Good morning and welcome, everyone. My name is Bernhard Schweizer, Investor Relations Contact at INFICON. I have the pleasure of hosting this webcast of our second quarter 2025 results conference. 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, online participants are requested to turn off their microphones and cameras, please. During the following Q&A session, participants are then invited to turn their microphones and cameras on when asking questions. Participants can add themselves to the queue of people wanting to ask questions by clicking on the "I Raise My Hand" icon. Alternatively, you can also use the chat function in MS Teams.
You should have received by now a press release on the Q2 results together with a link to the accompanying visuals for this web conference and the full half-year report. All documents are available for download in the Investor Relations section of the INFICON website, www.inficon.com. I would also like to inform you that we record this web conference to archive the audio file later today on the INFICON website. The oral statements made by INFICON during this session may contain forward-looking statements that do not relate solely to historical or current facts. These forward-looking statements are based on 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, for the introduction. Welcome, everybody, to the earnings release July 30th of Q2 2025. Let me jump to our agenda today. First, I will tell you, as usual, a couple of key messages, the figures of the quarter, the review of the target markets, and the full-year expectations. Afterwards, I will hand over to Matthias Tröndle, our CFO, for more details on the financials. First, the overview of the 2025 Q2 results. INFICON continues on the growth path with sequential growth in all regions and all markets except for security and energy. It's a positive order trend again, with a nice step up in orders. We have continued risks and temporarily in Q2, the profitability got impacted due to trade disputes. When you look into more details, we increased the sales to $167 million. This is a plus of 6% quarter on quarter.
The orders increased substantially with a continued book-to-bill ratio of one. We continue to have economic risk and uncertainties due to trade disputes. If you look at the segments high level, semiconductor continues to grow quarter on quarter, + 7%. Good orders. It's still low visibility and a lot of dynamics. We believe, though, that recovery is continuing. At the same time, the broader semiconductor ramp that we are looking for most likely has now shifted into 2026. When we look at general vacuum, we continue on the growth path in 2025 after another good quarter to a + 6% quarter on quarter. For RSC auto sales, we continue to grow in recent quarters in a difficult market, consolidating EV battery market, + 7% quarter on quarter.
The security and energy market, after strong growth years up to the 2024 record sales that were another + 21% on the full year, we have a slower 2025. This is mainly due to the timing of government programs. When we look at the operating result, the main impact here is the trade disputes. The operating income ends up at $25 million or 15.1% for Q2. The temporary impacts of the trade disputes include unavailable tariffs, mainly in April, May, the accelerated relocation cost, some FX cost impact, and some volume mix effects. I think, in general, we can say we had to a little bit reflect, and for us, it's an easy answer of what the decision is for us for this Q2 regarding market development, focus on our customers versus managing short-term cost impacts. For INFICON, this is in our DNA. It was a clear decision.
We stepped up our relocation efforts to reconfigure the global footprint and really pushed these projects, some of them times two, times three. I will talk some more about it in a minute. We're then able to transfer most of these production lines within a quarter, which is, of course, much faster than this usually goes. We also decided to work together with the customers. Our long-term partnerships are an absolute top priority for us, and hence, we also had to go and absorb some of the tariffs. With most customers, we find some good solutions. These discussions are still ongoing of how we navigate these difficult times.
We also then decided Q2 will absorb this extra impact in order to be adapting fast and then move forward and go for a strategy to rather gain market share in these difficult times, which is very well possible if you adapt fast to the new rules of this new trade world. I believe we have very good opportunities there. Anyway, going back to, if I close this sidebar for a minute, going back to the overview, cash flow, robust at the stable high level of $18.7 million. Then, regarding organization and future investment, the continued investment in R&D, 8.3% of sales, and also capacity of $5.1 million. We still think, depending on how the market develops, CapEx expectation roughly comes in at this $25 million- $30 million.
If I now look at the global regional development, you can see some interesting development in Asia with a very strong quarter, significant growth year on year. Europe and especially Americas is slower. We have seen, in Europe and Americas, rather a sideways trend, but there with some good positive signals for sure. If you then jump into the target markets, first, of course, semiconductor vacuum coating. We remain to be in a very strong position. Continuous growth in a really challenging environment, the low visibility. We believe the recovery continues, but the ramp, the broader ramp, is probably delayed into 2026, after the most recent developments. The trade disputes definitely impact growth negatively, causing investment delays, moving of projects, even some cancellation. Mainly, it's moving and delaying of projects.
If you look at the Q2 sales, they increased by +7% quarter on quarter and year to date, +7%, which is also a nice development forward. We remain in number one position for most of our product lines, with the pressure measurement premium line closing up to number one, currently in position two. Good, making good gains there in most regions, to be honest, in terms of design and wins. The market expectation for 2025: flat to growth. Again, the visibility stays low, but there is a reason for moderate optimism as the recovery continues. We hopefully see in our most realistic scenario a little bit of a calming down of the trade tensions, a bit more steady waters for the second half. The ramp looks like it most likely will fall into 2026. Overall, the drivers are strong in this market. They remain strong mid and long term.
What we see is a broadening trend, but still a narrow trend around AI investments. HPC is certainly interesting. Also, HBM. While memory in general is not so dynamic this year, we still see a lot of investment in future nodes there, and also an increased use of advanced sensors for these future nodes. This investment in leading-edge nodes and advanced chip design is continuing. The pace is not actually slowing down. Advanced packaging is a bigger and bigger topic, but all kinds of dimensions are being worked on. Exciting times in terms of R&D and in terms of new innovation and the partnerships we have with our customers. There's a lot going on in the R&D pipeline. While on the general economic front, it's a bit confusing with low visibility. I believe inside the technology roadmaps, there's a lot of exciting stuff happening.
We are right in the middle of it with all kinds of new innovations in the pipeline. Jumping to automotive refrigeration air conditioning market, strong position. Clearly, we have a continued multi-year growth in a very difficult environment. There's consolidation, good development in Asia. Americas is around flat. Europe is lower. We see continued sales growth, + 7% quarter on quarter, year to date, + 2%. We remain number one in the RSC battery market. We are making market share gains in a market that is generally not growing. We have seen some good positive signs, specifically in Q1 on the automotive market, but it hasn't really fully materialized. It's still relatively slow. While we think we might be past the trough, there is no real acceleration. Similar on the EV side, there are some positive signs, some development. We believe that probably in 2026, there is really an acceleration.
Also, here, the visibility is low. What is going to happen next? The policy landscape is also a little bit confusing. Also here, the trade disputes make it a bit more difficult to understand what the development exactly is going to be. So battery, I just mentioned, the consumer battery market is still more resilient and stable and, with growth. Midterm outlook in the whole market we see positive. Of course, the EV transition we believe will come back, but also on the RSC auto side, we make continued growth, specifically in this subsegment of the handheld, after-sales service products. Good growth over years, which is driven, the whole RSC auto side is driven more by new refrigerants and the new regulations, future sustainability.
When you look at the chart on the right, you see over the year, we had a CAGR of 10% in a really difficult last one, two years. The last five years with 10% CAGR, I think we have shown great resilience and growth and market share gains also in this market. When we move on, general vacuum, after the quite slow 2024, we still remember, 2023 was opening up of COVID, the backlog reduction that went into the first quarter of 2024. We had a couple of slow quarters in 2024. Now we're back on the growth track, with good Q1 and also good Q2. It's a broad industrial market that is addressed through multi-brand strategy with long-term channel partners. There are different submarkets in here.
For each one, we build out our position or have already a very strong position as a most complete full liner for vacuum instrumentation. We are in a number one position overall. Continued growth with + 6% quarter on quarter and + 19% year on year. We have good order improvements quarter on quarter and year on year. This should continue like this. One more point is important. We see not yet a recovery of the solar business, which is part of the nice dynamic we see in 2022, 2023, in terms of market development here. This will probably only start to recover in 2026 as it looks right now, mainly due to the overcapacity and the consolidation in the market there, mainly in China. Overall, we have a strong position, also a good market development and R&D pipeline here in the respective submarkets.
If you jump into the last of our target markets, security and energy, strong position with the leading product also here. The cycles, as most of you know, are largely dependent on government programs. They have their own dynamics. It's a good diversification factor in that sense versus the other end markets. We expected this year to be slower after a five-year growth, 9% CAGR. Now, the next phases and the next timings of these programs are still in the finishing phases. It's a normal process. Overall, the security budgets due to the global security situation are going up, specifically in Europe. We see these positive trends. We have growth in Asia and Europe. We also have, with a flagship product in this segment, the new hub site, a lot more applications that we can go in, which is also in the works.
The qualification process is relatively long on the timeline, but we make very good gains. We're optimistic here too, while 2025 certainly will be a slower year. With that, I come to the special topic around the worldwide footprint. As I explained already in the last earnings release of Q1, we have had, the last years, a plan to adapt our footprint to the most recent geopolitical and economic situation and trends. There are factors in there where the U.S. economy and the China economy de-risk or decouple, and similar trends in other parts. One of the reasons why we opened up the Malaysia factory was exactly this anticipation of this. What we have in general, as you know, is a decentralized system of competency centers that then can be adjusted relatively fast. Each one of these units has a fast reaction time, is adaptable.
I think we could now really show our strengths in Q2. The benefits will come over time, clearly, right, because now we needed to just show what we can do by readjusting this in an accelerated timeframe. Some of these projects, I was asking the team, "Can you do this in a third of the original timeframe?" and they have delivered. It was truly impressive. The Malaysia factory has really added product lines now because of this. It was already planned, but most of them needed to be accelerated. The China factory, a similar thing. There were product lines moved there. The same in Cologne and the same in the U.S.. All of those with major relocation projects that we have all accelerated and have largely concluded in this one quarter, which you normally would expect to be a number of quarters for such projects.
This is not done, and hence also this impact on the operating income. The largest part, though, there is, and I guess we'll say a few more words about this, is around the unavoidable tariff. We're committed to our customer. We deliver. We found solutions in many places of how to deliver and how to absorb costs. When we want to serve customers, we serve customers. A large part of this is about 2% is these unavoidable tariffs that mainly occurred in April, May. They already largely disappeared in June through the conclusion of this relocation project. We had some extra costs for this acceleration of the relocation. It's about 0.5 percentage point. One about 1.5 percentage points around FX cost impacts, which we also see trade war-related, which we have been starting to compensate more aggressively with cost measures.
These programs are ongoing and take effect, but you will not see this yet in the Q2 numbers, obviously. These are being implemented, and they will be seen in the following quarters. There is one more effect about volume and mix. Some of the volume got stuck. Some of the shipments, we agreed with the customer not to ship due to temporary, really high tariffs. We had over 100% for certain constellations. Some of the volume got slowed down, and it was also some of the volume that was high in margin. There was a bit of a shift there too in terms of volume and mix. All right. With that, I jump to the expectations 2025. Overall, we see ourselves continuing on the growth track in spite of this difficult environment. We had a good order entry again in the semi-RSC auto and general vacuum markets.
The trade tensions stay. They add uncertainty risk across all markets, and they impact the profitability in Q2. We also see some positive momentum in the markets for signals, good things. However, through this additional uncertainty, we believe also there's a little bit of a delay on investments. Semi-ramp, most notably, will probably move into 2026. Automotive was another example. We also believe there's rather an acceleration next year and similar solar. There are a few of those that just on the timeline moved. In general, we believe this year is rather a transitionary year. Unfortunately, again, we see some we've seen some good Q1 signals, and I believe these trade disputes have just slowed this down a bit and muted it. It's moving more on the timeline than it disappeared or anything.
We end up with a guidance for 2025 based on all of this, of sales of $660 million- $690 million. We reduced the upper range, while the midpoint is in a similar area. The operating income we reduced due to this Q2 profitability impacts around the trade dispute and so on. We reduced to 18% for the full year. With that, I conclude. The reminder, as always, if you want to know more about INFICON and all the good stuff we do, if you go to the moon, there's more space happening. There's more semi innovation happening. There's more automotive innovation happening. There's also other things that happen with our brilliant engineers and other things in the company. Follow us online. There is a lot to be seen there.
With that, I conclude my part, and I would like to hand over to our CFO, Matthias Tröndle, for more details on the financials.
Thank you, Oliver. Good morning, everyone, and welcome to our second quarter call, as usual. I will cover the Q2 financial performance, quickly talk about the guidance, and also cover the half-year results. Now let's start. Let's start with the highlights for Q2. The order situation improved compared to the previous quarters, and the book-to-bill ratio was above one. The sales showed a slight increase versus Q2 last year and did grow by 5.8% versus the previous quarter, Q1. The gross margin dropped clearly, hit by temporary impacts from trade-related disputes, and reached a low 43.1%. We achieved an operating income of $25.3 million or 15.1% of sales.
CapEx reached $5.1 million and ended on a similar level like in the previous quarter and also like in the last year. Cash flow ended with a solid $18.7 million, and net cash did grow and ended by $38.5 million after the $58 million dividend payment in Q2 in April. Our equity ratio increased slightly and reached 65.3%. Now let me go a little bit more into the details. As you have seen in the press release, we achieved sales of $167.4 million compared to Q2 last year. This represents a slight increase of 0.3%. Taking into account the positive currency impact of 2.2%, we posted an organic decrease of 1.9%. Oliver did already comment the end market developments compared to Q2. Sales to the general vacuum market increased for the second time in a row and did grow by 19%.
Refrigeration, air conditioning, and automotive sales remained stable, and the semi and vacuum coating declined by 2.3% versus the strong quarter last year. Sales to security and energy dropped by 8%. Compared to the previous quarter, Q1, the picture looks a little bit better. We can report that sales did grow by 5.8%, and we had increases in all markets with the exception of the market for security and energy. Looking at the regional distribution of sales on the right-hand side, you see that Asia developed, surged by 15%, where sales to all markets did grow, but especially general vacuum showed a strong improvement. Europe declined, and America was slow due to weak security and energy business. Let's go to the operational costs. R&D costs did increase by 6.3% due to our continued focus on development activities and related investments.
SG&A costs did increase by 3.1%, but this increase was mainly driven by foreign currency impacts and because they stayed tightly managed. Now turning to the margin situation. Q2's margins have been under pressure and declined. The gross profit margin reached in Q2 43.1% and decreased by 4.1 percentage points compared to Q2. The operating profit margin for the second quarter reached 15.1% compared to 20.2% a year ago, a reduction of 5.1 percentage points. What were the main reasons for that? We had several temporary negative impacts, whether direct or indirectly related from trade-related disputes, which were cost peaks due to the tariff escalation, especially in April and May, and increased basic tariffs as the main factors. Transition costs due to necessary acceleration of ongoing production relocation was the second one. The third one was impact on sales volume, some temporary order deferrals, and also swings in mix.
The SG&A operating expense increase was largely driven by the foreign currency impacts. As Oliver mentioned, we gave some indications of what the share is. The tariff portion is around 2 percentage points. The transition cost and relocation cost about 0.5 percentage points impact. Sales volume around 1. The operating expense foreign currency impacts around 1.5% impact. All impacts add up together for nearly 5 percentage points. Now let's go to the income tax. The tax expense for the second quarter was at $3.4 million, which represents a tax rate of 15.5% and is slightly lower than Q2 last year, where we recorded $6.2 million. Net profit reached $18.3 million or 10.9%. This is driven by the lower operating income and negative foreign currency impacts, partially compensated by the lower tax rate. Now let's move to the balance sheet highlights.
Our net cash reached $38.5 million, which is about $36 million lower than end of last year and about $24 million better than the previous year in Q2. The lower level compared to end of 2024 is mainly driven by the $58 million dividend payout we had in April this year. Returns for inventory remain stable at 2.4, and the DSO ratio had 47.6 days, a good and comparable level to Q4 and also the previous quarters. Our burden of capital closed at $229 million or 34.2% of sales, and with that ended about $14 million higher than end of last year. The increase is driven by the change of inventory levels, which also is impacted by some unfavorable foreign currency impacts.
Our operating cash flow reached a solid level of $18.7 million, nearly unchanged to Q2 last year, but could not reach the relatively high level of Q4 last year. The balance sheet shows an improved solid structure with a 65% equity ratio after 64% in Q2 last year. Those were my comments on the balance sheet and Q2 results. Now I come to the guidance. After the operational adjustments we made in the last months and our assessment of the various markets, and gradually improving order patterns and some positive dynamic, we updated and narrowed the guidance and expect now revenue of $660 million- $690 million for the full year of 2025 with an operating income margin of around 18%, including the trade and tariff impacts. Finally, I quickly want to comment on our last-year performance.
Here I can say the net sales for the first six months reached $325.7 million compared with $321.2 million for the same period last year, representing a 1.4% increase or, adjusted for currency effects, a plus of 1.2% organically. Similar to the sales development in Q2, the first half of 2025 showed growth in all end markets except security and energy. Semiconductor did grow by 6.6%, mainly driven by Asia. Refrigeration, air conditioning, and automotive increased by 1.5%, and general vacuum recovered from last year's drop and gained 1.1%. Security and energy declined by 33% due to the missing large public sector audit. The gross profit percentage decreased to 46.2% after 47.2% last year, and the operating income reached $57.2 million or 17.6% after $65 million last year or 20.2% last year. Both gross margins and operating income have been impacted by the temporary tariff impacts we just discussed.
The operating cash flow developed nearly stable compared to the first half of last year and reached $37 million. The balance sheet shows, as mentioned, a 65% equity ratio after 64% last year. As mentioned in our press release, the complete half-year report of 2025 with more details is available in the investors' section of our website. With that, I would like to close the presentation. The next events are here. It's basically our Q3 conference call at the end of October, followed by an analyst visit in Balzers here in Liechtenstein in November. We are now ready to answer your questions.
Thank you, gentlemen. We have a nice queue of people wanting to ask questions. The first questions come from Joern Iffert. Jörn, please.
Thank you for taking my questions. It's a couple of questions, sub-questions, please, on the margin development, if you allow me. Then one follow-up on the semi-end market. Maybe I would take the margin question step by step. The first one is just, I mean, you mentioned of this 500 basis points. 200 basis points are direct tariffs, then 50 basis points were the capacity relocations. You mentioned 100 basis points volumes were these deferrals of higher margin products. You also mentioned 1.5 basis points operating expenses SG&A due to FX. Is this just to summarize, is this correct?
Correct.
Yeah.
Okay. There is a second sub-question, pricing power. I mean, many companies in Switzerland immediately price the tariffs to the customer. Why have you decided not to do it?
That's what I, when I earlier mentioned, there's a bit of a decision that I think you can make with your customers. I think we repeatedly talked about pricing power. We see it as a bit different. Yes, we have pricing power, but this is short-term thinking. I think, for a year or two, you can price, and then you're locked in when you decide in easily. What you do when you overdo this is you will be replaced one way or another over time. If you really think long-term in terms of your strategic partnership, and we have a strong relationship with all players in semi, chip makers, and OEMs. For us, the first step is not going to the price tool and increasing it. For us, the first step is having a discussion and finding out what do we do. Some things we didn't ship.
Some things we changed the shipping route, but we couldn't do it just yet in April, right? There's a couple of tariffs that we just had to absorb. We'll have post-discussion on this after. What we will not do is a thing like, "Are we not shipping you if you don't pay us extra for tariffs or things like that?" We have trust in this relationship that we continue. Our approach is probably slightly different. We very strongly believe this is the better approach long-term. There's always, in situations like this, where you have very little time and you need to move fast, you make fast decisions. Not every decision is 100%. I think we have actually strengthened our very strong foundation in the market with how we behaved and how we navigate and then how we communicated in Q2.
The second out of third sub-question to this topic, please, where exactly were the tariffs occurring? Is it from the U.S. to China? Is it China to the U.S.? Are these the main routes?
Yeah. I mean, the tariffs that really bite were the ones between the U.S. and China, right? Of course, from China to the U.S. Historically, we have our China factory for 25 years. Not everybody has had a China factory, right? It's very established. Also, our footprint and our connections to Chinese customers. We talked about that in prior earnings releases. We had to reconfigure it. Not everything was already moved out. Not everything we could avoid shipping. That's where some of these things, or some of these tariffs, were incurred. The same from the U.S. to China. We are very committed to the Chinese market. I think we can show how we grow in this market, how we make wins. We have a very good position, actually, there going forward, compared to Western competition and also against Chinese. We've shown that, especially in the auto market.
There also, not everything was ready, even though it was in our strategic plans. Hence, we had this half percentage point, accelerated relocation cost that we just felt, hey, now we're going to just do it. We steer the whole company towards this for a quarter. Now we can also go back to business and building long-term business up with R&D partnerships and developing customers and all these strategic topics. We just took a stance of ripping off the band-aid fast and then moved straight back to building up long-term, if that makes sense.
Maybe the last sub-question, looking forward, looking at the second half, I think your guidance implies already a material sequential margin improvement again, closer to 19%, around 19% in the second half. Does it mean the tariffs more or less have disappeared under the recent deals we have seen? Does it mean your relocation of capacity is finished already, that you're not subject to tariffs anymore? Does it also mean you find some of the sales volumes which were delayed are now being shipped again in Q3 already? Also, do you see the margin improvements going closer to 19% already in Q3?
A little bit yes to all of it, but to be specific, yes. These projects, we really push them. As I mentioned earlier, when I was talking about the global footprint, we have been successful to relocate the largest part of it. All the big, flagship products are now in the new location. Often, it's two locations now, right? That's how you will serve the global market. There are more trade barriers and other export regulations in different places. That's a little bit of the development of the recent years. Hence, also our strategy there to develop this footprint. Yes, that's what we see going away. Regarding tariffs, we already have seen this improvement in the recent months. April was the main hit, that may be a bit less, and June was a further improvement.
Given that, yes, I would say also the shipments that couldn't be shipped for this or the other reason, right? When you change a product line, it's complicated to do the whole customs. SAP needs to move there. There are hiccups and bumps. These have been worked through largely, but a few more things remain. I think we are now in a very good position for this scenario that we've seen. What we don't know is how these trade disputes continue. They're clearly not gone. There could be a scenario where you say it's a bit of a more calm situation, less volatile in the second half. You can settle in a little bit to where you're going, but not everything is yet announced, right? We notably have the Swiss deal with the U.S. not announced. I think the European agreement has been outlined but not fleshed out.
There are some countries that have not all been negotiated. I'm not the one you should ask about this kind of analysis. I can only share you our thoughts, how we see it. I see a clear improvement in the second half, based on our realistic scenario, right? We always have at least two or three scenarios. I believe that's where we will land, also based on the most recent months. I think, Matthias, if you want to add.
I can agree with what you said. We expect certain relief on these tariffs. Will they disappear? No. There will be some, but the heavy uplifts, I would say, due to this April 2nd, I think, Liberation Day, Reciprocal Tariffs, right? I think this is definitely lower, to be expected. We need to wait where and how the final agreements will be going forward. Will it be the 15% for Europe, yes or no, and when? How is the transition period? There should be some relief, definitely. Also, some relief on the relocation costs and impacts. They will not stop. There were still certain activities. We said it's nearly or largely completed what we started in Q2. There will still be some, but there should be some improvement and some relief, definitely.
Yeah. I would just want to stress that the core of INFICON is strong. Actually, I believe we have gained a lot of points with our customers how we navigated Q2. You'll have to take my word for it for now, but let's see how it develops in the future. I think this was a very good move. We have gotten very positive feedback on how we navigated this, and also the speed of how we adapted and changed around our configurations in accordance with the discussions with our customers. Of course, also suppliers are always very important in this when you strengthen your supply chain. This was a trend the last two, three years. I think this really showed we have a whole different company here that can adapt to extreme scenarios in a really short time. Anyway, back to you, Joern. You said you have a few questions.
No, sorry. I don't want to occupy the line here. I go back in the queue and then maybe follow up later. Thank you.
All right. Thank you, Joern. Thanks.
Thank you, Jörn. The next questions come from Nejc Lavric.
Hi, Nejc.
Hi there. Thank you for taking my question. Maybe the first one on the order since we've covered a lot of the margin. I mean, it's above one, which maybe is a bit of a surprise looking just at VAT, ASML, and certainly positive. You also write you've seen a substantial improvement year-over-year, sequentially. Can you maybe break that down a bit? I mean, how high is that improvement? Just give us a bit more color on that. That would be my first question.
Yeah, probably best to do it by end market. I mean, first of all, I would say this: the security and energy market is a bit of a diversification factor for us, right? It grows nicely. We've shown that the last five years, it has its own dynamic. It helped us last year, certainly, as it had a higher share, clearly. It is slow this year. If you were taking security and energy on the same level, if you remove it from this general economic development, then you could say we had a good growth this year when you look at these sectors, which just shows the resilience and the strengths of INFICON, also in some difficult markets. It shows also our clear focus to go for market share, long-term partnerships, building this out, building on it. This is all something that comes over time.
Security and energy will also come when the timings of these programs are clear. You can imagine when you look at the security and energy market, there's a bit of a confusion in terms of investment. A lot of money is allocated, but it's not very clear how to spend and where to spend and what program needs to be adapting and how. Maybe that as an overall picture. If you go through each one, I think semiconductor, in Q1, we felt this is the year where we have a, where we see a broader upcycle. It looked like it. I think this Q2, trade disputes were muting this upside dynamic and delaying it. Hence, we would see it now next year. It's still mainly the dynamics are around these leading edge nodes, which are a lot disconnected with this, data centers, HPC, and HPM.
While, of course, also memory is a bit, after recovery, it's a bit going sideways again, right? This is also we see some acceleration and deacceleration in the different submarkets. For sure, there is some hesitancies in investment projects, and everybody looks at their investment projects under the timing twice or three times these days. Overall, semiconductor, as I said, the dynamic of how we work together with the customer, the opportunities that we see. When I look at the broader strategy, we see gains of how we access more market and where we can get market share over time. I see positive trends. It doesn't entirely connect back to a quarter normally, right? This is more of something that you need to look at bigger time spans. Maybe Matthias can also say a thing in a minute about the market.
Just quickly, when you go for automotive, we saw good, good positive signals also there in Q2. Now it's a bit muted again. However, it's kind of stabilizing on this lower level, maybe with some positive signals. Next year, we'll see some more dynamic. I think the orders come from share gains at this point. There's still, especially in the battery market, a lot of dynamics of what is the latest technology, what's going to be the next step, and so on. On the RSC side, some of it is connected with auto, but on the RSC side, we have more of a continuous growth that we've seen over the last years and also will continue into the future. There is, as I said earlier, especially these after-service handhelds, they have seen very good growth with always a couple of new submarkets opening up, new applications, more automation.
There's also some robotics aspect to it. There's a bit more of a steady growth on that end, whereas the other extreme is battery, which is more step and more volatile. When you look at general vacuum, this is a market with 20 submarkets in it, and about half of it we serve through private label. Private label has really recovered. The general industrial market has recovered versus the trough last year. I think we are on a level where this can continue like this. All of these statements, we cannot predict if there's another escalation of these trade disputes. The way we see it, the realistic scenario, that kind of view on it, we would be optimistic there. You see also our outlook statements per segment there. I hope this helps, Nejc, in giving a bit more color. Do you want to add some more?
Yeah, Matthias.
Some numbers maybe?
I'm not sure.
Numbers would be great.
I know. I know.
I mean, you guys got all the numbers, Nejc, right?
Yes, that's true.
The numbers, I know. Maybe a few more comments. The orders developed better, yeah, as we said, and they did grow the second time in a row. From Q4 to Q1, we had growth, and Q1 to Q2, we had growth. I think that's positive. When we look at the previous quarter, I think we had also here in three out of four markets, we had positive order development. Majority really in semi and vacuum coating, yeah, of the order increase from Q1 to Q2. When we take a look, where does it come from? It was mainly Asia and Europe, where we had good developments, while the U.S. was more or less stable. Also, we had in GBE, general vacuum, and on RSC, we had a little bit of growth compared to Q1, which is also good.
The only market, similar like the comments for the safe side, is security energy, where the order pattern is weak, really, I must say, and doesn't show really strong development in these days. Semi very good, I would say, and the GBE and WAC with a good development as well. Semi, as I said, coming from Asia and Europe mainly. Maybe this helps a little bit to size. The book-to-bill above one the second time, while revenues are increasing from Q1 to Q2, is also not bad.
Yeah, it also made that jump up, right? Obviously. Yeah. Good. Is that helpful? Hopefully, Nejc.
Yeah, that's helpful. Maybe just on some of these reconfigurations. If we go to your factories, right, normally you show all of these machines and you say it takes one year for certain stuff to get trained. You now say that the reconfiguration is largely completed and you have these 50 bps of an impact. How certain are you that this is really over now? I can imagine you also would have to order some machines. The CapEx really hasn't increased year-over-year. Is this really largely completed?
Yeah. I mean, some of this CapEx is not something, right? If you look about the period of depreciation, and then you have it already somewhere in your budgets, the impact is not so high. I'll let also Matthias comment on it. Yes, for this reconfiguration that we needed to do based on this new landscape in Q2, yes. The big disclaimer is I do not know how these trade disputes will continue, what escalations we have. My fear is rather actually not this because then we'll just adapt to it. We've just shown how we can do that. Maybe there's another configuration needed. At this point, we don't see a big step like this again needed, right? The biggest one was this decoupling U.S.-China theme, not only, but this. We rather look now into next year and there's concerns about inflation and more economic slowdown.
When these effects of Q2 will work itself through the system, there could be supply chain concerns. We don't know more than all of you do. You've got great research departments, right? We're just trying to understand what then that next step will be. I believe our footprint is fit. We showed it. We've proven it. We can speed it up and we will absorb and then move on. This is not going to the core of INFICON has not changed. We could go and do some math of what hypothetically the OpEx would be without these trade disputes. It's a new point because, yeah, there's no alternate reality, and the alternate reality, we gave you the guidance for what we think for this year. The new reality is this. The new playbook is this. I believe many of the facts other companies will still see.
We just try to be really proactive and forthcoming with information, but also proactive in the implementation. Quick rip-off the band-aid, move on is the general INFICON way for things like that. Maybe it helps.
Okay, yeah, thank you.
A lot of uncertainty and a lot of low visibility.
Maybe just let me add one comment. You asked why is CapEx low and you did many things and largely completed it. This really depends on what kind of projects and product lines you transfer. Some are more CapEx intensive, some are less. Also, sometimes you see that you transfer internally, right? Some of the production equipment from location A to B. This is not really a CapEx. Then you have your tools, instruments, you have people costs, and maybe training and setup costs, which are impacting the P&L and not so much more, at least in the moment of CapEx. That's one thing. Regarding your question, is it really largely completed? I would say all the projects and tasks we initiated, they are largely completed. Will this be the final end stage? We don't know yet. As Oliver said, we only know what we know today.
Will there be the need eventually to do something else, right, in the next coming months and to think about the structure? Could be. We don't know yet. I only can say we are ready and we are watching this, right? If decisions are needed to make, we do it, right? The projects we talked about, they are largely completed.
I think one point I want to stress again, what Matthias just said, which will help to illustrate, right? We don't actually have growth this year. I mean, we have growth from INFICON, but the market itself hasn't done this ramp. As you all know, we have been preparing second half of last year to do this ramp, right, where there will be real growth, right? When you use cool growth, 7%, all that, good. We're talking about a ramp, 20%, 30%, sometimes even more. We are ready for that still. Not all activate, not all staffed, still same thing. Of course, you can then, when you move a product line, you take that product line from one place, ship it over to somewhere else. It doesn't need more equipment. Plus, we would even have more equipment from this ramp if we needed it.
Again, this acceleration of this semi-ramp isn't happening this year, it looks like. It's just good, solid growth on this basis where we are that we're currently showing. You don't need necessarily a lot more CapEx, if that makes sense, right? Also, the buildings there, when you think buildings, we need to think two ramps or three ramps ahead, meaning a 5, 10 years plan. We have the buildings. We have the location. That's part of our long-term strategy. This is about what you put in there and what you're really making there, more than a mix of what happens in the building, if that makes sense.
Thank you very much.
Sure.
Thank you, Nash. Next questions come from Martin Comtesse . Martin?
Yes. Good morning, everyone. Hey.
Hey, Martin.
I would just like to go back quickly to the margin implications. Can you help me? Can you just elaborate a little bit on the negative FX component of 150 basis points, where that comes from? Is it likely to persist at the current level also in the second half? That would be the first one, and then I might follow up with another one.
I think let me try to explain a little bit the FX index first, and then Oliver can add. It's relatively simple, I must say. As you know, we have some exposure on the Swiss franc side, and we also have some exposure on the euro side. When we take a look to the currency development year-over-year, I think we had an 11% change in currency, Swiss franc versus U.S. dollar. 11%, that's a big number, right? Q2 to Q2, and we had about 7% change in euro, which is the other currency where, based on our European business and the Cologne business especially, we have also certain exposure. These two currencies mainly drive the currency impact we talk about.
That's helpful. I'm just trying to get to what Joern already mentioned earlier. If we take the midpoint of your new guidance, you're basically implying an 18.5% margin in the second half, so a meaningful step up from Q2, 350 basis points or so. If I look at the individual moving parts, 150 basis points FX, which is likely not going away in the second half. We all don't have a crystal ball, but for now, we would expect currencies to stay where they are. Accelerated relocation, 50 bps is going to be done mostly. Sales volume, okay, done, but that still leaves me with quite a difference for you to move from 15% to 18%, 18.5%. I did understand that you will likely continue to price, or share the gain with your clients in terms of the direct tariff impact, which was 200 basis points.
What I'm just trying to get to is how quickly can you get back, realistically get back to the 48%- 49% gross profit margin? Is it likely that you will also have a negative impact in 2026? I understand we don't know where tariffs are going, but let's assume for now tariffs are going to stay where they are, where they were in Q2. Will there be below 20% margin next year? Where does the recovery in these four individual moving parts come from in the second half?
Yeah. I think I looked at general, and then maybe Matthias can give some more qualitative numbers. Hey, look, the INFICON model is still a 20%+ opaque model, and the one where we continuously try to further improve. Nothing of this has changed in long-term strategy. Nothing of the strategic initiatives have changed on the growth side or on the efficiency side, operating efficiency, digitalization, other automation. Nothing of this has changed. We know that this is going to go away because there are clear one-off effects that we can identify. So there's the building blocks in it. In terms of FX, I mean, strong Swiss franc is never really good for Swiss companies. We have seen that in the past. We are much less exposed.
If you look at our Swiss location, as you know, it's just one of three big ones or one out of 11 competence centers. So we are much more diversified. That's why we also typically have a much higher natural hedge on FX. When you specifically look at, for instance, Swiss franc development, though, compare Q1 with Q2, and/or also Q4, it's a bit of an up and down. Yes, I know we kind of ended up at this very strong Swiss franc overall, but the dynamics are still higher than the situation we generally suggest in Q2. There might be improvement on it. I would also say, on short term, more intensifies, but in general, long term, we try to manage this, strengths of this currency, specifically the Swiss franc, for instance, also the euro to some degree, with this relocation and cost optimization.
I don't know how quickly this will materialize or how quickly the effect will go reverse. I look at this with a relaxed perspective. I think this is manageable. We've seen this before. Again, we do not have a one concentrated location or two big locations. We are more diversified than that. If you compare the profile of our cost with the profile of our revenue, it's relatively balanced. The only thing is, there's not many customers in Switzerland for semi or auto, right? That's the one thing that we need to watch a little bit. Again, for that, we also have this reconfiguration projects longer term. We stepped it up a little bit because we do expect it to be a bit stronger in comparison. I think we can work through that. I would not worry about 2026. I mean, the last three years were difficult to estimate.
How do I make a statement for next year that ages well beyond a couple of months, right? If I look at next year, I really can look at it with optimism in spite of everything that happens in the world. The tech nodes are pushing. There's a lot of new innovation from space to quantum computing to all these new tech nodes and semi. We are right there. We're right plugged in. There's a lot of new applications and sense technology coming online. Data analytics is on fire. Oh my God, these new products that we're making there and the stuff that's happening. All markets look like they grow next year versus this year. This is not guidance. This is just the general feeling of how the development is based on what I said earlier.
Hey, there's reason for optimism even though we're in the middle of a storm, frankly. Because underlying factors haven't changed, actually. I think they could even, you could even say they have improved. No reason for negativity or too much. We have to navigate it. That's what we're doing here at INFICON. We are as excited as ever about our business and about our opportunities, frankly. Isn't it a great time to live? I mean, all the stuff we're doing. We just have a brand new project I cannot talk about, about the moon and all this stuff in tech with AI. You can read my LinkedIn. I did my own coding project with two bots this summer. Super cool stuff. Anyway, sorry. You asked me about what's in the future. I'm excited about it as much. This is a bit miserable. I get it.
This is not going to the core. Right? It's not changing anything. It's not going to knock off INFICON or anything. We just plow through. We poked the bandaid. Move on. It's fine. Execute further. Actually, rather more opportunities than less, frankly, when you compare to Q1. You look at the long-term perspective, yeah?
That sounds very good. You know how dull we are at the capital market and always just look at pure numbers.
I know. You guys, when we talk about the tech stuff, I see sparkles in all of your eyes. I know. We both have to, right? We have to do numbers, and we also talk about the exciting stuff in the industry. I want to stress that if too much goes off with the tangent, there's optimism to have for next year, I think. That should be the general statement. While trade disputes settle down, these big drivers have actually accelerated. Everything is a little later, that's all. Right? Sure. Happens to come.
Just go ahead.
A small follow-up here. Do I understand correctly that the 200 basis points, the majority of that direct tariff impact is something that you would expect to see go away already in the course of the second half? Or is it that this?
Yeah. It already has. The impact was mainly in April, and then it was low in May. Then it even further improved in June. Again, who knows, right? When we do sudden movements in policy, there's going to be some kind of bump and scratches and bruises, but it's a temporary nature of it. I think this is not in a realistic scenario. You don't see this anymore this year. This has been this, largely around the decoupling logic I explained. Yeah.
Excellent. Maybe a quick last one, if I may. The lower sales guidance on the lower half of your initial guidance, is that exclusively to do with the delay in the semi ramp-up, or does it also have any other sector impact?
The semi is certainly a big thing, right? Also why we clicked off the upper part there. We just don't see this upside. I mean, if you look at how we try to communicate with you, we try to communicate early and what we know. We already in a full-year presentation, so two earnings releases back, we talked about this year maybe not being as exciting as we all hoped for, with a full-fat semi ramp in the middle of it. I think then in Q2, we continued this. This is basically a bit of a confirmation on a little bit, the lower-end scenario of the ramp is just not really materializing this year. That is the main factor. There's some others, right? I mean, automotive in Q1, we saw good signals, as I mentioned. There were a few other things.
At one point, even we felt solar maybe is also going to happen next year. That's just why this whole guidance now is also on a similar comparable level with last year. I mean, you see the resilience in it, and you could say we're doing a growth if you take out this semi market, which has its own dynamic, right? That's a little bit what I tried to explain earlier in the discussion with Nash. It's not broad-based, right? I hope that helps.
Thanks, very clear. I'll go back to the queue.
Thank you, Martin.
The next questions come from Michael Foeth. Michael, please.
Hi, Michael.
Yes. Hi. Hi, everyone. Just two quick ones for me. The one coming back to your last answer, you know there are a lot of fab projects out there in semiconductor, and I'm just trying to understand what's triggering this delay that you are seeing. I mean, you're not the only ones. Obviously, the whole industry is seeing it. More specifically, from a fab project perspective, if you can help us, what is triggering that delay specifically, and what makes you confident that the ramp is going to come in 2026? That's the first question. The second one would be if you could give some granularity on your semiconductor sales in terms of the demand from OEMs versus end users and, you know, sensor solutions versus, you know, software and FabGuard . That would be helpful. Thank you.
All right. Yeah. Let's do it one by one. First, about the fab projects. Generally, they're all still there, and generally, everybody's planning to implement them, and many are in implementation, right? Obviously, we have good orders out of Asia, China, and outside China, with the big players that you know well. Some need to catch up. Some are plowing ahead at the front. It's a mix. In China, there's a bit of a different dynamic always. You see a lot of displacement of OEMs, of Western OEMs there. Good growth, also more resilient than we maybe thought. On the fab projects, this is just some investment delays mainly. Very few cancellations. I mean, the most notable one is probably Intel in Magdeburg. It is a long time coming, right? We kind of had to expect this. There's also some financial troubles that some others got into.
That is mainly where maybe a cancellation happens. All the other projects, the assumption is, this is going to come. It just shifts a couple of quarters, generally, in the average, right? This does not mean every project is moved, but in the average, right? Some are a little bit further, some come just a quarter later. That's a bit the flavor. You see this also with the top spenders in CapEx, that they look at the project twice. I mean, wouldn't anybody understand that we do that as well, that INFICON for our microscopic CapEx projects in comparison, that we look at it twice in this time. Why? Because there's a lot of uncertainty. Do I need this capacity really, or when do I need it, and so on, right? And where do I need it?
Let's do another round of discussion, and that's what we exactly also see with our customers. In both, actually, if end users or chip makers and tool makers, we see these effects. Again, I believe this is rather a delay. Actually, most of it is rather delaying and a little bit wait and see until this trade dispute settles down, I think. All of them are super confident on midterm plans, R&D projects. Everything strategic is full-on plowing forward. Frankly, nothing has changed. I think, again, the underlying drivers are there. Consumption is not super exciting, maybe you could say. That's something that also makes things a bit slower as maybe another factor. We have one super exciting application, obviously, with AI really finding proper applications now and really shows first productivity gains. That's something that will further expand, but it is still narrow at this time, right?
It's not broad-based for everybody in the semi space. All the OEMs and all the chip makers are not profiting from it. Maybe often we had other killer applications out there, where maybe a new consumer product would really plow ahead, and they are in the works, but it isn't here yet. Maybe to give you a little bit of the picture of the dynamics there, where our growth is coming from, it's similar to what I explained last year a lot. We look at the semi market as a number of submarkets, and now we almost need to look at customer by customer because there are kind of different dynamics.
Some need to catch up in one area, some need to plow ahead, some make a move into a new space, and all of them have something strategic, technology-wise, they're working on, and that scales up in some places already or is a full step like the really leading foundries. There's also, in some areas, a bit slowed, as I mentioned earlier. I mentioned there's some good dynamics in China OEMs. I think we have seen chip maker dynamics last year in China quite a lot. We see in Asia in general a good trend this year, in China and outside of China. Europe could be more dynamic. It's not bad. Of course, there's one big name or one big OEM that is a bit slowed, but it's not a broad-based dynamic. In the U.S., there's maybe some way you can see there.
It's the epicenter of the trade dispute and maybe calls for more uncertainty to some degree, and hence, there's more thinking. Again, when we talk with our strategic partners about strategic projects, there's no delay, there's no question marks. They move ahead. It is a very fragmented picture, right? The visibility is low, and again, each customer has a couple of things that are almost ramping and a couple of things that are a bit in the doldrums. That's why you get this very murky picture overall. I hope this helps. It's not so easy to give you the list and pinpoint it, right? Apologies. We would love to have that too. Maybe next year, when this gets more broad-based and everybody scales it up, then that will happen.
Thank you.
Sure. Certainly. Thanks, Michael.
The next questions come from Michael Inauen .
Yes. Morning, everyone. Thanks very much. Just, two questions, actually. I was trying to understand what you make of the tariff, let's call it solution or tariff deal that we have between the European Union and the U.S. I mean, there's still 15% tariffs now, which is actually, yeah, a lot. I mean, it's better than what was probably anticipated, but it's still a lot. I was wondering with your production in Germany if there's any impact with that. The second, what I'm trying to understand a little bit, the fact that you basically took some tariffs from your customers, as I understand it. We had a similar situation, I remember, during COVID when you also shared the pain with your clients on customs, for example, and higher costs in general.
Over budget.
Exactly. I was just trying to understand, does this happen out of discussion that you had with your clients? Is there actual pressure from your clients to take some of these costs, or is it your own decision to not have this discussion, actually? I'm just trying to understand. Is there a real risk that the client tells you, "Look, if you don't take over some of these costs, I'm moving over to whoever, MKS or whoever's there," just to get a feeling for it? Thanks.
Yeah. Sure. Now there's no real pressure. I think on short notice, everybody can go and raise prices. Some suppliers did it in the last time when we had this high inflation three years back. Guess what? They're all replaced. It's like when you do this at home, right? Somebody makes the remodeling of your house and really rips you off. You're never going to ever invite that contractor back into your house, even if you pay more somewhere else. This is the way how we look at strategic partnerships. It is always a discussion. The first thing when Liberation Day happens, and the whole management team actually was shouting at the time and actually talking to customers, as it happens coincidentally even together, we first talk to the customer. That's the first step. How are we going to navigate this? Like everything else. That's partnership.
If you send them a letter, "Here's the price increase," they will say, "No choice. We'll do it." You for sure lose brownie points. It's not a bad comparison, honestly, back then when we had these increased ship costs. The choice was always first, we need to ship. Everybody was in expansion there, right? Some of our product lines, they actually quadrupled in volume. You're not going to go and hold back and make a negotiation and will not ship. Some of our suppliers did that. Some of our board suppliers did that. It's clear what you do, right? There's a Tiger team that goes and replaced them as fast as possible. Back then also we focused on shipping. It's the same behavior. It's the DNA. You don't change the DNA of a company quickly. Anyway, I like the comparison a lot, honestly, Michael.
This was not a big discussion in the team here. It was more about, "Hey, what's first? What's not important? Who does what?" Frankly, I'm always a fan of when the CEO doesn't have to say much, but people do the right things. What then happened is that we all set up great teams that care about their business and that go for it. They make mistakes, but they're moving fast and they do it to their best knowledge. That's exactly what happened in Q2. I'm immensely proud of how they reacted. They moved on. For some things, we need to have a discussion. We had price increases, but we did that with deliberation and with discussion. First, it's about the strategic wins, and then it's about compensating short-term, opening profitability topics, right? That's always the right play if you want to be in the game.
We're in the game for 50-something years, so we're not going to go away. They're not going to go away. It's like a family, right? You still invite the old uncle to Thanksgiving or to your barbecue in summer or to your birthday party. This is how it is, right? Some guys maybe like more and they do a little bit more with. We would like to rather be the guys that are easy to make business with, do innovation, to really wow them on how we solve things. That's how we navigated this. I hope I answered your question properly. Was it good enough?
Yeah.
Yeah, all right.
I mean, it's just important to understand, I guess, that's because exactly the COVID situation was somewhat similar. I mean, completely different, but still somewhat similar. Just trying to make sure that you were not really under pressure.
No, in crisis, you see what your team is made of and how much you need to manage yourself. I think that's exactly comparable. I like it. Thanks, Michael.
Thanks. Can you say something to the European-U.S. deal?
That was still the question. That's right.
Yeah.
Some of this we expected. I mean, we were at 10%, and then Liberation Day was 20%, and the letter was 30%. The general tendency seems to be there is generally more tariffs between trading blocks and or general barriers. This seems to be the new world, right? If you look at the analysis, what happened the last 100 years, we always reduced them everywhere, pre-trade agreements, and so on. It seems to be now a bit of a paradigm shift. We anticipated that too. Now we need to go and find out what this 50% really means. As I mentioned in the last earnings release, when these announcements are made, the last time the example was, the China-U.S. made an agreement, and they said it's 10% and 30% now.
When we then did the investigation and you need to call up experts, you pull together your own experts, you actually file requests to understand it with the authorities, we found out it's not 30%, it's 55%. Because tariff stays, this bond stays, this is a special category. Some even fell away. We need to analyze what it truly means. Sometimes they also fall away. It's not only more. We will look at it, but 10% or 15% is a similar kind of range. Our reconfiguration of our footprint will continue. That is part of our strategy now for the last three, four years. We built this capability up. We might move something out of Germany to the U.S. or to China, based on this, but these projects are already ongoing.
This is not as dramatic as this Liberation Day shock with the upgrades to it, which we currently have 50-something percent of tariffs from China to the U.S. That is a much smaller scope. We need to also see what the Swiss-U.S. agreement will look like. There are voices out there that it could be comparable. We will have to just look at it and then analyze it, and it will take a week or two until we know. I am sure the teams are motoring away. We have scenario plans already for how extreme it is. We also had to expect maybe 30%. In that sense, it's better. You can see EU and U.S. trade policy and agreement. There's a shift there, right? We are also studying this closely. Where will this really end up with and what really stays long-term and what will not?
We look at this different than between China and U.S. from our humble view, right? Please ask the real experts about policy or global trade policy. We believe there are solutions to be found formally between these two blocks, and some things need to be worked out. It might be still a bit bumpy in the next months, but there will be working some things out. Yeah, I hope that helps.
It's a long discussion, but just let me add, right? Sometimes we say, "Well, tariffs, right?" A tariff is an easy word, right? Five letters, but it's really complex, right? What's really behind it? There are so many dependencies and rules you need to understand, you need to apply. Also, very much depending is, of course, who's paying the customs, right, or the tariffs, right? Number one is this is all defined mainly in the INCO terms. The INCO terms define a lot, right? Who's really paying? Who's importing the goods? That's one thing. There are so many other aspects, right? Will the goods be brought out of the country again after a couple of days? Maybe it's also a tariff. All these things we must watch and analyze and try to get a good understanding. Then we can judge and basically what we said earlier.
Of course, we watch it and we need to watch. We need to make the right decisions, right, when we have some clarity about what could be the impact. As Oliver said, even today, two days before the official day, I think August 1st, we don't know what's the agreement with Switzerland and eventually Liechtenstein. We don't know yet. We will see. Then we look at our structure, at our product streams and product flows, right, into the world. We need to make the right decisions.
That's very good additions that Matthias made here, right, just to show you the complexity of it. It really breaks down in a complex process. There's also the customer discussion. Who shares, who does what, or do we change the revenue stream or the shipping stream? We'll work through it. It shouldn't be that extreme. It's not a great deal, right? I mean, we are fans of the world before, where there's a couple of percntage between the blocks, especially the major trading blocks, right, excluding maybe U.S. and China. That is good, right? Free room to operate, not too many tax burdens and regulations. It's obvious, right? That's the easiest to make business and grow business. The world is what the world is. You can navigate where you are. It's the same rules for everybody, right? I believe we are just in a very good place to navigate this.
We remain confident, whatever it will be thrown at us.
That is good to hear. Thank you very much for that.
Thanks, Michael.
Bye, guys.
At this moment, I don't see anyone else wanting to ask questions. Maybe this is the point for closing remarks.
All right. Thank you very much, everybody, for your interest, for your continuous support. We meet again soon in a quarter. Interesting time. As I mentioned earlier, also very exciting times at the same time. I would say the same thing. We remain confident and optimistic here, and see what the future brings. With that, we meet again soon as Matthias has outlined in the next dates for the next earnings release and other events we will participate. Thank you very much and have a wonderful day. Talk soon. Thank you.