Ladies and gentlemen, welcome to VAT Half Year 2025 Results Conference Call, a live webcast. I am Valentina Nekoros, 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. Webcast viewers may submit their questions in writing via the relative field. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Urs Gantner, CEO. Please go ahead. Good morning, ladies and gentlemen, and thank you for joining this webcast on our Q2 and Half Year 2025 results. Today, I'm joined on this call by our CFO, Fabian Chiozza. Also here with me is Michel Gerber from our IR and Sustainability team. For today's agenda, we have scheduled the following three parts before opening for a Q&A session. I will start with the highlights of the second quarter and half-year results 2025, and then Fabian will go through the financials in some more detail. I will then conclude with a look ahead and share our expectations for the remainder of the year. Here on slide 3, you see the usual forward-looking statement reminding you of the many inherent unknown risks that exist. The world still faces many geopolitical uncertainties affecting many areas of our daily life and making the business environment challenging, to say the least. Our main business, the semiconductor industry, is no exception in this environment, or even one of the major industries in focus. Despite all that, I'm proud to say that VAT has again delivered a very solid set of results given the circumstances like the unresolved situation around global tariffs or the substantial strength of the Swiss franc against all our major trading currencies. I'd like to express my sincere thanks to our colleagues, our customers, and suppliers who have made this possible. One major factor I would like to highlight upfront, and that we have now mentioned prominently also in our media release, is the sizable negative effects development we have experienced in the first six months over the year, and in particular during the second quarter. The Swiss franc, as our functional and reporting currency, has strengthened against all our trading currencies. Over the last three months, the U.S. dollar to Swiss franc rate has dropped 10%. Since the start of the year, the drop is even 13%. While our financial hedging activities absorb the balance sheet revaluation losses, we ultimately report in Swiss francs, and therefore we decided to highlight also the business development at constant currency rates to highlight the company performance. Fabian will go into more details on this in his part of today's presentation. What were the highlights of the first six months of 2025? Order-wise, the market remains in a healthy condition, and we are about to see another record year regarding Wafer Fab Equipment. Besides ethics, one important observation why our orders in semiconductor did not grow year on year is the fact that our customers are not ordering long ahead, as the years where different shortages dominated the global supply chains. Meanwhile, global supply chains have become again more reliable, so we see fewer advance orders just to secure delivery. In sales, however, we saw a year-on-year increase of 24% in reported numbers, driven by semiconductors, followed by global services, and a flat development in advanced industrial. In half year one 2025, we achieved a new record in total factory output with 60% year-over-year growth in our Malaysian site. I want to thank our global operations team for this fantastic result. The same applies for our EBITDA number, which is up 22%, and had it not been for ethics adversity, the EBITDA margin would also have increased nicely compared to the reported decline year-on-year. These are the external factors that have impacted our performance. With our internal efforts, we continue to fuel our innovation pipeline and again increase the number of Specification Wins substantially over half year one 2024. I am proud to see that 20% of these wins have been achieved in our adjacent businesses, a testament that the strategic direction is alive and our Share of Wallet is increasing. Ultimately, what do we anticipate for Wafer Fab Equipment, our major sales forecast indicator? Here, nothing has changed in the underlying growth drivers, except for some question marks around the timing of the anticipated next investment ramp. Wafer Fab Equipment has plateaued at a record level just north of $100 billion per year. Technologies are progressing, and additional capacity will need on the roadmap towards the $1 trillion U.S. dollar industry. The construction of more than 100 new fabs around the world is laying the foundation for future growth in Wafer Fab Equipment. VAT is ready to master the next ramp and to serve its customers adequately. Let's turn to slide 6 of the presentation that's available on our website and look at an overview of the half-year key figures and the segment breakdown. Valves, our largest segment, accounted for about 84% of our sales, which is up from 81% a year ago. Global services consequently declined to 16% as the Retrofit business showed weak development year-on-year in half year one. Our highlights in the first six months of 2025, besides the record number in Spec Wins, was a 24% growth in sales on strong backlog execution, an EBITDA that is up 22% year-on-year, and last but not least, a very solid free cash flow development. Here on slide 7, I would like to briefly remind you of the fact that about 80% of VAT's business is directly linked to the semiconductor industry, with the remainder catering to many advanced industrial applications, a business that saw a flat sales development in half year one 2025 versus half year one 2024. Geographically, we now have 74% of our products and services being delivered to Asia. Compared to a year ago when this number amounted to 63% as a percentage of group sales. Our direct China business accounted for about 35%, up from 30% a year earlier. As elaborated on numerous occasions and the last time during our capital markets day in May, innovation is a key success factor and differentiator for VAT. In the first six months, we spent around CHF 31 million on R&D, representing about 7% of group sales and 9% of our semiconductor sales. The success and effectiveness of our accelerated R&D spend is demonstrated by the increasing number of Specification Wins growing by 27% year-on-year. Another area where we measure our success is in the market, our adjacencies. Not only do they represent 20% of all Spec Wins, but they also continue to grow fast in sales volume. At CHF 45 million in the first six months of 2025, they are 45% higher than a year ago. Adjacencies represent just over 8% of group sales and still are at some distance compared to the 15% we expect by 2027, but the trajectory is pointing in the right direction. To wrap up my initial comments before handing over to the financial deep dive, overall, the semiconductor industry is firmly on track towards a $1 trillion plus U.S. dollar market by 2030 as the adoption of artificial intelligence continues, requiring more advanced and energy-efficient chips. The technological advancements to achieve this goal continue, and investment conditions for additional leading-edge manufacturing capacity remain strong, driven by the Hyperscaler. Consequently, Wafer Fab Equipment spend is at record levels despite geopolitical and macroeconomic uncertainties, just north of the $100 billion mark. Apart from the leading foundries and IDMs, China contributes the most to this record Wafer Fab Equipment spending. China continues to invest heavily in its self-sufficiency in chip manufacturing, and the domestic OEMs gain more share. Finally, our large customers' sentiment remains positive, and a more pronounced ramp is generally expected. This is witnessed by the demand from customers for ever shorter lead times compared to the last couple of years. This concludes my initial remarks for the half year one 2025 review, and I would now like to hand over to Fabian for a more detailed look at our financials. Thanks, Urs, and also from my side, a warm welcome to all of you who are joining us on this webcast today. As Urs has already mentioned some of the financial highlights in his introductory remarks, let me directly start with the order intake. Above you see the order development of the second quarter and half year in 2025. The order patterns describe, on one hand, the continued good market demand. However, geopolitical uncertainties made the timing of certain investment decisions more difficult. Larger investments, especially in the most advanced technologies, have not been fully triggered yet. We expect an acceleration of these investments now rather towards the end of 2025 and into 2026. The recent CapEx confirmation for 2025 by a large chip manufacturer supports this view, and we expect other players to follow with similar statements. In addition, and as Urs has already mentioned, the fast evaluation of most of our trading currencies against the Swiss franc had a substantial negative impact on our reported numbers, masking to a large degree the still very healthy market environment. Reported Q2 orders, for example, were up only 3% sequentially. However, on a constant currency basis, the growth would have been 10%. Year-on-year, the order intake was down 9%. At constant currency, it would have been virtually flat. The negative impact, especially of the U.S. dollar devaluation against the Swiss franc, was less pronounced when we look at the respective half-year numbers. Reported, they are down 3%. At constant currencies, they again would be flat. When we look at the order book, we see a 15% lower level compared to June 2024 and 13% lower versus the end of Q1. As described already shortly by Urs, this is a testimony of our strong production and therefore order book execution capabilities. On slide 12, we want to put the current result in historical context. Here we see the development of orders and sales since the first quarter of 2021. At the peak in Q4, the Book-to-Bill Ratio stood at a staggering 1.7 times. In Q1 2023, it was 0.6 times. However, impacted by several special effects. Nevertheless, with our Book-to-Bill of 0.88 times in Q2 of this year, we are at about the midpoint of the peak-to-trough range or the next up cycle, if you want. However, and again reflecting the uncertainties in the market, the Book-to-Bill Ratio remained for the third quarter in a row below one. Moving to slide 13. On this and the next slide, I would like to show you the order and sales pattern of our three businesses: semiconductors and Advanced Industrials that together form the reporting segment Valves, and our service business representing its own reporting segment, Global Service. As you have heard, the Valves segment accounts for about 84% of group sales, and Global Service represents the rest. Together with the semiconductor business unit embedded in the Valves segment, VAT's business related to semiconductors accounts for about 80% of group sales. In Valves, orders were down both in semiconductors and Advanced Industrials in the first half of the year compared to the same period in 2024 by 3% each. In semiconductors, it was primarily because of the global uncertainties resulting in slower investments in the next technologies. In addition, we see customers demanding shorter lead times as the supply chain has substantially stabilized over the last two years. Nevertheless, they expect their suppliers to be ready whenever a faster ramp materializes. However, comparing the order intake in the second half of 2024 with the first semester of 2025, as shown here on this slide, the decline was more pronounced, mainly the impact of the FX movements. Advanced Industrials had lower orders, largely due to the often project-related nature of their business. Sales in the first half of 2025 were up 35% for semiconductors as the order book's execution was strong and flat for Advanced Industrials. Compared to the second half of 2024, however, sales were up nicely in both businesses. As shown on slide 14, the segment Global Service observed a very strong second quarter, with orders up 23% sequentially and sales up 12% quarter on quarter, whereas all subsegments contributed to this quarterly improvement. For the first six months, orders were still down 5% year-on-year; sales, however, increased by the same percentage amount. This development in sales reflects higher semiconductor fab utilization rates, which have benefited our consumables and repair business. Subfab activity also increased while the upgrade and Retrofit business was significantly down year-on-year, with some acceleration observed in the second quarter. Turning now to our profitability, starting with gross profit and the gross profit margin. Overall, our gross profit for the first six months grew 22% year-on-year, which is slightly less than the reported 24% year-on-year growth in sales. Nevertheless, the gross profit margin remained at the high level of 65% compared to 66% a year earlier, despite adverse FX movements and increased sales from inventory. This solid gross profit margin is the result of our relentless focus on operational excellence, coupled with the disciplined execution of our Operating Flex Model, allowing us to adjust our cost base quickly to changing market environments, both in up and down cycles. Moving down the P&L to the EBITDA line, we achieved EBITDA growth of 22% to CHF 165 million. At constant FX rates, our EBITDA would even have gone up 33%, again a display of how challenging the FX situation was during those past months and in particular the last quarter. The reported EBITDA reflects, on the one hand, our top-line growth in combination with operational measures focused on productivity and cost improvements, as well as continued investment in capacity and capabilities ahead of the anticipated technology transition. The net foreign exchange impact, including hedging and balance sheet revaluations on EBITDA margin, was negative by 1.6 percentage points for the first semester of this year, resulting in an EBITDA margin of 29.6% or 31.2% at constant FX. EBIT for the first six months of 2025 increased 25% to CHF 142 million. EBIT margin remained largely flat at 25.4% versus 25.3% a year earlier. Let's now get to the bottom line with some of the other financials on chart 70. Depreciation and amortization increased slightly as a result of our growth investments in the previous years, mainly in Malaysia and the new innovation center here in Haag. As a percentage of net sales, depreciation stands at 4.1% compared to 4.8% a year ago. The sharp swing in our finance net result from a positive CHF 1 million last year to a negative CHF 12 million is a consequence of the currency movements resulting in revaluation losses on cash balances and intercompany loans. Tax rate for 2025 increased slightly to 18.5% based on additional tax expenses related to the Global Minimum Top-Up Tax in Switzerland and profit shifts between Switzerland and other group countries with a higher tax rate, based on the global comprehensive tax calculation at year-end 2025. Full-year rate expected closer to the full year 2024 level. As a consequence of the above, net income grew less than EBITDA or EBIT, still showing an increase of 12%. Our free cash flow generation is shown on chart 18 and is one of the highlights of the first six months of the year. At CHF 51 million, it is 93% up year-on-year, and the free cash flow conversion rate as a percentage of EBITDA has gone up from 20% after six months in 2024 to now 31%. This is the result of the substantially higher EBITDA, our appropriate CapEx, and the very modest growth in our trade working capital. Actually, when you measure trade working capital as a percentage of sales, it declined by nearly 5 percentage points from 36% of sales to 31%. When it comes to leverage, on chart 19, we continue to demonstrate our conservative views on leverage and capital structure, despite our significant investment appetite. Net debt amounted to CHF 262 million compared to CHF 231 million one year ago. This translates to a net debt-to-EBITDA leverage ratio of 0.8 times and is in line with the normal seasonal pattern that includes the dividend payment in early May. As a reminder, we distributed 105% of the free cash flow 2024 in the form of a dividend of CHF 6.25 per share to our shareholders. This means we retain a very healthy balance sheet to allow us to self-fund our R&D and growth initiatives in the years to come. By summarizing the half-year 2025 financial performance, we can say that these results were strong given circumstances, confirming VAT's leading market position and execution strength. Unfortunately, the harsh FX environment has also masked our performance. Overall, during the first six months of the year, we achieved a strong backlog execution coupled with continued readiness preparations for the expected market growth. VAT battled the adverse FX developments and mitigated those to a certain extent through financial hedging activities. However, it is clear that any further strength of the Swiss franc requires close monitoring and the acceleration of our Natural Hedging efforts and other initiatives. We have so far well monitored and actively managed the tariff uncertainties and can state that we had no material financial impact in the first half of 2025. We continue to invest in R&D and production capacity, two key elements for ongoing business success. Our factory Bondi in Penang was completed. The same happened at the innovation center in Haag, and the new factory in Romania, our internal supplier, started operations late in the second quarter. Last but not least, the ERP Transformation was fully and successfully concluded in all our production hubs. Service and sales organizations will be migrated on the new ERP over the course of this and next year. Looking ahead for the rest of 2025 and into 2026, the following finance priorities apply. We continue our disciplined cost and capacity management, closely monitoring customer requirements, especially on lead time development to assure ramp readiness. We further drive the flexible operating model in light of the persistent uncertain geopolitical and macro developments. As demand accelerates, we will increase factory output in Malaysia, introduce additional automation and capacity increase in Haag, and harness full benefits of a new Romanian factory, a key internal supplier for many VAT components. Lastly, we will monitor and align CapEx requirements with witnessed and expected market development. This concludes my financial remarks, and I now hand back to Urs for some insights into how we see the market developing and why we are strongly going to participate in the expected growth. Thank you, Fabian, and also thank the whole finance team to guide us through this very difficult environment. As we just had our capital market day on May 20, when we described our detailed midterm strategy, let me in the next couple of minutes focus on the rest of 2025 and our market expectations. We are globally in close contact with our customers and look closely at the market research done on Wafer Fab Equipment spend. In our discussions with our customers, we still get very positive signals about the next couple of quarters. Everyone acknowledges that the technological transition to 2 nanometer or Gate-All-Around is happening, and this will require substantial investments in new capacity, but also upgrades of certain legacy sites. 2026 will be the year when products equipped with this new transistor technology are released. A big question mark, however, remains around the timing of the accelerated ramp. Most of us expected it to materialize during 2025. However, the geopolitical uncertainties had put a brake on this, slowing down the Wafer Fab Equipment growth trend. However, 2025 is still expected to be a record year, and the more than 100 fabs in construction build the foundation of this future growth. For 2025, the Wafer Fab Equipment market consensus is around $105 billion currently, about the same level as at the time of our capital market day. For VAT, this signifies ample growth opportunities as the vacuum-related content in Wafer Fab Equipment is growing faster than the overall Wafer Fab Equipment, especially from 2026 onwards, and that the Leading Edge technologies are outpacing the Lagging Edge ones. In addition, the position and edge technologies continue to gain share within Wafer Fab Equipment, partly driven by the developments in China. In a nutshell, and you know this slide from our capital markets day as well, our growth drivers remain unchanged, and as the anticipated technological advancements favor our leading innovation and market position. As a result of this, and as I elaborated during our remarks already, I summarize. The trend towards the expected $1 trillion semiconductor market is alive and kicking. We expect VAT to outgrow Wafer Fab Equipment by up to 2x over the next five-year period from 2025 to 2029. Our growth is accelerated by increasing demand for logic, memory, and packaging technologies and is further driven by emerging AI applications. Vacuum-related Wafer Fab Equipment is expected to grow 1.5 times faster than the overall. Last but not least, VAT Spec Wins in Valves and in particular in adjacencies are paving the way and driving the Share of Wallet increases. Most importantly, VAT is poised to capture all growth opportunities with our installed capacities and capabilities. At the same time, we have a proven flexible model that makes us very resilient during economic downturns. For the rest of 2025, we expect that the overall business trend continues at a healthy level. We already mentioned geopolitics and the uncertainties over where and when the semiconductor investment will accelerate to the next level. It is expected that 2025 will be another record year, but it is not expected that the ramp to the next level starts in 2025. However, with the shift in Wafer Fab Equipment technologies towards more Leading Edge and more vacuum-based equipment, VAT will benefit and outgrow the market based on the Share of Wallet gains reported as Spec Wins in the last years. Looking at our individual businesses, the semiconductor is benefiting from the technology transition, related investments in leading applications, ongoing solid demand from Chinese OEMs to support self-sufficiency, and increased Hyperscaler investment programs announced for 2025 and beyond to support AI applications. The Advanced Industrial business is expected to pick up in half-year two due to demand for scientific instruments and industrial applications. We also expect larger projects, mainly in the field of R&D, to begin. Last but not least, global service activities are anticipating higher demand owing to higher capacity utilization overall and upgrades and Retrofits of existing fabs. Tariff-wise, we estimate that there are no material negative direct financial impacts of global tariff announcements. Therefore, the bottom line is that we still expect higher orders, sales, EBITDA, EBITDA margin, and net income and free cash flow in 2025 versus 2024. For Q3, we expect sales between CHF 255 million-CHF 285 million. For the full year, we feel confident with the current consensus in the market. With that, I would like to conclude our remarks and hand over to Michel for the Q&A. Thank you, Urs. We now start the Q&A session, and as usual, you have the possibility to either ask your questions via the operator over the phone or send your question directly to me via the webcast chat function. As a reminder, like every time, please limit your initial questions to two to allow the other callers who wish to ask questions that they can do so too. Follow-up questions may be possible later in the Q&A should time allow it. With that, I'd like to ask Valentina, our operator, for the first question from the phone. The first question from the phone comes from Sebastian Kuenne from RBC Capital Markets. Please go ahead. Yeah, hi. Thank you for taking my questions. My first question is relating U.S. dollar. So everyone is probably happy with the o rganic growth that you delivered, but the lower U.S. dollar is the new reality. So my first question is, how do you plan to protect your earnings in the second half? How quickly can you basically adjust contracts? My second question is. You still guide for a higher EBITDA margin for the year, so above 31.2%. You delivered 29.6%, and probably in Q2 it was even below that. That implies that you probably need close to 33% margin in the second half to achieve your g uidance. Is this done through mix? Is it more Global Service? Is it pricing? Is it cutting costs? What are the measures here? Thank you. Thank you, Sebastian, for your two questions which I will gladly answer. Let me maybe start at the latter one on the EBITDA development into the second half. You're absolutely right with your analysis, and here we also see t he second half. When you look at historical performance, we have always been g eared towards a stronger performance in the second half year, and that seasonality also applies this year. This is on the back of o ur personal cost. How we incorporate inflation wage adjustments, which are geared more to the second half year, but then also, for instance, all your vacation build-up happened usually in the first semester and then are consumed in the second semester. So these are, let's say, the drivers on the personal cost. Then on the operating expenses, we also had s ome one-off effects in the first half, which will not r epeat into the second half. And then, as you also h inted, the mix, will also be more favorable in the second half. Plus, don't forget that we also had a rather m uted contribution from our hedging activities in the first semester, especially Q1, was actually pretty bad with the volatility that we observed there. Now, assuming a stable or even maybe slightly deteriorating development, I do expect that the hedging gains that are unrealized and that you can also find in note 11 of our half-year report will also have a positive effect on the bottom line. Talking about your first question on that we have in place, look, it is not a surprise that we have the current development where all major trading currencies are devaluating against the rather Swiss franc. I think that development is something which we have anticipated for many quarters already and therefore have also prepared ourselves. One testimony here is, as we have communicated, the new factory in Romania, which will help us to not only accelerate our best cost country sourcing but also reduce the exposure on the Swiss franc, then we have further ramp happening in Malaysia, which you can see also from the slide I have included in the capital market day. Last but not least, also now the completion of the ERP rollout, at least in the production hubs, gives us now the foundation also to shift some of the more transactional roles into service centers and then also reduce the FX exposure. Overall, I think from both financial but also Natural Hedging activities, we have been prepared. We will now execute and also closely monitor how the situation unfolds. Again, I do expect that the certain situation will prevail. Last but not least, when you talk about contractual obligations or even a change of our contracts, so far, we have not passed on any price increases due to the current FX situation, and I also do not foresee this in the near term. Next question, please. The next question comes from Yang Meihan from Goldman Sachs. Please go ahead. Hi, good morning. Thank you for taking my questions. The first one is you have basically reduced your CapEx decisions. What are the main items that you are shifting to the right? Is it mainly a result of a slower ramp-up in the Malaysia facilities, or is there anything else? I will ask the follow-up. Thank you. Good morning. Yes, absolutely right. We have the possibility to flexibly adjust now the build-out of Malaysia 1B, and as such, the currently existing demand is sufficient for the next quarters, and therefore we were able also here to adjust the CapEx number. Got it. On the Global Service orders, you have seen a very good sequential growth quarter on quarter. Given that you mentioned the fab utilization rate is still elevated and you have some restocking activity, do you expect the second half to be a further acceleration because you have still a few projects that are in the pipeline waiting for approvals? Yeah, in the service business, certainly we expect that we will see growth in the second half year as you said utilization is going up. Today the situation is that in the Leading Edge and the leading technology, the big foundries and IDMs globally, they are running on quite a high utilization level, but the lagging nodes are on roughly at the 50%-70%. Once this is picking up as well, then also here more service business will come. As we saw, especially in the Q2 pickup in the service business, and we anticipate that this will continue like that to the end of this year. Got it. Thank you very much. Thank you. Next question, please. The next question comes from Joel Istvad from UBS. Please go ahead. Thank you. Good morning. Just two questions, please. The first one is on the other trends and new technology platforms. High Bandwidth Memory is more or less in a full swing. Micron is already generating, I think, 15% of its sales with High Bandwidth Memory products. Is this not visible really in your order intake because other legacy platform investments are slowing down somewhat currently? This will be the first question, please. And if you allow me the second question, I mean, China was growing very strongly year -over -year, I assume also sequentially. When you go into 2026, would you say that China is becoming more flattish and the growth must come from outside China, or how do you view this? Yeah, let's start. It's always good to start with the second one because this is just in keeps in mind. China certainly had a huge growth, and you know that China wants to increase the self-sufficiency rate in the chip manufacturing, but also in the equipment. Still today, the share of the domestic OEMs is rather low, and this is going to increase. Even if the Wafer Fab Equipment in China in total would be on a constant level in 2026, the share of the Chinese OEM will grow. This is certainly one of the growth vectors we see in VAT as well. For 2025 to 2026, we see growth rates in the 4%-5% going forward as well. China, an interesting market for everybody since besides the leading foundry, this is the biggest investment field in Wafer Fab Equipment. Having said that, you're mainly focusing also on other leading technologies like the HBM, that's certainly something that's in full swing. Also then together with the AI-driven new logic, certainly there will be investment needed and certainly also good if there is competition out in the market. As soon as there is competition and with the HBM, there is competition still in the market, there will be investment to gain the leading position. Where in the logic, of course, there's a clear number one, and there we rely on the investments. Done globally and in the different regions. Legacy products, I think there is enough capacity out there in the market, so certainly the Leading Edge is the big investment cycle going forward. If I may, just to follow up on this one, I mean, would you have expected one or two years ago that High Bandwidth Memory is incrementally more visible in an order intake acceleration for the group? And don't you see the risk that Gate-All-Around, for example, then having more or less the same destiny in your order intake, that this is growing nicely, but other legacy nodes are maybe seeing lower investments, that it's not becoming so visible in your order intake? In general, our order intake, of course, we are part of o n a machine like qualified on a Wafer Fab Equipment machine, and. We are not delivering to the companies you mentioned like a Micron. We are delivering to the OEMs globally for deposition and edge tools, and mainly, and of course, also the EUV tools. This is where we see who is growing, and. It doesn't mean that our product is particularly done for an HBM technology o r a Gate-All-Around technology. It's more for the, as I always say, it's deposition. Lithography, and etching. If you see now on the three big IDMs, so one is certainly investing a lot, and let's say the other tools are kind of muted. One is certainly down, and one is kind of flattish with some positive signs of recovery i n the future. Today, everybody, the main investments are done in China and w ith the leading foundry. Going forward, certainly also the others will pick up again, and then we see the cycle going up. Thank you very much. Thank you. I'll now go over to the webcast questions. The first one is from Thomas Jager at Mirabaud Asset Management, but I think, Fabian, you already answered this question. Thomas wanted to ask, are you able to increase selling prices in H2 to compensate for the soft U.S. dollar, Swiss franc? I think the answer here is clearly no. You could potentially do price increases for raw materials like we did at the beginning of 2022, but these FX things are not something that we can pass over to our customers. The next question that we have is from Gurakar Vivek Kanthanam from Scotiabank. What is the current run rate of the production capacity level overall in Haag and in Penang? Yeah, we were able to increase the output in Malaysia significantly, as was also mentioned, about 60% year-over-year growth. When we look at the run rate of Malaysia 1A, we are right now just around CHF 500 million, which reflects about 90% utilization. In Switzerland, utilization levels are somewhere around 65%. Also here, we have sufficient surge capacity available in both locations. Great. Thank you. And then maybe the last one here from the webcast, it's from Christoph Grau from AVP. I think partly we answered that already, but maybe you can add some more flavor. Can you say something about the situation in China? What opportunities do you see in China? I think that's the part we already answered. How do you assess the risk in relation to the escalating conflict between China and the USA? Yeah, I think China is a very interesting field. China is achieving self-sufficiency. A lot of investments ongoing also on reducing node size. So currently a lot of activity is going on the 7-nanometer technology. So China OEM, China fabs are on a trajectory of technology today. It's not about the high volume. This was in the past, the mature edge, so they have enough capacity, but it's all about now achieving also the 7-nanometer Leading Edge logic chips. And of course, also the Leading Edge memory chips going forward. There is a technology trajectory which is very interesting for also the supply chain and component suppliers as VAT, but also others. This will continue over the next year. This is not something that can be solved within just a quarter or a year. If you look back how long it took also, let's say, the Western world to come to the 7-nanometer, 5-nanometer, it's like a decade with the FinFET technology. I anticipate personally that China will be faster, but still there are a few years to go until they will be on this level as the others are today. Driven by technology, and this kind of reduces also the risk for our technology because they need this technology to achieve their goal. On geopolitics, I'm not a politician, so we have to be compliant, but the rules are out there in the market. We will be compliant, but also here I do not anticipate today that there is that we will have a big impact on our business. Thank you, Urs. We don't have no webcast questions left at the moment, so I'll hand back to the operator for the next question over the phone. The next question from the phone comes from Didier Scemama, Bank of America. Please go ahead. Good morning, gentlemen. Thanks for taking my question. I just wanted to go back to a comment you made earlier. I was a bit surprised by that. You said you're comfortable with the consensus out there. Presumably, that's at constant currency, or are you comfortable with the absolute consensus out there for revenues for the full year? Yeah, we are confident with the absolute about what's out there. Of course, seeing today's currency, how it is today, nobody knows how this will develop until end of the year. Okay. So you would expect that to snap back very materially in the fourth quarter, presumably? Can you say again? You would expect a pretty substantial snapback in Q4, effectively. Yes, that's correct. Okay, understood. And the other question I wanted to ask you, so. I mean, we see across the semi-cap landscape. Two customers of yours, maybe not the most important ones, which are either seeing weaker orders or are seeing some sort of push-outs from leading-edge logic foundry customers. Are you not worried that this is going to impact you in the second half on your orders, or are you seeing strength elsewhere, either from China semi-caps or perhaps from t hose NAND upgrades which have been delayed compensating for it? Thank you. Yeah, first of all, of course, all our customers are important, so there's no less important customers. Yeah, but in the end, I always say we are kind of agnostic to what technology is ramping. If one technology is kind of a little bit pushed back. Then maybe other investments are done. If one, for example, less in lithography is invested, then it's even better for VAT because there is edge and deposition growing. That's the beauty I see for VAT, that we are qualified on all these leading-edge tools, but also, of course, a lot of lagging technologies. We can balance, and we have to adjust. This is also what we mean when we say we have to have very short times because we have to adjust our operations very fast and flexible to what products are needed in the market. Yeah. And Didier, let me maybe just complement your question around the growth pattern in the second semester. What we reiterate is that we feel comfortable with the consensus. Consensus, to my knowledge, sits around CHF 1.1 billion-ish, which represents about an 18%-20% growth year -over -year. When we talk about a current FX, then I mean the year-to-date average, but as you know, the actual rate sits well below the average. Obviously, if we assume now a stable development, we already have some further negative effects coming in the Q3 and then also the Q4. If you take the current achievement in the first half and just annualize that, you basically already land well in the consensus, which would imply that even a sideway development is providing us this discomfort to hit the consensus. Hopefully clarified. No, no, that's very, very clear. Thank you. Yeah. Next question, please. The next question comes from Nabeel Aziz from Rothschild & Co Redburn. Please go ahead. Hey, guys. Thanks for taking the question. Just in kind of sympathy with that, in previous quarters, we had the impression that the Gate-All-Around ramp inflection for VAT likely falls in kind of the November, December timeframe. Is there any change to that view? It sounded like in the initial comments that you felt that could be more 1Q 2026 skewed. Any color that you've got on your expectations and whether that's changed since 90 days ago would be great. Thanks. I think it's about the same. What we mentioned in our capital markets day. I think in the Gate-All-Around, there is a clear roadmap that the first product will come out next year. I think in the end, the IDMs and foundries, they also need their customers to switch then to the next node. This is driving that. What we hear today, it's also that there will be the first smartphones and data centers being equipped with this new technology. That's a positive sign. This is the investment with all the Hyperscalers we hear. This is all confirmed. Since our capital markets day, nothing changed there. What has changed compared to the capital markets day is the investment cycle in the net, that we hear that this is more upgrade today, and the capacity expansion is pushed out, further pushed out to 2027-2028. Okay, great. And then just as a follow-up, just on order intake, just had a question about the order momentum at the start of the quarter versus the end of the quarter and how that looked, kind of at the start and the end, and whether there were any sense of any order cancellations or push-outs. Thanks. No, I think that's always a very good indicator indeed. If we had more push-outs and pull-ins, then of course, the market's slowing down. Today, we do not see that. We track that closely. We do not see any alert that there is more push-outs and pull-ins. Even in some regions, there are more pull-ins, and then sometimes you have push-outs, but I think it's well-balanced today that we are confident that the business will evolve as we elaborated today. Okay, great. Thanks. The next question comes from Michael Foeth from Vontobel. Please go ahead. Yes, good morning, everyone. I have two questions. The one is on free cash flow, strong free cash flow in the first half of the year. What can we read across from that into the second half? Will the Net Working Capital Intensity remain as low? That would be the first question. The second question is relating to NAND and the importance really that NAND has for, or the NAND volumes have for your business when you compare it to the last cycle. What is actually your expectation that NAND will bring in terms of additional or incremental sales volumes to VAT? Thank you. I take the second question on the NAND and then hand over to Fabian for the free cash flow and the stable working capital. Of course, NAND has historically been a very, very important field for our growth because our share on these tools was very prominent on our customer side. In general, if you look at the technology behind what is the request for NAND, DRAM, or logic, it's always the same manufacturing tools. It's always deposition and etch. That's why I'm always focusing on kind of the application instead of the. Device and the market behind that. For us, the NAND will be, of course, another boost, and it will be a boost in Wafer Fab Equipment again. The NAND portion of NAND was in 2017, 2018, pretty high when the 3D NAND came into the market. Meanwhile, logic has a dominant portion and dominant share in the Wafer Fab Equipment. For us, as I mentioned, we are kind of agnostic, but in the end all these devices need deposition and etch tools. Having said that, yes, of course, everybody is looking for a NAND uplift that this will just boost the business and will be other than kind of the next growth to the next plateau. I'm talking more about this plateauing now with Wafer Fab Equipment. We are now in the third year, around the $100 billion. Consensus is $105 billion. Next year, probably going to the $110 billion. We're still kind of a plateau with 5% growth. If NAND will kick in, of course, then we see this growth to the $125 billion-ish Wafer Fab Equipment market. Fantastic. On the free cash flow pattern in the second half, you remember my statements also in the capital markets day. We have put quite some focus on our inventory development, which has definitely been burdened by the ERP transition during the course of 2024 and now into 2025 as we reduce these inventories, but also leverage the benefits of our ERP. We can now gradually work down the trade working capital towards the midterm target of 26%. We already achieved now a bus stop after six months at 31%. I do expect that we will drive this down below 30% now at year-end. This will be one of the key contributors to our free cash flow in the second semester. Asking about full-year cash flow, I currently expect that we will be within the communicated range of 60%-70% conversion. I would say in this year somewhere in the lower part of this guidance. Okay, very clear. Thank you. The next question comes from Sandeep Deshpande from JPMorgan. Please go ahead. Yeah, hi. Thanks for letting me on. I just want a clarification on one of the earlier questions. We have seen some changes happening with the semi-cap industry in the last three months, possibly because the end customers are getting more cautious associated with tariffs or whatever. The cycle improvements are less than before. Have you not seen any change from how your customers, which are mainly the semiconductor equipment suppliers, are behaving in terms of what they are saying to you in terms of the second half of the year or potentially into 2026? My second question is about China. I mean, China, as you have said in the earlier, to a response to an earlier question, will increase as a percentage of your sales going forward as those companies become more important, the Chinese semi-caps become more important. The question is, does this have an impact on your margin in the future? Yeah, of course, we do not talk about margin on an account level. So China business is generally a very interesting business because it is a growth business as well. Technology-driven, that is interesting for Western companies as VAT, but also others are benefiting from this situation. So overall, you mentioned the semi-cap changes and how our customers are behaving. Certainly, in the long run, everybody sees this 1 trillion market to come. The technological advancements, they have to come. And this is not only about to have a better product, have a higher computing power. It is also reducing the energy needed for the chips, especially for the AI application. In the long run, everybody is very positive that this is going to happen. On a short note, as always, there is a little bit cautious at the moment with all this geopolitics behind how they have to set up the, everybody has to set up the supply chain, where to produce, where to ship, and all these uncertainties in this market driven by more politics than the market itself. I think this created some cautious in the order patterning, and that is what I also say. The lead times must be very short if we have to be prepared that we have to deliver very fast going forward. Yes. And maybe just to overlay Urs's statement on the mixed effects, yes, we currently do see some benefits from that exposure which we have going forward. I would see the effect on the gross profit not to be significant. And on the bottom line, with the growth and operational leverage kicking in, you will not observe any things out of these mixed changes. Thanks, Fabian. I mean, just one quick follow-up on my earlier question on what you are seeing in the market. You have said that you are fairly comfortable with where the consensus is standing for the year on the revenue, but you have also made a new comment that NAND has been pushed out a little bit. So something else is contributing to that trend into the second half of this year. What are the end markets which are contributing to that trend? Basically, we were not expecting a lot of investment in NAND this year. It is always said that there will be upgrades. Excuse me. There will be upgrades in the NAND a nd upgrades does not mean that there is a lot of capacity built out. In our model for this year, NAND was not that prominent as other technologies. Of course, we also see now for the second half of the year that, as you mentioned, that GSE is growing with the fab utilization going up. We see we have a nicer order backlog also on the ADV, which we want to execute in the second half of the year. Thank you. The next question comes from Craig Abbott from Kepler Cheuvreux. Please go ahead. Yes, hi. Good morning. My earlier question about the sales trending for next two quarters has been well addressed. Thank you for that. Looking also at the order book trends and Book-to-Bill, I mean, you said in your initial comments that you expect nevertheless still to see that acceleration towards the end of the year. I just want to get a feel for how you're thinking in terms of that Book-to-Bill. You said the 0.88 is about midway through the typical trough to peak range. I mean, are you expecting that to get back toward that one times or higher Book-to-Bill Ratio as we head toward the end of the year? Thank you. Yeah, I think in Q3 still, probably the Book-to-Bill will be below one. In Q4, we expect that it will be really up and be below one again. Up, yeah. Up, up, up. Quite close to one, I think. Q3 it's below, and Q4 it will be above. Clearly, we are above one again. Sorry for the confusion. Okay, no, that's very helpful. Thank you. The next question comes from Nejc Lavric from Octavian AG. Please go ahead. Hi. Thank you for taking my question. My first one is rather, I would say, midterm, and it's on the EBITDA margin. I mean, you seem quite confident to come back above 30%, but if we look at some of the facts, I mean, one, you have a product mix headwind. You have FX headwind. Your R&D is at 7%, and you're going to hire 100 people for innovation hub. In H2, you're going to have a negative effect from work in progress. You're expanding your capacity, and you've technically lowered the Q3 sales guidance. You're still expanding your capacity. My question is, how confident are you that we might go above 30%? Or if I look at some of the estimates going forward, I mean, we are at 36% in three years. I mean, this seems not to be materializing. Maybe the first question, how confident you are on the margin, and at what point will you decide on cost cutting at the current 40% spare capacity? Thanks for this exhaustive question, Nejc. Look, as I have explained before, the second semester is always stronger than the first one. I think these seasonal patterns are inherent to our operating model here at VAT. As I have also stated in my priorities for the second half, we are not sleeping. Disciplined cost spend in line with demand development is part of our b read and butter, is part of our Operating Flex Model. As such, again, I feel very comfortable but also confident that we will see these increases in the bottom line for the second semester. All right. This is my second question on the adjacencies. I mean, you've been saying now for, I believe, two years that the adjacencies are 20% of Spec Wins and your guidance is 10%-15%. Why is there a gap there? I mean, should not at some point this 20% be also representative when it comes to the revenue? Also, thank you very much for providing the numbers on the sales. Thank you. Yeah, welcome. We are very transparent here as well. Of course, a spec win is a win on a machine that goes to the market in the future. In semiconductor, of course, our Spec Wins are mainly in the Leading Edge. It takes time from a spec win until it is qualified and also in the market. There is an inflection point that these tools are going into the market itself. For us, forward-looking, of course, we measure the Spec Wins because this is in our hand. This is how we can drive our R&D and innovation roadmap. Then we also have to be patient until this technology then is qualified in the market and goes into high volume. There is always this gap behind that. If you look back now in the last three years, a lot of the business also from Western OEMs were driven by, also by China. The share of their China business was very, very high. Here, of course, there were mainly also the lagging technologies going in. Our qualified adjacencies did not yet get to the market in the last years with the Leading Edge going forward. We are very positive and confident that the share of these adjacencies and the Spec Wins will materialize in the market. This is kind of the mechanics behind that. From a spec win to the high-volume manufacturing, it is typically the three to five years. Always depends on what kind of products and what kind of tool. Okay. The next question comes from Nigel van Putten from Morgan Stanley please go ahead. Hi, good morning. A couple of good questions already asked. I just want to double-click on the views into the end of the year. It does imply that you're seeing fourth quarter up a little bit to reach that sort of $1.1 billion growth rate. My question is really on 2026. Maybe some color there. I mean, this year, congrats on sort of that strong outlook. I guess it's 17% roughly. But also helped by some lumpiness last year. You got a 39% growth in the first quarter and t he implied sort of midpoint of guide points to, what is it, 28%, I think, in the third quarter. More into 2026, y ou do not have those tailwinds because obviously, sales have been quite flat this year. On my numbers, to sort of grow 15%, you would need sequential growth to pick up quite a bit. Do you have any sort of confidence that will happen? I think at the capital markets, say, we had rated 20% growth over 2025, 2026, and 2027. Or would that be more sort of towards 2027 where you see more of a pickup? Any color there will be helpful. Thanks. Another follow-up. Yeah. Very good observations and analysis. We see the start of 2026, certainly more flattish. Starting flattish, but it will be very important to us that we see this technology shift happening as well. As I mentioned, we have a higher Share of Wallet on the Leading Edge tool. This will certainly then help us to outgrow the market. Even if the Wafer Fab Equipment is only going to the only $110 billion, it will be a new record also in 2026. The shift is more towards the Leading Edge. We will outgrow certainly the market again. We will be in the teens then also in the growth next year. In the teens. Okay. Thank you very much. Thank you. Sorry. Oh, yeah. One more before I close. One more before I go to the last question. We are already over the hour. Go ahead, Nigel. Okay. If Nigel is no longer here, I have another question from the webcast. As I indicated, this will be the last question for today's call. There are actually two questions. One is, how do we see the temp planning for VAT? Also, of course, we opened up here, and then there was the natural follow-up. How are we feeling with the consensus EBITDA for the full year? We elaborated on the top line. Okay. I can basically combine the two questions, Michel. On the temps, we are currently sitting at about 7% in operations here in Switzerland. As I said before, we will monitor development and also then adapt the temp structure to the needs that we see fit up until the end of the year. On the EBITDA consensus, circling back to the first question I answered where we talked about the EBITDA in the second semester, when I look at the consensus, it would imply kind of a 36%-36.5% EBITDA in the second semester, which is definitely a bit too rich at the moment, given also the pressure that we will still experience from FX. This being said, I think we should all be conscious about the hedging gains that we still have sitting in the balance sheet that we will recycle now into the second semester. That is positive, b ut we also have o bserved massive balance sheet revaluations. Which or where the timing matters of such revaluations. If you have them within the semester, I think these are well digestible. If you have them, let's say, by the end of the year, then the hedging gains cannot compensate that. Bottom line is, I think the EBITDA consensus is still a bit rich in the current adversities that we are observing, but overall feeling still very comfortable that we will see a significant step up in EBITDA performance semester over semester. Okay. Thank you, Fabian. Thanks, everybody. Maybe just quick before I close the call, a little bit of housekeeping. You might have seen the out-of-office reply when you tried to contact Chris. He's currently out of action. Will be back later in the year. Please, if you have any IR questions or IR-related matters, again, direct them directly to me. With that, I would like to close today's webcast. VAT will be at a couple of conferences over the next couple of weeks. We will see you again with the trading update for the third quarter 2025 on October 16. Until then, we wish you all a relaxing and nice summer, and talk to you soon. Thanks. Bye-bye. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Good.