Tecan Group Ltd. Aktie

Excellent. All right, welcome everyone to our Fireside Chat with Tecan. I'm Aisyah Noor, Head of European MedTech Research at Morgan Stanley, and it's my pleasure to host for our first time Tecan CEO, Monica Manotas, today. Before we start, I'm obligated to inform you to check ms.com/researchdisclosures for important disclosures. And for any questions, please check with your MS sales rep.

With that, welcome, Monica. It's great to have you here at our conference in New York. If we first start off with the bigger picture and some introductory remarks from yourself, this is our first MS Fireside in New York with Tecan, as with you as CEO. So very proud to host your inaugural session. I imagine there are a good amount of newcomers to the Tecan investment case in the room today. So could you start with introducing in a few words the Tecan business and equity story?

Great. So thank you for having me here, Aisyah, and I'm excited to talk to you about our story, so thanks for your interest. So maybe at the highest levels, Tecan is a player in the life sciences tool space, with a leadership position in laboratory automation. So if you think about pharma customers doing a screening of compounds or diagnostics players processing patient samples, or maybe a scientist sequencing a genome, it is highly likely that they're doing that, leveraging the Tecan technology in their liquid handling, their detection or generally in their sample preparation.

Maybe a little bit about myself, I have been the Tecan CEO for about a year, joined the Board a year before that. But I've been in the life sciences tool space for over 25 years, and I have been associated with Tecan even before, you know, I actually joined the Board, which allowed me the opportunity to know them very much like a customer, right? And that allowed me to have an understanding of their overall strength.

When I joined the Board, it was a tough time for Tecan, if you think, 2024, 2025. And as I got to know them a little bit from the inside, it allowed me to also confirm what I knew were the strengths of the company, you know, strong product portfolio, strong brands, great customer relationships, really good teams. And it was a matter of really taking advantage of that foundation to get them to a place where we were executing ahead of where the markets actually were, which is why that led us to, you know, launching our transformation program called Rewired earlier this year.

And what we're doing there is we keep saying that we're going to, through that program, future-proof Tecan so we can be sure that we are executing to be ahead of where the markets are, always outperforming the markets. When you put that in perspective and maybe connecting that to what is our equity story, I would summarize it in 3 areas, right? We have a very strong leadership position in the laboratory automation and particularly in liquid handling. You ask any customer in our space who Tecan is, they will likely tell you we are the gold standard in liquid handling automation particularly. So that strength and leadership position is #1.

We service markets that are very attractive. So, granted, they've had a little bit of some uncertainties in the last couple of years, but when you actually look at the fundamentals for growth, they're very much intact. And then #3 is the opportunity that we have now in these markets as it relates to technologies like AI coming into play in how the customers are now seeing that for them to truly be able to take advantage of what AI brings to them, automation is no longer a nice to have, it's much more of an essential. So all these components make the Tecan story an exciting one that you should all be considering.

Okay. That's a great segue into my first question then. I wanted to start with the AI theme because it's caught the attention of many people since the headlines first came out. Can you talk about the 2 AI-based partnerships that you've signed this year, how they differ from each other, how it applies to your product offering, and then how it benefits either party? And why do you think Tecan was chosen for these use cases?

Yeah, maybe starting with the last part of your question on why we were chosen. I think that, that ties well with the reason why our customers decide to go with our technologies. And what I constantly hear from them is they really appreciate the modular approach that our technology has from both a hardware and a software perspective that allows them to have good amounts of flexibility to apply our technology into the applications that they're trying to work the technology into. So I think it was the same case as we were thinking about why they came to us for these things. And to be quite honest, in many cases, they told us themselves, our partners, that it was the customers that said, okay, for this play, you need to go talk to Tecan. So good testament of our presence in the market with our customers.

When you think about the 2 partnerships, they are quite different. If you think about this whole ecosystem between the dry lab and the wet lab, I would characterize the first 1, which was the partnership that we started with NVIDIA, was the first 1 that we announced earlier this year with the first milestone of adding agentic AI capabilities into our Introspect tool announced, I think it was in May of this year. And the idea here, if you think about, again, the ecosystem of the dry and the wet lab, here it's about focusing on the wet lab and making sure one of the things that is important for the customers is the reliability of this wet lab to get the results that they need to then be able to actually connect into the dry lab. And that's where the Introspect tool and what we're trying to do with NVIDIA comes into play.

The Introspect tool in itself, before the NVIDIA collaboration came into play, was really designed to help customers monitor their fleet of instruments, right, to be able to know that the instruments are working, that the level of utilization of consumables to total is in line, all of those different parameters. And what the tools now of agentic AI is adding to Introspect is basically making the tool smarter, right? The customers are able to now interact with Introspect through agentic AI. It just makes it a lot easier to work with the tool and monitor different things. And actually, the tool can now be a little bit more predictive on what are the things that the customers should look into and ensuring that everything in the fleet of instruments is performing as expected. So, it goes into how you make that wet lab more reliable.

The second partnership is what we announced actually more recently, is the work that we're doing with Anthropic. And there -- what Anthropic wanted to do, they launched something that they call MHS. It's the Model Hardware Standard. And what they're trying to do is support customers that are interested in automating tasks within the lab. To be able to do that, they need a way for the laboratory instrumentation to communicate to agentic AI. And that's why they developed this protocol so that if the instruments speak that language, then they will be able to connect to the agentic AI.

And so the way to think about it again, if you think about the dry versus wet lab universe, this is a way to create a better or easier integration or connection between the wet lab, which is usually where we sit, and the dry lab or the in silico, right, where the AI models are. And that's where -- how -- between those 2, that's where you create that closed loop that everybody talks about. And we, in addition, have another side of interest in this partnership, which is, if you think about this concept of the autonomous lab, so for us, we play there through our own integration capabilities through our Labwerx business. And we actually create those integrations between the various instruments to create the work cells or robotic work cells for the customers.

But if we get to that point where truly you can have a communication standard that all these instruments are talking, I think that changes the way we run these integrations and you can accelerate the process of eventually getting to that autonomous lab. So that's another piece by which this is an interesting partnership for us to play in. And the more we have other players actually using MHS, the more interesting this part of getting to the autonomous lab becomes.

Okay. How do you think about the commercial model for these AI-enabled offerings? Is this a software subscription, a service layer, or is it embedded in your instrument pricing?

So it's a very interesting question. And you can see in how we have worked up until now, we have not really monetized software. Usually we see software as a way to either control the instruments, right, is what you see with like FluentControl, for example. But then we also have digital tools like Introspect that we add to the hardware sale as a way to sell more instruments. So this is what we know how to do and certainly what we've seen with Introspect initially is to be able for us to sell more of our instruments.

But we're open. I mean, one of the things that we have been thinking now as we've added this layer of agentic AI into Introspect is, does that create another opportunity for us where maybe you say, okay, we could sell the base Introspect with the instrument. And if the customer is interested in the agentic AI, there will be a subscription model added on top. I think if we go in that direction, we will need to think about channels to market and everything because it is a bit of a different sale. But at this stage, given everything that is happening in this space, we're open to looking at the different alternatives.

So investors are obviously looking for ways to understand the materiality of "autonomous labs" as a revenue potential for Tecan. I know it's early days, but I would love to throw some hypotheticals at you and see what you think makes sense. The first is just a broader market acceleration, growth acceleration from earlier discovery, higher efficiency. The second is automation penetration increases. What have you, as we know, generally accepted, it's about 20% of labs today are "automated" so could that increase? The third or more near term is you get this kind of customer wins or conversions to your platform from users who want in on the Introspect digital overlay where they don't get that with your competitors today. And so that can catalyze their breakthrough discoveries, workflow, what have you. Have your customer discussions come that far? What are you envisioning here?

Yeah, I mean, I would say that the likely outcome is probably a combination of all of them. I can't imagine one scenario over the other. We definitely will see more usage of automation across the board as things change in the entire drug discovery and development process. We have seen already that as our customers are actually coming up with different modalities of drugs, that is actually allowing them to start to think of automation in areas of the process where before manual methods were just fine, and QC is a good example of that, where, as you have to test for more parameters, you actually need more of the use of automation.

I do think that the idea that customers have is to truly disrupt the entire drug discovery and development process, right, to get it to go faster, less costly, higher yield in the end. And that will require a change at the very beginning of the process, which will likely mean a different role of automation within the autonomous lab and perhaps getting to that concept of the autonomous lab sooner. I think the pace at which that will happen probably depends on all of the technologies, right? And how quickly the customers can really think about how this new play looks like and how they manage their own data to be able to you know feed these AI models and continue to teach them as they continue their closed loop.

Okay. And then bringing back to the kind of more near-term dynamics, those who are more skeptical to the AI thematic are of the view that if indeed Tecan was a beneficiary of AI, it would materialize more strongly in the order demand, which, as we know, came in at flattish in the second quarter thereabouts. Could it manifest more strongly in your consumable sales, in your view? So if utilization of your systems go up because of AI, then your consumable sales accelerate first before equipment. Is that one way you're thinking about it?

That is a way to think about it. I think this will ultimately have an impact on both consumables and instruments, but I would say it is, we're in early stages of all these changes, so there is a lot more to come. And, you know, when you think about, again, if you get to that concept of the autonomous labs, these labs actually working 24 hours a day, you definitely see the consumption of consumables will be going up. But as the customers continue to actually feed more of these up, as, you know, there is more volumes coming in through the dry labs, then there will be more overall usage of instruments, either through new labs that get created or through the normal replacement cycles.

And then obviously as we bring in new innovation and new technology, that's going to drive both. So I do see that it's going to be coming both through consumables and instruments, but we are at the very, very early stages, so I think connecting the Q2 to this is not the right way to look at it.

If we move on then to the life science market, could you take us through the outlook for your life science business today? I know we're, in the first half result, we're starting to see green shoots from both your results and your peers in the second quarter. You saw strong biopharma, China's recovering, A&G's still a bit weak. We've got Veya launching this year, which is helpful. Just talk us through what segments are doing better and what's not doing so well.

Sure. So I'll start with the biopharma segment, which is the largest for life sciences. And there we definitely are seeing the dynamics of the recovery as we expected at the beginning of the year. We started to see that in Q1. What I saw a difference between Q2 and Q1 was that we started to see recovery in instruments. So again, I think it's a good gauge of the health of the segment so far. So that was good. I mentioned in the first half results that we saw growth in the high single digits in biopharma. This is all in the back of our life sciences business because that's where we have the presence in through life sciences. So all good. I mean, I've mentioned I'm being prudent as we look through the rest of the year because this is just the beginning, but I think the signs are all very good.

If I look at the diagnostic side, I mean, it was overall good for life sciences. Here we have actually a touch point both through life sciences and through partnering. We saw for the overall company growth in the mid-single digits in diagnostics, but it was really contributed by both the life sciences side as well as partnering. So that was good results overall in life sciences as well. As you mentioned, Academic and Government, we haven't really seen the recovery just yet. I mentioned in the first half results, we saw declines in the double digits there. I mean, here it's really the presence is through life sciences, so that's where we have the connection to A&G.

We're keeping an eye on the funding. I mean, we talk a lot about what's happening with NIH funding. It was good to see the growth this year, but the connection to the actual outflows or the flow of funds is not quite there, and we see still conservatism on our customer base, but that was just in the U.S. I mean the reality is that we saw weakness across the board. It was not great in Europe. And the only good point was Asia outside of China. We did see growth in this segment.

I think for anyone that has been in the tool space for as long as I have, you know that there are cycles in this segment. So certainly one that we have to continue to watch because we do know that these funds will eventually come back and I always say that academia and government is the source of innovation. This is not only where the future scientists of biopharma and diagnostics are getting trained, which is why you want them to know your technology, but also it's the source for, you know, the future spin-offs that will become biotech that then are bought by biopharma. So for all those reasons, it's a very important segment for us to follow.

Okay. And then moving on to your liquid handling business. So you saw an acceleration in your liquid handling business in the second quarter, which is encouraging. How do you think about your market share in liquid handling in the context of new products from Hamilton and Beckman, and what's driving the acceleration you saw in the second quarter?

Yes, I think maybe to start with the driver for the acceleration, I do think that is on the back of what we're seeing in the biopharma side. So that's the first point. When we think about our share, we see overall that we've been holding well and it's been a combination of us actually taking share in the high end of, of the overall kind of market segment. And the opportunity that we see for ourselves is to actually be able to take more share in kind of that mid-range of the segment.

I mean, we see third-party reports that see us either maintaining share or maybe even taking a little bit from an overall perspective in liquid handling, which is good to see. And we certainly are making investments in that area that is our core. You know, all the investments that we're making to drive more opportunities through our Labwerx with getting into robotic work cells, I think that overall is an interesting play for us in liquid handling.

And then moving on to your largest customer. So you delivered mid-single-digit growth in MedTech in the first half. Your largest customer was also growing well. And your full year guidance is to grow flat, which implies a decline in the second half. Beyond the tough comps, how do you see your market share with your largest customer evolving over the next months and years? And do you see a path to growing at the same rate as your largest customer?

So maybe a couple of things to unpack there. So I think you know that our content is different between what we support the customer with in their old model versus the new, which is why as they see the ramp up of the new model versus the ramp down of the old, we see the performance that we see with them. I think I would say the health of the relationship is very good. We are in the preferred supplier category. I mean, they, as they have grown, had to take some decisions around risk management because they can't have sole supplier sourcing in some areas, and that's what they've done as they came up with the new version.

We work very closely with them to understand their needs, particularly when you are in the period where we have the ramp up and the ramp down, which is why, you know, in the latest numbers that we've seen, a clear picture of what the mix is looking like, because this is what drives a lot of what we end up delivering to that customer. That's where we see that, okay, it's going to be a slight decline this year.

But what I think I'm the most excited about here is what the CDMO business is doing to really gain other customers, and this is why they will be able to actually make up that change with the largest customer, with other customers where they see growth and overall for their contribution to Tecan total, that part doesn't change at all. One of the things that I talked about early on in my tenure was the need to get the team on the partnering side. So this is both the OEM and the CDMO side back in building the funnel and they've been doing a very good job, which is why we get the business back to growing outside of the dynamics of the largest customer.

Okay. That ties into my next question as well, actually. So your partnering business today is about 60% of your total sales and it's organized around these 3, Synergence, Cavro, and Paramit. How do you think about the right long-term mix between these 3 subsegments and where do you see the highest growth opportunities across the 3?

Yes, I mean, they are very connected because particularly for the IVD life sciences subset of customers, I mean the value proposition that we're bringing today with the CDMO added to the equation is a lot stronger to the point that we are now able to propose new projects for our customers on the OEM side with the option of manufacturing in 2 different locations whereas it was something that we couldn't do in the past. So there is definitely a connection in all 3.

I mean, in the world where I could be selfish and I could get what I wanted, obviously I would say that the -- I want the OEM to be a larger proportion because from a profitability perspective, it makes much more sense for us from a mix in total. But the reality is that the CDMO side brings that value to the equation. And one of the things that we're doing as part of our Rewired program is actually leveraging that capability for our life sciences business so that we can improve the profitability there as well.

Okay. And then just 1 more on Cavro. So this business saw some supply issues in the second quarter, '26. You've called out, you know, it will take some time to resolve. What are some of these supply disruption and what kind of structural changes are you making to kind of prevent this from happening again?

Yes, I think the genesis of the issues that we see today really come from the point when we decided to move the business from their original site in California over to Malaysia and maybe some errors in the planning of the inventory needed as part of this that now have led to some issues that we see with some of the suppliers where we either have product obsolescence or the supplier has moved and doesn't have this product anymore and has led to us making some decisions around having to come up with the secondary sourcing or just a completely new source for some of these components.

This is something that we're taking very, very seriously because these components are very strategic to the instruments that our partners are manufacturing, and that includes our own, because we use these components both for our life sciences and for the Synergence offering, which is why it's very important for us to go through this very transparently with our customers, and in some cases, having to work with them on decisions around prioritization given the supply limitations. It's something that will take probably the entire second half to resolve but we're working through it.

Okay. And then I guess. And then this last 1 on growth, Asia was the main growth driver in the first half from a regional perspective, and you've talked about very strong results in Japan, China, mid-single-digit growth. How sustainable is this, you know, region as a growth driver for you mid-term, and how are you thinking about China risk from a competitive perspective, demand, supply chain perspective?

Yes, so truly Asia was a star performer for us in the first half. I mean, when we looked at the performance, it wasn't a single country. We had good performance out of China, but very strong performance out of Japan. Korea did very well. We had really good performance in Australia. So all of that is good. I'm not sure that we can keep it to that high level. But, I mean, given what we're seeing in some of these markets, I talked about the trend that we're seeing with the biofoundries in Japan that works exactly to our sweet spot. We see something similar actually going on in Korea, so there's a lot of opportunities there. We've now made the investment to go direct in India to further penetrate the biopharma segment. So I do expect Asia to continue to be a contributor of growth going forward.

Okay. Moving on then to your Rewired program. So you have a target of reaching 20% EBITDA margin in constant currency by 2028, which implies 400 bps margin expansion from 2025 as a baseline, and it does rely on a decent amount of cost out. Can you talk through the visibility to achieving this target and how far along this journey you are, you know, key projects you'd need to undergo to get there?

Yes, it's a very good question. So maybe as a start, when we modeled how we could get the 400 bps, we did have as a starting point that there would be a combination of operational leverage, so something where we're taking advantage of the volume as we're growing, as well as cost out and we kind of did the math of roughly 1/3, 2/3, so it is a big component of cost out, and I think this is purposeful to ensure that we are driving what needs to be driven from a cost-out perspective in areas that are fully in our control.

What we see in terms of the contributions for this really come through the 3 pillars of what Rewired brings to the table. So, you know, it's the portfolio discipline and the decisions that we made already that we're executing on now. For areas where they were contributing negatively to the EBITDA, so that would be costs that will be coming out. So that would be very clear. We will continue to look at the portfolio to see what other opportunities that there needs to be from an execution perspective where, you know, we may not be the rightful owner for a certain asset and we can use that same capital to focus in some of the other areas where we can be stronger.

We have a component around commercial excellence, and this is more tied to what we expect from an operational leverage perspective in the EBITDA. And then we have a component on the operational excellence side, which is where we're looking at where we manufacture, how much productivity we can get of the investments in R&D, where do we have our back office support? All of that will be cost out coming from the base that exists today. And those things are very much under our control. I think maybe the main watch out for me as we execute on all of this is ensuring that we keep the balance so that as the markets continue to come back, which is what we expect throughout these 3 years, we don't miss on any opportunities from an investment perspective. And this is why when we initially talked about Rewired, I specifically was talking about the innovation engine as the one that probably I'll be the most careful about.

One quick 1 on cost inflation. So could you talk us through the cost outlook and the major drivers of cost headwinds to the margin, so raw materials, energy, freight, tariffs, et cetera?

Yes, so for us, when you think about the inflation that we see, it is not off of what we have seen historically. I mean, some of the macro things that are going on now that are driving because of the war in Iran or these things that are maybe driven by the higher oil prices or things like that. These things impact us a little bit less probably because you think about our raw materials, it's much more sub-assemblies and components. So definitely, I mean, obviously we always keep an eye on inflation, but it's not something that you need to model going up substantially. I think it's more, you know, kind of in line with what we've seen in the past.

Okay. If we move on then to capital allocation, so you have you're about halfway through the 120 million share buyback program you announced last year. Any scope to accelerating this, given where your share price is versus history, or conversely, could there be scope to make buybacks a more regular occurrence, given your focus on optimizing the share in the portfolio for the time being?

Yeah. No, so you're right. The program was launched about a year ago. We're about halfway through. We don't really have any plans right now to change it. I think it will run as it is. And to me, a decision to change it would tie more to decisions around our allocation of capital priorities where we always have the organic investments as #1 and M&A as #2. So if there was a need for something, then we may think of a change there, but so far it's business as usual.

Okay. What's your appetite for M&A then and what areas of the market make most sense to you? You've done a lot of bolt-on acquisitions over the years, many of which were distributor or geographic expansions. Should we expect more of the same or, you know, equally you also exited some genomics assets in the first half, other areas of your business that you think could be non-core?

So maybe to the latter part of your question, this is all what the portfolio discipline initiative is all about in Rewired. So we will continue to look at the portfolio with that strategic lens in mind. With that also comes opportunities for expansion. So, I mean, definitely one of the ways to achieve that expansion can be through M&A. So this is why I think about the M&A lens on businesses that could actually add or expand the portfolio strength that we have in our life sciences business with the proprietary products because I see those as an opportunity to indirectly add opportunities on the partnering side.

I see potential deals maybe in 2 categories, and you mentioned the last few deals have been more geographic expansions. The last one was actually the Wako Automation assets. So that's a good example of maybe something that would be more of a bolt-on in the areas where we already have expertise. In this case, it was lab automation that allowed us a better entry into an expansion of what Labwerx already was doing, right, the robotic work cells. So those are really bolt-ons that add to the capabilities and the expertise in lab automation that we already have.

Then maybe the second category could be a new leg that already -- it's scaled enough that can stand on its own, but it has the connection from an adjacency perspective to the workflows where the customers know us for, so they could add us additional real estate in the lab, but in areas where you can say we are the rightful owners because they touch the areas that the customers know and they respect us for.

Okay. That takes us to the end of the session. Monica, thanks so much for the insights today. And to the audience, thanks for participating. Thank you, everyone.

Thank you.

Ladies and gentlemen, welcome to the Tecan Group Half Year Results 2026 Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it is my pleasure to hand over to Martin Brandle, Senior Vice President, Corporate Communications and Investor Relations. Please go ahead, sir.

Thank you, and good morning everyone. Thank you for joining our conference call this morning. We are pleased to share and discuss our results for the first half of 2026 with you. Joining me on the call today are our Chief Executive Officer, Monica Manotas; and our Chief Financial Officer, Camila Japur.

Before we begin, let's quickly go over a few formalities as usual. The press release announcing our financial result was issued this morning at 7:00 a.m. Central European Summer Time. Both the press release and the 2026 interim report are available on our website tecan.com, under the Investor Relations tab.

Additionally, the PDF of the presentation slides, which we will be discussing during this call is available for download. I'd like to remind you that this call is being webcast live on our homepage, and the link to the replay will be available shortly after the live webcast on our investor web page. With that, let me now turn it over to Monica Manotas. Monica?

Thank you, Martin, and good morning everyone and thank you all for joining us for our 2026 half year results presentation. As Martin just said, I'm joined here today by Camila Japur, our new CFO. Welcome, Camila. You hit the ground running from your start on June 1, and it is great to have you here and also as part of the leadership team.

Together, we will take you through our performance for the first half of 2026, our views for the rest of the year and beyond and also give you an update on our transformation program Rewired. At our Capital Markets update in March, we explained to you how we intend to reignite growth at Tecan with our Rewired transformation program. And I am pleased to say that our solid results with above-market growth in the first half gives us good reason for confidence.

Now let me quickly walk you through today's agenda. I will start with a short introduction and the headline financial highlights for the first half of 2026. Camila will then take you through the financial results in more detail. And after that, I will come back to give you an update on our Rewired transformation program, our outlook for the rest of the year and our targets for 2028. As always, at the end, we will have time for your questions.

Our performance in the first half was solid. I'm pleased about the above-market growth in both segments. Profitability is sound, yet reflects the cost of our Rewired program and of IT investments.

A look at our results. Group sales came in at CHF 427.5 million, up 3.4% in local currencies, with both our Life Sciences and Partnering segments contributing to comparable growth.

Order entry was CHF 444.3 million, up 3% in local currencies, keeping our book-to-bill ratio above 1 in both segments. Adjusted EBITDA was CHF 64.5 million, corresponding to a margin of 15.1% of sales, slightly ahead of last year. Basic EPS was CHF 0.99 and adjusted EPS was CHF 2.62, both below last year's levels. Here FX was an important headwind, but Camila will take you through the key drivers. Operating cash flow was CHF 17 million.

As Camila will explain in more detail, the significant decrease in the first half of 2026 was mainly due to changes in working capital. These factors are non-structural. Operating cash flow has historically been strong, and it will remain strong in a future-proof Tecan. Overall, a solid first half with good above-market growth. There are areas for improvement, which we are addressing with Rewired, but we remain financially very strong, and this allows us to invest in future-proofing our company while returning capital to our shareholders in line with our capital allocation strategy.

Let's now take a look at our end markets. As a reminder on the format of this slide, the slide is intended to show how we expect our end markets to perform this year. The arrows in each customer segment represent the expected change versus last year. There are 2 arrows for each segment, representing the lower and the upper end of the expected range. Overall, in H1, trends developed as we expected. Markets have been largely constructive and continued to recover. Now let me share some color on how we performed in each segment in H1. I will start in the middle with the Biopharma and Diagnostics since they are the most relevant for us.

In Biopharma, we grew high single digits. We are seeing the recovery we were expecting. The Diagnostics segment continued to grow steadily, and we delivered mid-single-digit growth in this segment. Now moving on to Academia and Government. There we saw a double-digit decline. Relative to our expectations, our view is that for lab automation, this segment performed on the lower end of the range. And finally, in MedTech, we grew in the mid-single digits. We continue to see healthy growth in the market for this segment. However, concentration of our business among a few customers means our growth can reflect single customer decisions more than the overall market dynamics.

Now looking out to the second half of 2026, while we have seen some signs of acceleration in the market, we believe it is too early to call a change in trend. So with that, our assumption is that for the full year 2026, the markets will perform as we anticipated at the beginning of the year. On the whole, I'm pleased with the development of Tecan and of the market environment so far this year. Our performance has been solid. We are confident in our ability to grow above the market, yet we remain prudent.

And with this, I'd like to hand over to Camila Japur, our CFO, for the detailed discussion of our results.

Good morning, everyone. Thank you, Monica. I'm pleased to present a detailed overview of Tecan's financial results for the first half of 2026.

Let me start with sales and order entry on Slide 6. On the left top of the slide, you can see the reported sales for the group of CHF 427.5 million, representing a decrease of 2.7% reported figures, but an increase of 3.4% in local currencies. Growth momentum was sustained in the second quarter with sales up 3.4% in local currencies.

Moving to order entry. The first half reached CHF 444.3 million, up 3% in local currency with book-to-bill ratio of 1.04 and above 1 in both business segments. Important to say that Q2 order growth was stable year-on-year in local currencies despite a tougher comparison base and Q2 orders exceeding Q1 levels.

Moving to Slide 7, where we look at segment performance. Let's start with the Life Sciences business. Sales grew 3.1% in local currency, outperforming the broader lab automation market. The growth was driven by continued strong performance in the Biopharma and Diagnostic customer segments with sales in Academia and Government declined as expected. The Life Sciences business was sequential improvement with Q2 sales increase of 4.6% in local currency year-over-year.

From a regional perspective, half 1 sales in Europe remained stable, while the U.S. delivered approximated 1% growth in local currency. Both regions experienced an acceleration of growth in the second quarter. Asia was the main growth driver with Japan posting very strong results and China achieving mid-single-digit growth. In Asia, liquid handling instruments, including both standard platforms and our Labwerx customized solutions were major contributions to this positive development.

Now let's talk about our Partnering business. Sales increased by 3.6% in local currency, supported by solid growth in Diagnostic and MedTech. Q2 delivered growth of 2.4% in local currencies despite an increasingly challenging comparison base. Looking at our different offerings, we saw a continued growth -- good growth in Synergence services for complete system, and we saw the highest growth in our Paramit CDMO services, which also benefited from a lower comparison base in prior year.

In Cavro OEM components, sales decreased again as we had some supply challenge, and we were unable to ship all of the planned backlog. Order entry was solid as reflected by a book-to-bill ratio above 1 in both segments during the first half.

Now let's change gears to profitability. Before we talk about EBITDA, I would like to comment about our gross margin and OpEx. Gross profit margin declined year-over-year from 36.2% to 33.9%, driven mainly by material cost inflation, inventory valuation, FX and tariffs. The decline in gross margin was partially offset by a lower OpEx that had a benefit from FX and reduced accrual and improvements from Rewired.

Our adjusted EBITDA reached CHF 64.6 million, just CHF 1.1 million below year-over-year. The adjusted EBITDA margin increased to 15.1%, slightly above the 15% reported in half 1 2025. This was achieved despite headwinds from FX and tariffs, which had combined negative impact of 170 basis points. Nevertheless, underlying profitability improved by 108 basis points, primarily as a result of sales volume increase, a favorable product mix and the first benefit realized from Rewired transformation program.

Let's move to Page 9. I want to introduce this new slide to provide greater transparency on the reconciliation from reported to adjusted EBITDA, clearly outline the impact of our transformation and IT investments. You can see in the table on the left side that the difference of CHF 17.9 million to adjusted EBITDA is mainly explained by the cost of CHF 7.6 million related to the Rewired transformation program, including restructuring expenses.

In the second bullet, we see investments to upgrade our SAP R/3 to S/4HANA and the new CRM system. This project named Elevate was launched in 2024. In the last line of the table, we also have the positive effect from the tariff refund of CHF 0.5 million. As you may saw in the press release, we expect a further refund of around CHF 6 million in half 2.

Now let's talk about Rewired. As previously communicated, implement Rewired requires upfront investments. These costs are a combination of cash and non-cash items and are necessary to deliver the sustainable improvements and returns we expect from the program. The total OpEx to deliver Rewired is estimated at CHF 45 million to CHF 60 million. And in half 1, we booked CHF 7.6 million. First savings from Rewired are materializing, increasing our confidence that the program will generate long-term value.

My focus in the coming months will be on establishing disciplined cost base tracking and developing a comprehensive understanding of all underlying cost drivers to position Tecan for sustainable growth and improved profitability. Then I will be happy to share more quantitative progress of our Rewired execution with you.

Turning to Project Elevate, I would like to stress that while Rewired is a comprehensive transformation program, Elevate is our ERP and CRM modernization project. Elevate non-recurring costs in the first half were CHF 9.9 million. Differently from Rewired that we are investing in the first year in the reset phase, for Elevate, we are moving to the final stage of the project with go-lives anticipated in the first half of 2027. Both Rewired and Elevate are critical to strengthening our foundation and supporting our strategic ambitions. I hope this view helps to increase transparency of our strategic investments.

Now moving to our segment profitability on Slide 10. Let's start with Life Sciences business. As illustrated in the chart in the bottom of the page, the adjusted EBITDA margin was 13.8% of sales. This segment absorbed most of the negative impacts from FX and tariffs that were partially offset by positive contribution from higher volumes and operational improvements under the Rewired program. In the Partnering business, the adjusted EBITDA margin increased to 18.7%, driven by higher volumes, a favorable product mix and operational improvements resulting from Rewired despite adverse FX and tariff impact.

On Slide 11, we will talk about net profit and earnings per share. Before talking about adjusted figures, I want to explain the factors that impacted the non-adjusted earnings. All reported earnings figures include EBIT, net profit and earnings per share were affected by higher costs related to Rewired transformation program and Elevate project. Reported net profit of CHF 12.3 million was also impacted by negative effects from FX hedging below the operating profit line.

Now I will talk about the adjusted numbers that you can see in the chart. Adjusted net profit declined by 3.5% to CHF 32.5 million. Adjusted earnings per share were CHF 2.62, down CHF 1.5 year-on-year. The decline in adjusted earnings per share is lower than the decline in adjusted net profit as the number of outstanding shares was reduced through the ongoing share buyback program.

In my last slide on Page 12, I will talk about cash flow. Before diving into the numbers, I would like to highlight that Tecan maintain a strong financial position to continue investing in our transformation program to future-proof Tecan, while also returning value to shareholders through dividends and our share buyback program.

Let's start with operating cash flow that is positive, but significantly lower at CHF 17 million with cash conversion also declining compared to previous period. This was mainly due to higher accounts receivable for increased sales late in the period, and inventory buildup to enhance operational resilience amid supply chain challenge and higher payments, including tax payments related to prior period. These factors are non-structural and operating cash flow has historically been strong.

Days sales outstanding increased slightly from 45 to 47 days, mainly reflect the higher accounts receivable concentrated in the end of the quarter. The change corresponded to a normal fluctuation. I also wanted to reinforce the message that cash flow generation is a key focus area for me, and we will continue to drive actions to maintain healthy working capital.

Now moving to investments. In the first half, it amounted CHF 4.3 million. This includes CHF 25.7 million invested in property, plant and equipment and other intangibles, which cover the new consumable production line in the U.S. and investments related to Elevate project. Cash flow from finance activities in the first half included the dividend payments of CHF 37.2 million and the purchase of treasury shares of CHF 30.5 million. This reflects our commitment to attractive shareholder returns while ensuring the capital strength to transform and expand our business. I also want to talk about net liquidity in the last 12 months comparing June 2025 versus June 2026. We saw a decline to CHF 73.5 million in the first half, reflecting the combined impact of all mentioned effects.

Before I hand back to Monica, I would like to reiterate my confidence in Tecan's strong position and our ability to successfully navigate this transformation journey. I'm confident that as part of Rewired, we can deliver sustainable, profitable growth. Thank you.

Thank you, Camila. I would now like to give you an update on our Rewired transformation program and share our outlook for the remainder of 2026 and beyond. As a reminder, we launched Rewired in the first quarter to future-proof Tecan and to help us excel in both innovation and execution. This 3-year program is designed to generate more than 4% CAGR versus our 2025 baseline, taking us to our 2028 target of CHF 1 billion in sales and 20% adjusted EBITDA margin. It's built around 3 pillars. First is portfolio discipline. We're building on our strengths, investing in scalable differentiated segments and exiting non-core businesses to drive focus from a talent and innovation perspective.

Second, commercial excellence. We're building an organization that outperforms the market through sharper segmentation, value-based pricing and a more agile go-to-market approach. And third, operational excellence, creating scalable, resilient operations on a lower cost base and which convert growth into margin and cash. And underpinning all 3 pillars is a performance culture. Successful execution relies on ownership, accountability and collaboration across the organization.

Now let's look at the progress we have made against each of the 3 pillars since our last update. And here are some highlights. On portfolio discipline, we closed our Boston design site in April. This was the site we acquired in 2021 as part of the Paramit acquisition that house dedicated early-stage design functions for medical devices. We have also advanced the planned exit from selected Tecan Genomics activities with the process progressing as planned and our customers continuing to be served seamlessly throughout.

On commercial excellence, we're building out the ecosystem to position Tecan as the partner of choice for AI-powered labs. The first concrete milestone is Agentic AI for Introspect as part of our NVIDIA partnership. We're also collaborating with NVIDIA on the further development of physical AI capabilities. In parallel to the NVIDIA partnership, we are advancing a growing portfolio of AI-driven initiatives with technology partners and customers where we position Tecan products as key enablers of AI-powered laboratories. For example, in Japan, Tecan collaborated with a customer to develop a biofoundry, which is a highly automated factory for biology that integrates robotics, AI, synthetic biology, genome engineering, high-throughput testing and data analytics. Tecan technology serves as a core component in this innovative setup.

In terms of geographic expansion, in May, we expanded our direct presence in India with a new local sales and service team based near New Delhi, an important step in one of the world's most dynamic life science markets. Operational excellence is focused on scalable, resilient operations that convert growth into margins and cash. Efficient operations and a lower cost base are a priority for us. At the end of March, we divested our precision machining site in California and consolidated that manufacturing capability in Vietnam. Our U.S.-based pipette tip production has been operational since Q2, giving us more responsive, resilient supply for the U.S. market, including a meaningful reduction in CO2 emissions. And we continue to advance on our previously initiated investment in a harmonized SAP enterprise architecture. The project is an important step. And as Camila explained, its cost is recorded under the Elevate program.

To drive the work on all 3 pillars, we have also made progress in strengthening our performance culture. Examples from the first half of the year include clear P&L ownership by the businesses with aligned incentives, ownership of the innovation road map by the businesses also with aligned incentives and tighter cost discipline.

My first year as CEO has clearly confirmed the potential of Tecan. To realize this potential, to future-proof the company and to drive long-term value, we launched our Rewired transformation program in the first quarter of this year. Following the implementation of initial measures in the second quarter, we expect these to contribute to our full year performance and serve as the foundation for accelerated growth and profitability. We will continue to share proof points as we progress with Rewired.

With this, let me turn to our financial outlook for 2026. We continue to expect sales growth in the low single digits in local currencies for the year, and our aim is to grow above the market. Our results in the first half confirm our confidence in our performance and in our adjusted EBITDA margin outlook of 15.5% to 16.5% for the full year 2026. We now expect a slightly lower negative impact from tariffs than previously assumed. At the same time, we expect positive effects from higher sales volumes, a favorable product mix and the initial benefits from our Rewired transformation program. Based on these developments and based on what we delivered in the first half, we currently expect to close the year towards the upper end of our guided range.

And now looking forward beyond 2026, we also confirm our outlook and targets for 2028. CHF 1 billion in sales, representing a CAGR above 4% from our 2025 baseline in local currencies and a 20% adjusted EBITDA margin. Beyond 2028, we confirm our ambition of mid- to high single-digit sales growth and an adjusted EBITDA margin above 20%.

Now to sum up the first half, I am pleased about the progress we achieved. We grew above the market. We have good momentum in Life Sciences and Partnering is on track. We have a significant opportunity to realize the full potential of Tecan. Rewired is progressing well, and we expect it to contribute materially in 2027 and 2028.

While I'm pleased about our performance in H1, I'm still prudent about the market recovery and continue to expect it to be gradual. What I am certainly confident about is our ability to execute and deliver on our commitments. We're now very happy to take your questions.

[Operator Instructions] Our first question comes from Aisyah Noor from Morgan Stanley.

My first one is on the Rewired program. Could you give us a feel for the sustainability of the cost savings you generated from this program? And could there be upside to this program versus when you first announced this program? And what are the one-off or restructuring costs you've earmarked for the period versus the CHF 8 million you booked in the first half? And then my second question is a bigger picture one on AI, which I noticed you've highlighted a lot more in this quarter presentation with this NVIDIA partnership, which all sounds very exciting. How are customer conversations trending here? Do you see this resulting in, for example, higher automation requirements, expanded project discussions, et cetera? And when do you think this could materialize more concretely in your order growth?

Thank you for the questions, Aisyah. Let me start with the Rewired piece, and I can give an overall context and maybe, Camila, you can add some perspectives as well there. So overall, I am happy with the way things have started on Rewired. On your question around sustainability of savings from what we've seen so far, if you actually take a look at the first savings that we've seen have been really through the exits of the businesses that we talked about also in March and what we've started to execute. So those costs come out of the system, those are certainly sustainable. So that's a permanent kind of cost out that we will see out of those.

As we continue to execute, you will start to see more of those coming through. I mean, as we've said, we launched the program in Q1. So we technically really just have one quarter under our belt. And yes, you're right. I mean we do continue to review the program to see if there are other opportunities to be added, obviously, being careful on ensuring that we don't miss kind of the focus of the team on the execution side. It's a balance that we're playing. But overall, very, very happy with how things have gone. Camila?

Yes. So just to complement this, before you mentioned the AI piece. So on top of that, I want to highlight that the focus in coming months will be to establish a disciplined cost base tracking and develop a comprehensive understanding of all underlying cost drivers that we have in the company. This will also enable us to give more transparency about the numbers, how they trend, right? But I need a bit more time, right? And then you also asked about the cost, the restructuring cost. I would say, for Rewired program 2026, it will be similar level in the second half. So it will be, we reported the total cost. And for 2026, it's a bit lower than the average for the 3 years. That's it for now, yes.

And then I'll turn over to the second question around AI. This is a really, really exciting topic for us. And certainly, we see it on the side of the opportunity of how automation can play a role and just seeing the excitement from a customers' perspective. And I would say maybe 2 sides. I mean, certainly, what I see on the customers, primarily on the clinical diagnostics side, they have been really excited to see the capabilities that we've added to our Introspect tool because these customers tend to have larger fleets in their labs, and they really are focused on kind of efficiency and automation. They don't have the ability to have manual processes, just something relative to the volumes that they handle just wouldn't work.

So they definitely rely on automation and a tool like this really allows them to truly understand all the opportunities from an efficiency perspective of the fleet that they have. We have more things coming as part of the collaboration with NVIDIA. I mentioned physical AI, but there's another piece that we're talking about that we're calling Discovery Introspect that will allow for faster processing of larger subsets of data. So again, something very much targeting this subset of customers.

And then on the side of our biopharma customers also, they are very excited to see how they embed AI in their drug discovery process. And here, we help them by ensuring that we make the validation of the results as optimal as possible. Again, there is no way for them to be able to manage all of this if they are accelerating the in silico bit, if the validation doesn't leverage automation and AI as well. But the connection of those 2 to create that closed loop is where our value add from an AI perspective comes into play, and they're interested in the concept of autonomous labs. So all of that is certainly in the conversations.

You asked how much of this is truly maybe converting to business. I would say, it is at the very, very beginning of the process. But I'd say all of the customers have this in mind because they see the benefits in different ways in what they do. And stay tuned because we have more things that we're working on from an AI perspective to continue to partner with our customers. I hope that helps.

The next question comes from Harry Gillis from Berenberg.

Just as we start to think about 2027 growth, I have some sort of related questions on what we're seeing on the order entry side. So I guess, order growth slowed from 6.7 in Q1 to stable in Q2, although I appreciate the book-to-bill is above 1 and there was a sequential improvement. But just trying to understand with tougher comps in the order side also into H2, how should we think about orders as we move into H2 with -- we're seeing the underlying improvements in certain areas of the market, but also the tougher comps? And then maybe by division, I noticed you said Life Sciences orders accelerated in Q2. So is the sort of broader slowdown maybe to do with your largest customer in Partnering or does it reflect any sort of underlying slowdown? Really just trying to get a sense of confidence in terms of the orders and the backlog in H2 as we start to think about '27 growth.

Thank you for the question, Harry. I'll give you an overall view. So a lot to unpack there. But I would maybe start by saying, I feel good. When I think about the launch point into H2, I feel good about what I'm seeing, a combination of kind of the order behavior, but also the continued expected recovery of the market. Maybe that is at a high level. You're right in what you're saying that sometimes you have to take into account the comp that is slightly different in the different segments. So when I think about Life Sciences, maybe as a start, I'd say that definitely, we saw an acceleration. I think you mentioned and we mentioned it in the prepared comments in Q2 versus Q1. And I think the kind of underlying that is, it goes to the recovery that we are seeing in the market because we did see better results out of the instrumentation part of the portfolio.

So with orders accelerating in Q2, I feel good about the second half. Of course, we want to keep an eye on how the markets continue to recover. And there were a couple of things from a comp perspective, particularly consumables side as customers prepare to take advantage of the new capability in the U.S. We know that they placed some orders in the first half that perhaps we're going to see -- we're not going to see in the second half. So I still expect consumables to grow higher than the overall average. But I know that there are some dynamics there that will have an impact in H2. But overall, feel good, I guess, particularly on the side of what we're seeing in terms of acceleration of the instrumentation part, I think that's a good signal for market recovery.

On the Partnering side, you made the point around the largest customer, that is definitely playing a role. We always knew that this year was going to be a little bit skewed from a growth perspective, just given how the comp worked out in 2025. So H1 was always going to be stronger than H2, and I think that is reflected in the order entry levels. So no surprise there. We continue to stay obviously very close to that customer as we think about H2 and then, obviously, the prospects going forward.

When I think about what we're seeing on the Synergence side, I feel good that our customers are seeing also the recovery that we're seeing. And I feel good about the expectations for the second half. We see some of our big customers having strong success in the market. So that's going to reflect well for us. And then as Camila made the comment around Cavro, we have backlog that we couldn't ship in the first half. So that would add to our -- the expected results in H2 is that we have a catch-up that we need to do there. So that will help overall the H2 results. And it's exciting to see what some of our customers, both on Diagnostics and Life Sciences are doing in terms of components. So I feel good about that business as well. I hope that gives you an overall sense of how to think about H2.

Can I just ask one more question and then perhaps I can join the queue again? Just it was helpful saying you sort of expected to deliver towards the higher end of the margin guidance. So that's the sort of base case. However, I noticed the sort of underlying improvement you've tweaked down from 50 to 150 to 40 to 140 basis points. Is there -- like I was just wondering if there's a specific reason on that, just given H1 seems to progress very well on the adjusted EBITDA side of things.

So we are very comfortable with our guidance now. And I think the first results of Rewired give strength our confidence. So this is why I also mentioned that we expect to be more in the upper range of that guidance. But as I joined in June, right, so -- and my focus now is to really have a very good grip and understanding of our cost base and I track this in a very disciplined manner. And then we believe that with the solid results in the first half that this will continue in the second one, but I prefer to take a more like a conservative approach here for guiding the upper range of that bridge, but not change the guidance.

The next question comes from Jan Koch from Deutsche Bank.

I would like to come back to the phasing in H2. And could you help us to better understand the phasing of especially sales and order intake in Q3 and Q4? Given the tough comparison in Q3, do you expect order intake growth to improve sequentially? And then secondly, yes, great to see the sequential growth acceleration in Life Sciences. Aside from exposure to the Academic and Government channel, are there any Life Sciences businesses that haven't returned to a more normalized growth rate yet? And could you also update us on the current sales exposure to the A&G channel in both the Life Sciences and the Partnering businesses?

Okay. Do you want to take the phasing? I can take -- maybe I'll start on the first part is on the phasing of the numbers. So I guess maybe as a general comment, I expect this year to look more as how the business was looking before all the ups and downs during the pandemic and following, which means at the very high level, we tend to have a bit more weighting on, from a sales perspective, on the second half than we do on the first half. So that's kind of the expectation overall.

And then there's really nothing to highlight third quarter versus fourth quarter other than maybe keeping an eye a little bit on the comp that we saw primarily on the Partnering business. And it was -- for part of the business, it was a little bit higher in the third quarter. And for the other part of the business, it was a little bit higher on the fourth quarter. So that would be the only watch out as we think about the second half. But as I said, I feel really good about what we're hearing from our customers in terms of the prospects and how they are doing in the market to deliver on our commitments in the second half. So I hope that gives you a little bit of color from a phasing perspective.

And then if I take the second part of the question, which is on the Life Sciences, I think you were asking what are the areas where perhaps we're not yet seeing a recovery. And certainly, I would say maybe 2 aspects there. One is on the Academia and Government, as I mentioned in my comments, I think this is the area that is lagging from a recovery perspective. We saw weakness, quite honestly, pretty much across the board in all geographies, perhaps except JPAC or the kind of the Asia region, except China.

When we look at what is going on, it is clear that it's not even throughout, right? There are certain institutions that have funding. So it's really a matter of kind of looking where the funding is and really supporting those customers in that perspective, and that's really the work that the team has been doing and that we're following very closely the sources of funds and ensuring that we start to see that flow and keeping an eye on that.

Maybe the second area in Life Sciences, we're keeping a very close eye is the development of the growth in instrumentation. And there, as I mentioned, we did see quite a difference in the first quarter versus the second quarter. So it's really nice to see how that has improved in the second quarter. And I think that's really a good testament of the overall recovery, particularly what we're seeing in the Biopharma segment.

Yes. One quick follow-up, if I may, regarding the supply chain issues that prevented you from shipping all orders. Could you quantify that impact? And have these issues now been resolved?

Yes. So the issues relate particularly to supply with a couple of major suppliers that we have within Cavro. We do -- we see an improvement overall, but we expect that recovery to kind of take place throughout the second half. So I think it's going to be a gradual one. That's what I would say. And I mean it from the perspective of the size of it, maybe just to give you a sense and for you to have a sense of the size of Cavro, it did put Cavro in total negative. So you should see that going back to positive territory as we recover overall.

The next question comes from Sebastian Vogel from UBS.

I've got 2 questions. The first one is on the margins, if we -- I mean it's not easy, but nonetheless, to think about like how margins were looking in June or May compared to the average of H1 that you gave us. Is there any sort of ballpark indication that you can provide us? The other question I would then take afterwards.

It came strong more in the end of the quarter, but this is because of the fluctuation in revenue that we have more concentrated in the end of the quarter. So that's the main reason. And the volume helps, right, so yes.

Sure. But do we talk like whether 50 basis points higher than the average or more like 100 basis points? Or is it -- just some sort of, yes, granularity would be great.

We don't disclose on that detail level, Sebastian.

Then my second question is with regard to the underlying improvements that you were showing into the waterfall chart. And as you have said, right, you have like 180 basis points in the first half. You guide for 40 to 140 basis points for the full year. So is that just outright overall massive conservatism or is there something to be expected to see this 180 basis points to going something like the midpoint maybe in the 90?

Yes. So as we mentioned, we are very confident on the guidance for the second half and the full year. And we believe, as Monica mentioned, that we will be more on the upper part. It's my -- I just started in June. So I want to have a better view of our cost drive, cost base to feel very confident to change guidance at this stage. But we are confident that we'll be in that range, more in the upper part.

Next question comes from Delphine Le Louet from Bernstein.

Just to be back on the tariff, please. Can we get a sense of the seasonality getting into H2 and to confirm that approximately 90% or 95% so far that we've been seeing into H1 was dedicated to the Life Sciences? This is the first question. The second question deals with the investment, which is ongoing, both regarding AI and regarding IT infrastructure. Can you give us a sense of how big is that for the Rewired and the reignite and how much we should think about that getting into '27?

So let's start with tariffs here. So in the first half, as you saw in the bridge, it was a negative impact of 50 bps. And we got a big refund that is not visible in the bridge, right, because this is adjusted. For the second half, the impact should be lower. We estimated around 30 bps, which lead for the full year impact of 40 bps. And this reflects the most recent change in the tariffs communicated, right?

When it comes to investments for the Rewired program, we have -- as you know, this is a journey, it's a 3 years program. And our expectation is that by 2026, we are more in the lower end of the spend, '27 that will increase because there are a lot of transformation going on in the company. So it will be a higher impact in 2027. For the IT investments, what we call Elevate program, that is SAP S/4HANA and the CRM system. Here is that we are more towards the end of the program. So our expectation is to go live in the first half of 2027. And I expect that the spend per half at similar level than we had in the first half of 2026. So that's just to give you an idea.

Maybe looking to add on the tariff point, you are right that the majority of the tariffs are borne by our Life Sciences business. It just has to do with the way the contracts are set up on the Partnering side.

[Operator Instructions] We have now a follow-up question from Harry Gillis from Berenberg.

I think you noted mid-single-digit growth for the Life Sciences business in China. Could you maybe just discuss what you're seeing in the different end markets, maybe Academia and Government versus Biopharma and how sustainable that growth is?

Yes. Thanks for the question, Harry. So you're right. We did see that business back to growth. When I think about the market dynamics in China, I don't really think that anything has changed relative to perhaps what we discussed maybe at the beginning of the year and even towards the end of last year. I think that what changed is more our team's understanding of how to win in that market overall. And so when you actually look at the overall results by segment, we see that the driver of the growth for us has been on the Biopharma side, which is nice to see.

I think I have shared in the past that China is very much at the forefront when it comes to innovation, when we actually first started to see the concept of robotic work cells applied into autonomous labs, it was actually there in China. So our offering there, including what we have through our Labwerx team resonates very well with the customers over there. And that's why I think it's -- that's what's driving growth in Biopharma. I mean I think from a market perspective, I think it is sustainable. So I think it will be a matter of us continuing to execute well and execute to continue to gain share in.

I think on the Academia side, I mean, it hasn't really changed. The concept of local is -- continues to be important. And typically, what our customers will need to do is they will have in tenders a certain minimum requirement, right, of the made in China piece and then they work with us to figure out how our piece fits within the total to increase their chances of getting their -- the funding. We had a very nice win in the first half from one of our Academia customers, a tender that they put out that helped on the orders we haven't shipped the product that that should help in the second half from a revenue perspective on the Academia side. But as I said, I think when you think about the over or the under-arching dynamics, I don't think they have changed. It's really more how we manage the dynamics and win in that market.

The next question comes from Laura Pfeifer from Octavian.

Maybe just coming back to the sales guidance, you have not changed the wording and you have not mentioned either that you would expect it maybe to be at the upper end as you have done with the margin. So, yes, I'm just wondering what degree of conservatism is still embedded in that implied growth rate for H1? I mean, when I take the midpoint, it's probably only like 1% growth required in H2. And what would prevent the strong momentum you have seen in H1 from continuing or maybe even accelerating?

And then the second one is on Paramit, specifically maybe on the largest customer. Can you discuss a little bit more here the sales and order development you have seen and also what we should expect for the rest of the year? I think if I remember correctly, in March, you were expecting rather flattish sales trends for the largest customer. Just wondering if that has changed anyhow.

Yes. Thanks, Laura, for the question. So I'm going to start with the sales guidance. I would say that here, I mean, as I mentioned in the prepared comments, I'm being prudent from a market perspective. We are seeing the recovery, but this is something to be watched just because I'm not ready to call out a change in the trend, and that then plays a role in what we're seeing from -- or what we are expecting from a total sales perspective. So that's the overall comment. From a market perspective, I want to be prudent and continue to see as the market continues to recover.

With that said, obviously, we do have some differences from a comp perspective to be careful about, particularly on the Partnering part of the business, which ties to the second part of the question, which we always knew that we would have a harder comp from a second half perspective because our largest customer had a stronger second half in 2025.

As it relates to Paramit, yes, so as you said, we have been guiding for a flat number in 2026 versus 2025. We had a really strong growth in the first half, as Camila mentioned, and this was particularly even more so in Q1 just because a matter of how the comp actually worked in 2025. So we did see, as we expected, a strong H1 with them. As we reviewed the next 6 months with them and looking particularly at how they're seeing the product mix because, as you know, from a demand perspective, they really have no issue with how they're seeing the growth, which is really great to see. But as we look at our deliveries and how they are expecting product mix. Right now, the latest numbers are coming in just slightly below the 2025 numbers, but that doesn't change at all the expectations of the Paramit or the CDMO business from a full year perspective. So they will make up that small difference with growth in other customers. But that's what the latest discussions with them are.

We'll now take the last question for today's call, is coming from Daniel Jelovcan from ZKB.

First of all, Camila, a good start in retrospective. I only heard very positive things from investors when you were with u-blox. So, yes.

Thank you.

First question, I didn't really understand the negative hedging costs. I mean, when you lose on the top line and on the margin in terms of ForEx, shouldn't there be a positive hedging gain below the EBIT? That's my understanding. So can you maybe explain the bridge how that happened? First question.

So this is 0 versus the spot. And then -- but we have the cash, it's not impacted. So we have in average, right, this is 0. But then we have -- as the dollar is going up and now in the later days and months, then we also have the negative impact of the hedging contract, right? So -- but this helps in the cash flow. We have -- we do have a large exposure to dollar, a net exposure of around CHF 160 million. So it's important that we keep the hedging contract to mitigate that impact. But we don't disclose more details about it in this call.

And last question on the Academia, I mean, a lot of peers have now said that there is a budget which is geared to 82% to late-stage clinical work and 18% to early discovery work at Academia. So can you elaborate a bit on the impact on Tecan? Where are you more geared? That would be helpful.

Yes, I can take that, Daniel. And I assume you're talking about NIH funding. Is that correct?

Yes.

Yes. So I mean, we did see earlier this year that there was approval for this fiscal year on a budget that was slightly higher than previous year. I think what our customers are telling us is they don't necessarily see the actual flow of the funds, and there's been data out there showing that. So that's really the key watch out as we look forward and supporting our customers in this segment is how will they then start to see the flow of funds into their projects because one thing that is very clear is that if you think about the priorities in what the administration wants to see accelerated from a research perspective is things related to AI and automation. So I think it's how we expect to see those funds flowing through, and that's really what they're not seeing and that's driving their level of conservatism. Certainly a watch out especially as they start conversations about the next fiscal year and our customers actually figure out how to prepare their -- kind of their brand proposals on the basis of the new rules that are in place.

But your exposure is mostly to late-stage clinical work or early discovery in general?

Yes, it tends to be more early discovery. But when you think about the Academia exposure, it's roughly about 15-ish percent of the Life Sciences business. We really have no exposure on the Partnering side. So that works out to be roughly about 5% for total company.

Thank you very much. With that, we would like to conclude today's call. Thank you very much for your participation, and we wish you a great day. Thank you.

Thank you.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Hello, everyone. My name is Martin Brandle, I'm the Senior Vice President, Corporate Communications and Investor Relations here at Tecan. Welcome to Tecan's Full Year 2025 Financial Results Analyst and Media Conference and Capital Markets Update. A special welcome to those attending in person here in Zurich. I also warmly welcome everyone joining us through the live webcast.

Joining me on stage and presenting today are our Chief Executive Officer, Monica Manotas; and our Chief Financial Officer, Tania Micki.

Before we begin, let's quickly go over a few formalities as usual. The press release announcing our financial results and the highlights of the capital markets update was issued this morning at 6 a.m. Central European time. Both the press release and the 2025 annual report are available on our company website, tecan.com, under the Investor Relations tab.

Our 2025 sustainability report was also published as part of the annual report this morning. Additionally, the PDF of the presentation slides, which we will be discussing during this call is available for download. I'd like to remind you that this event is being webcast live on our homepage. A link to the replay will be available shortly after the live event and on our investor webpage.

With that, let me now turn it over to Monica Manotas. Monica?

Thank you very much, Martin. Good afternoon, everybody, and welcome to our event here. Thank you for your interest in Tecan and in our story. So as Martin was saying, we have 2 main topics that we're going to go through today. One is our 2025 earnings results, and Tania will take us through the majority of that, and I will take us through the capital markets update. But before we get into the details or the first section of the presentation, I wanted to start with this, which is our 2025 results at a glance. All these numbers were in the press release that you saw this morning.

But just as a recap, total sales for 2025 were CHF 882.5 million, that's about a 1.6% negative growth in local currency. Adjusted EBITDA, CHF 142.1 million, that's 16.1% of sales. Our cash flow was a healthy CHF 138 million, so that represents 118% conversion. So I'd say that was quite good. We actually, as a result of some decisions that we made to streamline our portfolio and exit certain businesses where we were not creating value, we had a partial impairment of our goodwill that resulted in the charge of CHF 139.5 million that you see here.

With that, we reached an earnings per share of negative CHF 8.74, adjusted would be plus CHF 6.87. On our AGM next month, our Board is going to propose to shareholders a dividend of CHF 3, which is stable versus last year as a sign of confidence in our future and commitment to return to our shareholders.

So what does that all mean? I think you all know my background, right? I have in my 25-plus career in the tool space managed 8 different P&Ls, 9 with this one. I think I can say with a lot of credit that I have seen many different kinds of businesses in different types because many people say, okay, you come from a business that was in the billions, plural, no I have seen small, medium, large. I have seen some that are focused on instruments, some that are focused in reagents and consumables, some that are a mix, some that are more focused on commercial, some more focused on operations, some more focused on innovation. I, truly, I have seen it all.

So I can say with a lot of credit that with what we have at Tecan, we are not performing at our potential. That is very, very clear for me. Now I will say that, yes, it's true that the markets in the last couple of years have dealt with some uncertainty. So that is fair. But that's not the entire story. We have had distractions and have executed inconsistently. And that has resulted in what you're seeing. Now the good news is we have a very strong market position, and our strategic relevance as it relates to our customers, remains very much intact. So 2 very strong things to build on.

So that's why we're here today to talk about what are we going to do about this, the transformation program that we have launched that's called Rewired, we'll touch on that in the Capital Markets section. But the idea there is to get to a concept that you'll hear me talk a lot about, which is to future-proof Tecan. So what do I mean by that? What I mean is that we need to get to a position where no matter what kind of market we are experiencing, we should always be in a position that we over deliver versus the market. That is the goal here, and that's why we're doing the Rewired transformation.

A couple of things that I'll mention around Rewired. First is that the name was very deliberately chosen because this is not a case where everything has to change. There's a lot of strong building blocks to build off of. And it's more of a case of retweaking, right? It's putting things, connecting things in the right way so that they generate the right results. And that's why we chose the name, Rewired.

The other thing is we chose to do it as a transformation program to create the discipline, to create that muscle in the organization around a very disciplined and prioritized execution. This eventually, this is a program, and you'll see it when I present the pieces that we expect it to be about 3 years. The idea that this discipline is going to then become our overall discipline in how we do business. This will become our business system, so to speak, our new discipline in how we execute.

So I mentioned that I feel comfortable that we have foundational items to work on, and that's what I mean here. One is our leadership position. When you talk to any customer in our space about who Tecan is, they will tell you that we are the gold standard for liquid handling automation and that is something strong that we can build on. The markets that we serve are very attractive. I already mentioned that, yes, we've had some uncertainties in the last couple of years, but the fundamentals are intact, and I'll share with you what I mean by that.

But there's a third point here and it's the time now because what is happening with AI and technology is making automation go from a nice to have by our customers to a true need in order for them to be able to actually leverage AI and the new technologies that they have at their disposal to make something different out of their science. So this is why now is the time to think about how we're going to be future-proofing Tecan to take advantage of this opportunity.

Now I wanted to go through this slide for those of you that perhaps are a little bit newer to the Tecan story. And this is who Tecan is. If you look at the left-hand side, you see our Life Sciences business. This is what I call our core or our backbone, right? This is where we have our Tecan branded portfolio. Again, when you think of -- you ask the customers who Tecan is, they will tell you, we are the gold standard for liquid handling automation. That franchise of products that includes instruments, consumables and services is what sits in the Life Sciences business.

In addition to that, we have Tecan-branded detection instrumentation as well as the reagents portfolio. This represents about 40% of our total company. We service customers in the life science research space as well as clinical diagnostics. These are end users. This is where we serve pharma, biotech, the academia as well as clinical diagnostics, doing applications in genomics, proteomics and cell and tissue. That knowledge and expertise that makes us the gold standard in liquid handling automation on fluidics and robotics is what we use to leverage to create the partnering business. Here, we have tailored OEM systems and OEM components, both tailored and standard solutions. And we also have our CDMO solutions in this part.

Here, this represents about 60% of our total, and we go to market with 3 brands: Synergence for our tailored OEM systems; Cavro for our OEM components; and Paramit for our CDMO solutions. The customers that we serve are more partners These are customers that eventually also serve end users in the life science research as well as IVD and MedTech spaces.

And when you look at what is in the middle, this is what connects the 2 pieces, right? It's what we're calling our Tecan platform, which is made up of that innovation engine, which is a combination that know-how those patents, that expertise that we have in fluidics and robotics as well as that advanced engineering as well as software development capabilities. The culture of customer proximity, whether it's with end users on the left, on the life sciences side or our partners on the right through partnering, it's that proximity to the customers that makes us special to them. And that actually continuously feeds the innovation engine.

So this is like a virtuous cycle between these two that makes each one better every day. The regulatory excellence, something that is used in both sides and very much appreciated by the customers and actually quite -- makes us quite unique because these customers are working in regulated environments. And our global manufacturing where we now have capabilities in the U.S., in Europe and in Asia.

So with this, I'm going to turn things over to Tania, that will take us through the 2025 results.

Thank you, Monica. Good afternoon from my side as well. Of course, I did not have anything with my voice before, but now that I'm talking. So before Monica goes into more details on how we view the future, let me give you a little bit more detailed overview of our financial results for the year -- fiscal year 2025.

I will start with order entry and sales. And Monica has mentioned already some of the numbers. But from the key drivers, what we have seen in 2025, order and sales development, we still were impacted by the muted market environment, especially for the life sciences instruments and instrument components. But let's look at the numbers more in detail.

Order entry for the full year totaled CHF 900.9 million, reflecting a year-on-year increase of 3.8% in local currencies. The local currency increase was driven by a strong demand in diagnostics, especially in the Partnering Business. Life Science business segment also grew moderately in local currencies despite the headwinds from the academia and government. And I will address more the segment-specific details shortly. Overall, the group's order entry in the second half increased by 8.6% in local currencies.

Reported sales for the group in fiscal year 2025, as Monica mentioned, decreased by 1.6% in local currencies to CHF 882.5 million. This is in line with our sales outlook. Sales in the second half increased by 0.4% in local currencies compared to the prior year period. The sales results were previously communicated in our trading statement on January 12, 2026, and have not changed.

Let's now look at the sales performance of our 2 business segments. And let's start with the Life Sciences business segment. For the full year 2025, reported sales decreased by 5% in Swiss francs and 1% in local currencies to CHF 377.1 million. As I mentioned, academia and government demand was mostly the one impacting the growth because of their funding uncertainty, while biopharma saw stable sales and strong order entry in the second half.

Diagnostics had also a strong order entry growth and solid sales, also fueling the consumables recovery. The book-to-bill ratio was slightly above 1 for the full year with moderate order growth in local currencies, accelerating during the second half. Sequential growth in local currencies was 9.8% when comparing the second half of 2025 to the first half.

The Partnering Business segment generated sales of CHF 505.4 million in 2025, marking a decrease of 5.9% in Swiss francs and 2% in local currencies. Academia and government funding uncertainty as well as weak Life Sciences demand impacted the Cavro and the CDMO businesses. On the other hand, strength in diagnostics drove solid growth in our Synergence business.

In the second half, medical accounts and particularly, our main customer contributed positively to the CDMO services, driving an increase in sales of 3.3% in local currencies in Partnering. Order entry was up mid-single digits for the year and in the low double digits in the second half of the year. As a result, the book-to-bill ratio was also above 1 for 2025.

Our next slide addresses our adjusted EBITDA. Adjusted EBITDA reached CHF 142.1 million, which was CHF 22.3 million below 2024 levels. The adjusted EBITDA margin decreased by 150 basis points, now standing at 16.1%. Several key factors explain this difference and collectively impacted our adjusted EBITDA margin performance for the year.

On the negative side, lower sales volume, but especially exchange rates impacting the margin by approximately 130 basis points, and U.S. administration imposed tariffs representing an additional unfavorable 70 basis points contributed to the decline. On the positive side, we benefited from a favorable product mix, price increases and efficiency and cost improvement. Excluding the combined 200 basis points headwind from foreign exchange effects and tariffs, the adjusted EBITDA margin was 18.1%, in line with our initial guidance.

Let's now look at the segment profitability. Looking at the operating profitability, we can observe that key drivers are affecting both business segments similarly with the adjusted EBITDA margin development primarily impacted by the weak dollar and the tariffs. With that context in mind, let's move to the figures.

In the Life Sciences business, adjusted EBITDA reached CHF 63.4 million. The adjusted EBITDA margin decreased to 16.5% of sales, primarily due to the external factors I mentioned. Cost control measures helped alleviate the impact of lower sales volumes and adverse exchange rate effects and tariffs.

Moving on to the Partnering Business segment. Adjusted EBITDA reached CHF 89.7 million. The adjusted EBITDA margin increased to 17.7% of sales, driven by a positive product mix. Similar to the Life Science Business, segment adverse exchange rate effects and tariffs were partly offsetting the margin improvement.

Let's turn now to the net profit and earnings per share on the next slide. Adjusted net profit was CHF 87 million, down from CHF 103.1 million in 2024. In addition to the lower operating profit, net profit was impacted by reduced financial results due to the translation of the U.S. dollar-denominated assets into Swiss francs. As a result, adjusted earnings per share were CHF 6.87 compared to CHF 8.08 in 2024. The number of shares outstanding decreased to 12.7 million from 12.8 million in 2024, driven by the share buyback program.

Reported net profit was impacted by the noncash impairment charges that Monica mentioned before, of CHF 139.5 million that I will address in more details in the next slide. As a result of the impairment charges, we reported a net loss of CHF 110.7 million comparing to 2024, a positive net profit of CHF 67.7 million. Similarly, reported earnings per share went down to minus CHF 8.74 comparing to CHF 5.30 in 2024 due to these impairment charges.

Dividends, based on the solid cash flows for the full year 2025 and has an expression of the confidence in Tecan's future and of the commitment to shareholders' return, the Board of Directors will propose an unchanged dividend of CHF 3 per share at the company's Annual General Meeting on April 15, 2026. Half of the dividend or CHF 1.50 will again be paid out from the available capital contribution reserve and is, therefore, not subject to withholding tax.

Let's now look a little bit on the impairment and some more details. What you see in the first table, the EUR 139.5 million that we mentioned for goodwill and PPA impairment, as I mentioned before. Sorry, I'm lost in my paper. And so I will continue without the note, but the second table is basically representing the exit from non-value-creating activities at Tecan Genomics, and that represents CHF 5.3 million of write-off from our assets as well. And Monica will go a little bit more in detail on the impact from why we went into those non-value-creating activities, which ones and how that is going to look afterwards.

Now finally, let's look at cash flow. Cash flow from operating activities was CHF 138 million comparing to CHF 148.5 million in 2024. As Monica mentioned, that is a solid cash conversion that we had as we improved to 118% of EBITDA, up from 100% in 2024. Our days sales outstanding decreased to 46 days from 52 days in 2024. And cash flow from operating activities includes CHF 61 million for amortization and depreciation as well as the goodwill and PPA impairment of EUR 139.5 million that I've mentioned before.

Investment totaled CHF 76.5 million including CHF 10.2 million in newly capitalized development costs, CHF 25.1 million in property, plant and equipment and other intangibles as well as CHF 112.2 million repayment from our time deposits. Cash flow from financing activities included CHF 38 million in dividend payments. They also included CHF 33.4 million for treasury share purchases with CHF 24.8 million repurchased under the share buyback program from August to December 2025.

It also included the CHF 100.1 million change from the bond financing. Thanks to solid cash flow management, our net liquidity position, which includes cash and cash equivalents plus short-term time deposits less bank liabilities, loans and the outstanding bond increased to CHF 160.8 million as of December 31, 2025, up from CHF 153.7 million on December 31, 2024.

With this, I'm handing over back to Monica.

Thank you, Tania. And I want to take this opportunity publicly to thank you for being my partner during these first 7 months for me and actually, I should say, the next 2 months because I will still have you for a couple more months. I couldn't have thought of a better partner to help me understand the business very well, understand where are the opportunities and maybe the risks as we put together this plan for on a going-forward basis. I wish you all the best in your next endeavor. And I'm sure we'll be in touch. We will have a glass of wine and talk about how we both are doing, obviously picked by you, don't worry.

And I am sure that all of you guys are interested to find out how the process is going for the CFO search. So I'm glad to say we've made a lot of progress. I am very happy with where we are. I will not share news just yet, but news will be coming fairly shortly, so stay tuned for that.

All right. So I'll pick up where I left. I have talked about already the fact that I think that the 2025 numbers are not really reflecting the potential of Tecan. That's very clear. We have done the diagnosis already, and I've already said, okay, markets have played a role, no question. But I think the issue here boils down to distraction and inconsistent execution. That weakened our performance and also the confidence of the teams in, again, continuing to be waning in the market.

The good news is the core is intact and financially, Tecan is strong. So as we think about the forward momentum, first and foremost, focus has been restored. So we have clear priorities. We already worked on a tighter portfolio, and again, into that as part of Rewired, and have a mechanism for disciplined execution. And we are here to talk about the path to profitable growth. But before we do that, I have a few slides where I want to give you some context on the markets.

First, starting with what we expect in '26, and then maybe a little bit more kind of going forward, the secular trends that we see in the markets that we play. I think you've heard me talk before about the expectations coming out of '25 and into '26. I do expect that the markets are going to be gradually improving from now getting back to what we believe is a normalized level for us. But it will be a gradual step.

I have actually said before, I think you've heard me that I expect the markets this year to be somewhere in the range of minus 1 to plus 1. And perhaps being a little bit conservative, and that's due to what I'm seeing in the academia and government space. I do think that things will get better this year versus last, last year, there was a lot of talk, particularly with our customers in the U.S. around what was going to happen with NIH funding, which is clearly, for them, an important component in how they fund their investments.

Certainly, by the time we close the year, it was becoming clear that there was bipartisan support to keep the NIH funding closer to stable as opposed to the large cuts that were talked about at the beginning of the year. But what we see now is our customers are kind of expecting a little bit more of like true clarity on the level of funding to be expected. So yes, maybe I'm here and being a little bit conservative. This is one that we're watching very closely. But I do want to see that change in behavior of our customers in the U.S. before changing the view here.

On biopharma. Again, these customers had a tough time last year. There were all these discussions about the need to give MFN in the U.S. By the time the year ended last year, it was clear like the majority of the large pharmas already had deals done with the U.S. government. That gives them a lot more clarity around what to expect in that market that is so important for them. And therefore, they will start to make clear decisions from an investment perspective. Some will say, there'll be more of them in the U.S. versus Europe. The reality is, for us, it doesn't matter wherever they make them, We will be there to take advantage. So I do believe that this market will be better in '26 than it was in '25.

Diagnosis was strong for us in '26 -- in '25, sorry, and we don't really see a reason for that to change as we go into this year. And then for MedTech, for us, what's important here is the outsourcing trend, and we believe that that's going to be continuously there in '26 as it was in '25. So an opportunity for us to continue to take advantage.

But as we think about these markets much more in the longer term, these are very attractive markets and those solid fundamentals are very much intact. We have, for a long time, talked in this space that we are living the century of biology. And that definitely still is the case. But I think that now we have an opportunity of putting together the century of biology with the technology advancements that we're seeing with AI and other digital tools that are making the demand for automation even more important for our customers. So that is something that is very interesting for us as we play in this market and in the area of automation.

What we're seeing with biopharma customers is that they are using AI to accelerate the drug discovery and enable personalized medicines. That trend around personalized medicines is also impacting what our diagnostics customers are seeing, and they are also leveraging AI to drive companion diagnostics and in the end, enable earlier and more effective interventions. From an academic and government side, and these are the customers that tend to be the pioneers when it comes to scientific research, and they are actually taking advantage of multi-omics and new technologies that accelerate large-scale biological discoveries.

And then on the MedTech side, we are lucky to be playing or to be having as a customer one of the pioneers when it comes to robotic-assisted surgeries. So all those advanced procedures, we definitely see continuing and devices like wearables that will enable more precise and more proactive care, again, connecting to what we're seeing in the diagnostics and biopharma side around personalized medicine.

All of that, again, has the common denominator that as more throughput is needed because these AI models give more data and there requires more speed and higher throughput and more accuracy, all of that drives the need for more automation in all the segments. So I often get asked the question about what AI means for Tecan. So I thought I'd use this example here, which is how our customers in the biopharma space are leveraging AI in their drug discovery process.

And you can see here in this chart, it's a very simplified diagram to show the drug discovery, development and manufacturing process at the very beginning, the first 3 steps are the discovery, then we have [ drug ] manufacturing with QC and then finally, patient testing. So our customers are using AI at the very beginning of the process to drive the lead and target identification. This is the piece that they're doing in-silico in the computer, right?

They have disease targets that they're trying to connect with the leads that could be the potential drugs, right, for those targets. Of course, the computer, the AI-generated models can handle a lot of data. So there can be a lot of potential combinations that actually make it through. But all of that needs to be tested in the wet lab, and that piece is still remaining there. But of course, that is where we come into play in the lead compound generation, so that next step.

Of course, to be able to manage that large amount of data that comes from the AI models, you need automation. Otherwise, the wet lab becomes the bottleneck in the whole process. And then there's a close loop in between those 2 because as you test things in the wet lab, whatever works goes in and then they feed again the AI models to try to create a better and better outcome when it comes to these pairs and then make it all the way down. So a lot of opportunity for us using this, particularly in the drug discovery, which tends to be our sweet spot.

Now what we've seen with this is that our customers are pulling us downstream in the process as well. And I think what is happening is that because you're using those AI models at the very beginning, we are now seeing that the customers are using many more different types of therapies or types of drugs that come through. They have to be tested under more than one parameter, so more parameters to be tested in QC, and we're seeing that our customers are pulling us into that step of the process as well.

And this is not something that we're saying that it is the future, and it will happen and comes to questions, okay, when is this future becoming a reality. This is a reality today already. Now share there 2 examples of customers that are already using us in these processes and where they are leveraging AI. And the first one is this customer called the Officinae Bio. This is a biotech company in Italy that supports advanced therapies in mRNA and cell therapy as well, and they are actually using affluent at the core of that closed loop system. So what I was mentioning there at the very beginning of the process. So again, very real example of today.

And then the second one there is Cellares, and these guys are using a Tecan to create a QC platform. These are -- this is a CDMO that is focused in cell therapy manufacturing. So they're leveraging our Fluent in that step in quality control, as I was mentioning before. Not exactly what is normally our sweet spot or again, something where we're being pulled in by our customers because of the needs that have been driven by AI. So 2 very real examples.

Now with that, I have talked about the market, right? It's a very attractive market, went through some uncertainties, but it's getting better and the trends are the fundamentals here, as you can see, are very real and made even more attractive through AI tools. which is more the reason to say that we need to future-proof ourselves now. So how are we doing that? It's through our Rewired transformation program.

Our target for this program is to generate by 2028, CHF 1 billion in sales and 20% adjusted EBITDA. And the program is going to have 3 core components. One is about portfolio discipline. And this is really -- taking a look at our portfolio, looking at what are the areas where we can actually create value and ensuring that we're focusing our investments there, and then exiting businesses that perhaps do not meet that criteria. This is the piece that actually ties to the impairment that we were talking about earlier.

We made 2 decisions last year linked to this particular part of the process. One was to exit the design activities that were part of the Paramit acquisition. So that's what created the partial impairment of the goodwill from the Paramit deal. And then the second one was to exit some of the activities that were done by Tecan Genomics, where we were just not creating value for customers that generated a write-off of about CHF 5 million that's in our P&L for 2025.

The second portion of the program is what we're calling commercial excellence. And this means different things for the 2 businesses. But this is really what's going to be the engine that drives us back to generating growth by taking share in the market. It will be about getting -- doing sharper segmentation. We have opportunities in parts of the portfolio to do value-based pricing. And just overall, a more agile go-to-market, both in Life Sciences and in Partnering. And I have specific slides where you can see a few examples of what I mean by that.

And then the third one is operational excellence. Very simply put, this is ensuring that as we grow that extra revenue flows through converted to margins and cash. But there's actually a fourth component here in the transformation. And this is what we're calling a performance culture. It's the common denominator, what connects it all. It's our people, right? It's really driving a culture of execution, of ownership, of accountability and collaboration. Our people are what's going to make this happen, and I'll share some of the things that we're doing there to ensure that we have a culture of performance.

Now how are we doing this? What I'm trying to show here is year-by-year, what is going to be happening in each of the phases of the program. And I'll show you a few examples. This is meant to be examples of things that are happening to allow us to go from the big point, which is the 2025 numbers, you see them there, CHF 882 million for sales and 16.1% of adjusted EBITDA over to the 2028 targets of CHF 1 billion and 20%.

2026 is the year of Reset. This is this year. Here is where we are going to be doing things like, for example, the streamlining of the portfolio, which I have talked about already. We'll be accelerating the commercial share gain initiatives. And again, I'll share some examples of that. And we work on the optimization of production capacity in consumables, which basically means we're localizing our production in the U.S. for the U.S. market on the consumable side. This is work that has already started, and we expect to go live later this year.

2027 is the year of Recharge. And here, we will see having impact in these numbers, the advanced regional growth strategy. You heard me talk about this already. The optimization of our product cost, the discipline that we had lost a little bit, and we're bringing back that should give us opportunities on the gross margin side and then the acceleration of the R&D productivity, getting the returns on that investment that we're making on the R&D front.

And then finally, 2028 is when we will be fully Rewired. And some examples of the things that we will see have an impact in that year are scaling into adjacent markets, realizing our growth for the new wins. Again, we've done some work already on rebuilding the funnels, particularly on the Partnering side, and we should see benefits from that already starting in '28 leveraging our CDMO site in Malaysia at scale to drive operational efficiencies. And finally, completing the work that we have started already around vertical integration, a lot of that of bringing, in-sourcing things into our Vietnam side to drive efficiencies and savings as well.

So what I'm going to do here is help you bridge the starting point and the endpoint being 2028 from a sales perspective. And let me just explain to you what you're seeing here on the slide. So you can see, if you go here, that's the 2025 number. This is the starting point, CHF 882 million. 2028, you see the CHF 1 billion. So you see here the bridge in between. This is where we have the CHF 120 million, so I'll get into that.

What we put up there, just so you get a sense of the reference is our growth -- market growth assumptions. So coming out of 2025, where we think the market did somewhere between minus 2 and minus 1, 2026, you see the minus 1 to plus 1 that I talked about, gradual improvement, as I said, '27 to '28, plus 1 to plus 3, and then post 2028, getting back to what we believe is normalized for us, the low to mid-single digits.

That CHF 120 million that is in between, it's kind of split between Life Sciences and Partnering and rough numbers, we believe that we should get somewhere along the lines of 55% of that CHF 120 million coming from Life Sciences and 45% coming from Partnering.

On the Life Sciences side, we have 3 categories of areas of focus, so to speak, from a revenue perspective. Core portfolio, so this is protecting our core, what's coming from new products and what's coming from regional expansion. On the Partnering side, also the protection of the core and how that's going to do over the period as well as the new wins. So now I'm going to double-click on each one to give you a sense of what have we included in each of these areas.

And I'm going to start with Life Sciences core. You'll see here at the top, so you remember the contribution of each one of these into the bridge. And again, this one here is really about protecting and growing the core. This is in Life Sciences, the biggest piece. This is the growth that should be coming from the products that are already in our portfolio today. Of course, the first step is to ensure that we focus on the areas that will be adding value and discontinuing subscale businesses, which is what we did with the Tecan Genomics pieces.

This, of course, the biggest part of this core in Life Sciences is our liquid handling franchise of instruments, services and consumables. That piece, if you think about between -- before the pandemic started and last year, grew in the mid-single digits. So we know that piece has value for the customers, and that can grow. So it's about protecting that. And here, we will do it by building momentum -- the momentum that we have in high-growth segments.

For example, in the U.S., we found that in central labs that are focusing on genetic testing, that is a great opportunity for us. We focused the team in that area, and we've generated double-digit growth from those. So it's really looking for those areas that are truly growing and focusing.

The next one, positioning ourselves as the automation partner of choice for AI-powered labs. And this is exciting because we have our tool of Introspect that we can use to this. Now we've had Introspect now for a number of years. We have over 1,500 instruments now connected or our customers have them connected to the tool. And now that we have this data, we can see and we can prove to the customers that when you have this tool to manage your fleet in the lab, you have increased quality, increased performance and increased efficiency in the lab, which is something obviously that resonates with the customers.

And what we're going to do with the Introspect going forward is actually leverage AI tools. So if any of you attended SLAS in Boston a few weeks ago, you may have seen that we did a preview to the customers that attended of the new agentic AI for Introspect. There was a huge amount of interest from this so much that we had to add sessions after the event because we just couldn't accommodate so many people. This is one example of many that we have in the pipeline in trying to leverage AI to help our customers use the tool to manage their fleets in an easier way. And actually, on this, I'll share that you will see an interesting announcement coming from us around partners in this space. So one to watch. So stay tuned for that.

And then the last point here on protecting the core is really this one around commercial excellence. So what I mean by this is we have tools like, for example, value-based pricing, which we can leverage for parts of the portfolio in Life Sciences. Our sales force effectiveness. You've heard us talk already about the fact that we've been investing as we do the new S/4HANA. We're investing in other digital tools, for example, Salesforce, that's going to allow us to do a better job at understanding the efficiency and effectiveness of our sales organization. So leveraging that tool is an opportunity.

And then finally, key account management. This is something that we started already in our regions last year and we now have an opportunity to bring that more globally so that as we create better relationships with GSK in the U.K., we understand what are their opportunities for growth in the U.S. and pass on those opportunities to the U.S. team or as we see that Lilly is investing in Asia, we have that chance to actually pass on that opportunity from the U.S. team to the Asia team so that we can capture more growth out of the key accounts, lots of opportunities for us there.

The second bucket of opportunities for Life Sciences is in new product offerings. And last year, you heard me talk a lot about Veya, which was a product that we launched last year and that we'll be continuing to drive growth in this particular category for new products. But today, I wanted to highlight a different new product, which is our robotic workcells. And this one is interesting because it combines expertise that we've had at Tecan for many years with our Labwerx team. We have over 30 years of experience doing integrations in that team together with our newly acquired FlowPilot software.

These 2 things combined allow us to offer our customers not only the robotic workcells that have the liquid handler as the brain using our Fluent control, but also robotic workcells that don't need to have the liquid handler necessarily as the brain because we have the brain being our FlowPilot software as the orchestration for the tool. That in itself unlocks an opportunity that we estimate is north of $200 million of total addressable market in this space. So again, those of you that perhaps attended SLAS in Boston may have seen in our booth the showcase that we did for robotic workcells in terms of our capabilities there. So very exciting.

And then the last set of opportunities for Life Sciences is in the regional expansion. So expecting to contribute between CHF 5 million and CHF 15 million. And this is the one that you've heard me maybe talk about started in 2024 with the investments that we made in South Korea that allowed us to deliver double-digit growth in '25. Last year, we made investments in India, where we'll do a hybrid model together with our distributors and targeting very much the biopharma segment in India. And then we will have others that are in the pipeline that we're reviewing to identify and where are the biggest opportunities.

Now turning to Partnering. So here, we have the 2 areas. The first, I'll start with the core offering that should allow us to have an extra CHF 15 million to CHF 25 million of contribution. And what is included here is all the programs and products that are already in the market from our customers plus the new ones that are about to be launched, which, in the case of Synergence and Cavro is about 10 of them, and in the case of Paramit is about 5 of them.

You remember that in this business, we actually -- once the product is completed and it's put in the market, the customers actually do the work on the commercial and marketing side. Our role is to ensure operationally they are supported to be able to win in the market overall. So here, it's all about intensifying our key account management to ensure that we grow and protect the share of wallet with those customer partners as well as managing the end-of-life products because, of course, we have some that have been in the market for quite some time. The customers will make their decisions of when it's time to get the next generation, and we want to be there for them to help them design and manufacture the next generation of products.

And what I wanted to do now is to actually show you 3 specific examples that are included in this core offering that give you a sense of how synergies work between these businesses. And the first one is actually -- this is a customer that's in the life science tool space, focusing on next-generation sequencing. And they are entering the proteomics space, and they started this relationship in Life Sciences. Here, they used a Fluent platform and customized it to build the proof of concept for them. Once we knew that, that proof of concept was working, the relationship passed over to the Synergence team, who then built a fully customized solution for the customer.

The second example is also a player in the Life Sciences tool space, and they were looking to make a high-throughput proteomic system for liquid biopsies. Here, the relationship started with Cavro. They had their design and they saw that our components would be good additions to the overall design. They actually -- in this particular case, they went for development and manufacturing with a competitor of ours. We started to have some challenges with the competitor. And because of the relationship that they already have with us, decided to give us the opportunity to manufacture that design that the other competitor had done at the Paramit site.

And then the third example is one that this is a player in the molecular diagnostics space. This is one that started with Synergence. We have this relationship where we have designed the analyzer for the customer designing and manufacturing. When it came time for the next generation, they decided to actually go with a competitor of ours. And so they went and they started to have some challenges with that competitor. And we obviously still kept the relationship. So that resulted in them giving us the opportunity to manufacture the existing design through Paramit.

And what happened here is that now that we have it with Paramit, we will have the door open again to when they're ready for that next-generation design to take back the business through Synergence. So again, another virtuous circle that will happen here. So all these 3 are included in this section of core offerings for Partnering.

And then the last bit of the bridge for the Partnering side is the new wins and offers. And what we've done here is to take the funnels of opportunities for Synergence, Cavro and Paramit and figured out which ones are the opportunities with the highest probability of success that are later in the process. Remember, here, we're talking about a 3-year range. So it has to be things that are later on enough to be able to make revenues in this period.

I think you've heard me talk into some of the other sessions that this -- the work to rebuild the funnels have been something that was very much a priority at the very early stages of my tenure because I know that this is an area from a sales cycle that is a little bit longer. And it's been nice to see, If I look at the funnels from the combination of these 3, Synergence, Cavro and Paramit, where we ended up 2025 to where we are now in '26, the funnels in total have grown about 50%.

So this gives me a good indication that this work is paying off. And of course, we have to keep going because not everything is going to work in these funnels. So we have taken a subset here to make up for the part that we need to deliver the CHF 1 billion of commitment.

So here, of course, we have to continue doubling down on these identified targets to take them through the end of the funnel, making sure that we keep the intense collaboration between sales and R&D. This is particularly important for the Synergence part of the business. We have to deliver on our innovation road map for the next-generation Cavro products. And finally, we will be establishing last-mile development services that will be tied to the Paramit offering. That's something that we have seen that causes stickiness, and it's something that our customers on the contract manufacturing side really appreciate because it helps them optimize the designs that come to us.

Now I want to do something similar, but with the EBITDA. So you can see how we are bridging from the starting point to the target in '28. So very similar setup of the bridge. You can see here the 2025 numbers. I think that -- there. The 2025 numbers here, that's CHF 882 million at 16%. That's CHF 142 million. And then here, you got for 2028, the CHF 1 billion at 20%, that's the CHF 200 million. So this is roughly a CHF 60 million bridge that we have to generate.

And here, we've done it in the same categories as we've set up the program, right? You have portfolio discipline, generating between CHF 5 million to CHF 10 million; commercial excellence, CHF 10 million to CHF 20 million; and operational excellence CHF 25 million to CHF 35 million. And then we specifically put out the number, there is something that will come through as market growth that would be CHF 5 million to CHF 10 million.

If you think about this CHF 60 million. You can think about it that roughly 1/3 of it is going to come through the volume from the growth initiatives and about 2/3 of it should come from cost savings from the other initiatives in the program.

So I'm going to do a click down on the operational excellence because it's the largest component here. So you get a sense of the types of things that are going to give us these savings. So it's very similar format then we used -- that I used before to present the program, Reset, Recharge Rewired. So in 2026, we have, as an example, the streamlining of the precision machining operations. We have 2 sites to do precision machining, one in California, one in Vietnam. We have consolidated our needs into the Vietnam site, and that has allowed us to exit the site in California. This one is already done.

We are optimizing our production capacity in consumables. I mentioned this one already. This is about localizing production for consumables for U.S., so U.S. for U.S. And reinforcing our market-driven R&D, basically in very simple terms, what this means is that the ownership of the R&D pipeline or the innovation pipeline will sit clearly with the product managers, making it a market-driven R&D, of course, with very, very close collaboration with the R&D organization.

2027, our Recharge here, we will have the optimization of the product cost. I mentioned that already. Simplification of supply chains. And here, I was referring specifically to the work we've already started to -- we've already done the work of moving the manufacturing of our Cavro products over to Malaysia, but we still have to do the work of localizing the supply chain. So we expect that to be giving us benefits in '27. However, there is much more opportunities in other parts of the company to simplify the supply chain. So this is a broader term there.

Acceleration of the R&D productivity. So the actions that we will take in '26 will give us benefits in terms of returns of the activities in R&D. Rollout of the harmonized enterprise architecture. This is S/4HANA and our digital tools like Salesforce that will allow us to establish our functional centers of excellence for the areas where it makes sense, and we have enough scale in some of the areas to make this something that makes sense for us.

And then finally, for the year that will be Rewired, the main point of benefit is leveraging of our CDMO site in Malaysia at scale to drive operational efficiencies. And then we will have completed our vertical integration projects. All this has been consolidated into our Vietnam site from a precision machining perspective.

A word on the cost. So here, you can see overall the cost of the program. But I think more important than the totals here is that each one of the items in the funnel, and as you can imagine, I have shared many things that are getting us to the bridge from an EBITDA perspective. The funnel is bigger than that because we know that some of the things we will choose to do maybe at a later point or they will not drive the exact benefit. So we need to have a higher funnel to ensure that we can deliver the CHF 60 million.

Each one of those items, if it's there is because it has a clear return on investment case. You can see here the totals overall with these numbers, You see that we get a return or a payback of roughly 2 years, which I think makes perfect sense for a program like this, just again confirms the need for us to do this.

So I spent a lot of time talking about Rewired, how we need to get ourselves future-proofed as Tecan. But if you remember in one of those first slides when I was presenting Tecan, one of the points that in that middle circle was the innovation engine. And I mentioned that, that's one of the things that makes us unique, right? That makes us who we are, and that gives us that status as the gold standard for liquid handling automation and drives the performance of the businesses.

As we do all of this work on Rewired, we have to make sure that we protect our innovation engine. So this slide is about my commitment that that's what we're going to be doing. Of course, we have to gain productivity in R&D. I think if you heard me say before, one of the things that I saw coming in was that the level of R&D investment for me relative to the size of the business was fine, but the focus had to be on the return on those investments. As we work on those, we have to ensure that we protect our focus on innovation because it's the only way to be successful as a life science tools player.

And what this slide shows is that we're going to be focusing that those -- that time and investment in innovation in areas that are growing faster than the average market to help us continue to win.

In the biopharma space, it's things like analytical technologies in drug discovery and production and also bioprocessing. On the diagnostics side, we have things like molecular diagnostics in oncology as well as high-plex proteomics. And the academia and government, we have single cell and the 3D models and organoids as areas of opportunity. Of course, this is a non-exhaustive list, but just to give you a sense.

A word on capital allocation. The point I'm trying to make here is not necessarily a change in the priorities. What you see here is the priorities as we've had them before. So organic growth is priority number one. M&A. Then number three is the dividends and share buybacks, so returns to shareholders. The point is really more about the focus on return on invested capital.

When you think about what that means for the organic investments, it's really the entire program that I've been talking about, right, getting the company to the right level of profitability means that whatever we're investing or reinvesting back in the business is going to get the right return from an ROIC perspective.

Similarly on M&A, there are 2 things here. One is that the focus that we're going to take from an M&A perspective is going to be around focusing on strengthening the Life Sciences portfolio. And the reason is that this is what makes up the core and the backbone as we get stronger in our Life Sciences portfolio, we will immediately have indirectly more opportunities on the partnering side.

Then the second point on the M&A front is, of course, we will have a strict criteria when it comes to return on invested capital. And maybe a double-click here on M&A. I see 2 types of deals as opportunities. The first is what I'm calling scale-up deals, and this is where we would be adding a large new vertical that is adjacent to our core. So yes, it would be new, but it would be something that works within the workflows that we are already present in with our customers.

And then the second one, I'm calling where we would be closing strategic gaps. So these would be more small to mid-caps and basically bolt-on acquisitions that address strategic needs across individual business segments. With again now, the priority is focusing on strengthening our portfolio of Life Sciences and having the right criteria for return on invested capital.

Performance culture. So again, I talked a lot about the Rewired program and how this is going to work. It will not work without our people, right? Our people are the foundation for this transformation. And the key here is to deliver a culture of performance -- performance, ownership and accountability. And we've already started that process by ensuring that our business leaders have full responsibility and ownership of their P&L, top and bottom. They will drive the priorities for the functional leaders.

We will continue to work in a matrix because matrix allows us to actually leverage the scale that we have to our advantage, but they need to be driving the needs and they need to set up what is the definition of excellence for a function. So that's already a change that has happened. And our teams were really looking for it.

When I think about -- what I've heard from the teams as I've traveled around and what we saw as results in the Great Place to Work survey that we do, they were looking for that clarity, that ownership of responsibility so that they can drive the results that are needed for the company overall. We have a great team. I have -- as I've shared before with all of you been flying around the different areas and regions to get to know the teams in the U.S., the teams here in Europe and the teams in Asia, and they are a great team, they're experienced, they know the customers, they know our products, they know what it takes to win.

So this is really, again, about ensuring that they have clarity on what success looks like so that we can be delivering together on this transformation. And bottom line is we want to be a destination for top talent. So anybody that wants to work in the Life Science tool space, they should think to come to Tecan first.

I've been spending a lot of time talking about our targets by 2028, and I'm sure you're all thinking, okay, what does that mean for 2026, the year that we're in. So I talked about 2026 as a year of Reset. Now that does not mean that the ultimate target for this transformation, which is to always outperform the market will not apply in 2026. That's what we are trying to do here. So on the outset of a market growing between minus 1 and plus 1, which is the underlying assumption that we're making here.

We are expecting our sales for 2026 to be growing in the low single-digit range, and we expect to generate an adjusted EBITDA margin of 15.5% to 16.5%. And you can see there a small bridge to share -- to show you, we expect the headwinds coming still from FX and tariffs, representing about 110 bps and then about 50 to 150 bps coming from the transformation program. That's what gets us to the range.

So the recap, 2026, sales plus low single digits, adjusted EBITDA margin 15.5% to 16.5%. 2028, CHF 1 billion in sales, adjusted EBITDA margin of 20%. And then beyond 2028, we get to our mid-term guidance, we said mid- to high-single digits and adjusted EBITDA expanding from the base of 20% on a year-by-year basis as we will continue to grow the business.

So I'll close with our ambition and commitment. Couldn't get to the end. We have a leadership position in liquid handling and laboratory automation that we need to leverage. We work in attractive markets where automation is now essential and AI is a catalyst for growth, and we are committed to transforming and future-proofing Tecan to deliver profitable growth for our shareholders.

Thank you very much. And with this, I'm going to transfer things over to Martin to moderate the Q&A.

Thank you, Monica. Before we now open the floor for the Q&A session, I have a few remarks.

[Operator Instructions]

Please limit your questions 1 or at most 2 at a time. I know this will be very hard for some of you here in this room. However, I'm confident there will be opportunities to get the microphone back later if you have additional questions.

[Operator Instructions]

With that, let's kick off the Q&A, and we start here with questions in the room, up here.

Sibylle Bischofberger from Bank Vontobel. Yes, last year, a very important topic was always China. You didn't mention China now. Could you tell us how was it 2025, finally? And how do you expect the China to develop with the programs or program not being active?

Yes. Thank you, Sibylle. Can you hear me? Thank you for the question. So well, first, how we did in China last year, and then the comments are specific to Life Sciences, which is where we have the direct access to the market. And we did a decline of roughly about 10% in total. So it was not a good year overall for us in China.

Now the result when you actually do one click down, the area where we did not do well was on the academia and government side, and that was -- it's the largest proportion of the revenues that we do in China. We actually did very well in biopharma. So as we think about the strategy for us going into 2026, again, it would go into that area or same focus in the areas where we find momentum is how can we leverage the areas of strength.

We've seen a very, very interesting reaction and positive reaction from the Chinese market around robotic workcells. In fact, I think they were the first ones that started to -- where we started to see that trend not just in biopharma institutions, but we've seen examples of them using them in other parts like biobanks, for example. So that's what we're going to be doing in China.

For us, it's extremely important to stay in China. So we have no interest in exiting. It's a market that is extremely dynamic, and we learned a lot by being there. What else is going on. I think I've shared before, whenever we see something interesting, we bring it over to Mannedorf to open it up, see what we learn out of what is happening from a technology perspective. It's a very dynamic market. So we do expect to stay.

Laura?

Laura Pfeifer from Octavian. So on the CapEx and production setup, could you please elaborate on your CapEx investments, how they will phase over time. And also what is included. I think you made mention to of a greenfield site. So I think more details here would be appreciated.

Do you want to take that, Tania?

Sorry, Laura. Can you repeat it because I was focusing on China?

No worries. No, I was asking on the CapEx, how it will phase over time, like the transformation program and also how your future setup will look like. I think you made mention of a greenfield site included in these projections.

So from an operational excellence perspective, the time line is a little bit longer for delivering on the initiatives because it can require, let's say, heavier lift on those. So from a CapEx perspective, you would see it more on the '28 -- '27, '28 with a starting point, but then a bigger impact on the 28th year.

I'll just add that. So we have not made a final decision on whether we would go greenfield or we would lease a site in Malaysia. We own land, so we have that option. We have space now in our site. So we can begin the transfer activities. Also we could actually move the warehouse that exists in our site today and that opens up space. So that allows us to get started. And then as Tania was saying then that decision, we can take a little bit later. And the CapEx, as you saw on the slide would be the higher CapEx if we choose the greenfield option, but that's what we are evaluating right now.

Maybe I'll leave it in that row. Harry?

Harry Gillis, Berenberg. I've got a couple of questions just on your '28 targets. How should we think about the phasing as we move there, particularly, I suppose, if -- you've given the guidance for low single digit and the sort of 16% margin at the midpoint, how should we think about the phasing of growth then in '27 and '28, particularly against the context of 1% to 3% market growth?

And then equally on the margin side, I guess, with all these initiatives you talked about, how sort of front-end loaded are there? And what's the sort of step-up again, roughly between '27 and then '28?

And sorry, if I could just squeeze in one more, but on the same topic. Like Monica, I just wanted to ask what your sort of guidance philosophy is at a high level? This is the first time you've issued guidance at Tecan. Should we think of these targets at the midpoint of a range of outcomes? Are they numbers you're highly confident in achieving the growth at least in '26? How much of this is underwritten by the order book and the visibility you already have today? Because I suppose we could say, over the last couple of years, visibility has been a little bit of a problem.

Do you want to take the first one on phasing?

So from -- let me start with the margin. From a margin perspective, I see it a little bit more balanced between '27 and '28. '27, probably an impact between 100 and 200 basis points, depending a little bit also on the timing of initiatives. As Monica mentioned, we did not fully define everything. But it's -- I would say, it's fairly balanced between the 2 years. On the sales growth, there could be a little bit more in '28 versus '27. But again, it's not a big difference between the two.

So I would say, again, it's not like one is dramatic. It's not 10% and 5%. It's not like that. And then from the visibility that you're mentioning. Well, we had a solid order entry in '25, as we have mentioned it. So we have a good -- and we are at a book-to-bill ratio of above 1. We have a good backlog. I would say '26 is reasonably feasible.

Maybe I'll add there, too. The point is you're asking a little bit what my philosophy is around guidance and how I think about the visibility. And I think in this business, you have to separate Partnering from Life Sciences. In Life Sciences, it is much more of a -- we get the orders in 1 quarter. We deliver the revenue just in kind of high ways to look at this. So what we look at there is the trending and I think I've shared this before a number of times, there's one metric that I really like to see, which is the last 12 months of order entry that gives me a sense of that trending that is happening.

And I see that being positive in -- actually in both businesses, but particularly on the Life Sciences side. It's important because it will give us a sense of, hey, there is a little bit of recovery in the market, and we are working ourselves, this point that I was making before around ensuring we focus in the areas that are working, are allowing us to see the difference in the trend in orders. So that's what I see on the Life Sciences side.

I mean, of course, the guidance that we gave is for the entire year. What we have now started to do is provide qualitative updates so that would give us an opportunity to actually share if we're seeing things that are different because in this market, particularly for Life Sciences, it's something that happens quarter-by-quarter. But I think the trending that I see leads me to this position that, that ties to the guidance.

When it comes to Partnering, we see much more of a -- because it's large customers, you can see much more of a kind of ups and downs that are maybe less smooth, I would say, than that we have in Partnering -- in Life Sciences.

Here, I think we have to rely a lot on being extremely close particularly to the larger partners to understand how do they view their year and then ensuring that we understand on a quarter-by-quarter basis what they expect from us, not just so that we can be able to deliver to their own commitments, but also so that we can understand whether they're going to be making sense relative to our own commitments to the market.

So with that information, I feel confident again that they will have the right level of orders to be able to achieve the numbers that we talked about. But same thing. If we see some things that make us believe that there is something different, this is why I think having those qualitative updates on a quarterly basis, I'm not having to wait for a midyear and our year-end will become very helpful so that we can keep you all updated. So I hope that's helpful, Harry.

Thank you both for the details. Can I go, Martin?

Yes. Sorry.

Thank you both for the details. [ Leone ] from UBS. I have a few more follow-ups for the 2026 guidance. So normally, you have a bit of a cadence between the first year and the second year. Can you maybe already give a bit of color in terms of what you're seeing entering the year now? Will H1 be a bit softer, both on top line and margin? And also on this one slide that you have, 39 that you showed, the 50 to 150 bps expansion or support for the margin. Can you maybe detail a bit more where this should come from? And also what supports the lower and upper end? That will be the first question.

Maybe I'll do top line and you can go to the margins. So overall, as we started the year, I think the first couple of months have come in pretty much as expected. I don't think as we modeled this year, there was such a huge difference between first year and second year, perhaps a little bit in Partnering, we had a stronger second half last year, so something to be taken into account.

When I think about that from a market perspective. We recently got the results of the SDi report that usually gives a sense of overall market and also by various product lines that now goes into Q4 of last year. So we have the entire year. And we can see that Q4 came in slightly better, which is a signal for positivity of what to expect from this year. Again, I don't think it's going to be anything super different. I still believe it's going to be a gradual improvement. But those are, I guess, a couple of data points that show that what we have been estimating for this year seems still reasonable at this stage.

Now we switch roles.

I'll just answer the margin. So as Monica said, I mean, on the sales, we do not expect big differences. On the margin side, normally, we do not give numbers for the quarterly part. But let's say, from a half year perspective, what we have comparing to previous year in H1 are higher tariffs. So that would be, of course, impacting from that perspective. But then between H1 and H2, I mean, typically, we have a better H2 than H1. So I would expect something similar for '26 as well.

And this 50 to 100 bps support that you have on the slide, can you maybe give some components for that to understand a bit better?

From what we have for '25?

No, for '26. So those would be the examples that I've shared on the slide. If you think about the slide on operational improvements for '26. So for example, things like the decisions that we've already made around portfolio or the exit of the facility in California, the localization of the consumables into the U.S. should -- it will have a small impact in '26. But I think we should still be able to see a bit because that should come live in the second half of the year. So a few of the examples that were in that slide that should drive that.

Finally, Dani here.

Daniel Jelovcan from ZKB. So just one. The design business of Paramit, which was, I think, a CHF 140 million impairment, which honestly, I don't care too much of, but I still would be curious to find out what it was. Was that -- is that so important? I cannot imagine. I cannot imagine that an innovative surgical needs an outside designer for their robotic arms. So it's a bit difficult to understand as an outsider. And now you are here in kitchen sink and everything, fine. But still to understand why you killed that design business, which I think was okay.

Thank you, Daniel. Yes. So this was actually an acquisition that was done by Paramit only a few months before Tecan acquired Paramit. It was a company called Emphysys. And this was all part of the strategy that Paramit had to actually build the development side to go from being a contract manufacturer, which is what they were at their core to being more of a CDMO player.

The issue that I think will -- maybe first to say, when we bought Paramit, there was a high expectation that, that business was going to deliver a high amount of growth or maybe over -- higher than the average, so to speak, again, because the idea is that the [ D ] gives you stickiness with customers. That idea in itself is correct. So the D gives you stickiness with the customers. But the Emphysys model was very upstream or much more upstream than where Paramit would sit.

And so what happened was that it was very, very difficult to create a connection between any customer that was using the capabilities out of that design center and them actually being anywhere near to being ready for the manufacturing piece. It was like the 2 things were kind of here and here. And I think this was why it was -- it was difficult in itself to grow that business. And even more so, it was difficult for it to really be seen as a synergistic catalyst to growing the core, which is continued to be contract manufacturing. So that's why we made the decision.

Jan Koch, Deutsche Bank. Thanks for taking my two questions. I would like to come back to your guidance philosophy, and thanks for providing all the building blocks behind the 2028 margin target. But could you elaborate again on the strategic rationale behind that specific target. I'm just wondering why you have not chosen a more conservative approach after what we have seen over the last 2 years?

And then secondly, could you elaborate on the competitive dynamics in the U.S. handling -- liquid handling market? Specifically, are you observing increased competition, especially from Asian players?

Thanks, Jan Koch. So I'll take the first question first. So I picked this target because I believe it's the right place for the business to be. In fact, I think that there is additional opportunity, but we have to take it step by step. And I think -- when you think about a player in this space and the areas that we touch, that is the correct set of expectations for a business like this. So that's why we are setting up the target at this level.

It's true that not every part of the business will generate the same amount of margin, but we've looked at it from a product mix perspective, and I think this is the right level of aspiration. It will take time. This is why this is not something that I could say that we could do sooner. Some of the things that need to drive this value are enablers that will take a little bit of time for us to implement and we have to do it in a way that we protect the core that is actually making us successful up until this point.

But I think if we were not aspirational in setting up the right target for the business, it would be wrong for our investors because this is what the business, a business like ours needs to be able to generate. So that's that. And now, I've forgotten your second question.

The U.S. liquid handling market.

So the dynamics, I think when I think about the key players in this space, I think the core competitors continue to be the same ones that for me in that space are particularly Hamilton, and I think Beckman would be the other one. It's been quite stable, and I say that probably because the customers in our space tend to be conservative. They know what they like and they go for the highest quality and the highest technology.

But it goes to the point that was made here, maybe Sibylle asked the question about China. I mean we keep an eye on what is going on there because we know into that those players are very dynamic. But so far, we haven't really seen them get into that high-end space that we play in together with those other players.

Ingo Stossel from UBS. Two questions on my side. First, on your portfolio. Do you see any further areas that you might want to exit? And on the flip side, how much are you looking to add in the medium term by M&A? And on capital allocation, what do you mean by maintaining a strong balance sheet? I mean you have a good net liquidity position at the moment. Are you looking to lever up from here? Or how should we understand your guidance?

Sure. So on the M&A or the portfolio question, I think, first, we are going to continue looking at what makes sense. We took these decisions because they were the ones that were more -- the most painfully obvious that we need to make, and there was just no reason to wait any longer to exit those. But we will continue to look at the portfolio. And I think that as we get better and start to deliver on these commitments, the bar is going to get higher, and we will need to continue to make those choices. We don't really have others just yet, but we will continue to review the portfolio with that in mind.

On the M&A topic, yes, I mean I talked about the M&A priority being something that will strengthen the portfolio, particularly on Life Sciences because this is where I see that we have the most opportunity to leverage the position that we've already created for ourselves, so we could use additional or stronger portfolio from that perspective. I don't really have specific targets just yet. But I will definitely think about that as we think about how we deliver on our commitments. And if things that play on that and have the right criteria when it comes to ROIC, we will definitely use it as part of the initiatives to get to our targets.

And the balance sheet?

Do you want something to add on, Tania?

Sure. I mean, while maintaining it strong does not mean that we won't be using leverage if we have the right target and the right acquisition. It's just about the fact that we are still focusing on delivering cash flow and maintaining. But again, that is the base for potential acquisitions.

Maybe Laura?

Just a follow-up. Laura Pfeifer, Octavian. So on your largest customer, what have you -- or what assumptions have you embedded in your guidance, both for this year and also for the mid-term?

So maybe I'll start with the mid-term. So that would have been in the core portfolio bucket, if you remember, the different pieces that make up the Partnering bridge. We were actually very conservative when it came to the assumptions for the largest customer and assumed a small decline, not because we right now are seeing anything that leads us to believe that would be the case, but we just wanted to be conservative in ensuring that we were looking at the rest of the components of the funnel and the ones -- the areas that would have the most probability of success. So that was it. When you think about this year, particularly for the largest customer, we are estimating it at this point to be roughly flat to last year.

Maybe Harry?

Harry Gillis from Berenberg. Just two really quick ones. You talked a lot about value-based pricing. What specific areas in the portfolio do you see room for that?

And then on the CFO search, you said maybe an update sometime soon. What type of candidate have you been looking for? You've got the Life Sciences expertise. Could actually someone more in the manufacturing or restructuring experience help?

So maybe starting with the CFO search. Yes, I mean, overall, I want a candidate that is strong in overall financial acumen and understands transformations, understands how to drive change, I think, more importantly. The pieces on being a strong partner from a finance perspective, I think, are the obvious ones. But for me, this role is the most important business partner.

And yes, I used the person, and Tania knows this, to be my closest partner when it comes to modeling something like this and driving the entire organization towards execution, being the right voice when it comes to understanding the business well and seeing the forecast that are coming from the various businesses make sense relative to what are the signals that are coming. So all that is all part of having strong business acumen. Maybe less specifically in manufacturing or less specifically in one area, but more just overall and having somebody that understands what change means to help us drive it here.

And I've forgotten your first question. For value-based pricing, yes, this is an area -- it is more relevant to the Life Sciences, I'd put it in the context of that business. There are various parts of the portfolio where I think it would make sense. One that we're looking at right now is for the robotic workcells or the entire offering that we do for integrations as part of Labwerx.

And I talk about that one in particular because I think this is one, when you're talking to a customer about a robotic workcell, they tend to be very open around the workflow that they're trying to accomplish with the cell and the pain points that they are trying to solve as they put together a solution like this.

And to me, when you think about value-based pricing, this is the most important information that you can do because you create a value proposition on the basis of what is the value to the customer of solving that specific pain point that they are targeting. So that's just one example, but there will be others in the portfolio of LSB.

Maybe bringing in some questions here through the webcast and scrolling over the questions. Many were the same, so have been answered.

One that is here remaining also is on the EBITDA bridge. And the question is, what are the drivers to get to the high end or the lower end of those specific improvements?

So I can take this one. I mean basically, it's about, in a way, worst-case, best-case scenario. Those amounts are very much a little bit depending on the timing as well as potential leakages like higher inflation or cost that we cannot right now anticipate. But we are fairly confident on the range.

Maybe another one. Thank you, Tania, for -- maybe, Monica, you. How do you plan to prevent Tecan from becoming a takeover target?

Very hard question to answer. I mean I will not be able to do something particularly on that other than ensuring that we focus the business on delivering on these commitments. I mean at the end of the day, independent of we're going to be a takeover target or anything along those lines, this is the right thing to do for the business. This is the right aspiration for an investment like Tecan because we have strength in the portfolio, strong customer relationships and it's about leveraging that. I think that's all I can say.

Another question from the room.

Yes, I have a few more housekeeping questions for CapEx and OpEx and net working capital. Just to double check, so the CapEx that you mentioned for mid-term, this is a fade towards -- so this will increase towards 2028 or you will have a decline in CapEx? This was not really clear in the beginning.

So as Monica mentioned, first of all, this was the higher side we've mentioned here, assuming greenfield which, of course, if there is no greenfield, it would be much lower. But I would say the bulk would still be between '27, '28, more in '28 than '27.

Okay. And similar dynamic for the OpEx?

OpEx, I would say, would be more stable or yes, distributed over the years.

Okay. And just for double checking. Tax rate, can you assume this will be fairly constant around like 19%, 20%?

Yes, if things are as, I would say, normal. But you have seen the -- and I exclude '25, you have seen in '24, for example, we were fairly low also because of the lower profits in the U.S. So it's very much related also to the restructuring charges that we will be taking. So from that perspective, I would say, normal level of taxes, yes, around 19%, 20%. But if you have, of course, lower profit on a statutory basis, then you have lower tax rate as well.

Maybe another one from the webcast. What risks do you anticipate from the Middle East conflict, whether in oil prices, metal pricing or supply chain disruptions?

Do you want to take that?

So at this stage, what we see, we do not have direct disruptions because we do not really have much of the business in the Middle East. Having said that, what we have seen is some increases in freight costs, and there could be some impact from energy costs as well, but they are not that material at this stage and they are not considered because we did not know about that before, but let's say, within the guidance that we have, we are still good with the numbers that we provided.

From the webcast, I think that's it. We have another question here. Mark?

[indiscernible] I would have an understanding question concerning the actual fluctuation rate and the expected one? And have you had so far unwanted departures? I mean, have you lost kind of key people that you would have loved to keep beside the CFO, maybe?

Yes. No. So far, that has not happened. I should knock on wood. No, to be honest, it has not happened. I mean we have some turnover that is normal for the business. If you take out the -- the one that is involuntary or voluntary turnover is low. So it's quite under control. We've shared with the teams, obviously, our aspirations because, as I said, they are going to be the ones that are making it happen. But I think it's overall a level of comfort from the size, not that they don't believe that this is -- it's quite aspirational, but they were looking for clarity. And they appreciate to have clarity on what success looks like here and working together as a team to get there.

One follow-up question on your largest customer. I understand that you're currently here or that this business currently pressured by the lower ASP of the new generation. But at some point, that negative impact should be washed out. So at what point in time do you expect there to be a higher correlation between the placement numbers and your, yes, sales growth with that customer?

Yes. The thing is that there are 2 things. So one, clearly, the fact that they have that difference of the new model ramping up, the old model ramping down is having an impact overall. But I'm not sure that it's really going to go to a 1-to-1 because we don't make the entire part or even a module of the instrument because this is made up by more than 1 piece. We make components that go inside and there are different policies when it comes to the stock levels that we need to hold, that they need to hold for the different parts. So that's why I find it even after we go through this particular period that makes it tougher I'm not sure if we would truly see a 1-to-1 for that reason.

Understood. But if we then just take the average over the next, let's say, 3 to 4 years, that would still mean you could grow that customer in the high single digits or low double digits?

Yes, potentially. And I think this is why the most important thing for us really is to ensure that they are successful in the market because if they are successful in the market, then we're going to be just fine.

And don't forget that we don't only produce those 2 products. We have other products as well, and we are constantly offering them other solutions as well.

More questions or did we exhaust the pool of questions here on the web we have?

Just like maybe one last question around your -- this year's guidance and your mid-term guidance in terms of risks. Have you priced in some buffer, especially for this mid-term target of CHF 1 billion?

So when I think about the components of how we get there, and actually, this applies both to the top and the bottom line for the bridge. The funnel that we have of things that will allow us to get there is bigger than, let's call it, the CHF 60 million of incremental, if you think about it bottom line, but the top line is similar because of the points that we were making before, we have to make sure that we have things done in the right order. Sometimes then we will get perhaps a benefit that will be lower than we planned. Perhaps we have some headwinds that come in like we have now going on with Middle East, there will be things that are unknown in this period.

This is why we have modeled this with an overall buffer, meaning that the funnel of activities is bigger than what we showed there. One of the things, and Harry and I were talking about this offline, is the FX piece is for us totally unknown. So this is done on the basis of what we know today regarding FX. So that piece, I think we'll have to kind of see how it plays along the years.

Sorry to be annoying, I've got one more on that same '28 target. I suppose if the guidance for this year is low single digit and the market growth rate is minus 1% to plus 1%, I suppose at max, you're growing 2% ahead of the market. For '27 and '28, you gave 1% to 3%. And I think to get to that CHF 1 billion, you need to do more than 2% above that. Is that fair to think of? And I guess, what's driving the increase in above-market growth rate?

Yes. I think the way you think about it is that we are building an engine that needs to get better at taking share in the market. I think this is the piece that has been missing when you think about our performance in the last couple of years. I was sharing that we always need to be sure that we are over delivering versus market, and it's really hard to say that the last 2 years we've been doing that. So we expect that engine to get better as we think about the next 2 years. That's kind of maybe the underlying assumption in all of this. But yes, you can do the math of what would be the CAGR and depending on how we end, what it means for the next 2 years.

You know that if there is silence for 5 seconds, the Q&A will be concluded.

I will still be around for the [ app ].

Good. This seems to be the case. So we conclude the Q&A. Thank you very much for your participation. And before we close the session, maybe Monica, would you like to share some closing remarks?

Yes. Thank you, Martin. So thanks, everybody, for being here. Thank you for your interest in the Tecan story. And as I said, we're going to be around in the [ app ]. I'm here as well as Tania and Martin, and my team is here as well, so we can answer any other questions in a little bit more informal setting.

I'm going to close and leave you with, again, those final words of what is our ambition and our commitment, right? I truly believe in that leadership position that we have. We work in attractive markets and now is a great time to be there when you think about the impact of AI and technologies for our customers. And ultimately, we are committed to transforming and to future-proving Tecan to deliver profitable growth to our shareholders. Thank you, and we look forward to talking to you soon.

Good morning, everyone. Happy to see you all. My name is Artem, and welcome you all at Tecan Company presentation at 44th JPMorgan Healthcare Conference. The presentation will be led by the CEO of the company, Monica Manotas. And we're targeting for 30 minutes presentation and 10 minutes Q&A at the end. So save your questions until the end of the presentation.

The Q&A will be joined by the CFO of the company, Tania Micki. Monica, over to you.

Thank you, Artem. So good morning, everyone. First of all, thank you very much for joining. I appreciate your interest in Tecan, and I'm excited to be here to tell you the story. Before I get into the material, just say a word about myself. I've been in the seat for about 5 months now, so still relatively new to it, but certainly not new to the life sciences tool space. I've been in the industry for over 25 years.

And my story with Tecan started actually quite a few years ago when I was in Thermo Fisher and had a lot of dealings with Tecan. We were suppliers and customers to one another. And that's where I really got to get familiar with our product portfolio and maybe more importantly, the people behind it, given the support in developing the products. So I joined the Board in 2024, which was an easy decision as a result.

And when Lukas, our Chairman, asked me if I would be interested in the CEO role, it was an easy decision for me, and it was because of the potential that I saw in the company, which is what I'm going to be talking about here. And it's really about reigniting the Tecan story, right? We have a really nice growth story to tell, one that perhaps has lost a little bit of momentum in the last couple of years, but where we really have all the ingredients to reignite it.

Very much a leadership position in our space, which is liquid handling and laboratory automation. We service very attractive markets that have very strong fundamentals for growth. So that's good. And relative to those markets and our customers, they are in front of a very interesting opportunity right now because between the new technologies that they have at their disposal and the power of AI, they are seeing more and more that automation is becoming essential in their workflows. And that means a very important and interesting opportunity for a company like Tecan.

So now it's all about building our future, right? And the reason why I am so confident about it is because we can build on a very strong foundation, which is good. And I say that because we have a synergistic portfolio, and I'll talk about that a little bit more in a couple of slides, but we're organized into businesses that really reinforce each other through technologies and common platforms that allow us to actually service a larger continuum of customers.

We have great customer relationships. We're very close to them. I have had the opportunity over this first 5 months being in the role to get to meet many of them. And I have seen how close we are, and that allows us to actually do co-innovations with them, a really nice opportunity that our Partnering Business brings to us.

We have data access from them, just faster ability to translate what is going on in the market because we understand it through our customers. We have depth from an innovation and IP perspective. Obviously, in this space, this is very important. And here, it's a combination of a strong patent base, very sustained R&D investment, and you can see it in our P&L over time and just a very strong team of experts, both from an engineering perspective as well as our application scientists that are working day-to-day straight with our customers.

And then finally, that end-to-end value chain control. And here, I'm talking about, again, the way we have set up this continuum and how we support our customers, we have capabilities spanning research and clinical applications. And all this under a very much common denominator, which is a clear purpose to improve people's lives and health, and we do it by empowering our customers to scale health care innovation globally from research all the way to the clinic.

Now I wanted to spend a couple of slides just talking a little bit about Tecan and who we are for those of you that are new to the story. And I'd like to use this depiction because what I find is the most unique thing about Tecan is that we have platforms that are flexible enough to allow us to service the entire continuum of health care. And what I mean by that, if you look at kind of that top left of the circle, it allows us to serve all kinds of customer needs from research to the clinic, as I mentioned. You look at the top right, it's for customers that are handling any type of biological samples. So DNA or RNA, cell, tissue proteins, they can use our capabilities.

And then in the bottom, also for any kind of detection technologies. They're working with imaging, they're working with mass spec or sequencing, PCR, they can use this. And here, when I talk about platforms, I mean both the hardware and the software side. And what we do is we create modules that become building blocks to establish the products or the solutions that support the applications in all these categories for the different customers.

So as I mentioned, we are organized in 2 businesses. Our Life Science business is roughly 40% of our total. This is where we have the Tecan branded portfolio. It service customers in the life science research side. So this is where we service academic and government institutions, biopharma customers and clinical labs. And the portfolio is made up of our instrumentation. So this is mostly our liquid handling robots as well as our detection portfolio, the respective consumables and some reagents and then our service and digital offerings.

Our Partnering Business is about 60% of the total business. And here, we support customers more in the unregulated environment. So think our IVD customers, med tech and some applied markets. And we have 3 components of the portfolio. What we call our Synergence branded offering. This is the OEM offering. So this is where we support mostly IVD and some life science customers, again, utilizing the expertise and platforms that we also use for our own proprietary products, but we do codevelopments with these customers that typically have expertise on the reagents and assay side and are looking for a partner that can help them develop instruments.

And again, because these are IVD typically, they tend to be, in the end, closed systems that work with the respective reagents for the customers. We have the Cavro offering. This is basically standard and customized components. So think pumps, valves, components that go into the instruments can be a part of the Synergence offering and also within the Tecan branded products at the top. So this is for customers that do their own development but would like still to have the components inside.

And then finally, our Paramit offering, which is our contract manufacturing expertise. And I'll share a little bit more there since this was the latest addition to the portfolio. It was an acquisition that was done in 2021, basically to add contract manufacturing capabilities. So Paramit focuses on high complexity, low volume products for highly regulated markets. So again, very much aligned with the focus areas for Tecan. But Paramit added 2 capabilities to Tecan. One, it expanded our total addressable market because it was already offering these services to the med tech space. And number two, also very important, it added manufacturing capabilities for Tecan in the U.S. as well as in Malaysia.

So up until that point, the capabilities were concentrated in Europe for Tecan. So this made our entire supply chain much more flexible, again, something that we can take advantage ourselves, but very much our customers appreciate in this day and age to have that level of flexibility. We service very attractive markets. I've mentioned that at the beginning that perhaps have gone through a little bit of uncertainty in the last couple of years, but have very, very strong fundamentals of growth that I think we all in this room believe in.

And some examples about what the customers are going through in what we're calling the century of biology and all these technology advancements that they have at their disposal. From a biopharma perspective, our customers are now leveraging AI in their drug discovery and development process to identify new drug candidates and accelerate that process. On the diagnostics side, amongst many things, they're dealing with what it means to have personalized medicine, right? And treatments for those obviously generate a lot more need for volume and data.

From an academic and government, these customers tend to be the pioneers when it comes to research. And now they have the power of multiomics, right, combining biological data to better understand disease mechanisms, again, needing more power in their workflows. And finally, Medi Tech, here, we have innovative surgical procedures. And again, we're lucky to be working already with one of the pioneers for robotic-assisted surgery.

So one thing that is a common denominator across all these trends is that all of these needs actually require for more lab automation because there is more throughput required, more need for precision to build the data that is needed to feed the various models within the workflow. So maybe turning it around, how does lab automation make a difference? And you can see some examples here.

Scalability, obviously, important as you have more data, and this is something that our customers both on the biopharma side and certainly on the diagnostic side need as they deal with increased complexity, the AI models that need to be fed with cleaner data, all that takes advance -- or automation allows that to happen. Consistent, reliable results, obviously needed across the board. Regulatory compliance, very much a need here.

We're talking about regulated markets, reducing dependence on skilled staff. This is something that's been a pain point, particularly for our diagnostics customers for quite some time and having automation certainly allows them to manage that pain point and lower operating costs. I think this is something that our diagnostics, academia customers are very interested in, but even our biopharma customers like to have that efficiency in their processes overall.

So I often get asked the question around AI, right? And what does that mean for us, thinking is this a catalyst for growth in our particular product portfolio? Or is it going to be something that makes our products less needed over time? And I wanted to use the example of what our customers are doing with AI in the drug discovery and development process. And you can see it here, but basically, our customers are using AI models at the very beginning of the process and the target identification, right? That's the piece that they are doing in the computer in silico to try to get as many candidates at the beginning that have more chance to make it all the way through the process, just makes the process overall more efficient and add speed to a process that's already quite long.

With that, there is more output that comes to the later stages of the process that actually happen in the wet lab, which is where we come into play. So the more potential candidates that come in at the beginning of the process, the more that requires to go through the wet lab to actually check if these candidates are indeed the right candidates to take through the process. And there is a closed loop that happens. You can see it there depicted in the slide because as more information gets checked in the wet lab, then it goes back and feeds again the AI models, which is why automation is so used here because it's the only way to ensure consistent data and clean data that is required in these AI models. So very much AI is a catalyst for growth for our products.

And before I move on, I'll say that also as you go down the process, this has an implication in the demand for later stages here. And I'll use the example of QC where in this process, this is a part where it has typically been done with manual methods. But we're seeing more and more that customers are valuing automation in that space because as they have to test all these novel drug types, they have more parameters to check QC for, and they are seeing the power and the benefit of using automation in that step. It's something that we've already seen from our customers.

So where are we today? Now I've talked about the great foundation that we have. We're leaders in our space. I have talked about the interesting markets that we serve and the opportunity that we have from a growth perspective. That's all good. But here's the -- maybe the sobering moment is this is our performance, right? We have had, for a number of years, a really nice growth story. Obviously, it was augmented during the time of the pandemic. And since the pandemic has been over, we have not really been able to get back to growth, and you have seen that come through in our earnings performance as well.

So this is the reality, right? Now I said at the beginning that I joined here because I saw the potential and the opportunity to reignite the growth story. So I've been working in the last few months with my team to understand what has happened and not really to dissect and over dissect an issue, but more really to understand what needs to change. Now granted, markets have had a role here. They've had some uncertain times, so no question. But there is a part from our perspective. And I think the bottom line is we've lost some focus on our customers is what really, in the end, didn't allow us to truly see what was coming, for example, in 2024 that we had a further correction and you saw the results there. And also, I think we've executed inconsistently.

And those are things that we need to fix. -- because at the end of the day, we need to be able to overdeliver to deliver a differentiated performance in all kinds of situations from a market perspective.

The good news is 2 things. One is the core is intact. So that is a good place to build. And financially, Tecan is strong. So another very important kind of pillar in the end to build off of. Over the last few months, focus has been reestablished, and I will recap some of the growth initiatives that maybe some of you have already heard me say, these are working, and we will continue to focus the teams on that. But we've been talking about the concept of future-proofing Tecan within my team. And what this means is taking action to drive consistent execution.

As I said, it doesn't matter if the markets are blue sky situation or if they're having some challenges as we've been facing now. The point is that we always need to deliver differentiated performance. This is good for our investors. This is good for our customers because they have a stable partner in front of them. This is good for our employees because they have a stable source of employment coming through. So good across the board.

So to do this, we are going to be launching this year a transformation program with the objective to focus us on ensuring that we are delivering going forward, consistent performance and get the business back to growth. The program is going to have 3 main pillars. One is going to be around portfolio discipline. And here, this is all going to be about looking at our portfolio and identifying what are those areas where we can compete to lead, where our customers are looking for our support and making sure that we focus our investments in those areas and then looking at which ones are those areas that perhaps we made some investments in previous years that made sense at the time, but we just could not get the traction on and deciding what to do about those.

The second pillar will be all about commercial excellence, and this is going to be what drives or reignites the growth. Here, I'll share again a recap of some of the growth initiatives that we are already working on that are driving results. But we will do things like, for example, establish some sharper segmentation to ensure that we have clarity on where we have opportunities to gain share in the markets that we focus on.

Value-based pricing. There are parts of the portfolio that can benefit from value-based pricing, and that represents an opportunity for us and just overall strong commercial execution. And then finally, operational excellence. And this one is really all about ensuring that as we scale, as we get the growth, that converts into margins and cash. It's a responsibility from our perspective to do that. And here's where we're going to do things that looking overall at our footprint and ensuring that we are using it in the most optimal way, making sure that we're monetizing the investments that we're making in terms of IT tools from that perspective, all these things are going to be looked at and managed through this pillar.

And in the end, this is all going to be underpinned by our people. They are going to be the ones that are executing. And here is all about driving a culture of performance, right? Again, we have to be consistent in our execution. We have to do what we say, execute on our commitments and just overall create sustainable value, both for our customers and our shareholders.

Now to recap some of the growth initiatives that we will continue in 2026. The first one is all about leveraging the innovation investments, right? You've -- I think most of you have heard me talk about Veya, that was a product that was launched in Q1 of last year. It's an interesting new platform for us because it allows us to target a different type of customer, still focused in the medium to high end of the range because that's our sweet spot, but these tend to be customers that are a bit newer to automation that are running applications that perhaps are not needed to be run on a daily basis, which means they require less throughput than perhaps what the Fluent can offer but still benefit from the accuracy that automation gives them in their applications.

The response by the market has been very strong here. So we're happy with the run rate and the results that we saw last year, and we do expect a continued ramp-up in 2026 from this platform. Number two, another one that I'm very excited about is the robotic work cell offering, and this is where the acquisition that we made last year of the director scheduling software. We call it FlowPilot for our customers plays a role. And it's a very interesting combination of the capabilities that we have within our Labwerx offering. These are experts in integrations with now having the software capabilities that creates the brain of the entire workflow operation.

And this is where you've all probably heard the concept of autonomous labs or some people call them light out labs or the dark labs, right? More and more our customers in biopharma and actually, we've seen this in some academic institutions in China as well, are going to creating these robotic work cells that benefit from automation and again, as they put in AI in their entire drug discovery and development processes. So a very interesting opportunity, one that, again, because of the Labwerx capabilities that we already have, we have a very rightful place to win in and one that we're very excited about now that we have the software capabilities with FlowPilot.

The third is about unlocking growth markets, right? These are markets -- geographic markets where we have been underpenetrated because we just haven't been directly present in. This one started actually with the investments that we made in 2024 in South Korea that allowed us to generate double-digit growth in that region last year. The next one here is India, where we're going to be making very targeted investments. And here, the target is to go after the biopharma segment in India that has been growing quite a lot over the last couple of years.

And then from there, there will be more opportunities. And again, it's all about targeting underpenetrated markets to drive incremental growth.

And then finally, on our Partnering Business. Last year, we made some changes to fix some execution issues. And this year, it's really going to be all about strengthening the existing customer partnerships because, again, they're very deep with them. We have much more opportunities to go after incremental share of wallet with them with new things or even next generations of existing relationships as well as creating a funnel of new opportunities and new potential partnerships in all 3 parts of the portfolio.

We have some new exciting things in all 3 parts of the portfolio here that we're excited will drive growth in 2026. Now I thought I would recap the sales results that we announced last week for 2025. And I think you've all seen them. Overall for the year, we generated a 1.6% decline in local currencies total. That was roughly 1% decline in our Life Sciences business and 2% decline in our Partnering Business. But what was the most encouraging was to see the order entry. We had overall 3.8% growth in local currency in total for order entry. And perhaps even more importantly, when I looked at the 2 businesses, we now have book-to-bill ratios of over 1 in both. So again, encouraging signs for this year.

Of course, I'm not going to be talking about specific guidance yet. We will do that in March of this year as we typically do, but I thought I'd share a little bit my view as we come into 2026. And I'm still of the belief that we are going to see these markets recover, but it's going to be a gradual recovery. And I say that for what I see in each of the segments. So starting with the academia and government, I think our customers here, particularly in the U.S., continue to want to get a little bit more clarity. I think everybody is talking about the fact that it will be better than last year, that NIH budgets will be stable and not a major reduction as was talked about last year.

So that's all very good. But I think our customers are still waiting for maybe some more specifics and clarity around that to be able to feel comfortable to make the investments that they want. So on this one, I'm still being maybe cautiously optimistic, but perhaps a bit conservative as we start the year and obviously, one that we will continue to track.

Biopharma, I mean, I do think that it will be better than last year. I think at this stage, we see that pretty much all of the large pharma companies have finalized deals with the U.S. government that gives them better clarity, better clarity around the situation with the tariffs. So that's all good. I think that's going to allow them to have a better view of how they're going to make their capital investments, not just in the later stage, but throughout the entire drug discovery process.

Diagnostics. I mean, diagnostics was a very good segment for us last year. We saw strength there, both on the IVD side as well as the piece that we touched within clinical labs in our life sciences industry -- or in our Life Sciences business. Here, I don't really see a reason to believe that this is going to change. So I think this is one that will continue to be strong for us in '26.

And then on the Medi Tech side, I think we're going to continue to see those pockets of growth and that trend towards outsourcing will probably continue. So something that will be -- continue to be an opportunity for us to go after. So all in all, I do expect the market to be better than last year. I think at this stage, maybe something flat, we would say in automation in '25. It was down in the low single digits, perhaps 1.5-ish or 1.5% to 2%. I think here, say, maybe flattish, which will be better, maybe somewhere between minus 1% and plus 1%, depending on how the various segments play out.

And of course, something that we will continue to keep an eye on as we get ready to provide guidance in a couple of months. But I want to recap this because, okay, as I said, 2026 will be better, and it will be a gradual improvement, but we still believe in the midterm outlook, which underpins a market growth of 3% to 5%. And then obviously, as I said, we need to be always delivering differentiated performance and overachieving the market. So with that, we are thinking from a midterm perspective to go back to the mid- to high single digits, which I think is doable given the opportunities that we have in front of us.

And then from an EBITDA outlook perspective, we will talk more in a couple of months, but we will work to ensure that we have that line of sight back to that 20% that we talked about in the capital markets in 2024 and then start to see expansions from there. We are working on some dates for an update of capital markets, likely be in the spring. So just keep an eye on that as we finalize the dates and make them public.

So I will close with this slide. These are kind of the key takeaways that I want you to leave this room with. We have a very strong foundation to build off of, including talent, expertise and customer relationships. We service as attractive markets where automation is essential now and AI is a catalyst for growth. We are committed to consistent execution and future-proofing Tecan and obviously focused on delivering profitable growth for our shareholders.

So thank you very much. And with that, Artem, I think I'm going to turn it back to you for moderating Q&A.

Thank you very much, Monica. Yes. Now we move into Q&A. We will be joined by Tania Micki, the CFO of the company.

And maybe just to get ball rolling. First question is actually coming from me. Monica, you joined like 5 months ago since August last year. So can you just elaborate more what brought you to Tecan? And second part of the question is like what were your key priorities and learnings since you started?

Yes. Maybe starting with the first part. I mean, as I was sharing earlier in the presentation, to me, it was really about seeing the potential to reignite the growth and working with the teams to make it happen. And that's what made it exciting. As I said, I didn't come in totally new, right? I had a lot of experience dealing with Tecan in my time in Thermo. And then when I joined the Board, I got a sense of what were the foundation for growth here, and that's really what excited me to take the role.

If I think about my priorities that I've had over the first 5 months in the role, it's been number one, absolutely to work to ensure we get the company back to growth because that's the beginning of everything. And as I said, I have been happy to see that there were some things already taking place, and it was really all about driving the focus in these areas to ensure that we can get back, being close to the customers so we can understand their inflection points as they are also navigating some challenges. And our role is to help our customers to navigate those. And I think we have the right expertise, the right products, the right relationships to make all that happen.

And what has been the biggest takeaways from the discussions and feedback from customers, from partners and from employees as well?

Yes. I think they are all excited of the opportunities that they have leveraging the new technologies and the role of AI in accelerating the research, whether this is through an academic institution or to a biopharma or diagnostics or clinical labs companies. They see the opportunities that are in front of them. They are starting to see more clarity in the funding environment, and this means different things in the different areas like I shared. So I think they are excited to utilize our products on the automation side or as a partner to help them develop new products in the end to support their own customers.

Just wanted to check with the audience if there are any other questions from you? Please just wait for a mic.

I just wanted to ask a question on the last couple of years. As you said, it's been challenging because of the end markets, but as well because of some loss of focus on the customers and some inconsistent execution. Can you please provide some more details on like of these 2 aspects in Tecan and what you've seen and how you're addressing that going forward?

Yes. Thanks for the question. I would say that I concluded all of that because, again, when we were navigating all of us in the space because I was in the space in a different company through the pandemic, it was very clear that we had a lot going on, generated a lot of growth, but we were going to go back to a more kind of normalized place. That resulted in quite a lot of change in dynamics, not just for the workflows that were touched directly by the pandemic, be it through testing or on the vaccine side, but also indirectly because as customers tended to have more funding, they actually invested quite a lot in their labs overall and that created a change in the replacement cycle that is kind of normally going here.

So it had a lot of impacts. And the key here was always from our perspective to stay very close to the customers to understand how was that landing point going to happen because we weren't really sure when exactly it was going to happen. We just knew it would. I think my conclusion and seeing what happened in Tecan where we had quite a landing in 2024, as you've seen from the numbers was that perhaps we lost a little bit of that direct touch with the customers to try to understand it, it was something very difficult to do, but you had to like stay in touch with that, see some of the KPIs that 2020 hindsight is a great thing. You see it in the order entry. It's one of the KPIs that we see. And we should have seen that going down. There should have been signals that this was going to happen. So this is what I mean by loss of focus and kind of bringing back that focus and back that discipline around execution.

I had a question on the Partnering Business. So this, I guess, is driven also by the trend to outsource development, manufacturing and so on. So what kind of trends are you seeing there from the customers? Is this going to increase in the future? Or is this something where the market essentially is maxed out and it's now more a distribution?

Thanks for the question, Jasper. I see that the trend will continue because I think customers typically don't have just one way of working with partners. I think what you see in most customers is that there are certain areas that they want to do themselves and certain areas where they see that they don't have the right expertise, and they look for partners like us, which is why when you're already working with one of them and you've established that close connection, it gives you the opportunity to see what are those other areas where there is opportunity.

One of the things that I have found very compelling about the portfolio that we have on the partnering side is that we have made it such that there is different options for customers depending on the level that they want to partner with. So as I was saying, if they want a partner to do the full-on development of the instrument, they come to us with our Synergence offering. But if they have that capability, but are looking for components, they have Cavro there.

And if they actually have already a design in place, but they don't have -- they haven't invested yet in manufacturing capabilities or they have invested in manufacturing, but they are full with other products, and they come to us with our Paramit offering. So it is nice to be able to have the 3 and have the customers take their pick depending on what is their philosophy when it comes to outsourcing.

Checking if any other questions from the audience? Maybe before we finish, a few questions to Tania. So Tecan returned to sales growth in the second half of 2025 and reporting strong order intake as well. So what was the key driver behind the positive development?

Indeed, we were very pleased with the development, and Monica has mentioned, the 3.8% of order growth as well. In the second half, particularly, we actually had very good momentum across the segments. And you will recall that Monica showed 4 segments. So biopharma, diagnostics and Medi Tech, all were growing and the only exception was the academia and government as we expected actually.

And just one question about like impact of U.S. government shutdown. So have you seen any kind of material impact on your business and any recovery following that?

I wouldn't call it material simply because we actually did not expect much. So from that perspective, the impact was minimal. We had some administrative issues because the portals were shut down, but we were able at the end to send everything that we needed to the U.S. and to sell as we planned.

Yes. I think maybe for clarity, the part of the business where we have exposure to academia is in the Life Sciences part. If you think about that, when we were making our assumptions for the forecast in the fourth quarter, even though the shutdown, I don't think had happened yet, we thought it would. And for us, it's important because a lot of those instruments come from Europe to the U.S. We knew that we have a certain window when we have to send the instruments to be able to actually have them count.

So because we saw the risk, we already planned in the forecast that, that was going to likely not happen. And sure enough, this is exactly how it turned out. So yes, it was not a surprise for that reason. I think we called it right. And yes, then afterwards, now it's all open. So we are expecting to see customers kind of start to order again.

Got it. Just a final check if any last question from the audience. Then I think we can conclude this presentation. Thank you very much, Monica and Tania.

Thanks, everybody. Thanks, Artem.