Accelleron Industries AG

Hello, everyone, and a warm welcome to the Acceleron Full Year Results 2025 Investor and Analyst Conference. We are happy to have you as participants here in the room in Zurich, as well as remotely via webcast. For the in-house participants, here is a short safety announcement. In case of an emergency, please stay calm. Okay. follow the signs, go down the stairs outside to the gathering point in front of the building. For everyone now, the ones in the room and the remote participants, please take note of this safe harbor statement. The presentation today contains forward-looking information that naturally comes with uncertainties. Furthermore, figures in the presentation are in U.S. dollars and were prepared according to the U.S. GAAP accounting standard. After the presentation by Daniel and Adrian, there will be a Q&A session where you will have the opportunity to ask questions. If you're here in the room, it's simple. You just raise your hands. If you're joining remotely, you can either post your questions in the chat tool or ask them via the phone line. The operator will explain you what you have to do exactly. And for now, I will hand over to our CEO, Daniel Bischofberger.

Michael, as usual, thank you for the introduction. So welcome everyone to the full year results conference. Besides Michael Diber, I guess you very well know him from all the road shows we are undertaking. As usual, I'm also joined by Adrian, our CFO. So here's the agenda for around the next hour. So we will start with the key highlights, 2025. Adrian will then take over and talk about the financials of 2025. I will then conclude with a closer look at the marine and energy markets and the outlook for 2026 and, of course, including the guidance. Besides the financials, the postponed adoption of the IMO net zero framework and as well as the prime and backup power application for the energy market will be the focus topics of today. And of course, as already said, there's a usual Q&A session at the end. And for those here in the room, you're more than welcome then after us to join for the networking lunch. I guess with that being said, let's go to the presentation now. So in 2025, Accelon delivered another year of outstanding growth and profitability. While the marine market remained resilient throughout the year, the energy market emerged as a powerful additional growth driver, especially with demand for backup for data center prime and backup power solutions. Building off on the success of 2024, we reached new heights in 2025. Revenues rose to US$1.26 billion, increasing by almost 24% year on year. This achievement reflects both strong market fundamentals and our continued ability to capture market share in attractive segments. The operational EBITDA was up almost 23% to US$321 million. U.S. tariffs, the operational EBITDA margin was only slightly below last year, namely 25.4% in 25 compared to 25.6% a year before. Net income increased by almost 36% to $224 million, and free cash flow conversion stood at 88%. In summary, Last year we again demonstrated that we could grow profitably even in a challenging geopolitical and macroeconomic environment. When you look at revenues, operational EBITDA and net income from 23 to 25, so when we went stock listing, you can see that all increased year after year. Growing profitably by well over 20% in 2025 is not a matter of cost, particularly while gaining market share. Net income more than doubled from 2023 to 2025. The higher net income enables a dividend increase of 20%. So the Board of Directors will propose a dividend payment of 1 Swiss franc 50 cents per share to the Annual General Meeting on April 28. In addition, we will launch our first share buyback program totaling 100 million US Swiss Francs in line with our capital allocation framework and hence delivering on our promises. The program is expected to start in the second quarter of this year and is planned to run for two years. It will be executed on a second trading line on six Swiss exchange, and we intend to use the capital ban for the cancellation of the shares repurchased under this program. So enough about figures now, let's look at some of the highlights of 25. With our activities last year, we expanded our capacity offerings and reach on the one hand, And we helped to shape pathways for decarbonization on the other hand. We signed service agreements in both marine and energy with a total value of $150 million in 2025. By way of example, we signed our 50th Turbomarine Full Cover Service Agreement in December. So reflecting the growing adoption of fixed cost service plans among ship operators. These milestones demonstrate customers' confidence in our global service network and our long-term value proposition. The photo you see on top left is of a power plant in Alaska. With the utility running this power plant, we signed a record-breaking 17-year October Smart Care Agreement. Our mission is to maximize uptime, and maintain critical power supply in such a remote and demanding environment where skilled labor is scarce and expensive. Demand for marine upgrades remained high with EPLO and FITS2 upgrades expanding by 45% year on year. We also executed reliably at scale, producing over 22,000 turbochargers, a new record. Just as a reminder, in 2020, when we went on the Swiss Stock Exchange, we produced around 10,000 turbochargers, less than half of what we produce today. In fuel injection, we kicked off a multi-year investment program to expand manufacturing and R&D capabilities. The investments in Italy, including OMT's new technology center in Turin, support global demand for fuel injectors and reinforce our position in future fuel applications. We also expanded the reach of our digital solution through partnership in South Korea and Japan. This collaboration will promote our Lorica 360 and Turbo Insights offering, enabling broader fleet coverage and deeper insight for our customers across Asia. Our net zero reports published last year are steering industry dialogue about decarbonization. The first report highlights the need for shipping to pool its carbon-neutral fuel demand with other so-called hard-to-carry to abate or hard to decarbonize industries. These are airlines, these are cement industry, agriculture industry to accelerate the energy transition. The second report illuminates the cross-sector pathway for scaling e-fuels in Asia Pacific. It highlights the region's emerging role in demonstrating how green hydrogen-based e-fuel networks can be built. connected and scaled, supported by industrial policies of countries in Asia Pacific. So we clearly see in Asia they are not waiting for any regulation. Based on industrial policy, they will start producing these e-fuels. And over time, especially considering the huge space in China, for example, they will get the costs down to quite a competitive level. So Asia is moving, while Europe has great regulation, but not the clear way to help the production of those fuels. Finally, the science-based target initiatives, in short, SPTI-approved experiments, near-term climate targets for 2030, making an important milestone for the company. So this independent approval confirms that Exoron's climate goals, which are to reduce scope 1 and 2 emissions by 50% and scope 3 emissions by 25% by 2030, and this is the baseline of 2023, are in line with the Paris Agreement's objectives. So all in all, it has been a very busy year for all of us, but equally rewarding for all of us. Let's move on to the next slide. I'm pleased to say that we have successfully integrated TrueNorth Marine, the Canadian company we acquired in 24. In doing so, we can now promote our digital solutions under the umbrella of Lorica 360. to a combined broader customer base. So, for example, Acceleron's OptiHAL module is being sold now to TrueNorth Marine customers. But vice versa, also the TrueNorth Marine OptiNav AI module is being sold to Acceleron's customer. Through the TrueNorth Marine acquisition, we have gained additional capabilities. We now have XC fairers in the team, supported by AI-powered tools who play an increasingly important role in providing remote operational advice to ship charters. OptiNav AI is a great example of this. So the solution delivers AI-supported voyage optimization combining weather, routing, and vessel-specific performance models. In an OptiNav AI trial with COFCO International last year, we could demonstrate significant fuel savings emission reduction and cost savings. COFCO International is a large agricultural trader, commodities traders and major ship owners. So across 13 ocean-going voyages, we achieved an average fuel saving of 3.5%, reduced CO2 emission by more than 1,000 metric tons, and achieving cost savings of 2 to 3% on average per voyage. And importantly, these savings have been achieved by no CapEx investment on board or any installation on the ship. With those remarks, I conclude my first part and I will now hand over to you, Adrian. Thank you.

Thank you, Daniel. Let us now take a closer look at our strong 2025 financials, starting as always with the group performance. Our core markets provided an encouraging backdrop in 2025. We saw positive market momentum throughout the entire year, and continue to deliver for our customers, resulting in market share gains in both marine and energy. Growth in 2025 outpaced the upgraded expectations we set in summer, largely driven by higher volumes and direct indirect pricing effects. Indirect pricing effects arose from billing in Swiss franc respectively the Swiss franc's appreciation, versus the US dollar, our reporting currency. After last year's 1 billion US dollar revenue mark breakthrough, we accelerated our strong growth trajectory. Overall, our revenues grew by 23.5% to 1 billion and 263 million US dollars for the full year 2025. In constant currency, we grew by 21.6%, exceeding the latest guidance of 16 to 19%. Moving to the operational EBITDA, which reached 321 million US dollars, up by roughly 23%, with a margin of 25.4%, only slightly below 2024, and just above our latest guidance of 24 to 25%. The attractive margin was slightly impacted by the strong growth of new business, which outpaced the growth of service, tariff cost, and an increase in warranty provisions. Finally, moderate cost inflation was largely offset by price increases and productivity initiatives. The next slide depicts the performance of the medium-low speed segment. Our medium and low-speed segment delivered another year of broad base growth. The marine business continued to perform exceptionally well, supported by further gains in new-build market share and the delivery of more than 1,000 low-speed turbochargers. The crew service business has returned to pre-COVID levels. Mentioned demand for retrofits and upgrades remained high, with EPLO and FITS2 upgrades expanding by 45% year-on-year, reaching close to US$40 million in revenue. Demand for fuel injectors also remained strong throughout the year. In China, strong domestic demand and export activity resulted in high revenues from turbochargers for diesel electric locomotives. The segment's revenues increased by 156.1 million US dollars or 20.2% to 929.6 million US dollars. On an organic basis, we grew by 17.2%. Our fuel injection business contributed 97.6 million US dollars. The operational EBITDA margin increased by 10 basis points. A strong increase in new business activity and an increase in warranty provisions, namely linked to the growing installed turbocharger population, were offset by operational leverage. Let's look now at the high speed segment. In 2025, the high-speed segment upward trajectory accelerated. Growth was driven by sustained momentum in data center backup and rising prime power solution demand in the US. In respect to the US gas compression business, we saw a further demand increase in line with our expectations. Overall, we delivered 15,800 high-speed turbochargers including a record 8,000 TPX44 units for emergency genset for data center and other critical infrastructure applications. More than tripling the TPX44 production year on year. Revenues in the high-speed segment increased by 84.5 million US dollars or 33.9% to $333.5 million. On an organic basis, we grew by 31%. The operational EBITDA margin decreased by 70 basis points. The rapid expansion of new business and tariff costs were largely offset by operational leverage. On the next slide, let's go through the bridge from operational EBITDA to net income. As always, starting on the left, operational EBITDA amounted to 321 million US dollars. Next to it, you can see the one-off and non-operational cost, which amounted to 12 million US dollars compared to 19 million US dollars in 2024. Of these 12 million US dollars, roughly 4.5 million US dollars were related to M&A activities. Moving on, we had acquisition related amortization cost of 5.8 million US dollars. Consequently, income from operations or EBIT amounted to 303 million US dollars. The next item is comprised of interest payments, pension income and fair value changes of FX instruments used to hedge non-operational foreign exchange risks. In total, this item amounted to 300,000 US dollars. One further to the right, we can see the income tax expense, which amounted to 59 million US dollars. The effective tax rate decreased from 20.6% in 2024 to 19.5%, mainly due to a change in jurisdictional profit mix. And with all of that, you get to a net income of 244 million US dollars, 35.8% higher than in 2024. Let's look now at the free cash flow in more detail on the next slide. Free cash flow conversion remained high in 2025, at the healthy 88%, despite strong growth and higher investments. Overall, the 10 million USD increase in working capital reflects growth-driven effects and a normalization rather than a deterioration in cash discipline. First, higher business volume, led to an increase in receivables, while collection disciplines remained strong. Second, trade variables normalized in line with higher business activities. And third, inventories increased as we ramped up our production to meet growing customer demand, temporarily tying up some additional working capital. Capital expenditures increased by 50%, reflecting our additional investments in our Swiss, Chinese and Italian factories to optimize and expand production capabilities across the globe. As a result, despite accelerons, strong growths and higher investments, free cash flow increased by 37 million US dollars to 240 million US dollars in 2025, underscoring the highly cash generative nature of our business. Let me conclude the financial review by providing some color on the capital allocation framework. You might remember our capital allocation framework that we presented two years ago. Back then, we highlighted our target net leverage corridor of 0.5 to 1.5 times operational EBITDA, our ambition of a stable to growing dividend, our clear focus on R&D and adequate capex to enable growth, and the fact that we would return excess cash through shared buybacks unless M&A opportunities materialize. Let me now walk you through how we have addressed and continue to address these components. Based on our strong results and a good cash conversion, we managed to reach a net leverage of about 0.5 times operationally BTA. In line with our framework, this allows the board of directors to propose an attractive dividend of 1.5 Swiss francs per share to the annual general meeting on April 28, 2026. Additionally, we are complementing this with a share buyback program of 100 million Swiss francs. Staniel said, we plan to launch it in Q2 of this year and to execute it over two years. Let's now look at other components of our framework. To cope with our expected growths, we plan to further increase capex for the coming two to three years to expand our capacity while keeping a balanced approach of make or buy to ensure long-term viability. Consequently, CAPEX will amount to 5-7% of revenues per annum. We are making these investments from a position of strength, which allows us to keep focusing on organic and inorganic growth and investing in R&D. M&A also remains an active area of strategic interest. where we will invest when it makes sense and opportunities materialize, selectively and disciplined. Now back to you, Daniel.