Earnings call transcript: Inficon sees steady growth in Q2 2025

Inficon Holding’s Q2 2025 earnings call revealed a steady quarter with sales reaching $167 million, marking a 6% increase from the previous quarter. With a market capitalization of $3.06 billion, the company maintained its operating income margin at 15.1% of sales. According to InvestingPro analysis, the stock appears slightly overvalued at current levels, trading at a P/E ratio of 29.25x. Despite a stable book-to-bill ratio of 1.0, Inficon’s gross margin saw a decline, dropping 4.1 percentage points year-over-year to 43.1%. The company remains optimistic about its full-year guidance, projecting sales between $660 million and $690 million, with an operating income margin of 18%.

Key Takeaways

• Sales increased by 6% quarter-on-quarter to $167 million.
• Gross margin decreased by 4.1 percentage points year-over-year.
• Operating income margin was steady at 15.1%.
• Full-year sales guidance remains at $660-690 million.
• Continued focus on R&D and strategic market investments.

Company Performance

Inficon Holding demonstrated a solid performance in Q2 2025, with sales growth driven by its strong position in semiconductor pressure measurement and advancements in sensor technologies. The company has been actively investing in the automotive and refrigeration markets, expanding its applications in security and energy sectors. Despite challenges in the semiconductor market, Inficon continues to hold a competitive edge as a market leader.

Financial Highlights

• Revenue: $167 million, up 6% from the previous quarter.
• Operating income: $25 million, representing 15.1% of sales.
• Gross margin: 43.1%, down 4.1 percentage points year-over-year.
• Cash flow: $18.7 million.

Outlook & Guidance

Inficon is optimistic about the future, expecting a ramp-up in the semiconductor market by 2026 and a recovery in the automotive and solar sectors. While InvestingPro analysis indicates net income may face pressure this year, the company maintains strong fundamentals with a 29% return on equity and healthy cash flow generation. Access the full Pro Research Report for detailed insights into Inficon’s growth trajectory and market position. The company is committed to continuing its investments in strategic markets and expanding its production capacity in Malaysia and China. Full-year sales guidance remains unchanged at $660-690 million, with an operating income margin of 18%.

Executive Commentary

CEO Oliver Wirsch emphasized the company’s innovative pipeline and resilience in challenging market conditions. "We are right in the middle of it with all kinds of new innovations in the pipeline," he stated. He also highlighted the strength of Inficon’s core operations, noting, "The core of Inficon is strong."

Risks and Challenges

• Continued delays in the semiconductor market expansion.
• Tariff impacts and trade disputes affecting production costs.
• Slower growth in security and energy sectors due to government program timing.
• Potential supply chain disruptions as global footprint reconfigurations continue.
• Macroeconomic pressures impacting customer demand.

Q&A

During the Q&A session, analysts inquired about the company’s strategies to mitigate tariff impacts and the delay in the semiconductor market expansion. Inficon emphasized its flexibility in global production and maintained a focus on long-term customer relationships.

Full transcript - Inficon Holding (IFCN) Q2 2025:

Bernard Leiser, Investor Relations Contact, Inficon: Good morning and welcome everyone. My name is Bernard Leiser, Investor Relations contact at Inficon. I have the pleasure of hosting this webcast of our second quarter twenty twenty five results conference. With us today are Oliver Wirsch, CEO of Inficon and Mapja Streindle, CFO of Inficon. The management team will first present the results and then take questions.

During management’s prepared remarks, online participants are requested to turn off their microphones and cameras please. During the following Q and A session, participants are then invited to turn their microphones and cameras on when asking questions. Participants can add themselves to the queue of people wanting to ask questions by clicking on the I raise my hand icon. Alternatively, you can also use the chat function in MS Teams. You should have received by now a press release on the Q2 results together with a link to the accompanying visuals for this web conference and the full half year report.

All documents are available for download in the Investor Relations section of Inficon website wwwinficon.com. I would also like to inform you that we record this web conference to archive the audio file later today on the Inficon website. The oral statements made by Inficon during this session may contain forward looking statements that do not relate solely to historical or current facts. These forward looking statements are based on current plans and expectations of our management and are subject to a number of uncertainties and risks 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 Bierce. Oliver, please.

Oliver Wirsch, CEO, Inficon: Thank you very much, Bernard, for the introduction. Welcome everybody to the earnings release 07/30/2025. And let me jump to our agenda today. First, I will tell you, as usual, a couple of key messages, the figures of the quarter, the review of the target markets and the full year expectations. Afterwards, I will hand over to Matthias Ternley, our CFO, for more details on the financials.

The overview of the twenty twenty five Q2 results. Infocom continues on the growth path with sequential growth in all regions and all markets except for security and energy. It’s a positive order trend, again, with a nice step up in orders. We have continued risk in this temporarily in Q2, the profitability got impacted due trade disputes. So when we look into more details, we increased the sales to 167,000,000.

This is a plus of 6% quarter on quarter. The orders increased substantially with a continued book to bill ratio of 1%. And we continue to have economic risk and uncertainties due to trade disputes. If you look at the segments high level, semiconductor continues to grow quarter on quarter, plus 7%. Good orders.

It’s still low visibility and a lot of dynamics. We believe, though, that a recovery is continuing. At the same time, the broader semiconductor ramp that we are looking for most likely has now shifted into 2026. When we look at general vacuum, we continue on the growth path in 2025 after another good quarter, plus 6% quarter on quarter. For RSE Auto sales, we continue to grow in recent quarters in a difficult market consolidating EV battery market, plus 7% quarter on quarter.

The security and energy markets after strong growth years up to the 2024 record sales that were another plus 21% on the full year. And we have a slower 2025. This is mainly due to the timing of government programs. When we look at the operating result, the main impact here is the trade disputes. The operating income ends up at USD 25,000,000 or 15.1% for Q2.

The temporary impacts of the trade disputes includes unavailable tariffs, mainly in April, May, the accelerated relocation cost, some FX cost impact and some volume mix effects. I think in general, we can say we had to a little bit reflect, and for us, it’s an easy answer of what the decision is for us for this Q2 regarding market development and focus on our customers versus managing short term cost impacts. For Inficon, this is in our DNA. It was a clear decision. We stepped up our relocation efforts to reconfigure the global footprint and really pushed these projects, some of them times two, times three.

: I will talk some more about it in a minute. And we’re then able to transfer most of

Oliver Wirsch, CEO, Inficon: these products and lines within a quarter, which is, of course, much faster than this usually goes. We also decided to work together with the customers. Our long term partnerships are absolute top priority for us, and hence, we also had to go and absorb some of the tariffs. With most customers, we find some good solutions. These discussions are still ongoing of how we navigate these difficult times.

But we also then decided Q2 will absorb this extra impact in order to be adapting fast and then move forward and go for a strategy to rather gain market share in these difficult times, which is very well possible if you’re that fast to the new rules of this new trade world. I believe we have very good opportunities there. Anyway, going back to if I close this sidebar for a minute, going back to the overview. Cash flow, robust at the stable high level of US18.7 million dollars And then regarding organization and future investment, the continued investment in R and D, 8.3% of sales and also capacity of US5.1 million dollars We still think depending on how the market develops, CapEx expectation roughly comes in at this 25,000,000 to $30,000,000 If I now look at the global regional development, you can see some interesting development in Asia with a very strong quarter, significant growth year on year. And Europe and especially Americas,

Jorn, Analyst: slower.

Oliver Wirsch, CEO, Inficon: We have seen in Europe and Americas rather a sideward trend, but

: there

Oliver Wirsch, CEO, Inficon: are some good positive signals for sure. If you then jump into the target markets first, of course, semiconductor vacuum coating. We remain to be in a very strong position, continuous growth in a really challenging environment, low visibility. We believe the recovery continues, but the ramp, the broader ramp is probably delayed into 2026 after the most recent developments. The trade disputes definitely impact growth negatively causing investment delays, moving of projects, even some cancellation, but mainly it’s moving and delaying of projects.

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

And we hopefully see in our most realistic scenario a little bit of a calming down of the train tensions, bit more steady waters for the second half. And then the ramp looks like it most likely will fall into 2026. Overall, the drivers are strong in this market. They remain strong mid and long term. And what we see is a broadening trend, but still a narrow trend around AI investments.

HPC is certainly interesting, also HBM. While memory in general is not so dynamic this year, We still see a lot of investment in future nodes there and also an increased use of advanced sensors for these future nodes. So this investments in leading edge nodes and advanced chip design are continuing. The pace is not actually slowing down. Advanced packaging is a bigger and bigger topic, but all kind of dimensions is being worked on.

Exciting times in terms of R and D and in terms of new innovation and partnerships we have with our customers. There’s a lot going on in the R and D pipeline, while in the general on the general economic front, it’s a bit confusing with low visibility. I believe inside the technology road maps, there’s a lot of exciting stuff happening, and we are right in the middle of it with all kind of new innovations in the pipeline. Jumping to automotive, refrigeration, air conditioning market. Strong position.

Clearly, we have a continued multiyear growth in a very difficult environment. There’s consolidation. Good development in Asia. Americas is around flat, Europe slower. So we see continued sales growth, plus 7% quarter on quarter, year to date, plus 2%.

We remain number one in RSE battery market. We’re making market share gains in a market that is generally not growing. We have seen some good positive signs, specifically in Q1 on the automotive market, but it hasn’t really fully materialized. It’s still relatively slow. While we think we might be past the trough, there is no real acceleration.

Similar on the EV side, there is some positive signs, some development. We believe that probably in 2026, there is really an acceleration. Also here, the visibility is low. What is going to happen next? Policy landscape is also a little bit confusing.

Also here, the trade disputes make it a bit more difficult to understand what the development exactly is going to be. So battery, I just mentioned. The consumer battery market still more resilient and stable and with growth. Midterm outlook in the whole market, we see positive. Of course, the EV transition, we believe, will come back.

But also on the RSC side, we made continuous growth, specifically in the subsegment of the handheld, after sales service products. Good growth over years, which is driven the whole RSC side is driven more by new refrigerants and the new regulations, future sustainability. So when you look at the chart on the right, you see over the year, we had a CAGR of 10% in a really difficult last one, two years. But the last five years, have 10% CAGR. I think we have shown great resilience and growth and market share gains also in this market.

When we move on, general vacuum. After the quite slow 2024, we still remember 2023 was opening up of COVID, the backlog reduction that went into the 2024, and then we had a couple of slow quarters in 2024. But now we’re back on the growth track with good Q1 and also good Q2. It’s a broad industrial market that is addressed through multi brand strategy with long term channel partners. So there’s different submarkets in here for each one.

We build out our position or have already a very strong position as our most complete full liner for vacuum instrumentation. We are in number one position overall. So continued growth with plus 6% quarter on quarter and plus 19% year on year. We have good order improvements quarter on quarter and year on year. So this should continue like this.

We see one more point. It’s important. We see not yet a recovery of the solar business, which is part of the nice dynamic we see in ’twenty two, ’twenty three. In terms of market development here, this will probably only start to recover in 2026 as it looks right now, mainly due to the overcapacity and deconsolidation in the market there, mainly in China. Overall, we have a strong position, also a good market development and R and D pipeline here in the respective submarkets.

If you jump into the last of our target markets, security and energy, strong position with the leading product also here. The cycles, as most of you know, are largely dependent on government programs. They have their own dynamics. It’s a good diversification factor in that sense versus the other end markets. So we expected this year to be slower after a five year growth, 9% CAGR.

And now the next phases and the next timings of these programs is still in definition phase. This is a normal process. Overall, the security budgets due to the global security situation are going up, specifically in Europe. We see these positive trends. So we have growth in Asia and Europe.

We also have with a flagship product in this segment, the new hub site, a lot more applications that we can go in, which is also in the works, but same here. Qualification process is relatively long on the timeline, but we make very good gains. So we’re optimistic here too, while 2025 certainly will be a slower year. And with that, I come to a special topic around the worldwide footprint. As I explained already in the last earnings release of Q1, we have had the last years a plan to adapt our footprint to the most recent geopolitical and economic situation and trends.

So there is factors in there where The U. S. Economy and the China economy derisk or decouple and similar trends in other parts. So one of the reasons why we opened up the Malaysia factory was exactly this anticipation of this. What we have in general, as you know, is a decentralized system of competency centers that then can be adjusted relatively fast.

Each one of these units has a fast reaction time, is adaptable. And I think we could now really show our strength in Q2. The benefits will come over time clearly, right? Because now we needed to just show what we can do by readjusting this in accelerated timeframe. So some of these projects, I was asking the team, can you do this in a third of the original time frame?

And they have delivered. It was truly impressive. So the Malaysia factory has really added product lines now because of this. It was already planned, but most of them needed to be accelerated. The China factory, similar thing.

Was product lines moved there, the same in Cologne and the same in U. S, all of those with major relocation projects that we have all accelerated and have largely concluded in this one quarter, which you normally would expect this to be a number of quarters for such projects. So this is not done, hence also this impact on the operating income. The largest part though there is, and I guess we’ll say a few more words about this, is around the unavoidable tariffs. We are committed to our customer.

We deliver. And we found solutions in many places of how to deliver and how to absorb costs. But when we want to serve customers, we serve customers. So a large part of this is about two percentage points is owned by tariffs that mainly occurred in April, May. They already largely disappeared in June through the conclusion of this relocation projects.

And then we had some extra costs for this acceleration of the relocations, about zero five percentage points. And then about 1.5 percentage points around FX cost impacts, which we also see trade war related, which we have been starting to compensate more aggressively with cost measures. These programs are ongoing and take effect, but you will not see this yet in the Q2 numbers, obviously. These are being implemented and they will be seen into the following quarters. So and then there’s one more effect about volume and mix.

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

With that, I jump to the expectations 2025. So overall, we see ourselves continuing on the growth track in spite of this difficult environment. We had a good order entry again in semi, RSE, auto and GD markets. The trade tensions stay. They add uncertainty, risk across all markets and they impact profitability in Q2.

So we also see some positive momentum in the markets for signals, good things. However, through this additional uncertainty, we believe also there’s a little bit of delay on investments. So semi ramp, most notably, will probably move into 2026. Automotive was another example. We also believe there’s rather an acceleration next year and similar solar.

So there’s a few of those that just on the timeline moved. In general, we believe this year is rather transitionary year. Unfortunately, again, we’ve seen some good Q1 signals, and I believe this trade disputes have just slowed this down a bit and muted it. But it’s moving more on the time line than it disappeared or anything. So we end up with a guidance for 2025 based on all of this of sales of $660,000,000 to $690,000,000 So we reduced the upper range, while the midpoint is in a similar area.

The operating income will be reduced due to this Q2 profitability impacts around the trade dispute and so on, we reduced to 18 percentage points for the full year. And with that, I conclude. The reminder, as always, if you want to know more about Inficon and all the good stuff we do, if you go to the moon, there’s more space happening, there’s more semi innovation happening, there’s more automotive innovation happening. There’s also other things that happen with our brilliant engineers and other things in the company. Follow us online.

There is a lot to be seen there. And with that, I conclude my part, and I would like to hand over to our CFO, Matthias Turnley, for more details on the financials.

Matthias Ternley, CFO, Inficon: So thank you, Oliver. Good morning, everyone, and welcome to our second quarter call. As usual, I will cover the Q2 financial performance, quickly talk about the guidance and also cover the half year results. Now let’s start. Let’s start with the highlights for Q2.

The order situation improved compared to the previous quarters, and the book to bill ratio was above one. The sales showed a slight increase versus Q2 last year and did grow by 5.8% versus the previous quarter Q1. The gross margins were clearly hit by temporary impacts from trade related disputes and reached low 43.1%. And we achieved an operating income of $25,300,000 or 15.1% of sales.

Oliver Wirsch, CEO, Inficon: CapEx reached

Matthias Ternley, CFO, Inficon: $5,100,000 and ended on a similar level like in the previous quarter and also like in the last year. Cash flow ended with a solid $18,700,000 and net cash did grow and ended by $38,500,000 after the $58,000,000 dividend payment in Q2 in April. And our equity ratio reached increased slightly and reached 65.3%. Now let me go a little bit more into the details. As you have seen in the press release, we achieved sales of $167,400,000 compared to Q2 last year.

This represents a slight increase of 0.3%. Taking into account the positive currency impact of 2.2%, we posted an organic decrease of 1.9%. Oliver did already comment the end market developments compared to Q2. Sales to the general vacuum market increased for the second time in a row and did grow by 19%. Refrigeration, air conditioning and automotive sales remained stable and the semi and vacuum coating declined by 2.3% versus the strong quarter last year.

Sales to security and energy dropped by 8%. Compared to previous quarter Q1, the picture looks a little bit better. We can report that sales did grow by 5.8% and we had increases in all markets with the exception of the market for security and energy. Looking at the regional distribution of sales on the right hand side, you see that Asia developed well, so it’s by 15% where sales to all markets did grow, but especially general vacuum showed a strong improvement. Europe declined and Americas was slow due to weak security and energy business.

Let’s go to the operational costs. R and D costs did increase by 6.3% due to our continued focus on development activities and related investments. SG and A cost did increase by 3.1%, but this increase was mainly driven by foreign currency impacts and the cost stayed tightly managed. Now turning to the margin situation. Q2’s margins have been under pressure and declined.

The gross profit margin reached in Q2 forty three point one percent and decreased by 4.1 percentage points compared to Q2. And the operating profit margin for the second quarter reached 15.1% compared to 20.2% a year ago, a reduction of 5.1 percentage points. So what were the main reasons for that? We had several temporary negative impacts, whether direct or indirect related from trade related disputes, which were cost peaks due to the tariff escalation, especially in April and May and increased basic tariffs as the main factors Transition costs due to necessary acceleration of ongoing production relocation was the second one. The third one was impact on sales volume, some temporary order deferrals and also swings in mix.

The SG and A operating expense increase was largely driven by the foreign currency impacts. As Oliver mentioned, we gave some indications of what the share is. So the tariff portion is around two percentage points, the transition cost and relocation cost about 0.5 percentage points impact, sales volume around 1% the operating expense foreign currency impact around 1.5% impact. So all impacts add up together for nearly five percentage points. Now let’s go to the income tax.

The tax expense for the second quarter was at $3,400,000 which represents a tax rate of 15.5% and is slightly lower than Q2 last year where we recorded $6,200,000 Net profit reached 18,300,000 or 10.9%. This is driven by the lower operating income and negative foreign currency impacts, partially compensated by the lower tax rate. Now let’s move to the balance sheet highlights. Our net cash reached $38,500,000 which is about $36,000,000 lower than end of last year and about $24,000,000 better than the previous year in Q2. The lower level compared to 2024 is mainly driven by the $58,000,000 dividend payout we had in April.

Returns for inventory remained stable at 2.4, and the DSO ratio had with forty seven point six days, a good and comparable level to Q4 and also the previous quarters. Our working capital closed at $229,000,000 or 34.2% of sales and with that ended about $14,000,000 higher than end of last year. The increase is driven by the change of inventory levels, which also is impacted by some unfavorable foreign currency impacts. Our operating cash flow reached a solid level of $18,700,000 nearly unchanged to last year, but could not reach the relatively high level of Q4 last year. And the balance sheet shows an improved solid structure with 65% equity ratio after 64% in Q2 last year.

So my comments on the balance sheet and Q2 results. Now I come to the guidance. After the operational adjustments we made in the last months and the our assessment of the various markets and gradually improving order patterns and some positive dynamics, we updated and narrowed the guidance and expect now revenue of $660,000,000 to $690,000,000 for the full year of 2025. With an operating income margin of around 18%, including the trade and tariff impacts. Finally, I quickly want to comment our last year performance.

And here, I can say the net sales for the first six months reached $325,700,000 compared with 321,200,000.0 for the same period last year, representing a 1.4% increase or adjusted for currency effects a plus by a plus of 1.2% organically. Similar to the sales development in Q2, the 2025 showed growth in all end markets except security and energy. Semiconductor did grow by 6.6%, mainly driven by Asia. Refrigeration, air conditioning and automotive increased by 1.5% and general vacuum recovered from last year’s swap and gained 1.1%. Security and energy declined by 33% due to the missing large public sector orders.

The gross profit percentage decreased to 46.2% after 47.2% last year, and the operating income reached $57,200,000 or 17.6% after $65,000,000 last year or 20.2% last year. Both gross margins and operating income have been impacted by the temporary tariff impacts we just discussed. The operating cash flow developed nearly stable compared to the first half of last year and reached $37,000,000 and the balance sheet shows, as mentioned, 65% equity ratio after 64% last year. As mentioned in our press release, the complete half year report of 2025 with more details is available in the Investors section of our website. With that, I would like to close the presentation.

The next events here here. It’s basically our Q3 conference call in October, and then we have followed by an analyst visit in Walthus here in Mishenstein in November. We are now ready to answer your questions.

Bernard Leiser, Investor Relations Contact, Inficon: Thank you, gentlemen. We have a nice queue of people wanting to ask questions. The first questions come from Ifert. Ifert,

Jorn, Analyst: Thank you for taking my questions. It’s a couple of questions, sub questions, please, on the margin development, if you allow me, And then one follow-up on the semi end market. But maybe I would take the margin question step by step. The first one is, Justin, you mentioned of this 500 basis points, 200 basis points are direct tariffs, then 50 basis points where the capacity relocations. And then you mentioned 100 basis points volumes where these deferrals of higher margin products.

And then you also mentioned 1.5 percentage points operating expenses, SG and A due to FX. Is this just to summarize, is this correct?

Oliver Wirsch, CEO, Inficon: Correct. Yes.

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

Oliver Wirsch, CEO, Inficon: Yeah. And that’s what I I mean, I earlier mentioned, there’s a bit of a decision that I think you can make with your customers. I think we repeatedly talked about pricing power, and we see this a bit different. Yes. We have pricing power, but this is a short term thinking.

I think for a year or two, you can price, and then you locked in, when you designed in easily. But that’s what what you do when you overdo this is you will be replaced one way or another over time. So if you really think long term in terms of your strategic partnership and we have strong relationship with all players in semi, chip makers and OEMs. So for us, the first step is not going to the price tool and increase it. For for us, the first step is having a discussion and find out what do we do.

Some things we didn’t ship. Some things we changed the shipping route, but we couldn’t do it just yet in April. Right? So there’s a couple of tariffs that we we just had to absorb. We’ll have post discussion on this after, but what we will not do is a thing like, are we not shipping you if you don’t pay us extra for tariffs or things like that.

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

Jorn, Analyst: And the second out of third sub question to this topic, please. Where exactly are the tariffs occurring? Is this from The U. S. To China?

Is it China of U. S? Are these the main routes?

Oliver Wirsch, CEO, Inficon: Yes. I mean, the tariffs that really bite were the ones between U. S. And China, right? And of course, from China to The U.

S. Historically, we have our China factory for twenty five years. Not everybody has had a China factory, and it’s very established. Also our footprint and our connections to Chinese customers, we talked about that in prior earnings releases. We had to reconfigure it.

Not everything was already moved out. Not everything we could avoid shipping. So that’s where some of these things or some of these tariffs were incurred. And the same from The U. S.

To China. We are very committed to the Chinese market. I think we can show how we grow in this market, how we make wins. We have a very good position actually there going forward compared to Western competition and also against Chinese. We’ve shown that especially in the auto market.

So there also, not everything was ready even though it was in our strategic plans. Hence also, have this zero five percentage point accelerated relocation cost that we just felt, hey, now we’re going to just do it. We steer the whole company towards this for a quarter, and now we can also go back to business and building long term business up with r and d partnerships and developing customers and all these strategic topics. So we just took a stance of ripping off the Band Aid fast and then move straight back to building up long term, if that makes sense.

Jorn, Analyst: And then maybe the last sub question. Looking forward, looking to the second half, I think your guidance implies already a material sequential margin improvement again, closer to the 19%, around 19% in the second half. So does it mean the tariffs more or less has disappeared under the recent deals we have seen? Does it mean your reallocation capacity is finished already, that you’re not subject to tariffs anymore? And does it also mean you find some the sales volumes, which were delayed, are now being shipped again in Q3 already?

And also, do you see the margin improvements going closer to 19% already in Q3?

Oliver Wirsch, CEO, Inficon: A little bit yes to all of it, but to be specific. Yes, these projects, we really push them. And as I mentioned earlier when I was talking about the global footprint, we have been successfully to relocate the largest part of it. All the big flagship products have are now in the new location. Often, it’s two locations now, right, because that’s how you serve the global market.

There’s more trade barriers and other export regulations in different places. That’s a little bit the development of the recent years, hence also our strategy there to develop this footprint. So yes, that’s what we see going away. Regarding tariffs, we’ve already seen this improvement in the recent months. So April was the main hit, May a bit less, and June was a further improvement.

So given that, yes, I would say. Also, shipments that couldn’t be shipped for this or the other reason, right, when you change a product line. It’s complicated to do the whole customs. SAP needs to move there. There is hiccups and bumps.

So these have been worked through largely, but a few more things remain.

Jorn, Analyst: I think we are now

Oliver Wirsch, CEO, Inficon: in a very good position for this scenario that we’ve seen. What we don’t know is how these trade disputes continue. They’re clearly not gone. There could be a scenario where you say it’s a bit of a more calm situation, less volatile in the second half. So you can settle in a little bit to where you’re going, But not everything is yet announced, right?

So we notably have the Swiss deal with U. S. Is not announced. I think the European agreement has been outlined but not fleshed out. There is ASEAN countries that have not all been negotiated.

I’m not the one you should ask about this kind of analysis. I can only share you our thoughts how we see it. So I see a clear improvement in the second half based on our realistic scenario. Right? We always have at least two or three scenarios.

So I believe that’s where we will land also based on the most recent months. Maybe, Matthias, if you wanna add Yeah.

Matthias Ternley, CFO, Inficon: I I I only can I only can agree with what you said? And so we expect certain belief, right, on this on the tariffs. Will they disappear? No. There will be some, but the heavy uplifts, I would say, due to this April 2, I think, Liberation Day, Eurocyprocal tariffs, right, I think this is definitely lower to be expected, and then we need to wait where and how the final final agreements will will be, right, going forward.

Will it be the 15% for Europe? Yes or no and when? And how how is the transition period? So, yeah, there should be some some relief, Definitely, also some relief on on the relocation costs and impacts. They will not stop.

There were there were still certain activities. We said it’s it’s it’s nearly or largely completed what we what we started in in q two. But there will be still be some, but there should be some some improvement and some relief, but definitely. Yeah.

Jorn, Analyst: I would just wanna I

Oliver Wirsch, CEO, Inficon: would just wanna stress that the core of Inficon is strong. And actually, I believe we have gained lot of points with our customers how we navigated q two. So you’ll have to take my my word for it for now, but let’s see how it develops into the future. I think this was a very good move. We have gotten very positive feedback of how we navigated this and also the speed of how we adapted and changed around our configurations in accordance with the discussions with our customers.

And of course, also suppliers are always very important in this. When you strengthen your supply chain, this was a trend the last two, three years. I think this really showed we have a whole different company here that can adapt to, yeah, extreme scenarios in really short time. Anyway, back to you, Jorn. You said you have a few questions.

Jorn, Analyst: No, sorry, I don’t want to occupy the line here. I go back in the queue and then maybe follow-up later. Thank you.

Oliver Wirsch, CEO, Inficon: Thank you, Jorn. Thanks.

Bernard Leiser, Investor Relations Contact, Inficon: Thank you, Jorn. The next questions come from Neish Lavrich.

Oliver Wirsch, CEO, Inficon: Hi, Nej.

Nej, Analyst: Hi, there. Thank you for taking my question. Maybe the first one on the order since we’ve covered a lot of margin. I mean, it’s above one, which maybe is a bit of surprise looking just at VAT, ASML. And certainly, positive, you’re also right, you’ve seen a substantial improvement year over year sequentially.

Can you maybe break that down a bit? I mean, how high is that improvement? Just give us a bit more color on that. That will be my first question.

Jorn, Analyst: Yes.

Oliver Wirsch, CEO, Inficon: Probably best to do it by end market. I mean, first of all, would say this, the security and energy market is a bit of a diversification factor for us, right? It grows nicely. We’ve shown that the last five years. It has its own dynamic.

It helped us last year, certainly, as it had a higher share, clearly, and it is slow this year. So if you were taking energy on the same level, right, if you remove it from this general economic development, then you could say we had a good growth this year when you look at these sectors, which just shows the resilience and the strengths of Inficon also in difficult markets. It shows also our clear focus to go for market share, long term partnerships, building this out, building on it. This is all something that comes over time. And security and energy will also come when the timings of these programs are clear.

You can imagine when you look at the security and energy market, there’s a bit of a confusion in terms of investment. A lot of money is allocated, but it’s not very clear how to spend and where to spend and what program needs to be adapting and how. So maybe that’s an overall picture. If you go through each one, I think semiconductor, in Q1, we felt this is the year where we have a where we see a broader up cycle. It looked like it.

I think this Q2 trade disputes were muting this upside dynamic and delaying it. Hence, we would see it now next year. And it’s still mainly the dynamics are the leading edge nodes, which are all disconnected with this data centers, HPC and HBM. While, of course, also memory is a bit after recovery. It’s a bit going sideways again.

Right? So this this is also we see some acceleration and deceleration in the different submarkets for sure. There is some hesitancies in investment projects and everybody looks at their investment projects under the timing twice or three times these days. But overall, semiconductor, as I said, the dynamic of how we work together with the customer, the opportunities that we see when I look at the broader strategy, we see gains of how we access more market and where we can get market share over time. So I see positive trend.

It doesn’t entirely connect back to a quarter normally, right? This is more of something that you need to look at bigger time spans. Maybe Matthias can also say a thing in a minute about the market. Just quickly, when you go for automotive, there is are good positive signals also there in Q2. Now it’s a bit muted again.

However, it’s kind of stabilizing on this lower level, maybe with some positive signals. And next year, we’ll see some more dynamic. I think the orders come from share gains at this point. There’s still, especially in the battery market, a lot of dynamics of what is the latest technology, what’s gonna be the next step and so on. On the RSC side, some of it is connected with auto.

But on the RSC side, we have more of a continuous growth that we’ve seen over the last years and also will continue into the future. And there is, as I said earlier, especially this after service handhelds, they have seen very good growth with always a couple of new subs sub markets opening up, new applications, more automation. There’s also some robotics aspect to it. So there’s a bit more of a steady growth on that end for it, whereas the other extreme is battery, which is more step and more volatile. And then when you look at general vacuum, yeah, this is a market with 20 submarkets in it.

And about half of it we serve through private label. Private label has really recovered. The general industrial market has recovered versus the trough last year. And I think we are on a level where this can continue like this. Hey.

All of these statements, we we cannot predict if there’s another escalation of this trade disputes. But the way we see it, the realistic scenario, right, that kind of view on it, we would be optimistic. There you see also our outlook statements per segment there. Yeah. I hope this helps, James, in in giving a bit more color.

Do you want to add some more Yeah. Maybe some numbers maybe?

Matthias Ternley, CFO, Inficon: I’m not sure.

Nej, Analyst: Numbers would be great. Yeah. I know. I know.

Oliver Wirsch, CEO, Inficon: I mean, you guys are not all the numbers, Nej. Right? The number guy. No. Maybe maybe a

Matthias Ternley, CFO, Inficon: few more comments. So orders developed better, as we said, and they did grow the second time in a row. So from Q4 to Q1, we have growth. In Q1 to Q2, we had growth. I think that’s positive.

And when we look at the previous quarter, I think we had also here in three out of four markets, we had positive order development. Majority really in semi and vacuum coating of the order increase from Q1 to Q2. And when we take a look where does it come from, it was mainly Asia and Europe, where we had good developments while The U. S. Was more or stable.

And but also, we had in in GPN, general vacuum on RISC. We had little bit of growth compared to Q1, which is also good. The only only market similar like like the commence for the safe side is security energy where where the, you know, the order pattern is is weak, really, I I must say, and and doesn’t show really a strong strong development in these days. But semi semi very good, I would say, and the the TV and rock with a with a good development as well. And and semi, as I said, coming from Asia and and The U and and Europe mainly.

Maybe this helps a little bit to to size.

Oliver Wirsch, CEO, Inficon: And and

Matthias Ternley, CFO, Inficon: the book to bill above one, the second time, while revenues are increasing from year one to to q two is also not bad.

Oliver Wirsch, CEO, Inficon: Yeah. It also made that jump up, right, obviously. Yeah. Good. Is that helpful, hopefully, Ned?

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

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

Oliver Wirsch, CEO, Inficon: Yes. I mean, some of this CapEx is not something right? If you look about the period of depreciation and then you have it already somewhere in your budgets, the impact is not so high. I’ll let also Matthias comment on it. Yes.

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

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

You’ve got great research departments. Right? So we we’re just trying to understand what then that next step will be. I I believe our footprint is fit. We showed it.

We’ve proven it. We can speed it up, we will absorb and then move on. This is not gonna the core of of Inticon has not changed. We could go and do some math of what hypothetically the OPEC would be without this trade disputes. It’s a new point because, yes, there is no alternate reality.

In the alternate reality, we gave you the guidance for we think for this year. The new reality is this. The new playbook is this. I believe many of the effects other companies will still see. We just try to be really proactive and forthcoming with information, but also proactive in the implementation.

So quick rip off the Band Aid move on is the general intercom way for things like that. So maybe it helps. Yeah. Thank you. Lot of uncertain certainty and a lot of low visibility.

Maybe maybe just let

Matthias Ternley, CFO, Inficon: me add one one one comment. You you asked why is CapEx slow, and you you did many things and largely completed. This really depends on what kind of road road checks and and product lines you transfer. Some are more CapEx intensive, some are less. And also, sometimes you see that that you transfer internally.

Right? Some of some of the production equipment from location a to b, so these are not really CapEx. And and then you have your tools, instruments, you have people cost and maybe training and setup costs, which are impacting the P and L and not so much more, at least in the moment, of CapEx. That’s one thing. And regarding your question, is it really largely completed?

I would say all the projects and tasks we initiated, they are largely completed. Will this be in the final end stage? We don’t know yet. As Oliver said, we already know what we know today. Will there be the need eventually to do something else, right, in the next coming months and and to think about the structure.

Could be. We we don’t know yet. I only can say we are we are ready, and we are watching this. Right? And, if decisions are needed to make, we we do it.

Right? But the the projects we talked about, they are largely completed.

Oliver Wirsch, CEO, Inficon: I think one point I wanna stress again, what Matthias just said, which will help to illustrate, right, we don’t actually have growth this year. I mean, we have growth from Inficom, but the market itself hasn’t done this ramp. And as you all know, we have been preparing second half last year to do this ramp, right, where there will be real growth, right? So when it’s cool growth, 7%, all that’s good, but we’re talking about a ramp, 20%, 30% and sometimes even more. So we are ready for that still, not all activate, not all staffed, still same thing.

But of course, you can then when you move a product line, you take that product line from one place, ship it over to somewhere else. It doesn’t need more equipment. Plus we would even have more equipment from this ramp if we needed it. But again, this acceleration of this semi ramp isn’t happening this year, looks like. It’s just good solid growth on this basis where we are that we’re currently showing.

So you don’t need necessarily a lot more CapEx, if that makes sense, right? Because also the buildings there, when you think buildings, we need to think two ramps or three ramps ahead, meaning five, ten years plan. So so we have the buildings. We have the location. It’s part of our long term strategy.

So so if this is about what you put in there and what you’re really making there, more than mix of what happens in the building, if that makes sense.

Nej, Analyst: Okay. Thank you very much.

Oliver Wirsch, CEO, Inficon: Sure.

Bernard Leiser, Investor Relations Contact, Inficon: Thank you, Nej. Next questions come from Martin Compasse. Martin?

Martin Compasse, Analyst: Yes. Good morning, everyone. Hey.

Oliver Wirsch, CEO, Inficon: Hey, Martin.

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

Matthias Ternley, CFO, Inficon: I think let me try to explain a little bit the FX index first, and Oliver can add. Well, it’s relatively simple, I must say. We as you know, we have some exposure on the Swiss franc side, and we also have some exposure on the euro side. And when we take a look to the currency development year over year, I think there’s a 11% change in in currency, Swiss franc versus US dollar. 11%, that’s a big number, right, through q two to q two, and we had about 7% change in euro, which is the other currency where based on our European business and the Cologne business, especially, where we have also certain exposure.

And these two currencies mainly mainly drive the the currency impact we talk about.

Martin Compasse, Analyst: That’s helpful. I’m just trying to what I’m what I’m trying to get to is basically what Jorn already mentioned earlier. If we take the midpoint of your new guidance, you’re basically implying an 18.5% margin in the second half. So meaningful step up from Q2, three fifty basis points or so. So if I look at the individual moving parts, 150 basis points FX, which is likely not going away in the second half.

We all don’t have a crystal ball, but for now, we we would expect currencies to stay where they are. Accelerated relocation, 50 pips is gonna be done mostly. Sales volume, okay, done, but that still leaves me with, you know, quite a difference for you to move from 15% to 18%, 18.5%. And I did understand that you will likely continue to price, or share the gain with your clients in terms of the direct tariff impact, which was 200 basis points. So what I’m just trying to get to is how quickly can you get back realistically get back to the 48% to 49% gross profit margin?

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

Oliver Wirsch, CEO, Inficon: Yeah. I think I will say general, and then maybe Matthias can give some more qualitative numbers. Hey. Look. The the Indigo model is still a 20% plus OPINK model and the one where we continuously try to further improve.

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

In terms of ethics, mean, strong Swiss franc is never really good for Swiss companies. We have seen that in the past. We are much less exposed. If you look at our Swiss location, as you know, it’s just one of three big ones or one out of 11 competence centers. So we’re much more diversified.

That’s why we also typically are have a much higher natural hedge on FX. When you specifically look at, for instance, Swiss franc development though compared Q1 with Q2 and or also Q4, it’s a bit of an up and down. So yes, I know we kind of ended up at this very strong Swiss franc overall, but the dynamics are still higher than the situation would generally suggest in Q2. So there might be improvement on it. But I would also say, on short term, more densifies, but in general, long term, we try to manage this strength of this currency, specifically the Swiss franc, for instance, also the euro to some degree with this relocation and cost optimization.

So don’t know how quickly this will materialize or how quickly the effects effect will go reverse. But I look at this with a relaxed perspective. I think this is manageable. We’ve seen this before. Again, we do not have a one concentrated location or two big locations.

We are more diversified than that. If you compare the profile of our cost with the profile of our revenue, it’s relatively balanced. The only thing is there’s not many customers in Switzerland for semi or auto, right? So that’s the one thing that we need to watch a little bit. But again, for that, we also have this reconfiguration projects longer term, and we stepped it up a little bit because we do expect it to be a bit stronger in comparison.

So I think we can work through that. I would not worry about 2026. I mean, the last three years were difficult to estimate. So how do I make a statement for next year that ages well beyond a couple of months? Right?

But if I look at next year, I really can look at it with optimism in spite of everything that happens in the world. The technology pushing, there’s a lot of new innovation from space to quantum computing to all these new tech nodes and semi. We are right there. We’re right plugged in. There’s a lot of new application and sense technology coming online.

Data analytics is on fire. Oh my god. There’s new products that we’re making there and the stuff that’s happening. All markets look like they grow next year versus this year. This is not guidance.

This is just the general feeling of how the development is based on what I said earlier. Hey, there’s reason for optimism even though we’re in the middle of a storm, frankly, because underlying factors haven’t changed, actually. I think they could even you could even say they have improved. So no reason for for negativity or too much to navigate it. That’s what we’re doing here at Impiccone, but, hey, we are as excited as ever about our business and about our opportunities, frankly.

Is isn’t it a great time to live? I mean, all the stuff we’re doing? We just have a brand new project I cannot talk about about the moon and all this stuff in in tech with AI and, you know, you can read my LinkedIn. I did my own coding projects with two bots this summer. Super cool stuff.

Anyway, sorry. But that you thought asked me about what’s in the future. I’m excited about it. As much this is a bit miserable, I get it. But this is not going to the core.

Right? It’s not changing anything. It’s not gonna knock off anything. It’s just plowing through. It took the Band Aid, move on.

It’s fine. Execute further. Actually, rather more opportunities than less, frankly, when you compare to q one. And you look at the loss perspective. Yeah?

So

Martin Compasse, Analyst: That sounds very good, but you know how dull we are at

Oliver Wirsch, CEO, Inficon: the capital market and always just look at pure numbers and I saw you. You guys you when we talk about the tech stuff, I see sparkles in all of your eyes. I know we both have to right?

Bernard Leiser, Investor Relations Contact, Inficon: We have

Oliver Wirsch, CEO, Inficon: to do numbers, and we also talk about the exciting stuff in the industry. But, again, I wanna stress not that that it’s too much go off with attention. There’s optimism to to have for next year, I think. That should be the general statement. And while trade dispute settles down, these big drivers, they have actually accelerated.

So, yeah, so everything is a little later. That’s all. Right? Sure.

Martin Compasse, Analyst: It happens to pop Maybe just a Yeah. Just a Go ahead. A small follow-up here. The two do I understand correctly that the 200 basis points, the majority of that direct tariff impact is something that you would expect to see go away already in the course of the second half? Or is it that this

Oliver Wirsch, CEO, Inficon: Yes. It already has. The impact is mainly in April and then it was a little in May and and, yeah, then even further improved in June. Again, who knows? Right?

And when we do sudden movement in policy, there’s gonna be some kind of bump and scratches and bruises, but it’s temporary nature of it. So I I think this you this is not in a realistic scenario, you don’t see this anymore this year. So so this is this has been this largely around decoupling logic I explained.

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

The semi is certainly a

Oliver Wirsch, CEO, Inficon: big thing. Right? Also, why we clicked off the upper part there. We just don’t see this upside. I mean if you look at how we try to communicate, we try to communicate early and what we know.

And so we already in full year presentations, so two earnings release back, we talked about this year maybe not being as exciting as we all hoped for, right, with a full fat semi ramp in the middle of it. And I think then in Q2, we continued this. So this is basically a bit of a confirmation on a little bit the lower end scenario of the ramp is just not really materializing this year. And so that is the main factor. And there’s some others, right?

I mean, automotive in Q1, we saw good signals, as I mentioned, and there was a few other things. At one point, even we felt solar maybe is also going to happen next year. So that’s just why this whole guidance now is also on a similar comparable level with like last year. I mean you see the resilience in it and you could say we’re doing a growth if you take out this SME market, which has its own dynamic. Right?

That’s a little bit what I tried to explain earlier in the discussion with NASH, but it’s not broad based. Right? So hope that that helps.

Martin Compasse, Analyst: Thanks. Very clear. I’ll go back

Oliver Wirsch, CEO, Inficon: to the queue. Thank you, Martin.

Bernard Leiser, Investor Relations Contact, Inficon: The next questions come from Michael Firth. Michael, please.

Martin Compasse, Analyst: Hi, Michael. Yes. Hi. Hi, everyone. Just two quick ones for me.

The one coming back to your last answer. There are a lot of fab projects out there in semiconductor. And I’m just trying to understand what’s triggering this delay that you are seeing. I mean, you’re not the only ones, obviously, the whole industry is seeing. More specifically, from a fab project perspective, if you can help us, what is triggering that delay specifically?

And what makes you confident that the ramp is going to come in 2026? That’s the first question. And the second one would be if you could give some granularity on your semiconductor sales in terms of the demand from OEMs versus end users and sensor solutions versus you know, software and FAB card? That will be helpful. Thank you.

Alright.

Oliver Wirsch, CEO, Inficon: Yeah. The let’s do it one by one. So first, about the fab projects. Generally, they’re all still there. And, generally, everybody’s planning to implement them and and many are in implementation.

Right? Obviously, we have good orders out of Asia, China and outside China with the big players that you know well. Don’t need to catch up. Some are plowing ahead at the front. It’s a mix.

And then in China, there’s a bit of a different dynamic always. You see a lot of displacement of OEMs, of Western OEMs there, good growth, also more resilient than we maybe thought. So but on on the fab projects, this is just some investment delays mainly, very few cancellation. I mean, the most notable one is probably Intel and Marktogor. It is a long time coming.

Right? We kind of had to expect this. And then then there’s also some financial troubles that some others got into. That is mainly where maybe a cancellation happens. All the other projects, the assumption is this is going to come.

It just shifts a couple of quarters generally in the average. Right? This does not mean every project is moved, but in the average, right? So I’m a little bit further from comes just a quarter later. That’s a bit of flavor.

And you see this also with the top spenders in CapEx that they look at the project twice. I mean, wouldn’t anybody understand that? We do that as well at Inficon for our microscopic CapEx projects. In comparison that we look at it twice in this time. Why?

Because there’s lot of uncertainty. Do I need this capacity really or when do I need it and so on, right? And where do I need it? So let’s do another round of discussion and that’s what we exactly also see with our customers in both, actually, end users, chip makers and tool makers, we see these effects. Again, believe this is rather a delay.

Actually, most of it is rather delaying and a little bit wait and see until this trade dispute settles down, I think. But all of them are super confident on midterm plans, r and d projects. Everything strategic is full on plowing forward. Frankly, nothing has changed. I think, again, the underlying drivers are there.

Consumption is not super exciting, maybe you could say, and that’s something that also makes things a bit slower. So maybe another factor. We have one super exciting application, obviously, with AI really finding proper applications now and and really shows first productivity gains, and that’s something that will further expand, but it is still narrow at this time. Right? It’s not pro paced for for everybody in in the semi space.

All the OEMs and all the gymnastics are not profiting from it. And then maybe often we had other killer applications out there, right, where where maybe a new consumer product would really plow ahead. And and and they are in the works, but it isn’t here yet. So so maybe to a little bit give you the picture of the dynamics there. Where our growth is coming from, it’s similar to what I explained in last year a lot.

We look at the semi market as a number of submarkets, and now we almost need to look at customer by customer because they’re kind of different dynamics. Some need to catch up. Some need to catch up in one area. Some need to plow ahead. Some make a move into a new space.

And so all of them have something strategic, technologically wise they’re working on and that scales up in some places already or is a full step, like the really leading foundries. But there’s also, in some areas, it’s a bit slowed, as I mentioned earlier. So I mentioned there’s some good dynamics in China OEMs. I think we have seen chipmaker dynamics last year in China quite a lot. Then we see in Asia, in general, a good trend this year in China and outside of China.

Europe could be more dynamic. It’s not bad. Of course, there’s one big name or one big OEM that that is a bit slowed, but it’s not a broad based dynamic. And in US, there is maybe some way you can see there. I mean, this is the mid the epicenter of the trade dispute and then maybe calls for more uncertainty to some degree and and hence, there’s more thinking.

But again, there, when we talk with our strategic partners about strategic projects, there’s no delay. There’s no question marks. The the the move ahead, but it is a very fragmented picture. Right? The visibility is low.

And and, again, each each customer has a couple things that are almost ramping and a couple things that are bit in adult drums. So that’s why you get this very murky picture overall. I hope this helps. It doesn’t it’s not it’s not so easily to give you the list and pinpoint it. Right?

Apology. We would love to have that too. Maybe next year when this gets more robust and everybody scales it up, then then that will happen.

Bernard Leiser, Investor Relations Contact, Inficon: Thank you.

Oliver Wirsch, CEO, Inficon: Sure. Certainly. Thanks, Michael.

Bernard Leiser, Investor Relations Contact, Inficon: The next questions come from Michel Rinowen.

: Yes. Good morning, everyone. Thanks very much. Just two questions actually. I was trying to understand what you make of the tariff, let’s call it, solution or tariff deal that we have between the European Union and The U.

S. I mean, there’s still 15% tariffs now. It’s actually, yeah, a lot. I mean, it’s better than what was probably anticipated, but it’s still a lot. So I was wondering with your production in Germany, if there’s any impact with that.

And the second one, trying to understand a little bit the the fact that you basically took some tariffs from your customers as I understand it. We had a similar situation I remember during COVID when you also shared the pain with your clients on on customs, for example, and and it’s higher cost in general. Over Brexit. Yeah. Yeah.

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

Thanks.

Oliver Wirsch, CEO, Inficon: Yeah. Sure. Look. Now there is no real pressure. I think on short short notice, everybody can go and raise prices.

And some suppliers did it in the last time when when we had this high inflation three years back, and guess what? They’re all replaced. It’s like when you do this at home. Right? Somebody makes the remodeling of your house and really rips you off.

You’re never gonna go ever invite that contractor back into your house even if you pay more somewhere else. And this is the way how we look at strategic partnerships. It is always a discussion. The first thing when Liberation Day happens and the whole management team actually was channeling at the time and actually talking to customers, and it happens coincidentally even together, we first talk to the customers. That’s the first step.

So how are gonna navigate this? Like everything else, that’s partnership. If you send them a letter, here’s the price increase, they will say, no choice. We’ll do it. But you for sure lose brownie points.

So so, yeah, it’s not a bad comparison, honestly, back then when we had this increased chip costs. The choice was always first we need to ship. Everybody was in expansion there. Right? Some of our product lines, they actually quadrupled in volume.

You’re not gonna go and hold back and make a negotiation. It will not ship. Some of our supplier did that. Some of our board suppliers did that. I mean, it’s clear what you do.

Right? There’s an entire team that goes and replace them as fast as possible. So so back then, also, we we focused on shipping. It’s the same behavior. It’s the DNA.

You don’t change the DNA of a company quickly. Anyway, I like the comparison a lot on the stream, Michael. This was not a big discussion in the team here. It was more about, hey, what’s first? What’s not important?

Who does what? And and frankly, I’m always a fan of when the CEO doesn’t have to say much, but people do the right things. Because what then happened is that we all set up great teams that care about their business and that go for it. They make mistake, but they’re moving fast, they do it to their best knowledge. And that’s exactly what happened in q two.

I’m immensely proud of how they reacted. And so they moved on. And yes, for some things, we need to have a discussion. Have price increases, but we did that with deliberation and with discussion. And first, it’s about the strategic wins and then it’s about compensating short term OPINK profitability topics.

Right? That’s always the right place you want to be in the game. We’re in the game for fifty something years. So so we’re not gonna go away. They’re not gonna go away.

It’s like a family. Right? So so you still invite the old uncle to Thanksgiving or to your barbecue in summer or to your birthday party. This is how it is. Right?

So but but then some some guys maybe like more and you do a little bit more with. And we would like to rather be the guys that are easy to make business with, do innovation, to really wow them on how we solve things, and so that’s how we navigated this. Now I hope I answered your question properly. Was it good enough?

: Yeah? Alright. Yeah. No. It’s just, mean, it’s just important to understand, I guess.

That’s because exactly the the COVID situation was somewhat similar, I mean, completely different, but still somewhat similar. So I’m just trying to make sure that you are not really under pressure.

Oliver Wirsch, CEO, Inficon: No. In crisis, you see what your team is made of and how much do you need to manage yourself. I think that’s exactly comparable. I like it. Thanks, Michael.

: Thanks. And can you say something to the European US deal? That was

Oliver Wirsch, CEO, Inficon: still the question. That’s right.

: Yeah.

Oliver Wirsch, CEO, Inficon: Some of this we expected. I mean, we were at 10% and then liberation, it was 20 and and the letter was 30. So the general tendency seems to be there is generally more tariffs between trading blocks and and or or general barriers. This seems to be the new world, right? If you look at the analysis, what happened the last one hundred years, we always reduced them everywhere, pre trade agreements and so on.

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

We found out it’s not 30%, it’s 55%. Because carriage stays, this bond stays, this is a special character category, some even fell away. So we need to analyze what it truly means, And sometimes they also fall away. It’s not only more. So we look at it, but 10 or 15 is is a similar kind of range.

Hey, I’ve got reconfiguration of our footprint will continue. That is part of our strategy. Now for the last three, four years, we built this capability up. So yes, we might move something out of Germany to The US or to China based on this, but these projects that are already ongoing. So this is not as dramatic as this Liberation Day shock with with the with the upgrades to it, right, which are we’re at 50 something percent of tariffs from China to The US.

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

So we also had to expect maybe 30%. And and so in that sense, it’s better. You can see you you and US trade policy and agreement. There’s a shift there. Right?

We’re also studying this closely. Where will this really end up with and what really stays long term and what will not? We look at this different than between China and US from our humble view. Right? Again, please ask the real experts about policy or global trade policy, but we believe there’s solutions to be found only between these two blocks.

And and and some things need to be worked out. Might be still a bit bumpy in the next months, but but they will be working some things out. Yeah. I hope that helps. This is

Matthias Ternley, CFO, Inficon: It’s a long discussion, but just let me add. Right? Sometimes we say, well, tariff. Right? And tariff is an easy word.

Right? Five letters or but it’s really complex. Right? What’s what’s really behind it. So there were so many dependencies and and and rules you you you need to understand, you need to apply.

And and also very much depending is, of course, who’s paying the the customs, right, or the tariffs. Right? And and number one is this is all defined mainly in in the legal terms. So the ego terms define a lot, right, who’s really paying, who’s importing the goods. That’s one thing.

And then there are so many other aspects. Right? Will the goods be be brought out of the country again after a couple of days? And then maybe it’s also And and all these things, we we must watch and analyze and and try to get a good understanding, and then we can judge and basically what what we said earlier. Of course, we watch it, and we need to watch, and then we need to make the right decisions, right, when when we have a a clarity some clarity, right, what could be the impact.

And as Oliver said, even today, right, two days before the official day, I think, August 1, we don’t know what’s the agreement with Switzerland and the eventual issue, we don’t know yet. And what we will see and then we look at our structure, our product streams and product flows right into the world, and then we need to to make the right decisions.

Oliver Wirsch, CEO, Inficon: Yeah. That’s very good additions that Matthias made here. Just to show you complexity of it. It really breaks down in a complex process, and then there’s also the customer discussion who share who does what, or do we change the revenue stream or the shipping stream or yeah. And then we’ll work through it.

But it it it shouldn’t be that extreme. It’s not a great deal. Right? I mean, we we are fans of the the world before where there’s a couple percentage between the blocks, especially the major trading blocks, right, excluding maybe US and China. That is good, right?

Free room to operate, not too many tax burdens and regulations. It’s obvious, right? That’s the easiest to make business and grow business. But then we we the the world is what the world is, so you can navigate where you are. It’s the same rules for everybody.

Right? And I believe we are just in a very good place to navigate this. So we remain confident whatever it will be thrown in us. That is good to hear. Thank you very much for that.

At

Bernard Leiser, Investor Relations Contact, Inficon: this moment, I don’t see anyone else wanting to ask questions. So maybe this is the point for closing remarks.

Oliver Wirsch, CEO, Inficon: All right, then thank you very much everybody for your interest, for your continuous support and we meet again soon in a quarter, interesting time And as I mentioned earlier, also very exciting times at the same time. So I would say the same thing. We remain confident and optimistic here and see what the future brings. Then with that, we meet again soon as Matthias has outlined in the next dates for the next earnings release and other events we will participate. Thank you very much, and have a wonderful day.

Talk soon. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.