Bachem Holding Stock

Good morning, everyone. Welcome to our Half Year 2026 Results Call.

Joining with us on the call are our CEO, Anne-Kathrin Stoller; and our CFO, Alain Schaffter. My name is Barbora Blaha, responsible for Investor Relations, and I will walk you through the call.

Before we begin, a brief housekeeping note. There will be enough time for questions after the presentation. [Operator Instructions] And as always, this call is being recorded, and a replay will be available on our web page. A few words on the agenda. Anne will start with an overview of our half year results 2026. Alain will then review the financial performance, and Anne will conclude the presentation with an update on market development and our business outlook. Following the presentation, we will be happy to take your questions. We expect today's call to last approximately 60 minutes.

And with that, over to you, Anne.

Thank you very much, Barbora, and good morning to everyone also from me. It is my pleasure to talk about our half year results today.

So let's look -- start with the -- a look at the team. So as Barbora mentioned today, Alain and I will be here on the call to guide through the results. And I'm very happy to draw your attention to our newest member of our executive team, Boris Corpataux. Boris is not new to Bachem. In fact, he's been with Bachem for more than 20 years, but we were very happy to appoint him to our new Chief Commercial Officer starting in this position on August 1. I've personally worked together with Boris for many years, and I'm extremely pleased that we found such a capable internal candidate for this position.

So let's look at our half year results. We achieved CHF 326.4 million sales in the first half of the year, which is a growth of 4% compared to the first half of 2025. And in local currencies, it's actually a growth of 7.3%. We also achieved EBIT (sic) [ EBITDA ] of CHF 82.8 million, and we invested almost CHF 150 million in CapEx, and Alain will talk more about the EBITDA and the CapEx numbers in his part of the presentation.

Let me put the first half year sales into perspective. So if we go to the next slide, we see the first half sales results of the previous years. And some of you may still remember that the first half of 2025 was an unusually high first half of the year. And we are very pleased that despite this fact that we are having a very, very strong reference first half year to compare to, we still achieved a growth of 4% even without contributions of Building K. So we are very happy with the sales of our first half year. And if we look where the sales are coming from, you see here that we had a very strong growth in CMC Development, where we achieved more than half of our first half year sales.

Commercial API was a bit lower than the first half of 2025. And again, this is according to our expectations because the Building K sales, which we always said we would expect in the second half of the year, are contributing primarily in the Commercial API sales category.

So with this, I think we are exactly where we expected to be with respect to our first half year sales and also with the contributions of these individual categories. We are very pleased with the growth that we have seen in the CMC Development based on the strong pipeline, and we expect Commercial APIs to be then much stronger in the second half of the year.

Let's look a little bit into where we invested and where we continue to expand our capacity across our site network. So in Bubendorf, we talked a lot about it already. We are ramping up our Building K production. We could produce first commercial GMP material in the first half of this year, and we are very pleased with how the ramp-up is proceeding. Along the rest of the site in Bubendorf, we are working on several CapEx projects to reduce specific bottlenecks, and we are also continuing with our operational excellence initiatives to unlock further capacity.

We were also extremely pleased to announce last week that we are now moving our Sisslerfeld project ahead and then we are really bringing it to life. We signed an agreement with a partner to supply large volumes of peptides as part of a strategic collaboration, and we will invest more than CHF 500 million, and we expect commercial production in 2030 out of our Sisslerfeld site. We are also continuing to invest in our U.S. sites, both in high-volume capacity that is primarily at our Vista site, and we are also modernizing and automating our small volume production at our Torrance site.

So overall, we are very pleased with our progress, both in terms of sales as well as our site advancements. And I will then here hand over to Alain to talk a little bit more about the financial numbers.

Yes. Happy to do so. So on the first, we see the usual table with the key figures. Anne already talked about the CHF 326.4 million that we have achieved on the sales top line in the first half of the year. The EBITDA margin of 25.4%. We go in a little bit deeper later. On the net income, we have stabilized this number. So we have a slight increase compared to the previous year. The cash flow from the operating activities resulted in CHF 104.7 million, and there were also more than 200 new colleagues joining Bachem in the first half of 2026.

So when we go to the EBITDA margin and the drivers behind, we have overall a dilution of 370 bps compared to the previous year, as Anne mentioned, a very strong first half in 2025. So we did grow on the top line, but what we see is the dilution from the costs that are necessary to cover the future growth of the company. And that is mainly happening in the COGS area. So we have added new people to absorb all the future growth. We have added or invested in maintenance. We have invested also in smaller capacity increases, optimization of the overall organization. So we see this 2.1 percentage points that the COGS have an impact on the margin dilution in the first half.

The marketing and sales numbers or cost expenses have been stable. So there is no impact from this side. On the G&A, other income, we also see a dilution of 0.6 percentage points, which is mainly driven by strengthening our global organizations. We added specific support functions to absorb the growth of the company. And also we had some shifts between different areas from a cost per se where we recognize the costs now. The R&D, we see also the dilution is 0.5 percentage points, but it's still in the bandwidth or the range we gave that we invest 1.2% -- 1.5% to 2% of our overall sales into R&D, which is a very important factor.

We do our own innovations. We have a look on process optimization, and it's a very important factor to keep our leadership as an expert in the TIDES business. At the end, we still have the Swiss -- the strong Swiss franc, which also impacted on the currency side by 0.6 percentage points, which led us to the reported 25.4% EBITDA margin that we have achieved. In local currency, the margin was 25.9%. As we have now seen, the U.S. dollar and also the euro are getting stronger versus the Swiss franc. We expect the top line impact from the currency effect to be about CHF 20 million with 2/3 of that impacting the EBITDA.

Let's have a look at the cash flow, starting from the EBITDA of CHF 82.8 million. We paid our taxes, CHF 9.3 million in the first half of '26. The change in receivables is not material. So this is also based on the slightly higher top line, no big impact. And then we see the inventory change, CHF 80.9 million impact on the cash flow. 1/3 of that number is related to raw materials, but also supplies, which is very important because we need that material to progress now also in Building K with the higher demand in production capacity.

2/3 is lying in the work in progress, semi-finished and finished goods. So this is all material products -- product -- products that will be supplied to our customers in the next few months. Also important, the part with the raw material is partially prefinanced by customers through their contribution as prepayments, which you see we have added another CHF 86.2 million from our customers in prepayments mentioned support to our working capital, but also our future CapEx initiatives that we will still have in the next few years.

The change in payables is reflecting mainly 2 points. It's the growing company and on the second, also the higher activity on purchasing materials, but also other costs overall to support the company's growth. The operating cash flow ends up with CHF 104.7 million. What did we do with that money? We spent more than this CHF 166.2 million in capacity increase. CHF 90 million -- a big number of that is going into direct capacity, be it buildings, be it equipment. And this is where we also will spend in the future our main part of our cash.

On the financing side, we paid out CHF 67.5 million as dividend from the last year '25 financial year, and we had drawdown loans from banks of CHF 150.7 million in the period. All of this leads us to a net increase of cash in CHF 20.6 million in the first 6 months of the year.

Looking at some key numbers on the balance sheet. We just talked about the drawdown of the bank loan. So we had CHF 52 million cash and cash equivalents at the end of June, but we also had outstanding borrowings, loans from the banks and also the main shareholder of CHF 208 million, which leads us into CHF 157 million net debt, which is representing a leverage ratio of 0.8x, also reflecting and showing that Bachem still has a financial flexibility in that sense to grow the company. The prepayments, we added CHF 86 million. So the balance by the end of June was CHF 455 million from the customer side, CHF 142 million out of that is declared as a current position, which means this money will flow back to the customers in the next 12 months based on the supply of products. And the balance sheet and the equity ratio, so the equity summed up to CHF 1.5 billion by the end of June, which is representing an equity ratio of 62%.

Now the last slide on the CapEx overview. We spent 45% of our overall sales into capacity. So we invested CHF 148 million in the first 6 months. And we will continue to invest there. It's a main factor for the -- to -- for the growth of the company, for the higher market demand. So we will invest in further capacity increases. 90% of this CHF 148 million was invested in capacity, as mentioned, building and equipment in the first 6 months. The outlook now, '26, we estimate a CapEx of CHF 350 million to CHF 400 million.

It's a little bit a lower number than we anticipated a few months ago. And the main reason there is that the Sisslerfeld now, we started it, Anne mentioned, we announced it last week. But first, earlier this year, we thought that it's going to be a little bit earlier, and that's now why we spend a little bit less. Overall, on the midterm, the overall CapEx is not changing.

And with that, looking forward, what's coming, the outlook back for Anne.

Thank you very much, Alain. So let's start with the outlook by looking a little bit into the market. We are still in a phase of strong growth, both as a company, but also the market. And a lot of that growth is still driven by what is very often nowadays called diabesity. So type 2 diabetes and obesity. And if you look primarily at the U.S., you still see that there is still a very large growth expected in number of patients and also not all patients currently are having access to medications.

So with this growth, both in the U.S. as well as in the Rest of the World, we still see an unprecedented demand for peptides, and that means as a CDMO and CMO, we are still having the responsibility to look into large-scale capacity expansions, but also into advanced manufacturing technology to unlock further capacity. And a lot of this growth is actually also then spilling over into other areas outside of diabetes and obesity. And if we look at the next slide, we see an overview of the peptide pipeline. And a lot of that pipeline, especially the late phase pipeline, the Phase III is actually driven by metabolic diseases.

You can see here, 37% is in metabolic areas, meaning it has overtaken the historically strong oncology area. But we see also still growth in other areas. And you can see here also the peptide pipeline per se is still growing overall. And we see with recent approvals that also other indications and other disease areas are being treated by peptides and the interest in peptides as a modality goes far beyond metabolic diseases. The same is true for oligonucleotides.

So looking at the oligonucleotide pipeline, you can see here, it's a less mature pipeline. It's a less mature modality, but we see a really strong growth in Phase I and Phase II projects. And over the next few years, we expect this then also to reflect in Phase III and approved products. The distribution between different disease areas is much more diverse for oligos. But also here, you can see that metabolic and cardiovascular indications are on the rise. And with that, we expect that also some larger indications and respectively, some larger volumes will drive the oligonucleotide market in the next couple of years.

So what does it mean for us as a CMO and CDMO for the priorities of the remaining year of 2026? We are in a very strong position with respect to orders. We have all orders for the remaining year of 2026 in our books. So the main priority and the main focus is actually on the seamless and high-quality execution of the existing orders of the existing contracts to make sure that our customers are in a position to ensure their safety, their patient supply.

We talked about the successful ramp-up of Building K. So we expect this to continue in the second half of the year. And we are also continuing to work on the construction of the second phase while we continue production of the first phase, and we expect then to see a strong contribution from Building K for the second half of the year. With the announcement of last week, we now also expect to really advance the Sisslerfeld project to accelerate it and to really bring it to life from a also construction point of view. And in parallel to all these activities, we are working on our strategy update, which will then be the ground for Bachem's next chapter, and we are looking forward to presenting that at the Capital Markets Day in November.

With that, we are already at the outlook for the year, the full year 2026. We expect our sales to grow 35% to 40% in local currencies. This is a refined guidance from the guidance of 35% to 45%, which we gave earlier this year. And this new guidance is now actually reflecting that we have much better visibility on our production plan for the rest of the year, and we are very confident that we are achieving this still very, very strong growth of 35% to 40%. For the profitability, we are still expecting our EBITDA margin to be in low 30s in local currency, so unchanged to what we communicated earlier this year.

And with this, I think I hand it back to Barbora to start our Q&A session.

Thank you, Anne, and thank you, Alain. Let's move directly to the Q&A. [Operator Instructions] And let's start with the first question with Daniel Jelovcan.

You hear me?

Yes.

Yes.

Yes.

Very good. So, three questions, when I may. The first one, I was a bit puzzled in your main segments with the development. Of course, I understand the dynamics in Building K ramp-up, but the Commercial API down close to 20%. Why was that? I mean, is the base business not growing? This one is typically growing somewhere mid-single digits. So that's why it was quite below my estimates, to be honest. Maybe I ask one by one.

Yes. So the base business is still growing, but we will see the base business growing primarily in the second half of the year. So we had a very strong growth in our development area in our pipeline, which we're very happy about. But the contribution for the Commercial APIs will be primarily in the second half of the year, and we expected it that way. But we also expect that for the full year, the distribution between Commercial API and CMC Development will be not fundamentally different compared to what we have seen last year. So a much stronger contribution to our Commercial API business in the second half of the year.

Okay. Fair enough. And also related to commercial, when you talked on Slide 18, the 94 approved peptides, do you disclose in how many you're involved? I mean, probably similar to your market share or maybe I'm on the wrong side.

No, we are not disclosing that information. So the 94 is peptides that are approved worldwide. Some of them are chemically manufactured. Some of them are made recombinantly, but we don't disclose which ones and how many of those we are making.

Okay. But on a follow-up on the 94, probably there is -- there are not so many fermented, right? It's probably most are chemical synthesis. Is that the correct assumption?

To be honest, I couldn't answer that question for sure. I'm sure we can look into that with the marketing department, but I cannot, from the top of my head, tell you what is the number of chemically synthesized versus recombinantly manufactured products.

All right. Okay. Yes. And the last one on inflation, raw mats and so on. How is that developing now and going forward? Maybe a question to Alain.

Yes. It's a good question, but we don't see a big impact from there. So the inflation and the costs on raw material, of course, it's fluctuating. It's sometimes higher, sometimes lower, but we don't see a big impact from that side, also not the salary point at the moment from inflation in Switzerland. It's not something material for the company. Also going forward, maybe more the price pressure on top line than the costs on the COGS side.

Yes. Okay. And supply chain-wise, Strait of Hormuz or so coming from China, is that not an issue?

We didn't see a huge impact for us because we were already having other ways around the Strait of Hormuz. So we did not have issues on getting the material that we have asked for to secure production.

And the next question comes from Zain Ebrahim.

Zain Ebrahim, JPMorgan. Two from me, please. My first question is just on the full year guidance and just to understand the reason for the revision more on the sales guidance from 35% to 45% to 35% to 40%. Is that reflecting maybe lower contribution from Building K? And why is that given that you mentioned the first half has developed in line with your expectations? So that's the first question.

And then the second question would just be to understand how -- when you mentioned the Building K ramp-up in the second half contribution to the guide, is that mainly from the first manufacturing lines? Or do the second phase contribute partially to the end of this year as well?

Maybe I'll start with the second question. So yes, the contribution from Building K comes from the first phase, from the first line. We are still finalizing construction for the second phase, and that will then start to contribute next year. And to the first question, yes, the first half went very well, and we also have very strong expectations for the second half of the year. The challenge that you have every year at the beginning of the year is that you need to make a rather accurate prediction on the full year sales.

And at that time, you have a good idea on what are the products, what is the product mix, what runs on which manufacturing line. But we are now in a much better position to know exactly what the production schedule for the second half will look like. So we know the products, what lines they're running and what are the number of changeovers. And based on this much better visibility on our production schedule, on the detailed production schedule, we are now in a much better position to say exactly which of the products that we manufacture this year will actually go out and will be delivered and sold this year and which maybe will then be delivered and sold in the beginning of 2027. So it's really no material change. It's just a much better visibility on the detailed production schedule.

And the next question comes from Tanya Hansalik.

Can you...

Tanya? Okay, we can hear you.

Yes. Okay. Great. Yes, I have maybe 2 or 3. Then the first question is, I don't know if you can answer it, on the Building K on the first part, can you confirm if you've been able to book revenues for these customers already? That would be the first question. And then the second question is, you left the EBITDA guidance unchanged. So I'd like to know what are the important factors to consider here? And how confident are you in the Building K output and yields?

And then the third question was on the pricing discount letter sent by a big GLP player to suppliers. Interesting to understand for the large-scale contracts, are the price and minimum commitments for these 5-year agreements, are these binding? Or are these based on moving forecasts adjusted based on demand?

So maybe I'll start with the first question on Building K. So I think we said earlier this year, and we can confirm this now that the sales out of Building K will contribute only in the second half of the year. So yes, production was already happening in the first half, but there was no sales contribution out of Building K in the first half. That will be then only in the second half.

And maybe I also take the third question and then let Alain comment more on the EBITDA question. So we don't disclose any details on our contracts with respect to what prices are fixed or not fixed. You can generally take into account that prices are usually a question of volume, so very much volume-linked. But other than that, I cannot confirm or comment on any pricing mechanisms on individual contracts.

And maybe before taking the second question, add to this third question, if there's a difference if you have minimum order quantities or the minimum order values and both contracts are valued. So even if the price changes, it's just the quantity differs and not the value of the minimum order in that sense. And on the EBITDA margin, we gave a certain range, which is low 30s, 30% to 35% -- 33% maybe. And if we achieve the top line now this huge growth of around 60% in the second half, the economy of scale, the operational excellence and also keeping the marketing sales, the G&A, the overhead cost stable.

As long as we achieve and we are confident, as Anne mentioned, this top line growth, the EBITDA margin will follow there. We still have ramp-up costs for the next phase of the building. So we are hiring more and more people also now for the second phase. So this will be a constant hiring process and always having some growth costs in our P&L in there. But we are confident to achieve this profitability guidance that we gave you.

And let's take the next question from Fynn Scherzler.

Fynn Scherzler from Deutsche Bank. I have 2 on Sisslerfeld. So essentially, can you tell us anything else on the contract that you won that was not already in the press release? So whether it's a new product, an existing product, a new customer, whether it's multiple products. So any additional color here would be helpful or maybe you could comment on the CapEx phasing of the project. And then related to that, on Sisslerfeld, my understanding is that the land that you have there is quite large.

So my question is, are you essentially happy for now with the large contract that you won? Or should we expect that you are looking for additional contracts in similar magnitude in the near term?

Yes. So we are very happy with the contract that we recently signed with this partner. However, this does not mean that this is the last contract that we expect to see for Sisslerfeld. We are still in discussions with a number of other potential partners. But I think this is a very, very meaningful first step in Sisslerfeld. As you mentioned, we -- the land that we acquired is very large.

So there is much more space for future additions and future buildings, but we are very happy with this very first step that we do in Sisslerfeld. And unfortunately, there's not more that we can disclose on either the partner, the product or other contractual terms as we agreed to keep those confidential with this partner.

And maybe I can answer the question of the phasing of the CapEx. So we are now ramping up. We're also hiring many people for Sisslerfeld as we have signed this contract and the team will grow there. Those are in-house hours that are capitalized. So we see now start of those CapEx and I would say, distribute then within the '27 to 2030, equally the CapEx, maybe a little bit lower at the end. But in the 3 years between, I think it's an equal portion of the CapEx there.

And let's take the next question Sibylle Bischofberger.

So I have also a question about Sisslerfeld. I remember a couple of years ago, you expected to invest CHF 1.2 billion, partly financed by customers, partly financed by you. Is this still the plan? Or did you change the strategy and now you start investing step by step depending on the contract? So you start now with the CHF 500 million. If there are new customer contracts signed, then you will increase the size? And then I have another question, so maybe one by one.

Yes. So the overall investment in the Sisslerfeld site, once it's fully built out, and we are talking a very long time frame here, will probably be way more than CHF 1.2 billion. But this first step, the CHF 500 million really allows us a significant growth and even has room within this building for additional partners.

And ultimately, of course, we always said we grow in line in lockstep with the market. If then this first building indicates that it's not large enough, then of course, we will add further buildings. But again, we will do that together with partners in making sure that we have volume commitments for those buildings. But there's a lot more space for a lot more buildings in Sisslerfeld, but I think it's important that we make this first step happening. And we are very excited that we now can do that.

And then about CapEx in the first half of 2026, how much was it Sisslerfeld and how much was it at Building K? Could you say something about that?

Sisslerfeld was mid-single digit. It was not that much.

And the most part is Building K.

The bigger part -- the biggest part is Building K. So I think it was about 70% was spent in Bubendorf, which is not only Building K. We have also, as Anne mentioned, debottlenecking and other projects on the comp books, but about 70% of that investment have been done in Bubendorf, and then the main part is Building K. And Sisslerfeld, it was not that much. It was the energy tunnel because we said we just go ahead with a bigger CapEx investments until we have signed the contract and a partner supports there also financially and for the future production.

Okay. And the other question is about oligonucleotides. Could you say something about the development?

Yes. Again, here, we are very pleased and very happy with the development in our oligonucleotide pipeline, both in terms of numbers and quality of projects, but also from a contribution. So we see also here that oligonucleotides are proceeding very well from a sales and also profitability point of view. And there, also the main contribution for oligonucleotides we see in the second half of the year. But again, here, we have the orders for the full year already in-house also for oligonucleotides.

And let's take the next question from Charles Pitman-King.

Charles Pitman-King from [ Barclays ]. Two from me. One, mostly, I think, a bit of a clarification. So just in terms of the FY '26 reduction of CapEx spend to CHF 350 million to CHF 400 million, can you just confirm that this relates to the push out of the Sisslerfeld? You mentioned it was due to a delay on Sisslerfeld spend. Is this because it took you longer than expected to find or to sign the contract with the anchor customer? And can you just maybe give us a little bit more information around the discussions you're having? Are decisions from customers being pushed out because of macro or other changes in the market? Any detail there would be helpful.

And then just a second question, following the recent announcement of Samsung Biologics to enter the synthetic peptide market versus [indiscernible] acquisition of PolyPeptide, I'm just wondering how you're thinking about the potential for rising competition within this market given their cash pressures are likely to be resolved, but also if you can give any detail on how you're thinking about high volume versus small volume given that competitor is more of a small volume provider, and you mentioned in the release today an intention to expand in the U.S. with some small volume capacity solutions.

Maybe I'll start with the CapEx, the lower guidance or outlook that we gave now is, yes, mainly it's the lower CapEx now anticipated for Sisslerfeld, but it's also on some of the projects we had contingency included there early this year, which has now not been used. So it's not because we are heavily delayed or we did not pursue CapEx projects. It's really mainly depending on unused contingency and the Sisslerfeld, which now is later. And maybe why did we have expected it earlier this year or it became later than we originally anticipated is that was a big contract and it's also even on the other side, maybe it's a big company.

It takes some time to go all through levels and to negotiate these contracts. I think from a timing-wise, we were still pretty fast even if we cannot say more than that on the timing, but it always takes some time and now we are happy that we signed now and announced that last week, but this is always difficult to look into the future even if it's January to July is only 5 to 6 months, which is like tomorrow, but many things are happening in negotiation. I'm sure everyone is aware that this can happen. And maybe for the other, I hand back to Anne.

Thank you, Alain. Yes. And maybe just to add to what you mentioned, I fully agree. I think given the size of the deal, I think the negotiations were extremely fast and efficient. And the primary deals or deal structure was actually agreed pretty early on. But as you can imagine, with a contract of that size, it takes a little bit of time to get through all formal approval processes within the 2 companies to get them to the final signature stage. On the question on the potential Samsung PolyPeptide acquisition, we always are consistent that we don't comment on individual competitors.

I think what is fair to say is that we see the competitor landscape in our business changing. So we have consolidation happening. We have new entries entering the peptide market, which is not very surprising. And so it keeps us on our toes, right? We are not afraid of competition. Competition is entering the market. Competition in the market is changing or consolidating. We just need to make sure that our offering remains very attractive and competitive.

And Alain commented earlier on our R&D activities. So we are still very much believing that a strong focus on innovation, manufacturing technology, having the best processes and the best equipment is what will ensure that we are successful in the long term.

And let's take the next question from Chris Richardson.

It's Chris Richardson from Jefferies. Maybe just the first one, assuming the H2 business -- sorry, the base business in H2 grows to a similar extent or even a bit higher as it did in H1, the implied contribution from customer A and Building K is roughly CHF 200 million. Can we expect that kind of run rate per half year from customer A and Building K? Or is there some nuance to that? I've got a couple more questions, but maybe I'll ask them individually.

Yes. So I think we need to be a bit careful with conclusions of that nature because keep in mind, we always said the sales will only contribute in the second half. That does not mean that we didn't produce in the first half of the year, right? So you cannot make the assumption that next year, it will just be double that, because we -- a lot of the production actually happened or started in the first half of the year, it just didn't hit the sales or the top line. So I think you need to be a bit careful with making just the conclusion that next year, we will do the same in both half years.

Is it fair to assume maybe -- sorry, just as a follow-up, that it's ramped up in quite a linear fashion so that the average utilization rate is hence 50% from the year going from 0% to 100% through the year?

Yes. Utilization rates of 100% are usually not realistic. So in an ideal plant, we usually target 85% utilization and the ramp-up is very much dependent on the project. So there are no general utilization ramp-up rates, right? It depends on what the customer expects. It depends on the process and what the rate and scale up is.

Super. And then maybe just a question on how the other lines in Building K are progressing in terms of the future, next couple of years' worth of expansion, and then maybe how customer B and that planning is progressing and whether validation is planned for 2H '26 or early next year?

Yes. So for this year, we plan that the construction activities will be completed and then ramp-up in the Phase 2 will happen next year. And I think we always said it will then take 2 to 3 years to reach full utilization.

Super. And maybe just finally, appreciate you can't comment on the global pipeline and your exposure to it. But can you maybe clarify how many Phase III projects and how that number has changed since year-end when I believe you had 16?

Yes, we don't disclose pipeline results at the half year. So the only number that I have for you is the same that you just mentioned, which is what we published for the full year 2025.

Wonderful. Actually, sorry, maybe I'll just ask a quick follow-up on Sisslerfeld, sorry. Given the CapEx change was due to a delay rather than any change of scope of Sisslerfeld from a larger project, as some have already mentioned on the call, is it fair to assume that maybe a CHF 500 million Sisslerfeld expansion was the plan as of full year?

Yes, that is correct. It was about the CHF 500 million.

And Tanya Hansalik, she has a follow-up question.

Yes. Was -- one was on the Sisslerfeld as well. Could I ask about the CapEx guide until the end of the decade? I think you previously had said around CHF 400 million until 2030. And this was with CHF 800 million to CHF 1 billion investment in Sisslerfeld. So I appreciate now we've got the first part, and hopefully, there'll be more. But yes, what does this mean in terms of the midterm CapEx guidance?

Yes. So maybe I need to disappoint you a little bit. We will give you an update at the Capital Markets Day at the end of November. Right now, I would not change the forecast or the outlook we gave earlier this year or even last year because Sisslerfeld was always a part in the outlook. But you will see or hear more on the Capital Markets Day for another 5 years looking into the future.

And another follow-up question is coming from Daniel Jelovcan.

Barbora?

Yes.

Yes.

Yes. Just on the prepayments, I'm not sure if you have ever disclosed that, but I guess it's only probably 1 or 2 customers with that methodology. And do you disclose the, let's say, until the end of the decade, the percentage of CapEx with prepayments? I mean other industry players talk about 25% to 30% of CapEx is financed with prepayments. Is that ballpark the right number? Or maybe you have disclosed it somewhere in the past?

No, we have never disclosed it. The point or why don't we -- I mean, there's 2 factors. One is, I mentioned, CapEx contribution and on the other hand, is working capital contribution. And there is more than just 1 or 2 or 3 customers now because also prepayments in the biotech industry or with smaller customers, it's just a given in the industry that you always ask for a little bit upfront money to also to secure your costs in the future. So that's totally normal.

When we talk about the big numbers, as mentioned, the working capital contribution, which comes in once a year, and we pay our bills for raw material and utilities, that's a percentage of the order confirmation that the customer gives us. So we calculate the working capital contribution as a prepayment. This is like a rolling 12 months. And then on the CapEx, we don't say how much or how many in percentage of the total CapEx because we don't want to reflect this to the outside.

If other people do, that's fine. We just see not a benefit of announcing such numbers publicly. But maybe the numbers you have is from others are not totally wrong as a median number.

Okay. Because it's quite relevant. I mean it's your operating cash flow will not cover the CapEx over the next few years. So it's -- and I understand...

We expect free cash flow positive in '29.

Okay. And you're still looking for nondilutive...

Yes. So we have signed this CHF 500 million credit facility that we announced in April, and we have other options to finance our growth. Very confident there to get that no sleepless nights because of that equity-linked increase or equity-linked instruments are not planned at the moment.

And I see a last follow-up question from Zain Ebrahim.

My follow-up was just on orals, in terms of oral peptides that you talked about them as a key growth driver overall. But can you talk a little bit more about your exposure, like whether you're exposed to any of the oral GLP-1s, not necessarily commercially, but even just like clinically, how we should think about that?

And I think you mentioned oligonucleotides is more second half weighted. Just wanted to understand what's driving that being more second half weighted. Is that just customer need? Or is that partially Building K related as well? Because my assumption is the Building K deferral in H2 is mostly peptide related. So I just wanted to clarify that.

Yes, that is correct. The oligonucleotide sales is not related in any way to Building K. It's just basically phasing of customer demand or orders. And on the oral question, there is no such thing as an oral peptide, right? There -- for us, we are manufacturing peptides.

And some of the peptides in our pipeline have -- are intended for a dual mechanism. So some of them have plans for both injectable and oral applications. But for us, we basically deliver a peptide to a customer. And then the customer decides if and to what extent this peptide that we delivered goes into an injectable or into an oral application. But in the end, for us, the peptide that we manufacture is exactly the same peptide.

Understood. That makes sense. And another follow-up and final follow-up was just on -- I think inventories increased quite significantly in H1 2026. Can you just comment on -- I think, about just over CHF 500 million. How much of that is finished goods versus raw materials and work in progress?

I don't know, to be honest, on the top of my head. It's -- I saw the difference where it increased. But to be honest, we can send you that if it's not in the half year report. I think about 20% is in raw materials and most of the rest is semi -- work in progress, semi and finished, but we can send you the table.

Okay. And I don't see any other questions. So before we close this session, let me briefly highlight our next event, which is the Capital Markets Day in -- on November 26. And please also refer to the legal disclaimer on the screen. And with that, I would like to thank everyone for your interest and see you at the CMD in November. Have a nice day. Thank you.

Thank you very much, everyone.

Thank you very much.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Okay. Next question, Tanya.

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

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

Okay. Estelle Betrisey from Berenberg.

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

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

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

Okay. [ Dani? ].

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

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

But there's no anchor customer side right now.

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

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

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

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

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

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

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

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

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

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

Good. Any other question?

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

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

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

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

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

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

Okay. [ Cibil ], maybe.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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