Cicor Technologies Aktie

Ladies and gentlemen, welcome to the Cicor Annual Media and Analyst Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it is my pleasure to hand over to Alexander Hagemann, CEO. Please go ahead, sir.

Thank you very much, Sandra. Good afternoon, ladies and gentlemen. Welcome to our 2025 annual results conference. Yes, like usual, in previous years, together with Peter Neumann, our CFO, I will give you some of the background and present the results to you. 2025 has been a very busy year, a year in which we have made significant process towards becoming the Pan-European leader in our chosen markets, by adding France, by adding Spain and by further strengthening our position in Aerospace & Defence. That was a very high level of activity, and that level of activity also led to very significant one-off costs related to the M&A. And as you will see later, we are making adjustments so that underlying performance can be viewed properly. All this before the backdrop of a challenging macroeconomic environment, and I'm sure we'll be talking about that. With what we have achieved in 2025, foundation is laid for strong 2026.

In short, Cicor has truly become one of the leading design and manufacturing partners for advanced electronics in Europe. With sales of CHF 616 million, we have grown 28%. Order intake has grown even stronger, 46.5%, leading to book-to-bill rate of 1.05. The underlying EBITDA was increasing significantly to CHF 65 million, a margin of 10.5%. Very noteworthy, again, an exceptionally strong free cash flow, which has reached 76% of adjusted EBITDA, as the result from very effective net working capital management. And Peter will go into detail and explain how we have achieved this. Cicor today is one of the leaders in aerospace and defence, #2 in Europe. And with that, we have created a platform that gives us leverage for organic growth.

Our focus are markets in applications that matter, where lives or high-value assets are depending on the functioning of the long term of the products that we do manufacture. That is the foundation for growth and the core of our strategy. The focus on High-Mix Low-Volume to those demanding markets. Since 2020 Cicor has achieved 6.3% annual average sales growth and therefore, we have outgrown the European EMS market significantly. That market has grown approximately 4% annually. For example, in ejection seats, Cicor has a market share of 80% supplying electronics to ejection seats for the free world. In hearing aids, Cicor technology is included in 1 out of 2 hearing aids worldwide. And in industrial applications, Cicor supports the manufacturing of the most advanced semiconductor equipment.

Another key element of our strategy is to supply in a pan-European footprint, plus global manufacturing offerings. And the M&A activity of the last year has enabled this. Today, Cicor has access to more than 70% of the European electronics OEMs by regional presence. And that indeed is a foundation for growth. Today, in our industry, what is needed are tailor-made manufacturing solutions, manufacturing in the customer's country. Near-shoring solutions or local for local manufacturing, like we provide in China and the U.S.

Talking about our market segments that we are focusing on most, starting with Aerospace & Defence. In earnest, we have entered that market in 2021 with our first acquisition. Today, 2/3 of the leading European defence integrators are amongst Cicor's customers, and that is a foundation for growth to come. That also provides stability not depending on only a few core customers, but very broadly based. So we are serving today more than 30 of the leading OEMs in that market. And as already communicated in earlier events, we are in the process of onboarding two more, more will be reported about the Q1 update. That market segment has grown more than 8x in the past 5 years, leading to #2 position in Europe.

Second strategic market is the Advanced Healthcare Technology segment. It is a unique combination of capabilities that we are able to offer and we are accelerating our organic growth as contract development manufacturing organization. The business to that market has doubled over the past 5 years, out of which the majority of that growth has been organic. Today, Cicor has achieved #3 position in Europe and expanded the reach through the acquisition of our Morocco and U.S. sites, which are specifically focused on medical application. In the Industrial market, Cicor is driving automation and miniaturization. Here, as mentioned earlier, we have access to the majority of European OEMs, providing us a platform for solid organic growth in the years to come. That business has grown about 2.5x over the past 5 years, which was a mix of organic growth and M&A.

Our market position is constantly evolving. If Cicor was still #10 in Europe in 2024, in '25, we already achieved #6 market position. And that gives us the customer outreach but also the scale in manufacturing to provide competitive solutions while delivering solid profitability.

Let me now talk about the highlights of Cicor in 2025. Number one, the transformative growth that I've already mentioned, turning Cicor into a true pan-European, I have to say, the only pan-European peer in our industry. And at the same time, as mentioned before, climbing the better in target segments. Five strategic acquisitions were completed, and I'll talk about those in a minute in more detail. We have achieved record adjusted EBITDA, albeit with some temporary margin dilution, however, while creating significant shareholder value, and Peter will go specifically in details about that.

We have accepted that temporary margin dilution because we have acquired strong underlying customers, robust operations and management teams. The strong free cash flow generation, 76% cash conversion of EBITDA did not only strengthen our balance sheet and deleverage the company, but also supporting growth strategy for the years to come. And as mentioned earlier, we have strengthened our market position as the leading European partner for high reliability electronics.

Let us go one level down into detail, talking about target markets. The Industrial segment saw robust growth, 48% in revenue over previous year. With positive organic growth in that segment, we had seen the worst already in the first half of 2025, plus mergers and acquisitions and all that growth from a very high base already. Aerospace and Defence, our second largest market saw solid growth of 30%. That was driven by M&A, combined with some organic growth. However, it needs to be noted that due to the nature of the aerospace and defence business, it takes a delay roughly 12 months before order intakes are converted into sales. Therefore, we are hopeful and optimistic that the high order intake in 2025 will allow us to deliver significant organic growth in 2026.

The medical markets saw a small growth of 4%. Here, we had still negative organic growth, which was the result of 2 customers of the AS division destocking as we have reached the trough of the cycle. In sales by region, all regions have grown. Asia has grown 9% via organic growth. The Americas have grown by 25%, which is also the result of our M&A activities, not only Valtronic in Cleveland, which was with the group for a short period of time, but also MADES of Spain, which has significant exports to U.S. defence customers. The focus on Europe, which has been strategic all the time and all over the years, is broad-based. You do not only see Switzerland as a strong market, but U.K. as our #1 market, Germany, about the same size as Switzerland and France strongly coming up. And here, I have to mention that our French business only joined the group in end of April.

Let me make comments about the 2 divisions. Most important was that the EMS division has returned to growth, albeit at a very, very small growth. This, however, was in a declining EMS market, where we still saw in Europe a 1.3% decline. So again, Cicor has gained market share, although these market share gains have been a bit smaller than in 2024, where Cicor has gained significantly. As a result of the organic development and M&A activity, sales have increased by 1/3 to CHF 584 million. The adjusted EBITDA margin was solid. and it demonstrated the operational discipline in all our existing businesses, while we have accepted a temporary margin dilution after the acquisition of Eolane.

As mentioned, Cicor has further gained market share. And at the same time, we have continued on our strategic move towards becoming a contract development and manufacturing organization. In the meantime, Cicor employs 400 engineers out of which half are in research and development. The strong order intake in Aerospace and Defence, especially in the second half of the year, supports future growth to come this year and thereafter. The AS division, on the other hand, had seen sales reduced significantly by 22% to CHF 35 million. This leads to a share of group sales of a bit below 6%. As mentioned before, that lower demand was exclusively driven by 2 medical device customers that, at the same time, have reduced their inventory levels, a temporary effect of which we expect that it will return.

So the cost structure was improved, and that improved cost structure allowed still an acceptable EBITDA margin of 10.8% despite the strong top line reduction and at the same time, will enable significant margin expansion when growth will return. And that strong growth is expected because not only these 2 medical customers have normalized demand, we also see specifically high demand from aerospace and defence customers. What we have done is a significant improvement of our cost structure, both by improving operational excellence further at the Boudry site for printed circuit boards and the consolidation of the Ulm site for hybrid substrates into the Brons, Switzerland site, where now 100% of manufacturing takes place.

Let me say a few words about strategy. And here, I won't go into detail because we had various occasions where strategy was already discussed. For now, we are leaving the financial objectives that you see on this slide unchanged. We will, however, during the year, review and potentially revise these objectives. Why will we do this? Because the progress has been faster than expected towards reaching the objectives of 2028. We have made significant progress in M&A in our very value-accretive approach to M&A. And therefore, we have a good and solid look on these midterm targets.

Again, the 3 core elements of strategy are we already mentioned focus on applications that matter, aerospace, defence, health care, technology and industrial. Our pan-European market access, which is very unique in the industry and none of our peers is following that route. And our focus on high mix, low volume at scale where we manage complexity of our customers and are well paid for that, giving not only customer retention, but also higher margins than the average of the industry.

Talking about M&A, we have started our journey in M&A in December 2021. So it is only a few years, 4 years actually of M&A, and we have completed 5 transactions last year. We see all these as value accretive. We are seeing that they are serving our core strategic interests, have a good industrial and financial fit to the business. And what that means, I will briefly explain. We have started in the year with the integration of Profectus in Germany, giving us in the Thuringia region of Germany, a strong footprint, mainly in the industrial sector. And in the meantime, we have consolidated the management team in Thuringia and have created a very strong base for organic growth in Germany. We have continued with the acquisition of Eolane in France, the French perimeter of Eolane, including the Moroccan sites out of court administered bankruptcy process. That transaction was completed. It gave us a very strong market position in France, especially in the high-end markets of aerospace, defence, railway infrastructure and nuclear power, plus Morocco as an excellent near-shoring option for our various customers.

We continued with the carving-out Geneva site out of Mercury Systems completed in June, at the same time, establishing a strategic supply relationship with Mercury. That strategic outsourcing project allows Mercury to focus on their core competence, while Cicor will support the company over the long term. We are in the process of transferring production to our Cicor sites in the U.K. and Switzerland to provide not only volumes and flexibility, but also optimized costs. The acquisition of MADES in August was a very important milestone because with MADES, we have acquired the leading Spanish provider of electronic manufacturing solutions for the aerospace and defence sector, including strong connections into the U.S. defence industry.

It is -- you can see Spain as a niche market, which it is, but a highly attractive niche market because of the very fast-growing business in aerospace and defence. We ended the year with a very small acquisition, the Morocco and Cleveland U.S. sites of Valtronic, very focused on the medical sector and marking the market entrance in the U.S. So that has been a very strong pipeline that we have completed and how that resulted in numbers Peter will explain now.

Thanks a lot, Alexander. Please let me now lead you through some more details. But before diving into the specifics of 2025, I want to take the long-term view and explain some of the dynamics. Let me start with the overview and our key figures from 2022 to 2025. As you can see, we have introduced the concept of adjusted profitability. Background is that with the increased level of M&A activities, we want to provide a more transparent view on underlying business dynamics, excluding onetime M&A effects. In 2025, we had with the abandonment of the TT Electronics transaction, the acquisition of Eolane out of administration and other transactions, significant onetime effects adding up to CHF 8.4 million on EBITDA. I will explain later -- I will explain more in details those later.

Now looking at the trends over the past 3 years, we nearly doubled in terms of adjusted EBITDA and tripled in adjusted net earnings. Also, you can nicely see how we have been driving free cash flow generation with CHF 110 million just in the past 2 years. For our M&A strategy, this is super important as this creates an extremely solid financial base and provides us financial flexibility to continue to go after attractive M&A opportunities moving forward.

With this over to the next chart. On the left, you see the growth, capturing organic and inorganic growth. And there, we are clearly the fastest-growing listed EMS. On the right, you see the corresponding leverage levels looking at net debt to EBITDA. Now the real important thing is that we have been growing by M&A, but did not fall into the trap of acquiring companies increasing gradually leverage and net debt. We have maintained our net debt levels always at moderate leverage of 0.7 to 1.4 in the past 4 years. Key success driver for this is our ability to integrate acquisitions fast and delivering strong free cash flow with our operational excellence program. In the next chart, I will explain this more in detail.

In this chart, you can see the absolute free cash flow in Swiss franc millions in blue. On top, you can see also the free cash flow as a percentage of EBITDA as line for the free cash flow conversion. In the purple line, you can see that free cash flow to EBITDA, excluding net working capital changes. And as you can see, this line has been really always around 50%. That is also our long-term objective. Now in yellow, you see the total free cash flow delivery, including net working capital changes. You can see nicely that in 2021 and 2022 during the supply chain crisis, we had a negative impact. On the other hand, you see that in 2024 and 2025, we have successfully brought down operating net working capital. Over the past 2 years, we delivered a record free cash flow of CHF 110 million, but I think is really nice also with the acquired companies contributing over proportionate to these excellent results.

This leads nicely over to our M&A execution. In this slide, you see in dark blue, the revenue of acquired companies measured as last 12 months revenue pre-completion all at current 2025 FX rates. In yellow, you see the net cash out for these acquisitions. Again, it's just an indication of the purchase consideration, the net cash outline. We usually pay considerations based on historic backwards-looking profitability. And if you look at all the transactions from '21 to '24, we have acquired around CHF 210 million of revenue, average multiples 5 to 7 and EBITDA margins being in line or being -- EBITDA margins in line with Cicor average. Hence, we had limited margin dilution.

As you can see now for 2025, we acquired the 5 transactions, CHF 221 million, but paid a very, very low purchase consideration and a cash out of CHF 50 million, significantly below historical values. Core reason is that the transactions were special situations and opportunities with Eolane, as Alexander nicely showed being the largest one as we acquired this business out of administration. The opportunity is that we now gradually bring these transactions to Cicor margins. Please let me elaborate more on this opportunity longer term and the short-term margin impact in the next slide.

In this chart, you can see in light blue, the revenue of the 2025 acquisitions, in dark blue the base business including the 2025 transactions. Looking at the dark blue, we maintained around 12% adjusted EBITDA margin with 2025 being negatively impacted by AS and Germany. So our base Cicor business is maintaining a strong profitability and continues to progress as we go into 2026. The light blue reflects the 2025 acquisitions that on an adjusted basis, delivered in 2025 mid-single-digit EBITDA margins. We progress in terms of EBITDA margins in 2026. And in average, we are again at mid-single digit, but we progressed to high single-digit margins going out of 2026.

Now on the top, you see in the pie chart, the percentage of this impact of the light yellow ones -- light blue ones is increasing, and it has a mix impact that brings the average, taking the midpoint margin from 10.5% to 10.3%. Again, the value creation that we bought these companies at very low purchase consideration and now gradually bring them to Cicor margins. And here from '25 to '26, you see that both dark blue and light blue progress, respectively, on margins.

After some of these introductions, let me now dive into the details of 2025. In 2025, we had a very strong order intake with a book-to-bill of 1.05. Net sales up 28% with M&A contributing 32% and FX and organic being negative with 2%, respectively. We introduced the concept of adjusted numbers to exclude onetime M&A impacts for EBITDA. As you can see, the difference in EBITDA is CHF 8.4 million. And on adjusted EBITDA, we progressed from CHF 60.7 million to CHF 64.6 million with a diluted EBITDA margin of 10.5%. On adjusted EBIT, we remained stable at CHF 47 million, and net profit is declining by 5%, mainly due to FX impacts that are onetime in nature. On the free cash flow, we again significantly surpassed our 50% conversion. The free cash flow generation of CHF 110 million, up for both '24 and '25 give us a very solid financial base.

As mentioned, we are providing reported and adjusted performance measures for 2025 and the previous years. All is detailed out in the annual report and in the appendix of this presentation. You can see that 2025 marks a record in terms of M&A activities and hence, some of these onetime effects, hence, the need to really transparently disclose them. For 2025, we had the write-down of the TT transactions, that was CHF 4.4 million on EBITDA. We had acquisition costs linked to buying Eolane out of administration. We disclosed this in the first half of CHF 2.5 million. We had standard purchase price allocation fair value adjustments, and we had some selective onetime restructuring reorganizations to drive productivity.

Now looking now at adjusted numbers at EMS, Alexander has been nicely explaining some of the dynamics. EMS is really the majority of our business at 95%. All of the 2025 transactions have been in EMS, and hence, you see the margin dilution. EMS had a solid year, and we are building market share in a declining market. AS is only around 5% of our Cicor sales and declining 22% on a reported basis. Alexander explained the reasons with the 2 major health care technology customers driving inventory optimization and obviously, the softer end market demand in hearing aids.

Let's now looking at our profit and loss statement. I already explained EBITDA margin dilution and the onetime EBITDA adjustments. Maybe some words on financial results and specifically the net FX result. With the Swiss franc strengthening, we had in 2025 a negative onetime impact of CHF 3.3 million versus a positive impact of CHF 1.4 million in the previous year. So it's a year-over-year impact of CHF 4.7 million. And on the financial results, you see the improved -- well refinancing costs with the [indiscernible] going down and giving us CHF 1 million less of costs.

If you look at the sales contribution, as mentioned, 32.5% M&A, FX and organic 2%, respectively, negative. If we would have consolidated all completed transactions from beginning of the year, our revenue would have been CHF 75 million higher and our current underlying business all-in 12-month basis would have been CHF 691 million in 2025. As usually, M&A results are reported with some delays. But I think it's important to understand what is the real underlying size of the current business.

Balance sheet. Net debt increased as we financed some of the transactions, but our leverage continues to remain very moderate at 1.1. Cicor is clearly in a strong position to continue its growth strategy. And as in the midterm target set, we want to remain below 2.75. Cash flow. Here, you see CapEx with CHF 12.6 million and the cash out, the net cash out for the transactions of CHF 50 million, CHF 49.9 million to be precise. And importantly, free cash flow, excluding M&A of CHF 49 million that basically funded the net cash outflow for the transactions. As mentioned, we expect free cash flow, excluding acquisitions, to be around 50% of EBITDA in the long run. Operating net working capital, we reached 22.3%. Our operational excellence program work and have been driving significant improvements. We have set ourselves now a new goal for 2028 to achieve operating net working capital below 20%.

CapEx. CapEx, we remain with 2.3% below our midterm goal, and we are obviously very selective in driving automation and productivity of our CapEx investments. We are not a high CapEx industry. Return on invested capital remains a key measure for us, and we target to achieve above 15% midterm. We show in this graph both reported return on invested capital as well as adjusted ROIC. In 2025, we maintained adjusted EBIT on a rolling basis stable. You see this year CHF 48 million to CHF 47 million, but had higher invested capital with the completion of the 5 transaction that created a significantly more sizable business. As we are progressing on margin improvements, this will drive adjusted EBIT and therefore, also ROIC back up towards our midterm goals.

Looking at our share structure, most importantly, 99% of the mandatory convertible bonds are converted ahead of the mandatory conversion '27. We have a very simple capital structure with 4.4 million shares outstanding. On earnings per share, I would like to rather go straight to the next chart where you can see the long-term trend. With our growth strategy, we have been building long-term value and adjusted earnings per share. If you exclude bond and FX impacts for 2025, we would have again progressed in terms of earnings per share and nicely been developing from CHF 2.85 to above CHF 8 over the last 5 years.

If you look at the purchase price allocation, we completed 5 transactions, and it has created a negative goodwill of CHF 1.4 million. In other words, this means that we acquired these 5 businesses more or less at fair value of the net assets. It highlights our disciplined approach on M&A and our moderate multiples that we have paid on these transactions. You can see also Eolane created a significant negative goodwill of CHF 17 million, but MADES, that is a very profitable and a higher profitability than Cicor created a positive goodwill of CHF 10 million. In balance, we paid the net asset value.

Now looking at the past, we have been growing over the last 5 years, average 24% year-over-year for 5 years. We are, therefore, ahead of our glide path to achieve CHF 1 billion in 2028 and require going forward only 15% in the next years to achieve our midterm objectives. In terms of details, M&A contributed 19%. FX was negative 2% and organic growth just above 6%. That as Alexander already said, is ahead of the market growth of 4%. So overall, we have a solid financial foundation to continue our growth strategy and achieve our midterm goals in 2028.

With this, please let me hand over to Alexander for the outlook in closing.

Thank you very much, Peter. Yes. So how are we starting into this year? And what do we expect for the year? Our priority very clearly is the continued integration of the 5 acquired companies. It remains a key priority because we want to drive aggressively the benefits like cross-selling, gaining new customers in the markets that we entered and so on. That remains a priority even after the normal integration work of most of these transactions has been completed. We expect to return to organic growth. Overall, markets are expected to return to organic growth in Europe. And we, at Cicor see with the underlying book-to-bill rate of 1.05 that we will definitely and we expect to definitely return to organic growth, albeit with a slower start to the year and looking at phasing of projects with our customers, momentum building throughout the year.

Margin improvement, operational efficiency is in focus. We are, of course, looking towards the improvement of margins of the acquired business, but also continuing to drive the operational performance of our existing business. Here, specifically said with Eolane, where we are on a positive glide path that should lead us from low to mid-single-digit margin when we acquired the business after integration to a high single-digit margin that we are targeting for the end of this year. Obviously, the anticipated continued appreciation of the Swiss franc remains a challenge. We are seeing heavy fluctuations over the past weeks and months, which is not posing a problem for us on a transactional basis because we can manage this through pricing, natural hedging and the way we are sourcing together with cost measures. However, this does, of course, have a translational effect on our results.

All in all, we are expecting 2026 sales of CHF 700 million to CHF 750 million and an adjusted EBITDA of CHF 70 million to CHF 80 million, which this has to be stated specifically these days, assuming stable geopolitical, economic and financial conditions. A small remarks to the EBITDA. Here, I circle back to what Peter has said already that with our largest acquisition Eolane being on the glide path towards high single-digit margins, the average in the year will obviously still be a bit lower. We will continue on our M&A strategy, but will remain extremely selective and disciplined with relation not only to strategic matters like industrial fit, cultural fit and so on, but also being extremely disciplined financially.

With that, I want to thank you very much and open the forum for questions.

[Operator Instructions]

Our first question comes from Chiara Di Giammaria from Berenberg.

I have 2 questions, if I may. The first one is whether you have been or you will be impacted by the memory chip shortage. And the second is on your guidance for 2026. So you guys for adjusted EBITDA. Can you remind us if you expect any one-off for the year?

Thank you very much for your questions, Chiara. Are we impacted by the memory chip price increase? Yes, we are to a limited extent. So the applications that we manufacture are not heavy users or consumers of memory chips. And in those instances where we are seeing an impact, we are passing those on to our customers. And with a few customers, these discussions are already in process or completed. With our guidance, you have seen that the adjustments were truly made for one-off in M&A. And the guidance we are providing is without any additional M&A. So here, you would not have to expect big adjustments in this year, obviously, unless there are major M&A projects, which on the other in turn will further increase top line and bottom line.

[Operator Instructions]

The next question comes from Marti Queral Ferre from UBS.

My first question would be on the book-to-bill, please. I mean I see that it deteriorated in Q4 compared to Q3 slightly. So could you elaborate a bit on what were the drivers of this deterioration? And also on what is the visibility that you currently have in the 3 different core end markets, please?

Thank you very much, Marti. The book-to-bill rate, it depends very often on larger orders. So you have to expect certain fluctuations from quarter-to-quarter in the book-to-bill rate. The high order intake was primarily driven by orders from the defence sector. I should say, however, that's not all partnerships are immediately turning into orders. And obviously, orders are not turning immediately into sales. So we have significant new partnerships and customer relationships and programs won. And these will, over time, turn into purchase orders. Also in the other markets, the non-aerospace and defence market, we have clearly seen a stabilization. As I mentioned, the industrial sector has seen some organic growth last year already. So here, the worst is clearly behind us and the cyclical recovery of the industry is beginning.

The trough of the medical market was a little bit later. But here, please go back to the fact that we have seen 2 customers that were very negative last year and are much more positive this year. So we expect positive momentum in all 3 markets with the biggest positive momentum being in aerospace and defence.

Okay. My second question would be on your EBITDA guidance. I mean, if I take the midpoint of the guidance, I think that the drop-through from sales to EBITDA is of around 10%, which seems rather limited to me. My question here, I guess, is, I mean, is this EBITDA guidance mainly impacted by Eolane? Or is there also an element of cautiousness given more limited visibility outside defence? And also one follow-up on the EBITDA. In Slide 25, I mean, shall I read this as that excluding Eolane, the 2025 adjusted EBITDA margin would have been around 12% for the year. Is that right?

Let me answer these questions, Marti. Thanks a lot. If I come to your first question on the slide, the dark blue area is the business of Cicor excluding all 2025 transactions. So obviously, Eolane has the biggest impact. And you're right that the business, excluding the 2025 transactions was around 12% EBITDA margin. That may be on the second question on the clarification on the chart. On the midpoint of the guidance, that is a 10.3%. I think it's -- this is what I tried to illustrate with the pie chart, right, that both the light blue as well as the dark blue progress very nice in terms of EBIT margin progression. But because the carryover, so the full year impact, like the CHF 75 million that you would see between 25 reported and pro forma comes in, this comes also in a mid-single-digit margin and hence, drives this margin dilution. That is the driver.

Okay. And then my last question would be on a couple of business points. The first one is in some recent contract wins in the A&D space. Could you give us some color on what are driving these wins here? And then on Medical, you also mentioned that the destocking from medical customers is over. So shall we expect some restocking here? Or what are your expectations for this year?

Let me answer the second question first. On the medical side, this was really a massive destocking efforts to drive cash flow at our medical customers. Here, I do not expect a restocking, but a return to normal -- a normal balance between their material procurement and their demand. So they have reduced their inventory levels and are now running with those lower inventory levels. In Aerospace and Defence, I've mentioned that we have seen a broad-based activity where we are winning new customers and new businesses. So we have not a single outstanding huge contract, but many contracts that are in the mid- to high single-digit million Swiss franc amounts.

The next question comes from Alexander Zienkowicz from mwb research.

I have one on the defence spending cycle. When do you expect the recent increases in European defence budgets to translate into meaningful production volumes and revenue contributions for cycle? And the second one will be on your M&A pipeline, but maybe first on the defence spending.

Thank you very much, Alexander, for your question. It is indeed one of the important topics and a topic that we have also focused on in our last Capital Market event end of last year. Indeed, when a customer and large integrator wins the program, it takes several years until the delivery starts. I think everybody knows what is happening for those of you who are in Switzerland or looking at that where it is set many delays, for example, for [indiscernible] deliveries to Switzerland. So we are seeing a program is won by one of the major primes and then it can take 3 years until they are placing their orders. And that is now with us, and that is now exactly what happened.

The order intake of the primes has started to increase significantly in 2022. And 3 years later in 2025, we see the increase of order intake at our end. So now we are entering that growth phase and revenue is typically then coming 1 year later. So 2022, the first major orders have been issued to defence primes. 2025 orders are reaching us, 2026 delivery of these products is starting. So you can expect that what has happened after the start of the Ukraine war and the realization that Europe has to rearm itself is that now we start seeing that translating into business for us.

And maybe a follow-up to that. I think during the acquisition of Mercury, you mentioned that you expect follow-up orders. How is that developing?

That is developing as expected. So we are seeing that we have acquired a large order book together with the outsourcing program. And now it's a regular project-by-project winning of new businesses.

Okay. Maybe one on M&A. Could you shed some light on your M&A pipeline? For sure, you have a bit to digest right now. How to think about your pace this year in terms of acquisitions? And the second part to this, if I recall it right, you mentioned transportation or rail as an interesting field. Any update on that?

Okay. Thank you very much. There's not a specific activity that we have on M&A related to railway infrastructure. We are developing that business very much organically. On M&A pipeline, you will understand that I cannot give any details. It is indeed true that acquisitions are very strategic. On the other hand, opportunities are there when they are there. As we have said multiple times, Peter and I, we are extremely selective on who we want to acquire. And that -- having said that, we have to take the opportunity when it arises, especially in an environment where we see some of our peers making acquisitions at what we consider inflated prices. We are taking the opportunity when we have, for example, an exclusive transaction of a company fitting very well that we can acquire at reasonable multiples. So it is impossible to provide a schedule here or to have a firm plan. We have, on one hand, to be super strategic, but on the other hand, also a bit opportunistic and act when the opportunity is there.

The next question comes from Bernd Laux from ZKB.

Let me ask 2 questions, please. The first one for Peter. Is it correct that you started to use factoring to optimize the working capital? And can you comment on the extent of factoring being used at the end of 2025? And the second is probably more for Alexander and related to Eolane. How do you see the year progressing? Are we starting at basically the same profitability level at which you acquired the business? And then towards the fourth quarter, you'll get a hockey stick like improvement in the profitability? And should that profitability increase then feed through to next year and lead to a clear double-digit EBITDA margin for the acquired French business?

Thanks a lot, Bernd, for the good question. I love this one because you already digged into the details, so wonderful. Let me comment on the factoring because I don't think that this should be perceived as a broad-based approach. But Eolane has, in the past, used factoring and we have with the transaction taken over factoring. So you see this one as well in the purchase price allocation. We have taken short-term financial liabilities of CHF 6 million, and we have continued with program. And we have expanded it on a nonrecourse basis for the businesses that we didn't acquire in a share deal, but in an asset deal. That is the background. This was well established there. So we just continued running with factor with some smaller adaptations, obviously, because of our scale and our accounting approach. But it's not a broad-based approach. It's just a continuation of what had been done in Eolane in the past.

And on the question of Eolane, Bernd, we have -- the business had been loss-making also on EBITDA level before we acquired it out of restructuring and administration. We have reduced headcount by 110 persons, mostly in headquarters where we're seeing far too high SG&A expenses, and that has turned the business positive in June last year and ever -- now the question is how and when do we bring it to our Cicor margins. First of all, we managed the integration, also the operational integration, meaning bringing operational KPIs like quality, on-time delivery to the levels that our customers expect from Cicor.

Secondly, we were seeing, and this was faster than expected. We were seeing customers coming back and customers giving us additional orders, very significant orders that are related to French defense programs. And these orders are converted into sales right now. And that is also driving profitability. It's driving profitability together with continued optimization measures on the operational side. So you mentioned double-digit margins. Let me be a little bit cautious. I always said we want to come to margins that are approaching Cicor margin at the rest of the business. And obviously, that's something we consider very achievable, and it will provide exceptional value through that transaction.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Alexander Hagemann for any closing remarks.

Yes. Thank you very much. Thanks for your participation in that call and spending the last hour for us. It has been definitely an exciting year. It has been an exciting year on many fronts. You have seen us being very busy in making acquisitions that are creating value. You have seen us not pursuing acquisitions that are not -- that would not have created sufficient value and at the same time, focusing on our core strategy that we have explained multiple times. So it has been an exciting year, and we are starting into the new year with a lot of optimism based on activity in the market that we are seeing over the past 2 months.

With that, thank you very much. I hope to see many of you very soon, somewhere in the world, and have a great rest of the day. 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. Goodbye.

So good afternoon, everybody. I wish you a very warm welcome to our 2025 Capital Markets Event from Cicor Technologies. I'm really happy that so many of you came here. And this is the first time that we do this as a hybrid event. So you saw all our help us here on technology. So this will be not only a live stream, but also interactive so we can also receive from the some 60 or so online participants that we have.

So we want to give you an update about what we do, dive deep in some of the areas that keep us busy. And to do that, we do not only have Peter Neumann, who you all know, our CFO, with us, but we have also Stefan Koller, our VP of EMS Sales. We have Franck Mayau, our Head of our French business. And online, we will also have Jack Symonds, the Head of Sales for our Aerospace and Defense business located in the U.K.

So let's start this. So we have an agenda here that you can see. We want to give you some business and market updates where we are standing, followed by Peter discussing financials, midterm targets, where we are. And then we spend quite some time on M&A, M&A as growth drivers, which has 3 elements. It's a bit the history of what we have done, including the 5 acquisitions that we have completed this year, talking about, obviously, our offer for TT Electronics, but also give you a flavor of how we integrate companies. And here, we got many questions because we have acquired Eolane out of bankruptcy. And therefore, it's very good that Franck Mayau, he will tell us how they're doing and how he is working with his team to turn around the company and to integrate it into the Cicor Group.

Then we'll talk about market leadership, market leadership in aerospace, defense and also the medical side, where Stefan will present specific sub-vertical example, go deep here and Jack give us an overview about the aerospace and defense market. So then we obviously have enough time for Q&A, both here from the room and for our online guests before we go to the upper row and can have more discussions.

So let's talk about market and business. And this is what we present normally as a one pager. You see, however, some updated numbers here because there are some new market numbers. They are very difficult to come by. It's mostly anonymous questioning of hundreds of our peers in Europe, and there is an independent body aggregating this data and giving us on an anonymous basis. So we continue to do what we always do, and we are never going away from that focus, engineering and designing electronics for our customers and manufacturing, combined with the high-tech offering of substrates. That's what we do for many years, and that is completely unchanged.

In a market, as you can see, which is roughly EUR 55 billion in size. That's the European market for electronic manufacturing services, the market that we focus on mostly. It is a market that is very fragmented, 1,900 companies operating roughly 2,400 factories across Europe. So very big with a big tail end of small customers. And as you can see, amongst the listed companies, Cicor is now #2 in that field. If you take the unlisted companies also, we are #4 in that market.

Now we have grown the market and our sales together with market growth that you see, we have grown organically. We have grown through M&A. Peter will talk a bit about that with increasing margins and the decrease you saw in the reported number and the midpoint of our guidance. This is the dilutive effect of Eolane, and we'll hear from Franck how we will get away from that dilution.

The 3 markets, I come to that, extremely important for us are the 3 verticals that we are in. This is really how I like to call it electronics for applications that matter. It's not the stuff that we like to play around with. It's the stuff that lives depend on or big assets are depending on. So that's what we are focused on, and I go a little bit in detail later. So that's what we do.

Let's start. I have 2 sections here, a few slides only. First talk a bit about the markets to give you more background about where the market for electronic manufacturing services stand right now in Europe. And then I will go more on the CCaaS side, what makes us unique to address these markets. So what you see is a market that -- and these are now really the reported numbers. You see that on the top left, a market that is growing very differently coming out of COVID, growing very slowly. Then everybody was filling up their inventories growing 16% into '22. Then we have negative growth and growth is expected to recover to 5% to 6% from next year onwards.

This, however, is only half of the truth because the full truth is that the third bullet point from the top, there is a big overlay of one player, world market leader, Foxconn, and they are building these servers for the big server data centers that are built right now in Europe. Everybody, you know this announced now multibillion euro investments into European-based servers. They have 2 factories, one in Czech Republic, one in Serbia, making these servers. And that is a growth business, as you will see on one of the next slides.

If you go into the core of the business, the core of the business, so everything excluding servers, then this is what you see. That's the growth that you see. And we had last year a negative 9%. That was mostly due to destocking and some issues in markets that we don't serve like the automotive market.

So you also saw in the reported numbers, Cicor had organic sales of minus 2%, so 2% contraction organically in a market that is doing minus 9%. So you see still significant market share gains last year.

Now we can dissect this market. We can dissect it by regions, and we can dissect it by applications. Let's start with the regions. These are the Western European, let's say, the most relevant Western European markets. I picked only Western Europe because that's where the customers are. And then there is Eastern European sales, which is feeding into West Europe. But that is important because you see a massive difference. You see countries with a high share of aerospace and defense business. That is specifically U.K., France, Sweden, Norway. These countries have very highly developed aerospace and defense market. The aerospace and defense is a big portion or a relatively large portion of the market. And you see growth, Spain also having quite some defense business, growth between a positive 1.1% and in Norway, minus 7.2%. Why minus 7.2%? Because they have also a big market for electric vehicle charging stations and that collapsed.

And then at the other end, you see markets that are mostly in industrial equipment and automotive. And this is specifically the DACH countries, Germany, Austria and Switzerland. You see these were really the laggards, minus 12.1% to minus 13.8%. This was a catastrophic development last year due to the exposure to that market. And we have seen in Germany, especially quite a number of bankruptcies, even of larger players doing EUR 100 million or so.

So it's very important and very telling to look at the markets. The more the share of aerospace and defense, the better the growth of the market. And aerospace and defense, you will hear that also later in the talk from Jack will continue to be a structural growth driver of the market with Germany, the rookie because Germany has a relatively small and underdeveloped aerospace and defense supply chain, which is, however, right now changing massively due to obvious developments that we all know.

Now let's dissect by the verticals. And the first 3 that you see here, industrial, aerospace, defense and health care technology, these are the 3 focus markets of Cicor. That's where we do almost everything that we do. You see aerospace and defense, 10% growth; industrial, minus 10%, very cyclical and destocking in health care, minus 6%. So which comes a weighted average of minus 6.6%. Again, Cicor -- so this was doing better than the overall markets. Why was overall market terrible? Look at consumer, minus 25%, just to give you the feeling here. So Cicor, minus 2%. These 3 verticals or minus 6.6%. So even within these verticals, we were able to gain market share. And that comes to the complete market contraction last year of minus 9.8%.

Then you see the EUR 3 billion, EUR 2.5 billion growth in computer, majority data centers, and that's all going to these 2 Foxconn factories, supporting and they will continue to grow, supporting those -- the big superscalers now building data centers across Europe. And everybody knows the story in which country you may be about big multibillion investments by Meta, by Microsoft, by who not. And that brought the overall market to minus 3.5%.

So these are the only reliable numbers that we have 2024. But I can tell you that '25 is very much similar, but the speed of the decline has reduced and come to a standstill and market expected, as I showed on the first slide, expected to return to growth next year and the expectation from our peers is plus close to 6% growth of the market next year.

So Cicor gained market share. You saw this, gained market share last year, gained market share first half this year. And why? We have -- to those of you who were here last year, we have presented our strategy, but let me summarize what we do and where we feel that Cicor is in a unique position in electronic manufacturing services around 3 dimensions.

First of all, it's applications that matter. That's how I like to call it. Applications that matter where electronics plays a very important role, as I said, safeguarding of lives like this person injecting a plane here or in implants or in any other aerospace defense application, many of the medical applications. Applications that matter are typically more regulated, less price sensitive, have more stable customer relationships and allow us to play our strength very well.

Secondly, on the left, high mix, low volume at scale. This is also a new term, and I think it describes well what we do. High mix, low volume means we don't do iPhones. We don't do notebook computers. We don't do the commodity stuff. We are doing -- we are managing a lot of complexity for our customers. And Jack later will show one example where you see it's a very dynamic setup where many of our sites of our factories are serving many sites of our customers. So high mix, low volume is a business that many of our peers do in Europe. However, we do it at scale. It means through our setup, we combine this high profit and strong customer retention business model of high mix, low volume with scale because we are in so many countries, we are now CHF 700 million run rate, plus/minus, and we get quite a lot of the benefits from scale on material procurement, for example, on leveraging our overhead base, our SG&A base and so on and so on. So very important.

And the third one, that is also totally unique pan-European market access. Typically, customers in the applications that matter, they need to be very close to their suppliers. There's always exchange, always visits, always people coming, discussing technology, discussing quality and so on, new product introduction. And that is why we need to be close to our customers. Pan-European market access, Cicor is the only player in our industry offering pan-European market access. It's a real uniqueness.

Now let me go through this -- through these 3 elements with the examples that we see here, aerospace and defense, saving lives. That's what it's all about. Saving lives in commercial aviation, in -- like in this case, in fast jets or also in developing the capabilities to deter, to attack and so on. It is all about saving lives of the people.

Health care technology is -- we have a number of subverticals that we're addressing. Very important is robot surgery, important is smart drug delivery, but this is what Stefan will talk about, hearing better. This -- it is about the improvement of the quality of life for an important part of the population. Stefan will give some numbers and some examples. Health care is -- it's now getting a bit bigger through our last acquisition, but so far, it's 20% of sales. And what we are doing in industrial, a lot is driving miniaturization, driving precision, driving these areas, for example, in sensor technology. Sensors is one of the fastest-growing areas of our business, but also robotics control systems, semiconductor equipment.

So I think you get the feel. It's not the remote control of your TV or like this. This company here would I think it's Logitech, very excellent company, excellent Swiss company, but they would never be our customers because this is high volume. This is high price pressure. There is every happen counts in this application. That's not for us. But then because we all love to buy this, they make millions and millions and millions. So it's low mix, high volume, high price sensitivity, low customer loyalty. So this is not for us. We are in these applications that matter.

High mix, low volume at scale. I mentioned it briefly, we have no cluster risk from individual customers. We have -- our largest customer does 5% of our revenue. We are -- I would say, today, we are playing best with customers between CHF 5 million and CHF 50 million annual revenue. However, this largest customer is a customer that we are serving in many different platforms in many different locations. So the individual exposure is not the 5% of our revenue, it's maybe 1%. That's what may be the size of the biggest program that we are supporting is. We have 13 customers above CHF 10 million sales, just to give you some figure. So we like -- as I mentioned, we like these customers between CHF 5 million and CHF 50 million and market position I've mentioned.

One aspect that is also important is that through the broad number of customers and the distribution in the subverticals, we are very decoupled in the cycles. The defense cycle is very different from the commercial aviation cycle, from semiconductor equipment, from general medical, from capital goods, et cetera. So and if you look at Cicor, it's balancing out very often these individual cycles of the sub-verticals. We do that through agility and flexibility in that a decentralized organization gives. If we do high mix, low volume, we need a totally flat organization, low SG&A, assign responsibility to our MDs like Franck and give them the opportunity to drive their businesses in the most entrepreneurial way. Of course, we drive with KPIs, best practice, benchmarking internally, et cetera, customer relationship management, but that is really important that we keep this decentralized organization.

There is a very popular book by a guy named Taleb. He published it 2013, I think, is called anti-fragility. It shows how decentralized organizations are massively more robust in challenging times and changing times. And when I heard about this book some time ago, I thought, wow, that's exactly what we do. It anti-fragility in a decentralized organization.

Now this is where we are. Footprint 2020. It's a little bit misleading because China is a big spot on the map, but it was only a very small factory at the time. So it was Switzerland, Germany, Romania, China, Vietnam, Singapore and Indonesia. But market access in Europe was mostly linked to Germany and Switzerland, a little bit of Northern Italy and so on. Today, we are home in the U.K., in Sweden, in France, Spain. We have manufacturing in Morocco, Tunisia, U.S. and more in China.

What does it give us? It gives us two things. It gives us, first of all, direct access to 70% of the electronics market in euros of Europe. So we have direct access inside the country without having to export to 70% of the European market. Nobody else has that in our industry. And secondly, if you're looking at how our manufacturing footprint is, we can offer tailor-made manufacturing solutions, sovereign capabilities. That's normally what you call that if the RUAG gives a purchase order, they want this to be manufactured in Switzerland. If BAE in the U.K. gives an order, they want this to be manufactured in the U.K., all for security reasons. And it goes around Europe. So sovereign capabilities are important.

Nearshoring. Nearshoring is important where we are offering Romania and Northern Africa as options. Northern Africa, really up and coming as manufacturing locations. Cost-wise, very competitive. Some of the countries quite stable. So not worse than what you find in Southeast Asia. And local for local. Local for local is also important for many customers. Please manufacture for me in the U.S., please manufacture for me in China because I have my factory in China. That's what customers are telling us.

So now we can obviously only offer this as we have the scale that we have, the size, the market position in Europe, we offer this uniqueness. So these 3 elements that I mentioned, they create a very unique position for Cicor, allowing for two things: number one, scalability, so organic growth, further market share gains; and secondly, superior margins.

So how does that play out? You can see that here. These are the listed peers of Cicor. That's first 3 quarter sales from the last 3 years, '23, '24, '25. This is all listed. So these are all reported numbers that we see here. And interesting, look at the #1 and 2 Scanfil and Kitron. Look how much they were -- how much bigger they were than Cicor in '23 and where they are now. Now we are almost equal. Now we are almost equal to these players. And if we take it pro forma, including acquisitions, we have surpassed Kitron.

So that's where we are. NOTE and Incap the same, really, these companies also Scanfil and Kitron saw massive declines of the business, 15% declines of the business last year. We had only this minus 2%. And of course, we had acquisitions there. The only company growing at the same pace as HANZA of Sweden, they are following the same strategy as we do.

So that's where we are and this is the outcome and result of what we have done over the past few years. So that has given you some view of the markets where we are, how we differentiate and how that resulted in growth.

And Peter, next to you.

Thank you so much. Thanks, Alexander. I will talk a bit about financial results. And I start with looking backwards longer term in history. I come to current results, and then I go into obviously, the midterm view and where we want to go in 2028.

So look, in the last 4 or 5 years, you've seen that we have moved from a manufacturer with CHF 200 million of revenue plus to -- now you see CHF 109 million to CHF 259 million. So really a factor 2.5 in terms of growth. And what is very nice is we have done with a balanced organic and inorganic growth and have consistently built margin along the way. A point here, you see first 9 months, we are already again at a growth of 25% with a large portion driven by inorganic growth.

Now if I look into half year results and half year result is the latest numbers where we disclosed full P&L, cash flow and so on. We have been growing 21%. And you have seen in the Q3 update, we have gaining momentum in terms of top line and order intake. Where is very nice is also you see if you exclude the Eolane acquisition, and I come to this, Eolane was for us a very attractive acquisition, entering a real strategic market, France at a very moderate net cash outflow. If you take this out, we have continued to build margin and also we have continued to deliver free cash flow. We always look at a free cash flow conversion to EBITDA above 50%. So if you exclude this Eolane impact, we had 63%.

For ones that are new to Cicor Eolane, we bought out of administration process. So it is a real administration process. We bought them out of very low valuations. But obviously, it meant that we had certain special structures in terms of obviously ramping up this out of bankruptcy and building up net working capital. And that's the way why we have Franck here because we believe it's a great value creation opportunity.

Earnings per share, very important. You see here 2 lines. One is the reported earnings per share in blue. We've put out the yellow line what we have. We have a small impact on -- in terms of FX impacts that is onetime in nature. But as you know, FX fluctuates. Last year, first half, the Swiss franc was getting weaker. And this year, it again was the opposite. So it has the up and the down. If you look at the yellow line, the earnings per share really over the long run is really delivering in line with our overall performance and obviously is a key indicator of how we are progressing in terms of profitability.

One point, we had with the mand convertible bond, a capital structure that was more complicated or more difficult to read. The good news is 99% of the mand convertible bond are now converted. So if you look into the number of outstanding shares and well -- if you look at the number of conditional shares for the mand convertible bond, there is only a small number, 13,000 left half year. And you see that we reported an outstanding shares with 4.4 million, the number that are very easy to use now.

Now that was to the current results in terms of half year and where we are. It is important to look back into our -- and forward to our midterm goals. We have set out our midterm strategy and the 2028 goals under the umbrella, creating together. We are tracking very well against our midterm objectives. You see here, we've set organic growth, 7% to 10%, achieving above CHF 1 billion revenue. This is a balanced organic and inorganic growth strategy and profitability in the range of EBITDA 10% to 13%.

So really, this is the midterm goals that we have put out. I put this into the context of the past performance. Here, you see what we have achieved in the first 4 years from 2020 to '24. Remember, in '24, we've put out the midterm goals and how it fits into the strategy. We've achieved above 8% organic growth and an inorganic growth of close to 16%. And the Swiss franc has been consistently strengthened over the past 4 years. And for all fairness, it continued to go along this way. And reality is we have also built this into our midterm goals.

Interesting is, and I think this leads very nicely over in the midterm goals, we said growth year-over-year of 20%, organic 7% to 10% and inorganic above 12% to 15% really this year. If you look into our results and what we published in Q3, we are tracking much stronger on M&A. We have done significant M&A work. And that's why also we said we want to obviously spend more time here to talk through the acquisitions we have done this year and obviously, some of the announcements we have made.

So thank you, Peter. And M&A, we present as a conversation. And it is what M&A is. It is a conversation. It is something where in my management team, Peter, Marco, the COO, but also Stefan as a sales leader or local MDs that are involved are really working together. That's extremely important for our M&D approach that we are doing it together as a team from the top. So that's what we have done, 13 acquisitions starting in December '21, so exactly 4 years ago.

What I'm always saying here, we are extremely disciplined if it comes to markets and quality of customers. So we only like to acquire what is exactly in our markets and where the customers have a high quality, good names, high value-add margins, so high gross margins with these customers. And if we do that, then we can be very agnostic to the way of transaction that we do. We have seen succession like Axis and a few others. You have seen carve-outs like Phoenix Mecano, who look for a better owner. You see restructuring like Eolane or the selective addition of new capabilities like Evolution Medtec and NEP.

Very interesting also, and we may even see more of that in the future, are carve-outs from OEMs who want to go fabless because many are now rethinking their strategy. And Mercury, that was a Swiss site in Geneva that we took over from a U.S.-based maker of aerospace defense equipment, and we are in the process of moving manufacturing to the U.K. So that's what you can expect from us to see. We are extremely disciplined with regards to the quality of customers and the markets they serve. We can be quite flexible with the structure of the transaction.

Now this is what we have closed this year. Profectus, mostly industrial and security applications in Germany, and we have -- we are managing that now together with another company in Thuringia, Eastern Germany that we acquired from Phoenix Mecano a few years back. Eolane, we will hear more about that. As Peter said, coming out of restructuring, offering us market entry and the near-shoring option of Morocco, highly attractive. Mercury, that is, as I mentioned already, the carve-out of manufacturing, then going fabless and now having become one of our largest customers as an effect.

MADES, also carve-out of a larger group, very, very successful, very profitable, good business, mostly in aerospace and defense. Having customers in Spain, in Europe and also in the U.S. They supply to the U.S. market. And the latest transaction, Valtronic, a small transaction, however, important because it doubles our capacity in our Morocco factory reporting to Franck, and it gives us the first footprint in the U.S. So what you see here this year is a massive strategic progress that we see opening up new markets, opening manufacturing locations elsewhere and driving our market growth.

Yes. But the most important element is probably integrating it properly. And what you see here is our integration playbook for ones who have been here last year, it is unchanged. We continue to have a foundational integration, and then we have what we call the key value drivers, foundational elements like financial reporting, controls, but also IT, cybersecurity, very important, HR, right KPIs. And obviously, if you look into the branding and administration elements like insurances and these type of things. And this is also what we will talk later on. I just want to say when we go to France, this is exactly what we have done there as well.

And interesting -- and then we have the key value drivers. I would point out two. Sales really driving market leadership. Again, that's what we will talk later on. And obviously, sourcing, procurement is for us always a big value driver because we are really giving scale to some of the smaller companies we acquire. I always say like a perspective, we acquired Profectors, as Alexander mentioned, in Germany. They paid payment terms. So half of the P&L is in electronic materials. They have been paying 30 to 60 days. Now we are at 120 and 150 days. You get them straight from day 1, these type of cash synergies, and you can imagine that the cost base is significantly lower.

The important thing is that the vast majority, so more than 90% of this integration plan, we closed within the first 6 months. And that is really important because as we are doing acquisitions, having this integration completed before moving on to further acquisition is very important. There is one element I always say, how are we doing this one is, first, technology. A lot of the elements that are important for us as a group run in applications that are agnostic to ERP systems. So get the data out of all the different systems but run across the platforms.

And secondly, we don't integrate ERP systems. It really doesn't financially make sense and also from the synergies. We do this more with interfaces, and we have done this very successfully. That enables that we are through the majority. I mean, look, if you look into what we have done between Mercury, obviously, Eolane, not Valtronic. Actually, everything except Valtronic, we are pretty much completed with the integration. And we thought France because it's obviously there's integration work and value creation is a good one to pick.

Now as last year, I want to share some results on M&A. As you've seen from Alexander, there was a heavy weight on M&A this year. That's why I really point out at the bottom, close to CHF 200 million of revenue, so vis-a-vis last 12 months before acquisition numbers have been acquired in 2025. So it's a heavy weight on this year and CHF 8 million EBITDA because of some of the special situations that we have used. Okay?

Now if you look, we have consistently delivered on growth where these companies are at 2025. And especially, we have developed profitability, plus 32%. Again, this is the full weight of the acquisitions that came with us in 2021 up to this year. And then obviously, free cash flow generation, we have recovered 38% of the free cash flow of the net cash outlay that we had with these acquisitions. So very strong results. Obviously, if you look into it, A&D, really the A&D focused companies have a very strong momentum, positive order book and obviously, outlook in line with the economic development. Germany has been softer. And then obviously, engineering, we really drive and integrate them into our joint network.

So -- and that is the foundation for what we proposed and agreed with the Board of TT Electronics. We know TT Electronics and Peter will give a bit of a review of what we have done with these 3 sites that we acquired 18 months ago. So we know the company for over 2 years. It's a company that, honestly, in U.K. stock market maybe has suffered a bit due to what was perceived about the business. We find it to be a company that we really like, that we find operationally strong in the factories that has very strong customers.

You see here in the industrial, you see in rail, Alstom, you see GE, Schneider Electric, you see Applied Materials, Casco in railway infrastructure. In aerospace, defense, Rolls-Royce, Honeywell, Parker Meggitt, MBDA, Thales, Ultra, BAE Systems, et cetera, et cetera. So you see just in medical customers like Thermo Fisher, Abbott, Medtronic, amazing customer portfolio. And that's -- you remember what I said earlier, that's what we look for. We look for total focus on the verticals that we like, and we look at very good customers, and they do have very, very good customers.

So that's the company, the way we see it. And that's on the bottom, you see some of the numbers that they delivered in 2024. Yes. And what we propose, maybe we go a bit in detail here, Peter.

Yes, I can go a bit through the transaction. We had initially had an offer that was 2/3 cash, 1/3 share. We improved the offer to a final all-cash offer. Final is a British term. So this is the final offer. So we cannot go up further. And what this implies, it's both obviously at the same valuation. We would have an enterprise value of close to CHF 400 million for TT. If you look at the key financials, we have -- this would make us a company of CHF 1.2 billion of revenue and EBITDA close to CHF 140 million. This includes -- and this is a very specific elements in the U.K. If you do a claim, basically synergies, you have to certify them. So we went through a process of certifying the synergies. We have identified GBP 13 million of synergies. And obviously, this was possible because we -- it's a friendly takeover, and we could do proper evaluation of the synergies and obviously work together with the team on respective due diligence. And it also gives us a very strong playbook for when the integration later on.

It is highly EPS accretive, above 30% by 2028, and it would mean a leverage -- pro forma leverage between 2 and 3. So it's a wide range because there is obviously depending on the choice of cash or shares that the TT shareholders have. And yes, we come later to the time line, but after a successful approval, then we need to go through regulatory approvals, meaning we would close in the first half of 2026.

And so how do these 2 companies come together? And I'll just repeat again, you hear us repeating the same things, some of these things 9 years in a row, repeating us always the same things. Stick to the key markets. And now look at the revenue by markets. On the left, you see Cicor, then you see TT Electronics. This is 2024. And you are seeing or for Cicor pro forma 2025 for TT Electronics '24 announced. You combine that. We have 28% aerospace and defense, TTS 27%. Wow, that's amazing. We have 36% industrial, they have 33%. We have 19% health care. They have 23%.

So if you bring it together, that is an almost perfect match. There is a lot of -- there is some customer overlap, absolutely, where we can make stronger combined offers, but there is also a lot of unique customer relationships where we will start immediately cross-selling. You see other business, 17% in Cicor, a big portion, for example, is transportation, including rail, railway infrastructure has become much stronger with the acquisition of Eolane France. And you see in TT Electronics distribution. These are the broadline electronic component distributors. And this is what we call the business that we call noncore business that we are putting under strategic review once this is done. But so a perfect match.

If you go to geographies, you see much more complementarity here. You see that Cicor, I have to say, yes, we have grown. That was our strategy in Europe. but we are relatively weak in the Americas, 4% of sales only and 10% in Asia. TT Electronics has a very well-balanced regional split. You see that North America, over 40% Asia, 1/4 of the business. Biggest country -- biggest countries for Cicor are Switzerland and U.K., biggest country for TT is the U.K.

So you see in the mix, bringing both customers together that now we can -- together with TT, we can make that important step to break out of Europe and move into the U.S., at the same time, offering very strong, especially in China, local for local manufacturing capabilities. So that's how it looks. It is an almost perfect fit.

Yes. And look, when we were last year here together, we talked Project Albert. That was, at that point in time, our largest transaction, and it was the acquisition of 3 TT sites in March '24. And look, it's -- obviously, we've shown the same way, we show results. It was an underperforming -- what TT called an underperforming business that we took over 3 sites, 2 in the U.K., 1 in China. Very important, we really learned a lot about cultural fit, integration planning and how to drive value. And you see here, we doubled profitability in absolute. And we managed to really recover the vast majority of 84% of the net cash outlay. Really, that was one and -- when do you have the chance to go after a larger transaction and have like kind of a mini test run as we had in 2024. So really nice because it gave us a lot of insights that helped us now as we were preparing and looking at integration and for the offer of the entire TT Electronics Group.

And how would that look together? It's a bit of a busy slide, and I will spend a couple of minutes explaining it. It shows our peers on the left with revenue and on the right with EBITDA. Now if you're looking at the numbers, how do you come to these numbers? How did we arrive there? We had to take 2024 numbers. Because these are the only reported numbers that we have. So what you see there is 2024 based, but we are adding on a pro forma basis, acquisitions made or announced since. So you see for Cicor, CHF 481 million reported sales stand-alone, which you see here. And then you are adding the acquisitions that had pro forma revenues of CHF 220 million. So you come to CHF 700 million. So that's Cicor pro forma today.

By the way, HANZA also announced a large acquisition, bringing them from CHF 404 million to CHF 680 million. They announced acquisition of a German peer, privately held BMK. So that -- and TT Electronics at CHF 550 million. So the ranking that you see Scanfil, Cicor, HANZA, Kitron, almost all the same size. And then the next one in the game is node significantly smaller. So this is the peer group.

What you can also see is that the combined company would be by far the leader amongst the listed EMS in Europe by far. And if you look into our business segments, again, high mix, low volume in the verticals that we serve, this combined company would even be the global #1 in this market. There's no one else offering that type of service to these 3 industries that combined TT and Cicor will do.

Now what you can see here is the combined Cicor pro forma and TT Electronics 60% above Scanfil. Now go to the right, the same picture, but for EBITDA, where we take the '24 EBITDA stand-alone plus the minimum synergies that Peter talked about. And here, you see double the number from the #2, which would be Scanfil, Kitron, et cetera. So you will see not only -- you will not only see a market leader, but also a profit leader in the industry. And that, of course, is what counts at the end of the day.

So that's why we pursue this. We mentioned the strategic fit. We have done that already. And now we are going to look into the numbers. The deal is not done yet, and that is where we come to the time line, Peter.

Yes, the time line. There is a share -- so we published -- TT Electronics published the scheme doc, where is a formal detailed documentation. There is a shareholder vote on the 17th of December, TT shareholders deciding about our scheme offer. And then if the shareholder vote is positive, that means above 75% of the voting are supportive. Then obviously, we go through all the regulatory clearings and that would mean a closing in half 1 2026.

So this transaction is in no way a done deal because of that shareholder vote that Peter talked about. So we will know on the evening of that day of the 17th. What happens if it passes, then exactly happens what you could see there. What happens if it doesn't pass, then we continue no harm done. Obviously, there are some one-off costs, some sun costs, but otherwise, no harm done and we continue our strategy. We have not at all stopped developing the rest of our business during that transaction.

So -- and looking backwards, we get many questions about M&A, how we do it, how we integrate. This was the most complex, the largest, the most difficult transaction. It was a true turnaround case. And Franck, tell us what you, your team and we together did.

Okay. So why Eolane? France is the second market in Europe, the second largest market and Cicor wasn't there. So obviously, there was a gap to be filled. And with Eolane integrated into Eolane, there's Morocco, a nearshore opportunity that is really interesting. We see more and more customers interested in nearshore in North Africa for the cost, for the access to the United States as well. The logistics are very well done. The tariffs are low. So that's a great opportunity.

So the deal included 7 sites, 5 sites in France and 2 sites in Morocco. And that's about 900 employees that were taken over. So a bit of the story of this integration. The first day, we talked about a little bit the complementarity of the deal. It's about the same type of customers and the same industries, quite clearly. We had in Eolane, very motivated workforce. The people have a large experience. They've been working for Eolane for a very long time. Some of the plants are in the countryside, so quite far away from the cities and very important for the people to stay and they're very attached to their company. And the equipment, the industry equipment was quite good. The workshops were at the right level. Some of the machines a bit older because of a lack of investments in the last years, but a very good level of performance of equipment.

But this was a company in bankruptcy. So some things were -- didn't go that well. And maybe what we can say is what we heard from the customers. In the very first weeks, we went to meet all the customers and Alexander himself came to visit the most important ones. And we got exactly the same feedback from all customers. They said, first, quality is good. There was no customer complaining about quality. So that was very good news and very important fundamental. But then they complained a lot about in the past, a very aggressive relationship, commercial and sales relationship. We heard a lot about one general manager who blackmailed a little bit the customers saying, well, if in next month, you don't accept my 20% price increase, then I stop delivering. And that was really tough for the customers who still remember that.

And another point, very important, is the delivery performance, what we call on-time delivery performance was very low. So the products were delivered late, significantly late, and this is very bad for customers, of course. So plus the financial weaknesses, Eolane had been in difficulties in financial difficulties for years or several years. And if you are a customer and you have critical products, of course, you don't want to depend on a critical supplier who might disappear one day or another.

So in fact, what we saw is that most of our customers had an exit strategy in mind. Some of them had started to double source some of the products. Some others didn't do it because, as Alexander mentioned, we are in a high mix, low volume. So very complex products with low volume. So if you want to transfer this type of product, it's very expensive and you don't get any return on investment on a very small volume. So a lot of products that stayed, but no more investment for the future in Eolane. That means that during 3 or 4 years, Eolane didn't get any new business. So they were leaving on all products -- the products we are making, sometimes they can live 30 years, 40 years, so that's fortunate. But a product line that was going -- that was getting older and going slowly, slowly down. Nevertheless, this was worth EUR 130 million still, so quite a large business.

So the customer said, that's the situation. But we are quite happy to see Cicor first because, obviously, the financial situation is much stronger, and we are relieved of the situation. Plus Cicor has a very high performance, industrial performance and very good reputation. So we're quite willing to give you the chance to show us a huge change in your way to do on-time delivery and then why not continue to work together for the future. That was the statement, the first month.

So we applied the PMI structure, the PMI process, which is very, very structured in administration, sales and suppliers in the culture and in the operational business excellence. Some examples in administration, IT, we made sure that IT was secured properly with cybersecurity, which is quite important to most of our customers. IT was based in Eolane on a Google platform. We transformed it to a Microsoft platform to be like Cicor. We worked on the compliance.

We worked on the legal part as well. It was a bankruptcy process and 2 sites plus the headquarters, which is a legal entity by itself, we were taking as an asset deal. The rest was a share deal, but those 2 sites, 3 sites were taken as an asset deal. So the day of the decision of the court, the 3 entities disappeared, and we created from day 1 new entities from scratch. So that wasn't that easy. That means that with all suppliers and with all customers, we had to recreate all the links, all the invoice system, all the finance system, all the ordering system. So quite a lot of work to be done.

In terms of changes, so I talked about the supplier part. In this bankruptcy process, most of our suppliers lost money, of course. Some of them lost some money, some of them lost a huge amount of money. And of course, Cicor was not responsible for it and was not responsible to solve this problem. This is part of the administration. But for the suppliers, it was not that easy and some of them wanted to cease part of the money back or all of their money back. So we had really 2 months of very hard negotiations to make them understand that they had lost it. It was part of the administration, but we were an opportunity for them to continue and to recover the rest. And even with the support of Cicor and the large company that they were working for to grow a lot within Cicor. So after those 2 very hard months, this crisis with supply chain, we were able to restart very good relationships with all our suppliers.

The big change and the big success was about the culture, the culture of our plants. Eolane was very hardly structured with a heavy headquarter with very many people in the headquarters and all the decisions were made at the headquarters. There was even 2 levels, one regional level and corporate level of headquarters. So in the plants, the people, they didn't have the procurement that was centralized. They didn't really have finance that was centralized. They didn't have sales. All the salespeople were in the central structure. They didn't even manage their unions that was done by HR people in the global system.

So they had, in fact, operations and no real decisions, no real impacts on what was going on in the business. So that was the big change.

For Cicor, the sites are really the engine of everything. So one site should be autonomous, should be able to work with these customers to develop these customers, to service customers and to work on the profits on the people and develop the perennity of the sites. So we had to select one leader for each site and then build around him, new competencies that were not there. So at management team with sales, that was new, with a real finance guy who was not dealing only with P&L, but with cash, so everything in his hands. We worked with HR to really have the grip on the employees and the development of the employees, and procurement. So a complete new team and the change of spirit of the people saying, well, now you don't depend on central. You don't have to wait for them to decide. You have your own fate in your hands, and you are accountable and responsible, and this is extremely strong. The people reacted very well to this. They said, why, we didn't understand what was going on. We didn't have any input impact on our actions, and now we can. And that was probably the main change that was making this success.

The other part is the focus on customer to have the plans responsible to develop their customers and to satisfy the customers. And this is as well a big change that was taken over very quickly. Of course, there's the reporting system, the financial reporting system is important. We don't change the ERPs, so that's key. But a very strong reporting system was in place to make sure that everybody talks the same language. That was quite a challenge for the people on the sites to understand that. But very quickly, it was taken over as well.

And we had during the PMI, a lot of communication, a lot of exchanges. We had at the beginning twice or 3 times even a small meeting with the top management of Cicor to make sure that everybody was aligned, that we could quickly get the support that was needed, so that was critical to the success.

So what's the result after 6, 7 months? We went back to the customers. And again, we got quite the same reaction from the customers. And in fact, they were all very surprised of the speed of the change. The on-time delivery changed drastically in a few months. So they're still waiting for it to be consolidated, but they're all very happy of the reactivity, to have teams that listen to them that react, that can make decisions, that's completely new to them. And they're thrilled about the results. Many of them are really surprised by the speed the changes was done. There's even one customer that told me, when we have more time later, we need to sit together and I would like to hear how you, at Cicor, were able to make such a drastic change and such a quick change.

So that's a very good result. Some of them got Cicor out of the black list. So they opened new orders to Cicor. We already got some during the last 2 months. So new orders are coming in. So that's quite new to the teams, and that was a big celebration. Some customers are a bit more traditional, a bit more reluctant. So they want to see a consolidation of the result during 2 or 3 or 4 months longer to make sure that they would give us orders again, but we've seen a complete change in the way customers look at us.

What are the key success factors of this change? First, I think the preacquisition plan. You've seen Alexander and the team, they know the business perfectly. They've got more than 30 plants, so they know what's going on the plants, how you run a plant, how you make it profitable, how you make it perform towards customers, plus all the plants they see in their M&A adventure. So they really know perfectly what should be done in each plant. That means that when they had in mind how we want to turn around Eolane, everything was already in the head. We didn't take 2/3 of the headquarters. We eliminated it from Eolane. So we started from scratch without managers from their headquarters, and that was quite a risk, but it worked perfectly. So this plan was extremely well for us.

And then the culture. The culture -- the vision is extremely clear, extremely simple, even simplistic, you could think it's simplistic. So everybody understands very quickly what is the vision, what needs to be done. And we even had at the beginning, some people saying, well, can you explain a bit better what is the strategy for Cicor? And I said, why, you've got those 3 sites, and that's it, and that's easy, easy to understand, easy to apply.

The customer focus is extremely important. We have -- we are working with customers who are a bit linked to their suppliers. They are very difficult products, high mix, low volume, they cannot change easily. So if you perform well in terms of quality, on-time delivery, there's no reason why they should give you.

And the autonomy. The autonomy is really key. So all the plants have everything in their hand to be able to do their job, to satisfy their customers, and it's very pragmatic. As we said, there is no -- at the time of the integration, there's no team of 20 people coming from the headquarters, changing the ERP, setting global procedures, group procedures that everybody has to follow. We take what is going well. We just followed the global guidelines and the synergies of the group. But this autonomy makes it very easy and very simple to be integrated, and that's probably the main key success factor, I think.

We did for Eolane, something a bit new to the group. We did -- we implemented a light managerial structure. So with a team of steering committee or management team for these global 7 sites, which are 8 now, which is with functional directors, one sales director, IT director, financial director. It's a very small team, but with the complexity of this takeover, it was quite important to have this global view, and it's probably a good way for the future as well when Cicor is growing to have those light regional management teams.

The support of Cicor Group was essential during the whole story, as I mentioned, to have Cicor there, helping directly or pointing out to the different plants in the operational excellence. Marco Kechele, the COO, is a real benchmark by himself. He knows so much. So when there's an issue, he just points out saying, well, if you do that, I've seen 3 factories trying to do it. It didn't work. So if you do it, I offer you a beer, but don't spend too much time because I'm not very optimistic. On the other hand, if there's something that is not going that well, he says, well, this, that plant in another place can do it much better. I give you the contact, give them a phone call, and they will help you to progress very quickly. So that's this network way of working, and those synergies are extremely, extremely efficient.

And finally, when you have a decentralized company like this, you need to rely on people, especially your local and these managing directors are very important. They need to be extremely loyal and transparent. If you have so many to manage directly, you cannot control them too much. So if there is a doubt on their way of behaving, that cannot work. So loyalty, transparency is critical. And then competencies, that's entrepreneurs, they need to manage everything about the company. So it's quite a level of competence. So you really need to make sure that you have the right guy and the right team around them to be sure that the company will evolve properly. And out of the 5 we put in place, we have to replace 2 to make sure that we had the right level for the future for Cicor. So that's the story of this integration. And now Cicor has bought Valtronic, so there's a new plant in Morocco. So we are integrating us, so we're reversing the process ourselves.

In terms of finances, so the acquisition was done in April. So the first month -- the first quarter -- the first half semester was quite difficult in terms of finances. We had one month, as I said, in some plants that were difficult to start again because we didn't have the supplies. We didn't have all the volumes. Some customers -- we couldn't invoice to the customers because we were not created in their system. So -- and we continue to lose some money at the beginning, and we lost CHF 2.5 million in the first half of the year. The second half improved drastically. We're quite profitable now. And globally, at the end of the year, we will be slightly positive for the whole year, which is quite an achievement.

The group is expecting from us in 2027, to be at the level of the margins of Cicor, obviously. I'm very confident in 2027 that we will reach this. When I see the results we have today, when we have volume, our plants are in overcapacity, most of them so far because we need more volume. But when we have volume, the profit is there. And the new business that we will acquire will absorb the fixed costs very quickly and will be very profitable. So 2027, we'll be at the margins from Cicor.

2026, we're expecting to do half the way, which will be a bit more of a challenge because acquiring new business is slow. Our customers, even if they change their mind, we are in businesses where new orders come after 6 months, 12 months, 18 months. It's quite slow to -- quite slow to grow. So the volumes won't be that big next year, which will make it a bit more difficult, but we'll be at half the way so single-digit profit. Thank you.

Thank you very much, Franck. So now you heard really this piece about M&A, what have we done, what do we plan on doing and how does it work, how does the integration work. I must say, you may wonder why on earth did we engage with Eolane. Of course, I had first customer calls end of last year already, so December months before the court hearing about this. And customers said that, if you bring that business to the Cicor level, we will give you many orders. We will give you a lot of business. And what Franck has told as a story is that actually, yes, they are doing exactly that. They are coming back.

So changing direction now a little bit with 2 quick talks about markets, health care and aerospace and defense because we really want to give you some firsthand input on what do we know about these markets, how do we see them and how do we think we can drive this market. And Stefan starts this off with the medical market based on hearing aids.

Thank you. Good afternoon also from my side. Or better, good evening already, in the meantime. I talk today about the hearing aid market, where is Cicor in the hearing aid market, what we do in the hearing aid market and actually what makes us so strong in the hearing aid market.

Before I go more into the hearing aid market, a few words about the global med tech market, because the hearing aid market at the end is a part of the global med tech market. Global med tech market is USD 700 billion and is expected to grow over the next few years, 7 to 8 percentage, so that we will see roughly USD 1,000 billion in 2030.

Now what is important for us? Important for us is not the global med tech market, it's what's the global electronic assembly market for the global med tech market. And this is still a high number at USD 70 billion. So roughly 50 percentage of this electronic assemblies are manufactured in-house by the OEMs, and roughly 50 percentage are outsourced to contract manufacturers like Cicor.

So -- and even if we take this 50 percentage, we still talk about the potential market of USD 35 billion. So when -- let's say, being a leader in the market, we try to be focused on some of the subverticals within this hearing -- within the global med tech market. And one of these subverticals is, for us, the global hearing aid market. And if you see the number of the global hearing aid market, USD 10 billion, it's actually very little compared to global med tech market. It's a bit more than 1 percentage. Similar expected market growth by 2030. So expected size is 15 billion in 2030. And the addressable potential for us for Cicor as a contract manufacturer is roughly USD 1 billion. Also here, we have roughly 50 percentage of the electronic assembly or of the part and manufactured in-house by the OEMs, but also here, 50 percentage, roughly USD 500 million is a market we can address. And I'll show you later how we address it. It's -- and I see -- I mean it's much more clear, in the USD 500 million market, we can generate a leading position, definitely.

When we go into this a bit more into the worldwide hearing aid market. So starting on the left side with the people in the world with hearing loss. So there are roughly 1.3 billion people in the world with mild hearing loss. So this is actually many of us. If you ask my wife, most probably me, as well. So there are many, 1.3 billion. We have 455 million (sic) [ 445 million ] with mild -- with a moderate or severe hearing loss, and we have a group of 35 million with a profound or complete hearing loss.

If you go now to the market segments. Within the hearing aid market, we see actually on top, the OTC market. This is a relatively new market, FDA approved 2022. Hearing aids, OTC stands for over the counter. And these are lower-cost, self-fit hearing aid, over-the-counter hearing aids without prescription. So easy to get. As I said, it's a relative new market. I mean it's a big amount of people can be addressed, but there is also actually growing competition from consumer electronic brands.

If you go to the mainstream market segment, and this is actually the classic hearing aid market, the classic hearing aid you know. This market is dominated by 5 global players. So we say the big 5. And this is -- Sonova from Switzerland, this is WSA, this is GN ReSound. This is Demant from Denmark, and this is Starkey from the U.S. Those 5 players actually dominate the hearing aid market, the classic mainstream hearing aid market. There for sure, there are also start-ups. There are smaller hearing aid manufacturers, but those big 5, they dominate the market.

And we have the third market segment are implants for the profound and complete hearing loss. These are partially specialized companies like Cochlear or like MED-EL, but also Advanced Bionics, which is part of Sonova as well.

So when we see these numbers, I mean, what's the conclusion. We have sold in 2024, worldwide sold a number of hearing aids, 22.5 million. We have actually 480 million people with a disabling hearing loss. And it's expected that this number grows to 700 million by 2050 because the population is getting older and the noise exposure is also getting higher. And at the moment, below 20 percentage of the people are wearing -- of this, 480 million people are wearing a hearing aid. So here, we talk about the massive underpenetrated market.

And the growth, I already mentioned, I mean, the demographic change will increase the number of people needing a hearing aid, but we also have a growing middle class in emerging markets like China, India, Indonesia, which have more money and can afford a hearing aid as well. So -- and we have a decline in stigmatization, so in the past 30 years ago, it was a stigma to having this little device behind the ears. But today, it's not so much anymore. I mean young people, anyway, they walk around with the earpods and later on changing the earpods by hearing aid. It's not a big step anymore. So it's -- and these are the market drivers and actually shows you a bit why this market is so interesting.

So what is our position? Cicor position in the hearing aid market. So we are -- I mentioned before, we are actually mainly in this mainstream hearing aid market and implants. So we are serving 3 of the big 5. I mentioned before, we are serving -- 3 of the big 5 are our customers. We have very -- many other customers in this segment as well. I mean there are suppliers with specific components, manufacturing specific components for hearing aid, but there are also some start-ups we have in our portfolio. There are also some smaller manufacturers of hearing aids in our portfolio.

What we also have is a very, very solid sales pipeline. Annualized USD 30 million is in our sales pipeline, only with hearing aid customers. These are new businesses with existing customers, but we also have new customers in our pipeline. And when we see a bit -- when we see a bit the numbers from 2020 to '28, I mean 2020, we had a low single-digit revenue in USD. We could grow in this segment until 2025 in an average of 15 percentage per year. And with this very solid sales pipeline, it's all the projects we have in the pipeline, with all the potential additional business we can acquire over the next year, we expect that actually this growth will accelerate. So we expect to have 28 percentage of average growth in this segment over the next 3 years and makes it to a high double-digit million sales revenue for Cicor.

So what do we do? I mean, why we are so strong in this field? Miniaturization is key at the end, miniaturization, because you don't want to have these big devices behind the ear, you want to have small devices, right? And what you see on the left side is our capability in plastic injection molding. It's very important. I have some example here with me so that you really see how tiny the parts are we manufacture.

So we do -- we do the toolings for these plastic parts. I mean, what you see here is actually a demonstrator, which just shows how, let's say, how small the holes can be we mold on it. And by the way, you see this part also here inside. I will give it around. We can do high-precision molding in-house, we can reach an accuracy of down to 3 micrometer, and human hair is 70 micrometer. So our precision, our accuracy is 25% smaller than -- 25x smaller than a human hair in diameter. And I give that around. So happy to get it back. So it gives you a bit of flavor on how tiny the parts is we manufacture. We manufacture over 100 million such plastic parts per year. So this is almost 300,000 per working day in our factory in Indonesia, mainly.

Another expertise we have in the field of hearing aids is actually the decorative capabilities for these plastic parts. So we have in our factory in Batam, we have 2 spray paint lines. You -- I mean the most of the hearing aids at least, a bit better hearing aids, they are painted. And you see here on the right side, the robot painting the hearing aid housings, and this is what we do in our factory in Batam as well. So we have 2 spray paint lines, one is for the hearing aid housings and one is for the accessories, I'll talk 2 slides later about. We also do some other decorative parts like pad printing, laser marking. But actually, what we can offer to our customer is really a one-stop shop solution, from the tool manufacturing, molding, painting and also on subassembly, I will show later on as well.

The second part is the -- are the PCBs. And the PCBs, I mean, the requirement is exactly the same from our customers. It's miniaturization. And with our flexible and rigid UHDI PCBs we still manufacture in Switzerland, 6 million pieces a year, we can reach the demand of our customers, having, for example, 25 micrometer line and space.

And the next level of the miniaturization is embedded PCB. So embedded PCB means it's not only a PCB, we also have a die, or in that case, 2 dies in the PCBs. So this is the next level miniaturization. This is a technology we developed in-house, and allows actually to have a much higher level of integration, much better energy consumption, and this is important as well because you don't want to charge your hearing aid every second hour.

And here, this is also an example I can share with you. These are 66 of these parts in this size is -- and the next one is accessories. We do for our hearing aid customers, complete accessories. What you see on the left side is an AI generated picture for hearing aid charger. We do for our customers, everything. These are usually full turnkey solutions. We manufacture this. We develop this product. We manufacture these products. We test them and ship them out. And we also have some other assembly services like micro subassemblies, as you see the picture on the right. These are operators under microscope. They do some subassemblies, micro subassemblies. Overall -- I have one more example. So this is a charger we manufacture in our factory in Batam.

Overall, you see we have a lot of services which perfectly fits to the demand of the hearing aid industry, and that generates actually the strong position we have in the market and helps us to further strengthen this position.

Thank you, Stefan. So this was a flood of also pretty technical things, but it shows you that being a leader in a market means to really adapt the specific capabilities that totally match the strategies of the customer. And it works very well. You have seen the impressive pipeline and the expected growth that we have here.

Now we are going from dedicated solutions being very small to dedicated solutions that are very big in a different market. The principle is the same, but the application is different. And we have Jack Symonds, who will present what we are doing in aerospace and defense. Jack?

Hey, Alexander. Good afternoon, everyone, and thanks for having me. Apologies, I can't be there to speak to you in person. Now very quickly, I'm Jack Symonds. I'm the VP sf Sales here in the U.K., looking after our broad range of customers in the aerospace and defense market. Been with Cicor since the acquisition of Axis in 2021. And before that, joined Axis as a graduate.

Next slide, please. So the last 12 to 24 months, really, we've seen the aerospace and defense market growing probably unlike anything we've seen in recent memory. And this is reflected in the news we see, in the press we read. Everywhere we look, those projections for increased requirements in both aerospace and defense, with a particular emphasis on requirements for European nations to build up their defense capabilities after what's been a period of chronic underinvestment, for a business with really strong heritage in aerospace and defense supply. This is a positive thing, especially at a time when we, at Cicor, are opening up access to further domestic markets with aerospace and defense specialization in Europe and beyond.

Next slide, please. So we know that to thrive in this market, the purpose and drive of what we do must go beyond the pure commercials. So we're manufacturing life, mission and system critical products. We understand that most of this technology is designed to either take or to save a life. We say that really seriously. This is really why we remain end user-focused and tuned into the wider goal, which really is safety and security at home. It's easy to do this when we recognize the products we build in their context and put ourselves in the shoes of the end user. So whether that's a commercial pilot who's flying blind in bad weather, relying on our sensors to bring the passengers home, or a young soldier in the field that needs Cicor technology to function as described every time to remain effective.

Our customers are the best in the world. I'm sure lots of salespeople will say that, but I really believe it. A true network of OEMs and brands responsible for the delivery of the most important technologies in the field. So Cicor partners with organizations such as those shown on the screen for long-term engagement. Many of the customers listed there have been trading with Cicor for 20 years, 30 years, some for even 40 years. And we focus almost entirely on enabling their programs and their products to be successful. And then ultimately, we will share in that mutual benefit.

So Cicor has seen significant growth in the aerospace and defense space since 2021, and that's primarily through acquisition as some of the speakers have already spoken to. Each time adding a new platform to address the domestic market and to further leverage our connected network of aerospace and defense experts across the group. Well-targeted acquisitions coupled with rapid and focused integration means that best practice sharing starts on day 1. Commonality of customers and contacts across the European marketplace accelerates those growth opportunities as customer programs remain connected on a local level.

The Cicor Group and shared resources and shared engagements allow us to plug into those customers, both regionally and globally. And as we've already spoken about today, best cost options are also available as part of the group. Romania, Morocco, Tunisia and Vietnam, and that really means we can serve the full range of aerospace and defense opportunities available.

Some selective references now. So due to security and export control, most of these examples stop short naming the actual platforms. However, hopefully, I can provide a bit of a flavor of the critical work Cicor does today supporting the European industrial base for aerospace and defense. So just zooming in on a couple of examples. Electronic warfare is a real growth area for aerospace and defense primes at the moment. Cicor supplies multiple customers, multiple programs, all looking to address that modern battle field through additional use of technology, whether that's active electronic warfare for offensive effects or actually manufacturing the complex RF circuits that counter those technologies.

And another one very close to my heart, the ejection seat technology, Alexander has already referenced it, but Cicor is very, very proud to produce the electronics for roughly 60% of the world's advanced ejection seats. This is across a real broad range of platforms, including all the fast jet programs you'll have heard of F-35, F-18, F-16 and T-45 in the U.S., but in Europe, Rafale, Gripen and Eurofighter, the pilots of those aircraft all rely on Cicor technologies to feel safe and ultimately, to bring them home.

So what you see on your screen now, hopefully -- so next slide. What you see on the screen now is a real example of just one very large aerospace and defense prime customer for Cicor today. Go ahead. So the blue dots represent customer locations and the Cicor logos represent our various sites delivering into them. So our pan-European footprint gives this customer exactly the access to the capabilities and capacity they need, where they need them. We're providing this customer with domestic supply into multiple sites here in the U.K. across France and in Switzerland, but we're also serving their sites in the Netherlands and Belgium from centers of excellence in Spain and Switzerland. Their spend is significant with Cicor today, is set to grow as they plug into more and more of what Cicor can offer.

Next slide. I thought it might be interesting to take a closer look on what defense contracting can mean in terms of time scales. I think it's very different to my colleagues, what they experience in the medical and the industrial market segment. So this is a real life time line for the suppliers engaged on the U.K. Ministry of Defense program, so the Ajax AFV, which is essentially a small tank. So from the point the U.K. Army identified the need for a new vehicle, all the way through to the first significant production runs and the delivery of those vehicles into the field. And while 15 years may seem like a ridiculous time lapse from tender to delivery, this sort of procurement cycle has major benefits for specialist suppliers within aerospace and defense like us, unlike the other segments.

So Cicor begins to benefit from value-adding work from the point of supplier selection, which you can see is many years before any real volume contract was awarded. We were engaged in design support, prototyping efforts, generating some moderate revenues before production have begun, but really cementing the relationships and the integral nature of Cicor supply onto this platform.

Each opportunity to engage throughout the time line is viewed certainly from our sales teams here as an opportunity to make Cicor more and more important to their customers' program. And once the volume EMS contracts are placed, more often than not, the customer is single sourced to Cicor. The Bedford site where I am today, continues to manufacture these products with very little threat of competition. Cicor has a healthy pipeline of aerospace and defense opportunities all at different stages of maturity along this typical time line. And yes, this is reflected in the growth we see in the sector.

Coming back to one of the graphics that was on my first slide, zooming in. We can see a real steady and sustained ramp-up in order intake at the prime contractor level across Europe. The different colored blocks represent massive players in the field, and you'll recognize most of them were on the customer list for Cicor too. So if we consider that Ajax illustration, we expect this to be mirrored in EMS opportunities, order intake and ultimately, sales over the next decade and beyond.

And finally, so if we consider the uptake in demand, the types of customers we work with and the criticality of that supply selection process, why do the best customers in the world seek out and partner with Cicor? For me, the answer is quite simple and yet very difficult to replicate. Cicor can offer everything a global aerospace and defense player is looking for. We have the presence locally, regionally and globally. Cicor has a presence in all the most important areas, U.K., Spain, Mainland Europe, the Nordics, U.S.A., Asia. We have the capability. So over time, we've built a broad range of highly complex capabilities, and these are carefully matched to the technology needs of aerospace and defense customers, both for their products today and looking forward to programs into the future. I was with a particular aerospace and defense customer here in the U.K. last week, we were discussing the technology needs for a program that won't go live until 2037.

We have the competence Cicor. Cicor has a proven track record, decades supporting the most important aerospace and defense projects and customers. We're really strong on compliance. It's a highly regulated market, and Cicor's aerospace and defense sites meet all the internationally required standards and accreditations that you absolutely must have to work on these sorts of programs.

And finally, it's the consistency. Through demonstrable performance into the aerospace and defense sector, the reputation that Cicor carries forward is built on tangible deliverables and not marketing. So the outcome of all that is the shared growth of Cicor and its customers and ultimately, financial success. However, throughout this journey, the purpose remains absolutely consistent. We have responsibility to best enable the safety critical products successfully into the field and into the hands of the end users that rely on them. Thank you.

Thank you very much, Jack. That worked actually perfectly well. So now you have seen 2 very different verticals. You have seen hearing aids and you have seen aerospace and defense. But what you can also recognize is really that doing and shaping our organization that is absolutely tailored to the needs of that specific customer group, that's where success is coming from.

And just very briefly, that's the picture I've shown. That's the USP of Cicor. The combination of these 3 elements: applications that matter, you saw them; high mix, low volume at scale, we discussed it; and pan-European market access. Now I won't spend much time here. This is just the repetition of what we have shown in multiple announcement. There's nothing new here. Q3 results, our very strong order intake in the month of October. We mentioned that in the media release, especially from aerospace and defense market. That's what you see here in the second bullet point, and keeping our guidance for the year unchanged despite some of the headwinds that we are seeing in the market.

So thank you very much. With that, I would open the floor for questions. And I propose we start here with the room and then we can go to our online colleagues, and Jack will also take questions.

Could you shed some light on the M&A scouting process?

The M&A scouting process is partially systematic, but partially event-driven. There is -- there are moments in the life of a company or a life of a business owner where you are looking, where there is an openness. And what we normally do, we try to keep in touch with many players in the industry over years. Sometimes it takes years before there is a maturity and the decision to sell a business.

So we don't like auctions. We are telling people normally who the sellers, who do advisers that auctions we said, sorry, we won't participate. We are happy to preempt this, make a very quick offer and et cetera, but we don't participate in auctions because the winner is the guy who's overpaying. So that's what we never do. So it's really a very, let's say, personalized process company by company, business owner by business owner that we do.

[indiscernible] One second.

With regard to the new acquisition, there is one large shareholder that is not on your side. Do you have any reasons? Is this a price or is it anything else?

So the only thing that I can say about this is that the offer is clearly highly beneficial not only for Cicor shareholders, but also for TT Electronics shareholders. What I like to say and what I said the other day, a rational decision would be to sell, to accept, but not everybody is rational. So we'll see. We'll see. I cannot say more, and we will know in 2 weeks.

Did you have contact with this group?

This is more the matter of the TT Chairman to hold contact with the shareholders, but we cannot really comment on specific individual companies.

I understand that.

I think you've done some deals to add development capabilities. I remember in the past, you've talked about turning the business from an EMS into CDMO, so yes. How is that going? You didn't mention that. And I think in the past, it was part of your growth strategy, but also part of the -- such to increase margins. Is that working? Or is that something that...

It continues to be. And if you look at the pipeline that Stefan has shown on hearing aid accessories, you saw this big pipeline expected 28% CAGR for the next 3 years. That is exactly the result of our ability to develop because hearing aid manufacturers consider a charger or a remote control or a TV streamer as non-core. Core for them is the little device that you have behind or inside your ears. So they're extremely happy to not develop these in-house. So we could not have this pipeline without the R&D work. Today, it's 200 men and women doing hardware, software, design, mechanical design and so on. So we are a considerable engineering organization.

But Stefan, I think you can talk about what you're doing in that vertical and R&D?

Yes. I mean, we see more and more that this is requested. I mean this is a very good example because this is a non-core product for our customers. And they don't -- I mean, they don't have the resources to do it in-house. And it's not only in the field of hearing aid, it's in many other fields that actually this is requested because we shouldn't forget that actually, it's still a challenge to get enough development engineers for many of our customers. And so they really have to decide what I do in-house and what I outsource. And this drives a lot of the pipeline we have currently.

So yes?

I have a question on this acquisition. For your existing customers, current existing customers, what are the advantages if Cicor doubles in size? So that you can offer more products, have the other production sites nearby there, their hubs, or what are the advantages?

We can offer -- very important in the future, we can offer the capacity. We can offer the enlarged capability to industrialize large programs. We can offer the enlarged footprint, especially talking to the U.S. And we can offer complementary capabilities because TT does some products like cable assemblies for aerospace and defense, extremely important, and Cicor's relatively weak in this area. That's very synergistic with the core offering of assembly. So there is a number of elements that we can do.

And you have seen ejects -- one chart, the complexity, because these aerospace defense companies are incredibly complex in this setup. They have been created through M&A, partnerships and so on, are running many programs in many locations. And they have a strong desire to reduce the number of suppliers, to rely on a very small number of totally strategic suppliers. The reality is that a large prime, a large integrator can have dozens of suppliers, can have 50 different suppliers in the field and they want to bring it down to a small number, maybe 10 or so ejectors.

Jack?

Absolutely. Absolutely. Couldn't say better myself, Alexander. The more plug-in points we can have into these large primes, the better.

Thank you very much for the presentation. It was very informative, and we feel very well-serviced clients. I wanted to ask a question, which is not so much on expansion, but on slimming down potentially because you're looking into acquisitions. What about the other side of the coin, carve-outs, not only, let's say, optimization because you will grow in double hopefully, if all the approvals are received. And I saw that you have something like 20% -- 15% to 20% other noncore businesses. Is there active thought around that? Or it depends on how the core business is developing?

So talking about our present business that -- at Cicor that we call as other markets, the 17%. A very important portion of that is what we call transportation, which is both a railway infrastructure, but also some off-highway vehicles, which we consider highly attractive market opportunity. So that is already a portion of that.

The remainder -- yes, yes, we are still in Swiss watches. We still do PCBs for your good Swiss watch that if you don't have a mechanical one. And we still do that. There is a little bit of history in there. And honestly, we are also a bit opportunistic in saying as long as we can make good money with that, it's okay.

The noncore business of TT, which is distribution, there, we announced that it's about 1/4 of the TT Electronics business that after a successful, which we hope successful acquisition, we will put under strategic review and then decide what to do about it.

You highlighted earlier in the slides that HANZA is copying your model a little bit during deals now. I think there have been other transactions, M&A transactions, even at times that relatively pricing multiples. Does that endanger a little bit the roll-up strategy? Do you find less targets at very low multiples or less targets that offer interesting post-merger benefits?

Yes, it shows that. It is true there are a few companies having the same model, Scanfil. Kitron has just announced an acquisition. HANZA is a bit special. Now I go deep into -- HANZA is 50% mechanical products, not electronics. So they're not really a pure play. But there are certain regions in Europe, especially the Nordics, Scandinavia, where multiples are becoming untenable, and that is something that -- where we are saying, let's look for a special situation, for example, where a business owner looks for a successor, where for him, it is very important to have the right acquirer, a company with a very good fit, where he is giving up some of the price and many do, but getting the right fit.

We are not participating in this race to the top 4 multiples, absolutely not. And yes, we have seen some of these acquisitions. And for some of them, we say, obviously, we don't think they are accretive, don't -- won't name which one, but it's so -- that's something we won't do. This is something -- we look at this TT Electronics acquisition Peter has mentioned, at least 30% EPS accretive, that's what we like. We don't like the dilutive transactions.

So the answer -- the short answer is yes, it gets more challenging. But of course, we have now the platform and the reach into different countries, that we can look for these opportunities in Germany, U.K., in Nordics and Spain and in France. So I'm confident that we will find other acquisition opportunities that fit our moat. But we will not participate in the price raise.

So I propose we take these 2 more questions, and then we move online after this.

With the all-cash offer, you announced a capital increase of CHF 75 million. Do you plan a capital increase with subscription rights? Does OEP take part in this capital increase? If this transaction is a success, afterwards, you would have a leverage of around 3x net debt to EBITDA. Does this mean that you would have to stop further M&A activities for a year or 2?

Let me level at various points. Let me take one after another one. First, you have announced in the scheme doc that we -- in case of a positive vote, that we would do a capital increase for all share offer. So for this equity or with this bridge that goes to equity, and that is a capital raise of CHF 75 million to CHF 100 million. That's what is in this scheme doc.

We have also announced in the scheme doc that at end of 2026, the leverage would be between 2 and 3x, okay? So not above 3x, but between 2 and 3x. Why? What are the 2 extremes? The 2 extremes are -- the 2 is obviously, if all TT shareholders would vote for -- go for the shares, we would still do the capital increase would end up at 2x. If obviously, all the shareholders would go for cash and we would do the capital increase would be 3x. That's why we came to this range, exactly.

And then on the -- there was nothing disclosed regarding structure, preemptive rights, and we will do this one in beginning of the year, depending on the situation. There was no -- nothing mentioned on OEP.

But if you could do such a big acquisition, that would mean that you have to pause with further acquisitions for a while.

Maybe I can say something because the reality is that with the free cash flow generation that we do, we could still do some acquisition and deleverage the balance sheet at the same time. So -- but there's nothing announced to that extent. They are the targets. We want to have net debt leverage below 2.75, so that's very clear. And the rest, it's driven by opportunity that we have. But the business that you -- what you have seen, we are very cash -- very strongly cash-generating.

If you look at the time line, we are talking here first half '26, right? We want to integrate properly within 6 months. We always said and then we deleverage between 2 and 3x. And as Alexander said, we want to remain from the leverage below 2.75. So there is -- that gives the key data points. But you can see, if there are bolt-on acquisitions, there is a way. And -- but priority is always first create a value and with proper integration and then go on in terms of going for other acquisitions.

We have one more question over there.

My first question has been answered in the meantime. But I have a second one, and that has to do with the operation of TT in Cleveland in the U.S. Can you tell me what went wrong there in '24? They didn't manage to get the...

Yes, it was -- it has been announced that this site had lost one customer for whatever reason, and that they had to adapt the cost structure to that. What we are saying, we have looked into the sites in detail. Peter has said it already, it's a friendly transaction, so we were allowed to do so. And we see a good path to success here.

And then what would be the product that you would then produce in the future there?

What they are doing, they are mostly in the core markets. So industrial, medical, aerospace, defense, and that the rest of the businesses.

So I would propose that we -- cannot, okay. You don't have any questions online? Okay. So we continue here. That's good.

TT has issued a trading update recently that reads a little bit weakish for 2025. I think they said they will reach the guidance, but needs to be glory Q4 or something like that. And it also reached a little bit weak for 2026, if I read between the lines. Were you surprised by this? Is this kind of something that is part of your assessment of TT?

We were not surprised about this because, obviously, we got current trading updates on everything, order book, et cetera, as part of the diligence, as part of this process. So we were not surprised. For us, what really matters, as Peter mentioned, that is the minimum cost savings, certified by 1 of the big 4 accounting firms of GBP 13 million or 240 basis points of margin of TT Electronics that we can develop, and that can be developed in this special setting between TT Electronics and Cicor because it is really because we have the same business model, because we have operations in the same country, because we have this decentral, very lean business model that we can drive. So we were not surprised. And the value of the transaction in the combination, specifically TT and Cicor, is absolutely there. So there's no change in our assessment and there's no surprise. I understand that the TT Board has to -- has a fiduciary responsibility, and they have responded appropriately.

Very good. Thank you very much. Do we have one online question in the meantime? Nothing. Okay. Then thank you very much to all of you here and also those online. I think we bombarded you with quite some stuff. Of course, this will be online and we'll have, behind that door, the opportunity for more conversation before maybe everybody is disappearing to the Christmas market outdoors.

So I want to thank also my colleagues, Peter, Stefan, Franck and also especially Jack in the U.K., for their presentation. And yes, enjoy the rest of the evening. And I look forward to the conversations we're having. Thank you very much.

Ladies and gentlemen, welcome to the Cicor Investor and Analyst Conference Call and Live Webcast. I'm Carmen, the Chorus Call operator. [Operator Instructions] The conference is being recorded. The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Mr. Peter Neumann, CFO. Please go ahead gentleman.

Thank you, and good morning to all joining us. With me today is Alexander Hagemann, our CEO. Earlier this morning, we announced that we have agreed to acquire TT Electronics, a U.K. leader in advanced electronics for performance-critical applications. You will find our press release and today's slides on our Investor Relations website, and we'll be referring to the slides as we move through the call. We will begin by taking you through the terms of the transaction and importantly, the strategic rationale. We will then open up for questions. Please note, today's call will include forward-looking statements. Actual results may differ. For full details, please see our press release and the appendix of this presentation.

With that, I will hand over to Alexander to walk us through the transaction.

Thanks, Peter. Good morning, everyone. Thank you for joining us on the call. We are truly excited to speak to you about our agreement with TT to create the largest global pure-play EMS provider in the high mix, low-volume segment with strong focus in health care technology, aerospace, defense and industrial automation. Let me start with a brief overview of the headline terms and financial effects. We have agreed to acquire TT for an equity value of CHF 303 million, which translates to an enterprise value of CHF 396 million.

The offer is structured aS 155p per TT share, 100p cash and 55p in Cicor shares. 2/3 and 1/3 cash stock. Together, we will have pro forma revenue exceeding CHF 1.2 billion and adjusted EBITDA of approximately CHF 140 million, including quantified run rate cost synergies of at least GBP 13 million, which is equivalent to CHF 14 million, with one-off costs to achieve of approximately CHF 16.5 million, equivalent to about CHF 17.5 million -- sorry, GBP 16.5 million, equivalent to CHF 17.5 million.

We see upside to this as well as potential additional revenue synergies as we continue to progress with the integration. This transaction is accretive to our EBITDA margin and expect it to deliver more than 30% EPS accretion in financial year 2028. We are targeting pro forma net leverage to be around 2.5 by the end of 2026, supported by strong cash flow generation of the combined business.

We anticipate closing in the first half of 2026, subject to shareholder and regulatory approvals. We have already received a letter of intent to vote in favor of the transaction from one of TT Electronics largest holders, Aberforth, withholding 10% shares.

Turning to Slide 4. Let me walk you through the transaction structure in more detail. The headline price of 155p per TT share split between 100p in cash and 0.0028 Cicor shares is based on Cicor's closing price and ForEx as of yesterday, implying 55p in value. This represents a premium of 64% to TT's spot price 53% to 3-month VWAP and 113% to the TT share price 6 months prior.

The Board of TT has unanimously recommended the offer to the shareholders. TT shareholders will hold about 10% of the enlarged group with Cicor current holders retaining the remaining 90%. OEP will remain the largest shareholder of the combined group with roughly 38%. They are equally as excited about the potential value creation for our shareholders of the enlarged Cicor Group and remain committed to helping us achieve our ambitions.

Completion is subject to TT shareholder approval, 15% by number, 75% by value of those voting and regulatory sign-off in several jurisdictions. Cicor shareholder approval is not required.

Turning to Slide 5. I'd like to give you a brief overview of TT. TT was incorporated in 1908 and is headquartered in Woking, United Kingdom. The company specializes in advanced electronics for demanding applications with a focus on Health Care, Aerospace and Defense and Automation and Electrification. TT operates across North America, the U.K. and Asia offering power and connectivity solutions, manufacturing services and specialist centers that contribute below 25% of revenues. Their customer base includes blue-chip names and the global footprint spans 8 sites in North America, 8 in the U.K. and 3 in Asia.

For 2024, TT generated CHF 550 million in revenue and CHF 54 million in adjusted EBITDA according to IFRS. Given all of this, we believe TT has a highly complementary business model and strong strategic fit with Cicor.

Turning to Slide 6. You will see why this is a transformational acquisition for us. First, by combining our strengths, we are creating a global EMS leader with expanded technical and manufacturing capabilities. The combined group will be the largest global pure-play EMS provider in the high mix, low-volume business. With strong focus in Health Care technology, Aerospace and Defense and Industrial Automation, with revenue doubling to over CHF 1.2 billion and with sector-leading EBITDA margins.

Second, the deal creates an agile and competitive platform that will accelerate organic growth. Cicor will be better able to pursue its global ambitions, especially in North America. The deal also presents significant cross-selling potential and deeper reach in key markets such as Health Care technology or Aerospace and Defense.

Third, the transaction significantly enhances our financial profile with exciting synergy potential. We have quantified at least GBP 13 million of synergies on an annual run rate basis by the end of the third year post completion. We see potential beyond this that while not quantifiable under U.K. takeover rules could provide material upside. The transaction boosts our EBITDA margin and is materially accretive to earnings per share.

Finally, this transaction builds on our strong M&A track record and makes us a stronger platform for continued market growth in the sector. We are highly experienced in acquiring and integrating businesses and will leverage our established and successful approach. This also specifically applies for selected TT sites, Project Albert, which we will further elaborate in the presentation.

Turning to Slide 7. Let's talk about the strategic fit. This combination significantly strengthens our capabilities in engineered electronics and high-specification components. We will maintain our focus on priority end markets of Industrial Automation, Health Care and Aerospace and Defense. Our footprint will be broader than ever. Across Europe, the Americas and Asia with a larger presence in the U.K. and new reach in North America. We see a real opportunity in the U.S. where we can leverage TT's manufacturing and Cicor's expertise to drive growth.

Our North American presence will also be strengthened by the acquisition of 2 sites from Valtronic, which we announced earlier this week. The Valtronic sites are highly complementary with TT's business and should provide additional synergy upside especially given the geographic proximity.

Turning to Slide 8. This page highlights how the enlarged group will become the one of the largest listed European EMS player with global operations and capabilities, both in terms of revenue and EBITDA. Our combined revenue exceeds CHF 1.2 billion on a financial year '24 basis, putting us at the top of the peer group. Our EBITDA and margin is expected to be sector-leading as well, thanks to our specialization on high mix, low volume manufacturing for highly demanding applications our operational excellence and the cost synergies we have identified.

Turning to Slide 9. We showcased our combined global manufacturing footprint. The map illustrates the addition of sites in new geographies, including North America, the U.K. and Asia. This further diversified footprint enables us to serve customers more globally optimize our supply chain and respond quickly to new market opportunities. In particular, this unlocks a significant opportunity for us in the U.S. to leverage TT's manufacturing sites and Cicor's operational expertise to accelerate revenue growth in North America.

You will see we have also shown here the location of the Valtronic sites in relation to TT's operations. At this point in time, we have not decided on any actions to consolidate the operating footprint that will strive to determine the best global setup moving forward. Both companies have undertaken independently such optimization measures as TT's closure of Plano and Cicor's closure of [indiscernible] .

Turning to Slide 10. As previously mentioned, we have quantified a run rate cost synergies of at least GBP 13 million, equivalent to CHF 14 million on an annual run rate basis by the end of the third year post completing the transaction. 95% of these synergies will be delivered within the first 2 years. We have a very high degree of confidence in delivering these synergies as they come from identifiable cost savings and have been heavily verified by a public reporting accountant. 85% will come from overlapping roles across head offices and senior management functions as well as duplicate public company costs. The remaining amount comes from overlapping roles outside of head office, where Cicor intends to apply a decentralized approach to drive efficiencies.

Beyond this quantified amount, we see significant potential additional synergies through the consolidation and improvement of specific manufacturing sites process, which could provide additional cost synergies and cross-selling opportunities across the enlarged customer base, providing revenue synergies. There will be one-off integration costs, mainly for workforce and site changes but we will manage these carefully to ensure a smooth transition.

Turning to Slide 11. Over the past several years, we have completed a series of strategic acquisitions across Europe and beyond in order to complement our existing strength and expand our capabilities. These have notably allowed us to further strengthen our leadership position in Aerospace and Defense. This proven playbook gives us confidence in our ability to successfully integrate TT and continue delivering value for our shareholders. What also increases our confidence in being able to execute this deal smoothly and drive shareholder value is our familiarity with TT's business. Just last year, we acquired 3 sites from TT and have been very pleased with how the integration has progressed.

Let me talk you through it in more detail now. After acquiring 3 TT sites in March 2024, we applied the Cicor business model and integration playbook with great success. That is to decentralize support functions and decision-making wherever possible and to minimize central SG&A spending. There has been a step change in profitability and free cash flow generation at these sites creating significant shareholder value. Most of the acquisition cash outlay was rapidly recovered with EBITDA more than doubling at the acquired sites. This experience also confirms the strong cultural and business fit between TT and Cicor which gives us confidence that applying the same integration approach at a larger scale will unlock further value at scale.

Turning to Slide 13. When managing our integration, the focus will be on delivering cost synergies, retaining the best talent and ensuring a best-in-class experience for our customers, partners and stakeholders. Within the first 6 months post completion, we will conduct a strategic review to finalize and refine our integration plans. We will continue to look for additional synergy opportunities and work to improve TT's performance within the group. Certain TT sites relating to their components business will be managed separately as noncore assets in line with TT Management's current plans. While these are good businesses operating in attractive end markets, they are not synergistic with the wider group. Therefore, we will conduct a review to determine whether Cicor is the best owner for these assets and what will drive maximum shareholder value for the enlarged group.

We will keep the market updated as we hit integration milestones and track our financial progress. Our team has a strong integration track record, and we are confident we will deliver on these objectives.

Turning to Slide 14. This transaction is fully aligned with Cicor's Strategy 2028, to be the leading pure-play pan-European electronics partner. The Enlarged Group will have more cross-selling opportunities, broader capabilities and a focus on high-growth sectors. We will integrate TT's operations using our experience in acquiring and integrating companies to deliver value. We will maintain a solid balance sheet, aiming for pro forma net leverage to be around 2.5x by the end of 2026.

Turning to Slide 15. Here's our timeline to completion. The TT shareholder vote is expected to take place in December with the corresponding scheme documents to be published as soon as practicable in November. As mentioned, the transaction is subject to merger control approvals in the U.K., Germany, the U.S., Mexico and Australia as well as foreign investment approvals in the U.K., France, Italy and the U.S. Cicor's experience in engaging with regulators for approval, given our M&A track record and we have a high degree of confidence in being able to successfully complete these processes.

On this basis, we expect closing to take place in the first half of 2026. Turning to Slide 16. I'd like to reiterate how excited we are about this acquisition. This transaction creates the largest global pure-play EMS provider in the high mix, low volume business with expanded technical and manufacturing capabilities. It enhances our financial profile and offers significant value creation for shareholders. It builds on our proven playbook of creating value by consolidating the fragmented EMS market and will allow us to continue to do so. This deal is fully aligned with our strategic road map and positions us for longer-term success.

With that, we are happy to take your questions.

[Operator Instructions]

The first question comes from the line of [indiscernible] From AWP.

First, I wanted to ask you, would you like questions in English? Could German also be fine. I don't know who's all on -- everybody on the call.

If English works for you, but we can also do it in Germany, yes.

English works. First thing I thought this morning as I saw this huge company you're buying, I thought, wow, that's pretty cheap. Can you -- in my first -- second thought was TT restructuring case because they had turnover going down last year, they had problems in North America because of taxes and other operative problems. Can you maybe comment on that?

Taking your questions one by one. We find that the valuation and the offered price is both offering value to TT's shareholders by offering a material premium of 64% to yesterday's close, whereas at the same time, it is truly value accretive for for Cicor shareholders with the anticipated EPS accretion of more than 30%, of which, as we said, a good portion will already happen earlier.

So the common view of the Boards and Management of both companies, TT and Cicor is that this is a win-win creating value for both sets of shareholders. Now about the situation of TT, I have to say, and that is all stated also by Warren Tucker and the 2.7 Announcement is that TT was set up for a -- to be a much larger company. They have set up a headquarter of scale, which would support a significantly larger company, but for a variety of reasons, that did not happen.

TT is clearly not a restructuring case, as you see in the underlying profitability already that TT has stand-alone. Yes, there have been some revenue -- the revenue coming back recently as the result, especially of inventory cycles in the Component business. So this is not a concern to us as we have done really a deep dive into TT into the markets and to the sites. And honestly, what we see is that TT's Management and Board have done an excellent job under present leadership to address all the critical topics of the company.

Okay. But still going back to -- You're not going to integrate TT [indiscernible] They're standing here. As I got the presentation was pretty fast. You were talking about some sites in Great Britain, you're going to close? Or can you go a little bit more on that? And what does that mean for your sites in U.K., in Switzerland? And how many employees do to Cicor and TT have today? And how much will they have with the company have together after integration in 3 years?

Cicor today has roughly 4,400 employees and TT Electronics almost 4,000. So together, it's above 8,000 we have announced that there will be certain headcount reductions according to the measures that I have outlined in the presentation that are less than 5% of the TT Electronics headcount. And as we mentioned, the cost savings will be focused on corporate SG&A by applying the Cicor lean operating model. As part of this, we are not anticipating site closures. This is not part of the plan that is announced today. What I have mentioned is that independently, TT has -- is in the process of closing an unprofitable site which is in Plano, Texas, manufacturing components, whereas we at Cicor have closed our thin-film site at Ulm and transferred production to our Swiss side and in [indiscernible] , but no facility closures foreseen as part of this plan and proposal.

So also, your question, how will this affect Cicor sites. We do not foresee at this point in time any effect on Cicor sites with regards to headcount. So nothing of any significance. We will be very focused and develop the cross-selling opportunities that we have.

Okay. Then I have to also dive into one thing you said about the integration. I didn't get that all completely. You said after 6 months, you would do a new review and decide if one certain part will also belong in the future to Cicor, but then I didn't get that what you were talking about.

Out of the roughly 18 sites of TT, and that is also in the 2.7 announcement. There are around 10 sites that are very synergistic with Cicor's business. These sites represent the vast majority of revenue of of TT Electronics. So this is really the dominant part. And these sites, we will integrate according the playbook, like we have done with the 3 sites Project Albert, 1.5 years ago, now it is just 10 sites. They are remaining roughly 7 sites after the closure of Plano that are operating in businesses that are not synergistic with the other 10 TT sites or the other Cicor sites.

And here, we will continue to manage these businesses, separated from the core business and identify for which side Cicor would be the best owner or if there would be another owner that could develop the potential of these sites better.

Okay. Then I got it right now. I'll just stay on the line, I got 2 more. You recently said -- you said the bar parts of this takeover price of CHF 303 million is about 2/3, so CHF 200 million. So I think that the bridge loan will be about CHF 100 million because at the Investor Conference, you recently said for takeovers, you had about CHF 100 million on hand. Is that correct?

Peter will comment on that.

Yes, we said this one, but what we have done because of the U.K. rules, we have established a bridge financing with a significantly higher that covers the full cash portion and hence, yes, the committed financing in place. It is done, a financing facility together with UBS and Commerzbank that covers more than the cash portion and obviously, the consideration payables to the TT shareholders under the terms of the offer. So we are using this to fulfill our requirements to prove the financial capacity to do the transaction. The entire bridge financing is as stated in the 2.7 Announcement, GBP 345 million.

And is that because it has to not only cover the cash portion of the purchase price, but also it has to provide security to allow to cover all existing depth of TT Electronics.

Did you -- any point of your presentation mentioned restructuring costs? You had a lot about synergies, but restructuring costs. Can you give me a heads up?

Yes. We have mentioned the restructuring costs of about GBP 16.5 million, and that is the overall integration costs. and that integration cost includes all aspects. That includes restructuring, restructuring where needed. So payments for positions that are eliminated in the combined group, but it also includes all other elements such as IT integration, which obviously, will be a very important portion of the overall.

Okay. Then I know I'm pretty long in the line, but one last one I got. Your midterm target was telling us you're going to have a CHF 1 billion turnover until 2028. So one big leap then you're over it, when we're going to hear your new midterm targets and could you already give an indication where you could go for?

What we can already say is that there is no reason that we see today, amend our midterm targets if it comes to organic growth through operating margins to a level of net debt our CapEx. On revenue targets, we will, in due course, publish a new target, but this is too early for me now to give you a response when exactly we will do this.

Ladies and gentlemen, there are no more questions. And I would like to turn the conference back over to Mr. Alexander Hagemann for any closing remarks.

So thank you very much for your interest. This is an exciting day. Coming together between TT Electronics under the roof of Cicor is an opportunity that in our view, really knows only winners. As we said, in our view and the view of the Board of TT Electronics highly attractive for TT shareholders. It is highly EPS accretive for Cicor shareholders. As enlarges the regional footprint, scale and also offerings for our customer base. And obviously, it increases opportunities for our employees and managers. So we are very excited about this opportunity.

Now obviously, we are going through the process as it is outlined. In the meantime, we are here to respond to your questions. obviously, also after this call, and we are very grateful for your interest in this transaction. Thank you very much, and have a great day.

Ladies and gentlemen, welcome to the Cicor Conference Call and Live Webcast. I'm Carmen, the ChorusCall operator.

[Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Mr. Peter Neumann, CFO. Please go ahead, gentlemen.

Thank you, and good morning to all joining us. With me today is Alexander Hagemann, our CEO. Earlier this morning, we announced that we have agreed to acquire TT Electronics, a U.K. leader in advanced electronics for performance-critical applications. You will find our press release and today's slides on our Investor Relations website, and we'll be referring to the slides as we move through the transaction. We begin by talking you through the terms of the transaction and importantly, the strategic rationale. We will then open up for questions.

Please note, today's call will include forward-looking statements. Actual results may differ. For full details, please see our press release and the appendix of this presentation.

With that, I will hand over to Alexander to walk us through the transaction.

Thanks, Peter. Good morning, everyone, and thank you for joining us on the call. We are truly excited to speak to you about our agreement with TT to create the largest global pure-play EMS provider in the high mix, low-volume segment with strong focus in health care technology, aerospace, defense and industrial automation.

Let me start with a brief overview of the headline terms and financial effects. We have agreed to acquire TT for an equity value of CHF 303 million, which translates to an enterprise value of CHF 396 million. The offer is structured as 155p per TT share, 100p in cash and 55p in Cicor shares, 2/3 and 1/3 cash stock. Together, we will have pro forma revenue exceeding CHF 1.2 billion and adjusted EBITDA of approximately CHF 140 million, including quantified run rate cost synergies of at least GBP 13 million, which is equivalent to CHF 14 million, with one-off costs to achieve of approximately CHF 16.5 million, equivalent to about CHF 17.5 million -- sorry, GBP 16.5 million, equivalent to CHF 17.5 million.

We see upside to this as well as potential additional revenue synergies as we continue to progress with the integration. This transaction is accretive to our EBITDA margin and expected to deliver more than 30% EPS accretion in financial year 2028. We are targeting pro forma net leverage to be around 2.5 by the end of 2026, supported by strong cash flow generation of the combined business.

We anticipate closing in the first half of 2026, subject to shareholder and regulatory approvals. We have already received a letter of intent to vote in favor of the transaction from one of TT Electronics' largest holders, Aberforth, who is holding 10% shares.

Turning to Slide 4. Let me walk you through the transaction structure in more detail. The headline price of 155p per TT share split between 100p in cash and 0.0028 Cicor shares is based on Cicor's closing price and ForEx as of yesterday, implying 55p in value. This represents a premium of 64% to TT's spot price, 53% to 3 months VWAP and 113% to the TT share price 6 months prior.

The Board of TT has unanimously recommended the offer to the shareholders. TT shareholders will hold about 10% of the enlarged group with Cicor current holders retaining the remaining 90%. OEP will remain the largest shareholder of the combined group with roughly 38%. They are equally as excited about the potential value creation for shareholders of the enlarged Cicor Group and remain committed to helping us achieve our ambitions. Completion is subject to TT shareholder approval, 50% by number, 75% by value of those voting and regulatory sign-off in several jurisdictions. Cicor shareholder approval is not required.

Turning to Slide 5. I'd like to give you a brief overview of TT. TT was incorporated in 1908 and is headquartered in Woking in the U.K. The company specializes in advanced electronics for demanding applications with a focus on health care, aerospace and defense and automation and electrification. TT operates across North America, the U.K. and Asia, offering power and connectivity solutions, manufacturing services and specialist sensors that contribute below 25% of revenues. Their customer base includes blue-chip names and the global footprint spans 8 sites in North America, 8 in the U.K. and 3 in Asia.

For 2024, TT generated CHF 550 million in revenue and CHF 54 million in adjusted EBITDA according to IFRS. Given all of this, we believe TT has a highly complementary business model and strong strategic fit with Cicor.

Turning to Slide 6. You will see why this is a transformational acquisition for us. First, by combining our strengths, we are creating a global EMS leader with expanded technical and manufacturing capabilities. The combined group will be the largest global pure-play EMS provider in the high mix, low-volume business with strong focus in health care technology, aerospace and defense and industrial automation with revenue doubling to over CHF 1.2 billion and with sector-leading EBITDA margins.

Second, the deal creates an agile and competitive platform that will accelerate organic growth. Cicor will be better able to pursue its global ambitions, especially North America. The deal also presents significant cross-selling potential and deeper reach in key markets such as health care technology or aerospace and defense.

Third, the transaction significantly enhances our financial profile with exciting synergy potential. We have quantified at least GBP 13 million of synergies on an annual run rate basis by the end of the third year post completion. We see potential beyond this that while not quantifiable under U.K. takeover rules, could provide material upside. The transaction boosts our EBITDA margin and is materially accretive to earnings per share.

Finally, this transaction builds on our strong M&A track record and makes us a stronger platform for continued market growth in the sector. We are highly experienced in acquiring and integrating businesses and will leverage our established and successful approach. This also specifically applies for selected TT sites known under Project Albert, which we will further elaborate in the presentation.

Turning to Slide 7. Let's talk about the strategic fit. This combination significantly strengthens our capabilities in engineered electronics and high-specification components. We will maintain our focus on priority end markets of industrial automation, health care and aerospace and defense.

Our footprint will be broader than ever across Europe, the Americas and Asia with a larger presence in the U.K. and new reach in North America. We see a real opportunity in the U.S. where we can leverage TT's manufacturing and Cicor's expertise to drive growth. Our North American presence will also be strengthened by the acquisition of 2 sites from Valtronic, which we announced earlier this week. The Valtronic sites are highly complementary with TT's business and should provide additional synergy upside, especially given the geographic proximity.

Turning to Slide 8. This page highlights how the enlarged group will become the one of the largest listed European EMS player with global operations and capabilities, both in terms of revenue and EBITDA. Our combined revenue exceeds CHF 1.2 billion on a financial year '24 basis, putting us at the top of the peer group. Our EBITDA and margin is expected to be sector-leading as well, thanks to our specialization on high-mix, low-volume manufacturing for highly demanding applications, our operational excellence and the cost synergies we have identified.

Turning to Slide 9. We showcase our combined global manufacturing footprint. The map illustrates the addition of sites in new geographies, including North America, the U.K. and Asia. This further diversified footprint enables us to serve customers more globally, optimize our supply chain and respond quickly to new market opportunities. In particular, this unlocks a significant opportunity for us in the U.S. to leverage TT's manufacturing sites and Cicor's operational expertise to accelerate revenue growth in North America.

You will see we have also shown here the location of the Valtronic sites in relation to TT's operations. At this point in time, we have not decided on any actions to consolidate the operating footprint that will strive to determine the best global setup moving forward. Both companies have undertaken independently such optimization measures as TT's closure of Plano and Cicor's closure of Ulm.

Turning to Slide 10. As previously mentioned, we have quantified run rate cost synergies of at least GBP 13 million, equivalent to CHF 14 million on an annual run rate basis by the end of the third year post completing the transaction. 95% of these synergies will be delivered within the first 2 years. We have a very high degree of confidence in delivering these synergies as they come from identifiable cost savings and have been heavily verified by a public reporting accountant. 85% will come from overlapping roles across head offices and senior management functions as well as duplicate public company costs.

The remaining amount comes from overlapping roles outside of head office, where Cicor intends to apply its decentralized approach to drive efficiencies. Beyond this quantified amount, we see significant potential additional synergies through the consolidation and improvement of specific manufacturing sites process, which could provide additional cost synergies and cross-selling opportunities across the enlarged customer base, providing revenue synergies. There will be one-off integration costs, mainly for workforce and site changes but we will manage these carefully to ensure a smooth transition.

Turning to Slide 11. Over the past several years, we have completed a series of strategic acquisitions across Europe and beyond in order to complement our existing strength and expand our capabilities. These have notably allowed us to further strengthen our leadership position in aerospace and defense. This proven playbook gives us confidence in our ability to successfully integrate TT and continue delivering value for our shareholders. What also increases our confidence in being able to execute this deal smoothly and drive shareholder value is our familiarity with TT's business. Just last year, we acquired 3 sites from TT and have been very pleased with how the integration has progressed.

Let me talk you through it in more detail now. After acquiring 3 TT sites in March 2024, we applied the Cicor business model and integration playbook with great success. That is to decentralize support functions and decision-making wherever possible and to minimize central SG&A spending. There has been a step change in profitability and free cash flow generation at these sites, creating significant shareholder value. Most of the acquisition cash outlay was rapidly recovered with EBITDA more than doubling at the acquired sites. This experience also confirmed the strong cultural and business fit between TT and Cicor, which gives us confidence that applying the same integration approach at a larger scale will unlock further value at scale.

Turning to Slide 13. When managing our integration, the focus will be on delivering cost synergies, retaining the best talent and ensuring a best-in-class experience for our customers, partners and stakeholders. Within the first 6 months post completion, we will conduct a strategic review to finalize and refine our integration plans. We will continue to look for additional synergy opportunities and work to improve TT's performance within the group.

Certain TT sites relating to their components business will be managed separately as noncore assets in line with TT management's current plans. While these are good businesses operating in attractive end markets, they are not synergistic with the wider group. Therefore, we will conduct a review to determine whether Cicor is the best owner for these assets and what will drive maximum shareholder value for the enlarged group. We will keep the market updated as we hit integration milestones and track our financial progress. Our team has a strong integration track record, and we are confident we will deliver on these objectives.

Turning to Slide 14. This transaction is fully aligned with Cicor's Strategy 2028, to be the leading pure-play pan-European electronics partner. The enlarged group will have more cross-selling opportunities, broader capabilities and a focus on high-growth sectors. We will integrate TT's operations using our experience in acquiring and integrating companies to deliver value. We will maintain a solid balance sheet, aiming for pro forma net leverage to be around 2.5 by the end of 2026.

Turning to Slide 15. Here's our timeline to completion. The TT shareholder vote is expected to take place in December with the corresponding scheme documents to be published as soon as practicable in November. As mentioned, the transaction is subject to merger control approvals in the U.K., Germany, the U.S., Mexico and Australia as well as foreign investment approvals in the U.K., France, Italy and the U.S. Cicor is experienced in engaging with regulators for approvals given our M&A track record, and we have a high degree of confidence in being able to successfully complete these processes. On this basis, we expect closing to take place in the first half of 2026.

Turning to Slide 16. I'd like to reiterate how excited we are about this acquisition. This transaction creates the largest global pure-play EMS provider in the high mix, low-volume business with expanded technical and manufacturing capabilities. It enhances our financial profile and offers significant value creation for shareholders. It builds on our proven playbook of creating value by consolidating the fragmented EMS market and will allow us to continue to do so. This deal is fully aligned with our strategic road map and positions us for long-term success.

With that, we are happy to take your questions.

[Operator Instructions] The first question comes from the line of Mr. Rolf Arpagaus from Awp.

First, I wanted to ask you, would you like the questions in English? Could German also be fine? I don't know who's -- everybody on the call.

If English works for you but we can also do it in Germany, yes.

English works. First thing I thought this morning as I saw this huge company you're buying, I thought, wow, that's pretty cheap. Can you -- and my first -- second thought was is TT restructuring case because they had turnover going down last year. They had problems in North America because of taxes and other operative problems. Can you maybe comment on that?

Taking your questions one by one. We find that the valuation and the offered price is both offering value to TT's shareholders by offering a material premium of 64% to yesterday's close. Whereas at the same time, it is truly value accretive for Cicor shareholders with the anticipated EPS accretion of more than 30%, of which, as we said, a good portion will already happen earlier. So the common view of the Boards and management of both companies, TT and Cicor is that this is a win-win creating value for both sets of shareholders.

Now about the situation of TT, I have to say, and that is was stated also by Warren Tucker in the 2.7 announcement is that TT was set up for a to be a much larger company. They have set up a headquarter of scale, which would support a significantly larger company. But for a variety of reasons, that did not happen.

TT is clearly not a restructuring case, as you see in the underlying profitability already that TT has stand-alone. Yes, there have been some revenue. The revenue coming back recently as the result, especially of inventory cycles in the component business. So this is not a concern to us as we have done really a deep dive into TT, into the markets, into the sites. And honestly, what we see is that TT's management and Board have done an excellent job under present leadership to address all the critical topics of the company.

Okay. But still going back to -- you're not going to integrate TT [indiscernible] as they're standing here as I got the presentation was pretty fast. You were talking about some sites in Great Britain, you're going to close? Or can you go a little bit more on that? And what does that mean for your sites in U.K., in Switzerland? And how many employees do Cicor and TT have today? And how much will they have -- will the company have together after integration in 3 years?

Cicor today has roughly 4,400 employees and TT Electronics almost 4,000. So together, it's above 8,000. We have announced that there will be certain headcount reductions according to the measures that I have outlined in the presentation that are less than 5% of the TT Electronics headcount. And as we mentioned, the cost savings will be focused on corporate SG&A by applying the Cicor lean operating model. As part of this, we are not anticipating site closures. This is not part of the plan that is announced today. What I have mentioned is that independently, TT has -- is in the process of closing an unprofitable site, which is in Plano, Texas manufacturing components, whereas we at Cicor have closed our thin-film site in Ulm and transferred production to our Swiss site in Wangs. But no facility closures foreseen as part of this plan and proposal.

So also your question, how will this affect Cicor sites? We do not foresee at this point in time any effect on Cicor sites with regards to headcount. So nothing of any significance. We will be very focused and develop the cross-selling opportunities that we have.

Okay. Then I have to also dive into one thing you said about the integration. I didn't get that all completely. You said after 6 months, you will do a new review and decide if one certain part will also belong in future to Cicor, but then I didn't get that what we were talking about.

Out of the roughly 18 sites of TT, and that is also in the 2.7 announcement, there are around 10 sites that are very synergistic with Cicor business. These sites represent the vast majority of revenue of TT Electronics. So this is really the dominant part. And these sites, we will integrate according the playbook like we have done with the 3 sites Project Albert 1.5 years ago. Now it is just 10 sites. There are remaining roughly 7 sites after the closure of Plano that are operating in businesses that are not synergistic with the other 10 TT sites or the other Cicor sites.

And here, we will continue to manage these businesses separated from the core business and identify for which sites Cicor would be the best owner or if there would be another owner that could develop the potential of these sites better.

Okay. Then I got it right now. I'll just stay in the line. I got 2 more. You recently said -- you said the bar part of this takeover price of CHF 303 million is about 2/3, so CHF 200 million. So I think that the bridge loan will be about CHF 100 million because at the investor conference, you recently said for takeovers, you had about CHF 100 million on hand. Is that correct?

Peter will comment on this.

Yes, we said this one. But what we have done because of the U.K. rules, we have established a bridge financing that is significantly higher that covers the full cash portion. And hence, we have the committed financing in place. It is done a financing facility together with UBS and Commerzbank that covers more than the cash portion and obviously, the consideration payables to the TD shareholders under the terms of the offer. So we are using this to fulfill our requirements to prove the financial capacity to do the transaction.

The entire bridge financing is, as stated in the 2.7 announcement, GBP 345 million.

And it is that high because it has to not only cover the cash portion of the purchase price but also it has to provide security to allow to cover all existing debt of TT Electronics.

Okay. Did you -- any point of your presentation, mention restructuring costs? You had a lot about synergies but restructuring costs. Could you give me a heads up?

Yes. We have mentioned the restructuring cost of about GBP 16.5 million, and that is the overall integration cost. And that integration cost includes all aspects. It includes restructuring where needed. So payments for positions that are eliminated in the combined group but it also includes all other elements such as IT integration, which obviously will be a very important portion of the overall.

Okay. Then I know I'm pretty long in the line, but one last one I got. Your midterm target was telling us that you're going to have a CHF 1 billion turnover until 2028. So one big leap and you're over it. When are we going to hear your new midterm targets? And could you already give an indication where you could go for?

What we can already say is that there is no reason that we see today to amend our midterm targets if it comes to organic growth to operating margins to level of net debt or CapEx. On revenue targets, we will, in due course, publish a new target but this is too early for me now to give you a response when exactly we will do this.

[Operator Instructions] Ladies and gentlemen, there are no more questions. And I would like to turn the conference back over to Ms. Alexander Hagemann for any closing remarks.

Thank you very much for your interest. This is an exciting day. Coming together between TT Electronics under the roof of Cicor is an opportunity that in our view, really knows only winners. It is, as we said, it is in our view and the view of the Board of TT Electronics, highly attractive for TT shareholders. It is highly EPS accretive for Cicor shareholders. It enlarges the regional footprint, scale and also offerings for our customer base. And obviously, it increases opportunities for our employees and managers. So we are very excited about this opportunity.

Now obviously, we're going through the process as it is outlined. In the meantime, we are here to respond to your questions, obviously, also after this call. And we are very grateful for your interest in this transaction. Thank you very much, and have a great day.

Ladies and gentlemen, welcome to the Cicor Half Year Report 2025 Conference Call and Live Webcast. I am [ Matilde, ] the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Alexander Hagemann, CEO.

Please go ahead.

Thank you very much, Matilde. Good afternoon, everybody, on this call. Very happy that we have a very large number of participants here. Today, as most of you have participated already, we will again present our numbers and of course, some of the background information in the first half of this year, which will be done by Peter Neumann, our CFO, and myself.

So moving to the next slide. This year was so far clearly a year with marked great steps towards the pan-European leadership in our chosen markets that we are looking for. Our chosen markets, as most of you know already, are those where we are talking about mission-critical electronics. Electronics where lives depend on where the safe operation of important assets depends on. And these are the markets of aerospace, defense, industrial, healthcare technology. Now if you are looking into these three markets, what they do really have in common is the extremely high demand to quality, reliability of what we are doing. First and foremost, market for aerospace and defense, 28% of pro forma sales this year are in this market where Cicor is present on above sea, below sea ships in the air and satellites, et cetera.

The industrial market is still our largest market, where Cicor drives miniaturization, automation and very important application sensors, semiconductor equipment and so on. And healthcare technology, 19% of pro forma sales, where Cicor has a leading position in medical variables like hearing aids, but also present in fast-growing markets like surgery, robots, implants and so on. Going to the next slide. That is what Cicor is really looking for. We are looking for pan-European leadership. And we have made over the past 6 months, major steps in expanding our position in the European market, and I will discuss that later. So the vision for 2028 towards which we have made these important steps forward are to become the leading pan-European electronics design and manufacturing partner for the markets that we have chosen.

And being pan-European for us means a very strong market presence, but also presence in engineering and manufacturing wherever it is needed. That is a clear USP of Cicor that is extremely important, especially for the market of aerospace and defense, where domestic manufacturing is absolutely key. Now when we are discussing the first half of this year, we need to understand that the numbers of Cicor that Peter will present in detail are impacted by a number of effects that need to be reconciled to understand the true and underlying performance of Cicor. First of all, what you will see, it is the timing of M&A. If we are reporting net sales growth of 21.4% year-on-year, which was driven mostly by acquisitions. Of course, this is very much impacted by the timing of our acquisitions, where in January, we already consolidated Profectus Solutions. Then in April, we took over Eolane France and Morocco and in June, one factory of Mercury Systems International.

So you can see that the numbers are heavily impacted by the timing of those acquisitions. Additionally, what you will see is for a proper reconciliation of our segment profitability that we have started to allocate corporate costs in a more proper and transparent way to our segments. And therefore, you need to add 85 basis points to segment profitability to make them comparable to previous year. Now talking about the business and looking how the EMS market in Europe looked like over the past year and also the first half of this year, we are especially satisfied with the fact that we are returning to growth. We are returning to organic growth and record a positive book-to-bill rate for the full first half of this year, whereas last year was still marked by a significant contraction of the order book as the result of inventory reductions from our customers. And as the effect and as a result, you can see a positive organic growth in quarter 2.

So when the first half of the year was still a slight negative on organic growth, the second quarter really marked the turnaround back to growing business. Now we are very satisfied with profitability of our business on a comparable level, that is when reconciling for the effects of the Eolane France integration about which Peter and also I will talk more about. So you saw an increase of 50 basis points in the operating margin, EBITDA margin to 11.2%. Peter will comment on the free cash flow. We continue to work very disciplined on net working capital to make our capital investments also very effectively and thus can report a significant free cash flow before acquisitions and also adjusting, of course, for the Eolane France acquisition. And last but definitely not least, I will come to that at the end. As usual, we are able to increase our full year guidance.

Now timing of acquisitions, I've already mentioned. And especially important, it is when we are looking at sales by industry. Here, you see 2 charts today. On the left, you are seeing the reported numbers from the first half, and that is the consolidated numbers, including the acquisitions as per the effective date of closing of the transaction. So again, for Eolane, that was in April. For Mercury Systems, this was in June only and no contribution yet from the acquisition of MADES in Spain, which will be closed only in the very near future, so in Q3.

So -- if we are looking at a pro forma basis, so with a full year contribution, which is theoretical, but it shows the proper run rate of the Cicor Group, you are seeing the following distribution. Industrial is still the most important market. It is diverse. It is many high-tech applications, as I mentioned already, being a bit over 1/3 of the business, 36%. Aerospace defense, already the second largest market, more than 1/4 of the business, almost 30% with 28%. That is an increase of 3 points over previous year and is driven obviously by acquisitions, but also organic growth. And healthcare technology as the third of our strategic markets with 19% of sales, very attractive market for us; however, the share has been reduced because our acquired companies have a little contribution to healthcare technology markets.

By regions, we see a continued move towards Europe against sales to Americas and Asia. Let me say one word about the Americas. Direct sales of Cicor that are affected by the U.S. tariff regimes, whatever they will look like after August 1, are only 0.5% of sales. So there is almost no direct impact of the U.S. tariff regime on Cicor direct sales. Special importance for us is the expansion of our presence in the aerospace and defense market. This is to provide a platform for our customers that is capable of not only fulfilling demands of today, but also to -- that is able to scale up with the customer demand. And very honestly, the significant and most significant growth is only happening now and in the years to come.

Aerospace defense programs take very significant timing from the decision of a program until we see the realization. And therefore, we are the one company, the one partner that has the most scalable, robust and secure platform for aerospace and defense electronics manufacturing throughout Europe. If you look at the map on the right, the pan-European presence of Cicor is a reality. You are seeing presence in the most important markets for aerospace and defense, which is Great Britain and France. Germany is a very fast emerging market for aerospace and defense. We are able to offer scalability and attractive cost in Romania, obviously, also NATO member and very important for us is also our presence in Spain.

Cicor is more of a true one-stop shop than anybody else in the industry because Cicor is able to offer all the services across the value chain from systems engineering, critical components from our Advanced substrates division, assembly and also the service that is required. So what you are seeing in Cicor, a clear USP in the industry and also in the numbers that you are seeing leadership in the European market of aerospace and defense. Overall, the division recorded a 26.2% increase in net sales, which was obviously driven in by acquisitions. Underlying profitability could be increased again to 11.1%. And again, this number, which is adjusted for the Eolane France integration to which I will come in the next slides, has been an increase over the last year when also considering the allocation of corporate costs to the segment.

So when looking at these numbers, we see roughly a 30 basis point increase in the operating margin. The integration of Profectus Solutions in January and Mercury International in June have worked very well. We are very satisfied with the status where we are. The Eolane France Integration, I'll come to that, has been marking a very, very important step, and we are on target to achieve our objectives for this acquisition. Again, the Spanish market entry with the acquisition of MADES, a highly successful business with a seasoned management team and margins slightly above group average has proceeded very well. Closing is subject to regulatory approvals as it's usual in the aerospace and defense market, it takes a little bit more time, but we expect to be able to report very soon progress in that area. So all this together leads to very satisfying progress towards pan-European leadership in our chosen markets.

I've mentioned Eolane France. We need to look at France as being the second largest market for electronics in Europe overall behind Germany and being the second most important market in Europe for aerospace and defense behind U.K. So it is extremely significant and important for us to be in that market. Now establishing this strong position in France, therefore, was absolutely strategic. And we were very satisfied that as an effect of a restructuring of Eolane, we were able to work very closely with the Ministry of Defense and the Ministry of Finance of France to secure this business. Securing the business is important for many of the leading aerospace and defense integrators and other French customers. And therefore, it was very of major importance to have a smooth transition, which we managed. So all the sites remained operational. The social climate was very positive.

We were able to do the integration of the businesses smoothly. You also see Morocco, 2 manufacturing sites in Morocco that we are now operating in Cicor. And Morocco is a highly competitive and logistically attractive, politically stable manufacturing location for electronics in Europe. So you really have to see Morocco as a country that has very favorable trading terms with many countries in the world, including the U.S., including the EU and Asian countries. You see Morocco being logistically obviously extremely close to Europe and labor rates being comparable with Southeast Asian nations. So Morocco, also very, very attractive addition to Cicor. Now looking at that acquisition, it has been an acquisition out of a regulated bankruptcy proceeding. And that has the consequence that you will need a bit of interpretation of the Cicor results in the first half to understand what it really is. That is the nature of this transition. Purchase price, in this case, is less than half of the cash investment that we did.

For a business with CHF 120 million annual business, of course, a very low purchase price of [ EUR 7.3 ] million plus the transaction cost of CHF 2.5 million, and we acquired [ EUR 3.7 ] million cash, which came with the business. But now as out of the 7 sites, we have acquired 5 sites in good standing that is as share transactions. We have acquired 2 sites out of bankruptcy. So these were asset transactions. Here, we were investing [ EUR 9.1 ] million to pay off certain debts and also to rebuild net working capital. And you have to consider the overall investment of CHF 15.3 million, including all these effects. Now [ EUR 15.3 ] million, that is the investment for a business of roughly [ EUR 130 ] million annually. So you are seeing that is about 12% of annual sales that were invested. I would say, a very unique value creation opportunity as we are now progressing towards making this a good and profitable business.

When understanding the annual numbers or the half year numbers, we also have to see that CHF 2.5 million of these cash investment has been recorded as negative EBITDA, which is integration cost and business continuity.

So please look at these numbers in a holistic way, and then it will be easily possible to understand the performance of Cicor. Now our other division, the AS division, it is a more and more robust business. It is a business where we have made significant progress by consolidating the Backnang site, a small site that we have acquired a few years back. And we are progressing now in consolidating our own Germany site into our main site in Switzerland in Wangs. So at the same time, our [ PCB ] site in Boudry, Switzerland has finalized very important operational excellence programs and is now very robust in their business. Therefore, even through a reduction of reported sales, which was significant, 19.2% reduction of sales caused by very sharp inventory reduction of the 2 largest healthcare technology customers has still seen an almost stable operating margin when considering the shift of corporate allocations with 13.3%.

So now when the inventory reduction is over, which we believe is pretty much the case now, then we can expect a very interesting uptick in margins in the future as that is a business that is very highly volume dependent.

So with that, I'm very happy to hand over to Peter to report in more detail on our financial results.

Thanks a lot, Alexander.

Let me lead you through some more details of the half year financials. If we go to the first slide, the key figures. Here, you can see that we are achieving a record revenue and EBITDA in absolute terms as we are successfully implementing our growth strategy. You see the book-to-bill of 1.02, clearly indicating future growth momentum. And as Alexander said, we are back to organic growth in Q2. Also if you look at the entire half year, the majority of revenue growth with 25% year-over-year is driven by the acquisitions. If you look at EBITDA profitability, we should look at the base profitability progression at Cicor that is very healthy with 50 basis points improvement versus 2024. We acquired Eolane in Q2, and this had a negative impact on the profitability. This is in line with our business plan and the negative Q2 Eolane results are nonrecurring in nature, and we expect a positive contribution for the second half of 2025.

On the base, we have a strong free cash flow performance with a free cash flow to EBITDA conversion of 64%. We remain extremely disciplined as a solid and reliable free cash flow generation is the engine of our growth strategy. You can see this as well in our CapEx that is below 2%. We have a strong base net earnings performance, FX and Eolane are nonstructural impacts that I will explain later that distort the underlying performance. Quick step back on the long term. As you can see, excluding Eolane, first half is a record in revenue, EBITDA and margin progression. Over the past year, Cicor has proven that it is able to grow profitable with a balanced organic and inorganic growth. Objective is clearly to continue this progression as we announced in our 2028 strategy to reach more than CHF 1 billion revenue.

Now half year 2025. Reported growth of 21.4% on revenue. M&A contributed 24.8% sales growth. FX as the Swiss franc has strengthened mainly against the U.S. dollar, but also against the pound is negative 1.4% and organic sales is minus 2.1%. But the decline, as Alexander said, is driven by -- as shared in the Q1 results by the exceptional STS materials sales in the base and the [ destocking ] of 2 medical customers in the AS division. Excluding these 2 effects, we are back to organic growth with momentum picking up. On EBITDA, we had a onetime impact, and you see this always, I show on the right, the elements, excluding Eolane, so that you transparently see the performance on the base, excluding the Eolane nonrecurring effect and with all-in numbers. On EBITDA, we had a onetime impact from Eolane of negative CHF 2.5 million. And you can see how the base business is progressing from 10.7% to 11.2%.

Net profit is on the base progressing solid. FX, we saw a big swing. Last year, we had in the first half, FX helps. This year, we saw the opposite effect as the Swiss franc was strengthening. On the free cash flow, Alexander already explained the CHF 9 million investment in Eolane, which should rather be looked at in the context of the M&A business case. Base business free cash flow conversion, really strong. Recall, our objective is to remain above a 50% conversion, and in this case, we are at 64%. Now if we look at the P&L statement in detail, I don't -- I mentioned already the key drivers up to EBITDA. I want to draw your attention on if you look into EBITDA to EBIT, 2 elements. One is clearly the depreciation of property, plant and equipment of 2.5%. On top, we see also an amortization of 1.4%, that is driven by the intangible assets that we acquired through our acquisitions.

On the financial income, we continue to see low and reduced interest expenses as the SARON reduced. And even more importantly, and this is that we have a smaller overall financial liability that I think is really exciting if you look into the number of acquisitions we have made and is showing also the impact of the free cash flow delivery in the last year. On net FX results, we had a help in the first half of '24, but we see the negative in 2025, creating a significant swing. This is noncash impact that comes from our intercompany financing. The tax rate is impacted by this. You should look at the tax rate, excluding this net FX result as this is not having an impact on the tax in absolute. Sales contribution, you can see M&A there, TT Electronics that we only closed in April 1, 2024, and Eolane are the 2 major material impacts. You can see that EMS is growing. Taking out the onetime STS impact, we would have been growing even CHF 5 million. AS impacted by the 2 medical customer destocking, as Alexander previously shared.

Now moving on to the balance sheet. Cicor continues to maintain a really strong balance sheet. Our balance sheet also shows the focus of Cicor to optimize our invested capital and delivering free cash flow. Net debt increased to CHF 73 million to the executed acquisitions. Leverage, we are at this point in time at 1.16, giving us significant headroom for further acquisitions. After -- assuming as we expect the MADES acquisition that is pending clearance to be closed in Q3, we would expect that we have afterwards another CHF 100 million for further M&A available. Equity ratio at healthy 30%. Free cash flow, excluding NA and Eolane M&A impact is at [ CHF 18.1 million, ] mainly due to the strong operational performance and net working capital improvements. You can also see that we had a total net cash outflow of CHF 18 million for the 3 acquisitions of Profectus, Eolane, the carve-out from Mercury International.

Generating sustainable free cash flow is a critical priority and a key pillar of our growth strategy. Some words on operating net working capital. We continue to focus on improvement and reducing net working capital as a percentage of revenue versus last year. The absolute increase is obviously driven by the acquisitions. We are now at 25%, in line with what we had at year-end levels in 2024. This is driven by an operational improvement on the base to 23.6% and the new acquisitions that came in at higher operating net working capital level. I personally always like this one because as acquisitions come in with higher operating net working capital levels, we are able, and this is a significant opportunity to deliver free cash flow as we are implementing our operational excellence program in the acquired company as we have done in the past as well.

Return on capital remains our focus. It is really clear to grow in absolute, improve profitability and manage invested capital that is in our business, to a large extent, operating net working capital. June impacted by Eolane nonrecurring effects and M&A coming in at higher operating net working capital levels. Overall, we remain an excellent momentum on ROIC and the elements mentioned are rather an opportunity to further improve going forward. We reconfirm our commitment to deliver ROIC above 15% as per our strategic 2028 midterm goals.

Here you see some more perspective on the impacts driving net earnings decline that are important to understand. You see that the base performance in absolute net earnings is strong year-over-year. You see the 2 FX impacts, the negative, so the help, the onetime help we saw last year, that is obviously nonrecurring in structure and onetime hurt we had this year driving this big swing year-over-year. And then you see also the Eolane impact that on a net earnings is close to CHF 3.5 million, CHF 3.4 million of negative. These are the drivers, but I think it's important to understand that excluding and we really look at FX, we have a very strong continuous progression. That is also what you see on earnings per share.

Here, you can see the longer-term earnings per share development and the recent positive development as Cicor is executing its growth strategy. Blue are the reported numbers that include the FX variability. From our view, you should look at the red line that excludes the foreign exchange impacts, driving a certain variability. Red line for 2025 includes also the negative Eolane impact. Again, our focus is to drive earnings per share longer term in line with our growth strategy and drive shareholder value. On the capital structure, good news is, at this point in time, 99% of our mandatory convertible bonds are converted during the optional conversion period, and we are back to a very easy to understand capital structure as the number of outstanding registered shares is also the one pretty much the same as the number of outstanding and conditional MCN shares, total number.

Second point, market capitalization is above CHF 700 million and even higher looking at current share prices. which I think is also excellent news. Now you see in the half year report, we really integrated 3 acquisitions. The most material one and probably also the most important to understand is Eolane. And I think here, you see the purchase price allocation of Eolane a bit more in detail. The purchase consideration is CHF 10 million, as mentioned, including transaction costs and the acquired cash worth of CHF 3.7 million. The deal structure was partially an asset deal for 2 sites and a share deal for the remaining 5 sites. The asset deals brought clearly some complexity, but came with benefits regarding organizational restructuring and past liabilities. On the share deals, we had similar complexity as French Chapter 11 process led to operational disruption.

We have now, in June, normalized most of the operational relationships with customers and suppliers. We have now a solid baseline to drive from gradual improvements as we have done in all our acquisitions and I see Alexander also elaborate on. Overall, we booked a negative goodwill of CHF 12.9 million for Eolane. Now if you take the 3 transactions together, you see this here a total net cash outflow of CHF 18 million and a total negative goodwill of CHF 8.7 million if you take into account Profectus as well as Mercury acquisitions.

With this, I hand over back to Alexander.

Thank you very much, Peter.

So it is important to understand looking at Cicor and we tried our best to make it as transparent as possible to you that we have seen a first half year with a very strong progression of underlying operational performance. And on top of that, the integration of Eolane France and Morocco, where we paid again, roughly 12% of annualized sales as a complete cash outflow has an enormous opportunity for value creation once the margins are coming closer to the Cicor levels, which we expect to happen in the next 18 months.

Now that is truly the 2 -- these are truly the 2 elements to look at. The strong underlying business plus the value creation opportunity from Eolane. It is also important for us to continue on our growth strategy as we have done in the first half and at the same time, being very disciplined as far as cash outflows are concerned and as far as the leverage of the overall balance sheet is concerned. So looking at our expectation for the rest of the year and the total year, we are seeing very clear signs of return to organic growth already happening in Q2 and looking at the larger the EMS division even for the full first half. We discussed progress in integrating the recently acquired businesses, very positive on Mercury and continuing according to our playbook -- according to our playbook for Eolane France.

And therefore, we are able to increase our guidance on the sales, so on top line and also bottom line, talking about our top line, we are seeing now sales of CHF 620 million to CHF 650 million. And these are not pro forma sales. These are reported sales. You're looking at pro forma sales, you are seeing a number which is roughly at CHF 700 million or higher. But on reported numbers, you can expect CHF 620 million to CHF 650 million sales, which is significantly more than the CHF 520 million to CHF 560 million in our former guidance.

And an operating result, when we are reconciling for the one-off effects from the Eolane integration, we are looking at CHF 64 million to CHF 72 million in EBITDA that we expect for the year. Previous guidance was CHF 60 million to CHF 70 million. And if you are including the roughly CHF 2.5 million negative EBITDA from the Eolane integration, you're looking for CHF 62 million to CHF 70 million EBITDA.

So we are specifically glad that we were able to increase our guidance, both on top and bottom line, especially because the significant strengthening of the Swiss franc over the past few months against the euro and of course, especially against the U.S. dollar has provided us very, very considerable headwinds slowing down, obviously, our growth. So which tells you that underlying and adjusted for ForEx, we are very positive about our business.

So with that, I want to thank you very much for your interest, and we are happy to take your questions.

[Operator Instructions]

The first question comes from the line of [indiscernible].

I was wondering, looking at this graph of your markets, can you say in what direction you want to steer the percentages in terms of maybe new acquisitions? Or where do you want to land?

Very good question. Thank you very much for that. We are seeing clearly that we are having significant growth in aerospace defense. It has been our strategic objective to build that European leadership, which we have now achieved. Aerospace and Defense will continue to grow organically, I expect in the next few years faster than other markets. At the same time, we want to specifically grow the medical, so healthcare technology markets. So for me, the perfect scenario are each of the 3 core markets, roughly 30% of sales each and 10% for the rest.

Okay. Very interesting. And what about the regions? Would you also like to go even more into Europe or maybe a bit more balanced?

We have been very clear that we are focusing on the European market. It has served us very well, and we have always said that being a leader in Europe is better than being a follower everywhere. We have to understand that also our Asia sales are mostly driven by companies with headquarters -- with the headquarters in Europe. The one region where over time, you will see more work to grow in that market is North America. So I would expect that medium term, you will see the American share of sales growing a bit.

We now have a question from the line of Alexander Zienkowicz from mwb research.

I have a question on the acquisitions. And over what time frame do you expect to realize the full operational and strategic synergies, especially in regard to Eolane and perhaps also for MADES? And when do you expect meaningful contributions in the P&L and also in terms of capital returns?

Thank you for the question. If I start with the last acquisition, which has not yet been closed, which is MADES. This is a very robust business with profits above the Cicor average, profit margins above the Cicor average. So that will be accretive from day #1. We don't expect any significant integration costs here. So it's very much a business like our first acquisition that we had done, which was Axis Electronics 3.5 years back. With MADES and Eolane France and Morocco, we are looking at roughly 18 months, so until the end of next year to realize the full synergies and operational improvements that we want to see.

The next question comes from the line of Bernd Laux from Zürcher Kantonalbank.

I have 2 questions. The first one is also related to Eolane. You reported that CHF 2.5 million EBITDA loss for the first half of the year and at the same time, CHF 2.5 million transaction costs. Does it mean that the underlying business of Eolane would have been breakeven in the first half of the year? And is it also true for Eolane that as is usual in Aerospace and Defense, the second half of the year is typically seasonally stronger than the first half of the year, so that profitability should improve and there will be no further one-offs at Eolane in the second half?

Let me maybe take the first question on the CHF 2.5 million. The CHF 2.5 million transaction cost cash outflow has been before the acquisition and is part of our purchase allocation on the balance sheet and is not impacting at all the CHF 2.5 million. The CHF 2.5 million that you see in the P&L in Q2 are really linked to, let's say, after the 22nd of April, we -- like it took time to -- for the asset deals, for example, to start up, starting again, start invoicing again and so on. So there are delays that are driving it in terms of the ramp-up operationally. The amounts are the same, but it's a pure coincident. The purchase price allocation captures the transaction costs in the opening balance sheet.

And to let you -- to maybe provide a bit more background on everything that Peter said. So we took over the business 22nd of April. So we had 10 weeks of cost of the business. But due to the restart of the business, we roughly had maybe 6 to 7 weeks of full revenue. So reduced revenues as suppliers had to restart their deliveries. We had to get systems up and running again, as Peter has just mentioned, but the cost, of course, was continuing. So that is the reason for the losses in the first 10 weeks.

That's very helpful. And my second question is related to the other sales segment. It has, on a pro forma basis, even slightly increased year-on-year to approximately 17% of total. Can you shed some light in what's inside the other sales and what's growing there?

What is growing and what I would consider personally as a highly interesting market is rail technology, mostly railway infrastructure, where we are -- have gained significant new customer relationship. So that is a market that from all of its characteristics, I would even consider strategic. And this is several percent of sales now. It has been a very small percentage before, maybe roughly 2%. Now it has grown to 3% to 4% of overall sales. So that is the biggest impact that we have seen.

[Operator Instructions] The next question comes from the line of Lukas Spang from Tigris Capital GmbH.

I would like to start with the Aerospace and Defense segment, more the industry segment of Aerospace and Defense. It was just 7% up in the first half. So I would be interested if you have already some visibility that this will accelerate in the second half of 2025? Or what is your expectation for Aerospace and Defense for the next months and quarters?

So the biggest impact, as we have said already is, of course, the timing of the acquisition. This is why we have provided the 2 views. Reported sales where, yes, we saw a reduction of percentage as those businesses with high aerospace and defense exposure were only joining later. Now moving forward, we clearly see that increase towards the range, as we mentioned, roughly 28%, and we expect organic growth above the average of all the businesses. So you can expect year-over-year a double-digit organic growth of the market. It is not as massive as some might expect because many programs are only starting to lead to high sales numbers in 2026, 2027.

Okay. And then if we talk about -- I know it's just some weeks, but if we talk about the start into Q3, the order momentum with the positive order momentum continue so far?

It is very difficult to make any statement here because, as you said, we are only 3 weeks into Q3. We are in a period that in Europe, at least, where, of course, our biggest market is typically a bit softer due to the summer period. So I would not be able to draw any conclusion from the last 3 weeks to the second half.

Yes. Okay. And then last question regarding the cash outflow in the second half of 2025 for M&A. So -- if the closing of MADES has not been finalized yet, is it right to expect that this is the only purchase price you still have to pay this year?

I'll leave this to Peter.

Look, I think it's fair to assume that the majority of the cash outflow has happened in the first quarter. There may be some amount still in the second half, but clearly significantly lower than what you have seen in Q2.

So you already have paid the purchase price for MADES?

Sorry, no, I was referring to Eolane. MADES, we are awaiting regulatory clearance. You would expect for a business that is more than half in aerospace, defense and has margin above Cicor margin, probably the higher end of our guidance, that is a 4 to 7 EBITDA multiple. So if you do the math, then you would come to a net cash outflow of around CHF 30 million.

So this is the last -- this is from today's perspective, the only cash outflow for M&A in 2025, right?

Exactly.

That's all you can expect for everything that is announced today.

[Operator Instructions] We now have a follow-up question from the line of Alexander Zienkowicz from mwb research.

A follow-up on railway actually. Given the recurring nature and long design cycles, do you see this as an area of strategic expansion going forward? Or is this already baked in, in your plannings?

It is a very, very good question. It's actually a question we are asking ourselves. And the reality is that from all the characteristics of this market, which is really the closeness to the customers, the difficulty to replace really the clear USP that you have in that market by being an entrenched supplier, it has all the characteristics of being a strategic market. Of course, at 3% to 4%, it is a relatively minor part of our overall business, but we will work to strengthen that market. It is a clear interest that we have.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Alexander Hagemann, CEO, for any closing remarks.

Yes. Thank you very much for your interest and for your questions in our company and to our investors for your trust in our business. It clearly has been a very exciting first half year. We have made this very major steps towards pan-European leadership on which we can now build in many ways, both in expanding organically our market presence in the markets and countries where we operate and also in driving operating margins to create value.

We're trying to explain that to you as some of the numbers that you are reading have to be reconciled, and I apologize for the work that we are causing to you for that, but it is important that we are reporting our numbers in a way that is transparent and can be understood well. So thank you again for your trust and your interest. I wish you all a wonderful afternoon and say goodbye for now.

Thank you.

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.

Goodbye.