from it. And then maybe often we had other killer applications out there, right, where maybe a new consumer product would really plow ahead. And they are in the works, but it isn't here yet.

So maybe to a little bit give you the picture of the dynamics there. Where our growth is coming from, it's similar to what I explained in last year a lot. We look at the semi market as a number of submarkets and now we almost need to look at customer by customer because they're kind of different dynamics. Some need to catch up, some need to catch up in one area, some need to plow ahead, some make a move into a new space.

So all of them have something strategic technologically wise they're working on and that scales up in some places already or is a full step like really leading foundries. But there's also, in some areas, is a bit slowed, as I mentioned earlier. So I mentioned there are some good dynamics in China OEMs. I think we have seen chip maker dynamics last year in China quite a lot.

And then we see in Asia in general, a good trend this year in China and outside of China. Europe could be more dynamic. It's not bad. Of course, there's one big name or one big OEM that is a bit slowed, but it's not a broad-based dynamic. And in U.S., there is maybe some wait and see there. I mean the epicenter of the trade dispute and maybe cause for more uncertainty to some degree.

And hence, there's more thinking. But again, there, when we talk with our strategic partners about strategic projects, there is no delay. There's no question marks that we move ahead. but it is a very fragmented picture, right? The visibility is low. And again, each customer has a couple of things that are almost ramping and a couple of things that are a bit in the doldrums.

So that's why you get this very murky picture overall. I hope this helps. It doesn't -- it's not so easy to give you the list and pinpoint it, right? Apology. We would love to have that too. Maybe next year, when this gets more broadband and everybody scales it up, then that will happen.

The next questions come from Michael Inauen.

Just two questions actually. I was trying to understand what you make of the tariff let's call it, solution or tariff deal that we have between the European Union and the U.S. I mean, there's still 15% tariffs now. It's actually a lot. I mean, it's better than what was probably anticipated, but it's still a lot. So I was wondering if your production in Germany, if there's any impact with that. .

And the second, what I'm trying to understand a little bit the fact that you basically took some tariffs from your customers, as I understand it. We had a similar situation, I remember during COVID when you also shared the pain with your clients on customers, for example, and the higher cost channel.

Yes, exactly. So I was just trying to understand, is it -- does this happen out of discussion that you had with your clients? Or is there actual pressure from your clients to take some of these costs? Or is it your own decision to not have this discussion actually? So I'm just trying to understand, is there a real risk that the client tells you look, if you don't take over some of these costs I'm moving over to whoever MKS or whoever there, just to get a feeling for it.

Yes, sure. Look, no, there is no real pressure. I think on short notice, everybody can go and raise prices. And some suppliers did it in the last time when we had this high inflation 3 years back. And guess what, they're all replaced. It's like when you do this at home, right, somebody makes the remodeling of your house and really rips you off. You're never going to go ever invite that contractor back into your house even if you pay more somewhere else. And this is the way how we look at strategic partnerships. It is always a discussion.

The first thing when liberation day happens and the whole management team actually was traveling at the time and actually talking to customers as it happens coincidentally even together, we first talked to the customer. That's the first step. So how are we going to navigate this? Like everything else, that's partnership.

If you send them a letter, here's a price increase, they will say, no choice, we'll do it. But you for sure lose branding points. So yes, it's not a bad comparison, honestly, back then when we had this increased chip costs. The choice was always first, we need to ship. Everybody was in the expansion there, right? Some of our product lines, they actually quadrupled in volume. You're not going to go and hold back and make a negotiation and we will not ship and some of our suppliers did that. Some of our board suppliers did that. I mean it's clear what you do, right?

There is an entire team that goes and replace them as fast as possible. So back then also, we focused on shipping. It's the same behavior. It's the DNA. You don't change the DNA of a company quickly. Anyway, I like the comparison a lot, honestly, Michael. This was not a big discussion in the team here. It was more about, hey, what's first, what's not important, who does what?

And frankly, I'm always a fan of when the CEO doesn't have to say much, but people do the right things because what then happened is that we all set up great teams that care about their business and that go for it, they make mistake, but they're moving fast and they do it to their best knowledge. And that's exactly what happened in Q2. I'm immensely proud of how they reacted. And so they moved on.

And yes, for some things, we need to have a discussion. We have price increases, but we did that with deliberation and with discussion. And first, it's about the strategic wins and then it's about compensating short-term op profitability topics, right? That's always the right play if you want to be in the game. We're in the game for 50-something years. So we are not going to go away. They're not going to go away. It's like a family, right?

So you still invite the old uncle to Thanksgiving or to your barbecue in summer or to your birthday party, which is how it is, right? So -- but some guys maybe like more and you do a little bit more with. And we would like to rather be the guys that are easy to make business with do innovation to really wow them on how we saw things. And so that's how we navigated this. Now I hope I answered your question properly. Was it -- all right.

It was interesting important to understand, I guess because exactly the COVID situation was somewhat similar, I mean completely different, but still somewhat similar, so just trying to make sure that you are not really under pressure. .

No, in fact you see what your team is made of and how much do you need to manage yourself. I think that's exactly comparable. I like it. Thanks, Michael.

And can you say something to the European U.S. deal? .

That was still the question. That's right. Some of this we expected. I mean, we were at 10% and then liberation there was 20% and the later was 30%. So the general tendency seems to be there is generally more tariffs between trading blocks and or general barriers. This seems to be the new world, right? If you look at the analysis, what happened in the last 100 years, we always reduce them everywhere, free trade agreements and so on.

And it seems to be now a bit of a paradigm shift. And so we anticipated that too. So now we need to go and find out what this 50% really means. As I mentioned in the last earnings release, when these announcements are made, like last time, the example was the China, the U.S. made an agreement and they said it's 10% and 30% now. When we then did the investigation and you need to call up experts, you pull together your own experts, you actually file requests to understand it with the authorities.

We found out it's not 30%, it's 55% because tariff stays, this one stays, this is a special category, some even fell away. So we need to analyze what it truly means. And sometimes they also fall away. It's not only more. So we'll look at it, but 10% or 15% is a similar kind of range. A reconfiguration of our footprint will continue. That is part of our strategy now for the last 3, 4 years.

We built this capability up. So yes, we might move something out of Germany to the U.S. or to China based on this, but the projects that are already ongoing. So it's not as dramatic as this liberation day shock with the upgrades to it, right, which we're currently at 50-something percent of tariffs from China to the U.S. So that is a much smaller scope.

Again, we need to also see what the Swiss U.S. agreement will look like. There's voices out there that it could be comparable, and we'll have to just look at it and then analyze it and we will take a week or 2 until we know. And then I'm sure the teams are motoring away. We have scenario plans already for how extreme it is.

So we also have to expect maybe 30%. And so in that sense, it's better. EU and U.S. trade policy and agreement, there's a shift there, right? We're also studying this closely where will this really end up with and what really stays long term and what will not.

We look at this different than between China and U.S. from our humble view, right? Again, please ask the real experts about policy or global trade policy. But we believe there is solutions to be found normally between these 2 blocks. And some things need to be worked out, might be still a bit bumpy in the next months, but they will be working some things out. Yes, I hope that helps...

It's a long discussion, but just let me add, right, sometimes we say well tariff, tariff is an easy word, right, 5 letters or -- but it's really complex, right? What's really -- there are so many dependencies and rules you need to understand, you need to apply. And also very much depending is, of course, who's paying the customs, right, or the tariffs, right? And number one is this is all defined mainly in the Incoterms.

So the Incoterms define a lot, right, who's really paying, who's importing the goods. That's one thing. And then there are so many other aspects, right? Will the goods be brought out of the country again after a couple of days. And then maybe it's -- and all these things we must watch and analyze and try to get a good understanding and then we can judge and basically what we said earlier.

Of course, we watch it and we need to watch and then we need to make the right decisions, right? When we have some clarity, what could be the impact. And as Oliver said, even today, right, 2 days before the official day, I think, August 1, we don't know what's the agreement with Switzerland and eventually, we don't know yet. And what we will see and then we look at our structure, our product streams and product flows right into the world, and then we need to make the right decisions.

And that's very good addition to Matthias made here, just to show you the complexity of it. It really breaks down in complex process. And then there's also the customer discussion, who does what or do we change the revenue stream or the shipping stream or yes, and then we'll work through it.

But it shouldn't be that extreme. It's not a great deal, right? I mean we are fans of the world before where there's a couple of percentage between the blocks, especially the major trading blocks, right, excluding maybe U.S. and China. That is good, right, free room to operate, not too many tax burdens and regulations. It's obvious, right?

That's the easiest to make business and grow business. But the world is what the world is. So you navigate where you are. It's the same rules for everybody, right? And I believe we are just in a very good place to navigate this. So we remain confident whatever will be thrown at us.

At this moment, I don't see anyone else wanting to ask questions. So maybe this is the point for closing remarks.

All right. Then thank you very much, everybody, for your interest, for your continuous support. And we meet again soon in a quarter, interesting time. And as I mentioned earlier, also very exciting times at the same time.

So I would say the same thing, we remain confident and optimistic here. and see what the future brings. And then with that, we meet again soon as Matthias has outlined in the next date for the next earnings release and other events, we will participate. Thank you very much, and have a wonderful day.

Thank you.