Good morning and welcome, everyone. My name is Bernhard Schweizer, Investor Relations Contact at INFICON. I have the pleasure to host this online Microsoft Teams webcast. Thank you for joining the INFICON Conference on its fourth quarter and full year 2024 results.
With us today are Oliver Wyrsch, CEO of INFICON, and Matthias Tröndle, CFO of INFICON. The management team will first present the results and then take questions. During management's prepared remarks, you're kindly asked to turn your microphones and cameras off.
You should have received by now a press release on the Q4 and full year results, together with the links to the accompanying visuals for this conference, a link to the annual report 2024, and the invitation to the annual general meeting of shareholders. All these documents are available for download in the investor section of the INFICON website, www.inficon.com.
During the Q&A session, you can ask questions either in writing using the chat function in MS Teams, or you can add yourselves to the queue of people wishing to ask questions by clicking on the I Raise My Hand icon. I would like to inform you that we record this web conference to archive the audio file later on the INFICON website. The oral statements made by INFICON during this MS Teams session may contain forward-looking statements that do not relate solely to historical or current facts.
These forward-looking statements are based on the current plans and expectations of our management and are subject to a number of uncertainties and risks that could significantly affect our current plans and expectations, as well as future results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Having said all that, I would like to hand over now to Oliver Wyrsch. Oliver, please.
Thank you very much, Bernhard. Welcome, everybody, to our earnings release conference, Q4 2024 and full year 2024. Let me jump right in. The agenda today, as usual. First, me, Oliver Wyrsch, CEO of INFICON. I will talk about key messages and figures for 2024, the target market business review, and expectations for 2025. After me, I'll hand over to our CFO, Matthias Tröndle, for more details on the financials.
Quickly about INFICON, for those less familiar, INFICON has three main pillars, among a couple of others, that make up the core of our competence. You see here Intelligent Sensor Solutions, which is everything around advanced sensors. This is a mass spectrometer, GCs. This is Thin Film sensors. A number of technologies where we are number one. This is located in Syracuse, New York. Then we have everything around measuring pressure and controlling pressure in Balzers in Liechtenstein.
The third one, leak detection tools in various applications in many different markets. Leak detection is located in Cologne, Germany. We are listed since the year 2000 and over 50 years in the market. Important for us is that you know that our smart sensors have additional capabilities through data analytics. We call them process-aware sensors.
That means they understand what happens within a tool and try to make decisions and give feedback around this context that they have of the tool. Based on all the sensors that we have, there is a number of technologies that support this sensor portfolio. We have a portfolio of software as well.
One bases all the sensor data of a tool among our sensors. There is also third-party inputs, the tool data, the pumps, and so on, that we all aggregate together in a digital twin to understand what happens in the tool and with the wafer, the tool health, and the wafer health.
With that data, when we aggregate it, we can also build a digital twin and schedule a whole fab with data analytics and AI, which we do for over 60 fabs worldwide. Now let's jump into the actual numbers of 2024. We are happy to report a strong result in a quite challenging environment. We were able to maintain our sales year on year. We made record sales full year in semiconductor, RSA Auto, and security and energy, meaning three of our end markets of four. The orders are still relatively slow.
If you go into the numbers, the overall number we achieved, $671 million of sales. When you look into the segments, we were able to grow the semiconductor business by 9%. This is a record sales, a record year. We were able to grow in a consolidation year of the RAC Auto market, even a little bit with plus 2%, also a record year.
A general vacuum after this extreme growth in 2023, it bounced back a little bit above the level of 2022. There was a clear consolidation. That is the broad industrial market. Many technology markets did not have such an easy year. The third record sales market and market that we report, security and energy, where we were able to grow plus 21%.
If you look at the operating result, we have been able to improve the operating income to $136 million or a record high of 20.3%. With the gross margin, we were able, in spite of the sales, to increase it by plus 1.2 percentage points year on year. The operating cash flow stays at a very high level on a stable trajectory.
If you look at the organization, we continue to invest in R&D with nearly 8% of our sales and also invest in the future with CapEx with $28 million. If you look in the worldwide markets, you can see that Asia and America showed a solid year in a challenging environment. Obviously, no doubt, Europe was slower.
When you look at the numbers for the full year, you see Asia and Americas plus about 1%, and Europe really a bit of a reduction with 5%, with a lot of weakness in the market last year. If you look at INFICON, it's important to understand that we are quite diversified, but are still quite selective about which markets we want to address. You see here on the left side the semiconductor industry, where we are quite diverse in different parts of the semiconductor industry.
There's leading logic, there's ICAPS, there's memory, there's display, there's also subfab, and of course, OEMs. On the other hand, we have a number of technology industries where we see good growth, where we can make a difference with our leading measurement capabilities, and where we also see good profitability. One of these segments just recently made a big breakthrough.
It's not such a big segment, but nonetheless, I would like to share that with you, which is the one in the middle on the right side, the space and robotics. We have actually been working with space agencies, in particular NASA and ESA, for many years. For nearly 10 years, we've been working on instrumentation for space. This needs to be specifically ruggedized and also have different capabilities than some of our sensors on Earth.
Nonetheless, the R&D is very synergetic. What is the big thing that I want to tell you about? What happened on February 26 is that we were able to launch the first commercial mass spec from Earth to the Moon. This is the first one that is created by a commercial company. It's now a standard product that you can go and build into your space ventures.
You see here a couple of pictures from the launch where we went there and where we had the mission briefing. There was also the Acting Administrator of NASA, Janet Petro, there. You see her talking about this mission, the IM-2 Prime 1 mission.
I was holding the drill where we are trying to drill a hole into the Moon to then sniff with our instrument what kind of minerals are there. Water is the most important, but also others are interesting resources. Water is important for energy, for food. You see pictures from the launch and how we left Earth and approached the Moon, and then finally we are landing on the Moon.
It was a non-nominal landing. Not everything works always in space. However, our instrument worked beautifully. We fulfilled all the specs, and it was tested multiple times and run very well.
Okay, now we go into the real numbers of the big end markets that we are addressing. First of all, of course, semiconductor vacuum coating. We're in a strong position, even though the current environment is quite challenging. We made record sales in Q4, both year on year and quarter on quarter. The market, as you know, of course, is slower recovery, slower recovering than expected.
We don't know the timing of this, but we do expect a ramp later in 2025. The shape on the timing is quite uncertain at this point. For us, it's important to focus that we find new applications, that we win market share. I think when you look at this chart there of a CAGR of 15.7% over the last five years, you can clearly see that we have been very strong in the market, gaining market share and finding new applications.
The outlook for this year is flat to growth. It depends a lot on this timing. I think we are moderately optimistic, but we haven't seen the broad dynamic yet. We see it selectively in some product lines. There is one ramp, you could call it, around AI investments, around HPC and HBM that we see with the respective customers. Otherwise, there's a lot of mixed signals.
There is also relatively positive, but not so many that you could call it a trend. If you look at our R&D pipeline, I think the numbers tell it, but I want to reemphasize we have a very strong pipeline there, a lot of prototypes out there. A couple of notable latest releases was certainly the expansion and upgrade with the CPM line.
That's our mass spec system portfolio or the UL product lines, or also a number of new sensor technologies that we bring to the market. Of course, more pressure management products. With that, I would like to move to the next end market, automotive refrigeration, air conditioning.
There we actually were able, in a consolidating market, to still grow the market by 2%, grow our business by 2% in 2024. Currently, one of the main markets there, auto market, the EV market, is in consolidation. I think this growth shows that we are also able here to expand our applications to gain market share. There are other segments, sub segments in here that address other markets slightly, which is RSC. For instance, one example is the service tool, the handheld that you see on the picture. This is a business that is steadily growing.
A little bit of a different dynamic, for instance, there is around the new refrigerant regulations. Also here, I want to emphasize that we have a very strong product lineup. The ELT product line to test batteries is industry-leading by quite a bit. I think we could be very proud of these achievements. Most recently, more to come. If I go into the next segment, general vacuum, that is a very broad bucket, if you will, with many submarkets in it.
Half of this business we address through channel partners. It has shown quite a bit of weakness in 2024. Maybe to remember, 2023 was the opening up of China and a large backlog that we reduced. That is why this is an exceptional year. I believe now we are back to the normalized level. From here on out, we feel that we will see some positive growth.
A lot is related, of course, to how macro develops, how the different industries develop. One big industry here that gave us a lot of dynamic also in 2023 was solar. Solar will probably have the second consolidation year this year as well.
We believe next year there will be more dynamics. We have already good product development there to be ready for the next technology nodes there as well. With this, I go to the last end market, security and energy. Also here, a very strong year, 21% growth full year. We have a very strong position also here.
To remind those that are not so familiar with this segment, this is one that is driven by government investment programs. The timing of those are a bit separate from the rest of the industries. We were just going through a couple of these investment phases.
There is more coming, but the timing of the next one is not entirely clear. I would remain, though, very positive about this segment with this unfortunate security situation. This, however, also drives security investments. We see tailwinds in general. Plus, we have a number of new applications with this new product that we still are addressing. However, for this year, we will not be able to go and reach that level of 2024.
With that, a few more points. Sustainability achievements. We continue to work on this and push forward. I think the key point on this slide and in general on CO2 emissions is that we were able to reduce the absolute greenhouse gas emissions over the last five years despite the massive growth of 68%. We continue to work on this and push forward. With that, I get to the expectations for 2025.
We are moderately optimistic for the next quarters. We believe that the markets could have quite a bit of upside, but there's so much uncertainty through geopolitics and trade wars that we also see downside potential and weaknesses as risks. Overall, as you've seen by each of the end markets, we see rather positive in summary potential.
One thing is probably the biggest factor here is when we come from a recovery in a real ramp in the semiconductor business. If that timing is and that shape is favorable and it starts in the mid of the year, then this could have a real positive impact. We don't know exactly right now. In this uncertainty, also many CapEx projects can move. We will have to monitor the situation closely.
For the guidance for 2025, we said that sales $660 million-$710 million and the operating income at around approximately 20%. Few product highlights. I spoke about those already. On the upper right side, you see we're ready for the next solar ramp. Then you see the products, LDS and ELT. We're continuously developing new upgrades to them. A lot of software and analytics also going in there for battery leak detection.
You see upper left, the UL portfolio with the smart spray that is very positively received in the market or one of our flagship products, the CPM mass spec system that hits all the new segments where we have the latest tech notes in semiconductors. Of course, software is continuously expanding. We have given this a boost, as you know, with forming a global AI center.
We have been doing AI for 25 years, but we gave this another push. There is a lot of things happening there, a lot of things in the pipeline, more to come at the later stage. With that, I get to the last slide. You know, you can follow us online. We tried to show you what's going on at INFICON. A couple of interesting things. Most recently, we have been able to win a big project in China for earthquake forecasting.
Yes, you do that also with gas analysis and smart software. One thing that you know from recent months is we won the Lam Research Award. We're very proud of that. Also, since then, we have been able to win another award from one of our customers, the Kokusai Electric Award that you see in the upper right corner.
Just a few of the latest news for you. Follow us online, then you'll be up to date. With that, I get to the second part of our prepared notes today, and I would like to hand over to Matthias Tröndle, our CFO, for more financial details.
Thank you, Oliver. Also welcome. From my side, good morning, everyone, and welcome to the call today. My agenda is even longer than Oliver's, one time a year. I have covered the financials for Q4 for the full fiscal year, also comment a little bit on the guidance. We quickly talk about the dividend and the share split we announced today. I have also the corporate calendar on the screen. Now let me first start with the highlights for Q4. Orders ended in Q4 at a similar level as in Q3.
Book to bill was below one. Our sales reached a new record level with $177.5 million, and the gross margin ended slightly below, slightly lower. We achieved an operating income of $36.1 million or 20.3%. From a balance sheet point of view, the equity ratio improved, reached above 70% again after, I think, four years, 72.4% exactly, which is good and very healthy.
The cash flow reached a solid $29.1 million level. The net cash also developed well because we had during the year a good cash flow and a solid cash flow performance. Net cash ended close to $75 million. The CapEx at a similar level as last year. Similar highlights for the full fiscal year. For the full fiscal year, the balance sheet or the, excuse me, the book to bill was below one.
We reached $671 million, nearly the same level as last year. We could improve the gross margin to 47.1%, which is 1.2% or 118 basis points compared to last year. The operating income reached a record level both in absolute values and as a percentage of sales with 20.3%. CapEx was higher than last year by $5 million, mainly driven by land building, but also machinery and equipment.
Cash flow, as I said, reached more or less last year's level. From a sustainability point of view, we can point out that CO2 emissions could be reduced by another 9%. In the meantime, we have 96% of electricity is really certified green, which is good. Now let me go more into the details.
As communicated this morning and mentioned before, we achieved revenue of $177.5 million in Q4, which is an increase of 1.7%. If we take out the acquisition impacts and negative currency impacts, the organic growth was plus 2%. Oliver already commented on the development of the end markets. Strong growth can be seen in two markets, semi-vacuum coating improved by 22%, and refrigeration, air conditioning, automotive did grow by 5%, while general vacuum dropped against the strong previous year by 30%.
Security and energy was also weaker and dropped by 8%. With that, the fourth quarter ended at this $177.5 million. As a quarterly figure, as a record high figure. I need to go back, sorry. Regional distribution on the right-hand side, you can see it here. We had growth in all regions.
The highest growth was in Asia with about 5%, while Europe and Americas showed both a minor plus. Now comes the next slide. The gross profit margin increased slightly by 1% in absolute numbers and reached 46.3% in Q4, slightly down by 30 basis points compared to Q4 last year. The positive impact of slightly higher volume was partially compensated by some inventory-related costs we had in Q4, as well as some unfavorable mixed impacts.
From the cost side, we spent $12.4 million on R&D, which is an increase of 9.2%, and the result of our continued development efforts and respective investments. In SG&A, the cost level did increase by 6.1% to $33.8 million. Here, personnel expense and higher compensation-related expense have been the main drivers for that increase.
Operating income, as a result, reached $36.1 million or 20.3% after $38.2 million or 21.9% in the record quarter Q4 last year. This corresponds to a slight decrease of 5.5%. The income tax, next page, the income tax for the fourth quarter was at $3.1 million stable and represents a tax rate of 8.4% comparable to the 8.8% last year.
The net profit, thanks to the favorable tax rate and lower foreign currency-related expenses, the net profit did grow by 5.6% and reached a strong $34.3 million level or 19.3% for Q4. This compares to $32.5 million or 18.6% in the prior year. Now we go to the balance sheet. Net cash, as already mentioned, reached nearly $75 million, which is about $30 million higher than end of last year and $23 million higher than in the third quarter.
Returns reached 2.4, and the DSO ratio improved again and reached 47.2 days. Our working capital reached $215 million or 30.3% of sales, a clearly better ratio than last year and also last quarter three. The majority of that decrease is driven by inventory reduction and reductions in accounts receivables. Our operating cash flow, which you can see on the right side, developed well. We reached $29.1 million, but we could not reach the very high and record high level in Q4 last year.
I believe it's a solid number and pretty good. Those were my comments on the balance sheet. Now let us go a little bit to the full year result here. I must say there is a little link error in this chart. Some of you might have seen it. The biggest portion, the light blue, is not security energy.
It would be nice if it would be, but we are working on that. The blue one is semi and vacuum coating, so we had a little bit mix here. The yellow is security energy. The green is refrigeration, and the orange is general vacuum. Sorry for that. We will correct this. For the full year, we reached $671 million, nearly last year's level, which corresponds to a decrease compared to last year, which corresponds to a decrease of 0.4%.
Excluding currency effects and acquisition effects, the sales were really flat. As you can see in the chart, we were able to grow in all end markets, except general vacuum. From a regional point of view, the largest sales region is Asia. They did grow by 1.2%, reaching $330 million and about 49% of global sales.
The increase here in Asia was mainly driven by strong sales in semi-vacuum coating, partially compensated by general vacuum performance, general vacuum sales. North America has a 27% share and did increase by 1%. Europe has now a share of 24% and did drop by 5%. Here we had weaknesses in most of the markets, actually. Now to the P&L, the gross profit clearly improved, as mentioned before, 47.1% in fiscal year 2024, showing an increase of 1.2% compared to previous year.
This is best gross margin since 2021 after we had many, many different negative impacts over the last two, three years, including the broker cost thing and other aspects. Here we made some progress. From the cost side, we spent $51.5 million on R&D for the full year, an increase of 6.2%. In SG&A, the cost did increase moderately by 2.2%.
Here again, the main drivers, of course, are personal expense, but also several initiatives we started and continued in the last year in IT and digitalization service, and also some organizational adjustments we did. The operating profit then for the full year reached record high, $136 million, 20.3% after $135.2 million last year and 20.1%, a slight plus of 0.6%, and the second year above the 20% mark from a profitability point of view.
Year on year, next page, the tax expense increased by roughly 2% to $23.6 million. This gave us a tax rate of 17.3% on average compared to 17.9% in the last year. The net profit reached $112.8 million or 16.8%. This is an increase of 6.7%. Also here, a few balance sheet items. Cash flow, as I said before, solid, $116.5 million, nearly reached the previous year's level. Capital expenditure increased by 21% to $28.4 million.
Working capital, I already commented, reduction mainly driven by accounts receivables and inventory reductions, and the equity ratio solid at 72%. On the next page is the guidance and the outlook. Oliver did already commented. There is some positive momentum in certain markets, but also some global uncertainties and some risk around that.
Based on the expected upturn in the semi-market in the second half and our assessment of the other end markets, we are still moderately optimistic, but also, as we said, there were also some risks in there. Therefore, our guidance is in the range of $660-$710 million with an operating profit of around 20%. Now we come to the distribution or the dividend and the stock split.
Following the good performance or strong performance in 2024, the Board of Directors has decided to propose to the shareholders at the AGM on April 8th the distribution of a dividend of CHF 21. This is a 5% increase compared to last year and represents 51% payout approximately. This also means that we return around $57 million to our shareholders. The payout is expected to take place on April 14th. On top of that, the Board also proposes to the shareholders a share split of 1-10.
This is to align our stock price better with the price levels on the SIX Swiss Exchange and comparable companies, as well as to enhance the liquidity and tradability. The split is also expected for April. The exact date is April 16th. With that, I would like to close the presentation.
Here are the remaining dates and events on our calendar. April is still busy or very busy. We have the AGM. We also have release of Q1 release, Q1 numbers, and then continue in July and October for the rest of the year. With that, I would like to close the presentation, and we are ready to take the questions.
Thank you, Oliver. Thank you, Matthias. We have a first question from Jörg-Samuel Brown.
Yeah, hi, guys. Thanks for taking my questions. I have two, if I may. Just firstly, on the operating margin guidance for around 20% in 2025, if we just take a step back and look at 2021 or 2022, your sales in 2025, even at the lower end, are still significantly higher than 2021 or 2022 levels, but you're not expecting any sort of margin expansion from those levels. Can you help us understand why you're not seeing any operating leverage?
I know you're investing in new products and new platforms, etc., but what's holding you back there? Just secondly, on China, specifically in your semi business, firstly, how big is China as a percentage of your sales in semiconductor and vacuum coating, and how has this changed over the years? Do you expect China semi sales to grow in 2025? Thanks, guys.
Okay, thank you, George. I will start. Yeah, quickly on the first question, the opaque. I think two factors are relevant. One you already mentioned. Yes, of course, this is the time to invest. This is the time when there's tool time available with customers, OEMs, and also end users. We're working on a lot of new product innovations for the next tech nodes. The technology roadmap actually hasn't slowed down anywhere. It's a perfect time to really boost that effort.
There is quite some investment in that. The other thing is that we were ready for the ramp since about Q3 last year. We, of course, have not activated all the CapEx and fully staffed all the production lines, but there is a little bit of extra cost structure there to be able to fulfill the ramp deliveries when it comes. We do not want to miss that. This is not something we generally want to do in semiconductor.
Of course, also after this not easy time after the pandemic, we tried to improve and solidify also our ability to scale up quickly. These are the two main factors, honestly. I do not think that the core ability to generate profit and also to scale it up has gone away at all. We would always go first after new applications, new technologies.
Honestly, there's a very long list of organic growth potential right now. You could get negative if you look out in the market in general or geopolitics these days. When we look into the innovation pipeline that we have, we are very optimistic. That's more about when is it going to materialize than what are we going to do. Maybe on the second topic, China.
China has typically been about a quarter of our overall sales. It fluctuates. I think last year, one notable factor was that the solar slowed down. Solar is mostly in China. EV batteries also slowed down last year. They will both stay slow for this year. These were negative factors.
At the same time, semi has been surprisingly resilient in China with a little bit of a peak mid-last year where we already thought, hey, maybe this could be an indicator for the ramp, but that was a little bit of an independent development. There was another or a few other factors that drove this peak in Q2, Q3, in orders and then deliveries. Part of it was in China. This has slowed down again.
Part of that could be that maybe there was some overordering there. We have to see how this year develops. In general, we look actually at China relatively optimistic. It's not the 5-10% growth anymore. We all know that. Around the key technologies and in this year specifically, around semi, there is reason for moderate optimism, really. I hope that helps, George.
Yeah, thank you so much, guys.
The next question is fromMichael Foeth . Michael? Yes, can you hear me?
Yes, we do. Good morning, everyone. Good morning, Oliver and Matthias. Two questions from me. The first one is looking at semi, you were expecting or you're hoping for a ramp in the second half of the year. My question is, what will trigger that ramp? Is it really OEMs or is it end users? Is it memory or logic? What are you looking for? What should we be looking for?
And then tying into that, maybe you can comment on what you're currently seeing in the first and second quarter when you talk to your customers. Is everybody in sort of a wait-and-see mode? Or there's a lot of noise from obviously macro and politics around some trying to figure out what's actually going on in the market. And then I have a follow-up. Thank you.
Okay, thanks, Michael. I'll take these two questions first. Yeah, if only we knew exactly, right? This has been some time now that it was unclear how the shape of this recovery and then the ramp looks like. Again, like I mentioned earlier with George, we were trying to be ready earlier. We have been preparing for it while the signals are really quite mixed.
When I say mixed, I mean with that, when you think about the slide I showed earlier of the different sub-markets that we have in semi, or you could actually almost look at maybe the top customers that we have in there, top 10, 20. Each one almost has a different story. If you look at the very big ones, you could break it down even from product line to product line how they react.
If you look at the OEMs or at the chip makers, some of their product lines, they really accelerated. You could say this gives reason for a lot of optimism. Some are slowing or they're speeding up and slowing down. We have this kind of picture when I say mixed signals.
Overall, I would say, except for this Q2, Q3 peak last year that had probably a little bit of other reasons, we have seen a steady improvement over the quarters for a year now. I would see step by step we are increasing. That is probably in line with other companies that you're looking at. The accelerat ion hasn't really happened yet.
When we talk with them, for some product lines, yes, there's projects and there is preparation for scaling it up, but it is not broad enough to really pull up, right, in the shape or form as we had it in the past. This is pretty much to your second half of the question. This is pretty much also the same for the first quarter. It kind of continues from last year. Every month, every quarter, a little bit of improvement.
However, there's some seasonality also, right? Obviously, Q4 is always quite big for different reasons. Q1 has been, especially in the recent years, quite slow normally for that. I hope that helps you with a little additional color. I can tell you, we talk about this daily with customers and internally and partners and suppliers.
It is not so easy to really find a better answer or more details. Unfortunately, we will have to go and stay optimistic and be ready for the ramp. For us, again, the key is really that we push our innovation within new design with OEMs or with new projects with IDMs. When we know we are at the forefront there, whenever this happens, we will also go with everybody else on the right. Most probably. Perfect. Interesting.
Most probably also helps that we serve both parties, right? OEMs and end users. We are in the software business, so we have a broad spectrum and a broad basis. We can then benefit from upstream. We are not so much focused only on one technology or one market. Yeah.
Maybe on that, to be very specific on my mixed signals, to stress that we see OEMs that have good dynamic. We also see chip makers that have good dynamic. We do see also the opposite in both spaces. Interesting enough. Nothing that really would further slow down, not that, but just that it does not accelerate or release dynamic enough to be a trend. I hope that helps, Michael.
Yes, thank you. A very short follow-up on a different topic. You talked about that success in Moon and Space launch, obviously very prestigious projects. My question is, are they also profitable? Just directionally, is it above or below the company average?
Yeah, it is above. It is, of course, small right now, right? This is a couple of million, maybe a bit more, because we also supply different product lines, not only this prestigious instrument. Vacuum is everywhere in space, right? Leak detection and pressure control is key there. I think one thing is noteworthy. Today, the space economy has grown quite a bit already. It is actually the same size as the semi industry. Of course, our penetration is much lower. There is not so much sophisticated measurement required.
We are at the tipping point there when you look at the number of launches we have per year. This exponentially grew. Now we have a couple of thousand a year. Before, it was a handful a year, maybe a decade ago. Why? Because it became so cheap. Bringing something from Earth to orbit is a factor of 50-100 cheaper now with the new rockets or the ones that are about to come online.
When you talk with these different companies that are developing there, this is really very early days and a very hot period. I believe the market will grow faster than a semiconductor. That is more 7-12% growth, something like that. Of course, for us, on a very small basis. It is a synergetic technology. It is full of vacuum. It is measuring. It is a challenge. Yes, it is, of course, also inspiring.
W e are excited about it. For the next couple of years, I think the usual suspects of flagship products and flagship market segments will drive our growth, right? You should always look to the next and the one after and the one after segment to be there when you need to be because you win now your position in the market and it scales up later. Maybe to calibrate that. But again, it is a positive contribution to our profitability. Thank you very much.
Thank you.
Thank you, Michael. The next question comes from Jörn Iffert . Jörn?
Hi, Oliver. Hi, Matthias. Thanks for taking my questions. I will take them one by one if it's okay. The first one is to follow up on the semi end markets. Can you give us a little more indication what was driving the very strong sales in Q4? Was it really analog? Was it memory? Was it logic and foundry? Or even if it was in this very mixed?
Also, when you give the signals for 2025, I understood semi end users, OEMs, different dynamics, some positive, some negatives. Is there any skew you can say this is memory, analog, or logic and foundry, which you identify already where it's better or even weaker? To start with this one, please.
Okay, sure. Yes. Around Q4, I think part of the factor there was the peak in orders that we got in Q2, Q3, and then that's when we delivered it. Some of the more sophisticated sensors have about this kind of delivery time. You think from ordering, specifying, building the package, delivering it and installing it and getting it up and running. That is probably one of the larger factors.
The underlying current, though, is also that product lines are the other extreme, which really saw the dip. You remember last year, obviously, that a year before in 2023, we had this 20%-30% dip in some segments of the market, memory, for instance. There is a continuous recovery there. The base lifts up step by step, I would say, on a broader basis.
That would be two factors that I can think of for Q4. There was a couple of additional wins of new products as well. How big that is in numbers, I think it's probably not as material as the other two factors, I would see. Now for 2025, like we put into the notes, I mean, mainly we see positive dynamic around this AI investment.
Of this hyperscaler investment where this new AI runs on, this is investments in HPC and HBM, meaning there is leading logic in there and there is also high bandwidth memory in there. And there's a few players in there that are very well positioned and really profit from this, but also mainly around this, I would say, not in other areas. When you also listen out in the markets, it's a similar thing that they tell us.
This is not the ramp. This is something that is a little bit independent. It is probably also not the full breadth of what eventually will come when this truly comes online, this AI technology. I mean, as we all know, we all try out stuff. We already launched three products, also with LLMs. We all find new applications all the time, but I believe the true impact is just about to come still, right?
This for me is early days, early investments. I would not call it pilots. That would be also making it too small, but it is not broad enough, right? There should be, because of the normalized inventories, just a broad recovery and ramp also in the chip industry coming. I think unfortunate is, especially the last couple of weeks, geopolitics injected a lot of uncertainty.
What happens then with CapEx projects, they get put on hold for a little bit. I think this is also why we are a little bit more cautious now of how this year is going to turn out versus maybe a couple of months ago where we felt this dynamic will probably be a bit more positive. Does that help? That is a more general statement, of course, but semiconductor projects are big CapEx projects, so they are very affected by this kind of dynamic.
Thanks for this. The second question, please. On General Vacuum, it has stabilized in the last two, three quarters on a certain revenue level. You said flat to mildly up. Can you give us the positives in the end markets, General Vacuum, and where you see the negatives in 2025 that will be a better feeling on the contributions of the end markets?
Yeah, I mean, one big chunk there, the solar consolidation is ongoing. It might take into 2026. It might need the next tech node really materializing, even perovskite. We're certainly ready for it, but this is not going to help this year. I think what we're seeing on the positive side there is that these channel partners where we really cover more broader, the industry have been steadily improving, but small steps.
That is also how we started out into this year. There is this moderate optimistic feeling, right? It's a flat plus kind of feeling that we have there. We certainly went through the rock bottom. I mean, yeah, what I just said earlier is the same there, right? The uncertainty, the uncertainty increased, even last week's a bit more. Projects get delayed. It's hard to say. Visibility is there particularly low in that segment for us.
Understand. Okay, thanks. The last question, I go back in the queue, just a quick technical one. When you say order intake is hesitant, uncertainty has increased, book to bill below one, which is not a big surprise, given seasonality in Q4, how bad or how skewed to the second half is your financial performance? Can we assume that you're falling back in Q1, for example, to the similar revenue level that we had last year, around $155 million plus minus, or is it even below this? Just a rough feeling how V-shaped 2025 will be in your financial guidance.
Yeah, we probably could say it's comparable, right? What would you say, Matthias? Could be a similar picture. Yeah, I agree. It could be like or in the range where what we had in last year, Q1. Yeah. Also, how the shape is of the year, I think it's interesting, right? Because many things have changed. So the underlying drivers are not the same.
The assumptions have changed. Many things have changed, but we would see it could work out quite comparable. There is, of course, again, as I said earlier, when we have the ramp, when a couple of macro data move more into the positive, then there's reason to be more optimistic.
Okay. Great. Thank you very much.
Sure. You're welcome. Thank you, Jørn.
Next question comes from Doron Landy. Doron?
Hi. Thank you for taking my questions. The first one, I want to focus a bit on the security and energy end market. I know that it's a rather minor contribution to sales, I think 5% or something like that.
With the dynamic of all those public sector contracts, how and how this works with the timing, is this just a nice-to-have business, or can we expect this to grow into a dedicated market? How should we look at that? Also, when we talk about those increased defense spending that is now the talk of the town a little bit, how does HAPSITE fare against fighter jets and ships and tankers and so on?
Yeah, for us, it is a key technology. This GC and the MS technology that goes, for instance, into the HAPSITE is something that is core to our capabilities, mass spectrometry in particular. What we flew to the Moon, what is now on the Moon, is a mass spectrometer that also goes in the HAPSITE and it also goes onto the chipmakers' tool or the toolmakers' tool.
We are committed to this from a technology perspective. Of course, the segment is a bit further away from where we are. However, you need to look at INFICON large as a key account-based business. When we focus on large accounts there, the U.S. Department of Defense, the behavior and how we sell is not dissimilar to how we sell into other segments. For the current security situation, yes, of course, defense business increased, and we have seen much more interest recently.
The biggest spender at this point is still the U.S., and then there are also a few other projects outside of security that drove this. We have not yet seen from the most recent announcements in Europe or NATO outside of the U.S. a dramatic increase beyond what we had before. It was actually the last couple of years already quite dynamic.
I think even though it's kind of hard for me to say in all this negativity of what happens to politics, it, of course, has positive upside for the HAPSITE business. There's another business in there that is notable, which is energy, which is a bit slowed down, right? This is also related with some of the energy transition.
It's still growing, but that's at the slower state. It has been a little bit losing its priority in a sense. We are pushing on there. We are actually also there optimistic that this will continuously grow, but it's a smaller number there. It's a bit more steady.
Maybe to add, it's still a more project-based business, right? It's like where you have this continuous order inflow, and you work on increasing it. You are dependent on a few big players, right, and the development there. This drives a little bit the business. It is a little bit slumpy and going up and down and project-based and focused on a few key account customers that are driving the success in that end market, basically.
Maybe one thing to note, Doron, is also there you see how the HAPSITE business behaves. It is quite lumpy. It is quite volatile. Actually, when you look at INFICON under the hood, you could say maybe there are 20-30 such businesses that are actually quite volatile. The diversification gives us this steadiness. For us, this is not something that particularly concerns us, how security and energy goes up and down. Much more this is actually how we generally work. It is sometimes very positively surprising what kind of a steadiness there is.
If you also look at the year 2024 over 2023, it's basically flat, but under the hood, so many things have changed. This is a bit how the mechanics are. Maybe that is an explanation how we would categorize the security business that is that volatile. We still believe in it. We invest in it, and we are number one in that market, and it's energetic R&D-wise.
Okay. I expected that. If I can just connect on this one, maybe on a bit of a broader sense, I mean, you partially answered it already, but when I look at the guidance and especially how this kind of sales plateau, again, with the different dynamics within it, but at the end of the day, we look at the group-level sales of around $670 million, $680 million now for the past two years and next year.
From other presentations, I remember that you posted about the CAGR of 10% since 2016. Would you still hold on to that, or have we kind of reached the limit in a kind of a pessimistic expression?
I mean, if you look through our CAGRs here, overall, I think we have 11% the last five years. I think it's pretty much still in this range. Our goal is, look, I mean, with so much uncertainty, how can we project this, right? That is hard. Again, we focus much on, are we winning business? And then when the market grows, we'll go with the market. This is a bit our leading metric. Overall, yes, we have this aspiration to grow 5-10%. I believe we have delivered on this also, including last year. If you look at the different markets, of course, it's a big mix.
I understand, right? You range from GenVac to Semi with the 9% and the minus 20%, right? If you look at the long-term CAGR, I believe, again, this is a lot based on choosing good markets that have growth and profitability potential and then be diversified in them. Overall, you get this steady growth. I think it's valid what we said before.
We have not changed the strategy. If it's going to be another boring year, I'm saying it boring, if it's more flat, right, lateral, it's okay. We spend more time on R&D. If all hell breaks loose in the semi ramp in the second half, then we'll go and ship what we can. We'll have to stay adaptable, right? That's the only way nowadays.
Okay. Final question. I read in the last year's press release that you increased or doubled the capacity. Just wondering what the current order situation is. What is your utilization and where is actually the potential there? If you can remind us.
Yeah. It depends, of course, a lot, right? For RSC Auto, we would have less buffer capacity and also for GenVac than for Semi. Semi, we are ready for a ramp, especially with the flagship product lines and where we have strong customer commitments and plans. We have not activated and staffed all of this production.
We can go and absorb a ramp of 20-30% today in relatively short notice. I mean, we still need a couple of months, but that's normally what you would definitely have when it's accelerating. We had a little bit of that in selected sub-markets already and delivered on them.
What I just mentioned, this orders on that was advanced sensors, a lot of mass specs that came in Q2, Q3 last year, and then we delivered it by Q4. That was exactly that infrastructure that did that. The strange thing there is it's put down again. Now we'll probably accelerate again. This is a bit of a different shaped ramp, really. That's how we deal with it, roughly, if that helped.
Yes, for sure. Thank you very much.
Thank you.
Thank you, Doron, for your questions. Next questions come from Felix Remmers.
Yes. Hello. Two questions from my side on Semi. First question would be, what is your best guess on the end market split within Semi by memory and logic? The second question is, we are ahead of a technological transition to two nanometers Gate-All-Around ?
All right. Yeah. The split of memory and logic. When you look at our slides again, or when you remember them, on the left side there, for us, semiconductor is we do not look at it only logic and memory. For us, there is leading logic, yes. That has always been a strong driver for us for market growth and also for innovation. Memory has historically been much smaller, right? There was much less use of sensorization there.
Now, specifically those that enter this AI investment area, meaning for memory, that would be HBM, there is much more sophistication needed. Of course, also when we go to the smaller technology node, as soon as you start using EUV, which is a little bit starting now with the adoption, there, the sensorization really increases quickly.
We deliver similar packages as for leading logic, but it's very selective, right? There are a couple of leading companies that do that. If you go more in the ICAPS range, there's a much broader mix. There are also a lot of software ways of optimizing your yield or your throughput. If you look at the whole second tier, auto and power and these players, this is all mixed for us, right? We would not make this split there.
We wouldn't have these details when we go and, for instance, imagine we install a fab management software that goes across several fabs, and all the chips technically are affected by it. They have mixed chips. They have logic chips. They have power chips. Where do you put them? It's hard for us to put them into these buckets.
What I can assure you is that we grow our memory segment, but it's probably not yet as big as the logic one. In terms of growth, meaning getting into new applications, it's probably growing faster. It must be, right? Because it is really becoming substantial for us. I hope I can give you this much of the information. I don't know, Matthias, if you can.
Nothing to add. I still also would confirm that logic might be the majority of the business, and now it's a little bit less. They are not equal. That's what I would say.
Yeah. In Semi, we also report our display. The whole sub-fab, how do you attribute that, right? It's just for us a bit more difficult to say that, right? Also, we have two channels. We have 50% going through OEMs, 50% going to chip makers. This all complicates it a little bit, unfortunately. You talked about the next tech node, the Gate-All-Around . Samsung did this step, and I think they struggled a bit.
They have no problem with that. They will double their efforts and jump to the next tech node. I think for us, it's important to stay close with this development of the new tech nodes. We try to focus to work with the customers on their next product line, on the next step, or even the one after when it comes more to research. Yes, we have been working on sensors specifically for these new requirements. There is new chemistry that is needed, the processes change. We need to understand these.
Actually, typically, we make sensor variants for this, either if it's for the OEM, for a specific tool that will go and use certain chemistry, or for the chip makers, we will have dedicated sensors that will then be able to look at these new chemistries. It's also about lifetime, but it's also about sensitivity to find specific types of chemistries to be able then to understand the process better. This is an ongoing project. It does drive sales, for sure. Every tech node does.
That's when the CapEx push comes. For us, it's not necessarily a huge big hurdle, but it is a couple of steps that we needed to take. For instance, the CPX, I talked about the mass spec system. This is now the second generation for these advanced tech nodes with these much harsher gases also and the higher sensitivity. We continuously, as you can see from that, are upgrading and delivering them to the market and have very positive feedback, actually. This is a little bit how we look at it. I hope that helps. We're certainly ready.
Okay. Thank you.
It's a little bit too technical an answer. We are at the forefront. We are the number one, for instance, in mass spectrometry. If you need one and you need the latest technology, you call us.
Yeah. I will. Okay. Thank you.
Very good. Thanks, Felix.
Thank you, Felix, for your question. I don't see anyone else in the queue right now. If there are no further questions, may I invite management for a closing remark at this time?
Yes. Thank you very much, everybody, for taking part in our earnings release today, full year 2024 and the quarter four of 2024. We are happy to report good numbers in a difficult environment. Thanks for your interest, for all your questions, for your support.
We're looking forward to continuously exchanging with you. We have a couple of upcoming events, and we'll meet for sure also in the next earnings release of Q1 2025. With that, thank you very much and have a wonderful day. Thank you.