Ypsomed Holding AG

to Ipsomed Half Year Results 2025-2026 Earnings Conference Call. Today, with CEO Simon Michel and CFO Samuel Künzli, we'd like to go over our first half year results. We'll go over the key achievements and the financial drivers for this first half year. After a short presentation, we will open the floor to questions.

thank you for for joining us again and a warm welcome to all without further ado i'll pass on then to simon please thank you very much sam for introduction uh good morning everybody great to take the time uh for us here this morning we have a great results you have seen it this morning let us deepen it i will do a channel overview and then hand over to samuel for the financials And as you know me, I always start with our purpose. This is why we get up every morning. IpsiMed is making self-care simpler and easier. And those four are our structural growth drivers. Therapy, go home, drugs have to be injected. More and more biosimilars are available. And the new large new class of GLP-1 incretins that is giving IpsiMed a strong push. So we profit a lot. We have a lot of tailwind that supports Ipsumet in its growth. And we are really well set up. Ipsumet is a pure play injection specialist. We are a leader in innovation. We have our operations under control and we have very robust financials. I will deepen now with you the first three pillars and then Samuel will go with you through the financials. Let me start with the injection specialist focus. As you all know, we have done our homework. We have finished the transformation after three years, a very clear path, selling DIA-X to Medic in 23, selling Penelis to MTD in 24, selling diabetes care to techmed this year and selling ipsotec last week to calista with that ipsomed is now really clear set up really focused self-injection specialist focusing on the high profit high margin self-injection b2b business so the new ipsomed is a delivery systems only company i will not further deepen the figures i will leave that on on to samuel in a couple of minutes Innovation leadership. IPSAMED is strong with by far the broadest portfolio of devices. The auto injectors to the left with the IPSA dose for larger volumes, the pens to the right and the digital assets. And as you may have read, we have received FDA approval as the first company at all with a digital device in America to support clinical studies, clinical trials with smart devices. also very proud that we were able to launch and present three new platforms to the community in our industry ipsodot ipsoflow and ipsoloop ipsoflow is a flex touch like device it's a spring driven disposable device for insulins for glp1 ipsodot is a glp1 optimized device a click very simple device And Ipsolu is the next-gen autoinjector. And what is in common for those three platforms is that they are all recyclable. They consist of one or maximum two different plastic parts. They used to have seven different plastic types. Now we are down to two different plastic types and that makes them recyclable. And that's our new technological S-curve. And it gives us at least four, not even five years of advantage towards competition. We are really, really much further now here in the new cycle. And Big Pharma Biotech, they want to all the devices that can eventually be recycled. So is Ipsomate net zero, Ipsomate zero, the first version, be reduced by 22% and Ipsolub now is reducing 64%, remaining us at 85 grams of carbon equivalent. And this, of course, then in the end we can offset and we'll further work on in the recyclable scheme. So the main focus of Ipsomate on the innovation is sustainable devices for our pharma partners. We have launched 12, 13 new products. We just mentioned three here. We are very proud to be the partner of Innovent with Mastudite. That's a GLP-1 incretin, the first of its kind in mainland China. We had a very good start. We are producing both out of Switzerland and out of China now. And we will move, of course, the volumes there to deliver out of China 100%. We have a client for Alzheimer's out of Japan, you may know, and we have a Japanese client here as well on a new innovative autoimmune therapy in the space of psoriasis. So very high value drugs that we present here, especially in the 2.25 format. I mean, a very important topic probably is how we are set up. And now we always hear IPSA made this dependency on GLP-1s. We have indeed over 30 deals in the space of Incretins and GLP-1s. Absolutely. But they make only at the moment a small part, much less than 10%. Overall, we have not one client that is delivering more than 15%, 1.5% of revenue. And that's important. It will stay even in the foreseeable future, next five years. Not one client will make more than 15%. And that's very important. So we don't have this clump risk, this risk of being too dependent of one client, of one molecule, really brought this up with 130 clients, 230 projects, 70 in the market, 160 in the pipeline. This is how Ipsumit is set up. And this shows also this graph here, how broad we are active. So we work in a large range of indications, in a large range of therapy areas, as you see here on this slide. IpsMed is not a diabetes company. IpsMed is not an obesity company. We are very broad. We are an injection therapy company. That's what we are doing for all kinds of therapies, and many more will follow in the coming years. And IpsMed is winning not only because of its unique platform portfolio, we are also winning because we do excellent service, because we pick up the phone after three times ringing, because we answer the emails in 24 hours. It's the way we work with our clients, the way we listen, the ability to customize devices, but still have to manufacture on the same lines. So we have now a setup that really lets us to accelerate, really lets us to profit from what we have been installing over the past years. Let me give you a couple of insights on the operation side. So what has happened? I mean, the main topic, obviously, is our big plan to move to one billion device capacity to the beginning, the end of this, the beginning of next decade. One billion installed Capacity today we are at 350-ish, so we almost tripled the capacity in the coming three years. It doesn't mean that we will deliver one billion devices end of the decade, but we are ready to deliver in a five, six, seven days model such volumes. And you see on this graph here where this is going to happen. So Switzerland is remaining an important place. Switzerland here in Solothurn, we are moving old contract manufacturing out, then we move new auto-injected Ipsumate in, will still be a very important site with roughly one quarter of the total volume. But the main site, obviously, is Schwerin, with tripling our current installation, our so-called Schwerin 2 program. And then also China, Changzhou, which had an excellent start in the team there, and Holly Springs near Raleigh, which we are going to sign this week and then really start installing the factory. So Ipsumit is becoming a much more global company. We have a footprint closer to our clients. This makes sense from a client perspective. It makes also sense from an ecological perspective. We have much less freight, much less cost on that end. So this is how Ipsumit is going to be positioned in the future. China for mainland China, US for North America, Switzerland and Germany for EU and rest of the world. As I just mentioned, Solothurn remains a very important place. Diabetes care business now moved out, so we have some office space left. We are going to fill that over the time. This is not the first priority. The main priority is manufacturing. We are installing a new high beam warehouse. We are installing a new tool shop, as you know, and we are installing two lines for auto injectors. In China, we had the opening in June. Great team, really ready, really proud. The team wants to succeed. They want to show us how it works. We want to learn from our friends in China. I have a very good feeling here that they will succeed. In Germany, we had the topping up ceremony with the Minister-President Schwesig a couple of weeks ago. You see here just a small glimpse on the new warehouse for 15,000 pallet places. This is now being built. It will be 40 meters high. It gives you an idea on how large this site will be, tripling basically in two phases our current Schwerin I site, which is going to be full by end of 26. North America, in the research triangle, so we decided for North Carolina, a bit more south on the east coast, a great area, fastest growing state in America, Raleigh, third fastest growing city in northern America, Raleigh, the research triangle with most big pharma being very close to our site, Holy Springs, a small town, we are able to buy here, acquire a finished finished building 15,000 square meters. It will take us now 18 months to install our equipment in, to install first lines in and then to be live end of 27, deliver first devices 28 for our customers in America. It's very important that we have now this message out there since SHL also delivered the site in in in america we are now also present that's important now that we are really close to our clients that is no longer an argument for our customers that we are not in america so very proud you found that spot that was there last week i had a very good impression i met the governor i met many chances of universities Also on the people side with the community colleges, the apprenticeship programs they have, they acquire 150,000 people per year that move to North Carolina. So I believe we will have not an issue here finding good staff, well-educated people to ramp up our site in the course of 2017. My last slide before I hand over to Samuel, this gives you a glimpse on the people side. As you see here, we are still growing a bit in Switzerland, but the main growth is now happening obviously in our manufacturing sites in Germany and in China. And that will also be the case in the coming years. Switzerland will only grow slightly, some specialty functions in R&D here and there, but the main growth of colleagues here is going to happen in Germany. uh china and then in two years in america in germany we are going to move from 500 people to 1 000 people over the course of the next three years so this is this is where the music is going to play this is where we're going to manufacture but we don't need more people in in in overhead in admin in r d so the main growth now is happening on variable side on on volumes on factory side 780 people as you see here moved out now last week they are now part of the tech mech group roughly 250 in Switzerland and 500 in the countries. It's no longer part of the EBSMED family, but many of them are nearby in Burgdorf. So with that, I would like to hand over to Samuel, who will give you an insight on where we are on the financials and how we are set up financially. Samuel, please.

Thank you, Simon, and a warm welcome also from my side. I will give you the highlights of the semi-annual result in the next 10 to 15 minutes. Let's start with the top line. We reported sales of 363 million Swiss francs in the first half year. On the left side, you see the breakdown. I do start with the green part, the diabetes care business. 75 million of sales, the infusion pump business realized in the months April to July. You remember, end of July, we had the closing of that business. 21 million Swiss francs. That is in the red part. This is all discontinued operations, and this includes Ipsotec. You heard we sold that business end of October. So in the first six months that was fully included. This includes also still the phase out of the pen needle and BGMS business. And this includes now also what we started for diabetes care, the contract manufacturing for infusion sets and reservoirs. Now let's focus on the core business, the remaining business, the delivery system business. Here we had sales of 267 million Swiss francs in the first half year. Let's deepen that. You see, we grew from 220 million Swiss francs last year to 267 million so a 21 percent top line growth in the core business so we are on track with what we guided you remember we said we will grow in the core business around 20 in the business year 25 26. What is especially a good sign and what I want to highlight is how the project revenues developed. We grew from 43 million to 52 million, so around 20% growth in the project business, pen and auto injectors together. And that is a very strong signal that we have a good pipeline because those project sales, so the clinical devices we sell, the customizing we do for our customers, They translate into mid-term commercial sales and this is the future then for the commercial sales. Now, the commercial sales, there we also had a very strong development. The main growth drivers were the auto injectors. They grew by 46%. Now, what did we earn? How does the profitability look? We reported an EBIT in the first half year of 152 million Swiss francs. That EBIT is high. It needs some explanation because we had certain one-off effects. I want to highlight that. Let's also have a look on the left side of this graph. The diabetes care business in those four months in which it was consolidated in our P&L made a loss of 5 million Swiss francs. So that business was not yet break even. In other, we report a profit on EBIT line of 70 million Swiss francs. The main driver was the book profit we realized from selling the diabetes care business. This profit was 75 million Swiss francs. Some of you expected a higher profit from this sale. We were reading numbers in your reports from 90 to 100 million. Therefore, I want to explain why we have now the 75 million Swiss francs profit. One important factor, and we mentioned that when we sold the diabetes care business, is the earn-out components. So the earn-out depends on the sales of the business we sold for the next three years. value earn outs in a balance sheet you always have to assume a certain uncertainty because the competition in that business insulate tandem they are not sleeping so from this total possible earn out of 90 million you see that in our books we took 45 million in our books The second point I want to mention, why this profit is maybe not so high as some of you expected, have in mind, we sold a business which still was also at the closing not break even. So we had still minus five negative EBIT and this of course does also not help for this book profit. Now let's focus on the core business. In delivery systems, we earned 87 million Swiss francs. This is an EBIT margin of 32.4%. Let's have a look now at how we make sure that we also grow and that we are profitable in the future. For that, we did the investments and these are mainly growth capex. You remember, we have our growth plan to reach this one billion device capacity by the beginning of the next decade. For this, we want to invest around 1.5 billion Swiss francs until end of the decade. This program we started already last business year. Partially, this is financed also by customers, have that in mind. But you see here very well, we are on track with those investments, with the fixed assets. Simon showed you the investments we did in Schwerin. So from this 126 million, the biggest part, roughly 120 million went to the core business, to the delivery system business. And yes, Schwerin is a very important site now we invest. We invest in Solothurn, but we invest also in China, in Changzhou. That were the main drivers on the fixed asset side. The intangibles as well, we developed the future platforms, the PEN auto-injector platform Simon showed you, the Ypsilop, the DOT and the FLOW. We have invested around 20 million overall. Roughly half of it is for the delivery system business. When you compare that number with the previous year for the intangibles, you see that in the previous year we still capitalized 39 million of intangible assets. And the main driver was that the diabetes care business in the previous year was six months included and was heavily investing at that time. So it's not that we invested less in R&D in the core business. Could we finance the growth capex with the operating cash flow? For this, we look now at the cash flow statement. Let's start with the operating cash flow. Again, have in mind, this is the operating cash flow for all the businesses, including the diabetes care and the discontinued operations. The 130 million is for everything. If we just look at the core business, that number is even slightly higher. We would be above 140 million cash flow we generate from the operations. And that is a very strong number. Then the cash flow from investment activity needs an explanation because you just saw we roughly invested 150 million. So why net we are here positive? The reason is we sold the diabetes care business and received a little bit more than 300 million already now in cash. So that makes this cash flow from investment activity positive, roughly 160 million. so the free cash flow around 290 million so even if you take that extraordinary cash we got from techmed for the sale of the diabetes care out you see we are only slightly negative so we nearly managed to finance with the operating cash flow Our growth capex, so having in mind that operating cash flow from the core business is even a little bit higher. So we would nearly finance that with the operating cash flow. What did we do now with this money? we paid back our short-term financial liabilities. We deleveraged. The net cash amount on our bank accounts at the end of September was roughly the same as it was at the end of March. since we are in a capital intensive industry we have to look also at our balance sheet and for us not only ebit margin counts for us counts the capital efficiency and we measure that with the return on capital employed and for us a very important number is this rosy in the core business so we realized again We created value, we realized the growth of around 21% in the core business and that shows that we create value for our shareholders. Then, the second point I want to mention, our balance sheet is very solid. We have an equity ratio of around 67% and the ratio net debt to EBITDA from the last 12 months is 0.3. So, the last 12 months EBITDA was 245 million Swiss francs and that is a very high and important number. The last 12 months EBITDA 245 million. So, as you see, we are well set, we are on track to finance that organic growth, growing up to 1 billion device capacity, investing in total this 1.5 billion with some co-investment from customers, with our own cash flow and our own resources. Now, let's finally look forward. We confirm our guidance for this business here. I mentioned already the top line. We expect to grow around 20% with the sales, with the delivery system business. And the EBIT, remember in the first half year we had now 87 million. So mathematically, we are not on half. But you need to have in mind that for us, typically the second half year is stronger than the first half year. So we are also comfortable to reach that EBIT range between 190 million and 210 million Swiss francs. In the last slide, I want to even look further in the future. our mid-term ambition many of you followed our capital market day and you saw our mid-term announcement we want to grow with our sales between 900 million swiss francs and 1.2 billion swiss francs so that is basically when you look at the delivery system sales of 24 25 which was around 500 million that is basically doubling the top line We want to reach between 280 and 340 million of EBIT. We also want to clarify, so this time we wrote it also, that the EBIT margin stays above the 30%. I last time only mentioned it on the oral way, so we want to really clarify this. This is our ambition and the capital efficiency should stay on the level we have now, around 20% ROC. With that, I want to finish the presentation and we want to open the floor for questions and I give back to Sam. Thank you, Samuel.

Indeed, strong financials, great performance for the first half year. Simon as well, thank you for going over key achievements. We will now open the floor for questions. Please click on your Microsoft Teams Raise your hands icon, and I will go through in order of the question asked. So you will have to unmute your mic then, and you can ask your question. So now we have on the screen number one SD. Sandra, I believe that that would be you. Please feel free to unmute and ask your questions.

I have two, one on the gross margin and one on the pen segment. I think maybe we go one by one. So first on the pen segment, can you comment on the current growth rate of your pen business? You mentioned that commercial sales of the auto injectors grew 46%. So the overall segment grew 21. So that implies a commercial sales from the pens. might have declined. Does that interpretation make sense? And then what do you expect from this segment going forward, especially with the new platforms such as the IPSOflow and IPSOdopt that should support the PEN's mid-term outlook? So that would be my first question on the PEN segment.

So indeed, we have been flat on the pens. Maybe, Samuel, you can explain why this has happened and then I can give a couple of comments on the new platforms.

Yeah, so it's the right observation. Yeah, so the pens were more or less flat. And have in mind with pens, there is quite a wide portfolio. So the pen sales are heavily driven by product and customer mix. But your observation is right. For now, it was flat. And the second part, when we look forward, yes, we assume a growth rate for the pens as well. But for you, it's fair to assume that the growth rate for the auto injectors, also when you look mid-term, will be higher than what we expect from the pens. But we expect also the pens to grow, especially having also our new platforms in mind. And Simon, please add from your side. Sure.

Sure. I mean, the main growth on Unopen is still happening on the disposal pens, is still happening on Unopen. So we have new clients in China and we have new clients in the Western world on GLP-1s. But those GLP-1s will only launch in 28, 29, 30. So these three years in between now, we are basically bridging with Chinese volumes. So this is going to start as of now-ish. Therefore, we are going to fill the capacity and then swap steadily with higher margin western products. That's for the UNOPEN. So this platform is still very much alive. IPSODOT and IPSOFLOW are new platforms. We have presented them now at PDA and CPHI the first time. We are now discussing and starting a dialogue. So this is something we will see the first revenues in three to four years from now. It's a new platform.

Okay, very helpful. Just to clarify, so the commercial sales were flat. You're not talking units, but rather sales.

You know, there's a mix. We have also a couple of older products in PEN, as you know, which declined a bit. But we have in total volumes on UNO PEN, we had a slight increase. In Swiss francs, we were flat.

Okay, super. Thank you very much. And then my second question is on the gross margin. So the H1 gross margin has still been diluted by non-core segments, the 41%, I think it was. What would be a reasonable assumption for the gross margin of the core YDS standalone business and how Should we expect that to evolve given the factors such as price pressure and lower ASP from high volume contracts, but then also potential efficiency improvement and positive mix effects from higher auto injector shares? That would be very helpful to have some guidance there.

Gladly, I want to give you, let's say, calculating backwards a view on how you can imagine that gross margin developing mid-term. If we say mid-term, the EBIT margin is still above the 30%. So then it's for you fair to assume that a little bit more than 10% will be needed for SG&A and R&D. what you need to realize still is a gross margin of at least 45 percent that you still end up above the 30 percent EBIT margin just bulk park numbers and again i tried to speak for a mix auto injectors pens project business As you know, many factors influence that. But just to give you a rough idea on how we think of that number.

Maybe a comment to the profitability, since Sandra is asking on that. Yesterday we have launched IPSO Fit. It's a fitness program that we roll out over the whole company. We believe it's the right moment, not that we really are under pressure, but it's the right moment since diabetes care is leaving us now. um so we see some potential for stranded cost improvements that we take out elements we have four programs in the space of organization base of procurement it data and systems so this is a program that we roll out in order to really also work on the cost on the on the on the bottom line to achieve those margins great thank you so much

Thank you, Sandra, for your question as well. And now we'll move to the second person. Odysseus, please feel free to unmute yourself and ask your question.

Thank you for taking my questions and then thanks Sam. So my first question is on the Sun Lutheran Plant Organization. Could you give us a feeling on the full year 26, 27, uh impact on the delivery system sales growth and and ebit i mean is it is high single-digit growth uh for delivery systems likely in that year or am i being too conservative here i mean i'm not sure just to like the question get right so for 25 26

the delivery system segment and which growth rate you were speaking of? 26-27. 26-27. Okay.

So 26-27, we don't really guide there, but it will be a bit low, a bit below. You know, in the end of the day, we have those waves. We have also months sometimes. We cannot really predict yet. It depends a lot of a couple of large launches. We will talk more about it in May. But in the end of the day, you have to see this billion that we look at, you know, end of the decade. This is where we are heading to. And so it might be a bit of a smaller one since we have now had a bit of stronger one on the 20 percent area. All over all, we will be in this 13 to 17 percent growth. Right. And so it can be a bit softer one. We have certain indications. But for us, the important element is the 20, 28, 29 timeframe where we are heading to.

And if I may add to that one, Simon correctly said, look, we have this one billion you see mid-term, which is the midpoint of that guidance, which implies this 15% CAGR year on year top line. And when we look now at next year, of course, the launches, the individual contracts, but one important factor you need to have in mind, we have also the phase out of the contract manufacturing which is going to end next business year so just roughly from that not having this contract manufacturing business within the delivery system so if you just have 20 30 million of sales less from that this automatically gives you a lower top line growth rate But as Simon said, we will do the guidance for 26-27 when we present the annual results in May 26.

I understand. Thank you for your clear answers. And my second question. Have there been any changes to your NOVA agreement announced in September 23 in light of the CAGRI seminar in Q4 and given some pipeline reorganization?

uh with the company no zero change you are fully on track installing the capacity here in switzerland and in germany everything is on track um got it thank you thank you to see us as well for your question and now we'll move to daniel daniel feel free to unmute yourself and ask your question

Yeah. Hello. Good morning. Do you hear me? Yes. Excellent. So three questions, if I may, and I just ask one by the other. So the first one is, would you be willing to share the dilution to the still very good 32.4% EBIT margin for YDS? I mean, how big was the dilution of the ramp up with Nomu and InnoVent? Because I have no idea. Is it 100 pips, 200 pips, 300?

It's a good one. Let's talk a bit about the comparison 35, 36 to 33 now percent, those two, three percent point in EBIT. Maybe you want to start with it, Samuel?

Good question, yeah. So it's right in the first half year, 24, 25, the EBIT margin in the core business was rather around 36 percent on EBIT margin level. So yes, now we report the 32, 2.4 percent and I want to highlight a few points first have in mind we sold a business area the diabetes care business and of course we had we used certain functions for both areas so it's normal to to have a certain dis-synergy a certain strain that costs Simon mentioned that has for us a high focus. We have an internal cost optimization program, the Ipsofit going on. So we want to really be on top of that. Then we talked about the PEN business. So I mentioned product customer mix. So that for sure does also not then help to keep that level. And your assumption is right. Yes, we have new contracts ramping up, Innovent and also Novo. So that, of course, is also a factor to be considered when you want to explain why in the core business the EBIT margin goes down from 36 to around 33. But I also want to highlight what we announced in in may this year when we did the full year guidance if you take the mid points from this full year guidance you are on 33 percent ebit margin so we expected that already we at that time already guided it in that way for the first half year because for those who observe us closely they know that in the first half year we rather have a little bit less sales and that means in the first half year the EBIT margin is rather a little bit lower because the distribution of the indirect costs is a little bit worse. So I hope that explains those main deviations. Simon, feel free to add from your side.

I think it's also good to assume that in general, now speaking, that when you install new capacity, you will always have some cost until it's full. You can also assume that Solotone is now really optimized, it's full, so you don't have costs laying around. It's really used, fixed costs are all covered. The same for Schwerin One. it's almost full you know there is it's really used but now we put we put changchou online and this is now just one part maybe one third a bit more is now is now running and we have space left that is generating cost and we will we will now put in in in 26 end of 26 you will see you will see something like three months of schwering two going live it's huge so we will have one or two lines in when we start in in 27 step by step so we'll have a bit a fixed cost there that we need to be covered. And then the same thing will happen one year later in the US. So that's why it's probably right to assume that this idle capacity costs us something like 2% constantly, and therefore you will not see a 36% EBIT anymore. And so that's why we actually guide in this direction above 30%. Samuel just made the mathematics on it. But that's a very good question. And we take a very close look at that.

but we had we have to do big steps and we cannot do whole whole whole yeah you have to build a building and then you install so it's it's a very important topic where we put a lot of attention on yeah that's very clear and yeah the synergy point is actually a good point as well uh that's at least yeah that's good that you highlight it the second question thanks the second question is i mean you the 20 percent growth in in project revenues I mean at the CMD you said it will rather be stable or decline a bit and of course I'm happy to see 20 because it's very good for the future but why is there such a big deviation basically

start and feel free to add then simon so the project business by nature has a higher volatility because that is the business what we invoice there is we do customizing for for our customers of those devices and we we sell clinical devices and by nature you have there if a clinical trial starts, you might have a higher delivery of clinical devices, you might reach certain milestones. So by nature you have more volatility. I mentioned we are also positively pleased that we have that 20% growth. But I want to stay with the opinion what we said at the capital market day. It's not something we can just assume to grow in parallel with the commercial sales. We have new platforms coming in, adding to the project business, but we have also platforms which are getting more mature. So the main statement stays. It stays more or less stable and only grows a little. Simon, feel free to add from your side.

That's great. And thank you. And the last question. I mean, the Alzheimer, you hear me? Sure. The Alzheimer device caught my attention, of course, a hot topic. But Alzheimer's probably isn't that important for you because the volumes are probably not that big. I mean, this one device now, is that in a commercial drug for Alzheimer's? And if so, how often do you need the autoinjector for Alzheimer's? I have no clue. Is it also weekly, like obesity? Yeah, thanks.

so it's like can be drug si biogen and um it it has been long it it it has launched in the us but i'm i'm not sure about uh if it's once weekly or i think it's once weekly but it's as it's just it's just starting now so it's slow but we'll but but we are we are we are we are we are launching it now we are delivering now we are just delivering well we don't talk about huge volumes

It's a maintenance therapy. I think probably if we look at their communication, it's probably best to see how they see the future of this particular therapy.

Great, thank you.

Next one.

Yes, thank you very much, Daniel. Now we'll turn to Pallav. You raise your hand, please. Pallav from Barclays. Feel free to unmute yourself and ask your question. So Pallav, if you hear us, you'll have to click on the mic icon to unmute yourself. Here you go. Unfortunately, Pallav, we cannot hear you. So that's okay. We'll move to Sibyl and come back to you in a moment. Sibylle, if that's okay, we'll move to you. If you can unmute your mic, Sibylle, and ask your question.

Good morning, everybody. Does it work now? Yes. Thank you. So I was quite happy with your development in YDS, but in there you have also the contract manufacturing for the French customer. Is it still correct that this part of the business is not growing and you will end production in November 26 or has anything changed because they ask you to produce longer for you? And what does it mean afterwards? Then you will have a couple of months no production there because you have to move the production facilities out and the next in. So will this mean that end 2026, 2027, you will have less sales due to that?

So I just thank you very much, Sibylle. So as Samuel said before, and then I let you answer the question on the on on on the amount so yes absolutely so that's what we said before that that will have a slight impact on the on the growth rate for 26 27 we will have um roughly actually uh almost half an year um less and then we you know we do it in two phases The first line, Solostar, we took out already. So there is no manufacturing at all anymore. We manufactured last Solostar in summer. So we are now installing the first open check the line. And then the same exercise will start half an year later in spring when we move out or summerish, we move out to JO and then we install that one. So we have twice in a row, something like four to six months, no manufacturing on one floor. So therefore, you, of course, will see that in the same time we are ramping up. I mean, for the auto injectors, we don't manufacture from day one, five shifts, seven days. So you also ramp up. So that will have an impact on the auto injector growth rate 26, 27. But maybe you can add some, give some more flavor on the contract business.

Yeah, gladly can give you a little bit more that you understand the numbers. So in the first half year now, this business, made a little bit more than 20 million swiss francs of sales so in line what we saw in the previous years the previous years was roughly 40 million for a full year so now we have a half year around 20 million for the second half year it's for you now fair to assume that it goes slightly down but not yet significantly so you we still might see around 15 million of sales in the second half year now of this business year and your assumption is right in November 26 it's going to stop that means we have in the next business year still a little bit more than six months so if you take the October and November as well so you might have eight months so you might still end up also again having around 15 million of sales of this not continued contract manufacturing business and I think Simon explained very well what the challenge is and that of course that is a reason why we have next business year a challenge with the top line growth.

Thank you. And then the second question is about the broadening of your portfolio. You mentioned it in Schwerin with the capital market day. Any news there on possible acquisition targets or in what direction you could go?

So we are really doing our analysis. We have a lot of lunches, a lot of dinners, and we continue to understand our space better. We are in such an excellent position. We have such a great opportunity ahead of us in our core business. And this is our main focus. We are focusing on delivering the capacity, on delivering the device to our clients. And at the same time, we do our homework. We listen, we talk a lot. We also look at the market specifically with some consultants. They help us to understand better margin profiles, etc. But we are not there yet to explain you our next steps.

Thank you very much.

Thank you also, Sibyl, for your question. Perhaps we'll have another try. Pallav, if you can maybe try again to unmute or type in your question into the chat and I can read it for you.

Good morning. Can you hear me now?

Perfect. Yes.

Sorry about that initially. So three questions. I'll take it one by one. Firstly, on your 20% revenue growth for the full year, Given the second half is traditionally stronger versus the first half, are you being conservative here because your H1 growth is already touching 21% or are there some moving parts which are missing?

I start and Simon feel free to add. Yes, the 20% growth for the full year is our guidance. When you now look at the second half year, which we now basically compete or compare against for what is ahead of us, You need to keep in mind that we had in the last business year a very good second half year. You remember we had even some pharma customers anticipating tariffs, so we even had very strong deliveries in February and March. So for you, it's fair to assume that it will be challenging to also overtake this already strong second half year, which we showed last year by 20 or more percent. It's fair to assume that this will be more difficult to reach and that, of course, you can make the conclusion also for the full year. I think that is important here too. to notice and gives you a little bit the flavor. Feel free to add.

Sure. I mean, we compare half year with half year, so fully on track.

Second question. So there's a lot of discussion around GLP-1s now over the last few months, and now the expectation is that pricing is going to be lower. So how are you thinking about the impact of that on your volumes? And also, how are you seeing the risk of oral GLP-1s in your medium-term ambitions that you laid out at the CMJC?

I mean we are just a device deliverer. We deliver devices according to contracts and those contracts are set in stone. They are rock solid for the next five to ten years so there's no impact on IPSA med side. We just deliver the devices. We have 47 contracts in GLP-1. We close all the large deals out there. We cannot give you the names But we are well set up. This is not a topic at all. We have no risk with NOVA or any other company. We are just delivering our volumes and will profit from GLP-1. As I said very clearly, we will not do more than 15, 1, 5% with any client in the future. So we have a clear broad spectrum. For our 130 clients, we have roughly 30 in the space of GLP-1. Mainly China will be interesting, actually more interesting in the next two years than Western world. Orals for us, you know, orals will play a role, of course. But as I said, again, you know, we deliver such a small volume of the overall GLP-1 opportunity out there. If you look at what Lilly is manufacturing themselves with their five or six contract manufacturer, and when you see what Novo is doing as SHL next to us, We are just all growing. And of course, oral will play a role, but oral will play a role eventually together with the injection. For some patients at the BMI of 30-35, they will take a one-shot, one-pill therapy. There are new formats coming. And then we wait for the new molecules coming, the new molecules that are less problematic on the muscle. So you have so much things going on. So for us, this is not a risk at all. It's a huge opportunity for Ipsimet. I will profit from GLP-1. And we are not dependent on NOVA also.

Sure. And lastly, just to fact check, any impact from FX in the numbers in the first half, if you could quantify, and what should we expect for the full year?

I gladly take that, Falaf. The huge majority of our contracts are in Swiss francs. So the currency we are reporting and the currency in which our stock is listed. So we do really have very minor FX impacts on the top line and also on profitability. So for modeling, you can really ignore that effect. And we'll also stay for the second half here that way.

Perfect, thank you.

Thank you also, Pallav. We'll now move to Peter. Peter, feel free to unmute yourself and ask your question.

Okay, can you hear me fine? Yes. Okay, great. Good morning. A couple of questions, please. The first topic is just on some of the ramp-up of facilities, and as you've highlighted, You've closed the first part of the contract manufacturing over the summer. It takes six months or so to put new machines in. Does that mean, say, around Easter time, you'll start to ramp up again on the first phase of the solar turn part? Yes, absolutely. Okay, so you'll start to ramp up from around Easter. Okay, good. And you're meeting the rest of the sales out of inventory, I presume.

And from existing lines. So we have obviously also installed capacity in Schwerin. You talk about auto injector now, right?

Yes.

Yes, of course, we have installed capacity in Schwerin. As you know, we are a platform company. Also, Novo is on a platform, so they run on the same line. So we are quite flexible here to deliver volumes for the ramp-up phase, especially now we have this machine learning phase where all those final assembly lines have to be installed. And therefore, we can deliver these also from different lines.

Okay, so the first part of Soloturn will start to ramp up and the beginning of Schwerin too. As you said, a couple of lines will be starting in H2. So they will also start to ramp up in the fiscal first half, from early fiscal first half, yes.

So exactly in 26 in the first half one large line will ramp up a bit before Easter here in Solothurn and the second line will only ramp up in the beginning of 27 because we have to we finish to jail until October November on the second floor and then we need again those four months of redoing putting paint on the wall and put the 40 plastic molding machines in and the big micron line and then it will take another four months so we will start in marchish maybe we'll see one month more from ramping up 27 for the second line a large line here in soliton is that answering your question yes it is thank you and then the other part was just on the us facility since you're able to buy a completed building and you can start putting machines in can you give a sense as to when the first sales you would expect would come out of that as you start to take that in phases Peter, this is really brownfield. I've been there last week. It's a building, but it's just a shell. There is soil on the ground. We are actually now deciding, I mean, we are ramping it up now. I think we are signing today the contractor. We will have to do the flooring in. We have to do the engineering in, the cooling, the pressure. We will put there the... the granulate system etc so the building will be handed over including everything which is technically relevant to operations to manufacturing in fall 27. So in roughly 20 months from now. And then the team will take roughly six months until they have installed the molding machines and the first lines. So the first goods will leave Holly Springs in Q128. That's realistic to assume. That is where we have to plan together with our clients in the US.

That's great. Thank you. And then I had two questions just on the cash flow statement. But one is you have a significant prepayment from customers for the first time that I can recall. And I was wondering if you could give some background to that and to what it relates. I guess it's maybe ramp up of the new facilities. But if you could talk a bit about how that's coming through and how that impacts cash flow.

Gladly, I take that question, Peter. It's true that we have co-investment, co-financing structures with our customers. There are two elements I want to describe, which we also mentioned at our Capital Market Day, of how customers participate. The one thing is they make the finance equipment, so they really pay advance payments for those equipments dedicated for them. And the other element we have are capacity contributions. So they somehow reserve and co-finance platform capacities which we build up. and you will see that now more often in our cash flow statement because of this 1.5 billion we're gonna invest roughly 400 million we expect with co-financing from customers so you will see that now more often such co-financing advances are coming into our balance sheet and this will help yes the operating cash flow these are the two elements there

Okay, thank you. And the last question was just on the intangible capex. I think you said up to 20 million, about half related to the delivery system business. And is that more or less the run rate going forward now?

I think it was all of it. It was actually half of the 39 delivery systems.

But Peter was talking of the 20 million in the actual year. That is right. Roughly half of it is the delivery system business and the other half was still because we had still four months of diabetes care business in our business here. So we capitalized that. And for you, You might not like that answer but you know the decision when you capitalize you know that depends always at which stage you develop something and there is like I told about the projects a certain volatility there is because whatever it's not always that you're constantly just developing and and capitalizing new projects. There is a certain volatility in those capitalizations, but you will see that going forward very clearly because we are now a pure play B2B company for the delivery system business and you can very clearly see what is capitalized and what is expensed.

But it's probably right to assume that this first half year is not a typical year because we had a much larger amount in the P&L. We were putting more money in the innovation phase for ipsa flow, ipsa dot, ipsa loop. So if you are in the innovation phase, we put it directly into the P&L. And now we are moving those platforms over to the product areas. And now it's going to be capitalized to finalize the development before they are then industrialized. So now in H2, you will see a higher amount of capitalized R&D. Maybe it's 15 million. And then overall, we don't give a guidance here, but it will probably be a bit above 20 million in the long run for R&D capitalized.

Oh, yeah. Okay. That's great. No, thank you very much. That's very clear. Thank you.

Thank you, Peter. In the interest of time, maybe we'll ask to ask a few shorter questions. Kizian, please feel free to unmute yourself and ask your question.

Yeah. Hi. Can you hear me? Thank you and congratulations on the strong performance in the first half. I just have a question on the sale of the diabetes care to TechMed. Since this is the company controlled by the founder, I just want to ask about the risk of contagion between

uh um it's still made and the tech match so this would be helpful for us also to analyze the consolidation scope um yeah thank you so there is uh no consolidation happening it's absolutely separated organization um techmed is a company a hundred percent under control of my father and it's made as a stock listed company where the michael family has a roughly 70 percent of the shares Or did I misunderstand your question?

No, this was a question about the risk of contagion, because this is a special construct. Thank you.

I mean, I mean, you know, we have I mean, I think it's not really a special contract. It's just different investments. We have investments in other industries as a family. We have a very clear contract manufacturing relationship between Ipsumet and Techmet for the Orbit reservoir and the Orbit infusion sets. We manufacture those two devices in Schwerin in our clean room. This contract last minimum three years, maximum five years. Both parties have an interest to move it out as early as possible because we charge too much for them and we earn not enough. We would like to charge this dilute to our overall margin. Obviously, that's why we put it into others. but um and it and we will need the clean room as well in roughly four years for our ipsodos ramp up our large volume injectors so it is a very clear very transparent logic contract manufacturing relationship very alike of the sanovi relationship we had so it's not even covered by product management it's only that also all all done in operations directly in a very lean manner okay thanks a lot

Brilliant. Thank you. We'll move to Ed, please. Ed, feel free to unmute yourself and ask your question.

Good morning. Thanks, guys, for taking my question. My question is just on Holly Springs. I think you said this is set to open in Q4 27. And you mentioned that labour is available. But can we talk about the gross profit margin here compared to European facilities? What's the pull and pushes? on this is this anything from automation to sort of premium prices for onshoring in the us that'd be really helpful to understand thanks

Thanks, Ed, for the question. So IPSMED is installing the same equipment in Germany as we do in Switzerland, as we do in China, as we will do in the US. So the manufacturing setup with Engel on molding and with our partners, Micron ATS, on assembly and eventually ASIC is remaining identical. We have lower energy costs in America than in Germany, massively lower energy costs, but we have higher building costs than in Germany. We have lower people costs in America slightly than in Germany, almost the same. But of course, in China, they are lower. So if you compare all the four sides, America, Germany, Switzerland and China, then America will, of course, be more expensive than mainland China. But I mean, we talk a range of all sides of less than 10% difference on the cost of goods. But the logic is identical how we work.

would you like to add something oh absolutely fine summarized that's nothing to it perfect thank you brilliant we'll move to daniel daniel please if we don't meet your mic and ask your question yeah just a quick one thanks uh holy springs i mean do you all have fixed contracts with

some customers or is it just you just build it at the moment no we have contracts good question so that's actually why we waited another year we wanted to have the ink we have a couple of customers um where we have contracts that we will deliver we will move and other customers are really new so we want to ramp up the us um step by step of course but we have to fill this large site and so um yes now we have contracts not just the building

So the risk is relatively limited, as we can probably say.

Yeah, I mean, our team really proved that we can industrialize in a different place. I mean, when I look at Shareen, we're now just installing ASIC 10, the 10th line of its kind. And this is a very smooth program. The same teams come together with the builder. the contractors we move it in and we ramp up it's really smooth and we are going to do the same thing now in china and in the us in china also the first two lines they went just online we didn't have it once in the executive board i assume the same thing will happen in america obviously we have to train the people we will get them also to switzerland we train them for three months they will get to know their lines, they will go back to America and ramp up their lines. And I had an extremely good impression when I was there last week. I was in several community colleges. We will work very closely with those colleges to get staff that have basic education. So America, what I've seen in North Carolina, is much further than what we think here in Europe. In terms of education, we have certain areas where the government really knows that biopharma, pharma, medtech, and specialty industries need people with an education. So those community colleges go to the high schools, they grab the students, they take them into the colleges, and together with the companies, they make four days in the company, two days at school, they make those joint programs. And these programs run in North Carolina for five, six years. So I'm really confident we will find the people. also if you look at the wage level it's way below massachusetts up in the north so we are in the area of below 60 000 dollars per per per operator so we are actually on the german even below the german level so from that perspective i believe we have made a very good selection then i wish you further good progress thanks

Thank you, Naya. Thank you. Thank you also. Danielle, we'll move maybe last but not least. Anna, please feel free to unmute your mic and ask your question.

Perfect. Thank you. Can you hear me? Yep. Okay. Maybe just a quick follow-up on that. I guess outside the U.S., you're obviously expanding in Germany, but how much of your overall capacity that you're coming online between now and 2030 is is already contracted. And then just another follow-up, the autoinjector growth of 46%, maybe just how much of that would be just driven by GLP-1 versus capacity coming online or just broader growth trends. Maybe if you could just talk about the 46%, if that would be sustainable growth rate. Thank you.

Sure. So I will have you specify it, Samuel. But you know, GLP-1 again, it is just about to start. So it's a smaller part of the 46%. We grow on various platforms. We can give a bit more flavor to GLP-1 just in a minute. On your other questions, we basically try to fill five out of seven days. So when you ask us how much we have contracted, obviously we have not contracted yet the full five days today of the capacity we are going to have by 2030, 31. But what we see in the pipeline and from our past, we close roughly 35 deals per year. roughly 25, 27 survive. If you look back and we assume and we look at our pipelines, we have quite a good overview on global pharma pipelines, not only of new molecules in phase two and phase three, where we are in with devices, but also in emerging markets with biosimilars. So this gives us a high level of confidence that we are going to close certain contracts that will lead us to a five out of seven day. Now, this is very important. Obviously, in an optimized setting, you want to manufacture seven days, but we need to have this spare capacity and this sometimes hurts a bit. But we had situations in the past where customers just needed more devices and we were always able to deliver. And this is still our promise. This makes us special compared to others that we are always able to deliver. And this is also why customers pay a premium at IPSAMED because we can always deliver. And that's why we will always have some spare capacities. But when you look at the weekend shifts, In Germany, the sixth day, I mean, you pay 25% more. Switzerland, the same thing, Sunday, 50% more. So from a cost of goods, of course, you want to run them as much as possible, but it also makes it a bit more expensive. So overall, you can assume that we don't build capacity without contracting behind.

If I may add to that one, we are lucky to be in an industry in which you have a very good visibility of the volumes. Our devices serve people with chronic conditions, so we get those customer forecasts for drugs where we are already selected with switching being very difficult in our industry we really have a very good visibility on based on that visibility we industrialize and yes simon mentioned a certain idle capacity we assume to serve to have the flexibility for those customers so we industrialize with with visibility Then to your second questions about the auto-injector growth, the more than 40% top-line growth. The main drivers, these are now these platforms, the 1 milliliter and the 2.25 milliliter, which are now in a growth phase. So have in mind, we start now still on a low basis. So in percentage, that's always a lot of growth. And now, yes, incretins are kicking in. not yet being significant, but you start from a very low basis. These incretin cells come on the top. But relate that now to the overall top line growth. We said mid-term, when the overall top line growth is a CAGR of 15%. And yes, I said that autoinjectors grow stronger than pens. Nevertheless, it's also fair to assume that this growth rate a little bit comes down. We grow in autoinjectors, but not year on year, always by 40% and more. That gives you a little bit color on that one.

And then you look at overall GLP-1, that makes for the full year clearly below 10%. But this is customers in China, customers in Russia. We have Victoza, Learabotides out there. So we have a whole bunch of GLP-1 products out there. And then slowly, of course, certain volumes for our Danish customer. So, I mean, it's a smaller part that is gradually increasing.

Thank you. Very helpful.

Perfect. Thank you very much, Anna, and thank you all of you for joining us today. Thank you, Simon and Samuel, for presenting our great achievements, the great financials, and we will be discussing very much, looking forward to continue discussion with you. Thank you all.

Excellent. Have a great week. Thank you.