Accelleron Industries AG

Ladies and gentlemen, welcome to the Acceleron half-year results 2025 webcast. I am Mathilde, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. Webcast viewers may submit their questions in writing via the related field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Michael Daiba, Head of Investor Relations. Please go ahead.

Hello everyone and a warm welcome to the Acceleron half-year results 2025 investor and media webcast. Thank you for joining us today. Today we'll walk you through our performance in the first six months of 2025, provide a detailed financial review and share our updated outlook for the remainder of the year. We'll also discuss how we are navigating current geopolitical challenges, including the new US tariff on Swiss goods, and how our strategic investments are positioning us for the long-term growth. Before we dive into the results, please take a note to the safe harbor statement. This presentation contains forward-looking statements based on current expectations and assumptions. These statements are, of course, subject to risks and uncertainties. All figures presented today are in US dollars and prepared according to US GAAP. For definition of non-GAAP financial measures, please refer to our investor website. The link is also provided in the presentation. After the presentation of Daniel and Adrian, there will be a Q&A session. You will be able to ask questions via the chat tool or the telephone. I will now hand over to our CEO, Daniel Bischofberger.

Hey, Michael. Thanks for the introduction. And good morning and welcome, everyone, also from my side. And thanks for joining. So besides Michael Diver, you already heard, and our well-known head of investor relations, I'm, as usual, joined by Adrian Grossenbach, our chief financial officer. And I would say let's move. Here is our agenda for the next hour. I will start with the key highlights of the first half of the year. Adrian will then take over for financial review of H1 2025. I'll return to give you an update on the marine and energy markets and an outlook here. including comments that are already mentioned by Michael on the current situation with US tariffs and the updated guidance. And we will conclude with a Q&A session, as Michael mentioned already and managed by Michael. So then let's begin the move on to the highlights. So in the first six months of 25, we continued on our growth trajectory, achieving high revenue growth and strong profitability. Revenues in the first half year reached $608 million, increasing by more than 20% year on year. The operational EBITDA was up by almost 21%, to $155 million, and the corresponding EBITDA margin increased by 0.1 percentage points, to 25.5%. So the net income grew by almost 30% to $115 million. And the free cash flow conversion stood at 70% compared to 34% in the same period of last year. Looking at the big picture, the markets have not cooled down in the first half year, despite geopolitical disruptions. And we've been firing in all cylinders to meet the demand. So what propelled our growth in the first six months of 25? Well, the product business was a key driver, but not only. The product business grew by more than 35% and the service business by more than 10%. The product business growth even surpassed service business growth in absolute dollars. And our impressive revenue growth was streamed by further gains in market share for turbocharger. This is especially true for merchant marine and data centers, as well as strong market demand for marine services, especially retrofits, and for backup balancing and prime power application. We also saw sustained high demand for fuel injection systems and above average orders in the rail sector. The demand for gas compression remained in line with expectation. The 10% U.S. tariffs that was in effect for Switzerland on other geographies impacted the half-year results only marginally. And here we are essentially talking about April to June here. However, we expect the current 39% tariff on Swiss goods in effect since August 7 to impact our EBITDA margin in the second half of 2025. More to this topic a little bit later in the presentation. On the next three slides, I'd like to highlight the role of Retrofits in marine services, our program in Italy, and the continued success of our high-speed turbochargers for backup power solution. So let's take a look first at Retrofits. As we explained in the past, decarbonization increases market interests in upgrades and retrofits. We differentiate between upgrades and retrofits. A turbocharger upgrade affects, as its name implies, only the turbocharger, while a retrofit also includes, besides the turbocharger, other components and systems, for example, the main propulsion engines. Hence, the scope of a retrofit tends to be larger, and consequently, the technical efficiency improvement potential for the ship bigger. Demand for these retrofits picked up significantly in the first half of 2025, driving growth in the marine services. There are two main types of retrofits we are offering, engine part load optimization on the left side, or in short, EPLO, and FIT2 on the right side. I will not bother you with the technical details of these solutions, but what they have in common is that they provide tangible fuel savings and reduce greenhouse gas emissions immediately for marine engines operating at varying loads and speeds. Other advantages of both EPLO and FITS2 are easy implementation, easy operation, and easy maintenance. They are also commercially viable for our customers. They are considered low investment, high returns retrofits. While the reduced fuel consumption positively impacts the ship owner's bottom line, the reduced emissions support regulatory compliance, which very often means as well a commercial benefit due to the lower emission charges and or penalties. So it's no wonder retrofits are gaining traction. Our revenues from upgrades and retrofits, including from projects on large container vessels, grew by 60% in the first half of 2025 compared to the first half of 2024. Overall, the annual upgrade and retrofit revenues in the past years were between 20 to 25 million US dollars per year. I would say moving on to the next slide. As you know, besides turbocharger, we also offer future fuel-ready fuel injection systems. And fuel injection plays a key role in decarbonizing the maritime industry. And we see high demand for advanced dual fuel systems, which can inject two different fuels. The market demand is higher than what we can meet with our current capacities. To meet the high demand, we have launched an $18 million multi-year investment program in Italy consisting three pillars. The aim is to expand production capacities and strengthen our technological leadership in fuel injections. On the left side, the first pillar of this growth strategy is the organic capacity increase at the existing OMT factory in Turin. Investments in new machinery have already been made and we plan to hire around 150 new employees within the next three years. Another important pillar is the construction of a new technology center in Turin by mid-2028. Construction for this $27 million project is well underway. The technology center, by the way, in walking distance from the existing factory, will offer more than 1,200 square meters for testing, assembly and prototype production, as well as new space, office space for about 100 employees. This will provide OMT with the necessary space for increasing OMT activities in new fuels such as ammonia and methanol. Crucially, it will also free up additional space in the nearby factory for further plant capacity increases in 27 and 28. The third pillar of the growing strategy is based on the acquisition of OMC2 last summer. The acquisition brings OMT additional production capacities. They are using free space in the factory and investing in new machinery. In the medium term, an extension of the factory building is also planned to be completed by 28, with the goal of tripling the production of the current OMC2 factory by 29. You can see a rendering of this factory extension in darker gray in the image on the right side. With our growth strategy consisting of these three pillars, we are well positioned to meet increasing market demand. This year already, the measures we have taken so far, including the acquisition of OMC2, allowed us to increase our output by 30% and to ensure the timely customer delivery of fuel injection systems. Our goal is to double the revenues from fuel injections to 150 million US dollars by 29 compared to 24. Let us move now to another product of ours, which is in very high demand, the TPX high-speed turbocharger. The continued success story of the TPX44 high-speed turbocharger used for data centers and to protect other critical infrastructure like hospitals remains impressive. Developed in close collaboration with an engine manufacturer and launched in 2019, it has quickly gained significant market share in the diesel market. Our dedicated product for standby generators offers substantially higher power density, resulting in a lower CapEx per kilowatt compared to competitors' solutions. Furthermore, the development of the second generation product is already underway and promises even greater advancements. We are well on track in 2025 to set new records, again in both production volumes and sales. As a reminder, in 24, we delivered 2,600 units of this model. This was already 100% growth versus 23 with 1,300 units delivered. In the first six months of 25, we already delivered 3,900 units. That's three and a half times more than in the same period of last year when we delivered 1,100 units. So many more data centers requiring turbochargers for backup power will come online in the years to come. The big question is how many? One recent study estimates that data center capacity, as defined by electrical power demand, will more than triple by 2030 compared to 2023. And this is only the low-range scenario, which would correspond to a compound annual growth rate of 18%. This is not to say that demand for our turbochargers will increase at the same rate, but it gives you an idea of the dynamics in these markets. And we are well positioned to continue to benefit from the data center boom. And with those remarks, I conclude my first part and I will now hand over to Adrian for the financial review. Adrian, it's yours. Thank you, Daniel.