Cicor Technologies Stock

Ladies and gentlemen, welcome to the Cicor Half Year Report 2026 Conference Call and Live Webcast. I am Valentina, the Chorus Call operator.

[Operator Instructions]

The conference is being recorded. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Alexander Hagemann, CEO. Please go ahead.

Thank you very much, and good morning, ladies and gentlemen. Thank you for your interest in Cicor for your continued interest.

So most of you have done this with us before, and I'm very happy that Peter Neumann, our CFO, and I can present results to you. We will go to the next slide. This is, yes. So first, I will give, as usual, some introduction and talk about some of the contents of the first half, whereas Peter will focus on the financial aspects.

Now most of you really do know Cicor very well. Therefore, I spare you off a large introduction. And I've summarized in one slide what is our ambition. Our ambition is to be the European leader in high mix, low-volume electronic manufacturing services for advanced markets, which is aerospace, defense, medical and industrial. And what you see on this slide is just where we stand right now.

You see over the past 5 years, you see a 24% annual growth from 2020 to 2025. That was full year, including 6% organic growth, 19% M&A growth. Very important for us is that the EBITDA has grown faster than sales, 28% in average with a margin increase from 9% to 10.5% in adjusted EBITDA margin. Today, Cicor is the only true pan-European provider of electronic manufacturing services. And we have access -- we can address 70% of the European market, extremely important for us as this provides us the ability to scale the business. And we have grown last year 40% through the acquisitions.

This is purely pro forma. So this is not the reported sales number, revenue number, this is pro forma, meaning that we have closed 2024 with CHF 480 million of sales, and we have acquired businesses that in the last 12 months before closing of the transaction done CHF 210 million in revenue. So this 40% growth already indicates that we have behind us a period of transition and a transformational period. And this is the theme that we are talking about for months now that the last 12 months from July '25 to June '26 indeed were a transformational period for Cicor.

In the result, we are now #2 in Europe in aerospace and defense markets, talking about last year, #3 in health care technology. So we are making progress in our ambition to become the European market leader. And in the meantime, we are serving 11 countries with manufacturing footprint, most importantly, 7 countries in EMEA.

Go to the next slide, where we can have a snapshot on the first half where it is most important, and I think a question that we received a lot over the past months, obviously, what's about organic growth?

We have commented in Q1 on the effects that have dragged down our revenue, mostly issues in the supply chain. And if I cannot say that these issues are overcome, we have been able to stabilize the situation and to return to organic growth in the second quarter. The almost 20% revenue growth, 19%, yes, it was for the complete first half on the back of acquisitions with a flat organic development overall in the first half.

But whereas Q1 was negative in organic, we already saw above 5% organic growth in Q2. And that's what we have commented over the past few months. We see that increasing momentum from the order book that is building. And that is a very satisfying development that we see, almost 40% order intake growth with the strongest contribution from aerospace and defense. That is very significant. And it is not a single shot.

This is a high book-to-bill rate that is pretty constant in the first half and where the second quarter was the fifth consecutive quarter now above 1. So it is not a short-term element. It is not something that is driven by 1 or 2 or 3 programs only. This is a very broad acceleration of the business that you see in the book-to-bill rate.

Now on the EBITDA margin, we will talk about that in detail, it's clearly affected by our integration and productivity measures where, however, and I'll show you a slide in a minute, the integration program is really on track and largely completed. So if we go on the next slide, we see how our revenue is split. And here, we have a bit more detail that we are now providing with regards to our regions.

But let's start on the left with our revenue by industry. The big growth engine was indeed aerospace and defense, with the share growing from 22% to 28% in our business. Overall, that was growing 19%. So an enormous growth of the aerospace and defense business, and that was both through acquisition, but also growing very well organically.

The industrial and health care technology markets were also in absolute terms growing but losing in share. Obviously, they were growing significantly slower than aerospace and defense. And organic growth was still a little negative in these 2 as we are coming in some countries out of an enormously poor economy. And that leads us to the right, the revenue by region, where you see that in the U.K., now U.K. is 23% of sales and a much larger business after 24% last year, continues to be the most important country for us, dominated by the aerospace and defense business that we are doing in the U.K. And what you see here is that the U.K. sales development is overall organic.

Switzerland. Switzerland, pretty stable, a pretty good situation. Cicor continues to be firmly rooted in the Swiss market. In Switzerland, you hear a lot of reports from manufacturers out of semiconductor, out of building technology and other markets, and Cicor continues to support the backbone of Swiss industry with electronics manufacturing services as the Swiss leader in that market.

So a stable and good position, reflecting the totality of Swiss industry, which is recovering and getting much stronger. France, the share has increased. That is purely due to the full integration of Eolane, what used to be Eolane France, now Cicor France, where we integrated the business from the end of April last year, but we are also seeing growth in that country.

Germany, Germany is the weak spot in Cicor. -- you see a decline in share -- sales share from 20% to 14%. Also in absolute terms, you see a significant reduction in sales, which is partially borne by our German entities and partially by exports, for example, from Asia into Germany, but also from Switzerland into Germany.

We have taken the appropriate measures so that the profit margins are in line with our expectations, but as you can see on a significantly lower basis. But let me also say Germany is seeing some signs of recovery, and we see over the past few months, a significantly increasing activity from customers in looking for new programs.

Rest of EMEA, as Cicor, we are in quite a number of countries. We are very broad-based. We are in Spain, but we also have significant sales to Italy, to Sweden, to Romania, for example. Asia Pacific, good situation, has grown a little bit organically has grown really on the back mostly of our strong medical business. And the same holds true for the Americas.

Going to the next slide. I was commenting on Aerospace and Defense. And you see that growth. Whereas last year, the first half was held back by the delay of certain major programs. These programs have kicked in, especially in the U.K. and you see more than 50%, almost 60% growth from '25 to '26. Overall, over the past years, 46% annualized growth -- 45%, sorry, 45% annualized growth, and this is on the back both of acquisitions and with a strong platform that we have created, we are generating the organic growth.

Share of revenue has increased to an all-time high. Now it's 28% in Cicor Group, and this is in line with our strategy where we want to see aerospace and defense becoming something like 1/3 of overall business.

Going to the next slide, please, where I want to comment a bit more on what we are doing with the businesses that we acquired in 2025. Peter will comment on the numbers and what we have done and how that affects us. But what you can see is that we have acquired not only 40% top line on a pro forma basis, but also 12 sites. So this is not only 40% more top line, it's also 40% more sites. And here, it is extremely important for us that we have implemented, mostly implemented in a very fast manner, a very disciplined execution of the integration measures.

And here, I talk about the operational integration that drives the cost synergies and creates the platform for future organic growth. In Germany, for example, we have established a cluster between our Thuringia sites, which includes Profectus. We have consolidated the management organization. If you wish, we now managed Thuringia as one virtual factory, creating the synergies that we have, but leaving the locations in place.

In Eolane, we have focused on operational excellence, new customer and program wins. And I'm very happy that we could announce new program wins such as the win for the French railway sector, a major 5-year program, which is contributing there.

We are now doing and we have completed second round efficiency measures. So within the 12 months after acquiring the businesses where most of the restructuring has taken place, now we have shaped and honed the efficiency and performance of the business and done additional measures.

And we have established Morocco as our main hub in North Africa.

So we operate in Romania, a best-in-class, highly automated factory that produce it at competitive cost. And as a proper low-cost alternative, we offer North Africa. That site is now growing very fast and where we integrate not only Eolane, but we integrate also the Moroccan site from Valtronic, which is under the same roof as one of our existing sites. That has allowed us to divest of the Tunisia site because that site was subscale and significantly smaller than what we do in Morocco. And that transaction has been completed a few weeks ago as announced.

Now what we did with Mercury Systems was a very attractive scenario where we have carved out the manufacturing operation in Switzerland. Typically, this comes at a comparably low purchase price. On the other hand, a carve-out requests strong measures to integrate the operations into our operation network.

We have made enormous progress despite some difficulties in transferring manufacturing from Switzerland to mostly our Newport U.K. site and some were local Swiss manufacturers required to our Bronschhofen site. So that puts us in the position that as planned, we can close the Geneva site before the end of 2026. However, and I mentioned the complexities of a carve-out and of transferring a site, and that requests a lot of double effort.

So we were hiring a number of employees in Newport, especially and had to keep the employees in Switzerland. So a lot of double expense, which is flowing into our EBITDA. But again, after some difficult start due to the technical complexities, we are now very well on track. And I can report to you having been on site a few weeks ago that the progress is absolutely amazing.

But MADES, we are having a fantastic business. We acquired a business that stand-alone is very profitable, extremely well connected to the Spanish defense industry, growing very fast, and that actually did require capacity expansion. Capacity expansion, we have done that already. That is a modest investment, meaning one additional assembly line that we have installed in Malaga to cope with the organic growth. That is very much coming from new customer wins. And Kongsberg, which we announced earlier in the year is one of those customers and additional -- a lot of cross-selling with our other large aerospace defense customers in Europe.

And in Valtronic, what we wanted from Valtronic, we got. We wanted the capacity, the resources, both in Morocco, which I commented already, and the resources and local manufacturing site in the U.S. So we got that, and we have forcefully adapted the cost structures to the present business, which the former owner did not do. And now we have a very strong base to grow our business, both in Morocco, as I mentioned earlier, but also in the U.S.

Going to the next slide, where I would very briefly want to talk about the divisions, EMS division, absolutely returning to organic growth in Q2. Good growth of the top line, 20%, of course, mostly driven by acquisitions. And the EBITDA margin also below our targets for the reasons already mentioned and widely explained. This is really due to the loss of efficiency during integration of the businesses. Today, EMS is 95% of what we are doing.

And on the next slide, let me briefly talk about the AS division. The AS division has returned to organic growth. So that is something which is already a positive despite the printed circuit board business, mostly medical being -- continued to be affected by a soft market environment as sales are shifting into H2.

The hybrid substrate business, on the other hand, is an extremely high demand where we are talking mostly about aerospace and defense applications. Now on the downside, and that is a lot of work that we put into that topic was the profitability being impacted by issues related to the ramp-up of capacity in Wangs.

We have faced, at the same time, not only the transfer of production from Germany after closing the factory last year. And on top of that, the exponentially growing demand from our aerospace and defense customers. That has resulted in manufacturing issues, which have weighed on profitability significantly in the first few months, but I can report that the actions that we have undertaken have been successful. And over the past couple of months, we have seen significantly improved results.

With that, I hand over to Peter, who will talk about the financial side.

Thanks a lot, Alexander. Good morning, ladies and gentlemen. Let me now lead you through some of the financial highlights. As usual, please let me start with the long-term view. Since the start of our growth strategy in 2021, we have delivered significant growth and profitability improvements.

2025 and 2026 profitability is diluted by the 2025 acquisitions and ongoing integration. Remember, these transactions came with very low purchase considerations and lower margins. As Alexander mentioned, our integration efficiency program is largely implemented, and it will deliver around CHF 10 million annualized savings going forward.

Let's dive deeper into the key figures of the first half 2026. Book-to-bill is strong at 1.2 for half year and has been above 1 since 5 quarters. Cicor achieved a new high in terms of absolute revenue with reported growth of 19%, reaching CHF 334 million of revenue. Core driver was M&A in the first half with plus 22.8%, offset by negative FX of minus 3.8%. On organic growth, Cicor is also building up momentum in terms of organic growth with plus 5.3% in Q2 after a decline of 6% in Q1.

EBITDA margin is impacted by the integration program. The margin dilution of the newly acquired companies will be decreasing moving forward. Free cash flow has been negative in the first half 2026 after 2 extremely strong years. Key reason is net working capital that increased ahead of -- with the growth accelerating and supply chain remaining fragile.

Important, this is the bridge between reported and adjusted EBITDA numbers. As you can see, all of the 2026 adjustments are linked to the announced integration efficiency program. This includes the divestiture of the Tunisian facility and the consolidation of the 2 manufacturing sites in Berrechid, Morocco. It also includes the final closure of the Ulm site in Germany as well as the move of the toolmaking for plastic injection molding from Singapore to Indonesia.

We have also used the opportunity to streamline hierarchical structures and taken target workforce reductions. So now looking more at the progression versus last year on an adjusted and reported basis. The light blue is adjusted reference in 2025. The white is adjusted in 2026, providing a comparable base. Dark blue are, for perspective the reported numbers in 2026. Order intake up close to 40% revenue growth of 19% with organic momentum picking up in Q2.

EBITDA reduced in absolutely mainly due to the AS results. EBITDA margin diluted as we were integrating the 2025 transaction and executed various relocation capacity ramp-up programs. EBIT reduced to the mentioned lower EBITDA profitability, while D&A was stable as a percentage. Net profit reduced lower versus EBIT as we had less onetime FX hurts while maintaining a stable tax rate. And free cash flow, as mentioned, negative after the last 2 very strong years as organic momentum has been picking up and supply chain situation is fragile.

Some perspective on the divisions as well. I mean, let's start with EMS. EMS is now 95% of the group revenue. So really the vast majority of our business. EBITDA margin diluted by the 2025 acquisitions, integration costs plus softness in the German market. The integration efficiency program plus the ramping up of specific revenue programs or customer programs in A&D and Medical will drive the EMS margin improvements moving forward.

On AS, it's only 5% of our group revenue. We have 2 technologies with different trends. Thin-film really benefited from increased demand, but has invested into capacity ramp-up in our site in Wang. The PCB business was impacted by shifts in customer demand. This has led overall to an absolute EBITDA reduction of CHF 1 million and an EBITDA margin erosion.

Let's now look on a group level at our adjusted income statement. You can see that material expenses remained broadly unchanged, but the EBITDA margin dilution effect is coming from the explained effects in operating expenses. And if you go into the nonadjusted income statement, you see it's really around the people cost.

Depreciation, amortization rate levels remained stable. And you see at the bottom, we had again a onetime FX hurt of CHF 1 million as the Swiss franc was strengthening, but the effect is lower versus last year where we had CHF 2.5 million. Tax rate, stable and relatively unchanged.

This chart shows a more detailed revenue bridge. You can see the major impact of CHF 64 million of the new acquired businesses and the number of months impacted for each transaction. Just to illustrate, for example, we closed the Mercury transaction beginning June 2025.

So the first 12 months of revenue count into inorganic. Then June 2026 starts to then after the 13th month, then starts to count into organic. It shows that moving forward, only remaining months of Valtronic and MADES will deliver M&A growth in the second half, so the percentage impact of the inorganic will go down.

Another point to mention is the negative FX impact of Swiss franc at close to CHF 11 million as the Swiss franc, especially at the beginning of 2025, strengthened significantly versus GBP, EUR and U.S. dollar. So that is an average 3.8% negative for the first half.

Same bridge for EBITDA. There you also see not only the bridge from adjusted last year to adjusted this year, but also reported. Acquisitions contributed an absolute CHF 1.6 million EBITDA.

FX had a negative effect of CHF 1.2 million and the base organic negative of CHF 1.5 million. The CHF 3.3 million adjustment on EBITDA all linked to the onetime effects of the integration efficiency program. On the consolidated balance sheet, first, the equity ratio improved to 29.3% due to delivered net profit as well as a more efficient treasury operations. You see later on that we have used excess cash to reduce our financial liabilities.

Financial leverage is at 1.3. So we remain at a very low leverage and have significant headroom to continue further value-accretive acquisitions. Cash flow statement. Sorry, you jumped one chart. Yes, cash flow statement. Let's now look at free cash flow, very important measure for us. I want to highlight especially the negative impact of working capital. You see here the minus CHF 22.1 million. I will explain on the specific more, and that has been the driver, obviously, for the negative free cash flow of CHF 11.5 million. One other point, we have used at the bottom, you see this CHF 29.7 million, so around CHF 30 million cash to reduce our financial liabilities.

Clearly, on the net working capital hurt, our priority in the second half is to convert the working capital buildup into cash as the expected sales ramp-up materialize and to deliver a clear improvement in free cash flow conversion. Now I mentioned operating net working capital. Here, you see the overall progress. You can see that over the last years, the operational excellence program has brought down net working capital as a percentage of revenue significantly.

Now at year-end 2025, we reached a new low with 22.3%. So the current levels are back with 24.3% are up versus the year-end 2025 results. And this is exactly driving the net working capital hurt. If you look into the details of the alternative performance measures, you will see that this is driven by increases in inventory and trade receivables.

But -- and this is obviously driven by the accelerating business momentum, and this is only partially offset by increases in trade payables. Return on invested capital remains for us a key measure as it nicely brings our strategy together. You can see that there is a large gap between adjusted and reported ROIC. Obviously, the reported ROIC is due to the TT transaction write-off end of last year and the integration program with CHF 3.3 million beginning EBITDA beginning of this year, significantly suppressed short term.

The adjusted ROIC is down mainly to the reduction in EBIT, while invested capital, including the new acquired companies has increased proportionately to the business size. The integration program and returning to historical EBITDA margin levels will drive ROIC and ROIC recovery.

Key figures per share, no major changes. You will see that our number of outstanding shares remained stable at 4.4 million. That is the right number to use if you look at earnings per share measures. And obviously, the vast majority of the mandatory convertible bond is by now converted into the optional conversion period.

Let's now dive into net profit and earnings per share. For 2026, we are at half year at similar levels at earnings per share with CHF 2.76 per share versus CHF 2.95 last year. As per our EBITDA guidance, we expect a stronger EBITDA in the second half compared to 2025, and that is obviously impacting then the total fiscal year earnings per share.

Now one important chart here is I really want to provide some more perspective on the fiscal year guidance and the sequential step-up in terms of revenue and EBITDA from Half 1 '26 to Half 2 '26. On the left, you see the reported numbers, as explained over the course of this presentation. On the right, you see what mathematically to achieve our fiscal year guidance you will require in the second half. you see a significant step-up.

The key drivers, let me start first, are obviously the 2025 acquisitions that are on the revenue side, really improving sequentially. A large portion of this is driven by A&D program. On top, we will see the ongoing savings of our integration program that you see then obviously, as the revenue goes up plus the integration program, the 2025 acquisitions are delivering significantly sequential EBITDA improvements.

The second one is, and we mentioned this always in our guidance, we are phased towards second half in terms of the programs and the revenue ramping up. We have a very clear line of sight on A&D and Medical programs where they're ramping up in the second half. This is really the second biggest building block because it obviously converts a significant -- to significant adjusted EBITDA.

Two smaller impacts, but are worthwhile to mention is we have largely completed all our transfers and capacity ramp-up programs. So we see the negative effect that we had in the first half, obviously disappearing and going down and obviously improving into a sequential improvement. And obviously, some of the supply chain lead time -- long lead times that has led to an impact in the first half are coming then in the second half. So really, overall, we have clear line of sight on the step-up and hence, we have reconfirmed our guidance.

With this, I hand over to Alexander for some more final business perspective on the outlook. Alexander, you're muted?

Yes. Thank you. Thank you very much, Peter. Very, very helpful. And what you can see everybody is really the amount of transformation that has taken place in Cicor over the 12 months. I'm extremely pleased how my team has performed. It shows the strength of our decentral organization because the size of the program and the number of actions could not have been controlled by one headquarter. It is the strength of our teams around the world, but especially in France, in the U.K., in Germany, in Switzerland that have been driving all these changes.

Now as Peter has shown in his last slide, it is all about converting the scale that we now have into earnings because our ambition is not only to be the European leader of now, we are very much complete with everything we wanted to do. It is more than 80% completion that we have. Very important, again, the divestiture of the Tunisia site, which, as we communicated earlier, has led to a lower 6-digit loss. However, avoided a significant restructuring charge while we were not only preserving the jobs for the employees, which have now found a new home, but also allowing us to do that without any restructuring.

Now looking forward, Peter has showed it all, and it is a return to positive organic growth in Q2. It is something that we expect to continue. Peter also said it, we have a clear line of sight of pretty much all the orders are in the books for the second half. And that allows us to look at sequential growth, so second half over first half between 10% and 25%. That is a very wide margin from 10% to 25% growth. And we also see, as you were seeing in one of the earlier charts from Peter, that this will be mostly organic.

Now why is this margin so wide? It is because the supply chains for critical components, especially in the aerospace and defense market continues to be very tense. We have other and general supply chain in circuit boards that have to be manufactured in Europe in an environment where capacities are constrained.

So a wide gap, and it is all about execution and the ability of our supply chain teams to secure the material required. And that leads to the expected revenue, CHF 700 million to CHF 750 million and adjusted EBITDA of CHF 70 million to CHF 80 million. We can tell you today that we feel comfortable in confirming that guidance for the full year. Of course, it assumes now talking about stable geopolitical situation is maybe not the right word, but assuming [indiscernible] geopolitical situation that is not further deteriorating over what we see today. And of course, we have always the overall economic situation and the [ ForEx special ] Swiss franc as a disclaimer here.

So with that, thank you very much. Thanks for your interest, and let's open...

[Operator Instructions] The first question comes from Chiara Di Giammaria from Berenberg.

Can you maybe elaborate more on the shift in the AS demand to H2? So why is this the case? And does this mean that you see an improvement in Healthcare for H2? And then also on the A&D business, you mentioned double-digit organic growth for H1. So the question is, what changed compared to Q1 here, so considering that the supply chain issues persist?

Thank you for your questions. The PCB business is very much linked to the hearing aid industry, where about half of our business is going into hearing aids. The hearing aid industry is depending on 5 major players in the world that are having almost the entirety of the business. And here, individual customers have started slow into the year as they have been slow in the second half of last year, have been started slow into the year, but have announced to us an acceleration of business. So that is what we see, and that is why we are stating we have this shift into second half.

In Aerospace and Defense, we had very specific issues with certain customized components where sub-suppliers of us were not able to deliver the quantity in time that we needed. At the same time, I would have to say it was the quarter -- the first quarter when the PCB manufacturers or the manufacturer of the [ bare ] printed circuit boards were realizing capacity constraints and they're not delivering on time. So we really saw that lead times for printed circuit boards that had always been in the range of something like 8 weeks have turned to something which is more like 20 weeks. So these are the 2 main effects that we saw.

The next question comes from Maissa Keskes from ODDO.

So could you please provide more color on the nature of the supply chain constraints? Are the bottlenecks mainly related to PCB shortage memory component as highlighted by your peers or you are facing constraints in other areas?

Yes. These are indeed the areas that we have. It is -- this is on memory chips, but we are not a very memory intense business. Our products have much less memory than, for example, service. So this is an effect that we have.

Now the -- in Europe, it is where printed circuit boards need to be manufactured locally, mostly in the country of where the product is utilized because the product IP is visible on these printed circuit boards. And after decades of the industry moving to Asia, each country only has a few PCB manufacturers left who can do this. So that is the one very big issue.

And talking about more general, the printed circuit boards for medical and industrial, the AI servers are using incredibly complex printed circuit boards, which are using enormous manufacturing capacity. So the global -- even the global printed circuit board industry is in a situation of shortage and delays. And this is for these 2 different regions. So reasons, European industry impacted by the defense demand and the Asian one by the demand from AI.

Okay. And would it be fair to assume that the low end of your full year guidance is already protected from the current supply chain constraints, while achieving, let's say, the half depends on the improvement in the component availability? Or do the ongoing supply chain poses a risk across the entire guidance?

Now this is what we are -- so the way we are communicating is that we are confident in achieving our guidance where, yes, the delta between the low end and the higher end is mostly due to execution risks, which are on the supply chain. If we are communicating that the whole guidance is contingent on also the supply chain situation, this implies that if we experience a collapsing of certain supply chains. For example, companies like OpenAI, NVIDIA buying up all the capacity in the world for PCB and nothing left for anybody else, that is a less likely scenario, but that is the disclaimer that we are putting in that we have a certain view on supply chain, that at the low end of the guidance, it will not be very good. But if it will become terrible and much worse than it is today, then obviously, there is a risk.

[Operator Instructions] The next question comes from Marti Queral from UBS.

The first one would be on the nondefense segment, so medical and industrial. I mean, I know that you mentioned that organic growth was still negative in H1 for both segments. Could you give us a feeling here of how much was it? Was it low single digit, mid-single digit?

Yes. Thank you very much for your question, Marti. First of all, we have seen and we mentioned that double-digit organic growth in the Aerospace and Defense segment. However, Aerospace and Defense is still less than 30%, so 28% in H1. So the reduction of the other segments was significantly lower. We have seen mostly a reduction of following customer demand to reduce prices to a level that we don't like because consumer business for us is opportunistic only. So we have some losses there, which is nonstrategic business.

In the Industrial and Medical, we are in an almost equal situation. So if you are talking about negative organic growth, we can say this is a low single-digit number only in the first half. So that is a clear sign that the business is preparing to come back. We see, as I mentioned earlier, we see increased activity from customers in these areas now, and I should say, even in Germany.

Okay. That's helpful. And then my second question would be on the free cash flow. I mean I know that H1 was impacted by the net working capital build, especially in inventories. But in H2, I think you expect also to grow.

So my question is, do you expect also net working capital to be a drag for the free cash flow in H2? Or how do you see here?

Maybe I take the question. Marti, thanks a lot for the question. We don't give a clear guidance on free cash flow for the year, but we say that on a sustainable basis, the free cash flow to EBITDA conversion is 50%. And I think what we also see is, obviously, as growth momentum is building up, well, let's put it this way, the negative free cash flow that we saw in the first half, the AR inventory will translate into free cash flow into the second half. But then it depends on the continued growth momentum also going into 2027, what the final result will be for the year. So obviously, a very strong growth momentum going into 2027 is also a nice thing from the business standpoint, but it has free cash flow implications.

But we are not guiding specifically on the quarter on the half year on the free cash flow delivery because, again, it would also imply that we're giving some level of guidance on the growth momentum for next year that we do in due course, obviously.

Okay. And then maybe just a follow-up here on the free cash flow. Like the increase in inventories, I would expect that this is maybe also related to the fact that you are probably prebuying some components because there are some shortages. So you want to make sure that you have that these components in advance. Is this a fair statement? Or is it also your customers, the ones that are taking the hit also in their balance sheet?

Look, you would see exactly -- if you see on our alternative performance measures, you see obviously the significant step-up in inventories. You see that the prepayments from customers are pretty stable versus end of last year or slightly going down. Effectively, you're right, the higher inventory levels are driven by -- to one extent, we try to protect, obviously, components ahead of the growth. And so it's driven by the supply chain, but also by the growth that we expect for the second half. So these are the 2 drivers for the higher inventory.

Accounts receivables, the increase is obviously driven by the higher and organic growth and the higher revenue we had in the first half and especially in Q2, but then obviously, we are collecting as we are going into Q3. And trade payables is relatively usually, it's increase as we have seen in the previous is only partially offsetting the increases in inventory and trade receivables. That's how you should think about it. And you see that, look, effectively versus end of last year, we had 22.3%. We are now at 24.3%. So with 200 basis points hurt or 2% increase, that is effectively the hurt that we're seeing in our free cash flow.

Okay. So basically, prepayments are roughly matching decreasing inventories?

No. That's not what I said. I said if you look at the numbers, inventory went from CHF 184 million end of last year to CHF 201.5 million in end of June and prepayments from customers for inventory went from CHF 46.9 million to CHF 43 million. So it is not the increase in inventory is not offset by prepayments from customers.

The effective, if you take inventory and prepayments together, it's around a CHF 20 million impact that you're seeing.

The next question comes from Alexander Zienkowicz from mwb Research.

Obviously, the questions about organic growth and your supply chain constraints have been asked. So thinking about M&A, how is your M&A firepower? Is it still the communicated CHF 150 million? Or has that changed by now?

I can answer this. We have -- I mean, we are at leverage from 1.3. We have obviously available funding. And obviously, we have shown with the TT transaction that we have also funding and available funding for a larger transaction. So in my mind, I mean, if you look at the current leverage and what we have guided that we want to remain below 2.75, you see that we have significant headroom in terms of financing. With existing financing facility, we have obviously up to CHF 100 million. That's what we have quoted.

Okay. One follow-up maybe. So you have the capability to perform a larger acquisition. But is this your target? Or are you still looking for bolt-on opportunities?

We are still looking for bolt-on acquisitions. That's our target. And in that sense, the proposed acquisition of TT was a unique situation. And the pipeline that we have is full of bolt-on acquisitions in a scale as we have performed them over the past years, which is roughly targets between CHF 30 million and CHF 150 million in scale. It's not purchase price, that is revenue to clarify.

The next question comes from Bernd Laux from Zürcher Kantonalbank.

I'd like to get to the integration and cost reduction program and I have 2 questions related to that. First, when you communicated the program in the first place, you indicated that the required one-off expenses would be a mid-single-digit million amount and you recognized CHF 3.3 million in the first half of the year. Should we anticipate roughly half as much for the second half of the year?

And the second part of the question is that you mentioned that the benefits out of the cost alignment and the streamlining will already be fully effective from the second half of 2026 onwards. So does it mean half of the CHF 10 million targeted savings will be visible in the second half profitability?

I can maybe comment on the one-timers. Obviously, a single digit -- mid-single digit means somewhere between CHF 4 million and CHF 6 million of onetime hurt. We have recognized CHF 3.3 million, which shows that we are continuing to implement some measures in the second half. But as you said, as we quoted that we are largely completed, it is probably fair that we are, if you look at the CHF 4 million to CHF 6 million, rather in the lower to the midpoint of this range. That is a fair assumption because the vast majority is communicated also to the impacted organizations and largely completed. That's maybe on the onetime element.

And then on the savings, yes, we are seeing that we are implementing and we have implemented the vast majority. So we start to see really the growing levels of savings as we enter into the second half.

The next question comes from Charlie Fehrenbach from awp.

You said earlier this year, you want to focus on the integration of the many acquisitions you had in the recent years. Now you announced to look forward for further acquisitions in the second half. Can I read this as a sign for -- of confidence?

Absolutely, absolutely. So I said that and I tried to hint to that earlier that my teams have done an amazing job in not only identifying, defining these actions that we're doing, but also executing on these actions in a very timely manner. That includes, for example, the divestiture of Tunisia, which I can say almost happened in record time.

So now it is important. It is important because we have limited management resources, even if I can rely on the global decentralized organization with an enormous amount of capable managers. But these integration measures, they take resources. They take time of everybody. And now as we state that most of the actions are completed, the same managers are supporting Peter and me in doing due diligence on new targets and integrating these new targets.

And therefore, yes, our global organization is getting its hands free for M&A activity. So very important. We have a limited organization like everybody has, and we should not overextend ourselves. And therefore, it was my priority to get these integration actions done extremely fast. And I think you can only see that as a sign of confidence, absolutely.

The next question comes from Martine Kverne from Nordea.

Just having one. The [ Cicor France land ], you said expected to reach close to group margin targets towards the end of 2026. And I'm just wondering what like the main remaining steps is to get there? And how you view like the capacity now that given you have gotten some new orders filling up in the site.

Thank you, Martine. It's a very important topic. We are discussing a lot. And yes, we have the confidence saying that we started the year at a low single-digit margin. We are expecting to end at a high single-digit margin in France. And therefore, what do we need to do now after doing, as I mentioned, the second round efficiency measures.

Now it is on top of that, also the top line growth, the increase of the business, organic growth from new programs, new customers that we won and program extensions.

Ladies and gentlemen that was the last question. Back over to you for any closing remarks.

Well, thank you very much for your interest. I see a lot of questions from you. And I want to thank you that you're spending a lot of time on working to understand Cicor, to follow us to see what we do. We have a very ambitious strategy. We are very ambitious in the way how we are implementing that, where, as you know, the last half year was very much the focus of integration and making ourselves a stronger company for the next steps moving forward.

So thank you very much for your continued interest. I speak here for Peter and myself and the whole Cicor team. And I wish all of you a fantastic and sunny day.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Operator Instructions]

Our first question comes from Chiara Di Giammaria from Berenberg.

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

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

[Operator Instructions]

The next question comes from Marti Queral Ferre from UBS.

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

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

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

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

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

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

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

The next question comes from Alexander Zienkowicz from mwb research.

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

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

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

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

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

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

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

The next question comes from Bernd Laux from ZKB.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

And Peter, next to you.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[indiscernible] One second.

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

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

Did you have contact with this group?

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

I understand that.

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

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

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

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

So yes?

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

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

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

Jack?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We have one more question over there.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

With that, we are happy to take your questions.

[Operator Instructions]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Peter will comment on that.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

With that, we are happy to take your questions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Peter will comment on this.

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

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

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

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

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

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

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

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

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

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