Interroll Holding AG (INRN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Interroll's Presentation of Half Year Results 2026 Conference Call and Live Webcast. I am Shari, the Chorus Call operator. [Operator Instructions] The conference is being recorded. 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.

Yes. Very good morning, ladies and gentlemen, to our Interroll's Presentation of the Half Year Results 2026. It's a pleasure and honor for Stephan Scharer, 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 3 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 are 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. But 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 a very sustainable also order intake as well as sales development. And 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. And thirdly, provide the structure that is necessary in order to sustain growth in products as well as service. Then when you look on the third-hand side, while we improve the quality, the competitiveness of our products, we also extend the product and solutions in order to serve our customers best. And 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. So 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, we also -- it was the outgoing CFO at that time, Heinz Hössli. In the meantime, Stephan Scharer is on Board. The team is almost completed. We have one more position to fill, that is the COO, which I am at presently acting as Interim. So before we go more into the details of the figure, I would quickly ask Stephan Scharer 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. And 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. I look forward to engaging with you in the future. And thanks a lot for your attention this morning. And with that, I turn back over to Markus Asch for the next section.

Thank you, Mr. Scharer. So, 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. And 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. So, we have seen in Europe, as indicated by you or to you in March that there are 2 effects relevant. First of all, the EMEA part, the Middle East and Africa part, we see a delay in orders, not a cancellation, but the 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 are also not being canceled, but there is some hesitance. That does not apply for the medium and smaller-sized projects where we see good activity. So in EMEA, 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 lesser dependent on big single projects, but we have a much wider base of order intake and sales. And 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. And then when you look at sales, 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, and that has developed with 9% increase in local currency, 14.1%. And that goes through all regions, almost all relevant countries. So 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 Scharer will talk more detail about that. It has mainly 4 reasons. One is a more abnormal product mix that we have seen and you see it on the sales side, on the product side. And 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. And third one is the one-term costs for the acquisition, especially of Apollo, but not only Apollo, we had 2 acquisitions in the first half in there. And then the third one is amortization, especially of the acquisition. They had some impact and 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. 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. And 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. And 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 are already on the fly in Q3. So, 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, and that's mainly driven by the orders of the second half of last year, but also some shorter smaller midsized 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. So, 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 shift 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. So, Europe is very strong. Asia Pacific, excellent with the development, as you can see, of about 30% and in Americas, it's not yet a 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%. So in local currency, we also see there a reasonably good development. EBIT, I will now hand over to Stephan Scharer, who will take you through the next slide before I will then go on again with the strategy.

Well, thank you. So to the EBIT. The EBIT reported at CHF 27 million, corresponding to an EBIT margin of 10% and a change of minus 2.2% to previous year. This despite a challenging environment, continued investment activities and the underlying operational performance of the business remains 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 and are 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 2 months ago, so we have only the first 2 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 in the prior year. This is a change of minus 6.6%. Return on sales is 7.3%. The decline was primarily driven by higher tax expenses, partly only offset by more favorable financial results, 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 as 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 a one-off impact 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 level that we had or historical levels we had before. Maybe I would like to highlight one more thing to the net result. The overall transactional currency exposure remains moderate as Interroll decentralized operating structure actually supports the natural hedge setup. We come to the balance sheet. And 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 (sic) [ CHF 668 million ], up CHF 67 million compared to the beginning of the year. And this, of course, is mainly related to -- 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%. So 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 the CHF 186 million in the beginning of the year. I think the decrease is, of course, reflects the strategic use of cash for acquisitions. Acquisitions include Apollo and Interroll AS Norway and the investments, of course, we do. And 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 we 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. So here, we have really strong support, and we see cash flow ending at 14.6% of 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. The underlying operating cash flow performance is very strong. And yes, I think what we can really see is that on one side, we have investments. On the other side, we also have an increase in capital expenditure in the first half year in our structure, and this reflects the cash outflow we have 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 were looking here at the half year results. This is usually distorted and 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 acquisition synergies gradually materialize, it is our ambition to recover returns towards the historical levels we had over time. So 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. And with that, I hand back over to Markus Asch.

Thank you very much, Stephan Scharer, for leading us and going through the key performance indicators, the details, what caused what and what was caused by, what was the result. I will then take you to our next chapter and say, what are the underlying business models behind strategy, key focus areas, why are we doing the things that we are doing, and 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, and 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 legal principle that are modular, that are platform-based. And we have started that with the first product with Rollers and Drives. We are moving -- we have moved that pretty much to conveyors. We are now moving sorters, but also we are moving it to hardware and software, the same principle. So, everything that is a modular that is a scalable business and technology, that's what we provide to our customers. So as we see more and more and both system integrators as well as end customers are telling us and are sharing that this complexity is one of the biggest challenges. Our task is to simplify that, to simplify basically material handling. And that's what we do through the modules that I just introduced to you. So if you look a little bit more into detail on the product side, we provide Rollers, Drives, pallet management, 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. And we have shown you here MCP PLAY that shows some of the indication what we are doing in modularizing and standardizing controls as well. And 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. So, those systems, typical commissioning times, at least on the projects that we have completed has been reduced by 50% to 70%, 80%. On the operations side for end users, usually the output goes up because we have systematically changed the approach more from 0 pressure accumulation to like the digital twin that is moving through the conveyor and adapting the conveyor accordingly to its requirements. So 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 in 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. And airport, which is a vertical for us very relevant between 10% and 15% of our business, we see that solid. And then we have an 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. And 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-mover consumer goods production where we traditionally are rather weak. So, maybe that's the bigger picture on the verticals. If you look at the market in total -- and 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. So, we talk about CHF 8 billion to CHF 10 billion. Second, it's a market that is structurally growing. It has its ups and downs, as just shared with you, but it's structurally growing. It's a solid market. And certainly, what's also very important, it is a market that is open for innovation. So for good technical solutions that provide value to system integrators to end users, that market is open. And then that leads us immediately to the question, why are we well positioned or why are we convinced we are well positioned? And that's what we show you a little bit at the bottom of this slide. We have a good portfolio, and we continuously work on improving that portfolio, both in terms of competitiveness; second, in terms of scope; and thirdly, 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 that maybe we have not been good enough in communicating that in the past. We are not a system integrator. Our business model is a scalable business model. It always drives modules, industrializes modules and scales modules, hardware control and in the future, even software, and 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 the similar quality around the world. And maybe when we look at our different types of customers, for system integrators, we are a technology partner. We provide them with technical solutions through their applications they need it. But for the end user, we generate value that are beyond a product. So, basically higher throughput, easiness of service and lower maintenance costs, the typical areas that for us are relevant. And what is very important for us? We are not dependent on 5 customers or 10. We have, as we shared with you, 19,000-plus customers that are very important for us because they are a 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. And I can combine those priorities very simply. First of all, market closeness. And last year, we have shared with you that we have invested in substantial structure in the Asia Pacific region and 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, but we're continuously working on that. And the same we are doing this year in Americas, both in North as well as Central and Latin America. And also, we are building there additional substance that is required to be able to generate momentum on order intake and sales, and we are there on our way as planned and we will see the results step by step coming in. It's important in Asia, not only to continue to expand our resources, but I want to point out and maybe the right-hand thing, what you see is our Innovation Hub. We have the first projects running, and they will have a time to market of about 11 months. So, they will be launched in November this year to the market. There are products and solutions that fit that regional markets in China and Southeast Asia well and that provide us with the basis for additional growth and additional momentum in the future. So, what you see is innovation and market closeness that are our major drivers to developing our business further. And give you a little bit detail on -- because you have seen in this -- for example, with MCP Play, what value we provide and it's different values to system integrators as for end user. Now, I'd just take you to the example and take you through the example how different the values are, but how relevant the values are. For a system integrator, installation or planning, installation and commissioning is a very part -- a very solid part of their value proposition to the market and of their costs. And our task is to simplify that business. So basically, from mechanical layout to software configuration to commissioning, we simplify that approach. And as I shared with you, in the last, for example, 6 projects that we have done, we have, on average, reduced commissioning times of about 70% to 80%. On the end users on the other side, and they only see the result maybe of a faster installation. But for them, we provide additional value. And that value is usually a higher throughput on the same mechanical layout. And then that reaches then 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, and we further develop that capability to serve end-users as well. Maybe some more details on the Apollo acquisition. 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. So, we are running in -- already in production and the first product is 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 the value proposition that today we didn't have, and that's vertical conveying -- spiral conveying. And that's very relevant into fast-moving consumer goods into some industrial applications, but also in the typical intralogistics applications. But 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 consuming goods environment. So 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. And the third point of Apollo that is very relevant for us is their service share. They have traditionally a higher service share than we. And so 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. So basically, on the example of Royal Apollo showing you 3 different areas: extension of our product line or product offering and 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. And we want to give you a differentiated and always a very balanced and realistic outlook. Again, we have -- as mentioned before, we have seen that the business momentum increases and we have managed to get additional momentum in an existing market. So step by step, we are increasing our efficiency and effectiveness in the market to generate momentum in the potential that is out there. And 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. But it was 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. And 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 continue 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 a clear guidelines. We have never given. And so we will not give clear guidelines, but 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 and what you have seen in invoice sales. There is no reason why this should slow down in the second half. So, that's roughly a direction that we -- I want to give you. And maybe if we move on to the last one, we have our Investor Relations web page with the half year report on. That's all the details that you can refer to. And then we are basically through and are open for questions.

[Operator Instructions] The first question is from Walter Bamert, ZKB.

Can you hear me?

Yes.

Okay. Could you give us some guidance what you mean when you say the conveyor, sorter business is on the fly? Is that regarding to order intake in the second half? And 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 conveyor -- what was partially missing was bigger projects. Some of them are now coming in when I mentioned on the fly, and they will step by step also even this year, turn into some of the sales. When you look at the sorter business, we also see them, some bigger projects coming in and they will probably not materialize. The majority will materialize next year.

Okay. 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, a, of our contract situation. Of course, also the -- mainly actually, it's a question of product mix and the higher part of projects currently in execution. But nothing in particular that changes to the normal development.

There was no substantial change in strategy, Mr. Bamert.

Okay. And 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%. So the organic growth in local currency of order intake is 5.5%. And we have an FX effect of 5.1% in invoiced sales. So the organic growth in local currency is 3.5%.

The next question is from Tobias Fahrenholz, ODDO.

So, a follow-up on the outlook. You mentioned there for the second half that you expect order intake to show a 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. So is your indication also true when you exclude M&A? First one.

Yes.

Okay. And the second one -- and the second one on...

You don't have to be long if they can be...

Yes. And on e-commerce, I mean, you indicated a good momentum. Could you speak a little bit more here about this important end market and rough supply-demand ratio? So do you hear from various clients now they are fully back to a normal investment mode as we might have seen before the pandemic? Or 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 the statistics as there are not typical statistics. But what you can do is when you talk to many customers, you get some feeling. And definitely, it 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. But in total, customers are basically back to a normal investment mode and want and will invest. You see some differentiated approaches. You see maybe the big babies also going into their last mile activities. So, there are smaller projects and more 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 those very few big ones. And there's also some interesting technology approaches where we are anchoring ourselves step by step into the right solutions also into the last mile. So all in all, that was a long answer to a short question. The momentum or -- there is a stabilization in that business all across the globe, not only in Europe, not only in Asia, not only in America, and there is some technology advanced approaches where we are in the middle of the discussion with our customers and the end customers.

The next question is from Vitushan Vijayakumar, Baader Europe.

I have a question on the margin dynamic for the second half. So it's clear that obviously, you need a stronger performance, especially thanks to the pickup expected in Americas maybe. So how -- can you just elaborate on the margin driver ahead, please? So, 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 do you see -- we have -- first of all, we have no differentiation or a different development on the margins in the various product groups. So, what we have seen is 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. But all in all, there is no substantial differentiation in our margins. You have seen a very, very special approach in the first half, which will more stabilize.

Okay. And 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?

So, we have seen maybe on 2 areas, critical development. One is steel. And steel, actually not in Asia or China, slightly in Europe or partially in Europe and a lot in the Americas. And that has a relevance that we had to adapt the prices in the market, and we have done that already only partially where it's necessary. And the second one is where we are very nervous or very sensitive, and that's the electronics side. We've seen there is some development mainly driven by automotive electric vehicle industry. That's where we -- the first priority is to make sure we can deliver. So, we're increasing our bookings or our orders just to make sure we can deliver, but we also see there are some strange development when it comes to pricing. So, 2 major drivers is steel and it's electronics. And what we need to do? We can transfer that to the market.

Okay. And just last question. This is purely modeling purpose. So, can you give us some dynamics and guidance that you may see for the whole year 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, but we also have some ramp-up preparation for new products that will be launched in 2027. So, 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. So, we don't see any change for the second half any longer.

And the third one was...

What 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 Asch 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. Unless, of course, any geopolitical changes that we can't foresee, of course.

Unfortunately, we cannot predict the future.

The next question is from Constantin Hesse from Jefferies.

I want to talk a little bit about momentum order-wise and profitability. Now, I understand that you don't want to give guidance. I understand that the fundamentals, they have been in place for years, right, but we still haven't seen growth in quite a while. So, what I'm trying to -- what I'm trying to understand, right, is what is the new growth level of this industry, right? Historically, Interroll has always told us 6% to 8%. You want to grow 50% ahead of the market, so 8% to 10%. Is that a growth figure that is still valid, you think? Because if I look at consensus, right, consensus today has orders growing over the next 2 years at 8.2% CAGR, right? Very similar for sales. About 8% CAGR over the next 2 years and about 12% CAGR on earnings. So, what I want to understand is, first, is this number still correct from an industry perspective? And second, how comfortable are you with these consensus estimates?

So, there are 2 messages. First of all, when you look at the industry, the industry was affected by ridiculous investments in '21-'22 that then basically eased off in the next few years. So the typical stable development you did not see. So, there was an up and down that basically confused a little bit the market and also confused us. So, 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% to 6%? Probably yes. You will always see ups and downs in different regions, but that the market solidly develops, we are convinced. And now our task is to outgrow the market with good technological approaches. That's what we're exactly preparing the foundations for with adding products, adding competitiveness and adding market access. So 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. And we are just preparing the grounds. And you have seen now some of the momentum restarting from the success of the past with different capabilities and different approaches to the market.

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, right, Markus, you just said 4% to 6% now. We're talking about a consensus outlook of about 8%. So if I'm...

No, no, no. We talked about the market.

Yes. Absolutely, the market. 4% to 6% of the market. But I want to understand, right, 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?

I mean, it's -- 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. And then for 2026, I just want to understand, so 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. So, 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. So, I just want to make sure that I'm understanding this right. Does that make sense from a dynamic perspective?

So, we just want to give you a guidance on the direction as 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. So, we do not expect an order decline compared to the previous year in the second half.

Not compared to the previous year?

The momentum compared to the relative growth momentum from the first half will rather increase. That was the message.