Good morning, everybody. Also in my name, I am Marc Desrayaud. I am the CEO of the company Mikron. We will bring you through the financial results. We would like to start with the order intake. The order intake H1 of the year 2026 reached CHF 134.5 million, which is higher than the H2 of the year 2025. Our business is for a big part a project business, our division Automation and Machining have got some project which are longing 12-15 months. You need a longer order backlog in order to be ready for the future to create some sales. One side of the business is a short-term business.
With that, with CHF 134 million, we have a plan for 2026, which is solid and we expect to have in the second part of the year an increase to come back to the same level as 2024. We had in 2024, 2025, very high order intake and a very high order backlog, which was good, but also somehow counterproductive because we had at the limit of the capacity. That is why we had in 2024 and 2025 longer delivery time, 15-18 months, which also has a consequence that we had some difficulty to deliver our customer. We hope that we are coming back in a normal situation. The reduction of the order intake in H2 of 2025 and H1 of 2026 came mainly from Europe, where we had a hype in 2024-2025 over the capacity. Asia is growing nicely and U.S. still remain weak.
It is a question of market. It was also a question of performance. We have implemented some change in management, and we hope to have a rebound very soon. Market for Machining, as all our peers are, is very weak, we do not see a definitive improvement overall on the market. We remain a niche player, we hope to have some order intake recovery due to new applications. Sorry for that. I don't know why the word application is not coming. We are developing some new application and new machines that we introduce on the market to gain some new sales. Positive is the development of the order intake in Tool. Tool is a business which is moving quite fast and despite the Swiss francs and the tariff which have impacted our business in U.S., have a solid growth.
In terms of net sales, we will have a relatively stable net sales at CHF 181 million. This is a slight reduction compared to 2025, first part of the year by 6%, whereas it is only 3.5% at stable exchange rates arises Swiss francs and especially US dollar. The demand is staying strong. We believe that the sales will recover in 2027. Our capacity utilization is very good in Europe and North America. We have started the year with low sales. We have some capacity available, and we will be ready to create some sales and to recover some orders as soon the market will be here. We will see in the H2 of the year our sales, which will be similar to the H1 of the year. The order intake that we will book during the second part of the year will be then for 2028.
For Machining, we had a decrease in sales following the lower order backlog in 2025. We do not see an improvement on the market and with the delay between the order intake and the sale, we need some time to recover the sales. We have booked some important orders in new application, and we see that the second part of the year will be more positive. Tool increase the sales by 12.6%. If you consider with the exchange rate is 20%. This is mainly driven by the increase of sales in a new application like medical, like aerospace, and also the development of sales channel in U.S. and in China. The trend for optimization of production by a customer better using the assets to produce is supporting our development with our high-performance solutions.
In term of operating profit, we will have a strong operating profit of 8.9% in the first part of the year, amounting to CHF 16.1 million. It's lower than last year. We had last year in the first part of the year an exceptional result. The reduction that we have in 2026 compared to 2025 is mainly coming from Automation. That was a division constant and strong. We have issued some cost-saving measures in the location where the performance is not at level. It help us to reduce the break-even and to reduce the impact of the non-performing units. At the same time, we are investing quite a lot in the future. We have some large project which are finishing. Our new location Boudry next with increase of capacity will be finished by the end of the year, which will bring extra savings.
We have implemented also in some location short-time work for the period where the sales are not here. We are convinced that the second part of the year will be similar performance. To be noted that compared to 2024, in the same period, we have approximately CHF 10 million less turnover and we have a better result, which is showing that the efficiency gain that we have created in the last two years are impacting. We are confident that we will keep our target and corridor for the profitability. As I just mentioned, we continue to invest. We have done quite a lot of investment in the last five years in terms of sustainability, in creating some new infrastructure. In the second part of 2026, we will open a new location for Tool in U.S. We'll start operation U.S.
Today, we deliver the goods from Europe to U.S. It's a decision which had been taken before the introduction of tariff and also before the change in the exchange rate. This is a strategic move. We have already entered the building. You see a picture on the slides, until the end of the year, we will start the operation. Market information will be done during the IMTS, which is an important exhibition in the U.S. in September. We will open also a legal entity in India. Today, we serve India from Singapore and from Europe. We will have, by the end of August, we have a legal entity location where we will localize some activities. It's also a commitment to the Indian market. We have different strategic initiatives to increase our presence in India.
As mentioned, the new plant in Boudry with doubling of the capacity will be finished by the end of the year. We are already operative. We have some infrastructure which still need to be implemented. With that, we will also reduce the external locations that we had, that we use in 2024, 2025, in order to keep the volume of sales. Then we are investing also in sales. We are investing in U.S. We are increasing the presence for Tool with resellers and distributors, but we are also changing our structure to be more present on the market and especially to be able to enter into new applications. All these give us confidence that we continue our strategic direction, even if we see that 2026 show a slight slowdown compared to 2025. We are in line with expectation.
We communicated last year and at the beginning of this year that 2026 we see a slight slowdown, but we are in line of expectation. This is not at the level of ambition. We know that we were a very positive mood in 2023, 2024 and 2025, but we are working on it. We have established a lot of new initiatives in order to go back to growth. If the growth is coming, the profitability will be there. The market is continuing to be down in Machining. You have certainly your peers as machine suppliers are also suffering. We could reduce the break even so that we are ready for the turnaround, and especially the development of application in medical and in e-mobility is giving us some hope. Automation, we are convinced that we have a temporary slowdown of pharma tech.
You know the geopolitics situation and also we had in the past very large order from some few customers which are in a cycle of consolidation. We need to rebound with U.S. This is for me the biggest topic for Mikron to recover our full performance. Tool is a very good direction. We grow, we are profitable, and we have a lot of things to do, and we will soon communicate on it. As a consequence, we confirm the forecast that we did at the beginning of the year will be in the range of CHF 340 million- CHF 380 million sales. Then we will have an operating profit margin, which will be between 7% and 10%, despite the weakness on some location.
In a nutshell, as a CEO of Mikron, I think that we are doing a good performance, taking into consideration the situation on the market. We are not happy to see a slowdown, but we are working on it, and we think that the second part of the year will show a positive direction. Now we give back the word to Philippe for the question.
Thank you, Marc. At this time, we open the lines for Q&A. If you have a question, you can raise your hand, and we can unmute your microphone. Florian, please go ahead.
Yes. Thanks. Thanks for letting me on. I just have a question on the Automation segment that I want to understand a little bit better. What is the key reason here for the weaker order intake? Because you mentioned CapEx cycles, maybe you could elaborate a little bit on those CapEx cycles.
Yes. What I was mentioning is that we know that we were profiting or getting benefit in 2024, 2025, about the large orders placed by large OEMs in the GLP-1 and injection devices. We know that this investment, we had a similar situation in U.S. in 2022 and 2023. We know that afterwards, there is a lot of lines which are ordered, the company which are buying this line have to implement it, start them. We know that this will be a big step in the increase of production by these customers, and it needs time to be digested. We have seen that in U.S. two, three years ago, and now we see in Europe that with the huge amount of orders that we got, we get more than CHF 200 million orders in 2024 and 2025.
It takes some time until these big orders are coming in. What is important is that below this single large order or single large customers
We are growing the number of customers. We are growing also the type of applications. The base is continuing to grow. This CHF 50 million-CHF 100 million single customer orders plans are today paused. We know that the market will continue to grow. We know that it will come back, but we do not know yet. You have all heard some of our customers that they are changing the management, revising the strategy. We are very closely working with them to see when the next step of investment will be done.
Okay. Thanks. That's clear. Maybe also looking at 2027 now in terms of sales. When I look at the order intake from H1, I know you're not guiding now for 2027, of course, but it looks difficult to grow on revenues in 2027 when I look at the order intake numbers. Is that a correct assessment, or am I missing something here?
As you say, we'll not guide for 2027. The time will come. What is important for us is that we recover some order intake, and depending on the product mix and depending on the delivery time that we will have, then we will see in the second part of the year how 2027 will go.
Okay. Understood. Thanks.
Hi, Peter, can you unmute the phone?
Hi. Thanks for taking my question. I got a question with regards to the margins. As you don't show the margins per segment any longer, I would nevertheless have a chance to ask how that's developed over the last six months, which segments posted a higher decrease or less high decrease, and in which kind of divisions are the margins currently in line with your bandwidth for the year? Is there any division that is below the bandwidth? Just to get a little bit of the feeling on how the segments developed.
Yes. In general, our Automation business, that is the biggest division, is about on our average margin. The Machining business is a little bit below the average margin, and the Tooling business is above the average margin. That is kind of how our margins are. Obviously, when the Automation business is reducing in sales, you have two factors. You have a little bit mix impact, and you also have, within the Automation division, the economy of scale negative impact, right? That is mainly why we are also saying the margin iterates with the reduction in sales in Automation.
Thanks for that. My second question would be with regards to operating leverage, and especially in the other operating expenses, where I saw that they slightly increased in H1, even though your sales decreased. I was wondering what is going on there. Maybe you can explain a little bit why these costs actually increased slightly.
Yeah. As you said, slightly, right? I think we have also running projects at the moment that we did not stop despite a decrease. That's one answer. It's a moment, right? That you look at it. You can also take substitute personal expense with operating expense there as well, if you outsource, for example. At the moment, there is nothing special that is going on. It also underlines a little bit our strategy at the moment. Just because of one half year where we have a little bit lower sales, we don't put everything on stop and do not jeopardize the future, right? We continue our strategic projects that help us grow further in the future.
Okay. Thanks. Maybe my last question, it's really an understanding question. The net assets from customer projects-
Yes.
They also increased when compared to year-end 2025.
Yes.
Even though order backlog decreased. Maybe you can help me understand that dynamic a little bit better from-
Well-
From orders to net assets from customer projects to backlog.
Yes.
It has to be just the way you described. When we work on projects, then we create sales as a percentage of completion. With this increased sales based on percentage of completion, our backlog goes down. That's this relation, right? The more sales, the lower backlog if you don't have the order entry. Then the offsetting account when you book the sales is the asset. You book work in progress. Debit asset, credit sales. Sales go up, asset go up, backlog goes down.
Okay. Good. Thank you.
Mr. Randers. Need to unmute the mic. Mr. Randers, you need to de-mute. Maybe Mrs. Wong.
Hello?
Yeah. Hi.
Hi. Chloe Wong from Edison. I have three questions. I'll ask them one at a time. The first one is on the 3P innovation partnership. Can you share a bit how that would work, and how will you sell the combined solution, and when do you expect the first order?
We had already in the past some models with this company. We want to strengthen this partnership. We do not need to have automatically some combined orders, but we are working on the market together, and we sell some solution including tool solutions. It's an increasing of our scope, being a general company without having to build by yourself. The first project on discussion today, we hope to be able to conclude in 2025, but it's more long-term strategy.
Okay. You've previously talked about the U.S. tariff creating uncertainty for customers and causing them to delay placing orders. What is the current situation?
The current situation is that we were suddenly faced with this in 2025 for project which have been concluded in 2024 and 2025. It was a little bit of surprise because the rules changed. We do import a part of our goods to U.S. and to resell to customer. We were impacted. We were impacted mainly in the mid of 2025. In the meantime, we have adapted, we have change of way of working. We have also put in our contract with the customer some clause that change in the taxation will be also in charge of the customer. For us, I think we have managed the difficult time of mid of 2025 to end of Q3 2025. We have increased also the cost for the importation of the tools, for example.
Of course, it makes the product from Europe less attractive than the product which are local. Fortunately, we do not have so many local competitors. In the field where we are, being in Automation, in Machining and Tools, we are facing mainly more projects and competition from abroad, being from Germany, from Italy, or even from Asia.
Okay. Got it.
It was with the 2025, it had create some additional cost on some project. We had, during two, three months, some increase of cost on imported goods. Now I think that we are well-organized.
Lastly, what gives you confidence that Machining orders will improve in H2?
We have quite a lot of project in the pipeline. We have some project which are already agreed, which need to be formalized. We see some application which are coming up, medical application, electrical connectors for the data centers. We have a good business with fittings, which are the part that you need for the cooling system of the data center. We see a dynamic today with the project that we are working on, which is much better than what we saw since mid of last year.
Okay. Thank you.
I think Mr. Randers asked a question: Could you please give some client-related insight on the approach to what project region? What is keeping them back? What kind of elements would make them restart new projects? Oh, this is a very interesting question. Thank you very much. I think you have to consider Automation and Machining separately. Machining, it's a question of how to organize a supply chain Where our customer are producing metal parts. Here we are speaking about our positioning is Machining with a lot of productivity. We're speaking about large models, and if you see the uncertainty on the market, everybody's holding on a little bit the plans. There is a lot of company which are not going in high-level production because they wait to see how the market will develop.
It means that for Machining, for example, some customer are continuing to use some single machine instead of investing of a transfer machine of Mikron, which is producing much more efficiently with less personnel and less production costs. As soon as, for example, in automotive, but also in electrical connectors, the supply chain will be a little bit stabilized, then we will see again the people will look for productivity, and then we will be back in the business. In terms of Automation, I think as already said, it has been a 2024, 2025 hype on the injection device for GLP-1 and insulin. It has been a lot of investment. You have seen that in order backlog and in our sales.
I think that now the market has to digest the increase of the production of the base molecule of GLP-1 API is still behind the market expectation. We see also that some of our customers got some problem in the final assembly of the pens, with also the capacity which are today not fully operational. We are delivering mostly for the half assembly or for the pre-assembly. This is why the project will come, but for the time being, our customer are holding down a little bit. Every segment, every application has got different reason for that. By the way, the good growth that we have in tools. Tool is an application where our positioning is to increase the profitability and the productivity of the customer.
We see that a lot of customer are increasing the productivity on existing machine, which is also coherent with the way that we see that investment on new machine is a little postponed. People want to get more from the existing machine, increasing the capacity by increasing the productivity. There will be some limit to it, because we can gain 20% productivity on a single spindle machine for medical, but at a given time, the production cost will not be good enough. We think that the rebound on tools is showing that the productivity is going up, and then we will have some opportunity. Mr. Peter? Okay, small question in the chat. Yeah, there is one question on Automation that is focused heavily on Pharma/Medtech. Will you stay this way? How is the industry focus as well? Thank you very much for the question.
Between 2021 and 2025, we had 50/50 application, purely injection, and let's say 80/20 Pharma/Medtech and the rest. We were focusing on this because it was a lot of business to be done. Now we are continuing to develop some other application. We have some application in, for example, connectors for solar panels. We have some application in commodity goods, like for the phone industry, and we are always looking some new application. The problematic as we report in the last two to three years was really to deliver everything we had in the order backlog, and that's why we have continued to develop our Pharma/Medtech business. Within Pharma/Medtech, besides the injection device, we still have a lot of potential.
We are becoming a Pharma and Medtech company, we have this competence, we have this understanding also of customer needs of, for example, in the diagnosis device, the blood measuring device, but also the different analysis that the patient has to do at home and not in hospital. Today, we are still continuing to develop some application in Pharma and Medtech because we think that there is a lot of potential that Mikron can develop. Mrs. Wong, did you have a question more?
Yes, I have a follow-up on the injection pens. The single-dose versus the multi-dose pens, what does this mean for your product? And do you get any sense that the launch of the pill by both Novo Nordisk and Eli Lilly is likely to limit demand for the injection pens?
To the second question, yes, the pill will come on the market. The pill have got a different type of customer access. The pill is not very efficient because you need 70 times more molecule to be as effective, but it will take mainly in the country where it's difficult to have injection, to keep the injection cold, and where you have a resistance to the needle, it will take a market share. This is known. This is known since a long time because the patent for the pills are coming up, and it will take, I would say 20%-30% of this market. Nevertheless, the injection pens will continue to grow because there is a growth of the overall market, and the pill will take a part of the growth. The second point is an interesting one.
There is not only the increase or the change in the size of the pen, having some bigger pens, having some double pen. There is also the topic of the recyclability of the pen. There is a lot of development which are ongoing, which should not change completely our business model. Because, yes, if you have a bigger pen, you'd still need to assemble it. We will have to adapt to the market, and we are working close to the big designer of pen. You know that Mikron is a supplier of assembly machine for all the big pen designer and with OEM. We are very often in contact with them, and we're also discussing with them how will the market look like in 10 years and five years.
The advantage for us is that it could be also an opportunity because if you change the size of the pen, the line which are today operational, we have some line which are already on the market since 7 - 15 years. This line, it will not be economical to upgrade this line to have bigger pens. It will be certainly some new investment.
Thank you.
Peter?
Thanks for taking my follow-up question. I would really like to ask you about the U.S. again, where you elaborated that you were also not quite happy with the performance there, and you implemented some changes. Maybe you can add some information with regards to what you would like to change there, what you also maybe already have done in the last couple of months.
We not give any detailed information, but we change a part of the management. The focus in the U.S. is to regain market share. That's why we speak about a performance because the market was slow during in all applications. Means in the assembly, the market was slow. We discussed with our peers. Everybody was looking for orders. A lot of project were not decided. We saw in the last month that some market were moving up, and we were not taking benefits of the recovery of the market as we wanted to do. We did a deep analysis, and we saw that the performance, mainly in the order acquisition, we were not aggressive enough. We were not present enough in the field. We decided to reinforce the sales team.
We got also some professionals which are coming from the same business as ours or adjacent business, which have got the network, which will allow us to be more performing in term of acquisition of project. For the rest, we have reduced the capacity, so we have taken the opportunity also to increase, to optimize the production. We have promoted some people in order to have a stronger management team.
Good. Thank you. There are no more questions, this will conclude our call. Thank you very much for participating in this call, and I wish you all a good summer vacation for those that have. Goodbye