Medmix Stock

Ladies and gentlemen, welcome to the Medmix Half Year Results 2026 Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to José Cascón, Chief of Staff to the CEO and Head of M&A. Please go ahead, sir.

Good morning, everyone. My name is José Cascón, Chief of Staff and Head of M&A at Medmix. I'm joined today by Rene Willi, our CEO; and Sven Luginbuehl, our CFO. In the interest of time, we will assume that you have read the disclaimer on this slide regarding forward-looking statements. With that, let me hand over to Rene to begin today's presentation.

Thank you, José. Also from my side, good morning, everyone. I'm very pleased to present the half year 2026 results to you today. Sven will guide you through our financial performance. I will update you on our business review and on our strategy as well as our near and midterm outlook. On Slide 4, you can see the highlights for the half year 2026. Despite a challenging market environment and revenues declining by 1.6% organically, we continued to improve profitability and we remain firmly on track to return to profitable growth.

Adjusted EBITDA margin increased by 40 basis points year-on-year to 20.3%, within our guidance range of around 20%. This marks the fifth consecutive half year of adjusted EBITDA margin improvement, underlining the consistent execution of our operational excellence and portfolio transformation initiatives. Gross profit margin also improved by 120 basis points to 37.8%, driven by operational improvements, a stronger revenue mix and disciplined cost management. Our strategy pivot towards Healthcare remains a key pillar of our transformation. Healthcare grew organically by 0.8%, driven by very strong growth in the Surgery business unit as well as a solid growth in Dental, partially offset by Drug Delivery.

We continue to strengthen our U.S. health care footprint through the expansion of our Atlanta facility, increasing output significantly while improving customer proximity and responsiveness. Superior customer experience is one of our imperatives. Our continued investments in innovation, co-developments with leading health care OEMs and industrialization of our Drug Delivery platforms reinforce our position in attractive high-growth, high-margin health care markets and supports our long-term profitable growth ambitions.

In industry, we continue to focus on the operational improvements, portfolio optimization, customer co-development and creation of a local-for-local hub in Atlanta. Growth was driven by our cartridges and mixer categories, while in dispensers, we focus on the most differentiating solution, optimizing our portfolio. As a result, the business continued to deliver profitable growth and confirms the successful turnaround of the business unit. Innovation remains at the heart of our growth strategy.

By working closely with customers, we continue to transform evolving market needs into differentiated solutions. Recent examples include FleXa in dental and the new 400-milliliter 5:1 cartridge for key automotive applications in industry, reinforcing our focus on customer-centric innovations and value creation. Overall, the first half of 2026 confirms that our strategic initiatives are delivering results. We are strengthening our profitability, advancing our portfolio transformation and continuing to build a stronger foundation for sustainable profitable growth.

On Slide 5, you can see the revenue development and key growth drivers across our business units in the first half of 2026. In our Healthcare segment, dental revenues increased by 1.5%, continuing the growth above market rates despite the demanding comparison base. As a reminder, in the first half of 2025, dental benefited from customer-driven acceleration of orders in anticipation of tariffs and a project milestone payment. Now growth was supported by sustained demand for our cementation and restorative solutions, which more than offset the ongoing structural decline in impression products. Drug Delivery generated revenues of CHF 16.5 million, a decrease of 13.8% compared to the previous year. As anticipated, performance reflected the impact of a customer second source strategy.

At the same time, we continue to strengthen our project pipeline, securing new opportunities and confirming strong market interest, particularly for high viscosity applications. I will discuss these developments in more detail later in the strategy part of the presentation. Our Surgery business delivered a very strong growth of 31.6% in the first half, supported by continued customer demand, the ramp-up of our Atlanta facility and further progress in the insourcing activities. We also strengthened our position with both existing and new customers, leveraging our differentiated delivery and mixing solutions.

In our Consumer and Industrial segment, Industry revenues increased by 3.6% driven by strong growth in cartridges and mixers. We continue to execute our portfolio optimization program while advancing automation, product flow optimization and insourcing activities, further strengthening operational performance and profitability. Revenue in Beauty declined by 9.2%, primarily due to lower volumes at GEKA, while Qiaoyi continued to grow. Encouragly, order intake at GEKA improved during the period, supporting our expectations for a stronger second half. In parallel, we initiated restructuring and cost reduction measures to enhance competitiveness, streamline operations and support future profitable growth.

Overall, our Healthcare business continued to build momentum, while the operational improvements implemented across consumer and industrial segments are contributing to stronger profitable growth and reinforcing the foundation for sustainable profitable growth. With this, I will hand over to Sven, who will take you deeper into the financials.

Thanks, Rene, and welcome also from my side. Let me now take you through our key financial metrics on Slide 7. Despite lower volumes, we delivered further margin expansion in the first half of 2026. Group revenues declined by 1.6% organically, reflecting softer underlying demand, particularly in the Beauty business unit. Including a negative foreign exchange impact of 3.3%, reported revenues decreased by 4.9% year-on-year to CHF 214.4 million. Gross profit reached CHF 81.8 million, reflecting a modest decrease in absolute terms compared to the prior year.

At the same time, gross profit margin increased by 120 basis points to 37.8%, driven by operational improvements, disciplined execution of our growth and efficiency initiatives and CHF 9 million in the prior year period, reflecting the impact of lower volumes. Despite this, adjusted EBITDA margin improved by 40 basis points to 20.3%, on track to deliver full year guidance. Reported EBITDA decreased to CHF 38.0 million compared to CHF 41.9 million in the prior year, primarily reflecting restructuring costs related to the Industry Dispenser and Beauty businesses.

EBIT declined to CHF 10.6 million and was additionally impacted by related impairment charges. Operating net cash flow improved by CHF 4.1 million to CHF 19.4 million due to lower capital expenditure. As a result, free cash flow increased to CHF 12 million. Our net debt to adjusted EBITDA ratio improved to 2.36x compared to 2.41x in the prior year period, driven by lower net debt. On Slide 8, you can see the half year 2025 to 2026 revenue bridge. As already mentioned by Rene, within the Healthcare segment, strong performance in Surgery and solid growth in Dental was partially offset by a decrease in Drug Delivery. The C&I segment remained impacted by lower demand in Beauty, while Industry continued to build on its turnaround.

Foreign exchange effects, mainly the weakening dollar and euro to Swiss franc negatively impacted growth year-on-year, reaching a 4.9% decline on a reported basis. On the right, you see the percentage revenue contributed by our segments and business units. The contribution of our Healthcare segment has increased 1 percentage point to 41% compared to the previous year, while the Consumer and Industrial segment contributed 59%. Slide 9 shows our half year Healthcare and C&I gross profit as well as gross profit margin year-on-year. Total gross profit decreased by CHF 1.4 million to CHF 81.1 million due to lower group revenues. Despite the decrease in revenues, we delivered a strong gross profit margin of 37.8%, a year-on-year increase of 120 basis points.

Healthcare gross profit increased by CHF 0.3 million and 140 basis points year-on-year to CHF 47.1 million, resulting in a gross profit margin of 54.6%. Dental and Surgery gross profit margin growth was partly offset by the Drug Delivery business unit as it continues to be impacted by the dual sourcing shift. Consumer & Industrial gross profit decreased by CHF 2.2 million to CHF 33.9 million, primarily reflecting lower Beauty volumes. Despite this decline, the segment gross profit margin improved by 20 basis points year-on-year to 26.5% Industry witnessed a significant increase in gross profit margin year-on-year, driven by operational efficiencies from our growth and efficiency program and an improvement in volumes.

Slide 10 shows the walk from our half year adjusted EBITDA in 2025 to 2026. The decline year-on-year in absolute adjusted EBITDA is primarily -- the decline is driven primarily by the decline in revenues in Beauty and Drug Delivery, partially offset by pricing effects. The upside from margin and mix reflects the impact of efficiency improvements as well as the impact of more dental revenue at higher margins, offset partly by underutilization in our Beauty business unit. The higher operating expenses include restructuring and impairment costs related to the Industry Dispenser and Beauty businesses. Net of these impacts, OpEx was lower by CHF 1.4 million year-on-year, reflecting growth and efficiency savings.

Adjusted EBITDA as a percentage of revenue has now grown sequentially for 5 consecutive half years, demonstrating the continued results of our operational excellence and portfolio transformation initiatives. Let's move to Slide 11. EBIT decreased year-on-year by CHF 5.1 million to CHF 10.6 million. EBIT as a percentage of revenue stands at 4.9%, a 210 basis points decrease year-on-year. The EBIT metrics clearly show the impact of restructuring and impairment measures of CHF 6.4 million in the first half of 2026 related to the Industry Dispenser and Beauty businesses. On Slide 12, you can see the walk from our half year operating net cash flow 2025 to 2026.

Operating net cash flow increased to CHF 19.4 million in the first half of 2026 compared to CHF 15.3 million of the previous year. This increase is due to lower CapEx level compared to the same period last year, partially offset by lower EBIT in half year 2026 and higher changes in net working capital compared to the same period last year. Our growth and efficiency program, which we launched in 2024 continues to deliver strong results and remains on track against our CHF 33 million saving target. Building on the significant progress achieved in 2024 and 2025, we have already exceeded our original CHF 30 million objective by CHF 1.0 million with CHF 6.8 million savings already realized and CHF 1.6 million savings secured during the first half of 2026.

These savings have been mainly driven by footprint optimization and operational efficiency initiatives across the group and only to a minor extent by restructuring measures in our Industry Dispenser and Beauty businesses, where we will see first tangible results in the second half of the year. The growth and efficiency program has successfully established a culture of continuous improvement and cost discipline, which is now embedded in our day-to-day operations and forms an integral part of our DNA. At the same time, we also continue to invest in our sales organization and R&D capabilities to support long-term growth and innovations. With that, I hand over to Rene to discuss our strategy and outlook.

Thank you, Sven. We continue to execute on the strategic priorities I presented earlier this year. Our strategic imperatives across all businesses and the entire organization remain strengthening customer proximity, accelerating innovation and further enhancing accountability across the organization. We have elevated the customer experience, making customer centricity the foundation of all our business unit strategies.

It has become a key growth driver across our company and a catalyst for innovation. Recent examples include FleXa in dental and the new 400-millimeter 5:1 cartridge for key automotive applications in industry. Both developed in close collaboration with customers to address evolving market needs. I will come back to these innovations later in the presentation. As already mentioned, an essential pillar of our strategy continues to be the transformation of Medmix into a high-performing organization. We are building an organization centered on accountability, entrepreneurial thinking and speed while empowering our business units and simplifying our organizational structure.

These actions are enabling faster decision-making, improving execution and positioning Medmix for sustainable long-term success. To support Medmix transformation into a high-performing organization, we further enhanced our leadership team with the appointment of [ Andreas Friis-Hansen ] as our new Chief Operating Officer. Bringing more than 20 years of international leadership experience in operations, manufacturing, supply chain, procurement and business transformation, he adds valuable expertise that will help drive operational excellence, accelerate execution of our strategic priorities and support Medmix on its path to profitable growth.

In Dental, we continue to grow above market with our existing portfolio, supported by strong demand for our cementation and restorative solutions. Increasing exposure to faster-growing product categories as a strategic -- is a strategic imperative for us to offset the structural decline in impression driven by the adoption of digital workflows. At the same time, we remain on track with our innovation pipeline. We just launched our next-generation syringe platform, FleXa, providing an important catalyst for future growth. Turning to this slide, you see FleXa.

One of our -- of the needs we increasingly heard from dental material manufacturer was the desire to further differentiate their products and strengthen their brands, while at the same time, improving the user experience for dentists. Working closely with our customers, we developed FleXa, a customizable syringe platform that combines branding flexibility, enhanced usability and manufacturing efficiency. Medmix clinical partner in dental medicine gave very positive feedback, highlighting FleXa's intuitive handling. FleXa enables our customers to strengthen their market position while delivering a better experience for dental professionals. Let's now move to the next slide.

In Surgery, we are one of the few players with a proprietary and comprehensive off-the-shelf portfolio, which is very attractive for start-ups, smaller emerging companies and tissue banks. On the other side, we have a development team and technology competence driving innovation with our global OEM customers. We continue to benefit from strong customer demand, the successful ramp-up of our Atlanta facility and further progress in insourcing activities.

We are strengthening our position with both existing and new customers and continue to broaden our offering through value-added services and innovative product solutions. All these initiatives have improved customer experience and position the business well to sustain its positive growth momentum. For our Drug Delivery business unit, our primary strategic focus remains the commercialization and scaling of our next-generation platforms. During the first half of the year, we continued to build a solid project pipeline and secured a new PiccoJect project, reflecting the strong market interest in the platform, particularly for high viscosity applications.

PiccoJect advanced further in the clinical phase across customer programs, marking another important milestones towards future commercialization, as I will show you in the next slide. We remain focused on expanding customer programs while continuing to invest in industrialization and manufacturing. On Slide 20, you can see the Drug Delivery pipeline. Our pipeline remains well diversified and substantially derisked, supported by a strong mix of generic, biosimilars, life cycle management and originator programs.

During the first half, one project was hibernated while a new one was added to the pipeline, maintaining a healthy portfolio of future opportunities. As already mentioned, PiccoJect continued to advance through the clinical phase across customer programs, marking another important step towards future commercialization. With key projects progressing according to plan and a solid opportunity pipeline extending beyond 2028, we remain excited by the long-term potential of our Drug Delivery business being a key element of our pivot to health care strategy. Let's now go to Slide 21.

In Beauty, our primary strategic objective remains to return to profitable growth. In the first half of the year, we made encouraging progress. We started selling Qiaoyi products through GEKA channels. And we also secured the first win for a combined product in the Middle East. Market conditions remain challenging, but order intake at GEKA improved, supported by recently won major project for which we will start shipping products in the next month. These developments give us the confidence in a stronger second half of the year.

We have launched decisive restructuring, cost reduction and commercial excellence initiatives to enhance competitiveness, improve profitability and customer experience. We are also optimizing our processes to better serve upcoming so-called indie brands. At the same time, we are accelerating innovation and leveraging the complementary strength of the GEKA and Qiaoyi portfolios to unlock future growth opportunities. As we assess the situation in Beauty, it became clear that restoring profitable growth required actions on several fronts with short- and long-term positive impact.

Starting from last year, we launched 3 complementary initiatives that are now firmly in execution mode. The first one, Return-to-Growth commercial program focuses on regaining growth. The program is built around 3 priorities: first, protecting our existing business; second, accelerating growth; and third, strengthening our customer focus. We expect these actions to support the stabilization of revenue in the near term and create the foundation for sustainable growth over the coming years. The program is already delivering tangible progress.

We have positioned us more competitively, which resulted in several large project wins. At the same time, we have increased our ability to serve smaller and more agile beauty brands, the so-called indie brands by adapting production capabilities and order requirements. Additionally, we are expanding into selected growth markets and unlocking new opportunities to cross-selling across the GEKA and Qiaoyi customer base. Together, these actions are expanding our commercial reach and strengthening our pipeline. Second, the cost containment program is delivering near-term savings and helping us to protect profitability. The focus has been on immediate cost measures, organizational rightsizing and structural cost reductions.

We have already delivered savings in the first half and expect additional benefits to come through the second half of the year. Lastly, the turnaround program is addressing the broader transformation agenda supported by external consultants. These initiatives take a comprehensive view of the business and combines 2 integrated work stream. commercial acceleration, including go-to-market, sales effectiveness and innovation and operational excellence with a focus on manufacturing competitiveness and further cost reductions. Taken together, these initiatives address both performance improvements in the short term and the structural changes needed to return Beauty business to sustainable profitable growth over the long term.

In Industry, we continue to execute our strategy on profitable growth despite ongoing geopolitical uncertainty and challenging market conditions. Growth in our core cartridge and mixer product categories, combined with operational improvements and continued gross margin expansion demonstrates the strength of our business model. We are also making very good progress with the optimization and streamlining of our dispenser portfolio while further advancing automation initiatives and the insourcing of manufacturing activities in our Atlanta facility.

At the same time, we continue to demonstrate our ability to translate customer needs into innovative solutions. One recent example highlights this well in the next slide. In this case, a customer supporting a leading European automotive OEM faced an urgent application challenge in e-mobility battery pack repair. They required a 400-millimeter cartridge with a nonstandard 5:1 ratio, compatible with existing Medmix dispensing systems and with an exceptionally compressed timeline. Working closely with this customer, our teams rapidly evaluated solutions. Through close collaboration and fast execution, we were able to design, validate and industrialize the new cartridge in record time. From commercial agreements to customer product release, the entire process was completed in less than 4 months.

Historically, these kinds of development projects have taken more than 1 year. This demonstrates Medmix's ability to combine application expertise, engineering capabilities and customer-centric execution to deliver innovative solutions at speed. As part of our ongoing strategic review, we continue to assess our portfolio and capital allocation with a clear focus on maximizing long-term shareholder value. Our objective remains to focus on core segments where we have sustainable competitive advantage. At the same time, we launched a comprehensive turnaround program in our Beauty business. These actions reflect our commitment to actively manage our portfolio and enhancing the competitiveness of our businesses.

With this, let's go to our outlook. Looking ahead, the external environment remains dynamic, shaped by macroeconomic uncertainty, geopolitical developments and evolving global trade patterns. Against this backdrop, we remain focused on disciplined execution, customer centricity and innovation to support sustainable profitable growth. For 2026, we expect flat to low single-digit organic revenue growth and an adjusted EBITDA margin of around 20%. Our midterm guidance remains unchanged with revenue CAGR of above 4% and adjusted EBITDA margins above 21%.

For 2026, we are on track to deliver in line with our guidance, and we expect to return to growth in the second half of the year. With this, let's move on to key takeaways. To conclude, we continue to advance our health care-focused portfolio transformation, strengthen our position in attractive markets and creating the foundation for sustainable profitable growth. At the same time, our focus on operational excellence and cost discipline is translating into improved profitability despite a softer demand environment.

We are fostering a high-performance culture built on accountability, empowerment and faster decision-making, enabling us to execute with greater focus and agility. With these priorities in place, we remain well positioned to deliver on our strategic objectives and create long-term value for all stakeholders. With this, I will hand over to the operator for our Q&A session. Thank you.

[Operator Instructions] Our first question comes from Alessandro Foletti from Octavian.

Just a couple, if possible. On Drug Delivery, you mentioned in the press release that the large majority of the decline related to the shift to the second supplier takes place in H1. So I was wondering if you can indicate how much of that decline is left, first part of the question. Second part of the question is what then will be the growth, say, starting in H1 '27? I know that it's lower than '28, but maybe there is already some growth.

Let me take this question. Thank you, Alessandro. Good to hear you. So -- we had -- I think the majority is really now the transition from -- has made in H1. We have still had some in Q3, but this is more in line with the normal fluctuation you see anyhow in the demand. So this will not change significantly. And so the majority is done really in the H1 and only a little bit in Q3.

When it comes to 2027, we believe that that's our planning right now that we are stable, that we will be quite flat. We don't expect that the first sales of PiccoJect commercial sales at the end of '27 will impact significantly the growth for the drug delivery. So there, we are plan from my perspective, also on the safe side. We see then really an increased growth momentum in 2028.

And maybe to add on that, if I may, and I guess that's where your question is pointing to as well is how will the second half for drug delivery look like. And what we currently see is that it will be on a similar level than in the previous year.

Okay. So H2 '26 compared to H2 '25?

Correct.

Okay. I have 3 small sort of further questions here. One is on the adjustments, right? We had again CHF 6.7 million (sic) [ CHF 6. 4 million ] One-offs. And I wonder what is the outlook for the delta between adjusted EBITDA and reported EBITDA or I don't know, an adjusted EBIT and reported EBIT, so to close so that these 2 lines become more equal to each other.

Thank you, Alessandro. I think that's a very important question. And it's our clear and that we discussed in the past is that we keep that difference smaller and that we really make it very close. But because of the restructuring, I think, which we have now accelerated also in this year, it has increased, but this is only something temporary. And I will hand over to Sven that can provide -- that he can provide you more details.

Thank you, Rene. So what happened in H1 was that we posted restructuring provisions as well as impairments in the amount of CHF 6.4 million. That's obviously -- or at least the restructuring part is impacting the adjusted EBITDA gap compared to EBITDA. We expect now in H2 further bookings since we are not yet at the end of our initiatives. What you can assume is that starting 2027, the gap will become much closer between adjusted EBITDA. And EBITDA since our clear goal is now to get over that situation, do the restructurings and then start '27 with clean books.

All right. Can I ask you 2 smaller questions. Maybe on the CapEx, it was a little bit lower. What's the outlook short term and midterm on that one?

I've not understood the first one. What -- which business you were a little bit lower?

On the -- on the CapEx, group investments, capital...

Okay. CapEx. Good. Thank you. I will hand over also Sven to provide you details about that.

As you have seen in the H1 report, CapEx was significantly lower by CHF 8 million or CHF 9 million, depending on whether you're looking at the cash flow statement or additions to assets. We expect a normalization now in the second half of the year also compared to the second half in 2025.

And maybe to add something from a strategic long-term perspective. When we look at CapEx, we look at drug delivery in a separate way than to the other businesses. And with the other businesses, which are more mature and ongoing, that's something we are really want to go also to the industry benchmarks. On the drug delivery, that's something we have to look really separately. That's actually the more successful we are, the higher the CapEx will be.

So that's something we have to be aware that this will require also some investment in the future. But for the other businesses, we made good progress. This will, of course, get more to the industry benchmark. We were higher historically. That was because we had to build up Atlanta and also Valencia.

Okay. My last question is maybe on the savings. You mentioned that you are basically on track, slightly ahead. How much of this savings is then reinvested in the business? Or I don't know, maybe put differently, how much remains inside the company is really a net gain?

Yes. I think we have to distinguish there between what Sven said already about the fit to the operational excellence program we have initiated earlier, I think already 1.5 year or 2 years ago and the new one, which is really targeted on the beauty. And on the earlier one, which was there, actually, we have invested significantly in also some of the faster-growing businesses. And I think Sven, you can provide details on this.

Yes. So what we have seen is that 2/3 of the savings are within COGS and 1/3 is in OpEx. Obviously, as you rightfully said, there are also some investments required to deliver the savings outcome. Where you can see the impact pretty tangible is actually on Slide 10, where you see that on a year-on-year basis, OpEx, net of restructuring and impairments and non-ops is CHF 1.4 million lower. And so you see that 1/3 of the savings impact is in OpEx there.

The next question comes from Edward Hall from Stifel.

I guess the first one would just be sort of going back on to Drug Delivery. It was encouraging to see the result this morning. I was just curious, if we were to strip out the -- obviously, the dual source effect, could you talk about the performance of the rest of the business? What type of drug is performing or what type of platform is performing? And that would be my first question.

Yes. If you -- because we have this major customer with the dual sourcing strategy, if you take that out, then we see the rest of the business is very stable. We have a few projects which are more at the end of the life cycle, and we have a few projects which are at the beginning and increasing. But overall, these projects are quite small compared also to the projects we have in the pipeline. And to be transparent, they do not really move the needle.

What will really make a big impact will be the -- what we have shown you on the pipeline, the projects we are launching then end of '27 and then roll out in '28. -- these are really large projects where we have device sales, which are also in the millions range. The other projects we have are all quite small, but multiple. So it's a larger portfolio, but quite small projects.

Perfect. That's really clear. And then on PiccoJect, I'd be curious to understand in terms of the indications, so what was hibernated and what was added? And then obviously, I've noticed on the slide, obesity project is there. Maybe you could talk a little bit about this customer, obviously, without sharing too many details, just trying to understand what level of excitement we could have on this particular indication. So...

It's a very interesting project, this obesity project. Key is that it's an innovative formulation, which results also in a higher viscosity, which makes PiccoJect really the ideal device for such an indication. And this is now really in the clinical studies, first clinical trials were very positive. And now we enter, I think, the interesting phase of the clinics. And we expect for this device also in the mid- to high single-digit million device units per year in the peak sales.

Okay. Perfect. That's really clear. And then I guess the surgery was a really strong quarter. And I think especially sort of sequentially, it showed great growth. I just want to try and understand sort of this growth. Is it due to a key launch? Is it due to greater insourcing? Like is this basically a single product driving this growth? Or is it a result of strategy implementations?

It's not really driven just by one key launch. I think that's really interesting. We had multiple -- it's really multiple new customers, and we were also successful with the existing customers. And when you look about the surgery results, what makes me really very happy is that we have also improved our customer base. And also in this first half of the year, and this is normal, we had some disappointments that, for example, customers were not successful with clinical studies and these kind of things.

But we are now in a situation that we are really broad in our customer base. We can delivering. I think there's also a high trust from the customers that they don't build up so much inventory as they have done in the past, where we had more supply issues that you don't see these kind of things. We can compensate that also with other customers. And so that was really good. And it was also a mix between small and large customers.

Perfect. That's clear. And then just finally, on Beauty, I mean, would it be a fair assumption just looking at sort of H2 '25, the CHF 78 million that you've got there, I mean, would it be a fair assumption that you're not going to see sort of positive growth just given the high sequential growth you'd have to report?

Yes, I can -- I hand over that also to Sven to provide you details. What I have to say is that H1 was really, I think, difficult. But what is promising is the is the order intake. And what we have also communicated already last year was about a large win, and that project will now be launched in the second half of this year. And this is just the nature of this industry. We see this launch as a big opportunity and could really help us. On the other side, we have to see how this is perceived by the customers. You see normally in these projects, it can be huge success or medium success, low success. It's very difficult to predict that that's something which is different in the Beauty business than to all our other businesses. And maybe, Sven, you want to give more details about H2.

So what we currently see for H2 compared to the same period last year is a low single-digit growth. So that's what we currently have as our forecast, and that's what we are aiming for.

The next question comes from Leonie Zirn from UBS.

I have a follow-up for the Beauty business. Sorry if you mentioned that already, I kind of dropped out in between. So regarding the cost takeout that you mentioned, can you quantify this a bit? And would this also benefit the EBITDA on a group level?

Sven you would like to take that question? I think, of course, it should also help us on the group level. But you can give the details.

If we are looking at Slide 13, then the numbers, you see there the savings, CHF 6.8 million. That does not include the expected savings from our restructuring program, which we launched since this is coming on top of the CHF 33 million. So included in the CHF 6.8 million savings are initiatives which we already launched before we initiated the restructuring programs such as short-term work, not replacing natural fluctuations. So that's what you see included in the CHF 6.8 million, not included are the restructuring topics for the Industry Dispenser and the Beauty business.

Thank you, Sven. And maybe something to add here. If you look at the dynamics in the Beauty business, then we have seen overcapacity industry also an increasing price pressure. And that's particularly for the larger customers, less for the indie brands. And with the restructuring program, we are increasing our competitiveness. And this is -- has 2 effects that we can be much more competitive also in our offering, which will provide us additional growth momentum and will also help us to increase the utilization in our plants, which will have then a positive effect also on our margins.

Okay. And a follow-up on the Surgery business. You just discussed the strong H1 and what kind of drove this. Can you maybe also give a bit of an outlook, what have you seen already like into the second half? Can we expect this like favorable customer mix to kind of have like the same positive effect? Or will this likely flatten out a bit?

So what we -- from an outlook, let's say, long term, that's what -- I was always saying that we can grow high single to low double-digit percentage over a longer period. I even believe that we can do a little bit more long term. You will see some fluctuations from one half year to another because the business is still small. You have to think this is our smallest business and one customer can still have a significant impact. But we think that we can really outgrow the market.

And this is -- and I mentioned that already, it's something which makes us a little bit special to everyone else is we have a very comprehensive portfolio of off-the-shelf products, which helps us a lot for the for some of the surgery indications also for smaller companies, then we have going more also with value-added services, which will help us to accelerate growth in tissue banks. And that's something this -- not -- really not the other companies don't have it to the same extent. We have a very strong development team also.

And we benefit there because our development team, there's a lot of technology synergies with dental as well with industry, and we can really provide to the customers, particularly to the large OEMs, solutions nobody else can provide to the same extent. So we are very bullish about surgery and how this will develop in the future.

Okay. Okay. Understood. And then last question on Dental. I mean, growth was slower than expected in H1, but understandable because you had the high comps from last year. So can you give a bit of color what would be your expectation for the second half? What do you see like in the underlying market? And also maybe some color on the growth dynamics for impression material.

If you look at dental, and it was really ups and downs if you looked about the H1 last year and the H1 too. But what I have to say, if you look about, let's say, the CAGR of 2 years, we are really exactly where we expect. This is what I said, mid-single-digit growth and mid-single-digit growth, that's about, I would say, more than 2x faster than the market. Because what you see in the market, if you look about the end markets and a lot of the growth came also from price increases. And we are there really from -- also from the unit perspective, we are growing significantly faster than the market.

When you look now about your question about the impression materials, Impression materials came really down and it's more 1/3 of our business and 2/3 is other businesses, the faster-growing segments. And we think that the impression material will continue to decline. If I look in the end markets, then the decline is more in the 5% range, what we see. We are probably declining a little bit less. So we are really particularly in -- when it comes from a unit perspective, there's some price pressure there, which means that in the other 2/3 of the business, we have to grow significantly faster. We have to grow there really in the high single digit.

That's what also something we are doing. And this is driven by innovations, and I was showing FleXa. It's a little bit difficult to see really the features on a slide. But this is creating really a competitive advantage for our customers, which will also allow them to grow faster than the overall market and gain market share. And this is how we -- why we can grow in this other 2/3 of the business significantly faster than the rest of the market. And Sven can also add something from a number perspective.

Thanks, Rene. Leonie, to your point regarding expectations for H2, what we currently see is that H2 will be more normalized compared to the same period last year. So we expect to see a growth more in the range what Rene mentioned before.

So mid-single digit.

Correct.

Yes. And then last question, and then I go back into the line. So you managed to increase your margins this half year despite the lower volumes. And then you also expect to have a bit better growth outlook and some cost savings for the second half. So could we say that the 20% EBITDA margin is a rather conservative guidance now? Or is this still like something you need to stretch towards?

I think we are confident that now that we can achieve the 20% guidance. I don't see there any risk. I think we are on a good track. And you rightly observed that actually in some of our margin improvement projects, we were faster than we expected, particularly in industry that was very good and also how we were restructuring our dispenser business, I think that really promising.

It's also promising how I see the accountability, our team members, particularly also in our dispenser business, how they proactively drive that. And this is something which is encouraging and makes me confident that we can continue to expand also our gross margin, particularly in the Industry business and that also in the Beauty business, that we will execute our turnaround very similar to what we have done in the industry business.

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

Thank you very much. I think before we conclude today's present everything, I would really thank you since for your time, engagement and particularly also for the questions and feedback. And this is really invaluable as we continue to shape the future of Medmix, and we want to do that together with you. And we are very confident about the opportunities ahead.

Our focus is clear to further strengthen our business, return to growth and create sustainable value for all our stakeholders. I would like to thank all our employees for their dedication, how they drive the change, our customers for their trust and our shareholders for their continued support. We appreciate the partnership and look forward to updating you on our progress in the months ahead. And thank you very much, and I wish everyone a great day. Thank you.

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

Good morning, everyone. My name is Domenico Truncellito, Head of Corporate Communications and IR at Medmix. I'm joined today by Rene Willi, our CEO; and Jennifer Dean, our CFO. In the interest of gravity, we will assume that you have read the disclaimer on the slides regarding forward-looking statements. With that, I will now hand over to Rene. Rene, please.

Also from my side, good morning, everyone. I'm very pleased to present the full year 2025 results to you today. Jenny will guide you through our financial performance. I will update you on our business review and our strategy as well as our near and midterm outlook.

On Slide 4, you can see the highlights for the full year 2025. We significantly increased gross profit and adjusted EBITDA margin above the range of our full year guidance despite decreased revenues. Gross profit increased by 310 basis points to CHF 161.9 million, delivering a strong gross margin of 36.1%. We clearly see that the savings generated by our growth and efficiency program and our strategic initiatives are going through to the bottom line. We have successfully turned around the Industry business unit following the shutdown of our Polish site in 2022.

Throughout 2025, we focused on improving efficiency by streamlining product flows and further automating production processes at our Valencia facility. In addition, we are making solid progress in in-sourcing third-party manufacturing in the U.S. to our Atlanta site, enhancing value creation.

Furthermore, we are on track with our Surgery and Drug Delivery production in Atlanta, which, on the one hand, increases customer proximity and on the other hand, reflects our disciplined strategy implementation.

We are steadily increasing our share in high-growth, high-margin healthcare applications. Another highlight in 2025 was our recognition by the TIME Magazine as one of the world's best companies in sustainable growth in 2026. The distinction places Medmix among an elite group of organizations that excel across the critical dimensions of financial stability and environmental impact, including greenhouse gas emissions, waste management, water consumption and renewable energy usage.

Out of more than 4,000 global companies evaluated across all industries that transparently disclose environmental performance data, only 500 made the final list. Slide 5. In our Healthcare segment, our Dental business unit continued to grow significantly above market in 2025 as we successfully increased our share in fast-growing product categories and are well-on track to launch our next generation of Dental applicators in 2026.

Our cementation and restorative solutions are growing faster than the structural decline in the impression category, which is becoming substituted by intraoral scanning. Our focus on these faster-growing product categories will continue to secure our growth momentum.

The Drug Delivery business unit generated revenue of CHF 34.2 million, a decrease of 19.6% compared to prior year. This decline was mainly due to the dual sourcing of one customer, which I identified in the second half and will continue to affect revenues in 2026 as it reaches the contractual cap. In our Drug Delivery business unit, we have significantly strengthened and derisked the project pipeline. I will share additional details in the strategy section of this presentation.

Our Surgery business unit was basically flat for the year. After growing 26% in the first half of 2025, Surgery recorded also sequentially double-digit growth in the second half of 2025. With our Atlanta facility, we have increased customer proximity in the world's largest healthcare market, U.S. This enables us to build a full portfolio of value-adding services and to become a strategic partner for our customers.

In our Consumer & Industrial segment, our -- we significantly have improved the business unit industry with 1.4% revenue growth and improved profitability, especially when considering sluggish end markets heavily impacted by geopolitical uncertainty.

Our Valencia facility is delivering the full portfolio of industrial products, and we progressed well on increasing efficiency and profitability through leaner product flows and automated production processes. We've also increased productivity at our Shanghai site and progressed local for local production in Atlanta.

Revenue of the Beauty business unit declined year-on-year by 12.9% to CHF 152.1 million. The first half of 2025 was marked by lower commercial activity and customer project delays. Sequentially, the second half of 2025 grew mid-single digit, supported by a successful dual-site global launch.

We protected our profitability through disciplined pricing while accelerating decisive cost-out measures to align our cost base with business volumes, allowing us to unlock additional profitable growth opportunities.

With this, I will hand over to Jenny, who will take you deeper into the financials. Please, Jenny.

Thanks, Rene. Our main KPIs can be seen on Slide 7. We delivered significant improvements year-on-year in gross profit, gross profit margin and profitability with the latter above the top end of our guidance.

This was achieved despite an organic revenue decline of 4.8%, which, however, was in line with our guidance. Foreign exchange rate effects of minus 2.6% resulted in reported growth of minus 7.4% or CHF 448 million. Our gross profit grew 1.4% year-on-year to CHF 161.9 million, and our gross profit margin expanded 310 basis points to 36.1%. The strategic actions and cost-out measures in our growth and efficiency plan, especially in our Consumer & Industrial segment, continued to deliver impressive results.

Higher Dental in the mix at improved margins further fueled the margin improvement. Tight discretionary cost control, actions from our growth and efficiency plan and the end of some acquisition-linked amortization of intangibles delivered lower year-on-year OpEx.

Combined with our gross margin improvement, this enabled us to deliver an adjusted EBITDA of CHF 89.7 million and an adjusted EBITDA margin of 20%, well above our full year guidance range of 18% to 19%.

Demonstrating the strong improvement in our underlying performance, EBITDA increased 5.1% to CHF 78.3 million and EBITDA margin by 210 basis points to 17.5%. EBIT increased CHF 9.9 million or 76.7% year-on-year to CHF 22.8 million.

Operating net cash flow is lower year-on-year at CHF 40.3 million. 2024 was a high comparable, reflecting the impact of a significant decline in net working capital in 2024, which remained flat during 2025. Our leverage ratio increased slightly year-on-year due to the decline in absolute adjusted EBITDA.

On Slide 8, you can see the full year 2024 to 2025 revenue bridge. As mentioned by Rene, within Healthcare segment, strong growth in Dental and flat revenue in Surgery was offset by a decrease in Drug Delivery. And within C&I segment, Industry grew slightly while Beauty declined.

Foreign exchange effects, mainly the weakening dollar and euro to Swiss franc negatively impacted growth year-on-year to arrive at minus 7.4% decline on a reported basis. On the right, you see the percentage of revenue contributed by our segments and business units.

The contribution of our Healthcare segment has increased 1 percentage point to 38%, meaning Consumer & Industrial segment contributed 62%. Slide 9 shows our full healthcare and C&I gross profit and gross profit margin year-on-year.

Total gross profit grew by 1.4% to CHF 161.9 million despite a decline in group revenues and delivering a strong gross profit margin of 36.1%, a year-on-year increase of 310 basis points. Healthcare gross profit was flat year-on-year despite organic revenue decline of 1%.

Gross profit margin grew 109 basis points to 51.8% Dental business unit revenues and percentage margins both grew year-on-year. Surgery revenue and margins remained flat and Drug Delivery revenues and margins remained under pressure.

Consumer & Industrial gross profit grew 3.9% year-on-year, contrasting with an organic revenue decline of 7%. The segment delivered a robust gross profit margin of 26.9%, an increase of 360 basis points year-on-year. This was achieved through operational efficiency gains and cost-out initiatives in our growth and efficiency program in both Industry and Beauty business units.

Slide 10 shows the walk from our full year adjusted EBITDA in 2024 to 2025. The decline year-on-year in absolute adjusted EBITDA is driven primarily by the decline in revenues in Beauty and Drug Delivery and lower add-back of one-off costs, somewhat masking the success of the growth and efficiency initiatives. The upside from margin and mix reflects these growth and efficiency impacts as well as the impact of more Dental revenue at higher margins, offset partly by tariff impacts in Industry, Dental and Beauty.

The upside from OpEx reflects growth and efficiency savings, offset partly by adverse transactional FX impacts, net impacts of provisions for litigation and restructuring and the impact of the reinvestment in our healthcare teams Adjusted EBITDA as a percentage of revenue has now grown sequentially for 4 half years.

Slide 11. EBIT increased CHF 9.9 million or 76.7% year-on-year to CHF 22.8 million. EBIT as a percentage of revenue stands at 5.1%, a 228 basis points increase year-on-year. Our EBIT metrics clearly show the impact of higher Dental in the mix at higher margins and the success of our growth and efficiency cost out and efficiency initiatives, especially in the Beauty and Industry business units.

On Slide 12, you can see the walk from our full operating net cash flow 2024 to 2025. Operating net cash flow decreased to CHF 40.3 million in 2025 from CHF 61 million in 2024. This decrease is driven primarily by 2 factors: early and anticipated cash receipts in December 2024, lowering the receipts in '25 and a significant decline in net working capital levels in 2024, which have remained flat overall in 2025. With that, I would invite Rene to come back to discuss our strategy and our outlook.

Thanks, Jenny. We are on track with implementing our strategy I presented last February. Our strategic priorities focus on the adaptation of our organizational setup to enhance our customer proximity, pace of innovation and ensure clear accountability.

An essential pillar of our strategy is our transformation into an entrepreneurial, high-performing organization. I will explore this further in the next slide, which focuses on our cultural journey. As we have stated in our results section, our Dental business unit continues to outpace overall Dental industry growth with our existing portfolio, and we remain on track to launch our next-generation Dental applicators in the second half of 2026.

For this reason, the second half of 2026 will grow stronger than the first one. Our strategy to increase exposure to faster-growing product categories is paying off. As mentioned before, growth in our cementation and restorative solution is more than offsetting the structural decline in impression caused by the shift toward internal scanning.

In Surgery, we are now producing a full range of products at our Atlanta site. We have launched significant co-development projects with existing customers and are successfully broadening our customer base. We will accelerate the growth momentum in 2026, driven by increased customer proximity, value-adding services and innovative product launches.

For our Drug Delivery business unit, the primary strategic focus is on commercialization of our 2 innovative device platforms, PiccoJect and D-Flex. Both are at the beginning of their life cycle and received a positive response from customers. In the past year, we have significantly strengthened and derisked our project pipeline. Design verification testing for our PiccoJect device has been successfully completed, and we have now entered clinical trials with our customer.

We have also secured launch readiness for PiccoJect by progressing industrialization and ramping up production at our sites in the U.S. and in Europe. Our other next-generation platform, D-Flex is already commercialized in '20. In 2025, this platform attracted growing interest, particularly for high-volume projects. I will give you more details on our Drug Delivery pipeline on Slide 16.

In Industry business unit, we successfully achieved a turnaround and returned to growth despite sluggish end markets. We have steadily improved profitability through our growth and efficiency program, focusing on streamlining product flows and further automating production processes at our Valencia facility.

In addition, we are making solid progress in insourcing third-party manufacturing in the United States to our Atlanta site. This will enhance value creation. As for Industry, our primary strategic imperative for the Beauty business unit is to return to profitable growth. Weak end markets and lower commercial activity of our main customers led to a significant revenue decline in the business unit.

We protected our profitability through disciplined pricing while accelerating decisive cost-out measures to align our cost base with the business volumes. We also executed selective investments to improve our cost position. This allowed us to increase our competitiveness and unlock additional profitable growth opportunities. An integral part of our strategic review is the continuous evaluation of our portfolio of activities and a keen focus on optimizing our capital allocation.

Our clear goal remains to pivot towards healthcare and increase our business stake organically or through strategic acquisitions in areas where we see high growth and a high margin potential. An example of how we evaluate our portfolio of activities is the repositioning of our industry dispenser business.

In 2025, we optimized the dispenser portfolio by focusing on areas where we have a clear right to win with a renewed emphasis on quality, service level and profitability. We reduced manufacturing complexity by consolidating assembly and warehousing operations, further enhancing efficiency.

Let's move to Slide 15. As mentioned in the previous slide, we put great emphasis on transforming Medmix into an entrepreneurial high-performing organization. This year, we made further progress by streamlining our structure and aligning business unit P&L ownership more closely with global functional responsibilities. We have created a lean organization that enables faster and more direct decision-making and strengthens accountability across the business.

We have also taken steps to better reward performance, particularly within our sales organization. We continue to strengthen our management team through the appointment of Charity Kufaas as Chief Strategy and Transformation Officer at the beginning of this year. With more than 20 years of global experience in strategy, M&A, transformation and P&L leadership, she will play a pivotal role in advancing our strategy.

Today, we have also announced the appointment of Sven Luginbuehl as our new Group CFO. Since 2022, Sven has served as Deputy Group CFO and Head of Corporate Finance at Medmix, bring extensive business expertise and deep financial knowledge to this new role. He is a seasoned finance executive with over 20 years of experience across publicly listed global companies, completed by Big 4 experience at PwC.

His deep understanding of our company and global exposure to core markets will ensure a seamless transition into this new role. Our long-term CFO, Jennifer Dean, will take over leadership of our Beauty business with focus on profitable growth. Jennifer brings deep insight into the Beauty business as she has played a key role in maintaining and enhancing profitability in the last years.

Slide 16. On Slide 16, you see the Drug Delivery pipeline. Our pipeline is substantially derisked driven by a strong focus on generics and biosimilars, which offer a reduced attrition rate. Within the originator portfolio, only one project carries notable risk as the others are either a device change or a drug that is already in the market.

As material device sales will start towards the end of 2027, and we secured a solid opportunity pipeline beside this pipeline you see even after 2028, we expect Drug Delivery to evolve into a meaningful driver of our future growth.

Let's go to Slide 17. Our growth and efficiency program, which we launched in 2024 aims at enhancing growth by reallocating resources to our strategic priorities and improving our performance through targeted cost reductions. We increased our initial cost saving targets of CHF 30 million by CHF 3 million to mitigate the Beauty revenue decline and are on track to deliver. By the end of 2025, we have realized savings of CHF 22.6 million and have already secured CHF 4.3 million for 2026.

Key contributions include simplifying the organizational structure and advancing the automation of production processes at our Valencia facility. We are continuing to invest in our sales organization and in R&D, which will ensure we accelerate growth and innovation in both our segments. In 2025, we realized CHF 19.6 million of cost-out savings

CHF 14.5 million of this CHF 19.6 million is included in margin, which also benefits from the impact of more Dental revenues at higher margins, offset partly by tariff impacts in Industry, Dental and Beauty. CHF 5.1 million is included in OpEx, which is also impacted by adverse transactional FX impacts, net impact of provisions for litigation and restructuring and impact of reinvestments in healthcare teams and projects.

On Slide 18, you see our capital allocation principles, which are shown in descending order of importance. The focus of our capital allocation remains on the one hand to strengthen our foundations and on the other hand, to invest in profitable growth. Board of Directors, therefore, decided to propose to the AGM a performance-driven dividend policy, which is based on the consolidated net income attributable to shareholders.

A minimum of 40% of earnings per share will be distributed with a higher payout ratio and performance and liquidity permit. We are convinced that this approach at this stage of the company's development will generate superior and more sustainable value for our shareholders.

Let me turn to our innovation capabilities, which are vital to fueling our future profitable growth. Today, I'd like to show you how we enhance our customers' competitiveness through our applicator solutions. I've selected an innovative surgical product, which we have highlighted before, but this time, we show it a concrete customer application as well as our ecopaCC cartridge, which also delivers the highest reliability in aerospace applications.

And in addition, I will present Dental innovation that showcases a strong customization capabilities. In this slide, you see a product and our customer is a fast-growing OEM, bringing breakthrough innovations to the medical field with its award-winning hemostatic technology.

Its hemostatic shell was recognized by TIME Magazine as one of the best inventions in 2025, underscoring its transformative potential in emergency and surgical care. As a strategic partner, we play a critical role in this success by producing the G-System syringe. A specialized applicator that delivers the hemostatic shell with precision and reliability. Beyond this partnership, the G-System stands out as an excellent solution for a wide range of medical device companies in Spine, Orthopedics, General Surgery and other clinical specialties, offering performance, versatility and trusted quality.

Let's move to the innovation in our industry business units. The MIXPAC ecopaCC cartridge system delivers a sustainable waste cutting and logistic efficient solution for applications in various segments like aerospace and others. The collapsible cartridge delivers the highest reliability for demanding applications.

The full production ramp-up planned for January, February 2026, it sets a new benchmark for responsible and dependable liquid applications in the industry. On Slide 22 is an example of an incremental innovation in our Dental business unit designed for single component Dental materials. And our Modular Syringe platform brings flexible branding and a premium user experience to every Dental practice. Its enhanced focus on customization ensures a uniquely adaptable solution for our Dental OEMs. With this, let's go to our outlook.

Looking ahead, the economic landscape remains challenging with continued geopolitical uncertainty and structural shifts in global trade. For 2026, we expect flat to low single-digit organic revenue growth and an adjusted EBITDA margin of around 20%.

Our midterm revenue CAGR remains unchanged at above 4%, and we are increasing our adjusted EBITDA margin guidance to above 21%, previously above 20%. For 2026, we anticipate growth to be stronger in the second half, supported by new product launches planned for H2. With this, let's move to the key takeaways.

We are making strong progress on our strategic priorities, positioning the company to grow profitable in attractive niche markets. For this year, we expect our top line to grow, supported by significant profitability gains in healthcare and C&I. At the same time, we are fostering a performance-driven culture through a leaner, more agile organization with clear accountability.

With this, I will hand over to the operator for our Q&A session.

[Operator Instructions] Our first question comes from Patrick Rafaisz from UBS.

Maybe if I can, 3 questions. The first one, I'll take them one after the other. The first one would be on the guidance. Should we assume a negative potentially H1 in terms of organics due to the dual source impact still and then a positive H2 with the product launches.

Is that how you get to the flat to slightly up guidance? And also on the guidance for the margin, you're assuming flat despite stabilizing revenues. How should we think about the, let's say, margin and mix contribution in '26 then? That's the first question.

Thank you, Patrick. Yes, we believe that the first half of the year will be weaker than the second half. And from our perspective, the first half of the year, that's more flat to slightly negative.

And the second half, we see them because of the innovations from flat to positive, which will turn also the full year from flat to positive. And as you mentioned, that the impact is also by the dual sourcing because we have seen particularly for this dual sourcing in Drug Delivery, we have seen that we have probably reached the cap at the end of last year. So that impact will be -- the lion's share will come in the first half of the year of the dual sourcing. And the second question was about the margin. I think that's something I think, Jenny, would you like to take that?

I think you're on the right track, Patrick. You're right. In 2025, we had an impact in the mix of more [indiscernible] and higher margins. In 2026, we expect a return to growth for some of the businesses with lower margin profiles, and that will impact our mix. That's why we're holding it at flat for 2026.

Okay. But it feels a bit cautious still, right? Because Dental should still grow, I assume, with a flat guidance overall, you cannot assume that much of growth in the other businesses. Drug Delivery is still negative. So I struggle to see why the mix shouldn't be -- or margin mix, right, in combination shouldn't be better with incremental cost savings, no more negative leverage from declining volumes for the year as a whole. Is that just building in some conservatism also maybe?

Maybe. Let's be honest. The tariffs are still unclear. We saw an impact of tariffs. We said it would be 1% in '25. It was around 1% in '25 and that was not for the full year. Let's see how that evolves. There's been quite some uncertainty there for '26. So that's still an open topic.

And the businesses that didn't grow or declined in '25 are significantly lower-margin businesses than Dental. So if these now have some growth in them, it does impact our mix. But you're right, we haven't overstretched this. We want to deliver on our promises, and we'll stick to this guidance.

Great. That's great. Then maybe still with guidance, but more on the targets. Can you clarify the midterm? Is that a rolling targets? Because clearly, the original 3-year period to get to 4% would require an extremely strong 2027, which just looks unlikely. Is that a correct assumption?

That's a correct assumption. As I've already mentioned, I think when we looked about Beauty in 2025, and that was really something which we have not expected this decline as we have seen, particularly in the first half of the year.

And that's from a top line perspective because Beauty is our largest business unit. It's not really possible to compensate that year. So it's rolling. I think from a profitability, of course, that was much easier to compensate because our highly profitable business units were performing well. That's also why we were able to maintain and now even to improve our guidance on the bottom line.

Great. And then the last question before going back into the queue would be on the balance sheet in terms of capital allocation priority now at the top to strengthen the balance sheet. Can you give us a framework of how you think about your optimal balance sheet in terms of net debt leverage or whatever KPIs you're focusing on?

So I think it's clear our focus remains on our leverage ratio for now. You see in the annual report that it's below 3, but it's still quite high in 2s. So this is our fundamental focus is to remain strong and get ourselves to a position where we can continue our M&A journey and pivot to healthcare.

We want to strengthen our balance sheet also really to be in a position that we can also capture any strategic opportunity we see.

Okay. Understood. So leverage going down to, let's say, 1.5x or something like that. Is that a fair number?

I would not say that this is something which we can now put as a target. I think it really depends when we see a strategic opportunity for an acquisition, then of course, then we will not go down to this level.

The next question comes from Alessandro Foletti from Octavian.

I also have a couple, if I may. First of all, on the working capital, maybe you mentioned that you had one-offs, et cetera. Can you explain? Because when I look at the balance sheet, I really don't see the major movements.

Actually, maybe I misspoke, but what I was meaning to say, so let's check the script, is that our net working capital did not move this year. What I said was our ONCF was slightly lower this year in 2025 because in 2024, we had a significant step down in net working capital. That was part of the growth and efficiency initiatives. We really did a great push. It was around 15% to 17% decline in 2024, but we remained flat in 2025.

We invested in the first half in ensuring with the tariff uncertainty that we had Dental product in the U.S. also to improve our customer service levels in the U.S. for Dental. And then we had some other items. So overall, we stayed flat, about CHF 1 million change, I think, year-on-year.

Can you then maybe explain your bridge in the cash flow because there is this CHF 24 million delta from working capital. I don't really understand that.

Okay. So overall, year-on-year, we had a decline in ONCF of CHF 20 million, about CHF 15 million of that was because we had a lower impact of the movement in net working capital and about half of the delta there was because we had received some earlier cash in from customers in '24 that, therefore, we didn't have in '25. That is more or less the bridge.

Okay. Okay. Good. Then the second question on the dual source in Drug Delivery. So can you explain when will -- you mentioned you reached the cap. So it means at some point, then there is no further decline. But when will the decline stop?

So of course, we don't have the exact numbers. That's something we get always a delay with the royalty payments from the second source. But our assumption is that we have reached within Q4, the cap. That means that by the end of next year, the effect should be over and then the growth will be followed the growth of the drug in the market.

So when you say end of next year, you mean '26 or?

Sorry, that was wrong. End of this year. Sorry about that. Last year, Q4, we have reached the 50%. So it means that we have an effect now in the first -- mainly in the first 3 quarters of this year and end of this year, it will be over. Sorry about that.

All right. Good. And then maybe, I guess, another one for Jenny, I guess. The delta between adjusted and reported EBITDA, it was kind of much bigger than I thought. Can you explain what is included there? And maybe what's the trend going forward? When is this sort of going to fade away?

Sure. So this year, the non-op adjustments were around -- or the one-off adjustments were about $8 million. The prior year is $16.4 million, so significantly lower year-on-year. What's included in 2025 is still some impacts from the ramp-up and investments in Atlanta.

That's the primary one from a margin perspective. In prior years, we had impacts from industry, from Valencia primarily, they're not there anymore. So it's really about Atlanta in the margin. And in OpEx, it's still some impacts -- one-off impacts of our growth and efficiency program.

In 2026, we expect this to come down again because Atlanta will start to ramp up by the end of the year. So then it will go from a ramp-up situation to production into 2028. So definitely, it should go down. Historically, we had around CHF 2 million to CHF 3 million a year. It was more around some strategic initiatives, this sort of thing. So I expect that that's where we're still heading towards is back to that level.

The next question comes from Edward Hall from Stifel.

I have a couple. Just starting with the guidance. I appreciate you've answered questions on this already. But if we could just think about maybe not maybe for full year, the growth within the different segments, I think especially with the contract you signed with Beauty last year. Just trying to understand where we could think of potential headwinds and potential tailwinds within the group. That would be my first question.

So when you look about the guidance, I think from a Beauty, we believe that for the first half of the year, we still will have some headwinds. And then in the second half, this will reduce. We think about the Beauty segment in the past, we always were saying that we see that market in the mid-single-digit growth.

That's something we believe that we see it now more in the low to mid-single digit. So that means that to achieve our guidance, the pivot to healthcare is mandatory. And I think that's also where we see a larger growth.

Perfect. And then if we think about the cost savings you highlighted this CHF 4.3 million sort of floor, is this the total expected? Could we see more savings in the P&L this year?

Yes, we will continue with our efficiency program, that's for sure. What you can also expect, even if we do not highlight this as an efficiency program in the future, this has become part of our DNA.

That's also what we think is critical to have with a high-performing organization. So this will continue even if we do not highlight. For this year, it's still ongoing. And then it will become as part of our business as usual that we are looking into these efficiency programs.

Perfect. And then just finally, on the Drug Delivery, I'm mainly addressing the slide you showed on Slide 16. If you could expand on some of these different indications and the volume expectations. I think you talked about most of them already being approved drugs.

But if we just try and understand sort of your positioning within this as a Drug Delivery market, I think last year, you talked about sort of a 5 million total production number. Has this changed? What's your current thinking at the moment?

No, this has not changed. I think that's in the same range as we already said in the past. I think the projects you see on this list are all somewhere between -- maybe the one which you see with the bone metabolism, rheumatology, obesity, that's one customer with multiple indications, but smaller volumes. All the other volumes are more in the million range, but single-digit million range of peak unit volumes.

[Operator Instructions] We have a follow-up question from Edward Hall from Stifel.

Yes, I'll jump back in the queue. Just a follow-up just on the gross profit margin within the Healthcare segment. I appreciate you don't split out by different subgroup. But if we think obviously something returning back to growth in 2026, I mean, how could we think about this absolute change in 2026?

Sorry, I've not heard the last thing in...

Yes. In terms of just the gross profit margin and the change that we expected, obviously, it's obviously -- we don't see the granularity you have on the different subsegment levels. So I'm just trying to understand the sensitivity to if surgical or Drug Delivery was to grow, what the potential impact that would have on the gross profit margin?

So what you see in the 3 Healthcare business units, we have right now, we have a very good profitability in Dental as well as in Surgery. And I think this will remain quite stable. Of course, Surgery can maybe go a little bit up if the volume goes, but the big impact will come when we see the device sales, what you see actually on this Slide 16, which will start kicking in end of '27 and '28 because the Drug Delivery profitability is at the moment, of course, significantly lower than what you see in Surgery or Dental. And as soon as we have this additional device sales, then also Drug Delivery business unit will go more into the range what you can expect from a Healthcare business unit.

We have a follow-up question from Patrick Rafaisz from UBS.

Two follow-ups. One is on the Drug Delivery business with most projects or launches kicking in only towards the end of '27. How should we think about the '27 growth? Is that just more a flattish number in all likelihood before we ramp up?

And the second question is on Dental, where you talked about the product categories. Can you just add a bit of color on the relative share of the most relevant product categories in the mix and which categories will actually drive the growth going forward with the next-generation launches?

Yes. Let me go first to the Drug Delivery, I think when you look '27, because it's at the end of '27, then it's very difficult to say how much we will grow in '27 because this project, the launch date can easily vary by a quarter or 2. That's why I'm careful to make any speculations on the '27.

It can be surprisingly good if it's a quarter earlier or it will be lower if it's a quarter later. And to say something about that is very difficult. The real growth will come in '28. And then about the different businesses, I think when you look about the impression business, which is a declining -- structural declining business, there, we have a very high market share. So that's probably over 50% in value we assume. And then the next bigger business is actually cementation.

And in cementation, our market share is more about 2/3 of the market, whereas a significant part of that cementation market is right now not accessible for us because Solventum is also sourcing from us, but they are also producing for one product, cementation product by themselves.

Where we see the real growth opportunities, these are particularly in the adhesive market, which is a very large market, and we have there a much lower market share. That's more in the single-digit percentage. And also in restorative, where we are more somewhere between 10% and 20%. These are, for us, big growth markets where we have also product launches planned.

In impression, cementation, crown and bridge segments, we are -- all in these segments, we have more than 50% market share in the accessible market. So the growth will come also from that because this market, the cementation is growing, but the real growth through market share gains that will come from adhesives and restorative.

Then besides that, there are multiple smaller markets where we see growth opportunities like the endo-perio market, professional whitening, aesthetics. So there are plenty of growth opportunities in the Dental world, which -- where we can also gain market share.

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

Thank you very much for attending. Very much appreciate it, Rene.

No, thank you. And as we conclude today's presentation, I really want to say thank you for your time, particularly also for the questions. I think that's always very helpful. And this year reminded us that what makes Medmix really exceptional. That's our people, our precision and also our ability to turn challenges into opportunities.

I think we have really strengthened our foundations, and we delivered for customers who rely on us every day. And as we look ahead, our ambition is clear. We will continue building a Medmix that is faster, stronger and more agile. And I would like to thank really to our employees, customers and shareholders. Thank you for your trust and partnership. Thank you very much.