SFS Aktie

So good morning, everyone, and thank you for joining us today for presenting the annual report of 2025. The following presentation of the 2025 annual results can be found on our website at www.sfs.com, under the Downloads section.

Now it's not moving to the next slide. Somehow it's not moving to the next slide. Can you -- someone is on the braking pedal, most probably you. Sorry for that. Volker Dostmann and I are pleased to present the SFS Group results for the financial year 2025. It was yet another year characterized by a demanding market environment, geopolitical uncertainty and continued currency headwinds.

Despite this, SFS delivered solid results. Our diversified positioning across end markets and regions once again proved to be a strength. At the same time, we initiated important structural measures that will strengthen our competitiveness for the years ahead.

So next slide, I have to say. Let me briefly guide you through today's agenda. In the next roughly 45 minutes, Volker and myself will actively walk you through the highlights of the year. I will start with a short reminder of how SFS is positioned and how we create value for our customers. After that, I will summarize the key takeaways of 2025. Volker will then walk you through the key financial figures in more detail, and then I will return with a short overview of the segment developments before we conclude with our outlook for 2026, and open the floor for questions for the remainder until noon.

Now we got kicked out. Okay. I'll start with the positioning of the SFS Group. SFS as a company is people throughout everyday life, often unnoticed 24 hours a day, 7 days a week. Our mission-critical precision components, fastening systems and quality tools are embedded in the products and processes of our customers. While our products are often small components within larger systems, they play an essential role in ensuring reliability, safety and performance by focusing on mission-critical applications. We help customers achieve efficiency and cost effectiveness across a wide range of applications. This positioning is built on a long-term customer relationship, engineering expertise and a deep understanding of our customers' applications.

Our guiding principle is simple, inventing success together. In many cases, the direct cost of our products represents only a very small share of the overall cost of our customer products. The real value lies in optimizing the overall process. Through value engineering, we improved product performance, simplify installation processes and reduce supply chain complexity for our customers. This is where we, as value creators, create measurable gains.

Our activities are structured in 3 segments. Engineered Components focuses on highly precise customer-specific components and assemblies. Fastening Systems develops and markets application-specific fastening solutions for the construction industry. And Distribution & Logistics provide tools, fasteners and C-part management solutions for industrial manufacturing customers.

Optimizing the product. Let's now take a look at the specific end market with an aerospace application. This example illustrates how value engineering works in practice. Instead of simply supplying a standard component, SFS engineers analyze the entire application and redesign a new solution. By replacing the conventional bracket solution on the left side with a hybrid insulated pin fixation with bolts on the right side, we can reduce weight and operating cost. At the same time, customers benefit from easier installation and lower procurement complexity.

The next success story as well in aerospace shows the engineering capabilities of our Engineered Components segment in the aerospace industry. From the initial customer idea to first flight, the development took only 16 months, which is very short for aerospace projects. The solution combines advanced plastics and metal processing technologies to create an ultra high-strength composite overhead compartment hinge for the refurbishment of existing aircraft cabins. It provides more space for passenger luggage, improves boarding and deboarding and contributes to both sustainability and cost efficiency for airlines.

To give another example from the aerospace market. Many of the solutions developed by SFS are not visible to the passenger, yet they are essential for the performance and safety of the aircraft. Typical examples include cabin assemblies, assembled solutions, injection molding components and new also aerospace fasteners. These solutions require a very high precision and close cooperation with the customers already during the design phase. SFS supports customers from engineering and prototyping all the way to serial production, creating strong and long-term partnership.

In the Fastening Systems segment, SFS combines products, tools and digital engineering solutions into integrated fastening systems. Our approach is not only to supply fasteners itself, but to optimize the entire fastening process. This includes specialized insulation tools and calculation software that ensures the correct application of the fastening solution. By combining these elements, we improve reliability, productivity and efficiency for our construction customers.

In Distribution & Logistics, SFS focuses on optimizing the supply and the management of tools and C-parts for industrial customers. Through smart tool storage and digital issuing system, employees have immediate access to tools and consumables at any time. This improves availability while reducing inventory levels and administrative effort. At the same time, the generated data enables further optimization of procurement and production processes. Payback for the customer is usually less than 5 years.

The concept can also be compared to a razorblade model. The system itself is the infrastructure, while the tools and consumables represent the continuously used blades. Through this system, we not only supply the tools but also generate transparency on consumption and usage patterns. This allows us to provide additional services such as cost optimization, inventory reduction and process improvements for our customers.

To act as a true value engineering partner, it is essential for SFS to have a clear focus on specific end markets and customer applications. For this reason, the SFS Group implemented several organizational changes to sharpen its end market exposure and strengthen collaboration across the segments.

As of January 1, 2026, the Engineered Components divisions were reorganized around applications, and the new region, Asia was created to further develop the important Asian growth markets.

Urs Langenauer was appointed as Head of EC segment; Martin Reichenecker to go with the leadership of Region Asia; and Iso Raunjak became Head of D&L segment; while Christina Burri joined the Group Executive Board as Head of Corporate HR, Communications and ESG. These changes also reflect the generational transition in leadership and ensure continuity in the execution of our strategy.

I'll start with the key takeaways of 2025 at a glance, resilience in turbulent times. The year 2025 proved to be another intense year against the backdrop of an adverse market environment. SFS realized solid results, thanks to its broad positioning across different end markets and regions. A program to streamline the global production and distribution network was proactively introduced with the goal of realigning production capacities with partially reduced customer demand and strengthening focus on core activities. Third party sales of CHF 3 billion was generated, plus 0.6% versus prior year. Organic sales growth of 2.9% demonstrates strong market positioning, currency effects again had a significant impact with minus 2.9%. And adjusted operating profit EBIT of CHF 371 million, in the prior year CHF 350.2 million was achieved, which resulted in an adjusted EBIT margin of 12.2%, in the prior year 11.6%.

Reduced earnings per share of CHF 5.63, in the prior year CHF 6.21 were caused by the economic environment and the nonrecurring effects from our program to streamline global production and distribution network. Expenditure on plant equipment, hardware and software declined considerably to CHF 103.7 million, in the prior year CHF 148.9 due to the completion of several major projects. Organizational adjustments, as mentioned, were completed to support the generational transition and to strengthen customer focus.

The key takeaways are clear. Consistent progress was achieved. In 2025, SFS achieved total sales growth of 0.6%, while organic growth reached 2.9%, demonstrating the solid underlying performance of the business. Currency effects had a negative impact on the reported figures. The main growth driver during the year was the electronics end market, which showed particularly strong demand. As a result, sales in electronics increased from around CHF 400 million to CHF 422 million, confirming the strong positioning of SFS in the targeted electronics applications.

On the environmental side, interim targets were exceeded. Sustainability remains an important pillar of SFS' long-term strategy. In 2025, we made further progress in reducing our environmental footprint. Compared to the 2020 baseline, Scope 1 and Scope 2 emissions were reduced by 77.1% measured as CO2 emissions in metric tons relative to net sales.

At the same time, we continue to increase the use of renewable energy, 81.5% of our total electricity demand is now covered by renewable sources, reflecting our continued efforts to decarbonize operations and move towards our long-term climate targets.

On the social side, dual education goals were secured, progress in accident rate finally achieved. Alongside environmental progress, SFS has also made further advancements in the social dimension of sustainability. Our training and development targets were successfully confirmed, reflecting our strong commitment to education and continuous employee development. A significant number of employees are engaged in education and training programs, reinforcing the importance we place on developing skills and future talents.

At the same time, we achieved a significant improvement in workplace safety. The accident rate measured as the number of accidents per million hours worked, declined noticeably, reflecting the continued focus on safety initiatives across the group.

With that, I'm now handing over to Volker for the presentation of the key financials.

Thank you very much, Jens, and a warm welcome also from my side. The financial year 2025, as said, was to be seen in the front of a backdrop mixed with geopolitical and economic challenges, distinct FX development and instability of international trade. We may report good results and satisfactory development in such difficult environment. The team showed great dedication to their end markets to their customers and found opportunities despite all of that. We thank all of the 30,646 employees for their dedication.

And I summarize the performance as a consistent progress. We grow, we optimize ourselves, namely the production and distribution network. We drive profitability and we generate with that significant levels of cash. But let me go into the details, starting with sales. We show sales of CHF 3.056 billion, which is 0.6% growth adversely affected, as you see, by the FX environment, CHF 88 million up to the tune of 2.9% that is lost against the appreciation of the Swiss francs.

Sales dynamics during 2025 have been challenging, as said, but after a muted first half year by geopolitics and hesitations in order patterns globally, we report a pickup in Q4 especially versus prior year, and our organic growth is despite the adverse conditions at 2.9%, just shy of our midterm guidance. This is largely based on the positive developments in Engineered Components where we see, especially in the electronics end market, replacement cycles in mobile phones. Additionally, the increase of stamped parts that we deliver to the respective customers successfully support our top line.

In parallel, we continue to ramp up the known brake systems in the automotive end market. That's happening in Switzerland, in China, in India and in the U.S. We are on track to see good progress there.

Distribution & Logistics shows very solid development in an end market where especially machine builders and manufacturers restricted their demand painfully and kept their priorities on operational necessities. Still, the team has managed to achieve organic growth of 2.4%.

With construction activities in Central Europe being very sluggish versus a more dynamic North American market, the segment Fastening Systems saw headwinds from the weakening of the U.S. dollar. Gradual improvements during the year were dampened towards year-end again.

Overall, we see a slight negative performance throughout the year for the Fastening Systems segment. As said, FX development, again, mainly against Swiss franc, dollar, euro, Swiss franc, melted off a significant portion of the locally made progress 29% up to the tune of CHF 88 million.

Looking into breakdown by geography and industries. I would like to highlight that we stay very solid in Europe at 56.8% and the share. But also we'd like to point out the shift in North America and Asia, where we gradually gain footprint to Asia 14.3%, and the Americas 17.8%.

Sales breakdown by industry shows a stable situation as well. Industrial manufacturing at 27%, just losing a wee bit in an extremely competitive market environment. We managed to keep the footprint almost stable. Construction and automotive, both at the 20% reach. Our local for local approach remains a strategic pillar. And with that setup, we see ourselves well positioned against tariffs and customs discussed. And also the unilateral measures taken by the respective countries. The uncertainty and the volatility from the end market demand is more of a concern to us at these days as the tariffs itself.

Operating profitability is at the CHF 371 million or 12.2% or EBITDA, CHF 505.8 million, 16.6%, which is a normalized figure. Reported, we are at CHF 324.3 million, 10.6% or EBITDA of CHF 466.6 million, 15.3% of sales. We adjusted to CHF 46.7 million one-time nonrecurring cost in the program of streamlining our production and distribution footprint, and this shows the results. We have managed to lower our personnel expense quota by 0.5 percentage points, and OpEx by 0.4 percentage points in a sustainable way. Based on a stronger second half year top line versus prior year and the improved performance, we record an emphasized pickup in profitability towards year-end.

As mentioned before, we tie that to significant part to the favorable economic environment in electronics, where we see this replacement -- the replacement cycle and also to the dynamics as such. We expect that to flatten out slightly during the coming months. And 2026 should not be such a distinct difference between first half year, second half year.

Being on an adjusted basis back in the target of 12% to 15% EBIT range was possible due to the progress in the streamlining of the footprint of production and distribution networks. And I would like to give a bit more detail on what we are doing at the moment and where we are on the next slide. We said that we are going to reduce top line by CHF 110 million, phasing out technologies and legacy products. We are, at this point of time, at the range of 20% that we actually phased out. Individual discussions with customers are ongoing, and we are confident to reach the target. As a nature of the topic, this is going to take longer.

650 FTEs were announced that we want to reduce overall. We implemented actions affecting more than 330 FTEs by year-end. 50% of the workforce is therefore roughly targeted. And again, this is a topic where we take our time in order to find the best possible solution for the businesses, but also for the individuals. And we are working towards finishing all these measures by end of 2027.

Reducing these 650 FTEs does and will involve closing as well as selling of individual sites. Divestiture is clearly there in the realm, and we would, in any case, prefer that as we can grant these people in the future in a different environment. Should you be looking at the overall FTEs on the group level, you will not find the 650. We have 2 counter effects that we would like to mention here, which have absolutely nothing to do with the streamlining of the profit -- of the production footprint. But you see the distinct workforce up in electronics, which usually is a temporary workforce, that is temporarily higher, as well as the ramp-up in India where we are expanding our product portfolio.

The total cost for the adaptation program was targeted at CHF 75 million, which still is our total target. At the moment, we are more than 60% through the measures from a cost perspective, one-time cost perspective, as I said, the CHF 46.7 million. We are striving to improve 0.8 percentage points on EBIT. We've seen first minor effect in 2025. We'll see roughly shy half of that in 2026. So we are here on good track. If we look at what we did in a chronological order, then you see these different sites that are and will be affected. And I'll summarize as follows.

We have places where we are through, sites where we are through like Brunn am Gebirge in Austria, like Olpe in Germany or Mocksville in the U.S. These sites are closed. The measures are fully implemented. On the other hand, we have sold Allchemet to the management in Emmenbrücke. That is one of these divestitures I mentioned. And we are lastly in implementation in Torbali in Turkey, in Turnov in Czech and also in Flawil, in Switzerland, where we are on track. And all measures as said shall be implemented by year-end of 2027, which brings me to earnings per share.

And as already mentioned, we have earnings per share of CHF 5.63, which is CHF 0.58 down versus prior year. We have impact from the streamlining program and the one-time cost, which obviously are reflected in our earnings per share. On the other hand, we have a pickup in profitability and mix, which works counter this. We have no or minor impacts from the financial result this year. And we have a bit of a pickup as we pay nominally less taxes in the year 2025.

Based on that result, the Board of Directors will propose to the general assembly of 22nd of April, a dividend of CHF 2.5. As in prior year, we will distribute part of that CHF 0.50 out of privileged capital reserves, which is an advantage to the individual shareholders in Switzerland. The rest, the CHF 2.0 will be distributed as a genuine dividend.

With that, we stay in a payout ratio of below 50%, which is a clear signal that we will continue to deleverage our balance sheet. Dividend yield is at 2.3% measured with the share price end of the year. Net working capital development remained flat, which was quite of a challenge in a situation where we had tariffs and uncertainty from a logistics point of view. We managed to keep that flat, especially focusing on inventories. Overall, we stay at 28%. Clearly, it remains a topic to come down on these levels again.

Brings me to capital expenditure, where we say with 3.4% of sales, we are reaching a historical low which is clearly down and below D&A ratio of 4.7%. This is clearly the outcome of the streamlining of the production floor print and the increase of utilization of existed installed capacity. Additionally, of course, we have the trends from the ending of the investments in Heerbrugg, which were large. And in China, in Nantong, where we had larger investment cycles during the last 2 years.

We keep the rigid view on CapEx, and we will reconfirm here the bracket of 4% to 6% of sales going forward in investment into CapEx as we take the positive cash flow from that element. We go to the operation free cash flow, which is a very strong signal at CHF 274 million. And therefore, at 57% of EBITDA or 124% of net income, which we deem as a strong signal and a clear document of the good ability to generate cash. As I said, whilst we optimize ourselves whilst we grow and therefore, also deleverage our balance sheet, and we will strive for that further.

Net working capital management, diligent CapEx decisions and profitable growth are cornerstones in our decision-making. We see ourselves positioned to keep the cash generation up and reconfirm the target bandwidth of [ 40 to 50 ] of EBITDA going forward. As said, balance sheet ratios come back steadily and the equity ratio that we lowered deliberately in 2022, acquiring Hoffmann Group and expanding distribution and logistics has come back to 64.4%. Meanwhile, good, in the range and above the targeted 60% threshold. Our first outstanding bond has been reimbursed against the revolving credit facility and we strive, as said, to go that path further as we go along.

Return on capital is fluctuating or moving exactly in parallel with our profitability and comparable levels to prior year along those performance indicators.

Effective tax rate, to our dismay, did raise again. We were aiming to reverse the trend and fighting against it, but we have some elements to line out here. One is the closure of sites made us write-off deferred tax assets as we lose them, which drives the tax rate. Secondly, we have a distinct hunger of the economies to generate tax income and the creativity in Germany, France, Italy and Hungary, with new taxes drives our tax rate and our ability to counter react was somewhat limited. And lastly, the continued moving out of our tax shield in the U.S. is counter affecting our other measure. If we look at tax rate on strict statutory rate, we would end up at 23% as we are positioned today. So there is a potential, and we will implement measures to drive that down and/or keep it flat.

That brings me to the KPI summary. I conclude my detailing on the performance. Thank you very much for your attention, and hand back to Jens.

Thank you very much, Volker, and I'm happy to continue with the presentation of the segment development. I'll start as usual with the headlines of the Engineered Components segment. The Engineered Components segment delivered good growth in both sales and profitability supported by several end markets and application areas. Within this segment, the electronics division was a key growth driver, particularly through stamped components used in mobile devices and components for nearline HDD applications.

The aerospace business showed a very encouraging performance throughout the entire year, reflecting strong demand and successful project execution has proven through the introduction. In contrast, demand in the medical device industry developed somewhat below expectation during the year. Despite excess capacity in the European market, the automotive division achieved solid results, demonstrating the competitiveness of its product portfolio. In addition, several ramp-up projects in Switzerland, China, India and the United States are progressing.

Finally, George Poh and Walter Kobler retired from the Group Executive Board, and Urs Langenauer assumed the role of Head of Engineered Components segment.

The Fastening Systems segment was impacted by the economic environment, particularly in Europe. In the context or in this context, the segment recorded a slightly negative sales development and weakening currencies further reduced operating profit in this sluggish market environment. At the same time, the North American construction industry proved more dynamic than its European counterpart. In addition, regionally cold and unusually long winter conditions at the beginning and the end of 2025 had a temporary negative effect on construction activities. Nevertheless, demand recovered slightly over the course of the financial year. And finally, market access in North America was further expanded through the acquisition of DB Building Fasteners in the United States on August 1, 2025.

The Distribution & Logistics segment showed subdued market momentum during the year. Nevertheless, the segment delivered solid results in this challenging environment, supported by prudent cost management, the onboarding of partners and a comprehensive range of products and services. The planned acquisitions of the partner companies, Gödde, Oltrogge and Perschmann will further strengthen the platform. These acquisitions will enable the further internationalization of the trading business. They will also allow us to pull resources and realize advantages in terms of expertise and costs. Furthermore, the purchase of a 51% stake of the 3D-printing platform, Jellypipe AG now renamed Hoffmann Additive Manufacturing expands our technology offering. Since January 1, 2026, Iso Raunjak has been leading the Distribution & Logistics segment.

Looking ahead to the financial year 2026. The outlook is still characterized by considerable uncertainty. Against this backdrop, the group will continue to focus on its rigorous customer orientation, pushing ahead with innovation projects and ensuring efficient and profitable business processes. We will steadfastly continue to pursue and implement the global production and distribution network, streamlining programs introduced in the year 2025.

For the 2026 financial year, the SFS Group is focusing on the midterm guidance and expect organic growth of 3% to 6% in local currencies as well as in our adjusted EBIT margin of 12% to 15%. Looking ahead, we continue to focus on our main strengths and opportunities with a clear emphasis on disciplined strategy execution, our key priority is building a fit-for-purpose global manufacturing and disposition network that reflects the current economic environment and includes targeted site-specific optimization measures. At the same time, we remain committed to maintaining a strong financial foundation supported by operational cost discipline in response to the challenging market conditions.

In addition, we'll continue to pursue selective bolt-on M&A opportunities that strengthen our technology portfolio, market access and distribution capabilities. Alongside these initiatives, we aim to further increase the equity ratio, ensuring that SFS remains financially robust and well positioned for sustainable long-term growth.

At this point, I would like to thank all employees of the SFS Group for their commitment, expertise and innovative energy, which were essential for the good results and development achieved during the year. I also extend my sincere thanks to our customers, business partners and shareholders for their trust, loyalty and constructive collaborations, which supports the long-term success of SFS.

Thank you for your attention. And now Volker and myself are happy to answer your questions you may have. We'll start first here in the room. [Operator Instructions]

Alessandro Foletti from Octavian. I have a couple. Maybe starting with the top line guidance for 2026. You had 2.9% organic in '25, and now you're guiding for a little bit less than that for '26. So I wonder what was special in '25 that is not repeating and what are the risks and chances for '26?

Last year, we also guided 3% to 6% in local currency, same as we do. This year, Volker will give us a little bit of the breakdown then in detail on where we expect this growth happening. Overall, I think when we go back a year from now, at that time, we also clearly said we have innovation projects and in general, initiatives in the organization to grow 3% to 4%. And this is roughly where we also ended up. And so also this year, we have a range of initiatives, which we are implementing as we discussed, so ramp-ups, which we expect to have in the year '26, also probably in that range of around 3% to 4% overall. I don't know whether you want to?

Maybe it's important, in that mix, we will see roughly CHF 50 million that go out as we streamline our production and distribution network, right? So from this CHF 110 million that we overall target, we expect roughly CHF 50 million in 2026 to materialize. So that is a headwind that you need to factor into your calculation.

Right. But then you have -- I don't know if this works, but then you have about CHF 100 million plus/minus, if I calculate correctly from M&A, right? And this is 3%. So you have CHF 50 million going out, that's 1.5%. So you have a 1.5% tailwind only from M&A or scope of consolidation, right? So looking at organic, it doesn't seem to be very dynamic, what you are indicating, at least the bottom of the range. So I wonder what are the moving parts? And where are the challenges?

I mean moving is -- the volatility, I think we mentioned earlier, we do not see yet a clear trend of recovery, right? We do see first sparks. We do see good months in some end markets. We see lower months in the same end markets. It's not a consistent trend that we have at the moment that signals recovery. That's the volatility that we alluded to, right? And yes, we are, from that point of view, we take our reservations. I think that's clear.

And I think if we go back to the numbers, as you mentioned, the Gödde, Perschmann, Oltrogge is around 3%. Then we had other acquisitions last year, smaller ones, which will give us an additional 0.3% to 0.5% effect on that one. And then we expect roughly around 1% to 2% from projects.

And when we go through the segments and take a look at the opportunities and start with the Engineered Components segment, we have a ramp-up ahead of us in aerospace fasteners that's one specific direction we take. Secondly, we have new programs also in the electronics area, where we add and increase value-added on the smartphone side. Then in automotive, we still have ramp-ups ahead of us with braking systems. These are more or less the main growth drivers broadly in Engineered Components, especially in China and India, we see that automotive demand is good and solid. We have roughly around 70% market share in China with ABS Valve components and see new customers coming. And we're also working on ball screw drive technology customers in China.

Besides that, we also have ball screw drive technology customer in India, which we acquired, low volume, low momentum, not a large market, only 6 million cars being produced in India. So maybe that's to be taken a little bit more on the cautious side. Then we have also to realize that most of the ramp-up projects, which we have seen over the last 2 years have not yielded yet the full top line impact as we expected. This is naturally given because the market environment has been a little bit more challenging. And we have also seen that some of the customers overestimated the change in technology. But sooner or later, we also expect that this will be happening and maybe this will take a little bit more time, and that's growth opportunity which we have in the back end.

Then in the segment Fastening Systems, we have seen that we had good organic growth in North America, a little bit challenging environment in Europe. And here, we have to say that in North America, we are gaining new customers. Our competitors have supply chain issues. So we expect here to also make further inroads on the construction market side. And then in Europe, it's more or less, it's a matter of recovery of confidence because the mega trend is clear. There are not enough apartments. There are not enough buildings out there. We have seen a substantial better performance against our competitors in Europe with our numbers as we have shown. So also we believe, we gained market share in general in Fastening Systems.

And then in Distribution & Logistics, which is mainly the industry environment in which we are. We have seen, I would say, a sharp correction over the last 2 years in Europe. We believe this correction is almost through. And we should see slightly improvement in the European environment. We see new applications like defense, for instance, is giving momentum to the industry in Europe and the general industry, the automotive is maybe more challenged on that side. But we also see that, I would say, the adjustment cycle, we believe, is gone, is through. And now the demand cycle will slowly start to build up, not quickly but slowly.

Just one small addition to that. Acquisition of the partners in D&L will yield only 3 quarters of the year. That might affect your...

Okay. 130 times 3 divided by 4.

Yes, it's still, given on the CHF 3 billion, it's still an impact.

One question then I'll pass on the mic. Maybe can you give a little bit more precise guidance on the CapEx? Because we really hit historic lows.

We're not going to be consistently below depreciation, right? I mean we are not going to stay consistently for a longer period below depreciation. We said 4% to 6%, we'll stay for this year rather to the lower end. But we will see, we will see eventually other expansion projects coming. We are, at the moment, building out India. We will have -- during this year, we will have machinery being added there. That's not going to change it significantly, but we will see that figure coming up. That's why we say 4% to 6%. For 2026, you can expect us to the lower of that range. But we will not stay consistently below this 4%. That's not going to fly.

Well, what I wonder is, we look at the past, you had very often like sort of normal CapEx and then a couple of bursts where it really went above the 6%, et cetera. Is it just not possible to keep it less volatile and more sort of kind of preparing today, future ramps? Or you really have to do it this way? And you will always have this sort of big chunks?

The big chunks, as you write out properly has a lot to do with technology and changes, shifts usually require that. Then as we know, I mean, positions are usually occupied on the supply side within applications. I mean a door is opening, you need to go in full force. And this is where we usually then see a peak. We have seen quite a few peaks in automotive due to the braking systems, for instance, then also in electronics due to stamped products and such things. So that's very much a characteristic of the Engineered Components segment.

In FS and D&L, it's more as we go. We need initial CapEx on a smaller basis. So we cannot promise it depends more or less on bigger opportunities. And the profile of SFS is clear. We need to go in early when the technology is new and fresh and form and shape, then the design so that we are specified in then for the rest of lifetime. And that usually requires that we do a leap forward. Otherwise, we leave the room and the space to others, and following usually is not as attractive on the margin side.

Christian Bader from Zürcher Kantonalbank. I have a question regarding your capital allocation. Now that your equity ratio is so high and net gearing is lower than everybody was expecting. So can we expect an acceleration of M&A activity in the short term? Or will it take a breath now having done a few deals in Europe?

Overall, we are not afraid of heavy cash around us, and it gives us an opportunity then to maybe also be a little bit more flexible and a little bit more constructive in -- on the M&A side, what we do with it. So I believe first priority for us is that we take a look at the quality of the M&A opportunities, which are out there in the market. That's key besides adhering to our strategy on the M&A side. Secondly, having more firing power is usually not a disadvantage. So we will be patient. And I think when we go back in history in time, SFS, we had quite a few years where we got asked a lot. When do you do a step forward, and we were patient to wait and then do the right move forward, for instance, with the Hoffmann Group or with Tegra Medical later on.

Same as we speak now. We certainly see more opportunities in the market. You see every year, we do usually 2 to 3 acquisitions. But once again, we are patient. We are in there for the mid and the long term and quality is key. We do not want to distract ourselves, management and the operations from customers and innovation by having to solve problems, which we cause by rushing into maybe M&As, which are not beneficial maybe there on that side.

And maybe a question on your supply chain. I mean given what's ongoing with the war in Iran. Are you affected at all by any supply chain constraint or maybe increase in the freight cost?

The questions are mounting as soon as it started, the telephones are running hot, everyone is calling and asking this question. And as we have experienced also from the past, when you know early on, the ships get rerouted and maybe it takes 2 weeks longer. And in terms of inventory management, that's not much of a challenge.

So we expect that we deliver to our customers on time and as promised. We do not expect that this will leave a mark on the top and on the bottom line. Besides that, we have, I would say, in terms of total sales, on the marginal volumes, which we ship from Asia to Europe, it's specific products. Usually, we source locally very strongly. And from that point of view, we do not expect an impact.

We expect an impact that this is a further dampening of the sentiment overall that maybe consumers but also industrial customers will probably remain more on the cautious side and maybe on the opportunistic and aggressive side, that's probably the effect we will be seeing.

On the capital allocation side, the M&A side, certainly high focus on Fastening Systems, construction market. That's the key. But we have also seen that when there are opportunities around in the D&L segment, that will also act there. If we could wish probably, we would ask for more opportunities maybe in the Americas and Asia. But that's on the wish list. Then we had a question here.

Tobias Fahrenholz from ODDO BHF. Can we speak a little bit about Germany? I mean it's an important region for you. Do you see some signs of improvement there? When would you see at the earliest some benefits from the bigger programs there? So thinking about D&L then maybe a little bit later cyclical, the Fastening Systems business. And how is your expansion of the product portfolio with the new fastening high runners going on?

I mean, alluding a bit to that, that we are all waiting for these big investment programs to happen, right? I said it before, until it drizzles through the supply chain and really creates orders at our sites, we mentioned we expect 24 months. What we would have hoped for was increase in sentiment, improvement in sentiment in the respective end markets, and that would kick in much faster than we would see the genuine money distributed to come our way.

We don't see that sentiment changing significantly. The pessimistic view in the market is persisting and that keeps that sluggish situation in construction, in Distribution & Logistics. And I think in the general industries, automotive area, it's widely discussed. So from that point of view, we see there a pocket of improvement. But as I said before, not a consistent trend where we say the market as such is showing maybe signs of one or the other direction.

And I think the pocket is the key. As you mentioned, the opportunities are out there as we talk defense and aerospace, for instance, is on the positive side and general machine building, mainly companies which had a major export to India, China, those are challenged overall. But I think fast key besides understanding the market key is then what is the need in the market. And there, we deliver good solutions. Everyone needs improvements on the cost side, needs to become competitive, needs to have a partner at the site, which we believe we are, who tells him there is room for improvement for potential to become more efficient. And I believe that's the opportunity now.

We lay the groundwork for the next leap in growth. Now you specify yourself into situations with new tools, new solutions, which then scale later on when the environment will improve again.

Maybe one more on the outlook, especially the profit margin. I mean we managed to get to the 12% at the lower end. As you said, well, you expect some savings from the program, let's say, maybe 30, 40 basis points. So you mentioned the wide range was 12% to 15%. Is this year's range somewhere between 12.5% and 13% or?

If that's your calculation. I'm not going to counter that one. I mean we said we want to see roughly half of the improvements until end of 2026, and that would go into that direction, yes. The range is rather wide. But we stick to it with our with our capital tied in and with our end markets and the respective risk. We belong into a bracket of 12% to 15%. And we just wanted to signal also that is where we are committed to be.

So next question. Yes. Right here.

I would have a question on the big topic of AI. There will be potentially a big improvement in labor productivity, especially the white collar labor productivity. Have you tried to quantify that? Or can you give us a kind of tangible forecast, what that means for you? What you do in order to implement these new technologies in the company?

Yes, yes. That's a very good topic. And I think we are full force on the AI side, committed to use it as a tool to improve productivity, but also to develop new solutions for our customers, increase efficiency. Last year, we had our international management conference exactly under the theme of AI, the next step opportunity. We have around 100 use cases in the organization on AI, where we work on to be implemented besides that we have many opportunities already implemented.

So if we start in the operations, we have a tool in place, which we call [indiscernible], that's our own developed manufacturing visualization and improvement system where year-by-year, we expect to improve productivity just by the system, 2% to 3%. The system captures data from all the working centers and brings them up, visualized in a good way so that the operator understands what are the main levers he or she has to improve productivity. In the background, we collect all the data, analyze it and also further improve.

So from that point of view, if we go back 5 years when we had an issue on an operating center, maybe it took you 3 to 5 days to fix the problem and solve it. Today, it's a matter of half a day because you have the data, and you can, from there, derive the root cause of the problem. So that's maybe on the operational side. And certainly, we have also on the white collar side, as you say, expectation is when you go out there and take a look at white papers that you can improve productivity by around 15%. Our ambition is that we said we want to improve productivity annually between 3% to 5% on the white collar side. So that's a clear ambition we have given to the organization and we budget year-by-year, the main initiatives and improvements going forward.

And thirdly, also on the market side, use AI tools and the e-shop, for instance, to lead customers easier, better and faster to their specific needs and products, which we have available to them. So overall, holistically, we clearly see this as a big opportunity. It's innovative. It's increasing productivity. And especially us, we see ourselves between the customer and usually a hardware product. But in between, it's all about digitization. That's the main enabler. And maybe on the IT side.

I mean we have formed a dedicated team that is administrating and realizing implementing selected initiatives out of this funnel of 100-plus initiatives, which gives also the organization tools at hand and environments where they can safely test their options. We deem it as very important that employees start working with the tools, right? And we felt like it was also -- there was a hesitation around in respect of security, of what am I allowed to do, how can I, right?

We gave there, meanwhile, a very good platform that is heavily used. And we see adoption is being really fast. And it sparks new ideas. And I think that is not to be underestimating the element in the AI environment is that you have dynamic from areas you never would have targeted before, right, because we have spread it out now. And that is working very well. And we'll look forward to realize some major steps where we also have then actually a reduction in workforce at certain process steps.

Okay. Maybe a second one. If I look at volume-wise, I mean you don't report the numbers, but given the organic growth that you report volume-wise, the group hasn't really grown that much in the last years. This year again with FX against you reported growth going to be flat, most probably you're closing or divesting 8 sites in these 3 years. So basically in front of this backdrop of sideways or shrinking kind of overall development. There are two other big topics out there. One is defense. Second one is robotics. I understand that your exposure to these 2 sectors is not significant or not that great at this point in time. What do you do in order to jump on this bandwagon, so to speak, in order to capture part of the growth that is probably coming from the 2 sectors?

We are certainly exposed to those areas. Defense has been quiet for many decades, we can say, in Europe mainly. But we are certainly active in North America where we have specific applications for instance. But it never has been truly a focus area where we say we want to set the future strategy and group on per se because when you take a look at the SFS Group, we have a sharp focus for consumables. And in defense, it's the cycles that can be quite intensive. And in consumables, like ammunition, we do not want to go. That's not our expertise. That's not our focus.

So we are mainly with the indirect enablement in defense. That means if new production is opening up, if someone is producing specific defense products and solutions, then we help this organization in equipping a manufacturing site with the needed tools and the needed infrastructure to do so, but we are not spacing ourselves into specific defense applications.

So from that side, we have seen good growth. I think, top of my head, around 20% growth in the defense applications we are focusing on. Last year, this has been some of the pockets and niches where we have seen growth also in Germany, in the DACH region, for instance, that's essential to us.

And secondly, I believe also part of the DNA of the SFS Group is that its consumables so that we have a steady continuous ongoing growth and not too much variation because, especially us with our DNA of automation and CapEx and investment, it always provides then the risk that you are maybe underutilized for quite a few years and maybe invested in specific applications you then cannot take to other end markets. That's the challenge. So the nature also of our Engineered Components business and D&L business is very much that we go into applications where we are flexible and reallocate and reuse the investments into maybe new applications, and that's somewhat limited in defense, in aerospace also somewhat limited. So we need to make sure we stay close to our DNA, and that's the path going forward.

Torsten Sauter from Kepler Cheuvreux. I'm not quite sure I understood your comments on the tax development, which is kind of higher than the statutory tax rate 26% versus 23% or something. Can I take the 23% as an indication of some sort of a guidance for the medium term? And what sort of tax can we expect for the year ahead?

Okay. So I was a bit fast on that, rather imprecise. 23% would be if we are in each and every jurisdiction optimally structured, right, which you never are, as you have adverse effects. And we need to work on that delta, number one, right, between 23% and 26.5%. But that's number one.

Number two, we need to squeeze out the 1x effect from giving up legal entities, namely that's going to be the case in Turkey, and in Czech, right? And we need to dampen that out. And lastly, the question is how we work on our legal structure and how we, within the given jurisdictions, kind of optimize the overall flow of values.

Now your question is towards where do we go? We would like to bring that towards '23, of course, not being in a position to give you precise date by when. But I would say we should see a first step this and next year, right? We must work on that. Yes.

Can I have a follow-up? Totally different topic. I understand that the European Commission has recently proposed this Made in EU framework. With your current setup and the products and verticals that you're shipping to, to what extent do you see SFS affected?

As we said and with local for local, we -- let's -- your shift of topic, let's come back with a completely different view on that. When we looked at tariffs and trade, we looked at streams that we really have crossing countries and delivering of one country to another, we ended up at roughly CHF 50 million for the group, right? So it is very limited where we really produce out of another country for a respective end market.

From that point of view, I'm not very alarmed. I was alarmed when Switzerland was considered non-EU, which seems not to be the case anymore. That would have affected our trade between Switzerland and Europe in the long term, right? And that would have been a headache, but that's gone by now.

I believe it's even a huge opportunity since we -- on the D&L side source around 90% of the products within Europe, which we distribute in Europe. We are certainly one of the partners to be with, especially when we then talk about, for instance, on the defense side, 70% of the value added needs to come from within Europe in such applications we can support, we can be a partner, we can help to achieve that.

So since there are no more questions in the room, we -- there's a question. Yes, last one, and then we go to the questions on -- that side, yes.

The question is actually quite simple. I've seen 2 multiyear trends. One of them is the ForEx, which everybody in the room knows. And the second one is your share of Swiss sales is also a multiyear decline. My question is you talked about Americas and Asia as a source of M&A. Have you ever looked at Switzerland with generational changes in small to medium companies that you would do acquisitions in Switzerland because you would no longer have the currency problem?

Absolutely. We do not exclude Switzerland as an M&A market. As a matter of fact, especially on the construction side, we have the clear intention to become stronger in Switzerland. We believe we are not well represented with our Fastening Systems segment in Switzerland. And so if there are opportunities, we would certainly go after that and take a close look at it.

So now we have the questions from online, yes.

So we start now with questions from the chat. We will unmute Jörn Iffert for questions.

A couple of questions, if I may. The first one is, please, on the EBIT margin, on the core EBIT margin development in the second half 2025, which was, I think, a very strong improvement in D&L. Can you please tell us what exactly were the key moving parts here? Why it was so strong in the second half versus the first half? Because I think in absolute terms, revenues are not too different. And then the same for Engineered Components, if this was mainly product mix with HCV and smartphones? This would be the first question. If it's okay, I would take them one by one.

Yes. Thanks for the question. So the distinct shift in D&L and Engineered Components, Engineered Components, pickup in electronics. So really mix and dynamics in the end market underpinned there the EBIT margin. Second effect within the Engineered Components is also the phase of the ramp-up. The ramp-up as they continue reaped more on better profitability as in the first year. So both of that plays into Engineered Components. When you look at D&L, it is truly not a shift in dynamic from a top line point of view. But there, we see clearly effects from the distribution network adaptations that we did and which kicked in, in the second half year. So there, we see really, I would say, a productivity improvement sales per employee. That would be the factors. If that helps you with your question, Jörn.

Yes. And then maybe to follow up on the second question then on the margin outlook for 2026. First of all, to clarify, did you say organic sales growth, 3% plus? Or is this including these complementary M&A to double check on the operating leverage? But then additionally, I mean, like my colleague was stripping out, you have the efficiency gains on the margins from the [indiscernible] you are doing overall having contributions on total EBITDA, which I think is quite profitable from recent M&A. If I set this into context to the revenues, you have some operating leverage.

So isn't this 13% run rate you have achieved in the second half the starting point to think about 2026? And if not, what are really in absence of macro risk, et cetera, the cost blocks we need to consider or reinvestments we need to consider on the margin bridge?

Okay. I think first, the question on the guidance. The guidance is clearly in local currencies, including scope effect, right? That's what we -- that's how we used to state it and how we keep it up, right? So no change from that point of view.

And your question about the margin dynamics going into 2026. Now electronics replacement cycle that we saw -- we've seen in Q4 2025 as well as the ramp-up in automotive and engineered components. As I said, we expect to flatten out slightly, right? So we do not -- I mean you said, is that now at the beginning of the new level. It will come down slightly as we see electronics in its seasonality coming down, and it will also volume-wise kind of be a more muted situation quarter 1, quarter 2, 2026 as today, right?

I would see no considerable cost blocks that we are adding. At the moment, we're working more or less to the other side. Of course, we are building up capacity here and there, but this is capacity that is mainly utilized and engaged already. So from a profitability point of view, not a game changer. And on the other hand, our streamlining of the production footprint will continue. As I said, adding a bit to the EBIT first half, we would expect to see by end of 2026 in the margin, right?

Okay. And the last question, just a technical one. Sorry when I missed this. You talked about your defense exposure was growing 20%, if I understood this correctly. Can you tell us what is the absolute amount you think you have as exposure to the defense sector when you were able to quantify the growth to it?

Yes, yes. Internally, we have a number which we usually say it's around CHF 30 million to CHF 36 million in defense. But question is always what do you count into defense and whatnot. It's somewhat not a black and white and a little bit of grayish area. That's roughly the basis.

Good. Then we continue with another question from the chat from Vitushan Vijayakumar from Baader Helvea.

So I would just have a question on -- so the growth drivers that are coming for '26 and even ahead. So I heard that there was a good momentum for the electronic markets with replacement cycles in mobile phones, as you mentioned. I wanted to know if this was rather a one-off effect? Or is it something that would be sustained in the future? And also, if you can just touch a word on -- about the footprint gaining in Americas and Asia as well, it would be good, yes.

First off, in electronics, that's unusual development replacement cycle we have seen in '25 for '26. We do not bet on it in the same amount and the same development, '26 is more about new value-added, meaning new components, new designs where we are able to participate and specify or being specified into new devices and solutions, which come to the market in '26. So we expect that the current base will continue in '26 with a number of smartphones and solutions being sold. And secondly, we expect them to have more value added in there.

Then to the question on the footprint expansion we have seen in the United States that we, in the Fastening Systems segment, acquired DB Fasteners. So our ambition is clear to continue that also in the year '26 that we maybe have smaller bolt-on acquisitions on the construction-related or end market related smaller companies with that growing geographically in the United States and gaining access to new customers, which we do not have.

Same in distribution on logistics and engineered components probably in the Americas and Asia, we would wish for -- so that means on the M&A side, strategically, we look sharper, more focused on Americas and Asia since we believe the opportunities are there. That's part of the strategy going into 2026.

Also with Martin Reichenecker having now the Region Asia more in the focus, we also expect to hopefully create there more momentum. I hope this did I answer your question.

Just another one on the competition and the pricing one. So I just wanted to know if you see any changes compared to 2025 or 2026 in terms of competition, but also in terms of pricing?

Yes. The competitive environment is fairly stable, we have to say in the end markets, some of the applications in which we are. I would need to think very, very hard to give you even a name of a new entrant, usually in our core applications, very steady, very stable overall. Clearly, in an environment like we have seen in '25, prices become more flexible, maybe a little bit more aggressive to defend market. So we usually then have the strategy to defend our pricing levels and secondly, go in with new solutions, innovations, maybe new product lines to offset and not needing -- need to give too much away and rather focus on new solutions, which then yield a good margin profile. That's usually our strategy as we are not the one to go to focus on commodities, for instance, and a low price strategy. We are more on the innovation side, on the solution side, on educating the customer what to do and giving strong advice. That's our position.

So life maybe became a little bit more challenging in '25, a little bit more on the defensive side. '26, we expect not too much change to that. We expect that the environment remains, I would say, with a high focus on cost and efficiency improvement on the customer side, and this is what we need to deliver.

Good. Since there are no more questions online and are there any more questions. Yes here. Yes. Sure. Always.

Just yesterday, there were [indiscernible] reporting numbers, sort of similar, maybe a tick lower than you, but in general, comparable. What I kind of liked -- one of the things that I like about what they said was their strategy to follow their global clients, right, where they supply them like you do with [indiscernible] in Switzerland, but these clients are global, and they're really -- can you do the same? Are you doing the same? Should be a big opportunity for D&L?

Yes, yes, absolutely. That's the big opportunity. And historically, as the Hoffmann and D&L segment, is focused very much, I would say, on customers in Germany, Austria, but also rest of Europe. We see that they have very strong key account management, which we are also expanding to our Swiss customer base, and this key account management exactly does that strategically. We focus following customers as customers shift value added to different countries and regions maybe for various reasons. We are clearly there to their site to help them and support them. That's initiative number one, which is a given.

Initiative number two is that we also are progressing in defining more local assortments, meaning that besides the global need and the global support, having them in China, Chinese assortment, which is more tailored to the Chinese needs and demands and characteristics, same we do in India and the same we do in the U.S. So we go into the future with a twofolded strategy following customers, but also local enablement with local solutions, which is key.

And is this kind of sort of already baked in, in what you're doing in the current growth rate of the company? Or is that, at some point, a change in the trend towards the upside?

That is baked in.

For '26, I imagine it is.

But also going forward because we see -- we must not underestimate, we see also the other way around. We also see global manufacturers building their automotive manufacturing sites or other manufacturing sites in Eastern Europe, in Mexico, in the U.S. And what they're doing, they bring their customer and they bring their supply chain with them wherever they come from, right? So we see also there quite a fierce environment. And as we showed last year once in a presentation, this switching costs for the relevant customer to switch between their current D&L provider and us as incumbent, that needs quite a bit of power and sales force until we can enter a new ground.

I think that's a very good point you make. In Engineered Components, we are already a little bit further there. We have customers we pick up in China, and they now come here to Hungary, for instance, or Serbia, and have a demand which we cover here even though we picked them up in China. In D&L, that would be the wish to be also at that point in the future. Not yet there. I believe that this local assortment initiative is starting and developing. We need to build it out more solidly.

Good. And we are right on time, 12:00. That's great. So Swiss precision also on your end with your questions you had right on time. So thank you all, and we wish you a good lunch and happy to invite you for lunch. Thank you. All the best to you.

Good morning, and welcome to the presentation of our first half 2025 results. Today's speakers are Volker Dostmann, CFO; and myself, Jens Breu, CEO of the SFS Group. The agenda over the next 90 minutes will be positioning of SFS, key takeaways, adjustment of production and distribution network, key financials, development of segments, guidance 2025, organizational further development as of 2026 as well as the opportunity for Q&A before closing. Also at this point, we would like to inform you that today's conference webcast will be recorded and uploaded to the website.

I will start with the positioning of SFS. SFS is a reliable companion throughout the day from early in the morning to late night, 7 days a week, mostly unnoticed since our mission-critical precision components, fastening systems and quality tools for selected end markets are embedded in the successful products and processes of our customers where they often fulfill mission-critical functions. Our value proposition inventing success together, driving innovation with value engineering. The direct cost of SFS products typically makes up less than 1% of the total cost of customers' product, but related internal costs like procurement and logistics are significantly higher.

To address this, SFS focuses on understanding customer applications and reducing total internal and environmental costs to customized value engineered solutions. Across its 3 segments, Engineered Components, Fastening Systems and Distribution & Logistics, SFS creates synergies in tooling-based technologies to serve a wide range of customers with tailored products, tools and systems. These innovative solutions are brought to life by our dedicated employees, our value creators who turn ideas into impact.

Before talking about the key takeaways of first half 2025, let us revisit some of our innovative solutions based on our value proposition. In the segment Engineered Components, conventional multipart solutions are often complex and error-prone, leading to higher costs, longer lead times and reduced efficiencies. In contrast, our innovative and streamlined solutions simplify design and manufacturing, reducing complexity and minimizing the risk of errors. This results in faster production, significant cost savings up to 60% and a more efficient, reliable and cost-effective outcome for our customers.

In the medical end market, most competitors only provide individual manufacturing solutions or processes. For our customers, this complicates the process of sourcing their products. At Tegra Medical, as an end-to-end solution provider, we manage the complexity for our customers from the source of raw material to molded, assembled, packaged and even sterilized products so that our customers can focus on market leadership in terms of competitive cost, quality and speed to market.

In the segment, Fastening Systems and the construction end market, for instance, the SFS MDC/MXC fastener combines multiple functions into a single component, reducing the need for additional parts and simplifying assembly. This leads to faster, more reliable installation, lower production costs and improved product quality. By minimizing complexity and enabling tailored solutions, we help our construction customers to achieve greater efficiency and cost savings.

Staying in the construction environment, the SFS isoweld system is a comprehensive solution for mechanically fastening flat roof membranes, combining an advanced induction welding tool with specially designed fasteners and stress plates. The system ensures secure, durable membrane attachment while enabling faster, cleaner and better independent installation. The offer is complemented by a proprietary installation calculation software for our customers.

In the segment, Distribution & logistics and the industrial end market, SFS aims to make customers more productive. We offer products and solutions that reduce downtime in production, that safeguard workers' health and safety and reduce manual effort in purchasing. The example shown is our GARANT PickOne, a state-of-the-art vending solution ensuring 24/7 product availability and reducing the need for manual tool distribution. SFS offers with that an integrated solution combining smart tool storage, high-quality tool consumables and tailored services to optimize tool management for customers.

Services such as tool resharpening, extend tool life, reduce waste, low overall tooling costs. This holistic approach improves operational efficiency, ensures tool availability and delivers measurable cost savings for our customers. Summarizing, SFS operates a global sales and manufacturing platform with 150 production sites and distribution companies across 35 countries. Its strong local presence in Asia, Europe and North America ensures close proximity to customers. This enables SFS to provide fast, reliable support and tailored solutions.

I will continue with the key takeaways first half 2025, which can be best summarized as solid performance. Solid results in a market with global trade policy upheavals and high uncertainty reflecting the company's sustained good positioning. SFS generated sales of CHF 1.539 billion, corresponding to a reduction of minus 0.4% compared with first half 2024. Currency effects reduced growth by minus 2.3%. On a like-for-like basis, slight organic growth of 1.1% was realized. To address the challenging market environment, SFS has started to selectively adjust its production and distribution network.

The program will generate onetime costs of approximately CHF 75 million and finish by the end of 2027. More insights to follow in the coming slides. Adjusted operating profit EBIT of CHF 168.1 million and an adjusted EBIT margin of 11% in the previous year, 11.7%, was achieved. Including onetime cost of CHF 5.9 million, the reported EBIT margin stays at 10.6%. As of January 1, 2026, the SFS Group will, in a final step, complete the adoption of its organization, allowing it to sharpen its focus on end markets and customers.

Besides, we updated the SFS Group guidance for the 2025 financial year. I will continue now with the detailed explanation of our initiative to selectively adjust our production and distribution network. This is an adaption to the changing market environment, particularly in the industrial manufacturing and automotive end markets, which present SFS with challenges. To strengthen focus on core activities and adjust production capacities to market demand, selected sites will be closed and individual business areas carved out.

The concentration on fewer strategic production plants and core activities optimizes efficient use of resources and reduces complexity within the production and distribution network. These activities will help to achieve SFS' defined long-term growth and for profitability targets. The SFS Group's strategy remains unchanged, particularly its local-for-local strategy. The program is to be completed by the end of 2027.

The expected reduction in sales will be about CHF 110 million and total program-related one-off costs will be approximately CHF 75 million, whereof CHF 30 million are balance sheet effects and CHF 35 million project costs and CHF 10 million loss by sale of assets. In total, CHF 25 million in cash and CHF 50 million noncash. A positive EBIT margin effect of approximately 0.8 percentage points as a result. And the one-off cost will be reported at an adjusted EBIT margin and communicated during the time of the program.

The current project overview indicates that about 650 full-time jobs will be affected due to sell-off, transfer and closing. Already communicated and initiated are the closing of the sales site Brunn am Gebirge, Austria, the activities are transferred to Germany in the spring of 2025. Olpe, Germany, the production site closure in second half 2025, the business will be partially relocated to Heerbrugg, Switzerland. Malaysia and Singapore, the Asia Pacific organization of Hoffmann will be moved to distribution partners gradually until fall 2025.

Emmenbrücke, Switzerland, as of June 30, 2025, a management buyout of Allchemet has been signed. The transaction will close by end of 2025. And Czech Republic, Turnov, the production site will be closed by 2026. The business partially relocated to Heerbrugg, Switzerland if profitability -- if profitable and if customers agree. As you can see by the measures to strengthen our position in a dynamic market environment, we are taking focused steps to optimize our structure and performance.

We are sharpening our core focus by closing selected sites and divesting noncore business areas, allowing us to concentrate on strategic priorities. By streamlining operations and concentrating activities in fewer high-performing locations, we improve capacity utilization and reduce operational complexity. These adjustments are aimed at increasing profitability and supporting our long-term growth objectives. Importantly, our overall strategy remains unchanged with a continued commitment to our proven local-for-local approach that ensures custom proximity and responsiveness.

We aim to communicate the remaining projects most likely until the end of the year 2025. I conclude my explanations of the key takeaways and the adjustment of the production and distribution network and hand over to Volker for covering the development of the key financials.

Thank you, Jens. Good morning, everybody, from my side. Warm welcome. The challenges have been described by the CEO, we are facing volatile frame conditions and ambiguity is making our customers hesitant in their decision process. With that backdrop given, we may result -- we may report solid results, clearly confirm our ability to generate cash and continue fulfilling our customers' needs and -- as reliable partners. It is an opportunity to thank our customers and our dedicated employees for their loyalty and cooperation, which makes this performance possible.

During first half year, we have, despite the circumstances, continued to grow organically by 17.5% or 1.1% -- CHF 17.5 million or 1.1%. From M&A effects, we grew additionally by CHF 12.3 million or 0.8% versus the previous year. However, FX effects, particularly from U.S. dollar and euro have adversely affected our sales by minus 2.3%. We, therefore, report overall sales of CHF 1.539 billion, which is minus 0.4% or minus CHF 5.8 million below prior year performance.

Currency exposure to the U.S. dollar and euro in the segments remained stable and vary between minus 2.8% to minus 1.8% according to the sales mix in the respective segments. First half year showed especially in Engineered Components, good organic growth. At the same time, volumes in the Fastening Systems segment suffered from difficult developments, mainly in Europe, whilst North America region shows some progress driven from a pricing point of view. The D&L segment shows restrained end markets with strong fluctuations, while customers partially are running austerity programs, the onboarding of our partners business in LogisticCity counterbalanced that effect partially.

Looking into the geographies and end markets, we show an increased weight in North America and in Asia, as Europe is softening to 57.5%. Relative weight of Switzerland further slightly reduces and is now at 11.4%. North America increases to 18.8%, Asia to 12.3%. Sales breakdown by industries shows an overall stable situation. The distinct local-for-local approach remains a strategic pillar for SFS. With such a setup, we deem ourselves well positioned against tariffs and customs discussed in the current geopolitical development. As opposed to direct impacts, we are concerned that consumer confidence and waning investment facility will further challenge the business.

We report an EBIT for the first half year of CHF 162.2 million or 10.6%, which we normalize for the onetime cost connected to changes to the production and distribution network of CHF 5.9 million to CHF 168.1 million and 11%, respectively. During the first half year, we took actions on the site in Olpe, Germany, in Brunn, Austria as well as for Hoffmann, Asia Pacific. We almost finalized the closing of the sites and the transfer of the activity within SFS or as in Asia Pacific to our partners. The underlying performance shows that the challenges described are managed and countered effectively. However, as indicated earlier, we are convinced that more is possible and further improvements will be made.

The respective projects are bundled and we will -- and will allow resizing focus, adaptation of production footprint in parallel with strengthening of the core technologies, as explained at the beginning. The reported earnings per share for the first half year is at CHF 2.86. This result is negatively impacted by the charges from the improvement program described by CHF 0.15 and is compared to the prior year's CHF 3.01 per half year 2024. Net working capital management remains a focus area, especially in times of slow demand.

The importance of production planning and inventory levels as well as collection of receivables are reviewed constantly. Based on the operational improvements and the FX development, cash-to-cash cycle came down by 4 days. Net working capital in percent of net sales came down by minus 1.2% to 29.2% of sales. CapEx is at 3.5% of sales, following our commitment to drive capital utilization and limit CapEx continuously to maintenance and productivity improvement.

We are, therefore, well below depreciation and amortization for the first half year. We are on track to attain a full year CapEx to the low of our indicated bracket of 4% to 6% of sales. Coming from a long phase of expansion, we turn our aim to capacity utilization, more selective investment decisions as well as the project to adjust our production and distribution network will lead the way. Our free cash flow for the first half year is at CHF 123 million, reflecting a conversion to adjusted EBITDA of 54.2% or 110% as we compare it to net result. This is compared to 35.5% of EBITDA in prior half year and 75% of net result. With this performance, we document our very good ability to generate cash and deleverage the balance sheet further to meanwhile, very stable levels.

With ongoing net working capital management, diligent CapEx decisions and organic growth, we see ourselves in a position to keep the cash generation up and reconfirm the targeted bandwidth of 40% to 50% of EBITDA on a full year basis. We have continuously deleveraged our balance sheet and report an equity ratio at 60.3%. The first of the 2 bonds has been settled at maturity against our revolving credit line in euro and congruent to our acquired euro investment. The remaining debt is treated as a net investment hedge and therefore, from FX effects will be further recorded directly in equity.

Given the above-mentioned developments, we see return on invested capital and return on capital employed on comparable levels to prior year. Going through the segments, let me start with Engineered Components. Beginning with this, we report CHF 563.1 million, which is plus 2.4% versus prior year. Besides automotive ramp-up in Switzerland and China, we see positive momentum in HDD business and in aircraft applications. Medical and Industrial Specials confirms last year's performance. Overall, consumer sentiment is restraining volumes and low visibility impacts fidelity of our customers to decide on their investments.

EBIT margin is at 13.7%. Normalized for the adjustments mentioned before, we adjust to 14.6%, which is compared to 14% in prior year. Fastening Systems, the segment which focuses on construction end market reports sales of CHF 297.2 million, plus 0.6% versus prior year. Very soft construction demand, particularly in Europe, show effect. Further localization in North America, in Exeter, is completed. EBIT margin of 11.8% is affected by the dilutive effect from the Swiss-based construction and wood business.

Distribution & Logistics segment is reporting CHF 678.8 million, minus 3% versus prior year. The European industrial end market experiences a very muted situation and demand is therefore slow. In parallel, the warehousing and logistics activity of 2 distribution partners have been successfully integrated in the LogisticCity facilities in Nuremburg, further driving utilization of the site. The dilutive effect of the integration of these partner businesses paired with the muted demand of the industrial end market, leads to EBIT of 8%. Normalized, we look at 8.2%.

Coming to the guidance and having seen first half year of 2025, we update our guidance and state sales to be around previous year levels and the adjusted EBIT margin also around previous year's levels. As usual, we state this in front of the current geopolitical and economic environment, which is paired with low visibility. Our strategic priorities remain the same. For 2025, we prioritize the strategy execution, fostering high team motivation and capitalize on opportunities, lay the foundation for future growth, conduct disciplined reviews and execute our strategic options meticulously.

Megatrends, we understand and monitor, anticipate changes and adapt strategies to remain competitive, focus on application areas with strong underlying growth. In the local-for-local strategy, we ensure balanced emphasis on different regions and markets, distribution channels and maintain close customer relationships to enable value proposition, achieve superior reliability in this proximity. We focus on our technology and integrate the AI, machine learning and IoT and automation into our daily operations.

We update our standardized processes, systems and equipment to mitigate risks and continuously enhance flexibility. We stick to our solid financing, emphasis strict cost discipline, respond to challenging market conditions, maintain good profitability and a robust balance sheet and achieve continued increase in equity ratio. With that, I hand back to Jens. I conclude my report on the performance, and thank you for your attention. Over to you, Jens.

Thank you, Volker, and welcome back to the agenda topic of organizational further development as of 2026. Vision 2030, prepare the organization for future growth is the headline we already have seen and shown during last year's Investor Day on September 5. Today, we communicate the second and final step of the organizational adjustment. The purpose of the project "Step-up" as we call it internally, is we want to make our organization ready for future growth by simplifying and streamlining the organization, sharpening our focus on end markets, empowering the segment management teams for decentral decision-making and advancing the organization to the next level or as we call it, "Step-up."

The new composition of the Group Executive Board will sharpen our focus on strategic decision-making by generating a broader perspective on segment and end markets with that breakdown silos and promote decision-making across divisions and functions, enable more holistic and strategic discussions, foster healthy internal debate. But also finding alignment with our company-wide structured employee development program through promotion of job rotation and broadening of leadership capabilities across the organization also on the GEB level.

Accelerated growth in Asia with that drive expansion in the region and use potential M&A opportunities, a lever not actively used over the past decade. Increased diversity within the GEB and with that strengthened leadership by ensuring gender diversity and moving beyond an all-male composition. Now what are the organizational changes as of January 1, 2026, with the aim to strengthen the end market focus in EC segment. First, the EC segment will no longer have divisions. The segment gets structured into business units, Automotive Formed Parts, Automotive Fasteners, Medical, Industrial and Electronics.

Urs Langenauer, Head of Division Automotive, will take over as Head of EC segment. George Poh, Head of Division Electronics, will retire from Business and Executive Board at the end of 2025. Walter Kobler, Head of Division Medical & Industrial Specials will also step down from the Group Executive Board and will continue as Head of Business Unit Medical until his upcoming retirement at the end of 2026. The organizational changes as of January 2026 with the aim of further development of the BUs in the growing Asian market.

Martin Reichenecker, Head of Segment D&L assumes overall responsibility for the Asian region. Iso Raunjak, former Head of Division D&L Switzerland and current Chief Human Resource Officer, will take over the D&L segment for Martin Reichenecker. And Christina Burri, Head of Corporate Accounting and Reporting, takes over responsibility for human resource, Marketing and Corporate Communications and ESG from Iso. With that, she will join the Group Executive Board as per January 1, 2026.

The Vision 2030 in Region Asia is clear. We want to drive growth in Asia. As part of our Vision 2030, Region Asia plays a central role in driving sustainable and profitable growth. Strategic initiatives are being implemented across key locations to strengthen our market position and unlock new opportunities. In India, we are building up local fastener production capabilities and advancing core automotive technologies to better serve regional customers. In addition, we are actively developing new business opportunities in the areas of brake and restrained systems. In Nantong, China, our focus is on expanding the BU activities -- business unit activities to drive overall growth in China.

We are accelerating go-to-market strategies for medical customers and aim to establish a leading position in ball screw drive technology for brake systems. In Malaysia, we are broadening our capabilities beyond the hard disk drive segment and intensifying our go-to-market efforts for medical customers to diversify and strengthen our customer base. Through these initiatives, we are reinforcing our commitment to local value creation, technological excellence and customer proximity across the Asian region.

Here, we still see today's group structure with the divisions in the segment Engineered Components. And on the following slide, the group structure and organization as of January 1, 2026. Finally, I would like to thank all SFS customers and employees for their hard work, their innovative spirit and their loyalty. Their enormous commitment is pivotal for our success. With that, we'll start now the Q&A.

And first, we take oral questions and then the written questions. If you would like to ask an oral question, please raise your hand now via MS Teams function, and you will then be called up. Please introduce then yourself briefly with your name and company before you ask your question.

So Mr. Iffert, you can now unmute yourself and ask your questions.

Can you hear me now?

Yes.

It took some time until I was able to unmute the microphone. I would start with 3 and then I will go back in the queue. The first one would be, please, on the H1 margins. There was a 1% to 2% ramp in full-time employees despite some end markets are developing not really great. So was not the opportunity to shift some employees from product lines, which are less utilized to the new ramp-ups? Was it really necessary to hire new people? And also, how do you see then in the second half, the cost efficiencies coming from personnel costs? This would be the first question.

Second question, if I may, just looking on your end markets in general, do you see any signs for an acceleration, signs for improvements? Or would you expect that in the next 6 months, the end markets are likely more or less developing the same like it was in the first half? And then maybe the third question, if I may, in the view into 2026, when you look on these efficiency programs, I mean, when do you expect the biggest movement in the margin improvement? Is it '26, '27? Is it gradual? Just to have a little better feeling here.

Thank you Jorn for your questions. And I will start maybe with the first 2 and maybe Volker does the third one. On the H1 margin, yes, certainly, we have seen on the personnel side an increase. This is seasonal. We see or we prepare for ramp-ups in electronics in Asia and see good development that increases the personnel costs in the first half, but then also in the third quarter.

Secondly, also in the segment Engineered Components, we have currently now around 75 employees in ramp-up of automotive products, which will not be needed in future. This is mainly safe launch procedures, meaning temporary labor going through and sorting products in order to secure safe launch for our major customer ramp-ups. That's a procedural requirement. We also expect towards second half of the year that will step-by-step bring those 75 employees back. And then in the segment Fastening Systems, we have around 50 employees in specific roles, helping us to increase inventory, ramp up production efforts to then later on support planned closures, which we foresee then for the near future.

So we are driven already in the first half of the year to invest into the strategic adjustment program and see due to that also an elevated FTE and labor force level in the second half of the year. We'll then see some of the benefits coming into play. Overall, as we indicated, we have around 650 FTEs, which will be affected by the program. And then on top of it, we aim for reducing and sweating out an additional 300 employees through not replacing them due to fluctuation, which is still in a range of around 6% to 8% globally.

Now when we take a look at the end market and judge a little bit what do we expect in Engineered Components, then we would foresee in the second half of the year continued ramp-ups. We have customer programs, which help us to continue. You know that the slight organic growth because the underlying legacy business is a little bit softer, but we would still see an organic growth in the second half of the year. In the segment Fastening Systems, we have seen a challenging first quarter, hard winter conditions. We have seen the tariffs, which also caused some uncertainties. But overall, we see a good development, solid development in the Americas, but still a weaker development in Europe, which we foresee will improve probably in the coming year 2026, and we'll still expect a more challenging environment in the second half of the year in Fastening Systems.

Distribution & Logistics, it's all about the tariffs, I have to say. As you know, 90% of our customer sales is within Europe. Europe is heavily export oriented. And so our customers are hovering on the cost side. We see strategic initiatives where we can offset some of the customer reduction on the cost side or the customer saving programs. But overall, we'll probably see a site about movement also in D&L for the remainder of the year. And for next year, it's difficult to judge. We plan and foresee that the current trade discussions and uncertainty is the new normal for the next few months and maybe even years, and that's why we also have a cost program initiated, which will help us to manage this situation.

So looking forward, we do not see any sparks, any causes, any reasons to see an ignition and an improvement. We certainly have good innovation projects, but the underlying existing business is a little bit softer for the time being.

Good. Let me go a bit into that question on efficiency signals and when we would expect these to happen. As said, it's a bundle of projects that we initiate and we will initiate during second half year. So depending on timing of potential closing and sale and transfer of the business, we expect effects to kick in, in the second half '26. We have partially projects that we indicated in Germany, in Austria and in Asia Pac that are almost to be closed. We will see some effect from these naturally earlier.

On the other hand, we are also dependent on the customer acceptance of transfer of business, as Jens indicated with Czech. And therefore, we are a bit depending and hesitant on giving a clear timing. We are positive that we are realizing that by second half year 2026. Gives me the opportunity to probably shed a bit of light on the overall cost that we engage. We mentioned CHF 75 million overall, of which roughly CHF 30 million are equity effects from currency translation adjustments where you have a pure equity effect and the loss on sales of assets that we've been mentioning.

These are also depending on how we can offload assets from a real estate point of view and others. And then we look at CHF 35 million of project costs, which are engaged in relocation, recertification, repurposing of production, footprint and closing, selling off sites. CHF 50 million, as said, are to be considered as noncash, out of the CHF 75 million, CHF 25 million as cash. And you can expect for full year 2025, the effect to be around CHF 20 million. That would mean that in second half year, you look at CHF 14 million to CHF 15 million of extraordinary cost. The rest would then be distributed in '26 and '27.

If you allow me one follow-up to be clear. For the second half, I mean, your full year guidance implies that the second half EBIT margin is close to 12% or in other words, it would be a CHF 10 million improvement year-over-year amid more or less flattish sales in the second half. So where is this CHF 10 million total EBIT improvement then coming from? Is this normalized headcount? Is this already the benefits of the efficiency program? Just to be clear, sorry to double check this.

It's partially effect from the mentioned projects in all Olpe, Austria and Asia Pac for Hoffmann, but it's also the hiring freeze where Jens alluded to the roughly 300 people that we are going to reduce in a run rate towards early 2026 so that will show the effects. Thank you for the question.

There are no more questions so far. Yes, then we have one from [ Tobias Fahrenholz ]. Yes, you can unmute yourself.

Quick one on pricing. Could you tell us what the pricing impact has been in the first half? And what do you expect at the moment for the second half? I assume you try to pass on all these U.S. price hikes? That would be my first one.

And then to understand these deconsolidation of the business you are going out is slightly more than CHF 100 million. How much of this is EC related, so I guess, mainly the auto part and how much is D&L? And can you also say something about the timing there? So we know your full year guidance, but is there already a slightly negative impact from leaving some businesses?

So thank you, yes, Tobias, for the questions. First off, yes, price increases are happening in the U.S. As we see tariffs coming in, we usually follow them right away either to the customers directly as we do the trading of construction goods, for instance, in the United States, mainly sourced in Asia. So that's usually a quick adjustment and increase on the pricing side with the Tier 1 customers. It's usually also negotiation and contractual agreement finding on how to absorb it.

Usually, it's also passed forward to the customer and a matter of discussion. So on the pricing side, not much we are concerned about. The total exposure, if tariffs are in place, is maybe around CHF 60 million out of the CHF 3 billion over the total company. So the exposure is very, very small there. When we come to the development -- the sales development or the sales distribution of the improvement measures, Volker will give you in a minute there an answer. Let me say on these projects, which we now summed up to total a little bit more than CHF 100 million in sales.

Over the last 5 years, we have seen the environment has been rather a little bit bumpy and patchy in a sense that 2020 and '21 was corona, then we had a supply chain situation globally. And then later on, we had a labor availability situation so we had to manage the business always considering those circumstances, batch by batch by batch a little bit and not a continuous flow. So we accumulated a few topics over time and said, okay, what is the right time or when is the right time to now approach those strategic adjustment and pruning of some business activities, which we deem as not being core. That's maybe a little bit on the history.

Overall, we do expect that there is no negative impact to the sales development of the group due to these adjustments, which we do overall, especially in D&L and Fastening Systems, it will make us more efficient. It will have certainly an impact on cost and cost competitiveness overall. And in the segment Engineered Components, it's a little bit also a mix. Some sites, which are just not fitting the new needs anymore and which are subcritical in size, get consolidated. So you can speak of some satellite sites, which we established over the years are kind of called and withdrawn back to the larger plants where we have enough capacity and currently don't see a need to enhance this capacity for the time being. So maybe there's a few words on this program.

And if you look at the distribution of what sales we are looking to discontinue, we are seeing probably 70% in the EC environment, 10% in Fastening Systems and roughly 20% in the D&L, right, so if you want to distribute that. Now as it is the case with long-term engagements in EC, sometimes it's not so clear cut how we get into a discontinuation of a program. That sometimes takes longer phaseouts in the tail, but that's what we are basically looking at 70% EC, 10% Fastening Systems and 20% in D&L.

Then we have another question from a person with a Swiss mobile phone number. You can also unmute yourself now.

Yes, can you hear me? This is [ Dominic Francis ] from Neuchatel [indiscernible].

Yes, we can hear you.

Well, is this actually the largest cost program in the history of SFS? I mean -- we've learned, I mean, 650 jobs affected and another 300 because of the hiring freeze and there might be, as I heard, I think, further closings of sites and so if you could answer that for me. And if -- regarding the further closures, maybe where could they again happen?

And question also is in -- for Switzerland, Allchemet, is this a big organization or small? I mean, how many people as a result of this management buyout will leave SFS? And could you then finally also let me know a bit about the -- your headquarter. Is there also the personnel there being reduced? Or is it overall even as you transfer now some activities maybe from the Czech Republic and also from Germany to Heerbrugg, will Heerbrugg even grow in personnel?

Thank you for your questions. And first off, no, it's not the largest adjustment which we have done before we went public in 2013 and '14. Also, we have done strategic realignments of the business activities, which we had at that time. We also kind of offloaded at that point in time, some of the activities which we deemed to be not core and where we deemed they are better owners than we as an organization.

So I think that's also very important and responsible decision-making. Are we the best owner or is maybe the target like, for instance, you mentioned Allchemet better off under a new leadership, which maybe has more entrepreneurial freedom due to restrictions of a larger entity in which they are embedded. So Allchemet, for instance, there, we do indirect sales to hardware distributors in Switzerland kind of our competitors. And after the Hoffmann acquisition, it became clear to us, we would like to harmonize also within Switzerland, the alignment with Hoffmann and distribution logistics.

And therefore, over the last 2 years, have looked around what would be the best solution for Allchemet, and we are happy that we were able to solve it with a management buyout overall. Now when we talk about where does the program have an impact and what happens overall, we clearly see Europe being challenged due to the trade discussions, which are continuing. We see, especially in the industrial sector, capacities are not being utilized. Our customers are suffering.

And when our customers are suffering, certainly, we feel that as well overall. And so we see that the smaller satellites, branch offices and smaller production sites are just not utilized anymore and can be rolled back into the larger sites. So that means, for instance, when we talk about Olpe in Germany, we certainly relocate the activities back to the site in Heerbrugg and the site in Heerbrugg here will have a higher significance in its activities in the years to come for our European footprint overall, for example.

But also the Brunn am Gebirge activities in Austria will now be done out of Frankfurt -- or near Frankfurt in Germany. Also there, it's a matter of efficiencies. Nowadays, IT technology, video conferencing, artificial intelligence and such things help us to be more flexible in where we station our employees. And due to that, we can also consolidate back to larger sites, larger entities and with that also become more efficient. So these are maybe 2 examples. Then also our plant in Czech Republic, for instance, also around 150 employees, for instance, has been subcritical over the years.

And now we do not talk about 3, 4 years. For the last 10, 15 years, we clearly realize this is subcritical for our technologies and for the challenges which we see in the end market and also the roll back the activities into the larger side of Heerbrugg. Believe overall, we have to take a look at the big picture. What's happening is that we see India and China becoming more independent on the technological level. So we can produce more local. And overall, the industry has developed itself nicely in those geographies. And we see the United States trying to fence themselves off to these trade policies.

And in the middle, it's the European continent who is very export oriented, which just sees less utilization on the industrial capacity side. And here, we are now taking measures to make sure that the plants and the activities, which we deem as core have enough utilization and are focused on the right opportunities and challenges in the next few years to come. That maybe a few words on the strategic alignments and on the Allchemet side.

Yes. And Allchemet goes into the same direction. It's a question of sharpening the profile towards the end markets, and therefore, we came to the conclusion that the activity of Allchemet is better owned by another structure and sold that off. You asked about the size. It's roughly CHF 35 million to CHF 40 million business with a low 1-digit margin -- EBIT margin. And therefore, the impact on our P&L will be minor. We are looking at 45 employees. So it is very relevant on the Swiss market. In the overall, we see it as a clear part in that bundle of measures to drive focus and end market orientation.

Good. Does this satisfy your question?

Yes, maybe -- sorry just Heerbrugg, if you could answer this question. Will it -- the personnel side there, will it stay the same? Or will it now decline as a result of all these measures? Or will it even grow on a net basis as you are transferring some of the work you've done in Germany and in the Czech Republic there?

Exactly stays -- I would give a conservative outlook and say stays stable -- on the conservative outlook stable.

And how big is the Heerbrugg as we speak in terms of staff?

Yes. We have 1,700 employees here locally on site. And as mentioned, the scale effects are substantial in today's business environment and that also explains why we are rolling back a site, Olpe, Germany with 45 employees and Czech with 150 employees. Overall, it's just that the scale economies cannot be applied there. And so this is the right time to roll it back in an environment, which is not expanding anymore industrially. As we have seen that, for instance, 10 years ago, 10 years ago, we had not enough space in Heerbrugg. We did not have enough capacity to manage the growth, the growth ambitions. So that's why we needed those satellite sites. But today, as we see geopolitically, we come into new orders and that requires that we make adjustment to our European manufacturing platform.

Okay. And just the 1,700 you have in...

Yes, exactly. 1,700 and 2,500 overall in Switzerland.

Then we have a next question from Mr. Obst. You should also be able to unmute yourself now.

First question is, again, of course, with the current adjustments you are mentioning, you are adjusting your growth expectations going forward. So what do you expect for the next 3 to 5 years currently? Formally, you had a growth idea for the entire group, which is now adjusted because you are reducing capacities and you are focusing on utilization rate, which makes absolutely sense, of course, in my point of view.

But what is the new growth expectations for the group overall? And the same is true, as I understand it for D&L, there was some kind of an adjustment of the mix idea of the regional mix. So before I understand that D&L should come from a more European-centric towards -- more towards U.S. and Asia Pacific. And now you are readjusting that at least a bit. So what is the new target from some kind of a regional perspective, if we go for the next 3 to 5 years?

And maybe 2 additional questions, if possible. What is the FX impact? You mentioned that price increases, especially in the U.S. You can counterbalance the tariff costs, at least a bit. Is it also true for all the FX changes you are expecting? And last but not least, you had a very strong free cash flow in the first half. How much of that is some kind of, I would call, one-off because of the structural adjustments you are making? And what can we expect in the second half on a more normalized rate?

Mr. Obst, thank you for your questions. And when we look out the midterm, we expect still 3% to 6% organic growth and an EBIT margin of 12% to 15%. So our midterm guidance is unchanged. When we take a look at our largest 20 customers, for instance, we grew in the first half year 2025 compared to first half year '24, reported 4.7%. So it clearly shows focusing on the right applications on the right customer groups. There's even in a challenging environment, the opportunity to grow nicely. And that's why we need to do some of the pruning because we are carrying forward or we have carried forward business activities, which we don't see as attractive to take into the future, maybe once again where we are not the best owner.

Talking about Distribution & Logistics, yes, 90% of sales, which we have in Europe. We have intensive activities in U.S., Mexico, China and India to expand our market positions. We see good organic growth on a low basis there in those regions. And the decision to roll back Asia Pacific has just been that we have seen that through partners, we can cover better the geographies and we can have a more efficient setup in Asia Pacific than doing it by ourselves. That's the reason.

So we also reallocate the resources and focusing more on the big ticket opportunities with India and China and U.S. and Mexico and don't deem as Asia Pacific as being our priority #1. That's why we have decided to hand it over to partners, which is not unusual. We have also in other regions, still partners, strong partners, which we do the business with and which absolutely makes sense to use it as the right arm to gain market share and increase growth in those regions. Then counterbalance tariffs, yes, we can counterbalance them on the pricing side. And then for the FX and free cash flow, maybe Volker?

I mean we said that -- and you're targeting predominantly at the segment FS, I assume with that as we have the U.S. exposure there in a distinct manner. I gave the bracket that we have a mix of FX effects of minus 2.8% to minus 1.8%. So FS is definitely there on the more impacted side, I would say. So we are there towards the -- towards 2-point-something percent, above 2%. We are having from FX effect that rest is pricing and small underlying volume growth, right?

So when you try to model that, that would be roughly the parameters that I could give. Your second question was on the cash flow, first half year being very strong. Yes, it is very strong. We expect that to come down a bit towards the second half of the year. That is based on the cash production predominantly in D&L that is now coming towards a situation where we have adapted inventory levels and where we have -- where we are facing the end market as we described it. But for full year, we are expecting to be well in our guided range of 40% to 50% of EBITDA.

Maybe one additional to the D&L issue. So bringing the business to some kind of a partnership for Asia Pacific. So you don't get the sales, but you get some kind of an income. This could increase your margin? Or is this significant the entire...

From a model point of view, yes. From the given size, I don't expect there to be too much visible on an overall. Here, we are talking about streamlining and increasing the focus and especially addressing that sales cost in sometimes extremely discarded geographical environment is optimized.

And could this be also -- despite the fact that you're currently mentioning that you will grow in India and in China by your own, could this also some kind of a blueprint for these areas?

No. At this point in time, I believe not so. But certainly, if we find opportunities to maybe carve out certain regions and give more power to the market development by having additional partners on board, then we certainly consider that and have those discussions. So we are free and flexible on that side. For us, we usually run both models through partners and doing it by ourselves.

Okay. And the last one, just for clarification on the FX side. As we see that there is an ongoing weakness of the U.S. dollar going forward, do you expect that you can counterbalance something additional with price increases there?

Well, that will very much be linked to the construction market in the U.S. and how it behaves. At the moment, I think, we reached a level of price increases that is bearable by the market, and we do not see volumes effect. It depends on the overall market condition and whether we have room for further price increases. But as we talk U.S., we would date that and time that statement that I made because it can be obsolete by tomorrow. That is a bit difficulty in the U.S.

So then there's an additional question from Jörn Iffert.

So it's Jorn from UBS again. Just 3 quick follow-ups, if I may. You were talking about a 6% to 8% headcount reduction, which is driven by efficiencies and normal fluctuations where you have no replacements. Is this a net number we should look for by end of 2027 that your full-time employees have 6% to 8% lower? Or is this a gross number? This would be the first question.

It's a gross number, yes. And it certainly depends also on the economic development, the environment overall. Today, this is the model. And the model will certainly be reviewed and looked at depending on how the environment evolves.

Okay. But just to make clear, when I make the math, the majority of your cost savings you have announced the 80 basis points on margin is clearly linked to full-time employee headcount reductions? It's not...

Yes.

Okay. Then maybe the second question. I mean, you were outperforming your end markets in '24, '25, given sales help market share gains. Any larger projects you can highlight for '26? Or will you be more exposed to the end market environment in '26?

Overall, still some projects in ramp-up. The usual ones in automotive and electronics, also good pipeline on the medical side, where we see organic growth opportunities. So we would expect in Engineered Components to be also driven by ramp-up projects by large. In Fastening Systems and D&L, we fall more back on the cyclicality of the markets of the end markets, construction and industry.

Okay. And the last question, a technical one. The margin impact from FX in the first half, is this worth to mention? Is it that you can speak about this was a couple of basis points? Or is it offsetting each other on your global footprint?

From a margin point of view, we look at pretty much an offset. That's rather balanced. From a balance sheet point of view, you would find some impact in the financial result, of course, but the margin impact is equalized.

No more oral questions so far.

So no more oral questions as we see, also no questions in writing questions so far. One more question. Yes, please, Swiss mobile number here.

Yes. You should also be able to unmute yourself now. First, with the Swiss number ending with 29. Calling in.

Yes. Once again, you raised your hand, Swiss mobile number with 29...

Can you hear me?

Yes, now, we hear you. Yes.

Okay. I'm sorry about that. I had to push several buttons. I have 3 questions, please, and I'd like to do them one after the other. Yes, it's Christian Bader here from ZKB. So my first question is regarding your guidance for this year. So I still struggle to understand it because you had an EBIT of CHF 162 million in the first 6 months. And in order to meet your guidance of flat EBIT 2025, you will have to report CHF 188 million of EBIT in the second half, which is in sharp contrast to the last 2 years when the, let's say, operating performance, both in terms of revenues and operating results was weaker in the second half.

So can you walk me through what are the main, let's say, building blocks or assumptions behind this, let's say, ambitious second half year outlook, please?

Yes. Thank you for the question. And absolutely, the right question to ask second half of the year. We have to say we -- for the last 2 years, '24 and '23, we truly had a growth ambition. Remember, we acquired Hoffmann, and we increased capacities to truly go out in the market and gain more market share. At that time, also the economic outlook has been better. And as we realized later on in '23 and '24, in particular, second half of the year has not come as we expected.

And I believe when you go out into the industrial end markets was a little bit the story which was there. Second half of the year will be better. And this is also what we prepared for, and we realized also then towards summer of 2024, that will not be the case and we'll probably need to make now or use now the time to make adjustments. And that's when we started working on our adjustment project to reorganize the industrial activities and probably to now approach and now use the time to also dispose some of the entities and activities which we deem as noncore. So very logical, very clear in your question and certainly an improve -- we expect to see an improvement in the second half of the year. Otherwise, we need to go back and sharpen the pencils again.

And maybe if I may, Christian, your calculation is correct, but I just wanted to emphasize that we are guiding on an adjusted EBIT base. And therefore, we would take the CHF 168 million for first half year versus the CHF 350 million that you imply in your calculation, which would be a CHF 14 million uplift, which, yes, is a significant uplift in the second half year, but not the CHF 162 million to CHF 188 million that you implied.

Okay. Then my second question relates to the cost saving benefits that you have published, it is 0.8%. And am I right to assume for our modeling that this will be phased in gradually and the full effect will be seen from the 1st of January 2028.

As I said and maybe I was not very clear. Thank you for giving me the opportunity to come back on that. We see some of the effects probably in the second half year or some we will see in second half year 2025 already because we took action in Olpe, in Brunn and in Asia Pac, right? Some of it, we will see to the latter of 2026. The full program ought to be finished by end of 2027, and we would be in a run rate situation for 2028.

But we will see on the way improvements in second half year 2025 towards the latter of 2026 and then ongoing. Does that help?

Yes, that's very clear. Thank you very much. And the last question relates to your main end market or 1 of the 2 main end markets is the automotive industry, which according to your statements has been struggling and is also apparently one of the main reasons to do all these adjustments. So I'm wondering, can you maybe give a little bit more background information about this -- the business to this sector?

Has this business -- from your product point of view, has it disappeared to other 2 competitors? Or has it disappeared because some of your customers in the OEM area are losing market share? Or has the production been relocated to, let's say, low-cost countries?

Thank you for that question. On the automotive side, we see multiple developments. First off, we clearly see that most cars nowadays are produced in China. And today, still, our Tier 1 customers assemble a lot of components or do preassemblies in Europe and ship it to China. And we believe in future years, that will be done more locally. That's why we expand our automotive activities in China, and that's why we kind of roll back the automotive footprint in Europe, which because we believe it's better off situated in India and China to some degree. That's the reason on that side.

Secondly, when we go back, we have strategically, 10 years ago, defined our footprint. for Europe, and we had activities, for instance, as we said, in the Czech Republic, and we had activities here in Switzerland. We still had at the time also activities in France. And the dynamics are quite often changing. And we see nowadays with the current technology, with the current needs of the customers, it's better to consolidate to larger sites, use economies of scale much better rather than being regionally and locally like it was requested, I would say, in the decades before, where there was a more heavy focus on, do you also have a setup, and service capabilities in the eastern part of Europe.

That has diminished that request, and that's why we have also now a higher level of freedom, and we can once again consolidate to larger organization. And then thirdly, the site, especially in Czech Republic, technology-wise, we have focused on screws. They are mainly not complex assemblies and formed parts. And especially on the screw side, we also have seen. It's better to consolidate it back into larger organization and sites. We also see more opportunities, especially in electrification with river technology, less with screw.

This is just also a technological development, which we have seen where we said now it makes sense to reconsider the decision to have a Czech site and a Czech entity available overall. And number four, also the availability of skilled labor is interesting in Czech, sometimes difficult in Switzerland, Rhine Valley here, more possible and feasible. This is also some of the considerations where do we get best access to talent. And usually, with a good reputation and being a sizable employer in the region, you are just a more attractive employer rather than being maybe a small site with 45 or 150 employees regionally.

These are maybe some of the considerations. So it's not the one or the other. The argument -- it's a list of arguments which led us believe we need to revisit the strategy, discuss it intensively for the last 12, 18 months and come now to a decision on moving forward and reorganizing our footprint in Europe.

So as you still maybe have the opportunity to think about the question, what we have usually also gotten questions around the GEB, the management team, what are the reasons to adjust the group structure overall. And I think we have seen in the presentation that we have now a head of segment for each segment, and we would like going forward being more free in the segment and within the segment Management Teams, Engineered Components, Fastening Systems and Distribution & Logistics to take decisions easier, faster, more local. That's why we form strong segment management team and on the Group Executive Board level, work more strategically on specific topics, as we also have grown the organization over the last 10 years.

Secondly, we see a substantial generational transition with Walter Kobler and with George Poh, both of them well more than 30 years within the organization and having collected experience in multiple end markets and geographies. And so it's now also the time for the current team, which is very strong, and we want to keep together in its current composition, give them the opportunity to learn, rotate and take a look at the business activities from different angles. That's why we are on a rotating scheme with the team.

We have seen Iso Raunjak doing D&L Switzerland, doing for a year HR and other topics. That's good vital learning. And now he will collect more international experience as being in charge in D&L segment overall. Martin Reichenecker, the same, a professional for many years within the organization for 20 years, now using the opportunity to relocate to Southeast Asia and collecting more experience in the Asian region. The other gentleman, Urs Langenauer, has gained substantial experience in the United States and in Germany, where he had responsibilities and tasks to manage for the group. And now he steps further and taking over Engineered Components from that side and that perspective, and he will also expand his reach and scope more international. He will manage the Engineered Components business.

So -- and then certainly, Christina Burri, also a long timer within the SFS organization and now able to step into the team, refreshing the team and also making sure we have more intensive debates and discussions on certain topics with because that's what makes the team strong and make a team grow, is having multiple views and directions on how to look at the business and debate it intensively for the better of the organization and for the better of the development of the organization. Maybe that's a short note on the organizational development.

And in the meantime, there have been no additional question. So I believe we can close today's call and maybe move forward to the next upcoming publications. We'll see January 23, 2026, Friday. We have publication of first results of financial year and then the publication of annual report March 6, '26, and then we have the Annual General Assembly, April 22, 2026. Overall, thank you, yes, for joining the call. We look very much forward to further good and solid development of the SFS Group. We are very confident about the course and the direction which we take.

Certainly, the environment around us is a little bit bumpy and the road forward also maybe has some challenges ahead of us, but overall, once again, we are strong, well positioned, and we see good organic growth opportunities in this current environment. And besides that also on the M&A side, also see good opportunities moving forward. So we enjoy to some degree, the current challenges, which we have because they provide us also with new and unusual opportunities, which we usually would not see in a more stringent organic growth GDP environment, as we have seen it in years before. Thank you all. Wishing you a good summer break and talk to you soon again. Bye-bye.

Thank you. Bye-bye.