PolyPeptide Stock

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

At this time, it is my pleasure to hand over to Lauren Starr, Head of Corporate Communications. Please go ahead, madam.

Good morning, everyone, and welcome to PolyPeptide's half year 2026 results presentation. I'm Lauren Starr, Head of Corporate Communications, and I'll be moderating today's session. Thank you for joining us, and I hope you're all having a good summer.

Before we begin, I would like to remind everyone that today's discussion may contain forward-looking statements. Please refer to the disclaimer included in today's presentation. Following the presentation, we will open the line for Q&A. Questions can be submitted either via the conference call or through the webcast chat.

Today's presentation will be led by our CEO, Juan Jose Gonzalez, who will provide a business update, followed by our Interim CFO, Tim Brandl, who will review the financial results. Juan Jose will then return to discuss our updated guidance and provide an update regarding Samsung Biologics' offer to acquire PolyPeptide.

And with that, it is my pleasure to hand over to our CEO, Juan Jose Gonzalez.

Thank you, Lauren, and good morning, everyone. Thank you for joining us this morning. Let's just start with the key messages for today. So first of all, we post in the first half of 2026 a strong growth in revenues and profitability. Our revenues increased 41.6% versus the first half of 2025 across both commercial and development. And this growth was driven by metabolics, which actually grew 72.6%. Our EBITDA margin improved from 2.7% in the first half of 2025 to 20.7% in the first half of 2026, and this reflects the benefit from the strong revenue growth of the company. Now -- we also benefit by one-time net favorable impact from exceptional items.

From a financial flexibility point of view, we also finished the first half of the year in a stronger position. This is driven by our operating cash flow with a solid operating performance and further net inflow from customer prepayments and the expansion of our revolving credit facility. Our capacity expansion across our global manufacturing network is on track, is now Braine that we discussed before already operating at target capacity, but our capacity expansions across Malmo, Strasbourg and Ambernath are on track.

More importantly, we have further expanded our rich pipeline. The number of Phase III projects increased from 30 at the end of 2025 to 37 at the end of the first half of 2026. Just to give you a sense, just to put this into context, globally, the number of synthetic peptide drugs in development in Phase III is about 70. That basically means that about half of all Phase III development activity is going through PolyPeptide. On the back of a strong performance in the first half of 2026, we are upgrading our 2026 full year guidance and confirming our midterm outlook.

Now with that as context, let's look at where we are from a market point of view. Now peptide is one of the most attractive markets for CDMOs. On the left-hand side, you have a projection of the global therapeutic peptide market from 2023 to 2025 to 2031. And what you can see is that the market is expected to quadruple from 2023 to 2031, and the growth is mainly driven by metabolics.

Now when you look at the number of peptide drugs in clinical development, if you include early-stage activity, you have about 1,600 programs. Of those ones, you already have 591 in clinical development. And the clinical development is across multiple therapeutic areas. There is activity in metabolics, of course, but also oncology, neurology, cardiovascular, infectious diseases and others. Actually, metabolic and oncology account for 40% of our clinical development activity.

And the most important thing is that we are seeing a next wave of innovation in metabolics, which is the main growth engine for peptides. We are seeing indications expansion, whether it is MASH, cardiovascular, sleep apnea, osteoarthritis. We are seeing extended dosing intervals like monthly injections. We are seeing higher efficacy, better side effects profile. We are seeing alternative delivery routes like orals. And basically, what this is doing is enhancing the value proposition of metabolic peptide offerings, which will ensure that the strong demand that we are observing today continue for the foreseeable future. So this is in terms of the market.

Now let's talk about how PolyPeptide is positioned within this attractive market. And basically, there are 2 things which are important. One is PolyPeptide has a deep peptide scientific expertise with over 70 years of experience and a strong track record having developed and produced over 1,000 therapeutic peptides. And the second thing is that we have a multisite network. We have infrastructure for development and manufacturing in the U.S., in Europe and Asia. And this gives us significant flexibility to make sure that we can put offerings that are in line with customer supply chain strategy. It give us flexibility given the geopolitical environment and it gives us customer proximity, which is also one of the reasons why we have such a rich pipeline. So this is about the market, where are we positioned.

Let's talk about the strategy for the company. And basically, the company is focused on having a very strong foundation. This is around our operational and quality excellence, our industrial scale capabilities, our talent and sustainability credentials like the EcoVadis Gold rating we just got. And then with those fundamentals, we work on 3 competitive advantages. Number one, proprietary technology, significant infrastructure and expertise in development. So as peptide becomes more complex, it's clear that PolyPeptide is the strongest partner to bring them to market and then our modularity expertise for capacity expansion. And our view is that as we work on these competitive advantages, we fulfill our vision of being the most innovative peptide CDMO, which we believe is the strongest position to make sure that you maximize the potential in this market.

Now let's see how this strategy is translating into results. So on the left-hand side, you have the revenue by therapeutic area. In the first half of 2021, when the company went public, company was EUR 135 million, out of which metabolics accounted for 25% of our revenues. And what you can see is that in the first half of 2026, excluding COVID, the company has been growing at a CAGR of 18%. But more importantly, metabolics now accounts for close to 70% of the total revenues of the company, growing at a CAGR of 35%. It's important to note that this rapid growth in metabolics is going to continue going forward on the back of the exposure we have with metabolics. I mean, we have over 30 programs across commercial and development in metabolics working with multiple metabolic players.

Now if you look at our revenue by business segment, you can see that the growth is being driven by both our development activities as well as our commercial activities. And as mentioned before, we are not only growing very rapidly, but we continue to strengthen our pipeline, which is an important indicator in terms of future growth. With 37 programs in Phase III and working in terms of the commercialization, we are going to be able to continue our accelerated growth trajectory.

Now let's talk about capacity expansion. And in terms of capacity expansion, I think we have shared before the successful ramp-up in Braine, where we are not only operating at target utilization, but actually, we have been able to improve on our yield. We are also on track in Strasbourg, which is starting the ramp-up in the second half of 2026, and Malmo continues to be on track for the ramp-up in 2027. More importantly, in addition to that, we are also pursuing expansions in Ambernath and downstream expansion in Torrance. So this capacity expansion programs, given where we are today is significantly derisked and we are confident it's going to help to support the growth of the company towards our midterm guidance in 2028.

Now of all these capacity expansions, the Malmo modular expansion is the most important one, not just because of the value of the investment, which is around EUR 100 million, largely funded by a large pharmaceutical player in metabolics. But more importantly, because this is our first modular concept being implemented. And basically, our experience today is confirming the significant benefits in terms of modularity, a lower execution risk, a much accelerated time to construction and then providing customers with more flexibility because once you build the module, then you can build the next module relatively quickly.

And as you can see in the time line, we started construction in 2024. By September 2025, all the modules were basically delivered on the site. By July 2026, all the construction has been completed, and we are undergoing commissioning. And we are on track to start ramp-up in 2027. That basically means that from starting construction to the time this is completed, it's 2.5 years. And it's important to note that once you have done one module, the next modules are actually even faster. So that we consider is a very important differentiator and one that resonates very well with customers.

So that's in terms of the update on the market, the company, our evolution, where are we with our capacity expansion programs. So let me pass it to Tim that will talk about our financial results.

Thank you, Juan Jose. Let me now take you through our H1 2026 financials, starting with revenue on this slide. In the first half of 2026, we generated EUR 236.6 million in revenue. That is an increase of 41.6% versus the same period last year or 43.7% at constant currency rates. Growth was once again driven mainly by metabolic therapeutics, as Juan Jose said. Importantly, though, both parts of our business contributed. Commercial revenue was up 35.8%, reflecting the high level of utilization developed in our new large-scale capacity in Braine, together with favorable market trends across our broad portfolio. Development revenue grew even faster, up 52.3% as strong demand from our late-stage clinical pipeline came through.

To give you a sense of the mix, revenue from metabolic therapeutics grew 73% year-on-year and now represents around 68% of total revenue. At the same time, we continue to maintain a diversified pipeline of active custom projects with strong exposure to metabolics, including GLP-1 receptor agonists as well as oncology and neurology. That diversity underpins the quality and resilience of our growth. So in short, large programs are driving strong broad-based growth across both development and commercial.

Moving on to profitability, where the improvement is even more striking. EBITDA reached EUR 49.1 million compared with just EUR 4.4 million in H1 2025. That takes our EBITDA margin to 20.7%, up from 2.7% last year. Let me just bridge that for you. The main driver was, of course, higher sales from increased production output, contributing around EUR 45 million. This was partially offset by investments in our people ahead of the second half growth of around EUR 4.8 million compared to H1 2025.

On exceptional items, we recorded a one-time favorable impact of EUR 9.2 million from the sale of intangible assets, which was partially offset by EUR 4.8 million of continued ERP-related investment. Even excluding that onetime net gain, the underlying EBITDA margin was a healthy 18.9%. So the key message here is that the step-up is structural, driven by high utilization of our large-scale SPPS asset in Braine and strong operational execution across the network.

And then finally, let me move to the cash flow and our balance sheet. Net cash flow from operating activities, excluding changes in net working capital, reached EUR 44.7 million. Within net working capital, the year-on-year movement mainly reflects higher receivables balances due to revenue phasing, which was partially offset by the continued net inflow of additional customer prepayments received, underlining the strength of our commercial relationships.

Net cash flow from investing activities was EUR 45.8 million, mainly related to the finalization of our Strasbourg and Malmo modular expansion projects. As Juan Jose mentioned, both projects continue to be progressing well and are expected to contribute to the growth of the group soon.

On liquidity, at the end of June, we had drawn EUR 100 million of our committed EUR 200 million revolving credit facility, which we expanded in March. Cash and cash equivalents stood at EUR 59 million at the end of H1. Taken together, this gives us the financial flexibility to keep funding our capacity expansions while supporting the growth ahead.

And with that, I will hand back to Juan Jose to discuss our guidance and the Samsung Biologics' offer.

Thank you, Tim. So let's talk about our guidance for 2026. First of all, our priorities for the remaining of the year are unchanged. We are focused on meeting the increasing demand, especially metabolics. We are focused on executing our capacity expansions across multiple sites, and we continue to advance negotiations for large commercial agreements to support our growth beyond 2028. Now on the back of the strong performance in the first half of the year, we are upgrading our guidance.

Our revenue growth is increasing from 20% to 25% to 25% to 30%. Our EBITDA margin is increasing from mid to high teens to high teens and our CapEx remain unchanged. It will continue to be forecasted at 15% to 20% of revenues. Now this performance again reflects a strong not just financial performance at the end of H1, but also the strong momentum that the company has.

Now let's talk about our midterm outlook. And with this performance, we are in a comfortable position to hit our midterm outlook. We believe that, again, our strategy around being the most innovative peptide, our focus of innovation on pipeline development, on capacity expansion, the execution of this strategy is allowing us to continue the accelerated transformation of the company. So we confirm our target of doubling 2023 revenues by 2028, an EBITDA margin approaching 25% by then and capital expenditure for the period of around 15% to 20%. We believe that this midterm outlook reflects adequately the strong performance of the company.

Now let me just talk about the Samsung Biologics' offer to acquire PolyPeptide. And as we communicated on the 20th of July, PolyPeptide Group and Samsung Biologics announced they have entered into a transaction agreement under which Samsung Biologics agreed to make an all-cash public tender offer to acquire all publicly held shares of PolyPeptide for CHF 44.31 per share. This transaction aims to provide PolyPeptide with the resources, investment capacity and a strategic platform to pursue the next phase of its growth and innovation. The combination of PolyPeptide deep scientific expertise, rich pipeline with Samsung Biologics industrial scale, resources and capabilities will create a transformational player to drive the growth in the overall peptide market.

Our anchor shareholder supported the process and agreed to tender all of its shares, accounting for 55.65% based on total shares outstanding. And the Board of Directors, acting through its independent and nonconflicted members unanimously recommended that PolyPeptide shareholders accept the offer, a recommendation supported by an independent fairness opinion. This offer is a 40% premium over the undisturbed price before the market rumors of a potential transaction became public and it is a 60% premium on the VWAP on the 60-day volume-weighted average stock price, again before the news regarding a potential transaction became public.

And with that, let's go into the Q&A.

[Operator Instructions] Our first question comes from Charles Weston from RBC Capital Markets.

Three, please, on the market. First of all, can you give us some color on how you've seen the competitive landscape develop? Clearly, we've had results from WuXi AppTec, whose peptide revenues have been very impressive in terms of the growth backend and obviously yourselves. So if you can just give us a sense of your view on how that competitive landscape is developing and in particular, also how pharma companies may also be looking to invest in their own capacity?

My second question is on consumer peptides. There's been a lot of news, obviously, in the U.S. about those becoming perhaps more available. And I don't think that the main pharma CDMOs, such as yourselves, are involved in those. But perhaps you could speculate as to whether that might change in the future?

And lastly, in terms of generic semaglutide, could you provide us some color on how you see that landscape evolving and in particular, also who are the key manufacturers?

Thank you very much, Charles. Listen, in terms of the competitive landscape, we haven't seen much change. First of all, I think in the case of WuXi AppTec, it's important to know that what they report is their production of tetramer, which is a raw material used by other CDMOs in the production of tirzepatide fragments, then the production of fragments itself, later production of peptides, plus oligos. So it's difficult to know really out of everything that report how much is really peptides.

But in any case, the concerns around biosecurity makes that, when we look at Western customers, in most of the commercial negotiations that we discussed, we are only competing against other Western players. We do not compete against Chinese players. Now at the same token, when there is a tender for China, we do not participate, and it is mainly Chinese CDMO players participating. But basically, I would say the concerns around intellectual property continues to be a barrier for Chinese CDMOs to participate more actively in the Western side. And of course, it's a benefit for companies like PolyPeptide.

Now in the case of consumer peptides, yes, I mean, we are following this development with interest. It could be an opportunity, but I have to say the demand from branded pharmaceutical and biotech players is so large that we, as a company, are very much focused on -- we are very much focused on bringing all these new products to market and supporting their commercialization. And generics is more or less the same. We do not really engage in terms of generic production. We believe most of the production is being done by Chinese and Indian players.

But again, I mean, going back to what I discussed in terms of the level of innovation and development in terms of metabolic peptide drugs, we think that there are many differentiated offerings coming to market and the branded side of the market will continue to grow very rapidly.

That's really helpful. I don't suppose you could share key names of the players you see as key manufacturers of generics in India and China, please?

No. I mean, we -- there are -- first of all, there are many, many players. It's difficult also to know what they report. In some cases, they say semaglutide, when it is actually a raw material. In some cases, they are producing non-GMP versus GMP. But I think if you do some search, you will be able to find the players which are advertising that they can do semaglutide. But I can confirm that this is mainly coming from China and India.

Congratulations on the Samsung deal.

The next question comes from Charles Pitman-King from Barclays.

Charles Pitman-King from Barclays. Three for me as well, please. Just in terms of the EBITDA one-offs, just trying to make sure I fully appreciate the moving parts here. So you mentioned the one-off of the sale of intangibles and the ERP-related investments. But in the appendix, there's a EUR 7.3 million related to a onetime impairment due to previously capitalized projects being terminated as well. So just wondering if you can confirm the actual underlying EBITDA comes in closer to EUR 37.4 million. And just wondering what -- whether you could provide detail on what drove the project termination?

And secondly, on Malmo, you kind of mention that this is the first modular experience and you're on track to ramp-up in 2027. But can you just confirm when you're talking about bringing different modules online, this is the first module that's set to ramp up over '27? And when should we expect the last module to come online? So what's the cadence to achieving full utilization?

And then just maybe, thirdly, if you're able to provide any thoughts on Samsung's potential to help fund your expansion into the U.S. market?

Yes. Thank you, Charles. Listen, let me start with -- why don't we start in with the profitability question, just to clarify that?

Sure, sure. Thanks, Charles. So the write-down that you noticed in the back is below EBITDA. So it's included in EBIT, and it's a noncash impact. So it's in the depreciation line as well. And in the P&L, you'll see it in the G&A. So it's below EBITDA, but within EBIT. But if you want to adjust the EBIT for that -- the EBITDA for that, it's a noncash D&A impact, I wouldn't adjust.

Right. In terms of the module in Malmo, basically, we use that term module to describe the entire capacity expansion. And what we are saying is that everything is coming online to support this EUR 100 million contract in 2027. In 2027, we start the ramp-up of the program, and we expect to finish the year at target utilization.

Now in the case of Samsung, I cannot comment on this that we are still going through the process. But if you look at the way that Samsung Biologics's CEO have referred to this transaction, it is mainly to diversify geographically and to accelerate the growth of the company. And we believe this is actually a recognition to the significant progress over the last 3 years of PolyPeptide and the potential it has to be able to scale up with such a rich pipeline and expertise.

The next question comes from Estelle Betrisey from Berenberg.

Congratulations also on my side on the results today. Maybe just a brief one on your ongoing CapEx program in Strasbourg. If you could just -- I mean, you expect to start the ramp-up in second half. Should we already expect some of those revenue contribution this year already? Or yes, if you could just give me a bit more color on this?

Yes. I mean we will start the ramp-up. So there will be some level of invoicing, but it's going to be very small. We expect most of the benefit to come in 2027.

[Operator Instructions] The next question comes from Daniel Jelovcan from ZKB.

Two remarks, so to say. The first remark is, of course, Juan Jose and Tim, we always have very nice conversations and roadshows and we'll be sad if the call today is the last one. I mean officially that is 11th of March, but you never know. So -- yes, it was a great pleasure. That's the first remark.

And second, the question actually is to double sales until '28, is that with the current CapEx plans? Or I guess it is so, right? And then there's a second part of this question.

Yes. So Daniel, first of all, thank you very much. And I also have enjoyed all of our conversations and thank you for your interest on the company.

In terms of our midterm guidance of doubling sales, this is with 15% to 20% CapEx target for the period. And again, based on how we finished the first half of '26, the upgraded guidance for the year, we are in a very comfortable position to meet our midterm guidance.

Okay. And so the follow-up on this is actually, when you are successful in one of these 37 projects in, I think, in metabolic, if you get 1, 2, 3 big ones, which are then commercial, let's say, beyond your '28 target. I mean, I have in mind that you have a lot of land in Braine. So the question is how -- if you have significant volumes for these GLP-1 drugs or whatever NASH, how quickly can you do kind of this, let's say, brownfield, right?

Yes.

Adding capacity to an existing site? Is that a 2, 3, 4-year time frame? Would you already begin to plan now? I think you got my point, right?

Yes. No, thank you, Daniel. It's clear. I mean, first of all, I mean, capacity expansion is one of the main areas of focus for any CDMO in a high-growth environment. And in our case, as we have this very rich pipeline, we are not only in negotiations, but already evaluating our options to significantly increase capacity as we expect to sign more than one commercial agreement. We have opportunities to rapidly increase capacity. This is driven not just by our availability to access to land in Belgium, Torrance and Ambernath, but also because of our modular approach, our modularity is very, very fast. And that basically means that we can really ramp up large-scale capacity very quickly. And our plan is whatever capacity expansion we are doing going forward that we use this modular technology to do it.

So, far, there are no further questions from the phone. Back over to you for the written questions.

Okay. We have a question from Laura Pfeiffer.

Please update us on your negotiations for large-scale volume contracts. What are the key topics you encounter? And have you seen any changes in demand dynamics? More specifically, how do customers react to the proposed takeover by Samsung?

Yes. So first of all, maybe just a couple of points. One is we continue to see the imbalance between supply and demand. And because of the complexity of the next-generation metabolic drugs that is putting PolyPeptide in a stronger position. And one of the main highlights for us as a company at the end of the first half of '26 is that our Phase III pipeline grew so rapidly, and it is growing not just because of our Phase II projects moving into Phase III, but because we are seeing Phase III projects that used to be done by competitors moving to PolyPeptide. And this is just driven again by the complexity and the inability of some of our competitors to deal with that. So we are very excited on that front.

In terms of the customer reaction, again, it's not given where we are for us to comment. But of course, Samsung Biologics is one of the most successful CDMOs globally and their track record and reputation is very, very high. So customers see this as an opportunity for PolyPeptide to access to resources and capabilities to scale up in a way that before was going to be very difficult. And on that front, this is very positive.

Thanks, Juan Jose. And now we have one from [ Rolf Aesselgaus ].

With Frederik Paulsen's 56% stake, Samsung is already close to the minimum required 66% of PolyPeptide shares. Are there any indications from other major shareholders as to how they plan to respond to Samsung's offer?

Tim, do you want to comment?

No, I think it's probably not the right time for us to comment. Of course, we've had the chance to speak to some of our investors, but the prospectus has not been published, and the acceptance period has not started. So we'll just need to see. But I guess, I mean, it's a very strong sign from our anchor shareholder that he supports the transaction. And I think we had good discussions with our investors overall. Anything to add, Juan Jose?

No. No, no, nothing to add.

Thank you, Tim. And a question from Tanya Hansalik from UBS.

Can you talk about how you see big pharma investing, building up its own in-house capacity? Do you see long-term demand for outsourced manufacturing continuing?

Yes. I think that's a very important question. And listen, if you look at the peptide market, there is always a mix between in-house and outsourcing. So we are -- we have always been in an environment where some customers have in-house, some customers have 2, some customers rely more on outsourcing. Now based on what we see today, if you look at the number of pharmaceutical and biotech players moving to large peptide drugs, without any peptide manufacturing expertise, is very large. And that's why we see they are relying on peptide CDMO support. We don't expect that to change. And again, you have 1,600 drugs in development. I don't think that is going to change the picture.

In any case, what is important for us is that we continue to aggressively work in development to make sure that we are there for the commercialization. That we believe is the most sustainable position in the future.

Thanks, Juan Jose. That now concludes the session. So thank you, everybody, for joining us today.

Lauren, sorry. I just wanted to say a couple of things. This might be our last earnings call. So first of all, I wanted to thank all the analysts that have been covering the company, Charles, Daniel, Tanya, Laura for their focus and interest.

But more importantly, I wanted to finish this call thanking all PolyPeptide employees because our results in the first half of the year, the transformation over the last 3 years reflect their perseverance, professionalism and passion to see the company fulfill its potential. And we wouldn't be where we are today without their efforts and Samsung Biologics' offer. I see it as a recognition to the quality and caliber of the organization that we have. But thank you very much, and enjoy the rest of the week.

Ladies and gentlemen, welcome to the PolyPeptide's Full Year 2025 Business Update and Results Presentation Conference Call and Live Webcast. I am Moira, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Tim Brandl, Financial Planning and IR. Please go ahead, sir.

Thank you. Good morning, everyone, and welcome to our 2025 full year results presentation. I am being joined today by our CEO, Juan Jose Gonzalez; and our CFO, Marc Augustin, who will take you through the presentation, and we'll be open to take questions at the end. Before we start, I would like to draw your attention to our usual disclaimer on Page 2. For the Q&A, please follow the instructions on Page 3.

Anyone who wishes to ask a question can do so via telephone or in writing in the webcast. Moving on to the agenda. Juan Gonzalez will start with a business update. Then Marc will guide you through the financial results before Juan Jose Gonzalez shares our guidance for the full year and the midterm outlook.

And with that, I'm pleased to hand over to our CEO, Juan Gonzalez.

Thank you, Tim, and good morning, everyone. 2025 has been a year with a strong growth and a marked improvement in profitability. We achieved in 2025, a 16% revenue increase at constant exchange rate, mainly driven by Metabolic Therapeutics. In terms of EBITDA, we grew 84.4% from 7.5% EBITDA margin in 2024 to 12% EBITDA margin in 2025. Actually, in the second half of 2025, PolyPeptide already reached 19% EBITDA margin.

We also have improved our financing flexibility. Our strong operating cash flow driven by increased profitability, better working capital and further customer support in the form of prepayments have significantly expanded our financing. We are also in advanced discussions to further expand our revolving credit facility. Now the combination of the better profitability, our ability to secure last customer support and this expansion of our revolving credit facility give us all the financing flexibility we need to continue our agenda towards our midterm guidance.

Therefore, although we have a flexibility, we do not plan to pursue an equity raise. In terms of our capacity expansions, they are on track to deliver the expected contribution towards our midterm guidance. Our new last decade capacity in Brain achieved optimal target utilization by the end of 2025. Actually, we optimized the output and now the potential revenues from this new capacity have increased from EUR 100 million to EUR 125 million.

Furthermore, our Malmo modular expansion is on track to start a ramp-up in 2027. The strong momentum in 2025 is reflected in our 2026 full year guidance with accelerated growth and a further improvement in profitability. On the back of this momentum, we are confirming our 2028 midterm guidance. So overall, we are very excited with the progress in 2025, but let's step back and talk about the market. In terms of the market, peptides is one of the most attractive markets for CDMOs.

On the left-hand side, you have the global therapeutic peptide market potential. The growth from 2024 to 2031 is expected to be a CAGR of 15% and reach EUR 175 billion. Metabolics will be the main driver of growth for this market, but the non-metabolic base that includes oncology, cardiovascular, rare diseases will also more than double during this period. What is driving the growth in this market is a significant clinical development.

On the right-hand side, what you have is the number of peptide drugs in clinical development by therapeutic area. And as you can see, there are over 500 clinical development programs underway and metabolic, oncology and neurology account for half of the total clinical development activity. Now when we look at the metabolic opportunity, which is the #1 driver, there are main things underway. Number one, the obesity comorbidities are significantly expanding the market. The impact of peptide metabolics on weight loss is significant, but they also have major benefits across other comorbidities, whether it is sleep apnea or MASH or cardiovascular or oncology, the potential of metabolic peptides is much broader than initially thought.

Now we see also the ongoing success of blockbuster drugs from Lilly and Novo Nordisk. And we see also a significant improvement in terms of the value proposition of metabolic peptides. We will see improvements in convenience going from weekly to monthly. We will see oral peptides. We are seeing multiple agonist and combination therapies that will improve the side effect profile of metabolic peptides, whether it is GI, whether it is mass mass. And we continue to see the expanding range of indications. And this is very important because what we see is that the competitiveness of metabolic peptides over time will continue to increase and remain relevant vis-a-vis new modalities like small molecules.

On top of that, you have a large number of new entrants, which are advancing the next-generation molecules. In terms of large pharma, Amgen, Roche, Pfizer, Boheim, AstraZeneca, Merck and the large number of biotechs, which are advancing these new metabolic projects are going to ensure that metabolic peptides continue to scale up very rapidly and reach what will be a significant new market by 2031.

Now given the development in the market, let's talk about how polypeptide is positioned within this market. And we believe that PolyPeptide is very well positioned. The company has deep peptide expertise. We have over 70 years of experience. We have a strong track record of over 1,000 therapeutic peptides manufactured. Actually, if you look at all the peptide drugs approved by the FDA since 2021, 50% came through peptide.

On top of that, we have a global multisite development and manufacturing network, providing customer proximity, flexibility and speed to market. We believe that to be a significant competitive advantage given the current geopolitical environment, our ability to provide supply chain solutions across the U.S., Europe and Asia is becoming more and more relevant.

Today, PolyPeptide work with 14 of the top 20 large pharmaceutical players. As you can imagine, not all the top 20 are engaged in peptides. That basically means that PolyPeptide works with most of the large pharma companies engaged in the development and commercialization of peptides.

Now let's talk about our innovation and how do we compete in the marketplace. And we have a vision of being the most innovative peptide CDMO The foundation around operational and quality excellence, industrial capabilities and having the right talent, culture and sustainability credentials are very important. On top of that, we work on 3 competitive advantages. We work on proprietary technologies, we work on development and we work on modularity.

Now let me just give you a flavor on the progress on these 3 main competitive advantages. In terms of innovation, the company has a proprietary technology that is focused on 3 areas that we believe are very important to meet customer needs. Number one, around sustainable manufacturing that significantly reduce the cost, the CapEx required to be able to use some of these raw materials. and to meet regulatory compliance. We are talking about proprietary technologies to reduce solvents. We are talking about green solvents to replace things like PFA. And we are now moving into a true solvent reprocessing within the sites that will significantly reduce the cost of solvents, which is an important part of our raw materials cost. We are also working on process speed and throughput. We're working on automation, and we have a proprietary technology, which is a high-capacity resin that increased the reactor throughput by 2 to 3x. And we are working on a better capacity expansion model, which is a flexible design for rapid deployment. And this is what we call our modular technology. It basically allows to reduce the implementation risk while providing significant flexibility. This agenda is supported by multiple patent families and scientific publications that ensure that we provide an offering to customers that cannot be matched in the marketplace.

Now this is in terms of innovation. And to support this innovation, we are also forming strategic relationships to strengthen our end-to-end offering. Basically, we're focusing on faster and efficient sourcing, reliable manufacturing and accelerated development pines. In terms of starting material, for example, we are deepening our relationship with [ Flama ] and lubing manufacturing solutions to secure significant raw material savings, improve our supply chain flexibility and resilience and broadening our sourcing options.

On the drug product side, we have a partnership with Lifecore Biomedical, which has expertise in formulation, fill and finish and packaging. And the idea is that in terms of development, we can provide a seamless transition between drug substance and drug product. Now this is in terms of innovation. Now let's talk about development as a competitive advantage. And today, we have the richest pipeline in the market. In 2021, when the company went public, we had 247 projects, out of which commercial projects were 51, 4 years later, 2025, we have 264 projects, and our commercial projects have grown by over 40%. That basically shows that our ability to develop products and move them into commercialization is working.

Not only that, PolyPeptide today is engaged in over 1/3 of all Phase III peptide projects globally. Now the reason why we have such a rich pipeline is because we have a proven track record of quality excellence, regulatory expertise and delivery performance. We have advanced capabilities for complex peptides and peptides are becoming more and more complex. Our ability to work with long, modified and high-value molecules is basically resulting on continue to advance our development pipeline. This is also driven by our proprietary technology, which is showing that to be able to produce industrial scale metabolics, you need a better development and manufacturing process.

Our development infrastructure is also a key area of development, a key area of competitive advantage. We have development infrastructure in the U.S., in Europe, and now we are building development capabilities in our Indian facility. Now this is in terms of development. Let's talk about modularity, and I will explain in a minute how do this modular concept looks. But in simple terms, traditional CDMO capacity expansion is not optimal. The projects tend to be delayed, budgets tend to be overrun in terms of cost. And if you look at the speed of the market development, you need a better and different way to build capacity. And in the case of modularity, our modular technology ensures speed. We have an accelerated construction time line, low execution risk. The existing manufacturing remains uninterrupted while we are expanding. Quality assurance, the standardized platform is supporting not only GMP, but also BLM requirements, which is important as peptide chains become longer and longer. It provides a fast scale up. It's a replicable setup to allow for short-term capacity addition and supply chain resilience.

This flexible supply runs across geographies with models deployed in the U.S., Europe and Asia, it provides a significant supply chain resilience. Now these are the benefits in terms of modularity. Let me show you how this modular technology looks. And we have our modular expansion, which is on track to double the SPPS capacity. And we have a video to show you how does it look like. So let's play a video now...

[Presentation]

[indiscernible] can give you a better feel in terms of how this mold technology looks like. And just to remind everyone, this is a metabolic program. It's an investment of EUR 100 million, which is largely funded by a large pharmaceutical player. And this molder concept gives you a much faster speed to market. Basically, you can in 3 years move from design to construction to validation.

Our experience with this model expansion in Malmo is that it is going to be around 1.5 years faster than our expansion in [indiscernible] The most important thing is that once you build one model, the next model can be even faster as you don't go through the design process phase. Now let's see how all these competitive advantages have resulted in terms of the performance of the company. And on the left-hand side, you have the revenue by therapeutic area from 2021 to 2025. And basically, PolyPeptide metabolic revenues have more than tripled since 2021. And today, it reached over half of the total revenues of the company.

Now just to give you a sense regarding the scale of our metabolic exposure, we have 47 programs, 37 are in development across 25 customers, of which 7 are already in Phase III. On top of that, we have 10 commercial projects. PolyPeptide in metabolics is working on GLP-1s, orals, multiple agonist and combination therapies. And our 3 major sites, BRI, Malmo and Torrance in the U.S. are actively engaged in the development and commercialization of this metabolic pipeline. That is the reason why we believe that our metabolic revenues will continue to grow at an accelerated pace.

Now let's look at our transformation towards commercial and large pharmaceuticals. On the left-hand side, you have our revenue by business area. And in 2021, when the company IPO-ed, our mix between development and commercial was around 50-50. By 2025, we have been able to grow our development revenues at a CAGR of 10%, but our commercial revenues grow even faster. We actually, over that period have doubled our commercial revenues. The benefits of having a larger percentage of commercial revenues is that it gives you more stability and predictability. And this also reflects very well what I show in terms of our development pipeline and the increase of our commercial projects.

Now if you look at our revenue by customer type, in 2021, we had large pharma, which means the top pharmaceutical players accounting for $119 million of the EUR 282 million. By 2025, large pharma has grown at a CAGR of nearly 20%. And today, it accounts for around 60% of the total revenues. We believe that working with large pharma provides also some additional benefits in terms of sustainability, having long-term relations and more stability. Now we have been able to grow our revenues in large pharma while also growing our revenues with innovative biotech companies, which we believe is very important as some of these biotech will end up being bought by large pharma and commercialized by them.

Now we talk about the evolution of our revenues. Let's see where we are with our capacity expansion. And our capacity expansion plans are on track and are expanding further in the U.S. and India. We basically talk about our expansion in brain that reached target utilization. We have been able to further optimize the output. And in 2026, we will get the full year effect of this brain facility, this new brain capacity operating at target utilization. In the case of Eras, we are starting the ramp-up in 2026. And that basically means that all the work in terms of engineering and validation is completed. In the case of Malmo, as we talked a few minutes ago, we are on track to start the ramp-up in 2027, and we are very excited given the size of this new capacity and the proven benefits of this modular technology.

On top of that, we also initiated a rapid expansion in India, which is going to become online in about 3 months. And finally, we are also embarking on a downstream expansion in province that we should see scaling up in 2027. This capacity expansion put us in a position to exceed our 2028 midterm guidance. We believe that we'll have all the capacity necessary to make sure that we meet the midterm guidance and ensure that we continue to grow in 2029. But from now onwards, all new capacity will be focused on making sure that the company maintains its strong growth profile beyond 2028.

Now let's talk about how we are funding our capacity expansion projects. And what you have here on the left-hand side is the capital expenditures, including the percentage of revenues. So in 2023, we spent 17% of revenue that increased to 26% in 2024 and 28% in 2025. Now the financing of this CapEx is mainly driven by customer prepayments. Over these 3 years, we received gross customer inflows of EUR 290 million, and we started to release payments for around EUR 90 million for a net inflow of EUR 156 million in terms of customer prepayments. The main areas of customer support is capacity reservation fees and raw material prepayments. So this is very much in line with PolyPeptide multiyear funding strategy for growth. We believe that our role in the development of these projects and the partnership that we have with customers to ensure that we can secure their support to invest capacity is an attractive model to grow the company over the next few years.

Now this is in terms of -- now we talk a lot in terms of our competitive advantage. We talk about our revenue evolution. We talk about this capacity expansion model with the customer funding. Let's talk about talent. And in terms of talent, we continue on strengthening our organization and capabilities. Now let me just start sharing that Marc, our CFO, is resigning for personal reasons and Tim Brandl is appointed as an interim CFO. Marc joined me about 2 years ago. And over the last 2 years, his impact on the company has been remarkable. The progress not just in terms of our financial performance, supporting our operations and commercial contract agreements, the strengthening of the finance function, Marc has had a very positive impact in the company, and we wish him all the best in the future.

Now in addition to this announcement, we have a very active global agenda. We are strengthening our capabilities, especially in supply chain, procurement and finance. We have been doing talent upgrades in Torrance across development, manufacturing and engineering. We are basically getting ready to do a larger expansion in the U.S., and we are basically making sure the organization is ready for that. And we are building a shared service center in India. And you have here a picture of integration. We are basically leveraging the fact that we have infrastructure in India and moving some back office functions there that is going to give us more flexibility as we grow our multisite network. So this is in terms of talent.

And with that, I'll pass it to Marc, who is going to share the financial results.

Thank you very much, Juan Jose. And this is my last call for PolyPeptide. I would like to take the opportunity to say thank you to the Board, to you, Juan Jose, the leadership team and the entire PolyPeptide organization for the last 2 years. A lot has been achieved during this period operationally, commercially and financially. And I believe the company has built a strong foundation for the next chapter of the growth journey.

But now let's move to the financials 2025. In 2025, we achieved sales of EUR 389.3 million, which represents around 16% growth at constant exchange rate. And I would say the underlying performance of the business was actually even stronger than the headline numbers suggest. So the real story is not only the level of growth, but also the quality behind.

Our development business grew by close to 30%, reaching EUR 153 million. That is an important signal for the future, because it reflects the strength of our pipeline and supports our confidence in future commercial momentum. And at the same time, we saw a solid growth of 7.9% in our commercial business, especially in Braine and Malmo, reaching EUR 236.0 million in total. The site and Braine delivered the strongest growth across the network in 2025. But also important is that a large commercial customer has now completely moved into our new commercial asset, freeing up capacity in the existing base. And that capacity was already backfilled with new late-stage development programs, which will transition into commercial phase in the near term.

So the key message for 2025 is not only the headline growth of 16% at constant exchange rate. More importantly, it shows that the PolyPeptide business model is becoming stronger, more balanced and more resilient and that we are putting the right building blocks in place to support future growth. And finally, as in previous years, FX only had a limited impact on sales due to our natural hedging approach.

Let's turn to the EBITDA development. Looking back 2 years when we started the profit improvement journey, operational performance was one of our key priorities. And today, we can see that the improvement initiatives, which we started across the network show tangible results and even more important that these are sustainable. We know that these activities take time to show the full results, but the impact we have achieved already over the last 2 years is very encouraging.

In 2025 alone, we improved EBITDA in the base business by more than EUR 40 million, and we are not done yet. There's more to come in the next years. Regarding the new asset in Braine, you may remember that in the first half, we were still making a small loss. However, by the end of the year, we have reached our target utilization as planned and finished the full year with a positive EBITDA of EUR 1.4 million. This is a great success for the site in BRI and also for the group. At the same time, we continue to invest in our people to support future development and to strengthen our capabilities. This led to a cost increase of EUR 16.4 million. That led to an EBITDA margin of 13.1% before exceptional costs.

As mentioned, we see further potential to improve profitability. And one of the key enablers to unlock that potential is our SAP project, which is designed to standardize and harmonize processes across the group. In 2025, we completed the prepare phase, resulting in project costs of EUR 4.1 million. Against this backdrop, EBITDA for 2025 came in at EUR 46.8 million, corresponding to a margin of 12% for the full year. And if we look specifically at the second half, the EBITDA margin reached 19%.

Let me recap on the next slide. We delivered a top line growth of 16% at constant exchange rate. We improved the EBITDA margin by 4.5 percentage points to 12% and EBITDA turned from negative EUR 7.4 million in 2024 to positive EUR 8.7 million in 2025. The improved operational performance was offset in the financial results by unrealized FX losses due to revaluation of intercompany loans, mainly in U.S. dollars, amounting to EUR 12.3 million, of which EUR 9.7 million has been already recognized in the first half of 2024.

Compared to 2024, the year-on-year change was minus EUR 18.5 million due to the fact that in 2024, the revaluation of the loans had positive impact of EUR 6.2 million. The second relevant item, which also is a noncash element relates to IFRS treatment of contract liabilities. For contract liabilities, the financing component has to be recognized in the financial results. This impacts for 2025 of EUR 6.9 million versus EUR 4.9 million in 2024. The interest expense was stable year-on-year of about EUR 8.5 million. This is leading to a net result of minus EUR 21.2 million for 2025.

Now let's turn to the cash flow bridge. And there, I would like to split the operational cash flow into 2 parts. The first part of EUR 38.6 million is mainly driven by the improved operational performance and the second part of EUR 38.9 million is a result of the progress we have made in the net working capital management and customer prepayments. A good way to look at the improvement we have achieved is to take net working capital, excluding contract liabilities in percent of sales. This KPI improved by more than 10 percent points from 46.1% in '24 to 35.1% in '21. That is a meaningful improvement and shows that we are capable to manage our net working capital alongside sales growth and profitability improvement. Investments account for EUR 111.7 million, mainly driven by growth projects. And finally, we end the year with a cash balance of EUR 74.6 million, essentially in line with 2024. EUR 51 million remained available under our RCF after drawing EUR 40 million during the year. So overall, we managed to improve operating cash and continue investing into the future.

Let me close with our financing strategy. This financing strategy is built on 4 pillars. The first pillar is improving profitability. Over the last 2 years, we have improved profitability sustainably step by step. In 2025, we reached EBITDA margin of 12% despite the ramp-up in Braine and the ERP project costs. The second pillar is customer prepayment. Our recent expansions and the ones to come are supported by customer prepayments that helps to balance the cash flow and at the same time, mitigate our investment risk. The third pillar is our existing credit facility, which we increased in '25 by EUR 40 million. And currently, we are in advanced discussions with our banks to increase it further. The last pillar is equity instruments. Although we don't expect to use those instruments near term, they are part of our toolbox.

So overall, the message is we have a balanced and comprehensive financing strategy in place while at the same time, making tangible progress in strengthening and growing our business.

And with that, I'm at the end of my final slide and also my last presentation of PolyPeptide. I would like to sincerely thank the Board, Juan Jose, the EC and the colleagues across the company for the trust, the collaboration and support over the last 2 years. It has been an intense journey, but also a very rewarding one. I'm proud of what we have achieved together, and I'm confident that PolyPeptide is in a strong position today than it was 2 years ago.

Thank you very much. And with that, I hand it back to Juan Jose.

Thank you very much, Marc. So let's talk about how all this strong momentum in 2024 and 2025 translate in our guidance for 2026. And basically, in 2026, we should expect an accelerated growth and further profitability improvement.

Our priority for 2026 are the following: to meet increasing demand, especially in metabolics, execute capacity expansion in [indiscernible] and the ramp-up in [indiscernible] and India and advance negotiations for large commercial agreements to support growth beyond 2028. For 2026, our revenue growth at constant exchange rates is 20% to 25%.

Now just to give you a sense, just the full year benefit of the new capacity in Braine will take us to the upper end of this guidance, and it excludes any additional growth from the rest of our network. In terms of EBITDA margin, we are targeting mid- to high teens. And in terms of CapEx, we are targeting 15% to 20%, in line with our midterm guidance.

Now let me just show you why the EBITDA margin is within range. If you look at our performance in 2023, 2024 and 2025, our EBITDA margin in the second half of the year is very much in line with what will be the full year EBITDA margin of the following year. So in 2023, in the second half, we achieved an EBITDA margin of 7.1%. And in the full year 2024, the EBITDA margin was 7.5%. In 2024, in the second half, we achieved an EBITDA margin of 11.1%. And in 2025, we achieved an EBITDA margin of 12%. So if you look at having achieved an EBITDA margin of 19%, while we are confident on our ability to achieve a mid- to high teens EBITDA margin for 2026.

Now in terms of 2028, we are basically confirming our midterm outlook. Given the rapid growth and where we will be in 2026, the contract we have signed and the demand forecast, we are comfortable on our ability to hit our 2028 guidance. In terms of EBITDA margin, having achieved in the second half of 2025 [indiscernible] 19%, our target of approaching 25% is within reach. And in terms of capital expenditures, we are in line for 15% to 20% of revenues.

So this strategy to be the most innovative pet CDMO anchored on 3 competitive advantages: innovation, development and the potential of modularity is a strategy that we believe will create significant value for stakeholders.

And with that, let's move into the Q&A.

The first question comes from the line of Charles Weston from RBC Europe Ltd.

Could I have 3, please? The first of all, a question on the non-metabolic growth that you showed. Metabolic has obviously been very strong. Non-metabolic has only grown around 1% CAGR. Could you perhaps touch on the dynamics there and what may have held back that growth? Secondly, on your advanced discussion on contracting beyond 2028, could you tell us whether that's with a new commercial -- potential new commercial customer or an existing one? And would this be something that you announce when you sign a deal or just wait for the next update? And then just lastly, please, on the industry as a whole, clearly, the industry is expecting semaglutide generics to enter the market either later this year or 2027. Could you help us understand what the manufacturing network looks like globally to support the generic players? Are they investing in their own manufacturing? Are they going to be using third parties?

Thank you, Charles, for the question. First of all, in terms of non-metabolic growth from 2021 to 2025, we actually have also been going through a process of exiting some noncore businesses. We are reducing our presence in genetics. We are reducing our presence in cosmetics. We are reducing our presence in what we call noncore sectors and doubling down on branded pharmaceuticals.

So that's actually driving what you see in terms of the net growth in terms of non-metabolics. Now if you look at our non-metabolic pipeline, we have a pipeline as rich as what we have in metabolics in areas like oncology, cardiovascular, rare diseases. So we actually expect to accelerate our growth in the non-metabolic space.

Now I mean, when you have such a late-stage pipeline, that basically puts us in a very good position for new commercial agreements. And in this case, we have several commercial discussions, and it's a combination of Phase III moving into commercialization and existing and new customers. Now in terms of generics, I have to say I don't have a visibility in terms of what is the total global manufacturing infrastructure being built to serve generics. In our case, our strategy is very much focused on working with large pharma and biotech customers, bringing development pipeline into commercialization. And that's really what we are focusing on. Although we have the ability to serve generics, generics is not really a priority for us.

Actually, our Amman facility support genetics, but it is going through an expansion to serve branded pharmaceutical products.

The next question comes from the line of Laura Pfeifer from Octavian.

I think I have 2. Maybe the first one relates to your guidance for this year. I think, Juan Jose, you mentioned it yourself that somehow the guidance looks very much derisked. Just looking at the midpoint, it implies some EUR 85 million to EUR 90 million in additional growth. And I think looking at the statement that you have increased the output at Braine, you can fulfill that just by incremental contribution from BRI.

So my question is, why did you give that guidance? I mean -- and what is the potential upside given that we also have probably other capacities and projects ramping up? And then the second one relates to your margin target for '26. You say mid- to high teens range. Maybe you can just confirm that. This is about 15% to 19%. And then what are the key drivers and headwinds we should consider? And also, what accretion would you expect from the brain capacity?

Yes, Laura, thank you for the questions. And listen, I think we have been working already for 3 years, and you probably know by now that we are a very thoughtful and a very conservative company in terms of issuing guidance. And we always say that we want our performance to drive our valuation, not our guidance. So I think we are comfortable with this 20% to 25% range.

Of course, if everything goes well, we can go higher than that, but we plan to review our guidance at midyear. And then in terms of the margin target is mid- to high teens. So again, finalizing H2 at 19% is a good indicator in terms of the full year. Of course, the investment in ERP is going to increase, and that's a potential consideration. And of course, there is a lot of mix movements that we are scaling up multiple projects. But I think you have enough to be able to come up with an estimate.

Marc, I don't know if you have additional comments?

No, I think you mentioned the most important points. So one, the ERP system is gaining speed. As said, we have finalized the prepare phase in '25. And now in '26, we are going into the build phase. So that, of course, is adding to that. And we also mentioned the ramp-up we see across the network for future growth that is also hitting our profitability in '26.

Okay. But maybe just as a follow-up, can you maybe quantify the ERP investment? How much will it be in '26?

We assume that the cost will double compared to what we see in '25.

It's around 2 points of EBITDA margin. I think that could be a good assumption.

Okay. And then just maybe quickly a follow-up on the first question on the sales growth guidance. Can you just maybe give us at least an understanding what is kind of the base business growth you have baked into that guidance? And what is the contribution from Braine?

Yes. No, again, this guidance reflects the benefit of full year utilization of the brain expansion. After that, the growth in the base and growth from additional capacity expansion is not included in the guidance. But at this point, our recommendation is to take the guidance. Just know that we are in a comfortable position relative to the guidance, and we will review where we are at the end of the first half results.

Next question comes from the line of Estelle Betrisey from Berenberg.

Congratulations today also on the results. I wanted also to build on the previous question about the -- if you could maybe explain further the increased revenue potential from grain that you've explained. Like what brings you to expect this further revenue to be generated from that site? And yes, how confident you are to reach it? And also if we can expect further upside to come from the other sites as well that are currently being ramped up?

Yes. Thank you, Estella. I mean one of the things in terms of our focus on innovation is that we have proprietary technology to increase the yield output. So in very simple terms, this capacity expansion was initially designed to produce 100 kilo batches and we basically use some of our technology to increase the size of the batches to 125. That's why we say that revenue potential of this new capacity now has increased from 100 million to $125 million. And then, I mean, we have been doing expansions across the network.

So we talk about [ Strasport ] that will be ramping up. We talk about India that will also be ramping up. And of course, we have debottlenecking programs to expand our capacity in Torrance. So overall, I think our ability to maintain the rapid growth momentum and accelerate relative to 2025 is pretty much the...

The next question comes from the line of Daniel Jelovcan from ZKB.

So the first question is on the commercial revenue, which in the first half was plus 30%. And now you have -- yes, you have reclassified the segments. So my question is, it looks like in the second half, you had actually negative growth in the commercial revenue. And also a question related to that, you combined now in the contract manufacturing plus generics and cosmetics.

Does it mean you have less growth in generics and cosmetics. I'm not sure if I understood it correctly. I mean, do you kind of exit that segment? Or yes, that's the first question. Then I follow with the second one.

Yes. Thank you, Daniel. And maybe just to clarify. So basically, we report development and commercial and within commercial, you have branded pharmaceutical, you have generics and then you have others. Now there is a lot of volatility between half year. That's why we always recommend for people to look at full year because our performance really depends not on what are we manufacturing, but what are we invoicing at a particular time. And you can see that sometimes development seems to accelerate rapidly, sometimes commercial but you should look basically at the full year growth for development and commercial revenue. I mean our strategy is very clear. We are a pure peptide player, and we are focused predominantly in branded pharmaceuticals. That basically means that we are deprioritizing the business and making sure that we are using our capacity to bring Phase II and Phase III projects into commercialization.

Marc, anything else to comment?

Yes. Maybe one further point to add to that, Daniel, is if you compare percentages between the half years, please consider also that the revenue is different between the half years. So as Juan Jose said, you should really look at the full year split, especially when we're talking about commercial and development.

Second question, your customer prepayments were down to, as you showed on the slide to EUR 27 million, so down from the previous years, which is probably normal in view of the big customers' contracts. But how is that going to look in the future? Is that increasing again because you probably have another big customer, which is doing some prepayments? That's the second question. And then I follow up with the third.

Yes. I mean in terms of customer prepayments, I will say it's better to do -- to look at it over a longer period of time. So if we look at the last 3 years, we said that we had a gross inflow of customer prepayments of EUR 290 million and that we released about EUR 90 million and a net inflow of about EUR 150 million. There will always be a lot of volatility year-over-year in terms of the size of the customer prepayments. What is important is that going forward, we expect customer prepayments to continue to be a material source of funding to expand our capacity.

Okay. And the last question -- and before that last question, maybe a personal remark, thank you very much, Marc. It was always a pleasure to work with you, and you are always quite -- I mean, you were always very helpful and spot on. Thank you so much for this first. And the last question, do you expect to pay taxes this year with the better profitability or you still can use some tax loss carryforwards?

Thank you, Daniel, and thanks for your nice words. Always a pleasure to work with you as well. So yes, the current profit situation, I think we are still using the loss carryforward so that we are not in a cash paying situation.

I think we have EUR 1.4 billion of tax carry losses to use. So I think taxes is not really something that we should be concerned for the next few years.

Let's go to the next one.

The next question comes from the line of Chris Richardson from Jefferies.

Just a couple, if possible. Can you please clarify the potential downside or drags on the sales growth given your comments that Braine should take you to sort of the midpoint of that guidance? Is there any complication with the backfilling of the capacity mentioned? Or is it something else? And then just regarding capacity optimizations, is this something we can expect to see in other expansions? Or is it Braine specific? And then just on Braine and those increased peak revenues, given it's only a single customer, in that expansion. Does this match -- does this increase in potential revenues match the demand from said customer? Or is there a risk this front-end loads the revenues from that site and any potential minimum contract order over its term life?

Yes. Thank you very much, Chris. And listen, in terms of downside, one of the reasons why there are barriers to entry into this market is because the development and manufacturing process is very complex. So at any moment, you could always find yourself finding some issues. And we are also in a very uncertain geopolitical environment. So I think it's very important for us to be prudent. But we don't see any new specific downside than just a normal complexities of running a better CDMO and a more volatile market environment.

Now in terms of the improvement in the yield in Bin, this is actually something that we do across our -- all of our commercial programs. It's just that now we have more potent technology to be able to be more effective driving yields. So in the case of Malmo, at this point, assume that this is a $100 million revenue expansion. But of course, we plan to apply our technology and see improvements in yield at some point. Now your last question regarding the expansion in brain and where this could be front-loaded. This actually reflects the rising demand of customer projects. And actually, we just renew and extend this last contract. And based on the forecast, we expect the demand to continue at a very high level for the next few years.

The next question comes from the line of Tanya Anzalik from UBS.

We'll proceed with the next question, which comes from the line of Charles Weston from RBC.

Echoing Daniel's words, Marc, thank you very much for your help over the last couple of years. Two follow-ups, if I can, please. First of all, can you remind us what the level of maintenance CapEx we should be thinking about in this business as a percentage of sales? And secondly, can I just follow up on an answer you just provided? I think I heard that you have renewed and expanded the contract with the large customer in Braine. Is that -- did I hear that right?

Yes, that's correct. And in terms of maintenance CapEx, it's around 4%. You can use 4%, 5% of revenues.

Okay. If I could just follow up on that customer renewal. I think the contract was out to 2029 or 2030, if I can remember. And I think it was roughly EUR 500 million over that time period. Are you able to share how much it's been expanded or how long it's been expanded?

Yes. No, thank you for the question, [indiscernible] We cannot really comment, but we have expanded the capacity and the customer is taking the full capacity. So you can just assume that we have a longer duration than what it was previously and that they are taking everything we can produce.

That was the last question from the phone at the moment.

Thank you very much. And Tanya, you can follow up with us so we can answer your questions. But listen, thank you very much to everyone. And we are very excited in terms of the evolution of PolyPeptide. The acceleration in terms of I'm sorry, I hear there is a question coming.

Yes.

A question via the chat. 2 questions, actually. The first one is regarding the financing or in relation to the financing and the development from the metabolics. So mega pharma customer funding is, of course, possible. They have a strong balance sheet. What about the next wave of GLP-1s with smaller companies and generics entering. They're not going to be able to finance and Bachem is issuing equity periodically. The question is, is that not something that PolyPeptide also needs to go beyond 2028?

All right. Thank you.

Yes. I mean, listen, if you look, first of all, at the next wave of metabolic launches, they are actually going to be executed by large pharmaceutical players. So Roche, [indiscernible] Pfizer, I mean, they are the ones that are really going to be driving these launches. So in terms of ability to secure customer support, we are confident mainly because we are the ones advancing these programs into -- from Phase I, Phase II, Phase III and then into commercialization.

I mean with the momentum that we have, we believe that as we move towards our 2028 target, we should see a significant improvement in our valuation. And that's why equity at this point is not really a preferred financing option. We are really focusing on improving our profitability, again, customer funding and expanding our debt, and that is going to be our model. Anything else for you to add, Marc?

No, I think it was a good summary and also the financing strategy.

And then there was a second question around the unrealized currency loss, the FX loss that we were showing on one of the finance slides related to the intercompany loan. The question is why is this currency risk not being hedged?

So it's a risk we had on the balance sheet for a short-term intercompany loan. So we fixed that risk now as through an equity comparable instrument between the companies. So there is no further risk going on.

And this is all noncash. So it's not really -- it's more of an accounting thing.

All right. Any more questions?

I think Tanya just sent a message with her question. Question is, what should we expect for 2026 for the profitability contribution related to Brain? And can you talk about the revolving credit facility, advanced negotiations and how much additional financing you need for the midterm targets?

Yes. So maybe let me just take the last one. You should see an announcement...

Relatively soon regarding the RCF expansion. So you can -- you will be able to get the details there. But I think with that, we don't need any more financing to hit our 2028 target because most of the capacity is pretty much underway.

Daniel, do you want to comment on the first question?

Profitability contribution from Braine in '26?

As you can imagine, Tanya, the contribution of new assets coming online is quite significant, especially if you compare '25 to '26 as we are working in a very much fixed cost base situation. The majority of the incremental revenue will come with a quite high EBITDA portion in it. But we don't go into details of profitability of a specific asset, I'm sorry.

Yes. But as you can imagine, in 2025, the contribution of the new capacity was breakeven basically. And now in 2026, you have that new capacity operating at optimal target. So that's going to be the #1 driver of improvement in profitability for the group. Any additional questions? No?

All right. So now we can do that closure.

Excuse me, this is the operator. We have a question from the phone from Charles Weston from RBC.

One more question. Charles...

Sorry, more questions and I've interrupted your closing, sorry, again. Could you give us a sense of what the revenue contribution from Braine was in 2025, please? It was kind of a follow-up from the last question, really asking it in a slightly different way.

Sure, Charles. So the contribution of Braine for '21 is EUR 35 million.

Before I start talking any more questions on the phone online? No?

All right. Okay. Listen, thank you very much for joining us this morning. And listen, we are very excited with the progress of PolyPeptide. We finished the year with a strong momentum. As you can see, with all the new capacity coming online, we will accelerate in 2026. We are moving to a much higher levels of profitability. We are very confident in terms of hitting our 2028 midterm guidance. And I have to say that the efforts around our innovation, our development pipeline, our capacity expansion, I think the company has a bright future.

So thank you very much, and enjoy the rest of the day.

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.