Good morning, everyone, and welcome to Comet's webcast on the first half 2025 results. Thank you for joining us today. I'm glad to have our CEO, Stephan Haferl, and our CFO, Christian Witt, here with me today. They'll walk you through the results and share some thoughts on what to expect for the rest of the year. As a reminder, all presentation materials and supporting documents have been available on our website since this morning. You're welcome to download them at your convenience for reference during today's session. Before we begin, please note that today's presentation may include forward-looking statements. These statements are based on current expectations, estimates, and projections, and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. With that, I'll now hand over to Stephan to begin the presentation.
Thank you, Ueli. Ladies and gentlemen, welcome to the presentation of our... Appreciate your time in following our presentation and for the opportunity to answer your questions afterwards. To start, I will provide you with an overview of the overall economic environment and assessment of the industries in which we operate and the key developments at Comet within this context. Christian will follow with the explanation of the financial numbers before I conclude with the outlook. After that, you will have ample time to ask us any questions. Now, let me begin with a brief review of our business and the industries we operate in. In the first half of 2025, Comet recorded a 20% year-on-year increase in net sales. In local currencies, our net sales demonstrated even stronger growth at 23.2%.
This impressive top-line growth was primarily driven by our PCT division, which outperformed the group as well as its market segment and vertical by growing at an impressive rate of 42.4%. These results reaffirm the consistent trend we have observed over several quarters. Our semiconductor exposed business continues to lead the way in terms of growth dynamics within the group, outperforming the industry and gaining market share. While we celebrate these achievements, it is essential to address the challenges we have encountered, particularly the impacts of a weak gross margin on our profitability. In the context of our financial performance, it is important to note that various factors, including changes in product and regional mix, as well as currency fluctuations, have exerted pressure on our margins. We have initiated a cost efficiency program in the IXS division to address these challenges and enhance profitability.
Our focus moving forward will be on optimizing processes, streamlining operations, and reducing costs in the division to improve margins and achieve sustainable profitability. This action is specifically taken because IXS's transition into the semiconductor inspection and the metrology market has taken longer despite its increasing positive momentum. In the first half of 2025, we noted a deceleration in incoming orders towards the latter part of the period. While all this saw a 7% growth compared to the first half of 2024, there was a sequential decline of 12% in incoming orders from Q1 to Q2 2025. The current book-to-bill ratio is slightly below 1.0x, emphasizing the importance of boosting future order intake to sustain a robust backlog. Moreover, allocating resources towards advancing Comet's strategic growth objectives has led to a decrease in free cash flow compared to the previous year.
A key initiative, the construction of the new Asian Hub facility in Penang, Malaysia, is fully on track for completion in 2026. This project holds significant promise for driving future expansion and enhancing operational effectiveness once fully operational. Let's now have a look at the developments in the industries we serve. In semiconductors, AI, cloud, and high-performance computing are driving strong demand for advanced logic and memory chips. However, the overall industry is facing challenges due to macroeconomic uncertainty, geopolitical tensions, and weakening demand in certain segments linked to volumes such as consumer electronics in general or automotive. The semiconductor market continues to remain in a state of value over volume play. In the area of wafer production equipment, we have observed a sustained level of investment, reflecting the industry's resilience as well as continued strong demand for leading-edge AI and HPC-related processing equipment.
Specifically in the memory segment, there is a notable increase in investment in high-bandwidth memory capabilities. However, the prevailing risks and challenges have resulted in heightened and volatile capital outlay. This scenario has prompted a strategic pivot towards upgrading existing wafer fabrication equipment where possible as a more cost-efficient option compared to acquiring new tools. For us, with turnover tied more closely to full hardware and system deployments, such upgrades don't move the needle as much. In the manufacturing sector, we have observed resilience and a modest recovery in the U.S., supported by still robust economic conditions and resilient consumer demand. However, other regions continue to face persistent weakness despite some signs of recovery on the horizon. Turning to the automotive sector, we have seen stagnant car production and slower growth in electric vehicle sales. This is largely due to cautious consumer sentiment and reduced subsidies in key markets.
While long-term electrification trends remain intact and offer opportunities, near-term demand has been tempered by economic uncertainty and evolving regulatory frameworks. This situation has led to a continued subdued demand for X-ray inspection and metrology equipment, while competition for the reduced or stagnant market has continued to increase, especially in the battery inspection market. The aerospace industry is not insulated from the current uncertainties. While the industry is still growing, the pace has slowed, and further deceleration is expected in the second half of the year due to ongoing uncertainty. However, the supply chain remains in recovery mode, which keeps the overall trajectory on a positive growth path. Additionally, defense budgets in key regions have continued to rise. As geopolitical tensions persist and global security challenges evolve, there is a growing emphasis on addressing emerging threats and safeguarding national interests. What do these industry developments mean for Comet?
In the PCT division, AI-driven momentum has continued to build. As organizations increasingly adopt AI solutions to boost efficiency, productivity, and innovation, the value proposition in AI remains strong and compelling. However, despite this momentum, we are still seeing volume-driven segments of the industry, mainly consumer electronics and automotive, falling short of expectation. Equally, AI device penetration into the edge, leading to a strong increase of refresh cycles and volume growth, is lagging behind. In contrast to the strong top-line growth at PCT, which indicates further market share gains, we noted a lower than expected gross margin influenced by various factors. Christian will give more details in his speech. On a brighter note, our Synertia platform is well positioned in the market, especially for the ongoing node transition towards gate all-around topologies, receiving significant attention and traction.
With further, as well as accelerating design wins from key industry players, Synertia continues to demonstrate its value proposition and market relevance in driving customer success and satisfaction going forward. Assessing the current market dynamics in the IXS division, we have observed that high runners in our product portfolio, especially for automotive and electronics inspection, are currently facing low market demand. This trend presents a significant challenge for us, which we are addressing by restructuring, as mentioned previously. On the upside, IXS is experiencing a further uptick in demand for its latest X-ray system. Specifically, the CA20 X-ray system developed for the semiconductor end market is attracting significant and accelerating attention through substantial interactions with leading semiconductor clients globally.
Although a few are delaying their purchasing decisions due to the present market environment, the substantial level of engagement indicates a robust interest in IXS product portfolio and confirmation of needs, requirements, and necessities in this emerging market for 3D advanced packaging inspection. As we continue executing on the IXS strategy beyond 2025, with a stronger focus on the semiconductor industry, we're making changes at IXS to better align our cost structure and capabilities with future market needs. This involves organizational adjustments, including workforce measures, as well as expense reductions across the IXS division. These steps will support our long-term goal of building a more focused, agile, and globally integrated business. Considering a weak market sentiment, we are particularly pleased that the IXM division reported growth in both net sales and profitability.
IXM has launched and will continue to launch a range of innovative new products that are set to lead the industry. One of the bright spots in IXM's end markets are the aerospace and defense sectors. Despite the overall market challenges, we have observed a positive trend in those industries with increasing demand for our products and services. Although we remain confident in the future of IXM, we know that the trend in our end markets powers sourcing from lower-cost competitors, promoting domestic production, and embracing more intense competition. By measures such as enhancing our manufacturing capabilities or continuing to foster a culture of innovation and efficiency, exemplified by past and present industry-leading product launches, we are positioning ourselves not only to navigate current market challenges. Let me briefly summarize the first half year.
The surge in investments in AI-related technologies within the semiconductor industry has played a crucial role in propelling an impressive 42% increase in net sales for PCT. These investments have enabled us to capitalize on the growing demand for AI solutions and position ourselves as a key player in this rapidly expanding market segment. It further manifests success in our fundamental strategy of the PCT division to diversify our market presence from NAND to more logic, DRAM, and high-performance memory applications. The trend in the semiconductor industry observed over the past few years continued into the first half of the year. Growth in the semiconductor industry was primarily fueled by AI-related value-driven applications, whereas volume-driven applications remained subdued. While we have experienced a gradual improvement in sales, with Q2 showing stronger results compared to Q1, margins were below our expectations.
As one of several measures to improve profitability, we have already launched improvement initiatives to drive performance enhancements. As we look ahead, we are mindful of the slowdown in incoming orders towards the end of the first half year, which indicates upcoming challenges for the second half of 2025, especially in our semiconductor business. We anticipate a slowdown of growth with a rather flat increase in sequential sales from H1 to H2. With that, I'll hand it over to our CFO to walk us through the numbers. Christian, the floor is yours.
Thanks, Stephan, and good morning, everyone. In the next few minutes, I will share our financial results for H1 2025 with you and highlight what's driving our performance. Our top-line growth has been primarily driven by strong performance in the PCT division and solid results in IXM. Although top-line growth was good, we have experienced a decline in gross profit margins, which has impacted overall group profitability. Additionally, FX headwind had a negative effect on our results. Forward-looking, the book-to-bill ratio is around one, indicating a softening in the weight of application equipment CapEx growth going into the second half. Considering these challenges, our financial priorities remain steadfast. I would like to highlight two notable initiatives in this regard.
Firstly, to deal with the challenges in IXS and the impact on our financials, we have implemented organizational adjustments, including workforce reduction and expense reduction initiatives to align with our strategic goals. Secondly, we have increased our revolving credit facility by CHF 40 million-C HF 100 million in total to enhance our financial flexibility going forward. Going into more detail, our performance in the first six months was marked by a diverse range of outcomes across our various divisions. In the current headwinds and challenges, two divisions delivered significant growth in both sales and margins, a clear demonstration of our resilience in a difficult business environment. During the first half year, the PCT division achieved remarkable sales growth of 42.4%, highlighting its expanding presence in the thriving AI applications market and the result of our strategy to diversify the application base.
Our growth was predominantly fueled by our established match boxes and vacuum capacitors. Furthermore, the Synertia platform, featuring the RF generator and the RF match, has achieved new design wins, paving the way for expanded market reach. Nevertheless, prevailing market conditions, marked by increased uncertainties, have resulted in prolonged customer testing and acceptance timelines, alongside a gradual recovery in the semiconductor industry. Despite these obstacles, we maintain a positive outlook on our business performance for the remainder of the year, anticipating a clear revenue increase from Synertia in 2025 compared to 2024. Despite achieving strong top-line growth, the division's profitability fell short of our expectations, with an increase in EBITDA margins from 9.7% to 15.8%. This was primarily due to a lower- than- expected gross margin influenced by an unfavorable product and regional mix and adverse exchange rates.
In addition to gross margins, order intake towards the end of the half year was disappointing. Recent analysis indicates a slowdown in incoming orders in the past few weeks, suggesting a dynamic second half year for PCT, more dynamic than initially anticipated, with some orders being delayed from Q3 to Q4 and Q4 to 2026. IXS faced challenges in the first half year due to difficult market conditions. This resulted in a net sales contraction of 11.8% to CHF 48.7 million and an underwhelming EBITDA margin of - 15.4%. Sales of standard systems into the established industrial markets were slow and could not be offset by new systems. However, there's growing interest in new systems, with CA20 X-ray system gaining traction through engagement with leading semiconductor customers worldwide. While some potential customers are delaying decisions due to market conditions, the level of engagement indicates a solid interest in IXS's offering.
To enhance profitability and to implement the strategy beyond 2025, we have started to make strategic changes to align the cost structure and the capabilities of IXS with our future market demand. These changes will involve organizational adjustments and expense reductions across the division to optimize workforce and operational efficiency. Unlike the system business, the IXM division has achieved solid results in the current uncertain business environment. The good performance was driven by the launch of new products in recent years. Those innovative products, such as Mesofocus and Explorer, gain more and more market traction, effectively offsetting price pressures from heightened competition in Asia, rising tariffs, and increased raw material costs. As a result, net sales rose by 4.2% to CHF 48.4 million. The EBITDA margin also improved by 1.5 percentage points to 17.2%. How do the divisional accomplishments translate into group figures reported?
The performance of the division led to a significant increase in net sales of CHF 37.9 million, representing a growth of 20% at group level, even in the face of a CHF 6 million negative impact from foreign exchange fluctuations. Despite the strong top-line growth, the profit margin was disappointing, dropping from 38.5% to 40.1% in the first half year of 2024, representing a decrease of 1.6 percentage points. As Stephan already mentioned, the lower gross margin is mainly due to mix effects and adverse currency fluctuations. The mix effects are not only related to product mix in PCT, where we sold a higher proportion of lower margin products, but extended to the regional and country mix, which developed unfavorably. While this decline is unsatisfactory, we are actively addressing other factors to compensate in order to ensure higher profitability levels going forward.
Because of the decline in the gross margin, the EBITDA also came in lower than expected. Lower than expected growth in the EBITDA margin was amplified by our investments of CHF 5.5 million year-over-year from our strategic growth initiatives. These investments are needed to drive the market penetration of our new products, particularly Synertia, CA20 X-ray system, and new X-ray modules. We still expect to absorb these costs once the new products begin to contribute meaningfully to net sales, which is anticipated to start in the second half of the year and gain momentum throughout Q2 2026. In summary, the EBITDA increased by 59.5% to CHF 20.7 million, resulting in an expanded EBITDA margin of 9.1%, up by 2.2 percentage points. The cash flow of CHF 1.3 million was primarily due to an improved working capital ratio and the investments in the growth project in Penang and Sumat.
Our focus on expanding into Penang aims to meet the increasing demand for weight of application equipment in the long term. The construction of our Penang facility is perfectly on time. Operations are expected to start by the end of Q2 2026. Our return on capital employed, ROSI, saw a significant improvement, reaching 7.1% in H1 2025, compared to just 1.5% in the previous year, but is still below our cost of capital of 9%. Our cash and cash equivalents, around CHF 93 million, are at the conclusion of H1 2025. A robust cash position underscores our liquidity strength and serves us as a solid foundation for pursuing future growth and investment opportunities. Our CapEx experienced a notable upswing, totaling CHF 12.1 million in H1 2025, equivalent to 5.3% of sales. This marked an increase of 2.8 percentage points compared to the same period in Q2 2024.
The primary driver behind the surge was the CapEx associated with the new production building in Penang, Malaysia. We anticipate that CapEx will remain elevated throughout Q2 2025 and Q2 2026, as we continue to invest in the Penang facility until it becomes operational. Net working capital as a percentage of sales showed significant improvement in H1 2025, decreasing to 27.3% from 32.7% at year-end 2024. This represents a reduction of 5.4 percentage points. While we have made significant progress in this area, we see room for further enhancement in the future. Moving forward, we will thoroughly explore the opportunity to continue improving our net working capital efficiency. Our net debt position improved significantly to a net cash position of CHF 0.4 million in H1 2025, compared with a net debt of CHF 16.1 million at year-end 2024. The corresponding debt factor improved from - 0.27 to zero.
Moreover, our equity position remained robust at CHF 308.1 million at the end of H1 2025, with an equity ratio of 61.8%, while there was a slight decrease of 5.3% in equity compared to year-end 2024. The equity ratio increased by 0.5 percentage points, reflecting a healthy balance sheet structure and financial stability. Lastly, our earnings per share surged to CHF 1.01 in H1 2025, marking an increase of 94.2% compared to the same period last year. In conclusion, Comet Holding AG has maintained an excellent financial position in the first half of 2025, characterized by strong liquidity, prudent debt management, and robust earnings growth. To conclude my part of the presentation, let us revisit the weak profitability we experienced in the first half of the year.
Our gross margin, currently at a low point, as seen in the trough of the semi-cycle, reflects challenges in exchange rates, mainly the U.S. dollar versus the Swiss franc, and product and regional mix. To tackle this situation, we have initiated actions to improve our profitability in the latter half of the year. This includes efficiency measures and faster capacity adaptation in production, partial price increases, reduction of discretionary spend, and the reduction in force in the IXS division. These actions are to improve our operational efficiency, but will not slow down the development and marketing of our product range expansion, the increasing co-creation with our customers, as well as the new product families, Synertia platform and CA20 X-ray system. We are dedicated to executing those initiatives with precision and agility to generate lasting value for all our stakeholders.
With that, I conclude my review of the first half year 2025 and hand it back to our CEO for an outlook on the second half of the year. Stephan, please.
Thank you, Christian. Let's now turn to the outlook. Ladies and gentlemen, let me share with you our insights on the latest developments in the semiconductor industry and the other industrial segments, particularly focusing on the trends and projections that are shaping our business in the coming months and thus our guidance for 2025. First and foremost, I am pleased to report that we expect to continue to experience strong growth in high-value AI-related products, reflecting the increasing demand for advanced technologies and the ongoing digital transformation across industries. While the volume markets remain volatile and are showing a slight recovery at best, we remain cautiously optimistic about the overall trajectory of the semiconductor industry for the rest of the year. We are closely monitoring market dynamics and trends, including the persistent cautious CapEx spend in the industry, which may impact the pace of recovery in the near term.
Considering possible order shifts from H2 2025 to H1 2026, we are proactively adjusting our operational plans and strategies to ensure that we can effectively manage further fluctuations in demand and maintain our competitive position in the market, as well as ramp readiness. Looking ahead, we are projecting a wafer fab equipment CapEx growth for full year 2025 of 3%- 5% over full year 2024. In the manufacturing sector, we are witnessing a recovery in the United States, driven by reshoring initiatives and investment in infrastructure. Conversely, the manufacturing landscape in Europe and Asia remains subdued, characterized by trade tensions and cost pressures. The potential impact of tariffs on global trade is a critical consideration for the global economy, as it could pose challenges and risks to overall demand, to supply chains, and pricing dynamics.
As we assess the implications of tariff policies on our business operations, we are proactively exploring mitigation strategies to safeguard our competitiveness and sustain our growth trajectory in a volatile trade environment. On a brighter note, the resilience of air travel and defense spending presents a promising opportunity for us to leverage our expertise in providing advanced solutions for non-destructive testing. Last but not least, while car production is expected to remain flat, the growth of electric vehicle sales at the global level signifies a significant shift in the automotive industry. We are ready to capitalize on this trend by enhancing our product portfolio to meet the evolving needs of EV manufacturers and automotive OEMs, for example, in battery testing. Let me conclude our presentation with the outlook for full year 2025.
The world around us is in a constant state of change, presenting us with new challenges and opportunities that require us to adapt and navigate with caution. As we look ahead to the remainder of fiscal year 2025, we are facing a landscape that is different from what we had originally anticipated. The global economy is experiencing fluctuations, market dynamics are shifting, and consumer behaviors are evolving in ways that we could not have predicted. As a result of these challenges, we reduce our guidance to better reflect the current market realities and uncertainties. For full year 2025, we now expect net sales of CHF 460 million- CHF 500 million, with an EBITDA margin in a range of 10%- 14%. What are the basic assumptions that lead us to the new guidance?
First of all, the semiconductor industry is experiencing a period of heightened caution, driven by factors such as new tariff proposals, further export restrictions and trade barriers, geopolitical tensions, and broader concerns that are reshaping the global business environment. As a result, the industry's outlook for the second half of the year has become increasingly cautious. In this context, it appears we are in a stagnation phase of the recovery. While certain sectors, such as aerospace and security defense, may continue to see tailwinds, the overall industrial markets are expected to face limited growth opportunities in the near term. This less optimistic short-term outlook, including further headwinds from FX volatility, has prompted us to reassess our growth projections and align our guidance with the prevailing market conditions.
While the road ahead may be bumpy and volatile, our priority remains the disciplined execution of our strategic growth initiatives, which are increasingly shifting from opportunity to reality, supported with targeted cost efficiency efforts aimed at improving margin performance. In conclusion, as we navigate through the challenges and uncertainties facing the semiconductor industry, we are guided by its steadfast commitment to excellent innovation and long-term value creation, to laying the foundation for sustainable growth and success in this dynamic landscape ahead. In summarizing, our PCT strategy is yielding results both in terms of increasing our market shares in logic and DRAM, as well as breaking into the generator market with Synertia. At IXM, the strategy is working and yielding results with the new product lines in that, among other areas, semi, electronics, and batteries.
At IXS, the strategic pivot is well on the way in terms of opportunities and design verifications on CA20, but we initiated a restructuring to sharpen our focus on semi and improve our overall cost position. This concludes the presentation. We are happy to take your questions for the remainder of the time in the webcast. Thank you.
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 up the volume from the webcast while asking a question. Webcast viewers may submit their questions in writing via the relative field. Anyone who has a question may press star and one at this time. The first question comes from Oliver Wong from Bank of America. Please go ahead.
Hey, good morning. Thanks for taking my question. I have a couple of questions on margins. First is for IXS. I understand you're taking sort of cost efficiency measures. Is that largely factored into the full year, the updated full year margin guidance? Are the bulk of those improvements going to be implemented quite soon and thus very much reflected into the H2 margin? My second question is on the PCT margins that were also weaker than expected. Could you help us, could you share a bit more color on the product and regional mixes, kind of what exact dynamics led to the weakened margins and whether you're seeing the same effects for the rest of the year? Thank you.
Okay. Thanks for your question. Let's go through that. It's relatively straightforward in IXS. The efficiency measures, the restructuring measures we are planning are going to be executed to the very largest part in H2 of 2025. We are in the middle of execution, and they are all factored into the guidance. That is an EBITDA guidance, including the cost for those restructuring measures. On your question to PCT, what led to the margin effects, which are positive on the volume side, but have the counterparts on the other areas? Let me explain a little bit what's the key drivers behind that, and then let me give you the outlook how that will continue. On PCT, you have a large volume of the revenue in U.S. dollars. The exchange rate effect in PCT is larger than in the other areas of the company.
If you take the whole company, we have ±1 % in the first half of the year, which we are down on the EBITDA margin due to FX, and the very largest part of the absolute amount is attributable to PCT. When you look at the full year for the FX effect, that will be ± 2% if the dollar increases plus minus or remains plus minus where it is at the moment, which is the basis for our projections. That will also be largely on the PCT side. That's number one. Number two, we have a couple of mixed effects, and I've elaborated on those, but let me go a bit deeper. We have some mixed effects with products within our customers, and these are not really systematic in a way that you could say it's more this group of products or that group of products.
It is a single individual product which might go in one or the other application. That is one of it. That's nothing you could really predict. You can look at your order book, but as some of that material is pulled as consignment, you don't even know exactly what will happen. This is a fluctuation and an uncertainty which we do live with, can live with, know how to tackle it, but it just reduces the visibility or it has leads to reduced visibility on the mix side. Second effect we see there on the mix side when we come to regional mix, we have a not too different regional mix when you look compared to H1 last year. When we look into our expectation for the second half, we have originally anticipated a stronger pickup in China, which is not on the bad side when we look at margins.
We do not see the hard signs yet for that to happen, which is why we have taken that out of the guidance, which leads to a slight decrease there. That is the different type of mixed effects we can see. Looking into cost as well, because it has a couple of aspects I've mentioned before, we have significantly invested into a couple of things where we expand for our future growth. That includes R&D, that includes some infrastructure like IT and sales and marketing, but that also includes some items when it comes to our facilities, especially to Penang, which is on the one hand CapEx, but there's always some OpEx area. That is a couple of items which lead to the higher cost base we have in the first half of the year. We have a couple of small efficiency issues.
That's like 0.5%, 0.1% at the maximum, which we have in the first half year. As mentioned before, we have the measures in place, some of them as of July 1st, some of them ongoing, to improve that for the second half of the year and compensate a large part of these effects in the second half of the year. That is basically to give you some more color on what was leading to the less than expected gross margin, especially in PCT and the group, and how we see the way forward. When you look into the functional costs, the buildup was mainly made in the second half of last year. We do expect a roughly flat development of the functional costs from the first to the second half of the year, with the exception that we will see the restructuring costs in IXS in H2.
That will be the difference. The rest should be plus minus flat, and we expect certain improvements on the gross profit side, as mentioned.
That's very helpful. Thank you.
The next question comes from George Brown from Deutsche Bank. Please go ahead.
Yeah, hi guys. Thanks for taking my questions. I have two, if I may. Firstly, maybe you can help us understand this disconnect between Lam Research and what they're seeing with regards to strong upgrade activity in NAND and what you're seeing. I obviously understand new capacity is better for you guys, but I guess I would expect Comet to see some benefits from upgrades in NAND. Any comments on that disconnect with your largest customer in PCT? A follow-up to that would be, you know, what's your expectations now into 2026, given you order push-outs from the second half? I have a follow-up as well. Thanks, guys.
Thank you for the question. The seemingly existing disconnect is actually not that difficult to explain. When you look at the messaging from the side of Lam, they look into a flattish second half of the year and a predominant, I would say, on the NAND side, activity on upgrades. Upgrades do not necessarily mean that an existing tool is completely gutted and all the instrumentation, including, for instance, our match boxes or Synertia generators, are being replaced. An upgrade can also involve just an upgrade of the software and changes in recipe. While that is, in general, for Lam, always a good business and always involves good margins, it does not necessarily mean that it represents a business opportunity for us if they are not going to replace upgrade hardware instrumentation like match boxes. That hopefully explains a little bit that seeming disconnect.
When it comes to the outlook for NAND, what we can say is that NAND typically is strongly linked to volume markets. The current sentiment out in the ecosystem is such that some talk about H1 2026 to H2 2026. Others say the next surge for NAND demand is rather in 2027 and then peaking in 2028. It is really hard to anticipate that. Some connect it also with sort of the transition of new gate all-around topologies, which is presumably going to happen in 2026, to then a surge in demand for NAND once those new semi-divisors come into, especially, consumer products. It's rather difficult to say. From my vantage point today, I would definitely revise my statement from earlier this year where I said we anticipate NAND recovery, including capacity, a soft capacity buildup by the end of 2025, and push that rather into 2026.
That will be my view as of today. I hope that gives a little color to that point.
Yeah, no, perfect. Just a second follow-up. In terms of new products on the Synertia, the CA20, you said that you expect a significant step up in sales in 2025 versus 2024. I was wondering if you could help quantify that, not just in terms of absolute growth, but in terms of what those new products can contribute in terms of percentage of total sales. You know, how much do you expect these new products to add to 2026 as well in terms of percentage of sales or an absolute number, if possible?
Right. I mean, the absolute contribution will remain still rather small in 2025. As I mentioned during my presentation, what we see is an acceleration of design wins and, I would say, smallest volumes to small volume buys from more and more customers. What we have not seen yet, and we've explained that in previous presentations, are big volume orders. The reason why we don't see that is that this will be strongly connected with the start of volume production, especially of new nodes. Once gate all-around, as the latest and most leading topology, goes into volume production, if you put a high likelihood to the roadmaps that are out there, that is presumably at this point going to happen in 2026, provided, again, that the end customers or the customers of, in this case, TSMC, are able to push those devices into their products.
Brilliant. Thanks, guys.
The next question comes from Sebastian Vogel from UBS. Please go ahead.
Hello. I've got three questions. I will ask them one by one. First one is on FX. Is there a chance that you could give us a little bit of a ballpark figure? What are your revenue share in U.S. dollars versus your cost share in U.S. dollars?
The revenue share in U.S. dollars is between 60% and 75%. The cost share is significantly lower.
Could you ballpark more than significantly lower, possible?
Ballpark 20 to 30.
Got it. The second question is with regard to the new guidance versus the old guidance, both on top line and on margin. Can you sort of try to help us a little bit understand what the building blocks and how the sort of the share of the building blocks were contributing to the change in guidance in that sense? Like what share is coming from mix? What share is coming from volume? What of FX? Is there something else in there? That would be great if you can add your thoughts there.
Yeah. Very clearly, looking starting with top line, we have three major effects. One is FX. That's in the range of CHF 10 million to CHF 15 million. We have volume PCT. That's somewhere between CHF 10 million and CHF 20 million for the reasons Stephan mentioned, market. Then we have the volume on the X-ray side, zero to minus CHF 5 million, where IXM is benefiting from stronger defense markets and so forth, compensating the hits, on the other hand, from the general markets and areas like automotive, electronics, and the alikes. IXS, we do have a lower than expected ramp of the CA20 X-ray system, and we do have also some impact on the general markets, as previously mentioned. In total, these effects on the X-ray are rather small. The key effect on revenue is on the PCT side.
Looking at the margins, we have, when you just look in the percentage points, plus minus, where are they coming from? We have FX of ± 2 percentage points. We have the lower- than- expected volume impacting via the leverage with about 2 to 3 percentage points. We have the mix effect of the regions and products. That's between 1 percentage point and 2 percentage points. We have a restructuring of IXS, which is up to 1 percentage point. On the other hand, we have taken countermeasures on the cost side, but not jeopardizing our key areas where we are investing in for our future, but leading to approximately 2 percentage points improvement on the prior guidance. That's where you end up, plus minus, with the new guidance of 10%- 14% in EBITDA.
That's more or less where it is coming from when you take the different components like FX, the volume, and the mix. On the other hand, the restructuring and the cost measures we have initiated and implemented.
Got it. One last question, obviously, about the IXS-related workforce. We are trying to guess. They made it implicitly anyway right now, but nonetheless, the associated cost that you have in mind that would hit you in the second half would be around which number?
It's up to 1% as a maximum.
Got it. Many thanks. That'll be all my questions then.
Sorry, % to be clear, percentage point of total Comet revenue, not of IXS revenue.
Yeah, yeah. No, got that one. Clear.
The next question comes from Michael Foeth from Vontobel. Please go ahead.
Yes, hi. Good morning, gentlemen. I have two questions. The first one is really on IXS. You mentioned all the measures that you're implementing. My question is really, where do you want IXS to stand in two to three years in terms of the profile? How should we think about the financial profile, the sort of growth trajectory, and margin profile that you are targeting for IXS? That is one question. The other one is on the disconnect with Lam. Maybe you already answered it in the answer you gave, but Lam seemed to be more bullish on China than it previously was. You seem to be a bit more cautious on China than you previously were. Is the answer to that the same that you gave for NAND and the upgrade business, or is there a different assumption behind the China perspective? Thank you.
Right. Thank you, Michael. Very good question. What is the profile position that we foresee and where we invest and work hard to achieve at IXS two, three years down the road? Clearly, we want to be at the back end or out of the woods in terms of the strategic pivot. The outcome has to be and will be that the revenue profile will be stacked clearly towards revenue coming from semiconductors. We will keep electronics, and there will also be revenue coming from battery. This part will be absolutely dominant over what will then still remain from the legacy business, especially on the automotive side.
As we have explained a number of times, that is how we are planning and know that we'll be working from the sales that we have been able to make so far, especially on the CA20 X-ray system, but also on other systems that go into the semiconductor market. The margin will be a lot better than what we have seen in the best of times of Yxlon or IXS within the Comet Group. When it comes to your question on Lam and the disconnect, I think the disconnect is not really existing when you consider the fact that Lam is profiting, especially in the NAND business, from upgrades rather than from capacity expansions. When you look at the utilization rates that we have in the NAND sector, they are rather low. They are just barely above 50% in some areas.
That is also one of the reasons why many players in the industry anticipate that capacity expansions will not happen in the short term. When it comes to China, I wouldn't say that we are bearish on China at all. We are definitely, I would say, more on the positive side, chips like Lam, but that is also where we have put in a lot of caution. It is hard to predict where things are going in terms of the geopolitical, let me call that messiness. Also, taking into consideration that in China, the entire semiconductor industry is very active to try to achieve self-sufficiency. That may mean that some of the entry-level products that we are still selling in China, not necessarily at the best margin, could be over time also replaced by Chinese actors, by Chinese companies in China.
There are lots of parameters that go into, I would say, the considerations to the answer to this question. There is a lot of uncertainty and questions of timing involved.
Okay, perfect. Thank you. That's helpful. Just one follow-up. You mentioned tariffs impacting IXM. Can you be a bit more specific how you're impacted, and if you can mitigate that somewhat?
Sure. I can give a little color to that. IXM is in its business with the U.S. in the situation that in the U.S., there is one big direct competitor, and that is Veris Imaging. Basically, they have, to a certain extent, uneven lengths of the sticks they fight with. That means that IXM has no issues in adapting pricing in order to mitigate the tariffs for products that are new or cannot be sort of replaced by products from our dear friends in the U.S., Veris Imaging. However, in areas where there are me-too products locally available, it has adverse effects. If we want to keep the volume in certain circumstances, we have to adapt pricing, and that leads obviously to it.
Okay, perfect. Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone or submit your questions in writing via the relative field. The next question comes from [Nijj Navarich] from Octavian. Please go ahead.
Yes, hi. Thank you for taking my questions. Maybe the first one, you're mentioning market share wins, but at the same time, you're saying there is increased competition also in China. I mean, can you maybe elaborate on that point?
Yes, exactly. The market share wins relate to that fundamental strategy that I mentioned of us transitioning over from NAND more into logic and HBM. On that side, clearly, we have increased share of wallets. We have increased our market share. When it comes to China, that is entering into murky waters. What we see is not a decline of our business, but it's very difficult to gauge how much of the business we are actually getting. We grow in China, but are we growing at the rate that the industry is growing? At the same time, when you go, for instance, to a semicon show in China, you see potential competitors literally mushrooming. Whether or not they are getting share from us, we don't know.
The waters are too murky to say, but obviously, we have put in a lot of caution in how we are looking into the development of that business.
Okay. As my second question, can you maybe give us a bit of an overview on your capacity? How much spare capacity do you have? Are there any plans to maybe move some of the production back to the U.S.? Just looking at TSMC plans. Samsung won an order there. How are you looking at this maybe for the next two years out?
Sure. Maybe on capacity, I'll hand over to you, and then I'll take some of the strategic footprint move considerations as a follow-up.
When you take a look at our capacity utilization at the moment in our factories, it's somewhere between 60% and 80% in a one-shift model. We have all the possibilities to expand there if we want to. In terms of movement, that is other issues where we need it for, which Stephan will expand on. I think what's important to understand is that Penang is not first and foremost a capacity expansion to make that explode. It is to give us a second location, to have the resilience our customers require, and to have a second hub in the world, which is in a low-cost semiconductor-packing country. I think that is not to be viewed from a capacity perspective. That is to be viewed from a strategic and long-term cost perspective.
Right. When it comes to the footprint considerations, as of today, and that is what we will stick to in the foreseeable future, we still have manufacturing capacities, actually, in the U.S., in Zhangzhou. They are currently being used, especially for new product introduction, small volume high mix, and also used as sort of the extended workbench of the mutual R&D efforts that still happen to a large extent in the Silicon Valley. Our R&D people in Zhangzhou are working hand in hand with R&D people from the two big wafer fab equipment makers that sit basically within a square mile of us. You alluded to TSMC and other players coming back to the U.S. As long as our principal customers actually do their manufacturing in Penang or close to Penang, not far away in Singapore, and we deliver there, there is for us no need.
We were in a situation where we were manufacturing in Zhangzhou and shipping far, far away for them to integrate our product into their systems and then being sent back to the U.S. We don't want to do that. We want to stay close to them. For us to consider transferring a part of the volume that we have transferred to Penang, for instance, back to the U.S., that would require that our customers also do this move. If that's the case, we have the possibility to do it. We're not going to proactively do it because it doesn't make any sense. I hope that kind of explains a little bit our thinking and our planning forward.
Yes, thank you very much. If I may, my last question on the tariffs, has there been any impact there? Yesterday we heard from Inficon, they had 200 basis points impact. You do quote this cost impact, and it's quite high. At the same time, you mentioned pricing. Are we seeing some of the effect there, and how is pricing maybe linked to that? Thank you very much.
Let me be very transparent and clear.
When it comes to P, and I'll go by division so that it's fully understood how the business model and the relations with our customers and our competitive position is the basis where we do or don't have an impact. In the PCT division, we have net-net zero impact of tariffs. The reason is that the U.S. tariffs in general are only applicable for products which remain in the U.S. If there's anything that our customers ask us to send them to a U.S. location, we will happily do so at their request, but they'll pay the tariff. It's very simple, and that's the type of agreements we have with them from basically three days after liberation date. That was very clear from the very beginning from the side of our key customers.
No impact on the PCT side because wherever we have something, it's to be paid and is being paid by the customer. Looking to IXM, Stephan explained what's the competitive position. There we do have an impact on the tariffs on our profitability because with selected products/customers, we do give in to some varying degree on prices, but very, very deliberate and selective. The overall effect-based estimate for 2025 is ± CHF 1 million, total 2025 impact estimate. Between tariffs we pay and what we get back in pricing, the difference, what we don't get back, is the million. In IXS, we have a relatively small business in U.S. dollars. There is a relatively limited impact. So far, this is being carried for the most, very, very most part by the customer. You cannot measure anything in millions here.
It is much, much smaller what we see as an impact on spare parts or similar. As the EU, where our production location for IXS system is, now has their agreement with 15%, we also know that we will not have a disruptive impact on our business, which 30% would have given. You can assume that there's a minimal impact. Altogether, PCT neutral, IXM ± CHF 1 million in 2025, IXS plus minus zero.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Ulrich Steiner for any closing remarks.
Ladies and gentlemen, thank you very much for attending today's web call. Thank you for your interesting questions. Whenever you have additional questions in the aftermath of this conference, you know where you can find us. Thanks again, and have a good day.