Ladies and gentlemen, welcome to the Bystronic AG half year 2026 results conference call and live webcast. I am Sandra, the conference call operator. I would like to remind you that all participants have been placed on only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions in writing by the relative field. 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 Domenico Iacovelli, CEO, and Javier Perez, CFO. Please go ahead, gentlemen.
Hello, everybody. Even from our side, a warm welcome to our half-year results for the year 2026. Javier Perez, our CFO, and myself will lead you through the presentation. I hope you all can see the presentation. I think everything should work. We will start with a business review, which will be presented by myself. Javier will present the financial review. I will give an outlook on how we see the year. We will start the Q&A session. Before we start with the business review, please take a minute to go to the disclaimer. I will read it in parallel. I'm a slow reader, but once I'm done, I will go to the business review. Let's start. What are the key figures for 2026?
We had an order intake of CHF 337.7 million, which at constant exchange rates is 15.7% more than in the previous year, which is of course good. It includes, of course, even the new acquired business, which we call Bystronic Rofin for the micro-machining area. That's why even the organic growth, the organic growth is basically our core business without our Rofin business. Even there, at constant exchange rates, we had an increase of 3.8%. What was very disappointing definitively was the net sales. Even though we had an increase of 5.4%, again, it includes Rofin. Our core business shrunk by nearly 7% in the first six months of the year. Of course, this resulted in a negative EBIT of CHF 23.4 million, which is, of course, much lower than what we had in 2025, even though we have a positive contribution from our Rofin business.
I'm sure Javier will elaborate much more on the numbers. After the first reads this morning and feedbacks, I want to shortly elaborate a little bit on what were the reasons for the very low EBIT. Of course, as recognized by many analysts, some of the margins were under pressure, but this is not the main reason for this result in the first half year. I want to remind that especially in Q1, we had only a net sales of CHF 128 million with Rofin and on our core business, only of CHF 116 million. It is definitively a topic of volume. This was mainly the reason why we made a warning a few weeks ago. The second one, which pays into the margin, we should not underestimate that we are ramping up our flexible manufacturing lines with more automation.
There we have much lower margins because we have basically new products coming up. This lower margin had an impact, especially in the first half of the year, all of them together are ending up in this negative EBITDA, which there are no excuses. It is bad, but there are reasons behind. Again, volume is definitively too low, especially in Q1, to catch it up. With that, I would say a positive sign, it's the order intake. As you can see here on this slide, it is the best order intake since back in 2023. I think last time it was in Q4 2023 that we had this order intake. Even if I deduct the Rofin business, we're still roundabout on the level of Q4 2023. It's a slight recovery. It's a positive sign. What are the drivers behind?
Many drivers, as mentioned already many times over the last few meetings we had and presentations, of course. We are going more and more from a machine manufacturer towards a system manufacturer. The lead to get the bookings is just taking longer. You have more preparation time. Customers, they need more time to raise the money, because if you have to make a down payment for CHF 300,000 for a single machine, it's easy to find the money. If you have to make a CHF 2 million-CHF 3 million down payment for a system, of course, even on the customer side, it takes a while to get the money funded. Nevertheless, it's a very nice development. Americas had a very strong demand for both for single machines, but even for fully automated lines after even a weak Q1.
Other regions had even a solid demand across product categories in Q2. What was very encouraging, of course, it's our Rofin business, which is slightly ahead of the plan. We see a very strong recovery, especially in semiconductor. All of that ends up in a very strong backlog, which I do not remember the last time I have seen it. It's CHF 308 million of backlog after the first six months of 2026, which of course will support our higher net sales in H2. Last but not least, please take in consideration that Q1 was still impacted by a lot of geopolitical impacts, whether it was the Iranian war, a certain uncertainty because of the tariffs. All of that had an impact in Q1 in order intake as well. We continue with Rofin. I already mentioned we had a very good contribution.
Definitively meets our growth expectations. Exceeds a little bit the contribution in margin in a positive way. Definitively aligned with long-term trends, especially in semiconductor and MedTech. Especially semiconductor in Southeast Asia is really picking up. We see this in order intake, in the quality of the order intake. We are very happy. It's CHF 35.5 million after five months. As you remember, it was a $100 million business, round about CHF 80 million business. 11 months, we have to be above CHF 70 million to be basically on track. Net sales the same. We are very happy with this development. What we have to say, the integration is on track despite some challenges, which Javier will explain later on when he shows the balance sheet, but nothing which cannot be solved.
Even here, we really do believe that we are on track, we can strongly feel that we have the same DNA, and we see already synergies coming up and huge opportunities. What is very, very important, I mentioned before that our order intake in Q1 was weak. In Q2, it was much better. Due to some reasons, one of which is definitely our system business, our integrated lines or flexible manufacturing lines, which are definitely paying into megatrends. You know all of them, whether it's data centers, and when it comes to data centers, it's not the classic chop shop which was in the past customer of Bystronic delivering high volumes. Highly automated lines are much more of interest for the customers here. Here we were able to win some orders who are supplying into these trends.
Semiconductors, which still have a huge CAGR of around about nine over the next year-over-year is semiconductors. Here we are now in with Rofin and all the orders which we still see a growth. We are really trying to get a little bit away from the dependency we had in the past from agriculture, which is still down. I think we see a lot of growth opportunities, and the growth opportunities are coming with high-end machines, but combined with fully automated line. The growth drivers behind it's clear. Increasing pressure on manufacturing costs on our customer side. We're doing a lot of business in the U.S. Skilled people, it's impossible to find. We need fully automated line, and this we see as a really driver for our business.
We have to catch the opportunities and bring the right offering to participate on these megatrends. We have to admit that our transformation, we started already one and a half years ago, went quite well, but we have to accelerate it. We still have to further integrate our manufacturing solution, increase customer productivity. Right now, the productivity doesn't depend anymore from a single machine, but it depends from the end-to-end process a customer has. Expanding software and digital capabilities, this is anyway a key. I think even here we are quite good on track. We still have some holes we have to close, but I think we are on the right track.
Again, differentiate beyond standalone machines without keeping in mind that the single machine still can make the difference, but if you cannot feed a single machine, which is the best one, the customer does not have the benefit out of it. We have to win in growth markets. As I mentioned before, there are growth markets, we cannot talk about the PMIs being positive over the last few months. It's driven by megatrends, and we have to participate on this one. Further, we have to strengthen our vertical market approach, which we are doing. New applications and opportunities, I think here we are really profiting a lot, even from our Rofin business, which those develop applications together with the end customer, which at the end turns into solutions and new machines. We cannot stop to expand our technology portfolio.
We all know that we still have some missing products in our product portfolio. We have to work on this one by own developments, by acquisitions, by strategic partnerships. We have to further transform how we operate. Again, we are coming from a single machine supplier, highly specialized, and we are going more and more into a project-oriented company. You need a project management organization. You need process optimization. What we want to further do, even to reduce our cost base, is centralized functional excellences with transversal vertical teams. With that, I'm done with the business review, and I would hand over to Javier for the financial review.
Thank you so much, Domenico, and also from my side, a very warm welcome. Let me give you a couple of more insights on the different financial KPIs. As said, we are quite happy with the order intake of CHF 338 million in the first half. 36 out of this CHF 338 million refers to Bystronic Rofin, 302 to our core business, which in fact is also growth year-over-year by 3.8%. Also our core business was much better, especially in Q2. As said, Q2 was CHF 190 million, also much stronger than the Q1 with CHF 148. In summary, as the order intake is exceeding our net sales, our backlog is also higher compared to Q1, but also especially compared to the year-end, and it amounts to CHF 308 million. At Q1, we did report a backlog of CHF 291 million.
This gives us also the confidence that the half-year two net sales will exceed the half-year one net sales. When analyzing, obviously, the full year, we can expect higher sales than calculating two times the first half. Net sales was at CHF 303 million, 36 out of this referring to Bystronic Rofin. As we heard already, we were really disappointed about the net sales in Q1 with CHF 128 million, and this did cause the biggest portion of the EBIT losses that we did report with half-year one. Q2 was much better. Sales amounted to CHF 175 million overall, still organically a decline of roughly 7%, while including Bystronic Rofin, we did report a growth of 5%. What was actually running quite well over the first half was overall in sales, our bending machines, we did recover quite a bit with automation and also our laser machines in Q2.
That also there we expect a higher utilization going forward. Especially EMEA and China were strong overall in half year one. Also in Q2, we did see that especially Americas did gain some momentum in order intake, and it will be followed by net sales as well. EBIT was disappointing at CHF 23.4 million, and again, most of this related to Q1, with Q2 being much better following the higher sales. Overall, our bottom line net result ended at CHF -25.4 million. Our financial result was negative with CHF 0.6 million, and the income taxes amounted to CHF 1.4 million. We got already a question from Torsten, from Kepler Cheuvreux, asking the question whether we had the non-recurring expenses in the first half.
We call it the one-off items, meaning costs that we did not plan nor expect, there were a couple of smaller items in different areas of CHF 1.9 million. Going forward, what do we expect for the second half? It depends on the single transformation initiatives that Domenico just mentioned, and we are evaluating different options how to realize also this transformation going forward. If you go to the cash flow, also in this round, yes, the overall operating free cash flow looks ugly. There are some very good reasons why this was a little bit worse than expected. One of it being the inventories. Within those inventories, we do report all customer systems which are almost finished but not yet installed. This did increase significantly versus last year.
Also, on the other side, we had receivables which were up, normal high, having a negative cash impact of CHF -31.4 million. Most of this relates to payments from the previous owner of Bystronic Rofin, which are committed but not yet released. On the positive side, from the higher order intake, we have also some compensating items, which are the advance payments from our customers amounting to a positive impact of roughly CHF 12 million. Overall, our operating free cash flow ended with a CHF -56.6 million. Going forward, we are expecting an improvement in half- year two. We should not expect that receivables will stay on this level. We can expect an improvement over the half -year two.
If we go to the balance sheet on the next slide, we continue to have a solid cash position with CHF 257 million reduction versus the year-end of CHF 331 million. To consider is apart from the negative free cash flow, we did issue the purchase price for Bystronic Rofin amounting to the CHF 48.3 million, we did get the full repayment of the Mammut loan, which had a positive impact of CHF 32.4 million. Related to the purchase of Bystronic Rofin, we had the goodwill amount, which we report also in our half-year report of CHF 4.2 million, impacting with the same amount our equity. Coming to this equity, the equity ratio is 66% at the end of June this year, coming down from 70% at the end of 2025. With this, I would hand over back to Domenico for the outlook.
Okay. Basically, as you have seen, we will confirm our outlook. It is still a challenging market. Yes, it's true. We see some signs of recovery. Honestly speaking, you've seen it even in Q2, especially in terms of order intake. I don't want to be too enthusiastic on this. I just want to have a confirmation over the next quarters that it is not just a peak. I think we have the right product and the right strategy to enter in mega trends, and if we will be able to catch it, I see a slight chance that we can continue like this. We confirm what we said in June. Basically, unfortunately, the hit in Q1 2026 was a bit too high to catch it up over the year.
As already mentioned by Javier, of course, we expect a much higher net sales already, supported by our backlog. Basically our H2 is already covered by the backlog. It's on us, right, to catch the net sales. Yes, our conclusion, Bystronic expects net sales to exceed its prior year level, of course, because of Bystronic Rofin, but even supported by our strong backlog. Our target to improve, and I think we said the statement was a step towards profitability based on the result of last year. I think this is difficult to achieve. That's why we don't expect to improve compared to previous year on bottom line on a full year. I think with that, we are coming to the Q&A session. I think the facilitator will drive us through the questions, and we will try to answer whatever is possible.
We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the 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 of the webcast while asking a question. Webcast viewers may submit their questions in writing via the relative field. In the interest of time, please limit yourself to one question. Anyone with a question may press star one at this time. Our first question comes from Aurelien Sivignon from ODDO BHF . Please go ahead.
Hi. Good morning. Thank you for the presentation. First question on my side on the order intake on the legacy business, if we exclude the Rofin scope, order intake in Q2 were broadly flattish year-on-year. Based on what you have seen so far in Q3, do you see a gradual recovery in H2 or result trend, let's say, broadly in line with Q2 for the remainder of the year?
Yes. Of course, that's our target. That's what I mentioned before. So far, we don't see a decline. Again, Q1 was extraordinary. A lot of uncertainty, and I'm talking about our core business, right? Iran had a direct impact. Just orders were not placed, right? I would say on our Q3 and Q4, we expect roundabout to be in line with that one, which would bring us on the order intake side we had anticipated for the year, right? Again, whether we can catch up what we lost in Q1, difficult but not impossible. For me, as long the book-to-bill ratio is positive, we are showing growth. What we see now for the next quarter, of course, it's even a little bit holiday season, especially end of July and August. But even here, we see a stable activity like we had now over the last few months.
Our project funnel is good and is much better than one year ago.
Okay, thank you. A follow-up one, if I may, given the, if we can call it, let's say the softer recovery, could you consider more cost savings than you initially expected at the beginning of the year?
We are working on it. The fact is that our cost base is still too high for the volume we have. As you might remember, when we did the restructuring, just as a comparison, I think in 2024, we had a net sales of CHF 331 million after the half year, and we had a minus of CHF 23 million in EBIT, right? If I take 2026, and I take only the organic net sales, I think right roundabout CHF 270 million with more or less the same EBIT. What I want to say, the cost reduction we did on fixed costs in the last restructuring, were extremely helpful because basically with more than CHF 60 million, we are more or less on the same level. If I take out the Rofin profit, a little bit higher, but still on the same level. It is fact, right?
We have to further work on our cost base. You have seen before this bullet point, the more towards project organization. We see a potential there to reorganize in a leaner way in how we execute. We see there a potential, then I will later on elaborate on the service question, which already popped up, because even there, we can gain efficiency, and will definitively work on further cost savings, on permanent cost savings for sure. We are even already working on temporary cost savings, such as short-time work and so on, to further support the profitability in the second half of the year.
Okay, got it. Thank you. Last one, if I may, on the working cap and the receivables that remain outstanding from Coherent, can we expect this amount, I think it's roughly CHF 10 million, CHF 20 million, to be collected in over, let's check, Q3 or Q4?
Yes, we are talking about a much higher amount. I will let it to Javier whether we can mention this amount or not.
No, it's an amount which is above CHF 20 million. Also there is a question online what the cash situation can be.
Javier, let's go. We have more than CHF 20 million outstanding already, this is just given from the system. We have transitional service agreements with Coherent, which is the seller. Basically, they are collecting the money for us, I would say, still till the end of September when we make the switch in systems. The cash flow from this legal entity is not coming to us. This is committed money. We don't see that risk at all, it impacts our cash flow. Yes, we see that in Q2 we will collect it. Maybe already in a few weeks, the situation will look completely different because we have already some flow over the last few days. The problem seems to be resolved. It's a purely system-related problem.
Okay, great. Thank you for the call. That's it on my side. Thank you.
Thank you, Aurelien.
The next question comes from Walter Bamert from ZKB. Please go ahead.
Hello, everybody. Can you hear me?
Yes.
Perfect.
Perfect. In Q2, you got close to break-even at EBIT level. You were still missing the profits from those orders which take longer to complete. Shouldn't come in a lot more EBIT also in the second half, that you clearly get the second half positive EBIT?
Walter, you bring it a little bit to point. In our business and with our revenue recognition, we have completed all the contract, and in Bystronic, even a little bit more. Unfortunately, we have this shift, of course, the second half of the year, which will be dramatically better on the bottom line. Will it be enough to basically close the gap? No, definitively not. It's definitively our aim. If the net sales comes, which we have in the backlog, then your assumption is going in the right direction. Whether we would be, let's say, already positive, it's difficult to say because, again, we have some new projects. We have even some prototypes in there. The direction is definitively right. Correct.
Not secure to close the gap from H1 or to close the gap to get to a break-even in the second half.
To close the gap of the first half year. I would say that for the second half of the year, we definitively should go towards, let's call it that here, let's be a little bit cautious, towards break-even.
Can you say how close you were to break-even in Q2?
I can just say this. I would say, listen, the big portion, which was more than two-thirds, three-fifths, four-fifths, if you want to call it like this, came in Q1 and the rest came in Q2.
Okay. Thank you very much.
You're welcome.
The next question comes from Remo Rosenau from Helvetische Bank . Please go ahead.
Yes, thank you. The organic growth without Rofin was -7% roughly in sales.
If I take the CHF 304.5 million from last year, this would result in CHF 21 million lower sales from the organization ex Rofin. This is difference of CHF 21 million, which resulted in a negative EBITDA contribution of CHF 16.6 million, and Rofin contributed positively. That means that every CHF 1 million sales you lost created a loss of CHF 1 million EBITDA, almost. This seems like a very high negative operating leverage, does not indicate that there were any additional cost savings between H1 2025 and H1 2026. All the cost savings were before. Or do I miss something here?
Domenico, I can take this. Remo, one additional information is probably that the -7% is at the constant rates. If you take the amount in Swiss franc, actually we are much lower with -12%. If you compare apples with apples, it's CHF 205 million last year versus CHF 267 million this year. Then with an unequal distribution Q1 and Q2. I think this helps potentially a little bit to soften your message. Yes.
Okay. Understood. Then about the pricing situation. The competitive landscape has changed, right? The last few years, and since COVID. What is the competitive situation, in particular concerning new players coming up from China and making your life a bit more difficult also outside of China? What are the consequences on the pricing?
I know that we talked a lot about margins under pressure and so on. I think this is overestimated. Sorry for being very straightforward. Of course, prices are under pressure. We see a Western world where I would say prices are quite stable. I am not saying not under pressure. It is a regional discussion. When it comes to Americas, especially North America, I think we have very stable prices, and we can even somehow mitigate the tariffs. It is a good evolution. When it comes to EMEA, we see a strong aggressivity from our direct competitors, which are not Chinese. I am talking about our big competitors out of Europe, especially out of Germany, being very aggressive. Do we go always with this aggressivity? No, we do not. It is not that we fight for every deal and for every price, because prices are usually not coming.
There we see a pressure. Where we see a price deterioration, a further price deterioration, which in my eyes is somehow dramatic, it is really in the Asian market, especially in China main market, the price drop is massive. This is something which in overall, pushes down our margins. It is really something we see. Of course, we are talking about in overall, I would say in the near two or three percentage points. It is not that we have the big steps. You have to imagine that in China, main competitors are dropping the prices by 20%. So far, we were able to mitigate it, and we did not have seen the necessity so far to go with this drop. Again, China mainland, definitely extremely competitive. When it comes to competitiveness from Chinese, we start to see a kind of a consolidation.
We do not see an increase of Chinese competition. Countries which became, over the years, Chinese, like Brazil, they are Chinese. There we do not compete anymore with a Bystronic product, but we compete with our Chinese products and brands. Right? We see a kind of a consolidation, and we even see that some of the customers coming back from Chinese product to regular premium product. Especially, which is, in my eyes, a positive trend so far, fully automated lines are not in the focus of Chinese machine manufacturers or our competition. Even in China mainland, basically, if we analyze our order intake, whenever it is a fully automated line, a smart factory, you name it. Basically, we are very competitive even with Bystronic China product. When it comes to a single machine, manually loaded and manually unloaded, Chinese are unbeatable.
Okay. How much sales approximately do you do in China, compared to overall?
I have to calculate it. One second.
Well, it's around CHF 40 million-CHF 50 million.
Usually it's CHF 50 million in mainland China, right? Round about CHF 50 million export from China to the rest of the world, but mainly APAC and so on.
Okay. If you look at your geographical sales split and your geographical cost split, how much is the overhang still from cost in Switzerland versus sales? You still have a cost overhang, right?
Yes.
How much of your costs are still based in Switzerland compared to your sales level in Switzerland?
Well, our strongest market in customer sales is the U.S. We have, apart from the manufacturing, in Niederönz, we have also a couple of group functions in Niederönz. There is an overhang of those costs in Switzerland, and therefore, we have this. I assume you want to elaborate on the exchange rate impact. There is an impact on this, yes.
Maybe I can add something, just to clarify a little bit. We cannot compare with Switzerland. I would say the too high costs, especially in EMEA, compared to the net sales. We don't have this issue in North America. This is mainly driven that, and as I mentioned before, we are selling in a different way in EMEA. We have all direct sales. We have many legal entities. We have a huge structure which is not sustained by the volume we have today. Let's put it this way. There is definitively the potential we can raise. It means even somehow an organizational change on how we sell and how we service.
Okay. Sorry, my last one. All these changes you still need to do in addition to what you have done already. Will they cost?
Yes, this is ongoing. This is definitively ongoing. It's not yet a big bang, right? We start with pilot countries where we consolidate. We think even about legal entity and sizes of legal entity and so on. Because if we reduce further our cost structure, we have to work in a different way. Honestly, it's not rocket science. It's what Javier and even I were used to work in our past companies, which I even see in other companies where I'm sitting in the board. Bystronic had a really strong regional setup, which as long you have a high volume and only single machines, you can sustain. With the product mix we have today, it's difficult to sustain it because it's too costly for the volume we have. Easy it is.
Okay. Are there any additional extra costs coming up at the horizon due to the things you have yet to do?
We are elaborating this. Costs are always coming with any changes. It would be too early to say a number today. Every change in countries outside of Switzerland is always costly. There will definitely be some costs.
Okay. Thank you. That's it for the time being. Thank you for your answers.
Thank you very much.
Welcome.
The next question comes from Tommaso Operto from UBS. Please go ahead.
Good morning. Thanks for taking my question. Just two questions on the outlook. You already alluded to it, but for the top line, you're saying that you expect it to be higher year-over-year, mostly driven by Rofin, but on a standalone basis, do you think you could achieve a flattish top-line evolution?
You're referring at the constant exchange rates, right? In the second half, in any case, the difference versus last year will be not that big anymore. We are a little bit cautious, but we are not so far away, Tommaso, with this. Yes. Right now, we did not promise to be higher.
Yeah, Javier, I think, Tommaso, yes, it goes in this direction. Yes.
Okay, thanks. Then maybe a bit more speculative, your midterm guidance where you have claimed that you would be able to achieve the 5%-7% EBIT margins. Now you've been mentioning continued pricing pressure, depending on the different regions, of course, and so on. Would you still think that, over the midterm, those are the margin levels that you would be able to achieve?
Definitely yes. It's clear. It's a matter of volume. I mentioned, where we are behind is in volume of net sales. Very frankly speaking, if we would have percentage of completion, we would have a completely different discussion as per today. We don't have it. It's not an excuse. If the volume is coming, and as you might remember in our guidance, I think everybody had a CHF 700 million in mind. With, without Rofin at that time, to reach this corridor plus minus. If the intake is going towards this direction, net sales will follow. If the order intake does not go in this direction, of course, we have to do something on the cost basis if we don't have further growth or acquisitions or whatever. I'm just talking about the core business to reach this corridor. Of course, it's still our aim.
We are behind, and I was very open on this one. This transformation took longer. That's just the truth, than we all expected. Even the ramp-up of all this automation solutions is somehow delayed by 12-14 months. That's basically the hit we have seen in Q1. There must be a time, despite of the revenue recognition method, where you close basically this gap from order intake to net sales. That's why, yes, we are fully disappointed with the result, but as long the book-to-bill ratio is positive, I'm somehow confident that we can, not without additional measures, if the volume is not coming, go in this direction. Yes.
Understood. Thanks a lot.
Gentlemen, that was the last question over the phone. Back over to you for the written questions.
Thank you very much for the questions we got by the chat. I would like to start with the question we got from Torsten Sauter, Kepler Cheuvreux, regarding service revenue. Can you elaborate on the service business? Should a business uptick not be preceded by a growth in service revenues?
I can take on this one. Not automatically. We have even to admit that Bystronic, and I think I talked a lot about reputation and so on in the past. It's coming from a time where the service business was extremely pushed very aggressively. This is possible if there is a shortage in the market and the high request. You can increase prices. We rather see that we over exceeded a certain level. That's why even in our budget for 2026, we have reduced the revenue in order to fulfill and satisfy the customer because an upset customer will never buy a new machine equipment. We did our analysis why we did lose market shares. This was one of the reasons.
That's why we don't want to be more aggressive on the service revenue, because in our eyes, it would be a one-off in revenue, but it would have a negative impact on the new machine sales because again, you can really stress customers. That's one part, which is decided by us. The second, what we should not underestimate, is the usage and the certain overcapacity, coming from a certain overcapacity in the market. If the machines are not fully utilized. Yes, you don't have to fix immediately all the machines. We should not underestimate that the market, even from us and our competition, was flooded with highly product machines. Less usage, less service, less spare parts. We are quite satisfied that we have a very stable service revenue at the moment.
We don't see a further deterioration, which in my eyes is a strong sign because, please remember that we halved the order intake in new machine equipment from 2021 to 2024. We didn't halve the service business in the same extent. Not at all. From this point of view, I think here we are on a decent level.
Thank you. Another question from Urs Kunz, Research Partners, regarding break-even. When do you expect to be EBIT break-even? Do you have a midterm target regarding your EBIT margin?
Yes. As mentioned on the midterm, our target was first to have a first positive EBIT margin in one of the quarters in 2026. Do we will reach it already this year? That's what we discussed already previously. It will be hard, but not impossible. This could happen in one of the two quarters coming in 2026. On a full year, it's really depending on the order intake in 2026. If it continues like we discussed before, and we answered the question of [Julia], of course, 2027 should become EBIT break-even. If this is the target. It's not, how to say it's not that what we want. Again, it's not yet given that it's coming just because the market evolution.
A question from Marc Saint John Webb of Quaero Capital regarding cash. How do you see cash burn in H2? Where do you expect to see the CHF 256 cash to be at the end of the year?
Well, me just hear a short comment. As I mentioned before, the CHF -57 million in the operating free cash flow is not fully representative. We expect an improvement towards half -year two, it should result in a higher cash position in the CHF 256 million. No cash burn in half- year two.
Another question from Elia Geiser, Research Partners, regarding Bystronic Rofin. There are two questions. What run rate synergies do you expect with Bystronic Rofin? Regarding the OpEx margin was quite bit higher than in the past half years. Is that a new structural level or just temporary?
Go ahead, Javier.
Well, probably on the synergies I can give you the word. Elia, I was trying to figure out what you mean with OpEx Margin.
No.
I know what he means. Maybe I will try, and you can make the synergies. On the OpEx Margin, of course, it is extremely higher compared to net sales if you take the percentage. Was this, how you call it, level or just temporary? For the Q1, it was just temporary. For the upcoming Q3 and Q4, it depends on the volume we will have. If the volume is going towards what we had planned, then we will recover on this one. It was, in the first half year, just temporary. Again, if the volume stays on a low level or the order intake should drop for whatever reason, we don't see it today, we still have a too high fixed cost block. That's definitely true. Javier, maybe on the synergies.
Well, on the synergies, let's say Bystronic Rofin is complementary with the end markets that we have. This was the purpose of acquiring Bystronic Rofin. Obviously, they have the same or partially the same suppliers as we have. Wherever possible, we are binding all the purchases with Bystronic legacy business and this one, actually, we have this already. Other than this, they have a different end market, different customer base, different markets. From there, we are keeping this business unit separate as it operates differently.
The last question we got so far from Torsten Sauter, Kepler Cheuvreux, regarding competitors. AMADA and Han's have apparently grown in H1. Are you losing share again? Are you in the wrong applications and markets for now?
We were not in the most prosperous markets in the past, I think I already answered this. That's why we tried to shift towards mega trends, which I think we are on a good track. It's clear. Just chop and just talk about agriculture might not be enough. That's why we want to have a kind of a diversification. When it comes to AMADA, it's difficult to compare because AMADA is still doing 80% with Japanese. The Japanese market, even the main market, the domestic market, is still quite strong. Further, AMADA has the huge advantage to being a single supplier to all the Japanese transplants in the world. I can tell you, even Japanese transplants right now built in India and so on, they're just buying from AMADA. It's close. It's a home turf.
You can compare it to Trumpf having the same situation with Germany, where they made in the past a huge portion of it. The difference is that Germany is down and Japan is still doing good. Please don't underestimate that the currency is helping AMADA a lot, but we don't see market share losses or further market share losses toward AMADA, definitively not. When it comes to Han's Laser, I can tell you that Han's Laser is losing a hell of money with the machine tool business and the lasers, which are comparable to our business. Han's Laser have a very broad product portfolio. They are doing very good. They're performing very good, and they can just afford to not be profitable in the business we are in. By the way, the price driver in China is Han's Laser dropping the prices.
It's a clear strategy to force a consolidation and bankruptcy of many Chinese competitors. That's how we see it.
There are no more questions. I hand back to you, Sandra.
Okay. There are also no further questions over the phone. Mr. Iacovelli, Mr. Perez , if you would like to add some closing remarks.
Thanks a lot for the questions and for joining our half year presentation. I know it's not satisfying. It is not for us. We are not finding any excuses. We see some highlights. For sure, we are a bit cautious to not become too euphoric after Q2. We do believe that we are going in the right direction. It takes longer than expected, so a bit of patient. I know it's a hard demand after the last few years. Yes, we stay confident. We will further fight. We don't wait on recovery on markets. We say that's not in our hand. We continue to work on what is under our control. With that said, thanks again. If there are further questions, please don't hesitate to contact Javier or myself. We are happy to further answer any possible question. Thank you very much.