Bystronic Stock

Ladies and gentlemen, welcome to the Bystronic AG Half Year 2026 Results Conference Call and Live Webcast, followed by a Q&A session. I am Sandra, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Domenico Iacovelli, CEO; and Javier Perez, CFO. Please go ahead, gentlemen.

So, hello, everybody. Even from our side, a warm welcome to our half year results for the year 2026. Javier Perez, our CFO, and myself will lead you through the presentation. I hope you all can see the presentation. I think everything should work. So, we will start with a business review and which will be presented by myself.

Javier will present the financial review, and then I will give an outlook on how we see the year, and then we will start the Q&A session. Before we start with the business review, please take a minute to go to the disclaimer. I will read it in parallel, and I'm a slow reader. But once I'm done, I will go to the business review. Okay.

Let's start. What are the key figures for 2026? We had an order intake of CHF 337.7 million, which at constant exchange rates is 15.7% more than the previous year, which is, of course, good. But it includes, of course, even the new acquired business, which we call Bystronic Rofin for the micro machining area.

That's why we even the organic growth. So the organic growth is basically our core business without our Rofin business. But even there at constant exchange rates, we had an increase of 3.8%. What was very disappointing, definitively, was the net sales, even though we had an increase of 5.4%, again, it includes Rofin, our core business shrunk by nearly 7% in the first 6 months of the year.

And of course, this resulted in a negative EBIT of CHF 23.4 million, which is, of course, much lower than what we had in 2025, even though we have a positive contribution from our Rofin business. I'm sure Javier will elaborate much more on the numbers. But after the first read this morning and feedback, I want to shortly elaborate a little bit on what were the reasons for the very low EBIT.

I mean, of course, as recognized by many analysts, some of the margins were under pressure, but this is not the main reason for this result in the first half year. I want to remind that especially in Q1, we had only a net sales of CHF 128 million with Rofin and on our core business, only of CHF 116 million.

So it is definitely a topic of volume and this was mainly the reason why we made a warning a few weeks ago. The second one, which pays into the margin, we should not underestimate that we are ramping up our full or let's call it, our flexible manufacturing lines with more automation.

And there, we have much lower margins because we have basically new products coming up. So this lower margin had an impact, especially in the first half of the year. And all of them together are ending up in this negative EBIT, which there are no excuses. It is bad, but there are reasons behind.

And again, volume is definitively too low, especially in Q1 to catch it up. Okay. With that to, I would say, a positive sign, it's the order intake. As you can see here on this slide, it is the best order intake since back in 2023. So I think last time it was in Q4 2023 that we had this order intake.

Even if I deduct the Rofin business, we're still around about on the level of Q1 -- Q4 in 2023. So it's a slight recovery. It's a positive sign. What are the drivers behind? There are many drivers, as mentioned already many times over the last few meetings we had and presentations.

Of course, we are going more and more from a machine manufacturer towards a system manufacturer. So the lead to get the bookings is just taking longer, right? So you have more preparation time. Customers, they need more time to raise the money because if you have to make a down payment for CHF 300,000 for a single machine, it's easy to find the money. If you have to make a CHF 2 million to CHF 3 million down payment for a system, of course, even on the customer side, it takes a while to get the money funded. So -- but nevertheless, it's a very nice development.

Americas had a very strong demand for both for single machines, but even for fully automated lines after even a weak Q1. Other regions had even a solid demand across product categories in Q2, but was very encouraging, of course, it's our Rofin business which is slightly ahead of the plan.

And we see a very strong recovery, especially in semiconductor. All of that ends up in a backlog in a very strong backlog, which I do not remember the last time I have seen it. It's CHF 308 million of backlog after the first 6 months of 2026, which, of course, will support our higher net sales in H2.

Last but not least, please take in consideration that Q1 was still impacted by a lot of geopolitical impacts, whether it was the Iranian war, a certain uncertainty because of the tariffs. So all of that had an impact in Q1 in order intake as well. Okay.

So we continue with Rofin. I already mentioned, we had a very good contribution. It definitely meets our growth expectations. It exceeds a little bit the contribution in margin in a positive way. It is definitely aligned with long-term trends, especially in semiconductor and medtech. So especially semiconductor in Southeast Asia is really picking up.

We see this in order intake, in the quality of the order intake. So we are very happy. It's CHF 35.5 million after 5 months. As you remember, it was a USD 100 million business, around about CHF 80 million business. So 11 months, we have to be above CHF 70 million to be basically on track.

Net sales, the same. So we are very happy with this development. And what we have to say that the integration is on track despite some challenges, which Javier will explain later on when he shows the balance sheet, but nothing which cannot be solved.

So even here, we really do believe that we are on track, and we can strongly feel that we have the same DNA, and we see already synergies coming up and huge opportunities. So what is very, very important, I mentioned before that our order intake in Q1 was weak. Q2, it was much better.

And due to some reasons, one of which definitely our system business, our integrated lines or flexible manufacturing lines, which are definitely paying into megatrends. You know all of them, whether it's data centers. And when it comes to data centers, it's not the classic job shop, which was in the past, customer of Bystronic delivering high volumes.

That's why highly automated lines are much more of interest for the customers here. And here, we were able to win some orders who are supplying into these trends. Semiconductors, which still have a huge CAGR of around about 9% over the next year, year-over-year is semiconductors.

I mean here, we are now in with Rofin and all the others, which we still see a growth, right? So we are really trying to get a little bit away from the dependency we had in the past from agriculture, which is still down. And I think we see a lot of growth opportunities and the growth opportunities are coming with high-end machines, and I still believe that we have best-in-class machines, but combined with fully automated line.

And the growth drivers behind it is clear. I mean, increasing pressure on manufacturing costs on our customer side. We're doing a lot of business in the U.S. skilled people, impossible to find. So we need fully automated line and this we see as a really driver for our business.

We have to catch the opportunities and bring the right offering to participate on these megatrends. So we have to admit that our transformation, we started already 1.5 years ago, went quite well, but we have to accelerate it, right? We still have to further integrate our -- the manufacturing solution, increase customer productivity.

So right now, the productivity doesn't depends anymore from a single machines but it depends from the end-to-end process a customer has. Expanding software and digital capabilities, I mean, this is anyway a key. I think even here, we are quite good on track. We still have some holes we have to close, but I think we are on the right track.

And then, again, differentiate beyond stand-alone machines without keeping in mind that the single machines still can make the difference. But if you cannot feed a single machine, which is the best one, the customer does not have the benefit out of it. Then we have to win in growth markets.

As I mentioned before, there are growth markets. So we cannot talk about the PMIs being positive over the last few months. It's driven by megatrends. We have to participate on this one. And further, we have to strengthen our vertical market approach, which we are doing.

New applications and opportunities. I think here, we are really profiting a lot even from our Rofin business, which those develop applications together with the end customer, which at the end turns into solutions and new machines.

Next, I mean, we cannot stop to expand our technology portfolio. We all know that we still have some missing products in our product portfolio. We have to work on this one by own developments, by acquisitions, by strategic partnerships and then we have to further transform how we operate.

Again, we are coming from a single machine supplier, highly specialized, and we are going more and more into a project-oriented company. So you need a project management organization, you need process optimization. And what we want to further do even to reduce our cost base is centralized functional excellences with transversal vertical teams. So with that, I'm done with the business review, and I would hand over to Javier for the financial review.

Thank you so much, Domenico. And also from my side, a very warm welcome. Let me give you a couple of more insights on the different financial KPIs. As said, we are quite happy with the order intake of CHF 338 million in the first half. CHF 36 million out of this CHF 338 million refers to Bystronic Rofin, CHF 302 million to our core business, which, in fact, is also growth year-over-year by 3.8%. So also our core business was much better, especially in Q2.

As said, Q2 was CHF 109 million, also much stronger than the Q1 with CHF 148 million. In summary, as the order intake is exceeding our net sales, our backlog is also higher compared to Q1, but also especially compared to the year-end, and it amounts to CHF 308 million. At Q1, we did report a backlog of CHF 291 million. This gives us also the confidence that the half year 2 net sales will exceed half year 1 net sales.

So when analyzing, obviously, the full year, we can expect higher sales than calculating 2x the first half. Net sales was at CHF 303 million, CHF 36 million out of this referring to Rofin. And as we heard already, we were really disappointed about the net sales in Q1 with CHF 128 million, and this did cause the biggest portion of the EBIT losses that we did report with half year 1.

Q2 was much better. Sales amounted to CHF 175 million overall, still organically a decline of roughly 7%, while including Rofin, we did report a growth of 5%. What was actually running quite well over the first half was overall in sales, our bending machines.

We did recover quite a bit with automation and also our laser machines in Q2. So that also there, we expect a higher utilization going forward. Especially EMEA and China were strong overall in half year 1. And then also in Q2, we did see that especially Americas did gain some momentum in order intake, and it will be followed by net sales as well.

EBIT was disappointing at CHF 23.4 million. And again, most of this related to Q1 with Q2 being much better following the higher sales. And overall, our bottom line net result ended at minus CHF 25.4 million. Our financial result was negative with CHF 0.6 million and the income taxes amounted to CHF 1.4 million.

Then we got already a question from Torsten from Kepler asking the question whether we had non-recurring expenses in the first half. We call it one-off items, meaning costs that we did not plan nor expect and there were a couple of smaller items in different areas of CHF 1.9 million.

Going forward, what do we expect for the second half? It depends on the single transformation initiatives that Domenico just mentioned, and we are evaluating different options how to realize also this transformation going forward.

If we go to the cash flow and also in this round, Yes. The overall operating free cash flow looks ugly. There are some very good reasons why this was a little bit worse than expected, one of it being the inventories within those inventories, we do report all customer systems, which are almost finished, but not yet installed. So this did increase significantly versus last year.

And also on the other side, we had receivables which were abnormal high, having a negative cash impact of minus CHF 31.4 million. And most of this relates to payments from the previous owner of Bystronic Rofin, which are committed but not yet released.

On the positive side, there is from the higher order intake, we have also some compensating items, which are the advanced payments from our customers amounting to a positive impact of roughly CHF 12 million. Overall, our operating free cash flow ended with minus CHF 56.6 million.

We are expecting -- going forward, we are expecting an improvement in half year 2. So we should not expect that receivables will stay on this level. So we can expect an improvement over the half year 2. If we go to the balance sheet on the next slide, we continue to have a solid cash position with CHF 257 million, a reduction versus the year-end of CHF 331 million.

To consider is apart from the negative free cash flow, we did issue the purchase price for Bystronic Rofin amounting to the CHF 48.3 million. And we did get the full repayment of the Mammut loan, which had a positive impact of CHF 32.4 million. Related to the purchase of Bystronic Rofin, we had the goodwill amount, which we report also in our half year report of CHF 4.2 million impacting with the same amount our equity. Coming to this equity, the equity ratio is 66% at the end of June this year, coming down from 70% at the end of 2025.

And with this, I would hand over back to Domenico for the outlook.

Okay. So basically, as you have seen, we will confirm our outlook. It is still a challenging market. Yes, it's true. We see some signs of recovery, honestly speaking. You've seen it even in Q2, especially in terms of order intake. But I don't want to be too enthusiastic on this.

I just want to have a confirmation over the last quarters that it is not just a peak. I think we have the right products and the right strategy to enter in megatrends. And if we will be able to catch it, I see a slight chance that we can continue like this. So we confirm what we said in June.

So basically, unfortunately, the hit in Q1 2026 was a bit too high to catch it up over the year. But as already mentioned by Javier, of course, we expect a much higher net sales already supported by our backlog. So basically, our H2 is already covered by the backlog. So it's on us, right, to catch the net sales.

And yes, our conclusion, Bystronic expects net sales to exceed prior year level, of course, because of Bystronic Rofin, but even supported by our strong backlog. But our target to improve, and I think we said the statement was a step towards profitability based on the result of last year.

I think this is difficult to achieve, and that's why we don't expect to improve compared to previous year on bottom line on a full year. So, and I think with that, we are coming to the Q&A session. I think facilitator will drive you through the questions, and we will try to answer whatever is possible.

[Operator Instructions] Our first question comes from Aurelien Sivignon from ODDO BHF.

First question on my side on the order intake on the legacy business. I mean, if we exclude the Rofin scope, order intake in Q2 were broadly flattish year-on-year. And based on what you have seen so far in Q3, do you see a gradual recovery in H2 or a trend, let's say, broadly in line with Q2 for the remainder of the year?

Yes. I mean, of course, that's our target. That's what I mentioned before. So far, we don't see a decline. Again, Q1 was extraordinary. A lot of uncertainty, and I'm talking about our core business, right? I mean, Iran had a direct impact, just orders were not placed, right?

And I would say on our Q3 and Q4, we expect round about to be in line with that one, which would bring us on the order intake side we had anticipated for the year, right?

Again, whether we can catch up what we lost in Q1, difficult, but not impossible. So for me, as long the book-to-bill ratio is positive, we are showing growth. And what we see now for the next quarter, of course, it's even a little bit holiday season, especially end of July and August. But even here, we see a stable activity like we had now over the last few months. So our project funnel is good and is much better than 1 year ago.

And a follow-up one, if I may, given the -- if we can call it, let's say the softer recovery, but could you consider more cost savings than you initially expected at the beginning of the year?

I mean, we are working on it. The fact is that our cost base is still too high for the volume we have. And as you might remember, when we did the restructuring, just as a comparison, right? I mean, I think in 2024, we had a net sales of CHF 331 million after the half year, and we had a minus of CHF 23 million in EBIT, right?

And if I take 2026, -- and I take only the organic net sales, I think we are around about CHF 270 million with more or less the same EBIT. So what I want to say is the cost reduction we did on fixed costs in the last restructuring were extremely helpful because basically with more than CHF 60 million, we are more or less on the same level.

If I take out the Rofin profit, a little bit higher, but still on the same level. But it is a fact, right? I mean we have to further work on our cost base. You have seen before this bullet point, the more towards project organization. We see a potential there to reorganize in a leaner way in how we execute. So we see there a potential.

And then I will later on elaborate on the service question, which already popped up because even there, we can gain efficiency and we will definitely work on further cost savings on permanent cost savings for sure, but we are even already working on temporary cost savings such as short work and so on to further support the profitability in the second half of year.

Okay. Got it. And last one, if I may, on the working cap and the receivables that remain outstanding from Coherent. Can we expect this amount, I think it's roughly CHF 10 million, CHF 20 million to be collected in over, let's say, Q3 or Q4?

Yes. And we are talking about a much higher amount. I will let it to Javier whether we can mention this amount or not, but...

No, it's an amount which is above CHF 20 million. So also there is a question online what the cash situation can be.

Let's go -- so we have more than CHF 20 million outstanding already, but this is just given from the system. So we have transfer service agreements with Coherent, which is the seller. And so basically, they are collecting the money for us, I would say, till the end of September when we make the switch in systems but the cash flow from this legal entity is not coming to us.

So this is committed money. We don't see that risk at all, but it impacts our cash flow. And yes, we see that in Q2, we will collect it. So maybe already in a few weeks, the situation will look completely different because we have already some flow over the last few days. So the problem seems to be resolved. It's a purely system-related problem.

The next question comes from Walter Bamert from ZKB.

Can you hear me?

Yes.

Perfect. So in Q2, you got close to breakeven at EBIT level. Now you were still missing the profits from those orders which take longer to complete. shouldn't come in a lot more EBIT also in the second half that you clearly get the second half positive EBIT?

I mean, Walter, you bring it a little bit to a point. In our business and with our revenue recognition, we have completed all the contract and in Bystronic even a little bit worse. Unfortunately, we have this shift of costs the second half of the year, which will be dramatically better on the bottom line. Will it be enough to basically close the gap? No, definitively not, right?

But that's -- it's definitely our aim. So if the net sales comes, which we have in the backlog, then your assumption is going in the right direction. Whether we will be, let's say, already positive, it's difficult to say because, again, we have some new projects. We have even some prototypes in there, but the direction is definitively right, correct.

But not secure to close the gap from H1 or to close the gap to get to a breakeven in the second half?

To close the gap of the first half year. But I would say that for the second half of the year, we definitely should go towards, let's call it that here, let's be a little bit cautious towards breakeven.

Can you say how close you were to breakeven in Q2?

I can just say, listen, I think we have to be -- yes, I would say, listen, the big portion, which was more than 2/3, 3/5, 4/5, if you want to call it like this, came in Q1 and the rest came in Q2.

Next question comes from Remo Rosenau from Helvetische Bank.

The organic growth without Rofin was minus 7% roughly in sales. If I take the CHF 304.5 million from last year, this would result in CHF 21 million lower sales from the organization ex Rofin. And this is a difference of CHF 21 million, which resulted in a negative EBITDA contribution of CHF 16.6 million.

And Rofin contributed positively. So that means that every CHF 1 million sales you lost created a loss of CHF 1 million EBITDA. Almost this seems like a very high negative operating leverage and does not indicate that there were any additional cost savings between H1 '25 and H1 '26. All the cost savings were before? Or do I miss something?

Domenico, I can take this, Remo. One additional information is probably that the minus 7% is at constant rates. If you take the amount in Swiss franc, actually, we are much lower with minus 12%. So if you compare apples with apples, it's CHF 205 million last year versus CHF 267 million this year. And then with an unequal distribution Q1 and Q2, I think this helps potentially a little bit to soften your message. Yes.

Okay. Understood. And then about the pricing situation. I mean, the competitive landscape has changed, right, the last few years and since COVID. So what is the competitive situation in particular concerning new players coming up from China, making your life a bit more difficult also outside of China. And what are the consequences on the pricing?

So maybe I know that we talked a lot about margins under pressure and so on. I think this is overestimated. Sorry for being very straight forward. Of course, prices are under pressure. We see a Western world where I would say prices are quite stable.

I'm not saying not under pressure. It's a regional discussion. So when it comes to Americas, especially North America, I think we have very stable prices and we can even somehow mitigate the tariffs. So it's a good evolution. When it comes to EMEA, we see a strong aggressivity from our direct competitors, which are not Chinese. So I'm talking about our big competitors out of Europe, especially out of Germany being very, very aggressive.

Do we go always with this aggressivity? No, we don't. So it's not that we fight for every deal and for every price because prices are usually not coming. So there, we see a pressure. Where we see a price deterioration, a further price deterioration, which in my eyes is somehow dramatic, it's really in the Asian market, especially in China, main market, the price drop is massive.

This is something which in overall pushes down our margins. That's -- it's really something we see. And of course, I mean, we are talking about in overall, I would say, in EMEA, 2 or 3 percentage points. It's not that we have the big steps, but you have to imagine that in China, main competitors are dropping the prices by 20%.

So far, we were able to mitigate it, and we did not have seen the necessity so far to go with this drop. But again, China Mainland, definitely extremely, extremely competitive. When it comes to competitiveness to -- from Chinese, we start to see a kind of a consolidation. So we don't see an increase of Chinese competition.

So countries which became over the years, Chinese, like Brazil, they are Chinese. So there, we don't compete anymore with the Bystronic product, but we compete with our Chinese products and brands, right? So we see a kind of a consolidation, and we even see that some of the customers coming back from Chinese product to rather premium product and especially which is, in my eyes, a positive trend so far, fully automated lines are not in the focus of Chinese machine manufacturers or our competition.

Even in China Mainland, basically, if we analyze our order intake, whenever it is a fully automated line, a smart factory, you name it. And basically, we are very competitive even with a strong China product. When it comes to a single machine, manually loaded and manually unloaded, Chinese are unbeatable.

Okay. How much sales approximately do you do in China compared to overall?

I have to calculate it one second.

Well, it's around CHF 40 million to CHF 50 million.

Usually, it's CHF 50 million in Mainland China, right? And around about CHF 50 million export from China to the rest of the world, but mainly APAC and so on.

Okay. And if you look at your geographical sales split and your geographical cost split, how much is the overhang still from costs in Switzerland versus sales? I mean you still have a cost overhang, right?

Yes.

And how much of your costs are still based in Switzerland compared to your sales level in Switzerland?

Well, our strongest market in customer sales is the U.S. And we have, apart from the manufacturing in Niederonz, we have also a couple of group functions in Niederonz. So there is an overhang of those costs in Switzerland. And therefore, we have this -- I assume you want to elaborate on the exchange rate impact. So there is an impact on this, yes.

Maybe I can add something just to clarify a little bit. We cannot compare with Switzerland. So I would say the let's say, too high costs, especially in EMEA compared to the net sales. We don't have this issue in North America.

This is mainly driven that -- and as I mentioned before, we are selling in a different way in EMEA. So we have all direct sales. We have many, many legal entities. So we have a huge structure, which is not sustained by the volume we have today. Let's put it this way. So there is definitely the potential we can raise. But it means even somehow an organizational change on how we sell and how we service.

Okay. And sorry, my last one. I mean, all these changes you need -- you still need to do in addition to what you have done already. Will they cost...

This is ongoing. This is definitely ongoing. It's not yet a big bang, right? So we start with pilot countries where we consolidate. We think about even about legal entity and sizes of legal entity and so on because if you reduce further our cost structure, we have to work in a different way.

But honestly, it's not rocket science. It's what Javier and even I were used to work in our past companies, which I even see in other companies where I'm sitting in the board. So it's -- Bystronic has a really strong regional setup, which as long you have a high volume and only single machines, you can sustain it. With the product mix we have today, it's difficult to sustain it because it's too costly for the volume we have, so easy it is.

Okay. Are there any additional extra costs coming up at the horizon due to the things you have to do?

We are elaborating this. I mean costs are always coming with any changes. It would be too early to say a number today. Every change in countries outside of Switzerland is always costly. So there will definitely be some costs.

The next question comes from Tommaso Operto from UBS.

Just 2 questions on the outlook. I mean, you already alluded to it, but for the top line, right, you're saying that you expect it to be higher year-over-year, mostly driven by Rofin. But on a stand-alone basis, do you think you could achieve a flattish top line evolution?

And you're referring at constant exchange rates, right? So in the second half, in any case, the difference versus last year will be not that big anymore. We are a little bit cautious, but we are not so far away, Tommaso, with this, yes. But right now, we did not promise to be higher.

Yes. But Javier, I think, Tommaso, yes, it goes in this direction, yes.

Okay. And then maybe a bit more speculative, but your midterm guidance, right, where you have claimed that you would be able to achieve the 5% to 7% EBIT margins. Now you've been mentioning continued pricing pressure depending on the different regions, of course, and so on. But would you still think that over the midterm, those are like the margin levels that you would be able to achieve?

Definitively, yes, right? I mean it's clear. It's a matter of volume, right? I mentioned -- I mean, where we are behind is in volume of net sales right? And very frankly speaking, if we would have percentage of completion, we would have a completely different discussion as per today. We don't have it. It's not an excuse.

So if the volume is coming, and as you might remember in our guidance, I think everybody had a CHF 700 million in mind, right, without Rofin at that time to reach this corridor plus/minus. And if the intake is going towards this direction, net sales will follow. If the order intake does not go in this direction, of course, we have to do something on the cost basis if we don't have further growth or acquisitions or whatever, I'm just talking about the core business to reach this corridor.

But of course, it's still our aim. We are behind, and I was very open on this one. This transformation took longer. That's just truth than we all expected, even the ramp-up of all the automation solutions is somehow delayed by 12 to 14 months. That's basically the hit we have seen in Q1, right?

So there must be a time despite of the revenue recognition method where you close basically this gap from order intake to net sales. That's why, yes, we are fully disappointed with the result, but as long book-to-bill ratio is positive, I'm somehow confident that we can, not without additional measures, if the volume is not coming, go in this direction, yes.

Gentlemen, that was the last question over the phone. Back over to you for the written questions.

Thank you very much for the questions we got by the chat. I would like to start with the question we got from Torsten Sauter, Kepler Cheuvreux regarding service revenue. Can you elaborate on the service business should the business uptick not be preceded by a growth in service revenues?

I can take on this one. I mean, not automatically. We have even to admit that Bystronic and I think I talked a lot about reputation and so on in the past. It's coming from a time where the service business was extremely pushed very aggressively. This is possible if there is a shortage in the market and the high request, right, you can increase prices, but we rather see that we over exceeded a certain level.

So that's why even in our budget for 2026, we have reduced the revenue in order to fulfill and satisfy the customer because an upset customer will never buy a new machine equipment. So we did our analysis why we did lose market shares. This was one of the reasons.

That's why we don't want to be more aggressive on the service revenue because in our eyes, it would be a one-off in revenue, but it would have a negative impact on the new machine sales because, again, you can really stress the customers. That's one part, which is decided by us.

The second, what we should not underestimate is the usage and the certain overcapacity, coming from a certain overcapacity in the market. So if the machines are not fully utilized, right, yes, you don't have to fix immediately all the machines, right? And we should not underestimate that the market even from us and our competition was flooded with highly product machines.

And so less usage, less service, less spare parts, but we are quite satisfied that we have a very stable service revenue at the moment. So we don't see a further deterioration, which, in my eyes, is a strong sign because, I mean, please remember that we halved the order intake in new machine equipment from '21 to '24. And we didn't halve the service business in the same extent, not at all. From this point of view, I think here, we are on a decent level.

Another question from Urs Kunz, Research Partners regarding breakeven. When do you expect to be EBIT breakeven? Do you have a midterm target regarding your EBIT margin?

Yes. I mean, as mentioned, on the midterm, our target was first to have a first positive EBIT margin in one of the quarters in 2026. Do we will reach it already this year? That's what we discussed already previously. It will be hard, but not impossible. So this could happen in 1 of the 2 quarters coming in 2026.

On a full year, it's really depending on the order intake in 2026. If it continues like we discussed before and we answered the question of [ Julia ], of course, 2027 should become EBIT breakeven if this is the target. But I mean, it's not, how to say it, it's not that what we want again. I mean, it's not yet given that it's coming just because the market evolution.

A question from Marc Saint John Webb of Quaero Capital regarding cash. How do you see cash burn in H2? Where do you expect to see the CHF 256 million cash to be at the end of the year?

Webb. Just here a short comment. As I mentioned before, the minus CHF 57 million in the operating free cash flow is not fully representative. So we expect an improvement towards half year 2. So it should result in a higher cash position than the CHF 256 million.

No cash burn in half year 2.

Another question from Elia Geiser Research Partners regarding Bystronic Rofin. There are 2 questions. What run rate synergies do you expect with Bystronic Rofin? And regarding the OpEx margin was quite a bit higher than in the past half years. Is that a new structural level or just temporary?

Go ahead, Javier.

Well, probably on the synergies, I can give you the word. Now Elia, I was trying to figure out what you mean with OpEx margin.

So I know what he means, right? Maybe I will try and you can make the synergies. I mean, on the OpEx margin, of course, it is extremely higher compared to net sales if you take the percentage, right? Was this -- how you call it, level or just temporary? For the Q1, it was just temporary, right?

For the upcoming Q3 and Q4, it depends on the volume we will have. If the volume is going towards what we had planned, then we will recover on this one. So it was in the first half year just temporary. But again, if the volume stays on a low level or the order intake should drop for whatever reason we don't see it today, we still have a too high fixed cost block. That's definitely true. And Javier, maybe on the synergies?

Well, on the synergies, let's say, Bystronic Rofin is complementary with the end markets that we have, right? So -- and this was the purpose of acquiring Bystronic Rofin. Obviously, they have the same or partially the same suppliers as we have. So wherever possible, we are binding all the purchases with Bystronic legacy business. And this one, actually, we have this already. Other than this, they have a different end market, different customer base, different markets. So from there, we are keeping this business unit separate as it operates differently.

And the last question we got so far from Torsten Sauter, Kepler Cheuvreux regarding competitors. Amada and Han's have apparently grown in H1. Are you losing share again? And are you in the wrong applications and markets for now?

I mean that we were not in the most prosperous markets in the past. I think I already answered this. That's why we try to shift towards megatrends, which I think we are on a good track, right? So it's clear.

I mean just job shop and just talking about agriculture might not be enough. But that's why we want to have a kind of a diversification. When it comes to Amada, it's difficult to compare because Amada is still doing 80% with Japanese, right? And the Japanese market, even the main market, the domestic market, is still quite strong.

Further, Amada has the huge advantage to being a single supplier to all the Japanese transplants in the world. And I can tell you, even Japanese transplants right now built in India and so on, they're just buying from Amada. So it's closed. So it's a home turf.

You can compare it to Trumpf having the same situation with Germany, where they made in the past a huge portion of it, right? And the difference is that Germany is down and Japan is still doing good. Then please don't underestimate that the currency is helping Amada a lot, but we don't see market share losses or further market share losses toward Amada, definitively not.

When it comes to Han's Laser, I can tell you that Han's Laser is losing a hell of money with the machine tool business and the lasers, which are comparable to our business. So Han's Laser has a very broad product portfolio. They are making -- they are doing very good and performing very good, and they can just afford to not be profitable in the business we are in. By the way, the price driver in China is Han's Laser dropping the prices. It's a clear strategy to force a consolidation and bankruptcy of many, many Chinese competitors. That's how we see it.

There are no more questions. I hand back to you, Sandra.

Okay. There are also no further questions over the phone. Mr. Iacovelli, Mr. Perez, if you would like to add some closing remarks.

Thanks a lot for the questions and for joining our half year presentation. I know it's not satisfying. It is not for us. We are not finding any excuses. We see some highlights. For sure, we are a bit cautious to not become too euphoric after Q2. We do believe that we are going in the right direction. It takes longer than expected. So a bit of patient. I know it's a hard demand after the last few years. Yes. But we stay confident we will further fight.

We don't wait on recovery on markets. We say that's not in our hand. We continue to work on what is under our control. With that said, thanks again. If there are further questions, please don't hesitate to contact Javier or myself. We are happy to further answer any possible questions. Thank you very much.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Good morning, everybody. A warm welcome to our Bystronic full year results for 2025. I'm happy to welcome as well Heinz Baumgartner, our Chair, dear investors. We will go through the presentation. I have Javier Perez today here, our new CFO. He will maybe introduce himself later as well. So please take a minute to go through the disclaimer. I will read it in the same time and then continue in the expectation that you are as fast as me by reading it.

Perfect. So we will start with the business review. Javier will then take over for the financial review. We will do an outlook together, and we will take a little bit more time for the Q&A session.

Let me start with the business review. You have seen the numbers already this morning. I will elaborate a bit more later on the regions and so on. So we had an order intake of CHF 634.5 million, which is a 5% increase at constant exchange rate. We had, as expected, a little bit lower net sales compared to last year at constant exchange rate by 2.2%. I will elaborate on the reasons why and so on as well.

I think what was an achievement, of course, we are not happy with the numbers, but it was with an extremely improved EBIT, which is minus CHF 19.8 million compared to the CHF 84 million we had in the previous year. Adjusted EBIT without the one-offs was the CHF 47 million, which is in comparison to last year, a big improvement because we have even much less net sales.

The operating free cash flow was slightly higher than in 2024 despite the fact that we had the payments of the one-offs with severance payments. The cash out was this year, but we will elaborate on this one as well. So in overall, the numbers are in line with what we have expected.

Again, on the EBIT side, slightly higher on the net sales, slightly lower than we had expected. What is really positive in my eyes, it's the first time after a few years for not saying many years to have a positive book-to-bill ratio. So order intake is higher for 2025 than the net sales, which, of course, results as well in a higher backlog.

If we go to the quarterly view, you see that there is not a real recovery in the market. At least we have now over, I would say, 7 quarters a stabilization in order intake. The last quarter in 2025 was good. And with that, I'm coming to the regions, starting with Americas. We had a solid demand. We had a lot of headwinds, the whole tariff discussion. It was a hit for us, but due to our local production, we could mitigate some of the costs. Nevertheless, especially in net sales, we had a few weeks during the summer period, all the famous 1st of August when everything was announced.

We had some customer postponing. We even stopped some deliveries because it was very uncertain how to calculate and so on. This had a certain impact. But in terms of order intake, it was really stable. And I think we were even able to somehow pass some of the tariffs to the customers. Of course, what was sold and in delivery was a pain for us, and it cost us a hell of a money, and we will shortly elaborate this when we talk about EBIT as well.

Meanwhile, I can say when we made the presentation last week, there was a stabilization of the tariff discussions. So over the weekend, we have now a new development. Nobody can exactly say what it means. But in overall, for us, it will not have an additional negative impact and will not have an additional positive impact because whether it is the 10% or the 15%, adding the existing tariffs, we stay more or less in the same range.

In EMEA, we saw a slight recovery. We had very good performance in Italy and in Spain over the whole year. And we had a quite good development in the first -- in the last quarter, even in DACH. Germany and Switzerland were quite strong, but really pushed by smart factories. Now the definition of Smart Factory is wide, but I'm saying about larger systems, not single machine. So there is a strong trend towards automated system, less single machines. So exactly what our strategy pays in. And the last quarter was really strong, and they made it up for the -- let's say, for the full year.

China is quite stable. We see even a positive development at DNE. That's our second brand. As you know, we made a new repositioning of our DNE brand. We decoupled DNE completely from Bystronic with look and feel, different sales channels and so on. And we even relocated the whole company from Shenzhen to Foshan. So we have now a state-of-the-art factory where we could increase the efficiency of building machines. We are coming close to 1,000 machines building out of this factory, which is very, very positive. But even the Bystronic brand in China seems to stabilize, but even towards smart factories.

The weak point is definitively APAC without China. So Southeast Asia, especially South Korea is slow. It was slow over the full year. And we are right now investigating what to do in this region, which was a quite important region in the past for Bystronic.

So a little bit how we developed the order intake. I already mentioned a few times that we -- if you look at the numbers, you will recognize that we are doing less business in the single machines, so in the standard machines. So a big driver in order intake and growth is definitely driven by the smart factories. So larger projects, there is a really growth as a big demand and growing demand for smart factories. Our software solution pays in a lot. So I think we can make a differentiation with our overall system. As you know, we still have a lot of small customers. I don't want to call it mom-and-pop shops anymore because they have smart factories as well, where they like to have the full software solution we offer.

What is very strong, and this is a sign of recovery is bending. We cannot sell more bending because we don't have more capacity. So the request for bending solutions and even here for automated bending solution is extremely high. We will invest heavily even in this year in bending solution as a fully automated bending solutions. I already mentioned the DNE relaunch. I think I don't have to repeat it again. But here on the picture, you see the factory. It's a 50,000 square meter factory, one floor, located in Foshan and not anymore in the city center of Shenzhen. Of course, we have even a cost advantage, but the reason behind is really to build more efficiently machines and not having it divided over different floors.

A highlight of 2025 was definitively our Tube business. As you know, we established Tube as our own business unit in our organization. We put ahead of this business unit, and we really focused on the market. The Tube market for small tubes is not a sheet metal market. This is something we had to recognize. And of course, what was a big highlight in terms of order intake, but not in net sales was the large Tube machine, the 330, which I think is really breaking through and contributing a lot in terms of order intake. Why I'm saying in net sales, delivery times. I mean we can tell it, but you will not have the final acceptance within the year where we do the sales recognition. So that's something you see in the net sales as well and it's normal. I explained it before. If you have single machines, which you deliver within 3 to 6 weeks and you do an installation within 2 weeks, you will have the sales recognition very close to the order intake.

As more you go to systems, you will have a sales recognition just delayed, right? And that's something you see in the net sales. That's something you will see even in the coming quarters because there will be -- when you do a shift from single machines to systems, you will have a small down until it recovers and it stabilizes.

Okay. I think the organization -- the reorganization is nearly done. I mean there are always some minor adjustments to do. I think what makes me extremely happy is that we finally have the EC, the Executive Committee, finalized with Javier as CFO; with Alberto Martinez, having a huge experience in our sheet metal business, leading the division Systems; and with Wilfried de Backer, having somebody having a very long-standing experience in service business for the division Service.

I think we have now a very strong market focus. So we aligned our organization to the needs of the market. I think we are much leaner. You see it in the cost savings. So of course, we are now more agile, and we are able to do very fast decisions. We increased our efficiencies, bundled our competencies. We consolidated our group function. I think there, we still have some potential, but I think now together with Javier, we will tackle new topics as well. So in optimization of our production setup, we did a lot. I think there is still some room.

Innovation, as I told already last time, we integrated R&D into the divisions. So Tube, which is not a division part of the System division, but they have a dedicated R&D, which are very close to the market. We have R&D in our division System. And of course, we put a huge focus on automation solution. Well, meanwhile, the headquarter of the automation development is in Switzerland. So we finalized this move.

Expansion of Smart Factories, I think I don't have to repeat it.

Last point, opportunities. You know that I was very open during the last conferences. We had quality issues. We had reputation issues. Some of you might ask why Service is slightly lower. That's because we decided we want to move more towards the customer. Maybe we squeezed a little bit too much our Service business. And with that, we disappointed some customers. So -- and of course, the price pressure in the past led a little bit to a situation where we did not put the quality on the first priority. I think we are back now there. We see this even in terms of warranty costs and so on. Is there still possibility for improvement? Definitively, yes. And I mean, I mentioned it with the R&D market-oriented product portfolio.

And last but not least, the focus on Tube Laser cutting systems remains very important for us. I think it's last time I'm showing something about the restructuring. The EBIT we are showing was only possible because the restructuring went better than expected. When I'm saying this, it's not that in overall we are doing more, but it was more in effect already in 2025 than we anticipated. So we will have less of these savings in 2026. The target to achieve the CHF 60 million annualized savings, I think it's achieved. Unfortunately, it's a sad number. We reduced by 600 FTEs, even slightly more. And as I mentioned already, I mean, nearly 85% of these savings are already achieved in '24 and in '25. So that I think in overall, we are satisfied with the outcome of the restructuring. Yes.

Okay, shortly on the ESG, I think we can be proud here. I mean we have plus 24% in renewable electricity. We have minus 6% in waste and circularity. And we still have a waste of 2,150 tonnes. In -- so our Scope 1 and 2, we reduced by 14%, which is, by the way, in line with the STBi. And for me, I would say the most important one on this slide, not because of CO2 and so on, but the workforce injuries went down. So our total recordable insurance rate went down by nearly 1/3, so by 28% to a rate of 1.15, which is, I would say, in our business, a good benchmark, definitively.

So coming to our strategy, I want to just elaborate that now because we did an acquisition, we are not only moving towards acquisitions. We still want to be in a growth mode in our core business. We did ongoing investments in our productivity, in our automation solution for our sheet metal market. We are offering a broader range of products for our full life cycle management. It goes in combination, by the way, even with our service offerings. We still see some white spots in the world. So we will focus on expanding regional markets. And of course, we still aim to gain back some market shares. I don't have final numbers. One year ago, I told you that we lost market shares. I can tell you today, with certainty that we gained market shares back. We will elaborate these numbers and maybe during some roadshows or so we can even share more information on this one.

And then something which was the main focus of mine. I'm coming from a world having a lot of OEMs. Bystronic does not have a lot of OEMs. The few ones they have. They were more concentrated on smaller mom-and-pop shops. I think here, the focus on OEMs as well is here.

Then we made some strategic partnerships. I think these 2 are, in my eyes, quite important. You know that Japan is always a difficult market for European. So either you are Japanese or you don't make business basically. So we have a strong alliance with Komatsu. Basically, the final signing will be in 2 weeks from now at the Komatsu headquarter, where together we want to establish a kind of a sales force and enter to the Japanese mainland. We see quite huge chances here. Then we partnered up with SSAB on green steel solutions. So we still push towards our ESG targets.

And last but not least, beside of the organic growth and becoming again profitable with our core business, of course, we are targeting more M&A. You all read it. On the next slide, I will elaborate a little bit. We definitively want to have a diversification on one hand, but only on our DNE. So we don't want to become Conzzeta again. So we are definitively not buying back Mammut, so don't worry. It has to have our DNE. And so that's very important. Why I want to have this? We have to become more resilient and not being depending only, let's say, from the sheet metal market. But again, it has [Technical Difficulty]. And the second one, what we are targeting as well is, of course, even in our core.

Please wait while you are joined to the conference.

Okay. So even in our core business, we still have some white spots, which we could fill with products. So maybe shortly on the recent acquisition we did, I think you know that we just closed it by the end of January. It will be in our books starting from the 1st of February. We acquired the business -- the machine tool business from Coherent. I know this company from my past quite well. So it was really a target that we were seeking for it. So they made around about CHF 80 million. So far, we only shared the USD 100 million. Now I can say it's CHF 80 million, around about 400 employees. Out of them, around 300 in Japan.

[Audio Gap]

It's homeland of one of your main competitors. So could you elaborate how -- what's the reasoning behind that expansion plan? And how do you think you can compete there versus some other?

Yes. The point is that this competitor is even a competitor of Komatsu. Komatsu has a wide range of products in the -- for the sheet metal processing industry, but they don't have a strong laser to compete against AMADA. And we do believe that together, we might have a chance to get bigger orders in Japan. That's really a strategic alliance for Japan Mainland at the beginning.

Thanks. And related to that, but specifically towards the U.S., do you see that the weaker yen versus the strong Swiss franc has a competitive impact for U.S.-related business so that AMADA would have an advantage pricing-wise due to their weak currency?

Yes, of course. I mean this was a big driver over the last few years. I mean that's the truth. I mean the Japan yen decreased, I don't know, 30% year-over-year in average, right? It was a big competitive advantage, but we should not underestimate that we are quietly strong localized already. So there are import taxes. And I do believe that the company will make -- who will make the race is the one who have the right mix between import and localization. And AMADA is doing the same. So AMADA is localized quite heavily, like we are. So from this point of view, I don't believe that this will be a further big advantage. And I can tell you, price-wise, we are more or less in the range. So it's not that we are more expensive than AMADA. So we are tracking the pricing quite closely. So I would even say that we are slightly below.

And last question for now. Thanks. Since you don't expect the market recovery for now, could that also result in an additional cost savings since you actually -- when you announced the cost savings, you expected a recovery of orders already by second half '25?

As per today, otherwise, I would have announced it, we are not expecting a restructuring in the way we did last year. We are further improving our setup and adjusting our setup. As I mentioned before, we -- the project and the product mix we have is not anymore the same like we had in the past. In the past, we produced single machines in high batches in a line. And now we are going more towards project. So it is rather a transformation to meet these requirements from the market. And with that, of course, we're always working on improvement on our cost base.

[ Thomas Morris, VBAG ]. What is the reason for the weak sales, Korean market? Is that due to the political unrest, which we have seen? Or is there a structural change in the market?

We are right now checking it. We are -- the first view is that, of course, it is becoming less a Western country. So Korea -- South Korea was always a Western country for me, very strongly related to the U.S. They were buying stuff. I mean, when you went to South Korea, you see German cars, you see American cars. I think the most McDonald's outside of the U.S. are definitely in South Korea, Kentucky Fried Chicken. And now we see a little bit switch towards Chinese low-cost products, right? Is this a trend? Is this a reality? We are checking it right now.

On the other hand, we see that there's a big demand for Smart Factories. So when I'm talking about Smart Factories, it's whole systems, not only a single machines. And there, we still see a huge potential for Bystronic. But of course, we -- from our side, we have to decide, is it more a Bystronic premium product market or is it more a Chinese? Then the DNE would maybe be the better fit. So far, we serve it very strongly with Bystronic premium product. So this is something we have to analyze. We are right now -- so some of our people are right now over there. We're doing a market study to understand it, but I personally believe it's more structural change in the behavior of the South Koreans.

Yes, I'm not sure if I fully understand the guidance. You mentioned a step toward profitability, but that means you expect not to reach profitability yet in '26?

There is something -- it's a good question. It's too early to say it. I mentioned today that we are going towards a system supplier, which was always our strategy, which in my eyes is the right strategy. It depends a lot in how much net sales we can recognize this year. So again, the delivery times are in a completely different sphere than we had in the past in the machines, right? So for me, the much more -- the more important indicator will be the top line in bookings, in order intake. And the net sales depending of when we have the order intake within this year. So if we get the CHF 700 million order intake in the last quarter, we will not make net sales. And this has to be -- and this is, I think, a change in paradigm. This is a change in how you have to look at Bystronic.

So we have long delivery time. I think Javier will maybe mention something on this. We are even checking whether our sales recognition is the right one as we do it today, right? So because we only do it after the final acceptance test. So if we have a customer which wants to have a different screw, we have to wait until we change the screw so that we can do. So we are checking a few things on here, but it all comes with the volume in this case. So if we will have the net sales, there's a big chance that we can achieve it. If the net sales will stay a little bit behind just because of this reason, then it will be very challenging.

Torsten Sauter, Kepler Cheuvreux. Can you remind us of the ForEx sensitivity of the business in its new scope? I understand that the euro, the dollar, in particular, are much weaker versus the Swiss franc in the new setup and you have a lot of production and overheads in Switzerland. And when I look at the results for 2025, I see in the financial result, quite significant hedging and intercompany financial ForEx-related items. Should I expect them to be in the same magnitude more or less in 2026, given the current spot rates?

I would say, yes, there will be not a big movement. Obviously, with Rofin coming in as from February, there will be also a slightly change. But I would say that their split of currencies is actually similar.

And just if I may, you have stopped disclosing regional or geographic revenues, right? This is no longer available, right?

We did not show this, in fact. As I mentioned this that, let's say, for Bystronic, it's 50% for Europe, 35% North America and let's say, APAC plus China, it's 15%.

[indiscernible], Commerzbank. I would like to go back to the question of -- I'm sorry, I forgot your name. You mentioned that now you're looking for more sales to coming back to a positive financial result. Well, more sales also says that you have more bills to pay and you have more payouts. For you, where is the point where you can get a positive result? What is the target of sales in total, where you can say if you have those sales, then we have a positive result?

So you're looking for the breakeven point, right?

Yes, yes.

Let's say, we will still have some positive impacts from the restructuring and not a huge amount, which will be in '26. And I don't know if you should say it, but if we can get somewhere between CHF 650 million and CHF 700 million, then, let's say, excluding Rofin, if you add Rofin, then for sure, we will be positive, yes.

But I think...

With CHF 650 million of sales, you can reach additional EBIT of...

Without Rofin, yes.

[indiscernible] million. In combination with ongoing savings still plus roughly CHF 40 million more in sales. Yes.

Yes. Maybe a question from my side, [ Mark Bosa, VBAG ] as well. Concerning the change from like single machine to projects, and you talked about the sales recognition, I would wonder about the cash flow side. Can you elaborate on the shift towards like prepayments, then milestone payments and then payments in percentages on the time axis in order for us to understand?

I mean this is absolute no change there. We are quite safe, I would say. I mean we are getting usually around about 30% down payment and 60% before delivery. This will not change even if we sell a system. So basically, we have 90 -- usually, in average, we have 90% of the cash in-house before we deliver. We have only a few big OEMs like John Deere, where we might make an exception. But in general, we have 90%. There is no shift even if we go for systems. And we are not aiming to change yet to POC or whatever. So what we are doing with the sales recognition is not in any connection with the payment and not in any connection with the customer.

And this is probably an important message, right? So payments is one thing and, obviously, sales recognition is a different thing.

And then just to come back to the previous question, the CHF 650 million breakeven on an EBIT basis or on a net basis?

On an EBIT basis.

EBIT, okay. I might have missed it, but the midterm guidance, you didn't reiterate that, that still stands.

It stands, yes.

5% to 7%.

Yes.

Okay. And a detailed question, just out of interest, you mentioned data centers were a big supportive driver this year. How much of sales does that make up of orders?

I mean we have -- I would say it's difficult because many of our customers are supplying parts. I mean not 100% of their volume goes only to data center, right? But I mean this would be a rough estimate, but I would say 10% of the System business. So overall of the group, we are talking about 6%, 7%. And why we did mention it is especially for the large Tube machine where we got large orders last year because of data centers in the U.S. really, which are really -- as on the Tube, I can say there, we have a few projects dedicated only to the build of data centers. Whereas on the flat sheet metals, it's a product mix, right, which is difficult to predict.

I would still have another question concerning the visibility due to the business kind of shift towards more project orientation that is longer lasting, but where visibility should increase, no? Is that correct?

It is correct, right? So we have a much better visibility. That's why we are cautious. So we see the project. We have a kind of a better planning, but it requires a longer waiting because the customer, they plan for a longer time instead of buying a single machine, right? So this is different, but it's the world I'm used from my past. And again, this is the only -- there will be a kind of a time until the shift is done, right, especially net sales, right? And that's why I look very much on the order intake.

And concerning the capital employed, there is a little change there, no? Even though time...

There should be no change, no. Let's say, the volume per project is obviously bigger than selling a single machine. But from -- you mean now the working capital impact should be really minor.

Okay. Do you consider factoring solutions in order to smoothen out certain balance sheet days?

If you consider what?

Factoring -- using factoring, for instance. That's not a topic.

No. Right now, not. It's also an expensive financing method, right? Yes.

Do we have any questions in the call? We have no questions from the phone so far.

We have a last -- second registration from Walter Bamert, Zürcher KB.

Can you help me with modeling the Rofin? So you gave CHF 80 million revenues. And I think the company has a decent profitability stand-alone. But perhaps you have purchase price allocation issues and perhaps also you reinvest some money to put it on, let's say, more fit for the future with more R&D or whatever. So that could also lead to a lower profitability. So what should we expect for this year and, let's say, 5 years out in the future?

Okay. Walter, let me answer on this. You bring it to the point, right? I mean when we made the announcement of the acquisition, I said it has to be higher than our corridor. Coming back what [indiscernible] asked, right? So of course, it should be higher than what we expected in the midterm for Bystronic. It's a completely different market. For the first year, I would say we have integration costs. We will have some investments, and we should not forget that partially it is a carve-out. So the big chunk is coming, of course, with the company we bought in Germany. But the rest of the world is a carve-out. It's combined with certain costs. But even though I would say we are in the lower range of the midterm guidance we gave even already for the first year. This is our target.

Okay. And investments into the future, any plans are made already?

Can you repeat it? I missed the first question.

Will you step up the R&D, for example, of this company or other activities where you say we need to invest first...

Yes, definitively. I mean the first target is to have a smooth integration, so a smooth decoupling from the owner from Coherent. I think this is the first target. So for me, it's like taking a baby out of an incubator, cutting all the tubes and see whether it still can walk. We are pretty confident. So we will be very cautious at the beginning. But yes, we see huge synergies. And as I mentioned, they are bringing technologies we do not have yet in-house like marking, laser marking, laser drilling, which can be combined to our products. So it's not only that we have a market access to new markets like semiconductor and health care. But of course, in terms of R&D, we will invest quite significantly. I think Bystronic always spent a lot of money. I think we can ask our Chair. I think we are quite on the big side in spending in R&D. So innovation is key. So we see huge potential there, and we will invest, yes.

Just for online, it's better.

Yes, to be on the safe side with microphone. Conceptually speaking, you're moving up the share of automation business compared to single machines business. In this transition and kind of outside-in perspective is a little bit clouded when you go into project-related and execution-related business mix. How should we look at the risk inherent strategy compared to selling standard machines basically?

It's always risks and chances, right? The risk is that we have an organization who cannot carry projects, that we have an organization who does not have the visibility or the transparency to track the project. And the chances is we have a great CFO now who helps me to bring me this transparency. I know the System business quite well. I think next week, there will be the announcements even from Andritz, and I think you will see great numbers, so you can make good money with projects.

We are benchmarking even with peers and so on. And the biggest chance I see is that we have a kind of a USP with our solutions, especially driven by the software, right? And the difference is, Torsten, nobody of you asks how much the costs are of the engine of your car, right? So basically, you -- either you buy BMW or BYD or Daimler or Volkswagen, and this is the price for the system you get, right? And you want just to drive from A to B. And that's exactly what we have with our customer. So my expectation is that we -- even on the margins of the single machines, which are still part of the system. So we should not forget, we still have the same components combined together to one system and nobody talks anymore about the single engine, which is built in there. So that's a big chance.

For those projects, not for now, no. But this would be like the path to evaluate, right?

As I don't know, you stole the microphone from Torsten, maybe. Okay.

He didn't want.

One question from the chat from Aurelien Sivignon from ODDO BHF regarding Rofin and diversification. After Rofin deal, would you say it's time now to focus on consolidation and integration? Or do you see further opportunities for diversification in 2026?

I mean, we talked a lot together, right? If I would be alone, Heinz, I would drive the diversification even more, right? And I'm always saying, "Hey, of course, we have to make an integration. Of course, we have to stabilize the business, but I'm always saying opportunities are not always there." So if the opportunity is coming tomorrow and it is the perfect right fit, then we have to do it, right? It's not that we can say, "Okay, now let's stabilize everything and so on and in 3 years, we start again." The opportunities might not be there in 3 years. So that's my clear focus.

Of course, you need to have a stable management, which we have today. I think, again, we still have negative numbers, and I'm absolutely not happy. But if you see the change despite the lower net sales to this profitability, negative profitability we showed, we need a big, big step in the right direction. So -- and now we can always say, "Let's wait, let's wait, let's consolidate and so on." Again, if there is the right opportunity, we will make both decisions and try to make it. And I can only say that the cooperation with the Board of Directors is great in this direction as well. So we are perfect in time.

I guess there are no further questions. Exactly, yes. Very good.

Perfect. So anything I have to say, just thank you very much. It's, by the way, a pleasure to see so many attendees here, and thank you very much. I mean we will anyway stay connected. Please feel free to reach out to us if you have any questions. Javier is here, and we will have still the chance to talk for out here, right? I think there's an up/low. And yes, thank you from my side.

Thank you so much.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.