Bachem Holding AG

Good morning ladies and gentlemen here in Zurich and online wherever you are joining from. Welcome to our full year 2025 results presentation. I am especially pleased to moderate today's session as it is the first results presentation in the new role of our CEO Ann-Kathrin Stoller. Joining us on stage as well is our CFO Alain Schafter. My name is Barbora Blaha and I am responsible for investor relations. So let's start with some remarks on the housekeeping. There will be sufficient time for questions after the presentation, and if you would like to ask a question, you can either type it into the Q&A box on the Zoom app at any time, so it's already open now, or simply raise your hand during the Q&A session if you're here in Zurich. And also, as always, this call is being recorded and the recordings will be uploaded on our webpage later today or tomorrow. So a few words on the agenda. First, Anne will provide a review of the year 2025. Then Alain will walk us through the financial results and Anne will close the presentation with an update on market environment and our business priorities for the current year. We expect this event to take about 60 minutes. And after the presentation, we will host an Aperol Riche here in this room and everyone attending in person is warmly invited to join. And with that, I am happy to hand over to Anne.

Thank you very much, Barbora. Good morning, everyone. A very warm welcome also from me to everybody here in Zurich and of course also to everybody joining us online. It's my great pleasure and honor to be here today and talk about the 2025 year results and also the outlook for 2026. So let's start. Let's start by looking a little bit back, 2025. It was a very good year. Our sales grew to 695.1 million Swiss francs, which is a growth of 14.8% or 19.2% in local currencies. Also, our EBITDA increased to 214.7 million Swiss francs, which is an EBITDA margin of 30.9%, and Alan will talk a little bit more about the effects behind that. As you are all aware, we are in a phase of strong growth, strong market growth, and also growth for Bachem, which means we are also investing a lot of money into our sites. In 2025, we invested 332.6 million Swiss francs, and we also grew in terms of personnel. We added more than 300 people to our workforce and we ended the year with 2,511 FTE. So if we look into our sales in a little bit more of a historic context, you see that we have been very consistently growing year over year. And this growth was even more emphasized, more pronounced, growing from 24 to 25. What is behind that growth? If you look at the distribution of the sales by top five customers and top 10 customers, we see that the share of our top five customers increased from 2024 to 2025. However, I would also like to remind everyone that these are the top five customers, and many of these customers have more than one product. So this is not the same as the top five products. We have our three distinct product categories, which are research and specialties, CNC development, and commercial API. And in 2025, all three of these product categories contributed to our growth. And we see that amongst those three, the CMC development contributed or grew the most. And on the next slide, I will talk a little bit more about each of these three categories and what was behind the growth that we saw. Commercial API is where ideally you primarily produce in campaigns, and we have seen in 2025 that we had more campaigns, longer campaigns, larger campaigns, and that had a lot of beneficial effects. On the one hand, it makes our production planning much more reliable, and also on the other hand, it has a positive effect on our equipment utilization. In addition to that, we launched a quite comprehensive operational excellence program in 2025 with a very strong focus last year on Bubendorf. We also see positive effects coming out of this operational excellence initiative. And we also, we had shift work before. We are producing shifts since many years, but we further extended shift work at our sites. If you look into CMC development, we see that our portfolio, our project portfolio is maturing. We'll also see a little bit more what that means on the next slide. But we also saw a strong effect from late stage projects where our customers asked us to also already build inventory for their pre-launch activities. So this means we have late stage projects here where we built stock prior to launch and so we would expect that some of these projects which in the future very likely show up in the commercial API category. For research and specialties, very much in line with what we have seen in recent years, the primary growth drivers are peptides, which are being used in either diagnostic or cosmetic applications. I already talked a little bit about our pipeline, our project pipeline in CMC development. On the one hand we see that we have more projects in later phases, but we also saw that in absolute numbers the number of projects went down a bit. That is due to a very careful project selection that we do. I think we've always said that for us, the main driver behind our pipeline is the quality of projects, not the quantity. And what I can say today is that we are very happy with our portfolio of projects, and we believe we have a very balanced pipeline. We already talked a little bit about growth and capacity expansion. So where did the more than 300 million of CARPEX investment go? We'll start looking into our Swiss sites. In Bubendorf, in building K, we made significant progress and we are very happy to report that we had a successful inspection by the RHI in 2025, which resulted in the manufacturing license for this first phase of the building K. But we also invested in our Bubendorf site beyond building K. We are making several investment projects there and working on those where we work on certain unit operations and add equipment selectively to address specific bottlenecks in some of our unit operations. We also invested into our Viuna site. As many of you know, that site is primarily focusing on producing precursors for peptide manufacturing, so that can be amino acid derivatives or diotripeptides. And so, especially in times as we see them right now, that is one of the great assets that we have to utilize that site to have an extra secure supply chain. We also made progress for our Sisslerfeld site, so on the one hand we acquired all five plots of land now, and we also founded our Barkem Sisslerfeld AG as a legal entity. And also we submitted a first permit application to build a utilities tunnel. So let's look beyond the ocean and look into our California sites. We have the Vista site, which is our large-scale manufacturing site in the US, and there we are working on further expanding our capacity, and that project is well on track. And in addition to that, looking even more into the future and potential future expansion, we also acquired a third building in Vista which is directly adjacent to the current two buildings. At the same time we're working on our Torrance site and at the Torrance site we are continuing our modernization efforts and also we are investing heavily into a higher degree of automation for the small scale manufacturing that we do at that site. We are not only relying on capacity expansion projects to increase capacity. I already briefly mentioned our operational excellence initiative. So, as I mentioned, the focus of that initiative was primarily in Bubendorf last year. But what we are generally working on is we work on a very large standardization. So across our network of sites, we want to use the same business processes, the same chemistry processes. We want to manufacture on the same type of equipment. And we see first results of those efforts. We also very much focus on communication especially communication on the manufacturing shop floor to make sure that this communication is very efficient and very fast and also to be very fast in the resolution of any challenges that we see in all communication measures that we have implemented focus primarily around that. I think in recent years we also talked about our network approach where we really specifically look into each site and the strength of that individual site and we carefully balance our portfolio with respect to those strengths of the sites. And if necessary and if it makes sense, we start to shift products from one site to another site to allow for extra space and capacity or because it makes more sense for that project to be manufactured at a different site. And that also helped us in 2025. So I would also like to mention in addition to all the business efforts and capacity expansion efforts, one strong focus area always was and will remain our sustainability efforts. I'm very happy to report that since many years we're working with EcoVadis. and also in 2025 we received a gold medal from Ecovades which puts us in the top 5% of all companies ranked by Ecovades and within the top 2% of companies ranked in our specific area of activity which is manufacturing for pharmaceutical products. We also joined the science-based targets initiative and we submitted our greenhouse gas emission reduction targets to that initiative and so we continue to work on various actions and various projects to continue our efforts in the sustainability area. That concludes my 2025 look back and I'm happy to hand over to Alan to talk more about the financial background.

Yes, so from my side, some financials review looking back in 2025. Anne already mentioned the sales 695 millions, the EBITDA over proportional growth in this year. I also want to highlight the net income with 148.8 million which brings the earnings per share almost to 2 Swiss Francs. Also we have later a slide the cash flow from operating activities which ended up with 271.6 million. Also for Bachem, the strong Swiss francs heavily impacted our numbers in 2025. So this table now represents the first on the local currency base. So we start with the 29.1% from last year. We see a slight dilution of 20 pips from the Cox area. This is because we invest there for the future growth. It's mainly labor cost. and this is what happened last year to people to achieve the growth in 26. On the marketing and sales, we kept the cost under proportional and therefore a positive impact in that space. On the R&D, we spent 1.5% of our sales into that area. It's very important. This is to keep our leadership in innovation and technology in the tight business. We are still in the range, even if it's a little bit less than last year, we always said 1.5 to 2% of the annual sales in that area. The G&A part, we are investing there. We have additional functions that we need as a growing company. We add where we see a need for the growing company, so also there a slight positive impact on the margin. With all of that in local currency, an underlying business we would have a margin of 30.2% in 2025, which is an increase of 110 pips compared to the last year. And then, as mentioned, the strong Swiss franc brought our margin down below 29% in 2025. And this is the first time we show something like a recurring underlying business, but we thought we had these two in the line. Other income, we had two special impacts, special items, which brought EBITDA to 30.9 as a reported number. The two impacts are, one is a sale of a building in the U.S., It was an old building. It was not on the site in Torrens or Vista. It was more in the San Francisco area and has been rented out over the last few years to a third party. Now we sold it in 2025. And the other part is a contribution from external parties to the project Sisterfeld. So we received money there, milestones, and this is reflected in the other income because it cannot be shown as a revenue. When we look at the cash flow, 214.7 million as a starting point, almost 38 million more than in the previous year. We pay taxes as we all have to do, 10 million accounts receivable. We see a positive impact and this is mainly driven by a more evenly distributed sales in the last few months of the year. On the inventory side, we have an increase. This includes raw material, work in progress, semi, finished goods. Some of the material that we have there, the raw material, is partially prepaid by the customers to support the working capital, and this is all needed to produce in 26 the demand from our customers that we can deliver into 26 on the purchase orders we have received from them. On the prepayments from our customer, this includes prepayments for capex, but also includes prepayments for working capital, as mentioned, for labor costs or material. There we see a net inflow of 85.4 million in 2025. And the change, the increase in payables and accruals, this is mainly driven by the course of the business. Growing business means usually more bills and more accruals in that area. So overall operating cash flow, 271.6 million in 25. Thereof, we spent, so cash out for our capex was 329.4 million. We mentioned the sale of the building that brought cash-in of 3.5 million in 2025, overall 325 million in the investing cash flow. On the financing part, we had the dividend from 2024 distributed, 63.7 million. A part of that 33 million has been kept in-house in the company as a loan from our main shareholder, IngroFinanz AG. And in addition, we have thrown down loans from the banks of 24.3 million in 2025. So overall, we see a net decrease of 64.1 million in the last year. Some key figures on the balance sheet. One on the left side where we start, net debt. As mentioned, we have drawn down loans during 2025. One is the majority shareholder, others are the bank. We ended up with a net debt of 26 million by the end of last year. And we will continue to, you saw the numbers, you see the investment plans we have, that this should not be a surprise that we will also use banks or third parties in the future for financial support. On the prepayment side from customers, by talking financial support, you saw the 85.4 million we received net this year, it ended up with a balance of 369 million. They are of 182 million are non-current, which means we have to pay back this money now to our customers through product supplies in 2026. So non-current means over the course of 12 months. On the balance sheet side, we grew the whole balance sheet first time over $2 billion. It's an increase of 10%. The equity also increased, but not that much, to $1.5 billion, so thereof a slight decrease in the ratio to 69% for 2025. On the CapEx side, Anne already mentioned, we're going to invest further. We have to invest. We invested $332.6 million in 2025. $295 million out of that was for capacity expansion, be it buildings or equipment. The overall number, 48% of our total sales invested in that area. We will invest further. We see the need. We need to invest to follow our growth strategy that we have. So for 2026, we see above 400 million right now. And to preempt maybe the question, we also said that last year, that 400 million as a capex, we are lower than this number. And there's two reasons. One is We had contingencies and plans, of course, you have to do that. Luckily, we didn't use that at the end of the day. And second, there can always be shifts from one project maybe to a next year. So, no worries that big projects are delayed because of that. And with that, back to the future, 2026.