I think we should start. It is now two minutes after 2:00, and I think big majority is already in. Again, good afternoon, ladies and gentlemen, and warm welcome to the IR follow-up talk on the first half of 2026. With me, as you can see, my colleague Laura. Some housekeeping rules at the very beginning. I think it works now. Everybody is on mute, and if you want to ask question later on in the Q and A, please raise your hand and unmute yourself, and then please switch on the camera so that we can see you when you ask your questions. Before we go over to the Q and A, just a quick update on last week's or quick summary of last week's call and results. As said, after that, then the Q and A.
Just a hint for you, we will try now to record or transcribe this call for internal use. If you do not want to have that, please let us know. Again, as said, before we move straight into the Q and A then, just a brief summary of the key point. Oh, sorry. Now back again. To start again, before we move into the Q and A, let me briefly summarize last week's key points from the earnings call, and then we start to discuss these topics in the Q and A. Overall, the first half of 2026 developed in line with our expectations. Despite the geopolitical and economic uncertainties in some markets, and of course, also noticeable currency effects, especially in Q1, we continued to grow. We held the profitability at a high level and confirmed the outlook for the full year.
Crucially for us, the underlying demand for our cooking systems and solution remains intact. The structural demand for efficient and automated cooking systems is really high, in particular against the backdrop of the ongoing shortage of skilled workers in the hospitality sector. Let us come to sales revenues performance and the regional development. Sales revenues came out at EUR 642 million in the first half, and this corresponds to an organic growth rate of 8% or 6% reported growth after currency effects. In the second quarter, revenue stood at EUR 324 million. This is 4% higher than in the previous year, and here we had no relevant FX effects anymore. Important to note here is that the first quarter in the U.S.A. was supported by pull forward effects linked to the pricing measures, which was then, of course, missing in Q2.
We estimate these effects to have amounted to around EUR 6 million-EUR 8 million, and overall, this paints a consistent picture for the first half of the year. Solid growth, demand was robust, and the performance more or less was in line with our expectations. Regionally, Europe remains the key growth driver. Germany grew by 9%, as did the European markets outside Germany. Here, Austria, Spain, Scandinavia, Switzerland, and Eastern European countries, amongst others, performed particularly well. In North America, reported growth stood at 4% but was around 10% on a currency-adjusted basis, so organic growth. For us, the U.S. market remains the most important growth market in the long term with this huge untapped potential. For the second half year and also for the future, we expect further growth here in the North American territory of around, let us say, 10%-15%.
Double-digit growth should be realistic here. Asia, on the other hand, was weighed down, particularly by China. There, turnover fell significantly, mainly due to the conversion by Yum China to increasingly source combi ovens locally. At the same time, we also see positive signs. The so-called street business is performing quite well. Sales team or sales organization for the iCombi One is now mostly in place. Dealer development is continuing as we know it from RATIONAL in former times, and we already have secured a first key account tender for the iCombi One. In the short term, China really remains challenging, but in the long term, we continue to see here really attractive opportunities. Other Asian markets like Japan are performing well, and adjusted for currency effects, we even see good growth rates in these markets.
When we come to products and innovation, at the product level, the iCombi remains, of course, the backbone of our business with a revenue of more than EUR 560 million and 5% growth. The iVario, the smaller part of the business, once again performed significantly more strongly, growing by 14% to close to EUR 80 million. This is in line with our expectations. As the market penetration for the iVario is still lower, this means there is a bigger opportunity to grow and therefore higher growth rates. On the iHexagon, we are still not publishing detailed figures, but as said in the call, we are satisfied with the development and, of course, we are also seeing an increasing number of users confirming all the benefits of the technology in practice, as we saw in this movie in the call.
Another important highlight in Q2 always is the National Restaurant Association show. The NRA show in Chicago, which is always an important barometer for the mood in the industry. We held 52 arena shows. As Peter said, we generated more leads than in previous years, so this is a positive development and we received very good feedbacks from our customer here. This underlines the potential and, of course, the strategic importance of the U.S. market. When we look at earnings costs and the balance sheet, before we go into the figures here, please let me give you one hint on the booking of the tariff refunds. These amounted to around EUR 14 million. At first, as we communicated, I think in the last meetings, we intended to book this in the other operating income line.
But after getting some statements from auditor organizations, we then decided to book it as a deduction from the cost of goods sold, as they recommend and as also our auditor recommends. This means that this refund positively affected the gross margin, which then came out at 59.8%. So 80 basis points above previous year's level. Adjusting for the tariff refund, the gross margin would be at 57.6%, so 140 basis points below H1 2025. This is then reflecting the higher cost levels we see mainly for the logistics and for the tariff expenses we were facing. EBIT rose by 11% to EUR 170 million in the first half, and the EBIT margin stood at 26.5%, so its highest level now for a few years. The one-off effect from the tariff refund in the U.S. was also significantly increasing the EBIT margin.
Without this effect, the EBIT margin would be at around 24.3%, which is in line with our guidance. Due to the seasonality we see throughout the year, it is normal that in H2 the EBIT margin is lower. The range of 25% - 26% would be realistic even without the tariff refund. For the full year, we expect tariff expenses to amount to around EUR 28 million- EUR 20 million. For 2027, this burden may be slightly higher due to the growing U.S. business. You know in general that as a matter of principle, we try to cushion all the cost effects through efficiency gains. We are now reviewing maybe possible pricing measures. We do not rule out this in case of the cost levels remaining that high, as we also see costs for steel, for material, for electronics increasing now.
In terms of the operating costs, we are continuing to invest selectively in strategic priorities. R&D expenses rose by 7% and sales and service increased by around 5%, while at the same time we remain very disciplined regarding the costs not directly related to sales, which is mainly the admin costs that are more or less stable. Balance sheet remains still very strong. Higher inventory levels that we were seeing are primarily due to the new warehouse in Dubai and higher stock levels in overseas markets to ensure now delivery capacity. Higher levels of accounts payable are rather a balance sheet date effect. When we look into the over, then we go into the outlook. For the full year, this means we are confirming our forecast. We continue to expect revenue growth in the mid to high single-digit percentage range.
For the EBIT margin, we are holding the range of 25% - 26%, but due to the tariff refund, we currently expect to be rather closer to the upper end of this range. With this, let's go over to Q and A. First question, Opie. Where is-
Hi, Stefan.
Hello, Opie.
Hi. Three questions from my end. Maybe just on margin. I know you've talked about it a bit, Peter did on the call, but sort of effectively if you assume 26%, the high end of the range effectively are 25% for H2, which is 2% lower. Do you mind just talking through key drivers there? Is this 25.5%, if I do the right EBIT margin to be thinking for H2 implied? My second question would be backlog. I think Peter said you're going into H2 with a bigger backlog than normal in the U.S., but also the key accounts in China. Do you mind just giving some sizing on those if you can? Lastly, on pricing, have competitors done anything in pricing in the U.S. given the higher costs they're facing as well?
Let's start with the margin question. I would say, as you said, the 25.5% is maybe a realistic ballpark number to assume for H2. Compared to the 24.3%, which we would have without the tariff refund, maybe this is, let's say, sort of a region where we say this is an increasing margin compared to H1. But then of course, plus the EUR 14 million refund, this would then mean, as you said, 26% flat. From that point of view, I would say this ballpark number is quite okay. Backlog, we announced that the level is around EUR 10 million-EUR 15 million elevated compared to former quarter ends, which means we were not able to really deliver all the high order intake we saw in June.
This will be at least partly feelable in Q3, this should support a little bit or be a good starting point into the Q3. So EUR 10 million-EUR 15 million was here the ballpark number. Regarding pricing, I think here we are still in discussions. It is no final decision yet at which magnitude, at which scope. Will it be global? Will it be selective? Will it be, I would say, rather in the lower single digit range? Otherwise, we do not have the final decision yet. Will it be on what product groups will it be? I think there is different scenarios. The board is now playing here in order to find the right decision, but there is no final decision we can communicate today.
That helps. Just on pricing, have competitors done anything on pricing?
Our competitive. Yeah, sorry. We didn't see anything so far, let's say it that way. Sometimes, pricing is played over the discounts. You don't change list prices, but you maybe to some extent change your discounts. This is something from the outside perspective we cannot see, but there is no list price changes we know so far.
Okay. Thanks very much.
Thank you.
Maybe I'll jump in with a couple of questions. So maybe just on the order backlog, should we extrapolate really anything from the June strength? You flagged the NRA fair in Chicago in May, so I'm just not sure. Should we see this as having a boost on your order backlog? Is that explaining a lot of the order backlog strength? That's question one. Question two, just on the China weakness you flagged. Is the underlying message unchanged on iCombi One, meaning no significant contribution this year? Is there a risk in your view that the product doesn't meet your internal targets based on what you've described on the key accounts in China? That's question two. Then just thirdly, just on the sales and servicing cost.
Just if you could give us a sense of the share of sales cost versus servicing within that line on the P&L would be helpful. Thanks.
Just a moment. Okay. So backlog, if I understand you correctly, you think whether we should extrapolate the positive effects from Q2 into the rest of the year. We would say maybe rather not. Sometimes it's a fluctuation you have, especially sometimes at quarter end, so that a March or a June is very strong and then you see we were not able to deliver this, and then this will be washed out maybe over the next month. So from that point of view, I would not extrapolate that.
Okay. Maybe just to complement, you mentioned the NRA in May. So I'm just wondering if that boosted the order backlog in June, basically. I don't remember when it was last year, so just-
Okay. It's always at the same time.
Yeah.
Approximately. It's not a special impact from the NRA show now-
Yeah.
Compared to previous year. That China weakness, there's, let's say, the three important parts we are having here. On the one hand, the quite subdued consumer sentiment we are seeing still in China. On the other hand, let's say that we are now lagging a little bit behind in building up the sales organizations compared to other markets. This is an ongoing process we are seeing now. And the third thing is that China was changing its purchase behavior toward more local sourcing. This is, of course, impacting us for sure. And we think with the iCombi One, we can here counteract to some extent, on the one hand, that we are addressing more price-sensitive customers with a cheaper unit, which is, of course, less powerful compared to the iCombi Pro, which is still for sale and which is still relevant for many customers, of course.
From that point of view, we think we can counteract here in a positive way. And whether it will be then in the end perceived by the customers as we are expecting, this is something we will see. Now, we see a first tender we won, as we said, a bigger tender with a key account. We see a continuous development now, and from that point of view, we are quite satisfied with the development. And we will then learn maybe by the end of the year or so, or in fall, that we say, "Is everything running in the direction that we expected, or do we maybe need to make some changes?" This will be assessed then.
Okay, cool. The third one on sales and servicing costs.
I think sales cost is around 19% or so of sales revenues, and 4%-5% or so is servicing, but I just need to check. Do you have it, Laura?
While Laura is looking for that, for the CMD, I understand we should expect a virtual event.
Yes.
Basically, the focus will be just if you could give us some color.
Yes. The CMD, we are planning, after now a few years that we had really live and we got some feedback that maybe we really should need to present something new, that it is worth traveling for the people. We had the idea to go over to, for this year, to do a ConnectedCooking, sort of a ConnectedCooking webinar, so virtual products. Of course, then followed by a Q and A session, like always, that you can ask any question you think is relevant here. But in order to give you an impression of the world of ConnectedCooking, which is, I think, quite relevant these days, more and more is helping.
Next year, hopefully everything works out well with the new service part center, so that in 2027, we can then welcome you back in Landsberg and show you some news here at the Landsberg location.
Thanks.
Okay. Service is around 3% of sales revenues, and sales expenses is around. Sales and marketing is around 20%. Opie has another question. You are still mute, Opie, I think.
Sorry. Two questions. One is on Germany, and one is a follow-up on tax. I think Germany Q1 was quite strong. Q2 is reasonably strong as well. But actually, from H2 last year, comps are getting quite hard. How should we think about an H2 this year? I know part of Q1 was due to a one-off from a dealer restocking, but was the strength in Q2 actually more underlying demand versus a one-off event? Then for tax for this year, do you mind just helping us think through how to think of the rates, just because last year was slightly higher than normal, and so is 24% the right-
Yeah.
Number to be thinking of?
Yeah. I think on Germany itself, there is not that one special effect that we are having. It's in general a broad good development. I think with some dealer stockings, you always have this to some extent, and then this is gone, and then they sell off the stocks they are having. Maybe in H1 in total, this is maybe not this big impact anymore. We had really for the German-speaking area, in Austria and Switzerland, for example, we had bigger tenders from supermarkets. This indeed helped here to realize this overproportional growth. All over Good development here. Sometimes you have this case that you say there is not the one reason, it's really in general a broad good development. When you remember back, maybe I think two or three years in Germany, we shrinked.
Then the explanation was we don't have the one explanation for this right now. Here sometimes, the good work you did, maybe the month or the years before are bearing fruits. Afterwards, maybe you work harder on onboarding people, and then you see this in a negative sales development maybe a few months ago, because you invest more in internal things. On the tax, we have these fluctuations. We, in 2024, I think we had a very low tax rate because we capitalized some deferred tax assets in Switzerland. This is in connection with the Swiss tax system we are in, where we were able then to capitalize some deferred tax assets, which we needed to depreciate, or is amortize here the right word? I don't know. In 2024. The average is approximately the tax, we would assume now for the next year.
It depends then on local developments and whether we need to amortize this asset. From that point of view, here there might be some fluctuations, but the average rate, I think it's 24- point flat percent approximately is something realistic.
Okay. And maybe just on DACH actually, was the strong supermarket orders, was that iHexagon or was it quite broad-based among the product groups?
No, I would say in supermarkets we mainly see iCombi.
Okay.
Perfect. Is there any more questions?
Hi, Stefan. May I ask a question?
Oh, hello, Marcia.
Hi, how are you? Nice to see you.
Good. You?
Good, thank you. Maybe just a follow-up on Germany. What should we, because obviously this has always been a more mature market, so in our models we've always had it more mid-single digit growth, and the growth has been coming in very nicely. How should we model it going forward? Do you think that these levels of growth that you've seen in the last couple of quarters is sustainable, or is there a reason that we should revert back to mid-single digit? Is the first question. On North America, basically, if I understand correctly, the backlog that carries over into Q3, it's roughly maybe a 6% contribution in the second half. If you say 10%-15% in H2 for North America, then that means, yeah, underlying it's yeah, 4%-9%.
Yeah, similar more or less underlying growth that we saw in H1, then the push forward from H1 into H2. Is that the way to think about it?
For Germany, maybe first. In the long term, we still expect the lower single-digit growth. At the moment it is really exceptional high, we would say. We are very happy about it, but for the long term, we would rather say that we are satisfied with the lower single-digit.
Yeah.
Growth rates in Germany.
On the U.S., we are talking about, let us say, organic growth levels, meaning, we had now 10% organic growth in the U.S. in H2. In H1, sorry, and for H2, we are expecting more or less the same, so that we are staying in this magnitude of the 10%-15% growth rates for this market as the potential is there. I hope I understood this correctly.
Okay. Because you said 10-15% in H2. Yeah, no, because I thought the orders that you couldn't book in Q2, they get pushed into Q3. That's, yeah, technically they were Q2 orders. And then the underlying, and then there's in addition to that.
Yeah.
The run rate underlying growth that you should see in H2. So that's how you get to the. It's about-
Yes.
Because the low double-digit million is like a 6% contribution to H2, roughly. So is that how you do the math to get to the 10-15%? Maybe you can help us, yeah, bridge it, how you get to 10-15%, why you're thinking 10-15% for H2.
Because this is the long-term assumption we are having, and I think whether it's 10, 11 or whether it's 13, although this is then on short-term topics. This is sometime maybe the EUR 6 million-EUR 8 million will be maybe partly. No, sorry, the EUR 10 million-EUR 15 million-
Yeah.
Which is partly in the U.S., will be then again partly maybe seeable in Q3. From that point of view, it will be within this range, in terms of the fluctuation, I would say.
Okay. Thank you.
You're welcome. Opie.
Just on margins and sort of component costs. I'm just wondering, do you have to sort of raise prices in other regions other than the U.S., or sort of the U.S. is really where you're seeing the brunt of higher costs?
This time, this is rather a global topic than just a U.S. topic. If we are talking about a price increase, my personal assumption here would be that we talk about a global price increase and not just on the U.S. But we will see the decision. I think scope, magnitude, product groups, regional scope, product groups, there is different scenarios on the table. But it will not be selectively for the U.S. this time.
Okay. Thanks very much.
Okay.
Maybe I will go with just a follow-up because I got a little confused here by one of the answers. The message on the order backlog at the end of Q2 was that basically your EUR 10 million -EUR 15 million above normal, right?
Yes.
Okay. Yep.
Yeah.
Just wanted to double-check that. Thanks.
Okay, perfect. Is there any more questions? Okay, perfect. Then if not, I would say thank you very much for joining the call and for staying in contact with us, and I hope we will meet again in November, at least in the earnings call. Until then, I wish you all the best, a good time, and see you soon. Bye-bye.
All right. Thanks very much.
Bye.
Thank you. Bye.
Bye-bye.