FACC AG Stock

A warm welcome ladies and gentlemen to the Earnings Call of FACC AG following the publication of the Q1 figures for 2026. I would like to welcome the company's CEO, Robert Machtlinger, the CFO, Florian Heindl; and Michael Steirer from Investor Relations, who will guide you through the figures in a moment, followed by a Q&A session via audio line and chat and with that, I hand over to you, Mr. Steirer.

Thank you a lot for the introduction, and good morning again to everyone, and thank you for joining us. Welcome to the FACC earnings calls, as I already mentioned. My name is Michael Steirer, and I'm joined today by our CEO, Robert Machtlinger; and our CFO, Florian Heindl. As always, detailed financial information has been made available in the press release published earlier today at 7:50 A.M. And if we are unable to address all questions during the call, please let us know, and we will arrange follow-up one-on-one discussions, case by case. Saying that, I would like to hand over to Robert Machtlinger, our CEO. Thank you.

Michael, good morning. Thank you for the introduction. Good morning, everyone, and thank you for joining today's earnings call for FACC for the first quarter of 2026. Before we go into the slides, maybe a few remarks concerning the overall development of the industry.

We all are very aware about the dynamics globally with the one or the other surprises that keep us again and the industry had to react with the Middle East crises.

Nevertheless, I would say this is not new, I would say, the operating environment still remains dynamic. It's not only supply chains that are causing issues since not demand, but more than three years right now. And I think our end customers, OEMs are very transparent in communicating.

Nevertheless, I think the industry is able to still navigate and manage the dynamics as best as we can. A few words on the geopolitical situation. This, of course, is keeping us very focused on the monitoring of the development. We are in very close contact with all of our customers, but also our suppliers to make the right decisions.

So far, it's well under control. In terms of the impact to the industry, in the meantime, I think there has been some impact also FACC, I've seen a couple of order adjustments in the first couple of weeks of the year 2026.

All the order adjustments we have received from our customers are worked into our business planning for the year 2026 and beyond. But nevertheless, Florian will talk about it, and we will be more specific at the end of the presentation. The adjustments we have seen are not unexpected, I would say.

We are working in scenarios since a couple of quarters. And what everything we see right now is not having an impact on the efficiency guidance. In saying that, I would like to go into the details, a few snapshots and highlights on the first quarter. FACC was able to announce a new contract we have signed up with Embraer,

It's basically a complete new cabin for the Embraer Praetor 600E and 500E business jets. We have developed this state-of-the-art, I would say, it's a new standard, I think. In business aviation, we have worked out together with Embraer. It's a long-lasting contract, again, showing evidence that FACC is a strong partner to the industry.

Secondly, we in the Management Board after a 1-year review and detailed analysis have made significant decisions in terms of capacity adjustments. We need to manage the market growth. As you have likely seen in the public press announcements, we are setting up capacity for the Aerostructures division, which will be a fully digitized robotic-assisted automated manufacturing site close to our current plant #3 in Upper Austria.

So this is certainly an important step dealing with the market development for the next couple of years. And finally, I think, and we will talk that the main reason of our call, the results of our fiscal year, it's pretty much and all in line with our expectations, I would say, the revenue growth compared to last year and even more important, the profitability has further increased, but Florian will talk more about those things.

Quick insight on the market outlook. We tried to be a little bit more focused on the demand versus supply. We would not repeat the long-term forecast, which is unchanged, showing the resilience of the industry. And you know all of those data. But basically, and I think this is very key at the time being in the middle of a significant dynamic in the Middle East, what is the market requirement? Where are we? And what is the risk of a further reduction or adjustment of the [indiscernible]. I want to keep it, I think, very high level. I think at the time being, there might be one or the other small adjustment for 2026, depending on the development of the Middle East, but all of our customers are confirming high demand of fuel-efficient airplanes. And even if the one or the other airline wants to postpone the delivery, there is enough demand that would compensate here and there. So overall, if you look into the dynamics in terms of traveling between the year 2000 and 2025, the revenue passenger kilometers are [ tripled ] over the last 25 years. The fleet has doubled. So this is giving us some indications that small and midsized airplanes are growing.

So the seat capacity of the main market, 80% of the aerospace market is small to midsized airplanes. But this midsized airplanes are growing in seat capacity. That's one element. But that's on the very right side of the chart, there is more demand than supply. This is also not new. We know that there have been a couple of hiccups, especially with the supply of own airplanes over the last couple of years.

I think they are doing exceptionally well right now in re-ramping up from where they're coming from. But you also know that Airbus has the one or the other issues and the Airbus management is very transparent with their engine supply issues. So overall, this is the -- you have to analyze, there is a shortfall of around about 5,200 airplanes, new modern airplanes that are not yet on the markets. I have to say that Boeing analysis is a little bit more pessimistic. They talked about 1,800 airplanes that are currently missing immediately. So we can navigate between the two numbers. But this is already a clear indication that the market demand and the requirement is there and the supply of the airplanes is not at the time being, holding up with the demand of the airplanes.

Two numbers last year, Airbus and Boeing delivered around about 1,400 airplanes. Before the crisis in 2020, the total combined delivery rate was slightly above 1,600 airplanes. So there is still a gap of more than 200 airplanes that are not yet produced, but airlines have a need for. And just taking this 500 -- sorry, 200 airplanes from last year, the number was bigger than this before, mathematically is giving us the gap that is basically and currently in the market.

So overall, I think that gives us a certain optimistic view that the demand and the requirements for producing airplanes and [indiscernible] is still very much a key objective for the industry. Looking into the output of Airbus and Boeing in the first quarter, nothing new. You probably have seen it. Airbus had a difficult start in the first month of the year, picking up slightly in February. Just looking into the April numbers, not yet confirmed, they have delivered around about 60 airplanes, they will announce shortly. So trend going in the right direction. I think some of the deliveries in April have been hold ups in the first quarter, because of administrative issues between China and Airbus on taking airplanes, paperwork and regulatory stuff.

Overall, engine is the bottleneck, but the order backlog at Airbus again increased to slightly above 9,000. Boeing, as I said before, they are very focused on the re-ramp-up. Output in the first quarter was higher compared to Airbus, higher since many years. So this is giving indication that they are on the right track. The 727 currently runs at the rate of 42 and Boeing prepares for further rate increases in line with the authorities.

Also here, the order book significantly increased to 6,100 aircraft. So overall, the trend is going in the right direction with the one or the other challenge we all have to deal with. In terms of the longer market term forecast, this is a refresh of what we shared with you, but especially in times with some uncertainty, we thought it's maybe helpful for you to see what we are expecting.

So looking into the first quarter 2026, baseline in terms of rates we are producing for our customers and what we are seeing as a rate within the decade that means ramp up between today and the end of the decade, we see quite sizable increases in terms of demand. Just jumping into the A320, you know that 37% of our business is related to the Airbus A320 family. Also here, we see a 32% organic increase in requirements, which, of course, is good for efficiency. Same is true for the A350 family, very well stabilized. Ramp-up is ongoing. We are currently producing a rate of 7 airplanes a month with a solid forecast and actions in place to ramp up to 12 within the next couple of periods, which is a 71% increase and which is above the rate we have produced to Airbus before the COVID crisis.

Same is true for the 787 from 5 a month to 12 a month, we are currently actually approaching rate 8 and 10 with Boeing 787 before the end of the third quarter. And then we are seeing a further ramp-up to a requirement of 8 and also quite important for FACC, the COMAC 919 [indiscernible] where we have a quite significant share of value is growing from currently 3 airplanes per month to above 8 before the end of the decade. So overall, I think the forecast we are getting are in line with our expectations, reconfirmed and this showing the organic growth we have in front of us. In saying that, I would like to hand over to our CFO for the financial details. Please, Florian.

Thanks, Robert, for the introduction. Hello, everyone, also from my side. Jumping into the first slide, you know very well, I think it summarizes perfectly what we have seen also in the last quarters, a constant improvement of our [Foreign Language].

[Technical Difficulty]

They are trying to reconnect. So it's just going to be a short time until they're back. So they're back in the call. Dear ladies and gentlemen, I'm very sorry for the inconvenience. We are on it.

Okay. We are trying to reconnect. We have a technical issue on our end. We are just getting another speaker, give us a minute.

Can you hear us?

We can hear you. Thank you.

So again, on the division results, in terms of revenue, we had a slight increase in Aerostructures and engine sales. As I explained before, we are expecting a pickup of the revenue in those two divisions at the rest of the year. In Cabin Interiors, we have already seen a strong revenue growth in Q1 compared to last year with 26%.

In terms of the division results, we can see, and this is also, of course, a very good sign also for the management board. All 3 divisions, again, are in positive EBIT territory, starting with Aerostructures, on the left side, EUR 4.1 million of EBIT, transforming in an EBIT margin of 4.6%. So massive improvement compared to Q1 2025 last year, which was a very weak quarter.

Engine sales, I would say nothing surprising here, solid double-digit EBIT margin around about 11% with EUR 4.8 million of EBIT. And Cabin Interiors are positive with roughly EUR 0.8 million, giving us a margin of 0.6%.

What you can see, and this is also, I would say, a consequence also of last year. Cabin Interiors still a challenging business for us, but we are on the right track as we have shown last year, and we expect the positive development of [indiscernible] and Cabin Interiors to continue.

Free cash flow, another slight improvement compared to last year's quarter one EUR 8.9 million of free cash flow in quarter 1 compared to the EUR 3.5 million last year. So I think this is also visible if you look at our net debt and leverage ratio, and we have seen that trend also in the last quarters.

So FACC effects on a constant path of increasing the free cash flow, dropping up free cash flow, working on our working capital and reducing our net debt.

And of course, this is very beneficial for the company, and we need it anyhow, as Robert just explained with massive investment program in front of us over the next couple of years.

And of course, a solid balance sheet and a solid cash flow statement is the necessary foundation for that. Cash flow, I just touched investments a little bit. So what you can expect going forward for this year is a slight pickup for the rest of the year in our CapEx investments.

You will see the major impact of CapEx investments in our new plants in the years to come. So not so much in 2026 as we start this project in the second half of the year with groundbreaking and preparing the better field for the building, basically.

So the big cash outs will be in 2027 and 2028. But nevertheless, you will see an impact also in the third and fourth quarter of 2026. Inventory, I also touched a little bit in the beginning already. What we have seen in Q1 2026 is a pickup in inventory to EUR 194 million.

So I put in comparison, again, the total assets as a percentage. So we are at around about 28.5% of our total assets. What this number is telling us, and I said that in the beginning that we still have problems in the supply chain with certain suppliers.

In general, the supply chain is improving over the last couple of years, but we still have hiccups. And this forces us to have buffer stock and we are, again, back on the territory of roughly EUR 190 million. Same is true as last year. We will work on that. We will keep it under control. We will work to bring it down.

But for the time being, we need to keep fastest look to secure the supply to our OEMs. In saying that, I want to hand back to Robert for the outlook.

Thank you, Florian. I hope you captured everything. Sorry for the technical hiccup we had in between. Well, in the outlook -- for the outlook, for the outlook, I think we can reconfirm what we have published at the end of last year, we see a continuation of our growth.

Still the spread is a little bit right. It's been 5% to 15% in top line growth. We will be in a position to narrow the guidance down with the end of Q2, where we normally have good and aligned data with our customers.

Overall, I think we are managing the volatility quite well. The EBIT will further increase as a result from scaling effects growth, but maturity is driven by our core project, which is, of course, taking further momentums. We are focused on also not unchanged strong our focus on the increase and rate demands from all of our customers, again, repeating statement.

This is unique for the time being, right now, all of our customers, all platforms, wide bodies and narrow bodies are ramping up at the same time. This is not normal. Normally, one commodity is ramping up. The other one is stable right now. We have ramp-ups everywhere, and we also have market dynamics and further growth potential in the urban mobility environment.

As forementioned, stabilizing our supply chain is key. We're working on that. We are making good headway, also with certain transfer of works, double sourcing and other mitigation issues, which will secure our position in terms of highest quality and reliability in terms of supply.

We are actively managing the entry cost volatility as we do U.S. dollar hedging, we also do hedging for energy costs. We have been active, and I'm happy to say that we have secured our energy cost for the full year of 2026 round about 30% to 40% of the energy cost is hedged for 2027.

And we have hedged the energy consumption before the energy cost made a turnaround with quite some increases on the market. So here also our hedging policy worked fine giving us a stable cost basis for energy..

Startup plant expansion, as we mentioned, will start in the Q4 of 2026 and directly related to that new facility, we have a significant high focus on digitalization optimization by bringing people on board from external partners.

So we are significantly increasing our knowledge base in these two areas, giving you a little bit of a KPI, a facility we are putting in place in today's environment, will have a requirement for roundabout 500 to 550 people.

With the new setup we are planning, the people, the need to operate the volume in that facility with the new robotics and the operating model we have rolled out we talked about roundabout 300 people.

So this is the efficiency, we want to bring into play with this new state-of-the-art facility. In saying that, I want to reconfirm for the company our guidance for 2026, and would like to open the floor for your questions.

Ladies and gentleman, we are opening the Q&A session. [Operator Instructions].

[Technical Difficulty]

I will unmute Mr. Bastian Brach now to ask your question. You can unmute yourself now.

I am sorry, I need to apologize for the technical issue, we might have it on our side. Terribly sorry for that one. And I hope you captured everything we presented.

Yes. We unmuted Mr. Bastian Brach to ask his question. So please Mr. Bastian.

Mr. Machtlinger, we heard everything you said on the presentation, so that's good and I hope you can hear me now. I have three questions. The first one, you mentioned the delivery adjustments from the OEMs, can you quantify the revenue impact of that in the next few quarters?

And do you expect a further increase in the still elevated inventory levels as a result of that, do you maybe have an internal target for the inventory levels at year-end or for the next quarters?

Yes. So basically, we need to expand a little bit. I think when we do our forecasting for a year, we normally start in early fall of the previous year based on market, let's say, orders we get.

We got a little bit used to it that in the first couple of weeks of a fiscal year, our customers are down adjusting to, let's say, to a more realistic plan. The point is we need to follow the water book or the order request of our customers at first.

So we are ordering material. We are preparing for the ramp-up and is then in the first couple of weeks of the year, the adjustments are done. We certainly have to deal with this circumstance. So we learned how to deal with it, I would say, in the last two to three years.

This happened also this year that we got or the adjustments. So if we -- to be a little bit precise by just talking things without meat on the bone. If we would look into the order book, we had for 2026 at the end of December of last year.

I think the growth would be more to the upper end of the FACC guidance. Adjustments we have seen right now because of various issues, supply chain issues, engines.

And recently, the Middle East, there was a reduction in the range in the middle, what I'd say, in the lower ends of the double-digit revenue number. So something around EUR 30 million to EUR 40 million of an adjustment we've seen from the year 2025 to what we see today.

So basically, by seeing this, we are very nicely inside the FACC guidance. Still not on the lower end, up more in the middle, I would say, a little bit above the middle. And what we also have seen from the past years, with the second quarter, the order signal is very stable without too many volatility ups and downs because then our customers have made the plan.

Again, I think even Airbus last week in the call are confirmed the guidance for 2026, all based on the engine availability, they have aligned retention suppliers. So this gives us, I think, good visibility for the end of the year.

Again, I think we want to specify our guidance at the end of Q2. In terms of inventory, well, I think this was a hiccup, is that before we had to prepare for the higher rates in certain areas, we have to move the rate increase to quarter 2 or the second half of the year.

Already having material on board. We are certain that the inventory will burn down at least in the second half of the year. We also have to understand that there is some lead time involved with some materials.

We currently see lead times that between half year and year. So we have to order in advance security. So there is a material rolling in with the rates ramping up a little bit later. So overall, we have a target for inventory and it will be significantly or let's say, measurable below what you have seen in the end of Q1.

My next question would be on the engine and Nacelles margin, which was quite a bit lower than the previous year. Was it due to lower development project revenues? Or was there any other driver you need to be aware of?

Most significantly, yes, I think some milestones, and this is not unexpected coming over the year. But also, we have to say you've seen it the engine nacelle in Aerostructures, revenue only has been growing by slightly above 1%.

Why is this coming from the [indiscernible] the engine nacelle and the Aerostructures has a bigger spec or work share on wide-body airplanes. Also the wide-body airplanes are ramping up, but slightly slower than expected at the beginning of the year which is a reason for a little bit of a lower growth in these 2 segments, but especially in engine nacelle, also a slightly lower EBIT for the first quarter.

Again, for the year-end we are expecting numbers that are closer to what we have seen in the past.

Okay. And my last question would be on COMAC. And yes, in the market, there's some talks about production delays only 3 deliveries in Q1. How do you see these issues and further ramp up in the next quarters and years? And maybe some comments on possible certification of the 919 outside of the home market, China and the Asian region.

Well, what we see, and we are close to them with our efficiency, China operation and with what everything we do with them, they are ramping up. COMAC is right now putting in place a second assembly line from the 919, which is advancing right now, putting the equipment in. So COMAC very focused in terms of ramping up.

However, COMAC has similar issues than the other two in the market with the one or the other supply chain issue. Some of it is engines. So they're working on that one is the other ones, too. I know that the production rate is increasing, the handover to customers is sometimes pending on the one or the other issue that needs to be installed to the airplane. In terms of, of exporting the airplane, I think for the time being, there was a huge market in China.

With the big China carriers, which will be supported first. There is some market out there in Indonesia and other countries where China is exporting and COMAC is trying to get certification road maps released with European authorities first and then following by the American authorities which might be a little bit more tricky, which I think also was the reason, I think, for a couple of Airbus non-deliveries to say diplomatically.

We have Mr. Elias New in line. To ask your question, please.

Yes. A few questions from my side. Firstly, just wondering if you could give us an update on the raw material front of your cost savings program and whether you've seen any adverse impacts on your input costs following the current Middle East crisis. And then also turn to fasteners, do you still expect the headwind to EBIT to be offset by the third quarter this year?

Well, thank you for the questions. Good questions. I want to start with the fastener question. So fasteners was a big impact and issue last year. We have been able last year to manage, first of all, supply and pricing, and we also aligned with our end customers to have a joint, let's say, procurement strategy where we're working together with all of our customers and any fluctuation, not with all fasteners, but with a significant portion of the fastener cost is right now indexed based on current pricing.

So is the problem going fully away in 2026? The answer is no because there is still some inventory coming in from the old orders. But the impact will be by far less than last year, and the situation will be fully mitigated during the fiscal year 2027. Nevertheless, in our assessments and guidance in terms of EBIT, the fastener impact was known and is part of our analysis. So no surprises to the management because we already knew last year what will hit us in 2026. And for the first question, I would ask Florian to answer.

So if I get it correctly, it was about input costs following the Middle East crisis. So what we have seen this time or at least not yet suppliers raising requests on our end. I also have to say and we frequently talk in that direction also Elias, we talked specifically the last time we met also in terms of input costs and our contract structures that we changed a little bit after -- or a little bit maybe the wrong expression.

We changed contracts after the last crisis, most notably Russia-Ukraine war with the impacts on the supply chain. So we took that chance, rearranged some contracts. And of course, we are now better protected in terms of requests from the supply chain. I think it's a question how long this crisis is ongoing in the Middle East. In the end, the longer, of course, the oil price stays on an elevated level. And we are now in the second month of this war, basically, oil prices in the range of around about USD 100. And we also need to think of last year in the time frame where the oil price was also in the range of USD 70 to USD 80.

So basically, right now, we are not expecting a major swing in the supply chain confronting us with price increases, but -- and this is the message also here, we need to wait and see how this crisis works out. And of course, if the oil price is sticking to $100 or even higher for a couple of months, there will be requests out of the supply chain. But this time, at the moment, we don't see that.

Okay. Great. Very helpful. And then just more of a housekeeping question on the tax impact in the first quarter. It looks like you benefited from some tax loss carryforward. So I was just wondering if given the positive tax impact you saw in Q1, what we should sort of assume for the remainder of the year in terms of the effective tax rates for you?

You are coming over a little bit broken, but I think the question is about tax loss carryforwards. Of course, we still enjoy some tax loss carryforwards out of the last couple of years with losses that we had, and we are consuming that concerning or related to the rules and regulation in terms of IFRS. So nothing surprising on that end.

Okay. Anything you can tell us in terms of effective tax rate that you expect this year?

Effective tax rate will, of course, increase for this year. We have seen that also in last years. It's going up a little bit as we are now at the end of consuming our tax loss carryforwards. So going forward, in the next couple of years, we will come back to a more normal effective tax rate.

Okay. Great. And then a final question from my side would be kind of coming back to the divisional margin development and particularly also Engine and nacelles. I mean, a colleague already mentioned that the margin was down year-on-year. But for the full year, would you expect the Engine and nacelles margin to kind of return to or remain at the same level as we saw in 2025? And I guess also turning to the Cabin Interiors margin, I was wondering whether this quarter, there were any one-offs and whether you were satisfied with the margin performance in that division?

Message is not changing as we talked last time a couple of weeks ago. So no different story here. The big target is, and we put that out frequently, we want to be an 8% to 10% EBIT margin company in 2027. And yes, we will have two divisions with double-digit EBIT margins in that time frame, which is Aerostructures, 10% plus and Engine and nacelles 10% plus. As Robert just explained before, of course, in Engine and nacelles, we had a little bit of a swing if we compare it to one year ago. But basically, and we also said that last time, the big challenge, of course, is to keep the Engine and nacelle margin, and we want to keep it where it is right now. So in the territory of around about 12%. The first quarter was a little bit higher -- lower than the 12%, but we want to get back to the 12% that we have seen last year. So no change in storyline here.

Okay. In terms of Q1 performance in Cabin Interiors margin development, any one-offs to call out there?

No. Also the same storyline here. We have seen the pickup in Cabin Interiors development last year, especially in the last quarters. So the first quarter now was a little bit weaker. But you can expect and overall, as we said, in terms of our guidance, you can expect an increasing improvement in terms of our operating EBIT margins, and this also includes, of course, Cabin Interiors. Q1 was a little bit weaker, yes, but you can expect a pickup in margins in the quarters to come.

We have another risen hand by Mr. Aymeric Poulain, you may unmute yourself now.

I guess most of my questions have been answered, but I wanted to come back to the EUR 120 million CapEx plan. And just checking what would be your full capacity utilization turnover on the current basis? And indeed, in terms of the roll-up of this CapEx plan, what incremental capacity would you expect to achieve either from new space, new machinery or from the productivity enhancing tools you're planning to add to the unit. And then as a derivative question from this, are there any specific risk on this CapEx plan from the interest rate environment? Obviously, you need to -- you are self-funding this CapEx plan. So there must be some sensitivity around interest cost. What's your view on the situation here? And is there some sensitivity based on the leverage you could carry going forward?

Thank you for the question. The first part, I would like to answer and the financing question will be taken by Florian. So first of all, the CapEx we are putting in place, there is two main reasons. The facility will be focused on aerostructures are basically large components like rudders, like elevators, like landing flaps, so bigger movable components where we are following a strategy, a portfolio strategy that FACC as a next step in complexity is offering the supply, the development and supply of an [indiscernible] to our customers.

So we do most of the parts for different airplanes. So we have the technology, we have the know-how. What we go next is a turnkey solution for a customer where we can do a tail of an airplane. So that's what we think is the way FACC should develop for the next -- for sure, for the next generation of airplanes that will be launched.

So the product family we are currently having and we are supplying rudders, elevators, flaps to our customers. And with the rate ramp-ups I showed you before, so this 30% to 140% increase on certain platforms need capacity. So we have invested before 2020 to be a EUR 1 billion company in terms of size. With the growth rates we are seeing, we grow in the next couple of years measurably beyond this EUR 1 billion, of course, simply driven by the market requirement and rate increases and the platform strategy we have.

So basically, a little bit more than half of the capacity this investment will bring is already occupied and used by the products we are producing under firm contract. So it's simply ramp ups organic growth, and we would like to manage this organic growth with less amount of people. So also this product will be digitized. Manual work will be replaced with robotics. For example, at the end of the process where people are today manually apply the painting, this will be done in an automated system.

The one or the other semi installation, preassembly, which is done to people today will be replaced by robotics. So half of the investment is consumed with rate increases we see in front of us. The other half is planned for new projects. On a few one, we are currently working on. It's not yet implemented. We are just starting with our customers to work on the industrial plan. But within the next two to three years, new products we are negotiating with our customers will be added to that facility.

And there will be an area in this facility, which we call a pre-serial production facility, which is more an R&D environment. So in this environment, around about 3,000 to 4,000 square meters, we already are testing new technologies. We want to offer to our customers in the next-generation airplanes. Why are we doing this? If we cannot show certain maturity on new materials and processes and how we operate and produce those components, the customers likely will not, let's say, let this technology be part of the new airplane platform. So we need to think in advance. We are investing right now to have a solid technical foundation and a solid proposal in terms of safety and maturity for the next-generation airplanes. So all in one, this facility will be predominantly run for rate increases. It will be the house for new products we will implement in the next three years and a small portion is a premanufacturing facility where we can do unique things that are not in the market today. And in terms of financing, I would like to hand over to Florian.

I will take Roberts Mike. I hope you can hear me.

Yes. Thank you.

So sorry for that. Camera working on my end now, but not the mic, sorry. So Aymeric, in terms of your question in terms of interest rates and the inherent risk in terms of this CapEx investment, I think I will put it in a more broader statement. Yes, we are financing it on our own terms, meaning no capital increase, as we said multiple times. So we will do it out of our own power. With the existing means that we have at our hand, what is currently ongoing is a renegotiation of our syndicated loan where we still have elevated interest rates back from the COVID period.

We are right now renegotiating it together with my team. This looks very promising because also with the more beneficial financial profile, also our interest margins that we pay will come down. And specifically with this plant investment and financing this plant, we will put together a subsidized loan component together with an Austrian bank and its related consortium behind it and the bank is the so-called [indiscernible] Control Bank. And this bank offers favorable interest rates to export-oriented companies like FACC. So this is a perfect fit for FACC. It's -- the interest rate is partly government subsidized. So it will come in lower than current expected market rates. So for us, a perfect instrument at the perfect timing to finance this CapEx investment.

Thank you very much, Mr. Poulain for your question. We have one last question in our chat box by Mr. [ Miguel Lago ]. He's asking, you didn't talk much about the Advanced Air Mobility segment. What can we expect in terms of growth this year?

Thank you. That's a very good question. So we are happy with what we have on the Advanced Air Mobility. So we have entered serial production in various cases. Still on the passenger drones, it's on very low rate because all of our customers are in the middle of running their certification programs. So output here starts to be a serial production output, but still on very low rate.

On non-passenger drones, meaning logistic drones, we are in a ramp-up where we are producing drones on a daily, weekly, monthly drumbeat with [ sizable ] revenue streams in the meantime. So we're not talking EUR 1 million or EUR 2 million in terms of production output. It's double-digit million output already driven by these programs.

So we see in the drone business, a revenue generation that is in the middle double-digit revenue area. As said, on the passenger drones, we have forecast following certification test completion. And this must be finished at the first step before ramping up further. But overall, in line with our expectations and again, repeating with the non-passenger drones, the revenue stream starts to develop nicely.

Thank you very much, Mr. [ Lago ] for your question. Well, with no further questions in our chat or risen hands, I would say we come to the end of today's earnings call. Thank you very much for your interest in FACC AG. A big thank you also to you, Mr. Machtlinger and Mr. Heindl and Mr. Steirer for your presentation and your time.

Should any further questions appear at a latter time, please feel free to contact Investor Relations, and I wish you all a successful May. And with that, I say thank you and bye-bye.

Thank you.

Thank you.

Good morning, ladies and gentlemen, and a warm welcome to today's Earnings Call of the FACC AG following the publication of the full year financial figures of 2025.

I'm delighted to welcome CEO, Robert Machtlinger; CFO, Florian Heindl; as well as Michael Steirer from Investor Relations. The gentleman will start with the presentation shortly. After the presentation, we will move on to the Q&A session in which you will be allowed to place your question directly to the management. We are looking forward to the numbers.

And having said this, Mr. Steirer, I hand over to you.

Thank you, Ingmar, and thanks for the introduction. Good morning from my side as well to everyone, and thank you for joining us today. Welcome to the FACC Fiscal Year 2025 Earnings Call.

As already mentioned, my name is Michael, and I'm joined by Robert Machtlinger, our CEO; and Florian Heindl, our CFO. As always, comprehensive financial information is available in our press release, which has already been published earlier today. And if we are unable to address all questions during today's call, we will be pleased to arrange follow-up one-on-one discussions afterwards. In this case, please contact our Investor Relations team, either Tanja or myself.

With that, I would like to hand over to our CEO, Robert Machtlinger. Thank you.

Michael, thank you very much for the introduction. Dear ladies and gentlemen, thank you for joining today's earnings call of FACC for the financial year 2025. Before we go into the details of our presentation, which was shared earlier today, and you might have seen it.

A few words on last year. Well, I think it was another year of dynamics in the global economy. So global tension was part of our fiscal year management activities, trying to react on time and quickly and in line with our strategy. I think as communicated and also published in various presses, there was some market dynamics ongoing from all the adjustments on various platforms, supply chain issues around the world caused by a couple of crisis, we are facing and still facing.

Nevertheless, I think we predicted 2025 quite well. In our budgeting, we have considered certain circumstances, which finally allowed us to react quickly once it came to the one or the other adjustment.

Let's jump into the last year's result. Well, last year, we announced "Unleash the Potential" which was a program we as the Management Board with our leadership team launched in fall of 2024. The program, as you well know, is called CORE, focusing on efficiency, cost reductions and profitability increases.

2025 was the first year where we had to unleash our potential and the potential is in motion. So the output in a still dynamic environment is a revenue growth of 11.3%. Total figures will be presented by Florian later. Over 3 years, and this is, I think, quite impressive, the total growth between fiscal year 2022 and fiscal year 2025 is slightly above 62%. So the dynamics of the market is giving us some tailwind. I think, we are growing faster than the market by itself, meaning that the strategic programs we brought on board during the crisis are also helping us to grow fast. Very positive also is a 49% increase of EBIT once comparing 2025 to 2024.

I need to repeat my statement. This was not done in a stable environment. We had to deal with global dynamics, including supply chain issues, which is -- which are not only causing our customers, the one or the other extra effort, but also FACC very positive. The free cash flow was significantly increased.

Efficiency. Numbers that we are sharing today is the result of what we have launched in 2024 and started to execute in the year of 2025. 11.3% more output with pretty much the same headcount in the group. So we only have increased headcount by 57 people across our global networks. That's the result of turning every stone. Being leaner in all aspects, increasing efficiency in Austria, but also in Croatia, our new Plant 6, which is up and running quite nicely. But also we, of course, are benefiting from the outsourcing of the one or the other package. I want to name one of it, the COMAC 919.

Full production was produced in Austria until 2023, 2024. We have moved the project to China at the year of 2025. It was a steep ramp-up in our China operations to accommodate COMAC requirements.

Structure. We are not only lean in what we do in operations. We also had a look into the FACC organization. We worked, especially in the second half of last year, starting in July to the end of the year to do a deep dive on FACC's organization. The Management Board with the leadership team agreed on the restructuring of the organization. The restructuring was put in place at the end of February this year, leading to a more agile, more accountable and more clear organization.

The outlook. We will have a few slides later on. But nevertheless, the business is doing well. The long-term forecasts are good. There is high demand from the industry and the supply is not following up at the time being with airline requests. So looking into the next 5 years, and we normally do a conservative planning, we see continuous growth in the industry, also benefiting FACC and we as the Management Board have decided and defined plans to invest up to EUR 350 million into the business between the year 2026 and 2030. A few slides later on.

CORE is the result or is the vehicle that is allowing us to perform. Nothing new to you. It's a couple of elements, reducing material cost, which is for us very important, passing on inflation effects to our customers by negotiating contracts above contract agreements. I think this is very fair and good discussions we are having with fair and reasonable settlements going forward.

Increased efficiency, that's what we have to do in every aspect and in every location, efficiency is working. And I think a revenue increase of more than EUR 100 million with the same amount of people speaks for itself and lowering expenses across our business is the typical cost savings everyone is going for.

Overall, in a nutshell, I think we are on track with our initiatives 2025, of course, was the starting point. 2026 will be another year of important changes. First of all, manifesting what we have done last year, but adding further activities and actions to continuously improve our market presence and our financial strength.

Also, I think very important to mention here is the strategic investment in Croatia. We have, as you know, tripled the size of the facility 2 years ago. The facility is exactly doing what we have planned for. And I think the result right now is clearly visible and measurable in our Cabin Interior division, which we turned around last year with a good foundation going forward.

In terms of potential in Motion, what does it mean in a quick nutshell, and again, Florian will elaborate a little bit more in detail in his speech. Revenue growth to close to EUR 1 billion, EUR 984 million to be exact, 11.3%. We have increased the EBIT by 49.4% in a still dynamic and challenging environment as a result from CORE and other initiatives and the free cash flow has significantly improved. And also to say, right now, all FACC segments, divisions are positively contributing to the group EBIT.

In terms of people development, after a few years with a quite strong people and recruitment activities, the year 2025 is very moderate, just 1.5% total increase worldwide, nicely spread between the main hubs in Austria, but also our facilities abroad Austria. Overall, I think the efficiency measures we have put in place with the FACC Academy, with the FACC educational training is right now paying back. I think we invested in the years before to get ready for the ramp-up. This investment into people development right now starts to pay back.

Overall, in 2025, we increased the headcount by 56 people, which is basically in the direct labor and not in the administration of our business or in the fixed cost area.

In terms of our commitment towards our customers. We have a very unique situation at the time being. All industries are ramping up and all platforms are ramping up. This was never the case in the past 20 years. We either had a ramp-up on narrow-body airplanes, single-aisle airplanes or we had a steep ramp-up on wide-body airplanes, but it never went parallel.

Right now, we have ramp-ups across all our platforms. If it's single aisle, wide-bodies, but also the Urban Air Mobility business is ramping up. So very unique situation. FSCC prepared for this. We have not missed a single delivery last year with big efforts we had to put in place before last year, but also last year.

Secondly, Advanced Air Mobility. You are watching it for the last couple of years. We have good customers in this environment. We see step changes in the certification of the products. One product we are currently producing and we have developed is a logistic drone.

Here, we have entered serial production environments already with a growing demand in 2026 and further good forecast for 2027. The passenger drones, our customers are in the middle of certifying their products. This is complex. This takes some time. But overall, also here, we see from one period to the other, a good momentum. We are producing serial production components for those platforms still on a lower rate. But once vehicles are certified, there is a good backlog with all of our customers, and we see a very healthy, sustainable growth in the years to come.

Next-generation airplanes, we prepare today for tomorrow. We know something will pop up on new generation airplanes having a need for new technology. We're assuming by the end of the decade, probably not before 2028, but not too far beyond 2030, new platforms will be launched based on new technology, propulsion systems will be a key driver.

Here, we are quite well positioned with all 3 engine manufacturers from Rolls-Royce, Pratt & Whitney, but also GE in the meantime. But we also are working intensively close with our airplane customers to define the lightweight and composite technology we need for the next platform. So we are investing in fully automated digitized production and operating systems. We do certain testing today to show technology readiness once we need it for our customers by the end of the decade. So all on track so far also in respect to this.

A few slides on the market. Overall, as I said before, the market is recovering. Very strong, I would say, come back from Boeing in the year of 2025. As you can see on the chart, the gray bar shows the Boeing output overall. So this is positive, I would call it. And they are very focused on quality, on on-time delivery and on a stable ramp-up.

Airbus had to adjust this year-end delivery slightly at the last quarter. We all know the reasons. It's a couple of bottlenecks in critical equipment, which will not go away immediately. It will keep us, but also our customers busy in the year of 2026.

Overall, if you look into the forecast of both main platform OEMs, Airbus and Boeing, they are forecasting an output growth of around about 10% just in the civil market. The business jet market on the right side is also exceptionally doing well.

FACC is the market leader on the midsized business jets, cabin furnishing with a market share of close to 60% and the midsized market is the dominating market in the business jet environment. Also here, we see double-digit growth for the year 2026 and 2027 with a little bit more moderate growth in the years beyond 2028.

Overall, the firm order backlog on civil airplanes ordered from airlines with our customers further increased between December 2024 and December 2025. So another 686 aircraft have been added to the backlog. So this is another year where the book-to-bill ratio is bigger than 1. So airlines are ordering more airplanes than our OEMs currently can deliver and supply to the OEMs.

What does -- and what the backlog increase of 686 airplanes mean to FACC? Depending on the platform and depending on the size of the airplane, this has a positive impact on the FACC order backlog. 686 airplanes in average is a volume increase of around about EUR 0.5 billion to the FACC order book as well. So the long-term perspective remains positive.

In saying that, I would like to hand over to Florian giving you further details on the financial figures of FACC.

Thanks, Robert, for your remarks. Good morning, everyone. I will jump directly into my presentation, giving you a quick overview of the basic figures of the last financial year.

On the left side, Robert touched it already in the beginning, we had a revenue increase of 11.3%, pushing us to a revenue close to EUR 1 billion. We ended up the year with EUR 984.4 million, which is almost exactly EUR 100 million plus compared to the financial year 2024.

On the right side, you see the usual graph in terms of our operating profit, the EBIT which was also nicely improved. We ended up the year at EUR 42.3 million, which gave us an EBIT margin of 4.3%. So again, a nice development compared to 2024 and fully in line with our midterm guidance of pushing the company to an 8% to 10% EBIT margin by 2027.

If we look at the certain divisions in terms of revenue, we have 2 divisions that had significant growth again, Engine & Nacelles and Cabin Interiors and one division, Aerostructures compared to 2024, which had a slight revenue decrease, minus 1%. Reason also explained in the last couple of quarters and also roadshows and meetings that we had.

We had a little bit of a drawback in terms of NRC revenue, which is development revenues compared to 2024. We were not fully able to compensate that in the last 2 quarters of last year. So that gave us a little bit of a revenue decline. The underlying RC business is growing, and we will also see that in 2026 to come.

In terms of EBIT in our divisions, also, Robert mentioned in the beginning, all 3 divisions contributed positive EBIT to the overall group result. Of course, with a little bit of a mixed picture, also again, reflecting on Aerostructures, and we made that clear in the last quarters, we had in the last year 2025, a material price problem, mainly coming out of the fastener environment in Aerostructures, which was pushing down our operating profit to EUR 7.2 million and basically halving the EBIT margin in that division to 2.1%. Going forward, we have a plan in place for 2026 and beyond. So we expect the margin to improve again, but it will take some time.

Engines & Nacelles, and we have seen the picture also in the last couple of years is our most profit-generating division at the moment. For the last year, we generated EUR 21.8 million of EBIT, which translates into 12.1% EBIT margin. And of course, the big task for 2026 is to work on that and to keep that level and maybe slightly improve it.

And last but not least, Cabin Interiors, we finally managed the turnaround after last couple of years with negative EBIT contributions or at least a black zeroes. We ended up the year with EUR 13.3 million positive EBIT, which translates into 2.9% EBIT margin, again, reflecting to our midterm guidance, which is unchanged by 2027, we are expecting an EBIT margin in Cabin Interiors around 7%.

Revenue distribution, a familiar picture. Robert touched it also a little bit in his remarks. No big changes here. Also in 2025, the A320 platform was the bread-and-butter business of FACC contributing with 37% of revenue to the overall revenue distribution at FACC. All the other platforms are basically unchanged. Business jets coming in as the second biggest driver as it has been majorly driven by Embraer and Bombardier in that regard.

I would especially highlight this development in free cash flow. It makes the CFO really happy to see that picture. We had a huge improvement in terms of free cash flow. So we -- in 2024, we had a free cash flow of roughly positive EUR 7.7 million. We increased the free cash flow by -- to EUR 59.1 million. This was, of course, no free lunch. It was hard work in all working capital areas, especially also in terms of inventory, where with another EUR 100 million on top, we managed to decrease the inventory compared to 2024 levels.

Investments are also very well controlled in 2025. You see the graph on the left side. We ended up the year with CapEx investments of around about EUR 22 million. As Robert will outline later on in his closing and outlook remarks, this number will change going forward. It will increase because we have significant investments in front of us, and those investments will not hit in 2026. They will be distributed over the next couple of years, but you can expect the CapEx investment figures to increase in the next couple of years.

On the right side, as just mentioned, inventory, we ended up the year slightly below the figures of the financial year 2024, so around about EUR 176 million of EBIT, but EUR 100 million of additional revenue. So well managed. Of course, I have to admit, we slightly missed our target that we gave ourselves going forward. We will keep pushing in terms of inventory. And of course, the target is to put another revenue increase on top of that and keeping our inventory stable, as you also can see in terms of the percentage rates compared to total assets, where we have been before COVID and where we are now in terms of the ratio of inventory in our total assets, there is still room for improvement.

The Management Board has full focus on it. But of course, we know also Robert will touch it later a little bit. We still have problems in the supply chain. We need to take care of certain suppliers. We need to have certain buffer stocks on hand to fulfill our promises to our customers.

Also very promising going forward was the improvement in net debt. You see that on the left side. So the company, as we have continuously told you, is on a deleveraging path, not only in absolute terms, but also in relative terms when we look at the leverage, leverage ratio for last year in 2025 ended up at 2.7. So we came down from the 3.6 in 2024, now 2.7. And of course, for 2026, we are also working on further improving that ratio and also further improving our absolute levels of net debt. This is one of the key pillars of the Management Board. We really want to get back to leverage ratios around 2 in the midterm, giving us a better financial profile.

In saying that, I will end my remarks now hand back to Robert for his final outlook. Thank you.

Thank you, Florian, for the details. A few slides on the outlook, ladies and gentlemen. So overall, we, of course, have looked into the market again for 2026. We see a revenue growth also in 2026. The spread of the growth is still quite wide, 5% to 15%. We also had a similar spread at the beginning of 2025, and we narrowed down with the end of Q2 last year, and we have been very specific then in the last quarter of 2025. We see a similar dynamic ongoing right now. So we are prepared for changes up and down whatever the market is doing.

Profitability, Florian mentioned, and I want to repeat. Our core project continues to be executed during the year of 2026, helping us in the company to develop towards our profitability target by the end of 2027. So there is no relaxation. There is further activities already ongoing and further activities, especially in the material supply chain will be rolled out during the year of 2026, helping us then finally in 2027.

Build rates, we see build rate increases across all major platforms in the industry. The good thing is FACC is participating on every rate ramp-up independently on what program we are talking. So this is part of our resilience and platform strategy, having a balanced product portfolio. As said many times before, most significant and important platform for us is the A320 family.

If you remind yourself, a few years ago, the platform was contributing more than 44% to the revenue. Right now, it's 37%. With the comeback of a couple of platforms in the United States, this ratio will be further balanced.

Challenges in front of us. Florian mentioned, and I will repeat it supply chain stability. I think most of our suppliers are doing well, but some of our suppliers are still critical. Here, we have derisking strategies rolled out by double sourcing, but also resourcing in terms of criticality. Again, resourcing is not doable from one day to the other, because normally, there is certification and qualification engage. But here, we are up and running. And again, full benefit will be visible then in the next periods to come.

High site cost and inflation is nothing new. We have adopted with our core project. We will continue doing this, especially in terms of further pushing digitalization, artificial intelligence and automization. And of course, a geopolitical tension where I have a few statements at the end of my statements.

In terms of investments, we mentioned there is up to EUR 350 million of investments planned for FACC between today and the end of 2030. Those investments are certainly structured in investments into new technology, new products, gaining market share across our 3 divisions, which is normally causing some start-up investment. It's also planned to set up capacity and capability in Austria, but also at our other locations.

To be specific, EUR 120 million of EUR 350 million will be invested into a brand-new fully digitized or automized aerostructures facility in Austria. This was a project we have launched in July of last year, being very holistic in our planning, considering existing capability we have, comparing with capability we have at other locations, doing assessments on access to train people, where we have quite a good workforce in Austria, highly trained and educated. Combination to R&D testing and qualification capability, but also, of course, considering the development of other markets and other locations over the next 30 years.

So this facility will help us to cope with the ramp-up of existing projects. It will give us a future capacity for programs. We have signed up to with our customers, and we are currently in loading, but it also will be combined with an 8,000 square meter test facility where we are testing new technologies, new materials, new processes, robotic-assisted assembly, everything we need to show evidence to our customers by 2030 that the FACC future lightweight technology will be a mature and safe technology.

So in saying that, I think we get prepared for the future. A few statements, and you might ask for it anyhow, and we prepared a little bit of highlights and the current situation on the Iran war. The entire world is watching it, so we do. And I think we don't have a crystal ball either. So we still can watch the current ongoing. There is several key factors that are still unclear, and we need to be reactive and agile in terms of the development.

I can tell you, we are in regular weekly, if not daily contact with our customers to align on the market. So far, the indication we get from every one of our customers, we stick to the current plans. There is certainly already impact in the airline world because of routes that are not used for the time being, airlines that have significantly reduced their network because of the crisis. This is ongoing. It's kept isolated for the time being.

The rest of the world, not including Middle East, of course, at this time, is flying with very high utilization of the airplanes. So, so far and for the time being, our customers are telling us there is a demand of 17,770 airplanes. There is not enough supply to airlines, and they are working on even reallocating airplanes if needed, if the crisis takes longer.

The industry overview so far, looking into the Middle East -- I'm sorry, the Middle East accounts for approximately 10% of the global aircraft deliveries between 2026 and 2030. Also, the revenue passenger kilometers flown is in the range of 8% to 9% in that region. So even if there is a full shutdown for some time, there is limitations in terms of the global impact. We are, of course, more concerned on the global geopolitical impact of the war, meaning inflation, price increases and a cool down of the global economy, which is, I think, good in some markets, weak in Europe. So we are expecting a cool down for the next months to come. The intensity and what it means in all the details, I think, today is unpredictable.

What have we done in FACC? Immediately after this activity started, we went into scenario planning in the Management Board together with our partners, but also our leadership team. There is various scenarios we have calculated considering a couple of things like we assume in most of our scenarios that COMAC programs and the Urban air mobility will be very little, if all are impacted from a crisis. We think COMAC needs to ramp up their production beyond 2025. I think they have a demand for the airplanes in their own market, and we think COMAC will push hard to use that momentum.

Urban air mobility, I think, is a little bit separated from the normal civil transportation. I think all of our customers will stick to their plans, certify their product and try to enter revenue service in the next 2 years to come.

And on the logistic drones, I think this is even more independent from the rest of the -- of traveling. FACC, as said before, we did various scenarios. The worst scenario we currently have planned is a scenario that could be as dramatic as the 911 impact, meaning a more significant reduction in airplane delivery output for 18 months. We know what we have to do in such a case. So adjusting variable cost, the fast way.

Depending on the significant and such a worst case would impact the industry, I think FACC can manage this environment in a positive way. Of course, there will be impact to the profitability.

In the short term, we don't see an immediate impact to FACC. During the last crisis, we have changed some of our contracting towards our customers, but also towards our supply chains, protecting us from certain super inflations. We have longer-term contracts in place as we speak that would mitigate some of cost pressures that could come. We have hedged strategies and material buffers for a certain time.

Energy cost and availability is not the concern. We have hedged our gas and electricity pricing. If we would secure full demand until the end of the year now, the impact to FACC would be less than EUR 0.5 million in extra cost. I'm not saying that we do that. I think we are quite well hedged with a big amount of energy we need. Just looking into the last days, energy costs went down. So we are very active. And so far, I think we have a plan going forward.

In conclusion, I think uncertainty remains high for the time being. Customer alignment is fully in place. The scenarios we have planned are showing positive results. And even the worst case, I would say, FACC, we think it will not be the worst case at this time, FACC would be able to manage.

In saying that, I would like to conclude with this statement, and I think the floor is yours for raising your questions. Thank you for listening.

[Operator Instructions] And we have the first question, Bastian Brach. You should be able to speak now and place your question.

Robert and Florian, and congrats on the very strong year. Two questions for me. The first one is on Interiors, a very strong year in that department. And thank you for providing the 7% margin target in [indiscernible] And what do you need to reach that target? Is it just operating leverage due to higher revenue? Or is it shifting more work to Croatia or price negotiations with customers? Or what do you need to like raise it for another 4 to 5 percentage points?

Well, in Interiors, I think it's a mix of various actions we have taken. I think you already gave the answer with your question. We are still ramping up Croatia. We are currently using around about 65% of the installed capacity. We are further moving work operations from FACCs Plant 2 in Upper Austria to Croatia to have the full effect of the labor cost saving in this facility. It's not only, however, the labor cost saving that is helping us, it's also the greenfield setup of the facility, where we have been very focused to drive for lowest cost operations and a clean interior environment.

A second element is the material cost. Interiors has more than 65% of the cost is in certain materials. Here, we have launched a resourcing and restructuring of the supply chain in the next 18 months, just by changing suppliers, certain methods and applying new technology. We have a material cost saving opportunity of around about EUR 10 million that will support interior profitability.

And then on a couple of contracts that have been ended we have been able to readjust the contract terms and conditions on the pricing level. So also this, of course, will help the Interior division to meet our EBIT target and to be sustainable in the profitability once going forward.

Okay. Then on the CapEx distribution for your new Austria facility, when do we see the bulk of the EUR 120 million hitting your CapEx? And yes, how do you plan to finance it? Is it only on your strong cash flows? Or do you plan to tap into external sources? And also on the EUR 350 million investment plan you lined out until 2030. Does it include OpEx like R&D as well? Or is it just CapEx?

Thanks, Bastian, for your question. In taking up the first part of the question, how -- what is the cash flow distribution of the investment in the new plant in Austria. We will start building. We are in the middle of the planning process right now. Currently, we are in negotiations, starting negotiations, doing the planning. And the excavators will come to our ground later that year. So building starts in fall 2026.

So the impact to 2026 figures in terms of CapEx is limited, I would say. Still, you will see an increase in the CapEx figures compared to last year, but the main cash flows out of this specific investment will be in 2027, 2028 and 2029. Also, the final fully loaded plant with all equipment in is to be expected in 2030. So if you want, this investment will be distributed over 4 years with the bulk to come in 2027, 2028 and 2029.

So how to finance that? We are currently working on that. There are certain ideas, I would say. You know that our syndicated loan that we have in place is expiring in February 2027. Myself and the finance team, we are currently renegotiating the syndicated loan contract. And of course, you might know there are certain investment options or financing options in Austria that are very beneficial and partly government funded. So the vision that we are -- have here is, of course, to include maybe a new facility in this -- financing facility in this syndicated loan contract to cover for that investment.

So you can expect going forward, a slightly different setup of the syndicated loan. Of the EUR 350 million total investments going forward, part of that is the new plant. And also Robert outlined in his beginning remarks, it's not only the existing projects that we are preparing for, but we're also preparing for certain new projects. Of course, there is also R&D included. We are preparing already for new manufacturing technologies of the future, for example, automated fiber placement, we are putting in place. This is also costing some money, but this is R&D investments in the end because it will give us the flexibility to prepare us, ourselves, the company for these new aircraft platforms that we expect in the 2030 time frame. So it's a mix basically, existing platforms, new projects and also new materials and new production processes of the future.

And we move on to the next participant. He's dialed in by phone. Elias New, you should be able to speak now and unmute yourself.

I hope you can hear me?

Yes, we can.

My first question would be on the revenue guidance for '26. I mean, given the wide guidance range you've given for revenue growth between 5% and 15%, I was just wondering whether you could elaborate a little bit on the assumptions that are embedded into this guidance also with respect to FX. I understand that engine supply availability is still the main issue, the main bottleneck. But any color on whether you would expect to end up in the top half of your guidance range based on where we stand today would be very helpful.

Well, this is a good question, I have to say. The wide spread and range between the 5% and 15% is certainly considering various aspects. So when we did the budgeting last year, we certainly could not predict Iran, but we saw there might be the one or the other hiccup, because there is various crisis areas in this world.

So I think when we did budget planning before 2020, it was a budget. It was not driven so much by scenario planning, I would say. In the last 2 to 3 years, we learned that we better have scenarios available. We certainly put the budget in to measure ourselves in terms of where are we actually compared to plan. But we have scenarios available, and this is giving us the opportunity to react quick in case we see a change.

I want to give you an example of last year. In the second quarter of 2025, and I think we talked about it, one customer told us that he needs to squeeze out a fair amount of airplanes from the planning because of various issues. And this squeeze out of those airplanes was impacting us from one day to the other with a EUR 45 million of revenue reduction. So just removing the revenue is the one end, but you need to react in terms of employment, material and planning. Since we had a scenario prepared that goes into personnel planning, material planning, we could work around it, and you have seen the result for 2025. So we still have been holding up to our guidance.

So what does it mean for this year? I think we have a certain baseline that might be in the middle of the 5% to 15% somewhere if everything works nice. There could be an upstream if all would be even more perfect than what we have seen in 2025, but there is downstream as supply chain issues or geopolitical things.

So I really need to ask for being patient with us. I think normally, and this is what has been the proof for the last 3 years. Rate adjustments normally are happening within the first 4 to 5 months of the year, meaning between January and May. That's what we have seen in the last couple of years. That's what we are expecting this year.

The second half of the year normally is quite stable. So I think the spread is right, and I can promise you with the end of Q2, we will narrow it down and be more specific. But for the sake of keeping our flexibility adjusting if geopolitical something is happening impacting our industry, we want to keep this flexibility for the time being.

Okay. Just a quick follow-up on that. I mean, in terms of the impact that you're seeing from Iran, anything specific to mention in particular, with regards to increased cost pressures, et cetera? I know you alluded to it before, I don't know if my line cut out. But anything that you could share right now on any impact that you are calculating for Iran and the current -- yes, any discussions that we have on supply chains on the one hand? And the other part of the equation would be your assumptions for FX rates, particularly with regard to U.S. dollar and euro rates, which have been quite volatile over the past few months.

Well, I think FX, Florian will answer. In terms of flexibility, what have we done, just as one example. Normally, FACC is mainly working with FACC employed people, because we have to train them, we have to educate them, we have to qualify them.

In the last couple of weeks and months, we have decided to use a little bit more contractors in our workforce, because our contractors' workforce is giving us more flexibility in adjusting if needed. We have implemented the last 3 years, flexible work times in across the FACC operations. So we are accumulating hours in certain high-yield phases. And if there is a phase where we need to support our customer, we have flexibility here as well.

In terms of material supply, Florian mentioned, we are buffering some material here and there. And I said it before, it's hedged with contracts. So we have a hedging horizon and fixed price period with our suppliers, that would mitigate immediate impact from price increases and therefore, cost increases for FACC. So we got prepared over the last 2 years to be more resilient. Again, I think we need to watch the situation very carefully. We have scenarios in our drawers, and we can react quickly if something happens.

Picking up your question, Elias, in terms of FX for 2026. We already have our hedging in place. Basically, we are talking about an average hedge rate for 2026 of around about 1.15, which is basically a little bit better than the current market spot rates that we are having. So 2026 done basically.

For 2027, we already have, of course, over the last couple of months, started our hedging activities. So we are also well underway in that regard. And if you watch the markets, the currency markets currently, of course, with any -- with daily news outflow from Iran and the U.S., basically, you see fluctuations in the FX markets. And of course, we use profitable environments, which we are right now, to be honest, around 1.16, 1.15. This is good for us to hedge the future.

Our MTP planning going forward is based on rates of 1.20. We said that also in the last couple of meetings that we had. So nothing changed on that. And of course, we are preparing to mitigate those FX risks via hedging.

Okay. That's very helpful. And just on that sort of margin progression side of things, I mean, you mentioned the FX component there already. But just in terms of thinking about the bridge on how to get to the 8% to 10% margin by 2027, would it be your best guess that we should see a sort of linear progression towards that 2027 margin target across '26 as well? Or do you expect that to be more weighted towards 2027 with most of the margin uplift coming in 2027?

No, nothing changed here. As we have talked also before, if we would do so, it would be in our expectation, a linear movement. You can expect, and we said that also in our outlook, again, an improvement in terms of EBIT, especially also the same with the revenue guidance we are giving also as in the last couple of years, the first half year, we are a little bit unspecific in terms of our EBIT guidance. And also here, we will narrow that down as we have done it last year, later on in the year.

That's great. Very clear. And just final question from my side on the cost savings initiative. I was just wondering if you could give us some color on the status quo and the progress, particularly on the raw material side, which you've mentioned remains the most challenging and whether you still think that the full EUR 80 million for the savings program by 2027 is still feasible given the ongoing challenges within the raw materials component?

Yes. So program, as Robert also outlined and also I said, program is still up and running, will be up and running until the end of the year. Management and leadership team is pushing very hard. You know the 4 components in the program: material costs down, price increases, efficiency gains and fixed cost reduction basically. Of course, we have several different degrees of progress in the certain environments. Some of them, we already have overachieved our targets and some of them, we are a little bit behind the plan.

And also to be transparent here, and I outlined it to you also, I think, in our last meeting, material costs is a pain at the time being. Supply chains are, to a certain degree, painful, and we need to carefully watch. And of course, we are working hard also here to achieve that goal by the end of the year because this is giving us the baseline for 2027, as we talked before, to achieve that 8% to 10% EBIT margin that we want to see in 2027.

We cannot hear you, unfortunately.

We move to the next participant, Aymeric Poulain, you should be able to speak now and place your question.

I have a few follow-up on the growth assumption. I think you said that the highest visibility you have is on COMAC and the Urban air mobility. So what are your assumptions for growth in these 2 segments for 2026, please? Then on the margin guidance for 2026, you didn't provide a precise. Obviously, the range of revenue growth can make quite an impact on that given the operational leverage. But there are also some one-off pressures that took place in 2025 that might not recur in 2026, like the pricing recovery of the cost on material for aerostructure or some of the staffing one-off costs. So could you remind us of this one-off cost in 2025 and what -- how we should see this impacting the margin positively in 2026?

The third question is on the investment plan. Obviously, it's a very large investment plan. And I think if I look at the staffing addition, it's probably more than 40% capacity increase potentially. So how confident are you that this increase of capacity can be filled? What kind of visibility you have on that? And what kind of return on capital do you expect given the fact that it might include some also some more automation and better quality assets?

And finally, on the funding, you didn't provide a clear answer, I suppose, but I was under the impression that as free cash flow was to recover, there was a plan to also provide return to a dividend stream. Is that no longer the case? Are you going to be using most of the free cash flow to invest into growth? Or is there still a plan to restore dividend stream?

Thank you, Aymeric. I'll take questions one by one. Starting with the first, you're asking for a more specific guidance on COMAC and Advanced Air Mobility. As we also have said in the past, of course, we have different growth rates across our certain divisions. As Robert also outlined, basically, with all our programs that we're having and the product mix in place, we are growing stronger than the average market. This is, of course, especially true also for those 2 platforms that you mentioned.

In terms of Advanced Air Mobility, also Robert mentioned in the beginning in his remarks, of course, we are -- especially with one project, and we talked about it already also at the logistics round, we are in an environment that I would call as a near zero production mode. So this is very promising going forward also for 2027, we expect to see another increase here with all the other projects that we have on the plate in the Advanced Air Mobility environment. Of course, we are at different stages in development. So that's the answer to that.

In terms of revenue and price fixings, you mentioned in terms of certain issues, I guess you are reflecting especially on Aerostructures and the fastener impact that we had 2025. As we also said several times in the past in our conversations, we have a mitigating action in place with our customers. Also customers, OEMs are certifying additional supply on that end.

Will it fully compensate us in 2026? Probably not because we also have a huge stockpile of fasteners that we in loaded to higher pricing from the past. So we need to eat that out of our inventory basically, but you will see improvements as we progress during 2026. Of course, we have price negotiations with certain customers ongoing. This is nothing unusual in the industry. We are doing that for several years. What we are experiencing is in the last couple of years, we had certain one-off payments and compensations from the customers. And of course, our aim is always to have it in the contracts as recurring price increases.

The investment plan overall, we are very confident, of course, to fill that additional capacities. Why? Because the investment that we are doing in Austria is basically triggered by existing projects that we have in-house already.

Why we are doing that in Austria is also explained in our press release that we sent out 2 weeks ago. We already have a modern Aerostructures plant right around the corner in St. Martin. We are building the new extension directly adjacent to this plant, meaning it gives us more floor space to be more efficient, to have a focus on automization, to have a focus on digitalization and push through the big Aerostructures parts that we have already in our portfolio. So we are not worried that we cannot fill up this plant with the existing project that we have in-house.

In terms of return of capital, in general, margin improvements, of course, this investment will heavily contribute, because it gives us the flexibility that we need in terms of automation. This will improve the margins, especially also in Aerostructures going forward and in the end, work out nicely for our return on capital and all other profit KPIs of the group too. And again, 2027 midterm guidance unchanged. We want to be an 8% to 10% EBIT margin company, and we will do everything to achieve that.

And last point of your question list was funding and dividend policy. So dividend policy at FACC is in place since 2014 when we had the IPO, telling us that we want to distribute 20% to 30% of the net profit to our shareholders. There were 2 dividends at FACC paid out, one in 2018 and in 2019. We are now proposing as the Management Board to pay out a dividend of EUR 0.10 per share for the last fiscal year. This will be resolved by the end -- by the AGM at the end of May and the payout date will be early June. So we are back on the dividend path. And of course, we want to keep that dividend paying path because this is our, I would say, one of our targets as Management Board. We want to be a reliable capital markets investment. And in our view, dividends are part of that story.

Thank you very much. And with watching the time running out, we kindly ask to send further questions to the IR department. And with having said this, a big thank you to your interest in FACC, and thank you to the gentleman for the presentation and answering the questions. I wish you all a lovely remaining day.

And with having said this, I hand over to Michael for some final remarks.

Thank you, Ingmar, and thank you all once again for your participation in today's call on our 2025 results. And as already mentioned and mentioned earlier, we remain available for individual discussions should you wish to explore specific topics in greater details. Please let us know. We greatly appreciate your continued interest and engagement, and we look forward to our future exchanges.

And maybe, Robert, I will hand over to you to the last remark -- the final remark. Thank you.

Thank you, Michael. The last remark is thank you for participating. Thank you for your questions. And looking forward to talk to you and hear you at the next call. Have a good day, and stay safe. Thank you. Goodbye.

Good day, ladies and gentlemen, and a warm welcome to today's earnings call of the FACC AG following the publication of the Q3 financial figures of 2025. I am delighted to welcome the CEO, Robert Machtlinger; CFO, Florian Heindl; as well as Michael Steirer from Investor Relations, who will start the presentation shortly. After the presentation, you will have the ability to place your questions in the Q&A session.

And having said this, I hand over to you, Mr. Steirer.

Ingmar, thank you so much for the introduction. So good afternoon from my side as well, and thank you for joining us today for the earnings call for the third quarter of the fiscal year 2025 of FACC. As always, I'm joined by Robert Machtlinger, our CEO; and Florian Heindl, our CFO. And as usual, detailed financial information have already been published earlier today via our usual networks.

Should we be unable to address all the questions during today's call due to some time constraints or whatsoever, we would be glad to arrange follow-up one-on-one discussions. In this case, please feel free to get in touch with our IR department. So Tanja or even myself, and we will arrange meetings, one-on-one meetings accordingly.

So this said, I would like now to hand over to our CEO, Robert Machtlinger, and starting with some highlights out of the Q3 of FACC's fiscal year. Thank you so much.

Michael, thank you very much for the introduction. Dear ladies, dear gentlemen, good morning, good afternoon, good day wherever you are at the time being, very glad to have you now to this call. Talking about the first 9 months of the FACC fiscal year and of course, the quarter 3. As you all know, from past years, the third quarter in FACC is driven by seasonality, which is driven by the industry. So we normally have a little bit of a lower top line compared to the other quarters, simply driven by the fact that in July and August, some of our customers are reducing the output because of vacation period.

In saying that, a few highlights, where we will elaborate a little bit more in detail in the next couple of minutes. But overall -- and this is positive. We are following the trends of the last couple of quarters and periods. The growth path is continuing. More details to follow in the next slides. Also, I'd be very happy to address the success of the implementation of FACC's Academy. We talked about it in recent calls. We have invested during the course of 2024 in setting up or adding to the previous established Academy a new facility, mainly focused on the training and education of our employees, not only new hires we are bringing on board, but also educating constantly our current staff.

Why do we do this? We need to secure ramp-up. We need to secure quality, and we need to secure an efficient ramp-up. And in a few minutes, I think we can talk a little bit more what does this setup do for us. It's definitely positive contributing to our CORE project because we are able to increase revenue with the same amount of staff, which is only and certainly also linked to well-educated people.

Also and highlight always in the third quarter is the celebration of our employee loyalty. As you also know, aerospace is a unique industry. So we have to educate, train and qualify our people. Having people on board constantly and with long experience is, of course, helping us in the transformation process. And again, in September, we have celebrated with 273 long-term employees helping us over decades to develop FACC. And in those celebrations, we are inviting people that they are working for FACC for up to 45 years. So since the beginning of the foundation, and it's going down to people being with us 10 years or longer. So that was very positive, and we see that people stick to our visions and our missions.

And last but not least, we are empowering our women in the company with our Wings for Women initiative, which is right now up and running for 2 years. Increasing diversity in the FACC environment as an overarching statement, but also being very focused of enabling and motivating women to take more leadership roles in the environment of FACC.

In saying that, a few slides on the market development. As said before, we are strongly benefiting from the continuous strong demand for passenger but also business jet airplanes. We are growing with the market despite a very challenging global environment, growth in the first 9 year -- 9 months was 8.6% in revenue. Again, I'm repeating my statement, this 8.6% growth resulting in EUR 697 million of revenue in the first 9 months was made pretty much with the same employment. So we only added 17 people during the first 9 months, which is less than 0.5% of people growth, but enabling 8.6% of revenue growth. So this is one important element of our CORE initiative and Florian will talk a little bit more on CORE. So one element by increasing efficiency is definitely working nicely to our plans.

EBIT was expected stable. Again, Q3 is normally not a quarter where we are harvesting too much on EBIT because revenues are low, but fixed costs are stable. So overall, the result was very much in line with our calculations and expectations. I also would like to address this is all happening in a still quite dynamic environment, starting from the order signal from our customers, which is, I would say, still strong and good, but having some volatility here and there.

Biggest challenge still is the material supply chain. In terms of costs, where we are having actions in execution by changing the one or the other supply chain because of uncompetitiveness, but also the on-time delivery of the one or the other material is still an action needed here and there. We can compensate with special shift arrangements and with a very flexible workforce helping us on flexible work times. But overall, there is still challenges as many other peers we have to deal with as well.

Overall, managed well in good alignment with all of our customers in our workforce. But once further stabilizing, this is, of course, helping us on efficiencies as well. Order book, unchanged strong and slightly above EUR 6 billion. This is the orders we have to deliver on the more than 17,000 airplanes that are currently firmly ordered from airlines with all of our customers.

A quick insight on our major customers and businesses. I'm very glad on the statements made from Airbus last week during their Q3 result call. So the year-end target of 800 roughly airplanes to be delivered was reconfirmed. I also would like to make one statement here. We all know that Airbus is managing critical supply chains very precisely. They are not making a secret out of it where it comes from. So there is still some engine bottlenecks, making them producing gliders. The amount of gliders in the inventory was reduced from the end of June date to the end of September date, from a little bit more than 50 to around about 30.

One thing which might be important to know, and this is the positive partnership we share with all of them. We are delivering to the 820 airplane deliveries. So our products are delivered. They are installed. They are at Airbus or any other customer. So we can deliver. The question is, can the end customer deliver the final product? So we are a little bit least impacted from this volatility. So we are up and running, as long as the plan is there to deliver the guidance.

Boeing, same thing, positive news. Boeing heavily stabilized in the last couple of months. They received clearance from the FAA to further increase their production rates. As you all know, there have been ceilings put on them, not go beyond certain output. This is right now lifted for the next phase and Boeing is ramping up their production lines, especially on the 737 MAX. Right now, rate is increasing beyond the 38, which was the limitations they had in steps to rates in the range of 60 airplanes over the next periods to come. They're also ramping up the 787 constantly from today's rate to rates again above 10, but also on the 777.

Business jets, which is, as you all know, a significant portion of our business as well. 20% of our revenues is linked to the business jet market. And also here, we see a strong demand already in the first 9 months, but also going into the future. A little bit of a closer eye -- view on the main customers' deliveries. As said before, ramp-up is continuing, very positive. If you look to the left side of the chart, the gray bar, and this is showing evidence and proof that Boeing is reramping up again quite significantly from the first 9 months of 2024 to the first 9 months of 2025, the Boeing rate increased by 51%, which is a significant challenge and was -- to our interpretation, very well managed.

Airbus, a little bit more of a flat line in terms of deliveries. But if we keep in mind that there is some gliders, meaning finished airplanes on their property without engines. So we shall add another 30 airplanes already produced or already tested because they are having engines that are hung on airplanes, they are doing the test flight, they remove the engine again to use it on the next airplane. So they did better in terms of production compared to deliveries. So overall, the ramp-up is continuing. And as you see from our numbers as well, we are growing together with our customers. On the right side, very unchanged picture, more than 17,000 airplanes firmly ordered from airlines with our customers. Biggest order backlog, half of the 17,000 airplanes is ordered at Airbus, 37% at Boeing and very stable COMAC with an order backlog and market share of 9% as we speak.

I also wanted to share a new slide with yourself, which is giving a little bit more of insight on the business jet market. Again, business jets is not a niche for FACC. It's 20% of the sales volume we are having. And also here, we can see on a year-by-year comparison that there was an increase of 15% in the market demand on the large jets, which is transcontinental business jets like the global express family from Bombardier or Gulfstream, with the biggest amount of increase, of course, those airplanes are produced at a slightly lower pace compared to the medium and small jets. But also here on the small jets, nice increase of 10%. FACC is active in all areas. However, the biggest market share we have in the medium and large jets. So small jets, we are producing as well, but of course, at a lower value and with lower scope of work. So you see the trend also here is a positive one.

In terms of the long-term demand, Airbus and Boeing have rolled out the new long-term forecast, still same picture as we have seen it in the previous calls. Market demand over the next 20 years is around about 43,000 airplanes. The share of replacements and plans needed for growth also pretty much stable. So not too much new information here. Again, on the right side, a little bit more important for you to know. This is the major platforms we are delivering FACC technology to. So it's all the significant airplanes that are currently available in the market.

On the A350, we are currently producing a rate of 6 in average for the first 9 months. Actually, we are at the rate of 7 [ trade ]. So we already ramping up and this airplane will see a long -- midterm demand of 12 airplanes. Important to know that for every A350, we have work share value of slightly EUR 2 million. So you see also in the long run, organic growth that is in front of us without investing into new projects. 787, very similar, doubling the rate between the average rate in 2025 up to now to 12. That's the midterm. The longer term is even higher also for the A350. If we look into '28, '29, both customers are forecasting numbers that are slightly above the 12. Boeing 777 current configuration running at a stable low rate. This will remain the same until the new version comes into the market.

A320 or the narrow-bodies in general, as we all know, 80% of the market volume in terms of rates, but also in terms of value. A320 is still a 21% growth in front of us, most important platform for FACC, 37% of the revenue is based on that airplane. We are constantly ramping up all of our projects, Interiors, Engines & Nacelles, but also Aerostructures. So solid growth in front of us. A220, 40% growth rate in front of us. We're currently at the rate of 9 to 10 airplanes a month going into further rate ramp-ups in the first quarter of 2026 and then following in the second quarter for the next step. So here on the 220, there was a little bit of a move to the right recently by 3 months. We could manage nicely with our customer, but it's also here ramping up.

Boeing 737, said before, the rate lift -- rate ceiling has been lifted by the FAA recently. So we are right now going in the midterm to a rate of 55. The longer perspective from Boeing on the MAX is above the rate 60 in the longer term. COMAC C919, as you all know, also quite important platform for FACC. We do the entire cabin for this Chinese produced airplane, but also wind components, mainly movables on the wing, but also the winglet, at the tip of the wing. Also here, we will more than double the output from today's average rate until the end of the decade, which is representing a 140% organic growth that is in front of us.

In saying that, I would like to hand over to Florian for the financial details.

So thank you, Robert, for your introduction. Hello also from my side. I'm now guiding you, as always, through our financial figures for the Q3.

Familiar slide for you, just going again box by box. So starting at the top with the market recovery, I think no more words needed. Robert very precisely explained what the market is doing and delivering strong growth for our company, which leads us to the second box, 8.6% revenue increase if we compare it to the last 9 months of 2024. So we are now standing at EUR 697.6 million. We are aiming for the EUR 1 billion revenue this year, which we will also later reconfirm in our guidance that Robert will present to you later on.

Operating EBIT, a little bit of, yes, I would say, a small setback. As Robert outlined already, it was on the expected level indeed. Also, if we compare it to the last year, we are pretty much in the same ballpark with EUR 21.5 million of EBIT. In terms of the margin, we are a little bit worse than last year's comparative period. But the big difference to last year will be that we are expecting a strong fourth quarter this year, and you will also see that in our guidance later presented that we updated.

Robert also outlined the limited expansion of workforce compared to our revenue growth. So we only added 17 additional employees compared to our employee level year-end 2024, which is a direct outflow of our CORE initiative where we are focusing heavily on the efficiency of the company, of course, blue-collar side, but also in the white-collar environment, where we are acting very strict in terms of bringing new people on board. And last but not least, free cash flow, very strong end of September, EUR 25 million. We see that in a later slide as well, also if we compare to the comparable period in 2024. So we really have seen a very good improvement here in the last time, but what is still a burden on us in terms of cash is the high inventories, and I have another slide on that as well a little later.

So revenues, also a very familiar slide. On the left side, and I've said already, strong ramp-up in the industry. FACC growing even stronger than that. Q3, EUR 697.6 million. On the right side, you see the EBIT development over the last couple of years, EUR 21.5 million of EBIT in Q3, giving us a margin of 3.1%. Also again, guidance a little later with an update where we are aiming, of course, for a better Q4 that will lift us into a new territory for the full year.

Development across divisions for Q3 year-to-date, Aerostructures pretty much stable if we compare it to the last year's Q3. Reason is the same as we already outlined in the first half year 2025 report. So the level of engineering work/development work that we have provided to our customers is a little bit lower than in the last year. We are expecting that to turn that around in the last year's quarter of 2025 and seeing an increase again as well.

Engine & Nacelles, pretty much strong growth as we know it and Cabin Interiors, our strongest growing division for the time being, also if we compare it to last year's Q3 period. EBIT development, and this is, I would say, very nice for at least 2 divisions, Engine & Nacelles and Interiors on the right. So we are seeing still the improvement in Cabin Interiors environment. Although Q3 in Cabin Interiors was negative, we are still for -- on a year-to-date basis on all 3 divisions in positive territory, which is a very good improvement compared to the last couple of years.

Aerostructures on the left side are still a little bit depressed. We outlined the reasons also in the earnings calls of the half year and Q1. So we have a problem in material costs, especially in the fastener environment. And if you look at the performance of Q1 and Q2 in Aerostructures, we are again also in Q3 in the ballpark of the EBIT margin that we also received in the first 2 quarters of the year. Of course, we are working heavily on that, and we are in negotiations with our customers. There will be an improvement starting next year. But for this year, we and also, I would say, the rest of the industry is a little bit dragged down by fasteners price increases that are especially hitting us in the Aerostructures environment.

Free cash flow, just stated before, EUR 25 million by the end of the September. You see the very big improvement if we compare it to last year's period in 2024, of course, heavily driven by our inventory improvement program. If we think back the levels that we had last year, where we are bouncing around EUR 200 million in terms of inventory, we have brought down that, and we are still not at the end of the road. Of course, Robert outlined also already, Q3 is historically a weaker quarter for FACC, always has been with the company shutdowns in terms of holidays in July and August at FACC, but also at our customers. And this is, of course, a drag on the free cash flow in Q3. But overall, we are still seeing a strong improvement that we are expecting to extend even further in Q4 2025.

Investments on the left side, so for the full year, you see for Q3, EUR 16.3 million. For the full year, you have the numbers lined up over the last couple of years, around about EUR 25 million to EUR 30 million. We are also expecting that for fiscal year 2025. So there will be no big surprise in the last quarter. And on the right side, as I just outlined, the inventory development over the last couple of years and also the ratio inventory compared to total assets.

What we see is a stabilization of inventory also if we look at the half year number 2025. So we are now -- or we have stabilized our inventory around EUR 175 million, I would say, which is a little lower than the end of 2024. Very good improvement if we compare it to the numbers we have seen last year, especially Q3 2024, where we have been at EUR 192 million roundabout. So a very big improvement, and there is still a long way to go.

Now handing back to the outlook for Robert. Robert, are you still here?

Well, it seems that we lost the connection. [Technical Difficulty]

I will just continue. I will just continue and then we wait for them to rejoin us for the Q&A session.

So last on the line is just the outlook. On the left side, revenue and EBIT, we already talked about it. We are still, and this has not changed. We are forecasting for the full year 2025, a revenue of around about EUR 1 billion, which is giving us a revenue increase of over 10%. And the difference to our last guidance is now the more narrowed down guidance for the EBIT margin, which we are now expecting for the full year between 4% to 5% if we compare that to 2024 with 3.2% for the full year. So that's a decent improvement. And it also indicates, of course, a stronger Q4 than last year that we are expecting.

On the right side, also a very familiar box, I would say, nothing changed here. We are still heavily included, I would say, ensuring the industry ramp-up, Robert also outlined before, especially with Airbus and the glider issues that they are having. This is not an issue of FACC. So we are performing. We are delivering our products to the finished aircraft, even if they have no engine, we don't care about that too much, I would say. We are delivering our product, and we need to ensure the ramp-up of our majority customers like Airbus, Boeing and also COMAC.

CORE will not go away. We made that very clear also over the last couple of presentations, I would say, I'm currently also on a roadshow in Canada. So this is the driving discussions that I also have with other investors, and we are really focused on our initiative also for next year. What we can see that the initiative is working. So we see improvements across the board, efficiency in terms of people we already talked. We are also seeing improvements in our cost structure. If I just look at the smaller item, which is called travel costs, for example. So pretty much a very broad program where we are working on and with the end goal, of course, to deliver an EBIT margin 8% to 10% by the end of 2027.

So this is also nothing new. This is a message that we know. If we look at this year with an EBIT margin of 4% to 5%, you can build the bridge also for next year, there will be a further improvement in 2026. And then finally, after our CORE initiative is fully up and running, we should end up at a group EBIT margin between 8% to 10%. Leverage ratio, also nothing unexpected. In the medium term, we are expecting to have a leverage ratio below 2.50 again. For the full year this year, of course, we are also expecting a further increase -- improvement also if we are looking for a potentially stronger Q4 than we had last year.

Globalization strategy, also nothing new. We are working on the expansion of our global footprint, still, of course, with a hard beating in Europe with Austria and Croatia. But of course, we are looking at our international locations that we already have and the potential to build it up. Quality and safety is the last thing, also very familiar in that box. So everything that we do -- it needs to secure the quality and product safety of the products that we are delivering to our customers, and this is paramount for FACC.

So with that said, I'm seeing that Robert is on the line again, and I want to hand over maybe to him. I just presented the outlook. And I think we are finally ready to move to the Q&A session. But if you also have to -- a final word on that slide, I happily hand over to you again.

No. Sorry for dropping out. So we had a system issue we had to report. Thank you, Florian, for taking over. All said perfectly. And I think right now, the floor is the floor for our visitors, and we are more than glad to answer your questions. Thank you, Florian, for stepping in.

[Operator Instructions] I will start with a question in our chat box. So please, I will read it out. Do you currently have or expect to have some exposure to the increased defense spending in the EU and especially Germany?

Well, we can answer that very easily. We have some dual-use goods we are producing mainly as a platform for civil. They are then used for military applications, too. For the time being, we are watching the defense market, especially the European defense market very closely, I have to say. We need to be very, I would say, open here and transparent. Setting up military business is a new business environment that in some cases, not to say in all cases, requires an isolated fenced operational environment.

So we only would respond to such opportunities if we can use, let's say, pretty much the state of the FACC operational setup. Setting up something new only makes sense if we have a larger volume in front of us. So long story short, still mainly focused on the civil aviation, UAM and some space business. Defense is under our watch list, but with volumes currently very little.

And one participant raised his hands, Bastian Brach, you should be able to speak now.

Can you hear me?

Yes, perfectly.

So some questions for me, but I will do them one by one. The first one is on the inventory level. I remember you gave us a target of around EUR 150 million by year-end regarding the inventory. Is this still reachable? Would be another huge step from Q3 to year-end? And could you -- could we expect a further inventory reduction in 2026? Or do you want to stabilize at the level?

Maybe a quick statement from myself first, and then you might elaborate on it a little bit further. So I think on the inventory, as I said before, seasonality in the third quarter, output to a certain degree because customer demands are a little bit lower. Nevertheless, we have level loaded, of course, our operations. So we have some inventory built up in order to prepare for the remainder of the year.

The fourth quarter will be a strong output quarter again. So by delivering end product and semi-finished product as we have it now to our customers, this will have an automatic impact to the inventory level. So there is a further reduction in front of us. And for the year-end target, Florian, I think you could take over, please from here.

Yes. Just to add on what Robert already said. So we handed out EUR 148 million to you as a guidance for the full year of the target that we want to achieve. As Robert just outlined, yes, there are challenges ahead of us. We have seen that also in the current numbers that we are having. It is a huge step down, of course, that we are aiming for, for the full year. This guidance is still up and running. So we are still very heavily working on it. And for next year, of course, we are already in the budgeting process or the budgeting process is already finalized. I do not want to front run here.

But also, of course, if you just look at the ratios, and it doesn't matter if you look at total assets ratio or compared to revenue, we are again or still, I would say, not at the levels before COVID, which is the overarching goal, of course, that we want to achieve. Is this possible already to achieve that in 2026? I would not expect that, to be honest, because the industry is still in a strong ramp-up. We have all the issues that also Robert talked before in the supply chain. Supply chain is improving, but we are still not there where we have been also before COVID. So you can expect that the inventory optimization program will also be up and running at FACC in 2026 and beyond.

Okay. Then the next question would be on the outlook, but only in terms of employee numbers. I think you won't give me an outlook for revenue and EBIT margin quite yet. But what do you plan for in 2026? I would expect another meaningful revenue increase in terms of headcount numbers, maybe also split between like blue collars or production workers and in your offices?

Well, in operations, we have a target set ourselves that we want to do a certain increase in revenue with the same amount of people. We have right now increased EUR 55 million of revenue during the course of this year with the same amount of people. Next year will be another year with growth. We talked about the ongoing rate increases. So we are adding people here and there in the blue-collar in the operational environment. But not at the same speed or curve, we are increasing our revenue. So we are adding people.

Currently, we have restarted the onboarding in October by bringing people up to speed. So there will be add-ons in the blue-collar environment. But again, if we increase the revenue at a certain percentage, the percentage in headcount increase will be significantly less. In the white-collar area, it's an objective not to ramp up any further. So keeping the workforce stable and managing more revenue with the same amount of fixed costs. That's our objective as we have it at the time being, and we are sticking to that.

Okay. My last question is on the CORE strategy and the outlined EUR 80 million cost savings until the end of 2026. Could you give us an indication how much of that is already in place right now? And maybe in which of the 4 areas you outlined, like production efficiency, is the biggest savings until now?

Well, it's the 4 elements as Florian described a few times. I might go into 2, and Florian might take over the other 2. Efficiency increases in operations is one element, accounting for roughly 1/4, 25% of the EUR 80 million. It's pretty much, as I just said before, more revenue with the same amount of people. So efficiency increases by learning curve effects, but also digitalization, automatization, some work transfers between FACC, Austria and FACC Croatia, of course, very important for our Interiors. But we are also offloading to supply chains, very low complex composite work in order to get efficiencies here. So this is running pretty much to plan. 1/3 of the savings expected this year, 2/3 to be expected next year.

The second point is inflation effects to be compensated by the market, meaning our customers. This is an ongoing process, where we are working daily. And this is out of contract, let's say, settlements we are asking for. Florian talked about the fastener issues that is impacting the entire industry, especially in 2025. Just to give you a figure, Aerostructures is impacted by around about EUR 10 million of unexpected price impacts during the course of 2025. So we have been able to overcompensate here and there. This hit we have seen this year, we have to take. But we have various agreements in place with both sides, suppliers and dealers to normalize the situation starting next year. And with the one or the other customer, we found agreement on getting compensation. So here, I think we have found solutions.

On the global supply chain restructuring, we have rolled out plans. Constantly, we are currently transferring 50, 5-0, individual work packages from supply chains that we have used in Europe for the last couple of years to either more competitive ones in Europe or -- and this is the majority using supply chains in best cost countries, which is Asia, of course, which is Southeast Europe, which is, however, also the South American environment. Here, we are currently active, but the benefits will trigger not before the fourth quarter of next year. So this is more the longer pole in the tent. Also here, we are expecting around about 25% of the effects coming from that area.

And Florian, if you want to talk on the [ savings ] again, 1/3, a little bit less than 1/3, 1/4 are being active and accountable this year, compensating the inflation effects. The bigger effect will come in the year 2026 and beyond on the material supply chain activities. Florian, please.

So maybe just on the fixed cost or the general expenses environment that we are having. I dropped one of the items already before, talking about travel expenses a little bit. This is, of course, also part of the package. So if we look at the EUR 10 million that we gave out target for the fixed cost or general expenses savings that we want to do, and travel expenses, for example, is one item where we had a huge saving this year already. So this is pretty much in the box already. Some improvements, of course, also planned for next year, but we really cut down on that environment.

Customers price increases, Robert already touched a little bit with his remarks also in terms of the fastener issues and compensation agreements that we have in place. And also, I think in this environment, we are pretty much well underway also this year, so heavily negotiating also as we speak for the Q4, some items already lined up and also for next year still. But overall, this EUR 20 million that we put out is also pretty much, I would say, over 50% already secured for this year.

Okay. So -- is the math like 1/3 to half of it already done and the rest next year, right?

I would rather say 1/3 this year with one exception. The fixed cost cutting program where we had around about EUR 10 million is applicable this year, but also will continue next year.

And we move on to Aymeric Poulain.

The first question is on the Q3 sales, please, the 4%. Would you be able to quantify the FX element of the apparent slowdown and whether the rest effectively organic growth is just volume or if there are some pricing effect? I think you also said on Q4, you don't expect pricing effect immediately for Aerostructures. And yet you forecast an implicit 25% growth in the top line in that quarter. So the contrast between the 2 quarters is quite stellar. Could you give a bit more color on why there's such a high contrast of growth between the 2 quarters that will be helpful. I've got other questions, but maybe we can start with that, if you want.

Maybe I'll start first with the FX part of that question and maybe then Robert adds a little bit on it in terms of the sales and the revenues. So in terms of FX perspective, and I think we -- this is also, of course, a very interesting question that we're always facing as we are a 100% U.S. dollar-dominated company. But for the fiscal year 2025, the hedging that we have in place is pretty much done with an average rate of 1.10.

So I would say the exposure that we have to the currently weaker dollar is 2025 not really relevant. Of course, we have a hedging portfolio that fluctuates a little bit in terms of the average rates. We are doing the hedging only with forwards. So we have -- if you look quarter-to-quarter, and we are not, I would say, publishing that figures. But if you look quarter-to-quarter, you have a little different hedge rates on average for each quarter. But on average, for the full year, we are standing at 1.10, which is a very good rate, I would say, and this is beneficial for us during this year.

Well, on the output, as I said before, Q1, Q2 normally is ramping up stable, and we knew from the H1 reporting. Q3 definitely was -- compared to every other year, very weak in terms of customer demand and therefore, product delivery. We had 30% to 40% reduction in revenue, especially in the month of August. So for the rest of the year, as Florian said, and I confirm -- the orders are in, we are delivering at a higher pace. We already see it in October, we have the November in front of us. And as also stated by Florian, some of the development cost milestones are currently finishing. So services or [ NSEs ] development cost invoicing also will take during the month of November and December.

So overall, the overall outlook is based on today's environment confirmed. And just to give you a little bit of an insight, Airbus, Boeing and all of our other customers are further ramping up. We are a little bit ahead of that because we need to deliver wind components, for example, roughly half a year sooner before the airplane is finished and handed over to an end customer. So also in the month of December, especially January, February, we are again preparing for the next rate ramp-up. And we are already starting now. This is why we also are ramping up. Some of the works are already a little bit ahead of schedule. So that's a little bit of an explanation of the quarterly differences in terms of revenue output. I hope that helps.

Yes, that helps. And coming back on the guidance, so you have this margin upgrade effectively or a slightly higher base of the range, above 4% despite the fact that you won't get the pricing negotiation kicking in on the Aerostructures side before next year. So in terms of the year-on-year impact that you would expect in 2026 for Aerostructures, would you have an idea of how significant it could be?

Well, we do not want to give a guidance for the next year, if we are [ finishing ] this year. But as you heard from previous or in previous calls, we have -- we have laid out a transformation plan driven by many things. Some of it we talked about efficiency, digitalization, optimization, further ramping up Croatia, especially important for our Cabin division. And also here, I think Florian gave you some numbers. We are breaking even right now after many years of suffering from certain things.

What is it, and this is unchanged by the year end of 2027. We want to have the company developed into a company delivering high single-digit, low double-digit EBIT margins, a little bit higher on Engines & Nacelles and Aerostructures and the Cabin division in the range of 6% to 7.5% sustainable profit margin.

So that's the plan we have laid out. That's what we are following. For the next year, there will be another further increase from where we are coming, transitioning into the target we have laid out in earlier calls.

Okay. And urban mobility, where are we on the regulatory front? Do you expect some first commercial approvals by the end of next year? Or is it still a bit too early?

It's still a little bit too early. I know from where we are with our U.S. customers, there is continuous test flights ongoing. There is targets for one customer. It's public. You can read it up. It's Archer, who wants to do a public certified people transportation during the Los Angeles Olympic Games. This is a milestone for them to be achieved. They are working towards that one. We are producing very low serial production part rate at the time being, supporting initial production.

On the second customer, whom we name to you is Eve, which is the Embraer spin-off. We are currently in a phase of producing the first part 2, which is parts for testing and first compliant test flights. So they are, let's say, following pretty much a year to 18 months Archer in terms of schedule. And we have another 2 projects where we can't talk about the end customer. But on one of the projects, which is logistics, not people transportation, we are currently producing serial production products as we speak, still at, I would say, low rate.

For 2026, however, one of the projects is ramping up in full production. We are just setting up a production line, which is going operational this week. For the next year in this project, we are not only looking into development, let's say, revenues. We have a first year of very stable and sizable production volume. If I talk production volume, we talked about EUR 30 million to EUR 40 million of serial production environment. So it's not only R&D yet. So it's entering step in a serial production environment.

So still, sorry that we can't name the end customer on those other 2 projects, but one of it is really taking up momentum and will contribute with around about EUR 30 million to EUR 40 million in recurring revenue starting next year. So that's the positive.

Yes. And the last, COMAC was reported to have had some delays in its production rate in 2025. Is it a temporary slowdown similar to what we saw at Airbus due to engine scarcity? Or is there something a bit more longer lasting on that situation?

I would say you made the right statement. I think it's a slowdown of the very ambitious ramp-up plans they had in place. So they rebalanced to a certain degree. I would call it that way, this new ramp-up forecast is a little bit more in line with what we would have been expected. So we have prepared for the steeper ramp-up, and we right now really adjusted to the new figures. So we worked it nicely with our customer. Again, ramp-up ongoing, but at a little bit of a more moderate pace.

And we have one last in our chat box. I will read this out. What do you consider your competitive advantage to your close competitors?

Well, I think it's never a single one. I think it's the holistic benefit we're having. We are never the biggest one. As you know, there is a few out there that are bigger. There was a very big one that is right now customer-owned again and split up between 2 customers. You know whom I'm talking about. They certainly have a volume advantage here and there.

Overall, I think we are leading in some technology developments, especially for the next-generation airplanes where we are engaged not with only one, we are engaged with all of them, and we are engaged not in one commodity. We are engaged in Cabin, we are engaged in Aerostructures, and we are engaged in the [indiscernible] system. So this is giving us more access to a wider market. I think that's a little bit underpinned by our growth. We are normally growing faster than the normal production rate increases because we have a wider portfolio.

One benefit also, I think, is our global spread. So we are, of course, strong in Europe with our setups in Austria, but also Croatia. We started our Asian engagement long before AVIC was a majority shareholder in China. So we are active in China since the early 2000 years. As you know, AVIC bought us in 2009. So we have been there 7 years before AVIC took the share in FACC. The same is true for India. We are active in India since 2010. with own operations in Pune but a strong partnership in Bangalore as well. So here, we have, I think, some advantage compared to our peers.

The other side of the coin, we can talk as well. Europe definitely had more inflation cost issues compared to other markets. Here, we are, and Florian and I talked about it, engaged with our CORE projects in order to close the gap. But overall, I would say its flexibility, its highest quality and reliability. It's our global footprint, and we are acting in more areas compared to our peers who either are Cabin or either our [ propulsion ] or either our Aerostructures, we can deal with all of it.

Thank you very much. And with watching the time running out and in the meantime, we do not have and received further questions, we, therefore, come to the end of today's earnings call. Thank you very much for your interest in FACC. And a big thank you to the gentlemen for your presentation and the time you took to answer the questions. Should further questions arise at a later time, please feel free to contact Investor Relations of FACC. I wish you all a lovely remaining day. Thank you. Stay safe, and bye-bye.

Thank you, everyone.

Everyone, thank you. Always a pleasure. Bye.

Hello, everyone, and a very warm welcome to the Austrian Air Conference. It is a pleasure to have you all here today for this special roundtable session. This session is dedicated to the FACC AG. We are truly delighted to have the chance to hear from their leadership. It is my honor to introduce their CFO, Florian Heindl, who will share some insights with us today. And without further ado, let me hand over to you, Florian. The stage is yours.

Thank you very much. Hello, everybody. Thank you for attending today's call. I will just browse quickly to a couple of slides that we prepared. And then afterwards, we have a Q&A session where I can answer all the open and remaining questions.

So very quickly, FACC, the headline you see here, Unleash the Potential, and this is the basic line, I would say, that is currently driving us for the moment, much of potential in our company, and I will quickly guide you through a couple of insights.

Overview, what we will talk about today, company presentation, the global market in terms of Civil Aerospace, the financials of FACC and a short outlook for the rest of the year, but also in medium term. Very briefly, because it's a recent change in our Management Board structure of the company. On the right side, you can see that the former COO, Mr. Andreas Ockel, resigned from the Management Board of FACC on 24th of June 2025. So this summer, around about a couple of months ago. And the Supervisory Board of FACC took the decision to reorganize and restructure the FACC Management Board, essentially reduced the number of Board members from 4 to 3 persons. You can see the current Management Board on the left side with the CEO, Robert Machtlinger, myself as the CFO and our Chief Strategy Officer, Mr. Xu Tongyu, a Chinese person.

Marked in green are the -- sorry, marked in green are the new assignments in this new management Board. So Mr. Machtlinger took over the area of operations, facility management, occupational safety and the whole quality area from the COO. Myself took over human resources and sustainability and Mr. Xu took over the procurement and logistic responsibilities and the corporate strategy of our group. So this is the new setup going forward. I think it's a very good signal also for the whole organization that the Management Board was reduced because we are in an era of cost or an era of cost saving, and it starts at the top.

Where are we coming from? From skis to the sky. So maybe some of you know our origins. We are a spin-off of a company called Fischer. You see in the front of this slide, Fischer is a ski manufacturer located in Upper Austria, which was the birth site of FACC. FACC was a spin-off in 1989 when the company was founded, so 36 years ago. And we took the technology from the ski industry, the lightweight composite technology into aviation, and we are very successful in doing that as our revenues and results are showing. We are still neighboring the Fischer manufacturing plant here in Reed, where the headquarters is located. But besides that, on a legal perspective, we have nothing to do with our former mothership anymore.

FACC at a glance. So a brief overview on the left side, starting on the left top, who we are. And I just briefly mentioned it, we are an aerospace technology and composite lightweight company who tries to serve all OEMs on the market. And what you can get at FACC are turnkey capabilities, and you will see that on the next slide where I briefly explained that.

Right now, we have around about 3,850 full-time equivalents in our group, where the majority is currently located in Austria, where we have our majority manufacturing footprint. Worth noting is also that we have employees from over 50 nations in our group in the meantime, so rapidly growing and sourcing people from all over the world. What we are doing is we are serving the whole civil aviation market, meaning the whole commercial aviation, but also advanced air mobility, for example, the drone segment that we are entertaining, and we are also looking at the space environment as a potential future market.

We have a global network. As I said, although our heart is pumping in Austria in terms of our manufacturing footprint with around about 80% of the manufacturing still located in Austria, we have a global setup with 15 development and production sites worldwide. Worth noting is, for example, Croatia, our newest manufacturing footprint with around about 1 million of labor hours capacity that we have in Croatia. We are a publicly listed company, obviously, with 55% majority shareholder from China, AWI Corporation, the rest is in free float listed on the Vienna Stock Exchange.

On the right side, very briefly, an overview of our impressive customer landscape, starting with our most important customer for the time being, Airbus with around about 55% of our total revenue generated with Airbus. But also Boeing and the Chinese OEM, COMAC are very important for us as well as Bombardier and Embraer, especially in the business jet segment that we are serving. In the middle segment of this chart, you can see the engines manufacturers, which are also our core customers, GE Aerospace, Pratt & Whitney, Rolls-Royce and Collins Aerospace, which we are serving in the Engine and Nacelles division.

And jumping to the bottom of the slide, you see our, I would say, most prospective customers of the future. It's Archer in the drone environment, also Eve drone environment and the single space project that we are currently entertaining is with Ariane Group. So a full customer landscape for you to review.

What you can get at FACC, and I mentioned it before, and this is the most important thing to know about FACC is triple competence and turnkey solutions in composite manufacturing, meaning it starts with design, moves over to production ending up in maintenance. So as a customer, you can get everything at FACC if you choose to or you can only choose to take a part of this full circle of capabilities and for example, just have your products manufactured at FACC. But we are also, of course, only designing certain products or also doing certain repairs for certain products. So it's really a full competency that we are offering to the market. And of course, as usual, in civil aviation, you need certificates and approvals from local authorities for that. And of course, we are having that as well, and it's the most precious thing for us having as a company.

What is our business? Jumping into our business segments. On the left side, you see the core business, as we call it, 3 divisions, Aerostructures dealing with everything that is outside of the plane, most notably movables, farings and wing elements. The middle section, engine and nacelles. So everything that is related to engines in the not heat-exposed area of the engine and nacelles, meaning the coverings of the engine, for example.

Cabin Interiors, we have 2 major sections that we are serving. For example, the commercial aircraft like Airbus A320 as the bread-and-butter business for FACC. So for example, as a signature product in this division, every overhead in every flying A320 is coming out of FACC. And the second section is business jets, and I mentioned it before, where we are doing business with Embraer and Bombardier, most notably. On the right side, what we call new business are the prospective future revenue and earnings generators of our company, which is the MRO segment, meaning maintenance, repair and overhaul, which we are doing together with our OEMs, but also with certain operators, meaning the airlines. Middle section, advanced air mobility. This is currently the most driving environment that we are engaged in is the drone environment, meaning passenger transportation and goods logistics. So very important story. I have another slide very soon.

And on the right is the space environment. As I just said, currently, we are only entertaining one project, which is a launcher system for the Ariane rocket. So space is definitely something that we are watching also with regards to what is happening in the U.S. with the privatization of space like Blue Origin or SpaceX and all those companies alike. But for us, it's mainly important to learn from a technology side it will definitely not be a business segment that we will heavily invest in. Again, it's for us learning by using and applying technologies from space.

Advanced Air Mobility, this is the slide. So the drone business. As I said in the beginning, it's a very growing business at FACC and also globally, very important one. We are dealing essentially with 4 projects, 2 of them are in the passenger transportation environment, Archer and Eve, both companies from the U.S. And on the right side, we are entertaining a project with Drone Logistics. We are not allowed to announce the customer yet, but it's a very big multibillion U.S. dollar company. And also another logistics project, which is not for the small parcels, but for bigger ones, which we are also not allowed to announce the customers. Both of them -- both of these projects are also located in the U.S.

So very interesting business. FACC entered this business in 2018 with a company or a partner back then called EHang, a Chinese drone manufacturer. So this was the entry in the market of drone manufacturing. Since then, and as you can see in that portfolio, the cooperation with EHang came to a standstill also as a result of COVID. But nevertheless, we managed to in load for other projects that you can see here that are in various stages of pre-serial production already. By far, fastest advanced projects are Archer and the drone logistics company, which are already in a very extended pre-series production mode. So here, we are really talking about volume already, for example, the drone logistics company from the U.S. has ordered around 1,000 drones for the business year 2026, which we will, of course, happily manufacture for them.

And for example, with this regards, we are really manufacturing the whole drone. Of course, we are sourcing the electronics, et cetera, from other suppliers, but the customer in the end gets the fully assembled drone and only needs to do some, I would say, final assembly by himself.

The global market in civil aviation, and I think this is the most important thing to know. Global aviation is very resilient. And you can see it on that chart. You see the chart starting in 1990. You have several crisis in there, Gulf crisis, Asian crisis, 9/11, financial crisis and most notably, the last crisis was, of course, COVID, which had the biggest impact over decades on the global aviation environment. So -- but, and this is the most important thing to get away here is that, the market very quickly recovers after each and every crisis. And especially looking now at the industrial environment in Europe and most notably also in Austria, we are one of the very few industries that is enjoying double-digit growth rates. FACC had growth of 20% last year, 23% the year before. And for this year, we are looking for growth at over 10% per annum.

So this is the most important thing to know about the civil aviation business. It's a growing market. The medium-term growth rates in the industry are between 4% to 5%. So this is something that Airbus and Boeing, of course, are constantly analyzing. So underlying growth rate of the market, 4% to 5%. FACC is growing usually more than that because of our diverse portfolio and the add-on business of, for example, the drone environment.

The demand in terms of new aircraft that are needed by the market until 2043. So this is the one of the latest analysis from Airbus. Boeing is also doing its own analysis. The number is not different. So also Boeing is looking at around about 43,000 new airplanes until 2043. You can see here on the left side, the distribution. So currently in service in 2025, around about 25,000 airplanes. From this 25,000, around about 6,000 will stay until 2043. 18,500 round about will be replaced and 24,000 additional airplanes will be needed to cover the market demand. So a very interesting market environment FACC is operating in.

To break that down a little bit for you, you can see on the right side, the aircraft production rates per month and the future forecast by the OEM. So what does it mean for FACC? You can see here the platforms on the left. So all platforms that are also entertained by FACC, starting at the wide-body aircraft, meaning the big ones like the A350, a current manufacturing rate at FACC, 6 airplanes per month. This is to be forecasted to double in the next couple of years. Exactly the same is true for the Boeing 787, which is [indiscernible] to the A350, also from rate 6 currently to rate 12. And the interesting thing to know is that we already have been at these double-digit rates before COVID. So these are airplanes that are not fully recovered yet, but are expected to recover until 2027 roundabout.

What does that mean for FACC in that specific regard? We do not need to invest anything because all the capacity is already here that we need. We only need to do additional shifts in personnel. Jumping down to the single-aisle environment, which is the bread and butter business for FACC. So most important platform is the A320 family with 62 aircraft produced currently per month. Airbus is forecasting an increase until 2027 of up to 75 airplanes per month. [indiscernible], the Boeing 737 currently produced at rates around, I would say, 35 for the time being. They also have a production cap currently from the U.S. government, meaning that they need to solve all the quality problems that they had in the past.

So once this cap is lifted, Boeing is looking also, of course, to increase their production rates in the future. And we are here looking at the forecast of around about 55 airplanes also somewhere in the years 2027 to 2028. And the last one is COMAC, the C919, the I would say, upcoming star from China. Currently, if you compare it to an A320, of course, very limited production rates with around about 5 per month. The long-term forecast, of course, also almost tripling. So also a very interesting business for FACC. Currently, we have around about USD 1 million of production volume on every C919 that is produced.

Financials of FACC, and this is something where we are currently working on. I will come to that in a minute. So market, we already heard about market recovery continues. I would not talk about the market recovery anymore because we are already enjoying market rates and production rates that are overwhelmingly higher than we had before COVID. So we are fully back on track. FACC in the first half year of 2025 had a half year revenue of EUR 484.7 million. The EBIT was EUR 18.4 million. We in loaded in the last 12 months, 123 additional employees. So employee growth was still there. And most important, of course, for the CFO, what remains in the pocket, the free cash flow positive with EUR 31.7 million. So just to give you a couple of quick facts about our first half year of 2025.

Longer-term view in terms of revenue, you see on the left side, where we already have been before COVID, EUR 800 million company. COVID, of course, gave us a severe hit. Since then, a rapid recovery with now in the half year, EUR 484.7 million. For the full year, we are expecting a revenue of around about EUR 1 billion for the first time. So another year of strong growth at FACC. The operating result on the right side, this is, I would say, the thing that we have to work on FACC, and I have a slide on that as well going forward. And this is a huge part from my perspective of our, I would say, beneficial equity story and the interesting equity story that we can provide. So you can see since COVID, we are on a recovery path. Year-over-year, we are increasing the EBIT and also the margin, 3.8% EBIT margin in half year. 18.4%, as I said before.

The forecast for the guidance for the full year is to increase the EBIT margin even further. So you see last year, we had 3.2%. So of course, the goal is to extend that EBIT margin in terms of absolute and relative figures. Revenue distribution, I touched it before a little bit already when we talked about manufacturing rates. So what you can see here is the revenue distribution in Q1 2025. So it does not change much. Also if you compare it to the right side in the fiscal year 2024. Bread and butter business, as mentioned before, is really the A320 family, followed by the business jet segment and the A350 that we are providing parts for. So, looking down a little bit, you see the A220 and also the A330. And if we add up all those Airbus platforms, you see that well over 50% revenue share is generated for the time being with Airbus.

The strategic goal of the Management Board is to decrease this relative Airbus share, meaning that we, of course, do not want to lose Airbus business. But relatively, we want to bring up Boeing business again, which will, by the way, happen automatically once Boeing gets back on track with the 787 and the 737. So revenue share automatically will increase with FACC again, but also we want to win new projects with Boeing. The revenue distribution in the past, so looking back 10 to 15 years was around about 1/3 Airbus business, 1/3 Boeing business and 1/3 the rest. And this is a structure that we are looking forward to getting back again.

So for the time being, as I said, Airbus, the most important customer for the medium term, we are looking at a more balanced revenue distribution again. Free cash flow on the left side, first half year 2025, you see the EUR 31.7 million generated in terms of free cash flow, which was a huge improvement if we compare it to H1 2024 with EUR 7.4 million. Is it enough? No, it's not enough. And this is the pain point we are still working on, and I have an extra slide for you in a second.

Also in terms of cash flow, the investments pretty much stable at FACC, always fluctuating between EUR 25 million and EUR 35 million a year. More important for the time being are -- is the development of working capital, most notably inventory. Inventory is currently a pain for FACC. So if you take a look at the inventory development over the last couple of years, of course, it rose again with the increasing revenue, but the problematic thing is the share of inventory compared to the total assets, where we are standing right now at 23.3% in half year 2025 with EUR 172 million.

So the biggest inventory that we had at FACC was in Q3 2024 with around about EUR 192 million. So we already came down EUR 20 million and the target for the financial year 2024, the year 2025, the year-end is EUR 148 million. So another EUR 25 million to go from the half year figures. And this is, of course, one of the most important drivers in terms of optimization of free cash flow, bringing down our inventory numbers again. It's not a problem of lack in demand, I have to say. It's a problem in terms of supply chain. We still have frictions in the supply chain, and you might have read that Airbus has a problem in terms of getting all the engines that they need for the fully manufactured planes that they have sitting on their ground. So this is only one example of the problems in the supply chain. So they are still very relevant also as a result of COVID and of course, also as a result of the energy crisis out of the Ukraine war.

What does that mean for FACC in a nutshell? And what is part of the equity story of FACC and why do I think that FACC is an interesting investment? So as I said before, we have a very strong market, and you have seen that in terms of revenue, but we have -- still have a problem in terms of margins and in terms of cash flow. And we are dealing with that with a program that is called corporate reshaping, making us fit for the future. So we call it core corporate reshaping. What's meant by that?

Until 2026, we want to harvest EUR 80 million of result improvements. And those result improvements should be generated in 4 different sections. The first section is EUR 25 million in material cost saving, EUR 25 million in terms of increased efficiency, meaning more output with a lower amount of people. That also means, of course, or includes the white collar environment and the internal organization of FACC, EUR 20 million of price increases with our customers and EUR 10 million of reduction of other costs, general expenses, so to say, marketing costs, consulting costs, but also benefits that we had in the past for our employees.

So this is really a big package that we have put together. We started working in the fourth quarter of 2024, and it's expected to end in 2026. And this will really provide the basis for our future success. So really bringing our cost environment back under control.

The outlook for the company, and I said it in the beginning on the left side, so EUR 1 billion revenue for the fiscal year 2025, which translates in a growth of over 10% again, so very strong growth. And for the first time in history, we are aiming for the EUR 1 billion revenue mark. The EBIT margin, we want to improve further. 2024, we had an EBIT margin of 3.2%. So we are definitely expecting a strong increase for this fiscal year. And on the right side, you see the, I would say, medium-term outlook. So as you have seen, since COVID, the industry is in a strong ramp-up. FACC is for the most part for our OEMs, the Tier 1 partner, meaning we are crucial to securing their ramp-up. And this is something that we take very seriously and is on top of our agenda.

The core efficiency measures we talked about are the baseline to improve our EBIT margins. The target EBIT margin by the end of 2027 on a group level shall be 8% to 10%. There will be certain differences when we look at the divisions. So Aerostructures and Engine nacelles will have double-digit EBIT margins. By the way, Engine & nacelles is already enjoying EBIT margins of around 12%. Cabin Interiors division will be a single-digit EBIT margin environment in the area of around about 7%. So in the blender, it will be around 8% to 10% on a group level. Company will be further deleveraged. We have around about a leverage ratio of 3.6 at the moment. We want to come down to a ratio again of below 2.50 that we also enjoyed before COVID.

We will further push our globalization strategy, meaning the expansion of the global footprint, as I said before, currently, we have a very heavy focus in terms of manufacturing in Austria. We are looking now to a strategy being closer to the customer. Austria and Croatia is fine when we talk about the European Airbus business. But when we're talking about the U.S. customers like Boeing or the Canadian customers like Bombardier or our Chinese customers, the Austrian setup for the future might not be sufficient, and we will work on that.

And last but not least, the most important thing for FACC is quality and safety. Everything we do is under these 2 premises. So we want to secure the safety of flying, and this is also one of our most important things to do.

So thank you for your attention, and I'm now looking to a healthy Q&A session.

Yes. Thank you very much for your insightful and interesting presentation, Florian. Ladies and gentlemen, it is your turn now as we move on to our Q&A session.

[Operator Instructions]

One already has arrived, do you plan a capital increase in the near-term future to reduce the leverage?

Thank you for your question. A capital increase to reduce the leverage is very clearly not planned. What we see going forward is an increase in investments, and we have said that publicly already, if you check the news, FACC is planning to invest around about EUR 300 million in the next 5 years until 2030. Why is that? Or what are the contents of that investment package? One thing is definitely a new plant, so fresh capacity for FACC. If we talk about the full composite plant in terms of what FACC needs, we're talking about an investment volume between EUR 50 million to EUR 70 million. So this is one part of the equation.

The second part is that we expect both Airbus and Boeing to launch new generation aircraft platforms by the end of the decade, meaning they will start development work. And this will mean for FACC that we need to invest again like we did for the A380, for the A320, for the A350 in the past. So this is the content of the investment package that we are looking at in the next couple of years. And to come back to the initial question, so capital increase to reduce leverage, no. Might there be a capital increase to cover certain future investments? That is, of course, part of the discussion how to finance those future investments. But of course, it's not planned yet.

Thank you very much. And ladies and gentlemen, this is your space for your questions. So let us know if you have any. We have already received a few questions ahead of the call, which we would like to start with. And Florian, you mentioned the drone business in connection with growth markets or new business areas. Can you explain the business model for passenger drones in more detail? What is the time line? And when can we expect to see drones in flight?

Yes. very good question. We are -- as I said, we are entertaining the drone environment since a couple of years. We are one of the companies in the civil drone segment. It's also worth noting we are doing no military business at FACC. So no military business in terms of planes, but also no military business in terms of drones. So really focused on the civil aviation. And in terms of drones, if we talk about the passenger transportation for drones, we have 2 projects. And one of the further advanced is Archer, which is a stock-listed company in the U.S.

They are looking at their final certification, I would say, next -- sometime next year. And their concept is together with a strong shareholder base, one of their shareholders is United Airlines, for example, they are partnering up with United Airlines with an idea that if you buy a ticket for a United Airlines flight that you can also buy a ticket for the final transportation from the airport to the inner city, in the big cities, of course, with traffic problems. For example, New York or Chicago or whatever. So you can choose together with your United Airlines ticket, you can also buy a ticket for the last mile transportation with a passenger drone instead of a taxi, costing you around about the same with a fraction of the time needed. So that's the business model, for example, for Archer.

Archer also has already certain contracts in their books with other applications, for example, the U.S. Army. U.S. Army wants Archer products not to use in combat, but for people transportation behind the front lines instead of helicopter. So that's the business idea largely for the passenger transportation in the drone environment. And of course, we are very happy to entertain that because our knowledge is very important for them. We are talking about lightweight composite components because all of those projects are battery powered, so fully electric. And their weight is really the key. So you cannot do it with metals. You must do it with lightweight components, and this is where FACC comes into play.

When can we expect to see those drones flying? So looking at China, they are already flying. Our former partner that I mentioned, EHang is already flying in China, but only in a very, I would say, limited and controlled environment. The EHang drone will also be very difficult to get certified in the European or the Western world in general. So if you ask me, this -- as I said, Archer is expecting the final certification in 2026. If that happens, that would be really fine. Let's see how that works out. But definitely, very definitely, until the end of the decade, for sure, there will be people transported by drones, very sure.

Thank you very much. And one more question. What is FACC's market position in aviation? Are there many new competitors? Or are the barriers to market entry too high?

No. The competitor landscape for FACC is basically the same over the last couple of years because -- and you mentioned it, the entry hurdles for new competitors are very high. You have very high certification hurdles and you need much of investments to enter a business with very low volume. So it's very plainly speaking, a largely single source industry, meaning makes it very hard for new competitors to enter the business without taking huge investments and long time for certification.

In civil aviation, you need to certify everything with the authorities and also the OEMs. Every process, all the people, all the plants, all the materials need to be certified, and this is very time consuming and very costly, and it's not easy to change. So for us, of course, it's a good situation because the amount of competitors that we are having is limited.

Thank you very much. And as no further questions have come in, we now come to the end of today's roundtable. Should further questions arise at a later time, please feel free to contact the Investor Relations team. Thank you, dearly, Florian and all of you for attending this call. We are happy about this ongoing Austrian Air conference and kindly invite you to our panel discussion at 1:00 p.m. with Vienna Stock Exchange. And with this, I hand over again to you, Florian, for some final remarks.

So thank you, Judith, for your closing statement, and thank you, everyone, for joining this call. As I said, I think FACC is an interesting investment story. There is much going on. We have a huge market in front of us. We have a very good diversified portfolio in terms of our customers, but also in terms of our products. And I think the most interesting thing looking at us is that we are currently in a transformation phase also with our core project in terms of bringing the cost basis down and securing a healthy and profitable future for FACC.

So thank you for everyone joining this call. If you have further questions, please do not hesitate to contact our Investor Relations department. So thank you very much, and enjoy the rest of the day. Thank you, and bye-bye.