Bachem Aktie

Good morning, ladies and gentlemen, here in Zurich and online, wherever you are joining from. Welcome to our Full Year 2025 Results Presentation. I am especially pleased to moderate today's session as it is the first results presentation in the new role of our CEO, Anne-Kathrin Stoller. Joining us on stage as well is our CFO, Alain Schaffter. My name is Barbora Blaha, and I am responsible for Investor Relations.

So let's start with some remarks on the housekeeping. There will be sufficient time for questions after the presentation. [Operator Instructions]. And also, as always, this call is being recorded, and the recordings will be uploaded on our web page later today or tomorrow. So a few words on the agenda. First, Anne will provide a review of the year 2025. Then Alain will walk us through the financial results, and Anne will close the presentation with an update on market environment and our business priorities for the current year.

We expect this event to take about 60 minutes. And after the presentation, we will host an [indiscernible] here in this room and everyone attending in person is warmly invited to join. And with that, I am happy to hand over to Anne.

Thank you very much, Barbora. Good morning, everyone. A very warm welcome also from me to everybody here in Zurich and of course, also to everybody joining us online. It's my great pleasure and honor to be here today and talk about the 2025 year results and also the outlook for 2026.

So let's start by looking a little bit back 2025. It was a very good year. Our sales grew to CHF 695.1 million, which is a growth of 14.8% or 19.2% in local currencies. Also, our EBITDA increased to CHF 214.7 million, which is an EBITDA margin of 30.9%, and Alain will talk a little bit more about the effects behind that. As you are all aware, we are in a phase of strong growth, strong market growth and also growth for Bachem, which means we are also investing a lot of money into our sites. In 2025, we invested CHF 332.6 million, and we also grew in terms of personnel. We added more than 300 people to our workforce, and we ended the year with 2,511 FTE. So if we look into our sales in a little bit more of a historic context, you see that we have been very consistently growing year-over-year. And this growth was even more emphasized, more pronounced growing from '24 to '25.

What is behind that growth? If you look at the distribution of the sales by top 5 customers and top 10 customers, we see that the share of our top 5 customers increased from 2024 to 2025. However, I would also like to remind everyone that these are the top 5 customers, and many of these customers have more than one product. So this is not the same as the top 5 products. We have our 3 distinct product categories, which are research and specialties, CMC development and commercial API. And in 2025, all 3 of these product categories contributed to our growth. And we see that amongst those 3, the CMC development contributed or grew the most. And on the next slide, I will talk a little bit more about each of these 3 categories and what was behind the growth that we saw.

Commercial API is where ideally, you primarily produce in campaigns, and we have seen in 2025 that we had more campaigns, longer campaigns, larger campaigns. And that had a lot of beneficial effects. On the one hand, it makes our production planning much more reliable. And also, on the other hand, it has a positive effect on our equipment utilization. In addition to that, we launched a quite comprehensive operational excellence program in 2025 with a very strong focus last year on Bubendorf. We also see positive effects coming out of this operational excellence initiative. And we also -- we had shift work before. We are producing shifts since many years, but we further extended shift work at our sites.

If you look into CMC development, we see that our portfolio, our project portfolio is maturing. We'll also see a little bit more what that means on the next slide. But we also saw a strong effect from late-stage projects where our customers ask us to also already build inventory for their prelaunch activities. So this means we have late-stage projects here where we built stock prior to launch. And so we would expect that some of these projects would, in the future, very likely show up in the commercial API category.

For Research & Specialties, very much in line with what we have seen in recent years, the primary growth drivers are peptides, which are being used in either diagnostic or cosmetic applications. I already talked a little bit about our pipeline, our project pipeline in CMC development. On the one hand, we see that we have more projects in later phases, but we also saw that in absolute numbers, the number of projects went down a bit. That is due to a very careful project selection that we do. I think we have always said that for us, the main driver behind our pipeline is the quality of projects, not the quantity. And what I can say today is that we are very happy with our portfolio of projects, and we believe we have a very balanced pipeline.

We already talked a little bit about growth and capacity expansion. So where did the more than CHF 300 million of CapEx investment go? We'll start looking into our Swiss sites in Bubendorf, in Building K, we made significant progress, and we are very happy to report that we had a successful inspection by the RHI in 2025, which resulted in the manufacturing license for this first phase of the Building K.

But we also invested in our Bubendorf site beyond Building K. We are making several investment projects there and working on those where we work on certain unit operations and add equipment selectively to address specific bottlenecks in some of our unit operations. We also invested into our Vionnaz site. As many of you know, that site is primarily focusing on producing precursors for peptide manufacturing, so that can be amino acid derivatives or [ diotide ] peptides. And so especially in times as we see them right now, that is one of the great assets that we have to utilize that site to have an extra secure supply chain.

We also made progress for our Sisslerfeld site. So on the one hand, we acquired all 5 plots of land now. And we also founded our Bachem Sisslerfeld AG as a legal entity. And also, we submitted a first permit application to build a utilities tunnel. So let's look beyond the ocean and look into our California sites. We have the Vista site, which is our large-scale manufacturing site in the U.S. And there, we are working on further expanding our capacity, and that project is well on track.

And in addition to that, looking even more into the future and potential future expansion, we also acquired a third building in Vista, which is directly adjacent to the current 2 buildings. At the same time, we are working on our Torrance site. And at the Torrance site, we are continuing our modernization efforts. And also, we are investing heavily into a higher degree of automation for the small-scale manufacturing that we do at that site. We are not only relying on capacity expansion projects to increase capacity. I already briefly mentioned our operational excellence initiative. So as I mentioned, the focus of that initiative was primarily in Bubendorf last year.

But what we are generally working on is we work on a very large standardization. So across our network of sites, we want to use the same business processes, the same chemistry processes. We want to manufacture on the same type of equipment, and we see first results of those efforts. We are also very much focused on communication, especially communication on the manufacturing shop floor to make sure that this communication is very efficient and very fast and also to be very fast in the resolution of any challenges that we see and all communication measures that we have implemented focused primarily around that.

I think in recent years, we also talked about our network approach where we really specifically look into each site and the strength of that individual site. And we carefully balance our portfolio with respect to those strength of the sites. And if necessary and if it makes sense, we start to shift products from one site to another site to allow for extra space and capacity or because it makes more sense for that project to be manufactured at a different site. And that also helped us in 2025.

So I would also like to mention in addition to all the business efforts and capacity expansion efforts, one strong focus area always was and will remain our sustainability efforts. I'm very happy to report that since many years, we are working with EcoVadis. And also in 2025, we received a gold metal from EcoVadis, which puts us in the top 5% of all companies ranked by EcoVadis and within the top 2% of companies ranked in our specific area of activity, which is manufacturing for pharmaceutical products. We also joined the science-based targets initiative, and we submitted our greenhouse gas emission reduction targets to that initiative. And so we continue to work on various actions and various projects to continue our efforts in the sustainability area. That concludes my 2025 look back, and I'm happy to hand over to Alain to talk more about the financial background.

Yes. So from my side, some financials review looking back in 2025. Anne already mentioned the sales, CHF 695 million, the EBITDA overproportional growth in this year. I also want to highlight the net income with CHF 148.8 million, which brings the earnings per share almost to CHF 2. Also, we have later a slide, the cash flow from operating activities, which ended up with CHF 271.6 million. Also for Bachem, the strong Swiss francs heavily impacted our numbers in 2025.

So this table now represents the first on a local currency base. So we start with the 29.1% from last year. We see a slightly dilution of 20 bps from the COGS area. This is because we invest there for the future growth. It's mainly labor cost. And this is what happened last year, the people to achieve the growth in '26. On the marketing and sales, we kept the cost under proportional and therefore, a positive impact in that space. On the R&D, we spent 1.5% of our sales into that area. It's very important. This is to keep our leadership in innovation and technology in the ties business.

We are still in the range, even if it's a little bit less than last year, we always said 1.5% to 2% of the annual sales in that area. The G&A part, we are investing there. We have additional functions that we need as a growing company. We add where we see a need for the growing company. So also there, a slight positive impact on the margin. With all of that in local currency, an underlying business, we would have a margin of 30.2% in the 2025, which is an increase of 110 bps compared to the last year. And then as mentioned, the strong Swiss franc brought our margin down below 29% in '25. And this is the first time we show something like a recurring underlying business, but we thought we had these 2 in the line other income, we had 2 special impacts, special items, which brought the EBITDA to CHF 30.9 million as a reported number.

The 2 impacts are: one is the sale of a building in the U.S. It was an old building. It was not on the sites in Torrance or Vista. It was more in the San Francisco area and has been rented out over the last few years to a third party. Now we could sold it in 2025. And the other part is a contribution from external parties to the project Sisslerfeld. So we received money there, milestones, and this is reflected in the other income because it cannot be shown as a revenue.

When we look at the cash flow, CHF 214.7 million as a starting point, almost CHF 38 million more than in the previous year. We paid taxes as we all have to do CHF 10 million [Technical Difficulty] accounts receivable, we see a positive impact, and this is mainly driven by a more evenly distributed sales in the last few months of the year. On the inventory side, we have an increase. This includes raw material, work in progress, semi finished goods. Some of the material that we have there, the raw material is partially prepaid by the customers to support the working capital, and this is all needed to produce in '26 the demand from our customers that we can deliver into '26 on the purchase orders we have received from them.

On the prepayments from our customer, this includes prepayments for CapEx, but also includes prepayments for working capital, as mentioned, for labor cost or material. There we see a net inflow of EUR 85.4 million in 2025. And the change -- the increase in payables and accruals, this is mainly driven by the course of the business. Growing business means usually more bills and more accruals in that area. So overall, operating cash flow, CHF 271.6 million in '25. Thereof, we spent, so cash out for our CapEx was CHF 329.4 million. We mentioned the sale of the building that brought cash in of CHF 3.5 million in '25. overall, CHF 325 million in the investing cash flow.

On the financing part, we had the dividend from 2024 distributed CHF 63.7 million. A part of that CHF 33 million has been kept in-house in the company as a loan from our main shareholder, Ingro Finanz AG. And in addition, we have drawn down loans from the banks of CHF 24.3 million in '25. So overall, we see a net decrease of CHF 64.1 million in the last year. Some key figures on the balance sheet. One on the left side, where we start net debt. As mentioned, we have drawn down loans during 2025.

One is the majority shareholder, others are the bank. We ended up with a net debt of CHF 26 million by the end of last year. And we will continue to -- you saw the numbers, you see the investment plans we have. So this should not be a surprise that we will also use banks or third parties in the future for financial support. On the prepayment side from customers, talking financial support, you saw the CHF 85.4 million we received net this year, it ended up with a balance of CHF 369 million, thereof CHF 182 million are noncurrent, which means we have to pay back this money now to our customers through product supplies in 2026.

So noncurrent means over the course of 12 months. On the balance sheet side, we grew the whole balance sheet first time over CHF 2 billion. It's an increase of 10%. The equity also increased, but not that much to CHF 1.5 billion. So thereof, a slight decrease in the ratio to 69% for 2025. On the CapEx, Anne already mentioned, we're going to invest further. We have to invest. We invested CHF 332.6 million in 2025. CHF 295 million out of that was for capacity expansion, be it buildings or equipment. The overall number, 48% of our total sales invested in that area. We will invest further. We see the need. We need to invest to follow our growth strategy that we have.

So for 2026, we see above CHF 400 million right now. And to preempt maybe the question, we also said that last year that CHF 400 million as a CapEx, we are lower than this number, and there is 2 reasons. One is we had contingencies in plans. Of course, we have to do that. Luckily, we didn't use that at the end of the day. And second, there can always be shifts from one project maybe to a next year. So no worries that big projects are delayed because of that. And with that, back to the future 2026.

Yes. So let's look into 2026, and I would like to do that by starting to look a little bit more into the peptide and oligonucleotide market. So we see a continued strong demand for peptides and oligonucleotides manufactured by chemical synthesis. And there are several drivers behind this continued strong demand, and some of them are listed here on this slide.

So first of all, we see an increasing complexity of the molecules in development. I remember 20 years ago when I joined Bachem, most peptides were linear, 20 to 30 were peptides. Those times have changed. We see cyclic peptides, constrained peptides, we see conjugated peptides with side chains, unnatural amino acids, you name it. And the same is true for oligonucleotides. We are starting to see more and more complexity also in that space.

So that's good for us because chemical synthesis is extremely versatile, and we can address all kinds of different modifications. We also see that demand is growing. That is on the one hand, based on indications. So both more indications, partially in rare diseases, but also in very large patient populations. But we also see demand is increasing because of new ways of administration. And one, of course, that is also very much in the public domain right now is oral administration, which we all know uses quite a lot of more API.

So all of these factors are driving an increased need for chemically synthesized tides. Looking a little bit more specifically into the peptide market, we see a strong pipeline growth and the majority of that pipeline growth is driven by oncology indications and also metabolic indications. Overall, there are about 1,000 peptides in development and a little under half of these are in clinical development. And we also see a growth in Phase III projects, which is also in line with what we have seen earlier in the numbers for the Bachem pipeline. So what are trends that we see in peptide drug development. One is very obviously a strong driver and strong focus on metabolic indications. There's a lot of press around those and a lot of excitement.

What we also see is that we have a spillover or a halo effect. So this strong interest in peptides for metabolic indications has resparked an overall interest in peptides. I mean we are in this space since 50 years. For us, peptides always were in the focus for the pharmaceutical industry, that was not always the case, but we now see a very strong renewed interest in peptides as a drug target overall. And I already talked about the increasing complexity. So that means by being able to modify and conjugate peptides, they also become targets which are more easily druggable.

So administration and half-life and the time between doses are all very positive effects by being able to make these very complex molecules. We are also very excited and very happy about what we see in the oligo market, both internally as a contribution to our CMC development product category, but also what is happening in the market. There's a very strong growth also in oligonucleotides in development. We see here roughly that we have almost the same number of oligonucleotides in development as peptides, just a little bit lower. And the share of products in clinical development is also a little bit lower at 30%. And that is not surprising because if you look at the oligonucleotide market and oligonucleotide development compared to peptides, this area is much younger. So it's from a timing perspective, slightly behind or slightly shifted in time.

But we also see here that cardiovascular indications are a large share of the pipeline, which also speaks to now much larger indications. Historically, when we look at the first approvals in the oligonucleotide field, they were all in orphan diseases. We now see, if we look at more recent approvals or also in the late-stage projects, we see much larger indications and much larger patient populations and also some activities in the metabolic space, for example. So also here, looking a little bit into trends, one very prominent one that we are all very excited about is, of course, the extrahepatic delivery. So all targets so far on the market was primarily targeting the liver. The next big chapter for oligonucleotides will come by being able to address other targets and there are some very promising developments in that area.

We also already talked about the broader patient populations, broader indications, which will increase the product demand and also will drive further innovation in how we manufacture TIDES or oligonucleotides in this case. And of course, a trend that is also very much one that we all read a lot about in the news is AI. So we also see AI is changing the way that drug discovery works also in the oligonucleotide field. So what does that mean for Bachem? At Bachem, we have 3 distinct operating modes. And I would like to briefly explain those and highlight those on this slide. Let's start on the left-hand side.

This is the area that we call the trailblazing CDMO. And in this trailblazing CDMO, we work very much on research and development. And Alain mentioned, we invested 1.5% of our sales into our own development and research. That is not to develop products or drugs. That's not our area, but we develop new manufacturing technologies or we use new technologies that are out there on the market and apply them to TIDES manufacturing. And we do this very deliberately, always have. And so this is the area where we really look into those new technologies and new developments either on the chemistry side or on equipment side or other areas.

And we then use those and apply them to first real case projects and products. And hopefully, if they are successful, they then develop into the middle part, which is the classical CDMO part. This is where we work with all our partners to support them during their clinical development phase with material for Phase I, II, III, but also with a lot of services, analytical services, regulatory services, process development services. And we then apply what we learned on these new technologies, and we work with our customers to use them in the clinical development. And of course, the ultimate goal finally is both for the products as well as for these technologies to make it into the right part, which is the commercial manufacturing of larger volumes of commercially approved APIs for drugs.

And so that is the ultimate goal. We work on all 3 of these areas, and we have examples for technology innovation in all 3 of those areas. So I think this is really one area where historically, we always had this focus on innovation, and we now really see that, that pays off. So coming now to specific ideas and results and expectations for 2026. What we primarily will focus on is, of course, a very reliable execution on our manufacturing with respect to existing contracts and to fulfill what our customers need for us. We also -- and that is a big part of that. We also will ramp up our production in Building K. So that is a very strong focus area for this year. And at the same time, looking beyond Building K, we are working on partnerships for the Sisslerfeld site.

And then we also want to look beyond what happens at Bachem overall, what and where do we go as a company? What is our next chapter. We work on that together with the executive team and also with the Board, and we look very much forward to presenting the results of that exercise at our Capital Markets Day in November. So looking at some numbers, this is where we expect to be in 2026. We expect our sales to grow 35% to 45% in local currencies and also our profitability, meaning our EBITDA margin to be in the low 30s again in local currencies. I think that concludes the outlook for 2026, and we are very happy to answer any questions.

Thank you, Anne. Let's move on to the Q&A. [Operator Instructions]. So the first question comes from [indiscernible].

I have a question about the outlook, and you were hit quite heavily by currencies in 2025. Could you give us any hint about what you expect on the top line and on the margin, which -- how much they are affected by currencies? And my second question, Sisslerfeld, you have this extraordinary positive inflow of effect. Can we expect another CHF 13 million in 2026? Or is the outlook without extraordinary effects?

So I can answer the first question. So the impact now with the actual rates we see compared to the rates from last year, I would expect millions, low 30s on top line and low 20s on EBITDA. So about CHF 70 million from top line is impacting the EBITDA with the actual rates. And on the second, I would not expect something similar in 2026.

Okay. Next question, Tanya.

Tanya Hansalik from UBS. So I was wondering for the guidance for 2026, you gave a range for us. Can you give us the building blocks for the lower and upper end of the range and maybe the contribution you expect from Building K and the base business and also if there's a bit of the U.S. ramp in there? And then my second question is on the customer ramp-up. When do you expect commercial deliveries for this one? Just to think about the phasing for H1 and H2, please?

So for the 2026 guidance, Building K, obviously, and the ramp-up in Building K has a very strong contribution to that guidance and to the growth that we expect. We don't disclose any specific numbers, but also based on, as we say, this ramp-up will appear in phases. And right now, we are on target with respect to that ramp-up. The primary contribution from this ramp-up will -- we will see in our revenues in the second half of the year. So we expect a much stronger second half of 2026 than first half.

Okay. Estelle Betrisey from Berenberg.

Just to maybe build on the Sisslerfeld. You talked about the partnerships. So maybe you can elaborate a bit more what's the plan here? Originally it was a bit more of a one can open a client? Like what are your expectations right now? And where do you stand? And then in terms of financing also, how you talked about third-party also financing. So if you could elaborate a bit further on that, please?

I can start with the Sisslerfeld question. So we are in negotiations with several parties on Sisslerfeld. And as long as these negotiations are ongoing, we cannot comment on any details. And then for the second question, which I -- as far as I understood was around the financing. I think the general financing question, I would give it to Alain.

So you've seen we have taken out loans in '25. I have right now enough credit lines with banks that doesn't make me feel sleepless in the night. We are evaluating the best option. It's still no equity-linked instrument is planned at the moment. So it will be third-party loans, and we are working on that, but no bad feelings to finance that growth in the next years.

Okay. [ Dani? ].

Thanks Barbora. [ Dani, KB ]. I was a bit surprised when you talked about Sisslerfeld milestone. First glance, I thought it's maybe a cantonal subsidy. But when you talk about milestone, does it mean you have an anchor client? You always talked about you only build Sisslerfeld when you have an anchor customer. Is that the correct interpretation? If so, it would, of course, be very nice to hear.

It doesn't have to be one anchor customer. It can be also several anchor customers. And the payment was based on a contractual term, which -- where we reached a certain milestone and that payment was then the result of reaching that milestone.

But there's no anchor customer side right now.

Okay. [indiscernible] in what indication that is obviously, with the GLP-1 cooling down -- until the end of the decade, I mean, it's difficult to interpret as an outsider.

Yes. So I think what we can say is what we said in the past is the Sisslerfeld site will be a site for large-scale manufacturing. It will be a pure production site for large-scale products. And well, obviously, the majority, not all, but the majority of products that require manufacturing at that scale are in this obesity or metabolic area.

Second last question. On the slide, if oncology drugs in Phase III on the market, it's actually a higher amount of drugs than metabolic. But I guess the volume in oncology is, of course, much smaller but probably more profitable for you in the end when compared to the large contracts in GLP-1. But let's say, if the famous customer B, once you named a few years ago, is not so successful as the market believes, does it mean that you can repurpose some of the second part in Building K to oncology? Or will that happen somewhere else in Torrance or in Vista or I think you see the direction of the question.

So maybe to start on the first part, I would not say that oncology products per se have a lower margin, right? The volumes, I fully agree with the volumes are lower, but I think they still -- these products across all indications still make a very nice contribution to our margin. And then the -- to the second part of the question, the equipment that we built is generally multipurpose equipment. So we can manufacture peptides on these equipment.

That doesn't mean we can only manufacture peptides for certain indications. However, the equipment has a certain size. And that means the product that needs to go into that equipment also needs to have a certain batch size. And I briefly talked about our network strategy. So within Bachem, we have a network of sites that range from smaller scale, for example, at the Torrance site to large scale now in Building K and in the future in Sisslerfeld. And we really try to be very deliberate about where does a project fit and what site is the optimal fit for that project.

Good. Let's take some questions from the other side, Laura?

Laura Pfeifer from Octavian. I would like to come back first on the sales guidance. I understand you don't give out an exact split, but maybe can you indicate how much growth could come from the base business? So excluding Building K, can this be, I don't know, 10% to 15%. And then I guess the rest is depending on Building K. So a little bit more color here would be appreciated.

And then also, is there a potential for an upside if things go really well in the ramp-up phase? And then secondly, maybe on the margin guidance, you say low 30s EBITDA margin in local currencies. This compares to [ 30.2% ], the clean base from 25%. So can you clarify what is low 30s? Is this 32%, 33%? And then also why are you so highly confident given that you still have the dilution from the new capacity in it? So just a little bit more clarity maybe on the margin drivers. And then just very quickly, maybe on your first kind of feedback from the ramp-up of the first line, how is that progressing? And what are your learnings so far?

I hope I still remember the first question correctly. So yes, I think what we can say is the majority of the growth will have to come out of Building K. We don't provide specific numbers, but it's a mixture, of course, of the base business and ramp up also in other facilities, but the majority comes out of Building K. And the current ramp-up plans and manufacturing plans go according to plan and any upside or downside is currently reflected in our guidance. And I think the other one is probably... question.

Yes, on the margin, I mean, we say low 30s, this can be between 30% and 33%. We see like we have a bigger bandwidth on the top line with 35% to 45%. And we also see, depending where this goes, it can impact the margin. So that's why I also leave this range there of low 30s. There is always something can happen in a ramp-up, not only top line, but also cost-wise. And that's why we keep this low 30s. But I would say we don't want to be lower than this year, of course.

Good. Any other question?

Yes, [indiscernible]. Again, for the Building K and the ramp-up, sometimes you say the ramp-up will take place. Does this mean there is actually no commercial production taking place right now? Or what is the stage right now?

We have started with production. So the ramp-up is going according to the plan. So we are manufacturing in the first lines.

Okay. Let's take some questions online. So Amit Thakkar is asking, can you update us on the capacity outlook for Sisslerfeld, specifically your ability and timing to fill the site? And how you're thinking about demand sustainably given recent softer GLP-1-related data and any potential pricing implications?

Yes. So the Sisslerfeld is a very large piece of land, and there will be -- once the site is fully built out, there will be several buildings, and we will grow into that site as we have always done it, as we have also done it in Bubendorf piece by piece and bit by bit, and that will be done in very strong coordination with our customers. So we will build the site at the pace that is required by the market, but we still see a very strong demand for products or specifically also for metabolic indications. So therefore, we still believe that this site will add a great benefit to both Bachem as well as our customers and their patients.

And maybe also a related question to the demand online from Zain Ebrahim. Can you remind us how much of Building K is booked currently? And what your confidence level is in being able to fill up Building K based on your latest conversation with customers?

A very large portion of Building K is already fully booked. I think we made announcements over the last few years on customers with contracts. So we are very confident about the utilization of Building K.

Okay. [ Cibil ], maybe.

You're going to invest more than CHF 400 million in CapEx. Could you remind us how much will be maintenance CapEx and how much will be growth CapEx and how much was it in 2025? And additionally, I expect also your customer financing, some CapEx, how much will it be this year?

So on the first question, we -- out of the CHF 332 million, it was CHF 295 million was capacity expansions for the remaining part. It's a similar relation that it was in the previous year. So you can imagine it's about the same. The big part still goes into capacity globally. On the side, how much do we expect? We had in the first few months already, again, a positive inflow from customers, which are contractually agreed in the past. I would not expect other big numbers coming in 2026. So you saw the noncurrent part of the liability. I would more expect a cash outflow in '26 from prepayments.

Okay. A follow-up question from Tanya, please in the back.

I wanted to ask some questions on the U.S. expansion. I think $250 million is your planned investment for that. How much of this, if you could give us an indication is backed by also customer prepayments or minimum commitments? And when should we expect the first revenue contributions from the capacity expansion? I have a second question. And also the second question is on an update on Oligos. You mentioned the potential of the market on your side. Can you give us maybe an update on your exposure or what we can expect from Oligos medium term for Bachem?

We are very pleased with what we see right now from the oligonucleotide. So we see a very nice growth in that area. We expect this nice trend to continue. But of course, compared to the peptides, it's still a relatively small part. And on the U.S. side, we expect that we will see first output from the current ongoing capacity project in Vista next year, so in 2027.

Thank you. Maybe one question. Here in front, [ Andy ].

Could you give us some insight in how much FX did cost since you gave us the EUR 1 billion guidance a few years back?

Yes, I can. I did that calculation and deferred a bit. So when we gave the guidance, when we calculate today's numbers with that local currency from that day, it's about CHF 80 million to CHF 90 million we lost on top line and about 2/3 of that on EBITDA.

Let's take some more online questions. So Fynn Scherzler from Deutsche Bank is asking on customers A and B, how flexible are your contract volumes here? For example, if one truck does much better and one worse than expected, have the forecasts you received from your customer changed as of late?

No, they have not. So we still have contracts where we have forecast from customers, long-term forecasts and a certain binding period in the forecast. And right now, we don't see any changes to those.

And then a question from Chris Richardson from Jefferies. What are the phases of the ramp for Building K? Is it separate lines or something else?

Yes. We talk about phases, not lines because one line can consist -- one phase can consist of several lines. So we are now ramping up the Phase 1 lines. And then later in the year, we expect the ramp-up from the Phase 2.

And we will take some questions online. Another question from Chris is, what is your time line to signing an anchor customer for Sisslerfeld to hit the end of decade target?

We hope to be able to make announcements on partnerships for Sisslerfeld still this year.

And continuing with Chris questions. Could you please also clarify what's the contributing factors for the 35% growth in CMC development in financial year '25. Was it new capacity, price or higher efficiency?

I think a very large driver behind that was the buildup of inventory for prelaunch activities. So I think the strongest driver behind that, obviously, is more campaign mode, more larger scale manufacturing and also larger volumes in that category.

Good. Then a question from Charles Weston, RBC. When might you negotiate a customer A contract extension? Your peer announced an extension this morning from their large customer.

Contract negotiations will happen in time for us to renew the contract. And as long as there is nothing signed, we will not comment on any ongoing negotiations.

Thank you. Some more questions here in the room, yes, in the front, please.

[indiscernible]. I would have an understanding question. You mentioned the rising complexity as such. Could you maybe allude a bit on that in terms of competitive advantages, Bachem having existed for 52 years, having the brightest brains basically on those developments. How should we expect market shares to develop over the next 5, 10 years?

Yes, it's absolutely correct that Bachem probably has the longest experience in the market and also historically has always had this very strong focus on innovation and being able to manufacture very complex molecules. And so in that area, we certainly have very distinct competitive advantage where customers come to us and we are able to manufacture product that other companies in that area have not been successful with.

So is it fair to assume that the -- what is it, 40% market share currently is rather to be expected to be stable or increasing again in your favor due to maybe geopolitics as well?

I think we need to be a bit careful to distinguish the number of projects where I think, yes, we have that advantage, and we may see more projects with more complex molecules. But when you look at market share in terms of sales, it's obviously primarily very large volume projects driving that. And some of these more complex molecules are in large indications, but some of them are also in very small niche indications.

Any other questions here in the room, Daniel? -- in the front.

Just one on the EBITDA margin target for this year. When I do the bridge calculation, let's say, starting basis adjusted 28.5%. You say low 30s, so let's say, 32. I guess ForEx will shift away 100 bps or so, 150, then you end up with a 200 bps underlying margin improvement, which is, in my view, quite substantial. What makes you so confident? I mean you have all the ramp-up effects. Okay, you have the first customer in Building K, which is up and running. So I guess the extra costs there are out, but you will have the extra cost for the next customer beginning commercial scale up in '27 and so on and so on. So just to understand the dilutive effects where they are overcompensated it's quite a significant step-up.

I mean I think there are 2 points. One is the COGS area where we mentioned and we also saw it here now where the gross profit is slightly diluted because we have costs, but we also build costs in for the ramp-up in the budget, which is the base for the guidance, of course.

So there is something can happen. But the main positive contributor then is if we keep G&A marketing sales, the R&D stable, there will be like this year in '25, a positive contribution. And with that, just for mathematical reason, the margin should go up because if we keep those under proportional, we will not grow marketing and sales and G&A by 40%, hopefully. So there is a positive impact on the margin just from this big jump in the sales.

And somewhat related question online from Peter [indiscernible] . Is there any phasing for the utilization of Bubendorf's existing capacity as Building K is ramped? Will there be underutilization in phases of the years as products are transferred and new products ramped up?

I would not expect that to be the case. So while we then transfer projects over to Building K, we saw we have a very healthy pipeline that is also maturing to later-stage development projects. So that means we expect the capacity that we will free up in our existing manufacturing buildings to be filled by those projects.

Okay. Thank you. Any other questions here from the audience? Then a last question from Zain Ebrahim, JPMorgan. How should we think about the margin development from here in '27 and beyond? And what is your exposure to energy costs? And are these fully passed through to customers?

On the margin side, we see over the next few years, a slight increase every year with the growth, let's say, economy of scale. So we see going up every year slightly. So the base we said 30% that really should be a base, but it should go above in the next few years constantly every year. On the energy cost, it's, I would say, mid-single-digit millions. So it's an amount. It's not substantial in the overall cost and some or many of the contracts allow us to pass such costs through to the customer.

Okay. Thank you. There are no other questions online. Last chance to ask questions here in the room, which is not the case. So before we close this event, let me briefly mention our upcoming events, which is the Annual General Meeting on April 29, our half year results on July 30 and Capital Markets Day, as already mentioned, on November 26 and also our mandatory legal disclaimer. And with that, I would like to thank everyone for your interest and your time, and wish you a great day. Thank you.

[Audio Gap]

then Alain will do the same from a financial perspective. And Thomas will end the presentation with some remarks on the market development and our business outlook. As mentioned, there will be a Q&A session after the presentation. And we estimate that the entire event will take around 60 minutes.

And with that, over to you, Thomas.

Thank you, Barbora. Welcome, everybody. As you can imagine, I'm very happy with the results the team achieved in my dual role as CEO and COO, I'm especially grateful that our operational performance has substantially improved. Obviously, our interventions are working, and we are adjusting to the new realities of the peptide market.

Peter Grogg, Bachem's Founder and ordinary Chairman died on the second of June after a short but severe illness. The shares remain with the family, [ his doctor ], Nicole Grogg Hötzer, who serves as Vice Chairwoman on the Board since 2011 continues to serve in this role.

Now into the details of the numbers. And I agree with the publications that are out there, we had a good first half year. In detail, we achieved CHF 313 million sales. That's an increase of 30.2% in Swiss francs. Important at Bachem always not only growth, but profitable growth. So we achieved an EBITDA of CHF 91 million, that's an increase of 64% and resulted in an EBITDA margin of 29.1%. This is everything. There's no core. This is what we have in Swiss francs and it's a very nice result that makes us all very happy at market.

But it's not only the result, it's also the build for the future that is remarkable. We invested CHF 129.5 million in CapEx and we increased our workforce by 84 colleagues in the team Bachem to now 2,292.

If you look at the results for the first half year, you see that this year, finally, we have a better first half year. And still you might have the question by now two good half years in a row. [indiscernible] substantially improve this result. I would say, since summer 2023, we knew that the change in the peptide market requires an adoption in the way we execute our business. We then set out with determination to define interventions that will make us successful in routine shift manufacturing.

In addition, we had to adjust how we execute and ultimately accelerate our CapEx projects. Many of these interventions were new and challenging. However, they clearly deliver and they will help us to achieve our goal of CHF 1 billion revenue in 2026 -- and I should say over CHF 1 billion revenue in Swiss francs in 2026 and an EBIT margin over 30%. So good news and hopeful for the future.

If you look at our product segments, product categories, I would say, research chemicals is -- about stable at CHF 20.8 million, the smallest piece CMC development, very strong at CHF 123.7 million, plus 36.9% and the commercial API at CHF 168.4 million, a plus of 32.4%. That brings us to those CHF 313 million in the first half year. The reasons for this improvement I mentioned it's the operational excellence measures we take, we run our shift very nicely. We have seamless execution, a very good operational half year in 2025. And it's also the network approach. We use all our sites. We make sure that we have similar and standardized processes, so we can use capacity in different sites and produce for the same product if the demand is there.

In Bubendorf, we had very good execution. In Vista we also had good execution. And in addition, we have substantial CapEx projects running there, a great job of the Americans also in Torrance, the pipeline growth, smaller projects, development projects, early phase projects getting executed there. In our Valais site in [ Vionnaz ], the rebuild is progressing according to plan. First line is back in service and we have a consistently high utilization of the capacity that was not affected by the [ fire ]. Overall, a great picture and something we look forward to build on going forward.

If we look at what is also very important, of course, it is building. This project is on track. We have a stable scope, we are within our budget when it comes to cost and especially we have a very good execution in the construction site when it comes to safety. Good safety numbers, good progress. So everybody really looking forward to bring those manufacturing trains into operation, the first trains are commissioned, technical production activities are progressing as we talk. That means, overall, our commercial manufacturing plan is as planned and we are fully aligned with our customer. We still expect GMP production to start in 2025. And this is conditional of the approval by the Swiss authorities of that building. Inspections are planned and we remain confident that this all happens.

And this, of course, as everybody knows, is important, especially for the 2026 results, where we plan with those additional manufacturing capacity. Patients are waiting, we need it, and it's built into our guidance for 2026. And with that, I pass it on to Alain to explain to you the numbers in more details.

Yes. Also welcome from my side. Some key figures, a little bit lower in the P&L at a first glance. When we look at the EBIT, where we achieved CHF 66.9 million which is almost 90% increase compared to the previous year or period. And on the net income, everyone knows about the strong Swiss francs. There, we suffered from about CHF 11 million from a currency effect from a loss from the translation at the balance sheet date.

But if you go further on the EBITDA, you see that all major cost categories contributed to the increase in the margin, which went from the first half year '24 by 600 bps up to 29.1%. The main driver here is coming from operations, the COGS part, and we see there, as Thomas mentioned, we have sustained operational efficiencies, and these improvements are becoming increasingly evident across our cost base. And in addition, a favorable product mix also supported this positive margin development.

On the marketing and sales part, we kept our expenses under proportional to the top line growth and therefore, also a positive contribution to the margin.

R&D, a very important factor for the future and the innovation of Bachem also benefit contributed to the margin. We spend about 1.5% of our sales into that area.

On the G&A part, also positive, and we will invest there also in the future in strengthening existing teams but also where needed strategic and selective adding key roles to support the growth of Bachem. As mentioned, there was -- especially in the second half, there was a currency headwind, especially the strong Swiss francs compared to the U.S. dollar. And if you would report in local currency, we would have achieved a 30.4% margin on EBITDA in 2025 first half.

When we look at the cash flow, we starting with EBITDA of CHF 91 million. On the positive side, the cash inflow, we see now the collecting of the higher accounts receivable by the end of last year, contributing more than CHF 60 million, but also the prepayments from customer with a plus of CHF 20.6 million. These prepayments are supporting our CapEx plans, but also our working capital, and it shows always the commitment and the trust from our partners, from our customers in Bachem for future deliveries.

On the outflow, there is always a tax point, CHF 7.3 million we spent or we cashed out this year and also the change in other payables. So we also paid invoices during the first half. And there we see the outflow of CHF 38.8 million.

On the inventory, we also invested there. We have higher levels of work in progress, semi-finished but also finished goods. And this is aligned with the future growth and the delivery of goods to our customers. Overall, our operating cash flow resulted in CHF 86 million for the first half.

On the CapEx side, we invested CHF 147 million in that area, and this is reflecting our commitment for the future expansion of our capacity.

On the financing cash flow, we declared a dividend of CHF 63.7 million that was partially paid out. But in addition, CHF 33 million has been retained and converted into a shareholder loan from Ingro Finanz AG. In addition, we also drawn down CHF 27.7 million from our existing credit lines with the banks. And overall, this led to a net decrease in cash in the first half of CHF 66.1 million.

When we look at the balance sheet, as mentioned, Bachem has taken out loans in the recent months. And by the end of June, our net debt balance to CHF 31.7 million and also the prepayments from customers, we just saw the increase. There was a net inflow adds up now to CHF 303.9 million by the end of June. The balance sheet with CHF 1.9 billion kept stable and also did equity with CHF 1.4 billion, so a slightly decrease of the equity ratio to 71%.

On the CapEx, as mentioned, we have invested or spent CHF 129.1 million in the first half, this represents 41% of our total sales. CHF 115 million out of this CHF 129 million are or have been spent for capacity increase being infrastructure or equipment. And this is a very important factor for the future of Bachem increasing the capacity to meet the market's demand, we will also, in the future, invest heavily in those areas in the coming years globally across all sites.

And with that, I'm handing back to Thomas for the outlook and the future.

Thank you, Alain. Clearly, nice numbers. And I would say the [indiscernible] is working and that's great. But importantly, it's working in a market that is very interesting, and I think we are all very happy with the positioning of Bachem.

So two slides, one on the peptide market, one of the oligonucleotide markets, those markets we are active in. The first one on peptides. If you look at the top left quadrant, you see the pipeline. And the pipeline is increasing in Magenta. Those are the approved drugs, but it's also increasing and even a little bit stronger in early-stage projects in Phase I and Phase II. Just highlighting the importance of peptides. And if we shift over to the right side of the chart, then we see that it's not only in metabolic disease. It is relatively broad. We have oncology there in a number of projects. We have orders that means a hell of a lot of different ones and cardiovascular immunology, you name it. They are all there, peptides are very active molecules in small quantities with little side effect. People are very interested in that.

At the same time, we all know the sheer magnitude of the anti-obesity market is overwhelming. We are currently about CHF 30 billion in 2024, and it's predicted to go around CHF 200 billion going forward. So this growth of the anti-obesity market is what we prepare for. And that's where our investments are going. That's where our engineering teams are working. That's where our CapEx knowledge brings new facilities and even better equipment going forward.

Looking into the oligonucleotide market, we see a similar picture at top left you see the pipeline growing. The blue colors again are early stage, and you see an impressive increase of those Phase II and Phase I projects and at the same time, a somewhat slower but still steady increase of approved drugs over the last couple of years. Also here, many different therapeutic indications. And if you go to the bottom right, a healthy CAGR of more than 30% coming up in our expectation to around CHF 30 billion in 2030. So we are very happy with both legs with the peptide leg, of course, but also with the oligonucleotide leg, and we want to stay in those two modalities have really nice positioning of the company where we can bring our strength in synthetic molecule manufacturing to the market and create value for our customers, and of course, most importantly for patients who are in need of good medicine.

So I spoke a little bit about interventions, about things we learned over the couple of years, and we tried to put that together in this slide. If you look at the past, that was what Bachem was used for almost 50 years. We typically have built capacity upfront, then we got demand to fill up the capacity. This is all changed right now the demand is almost on constraint. There's a lot of demand out there in the market, and we are somewhat constrained with capacity, but we are expanding as quickly as we ever can and with very good innovation into new infrastructure into new buildings, into new sites. That's what we like to do, and it's very fulfilling to see that happen.

And so you can go through all of them. I think the magenta here is important, too. We had almost no shift work or no shift work back a couple of years. Right now, shiftwork is, of course, what we need to do and we learned and execute that much more professionally and we will continue to improve on our operations going forward, bringing the new building into operations, we remain very cautious about what our changes that are necessary but also optimistic that we will achieve those changes, new realities of this peptide and oligonucleotide manufacturing.

With that, we move on to the next slide. And a slide to show you that Clearly, there are many pieces in how you can improve your operation, how you can improve the company to be ready for the future. We mentioned operational excellence where we go very deliberate after improvement, making sure that we have no time where the [indiscernible] are not running and that we have no mistakes. We were -- I talked about the network approach, when we look at for harmonization and standardization over the different continents, so that we can utilize different capacity for the same molecule. And of course, the core of this slide is innovation. We keep pressing and pushing for automation so that we can increase our quality of work and get a lower cost base and also how we can improve process chemistry so that we have less material use and ultimately have [indiscernible] chemistry that is having a less severe impact on our environment or a reduced footprint, I would say.

We look also at the portfolio, we are selective in what we are choosing to bring into our operations and then make sure that we optimize our resources for the best output that's possible. And then again, as I mentioned, we have new sites. We have building K., we were [indiscernible], we increased our capacity going forward. And on the next slide, I have some keywords to what's happening in those CapEx projects that are moving along, humming along I should say.

On track for Building K, that is great news. And the excitement in Bubendorf is building almost every day. the operations team are in there. They're using the first lines. So this is moving along, and we're looking for first GMP production there in 2025. That is great news.

In the existing footprint globally, we make smaller additions to reduce bottlenecks. Bottlenecks is always what holds capacity back. So we enlarge those equipments, those unit operations so that we have less bottlenecks. In Vienna, we invest mainly for a supply of key precursors, so we have our own starting material manufacturing there. That is also very helpful. It gives us a certain level of independence. This I mentioned, we have capacity investments for larger projects. And in turn, we focus on automation for the small scale early phase manufacturing. Sisslerfeld, two very important development. We submitted the site plan and the first construction application, we expect to submit in 2025. Great work by the team and important work.

The priorities, I think I mentioned almost all of them already conclude those CapEx projects continue to expand capacity. That's a key priority for 2025 and ongoing. We want to have the test match in building K. I think we are optimistic that this is going to happen. Emphasize on safe and efficient operations, that's important. And especially with the large-scale equipment we take into operation, we have seen that we made big steps forward, and we understand how to improve that going forward. And of course, all the pieces need to fall together, if you want to execute, starting material is a key piece. We are working on our supply chain so that we have everything in place when we are ready to go. And we are good there, and we're going to further improve what we are doing with our supply chain, with our partners going forward.

And with that, I believe we come to the outlook for the full year. We raised the sales guidance to 13% -- to 18% growth in local currencies. We keep the profitability, the guidance in the high 20s. We keep the 2026 guidance, sales over CHF 1 billion and profitability over 30%. So that was good news overall. And now we have time for questions and answers.

Thank you, Thomas. Thank you, Alain. [Operator Instructions] I see already a couple of raised hands. So let's start with Zain.

This is Zain Ebrahim from JPMorgan. So you raised the '25 guidance. But given the strong first half performance, the midpoint of the raised guide still in place, it's quite a steep slowdown in growth in the second half. So is this reflecting increased caution in the guide due to sort of the geopolitical environment? Or are there any fundamental reasons for the slowdown and also acknowledge the stronger second half pace last year?

And tied to that, just a question on FX in terms of the FX impact you're assuming for sales and EBITDA in '25, given the 4% headwind you saw in the first half, and where the Swiss franc is at the moment.

And last question is just a clarification one. I think you said on the regulatory inspection for Building K that you're expecting Swissmedic inspection later this year. Do you think you might need FDA inspection as well? And is the Swissmedic inspection already scheduled?

I'll start with the third one. Clearly, we expect Swissmedic here. We don't foresee an FDA inspection. There's a mutual recognition agreement between the U.S. and Switzerland. So we believe we have the Swissmedic inspection.

There was a second question about whether the time line of the inspection is already named defined and yes, indeed, that's the case. For growth, we see growth continuing in the second half and you did the calculation. We gave you the time lines, I think that's all we can say to that and one in the middle of...

Yes, the FX, that was for me, I guess. So if we would stay with that actual currency rate, especially the dollar, I would expect for the full year impact of around CHF 25 million. And if you think about that top line, if you think about what's the impact on the margin, that is about 60% of that will suffer the EBITDA from that headwind.

The next question comes from Charles Pitman King.

Charles Pitman King from Barclays. Firstly, just on the results and the strong operational execution. I was wondering if you could just provide us a little bit more detail on the actual steps you've taken over the past 6 months here to deliver on this improvement, as you kind of highlighted at the beginning, just what are those steps? And how -- if we can now assume most of your facilities are operating at this enhanced level such that changes in batch delivery can have an impact on your financials, how can we, therefore, think about this productivity level going forward? Is this -- are you confirming this is sustainable through '25? And do you think that this is a good bar from which to go into FY '26? But given you've made these improvements, I assume FY '26 expansion is coming from the new capacity rather than further improvements in operational execution. So just wondering it's kind of the low-hanging fruit as such has been achieved there.

And then just on the -- my second question is for debt. You kind of highlighted that you've taken some debt on for the first time in the first half. And I think you mentioned about some of it being used or transitioned into a loan. But I just wanted to know kind of what the purpose was for raising this debt and what you've really delivered that to given on an optic basis, dividends kind of equal debt and to make sure it isn't being as a kind of payday loan as such. I wouldn't expect that, but I just want to dig a little bit more into your drivers behind the debt rate.

Let me start with the question about operational excellence. Overall, peptide manufacturing is a complex task. So we never -- we'll never rest on our low rates. We continuously improve how we execute our operations. And you really have to think holistically about what we are doing here. We are growing into a company that delivers massively larger quantities of peptides than we did before. In that respect, you can call it low-hanging fruit. They are certainly have been harvested, but we continue to improve. And I still would like to say that you should assume that most of the growth comes from additional capacity going forward. But we will continuously improve how we execute our business. That's in operations, but that's in all other functions, too. And then there was a lot about debt, so I'm probably going to ask...

The debt is -- I mean also in the past, Ingro Finanz as the main shareholder always provided a portion of the dividend or kept it in the company as a debt. That's not something new. That was just not the case for the last few years when there was enough cash to support the growth of the company, and we all knew that there will be the point in time where our cash balance cannot support this high CapEx anymore. So we have this debt now, and there are several strong partnerships with banks behind where we have open credit lines that support us financially in the future. So this is something that will go on in the future. We will need that debt and that's actually how we finance our growth in that sense.

The next question comes from Charles Weston.

Thanks, Barbora. It's Charles Weston from RBC. Three questions, please. First of all, there has been some speculation in the press and by some investors that first half might have benefited from some pull forward of demand from U.S. customers trying to get in ahead of any increases in pharmaceutical tariffs. Can you comment on whether you've seen that, whether the first half benefited from that? And indeed, whether such a pull forward is even possible given the constrained capacity that you have?

Second question, please, on portfolio optimization. I appreciate that you're careful in taking on the right product -- projects. But have you been actively managing older projects that you have already got a perhaps managing them out or increasing pricing significantly if they are becoming -- or if they are less profitable than new opportunities.

And then lastly, you show a slide on the oligo market, commenting on the potential growth there? Is there any update on Bachem's own activity within oligos? Obviously, there were some delays last year. So a little update there would be helpful.

Thanks, Charles. I'll take the front -- first one first, front loading. We especially look into it once we had the half year results, we look with our [ obedient ] sales. And the answer is really, we don't see any indication that we have substantial front-loading in the result. And in addition, I would mention we are short on capacity. If somebody did front load, we have other projects to put into those slots. So that's not something we are concerned right now.

The second one was how we managed the portfolio. I think we always managed the portfolio. We want to be a long-term partner. So we want to stick with the projects we have, but we want to be more selective in what we can take on right now. And this is not the ideal case for a CDMO. So we are actually working also to increase capacity so that we can really serve everybody out there. So we believe that's the short term situation.

And the third one, I believe, I hope is -- was for Alain because I forgot.

It was oligo update.

Oligo? No I take that. The situation is there's no update. We don't report individually on Oligo, what I said is we are very happy how the progress is taking shape there. Also the market, we look very carefully and we hope that a larger indication come to the market and we are ready to serve those indications too.

The next question comes from Laura Pfeifer.

Yes. Hello. Good afternoon, everyone. Maybe first on profitability and your margin guidance. I mean taking your high 20s EBITDA guidance in local currency, this implies the margins -- some are probably in the 20s in the second half, and this compares to 33% that you had last year. So I suppose a planned increase in personnel, you mentioned is one of the headwinds and also the ramp-up costs for building [ cable ], are there other specific headwinds that we should have to consider maybe mix or something else. So I think that's the first question.

Then the second one is on your site expansion Vista in the U.S., I understand you're increasing your large-scale capacity there. And could you please indicate the level of CapEx investments you plan for the next couple of years? And also the time lines for bringing this onstream? And I think in that context, I'm just wondering, given that currently you have around 20% of sales, I believe that that's more or less the number that you produce in the U.S. if you aim to increase that some more substantially in the future.

I was hoping Alain starts with the profitability.

With the profitability yes, I can do that. Yes, you're right, Laura. That's the main parts that we see there as not known costs right now. So we are ramping up. We have to hire new people, and it's just an uncertainty behind. When we guided for the full year, as said, we hope we are going to be above 28%. Now maybe we are targeting the higher level of our guidance, but there's still uncertainty, and that's why we kept it from the range where we have been.

And then, I don't know, maybe I can give you some CapEx numbers and then Thomas can tell you about the time lines. So with the U.S., we mentioned that we've gone and invest there. It's a huge investment also for the U.S. sites. In the next 5 years, we expect to be at USD 90 million, USD 100 million to invest in the U.S. on both sides, mainly in Vista. Now, Thomas, maybe on the time lines.

As always, we go as fast as ever possible. We see some of the investments coming into operations in 2026 and onwards.

Okay. And I guess, the USD 90 million to USD 100 million, that's accumulated number over...

Yes, that's 4, 5 years, yes.

4 to 5 years, okay.

The next question comes from [indiscernible].

I have first question. What happened -- I'm very surprised about the very good results, so congratulations. Has it -- what happened in June? Was it the sales generated very late in the semester because I had a feeling I was in contact with you and then the results were much stronger. Is it very late happening in this very strong results? Maybe this is the first question.

I see nothing out of the usual for this first half year when it comes to the distribution within the 6 months.

And the second thing is that you plan to invest more than CHF 400 million CapEx in 2025. Could you tell us especially in the second half, I mean, you have to double -- nearly double CapEx invested in the first half. Where will it mainly be invested? Is it still Bubendorf?

Yes. It's Bubendorf and still a substantial part will go into Building K.

And the next question comes from Fynn.

Yes. Fynn Scherzler from Deutsche Bank. So the first one is on the test batches that you have started to produce now in Building K. So in terms of timing, when will you know about the quality and yield of these batches and do you plan to update the market on that? And connected to that, should we also expect an [ ad hoc ] announcement of you when the regulatory inspection goes through? And do you maybe have an indication for us when that would be? Or should we expect to not hear from you on this until the full year results release?

And then secondly, on the Sisslerfeld expansion, you mentioned that you will already start some of the construction applications there. Can you maybe update us on the discussions there? So does that mean you have line of sight on securing an anchor customer or that you are very constructive on doing so? Or how has this been trending in the recent past?

Thank you, Fynn. Those are important questions, absolutely. And I think we keep it like we always do. If something is ad hoc requirement, we will go out to the market and inform immediately. And if not, we bundle that together so to make it easy for all of you guys. So if something substantial happens, we will let you know. And if not, I think we just focus on our execution.

And for Sisslerfeld, maybe that was the second question. There, we mentioned in the past that we are looking for a partner. And if we execute this, we would assume that we have an agreement with a partner going forward.

The next question comes from Estelle Bétrisey, Berenberg?

Hello, can you hear me?

Yes.

Estelle Bétrisey from Berenberg. First of all, a huge congrats for the results today. I just wanted to hear maybe just if you have a bit more color you can give us on the second and the other lines that you have in Building K. Any updates on those? Have you started already the commissioning and qualification?

Thank you very much for your question and your judgement on the result. Yes. The other lines, they're going according to plan. The focus is, of course, on the first line, but it's right. I mean the entire building, we talk about 120 infrastructure elements for systems that are up and running. And so we're also progressing with the other lines according to plan. And this is really, really good news for all of us at Bachem.

Next question comes from Tanya Hansalik, UBS.

Can you hear me?

Yes.

Yes. Okay. Great. Also congrats from my side for the good H1 result. I think I just have one more question. In regards to your 2026 guidance, it's been a few years since you issued this and the Swiss franc has appreciated quite a bit versus the dollar and since your sales guidance is in Swiss francs, does this mean the underlying growth assumptions you have are higher? Can you help us with kind of the gap here?

Thank you, Tanya. Yes, we observed the same with the Swiss francs-dollar exchange rate, and we can't change it. And we still believe that we're going to be above CHF 1 billion. That's the reality.

Next question comes from Constantin [indiscernible]

Yes. Can you hear me?

Yes.

Maybe two, one a bit more philosophical and one more on the financial side. Thomas, maybe first for you. I think we see a lot of innovations and incremental improvements to optimize raw material and solvent efficiency. And these sometimes seems to be pretty substantial cutting soybean used by, I don't know, 50% or so in some cases. I would be interested to hear more about how these innovations are already included in your multiyear contracts. I mean you obviously have included your higher process automation and all sorts of improvements that you planned in a long time for Building K already but to me, it also looks like competitors are really making great progress on the consumables efficiency in general and it seems to be a kind of a dynamic situation. So do you expect efficiency to be even better than initially planned? And if so, how would that be then split between you and clients? Would you still expect that to transform into lower prices, sorry, as the whole industry is becoming more efficient? Or is this something where you expect to gain some incremental margin?

And then the second, maybe for Alain, just maybe I'm overlooking something, but if you just check the cash flow statement there, I see a D&A of CHF 16.2 million, but the gap between EBITDA and EBIT suggests like CHF 24 million. What is the other item that is missing in that?

Yes, you can you start and I'll do the financial after.

Yes, I thought so, I give you a lengthy answer. Philosophical question, where are we going? With this industry. I think we have a lot of incremental change, as you said, and those are quite substantial, and we bake them in as they happen, and we also try to bring on somewhat more pronounced significant changes with new technologies, which is a little bit harder because sometimes you also need to get the regulatory body on board and firsts are not always easy. But we are convinced that our initiative for continuous chromatography is a very successful one, and also the tech assisted Synthesis is something we believe has a lot of merits and we invest in those technologies. And we will see what happen when we make our estimates and build them into our guidance or outlook. But typically, those step innovations, they take longer than 12 months. With that, on to you, Alain.

On the D&A, Yes. I mean, Constantin, you're right, it looks a little bit strange and that was also -- so we got this question already in the morning. The difference between the 16 and the 24 , you find in Note 9 in the half year report. That's when we did impair the equipment in Vienna in '23, we thought it's all damaged and later, we found out it's still can be used, it just need to be maintained repaired, which was also paid by the insurance company. but you see the 7.8, 4.8 in Note 9 and with that together because it was -- it shown net in the cash flow statement because it was still paid by the [ mighty ] insurance company, but the real EBIT -- the real D&A is this CHF 24 million you see in the P&L.

Okay. Perfect. And Thomas, if I understood that correctly. So the innovations that you see that maybe some competitors are more actively pushing recently have been in the pipeline for longer, and you would say that there is no pressure on your, let's say, 4, 5 year length contracts that customers will say, "Hey, you make such great progress on the efficiency, maybe we can lower a bit the prices without you harming your margin?. So that's just sort of what I'm thinking about, if I hear cuts of 40% to 50% to the solvents.

Now you made me interest. What are the published progress of the competitors? We don't observe.

I think I've seen these like what's called percolation wash in the [ SPPS ] or -- that, for example?

Yes. Percolation wash is not something that is unknown to Bachem. I would not assume that is -- we are not capable of doing. And yes, I think that's all I need to say.

The next question comes from Daniel Jelovcan. Otherwise, he also wrote a question into the chat. So Daniel Jelovcan from ZKB is asking, can you elaborate a bit more on the high -- more than CHF 400 million CapEx for the full year '25. Why is it so high in second half? I thought that Building K is already almost done, at least for the Customer A.

I can elaborate on that. And it's important to know that we will be in a dual mode in Building K where we still have a construction site and at the same time, we produce in the other part of the building. So Building K will continue to be a construction site until, I assume, roughly 2027, and that's where our substantial money goes from our CapEx. In addition, to the debottlenecking in Bubendorf, some investments in Vienna and quite substantial investments that Alain mentioned in the U.S.

And then we have one more raised hand. The name here says [ Sahana Sahana ]. I don't know this participant, but if you would like to ask a question, please unmute yourself.

That may have been mine. This is Samuel [indiscernible] I shall be, for a moment, Sahana Sahana. Okay. Samuel [indiscernible] And some of my questions have been anticipated. I'd like to go back though to the suggestion of more or less unchanged revenue in the second half simply doing arithmetic, not calculus. And it was kind of glossed over, I think, by Thomas Meier. But is that arithmetical correct? The revenues are expected to be about flat in the second half compared to the prior year second half. It's suggested by your numbers.

I don't think that's the reality. If you take our revised guidance, we have the potential for growth in the second half.

Okay. Again, the arithmetic suggests it's kind of flat. The second question though was also anticipated by someone else. And that is you two got some debt, okay? But the requirements of capital spending and so on, can they all be covered by debt? You did have an equity offering a few years ago. Do you anticipate in the sort of near to intermediate term, you're going to come back to the stock market and raise fresh equity capital?

Right now, there is no plans to raise capital in the midterm. That's actually what is the strategy of the company. We have, as I mentioned, strong partnership with banks. There are different options outside of equity-linked instruments, and we are always looking for the best solution for Bachem. And right now, we are going with those credit lines that we have opened with several banks right now.

And Sam, maybe to add to the second half growth. So if you take the midpoint of our guidance in local currencies, you see a growth in the second half.

I actually took the high point and...

So I calculated before and yes in local currency.

You and I can fight it out in the telephone later.

Next question is coming from Sybil [indiscernible]

Alain, just help me to understand. I'm a little confused about CapEx in the first half. I have two figures here, one is the CHF 129 million and the other one is the CHF 147 million. Could you help me to understand the difference?

Yes. CHF 129.1 million is the balance sheet. So here you see an invoice. CHF 147 million is the cash out. So let's say, you get an invoice by the end of June, it's no cash out, but it's a balance sheet. And then the next month, you have no CapEx, but you have the cash out. It's just the differentiation of the payment terms.

And the second round of questions by Zain.

Thank you for taking my follow-up. I just have one last, which is on the CMC business. And I think you've alluded to it in terms of the strength of the oligos business, but just in terms of the strength in CMC in the first half, was it driven by new projects mainly or some of your existing contracts [ impacting ] oligos? Just thinking about your oligonucleotides contracts and the timing of that coming through. So just any thoughts there on how we should think about the CMC business going forward maybe for the rest of this year, but also sort of into next year?

It's both, but many projects are strong that have been here for quite some time.

And one more question from Charles Pitman King.

Just given we've got the time, quick clarification just on the commentary around Sisslerfeld earlier. You highlighted that you're looking for a partner currently such that if the site is executed, this implies you have a partner. I just want to confirm what that means in line with your presentation commentary of intend to put in some applications by the end of the year. Does that implicitly mean that you expect to find a partner by the end of the year? Or does it mean you found one, and therefore, you therefore expect to file by the end of the year? Kind of which of those two scenarios should we be interpreting the presentation slide as?

Those are both hypotheticals and we will inform you as soon as we have something tangible.

And maybe to add there, this project is in a size that most likely requires ad hoc message to the outside.

And so there are no more raised hands and all the questions have been answered. So before we end this session, I would like to highlight our next event, which is the full year 2025 results presentation on March 12, 2026 and the next AGM on April 29 in 2026. And as always, our mandatory legal disclaimer. And with that, I would like to thank everyone for your time and interest, and have a nice day. Thank you.

Thank you. Bye, everyone.