Inficon Stock

Good morning and welcome, everyone. My name is Bernhard Schweizer, Investor Relations contact at INFICON. I have the pleasure of hosting this online Microsoft Teams webcast. Thank you for attending INFICON's conference on its second quarter and half year 2026 results. With us today are Oliver Wyrsch, CEO of INFICON; and Dimitrij Lisak, CFO of INFICON. The management team will first present the results and then answer your questions. During management's prepared remarks, you are kindly asked to turn off your microphones and cameras.

You should have received by now the press release on the Q2 2026 results together with the links to the accompanying presentation for this conference and the half year report. All these documents are available for download in the Investors section of the INFICON website at www.inficon.com. [Operator Instructions] I would also like to inform you that we are recording this web conference to archive the audio file later on the INFICON website.

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

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

Thank you very much, Bernhard. Welcome, everybody, to our earnings release Q2 2026. We have the usual agenda today. First, I will tell you a couple of key messages and figures of the quarters, talk about the target markets, businesses and then talk about the full year expectations. After me, then Dimitrij Lisak, our CFO, will go into more financial details.

When we look at Q2 2026, I'm very excited to say there's a couple of really strong components in it. I think 3 really stand out. Orders are really going up quick and accelerating across all sectors, all different businesses and products. We have sales that grew really nicely and we have also a very strong profitability, a big step-up reflecting this completed efficiency measures that we talked about in the last couple of quarters.

If we go more into the detail. The Q2 sales is a clear record quarter of $198 million, up 18% year-on-year, 9.5% versus Q1, which is already a strong growth quarter as you probably remember. We have growth across all regions and key target markets. The book-to-bill ratio is well above 1, one of the steepest inclines ever driven by record order intake across all regions, but also all different markets have shown a very positive momentum; of course Semiconductor & Vacuum Coating the strongest.

Talking about this market, there we had also the strongest sales growth of 31% year-on-year after also a strong Q1 that was growing already a big step up from last year and sequentially therefore, Q2 is 13% up in this quarter. General Vacuum continues the positive momentum, 11% up year-on-year, minus 3% quarter-on-quarter. However, that is just a timing thing because the orders are strong. I believe we will have further positive momentum going into the future of growth here as well.

RAC/Auto increased by 9% year-on-year and 13% compared to Q1 amid still demanding automotive market, but there's a couple of very strong drivers in there as well. And then Security & Energy, as you know, this is the timing. With the big government programs, we had strong orders in Q2 also from the U.S.. But year-on-year we declined 31% in sales, but improving 55% versus Q1. When we look at the other operating results. Gross margin 46.6%, that's 0.7 percentage points above previous quarter and plus 3.5 percentage points versus Q2 last year.

Operating income I think is most relevant here to mention, USD 42.3 million or 21.3% margin versus Q2 last year of 15.1%. It's an improvement also sequentially of 5 percentage point. So a big step-up from the last quarter much like we explained. We are now past this reconfiguration that we needed to do last year and we accelerated a number of strategic initiatives also as part of last year where we built a stronger footprint in the East, strengthened our innovation abilities in that area and also managed the cost in the West or in general more efficiently.

While we still invest of course, but we also needed to go through this configuration as you see and that clearly shows a positive effect. There's still some sand in the system. Obviously FX effects and tariffs haven't gone fully away, but I think we could more than compensate this with this program of reconfiguration. Operating cash flow robust of USD 48 million. Organization, I just mentioned it. We are very proud to say that this reconfiguration was completed of the footprint, manufacturing and innovation and it showed resilience through recent supply chain disruptions.

Also regarding the trade tensions, we feel we're very strong positioned now for the future. We continue the investment in leading-edge R&D on a similar level as before and we are increasing production capacity. Obviously with the accelerating order intake as well, CapEx of USD 8.7 million for this quarter. Full year, we would expect something around USD 35 million.

If I then jump to the different geographies. It's a strong quarter and growth in all regions year-on-year. Certainly, Asia Pacific for understandable reasons has most dynamic, but we can say all regions had positive momentum. Europe and Americas with nearly 20% while Asia Pacific over 30%. China looks a little bit slower here with 5.6%. However, that's a timing thing. The orders were also there very strong I think nearly the highest in China. So this is a very positive outlook for all regions I would say and also a great result year-on-year.

If we then jump into the end markets. Semiconductor, we continue to build out our strong leading positions. This is a lot related with the strategic partnership we have in the top account in the industry where we work together on the next generation of their product challenges. I think this is leading to a very strong product pipeline that we continuously execute and launch new steps at the leading edge of all the measurement issues and data analytics issues that are in the market to push the industry forward. We see here the strong growth that I mentioned earlier.

Orders significantly up. This is not a normal ramp. This is the steepest we have ever seen with a big jump up. We grow a lot from 30%, but the orders also are really steep. And there's a lot more to come when we look at the projections that we talk through with our strategic partner and the customers. When we look at the reasons for the driver, naturally there is the data center build-out and with that connected leading-edge logic, high bandwidth memory, but there's more in there.

It spreads out across the semiconductor ecosystem also into other sectors; communication, automotive, IoT-like chips; they also profit from this build-out. So we see really a momentum across all these different submarkets that we are looking at and working in here. And then if we jump into the technology end markets. We normally look at 3 different parts here. All of them are specifically selected synergetically in terms of R&D, in terms of strategy, but also with strong growth profile and profitability profile.

When we look into these 3 parts, we have automotive, refrigeration, air conditioning. Strong CAGR overall, like in all markets we have a track record of growing above the market. Also here not only in semi, we continue to grow sales up 9% year-on-year, 13% quarter-on-quarter, solid order intake. However, underlying, it's a bit mixed as well. I believe automotive hasn't regained the momentum it had and EV is in some regions accelerating, in some regions not. So that's a bit of a mix.

Storage batteries is actually more exciting. Some of it is data center driven, some of it is other usage and also consumer batteries are actually quite resilient no matter the most recent dynamics in the market. Service handheld expansion, this is aftersales service tools. These are continuously growing over the last years. It's a continuing growth story. And the new HVAC next to the general HVAC and heat pump development, there is also a data center driver establishing. And not to forget the new refrigerant regulations due to climate change, this is also a continuous driver for the sector.

What is exciting now that hydrogen gets a bit more expensive or even scarce, we have launched a new product, Arnova, which is leak detection with air and argon clearly; much cheaper, much easier to get. I believe this is going to be a breakthrough product as well further establishing our #1 position in this market. If you look at General Vacuum, this is across many different advanced industries. Sales 30% plus (sic) [ 11% plus ], minus 3% quarter-on-quarter. Again strong order intake. This is a timing topic more than anything else and we believe this is going to be continuing strong growth.

We have the #1 position here with the most complete instrumentation offering. A couple of industries -- some markets here have more dynamics. I believe some of the smaller ones, newer ones, are exciting; big science, space robotics, but also life science. And then solar is still a bit soft. I believe we are still working through this overcapacity and looking for the next bigger step, the next techno, something around ferrous guide, something like that. That is a little bit out in the future, probably only at the end of this year or beginning of next year.

Then the smallest segment briefly, Security & Energy. Again, this is very much driven by large programs. We got strong orders in Q2 mainly from the U.S., but also other programs are warming up. There's obviously rising defense budgets, which will drive this segment further, but the procurement processes are not as efficient as fast as we would maybe like. With that, I jump to the expectations 2026. INFICON raises the full year 2026 guidance. Orders are very strong, really the steepest incline and a lot more to come.

With what we see in the market, we also believe that we can execute. As you've seen, we have shown good quarters absorbing this growth and scaling up based on our reconfiguration and our work prior to this. So we are quite confident for the future with the upcycle accelerating, but also the other markets as I explained earlier. There are some risks that remain; trade disputes, geopolitics. With that, we would move it from USD 710 million to USD 750 million sales to USD 750 million to USD 780 million sales and operating income we narrow to 19% to 20% from previously 18% to 20%.

And with that, I conclude. Again as always, if you want to know more about us; follow us in the different channels, you will see all this exciting news in different developments of new products, but also collaborations be it space, be it with big technology companies. And you also see here new product launches are announced there and, in particular what I mentioned earlier, the liquid digital detection system, Arnova that now works with air and argon; doesn't need hydrogen to do the same thing.

So with that, I would like to hand over to the second part of our prepared note with Dimitrij Lisak, our CFO, that will give you some more details on our financials.

Thank you, Oliver. Good morning, everyone. So I will give you some more color on the quarterly financials, the half year results, reiterate the guidance and the upcoming exciting corporate calendar. First of all, to start off. Q2 was a quarter of record orders, record sales and very strong profitability further strengthening our balance sheet at the same time. The orders, as mentioned before, reached its highest level by far with a book-to-bill well above 1. The order intake was broad and developed strongly across all regions.

Sales increased by 18.3% versus Q2 prior year to $198.1 million. Gross margin increased as well by 3.5 percentage points versus Q2 prior year to 46.6%. Operating income ended strongly at $42.3 million, increasing by 67.2%, which represents 21.3% net sales and with this, a sequential increase of 5 percentage points versus the previous quarter. The equity ratio ended solid at 64% underlining the financial resilience of our business. And both the operating cash flow and net cash showed a strong performance, almost doubling versus the reference period prior year.

CapEx ended at $8.7 million and we mentioned it earlier, we also are increasing our full year outlook for the CapEx from $30 million to roughly $35 million. Coming to the sales in more detail. We grew 18.3% across all regions and 3 of the 4 end markets. Thereof, the organic growth was 74% and the rest attributed to currency effects. Looking at the regional split: Asia Pacific showed the strongest growth with 32.5% followed by Europe with 18.9%, Americas with 18.7% and China with 5.6%.

The operating expenses remained under close focus, overall increasing by 7.1% compared to previous year with R&D costs decreasing slightly by 2.1% reflecting mainly seasonal effects and currently representing around 7% of net sales. While SG&A costs increased by 10.8% driven mainly by personnel expenses, some remaining adverse FX effects and continued investments in our system and infrastructure.

Overall, the operating income ended at a strong margin of 21.3% net sales and showed substantial improvement versus the previous quarter and the previous year Q2 as well as year-end. Here, I would like to highlight the 3 key factors. First of all, the improved operational efficiencies after the completed production reconfiguration that we see reflected in the result and also reflected in the improved gross margin by 3.5 percentage points versus Q2 '25 to 46.6%.

At the same time, we had a strong top line in Q2. This also supported the margin and the operating income development and continuous efficiency gains and cost discipline on the OpEx side while FX and tariff effects remain to a certain extent, but not as pronounced as in the previous quarter. So these would be the 3 main factors. Looking at the income tax development, it increased to USD 10.5 million mainly driven by a higher taxable income. So there's a significant increase there compared to the reference period in Q2 '25.

And the net income increased by 76.4% year-over-year with the margin improvement to 16.3% mainly driven as well by the higher operating income. The balance sheet remains strong and continues to reflect a solid financial position. Here specifically, the operating cash flow almost doubled, increased to $84.4 million (sic) [ $48.4 million ] in Q2 '26. There are 2 key drivers. First of all, the higher net income and at the same time, the disciplined working capital management reflected in the increased inventory turns, increased payables position, but also a disciplined approach to accounts receivables increasing broadly with the net sales growth.

Coming to the financial overview of the first half year '26. INFICON had a strong first half year with double-digit sales growth of 16% and improved profitability across key metrics as well as a strong balance sheet. Sales increased by 16.4%, growing similarly as in the Q2 results in 3 of the 4 end markets and all regions. And the operating income increased to around $72 million, increasing by 25% versus previous year and 18.9% operating income margin, which is also an increase versus year-end at 16.7% and last year at 17.6%. And as mentioned before, the equity ratio remains solid at 64% for the half year.

With this, I would like to reiterate again the increased guidance. So overall, the guidance is raised and narrowed reflecting the strong half year performance, continued strong order intake and an accelerating semiconductor cycle with the updated guidance being $750 million to $780 million in net sales and an operating income margin of 19% to 20%. With this, I come to the last part, which are the upcoming events in the corporate calendar. We will have the Q3 '26 Media Conference on October 27. And we will have the next analyst visit in Balzers in person on November 19, 2026 where we'll be happy to welcome.

With this, I conclude the financial update and will be happy to take your questions.

Craig Abbott has the first question for you.

Congratulations to the good quarter. Two, please, from my side. The first one is operational. The second one is more about positioning. The first one is just on operational. I'm just trying to gauge a little bit how we should think about the operational leverage in the back half of the year. You said OpEx was up 7% in the second quarter. So clearly it looks like you're getting more top line growth than OpEx growth. If you could talk us through what you're expecting there. That would be the operational question and then I have a positioning question.

Okay. I can say a sentence or 2 and I think then you'll probably want to hear from Dimitrij too. Craig, thanks also for the congratulations. Yes, I think it was a very good quarter. I believe the biggest most important step was that we moved past this period of times where we had too much sand in the engine if I want to say it like this regarding the profitability and we make a big step forward. I think there is more air in there. Sure, there's operating leverage, but you see there is both steps that we did and I believe also in future there is a little bit of both possible.

Naturally, what played a little bit against that is the potential trade tensions and the geopolitical risk of the pressures on the supply chain. So far we have navigated this well with this new configuration, but it's a bit unpredictable. And the other thing is that investments also need to be made to absorb this extremely steep decline. So they will probably lead a little bit less cost there in some parts as well. I believe there's not necessarily new locations needed.

I believe the footprint is strong, but we will get to the point where larger steps are needed, which are in preparations meaning buildings and more clean rooms and so on. But you've seen our projection on the CapEx, that's our best projection at this point, which will not weigh too much on the profitability beyond what we've seen in the past. So maybe a few more -- a bit more color from you, Dimitrij.

Yes. I'd just like to add 1 or 2 things. I believe the production reconfiguration and also the efficiency measures we took in '25 and in Q1, this helps us to have a good starting point and also to have a good starting position in this trend that we're in now. What I would just ask you to be mindful of is also the topics we spoke about maybe more prominently in the previous earnings release, but this is still remaining and this is specifically the impact of inflation. These are the impacts of potential disruptions that might come. So all this needs to be considered, but we have a very comfortable and strong starting position.

Yes. So some factors are there also still, tariffs and FX. We spoke about that previously. There's not going to be massive jumps on that. I believe this is a slow and gradual improvement as we reconfigure further. I hope that helps, Craig.

That does indeed. And my second question was could you remind us, please, again when we're looking at your Chinese sales, how much of that you're selling actually directly into the Chinese chip ecosystem, i.e., the local players, the local OEMs versus indirectly via your Western OEM customers?

Okay. Yes, that is all direct. So we have also there the split of OEMs and chip makers. We serve both direct depending on the sophistication of the sensor solutions. It's much comparable with the rest of the world really, but it is a little bit of an independent ecosystem as we all know, right? It separates itself. But for us, we try not to make it a different approach all in all while it has certainly its particularities. Innovation is a bit specific and done in China. Manufacturing is done in China not for everything, obviously, right? That is a balance about what makes sense; cost-wise, innovation speed, manufacturing, supply chain. So it has its specifics, but largely, it's a similar model.

And what I also would like to say and I mentioned earlier, the sales were a little bit slower than the other side it's a high benchmark, but the order entry is very strong. I think we had also great meetings with top partners there projecting the future. We are very bullish about that market too and also our standing there. And I would like to remind everybody we're there for nearly 40 years. We manufacture there for over 25 years. We do innovation there. We have very strong ties. And we have so far always found a good way of working with our partners in China as well in spite of the complications that we had in trade war disputes.

Jorn Iffert has the next question for us.

The first one for you, please, on the order intake trends. I mean you said book-to-bill materially above 1. And at the same time, your second half sales outlook implies at the higher end that sales momentum remains flattish quarter-over-quarter. Just to double check a couple of assumptions, if I may. Do you see some restocking? Do you see some double ordering? Some customers already ordering for the first half '27 not materializing that in the second half? Or do you see any trends of the order intake has peaked already or is it more a concept of prudence for the second half, which is of course totally understandable in the current macro environment? Maybe some words around this to better grab it. That's the first question.

Yes. I expect a little bit of discussion around probably our projection and our guidance about next year. So it's the last one that you said, it's a little bit of prudence. Again, we're probably still digesting a bit the last year's surprises and that is not what we normally do here at INFICON, right? We would like to be more steady in delivering and also how we perform with this long-term CAGR above the market. I believe we've seen that also now that we grow above the market. The order intake is extremely steep. There is no double ordering. There's no building inventory that we can see anywhere.

Quite the opposite, I believe there is a lot of announcement of here's another chunk. We have also market share gains and we have new applications that we unlock that go on top as it has been in the past. So it is a bit on the cautious side. What I will say though is that the order timelines, they get a bit longer. So people would order a little bit sooner for some of the projects. However, we map this out and it does not have a material effect actually for the near term. It is just there's more discussions also about future projects there.

We see also some of the movements and that's not a large effect, but that other suppliers have delays and then some expansion projects are moved out. That is not because of demand. That's just probably because of the complexity of the ramp-up in some places. We are very well positioned. We have nowhere the bottleneck. We try to keep it that way and push forward. So if there is going to be more growth and we'll show it in Q3, there's a very high likelihood that we'll have to move it up materially again the guidance, then we will capture it, right? So we do not have that full certainty yet. But we have full certainty that we will have this expansion projects and we'll implement them.

And the second question is to some extent a follow-up, your total capacity expansion. I mean you have increased CapEx a little bit. But how do you see or how do you prepare the company for the next 2 years? I mean what is your potential total revenue output you can generate in 2 years with the current CapEx plans you have in place that we get a feeling what is maybe possible in terms of total output?

Yes. Look, we have always to have also some buffer, but we're clearly now building the company out for over $1 billion because we need to go and be able to deliver on this coming 2 years' projections. So we need to go and do this, implement these projects. Now they are being implemented as we speak. Obviously some take longer, some shorter, right? Cleanroom takes a year plus with some building expansions and then you have tools that take 6 to 9 months that might even delay a little bit because lead times might get longer and then staffing is a little bit a couple of months topic.

We have taken on a lot of temps as well to obviously make these steps up in delivery and we continue on that path. Roughly the same steepness. It's a little bit of steps. So we've probably done already 2 big orders level steps and then there's just another one happening now and there might be more steps. We don't exactly know how the shape of it is. But what we know is on the back end, we need to go and work on these projections directly with building up the right capacity for it.

Jorn, maybe to add, CapEx increased a little bit. So to put things into perspective, the number or the projection we gave for this year will be around 60% above the prior year CapEx. So this puts also the numbers behind the statement you just made because that means for us significant investments that we plan already this year into capacity.

It will be with extremely high likelihood a very large jump that we make in these 2 years. It's still early actually where we are now.

Sorry. A quick follow-up and then I'll go back in queue and ask the question. But if we had in 2023 or '22 at around $1 billion semi equipment CapEx, you had $300 million semi sales. Now we are likely going to $300 billion, which would mean your semi sales alone could go towards $1 billion by 2028, '29. Then you have the General Vacuum business, et cetera. So is this scenario where you would you be able to say you have a revenue output of $1.3 billion, $1.4 billion by '28, '29. Is this a big burden?

Certainly, it's a scary number when you think about it, but as soon as you start breaking it down, it is a scenario that we have to be looking at as well. We have a little bit of a range of scenarios now we're working on. But yes, it has been continuously accelerating and so it's a bit hard to say where we land, right? But the Q2 was quite extraordinary, I should say, even though we have seen some great jumps. And these partnerships I believe last year was just a huge plus to react how we did and strengthen our partnership when it was tough and it pays back a bit now because we even get on top orders maybe also because of performance of orders. I cannot judge that so well.

But I just know there's more coming in, discussions are ongoing and the scenarios are basically updated weekly. So we must look also at the very aggressive ones obviously, right? So in general, the strategy is I think everywhere, but specifically at INFICON. The expansion projects, they pay back anyway. It's about the timing. So it's rather good to be early and then you can maybe delay it out with some activation and some staffing if you really had to. But in this current scenario, you'll probably be on the safe side to just continuously expanding and that's roughly what we do. I think we have every week discussions of other expansion projects in places as we model out the future. It's quite a dynamic -- fantastic positive dynamic, but it's quite a dynamic environment really. Fun discussions.

Martin Marandon-Carlhian has the next questions for us.

My first one is on the '26 guidance. Just for me to understand. I understand that there is some conservatism in the guidance when you look at H2 growth growing modestly versus H1, but also the last quarter I think you were mentioning that we could see a slower Q3 and maybe a stronger Q4 due to some project timing. But I was wondering considering the very strong order intake, is that pattern still valid now?

Yes. Very good question, Martin, because this is a bit what we are also currently discussing. When we mentioned these order trends or also sales trends, this is just the seasonality that we normally have. Q3 is often one of the weaker ones. That is more timing of holidays and summer vacations and timing of project approvals and so on. But it might actually be that this year you will not see any of that. So it's unfolding still, right? The interesting thing is here also a little bit like in Q1 when you have Lunar New Year, you lose a little bit visibility for a minute.

And here is the same because the West is a bit absent and also the East during the July months -- during the July weeks. So that's where you would see a little bit less -- have a little bit less transparency of what the quarter is going to look like. But it looks extremely positive as we stand right now. Obviously I cannot comment too much on the exact numbers, but you might be right.

Okay. Very clear. In the semiconductor growth in Q2 more than 30%, do you have a way also to distinguish a bit between leading-edge logic, memory and the rest? And where do you think you have more visibility today?

I mean the drivers now -- leading logic has started earlier. It's really pushing forward in this current super cycle. And then memory, we all know when it started, right, last year with DRAM, with especially HBM. This continued. Both of them are probably 2 equal strong drivers. HBM is a bit more on fire just now in a positive sense. Obviously we know the key drivers there. We work with, all of them have very strong relationships. So that drives it forward. But what is really materially different maybe versus a year ago is that beyond that, there's a positive upswing.

And you know these other players in the market as well that were most recently also -- or there's also earnings season for them that they could go and make positive statements and that's exactly what we also see in the market. It goes across IoT, even automotive chips that have different purposes, right? So automotive is also used in industrial, in data center build-out, down to sensors, MEMS, power. All of these have now gained momentum again after a bit of a difficult time, right, the last 2, 3 years I'd say.

And that's very encouraging to see, but it is not as big there the CapEx and the projects maybe yet. But at this point, it is a step back versus what we obviously see in memory and logic. But for us, clearly these 2 are the biggest drivers maybe with memory being a tad more exciting even than logic. We've been spoiled with logic anyway, as you know, for some time in terms of growth. I hope that helps, Martin.

Yes, that helps a lot. And the last question for me. You probably saw the combination or the acquisition of Atonarp by VAT recently in mass spectrometry sensors. So I was wondering to what extent does this overlap with INFICON and what do you think about competition there? And also maybe what does it tell us about the prospects of that market if you start to see some M&A momentum in that segment?

All right. Certainly. Look, I mean Atonarp specifically we know for a very long time. They're around for nearly 20 years and there are around 20-plus people. It's very concentrated on Japan. So they have good products. I believe we have leading products in all their spaces and obviously our portfolio is massively bigger. So hey, competition is good for the business and drives us forward. I don't want to talk about the strategy of VAT necessarily. I believe they have an interest in sensorizing their larger systems, the lock systems. You will have to talk to them about this.

Again, it's a very small competitor and nothing that we were considering buying because we have I believe the superior technology and the broader variety. Let's say, if you think about our sensorization as a toolkit, we have a lot more tools in there and in the end each application is a bit of a challenge of how you put these tools, the pieces together to protect against particles or protect against aggressive chemistry and this continuously moves forward.

That's a little bit how it works when we say, hey, we adapt to molybdenum deposition or we adapt to selective etch processes in smaller tech nodes. Then each of these application needs an innovation step. So by having the base technology, that isn't yet the game. But hey, it's not a bad company. I think if you have no sensors could be good. But again, it's not for us a major competitor. Obviously we talked about our competitors in the past. I hope somebody like MKS, somebody like that. However, in that space, mass spectrometry, we have 80% plus market share globally also versus MKS that probably is the next largest in that space.

Michael Foeth has the next question.

I have 2 questions. The first one is on operating expenses again. I was surprised to see R&D slightly down when sales are really ramping up. So my question is what level of R&D are you targeting in the future and what should we expect going into the second half and into next year? And the second question is on China. As that industry is growing strongly, are you seeing any changes to the competitive dynamics in China now?

Okay. I'll go first to the R&D question. There's no change in course there or strategy. That's a timing thing. Again, we did a little bit of reconfiguration also of the innovation. So we moved closer to customers, were closer to them geographically as well. And we will continue to have similar comparable levels, 8% plus of sales will be also in future what we do. I would also like to remind everybody the part that is in SG&A is application engineering, but some of it is really what I spoke just a minute ago what these applications are. Some are simple, right?

That's just taking a standard tool of us and basically plugging it in to a certain tool and then you roll it out for the whole floor. But sometimes it's a real big step, right? We really reconfigure the base product quite a bit. So application engineering is a big chunk as well. And this is what we pushed a lot most recently and you could technically add that to R&D. So I would not say that R&D is down if you added that in, but I believe it's a temporary fluctuation, right? The sales went up quite a bit, right? If you look at percentage of sales, we do this independently, the R&D investment plan.

So just to complement on this, I mean year-to-date R&D costs have grown by around 4%. So the investments continue. This is purely what you see is a seasonality effect also considering the base of last year, there are a couple of smaller effects to this. So nothing major there.

We will stick to the general strategy of INFICON where we probably first invest in the new opportunities. We still believe same statement. We have a very long list where it's rather difficult to choose and not do too many things. So in that sense, now that we are out of this profitability dip, we will certainly continue to invest there, right? That will not change. We haven't stopped even during that dip of course, but we needed to little bit softer things. So on the second one regarding China dynamics, yes, I believe that's what you see in this 5-year plan as well as the strategy and it materializes.

I believe the idea is now the fewer players, stronger players, the global ones is what the market is trying to build or what I believe Chinese government policy is. And that's a good thing we believe because many of these players we know quite well. Some of them are really in the market for 20 years plus and so we grow with them and further strengthen our partnership. For us, there isn't a material difference if a partner is in China or anything anywhere else. Sure, there are certain regulation things that need to be looked at.

But in the end, that is okay if there's global Chinese players therefore and maybe less of those with this nearly 0 interest funding and very low profitability that really pushed down prices and moved the focus from value-add pricing to a little bit who is the cheapest. I would say that's a positive turn over time. And of course there's competition, but this is a competition way that we understand where companies grow, get funded normal and also have a normal profitability. But I would still say, right, there are strong companies in China.

The trade dispute favors them in many ways to build up their own capabilities and they are doing that in a wide range of deals in semi and outside. So we must be there, we must innovate there, we must work with them, we manufacture there and we stay close to them like in all the other 3 regions as well. I hope that answers your question, Michael, otherwise let me know.

The next question comes from Craig Mcdowell.

I hope you can hear me okay.

Yes.

I just wanted to come to margin, both gross margin and operating margin. From commentary on earlier questions, it sounds like we might be moving towards a quarterly revenue run rate of certainly north of $200 million, maybe close to $250 million. Just wondering whether you can give us a kind of indication of whether gross margin sort of soft guidance of high 40s still is relevant in that case? And similarly on operating margin, what's the kind of target operating margin with the run rate of USD 250 million per quarter, if you can comment on that? And I've got a follow-up as well.

I mean I can say something general and I think you want to hear from Dimitrij. So look, general one note of caution on our gross margin. The gross margin has a big mix impact in it because we have 2 different channels as others don't. We work 50% with OEM so 2 makers in semi and then with chip makers, there's a lot of application engineering part of it. So one has a low operating margin, 40s, 50s and then some of the chip maker products have 50%, 60% and if you go to software, you're even at the 80s. So the mix swings depending on their expansion projects, they are in there, right?

So I always take the gross margin a little bit with caution. What we internally look at when we look at the sub businesses, we very much look at the operating and how they perform there since the in between structure is slightly different. But I'm sure you can give a little bit more color.

Yes. Maybe just to reiterate on the gross margin then, it's not binary, right? So yes, volume of course helps, but then you have mix effects. You have the effects I mentioned before also in terms of inflation that would affect the COGS mix and so on. So there's a lot to consider. But overall, if you make -- if you use our updated and narrowed guidance and project, yes, to get to the upper range, you would need roughly similar quarters as we delivered now, maybe a bit less on OpEx. So that's the range if you look at the updated guidance of 19% to 20%. Does this answer your question?

Yes, that's helpful. And then just on my follow-up was great to hear your plans to expand capacity further and your own footprint. Just wondering on your certainty or confidence on your own suppliers and how confident are you receiving components, et cetera, you need for what sounds like a pretty steep ramp into '27.

Yes. Look, we certainly worked a lot on our supply chain and our manufacturing footprint the last 3 years specifically from what we learned after COVID and the supply chain crisis then. And naturally, also last year, this reconfiguration was all going in that same direction; more planning, closer ties to suppliers, closer geographically, also more second sources and things like that. So I believe we are placed pretty strongly. You've seen in the last 2 quarters, we could scale up as the orders came in. Naturally, the orders come in even faster. So we need to continue on that trajectory.

So far, we are keeping up in the sense of the customers are okay with us or there's suppliers in these large projects that struggle more with their timelines or the lead times. I believe so far, we haven't seen anything beyond smaller hiccups and actually some effects are interesting. I mean some of it, I mentioned the chokehold around magnets a little bit that has affected us already 2 times every time we found a solution. Then there was a little bit around PCBs, some concerns a couple of times. We have stocked up there to have a bit more buffer to navigate these bumps in the road.

And then there was also some selective smaller things, housing cables where the data center build-out basically ate into the capacity that the suppliers provided to us and they got in a bottleneck. But also there we found solutions so far. I guess so far, so good. The system works. The bumps were small. But I would not say we can project that into the future as we go through this ramp further, right? There's going to be bottlenecks that will hit us and we'll have to find other solutions. There might also be bigger ones.

So there is certainly a good amount of uncertainty around that. And then on top of that, of course geopolitical reasons, including trade tensions that can also be further concerning or bigger impact. But I believe that is more short-term impact than systematic impacts, right? But we'll keep you posted as we take on these orders and expand continuously. It's certainly an exciting journey.

The next question comes from Oliver Wong.

Hope you can hear me?

Yes.

So just a few quick questions for me. First is if you could comment on your lead times. Second, if you could comment on where your supply is relative to your demand? And then yes, I have a follow-up.

Okay. Let me quickly talk about lead times. I think supply/demand, we talked a little bit about. I'll add some more calls, I will try. So lead times, at this point I believe we are fulfilling this to the largest degree. Again, we could ship probably even faster, but this is also about just making sure that expansion projects of the chip fabs work out and then we so far have found good solutions. So there is nothing that is of a larger headache. But we certainly are continuously monitoring this and have smaller headaches every now and then, which need attention.

Supply and demand, I explained a little bit in a minute ago how we strengthened our supply chain, how we reconfigured manufacturing supply chain and how we have been most recently navigating it. I mean demand is really high. Supply so far worked out for us. But again, we are in an unprecedented steep incline here so we'll have to see where maybe things break in the system not only for us particularly, but in general, right? So we had a couple of scares and a couple of smaller bumps. I hope this answers your question, Oliver.

Just a quick follow-up. So lead times are still safe to say less than a quarter.

Sorry, I could not hear you.

I was saying lead times are less than a quarter.

Yes, this depends on the product, right? So the smaller sensors, typically that's a question of weeks. The very biggest one, most sophisticated one, they are as big as a phone booth was there, there would be the usual is 2 to 3 months, right? So that is at this point in okay areas. A little bit longer than usual, but we manage together with our customers.

Yes. Okay. Makes sense. And then I was also wondering about your growth relative to WFE for this year and next, kind of whether you'd comment on where you see your growth relative to WFE growth this year and next year?

Yes. That is an exciting question. Look, we try to grow both market. Don't take my word for it. We have done that in the past, look at our CAGRs versus the WFE. So as I commented earlier, on top of going with the market for WFE, we open up new applications, new measurement areas. This is things that in the past, there was no business case to put a sophisticated sensor on, but now it is because the process just demands it. It's the size, the complexity of it, too much wafer scrap tips the business case so there is also things where we find out new measurement ways that haven't been possible or let's say, put sensors in an environment where in the past they would die and now we found a solution to it.

So this and then so adding or unlocking applications and the other one is I believe you're taking market share. It's not possible on a broad base when you're #1 by such a clear margin. Obviously there isn't pockets where we can push that. So I believe the new application is probably the stronger driver here where there is also the average sensor price goes up and things like that. So I would say that's how we should look at our development at least in theory, let's see how it pans out very specific because everything is heating up.

The decisions are different. The decision models are different now by our customers than a year ago. There was much more time to evaluate. There was much more time to test. But at the same time, very small fractions of unlocking some additional yield or productivity already make a business case. So it's kind of an interesting time to see how this all pans out in the end. So there's a little bit of variability in that and probably also some timing. But again, I remain optimistic based on the past that we also continue like this in the future driven a lot by a tailwind of additional sensorization.

Got it. So I guess in theory base case, hopefully, you will grow at around WFE over time?

Yes, that is definitely possible based on my remarks that I've made.

Michael Inauen has the next question for us.

Sorry for being maybe the last one. But a couple of -- 2 questions actually on the revenue development, if I may. I don't know if you've answered it already, Oliver, but China sales in Q2 seem to be pretty low compared to the other regions. So I was just wondering what's the reason for that? And the second one also on revenue is can you split it a little bit for us between OEMs and actually chip producers? Because I mean the way I understand it is that you're probably benefiting right now on revenues from both whereas others like VAT and Comet still have to ramp the production phase. So they're getting the orders, but were not ready to ship it yet. So I'm just trying to understand are you like now earlier than these guys because you were obviously ready to ship or is it, let's say, another driver? Is it more the chip producers that actually put your sensors in existing fab lines? Can you give us a bit of color on that front maybe?

Yes, I'll try. It's a bit of a murky picture, which is highly dynamic. So I'll give you my best thoughts on that. Maybe first on China. As I mentioned earlier that, yes, that's a timing thing on China. Orders were [Audio Gap] tremendously in Q2, they'll come back. There's a little bit about project expansion. The recent discussions I had also personally, there was more and more and a couple of more ideas after that of where we would expand. So that is going to stay exciting there. Then OEMs versus chip maker, both have drivers right now, both feed into logic and memory.

Again, I probably think memory in comparison has a bit higher dynamic right now, but logic has been longer already in ramping, leading logic. And then now the other components of the chip -- of the semiconductor industry is also moving up so which has also positive effects. So it's quite a big mix. As you know probably, INFICON is quite diversified in terms of then not in terms of the submarkets we serve in semi, but also in terms of timing.

So when you make a fab expansion, some of our products come very early with the OEM tool orders and then some come with a first big selection of semiconductor advanced tools that we typically develop together with them years before in R&D of their node, but then they get ordered a little bit after. And then there's another order of these sensors when it goes into HVM and then maybe first issues and problems show up and there is another piece needed. And then there's the whole maintenance tools ramping up leak detectors like the UL and also smaller ones for service tools and the sub fab and so on.

So that is a span of maybe 6 to 12 months and I think every project is a bit in a different place. So it's hard to say because it's not -- like the step function didn't work like this that they are doing all the same, right? And if you look at memory, everybody has their own struggle. Some have sold all their capacity and desperately trying to build cleanrooms and fill it up and some have parts unlocked. It's a messy picture. But what we try to be really is use this configuration last year to also be ready for the ramp because it had to come, right?

What we saw last year was Q1, first sign that it will happen midyear. My theory is still that the trade war escalation just delayed it and compressed the beginning. And now of course we're entering not in the usual semi cycle only, which always happens like this every 3, 4 years, but we have this super cycle now, which is overlaid on top where I believe still the semiconductor industry is way behind in terms of ramping versus what the data center build-out plans actually are.

There is still a gap there, which we will have to eventually fill. So it probably will be a question of time. So everybody is just trying to go as fast as they can with their expansion. So regarding commenting on our Swiss peers, it's a bit hard for me. It's probably you need to go and talk to Stephan and Urs directly.

I didn't expect you to comment on that. Just trying to understand because the old patterns of course were different as also at INFICON as revenue patterns, but I think it's just not valid any longer for anyone right now in the chain.

Fill that gaps, right? And the memory gap, you can clearly see that. But we also really try to go -- every time that we have an under penetration go and build that up and so fill this ecosystem, fill it out. So whoever wins, we're trying to be in this time. So it is for that less volatile as we've just seen in the last 3 years. But now everything is up.

Yes, perfect. Just maybe just a very quick question for Dimitrij on the SG&A cost. Do I understand it right that it's mostly FX related and there's no additional -- I mean of course you have to add some costs with such a high volume. But is there anything we have to be aware of that has changed?

Yes. So FX is certainly a driver probably less pronounced if you look at Q4 and last year, it's less pronounced, but it's certainly one of the main drivers. But of course also contributing, we always mentioned it that we have also variable components in our compensation. So this also has played an impact and the investment in our systems. So we continue to invest to improve our systems. So you see this also reflected in the SG&A costs.

As there are no further questions, this is the ideal moment for management's closing remarks then.

Thank you very much, Bernhard. Thanks, everybody, for your continued interest. Thanks, everybody, for joining today for the interesting discussion. We'll meet you again latest in Q3 earnings release or in all of the various events where we are participating, which you'll find on our website. With that, big thanks and have a wonderful day.

Thank you, everyone.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The next question comes from Michael [indiscernible].

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

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

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

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

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

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

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

Next questions come from Jorn Iffert.

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

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

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

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

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

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

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

We have next question coming from Craig Abbott.

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

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

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

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

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

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

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

That was my second question.

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

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

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

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

We have a next question from Martin Marandon-Carlhian.

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

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

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

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

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

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

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

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

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

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

We know you have.

Thanks a -- thanks a lot.

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

Thank you, everyone.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Yes.

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

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

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

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

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

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

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

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

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

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

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

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

Next question comes from Michael Foeth.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Next questions come from Jörn Iffert.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Yes. Thank you very much.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The next questions come from [indiscernible].

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

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

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

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

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

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

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

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

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

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

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

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

The next questions come from Craig Abbott.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Yes. Correct.

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

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

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

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

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

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

Thank you. Goodbye.