Ladies and gentlemen, welcome to the Interroll presentation of half-year results 2026 conference call and live webcast. I am Shari, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Markus Asch, CEO. Please go ahead.
A very good morning, ladies and gentlemen, to our Interroll presentation of the half-year results 2026. It's a pleasure and honor for Stephan Schärer, CFO, and myself to present to you our half-year results. Maybe let's quickly do an overview of our customer base, and for some of you who have been in the call oftentimes have seen this. We have updated the numbers today. We can report to have about 19,000 to 20,000 customers. We don't know the details yet because through the acquisition, we might have some double customers, but it's above 19,000 and we have added a few companies as well as three more factories to the footprint. All in all, what is a solid base for us is a wide customer base and an international footprint that is relevant in fast serving our customers.
Before we go into the figures, I would like to go with you through some of the highlights that we're doing. First of all, let's look at the market. The market is stable, and we see even some clear signs of recoveries. It is very clear that the market has its ups and downs, like we have seen and we have shared with you. In March, for example, EMEA, especially Middle East and Africa, with some downturn. We also have seen that bigger projects in Europe are rather more hesitant to be awarded. At the same time, we see a stable development. Asia-Pacific, we have seen an excellent development both on order intake as well as sales. In North America, we are passing our way in building the necessary structure for very sustainable, also order intake as well as sales development.
FX, again, we have a substantial effect to be shared with you and to be reported to you as the Swiss franc again has risen against the major currencies. On the execution focus, what is for us very important to share with you what is the main message for us. First of all, strengthen our product offering, product and solution offerings in terms of range and in terms of competitiveness. Second, get closer to our customers in terms of sales and service, but also application knowledge. Thirdly, provide the structure that is necessary in order to sustain growth in products as well as service. When you look on the third side, while we improve the quality, the competitiveness of our products, we also extend the products and solutions in order to serve our customers best.
Basically, step-by-step, we extend our ecosystem that we can provide our customers and serve our customers so they can provide optimal solutions to their markets. All in all, we can say the business momentum has continued to improve. We are executing our strategy and are delivering the first results in this direction. Quickly, the organization update. Last time when we reported to you the full- year 2025, it was the outgoing CFO at that time, Heinz Hössli. In the meantime, Stephan Schärer is on board. The team is almost completed. We have one more position to fill. That's the COO, which I am presently acting as at interim. Before we go more into the details of the figure, I would quickly ask Stephan Schärer to introduce himself to you that you know who is behind this name.
Well, thank you very much and good morning, everyone. Pleasure to be here with you. As a short overview of my past 20 years in the finance leadership areas. Very quick, I've held international finance leadership roles across different industries, robotics, industrial automation, process industries. I've led, in that time, growth initiatives, business transformations, restructuring programs, acquisitions, as well as post-merger integrations. Most importantly, always contributing to sustainable value creation across global organizations. I think one of my highlights of my career I would like to point out here is my time in China, where I've spent close to 10 years, and I was part of the leadership team there in China that drove significant market share gains and profitable growth in what you can call a highly competitive automation market.
Beyond the financial results, I think the experience there provided valuable insights to me into how to scale businesses, navigating rapid change, and executing strategy in one of the world's, I think we would say, most dynamic industrial environments. Across all these experiences, my focus has always remained the same: connecting strategy, operations, and financial discipline to create sustainable long-term value for the customer, for the employees, and even more importantly, for the shareholders. Look forward to engaging with you in the future. Thanks a lot for your attention this morning. With that, I turn back over to Markus Asch for the next section.
Thank you, Mr. Schärer. Let's go on and let's have a brief look at the major performance highlights that we want to present to you. First of all, order intake. The order intake has increased by 3.9% in local currency by 8.5%, and that's very important to look a little bit more into detail what is behind. We have seen in Europe, as indicated by you, or to you in March, that there are two effects relevant. First of all, the MEA parts, the Middle East and Africa part, we see a delay in orders, not a cancellation, but a delay in orders towards maybe the second half. We don't know the details yet. On the bigger project side, we see there is a hesitance to move or to award bigger projects. They're also not being canceled, but there is some hesitance.
That does not apply for the medium- and smaller-sized projects. There we see good activity. In the MEA, we actually managed to overcome some of the weakness on the bigger projects and the Middle East, Africa part and have a very good development. We'll show that to you later on. In Asia Pacific, the order intake is excellent. It's even better than the sales that we showed to you. Americas is today still behind, but that's exactly according to plan. Why? Because we are, since the end of last year, beginning of this year, rebuilding the organization or building the organization to be much less dependent on big single projects, but we have a much wider base of order intake and sales. This is coming along according to plan.
We are expecting to see the first results in the second half, maybe end of Q3 or beginning of Q4. That's the order intake. When you look at sales basically have transitioned, or the order intake have transitioned into sales, and that was some of the indication that we have given you in March already that we would expect some of the order intake that happened in the second half last year would transition now into the sales. It has developed this 9% increase or in local currency, 14.1%. That goes to all regions, almost all relevant countries. There we see a very stable and a very solid development. On the EBIT side, there is a slight decline. It has mainly, and Stephan Schärer will talk more detail about that, it has mainly four reasons.
One is a more abnormal product mix that we have seen, you've seen it on the sales side, on the product side. The second one is that we have shared with you already a year ago that we will substantially increase our investments into innovation and into market development. Third one is the one-term cost for the acquisition, especially of Apollo, but not only Apollo. We had two acquisitions in the first half in there. The third one is amortization, especially of the acquisition. They had some impact. Maybe a smaller effect, we had some ramp-up preparation costs of an acquisition of last year where the products have been industrialized and they have been prepared and since beginning of Q3, we are shipping them to customers.
The very highlight is the operational cash flow that not only comes from working capital, but mainly driven by working capital. If we look a little bit more into detail, on the product side, how is the order intake being structured? I would like to highlight maybe a couple of points. First of all, Rollers is very stable. There was an effect of a couple of single customers, not relevant. Drives, very substantial. That's very good because it's day-to-day business and it shows our increase of market range and some competitiveness to make that happen. Conveyors & Sorters looks a little bit more difficult as it is because it's mainly driven from last year, a few bigger projects that were not repeated in the first half, but they're directly already on the fly in Q3. This is a rather stable development.
Pallet Handling maybe should give us an indication later on. You will not see it yet in sales, but we see it in order intake. There is a positive development after a couple of years of decline. It's not yet 100% sustainable, but at least it should give us an indication that we are moving step-by-step into the right direction. If you look at sales, and sales, basically what you see in Rollers and Drives on order intake in a few weeks later, you usually also see in the invoice sales. That's why both of them are positive.
Conveyors & Sorters, there's quite a difference to the order intake you just saw before. That's mainly driven by the orders of the second half of last year, but also some shorter, smaller mid-size projects that usually turn faster from order intake to sales, giving you an indication also driven by Europe that smaller projects we can turn faster into sales. Pallet Handling, as indicated to you before, is mainly driven by a time delay between order intake and sales. That should be turning into a more positive approach in the second half as well. All in all, 9% growth or in local currency, 14.1%, which should give us an indication that now after a couple of years of decline, the ship is turning into the right direction and gaining a step-by-step momentum into the right direction.
If we look at the sales by region, as I indicated to you before, that's basically the summary. Europe, pretty strong and completely compensating some of the weakness in Middle East and Africa. Europe is a very strong. Asia- Pacific, excellent, with a development, as you can see, of about 30%. In Americas, it's not yet huge, and that will be driven by the organization. The more and more the organization is in place, we will see there some momentum. Also what you should know, the currency effect in America is the biggest of about 7%. In local currency, we also see there a reasonably good development. EBIT, I will now hand over to Stephan Schärer, who will take you through the next slide before I will then go on again with the strategy.
Well, thank you. To the EBIT. The EBIT reports are CHF 27 million, corresponding to an EBIT margin of 10% and a change of -2.2% to the previous year. This despite a challenging environment, continued investment activities, and the underlying operational performance of the business remained solid. As communicated previously, profitability was impacted by targeted investments in research and development, innovation, and the strengthening of our regional and key account sales organization, as Markus Asch just pointed out. These investments are an important part of our strategy, designed to support sustainable growth and further strengthen our market position. Additionally, we would like to highlight here that the year-on-year comparison was affected by approximately CHF 3 million acquisition-related costs, as well as higher amortization, including resulting from the preliminary purchase price allocation associated with the Royal Apollo acquisition. These effects are not reflective of the underlying operational development of the business.
It's important to note that the purchase price allocation remains provisional at this point and may be subject to adjustments as the valuation process is being finalized in the second half year. As you know, we integrated or we acquired Apollo two months ago, so we had only the first two months included here. Looking beyond these effects, we are encouraged by the improvement in customer demand, the growth in sales, order intake, and believe that the strong operating cash flow generated achieved during the first half of the year. Also noted here, as I mentioned, the acquisition cost and the amortization, the depreciation itself remained unchanged. We go into the net results. Net profit reached CHF 19.8 million compared with CHF 21.2 million the prior year. This is a change of -6.6%. Return on sales is 7.3%.
The decline was primarily driven by higher tax expenses, partly only offset by a more favorable financial result, including positive foreign exchange valuation effects that we have here. The increase in the effective tax rate reflects a different profit mix across jurisdictions, as well a non-recurring tax effect related to the property rights transaction. We transferred IP rights into our Swiss holding and have related tax costs to that. This is one of its impacts that will not be repeated in the second half, of course. Excluding these items, the underlying tax rate development was more moderate, and we continue to expect the tax rate to normalize over time to the historical levels we had before. I would like to highlight one more thing to the net result. The overall transactional currency exposure remains moderate, as Interroll's decentralized operating structure actually supports the natural hedge setup.
We come to the balance sheet. Here I just would like to highlight the strength of Interroll. Looking at the balance sheet in more detail, you see here total assets increased to CHF 686 million, up CHF 67 million, compared to the beginning of the year. This, of course, is mainly driven by the acquisitions we've done. Plus, of course, the continued investments and the positive net profit generation we have. At the same time, you will see the shareholders' equity remains strong, with CHF 501 million, and an equity ratio of 75%. While we have expanded the asset base to support future growth, you see that Interroll continues to remain and maintain a very solid capital structure. Another important indicator of our financial strength, of course, is our net cash position.
You see it here at the end of June, we reported CHF 172 million, compared with CHF 186 million in the beginning of the year. I think the decrease, of course, reflects the strategic use of cash for acquisitions. Acquisitions include Apollo and Interroll AS Norway. The investments, of course we do. I think even though all these activities, you can see that we still have a very strong flexibility and a strong cash position there. If you go to the cash flow, you see here on one side, the operational cash flow. Operating cash flow with CHF 39.4 million. Of course, here we do have the result and a positive development in the net working capital. Here we have really strong support, and we see cash flow ending at 14.6% over sales. The difference to the free cash flow, of course, reflects our investments.
The free cash flow is mainly impacted by the strategic investments we've done here underlying operating cash flow performance was very strong. I think what we can really see is that on one side, we had investment, on the other side, we also had an increase in CapEx in the first half year in our structure, and this reflects the cash outflow we had in the first half year. Finally, to our value creation slide. The returns have normalized over the exceptionally high levels we had, of course, during the post-pandemic period. For the first half of 2026, ROE stood at 8%, while return on net asset was at 10.3%, compared with a WACC level of 9% shown on the slide. What is important is to say that we're looking here at half year result.
This is usually distorted. I think will be more meaningful at the end of the year when we have the full effect of our acquisitions in, as well as the business profit from that. The development reflects current market environment, higher capital employed following acquisitions, of course, as I said, and the impact of strategic investments made to strengthen the platform for future growth. I believe as market activity improves and acquisitions synergies gradually materialize, it is our ambition to recover returns towards historical levels we had over time. For us, the key point to highlight here is that we remain focused on a disciplined capital allocation approach. We have strong cash conversion and a sustainable value creation throughout the cycle. With that, I hand back over to Markus Asch.
Thank you very much, Stephan Schärer, for leading us and going through the key performance indicators to the details, what caused what and what was caused by what was the result. I will take you to our next chapter, what are the underlying business models behind strategy, key focus areas? Why are we doing the things that we are doing? They are producing the results that some of the effects you already have seen in the first half. First of all, I think what's very important, we are a product and solution supplier, not a system integrator. We do not manage complexity. We do not integrate systems to end customers because we don't want to do it. Our task is not to manage complexity.
Our task is to reduce complexity by offering systems to our customers, end- customers, but mainly system integrators, that are like a LEGO principle, that are modular, that are platform-based. We have started that with the first product, with Rollers and Drives. We have moved that pretty much to Conveyors. We are now moving Sorters. Also, we are moving it to hardware and software, the same principle. Everything that is a modular, that is a scalable business and technology, that's what we provide to our customers. As we see more and more in both system integrators as well as end customers are telling us and are sharing with us that complexity is one of the biggest challenges. Our task is to simplify that, to simplify basically material handling. That's what we do through the modules that I just introduced to you.
If you look a little bit more into detail on the product side, we provide Rollers, Drives, Pallet Handling, Conveyors & Sorters. We then enrich them towards solutions by combining some of those, like Conveyors & Sorters, for example, but also by combining them with controls and software. We have shown you here MCP PLAY that shows some of the indication what we are doing in modularizing and standardizing controls as well. That has following effects, and I will later on share with you a little bit more in detail. The effects on the system integrator, again, simplifying intralogistics, is ease of integration and commissioning. Those systems, typical commissioning times, at least on the projects that we have completed, has been reduced by 50%-70%, 80%.
On the operation side for end u sers, usually the output goes up because we have systematically changed the approach more from zero pressure accumulation to the digital twin that is moving through the conveyor and adapting the conveyor accordingly to its requirements. For both as system integrators as well as end users, we are driving value that is a sustainable value to the product, and it's a value beyond just the product. It's a system innovation approach. Let's quickly have a look at our market and maybe some of the markets of the end- markets that you see on the top of the slide, I would like to highlight a couple of them. We have seen some weaknesses on the airport side, especially Middle East.
At the beginning of this year, we will see an increased momentum in the second half, also in some other regions, for example, in Americas. An airport, which is a vertical for us, very relevant, between 10%-15% of our business, we see that solid. We have other area, we call it e-commerce. It's basically part of the CEP business, part of the supermarket e-groceries, and part of warehousing and distribution in the verticals. It's an overarching topic. There we see good momentum. We see a very stable development in food and beverage. It's never growing very fast, but it's also not declining very fast, so it's a very stable and a positive business. Especially with the Apollo acquisition, looks like we will have a better footprint into the manufacturing side and especially into the Fast-Moving Consumer Goods production, where we traditionally are rather weak.
Maybe that's a bigger picture on the verticals. If you look at the market in total, let me just summarize. You have seen on the right-hand side some of the overarching trends, but let me summarize it in my own words what's relevant. First of all, it's a sizable market, sizable for us. We talk about CHF 8 billion-CHF 10 billion. Second, it's a market that is structurally growing. It has its ups and downs, as I shared with you, but it's structurally growing. It's a solid market. Certainly, what's also very important, it is a market that is open for innovation. For good technical solutions that provide value to system integrators, to end users, that market is open. That leads us immediately to the question, why are we well-positioned or why are we convinced we are well-positioned?
That's what we show you a little bit at the bottom of this slide. We have a good portfolio, we continuously work on improving that portfolio, both in terms of competitiveness, second in terms of scope, and certainly in terms of adding additional capabilities that we didn't have today, like the Sortteq acquisition last year, the Apollo acquisition this year. This is very important. Sometimes we are asked, maybe we have not been good enough in communicating that in the past. We are not a system integrators. Our business model is a scalable business model. It always drives modules, industrialized modules, and scales modules, hardware, control, and in the future, even software. We see the first results. Our global footprint is unique. You almost or hardly find anybody with a similar footprint in the world.
That infrastructure is built, is done, so we can serve our customers fast, local, in a similar quality around the world. Maybe when we look at our different types of customers, for system integrators, we are a technology partner. We provide them with technical solutions to the applications they needed. For the end u ser, we generate value that are beyond a product. Basically, higher throughput, easiness of service, and lower maintenance costs. They're typical areas that for us are relevant. What is very important for us, we are not dependent on five customers or 10. We have, as we shared with you, 19,000+ customers that are very important for us because they are solid base, and we further develop that customer base, and we usually share with you once a year how our customer base develops, which is very essential and very important for us.
Let's look at our key execution priorities, I can combine those priorities very simply. First of all, market closeness. Last year, we have shared with you that we have invested in substantial structure in the Asia-Pacific region, they actually are turning now step- by- step into reality. That's why you see some of the growth that is happening there. I mean, yet finished, no, we're continuously working on that. The same we are doing this year in Americas, both in North as well as Central and Latin America. We are building their additional substance that is required, to be able to generate momentum on order intake and sales. We are there on our way as planned, we will see the results step-by-step coming in.
It's important in Asia, not only to continue to expand our resources, I want to point out, and maybe the right-hand thing, what you see is our innovation hub. We have the first projects running, they will have a time to market of about 11 months, so they will be launched in November this year to the market. They are products and solutions that fit that regional markets in China and Southeast Asia well, that provide us with the basis for additional growth and additional momentum in the future. What you see is innovation and market closeness. That are our major drivers to developing our business further. Give you a little bit of detail on, because you have seen, for example, with MCP PLAY, what value we provide, and it's different values to system integrators as for end users.
Now I could just take you to the example and take you through the example, how different the values are, but how relevant the values are. For system integrator, installation or laying, installation and commissioning is a very solid part of their value proposition to the market and of their costs. Our task is to simplify that business. Basically from mechanical layout to software configuration to commissioning, we simplify that approach. As I shared with you in the last, for example, six projects that we have done, we have, on average, reduced commissioning times of about 70%-80%. On the end users, on the other side, they only see the result maybe of a faster installation, but for them we provide additional value.
That value is usually a higher throughput on the same mechanical layout, and that reaches to different values in the future where we can monitor and measure uptime and can help them to improve their operations. Here we see the first results coming in. We further develop that capability to serve end users as well. Maybe some more details on the Apollo acquisition. You remember last year we have acquired Sortteq. That was mainly a product part where we had an open spot in our sortation between 3,500 and 8,000 parcels per hour. We have completed that Sortteq acquisition. We have industrialized the product. We are running already in production, and the first product out of serial production has been shipped to the market and will be shipped to the market in the next while.
On the Apollo side, there is more to that. First of all, we are also extending again a value proposition that today we didn't have. That's vertical conveying, spiral conveying. That's very relevant into Fast-Moving Consumer Goods, into some industrial applications, but also in the typical intralogistics applications. Secondly, Royal Apollo has, by their natural approach, a better access to markets where we are today not so strong. That's in an industrial environment and especially in the Fast-Moving Consumer Goods environment. Through Royal Apollo, and we take that leverage in the future, we can leverage that customer access. At the same time, Apollo can leverage the customer access of ours into the typical intralogistics application, mainly e-commerce. The third point of Apollo that is very relevant for us is their service share. They have traditionally a higher service share than we.
In some of the regions, we can combine the capabilities and the possibilities to move forward and to combine our strengths and to increase our share of service that is relevant for customer proximity during the product life cycle, but also to increase our business there. Basically, on the example of Royal Apollo showing you three different areas. Extension of our product line or product offering, better or different access to different customers, and increasing our global Lifetime Service share that is relevant for us in the future. Now let's look at the outlook. We want to give you a differentiated and always a very balanced and a realistic outlook. Again, as mentioned before, we have seen that the business momentum increases. We have managed to get additional momentum in an existing market.
Step- by- step, we are there increasing our efficiency and effectiveness in the markets to generate momentum in the potential that is out there. What is very encouraging is to see that our strategic investments, especially in customer proximity, application knowledge, key account management, are step-by-step generating traction, generating momentum, and are leading to results. It's for us very important that we continue to execute this very consistently. Further, as mentioned in Asia, very consistently in Europe and especially in the Americas, where we have a lot of momentum to gain. As indicated to you, we are in a sound and safe market in a sense that the market is strong and is open for innovations to develop in the future.
It's very clear, as long as we focus and continues to develop our customer values, we see that this momentum that we have now generated will continue. We have been criticized by you, especially in March, that we are not giving clear guidelines. We have never given, we will not give clear guidelines. The guidelines we can give you is what you have seen on order intake. We will probably see a slight increase in the momentum of the second half. What you have seen in invoice sales, there is no reason why this should slow down in the second half. That's roughly a direction that we want to give you. Maybe if we move on to the last one. We have our Investor Relations webpage with the half year report, with all the details that you can refer to.
We are basically through and are open for questions.
We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. In the interest of time, please limit yourself to three questions. Anyone who has a question may press star and one at this time. The first question is from Walter Bamert, ZKB. Please go ahead.
Good morning, everybody. Can you hear me?
Yes.
Could you give us some guidance what you mean when you say the Conveyors & Sorters business is on the fly? Is that regarding to order intake in the second half? Would that be early enough to lead also to higher revenues in the second half? Or is that more into the next year?
That's a differentiated answer. What we see on the Conveyors, what was partially missing was bigger projects. Some of them are now coming in. When I mention on the fly, they will step-by-step, also even this year, turn into some of the sales. When you look at the Sorters business, we also see some bigger projects coming in. They will probably not materialize. The majority will materialize next year.
When I look at the customer prepayments, they are up 70% year-over-year. Is that a meaningful figure that says something, or do you just require more prepayments?
I think it's a reflection of our contract situation. Mainly actually it's a question of the product mix and the higher part of projects currently in execution. Nothing in particular that changes to the normal development.
There was no substantial change in strategy, Mr. Bamert.
Okay. Could you please confirm the figures for order and sales organic growth in local currency?
Yes. We have an FX effect in order intake of 4.6%. The organic growth local currency of order intake is 5.5%. We have an FX effect of 5.1% in invoice sales. The organic growth in local currency is 10.5%.
Thank you very much.
The next question is from Tobias Fahrenholz, ODDO. Please go ahead.
Yes. Hi, good morning, gentlemen. Follow up on the outlook. You mentioned there for the second half that you expect order intake to show slightly better momentum. Growth momentum should not slow down. Of course, you have a little bit more revenues from Apollo coming up in the second half. Is your indication also true when you exclude M&A? This one.
Yeah.
Okay. The second one. Okay, good. The second one on-
Don't have to be long if they can be easy, right?
On e-commerce, you indicated good momentum. Could you speak a little bit more here about this important end- market and rough supply-demand ratios? Do you hear from various clients now they are fully back to a normal investment mode as we might have seen before the pandemic? Are there just a few clients and most still have lots of overcapacities? Maybe you also have any statistics or figures for this?
It's very difficult to share with you statistics as there are not typical statistics. What you can do is when you talk to many customers, you get some feeling. Definitely would be not right to say that the majority of the customers are back to an investment mode. Yes, there might be some specific reasons why they will not go ahead with a huge one or not. In total, customers are basically back to a normal investment mode and will invest. You see some differentiated approaches. You see mainly the big babies also going into their last mile activities. There are some smaller projects and higher volume projects. That means more projects, but smaller. Which is very good for us because we are not a system integrator that is fighting for the very few big ones.
There's also some interesting technology approaches where we are anchoring ourselves step-by-step into the right solutions, also into the last mile. All in all, that was a long answer to a short question. There is a stabilization in that business all across the globe, not only in Europe, not only in Asia, not only in America. There is some technology advanced approaches where we are in the middle of the discussion with our customers and the end- customers.
Okay. Thank you.
The next question is from Vitushan Vijayakumar, Baader Europe. Please go ahead.
Hi. Good morning. Thanks for taking my question. I have a question on the margins dynamic for the second half. It's clear that, obviously you need a stronger performance, especially thanks to the pickup expected in Americas, maybe. How can you just elaborate on the margin driver ahead, please? I know it will be kind of volume driven, but is there any other underlying factors maybe mix in terms of products or regions that may contribute for a more favorable outlook within margin mix, please?
What you see, first of all, we have no differentiation or different development on the margins in the various product groups. What we have seen a differentiated product mix in the first half that will more likely stabilize a little bit in a more balanced direction in the second half. All in all, there is no substantial differentiation in our margins. We have seen a very special approach in the first half, which will more stabilize.
Okay, thank you. On the cost side, what do you see in terms of inflationary pressure that is coming following the geopolitical conflict? Were you able to increase prices or is it in plan?
We have seen maybe on two areas, critical development. One is steel. Steel actually not in Asia or China, slightly in Europe or partially in Europe and a lot in the Americas. That has a relevance that we had to adopt the prices in the market, and we have done that already only partially and where it's necessary. The second one is where we are very nervous or very sensitive, and that's the electronic side. We've seen there's some development mainly driven by automotive electric vehicle industry. That's where the first priority, make sure we can deliver. We are increasing our bookings or our orders just to make sure we can deliver. We also see there are some strange development when it comes to pricing. Two major drivers is steel and it's electronics.
What we need to do, we can transfer that to the market.
Okay. Well, thank you. Just last question. This is purely modeling purpose. Can you give us some dynamics and guidance that you may see for the whole year of 2026 in terms of CapEx, tax rate, and net working capital, please?
I can say CapEx. CapEx for us, we are increasing. Normally we are in the CHF 20 million range. This year we will be a little bit higher because we drive multiple productivity tasks in production. We also have some ramp-up preparation for new products that will be launched in 2027. CapEx will be higher. What was the second one?
Tax rate.
Tax rate, I think.
We assume to go back to historic levels, because as I said, we had one-time effects. We have absorbed those now in the first half, we don't see any change for the second half any longer.
The third one was?
Was the working capital.
Working capital.
I think we do have a very strong working capital in H1, but we stay committed to work on working capital to make sure. As [inaudible] has pointed out, we might have to do some stocking on some selective commodities as they are critical. That might have an impact on our inventory levels overall, but that is, I think, a limited impact that you will see there.
Okay, perfect. Thanks.
Unless, of course, any geopolitical changes that we can't foresee, of course.
For sure, yeah. Thanks.
Unfortunately, we cannot predict the future.
We wish we could. Thank you.
Thank you.
The next question is from Constantin Hesse from Jefferies. Please go ahead.
Thank you very much. Good morning. Thanks for taking my questions. I want to talk a little bit about momentum, order-wise and profitability. I understand that you don't want to give guidance. I understand that the fundamentals, they have been in place for years, right? We still haven't seen growth in quite a while. What I've been trying to understand, is what is the new growth level of this industry, right? Historically, Interroll has always told us 6%-8%. You want to grow 50% ahead of the market, so 8%-10%. Is that a growth figure that is still valid, you think? Because if I look at consensus. Consensus today has orders growing over the next two years at 8.2% CAGR. Very similar for sales, about 8% CAGR over the next two years, and about 12% CAGR on earnings.
What I want to understand is, first, is this number still correct from an industry perspective? Second, how comfortable are you with these consensus estimates?
Two messages. First of all, when you look at the industry. The industry was affected by ridiculous investments in 2021, 2022, that then basically eased off in the next few years. The typical stable development you did not see. There was an up and down that basically confused a little bit the market and also confused us. This is a more stable one. Now there are tons of market researchers that you can evaluate. Is it realistic that the market grows with 6%, maybe 4%-6%? Probably yes. You will always see ups and downs in different regions, but that the market solidly develops, we are convinced. Now our task is to outgrow the market with good technological approaches. That's what we exactly preparing the foundations for, with adding products, adding competitiveness, and adding market access.
Is our task towards the future correct, and are we having there substantial concerns? No. That is the direction we will go and we will have to go. We are just preparing the grounds. You have seen now some of the momentum restarting from the success of the past, with different capabilities and different approaches to the market.
No, I completely understand that Interroll is obviously doing a lot from a strategy perspective, but I'm trying to really understand from a growth perspective. Markus, you just said 4%-6% now. We're talking about a consensus outlook of about 8%. If I'm an investor.
No. We talked about the market.
The market. That's what I mean. The market. Yeah. Absolutely. The market. 4%-6% the market. I want to understand, from an investor perspective, if I look at these numbers and I think, okay, we're looking at about 8% growth in terms of order intake for the coming years, is that a number that you feel comfortable with? Or do you think that is still too high?
At this point of time, it's difficult to say. Let's put it the other way around. We do not feel very uncomfortable with it.
Okay. Perfect. For 2026, I just want to understand, just for clarification, you said you expect momentum to improve in the second half. Can I just understand on top of what base that is? Because last year, order intake in the second half was about CHF 260 million. A bit of an improvement over the 4% reported growth rate of orders in the first half would imply a sequential decline in order intake. I just want to make sure that I'm understanding this right. Does that make sense from a dynamic perspective?
We just want to give you a guidance on the direction. Our order intake was driven by some of the bigger projects not coming in and some of the regional challenges that we shared with you, that should ease in the second half. We do not expect an order decline compared to the previous year in the second half.
No, not compared to the previous year.
More the momentum compared the relative growth momentum from the first half will rather increase. That was the message.
Fine. Sequentially, we still do expect a decline, though. On the margin very quickly, because consensus is expecting a very big jump in profitability in the second half. I think for the full-year, EBIT is currently being modeled at about CHF 80 million, which would imply about almost a 17.5%- 18% margin for the second half, which is clearly quite high up there. If we think about clearly this level feels a little bit high. If I think about the margin development in the first half, you already mentioned there were some specific one-offs that impacted the margin in the first half, which we won't see in the second half. With the acceleration in sales, what kind of a drop-through would you expect to see in the second half?
If I look at the margin of last year, 16.6% in the second half, is that a level that you feel comfortable with for the second half of this year? Do you think it will be a little bit lower because of less volume?
We usually do not give clear guidelines on EBIT, it's also too early to see all the details. It is clear that we will have to get our first consolidated acquisition approaches that has some effects, especially on amortization. All in all, our additional investments that we are doing in sales and technology that we have shared with you will cost some of it. The consensus is probably rather on the high side.
Understood. Thanks. Then just the last question, just on capital allocation. CHF 172 million in net cash. The question is, the shares have been performing quite poorly for a while now. Just wondering if there could be an interest in maybe starting a share buyback or anything of the likes, given the performance of the shares.
We have been very clear to you, also in March and also before, we right now look at opportunity to grow our competitiveness in the market. There are still others that we evaluate, that we look at it, and if we do not have the capability to use the money wisely, then this is the last resort that we look at. It's not an immediate approach.
Understood. Thank you.
The next question is from Sebastian Vogel, UBS. Please go ahead.
Good morning. I will ask my questions one- by- one. The first one is just a quick clarification on the organic order growth and organic sales growth. Excluding FX and excluding M&A, was it on the order side around 1% and on the top line around 5% in H1?
To be clear, in Swiss franc, the order intake growth organically was 0.9%, and on the sales side, it was 5.4%. In local currency, the growth in order intake organically was 5.5% and in sales, also again, in local currency, it was 10.5%.
Got it. My second question is regarding also on the profitability side, just to have a sort of a clear-cut picture of your H1 margins. You had, if I understood correctly, this CHF 3 million related to PPA and to M&A costs. These are sort of costs that were only taking place in H1, there will be nothing taking place like that one in H2, right?
No. That's not entirely correct. A little bit above CHF 1 million is the transaction cost we have for the acquisition. The CHF 2 million relates to amortization related to the purchase price allocation. There will be an impact, of course, from that amortization that feeds through to the entire year. We assume that additional cost is somewhere between CHF 3 million and CHF 4 million for the second half year.
Sorry, the last number was a little bit unclear. Can you repeat the last number?
CHF 3 million to CHF 4 million.
CHF 3 million-CHF 4 million. The PPA, the CHF 2 million will be gone.
That's the increase in the amortization coming from the acquisitions.
Got it. One last one. The M&A will be allocated mainly to Conveyors, from a segment perspective, or is it any sort of split or something in that regard?
Today, it's basically the Apollo M&A is in Conveyors. The other M&A is in all product groups.
Got it. Many thanks. I will go back to the queue.
Thank you.
The next question is from Remo Rosenau, Helvetische Bank. Please go ahead.
Yes. Thank you. I'm getting a bit confused now with these different organic order growth numbers. I'm sorry for that. For me, by definition, organic growth means in local currencies, ex acquisitions, like-for-like.
Yes.
Is the like- for- like organic order growth now 0.9% in the first half?
We have been confusing you there. We also learned this morning the like- for- like organic growth in local currency is order intake 5.5% and invoice sales 10.5%. This is the right figure. Organic growth in local currency.
Okay, which is like- for- like. For me, organic means like- for- like, but probably I'm wrong.
Absolutely. That's correct. Absolutely.
Because that is, of course, a better number. Listening to you, it seems that you expect this momentum to rather increase in the second half, this like- for- like number. In the previous year, we had an extremely strong second half with, I think, 17% organic growth in orders. The comparison base is quite high. You still expect this like- for- like number to get rather better than worse in the second half concerning orders, right?
That's our understanding today.
On the margin, obviously there was no operating leverage despite the strong growth in sales organically, like- for- like. I understand it has to do with the costs related to acquisitions, increased amortization on the EBIT. On the EBITDA, that has no impact. There, you mentioned strategic investment in innovation and so on and so forth. Could you quantify that a little bit? How much more did you spend for these investments into the future, i.e., what I'm trying to get at, what would have been the underlying margin development without these kind of extra spendings?
We have shared with you that we will spend maximum, or it will cost us maximum 1 percentage point in EBIT, what we invest in additional market and innovation, and we are roughly in that range.
Okay. If you would adjust that, there would still have been no operating leverage. The EBIT margin and the EBITDA margin would have been roughly 100 basis points higher, which is around the same level as the previous year. However, you had a strong underlying sales growth, shouldn't there be an operating leverage somehow?
Yes, it should. Also what we mentioned to you, there was a very special product mix.
Okay.
That has another effect there.
Okay, I hear you. Again, there, you expect in the second half an improvement as well, right?
Mm-hmm. Basically, the main question that is behind you, is our business scalable? Our business is scalable.
Exactly. What are the capacity utilization rates, roughly?
Sorry, could you repeat the question? I'm sure I understood.
Yeah. When we talk about operating leverage, what would be interesting to know is, how high is your utilization rate at the moment in your plants? How much more volumes could you get through without investing anything significantly in addition?
We have shared that with you already in the past, not substantially has changed. We are today roughly at 50%- 60%, 65%, whatever percent you want to name it. Of course, if we go substantially bigger, we'll have to invest into assembly and some automation. The basic infrastructure is in place, and there's enough capability.
Yeah. The big leverage is more volumes.
Sure. Correct. That's what we were preparing exactly as you see.
Okay. Good. Thank you.
Welcome.
We have a follow-up question from Sebastian Vogel. Please go ahead.
That's probably then the last one, right? Or
Yes, the last one.
We are above the target. Okay. Mr. Vogel.
Sure. Yeah, sorry for that. Just one follow-up with regard to the point of the one-off cost that I got that right. You had like CHF 3 million H1, you will have CHF 1 million H2, and then CHF 3 million-CHF 4 million for the full- year. Is that the right cadence? Would I get that right there?
Yes, correct.
Cool. Awesome. That was a rather short last question. Sorry for that.
I try to be quick and direct.
All right.
Okay.
That was the last question. I would now like to turn the conference back over to Markus Asch for any closing remarks.
Ladies and gentlemen, thank you again for giving us the time and listening to our webcast and to the presentation about the half year results. For us to summarize again, we are extending our market coverage, we're executing our strategy, and we are seeing the first results, and that exactly, very diligently, we will continue our work in order to generate the results for the company and for the shareholders that you now are seeing step-by-step coming in. Again, thank you very much for your time, and all the very best. Have a good summer time.
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