Siegfried Holding-reg Aktie

Welcome to the presentation of our half year results 2026. I'm here with Marcel Imwinkelried, our CEO; and Tania Micki, our CFO. First, Marcel will present the highlights of our numbers. Then Tania will go into the financials in more detail, and then Marcel will talk about the progress in our strategy EVOLVE+ and the outlook. At the end, we are looking forward to take all your questions through audio and video call in the Q&A session.

With that, Marcel, over to you.

Thanks a lot, Peter, and also from my side, good morning, and a warm welcome to all of you. I'm excited to present to you our half year results 2026 together with Tania. Tania joined us 2 months ago, and it was a busy start for her with the integration of the recent acquisition. With her strong experience as a CFO of a public listed company, she is already running on full speed. So I'm very pleased to have her on board.

Now let's turn to our half year results. The Siegfried team is delivering. Let me give you a summary on the upcoming slide. The performance of the first half of the year is exactly according to plan. Growth is in line with our expectation. Net sales grew by 4.8% in local currencies. Also core EBITDA margin, we increased from 21.6% up to 22.4%. Integration of newly acquired sites is on track. I will give you more details later on. EVOLVE+ strategy, exciting progress. So I really will share -- give you more insights later on as well.

With these results, we laid a solid foundation for the full year delivery. We are confident to confirm our guidance, high single-digit growth in local currencies and an EBITDA margin above 23%.

Now I'm handing over to Tania for the financial update.

Thank you, Marcel, and good morning to everyone from my side as well. I'm delighted to be joining you today for my first earnings call as CFO of Siegfried. While I have only recently joined the company, I have already had the opportunity to meet many of my colleagues across the organization, and I have been impressed by the depth of expertise, commitment and collaborative spirit of our teams. The strong focus on execution and operational excellence is clearly reflected in the results we are presenting today and is one of the reasons I'm excited to be part of Siegfried.

I'm very happy to have joined the company at this important stage of its development, and I look forward to supporting Siegfried in the next phase of its growth journey. I also look forward to meeting and engaging with many of you over the coming months.

With that, let me take you through our financial performance for the first half of 2026. As Marcel has just outlined, Siegfried once again delivered profitable growth in the first half of 2026, and I'm pleased to confirm that we have established a solid foundation to deliver our expected full year results. In line with the guidance, which we issued at the closing of the acquisition in May, net sales increased to CHF 633 million, representing growth of 2.2% on a reported basis and 4.8% in local currencies. Drug Substances sales reached CHF 431.1 million in the first half of the year, while Drug Products sales amounted to CHF 201.9 million.

As expected, seasonality is more pronounced this year than in previous years. This is mainly driven by the recent acquisition of 3 Drug Substances sites in the U.S. and Australia. As the transaction closed on May 1, the acquisition contributed for only 2 months in the current period. Drug Products is more second half weighted due to planned ramp-up of new products. In addition, seasonality is driven by the nature of our production plan.

Let me explain this in a bit more detail. The Siegfried Group recognizes most of its revenues at the completion of a production campaign. As the duration of these campaigns can vary from a few weeks to several months or even more than a year, the timing of revenue recognition differs from year-to-year and depends on the production plan. Similar to last year, a larger share of revenue recognition events are scheduled for the second half of this year, resulting in a stronger second half weighting.

Now let's have a look at the charts on the right-hand side, where we already see the first effects of the acquisition. Our U.S. dollar exposure has increased to 14% compared with 10% in the prior year period and driven by increased weight of U.S. generated revenues. For the full year, we expect U.S. dollar exposure to increase further to around 20% with the corresponding reductions in the share of the Swiss franc and the euro. The acquisition is also reflected in our sales mix. The Drug Substances share of net sales increased to 68.1% from 66.8% in the first half of last year. For the full year, we expect the Drug Substances contribution to increase further to around 70%.

Turning to foreign exchange rates. The U.S. dollar and euro both weakened against the Swiss franc compared to H1 2025. As a result, we experienced a currency headwind of 3.4% in Drug Products and 2.2% in Drug Substances. Based on current exchange rates, we continue to expect a currency headwind of around 2% for the full year. Importantly, our natural hedge once again worked well during the first 6 months, resulting in no material impact on our EBIT margin.

The next slide provides a reconciliation from our reported Swiss GAAP results to our core results, which form the basis for how we manage and steer the business. I would like to highlight 2 items included in the reconciliation. The first item relates to adjustments for our foreign pension plans while we make in every reporting period. We have reclassified CHF 900,000 of net interest on foreign pension plans from operating expenses to financial expenses. In the reconciliation to core net profit, we have also adjusted for the corresponding core net interest expense. The second item is the exclusion of CHF 400,000 of acquisition and integration-related costs from our core results.

Having explained the reconciliation to our core results, let me now take you through the core income statement. In the first half of 2026, we further improved our profitability, increasing our core EBITDA margin by 80 basis points compared with the same period last year. We achieved this despite continued increase in input costs, particularly personnel expenses. The main drivers of this improvement were productivity gains, a favorable product mix and a strong focus on cost discipline across our entire network, including our headquarters. What has particularly impressed me is the relentless focus on operational excellence throughout the organization, which remains a core pillar of our EVOLVE+ strategy. This progress is also reflected at the gross profit level.

Core gross profit increased to CHF 170.7 million, representing year-on-year growth of 4.7%. Core SG&A expenses increased slightly, reflecting our continued investment in systems and organizational capabilities. This includes strengthening our commercial organization in line with our increased focus on commercial excellence under EVOLVE+ as well as expanding our early phase development capabilities across both Drug Substances and Drug Products.

Between EBIT and core net profit, I would like to highlight 2 points. First, core financial expenses were slightly higher than in the first half of 2025, reflecting the expansion of our bond financing. Second, exchange rate movements had a slightly positive impact on the results. As always, this effect is driven by currency fluctuation and can vary significantly from period to period.

Let me now turn to our cash flow performance in the first half of the year. Operating cash flow amounted to CHF 93.7 million in the first half compared with CHF 149.6 million in the prior year period. The decrease was primarily driven by the timing of tax payments, currency translation effects and an increase in net working capital, largely reflecting the addition of the newly acquired sites. One of my key priorities will be to drive strong cash conversion as this remains fundamental to our capital allocation strategy and long-term value creation.

Capital expenditure was below the previous year's levels, reflecting the completion of our high-quality drug substance manufacturing facility in Minden. Investing cash flow also included acquisition-related outflows of CHF 157.4 million. Despite these investments, free cash flow remained positive at CHF 15.1 million. Financing activities generated CHF 143.3 million, primarily to fund the acquisition, resulting in net debt to core EBITDA increasing to 2.3 at the end of the period. Overall, the underlying cash generating capacity of the business remains strong. Our focus will continue to be on cash generation and net working capital management.

Let me now turn to our capital allocation framework. Our capital allocation framework remains unchanged. We continue to invest in attractive growth opportunities, both organically and through M&A. These investments are designed to support sustainable top line growth, strengthen our customer offering and over time, contribute to margin expansion and increased cash generation. The acquisition completed in the first half is a clear example of this framework in action. It strengthens our platform, expands our capabilities and demonstrates our ability to deploy capital selectively when we see a compelling strategic and financial opportunity. The recent acquisitions has neither changed this framework nor our M&A strategy. M&A remains always on.

At the same time, our immediate priority is the successful integration of the acquired business and the realization of the expected benefits and value creation. We will continue to assess opportunities against the same disciplined criteria, strategic fit, value creation and an attractive return on invested capital. We will not pursue transactions simply for the sake of growth. At the same time, our approach to organic investment remains equally disciplined.

And now that we have completed several major capacity expansion projects, we will focus on decreasing the capital expenditure level. This is also part of my ambition to maximize cash generation. Importantly, the ramp-up of our capacity expansion projects in Minden, Hameln and Barcelona are progressing according to plan with the additional capacity being filled in line with our original expectations, and Marcel will provide more detail on this in a moment.

Going forward, we will continue to invest selectively in capacity, technology and capabilities that support future customer demand while maintaining capital expenditure in the low teens as a percentage of sales. As expected, leverage has increased following the acquisition, and it is now our ambition to return back to pre-acquisition levels. We will put a strong focus on cash generation and deleveraging while maintaining the financial flexibility to invest in the business and act on attractive value-accretive M&A opportunities when they arise.

To sum up my remarks, we delivered a solid performance in the first half of the year. We executed exactly according to plan, and we established the foundation to deliver our guidance for the full year 2026.

With that, I would like to hand back to Marcel, who will give us more insights into the execution of our EVOLVE+ strategy.

Thanks a lot, Tania, for sharing the financial insights. And now let me provide some more insights into the good progress we have made in executing of our strategy. I will also share our outlook for the remainder of the year.

Two years after the launch of EVOLVE+ strategy, we are seeing positive results across all dimensions of our strategy. The industry trends remain very much intact. Our strategy EVOLVE+ is built on these trends. Let me give you a few examples of where we are seeing exciting progress. High demand and limited drug substance capacity in the U.S. We have significantly increased our capacity in the U.S. More details shortly.

Customers are looking for supply reliability due to geopolitical uncertainty. Our global network with 16 Drug Substance and DP sites across the U.S., Europe and Asia is the perfect answer to this need. Small, midsized pharma doesn't have development manufacturing capacities. We can now offer them the complete service from preclinical to commercial from Drug Substance to Drug Product. Athens and Grafton together have a really attractive offering in the U.S. Good news, the inflow of new projects for Grafton and Athens is very positive.

This means our hypothesis. 2 years ago, with the announcement of a new strategy of EVOLVE+ during the Capital Market Day, which we have adapted, is now really proven. These R&D teams are almost fully booked. And one important update related to commercial excellence. As you know, we have sharpened our go-to-market approach and strengthened our sales organization with more hunters. Good news also here, we were able to gain 31% more RFPs in Drug Products and 69 more RFPs in Drug Substances year-to-date compared to 2025.

In Drug Substance, we won twice as many new innovation customers year-to-date compared to last year. After 2 years, the direction is clear. EVOLVE+ is really working. We are building a stronger platform for future organic growth. One of the most visible example is how the recent acquisition further strengthens our global network. With our newly acquired sites, we now operate the largest global small molecule drug substance CDMO network globally. 10 sites across the U.S., Europe and Asia give us a truly global footprint with a very strong presence in the U.S. Our offering spans the full journey from preclinical development through the commercial manufacturing.

This combination of scale, technology offering and geographical reach is unique and puts us in a very strong competitive position. Nowadays, if we are offering a new molecule, we are able to send out offers from 3 different locations from Asia, Europe and U.S. and our customers can make the choice. For our customers, this is about more than just capacity. It's about supply reliability and at the end, also the flexibility. We can combine more than 150 years of experience with a Swiss quality mindset and deep technical expertise across our sites. This is an attractive proposition to customers. And we are already seeing strong momentum from our expanded U.S. presence.

Let me provide more details on that on the next 2 slides. From the day we announced the acquisition, the phone lines have been constantly ringing. Customers are curious about this additional capacity for U.S. We opened Wilmington for customer visits in July. Since then, 5 customers visits. Another 6 visits are scheduled in the upcoming 4 weeks. Even more important, we see very concrete interest from top-notch large and midsized pharmaceutical companies. They are looking for capacity for in-market products as well as future product launches.

The feedback has been consistently positive, and we have already submitted 3 concrete offers. This strong level of customer engagement gives us further confidence in the business plan and in our ability to deliver the targeted growth.

The real value of this acquisition lies in unlocking the capacity for new and high-volume business. People are the key. Our integration teams are fully focused and engaged to execute this plan. I had the opportunity to meet the team on several occasions, also together with the Board as part of our strategy offsite in the U.S. One thing I can really tell you, this team is really hungry. Our target remains unchanged to free up 80 cubic meters of high-quality capacity for innovative products available from 2028 onwards. We are on track. Transfer activities are already underway. Wilmington, the first transfer of the first product will be completed this year. Pennsville, transfers have been initiated, leveraging the synergies and capabilities of both sites.

At the same time, we are moving forward with new business. As capacity is freed up, we will gradually start development and transfer in activities for new product -- exclusive products. We expect first revenues from this new business in 2027, followed by a step-by-step ramp-up from 2028 onwards. And there is more. Wilmington continues to see strong demand for the existing portfolio. To sum up, we are moving fast. We are delivering according to our plan, and we remain fully on track to unlock the full value of this acquisition.

A key priority of our strategy EVOLVE+ is to further broaden our technology offering. This is absolutely key to attract new business, especially from small and midsized pharma. Good news, all our strategic technology upgrades are coming online as planned. El Masnou additional lines progressing well. The site recently shipped the first sterile products to the U.S. This is an important milestone after a successful FDA audit and an approval. Minden product transfers are progressing as planned. The first large full campaign was produced and packed earlier this year. The new production facility is now on stream, really on stream. Early phase development, as already explained, strong project inflow into our U.S. acceleration hub continues.

Barbera, first development projects for spray drying are being executed while we are building up the commercial capacity till end of this year. Hameln, the first prefilled syringe line is coming online as planned, and this progress confirms that it was the right decision to broaden our technology portfolio in these strategic areas.

To sum up, we have delivered a solid performance in the first half of the year. We have executed according to our plan, and we have laid the foundation that makes us confident to confirm our guidance for the full year 2026 and beyond. We have a laser focus on the execution of our strategy EVOLVE+ to ramp up our future organic growth. To unlock the full value of our acquisition and most important, we focus to be reliable, the reliable partner for our customers. On-time delivery, top quality and to make sure that our products are helping millions of patients worldwide.

This makes us confident on our positive midterm outlook. Siegfried will continue profitable growth with CapEx in the lower teens or even closer to 10% in the near future. And of course, M&A is always on at the right price and for the right business. We will continue our journey step by step, year by year.

Thanks for your attention now. And now I'm handing over to Peter for the Q&A session.

We will now start the Q&A session. [Operator Instructions] The first question is from Laura. Laura, can you hear us?

Yes, I can. Can you hear me?

Perfect.

I have 3. Maybe if I can go one by one, would be appreciated. So maybe first on Drug Substances, your guidance now includes some small volumes from the previously uncertain large contract here. And here, can you please specify what order is exactly back on? Is it like the usual order size and most of this will be delivered next year? Or is it just a small amount that will be effective for the second half? So that's just a clarification.

Thanks a lot for this question, Laura, because I'm expecting that plenty of you would ask the same question. So this is now really defined and also cleared out with the customer. So the additional business what we are gaining compared to the last guidance, which we had, is marginal. So -- but now everything is in, now with the full confirmation also for the guidance, which we gave in February and also after closing. So this -- everything is in. And of course, next year, business as usual.

Okay. And then maybe on Drug Products, it grew only a little bit in H1, but you point to the planned ramp-up of new products in H2. I'm just wondering if you could tell us a little bit more which site technology and products will drive this acceleration? And specifically also here, what is the time line on the first protein degrader project? Is that on track? And when will it have an impact on growth in DP?

Okay. Very good. I think, first of all, I think we have quite some new products, which we are transferring in. And of course, that's also the reason that we see then a bigger seasonality now in the second half of the year. So of course, the second half of the year will be stronger for DP compared to the first half of the year. Last year, it was 50-50. Now second half will be stronger.

To come back to the second question and in which locations, it's in 2 different locations where we are transferring as we speak, new business, which will really then go further, not only for the second half of the year, but also for the upcoming years then as well. The second question about the protein degrader. As I already mentioned that during the full year presentation in February, we won 3 protein degraders. So it's not only in Drug Product. We won also in Drug Substance as well. And this is well on track. But of course, the first year is more related to tech transfer, method transfer. And then, of course, the volume will start then in 1 year and afterwards and onwards then really to growth year-by-year.

Okay. So this will only have an impact from '27 onwards?

It has already an impact this year. But as you are doing the tech transfer, the impact really on the sales absolute number is marginal. Really, it's really changing then as soon as you are starting with the commercial production. So this is ramping up now next year and afterwards.

Okay. Great. I think that's clear. And then maybe the last question is quickly on the margin guidance. I mean, you had already 22.4% in H1. Your guidance is unchanged at above 23%. Just wondering if there are any kind of tailwinds or headwinds that we have to consider when we think about the H2 margin?

No, Laura, I think it's here, you just have more of a profitable mix effect. That would be maybe what makes the H1 2026 a little bit more than 2025 proportionately. But also, of course, we have the impact already of the operational excellence and also what Marcel mentioned, the focus on delivering with the cost discipline. So I would say there, it's still within the guidance that we are reconfirming for the full year, which is above 23%.

The next question is from Sibylle Bischofberger.

Nice to see you, Tania, and I wish you all the best for the future at Siegfried. So I have 3 questions. I will ask them one by one, if this is okay for you. So first about the acquisition of the 3 sites, how much was the acquisition effect in the first half? Is it fair to assume that it was around USD 25 million?

It's pretty much in line, indeed, Sibylle, because we are reconfirming again the $100 million guidance that we gave when we acquired or when we closed the acquisition, and that's in line with what you have mentioned.

And the second question is about the large contract. So now the large contract or the orders from there are included in the outlook for 2026. Is it fair to assume that because of that shift, then there is a positive effect expected in 2027?

I hope so. But we will look at that, and we are constantly in touch with the customer. As already outlined in the past, it's an in-market product. So I don't expect a big change there, but it will proceed, and business as usual as already outlined.

And we provide guidance...

And of course we will -- as usual, Sibylle, we will guide for 2027 then in February.

And only a small question about the currency effect on the 2026 results. If the currencies remain as they are, could you give us a hint how much it could be on sales and on margins?

So on sales, I'm estimating it to be around 2%. That's, again, as you said, expecting the currencies to not change from the level they are now, especially the U.S. dollar and the euro. From the margin we mentioned before, it's very marginal because we have a relatively good natural hedge.

The next question is from Estelle from Berenberg.

I wanted to ask about the capacity that you are freeing up with the newly acquired sites in the U.S. The transfers that are happening right now, I think it is already to free up that 80 cubic meter capacity? Or are you currently identifying other -- further assets to be freed in order to reach those 80 cubic meters?

I like this question. Also I was also sharing -- and I would like to start from a different angle here. I think also what we see, it's really changing for Drug Substance, more molecules. I was sharing with you 1 year ago compared to the past when for an API, it was common to have 5 to 7, 8 synthesis steps. It went up to 20 synthesis steps last year. And we're really now also happy to share with you the newest generation of small molecules, our customers are asking us for 40 synthesis steps. So these new molecules are becoming even more complex. And it's also, by the way, triggered by artificial intelligence because they are going now for the golden molecules. So they can already at the development, do much stronger development activities for these molecules.

And good news for us now, one is really to free up the capacity in U.S. to have enough capacity available for the near future for these new molecules. And by the way, also happy to have now on stream fully the I-804 facility in Minden. So I'm really confident that we can fill them very soon up.

Now the question, of course, we are also looking how we can further free up additional capacity as well. So far, what we have and already what I shared with you is this 80 cubic meters in Wilmington. But of course, I can also confirm that we are looking how we could further expand.

Next question is from Ed Hall.

The first one would just be on the, I think, the updated -- the confirmed guidance, and apologies if I missed this, but the segment guide that you originally had, I wanted to understand if that still holds or if there's any changes as you've reported this morning? That would be the first question.

No, I think we did this guidance beginning of the year also due to the fact -- due to the large contract where we had some uncertainty to show that up. However, in the meantime, this is settled. So we are confident that we have an agreement, full agreement also with the customer, and we don't need to do that. In the past, always, we gave guidance for -- at the group level. Of course, we are always reporting also at a different cluster. That means for Drug Substance and Drug Product, and we will go back as business as usual also for the near future.

As DP already, what I was outlining also for the question of the colleague previously, here, DP will be stronger in the second half of the year. That's also given, yes.

Okay. Perfect. And actually, just on that, I think we've had conversations previously about a 42-58 split of revenue, and you've mentioned the stronger H2. Is this the right sort of ballpark numbers I should think about? Or does it change somewhat?

It's more or less the ballpark. As you know, we cannot provide any more specific answer on the seasonality. But it is in that -- as I said in the beginning, it is more pronounced also because of the acquisition, having the larger weight, and the full 6 months is, of course, the main reason why it's driving this more pronounced seasonality.

For Drug Substance, DP, as already outlined, we have a stronger second half of the year compared to the first half, yes.

And then finally, just if we just look at the inventory and the conversion in H2. I think outside of the acquired inventory, how should we think about this conversion? And then maybe the days outstanding for controlled substances versus maybe other products? Is that at a different level to what you typically see?

As I mentioned before, I will be focusing on cash generation. The conversion of the inventory is, of course, part of it, and that's what we will work on together with Marcel because it is an operational part as well as the finance part. But yes, of course, we are working on converting it.

And of course, I think also if you can imagine, just Tania and myself were 2 weeks ago in Tasmania. And also to highlight this was really an exciting trip. Here, we had 40 degrees Celsius and they have winter time. The interesting part is really also to say their business model is that they are doing the first half of the year really harvesting. And in second half of the year, they are going for full production.

So then, of course, also after that, we will sell and dispatch everything. So also you can imagine this is also then driving the seasonality related to the net working capital. But this will be sorted out until end of the year according to the business.

The next question is from Fynn Scherzler from Deutsche Bank.

Really only 2 short ones left for me. So if I can come back to the Drug Products segment and the new product ramps you expect in the second half. I think in the past, we spoke of a large tableting contract that you had won. Is this among the new products that is now ramping up in the second half? And my second question, just brief...

Sorry, Fynn. It is exactly. You made already the point correctly. That's what we have announced in the first half of the year of 2024. This is now coming through. Exactly.

And we can assume this is the majority of it? Or is there also a couple of other projects?

It's more than this one. So -- but we cannot talk about products and also customers, but it's more than this one.

Okay. Okay. And then just lastly, a formality, if you could maybe quantify how much receivables factoring you had in the first half?

It's equivalent to what we had as of end of December, so the CHF 40 million. I will be working on decreasing it, so.

The next question is from Daniel Jelovcan.

So several questions, and I ask one by one. And sorry, I had a lot of interruptions in my line. So maybe the question was already asked. But just to be sure on the lost -- sorry, the last incremental order, which we have discussed [indiscernible] over the last month. You -- there are some people now saying that because it's now included, it implies a lower guidance, obviously. But you said that the impact this year is marginal. So this contract is now settled. You will get the business incrementally. But the impact, of course, with the lead time this year is minimal. Is that correct? Just to be very sure.

Yes, very sure, Daniel. Thanks a lot for clarifying this topic. And then let's close this chapter then for the near future. So I hope so, me as well, to have clarity for all of us. So this chapter is closed. Now it's already in there. So the effect was marginal. It was a potential upside. However, as you know, we have the tendency always to guide a little bit conservative. So that's also now -- everything is included with the confirmation of the guidance which we gave, which is in line also with the guidance which we gave after closing. So that's in a nutshell, and I think business as usual now ongoing.

But as you are already in August now or September, close, it means the impact will be little because it's just because you are so late in the year. But next year, of course, the impact will be bigger, right? Just to understand.

No. Next year is business as usual.

But the volume with this extra order should be higher?

Then we will come back to '27 -- in '27 in February. We cannot talk about '27 at this stage.

So it was related also for this year, that was a potential upside. Now we have that figured out, marginal upside, which is included in the guidance. And for next year, it's business as usual. So we have an outlook or forecast with these key customers for the next 3 years. And here, there is no change for 2027. But we will give the guidance then in February during the full year presentation.

Okay. And then the next question is the cash flow, Tania, you mentioned. I fully understand tax payment timing is an impact on the cash flow, but also the inventory delta. And when I look at the inventory delta just versus the first half '25, the delta was that inventory was up nearly CHF 200 million. And that was entirely because of the M&A consolidation or maybe also a ramp-up of some other CapEx projects or whatever?

It's both. Majority is for the acquisition. And also, like Marcel mentioned, we have, for example, quite a large inventory for the Tasmania operation because they harvest in the first half of the year and then they sell in the second. So by definition, you have much more in the beginning and then you have less in the second half. So it's the nature of the business.

So -- but majority is the acquisition. And then there is a portion, of course, of ramp-up simply because also, like Marcel mentioned, the more complex steps and the production plan. So those are 2 elements that are impacting.

Okay. And another one is on -- I mean, can you disclose in the end just the organic revenue growth for the group in the first half? I mean I have my calculation, but we have -- in the past, we had so many different assumptions regarding the transaction that -- I mean, I model 200 bps to be honest, impact on group top line from M&A. So is that ballpark a good assumption?

No, I think what we have guided also after signing and after closing. So the contribution of [ booster ] is for this year, $100 million annualized and that is in line also now after 4 months. And I know that you're really strong in the mathematics, so you can do the math. So I think also the underlying growth is as planned.

But you mean $100 million, right?

$100 million.

Dollars, yes.

Yes. I mean not everybody got that. I heard so.

Yes, you're absolutely right. There was some confusion. For this year, we have boosted for acquisition for 8 months, and the contribution is USD 100 million, what we have shared with you. This is the confirmation.

But with CHF 80 million, sorry to be stubborn here, but it means when I do the math and take 1/12 for 1 month, it would mean it's roughly CHF 15 million or so in the first half impact. That must be correct.

Not 1/12, Daniel -- 2/10. You divide the $100 million by 10 months, right -- by 8 months, sorry.

That is true, yes. On a yearly basis, it's more.

But also the seasonality, which I was just sharing, Daniel, with the site in Australia. So there is always the same pattern. First half of the year is really harvesting. Second year (sic) [ Second half of the year ] is production and then dispatching and invoicing. So that's the reason also why we have even a strong seasonality in the new portfolio with [ booster ].

Okay. And very last question. I haven't really understood that the transfer within the Wilmington site, which you said the first one will be done this year. So what is transferred within a site?

Good question, Daniel. Also that you understand that if you are transferring a product and especially within one site, then from the regulatory point of view, this is the fastest way what you can do. That's really fast track. And that's what we are doing. So we have different production buildings in Wilmington. And one of this particular production building is really fit for purpose for exclusive business. And this is exactly the 80 cubic meters, which I have already mentioned.

And to free up, we are internally at the Wilmington site transferring one product from this facility for exclusive business to an older one. And then we have already capacity available for 2027. That's also the reason why I was mentioning that we are generating the first revenues in 2027, what we are expecting.

So this is the fastest way. Second wave will be then also that we are doing consolidation together with Pennsville, that we are also filling further Pennsville as well, which will help a lot to the scale-up effect there and to free up then the additional cubic meters in Wilmington to bring in additional business as outlined.

We also had questions from Stephan Wulf from ODDO and from Charles Weston from RBC. Thank you so much for submitting these questions. In the meantime, we have, I think, answered them already. There is one more question from Rolf Arpagaus from AWP, and he's asking about the trade agreement between Switzerland and China. In the future, Swiss companies no longer need to pay tariffs when exporting products to China. Will that impact Siegfried in any way?

It could be an opportunity. And also what -- and I was together also with some customers in China. As you know, we have a site in Nantong and also the demand is much higher there as well. Interesting is like the local to local setup, the regionalization is going on in U.S., we see the same pattern now in China. Also, there is much higher interest for local to local also in China. That means not obviously just Chinese companies, but also European or U.S. companies are looking also to have capacity available in China. So for us, that's an opportunity.

Also, we're looking further how we can evolve also the business in China because innovation is coming more and more from China. In the past, it was 40- 40-20. So 40% of the new innovation came from U.S., 40% in Europe and 20% of China. That was 5 years ago. Nowadays, it's still 40-40-20, but this has changed. U.S. is still 40% of the development activities. Now this has changed between China and Europe. China is now also together with U.S. at 40% innovative stuff, and Europe at 20%. So that's also what we are looking for to further expand in China as well, but we have capacity available, which we are now offering to the customers. But the agreement -- trade agreement will even help us.

Thank you, Marcel, and thank you, Rolf, for this question. Now we are approaching the end of the Q&A. One more question from Tanya Hansalik.

Can you hear me?

Yes, we do.

Okay. Great. Yes. Just a couple more questions. Most of them have been answered. So on the cash flows, you provided some guidance, but maybe can you give an indication of the net working capital, if you expect a reversal in the second half? And when can we expect free cash flow to be positive?

Well, free cash flow was positive already in H1, right, Tanya. But we -- let me come back to you on this one because I'm still working on the cash projection. And as I said before, I have full focus on cash generation. For me, it's one of the most important KPIs. But to -- I'd rather come back to you with my thoughts on this. But for sure, it's the conversion of inventory. For sure, it's also Marcel said, less CapEx, more cost discipline around that. So that's what we are looking at.

So in a nutshell, long story short, we are looking forward to go to the south with the inventory. This is happening. One example was just the Tasmanian site. But also CapEx-wise, we had in the last years quite some investments, mid-teens, low teens and so on to build up the capacity. Now we're really happy to have the capacity for the next future growth phase. So also, we are coming now towards to 10%, which also help us then in the free cash flow. That's what we are looking for. More to come, we will share with you.

Well, thank you so much, Tanya. And also thank you to all the others who have asked questions and participated. We're looking forward to meet most of you again in February when we will announce our full year results.

With that, this webcast is closed. Thank you so much, and have a nice day.

Have a great weekend, and all the best. Thank you.

Thank you. Bye.

Good afternoon. Nice to see you all again here in Zurich. A warm welcome also to the participants in the webcast. My name is Peter Stierli, I'm the Head of Communications and IR. And with me is, as always, Marcel Imwinkelried, our CEO; and Reto Suter, our CFO.

Marcel will first give us a summary of our numbers, then Reto will talk about the financials a little more detail. And then Marcel will elaborate more on what's ahead next for us in the coming months this year. At the end, we will have a Q&A session. And for those who dialed in through the webcast, you can ask your questions through the audio or video call.

With that, Marcel, I'd like to hand over to you.

Thank you very much, Peter. I'm really happy. You know why? It's for me the first time that I'm presenting the full year results of Siegfried under my full responsibility for the full year. I'm really proud what we have accomplished as a team, and I'm standing as the CEO in front of the entire team of Siegfried, and I'm telling you why.

Most of you, I met 18 months ago in Barcelona, and I was introducing the new strategy, EVOLVE+. Great news. We are making progress. In most of the dimensions, we are ahead of the game, ahead of the plan. I will tell you more in the upcoming minutes.

Now I think, let's first look back what's the result of the full year 2025.

Not functioning. Maybe somebody can help me to -- Yes. Thanks a lot.

I would like to highlight, first of all, the profitable growth. For us, a big opportunity, and Reto will give you more insights, but when I joined Siegfried, 5 years ago, we were at 17-ish percentage of EBITDA. We're coming up step-by-step, year-over-year. And this is really important that we are coming up to the high 20s. I'm confident to do so, because operational excellence, which we have introduced in the last 2 years is the trigger that we are achieving such a high number at the core EBITDA margin. I think 23.5% is a very good result. Of course, we need to consider a one-timer of CHF 7.5 billion. Despite this one-timer, we are still above the 23 percentage with 23.05%, which is good. We have a strong plan in place also to keep this momentum and further improve our margin.

Secondly, we kept and we met our guidance with a growth of 4.3% in local currency versus last year. And last but not least, what's really important, not yet reflected also in the outlook in this presentation is the new acquisition of Noramco and Extractas, which will contribute significantly in top line and bottom line already this year, but also the next year. But this year, it depends when the closing will happen.

Outlook. I think here, really important also to show that Drug Product, we have created the momentum. We have an outlook for 2026 of high single-digit growth. This is also much more compared to 2025. So we have created the momentum there.

In Drug Substance, low single-digit growth. This is reflecting a prudent uncertainty or assumption regarding one large product for one company. Now also to clarify that a little bit, this doesn't mean that this product is -- will be gone or is still in. It's one-timer because our customer doesn't know yet how the demand will evolve further because it's an in-market product. So this will continue. And also in the future, this will be also an important product for us as well.

In a nutshell, then low single-digit growth for the group and of course, the core EBITDA margin, we are confident to be above the 23%. Of course, this is excluding the acquisition. It depends. This can happen end of March, so starting off the second quarter or at the third quarter this year. As soon as we have the clarity when the closing will happen, we will give the new guidance will, of course, increase significantly than the guidance at the top line. And also you can expect something at the bottom line as well because as already outlined, during the acquisition presentation, there is no dilution coming through due to this acquisition.

As already also shared with you, we have a momentum created due to commercial excellence. We have adapted our organization, and we have also defined and implemented the new go-to-market strategy. Good news. And that's also the reason why I really confident that we can keep and that I can confirm the positive midterm outlook for the next years.

Due to the fact, I've already shared with many of you also during the conferences that we were able to win additional RFPs inflows by 30%, but really good news, we won in 2025, 30% more projects, new customers in both clusters in Drug Substance as well as Drug Product versus 2024.

Now I would like to give you a flavor about operational highlights, 2025. As you know, safety is really close to our heart. And we are making progress also year-over-year in this dimension as well. We have reduced the lost time frequency -- injury frequency rate by 25% and further implemented the Class A project, which is the prerequisite to make sure that we are becoming a really top-notch supplier for our customers. We have 6 out of 13 sites already certified. So the last 7 sites, and then, of course, the newcomers will also be part of this.

Quality. Quality is the permit to operate in our industry. And especially also, you need to know that the FDA, the U.S. health authorities are raising the bar. One of the other competitors of us are struggling. But we have not only a great track record, we passed also successfully four FDA audits in the last year, which is prerequisite to win and to get new customers and products.

Sustainability highlights, 2025 further progressed. Compared to 2020, we have reduced close to 50% our carbon ambition. The same also for reduction of energy. This was also highlights over the last years. We're continuing to make progress on this as well.

To come back to EVOLVE+ strategy. We are investing quite heavily to be prepared for our near-term and midterm growth. We are making progress. As you know, in El Masnou, we are working and in a niche with the ophtha production and good news since 2 years, the ophthalmic growth is high single digit. If you are comparing that to the last decade, it was at the low single digit, and we are one of the market leaders for the ophtha business. That's the reason and the good news that we can and that we are doing, investing and expanding in our site in El Masnou for sterile ointments and also for droptainers.

Also to capture the new trend in the steriles, which are prefilled syringe and cartridges, we are installing as we speak. Two new lines. One is already installed. The operation is starting the qualification. The second one will come operationally by end of this year.

Minden. Minden, the transfers are underway. I told you we will get the first revenues in 2025. This happened. Now the ramp-up is coming through, and we will do the integration mid of the year as quite a lot of trades are already in operation at this time.

DINAMIQS, another highlight. Here, we did the integration last September with -- in Sweden close here to Zurich for the final vectors. Good news, we could not include that this in this presentation. 36 hours ago, we successfully passed the Swissmedic inspection to get the permit, the certificate that we can start with the GMP production, which is a great achievement.

Now I would like to hand over to Reto, he will give you more insights about the financial numbers.

Thank you very much, Marcel. Good afternoon, everybody, [Foreign Language] and thank you for joining us today. 2025 was another year of continued growth, structural margin expansion and strong cash generation for Siegfried. We delivered a really record profitability. And at the same time, we continued to invest and deploy capital in a meaningful way into capacity expansion into new technologies and obviously also into new capabilities.

The results that we achieved confirmed three very important elements of our business strategy. First, strength from a diversified portfolio across customers as well as products. Secondly, a significant impact from operational efficiency measures and portfolio optimization. And third, a contribution from diligent financial management, and also a diligent deployment of fresh capital to new opportunities. So despite significant currency headwinds and also, let's say, a challenging macroeconomic environment, we in 2025, delivered the best set of financial numbers in the history of Siegfried.

Now having said all this, and as we look now into 2026, we apply a very careful approach to guiding due to this outstanding confirmation of one single customer for one single product. This diligence and this prudence reflect honesty and also transparency. It's by no means a change in the structural growth trajectory of Siegfried as a company.

Now let's dive into the numbers, starting with sales. We grew by 4.3% in local currencies for the group to CHF 1.33 billion. That growth was equally spread along the two business lines, 4.3% in Drug Substances and then 4.3% as well in Drug Products. We saw the more pronounced seasonality that we announced a year ago, 53% of revenue was captured in H2. And of course -- not a surprise, a very heavy ForEx headwind as well, especially in the dollar and, of course, also in the euro.

The currency split, as you see, it's more or less unchanged to the last year. This is transactional analysis. So really contract-by-contract underlying currency, 50% of what we do is in the euro, 13% in the dollar, the remainder is in Swiss francs. Good news here, as in the past, we had no impact on the margin and the bottom line through these volatile currency environment.

Then the tariff exposure, as mentioned also throughout all of last year, minimal, we saw less than CHF 5 million of sales being affected by import duties, tariffs, et cetera. So optimally set up as well now to go into 2026.

Let me spend just a few words here on the reconciliation between the reported numbers under our accounting framework, Swiss GAAP versus the core EBITDA. These are the numbers that we and the team use to manage and stay our business.

You will see that in 2025, core numbers are below the reported numbers as it may be the case from time-to-time. Due to one fact, we have this pension liability in Germany mainly, which became smaller during 2025 as interest rates increased. And this CHF 10 million gain, we basically took out. And then we did what we always do, CHF 2.9 million of running current net interest, we basically transferred down to financial expenses. And then we adjusted for CHF 0.8 million of transaction cost. This is cost for a transaction where we had a serious look at, but did not ultimately consume it. So -- and that's that.

Now I would like to basically bring the 2025 results a bit into a broader context. Driven by organic growth and smart acquisitions, we have expanded the business and grew it profitably quite a bit. So sales grew from 2020 to 2025 from CHF 145 million to CHF 1.33 billion in this year. This is in Swiss francs. That's a CAGR of 9.5%. Would we do it in local currencies? So basically adding the currency headwinds, the absolute currency headwinds to the 2025 numbers, we are at 11.7%. In total, over this period, we have lost CHF 140 million for currencies. That's around the effect of the acquisition that we had in Spain. So it's significant.

From a margin point of view, this didn't impact us. We grew the margin from 17.7% to 23.5%. And this wasn't an easy environment to operate in. So this growth in sales, but also specifically in the margin, we managed despite the few disruption elements. So we have COVID, which was, of course, also an opportunity for us. We saw inflation. We saw destocking. We saw disruptions in supply chains. We saw currency wall and obviously also some elements of geopolitics. It's a resilient growth that we have been able to demonstrate and that we are going to demonstrate also going forward.

Specifically, we have proven the ability to as well replace substantially large components of our revenue streams. I'm referring here to the COVID vaccines, which we had, and then obviously, which went away luckily.

The margin expansion was structural, and it was driven by basically three things. The one was portfolio optimization, which we started in 2021 on the Drug Substances side, which we have now expanded to Drug Products, but where you see the effects in Drug Products not yet.

Then operational excellence, which added efficiency in a quite a significant scale year-on-year. Also, this will continue. And then, of course, effects of scale, where we brought onstream idle capacities, which then developed into basically revenues and also profits.

The growth was balanced. You know that. Mostly organic, and then the acquisition effect of the acquisition in Spain. And that's the plan also going forward.

If you go to the margins now comparing '24 numbers to '25 numbers, you see that at each margin level, we reached new record highs. So we translated the growth in Swiss francs of 2.6% to substantially larger expansions across the margin aggregates. So core gross profit was driven mainly by cost discipline portfolio optimization. Operational excellence increased to CHF 354 million plus 7.6%.

Core EBITDA, which includes, of course, the drivers for the gross profit margin plus the operating expenses, which we kept in check, 9.3% higher at 312.3%. And on it goes. Obviously, if you have a look at core net profit and core EBIT, this reflects the fact that we have invested into capacities, which are, as the case maybe not yet fully ramped up. So that will correct over time.

Diversification. It's a crucial key element in our business strategy and our business setup. We are well diversified relating to customers as well as to products. So we have no dominant customer dominating our revenue base. And the same is true for the products. This is largely the same numbers that I have presented to you a year ago.

Customer one, this is Novartis, 13% to 17%, largely diversified portfolio of products, and customer 2 at 10%, customer 3 to 10 at 31%. With the products, the top product at 6%, product 2 to 10 at 26%. We continue to generate the vast majority of our revenues in the commercial phase, 96%. So we're not exposed to early phase financing risks, important to understand. This gives us the stability in order to continue to grow in a structured way.

On profitability, just a few additions to things which I have already mentioned. Operating expenses remain disciplined at now 11.4% of sales. Despite some changes in the perimeter, we have added the acceleration hub and of course, also invested into capabilities, digitalization, et cetera.

The other operating income, as mentioned by Marcel, includes a one-off payment, which we don't expect to reoccur next year, CHF 7.5 million, which related to a 2021 incident of fraudulent payments. That's good news. We have all the money back. So we just follow through on these type of things.

Core financial expenses remained under control. We had, throughout the year, a bit higher level of debt but we kept the financial expenses in check. Effective tax rate still below 20%.

We significantly improved the cash flow, the operating cash flow, 35% up year-on-year, driven by higher profitability and disciplined working on the net working capital. We continued to focus on net working capital. We saw some timing effects of revenue recognition. So by year-end, we had the vast majority of the invoices in December. And of course, that goes against net working capital freeing up. I will say one word about this when I come to net debt-to-EBITDA ratio.

Strategic investments at CHF 231 million, that's tangible plus intangibles or brick-and-motor plus IT systems, which will support the future growth that we will see also going forward. On the financing side, we have placed successfully a CHF 300 million bond and we have introduced the factoring solution, a non-recourse factoring solution, which we used in an amount for CHF 40 million over year-end.

Now why did I do that? Factoring allows me to flatten net working capital consumption throughout the year. And I can do that if I compare the cost of this solution to other financing instruments at very attractive conditions. So I absolutely needed to do that.

The balance sheet now prior to the acquisition is solid at year-end at 1.5x net debt to core EBITDA which allows me to maintain financial flexibility also for the future. As of yesterday, a few days after the close, net debt-to-EBITDA is at 1.0x, which means that around CHF 150 million of accounts receivable have by now been converted into cash.

It gives you a bit of an idea on how net working capital consumption fluctuates throughout the year. This means that even after the funding of the announced acquisition, I will be able to continue to basically have a balance sheet to continue to invest.

Now based on this very strong financial numbers and the commitment of our Board of Directors to shareholder returns, we have decided to increase the distribution to shareholders. The proposal to the AGM, which will take place on April 16 this year will include the proposal of a par value repayment of CHF 0.4 per share.

Now let me summarize 2025. We saw continued growth for both businesses. We saw a structural expansion of the margin. We saw a record profitability, strong cash generation and a strong -- now even more flexible balance sheet. All of the factors which contribute to our structural growth trajectory remain in place.

One, the diversification; two, the contribution from operational excellence and optimization of the portfolio, which we now expand also into Drug Products; and three, the strong balance sheet and the careful application of new capital to new opportunities. So Siegfried is well positioned to capture all the opportunities which lie ahead of us and will continue to be the steady compounder that we have been in the past.

And with that, thank you very much for the attention. And I hand back to Marcel.

Thank you very much, Reto. Now let's talk about our future. And here, I'm really excited. I will give you some insights why I'm doing so. EVOLVE+ strategy, I think already highlighted, it's now really coming through, and it's resulting also in the results, which we have presented just now with operational excellence, which is the key contributor at the end for the EBITDA margin uplift. And secondly, really, what we see is the inflow and also the wins or the wins for new products and also projects and customers.

Now I would like to come to another topic and which I was asked several times in the past about M&A. It was always repeating M&A is always on, but really, you need to have the patience to find the right tool and to get it for an affordable price. That's something which is the secret of success of Siegfried, what we did, and we will continue. We found such a tool. It took quite some time to make that happen. And it was obviously also according to our EVOLVE's strategy to further grow on the existing core with Drug Substance, small molecules and then, of course, due to the current recent situation, which will not disappear in the near future for the U.S. supply points.

I'm constantly in touch with our customers, and they are telling me since 12 months. Marcel, I need to have a second supply point out of U.S. for U.S. It's not predictable for us anymore what will happen. It's independent of the administration in U.S. what will happen. All pharmaceutical companies are preparing this future setup, not only U.S. ones, also the European ones, they're asking for it. They are looking really to expand it.

But what happened over the last 30 years. In U.S., the pharmaceutical companies and also CDMO, they were investing in large molecules, Drug Substance, followed by sterile fill and finish locations, supply points in U.S. and also in new modalities like cell and gene.

But over the last 3 decades, Drug Substance small molecules was transferred out of U.S. to China, to India and also to Europe and of course, we are participating accordingly. However, the game is changing now. They are looking for it, and it's not a surprise, read the news, and you will find out the big pharmaceutical companies they are investing or were looking also for acquisitions in U.S. to get a hub, a location to produce Drug Substance small molecules. We did the same. But at the end, you need to find something which is really unique what you can offer compared to the community or also the competitors.

And what we found at the end, we found such a tool. First, you need to know there are less than 15 large-scale CDMO locations available in U.S. We did a lot of due diligence. I was several times in U.S. was watching and look how these sites were recapitalized, but very often very poor outed facilities and, of course, also missing capabilities. When I was the first time in the U.S., I found a strong location in Delaware and the second one in Georgia, excuse me.

And of course, I think the unique opportunity, but why we got it is so affordable at the end, Siegfried was the only company which is able to keep the production supply of this essential controlled substance also in the future.

Now if we are looking at the case, we have with this acquisition, a very stable market and also portfolio which we are taking over. Strong contribution also at EBITDA, protect market also for the future, because you're not allowed to import from somewhere else to this -- to U.S. for such controlled substances, a moderate growth. But for us, what's really on top of it is really the opportunity to gain exclusive business with this setup.

Wilmington, this would be the new site from Noramco together with the existing Pennsville site, which is just 20 minutes away by car. They are really, really close to each other, but even more important, also the product portfolio is overlapping. We are talking here about controlled substance. We know the products. We know the processes from each other because Noramco was also a customer of us and vice versa. Some of the people we even know already also from the past and vice versa. And there is -- will be very soon one approach for both sides. And what we can do is really to optimize this controlled substance portfolio in the Pennsville site. And then we will free up Facility #5, where 80 cubic meters are installed there to go for exclusive business.

Athens and Grafton. As you know, 1.5 years ago, we have acquired Grafton as an acceleration hub to start with early development activities for Drug Substance small molecules. With Athens also, by the way, like Wilmington, a previous J&J facility. So it was not a surprise to find two sites at the end with strong people, capable people, very well regarding process, which are in place, very well maintained and also high automation what we found there. There are also an add-on with Athens compared to Grafton because Grafton is really strong in Phase I and Phase II. Athens is even stronger in early phase activities. So it's for us at the end, an add-on.

We have a sweet spot and a big opportunity, and that's why I'm really truly excited about this deal. One is from closing of the day when we have the deal, we have a strong contribution, top line and bottom line immediately. However, the exciting case is really then to fill this capacity, which we are freeing up in the next 2 years. And of course, to bring in new customers, new business, it will also take 2 years. So we will do that in parallel.

So after 2028, on top of the base case, which we have also shared with you, we are looking forward to further increase the top line and also the bottom line. As you can imagine, also the pricing is very interesting because supply constraints to push demand, it's a different position which you have. So we will do the ramp-up after 2028. And I'm really excited, but I'm not alone. I'm not alone. Many of our colleagues in our organization who are waiting for it. And I would like also now to give some quotes and voices also of my colleagues.

[Presentation]

We are really excited. Now we are ready. We have the plan in place to make that happen independent when the closing will happen. If we are looking out at the entire network of Siegfried for Drug Substance, small molecules, we are complete now. This doesn't mean that we're not further looking also to expand. However, if you are looking from early phase preclinical up to commercial, we are very well positioned. We have all capabilities for all development phases in place. And if you're looking backwards, especially then from Phase III commercial and then out of patent, you see that we have seven sites in all three continents: China, Europe and also U.S. to make that happen. Whatever the demand is from the different customers and the demand is there.

So the dual supply points are given for the future, and this is a great achievement for us. Now I would like to share with you something else about an exciting new molecule mechanism platform. It's called protein degraders. It's a new mechanism, which is coming through. Of course, the research we were working since 2 decades on that. But now in the upcoming months, you will see the first approval for big products coming through.

Why is this so exciting for Siegfried? We are perfectly set up exactly for this kind of products. They need Drug Substance small molecules where we have the entire network in place, which I have just shared with you. But secondly, they need and will end up then in tablets or in capsules. So that means for Malta, but especially for Barbera, that's the place to be. So we can really offer for big pharmaceutical companies, but especially also for the small and mid-caps, the entire service what they need.

Just recently, over the last 5 weeks, we won three new products and three new customers directly linked with the same mechanism, what I'm sharing here with you.

One -- by the way, is not the same molecule when I'm talking about these three, we are talking about three different molecules. We're talking about three different customers. One is in Phase III, very interesting. So this will become quite soon, it will get approval. The other ones are a little bit earlier, but this will be a changer for the entire industry, a game changer and also a game changer for the company of Siegfried. And we will -- we are really full in there.

Happy to share with you more. And I'm sure in 3 years, we will talk more about this protein degraders.

Now capital allocation. I think, we are really disciplined on that. So if we are able to do an M&A acquisition and very often in the past, and we did it again to do acquisition and to buy new assets for half of the price, which is always then helping us at the mid- and long term to fill then the sites and also to gain the revenues really profitable. This is still on because I was also asked what does this mean with this acquisition now of Noramco and also Extractas. And also outlined by Reto, we still have firepower ready to use if we find one another tool what I was sharing with you. So this is ongoing, but you need to be patient. And it's not predictable at the end. We will see how this will evolve, but it's still on.

Now we are really set up to outpace the market growth, just also what I was sharing with you, inflow is great, 3%. This will come through also then midterm-wise as well. And for 2026, it depends because what I'm guiding you now will change definitely. It's just a question by when. Will it be in the second quarter or will it be in the third quarter? Because with the new acquisition after closing, we will significantly improve our guidance for 2026. So far for Drug Products, high single-digit growth. So compared to last year, much better, much higher, doubled. Secondly, Drug Substance low single digit due to the missing, pending confirmation for a product which is in-market product. So it's just fluctuation, but it will also support us in the midterm as well. That's for sure. And for the group, also reflected then in a low single-digit growth.

We are confident. And this is really important because the bottom line is absolutely key for me. Not just to growth, I want to over proportionally grow in the bottom line. And that's what we have shown up you as well, which is proven, and we will continue on that.

And you can expect also then a core EBITDA margin above 23%. We have a strong plan in place, and we will make it happen. Thanks a lot for your attention, and now happy to go for question and answers.

Thank you, Marcel. We'll now start with the Q&A session. Of course, many questions from the room here, but those who are joining us through the webcast, who would like to ask a question, please do that through the audio or video call, and you will be directed to the operator.

I'm Laura Pfeifer from Octavian. Maybe first on Drug Products. Here, you're guiding for an acceleration to high single digit. So to what extent is this growth driven by the large originator contract you have previously announced? I think it was 1 year ago or so. And also, could you provide more detail on the size and ramp-up time line for this contract? And maybe also what are the key terms? Is this a multiyear arrangement?

And then, I think the second one is more on Slide 21. You highlighted the protein degraders, but you also show obesity metabolic as a complex small molecule area. So can you provide us just an idea on your current overall exposure to metabolic GLP-1 programs across your overall business. So both -- all clusters, all service offerings and also what share of revenue this could represent over the next couple of years? Thank you.

Marcel?

Yes. Sure. Thanks a lot. Let's first start with the project, which we have announced 1 year ago. This is one part. But to be honest, we are growing in most of the -- really of the different dosage forms in Drug Product. So we are moving also upwards in Hameln especially in El Masnou. That's also the reason why I was sharing with you the expansion. This is significantly also coming up now. Also the new lines which we are investing in there are already more or less fully utilized by the new contracts, which is helping as well. Also the other portfolio in line is developing very nicely. It's in line with what I was highlighting with the ophtha growth and also in Barbera and in Malta, we are also coming up nice step-by-step. And I think it's a contribution broadly across all different dosage forms and all different sites, which is great.

That's -- it's ending up then in this high single digit, more to come because, as I already outlined, with the additional wins of 30% to 2024, you can assume that further growth will come in the upcoming years.

Then ramp up. With this -- what I was highlighting with the three new products, which we won over the last 4 weeks, it's -- this is really coming through then in 2027. The first one is Phase III. The other two ones, which are early, they are coming through them in 2028 and afterwards, but this will help us. And that's why I'm so confident for the midterm outlook independent from the acquisition that we have really the momentum and the inflow in the pipeline that you will take off.

Yes. Protein degrader, this is something exactly in line with what I was just sharing with these products, more is coming if you are looking and always -- and this gives you also a little bit of flavor. We are not the followers and waiting is like a CMO that somebody is coming to us and are you ready to send us no offer. We are doing that really proactively. What kind of technologies? What are the next future or the next trend in the industry to capture that and to read it also to proactively to approach them and tell them, listen, we can provide the full service what you need.

And that's a different approach compared to the past, and this is helping us now. Now to the GLP-1 exposure, I think this goes -- I think, of course, we were explaining that the GLP-1 exposure products -- molecules, they are really complex. But the same protein degraders, which I'm highlighting are also so complex like this. And I'm really happy that the third part of the true story that we have invested and decided to invest in the spray drying because the common approach for all of these different molecules, they need to have this spray drying, bridging technology in place. And here, we are unique that we can offer end-to-end or I'm preferring to use the word from beginning to the end.

Just, sorry, to clarify, so I'm now a bit confused. So the three new products that you have won over the last 5 weeks, these were all protein degraders or these were all...

Yes. Protein degraders. Yes.

Okay. And then, but then you did not really answer my question then on the obesity exposure. So do you already have established contracts for whatever Drug Product, Drug Substance?

We are not talking about obesity exposure. You know that Laura, because if I would share something related to that, and it's clear then I would highlight a product or also a company. That's what we are not doing.

Sibylle.

Sibylle Bischofberger from Vontobel. I have two questions. First, about the past. Sales from Wisconsin and the DINAMIQS should have increased in 2025, and they should more and more support sales growth also in 2026. If you could say something about these two parts of your business?

And then secondly, 2026, the outlook about the phasing between first half and second half. And if you could say something about the currency effects, how much they would affect sales on the top line if currencies would stay as they are at the moment?

Yes, I will take the first one, and Reto will take the second one.

DINAMIQS here, of course, we were really successful. I think, I shared that also in the conferences as well. So we won 10 additional customers over the last -- in the last year, one in Australia, four in U.S. and the rest in Europe. However, here, we are talking about development activities.

The growth rate is quite significant with 30% what we can plus/minus. However, 30% of a very low amount is still not a game changer or will change dramatically. That's the reason. But the prerequisite was exactly what I was highlighting during the presentation. First of all, we need to get the permit, the certificate from the Swissmedic Health Authority to operate and to start then with the GMP production. And as also outlined in the order presentation during the financial part, the money is really in there as soon as we can start with the GMP commercial production. So it's coming. But this setup is coming through then next year, mainly what you see then step-by-step coming up then. For this year, it will be not significant growth for us as a company.

Wisconsin also here, I think that's stable. Of course, this is not a game changer related to the top line or bottom line. So here, we are looking to develop 10, 15 projects on a yearly basis, but this is the funnel for the pipeline. So we are getting, of course, for the service we get paid and also the margin. But this is not a contributor at the end for our growth top line and bottom line. This is just filling then from now in 3 to 5 years to get one of these products, commercial, which ends up then really also visible in the P&L.

Thanks, Marcel. Reto, seasonality and FX impact.

No, absolutely. I think we had this question quite a few times. So let's clarify. Obviously, we do have, again, in 2026, we expect a negative impact on the top line by currencies.

Looking at the first 7 weeks of the year, comparing that to last year, I see a currency headwind of a bit more than 2% for the year. Now obviously, for the first half, this effect is stronger as degrading of the dollar only started after Liberation Day, sometimes at the beginning of April. So for the first half, it's actually closer to 3%. So I'm at 2.8% for the group.

On seasonality, while we are still working on that. The indications are that this is very similar to what we have been observing in 2025. So more like 47% to 53% instead of 48% to 52%.

The next question is from Charles Weston. Charles, can you hear us?

Two topics, if I can. First of all, on the product that has meant the sort of lower Drug Substance guidance. It's quite unusual to see such a sort of a change and volatility like this in a large on-market product. So is there any further color you can provide on this? Is your customer destocking? How confident are you that, that customer will come back? And then because it's so late, ordinarily contracts would be -- would include some sort of compensation payments or take-or-pay payments. So perhaps you can just touch on that for 2026.

And then the second question, please, is on the non-recourse debt. Is that off balance sheet? And you talked about CHF 40 million. Is it still CHF 40 million? Or is it going to be increasing going forward?

Okay. I will take the first one, and Reto will take the second one. For the first one, we are pending for the order confirmation. So he has also -- he is not sure how the demand, what he needs also short to midterm. That's the reason why we are waiting to get the final agreement on that. I think it's -- by the way, it's a customer which we are working together since 30 years. So it's not a question if the customer will come back. We have really strong relationship together since 30 years. And I think he has quite currently some volatility in the market regarding this product and he needs to figure out what does this mean. So that's also what I was highlighting. This market will remain in this very big more product also in the future as well.

Now if this not what come through, that the demand will be at lower than expected. Of course, you need to know that's a good question, Charles, that contractually, we are protected from the margin point of view. So maybe we would get a smaller hit than at the top line, but the bottom line is fully protected.

Yes. If I may, the second question, basically, the factoring solution. Basically, you sell accounts receivable, you receive cash, this affected the cash position in a positive way about CHF 40 million at year-end. This facility has a total size of CHF 50 million. So yes, I could go higher CHF 10 million. And as mentioned, this is not used for window dressing. It's really used to flatten out net working capital consumption throughout the year, which will then automatically mean that I can size the funding contracts accordingly lower. And as this facility comes in a better condition than usual funding contract, it's a net gain from the cost of debt point of view.

Okay. So we should just assume a similar rate going forward for that, should we?

Yes. Not more than CHF 50 million, yes.

Next question, Tanya?

Just to follow-up on this outstanding product confirmation. So I was surprised by the size of the magnitude of the product volumes that are missing or need to be confirmed. What are the implications if the demand stays lower in 2027? Do you also get a compensation or then it takes a while to ramp up the new product? Would there be a gap there in 2027?

And then my second question is on free cash flow. If you could provide some sort of guidance on that with your Project FALCON and then the non-recourse factoring, you mentioned, yes, when we can basically expect free cash flows to be positive?

As usual, I take the first one, and let Reto take the second one.

First one, so I think for 2027, I think this will come back because it's a onetime. They have to look at the stock level and how the latest forecast for there looks like. However, we have always a little bit some fluctuations. Some products are going through the roof, then you need to be flexible and to capture that, some of them are coming a little bit down. It depends, of course, we have also frozen horizon. That's the reason why we are protected also for this product from a margin point of view.

But as I just outlined ,with the win of this very important protein degrader for Barbera, where we are doing then the filling of the capsules. Then next year, this can already help to the potentially to fill if something like this, this would happen. So I think in a nutshell, this will not change our outlook for 2027. It's small fluctuation. It's, of course, a bigger product. It's not a very small one. But at the outlook also for '27 and afterwards, this will not change our view.

Yes. On the second question relating to free cash flow, that's obviously the result of two distinct topics. The one is how much operating cash flow do you achieve? And then secondly, what do you spend for investments?

Now I address these one by one, and then the combination is the answer. The operating cash flow in 2025 was, of course, masked and impacted by a very low revenue recognition. And this has obviously destroyed a lot of the good work that we had done when we speak about Project FALCON. I was sharing that as of yesterday, net debt-to-EBITDA is at 1.0, which means that CHF 150 million of accounts receivable have by now converted into cash.

So, ceteris paribus, if I will close the books now, my operating cash flow would be about around CHF 120 million higher than the one that I showed to you. So that's really dependent on when you close the book.

The second is, of course, we now had two very heavy years of investments, mid-teens. This year, it was actually 16% more like. This will now return and come back to low teens. As mentioned by Marcel, this is our guidance for 2026 and also for the years to come. So you see both parameters somewhat go into the right direction. I'm not worried around cash conversion, around cash generation, around the quality of the balance sheet and the flexibility that we have to fund further investments, not at all.

I just wanted to follow up on the replacing with the protein degrader. So you mean the API part of the contract or because you said you had the drug oral dosage form and also the API, maybe on the time lines of these two when they...

Yes, we're working on. I want to have everything from beginning to end. But we are very successful in both in Drug Product. Here, you can maybe imagine that if a big pharmaceutic company has developed such a product, where they are producing Drug Substance by themselves and then they are looking for somebody like Siegfried, who is then providing the service for the finished drug product. That's in this case. But in the other cases, here is really Drug Substance, but we are also in discussion to go then for the Drug Product as well. And that's exactly in line with the end -- beginning to end strategy that we can provide that.

Next question is from Fynn from Deutsche Bank.

I also have a follow-up question on the product that's awaiting the confirmation. So, you said it's an in-market product. Can you help us maybe with the size of the order that you are awaiting? So essentially asking what would growth look like with the product coming through? And could you clarify, is this an all-or-nothing situation? So did you either get the full amount? Or do you maybe want to get it partially?

And then -- sorry, more on that, do you have any indication on timing of that? So when do you expect to hear back from the customer? And do you have any idea for the odds of this actually coming through?

Yes. Happy to answer this question, sure. I think the magnitude -- of course, it's somehow a little bit impacting or impacting us. Otherwise, I stand in front of many strong analysts here, and they have their models. Of course, we would guide different or give a different guidance mid-single digit for Drug Substance. That's also according to the model, also what we had in our mind. And that's why we have taken the conservative approach this pending missing confirmation, but we will see how this will evolve. I think for this customer and this product is a little bit unique because it's -- the fluctuation is quite tough. I cannot share you with you with which kind of treatment, we are talking here about. Otherwise, it's clear for which product and customer you're talking about.

But this will maintain and going on. So of course, this product will be also important for the customer in the near future in 2027 and afterwards and also for Siegfried.

Okay. So if I can just follow up on timing. Do we expect to hear back from you on this specific measure before half year results? Or is this an ad hoc event? Or how should we think about it?

Yes. It's -- we have strong, strong relationship with these customers all 3 decades. We were growing together significantly. We had a lot of fun, but also you need to work if you have a little bit uncertainty like this in this moment. And we are continuously in touch with them, and he needs to figure out that we have already next week, the next exchange meeting. And as soon as we know more, then, of course, we will share then also to the external role as well.

Perfect. Second -- sorry, just one final question on the first Barbera contract that you've told us about already earlier that is supposed to start ramping in the second half of this year, if I understand correctly. Can you maybe expand a bit on how the preparations are going there? And maybe also what sort of magnitude of revenue we should expect from that in 2026?

This is coming through. So we are starting with commercial production has also announced that this will happen in '27 -- '26, excuse me. And then afterwards ramp-up in '27 and more. This is exactly according to plan, which is great. We had also the second one there as well, which we don't have so prominently announced, but we are filling now step-by-step also Barbera and with the new news, which I have just shared with this protein degrader. I'm looking forward also really for a bright future in Barbera as well. So this is according to plan.

I think it's important to understand, Marcel has answered that in his first answer to the first question, that the momentum in Drug Products is much larger than just one product in one site. It affects all of the dosage forms across all the sites and is broadly diversified and does not just rely on one or two contracts. I think that's important for the general understanding.

Next question from Daniel.

Daniel Jelovcan, Zurcher KB. So, still a bit parceled about this order confirmation. I mean, it's -- I heard that for the first time. And when I look at the exit rate from the second half, the momentum, 6.5%, which per se was a bit disappointing, to be honest. When I extrapolate that to the '26 growth, 6.5%, there's a delta of, let's say, 3 percentage points versus your guidance now. So we talk about the CHF 40 million product on a yearly base. So it's significant when I look at your diversification. So, and I'm a bit puzzled how come? I mean, you need the tech transfer and everything you need the approvals from Swissmedic FDA EMEA, and that takes 18 months. So that means that the product is already set up with Siegfried. So is that correct, the assumption? It's only dependent when the customer gives the green light and then you start just to be very sure. Is it more complex?

I can maybe take the technical elements of that, if I may. No. First, I don't buy into the concept of exit valuation, as much of the growth that we see is 1 year compared to the other year, as you know, we have long manufacturing cycles. So you can't take the revenue recognized in the second half and say that's the growth rate that we can assume then also for the first half of the following year. So that's that.

On the calculation of the magnitude, yes, of course. I mean, it was significantly large enough for us to change the guidance. And that gives you a bit of an indication and your number is not totally wrong.

And then thirdly, your assumption on the product, of course, it's an in-market product, which we already in the last year and the year before manufactured, and which we will continue to manufacture, as Marcel has mentioned. But now due to demand effects on that specific product for that specific customer in specific market there's uncertainty, but we are ready to go as soon as we have the confirmation.

So it's an existing product?

Yes.

You already do?

Yes. Since many years.

This product is then very successful.

Obviously, yes.

Okay.

But maybe our customer thinking it would be even more successful. That's exactly currently the demand.

That's good to hear. And then the protein degrader. I mean, I'm not a chemist. So is that something which you can patent, I guess, not production process. And then your competition, let's say, I mean, the Chinese, the WuXi AppTec -- as the world, they are all over the place. Can they do that as well?

Sure. I think, first of all, we cannot do the patent because that's a mechanism of the -- for the research to do the -- to find the molecules and then to appropriate that. So this has nothing directly to do with us, with Siegfried. It's a new mechanism how to treat because this kind of proteins in the past, they were really successful always to push back the treatment of the APIs. That's also why you have then to build up very specific molecule chains. With this new treatment, you can destroy such proteins. And then you can directly treat with the API then the patients. And that's the revolution and the game changer.

But this is at the research companies, big pharma, small mid-sized pharmaceutical research companies. So we cannot patent.

However, the unique situation of the setup is really what we have, it's Drug Substance small molecule. Second, due to the fact that so complex, you need to have spray drying, but it's for the majority of the small molecules nowadays.

And thirdly, these products are ending up as a tablet or as a capsule. And we have for the colleagues which also have visited 1.5 year ago, Barcelona, Barbera, that's the perfect setup, what we can offer to this kind of product families, which is coming through now. That's the unique position.

Competition? You can certainly do that as well.

Yes, sure. But I think, competition-wise, you don't have a setup like Siegfried who can do everything with small -- Drug Substance small molecules. Of course, we have also -- we have competitors there. With spray drying, also competitors. However, in combination in order to have both Drug Substance plus spray drying we are quite alone. And if you're talking about them to add the tablets and capsule manufacturing, you can research and ask also ChatGPT, you will not find so many.

Okay. Great. And last question. You still haven't answered to why the second half was to us, to the market, I mean consensus was higher for sales growth. And you were quite vocal in November and December at various events. And so that's why the market was quite bullish. And now you have the 6.5%, which is not bad, but below expectations. So were there some batch delays from December into January, which is quite typical in your industry or any specific reason?

No, nothing specifically. I think we have delivered according to our guidance. I know that the market expectation was a bit higher. But for us, it was perfect. And at the end, for us, it's important to come back to look really at the profitable growth and not just at the top line. And I think top line-wise, you have expected a little bit more, but I think we were doing much better than the bottom line. So at the end, for me, it was great.

Laura, again. Yes.

Maybe a question on the EBITDA margin guidance here. You guide for above 23%. So what are the drivers and the headwinds we should consider this year? I mean, will there be kind of a negative impact from -- if we assume this order is not coming through? So this could be one of the headwinds. Just keen to listen to your thoughts here. And then also when we use 23.0% as the clean base from '25, is there still the possibility for 60 to 100 basis points uplift as you did in the past?

Yes. I mean, for 2025, you guided ahead of 22%. So we define somewhat the floor. And our concept of guiding has not changed from 1 year to the other. Then secondly, on the positive side, what will we see as tailwinds for the guidance. It's, of course, commercial excellence, efforts of portfolio optimization, it's continuing process excellence, it's continuing operational excellence, and it's a bit of scale. That's what we're going to see on the tailwind side.

On the headwind side, of course, cost of doing business also in 2026 will increase. So we have continued inflation in the U.S. We have continued inflation in Germany. Both countries, we will have 700 in the U.S. We will have 1,000 -- continue to have 1,000 in Germany. That hurts a bit. So there, we will need to become more efficient, increase prices a little bit. And that's what allows us to also, as in the past, increase the margin from '26 compared to '25.

May to add that, the first question about this product, will this have also an impact on EBITDA? No. Also in the worst case, contractually, we are protected for the margin. So this will have any way no impact at the bottom line, and that's -- I'm really convinced that we will be above the 23%.

Next question, we have online from Ed Hall. Ed, can you hear us?

Yes. I think maybe switching gears up. I was curious if you can talk about the outlook of multiclient versus exclusive. And we've seen another year where multiclient performance in the double digits and [indiscernible] business as a structural trend. Is there how much pricing is associated with this growth? That would be my first question.

No. The question was on the split between multiclient and exclusive products, if I got that right. Whether there is a structural shift or so, something taking place. No, we just also have quite an attractive set of multiclient products that we manufacture. I think that's the answer.

Is this something which is structural? No, I don't think so. I honestly believe that over time, in the midterm, we will have and see a quicker growth in the exclusive part versus the multiclient part, which will, all-in-all, remain stable. However, from period-to-period in the short term, there can be a little fluctuations around that, but it's nothing which is structural.

Okay. And you mentioned pricing a little, just last question. And how much is pricing that contributed to growth when [indiscernible]

Honestly, we can't hear you. You sound like you spend your time in a wine seller or somewhere. Could you please repeat and maybe move a little closer to the microphone, Ed.

Is that a little bit better? Okay, perfect. Yes, I was just curious about the contribution of pricing to the generics and compare that to maybe some of the exclusive business.

Honestly, I don't think that there is a pricing difference between exclusive and the generics business. On top of my head, I don't have the numbers with me currently. Pricing impact on the 2025 numbers was not dominant. To be fair, we have in price here and there, but it was mostly efficiency gains and as well portfolio management, which helped us to increase the margin.

Good. Is that all, Ed? Or do you have a third question?

Sorry. One final question. I was wondering if you could just share the capabilities that you're looking to bring to the market when we think about these two drugs more holistically.

Sorry, we really -- we are having difficulties to understand. The capabilities...

I'll send an e-mail.

Yes, please send an e-mail, and then we will answer to you for sure.

Then we have another online question from Kristina.

It's Kristina Blaschek on for Max Smock, William Blair. I just wanted to circle back on the large Drug Substance contract driving uncertainty in your guide. Curious what's leading to a large range of outcomes in the customers' demand outlook for the already commercial product in the short term. And given your very strong RFPs in 2025 in Drug Substance and assuming likely strong backlog. Here's why you cannot so in some of the project work to offset potentially lower volumes from this one large contract in 2026. It was just a timing and ramp consideration. I'm really trying to get at if the contract ends up on the low end of volumes, will you be able to offset the shortfall with current projects in hand for 2027? Or will it require some more contract wins to offset?

Yes. No, a very good question. And Marcel was indeed referring to some project wins that we had. Now obviously, if you win a project of an exclusive product, this is still in the development phases, which means that the equipment that you use is mostly small scale, pilot scale and not commercial. The same is also true for the revenue expectation. These products gain size as they enter the commercial manufacturing. So the product and the wins that Marcel was referring to, these are products which are still in clinical phases, II entering III maybe. So even if we wanted, we couldn't slot them in, in the large commercial equipment that we use to produce this other product in question.

And the first question was whether if we would win or if the customer gets green light for the DS product, would we be closer to the consensus expense?

Yes, of course, yes. Immediately.

Got it. And then, [indiscernible] The second and final question is on the recent acquisition. In terms of valuation, I know you've said impressive under 10x EBITDA multiple. But wondering if you can give the purchase price and also expected incremental capacity and revenue on an annualized basis. I realize it's not exactly clear when the acquisition will close, just if it were to close on January 1.

I take it. Yes, I think I understood it. Regarding the acquisition, here, I think -- first of all, the price. We were sharing the evaluation compared to the EBITDA that we are paying or will pay less than 10. So really an affordable multiple. Now I think you need also to understand that we have not incorporated any synergies. So that's exactly what I was highlighting during the presentation to free up this 80 cubic meter capacity for the exclusive business. This would be on top, but this is not included in the price.

So for us, that's why I'm so exciting. It's one of the top corporate targets for 2026 to make that happen, to free up the capacity and to start then to ramp up in 2028. That's the big opportunity what we have, and we will make -- we will take care to make that happen, yes.

Good. There is no more question from the webcast. Is there any other questions here from the room? If not, then thank you so much. For those who still have some time, we would like to invite you for a drink and some snacks here around the corner. It would be great to meet as many as possible. Then yes, we're looking forward to see all of you again at the half year results on August 26. Thank you so much.

Hopefully, earlier for the closing and new guidance. Thanks a lot for your attention.

Welcome from Zofingen. Thanks for having joined this webcast. I think it goes without saying that we are truly excited to be here and to talk to you about this transaction. It has been in the making for a long time, and we are really looking forward now to share some more details with you. We will have a short presentation followed by a Q&A.

So with that, Marcel, over to you.

Good morning, everybody. Happy to meet you, to talk with you, and I'm really, really truly excited about this accomplishment that we have the deal now. It took some time, but for Siegfried, it's really a big step forward. And I would like to share with you some insight what does this mean for Siegfried and what are the benefits and why is this target so important to us.

First of all, I think it's a compelling manufacturing capacity at a very attractive price. We will come later on and also Reto will be in there as well to share with you more insights. We have signed a binding agreement for the 2 sites in U.S.A. and in Australia. And of course, for us, this was a target which we really want to have because the U.S. market is absolutely crucial. It's growing and also with the current environment, the key market for us to expand. And I think also here, it took some time, as already outlined, but this will definitely change our footprint in U.S. because we are really passing now the critical size in U.S., local to local. Also due to the strong balance sheet, what we have, we will finance through existing and new debt instruments. Also here, Reto will give you a little bit more insights related to that.

However, I think as always, and I'm saying for Siegfried, sometimes we are a very boring company because it's the same deal like in the past. We went for a value-accretive acquisition. And also the price already what I can tell you is really in favor of us according to the target. But even more important, we don't have any dilution on the bottom line. So no dilution for our existing EBITDA.

Now also to make the link back to our strategy, as you know, and also the market trends. We were reviewing over the last years, not only months, what's the current setup, especially for drug substance small molecules. I highlighted that also in the past that there are not many targets available or also locations in U.S. to fulfill this new demand, which is coming through. When I was listening also to our biggest customers, they were asking me over the last months, especially since the last -- over the last 12 months, can you further support also capacity out of U.S. for U.S. And as you can see at the right side, constrained supply. There are just 15 large-scale chemical CDMO sites in the U.S. And believe me, not many of them are in a good state. So status and for us was really important to find the right one. Of course, you can also read and hear that many greenfield expansions are going on. However, this will take a long time.

So we have really a time slot over the next 6 years to jump in and to be the supplier, the preferred supplier for the U.S. market. And it's in line. So still ongoing outsourcing trend in the pharma industry is ongoing, as already shared with you in the past and especially for the small and midsized pharmaceutical company, they need to have a service provider who can provide the full service from early development up to commercial. Siegfried is one of maybe 5 CDMOs who is able to provide this.

About the 3 sites, the locations which we bought. We started several months ago. And believe me, it took a lot of time, but also to do a proper due diligence. I was already last April in Wilmington to visit the site to see the assets because assets are absolutely crucial if you want to expand the exclusive business. And what I saw there was really a strong -- a good site with very proper assets in a good condition. And also, of course, due to the fact that prior to SK Capital to Noramco, this site and this location was also belonging to a big pharmaceutical company, which is called J&J. This means process in place, which is crucial, well maintained, highly automated. And this was also then for us, really important to see this is fit for purpose for the exclusive business.

There, we have 3 product families, the addiction treatment and preventation, the ADHD portfolio as well as the pain management. The site has approximately 185 FTEs as already outlined high quality and a multipurpose site, which is familiar with all needed and common synthesis, chemical synthesis that what we need to have to provide the service to our customers. The second site is Purisys in Athens in Georgia. Strong people, which I met there as well, strong chemists, which are really in favor to do early development activities, clinical and small-scale manufacturing, and they are really focused and specialists in highly regulated compounds and especially also for niche products. Also here, they are working currently 45 FTEs. It's complementary to the Grafton site and it's not somehow in competition with Grafton.

This is also important because Purisys is even stronger at the early phase compared to Grafton. Grafton is than in Phase I, Phase II, the site to be. The third one is the Extractas Bioscience facility in Tasmania and is one of the leading manufacturing of purified products. Here, we are talking about approximately 170 FTEs. And for us, the benefit is really the backward integration. This is increasing the resilience of the supply chain. Overall, on top of the assets, which are really good, really great, I was meeting strong people, people which were already also working for 10 years ago. People are really entrepreneurs. People are hungry to move the needle and to go together with the Siegfried family for a bright future and to develop the business overall.

Now what does this mean? I think overall, the business what we have there is really stable. Moderate growth, not a risk, no hiccups but a moderate growth. Also, it's somehow a safety and a secure portfolio what we will take over. We are familiar with that, also due to the fact that we have in Pennsville, some similar products there as well. The proximity of Wilmington and Pennsville is absolutely crucial for us as well. Why? Due to the fact that they are just 20 minutes by car away from each other, we can really get out some synergies. And also from the knowledge point of view, this will help us then also to optimize the portfolio for both sites. And of course, on top, what we are looking forward then is really to repurpose for innovative products, Wilmington because the capabilities which we have there and also the site with the assets will be a differentiator also for our customers for the U.S. supply.

Athens and Grafton already outlined. This is to form the best-in-class acceleration hub, what we are calling. So Grafton is the acceleration Hub 1.0 and then Athens 2.0. So overall, this is really a complementary and a comprehensive offering what we can now really start from early phase development up to commercial then for the rest of the sites. We will fill further the pipeline for innovative products. We see the demand. We are moving really nicely forward, increasing our pipeline also with early development projects as well.

Now we are passing the critical size. We have now 5 sites and close to 700 employees, which is roughly 20% of the entire organization of Siegfried, which is great. And of course, we are also looking then in U.S. to go for regionalization as well to further gain synergies in the near future.

Now about some multiples and financial insights, I'm handing over to Reto.

Thank you very much, Marcel. Very good morning to all of you. Let me add some technical details to this transaction. I will cover valuation, of course, profitability, the time line and of course, also a few technical details on financial impact on 2026 and also beyond and a few considerations on how we will finance this acquisition. On valuation, Marcel mentioned this, we will be able to acquire this business well below recent expectation for U.S.-based assets. And that's just great. We did it once again. This means that the highly selective disciplined approach to M&A will just -- has just been well confirmed today.

In the graph to the left, you see a few data points, all referring to enterprise value over EBITDA. Firstly, our own trading multiple, somewhere between 13x and 16x. In the middle, you see recent sellers' expectation for U.S.-based assets. These are assets which we have considered ourselves. Some of these assets have been in the press, so you can Google for them, CDMO U.S., for example, in the FT. And then lastly, you see the valuation that we have now paid and will be paid for this acquisition at hand, well below 10x. Again, disciplined and value accretive.

Obviously, why did we pay 10x? Marcel mentioned that it's a stable portfolio, and that's the price that you pay for that. Now obviously important, we are now in a really unique position to extract value from this transaction. We can optimize the portfolio between the very proximity sites of Pennsville and Wilmington. We can free up capacity in Wilmington and then allocate that free up capacity, which, as mentioned by Marcel, is in very high demand to valuable innovative compounds in the U.S. That's immediate.

On profitability, not dilutive. The acquired business trades ahead of Siegfried currently. So we have an immediate impact on profitability on the Siegfried Group, and it will not be an adverse one. Now on timing, that's an important one. The closing is subject to some closing conditions, and we expect to close it later in the year. We don't know exactly when this is going to happen. The revenue and profit clock for Siegfried starts at closing. So the earlier we close, the higher the revenue and profit contribution for 2026. That, of course, also has an impact on how we will provide financial guidance for the financial year 2026.

So on February 20, when we present the '25 numbers, the transaction will most probably not yet have closed yet. This means that we will guide at that point in time for 2026 without the acquisition impact. And then once the acquisition has closed, we will adjust the guidance to include the acquired business.

On financing, we have a strong balance sheet. So we currently expect to finance using existing and also new debt instruments. The selection has not yet taken place. It's too early. It will, of course, you know us follow strict commercial criteria and we'll also consider the state of the debt capital markets, had a really good start into the year, so that makes us very confident. Then lastly, the financial impact. How much net sales is this acquisition going to add to the Siegfried Group? Our best guess as of today is that the acquisition will add approximately 10% of current net sales to the group, and that's for a full year.

You must consider that Siegfried and also the acquired entities were clients of each other prior to this transaction. This means that after closing, some revenues on both ends will become internal revenues, while the profitability is capped. And for the avoidance of doubt, the 10%, which I gave you already considers this effect. And again, for the contribution to 2026, this very much depends on the point in time of closing. So I'm excited about this acquisition. It's, I think, at par with BASF in 2015 and the acquisition of the 2 drug products manufacturing sites from Novartis in Spain in 2021.

Back to Marcel.

Thank you very much, Reto, for explaining where we are compared to the expectations and also to share that this is really a highly accretive deal. Now to bring that back to the strategy, I think, as already outlined, still one of our top target was to grow in the existing core small molecules, drug substance product. Here, we are talking about drug substance. And especially the opportunities for us currently are even higher in drug substance in -- for U.S. That's the reason why also I'm so happy that we made the deal. Independent of that, you never know also, I think the strategy overall is still valid. And of course, we have the opportunity now to grow the network in U.S., which is absolutely crucial for the demand, what we are looking forward.

So that's in a nutshell. I'm totally happy. We are happy, excited about this deal. And now let's go for question and answers. I think there are quite a lot, I believe.

Thank you, Marcel. So we'll now start with the Q&A. [Operator Instructions]

First question is from Laura.

Maybe the first one is on the Wilmington site which is 150 cubic meters of capacity, can you please give us an idea on the current capacity utilization you have there? Also on the current profitability with today's portfolio. So is it above like the average for the transaction? Or is it rather maybe below it? And then also, thirdly, if you could provide us more details on your plans and time lines for on the repurposing towards more innovative products?

Yes. I think overall, first of all, the utilization is quite highly utilized. Wilmington, of course, we still have some capacity available. However, we need to combine that and do the reconciliation then with Pennsville we have opportunities. So really to optimize there. And we will free up some quite significant reactor volumes overall for the exclusive business with both sites. So we are talking about roughly 80 cubic meters, which we will have available for our customers.

To the second question about the margin, I think already outlined by Reto. So this is in line, in sync with our margin as well. So no dilution with the existing portfolios, there is no hope or any synergies already in. So really straightforward. And I think the third question -- Time lines, yes. I think it depends also how fast we can close the deal. However, we can start immediately when we are talking about to win additional products or also customers, this can start immediately because you are starting anyway first with the tech transfers, method transfers, and this will take anyway 1, 2 years. So I think the impact should be visible then in 2, 3 years, which will really support in our P&L. On top of the existing portfolio and revenue margin, what we are getting there.

Next question is from Charles Weston.

On the -- across the whole of the sort of Wilmington site, how much of what they do is controlled substances? It kind of looks like all of it. And does Pennsville do controlled substances? And does that make it sort of harder to move products from one to the other? That's my first question.

Yes. I think, yes, because we are customers for each other as well. So we know Noramco very well, Wilmington site, and they know us also very well. So we really know what they are doing and they know what we are doing. So there is also some overlapping. That's also why we are looking forward also to optimize overall and we are talking about the product portfolio, what's currently in there. So it's ATAP, the addiction treatment and fermentation in there, the ADHD and the pain management, what they have currently. But also now we figure out or we have, of course, already planned what we want to put, what kind of products in Pennsville and then also for the future in Wilmington.

Okay. And one other question, please, in terms of costs, from a P&L perspective, what would -- what should we expect from a cost synergy perspective? And from a capital cost perspective, how will this change your capital investment strategy or kind of expectations for the next few years?

Yes, Charles, I mean the value potential, the value creation potential clearly is in the repurposing of the Wilmington capacity for innovative business. That's by far the largest lever. Of course, as the 2 sites are really close together, there will be a little bit of opportunities, but that's not the value levers. In terms of CapEx, we have done the plans, what we will need for the Wilmington site. And as Marcel has mentioned, this is a site which is up to date from an investing point of view. So there's no significant catch-up CapEx needed to bring that up to speed. It's already basically good to go.

Next question is from Fynn.

So I have a follow-up. You said that the margin profile is pretty much in line with the group, and then you spoke about a stable portfolio. So does that mean the current portfolio is not growing in the 3 sites that you have acquired and it will only really start to grow once the tech transfer is done that you just mentioned, so in 2 to 3 years' time? This would be my first question.

Very good question. I think, yes, there is a growth, but it's not a significant growth. So I think it's a moderate growth between low single digit, mid-single digit. That's what we see in the portfolio also in the analysis. By the way, it was not a big deal for us to do because we know the portfolio and the market very well. Why is it so stable? Also, you need to know that you cannot import this kind of drugs to U.S. It's just local to local. So also from the competitive point of view, this will be not a big change. So this is also why we somehow or this business is protected also from the external companies outside of U.S.

Now I think for the 3 portfolios which we were talking about, we have the ADHD, there is quite a nice growth in the upcoming years, what we see. And then we see for the ATAP, this is a moderate growth and a little bit declining in the pain management overall, in reconciliation, it's a moderate growth, so which is good. But this is just one part of the benefits what we are looking for. The more important one is then to gain the new access for the exclusive business in the U.S.

Okay. That's very helpful. And frankly, I'm a bit surprised that you say the utilization is actually quite good. It's not going to be margin dilutive to the group. There's also no major investments required. So then I'm wondering, frankly, why could you acquire the site at such an attractive price?

Very good question, Fynn. This is also the secret of success why we were able to make that happen and also with such a multiple. I think there were more potential buyers in there for sure. However, due to the fact that the market is protected, you need to keep at the end as a new owner of that the supply for these drugs. And this was unique. Siegfried was most probably the only one could offer this. That was the unique pro for Siegfried.

Okay. That's very helpful. And sorry, one last one, just briefly on the 10% of group contribution in terms of revenue that you mentioned. Can you help us with at what utilization sort of the 3 sites sit on average? Because in the past, I think with the Novartis sites, the utilization was likely a bit lower. So is it close to optimal utilization already? Or how much more room would you see there to increase it further?

Yes. I think for the U.S., we still have 20% potential growth opportunities, but also here, this is not the end. So that's exactly why we have a big opportunity to optimize that then with our site in Pennsville. And for Australia, we are very -- what we are looking for really high utilization. So also the demand is for 2026 is already sold out.

The next question is from Daniel Jelovcan.

Okay. Great. Also congrats, very nice deal, obviously. So first question is this Noramco also acquired the drug products business from Cambrex. So I guess this is not included, obviously, but -- and it is the same facility. So -- or maybe not, so then it's totally irrelevant.

Maybe let me answer the first question, Daniel, Danny. Halo is not part of the deal. So this will belong still to SK Capital. So it's really just the drug substance and not the drug product setup.

And not the same location.

Yes. They are in total different locations as well, Danny. So it's really...

Yes. That's great. And the other question is, if I look at the Internet of Noramco, the facility looks quite different versus a normal small chemical facility. And I know the chemist, but I mean, all these treatment ADHD and so on, is that a different approach versus your normal advanced small molecule? Or so in other words, I mean, you mentioned it will take some time to repurpose. But I mean, how easy is it? I mean you have to change a lot the reactors or the setup or software or whatever. That's the question.

No, Danny, short and simple answer is no. It's exactly the same approach with the reactors, so stainless steel, Hastelloy reactors, [ Monel ] reactors. So it's exactly the same. And also what I was sharing already, we can all -- we can run all common chemical synthesis what we are doing in already all other locations as well. So there is not a big investment to come back also with CapEx. There are small changes maybe to optimize that, but from the CapEx point of view, it's not relevant, what we're looking for. And we are in a position really to gain immediately customers with new products. But we are optimizing then, of course, due to the some overlapping stuff then with Pennsville that makes sense to make sure that we have the best place, the best trains and reactors for each of the process steps of products.

Last question is all these 3 product families in Wilmington, which are probably rather low growth, as you said, I mean, do they disappear over time or in favor of more growing newer molecules? Or how can we expect that going forward?

I think they will not -- for sure, I think the supply needs to be given also to the U.S. patients at the end. So this will not disappear at all. for sure. It's, as already outlined, just a moderate growth, and we can absorb that. But with the combination and the proximity with Pennsville, we can gain much more out. So I think at the end, it's not only Wilmington, which will get the benefits also our existing Pennsville site will get also quite a lot of benefits on top of it due to the optimization step.

The next question is from [ Sibylle Bischofberger Frick.]

Congratulations also from my side. I get the feeling that the focus was very much on Wilmington. But therefore, my question on the Tasmania site. For me, it's -- when I think about the M&A for Siegfried, it's not the first, I think what you did there. Could you say something about it? Was it only a deal for 3 sites? That's why you took Tasmania just to get Wilmington?

No. I think overall, maybe to elaborate a little bit on Purisys as well as on Extractas in Tasmania as well. Thanks for your question, Sibylle. I think on Purisys, I was meeting their really strong chemists, and they are doing very nicely also development projects for many customers in U.S. But of course, I think due to the fact that they had also some restrictions and limitations from the capacity point of view, I think we can really now free up the full power of Purisys and on top then together with -- in combination with Grafton, what's already part of our Siegfried family. So here also, I'm looking forward, this will also help us as well for the future, not directly to -- by this site to develop our P&L, however, to fill the pipeline for all other drug substance sites in U.S., now Wilmington and Pennsville, but also for the European sites as well.

And by the way, also [indiscernible] was from the culture. When I was meeting these people, the key people in Wilmington, in Purisys but also in Tasmania, these people are really entrepreneurs. They were talking about EBITDA and so on what's not always covered with the big pharmaceutical companies, the colleagues there. very often they are talking about operational income, but not really directly linked with the EBITDA. So I think also from the culture point of view, this is a perfect fit for Siegfried, and I'm really happy to welcome these people quite soon.

To go back to the question to Tasmania, I think this is really beneficial for us as well to have the backward integration. So also we have the resilience and especially also over the last 2, 3 years, there were quite a shortage also on this kind of product. So we know what we are talking because also this site in Tasmania is one of our suppliers and we saw that the demand was so high, it was quite difficult to get also the volumes which we had -- which we were looking for. So also, it's not just that we had to take over the Tasmania location to get Wilmington or also the 2 U.S. sites. It's also a very good fit for Siegfried as well. I was also there. So I was prior to Christmas in Tasmania. It was quite a long flight, believe me. But also interesting to see that it's also chemical, it's chemical extraction. So it's not something absolutely new for us. So we are also familiar with this technology and this method as well.

And the other question is about the deal. It seems that you had -- you paid a very interesting price. So does it mean that goodwill intangibles are lower than normal deal? And could you say something about the whole amount and how much would be goodwill intangible and property, plant and equipment? Or do we have to expect or wait for the annual report where you have to mention it anyway?

Well, it's a fair question. A little too early as we have only signed the deal now. And obviously, the exact figures will depend on the point in time of the closing and the state of the target, also including net working capital, et cetera, at the point in time of the closing. From today's perspective, we do not expect a bad will, rather a bit of goodwill. How much this is going to be, we will see. And we will then, of course, provide transparency and disclosure in the 2026 financial report, which -- and on the way there, of course. Today, it's still a bit early for this question to be answered exactly.

Next question is from Ed Hall.

Just first one, again, back on Wilmington. And could you just tell us a bit more about the repurposing? I'm curious about sort of licenses that you may need to add or capabilities you may need to add? And then maybe just going a bit further, I mean, have you had conversations with clients? Would this be sort of in your eyes in the next 2, 3 years? Would this be internal transfers from Europe to U.S. or incremental contracts? A bit of scope there would be really, really helpful.

Yes. Good question. I think the first one, repurposing is a little bit when we are talking about portfolio. So we want to add that's in a nutshell, the repurposing. So also just to clarify, repurposing doesn't mean that we have to add to go for CapEx investment or whatever to get the technology in place and so on this is not needed also to close this question, which is a fair one. So repurposing is a little bit more to go and to look for exclusive business with this kind of customers, what we have anyway.

We have many of them in U.S. But by the way, it's not only U.S. U.S. customers are looking for a local supply point for U.S. also European customers are looking at the same -- from the same view and they're looking also forward to generate such supply points in U.S. for U.S. So repurposing is not a big deal. It's something what we have to look in the combination with the optimization with the Pennsville site. Already, we have plans in place. So we are ready also and I'm really excited. We are ready when we are closing to give full steam then in the execution. We know the portfolio. We know the products. We know the people and happy to start to run as soon as it's closed.

Maybe second question then I think related to the customers, as already shared when I'm meeting our key customers, big pharmaceutical companies because it's for them not predictable what's coming next. And I think it's also valid independent which administration will be leading then U.S. This will not disappear. The customers are really asking now and the regionalization is ongoing. They want to have 2 supply points in the near future. One supply point is U.S. for U.S. and one supply point will be Europe for rest of the world or the second supply point for Asia and Europe as well. So this is really a big advantage for our company and also from the strategic point of view to fulfill the demand at the request from our customers. That's clearly outspoken when I'm meeting our customers.

Perfect. That's really, really clear. And then maybe just on the second facility in the U.S. in Athens, obviously, more of an early-stage asset. But I'm curious as to what is the composition of those assets. I see they've got cytotoxic capabilities. I mean is this the sort of drugs that we should be thinking about coming through the pipeline? Or is there any more granularity you could share there, that would be really helpful.

Yes. I think it's in a niche. It's the common synthesis, what they can do, they can also hypo, Yes, they can do highly active as well managing there. Mainly it's lab. We are working with 45 people that are really working in the lab. This means also then at the early phase. I think then later on for the Phase I, Phase II, as soon it goes in this direction, you need to have bigger equipment what we have in Grafton. So it's really a very comprehensive approach what we can offer now than in the U.S. and also strong people there as well. So most of these people they were working already there since more than 10 years, that means also there were already scientists in J&J. They still working there. So also very low voluntary attrition rate and fully committed to the location and I think also then for the future.

Perfect. Congrats on the deal.

Thanks.

Thank you.

The next question is from Edward.

Okay. Just a few points that came out from the Q&A so far. Could you actually just talk about the capacity that's going to be freed up in Tasmania that's now available to Siegfried because you were talking earlier in one of your answers about the slight sort of not exactly bottlenecking, but certain friction with regard to supply. So how does that change the position for yourself there? Another one is on the working capital profile of the acquired businesses versus what you actually have for yourself at group level. And then knowing the knowledge you have of the assets acquired, the time frame, is there a significant compression versus if you were taking this as new as opposed to having a knowledge base already? Those are the start.

Yes. Maybe I'll give you the start on the net working capital level. As mentioned, we will know much more when we close the current situation then. But obviously, the operations, be it Purisys, be it Wilmington, we know quite well, and they will not behave totally different than other drug substances manufacturing sites that we already own. Then you asked around freeing up capacity in Tasmania. That's not what we're going to do. We are going to free up capacity in Wilmington. So that's the plant Tasmania is in Australia and is a backward integrated supply chain into raw materials. So there, we have no plans to do that. Then on the time frame on the repurposing, I think we touched upon that already. That's somewhere between 2 and 4 years until we have capacities available in Wilmington for innovative high-value compounds manufactured in the U.S. for U.S. clients.

Maybe to add then on the third question, I think it was also related to the capabilities. This is really also a very important dimension. I think to build up something from greenfield, and then you need to, first of all, to do the construction, qualification, validation, then you need to find the people. It's not so easy. And this is really a big advantage to get the momentum very fast because the people which I met there are strong people, strong scientists, strong chemists and this was also one of the key acceptance criteria for us that we are moving as fast as possible with this potential deal in the past.

Okay. And 2 quick other questions then. Just on the sites acquired, with regard to your European capacity and the integration of those working with your existing pharmaceutical customers, just to give an idea how you're going to sort of get the synergies out of this network now.

Yes. I think it's -- of course, it's very comprehensive at the end, and it's not in contradiction with the European locations. So this is absolutely important. Why? I think as I already outlined, our customers are looking for 2 supply points. So either we can offer something from U.S. or we are losing this business in U.S. So that's an advantage and why this deal is so important for us. So there is no contradiction at the end also for our sites here in Europe because the European sites, we are supplying for rest of the world for all other countries for all customers, as I outlined, I think it's independent from which countries our customers are coming from.

And my last question was going back to the beginning of your presentation. You talked about the quality of the assets you've acquired versus actually some of the competitors in the marketplace. If you actually look at your competitive positioning now post integration, what do you actually see the opportunities opening up a greater commercial sphere of influence for yourselves versus where you stand now?

I think the big opportunity, what we see, we were quite limited with the drug substance commercial production in U.S. That's, of course, that Wilmington is really now a big game changer for us because with this additional 150 cubic meter reactor volume and I think at the end, more than 50% we can use then for the exclusive business. This is a significant step change for us. And to bring that in the context, we were reviewing a lot of assets. And believe me also our customers are looking at many of these potential targets, how to overcome the situation. But very often due to the fact, especially for drug substance small molecules is a different story compared to fill and finish drug substance biologics or all other modalities because over the last 3 decades, more or less all production for drug substance molecules disappeared from U.S. Everything was transferred to China, to India or to Europe. Now it's really unique to have such an opportunity. And I'm really, really happy that we won this target due to the fact that we had a unique offer at the end to make it fit.

Okay. I don't know your company, but it looks a fascinating deal. So congratulations.

Thanks.

Thank you. Great. We are approaching the end of this session. Maybe one last question from Tanya.

Yes, it's okay. So one last question, if I may. On the margin trajectory, medium term, how does this change with the acquisition you've made today? Maybe what are the main factors to consider in terms of synergies and then the new contracts for exclusive synthesis that you aim to gain with the repurposing of capacity, pricing, things like that?

Yes. No, it's a fair question. I mean we described the status quo today, and that's at par, so not margin dilutive, rather margin accretive. And obviously, if we're able to increase the sales quantum by optimizing the capacity between Pennsville and Wilmington and welcoming new business in a structurally attractive area, exclusive drug substances in the U.S. for which is high demand, you could expect high valuable business. So the margin is and will be going up on a substantial part of our business. How much that will be and how it will impact the midterm, as mentioned, a bit too early, but certainly very positive. We will, as mentioned, revert to that once we close the deal.

Congratulations.

Thank you so much.

I think, Charles, you have a follow-up question. That will then be the last question of this Q&A.

Could you tell us what the financial leverage will be after the deal closes? And can I just ask a clarification question. If you free up space in Wilmington to sell for new innovative products, are you going to be focused specifically on controlled substances to fill that site? Or could that be any small molecule that you want to bring in?

No, we are looking forward to bring exclusive business in. So that's really the ultimate target, what we are fishing for and hunting in U.S. to bring in these new molecules where the highest demand is for sure.

Yes. And then on financial leverage, substantially below 3, of course. So I mentioned investment grade is incredibly important for us, and we would like to keep that. The operations that we purchase is highly cash generative and obviously also highly profitable. So this adds another caution. So dry powder after closing -- immediately after closing of this transaction will not be zero, but continue to be a triple-digit Swiss franc million.

Okay. We have one last question from [indiscernible].

I'm actually from the credit side, so the debt side of investment management. So I think part of my question was just answered. The second part -- so that was on the [indiscernible] rating. The second part was more if I got it right, that you might be looking to refinance or finance this deal through capital markets? And if so, what sort of timing should we be thinking?

Yes. I mean, obviously, it depends a lot on the point in time when we close and then, of course, also on the conditions of the debt capital markets at that point in time. So it's a little premature. But as you can imagine, we now for quite a while, follow each of the segments of that specific market quite closely. And we'll take then as soon as we approach that decision point, the best decision for all stakeholders involved.

Thank you for dialing in for this exciting times for Siegfried. And I think we are closing now.

Yes, we will close the call. Thanks for being here. Stay tuned. We hopefully see or speak each other again on February 20 when we will announce our full year results.

With that, that's all for now. Thank you so much.

Thank you so much.

Bye-bye.

Bye-bye.