Ladies and gentlemen, welcome to the H1 2026 financial results and conference call and live webcast. I am Moritz, your conference call operator. I would like to remind you that all participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question-and-answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Jan Keppeler. Please go ahead, sir.
Thank you, Moritz, and good afternoon, good morning to everyone joining us today for our H1 2026 financial results conference call. With me and the host of the presentation today are Marcus Wolfinger, CEO of STRATEC, as well as our CFO, Tanja Bücherl. Please be aware that this conference is being webcast live, and you can download the slides either from the webcast or from our website. Before we start, please allow me also to draw your attention to our safe harbor statement, which is on page two of the presentation. Now, without further ado, it is my pleasure to hand over to Marcus.
Yeah. Thanks, Jan, and good afternoon, good morning, everyone. Welcome to our presentation. Let me briefly walk you through the highlights, achievements, and to a certain degree, the challenges for the remainder of the year. As you have all seen, we have significantly improved the performance in Q2, which actually helped us to narrow the year-on-year gap, on sales and earnings. By the end of H1, however, I think, the thing which is probably worth to mention at this point that although we had a super strong momentum on the system business, and actually this is planned for the remainder of the year to continue, showing two things. First of all, unexpectedly, consumables and yeah, mainly maintenance parts and spares have been fairly weak. So one could actually say exceptionally weak.
Second thing is that it shows to a certain degree the resilience of our business model, that we still kept the margin on the expected level, which shows the discipline we are showing here. I will go into details, what the weak consumables and like I said, particularly, the weak business with maintenance parts and spares means. Then, certainly the profitability is nearly on the same level as in the prior year. We had a super robust free cash flow development. Slightly, and Tanja will dive into the details. Obviously, this comes from the very robust fourth quarter in 2025, where the money into the bank account only happened in the first month of the year, as we are expecting the same thing to happen this year. So a very, very backend loaded year again. Fourth quarter is expected to dominate the year.
We are expecting similar developments in terms of free cash flow development, in terms of seasonality, as we saw last year. Then we have an ongoing high demand for life cycle management projects. Literally within all our customers, we see those activities. At this moment in time, we see that it is swapping away from the activities which are derived from keeping the products longer in the market. This was the motivation a year or two ago to invest money into life cycle management. What we see now is that this is extremely dominated by two things. One is regulatory. We see that it gets more and more complicated to keep legacy products in the market, particularly in considering the renewal of the software.
As from a tendency perspective, older software is no longer seen as cybersecurity, and this is where the FDA is particularly looking into. Like I said, cyber and FDA activities are driving investments of our customers into product life cycle management. We see that the mood and appetite of going into newer products increases from that perspective because everyone sees that investing into product life cycle management is a means to an end. We have confirmed our 2026 guidance. Based on the forecasts and the plan and what our customers actually got in as orders, we see that it is very backend loaded again. A super strong year-end business over the last years.
The revenue contribution of the fourth quarter was between, say, 30% and 33% of the overall revenues of a year, and we are expecting the same thing to happen here, more likely at the top end of what I have just mentioned. With this, let me hand over to Tanja.
Thanks, Marcus. Hello, everyone. Also from my side, a warm welcome to our half-year earnings call. I will start highlighting the key financial metrics and then provide an overview of the sales performance of our operating divisions, profitability, and the cash flow. Let me start with the overview of the most important developments. As you can see on that slide, for the first half of the year, the revenues stood at EUR 112.5 million. This actually represents a nominal decline of 5.1% or 3.3% on a constant currency basis. Overall, the earnings performance was actually more robust than the revenue performance. Our adjusted EBITDA came in at EUR 15.7 million and the EBITDA margin even improved slightly to 13.9%.
The adjusted EBIT amounted to EUR 7.7 million compared to the EUR 8.5 million in the prior year, with the 6.9% in the adjusted EBIT margin was actually only slightly below the prior year figure of 7.2%, as you can see on that slide. The most significant positive difference compared to the prior year, Marcus has mentioned already, we see in the cash flow. You see it at the bottom of that slide. So the free cash flow amounted to EUR 23.5 million compared to a negative free cash flow last year of EUR 14.7 million. So all in all, we were able to provide that the weak Q1 was not actually representative for the full-year, and we performed a clear improvement in the Q2. On the next slide, we will have a closer look into the different developments.
As always, to provide a better comparison, we always present the adjusted key figures alongside the IFRS figures. As you know, the adjustments are related to amortization and depreciation from purchase price allocations, as well as the non-recurring effects like consulting, reorganization expenses. As already seen on the last page, you see on the top the adjusted EBIT of EUR 7.7 million. Taking the adjustments into account, the reported EBIT stood at approximately EUR 5.5 million, which shows a slight improvement compared to the prior year. On the right side of that chart, you see the net income. So the adjusted net income amounted to EUR 4.1 million or EUR 0.34 per share. The reported IFRS net income was at EUR 2.4 million, or EUR 0.20 per share. Let's have a closer look into the top line.
The decline that we see in the revenues in the first half of the year is actually mainly attributable to two factors. The first one is that several major customers actually optimized their inventories of Service Parts and Consumables in a strategic manner to optimize their working capital. This actually led to a temporary decline in the demand in this area. The second is the Development and Services business, which faced a year-on-year comparison on a high level. On the other side, the system business, as Marcus already mentioned, performed very well. So the demand was particularly strong in the areas of immunoassay, molecular diagnostics and immunohematology. This is for us very important, that the decline on the revenue that you see in that chart should not be interpreted as a general weakness across all of our business segments.
Rather, we see this positive momentum in our system business, while two other segments were impacted by only temporary or year-over-year comparison related effects. Let's have a closer look into the revenue development on the next slide. As already explained, the revenue trend by our operating divisions are showing a very mixed picture. On the left side, you see that the revenue from the systems increased by 15.4%, or on a constant currency basis to EUR 39.7 million. This is actually a very strong evidence of the growth momentum in our core business. We therefore see a solid foundation for further growth. To be precise, for the timing, it is depending on the customer's decisions and the production ramps. The revenue in the second bar chart from Service Parts and Consumables stood at EUR 46.1 million.
The 11.9% decline on a constant currency basis is again mainly attributable to the already mentioned inventory optimization measures taken by individual customers. Again, we consider these effects to be temporary. However, the timing for a full return to a normal level depends here again on the reduction of customer inventories and individual order patterns. On the right side, we see the development of services. Also here we see a decline by 7.8% on a constant currency basis. But here we need to take into account that the last year was really on a very high base already. Overall, on the right side you see the already mentioned shift in our product mix away from the service parts in the first half of the year, which had traditionally a higher margin. This leads me to our adjusted EBIT overview.
Therefore this product mix has an impact on our EBIT. You see that the adjusted EBIT for the first half of the year was at EUR 7.7 million. The adjusted EBIT margin was at 6.9% compared with the 7.2% in the prior year. The margin was mainly impacted by these negative scaling effects due to the lower revenue and the mentioned change in the product mix. The lower proportion of these high margin service parts and consumables had a noticeable impact in our margin. In the short term, the lower share of this high margin business has a negative impact on our product mix, but nevertheless, in the long term, this segment remains an important growth driver due to the growing installed bases in there.
On the other side, we are seeing that our cost discipline measures structural adjustments and also exchange rate effects had a positive impact in the first half of the year. It is particularly important to look at the second quarter for me. The adjusted EBIT increased by more than 125% to EUR 7 million, and the margin improved from 5.4% to 11.9%. Why is it so important for me? Because this is showing that the operational leverage is having a significant impact as revenue improves, and that we will continue with our efficiency measures also in the second half of the year. Last but not least, cash flow performance. Again, it was particularly strong in the first half of the year. As you can see, the operating cash flow amounted to EUR 29.7 million, compared with a negative figure of EUR 5.8 million in the prior year.
The free cash flow reached EUR 23.5 million, which enabled us to invest, reduce our debt, and pay the dividend all at the same time. This improvement is actually very encouraging for us and was driven, in particular, by a reduction in accounts receivable and also lower tax payments compared to prior years. But at the same time, the working capital management remains a key focus, particularly with regard to the inventories. We therefore make an internal differentiation between the strong current performance that we are seeing right now and the ongoing task of stabilizing this momentum in a sustainable manner. On the right side, you see the net debt fell to EUR 96.7 million. The ratio actually net debt to LTM EBITDA improved to 2.9 from 3.3 at the end of 2025. The equity ratio also increased to 58.1%.
Last but not least, you see as well that the investment ratio is slightly below our targeted corridor. We are sticking to our guidance for the full-year, but we are actually closely monitoring the development of this very volatile business environment that we are currently in. With that, I would like to hand over back to Marcus.
Yeah. Thanks, Tanja. Let me again walk you through our full-year guidance before I come to the conclusions, et cetera. On a constant currency basis, we have given a sales guidance on a full-year basis to grow in a medium to high single digit percentage range. Still, and we have mentioned that now a couple of times, we have an extremely volatile general business environment, and I don't need to walk you through all those contributors. At the end of the day, obviously a lot of those things we have planned when we have given forecasts, unfortunately, didn't materialize. Others materialized, which were unplanned and unpredictable. At the end of the day, I think it comes to an environment where we are trying to be as agile as possible.
Unfortunately, as we all know that if things don't materialize, they don't materialize at the moment when they don't materialize. When things are coming in additionally, this means always that the organization has to be stretched to a certain extent. I think we actually improved here in terms of agility very much. That's why we continue to confirm that guidance. We have to see that, and I mentioned that already, that the sales growth forecasted is expected to be generated almost exclusively from that strong year-end business. We generated about, and I said that already, between 30%-33% of the overall sales volume in the last couple of years in the fourth quarter, and we are expecting the same thing to happen in the fourth quarter of 2026. This gets you an indication of what we expect in Q3.
Here, and I think we mentioned that already to a certain degree, we are expecting to be in the same ballpark, in absolute terms, as shown in Q2. Adjusted EBIT margin is expected to be approximately on a previous year's level, which was 10% adjusted EBIT margin. On the investment side, we believe at this point that we will still be at the lower edge, as we have seen in the year 2025. At the lower edge of the investments as a percentage of sales area between 6.5% and 8.5%. The focus for the rest of the year is obviously to deliver. We want to maintain cost discipline throughout the company. There are a number of organizational measures ongoing as well as we are looking into BOM cost, et cetera. A lot of measures.
I think it is worth mentioning that over the past years, we have already harvested the low-hanging fruits, and in the meantime, we are looking into activities which are more structural. On the other hand, we have this very nice lineup of products which will be launched. We want to find that middle ground of staying cost-effective, but considering the growth which lies ahead of us as well. We want to, and here we actually made a sentence comprehensively and in timely to transfer the new products. You probably know that when we are talking about launch, this doesn't necessarily mean that our customers are talking about launch at the same time. This means ramping up serious production at the foreseen quality comprehensively and in a timely manner. This is the important thing. This is actually driving the growth of the company.
Then we are mitigating the dilutive effect of certain parts of the Diatron business to drive the group profitability, then executing deal pipeline. We talked about that in the past, we don't see a material change. Here we see that the appetite of our customers is driven by innovation in the application and not really innovation in the methods used, which at the end means that the deal pipeline looks like particularly the leads are looking very promising. We need to transfer those leads into development in order to make sure that we can guarantee the growth of the company in six, seven, eight years from now. Those products which will come to the market in the next five years are actually already contracted and are going by sequence through the different development departments of STRATEC Group.
However, in order to fill that pipeline beyond 2032, we definitely need to look into filling that pipeline. Then we obviously have limit profitability impact of additional input cost drivers such as I don't want to walk you through all those facts everybody is walking you through. I think the point which is worth to mention, which is probably a little bit atypical for us, is that we see, again, the materially increasing lead times and prices for everything which is related to electronics. We have to tackle that. There are a number of measures ongoing.
However, this is definitely a challenge for the entire industry, particularly in terms of life cycle management, that regulatory is literally forcing us to make sure that the availability of the approved product is guaranteed, which often means that we have to buy legacy products, which tend to have a big focus in terms of pricing. Then we intend to improve the cash flow dynamics with a strong focus on working capital efficiencies. Worth mentioning that we are still sitting on an elevated inventory level, and here three factors are coming together.
Most importantly, there is and there will continue to be a residual volume of inventory we are keeping for our customers, where we had to perform last-time buys in order to make sure that certain products will continue to be available for the next four, five, six, seven years, particularly if electronic components cannot be replaced, like cameras or lenses and things like that. The second part is the highly optimized for products which have turnover rates. Unfortunately, we have a number of products, particularly those ones which have been launched during COVID-19 or right after, where still the ramp-up is weaker than expected. When we are sitting on inventory levels, we can only reduce those inventory levels to the extent where those products are starting to turn. Targets for the margin and sales for 2028 and 2023.
I think we mentioned already that we are expecting a certain step function. For the period 2025 through 2028, a compound annual top-line growth of 6%-8%. Again, I think the point which is really worth mentioning that in our previous expectations, we foresaw a strong recovery of the MDx market. These expectations are actually seeing more a flattish to slight development of the MDx market. It still continues to be saturated, and there are certain new players. The market continues to change in terms of de-globalization of local solutions, et cetera, of different market demands, like more point-of-care dominated in the United States, more centralized dominated in the regions of the world.
For the period between 2028 and 2030, based on those products which are then coming to the market in the, say, next 10 quarters, a very strong acceleration of the top-line growth compound annual growth rate here expected to be in the area of 10%-12%. Like we mentioned before, the growth between now and 2028 is driven by products which are already on the market. So only most of them early stage, and then the growth thereafter is expected to base on the products which will come to the market in roughly the next 10 quarters. On the margin side, very much driven by those methods we have established and will continue to establish. We have given a step function as well. It's an adjusted EBIT margin of at least 13% by 2028 and adjusted EBIT margin of at least 15% by 2030.
This gets me to the end of the presentation. I would like to hand back to Moritz, who will explain us how to commence with Q&A. Thank you.
Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from Jan Koch from Deutsche Bank. Please go ahead.
Yeah. Hi, Marcus. Hi, Tanja. Thanks for taking my three questions. I would like to take them one by one, if possible. The first one is on your supply chain situation. One of your competitors said this week that it is seeing supply chain issues involving several suppliers. Are you seeing similar trends? Could your elevated inventory levels help to mitigate that? Related to that, could you remind us of your exposure to semiconductor chips overall and what this could mean in terms of your lead times and cost inflation?
Yeah. Thank you very much. Actually, we experienced similar situations in the last supply crisis. That's why we were very cautious in the way how we are designing things, like in a layer design where things can be replaced, et cetera. So, particularly for the younger products, we are well prepared for that situation. Obviously, there are challenges, and we have to see that in. Let me get you a really stupid example. If power supplies, where you have lead times in your SAP system of 10 weeks, you obviously plan for those 10 weeks, and you're looking to the demand. From one day to the other, if the lead times are increased to 40 weeks, you definitely have an issue. We are constantly monitoring that. We actually have put a special department into those activities. You cannot say yes or no.
At the end, it comes down to involving the customer, agility, looking into those products, then obviously logistical measures, particularly based on the way how our manufacturing approach works. So to have an almost 100% design depth and then handing over the assembly and manufacturing of components like modules to qualified suppliers. That's more or less the past. The future is looking into each element separately, looking into those long lead time items, in particular, taking care of the long lead time items, particularly if global supply chains are involved. So let me try to get you a certain optimistic level across. Sorry, is that we cannot say that we are immune. On the other side, I think we are fairly well prepared. This is only about our possibility and ability to supply. Pricing is another issue.
So again, example is we are obviously using built-in PCs, which are approved with the solution, so you cannot replace a built-in PC, just with the one you get in MediaMarkt or the like. So we are actually looking into the forecast and are placing orders for next year and the year after, and we do not even get prices for that. So in the past, we were able to buy kind of futures, in order to continue to be supplied. What we see is that we no longer get prices. However, this means that we have to take advantage of the new contractual situation we have with the majority of our customers, that this has to be perceived exceptional, so we can, to a certain degree, put that forward to our customers. I think what I wanted to get across is that we are trying to learn from the past.
However, we are still not immune. Hope that helps.
Yeah, it does. My second question is on orders. You mentioned on the last call that you had made some changes to your forecasting system, essentially, to limit customers' ability to postpone orders. How is that working so far, and has it improved your visibility for H2? In your prepared remarks, and in the press release, you mentioned there is still high customer ordering volatility. Isn't the main aim of the new forecasting system to prevent or at least reduce that volatility?
That is right, Jan. I think, again, it is worth mentioning that what we are actually comparing ourselves to. If we are looking into our real competitors, often way smaller than we are, we see that they have way more difficulties than we have. I would like to get across that if we would not have established the measures like forecast to be spread longer or away from orders towards supplier, more into forecasting systems, et cetera, then the situation would be even more difficult to handle. So we are actually, with all those measures, which are showing already efficiencies, we are working against the volatilities in the market. Without those measures, the situation would be even more demanding and even more challenging.
Doesn't help, however, I feel fairly comfortable we managed to actually, particularly for those customers which showed higher volatilities in the past, switch from a forecasting system into an ordering system. For those customers which are on lower run rates, and lower run rates is obviously always more demanding in terms of manufacturing planning than high continuous manufacturing. We switched into longer forecast cycles, et cetera. Let me put it that way. Obviously, we are self-criticizing ourselves every day, that we are far away from being perfect, but I think we have significantly improved over the past we saw after COVID-19. Yes, it helps, but it doesn't sort out the situation entirely.
Makes sense. Lastly, on the 2026 guidance, I understand that the year is very back-end loaded again, but could you help us with the phasing between Q3 and Q4 markets? You mentioned, essentially, if I reflect your comment about Q4 accounting for 33% of full-year sales in my model, that implies about 10% growth in Q3. Does that sound reasonable or too high?
Doesn't show our model. Actually, like I said, we are expecting Q2, in absolute terms, to be around the same ballpark as Q2. Then, and I was trying to really get that across, is that, over the past years, we showed that the fourth quarter is getting stronger and stronger. The contribution of Q4 over the last couple of years was between 30% and 33%. If we are doing our math the same way how you are doing that, it gets us closer to 34% and 35%, and that's what should be expected. If we are looking into our planning models, and again, this is based on orders which have, from the very, very beginning, been already placed in Q4, or this is actually milestone realization, which have been expected to happen in the fourth quarter.
This is all nicely lined up, but again, the devil's in the detail. Therefore, and again, we are optimistic on that, but we have to see that there are a lot of challenges and a lot of things we have to work on, and track, and monitor things very closely.
Great. Before I jump back into the queue, just one clarification on the currency translation effect in Q2. Could you confirm that this had a positive impact of around EUR 2.5 million on a year-on-year comparison basis?
Roughly in that range, yeah.
Okay. Perfect. Thank you.
Thanks.
The next question comes from Oliver Reinberg from Kepler Cheuvreux. Please go ahead.
Oh, yeah. Hi, Marcus and Tanja. Three questions from my side as well. Firstly, getting back to the consumable situation. Can you just talk to what kind of visibility do you have? What is really happening? Is it just like an inventory issue that the clients also highlight to you? Can you confirm with the utilization rate that there's nothing else going on? How concentrated is this kind of situation? Is this mostly one client or across the board? That would be question number one. Secondly, just on the demand for MDx, I'm not sure if I got that correctly. In the press release, you talked about that there is actually a kind of improvement of the situation, which would be, I think, quite reassuring. In your prepared remarks, when you talked about the midterm guidance, you talked about more flattish, saturated market for MDx.
I'm not sure if that is an assumption on the midterm guidance or what you still see. That would be question number two. And thirdly, just on life cycle management, can you just give us a flavor like what magnitude of your sales is related to life cycle management, and what are the lead times looking at? I assume that there's a stronger or quicker conversion from order to sales, just to get a flavor for that. Thanks.
Absolutely. Oliver, thank you so much for those questions. Consumables, and actually, I wanted to touch base on that. What we definitely see. First of all, and let me start from the tail end of the question regarding consumables. Obviously, particularly maintenance parts is very much driven by the install base of our customer. Here we often have preventive maintenance kits, which are dominating the sales here. Then we have other parts, and I will touch base on the consumables, like the plastic consumables, in a minute. What we see is that particularly those customers which have been facing M&A activities over the last year, that they are clearly showing that M&A is extensive, so the new owners are obviously looking often into optimization of service inventories. We all know that this is a means to an end.
We just don't know if those customers already hit the bottom. So there is a moment when you're trying to save, that you are not over-saving. Customers have to be served. Typically, the instruments are based on reagent rental contracts, which means our customers continue to be in charge for up times of the instrument, and that's why very cautious organizations tend to invest a lot of money into serviceability, availability of service resources, and availability of materials. Over-saving may lead to problems. We just don't know, and actually, we expected that to happen already in Q2. It just didn't happen, where the same effects got popped to the surface in the second half of last year already, that although the utilization of the molecular equipment is significantly improving on immunoassays and immunohematology, they continue to be very high.
In our industry, one could literally exclude that focus spare parts or maintenance parts are used due to regulatory reasons and risk assessments. So at the end, there is still a high utilization. At this moment in time, our sales is under expectation, which means that today our customers are using their warehouses. Like I said, this is a means to an end and affects mainly those customers where transactions happened over the past, say, 12 months. To the contrary, as we are reporting consumables together with our maintenance parts of diagnostic consumables, plastic consumables and spares in the same group, we can report that the plastic consumables are actually outperforming, certainly on an extremely low basis. Again, this is the proof that innovation comes back, again, application-driven, not system-driven.
It's very much driven by smaller customers rather than for the bigger customers as far as instrument is concerned. Sorry, my MDx statement was probably misleading. I was actually talking about those instruments which are already in the field. You already know that we have a lineup of products which will hit the market. That's why our midterm guidance is expecting a slight recovery. We actually see that the run rates are going up, but we have to see that if we are comparing pre-COVID levels with COVID levels and today's levels and say, if the run rate was one pre-COVID, it was between three and four during COVID, and it's still south of one with a slight growth rate. However, not the growth rates which were expected to happen in the export before COVID-19. Oliver, you're absolutely right.
Product life cycle has shorter revenue cycle, product life cycle management. Often software is related or replacing functional modules. Again, there are typically only three measures to take a product life cycle, particularly if the input side is shortening and the output side is getting longer and longer, which means last-time buys. I already mentioned that we are trying to avoid that. In certain cases, it's unavoidable, particularly if products are at the tail end of their product life cycle. Redesign, re-verification, revalidation, reapproval do not make too much sense. In these cases, our customers are allocating budgets into last-time buys. Then the second part is for newer products, a layered design where things are easier to be replaced with then more modern products, which often are coming along with a better price point and better performance.
But with the downside of revalidation, reapproval, again, a layered approach helps to cut those re-re-recycles short. The third measure is actually redesign, particularly affecting legacy products, particularly affecting the software. That's why if we are looking into the allocation across our departments, that software development and associated verification are running at or over capacity level, which actually shows the situation here. Important point, and I made it already, but allow me to reiterate that the motivations for product life cycle management after COVID-19 was the shortening of the input cycles and the fact that the output cycles are getting longer and longer. Our customers are trying to sell the product for a longer period of time. The motivation now is more regulatory driven. We see that particularly FDA, cybersecurity, environmental rules, et cetera, are actually more and more driving the product life cycle. I hope that helps.
Perfect. Thanks very much, Marcus.
Welcome.
Then the next question comes from Michael Heider from Berenberg Bank. Please go ahead.
Hi. Good afternoon, and thanks for taking my questions. I have roughly three left. The first one would be again on maintenance and consumables. Could you give us maybe just an indication what the sales level would have looked like if we exclude this one customer that is having a new owner and is optimizing net working capital? And then maybe also, is there any risk that they would be replacing these maintenance parts with another supplier, or is this contractually not possible? That would be my first question. Maybe take them one by one. I don't know. It's probably easier.
Yeah, no, thank you very much. Yeah, maintenance parts. So actually, this is not affecting one customer. I mentioned before, there is a number of customers which actually had M&A activities in the past. And I think, it's only normal that if, or like a more common pattern that new owners are looking into the details, and obviously, looking into inventory level of working capital is a measure to show efficiency. And like I said, optimizing things here often means that there is a trade. That's why particularly looking into the fact that the utilization of the equipment, and we see that, we are our IoT tools, and as it bases on reports generated by our customer, that the utilization nicely increases, that in parallel, the consume of those maintenance parts is going up in line with utilization. Unfortunately, we don't see that coming here.
Again, obviously, we have this discussion about third-party unapproved spare parts and maintenance parts, and we cannot exclude that this is not happening at all. However, allow me to say that then with all the confidence one could get to the table at this point. From a regulatory perspective and particularly from a risk perspective, bogus spare parts are not used in maintenance parts at the same time. Think about if our customers, or even the end users in the laboratory would knowingly use fake bogus parts, unapproved parts, and this would get to a false negative result. What would happen from a risk perspective? No one is actually to do that willingly. Certainly, there are regions of the world where people might replace tubing also, but that's not the driver of our maintenance parts business.
I can actually, like I said, with all the confidence, say that from a regulatory perspective, one could actually exclude that. You probably know about a scandal which happened in the 1990s in the aircraft industry. I think the same methods have been applied as in the aircraft industry, like what was established then to avoid the use of bogus spare parts.
Okay. Yeah, very clear. Thanks. Then, it's very small, I know, but other activities were down quite significantly. What was going on there?
Let me postpone the answer to the question, and let's get to question number three. We'll find that out.
Yeah. Then also a little bit housekeeping here. It was already mentioned that the FX impact was roughly EUR 2.5 million, but also here, maybe some details on the other operating income and expenses. So the income was very high, as is presumed, this was the FX impact. The other operating expenses, on the other hand, were lower than usual. Maybe also there, some more details, if possible. Then the last one, maybe we can take that together because all a little bit of housekeeping. Also, I read you capitalized borrowing costs, and maybe you can also give some details on that. Many thanks.
As we pointed out, we had this tailwind actually on the currencies. This year, on the other side, we received also some R&D grants, especially for our consumable business in Austria and here. So this gave us this positive momentum in the other operating income, other operating expenses in the first half of this year.
That would be the answer for the first question, actually.
For the second, the other activities on the sales side. We can also take it offline. It's very small. It was just out of interest. Hello?
Sorry?
Yes. Okay, sorry. I wasn't sure if you cut off.
Like the request here, I don't know if this was due to the interrupted line. No. Actually, let's take that offline.
Yeah. Okay. Yeah, no problem.
If this is in the interest of other participants, please let us know, and we'll get you the details in writing then.
Thanks.
All three questions answered?
Yeah. Capitalization of borrowing costs would have been the third one, but we can also take it offline. I guess it's also details.
Let's do the same here.
Let's do the same here.
Yeah.
Yeah. Okay. Thanks a lot.
The next question comes from Jitisha Malhotra from AlphaValue. Please go ahead.
Hello. Hi. Thank you for taking my questions, two from my side. Firstly, with H1 adjusted EBIT at just 6.9% versus the 10% full-year margin target, can you give me more color on H2 phasing, please? How much of the expected step up is already covered by firm orders versus forecasts that you think are still sensitive to customer volatility? My second question would be on the CapEx phasing, again on guidance. When you say, as we saw that H1 CapEx came in at 5.5% of sales, and it is slightly below the guided corridor of 6.5%- 8.5%. Is this timing, or is this a deliberate slowdown given the geopolitical situation, or should we expect some catch up in H2? Thank you.
Yeah, thank you. Let me answer the first question first. The margin step up actually is mainly driven by two factors. One is actually to a certain degree, product mix. But let me say, the main factor here is definitely operational leverage. I think we have shown already in quarter two what kind of performance lies in the company when we are getting to higher revenue and higher production numbers and higher output numbers, and that is exactly where we are coming from. I think exactly what we are trying to get across for years now, that as soon as growth comes back, and we expect it to happen in a foreseen manner, then definitely margin will come back.
Okay, thanks. I will take the second question regarding the investments to CapEx ratio. We are still sticking to our guidance between 6.5% and 8.5%. As I said, we are really watching very closely the current business development, that we are not getting into any pre-investment phases. Therefore, we are monitoring it very closely during the next months.
Right. That is helpful. Thank you so much.
Welcome.
Thank you.
As a reminder, if you would like to ask a question, you may press star and one. We do have one follow-up question from Jan Koch from Deutsche Bank. Please go ahead.
Yeah, thanks for taking my two follow-up questions. The first one is on the strong Analyzer Systems growth. Was some of the growth driven by stocking of customers ahead of new product launches, or should this rather happen in H2? The second question, we haven't heard much about Natech for a while. So how's the integration progressing? On top of the $ 30 million purchasing price, have you paid any additional earn-outs over the last few years, or has the business not developed in line with the initial plan?
Yeah. No, Jan, thanks very much. Actually, you mentioned launches and I hear a clear no. This is not initial stock keeping or anything the like. We would love to see that, but unfortunately, we don't. This is very much driven by, let me say, growing run rates here and there and orders which are happening, or which have already initially been placed from quarter four on. Then, sorry, I forgot the second half of the question.
Natech, the acquisition.
Ah, Natech. Yeah. Actually, clear statement here. So there is no kind of further earn out or anything the like. It's that the sales price was the price which is in our books. The business is showing nice progress in the meantime. We are definitely behind our initial plans, particularly in post-merger integration. We are behind. We had certain plans which particularly driven by the, let me say, volatile market, particularly activities in the United States. and the focus on other activities kept us a little bit away. But as Tanja mentioned before, we are definitely focusing into the activities in Natech and definitely particularly the fact that this is our U.S. base, makes us believe that definitely this is the site of the growth of the company.
If investments are happening in this environment, then definitely in the United States, helping to address the needs of the U.S. market.
Great. Thank you.
There are no further questions at this time, so I would like to turn the conference back over to Jan Keppeler for any closing remarks.
Thank you, everyone, for joining us today. If there are any follow-up questions, do not hesitate to contact the investor relations team. Again, thank you and goodbye.
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