Cicor Technologies Ltd. (CICN.SW) Earnings Call Transcript & Summary

So good afternoon, everybody. I wish you a very warm welcome to our 2025 Capital Markets Event from Cicor Technologies. I'm really happy that so many of you came here. And this is the first time that we do this as a hybrid event. So you saw all our help us here on technology. So this will be not only a live stream, but also interactive so we can also receive from the some 60 or so online participants that we have. So we want to give you an update about what we do, dive deep in some of the areas that keep us busy. And to do that, we do not only have Peter Neumann, who you all know, our CFO, with us, but we have also Stefan Koller, our VP of EMS Sales. We have Franck Mayau, our Head of our French business. And online, we will also have Jack Symonds, the Head of Sales for our Aerospace and Defense business located in the U.K. So let's start this. So we have an agenda here that you can see. We want to give you some business and market updates where we are standing, followed by Peter discussing financials, midterm targets, where we are. And then we spend quite some time on M&A, M&A as growth drivers, which has 3 elements. It's a bit the history of what we have done, including the 5 acquisitions that we have completed this year, talking about, obviously, our offer for TT Electronics, but also give you a flavor of how we integrate companies. And here, we got many questions because we have acquired Eolane out of bankruptcy. And therefore, it's very good that Franck Mayau, he will tell us how they're doing and how he is working with his team to turn around the company and to integrate it into the Cicor Group. Then we'll talk about market leadership, market leadership in aerospace, defense and also the medical side, where Stefan will present specific sub-vertical example, go deep here and Jack give us an overview about the aerospace and defense market. So then we obviously have enough time for Q&A, both here from the room and for our online guests before we go to the upper row and can have more discussions. So let's talk about market and business. And this is what we present normally as a one pager. You see, however, some updated numbers here because there are some new market numbers. They are very difficult to come by. It's mostly anonymous questioning of hundreds of our peers in Europe, and there is an independent body aggregating this data and giving us on an anonymous basis. So we continue to do what we always do, and we are never going away from that focus, engineering and designing electronics for our customers and manufacturing, combined with the high-tech offering of substrates. That's what we do for many years, and that is completely unchanged. In a market, as you can see, which is roughly EUR 55 billion in size. That's the European market for electronic manufacturing services, the market that we focus on mostly. It is a market that is very fragmented, 1,900 companies operating roughly 2,400 factories across Europe. So very big with a big tail end of small customers. And as you can see, amongst the listed companies, Cicor is now #2 in that field. If you take the unlisted companies also, we are #4 in that market. Now we have grown the market and our sales together with market growth that you see, we have grown organically. We have grown through M&A. Peter will talk a bit about that with increasing margins and the decrease you saw in the reported number and the midpoint of our guidance. This is the dilutive effect of Eolane, and we'll hear from Franck how we will get away from that dilution. The 3 markets, I come to that, extremely important for us are the 3 verticals that we are in. This is really how I like to call it electronics for applications that matter. It's not the stuff that we like to play around with. It's the stuff that lives depend on or big assets are depending on. So that's what we are focused on, and I go a little bit in detail later. So that's what we do. Let's start. I have 2 sections here, a few slides only. First talk a bit about the markets to give you more background about where the market for electronic manufacturing services stand right now in Europe. And then I will go more on the CCaaS side, what makes us unique to address these markets. So what you see is a market that -- and these are now really the reported numbers. You see that on the top left, a market that is growing very differently coming out of COVID, growing very slowly. Then everybody was filling up their inventories growing 16% into '22. Then we have negative growth and growth is expected to recover to 5% to 6% from next year onwards. This, however, is only half of the truth because the full truth is that the third bullet point from the top, there is a big overlay of one player, world market leader, Foxconn, and they are building these servers for the big server data centers that are built right now in Europe. Everybody, you know this announced now multibillion euro investments into European-based servers. They have 2 factories, one in Czech Republic, one in Serbia, making these servers. And that is a growth business, as you will see on one of the next slides. If you go into the core of the business, the core of the business, so everything excluding servers, then this is what you see. That's the growth that you see. And we had last year a negative 9%. That was mostly due to destocking and some issues in markets that we don't serve like the automotive market. So you also saw in the reported numbers, Cicor had organic sales of minus 2%, so 2% contraction organically in a market that is doing minus 9%. So you see still significant market share gains last year. Now we can dissect this market. We can dissect it by regions, and we can dissect it by applications. Let's start with the regions. These are the Western European, let's say, the most relevant Western European markets. I picked only Western Europe because that's where the customers are. And then there is Eastern European sales, which is feeding into West Europe. But that is important because you see a massive difference. You see countries with a high share of aerospace and defense business. That is specifically U.K., France, Sweden, Norway. These countries have very highly developed aerospace and defense market. The aerospace and defense is a big portion or a relatively large portion of the market. And you see growth, Spain also having quite some defense business, growth between a positive 1.1% and in Norway, minus 7.2%. Why minus 7.2%? Because they have also a big market for electric vehicle charging stations and that collapsed. And then at the other end, you see markets that are mostly in industrial equipment and automotive. And this is specifically the DACH countries, Germany, Austria and Switzerland. You see these were really the laggards, minus 12.1% to minus 13.8%. This was a catastrophic development last year due to the exposure to that market. And we have seen in Germany, especially quite a number of bankruptcies, even of larger players doing EUR 100 million or so. So it's very important and very telling to look at the markets. The more the share of aerospace and defense, the better the growth of the market. And aerospace and defense, you will hear that also later in the talk from Jack will continue to be a structural growth driver of the market with Germany, the rookie because Germany has a relatively small and underdeveloped aerospace and defense supply chain, which is, however, right now changing massively due to obvious developments that we all know. Now let's dissect by the verticals. And the first 3 that you see here, industrial, aerospace, defense and health care technology, these are the 3 focus markets of Cicor. That's where we do almost everything that we do. You see aerospace and defense, 10% growth; industrial, minus 10%, very cyclical and destocking in health care, minus 6%. So which comes a weighted average of minus 6.6%. Again, Cicor -- so this was doing better than the overall markets. Why was overall market terrible? Look at consumer, minus 25%, just to give you the feeling here. So Cicor, minus 2%. These 3 verticals or minus 6.6%. So even within these verticals, we were able to gain market share. And that comes to the complete market contraction last year of minus 9.8%. Then you see the EUR 3 billion, EUR 2.5 billion growth in computer, majority data centers, and that's all going to these 2 Foxconn factories, supporting and they will continue to grow, supporting those -- the big superscalers now building data centers across Europe. And everybody knows the story in which country you may be about big multibillion investments by Meta, by Microsoft, by who not. And that brought the overall market to minus 3.5%. So these are the only reliable numbers that we have 2024. But I can tell you that '25 is very much similar, but the speed of the decline has reduced and come to a standstill and market expected, as I showed on the first slide, expected to return to growth next year and the expectation from our peers is plus close to 6% growth of the market next year. So Cicor gained market share. You saw this, gained market share last year, gained market share first half this year. And why? We have -- to those of you who were here last year, we have presented our strategy, but let me summarize what we do and where we feel that Cicor is in a unique position in electronic manufacturing services around 3 dimensions. First of all, it's applications that matter. That's how I like to call it. Applications that matter where electronics plays a very important role, as I said, safeguarding of lives like this person injecting a plane here or in implants or in any other aerospace defense application, many of the medical applications. Applications that matter are typically more regulated, less price sensitive, have more stable customer relationships and allow us to play our strength very well. Secondly, on the left, high mix, low volume at scale. This is also a new term, and I think it describes well what we do. High mix, low volume means we don't do iPhones. We don't do notebook computers. We don't do the commodity stuff. We are doing -- we are managing a lot of complexity for our customers. And Jack later will show one example where you see it's a very dynamic setup where many of our sites of our factories are serving many sites of our customers. So high mix, low volume is a business that many of our peers do in Europe. However, we do it at scale. It means through our setup, we combine this high profit and strong customer retention business model of high mix, low volume with scale because we are in so many countries, we are now CHF 700 million run rate, plus/minus, and we get quite a lot of the benefits from scale on material procurement, for example, on leveraging our overhead base, our SG&A base and so on and so on. So very important. And the third one, that is also totally unique pan-European market access. Typically, customers in the applications that matter, they need to be very close to their suppliers. There's always exchange, always visits, always people coming, discussing technology, discussing quality and so on, new product introduction. And that is why we need to be close to our customers. Pan-European market access, Cicor is the only player in our industry offering pan-European market access. It's a real uniqueness. Now let me go through this -- through these 3 elements with the examples that we see here, aerospace and defense, saving lives. That's what it's all about. Saving lives in commercial aviation, in -- like in this case, in fast jets or also in developing the capabilities to deter, to attack and so on. It is all about saving lives of the people. Health care technology is -- we have a number of subverticals that we're addressing. Very important is robot surgery, important is smart drug delivery, but this is what Stefan will talk about, hearing better. This -- it is about the improvement of the quality of life for an important part of the population. Stefan will give some numbers and some examples. Health care is -- it's now getting a bit bigger through our last acquisition, but so far, it's 20% of sales. And what we are doing in industrial, a lot is driving miniaturization, driving precision, driving these areas, for example, in sensor technology. Sensors is one of the fastest-growing areas of our business, but also robotics control systems, semiconductor equipment. So I think you get the feel. It's not the remote control of your TV or like this. This company here would I think it's Logitech, very excellent company, excellent Swiss company, but they would never be our customers because this is high volume. This is high price pressure. There is every happen counts in this application. That's not for us. But then because we all love to buy this, they make millions and millions and millions. So it's low mix, high volume, high price sensitivity, low customer loyalty. So this is not for us. We are in these applications that matter. High mix, low volume at scale. I mentioned it briefly, we have no cluster risk from individual customers. We have -- our largest customer does 5% of our revenue. We are -- I would say, today, we are playing best with customers between CHF 5 million and CHF 50 million annual revenue. However, this largest customer is a customer that we are serving in many different platforms in many different locations. So the individual exposure is not the 5% of our revenue, it's maybe 1%. That's what may be the size of the biggest program that we are supporting is. We have 13 customers above CHF 10 million sales, just to give you some figure. So we like -- as I mentioned, we like these customers between CHF 5 million and CHF 50 million and market position I've mentioned. One aspect that is also important is that through the broad number of customers and the distribution in the subverticals, we are very decoupled in the cycles. The defense cycle is very different from the commercial aviation cycle, from semiconductor equipment, from general medical, from capital goods, et cetera. So and if you look at Cicor, it's balancing out very often these individual cycles of the sub-verticals. We do that through agility and flexibility in that a decentralized organization gives. If we do high mix, low volume, we need a totally flat organization, low SG&A, assign responsibility to our MDs like Franck and give them the opportunity to drive their businesses in the most entrepreneurial way. Of course, we drive with KPIs, best practice, benchmarking internally, et cetera, customer relationship management, but that is really important that we keep this decentralized organization. There is a very popular book by a guy named Taleb. He published it 2013, I think, is called anti-fragility. It shows how decentralized organizations are massively more robust in challenging times and changing times. And when I heard about this book some time ago, I thought, wow, that's exactly what we do. It anti-fragility in a decentralized organization. Now this is where we are. Footprint 2020. It's a little bit misleading because China is a big spot on the map, but it was only a very small factory at the time. So it was Switzerland, Germany, Romania, China, Vietnam, Singapore and Indonesia. But market access in Europe was mostly linked to Germany and Switzerland, a little bit of Northern Italy and so on. Today, we are home in the U.K., in Sweden, in France, Spain. We have manufacturing in Morocco, Tunisia, U.S. and more in China. What does it give us? It gives us two things. It gives us, first of all, direct access to 70% of the electronics market in euros of Europe. So we have direct access inside the country without having to export to 70% of the European market. Nobody else has that in our industry. And secondly, if you're looking at how our manufacturing footprint is, we can offer tailor-made manufacturing solutions, sovereign capabilities. That's normally what you call that if the RUAG gives a purchase order, they want this to be manufactured in Switzerland. If BAE in the U.K. gives an order, they want this to be manufactured in the U.K., all for security reasons. And it goes around Europe. So sovereign capabilities are important. Nearshoring. Nearshoring is important where we are offering Romania and Northern Africa as options. Northern Africa, really up and coming as manufacturing locations. Cost-wise, very competitive. Some of the countries quite stable. So not worse than what you find in Southeast Asia. And local for local. Local for local is also important for many customers. Please manufacture for me in the U.S., please manufacture for me in China because I have my factory in China. That's what customers are telling us. So now we can obviously only offer this as we have the scale that we have, the size, the market position in Europe, we offer this uniqueness. So these 3 elements that I mentioned, they create a very unique position for Cicor, allowing for two things: number one, scalability, so organic growth, further market share gains; and secondly, superior margins. So how does that play out? You can see that here. These are the listed peers of Cicor. That's first 3 quarter sales from the last 3 years, '23, '24, '25. This is all listed. So these are all reported numbers that we see here. And interesting, look at the #1 and 2 Scanfil and Kitron. Look how much they were -- how much bigger they were than Cicor in '23 and where they are now. Now we are almost equal. Now we are almost equal to these players. And if we take it pro forma, including acquisitions, we have surpassed Kitron. So that's where we are. NOTE and Incap the same, really, these companies also Scanfil and Kitron saw massive declines of the business, 15% declines of the business last year. We had only this minus 2%. And of course, we had acquisitions there. The only company growing at the same pace as HANZA of Sweden, they are following the same strategy as we do. So that's where we are and this is the outcome and result of what we have done over the past few years. So that has given you some view of the markets where we are, how we differentiate and how that resulted in growth. And Peter, next to you.

Thank you so much. Thanks, Alexander. I will talk a bit about financial results. And I start with looking backwards longer term in history. I come to current results, and then I go into obviously, the midterm view and where we want to go in 2028. So look, in the last 4 or 5 years, you've seen that we have moved from a manufacturer with CHF 200 million of revenue plus to -- now you see CHF 109 million to CHF 259 million. So really a factor 2.5 in terms of growth. And what is very nice is we have done with a balanced organic and inorganic growth and have consistently built margin along the way. A point here, you see first 9 months, we are already again at a growth of 25% with a large portion driven by inorganic growth. Now if I look into half year results and half year result is the latest numbers where we disclosed full P&L, cash flow and so on. We have been growing 21%. And you have seen in the Q3 update, we have gaining momentum in terms of top line and order intake. Where is very nice is also you see if you exclude the Eolane acquisition, and I come to this, Eolane was for us a very attractive acquisition, entering a real strategic market, France at a very moderate net cash outflow. If you take this out, we have continued to build margin and also we have continued to deliver free cash flow. We always look at a free cash flow conversion to EBITDA above 50%. So if you exclude this Eolane impact, we had 63%. For ones that are new to Cicor Eolane, we bought out of administration process. So it is a real administration process. We bought them out of very low valuations. But obviously, it meant that we had certain special structures in terms of obviously ramping up this out of bankruptcy and building up net working capital. And that's the way why we have Franck here because we believe it's a great value creation opportunity. Earnings per share, very important. You see here 2 lines. One is the reported earnings per share in blue. We've put out the yellow line what we have. We have a small impact on -- in terms of FX impacts that is onetime in nature. But as you know, FX fluctuates. Last year, first half, the Swiss franc was getting weaker. And this year, it again was the opposite. So it has the up and the down. If you look at the yellow line, the earnings per share really over the long run is really delivering in line with our overall performance and obviously is a key indicator of how we are progressing in terms of profitability. One point, we had with the mand convertible bond, a capital structure that was more complicated or more difficult to read. The good news is 99% of the mand convertible bond are now converted. So if you look into the number of outstanding shares and well -- if you look at the number of conditional shares for the mand convertible bond, there is only a small number, 13,000 left half year. And you see that we reported an outstanding shares with 4.4 million, the number that are very easy to use now. Now that was to the current results in terms of half year and where we are. It is important to look back into our -- and forward to our midterm goals. We have set out our midterm strategy and the 2028 goals under the umbrella, creating together. We are tracking very well against our midterm objectives. You see here, we've set organic growth, 7% to 10%, achieving above CHF 1 billion revenue. This is a balanced organic and inorganic growth strategy and profitability in the range of EBITDA 10% to 13%. So really, this is the midterm goals that we have put out. I put this into the context of the past performance. Here, you see what we have achieved in the first 4 years from 2020 to '24. Remember, in '24, we've put out the midterm goals and how it fits into the strategy. We've achieved above 8% organic growth and an inorganic growth of close to 16%. And the Swiss franc has been consistently strengthened over the past 4 years. And for all fairness, it continued to go along this way. And reality is we have also built this into our midterm goals. Interesting is, and I think this leads very nicely over in the midterm goals, we said growth year-over-year of 20%, organic 7% to 10% and inorganic above 12% to 15% really this year. If you look into our results and what we published in Q3, we are tracking much stronger on M&A. We have done significant M&A work. And that's why also we said we want to obviously spend more time here to talk through the acquisitions we have done this year and obviously, some of the announcements we have made.

So thank you, Peter. And M&A, we present as a conversation. And it is what M&A is. It is a conversation. It is something where in my management team, Peter, Marco, the COO, but also Stefan as a sales leader or local MDs that are involved are really working together. That's extremely important for our M&D approach that we are doing it together as a team from the top. So that's what we have done, 13 acquisitions starting in December '21, so exactly 4 years ago. What I'm always saying here, we are extremely disciplined if it comes to markets and quality of customers. So we only like to acquire what is exactly in our markets and where the customers have a high quality, good names, high value-add margins, so high gross margins with these customers. And if we do that, then we can be very agnostic to the way of transaction that we do. We have seen succession like Axis and a few others. You have seen carve-outs like Phoenix Mecano, who look for a better owner. You see restructuring like Eolane or the selective addition of new capabilities like Evolution Medtec and NEP. Very interesting also, and we may even see more of that in the future, are carve-outs from OEMs who want to go fabless because many are now rethinking their strategy. And Mercury, that was a Swiss site in Geneva that we took over from a U.S.-based maker of aerospace defense equipment, and we are in the process of moving manufacturing to the U.K. So that's what you can expect from us to see. We are extremely disciplined with regards to the quality of customers and the markets they serve. We can be quite flexible with the structure of the transaction. Now this is what we have closed this year. Profectus, mostly industrial and security applications in Germany, and we have -- we are managing that now together with another company in Thuringia, Eastern Germany that we acquired from Phoenix Mecano a few years back. Eolane, we will hear more about that. As Peter said, coming out of restructuring, offering us market entry and the near-shoring option of Morocco, highly attractive. Mercury, that is, as I mentioned already, the carve-out of manufacturing, then going fabless and now having become one of our largest customers as an effect. MADES, also carve-out of a larger group, very, very successful, very profitable, good business, mostly in aerospace and defense. Having customers in Spain, in Europe and also in the U.S. They supply to the U.S. market. And the latest transaction, Valtronic, a small transaction, however, important because it doubles our capacity in our Morocco factory reporting to Franck, and it gives us the first footprint in the U.S. So what you see here this year is a massive strategic progress that we see opening up new markets, opening manufacturing locations elsewhere and driving our market growth.

Yes. But the most important element is probably integrating it properly. And what you see here is our integration playbook for ones who have been here last year, it is unchanged. We continue to have a foundational integration, and then we have what we call the key value drivers, foundational elements like financial reporting, controls, but also IT, cybersecurity, very important, HR, right KPIs. And obviously, if you look into the branding and administration elements like insurances and these type of things. And this is also what we will talk later on. I just want to say when we go to France, this is exactly what we have done there as well. And interesting -- and then we have the key value drivers. I would point out two. Sales really driving market leadership. Again, that's what we will talk later on. And obviously, sourcing, procurement is for us always a big value driver because we are really giving scale to some of the smaller companies we acquire. I always say like a perspective, we acquired Profectors, as Alexander mentioned, in Germany. They paid payment terms. So half of the P&L is in electronic materials. They have been paying 30 to 60 days. Now we are at 120 and 150 days. You get them straight from day 1, these type of cash synergies, and you can imagine that the cost base is significantly lower. The important thing is that the vast majority, so more than 90% of this integration plan, we closed within the first 6 months. And that is really important because as we are doing acquisitions, having this integration completed before moving on to further acquisition is very important. There is one element I always say, how are we doing this one is, first, technology. A lot of the elements that are important for us as a group run in applications that are agnostic to ERP systems. So get the data out of all the different systems but run across the platforms. And secondly, we don't integrate ERP systems. It really doesn't financially make sense and also from the synergies. We do this more with interfaces, and we have done this very successfully. That enables that we are through the majority. I mean, look, if you look into what we have done between Mercury, obviously, Eolane, not Valtronic. Actually, everything except Valtronic, we are pretty much completed with the integration. And we thought France because it's obviously there's integration work and value creation is a good one to pick. Now as last year, I want to share some results on M&A. As you've seen from Alexander, there was a heavy weight on M&A this year. That's why I really point out at the bottom, close to CHF 200 million of revenue, so vis-a-vis last 12 months before acquisition numbers have been acquired in 2025. So it's a heavy weight on this year and CHF 8 million EBITDA because of some of the special situations that we have used. Okay? Now if you look, we have consistently delivered on growth where these companies are at 2025. And especially, we have developed profitability, plus 32%. Again, this is the full weight of the acquisitions that came with us in 2021 up to this year. And then obviously, free cash flow generation, we have recovered 38% of the free cash flow of the net cash outlay that we had with these acquisitions. So very strong results. Obviously, if you look into it, A&D, really the A&D focused companies have a very strong momentum, positive order book and obviously, outlook in line with the economic development. Germany has been softer. And then obviously, engineering, we really drive and integrate them into our joint network.

So -- and that is the foundation for what we proposed and agreed with the Board of TT Electronics. We know TT Electronics and Peter will give a bit of a review of what we have done with these 3 sites that we acquired 18 months ago. So we know the company for over 2 years. It's a company that, honestly, in U.K. stock market maybe has suffered a bit due to what was perceived about the business. We find it to be a company that we really like, that we find operationally strong in the factories that has very strong customers. You see here in the industrial, you see in rail, Alstom, you see GE, Schneider Electric, you see Applied Materials, Casco in railway infrastructure. In aerospace, defense, Rolls-Royce, Honeywell, Parker Meggitt, MBDA, Thales, Ultra, BAE Systems, et cetera, et cetera. So you see just in medical customers like Thermo Fisher, Abbott, Medtronic, amazing customer portfolio. And that's -- you remember what I said earlier, that's what we look for. We look for total focus on the verticals that we like, and we look at very good customers, and they do have very, very good customers. So that's the company, the way we see it. And that's on the bottom, you see some of the numbers that they delivered in 2024. Yes. And what we propose, maybe we go a bit in detail here, Peter.

Yes, I can go a bit through the transaction. We had initially had an offer that was 2/3 cash, 1/3 share. We improved the offer to a final all-cash offer. Final is a British term. So this is the final offer. So we cannot go up further. And what this implies, it's both obviously at the same valuation. We would have an enterprise value of close to CHF 400 million for TT. If you look at the key financials, we have -- this would make us a company of CHF 1.2 billion of revenue and EBITDA close to CHF 140 million. This includes -- and this is a very specific elements in the U.K. If you do a claim, basically synergies, you have to certify them. So we went through a process of certifying the synergies. We have identified GBP 13 million of synergies. And obviously, this was possible because we -- it's a friendly takeover, and we could do proper evaluation of the synergies and obviously work together with the team on respective due diligence. And it also gives us a very strong playbook for when the integration later on. It is highly EPS accretive, above 30% by 2028, and it would mean a leverage -- pro forma leverage between 2 and 3. So it's a wide range because there is obviously depending on the choice of cash or shares that the TT shareholders have. And yes, we come later to the time line, but after a successful approval, then we need to go through regulatory approvals, meaning we would close in the first half of 2026.

And so how do these 2 companies come together? And I'll just repeat again, you hear us repeating the same things, some of these things 9 years in a row, repeating us always the same things. Stick to the key markets. And now look at the revenue by markets. On the left, you see Cicor, then you see TT Electronics. This is 2024. And you are seeing or for Cicor pro forma 2025 for TT Electronics '24 announced. You combine that. We have 28% aerospace and defense, TTS 27%. Wow, that's amazing. We have 36% industrial, they have 33%. We have 19% health care. They have 23%. So if you bring it together, that is an almost perfect match. There is a lot of -- there is some customer overlap, absolutely, where we can make stronger combined offers, but there is also a lot of unique customer relationships where we will start immediately cross-selling. You see other business, 17% in Cicor, a big portion, for example, is transportation, including rail, railway infrastructure has become much stronger with the acquisition of Eolane France. And you see in TT Electronics distribution. These are the broadline electronic component distributors. And this is what we call the business that we call noncore business that we are putting under strategic review once this is done. But so a perfect match. If you go to geographies, you see much more complementarity here. You see that Cicor, I have to say, yes, we have grown. That was our strategy in Europe. but we are relatively weak in the Americas, 4% of sales only and 10% in Asia. TT Electronics has a very well-balanced regional split. You see that North America, over 40% Asia, 1/4 of the business. Biggest country -- biggest countries for Cicor are Switzerland and U.K., biggest country for TT is the U.K. So you see in the mix, bringing both customers together that now we can -- together with TT, we can make that important step to break out of Europe and move into the U.S., at the same time, offering very strong, especially in China, local for local manufacturing capabilities. So that's how it looks. It is an almost perfect fit.

Yes. And look, when we were last year here together, we talked Project Albert. That was, at that point in time, our largest transaction, and it was the acquisition of 3 TT sites in March '24. And look, it's -- obviously, we've shown the same way, we show results. It was an underperforming -- what TT called an underperforming business that we took over 3 sites, 2 in the U.K., 1 in China. Very important, we really learned a lot about cultural fit, integration planning and how to drive value. And you see here, we doubled profitability in absolute. And we managed to really recover the vast majority of 84% of the net cash outlay. Really, that was one and -- when do you have the chance to go after a larger transaction and have like kind of a mini test run as we had in 2024. So really nice because it gave us a lot of insights that helped us now as we were preparing and looking at integration and for the offer of the entire TT Electronics Group.

And how would that look together? It's a bit of a busy slide, and I will spend a couple of minutes explaining it. It shows our peers on the left with revenue and on the right with EBITDA. Now if you're looking at the numbers, how do you come to these numbers? How did we arrive there? We had to take 2024 numbers. Because these are the only reported numbers that we have. So what you see there is 2024 based, but we are adding on a pro forma basis, acquisitions made or announced since. So you see for Cicor, CHF 481 million reported sales stand-alone, which you see here. And then you are adding the acquisitions that had pro forma revenues of CHF 220 million. So you come to CHF 700 million. So that's Cicor pro forma today. By the way, HANZA also announced a large acquisition, bringing them from CHF 404 million to CHF 680 million. They announced acquisition of a German peer, privately held BMK. So that -- and TT Electronics at CHF 550 million. So the ranking that you see Scanfil, Cicor, HANZA, Kitron, almost all the same size. And then the next one in the game is node significantly smaller. So this is the peer group. What you can also see is that the combined company would be by far the leader amongst the listed EMS in Europe by far. And if you look into our business segments, again, high mix, low volume in the verticals that we serve, this combined company would even be the global #1 in this market. There's no one else offering that type of service to these 3 industries that combined TT and Cicor will do. Now what you can see here is the combined Cicor pro forma and TT Electronics 60% above Scanfil. Now go to the right, the same picture, but for EBITDA, where we take the '24 EBITDA stand-alone plus the minimum synergies that Peter talked about. And here, you see double the number from the #2, which would be Scanfil, Kitron, et cetera. So you will see not only -- you will not only see a market leader, but also a profit leader in the industry. And that, of course, is what counts at the end of the day. So that's why we pursue this. We mentioned the strategic fit. We have done that already. And now we are going to look into the numbers. The deal is not done yet, and that is where we come to the time line, Peter.

Yes, the time line. There is a share -- so we published -- TT Electronics published the scheme doc, where is a formal detailed documentation. There is a shareholder vote on the 17th of December, TT shareholders deciding about our scheme offer. And then if the shareholder vote is positive, that means above 75% of the voting are supportive. Then obviously, we go through all the regulatory clearings and that would mean a closing in half 1 2026.

So this transaction is in no way a done deal because of that shareholder vote that Peter talked about. So we will know on the evening of that day of the 17th. What happens if it passes, then exactly happens what you could see there. What happens if it doesn't pass, then we continue no harm done. Obviously, there are some one-off costs, some sun costs, but otherwise, no harm done and we continue our strategy. We have not at all stopped developing the rest of our business during that transaction. So -- and looking backwards, we get many questions about M&A, how we do it, how we integrate. This was the most complex, the largest, the most difficult transaction. It was a true turnaround case. And Franck, tell us what you, your team and we together did.

Okay. So why Eolane? France is the second market in Europe, the second largest market and Cicor wasn't there. So obviously, there was a gap to be filled. And with Eolane integrated into Eolane, there's Morocco, a nearshore opportunity that is really interesting. We see more and more customers interested in nearshore in North Africa for the cost, for the access to the United States as well. The logistics are very well done. The tariffs are low. So that's a great opportunity. So the deal included 7 sites, 5 sites in France and 2 sites in Morocco. And that's about 900 employees that were taken over. So a bit of the story of this integration. The first day, we talked about a little bit the complementarity of the deal. It's about the same type of customers and the same industries, quite clearly. We had in Eolane, very motivated workforce. The people have a large experience. They've been working for Eolane for a very long time. Some of the plants are in the countryside, so quite far away from the cities and very important for the people to stay and they're very attached to their company. And the equipment, the industry equipment was quite good. The workshops were at the right level. Some of the machines a bit older because of a lack of investments in the last years, but a very good level of performance of equipment. But this was a company in bankruptcy. So some things were -- didn't go that well. And maybe what we can say is what we heard from the customers. In the very first weeks, we went to meet all the customers and Alexander himself came to visit the most important ones. And we got exactly the same feedback from all customers. They said, first, quality is good. There was no customer complaining about quality. So that was very good news and very important fundamental. But then they complained a lot about in the past, a very aggressive relationship, commercial and sales relationship. We heard a lot about one general manager who blackmailed a little bit the customers saying, well, if in next month, you don't accept my 20% price increase, then I stop delivering. And that was really tough for the customers who still remember that. And another point, very important, is the delivery performance, what we call on-time delivery performance was very low. So the products were delivered late, significantly late, and this is very bad for customers, of course. So plus the financial weaknesses, Eolane had been in difficulties in financial difficulties for years or several years. And if you are a customer and you have critical products, of course, you don't want to depend on a critical supplier who might disappear one day or another. So in fact, what we saw is that most of our customers had an exit strategy in mind. Some of them had started to double source some of the products. Some others didn't do it because, as Alexander mentioned, we are in a high mix, low volume. So very complex products with low volume. So if you want to transfer this type of product, it's very expensive and you don't get any return on investment on a very small volume. So a lot of products that stayed, but no more investment for the future in Eolane. That means that during 3 or 4 years, Eolane didn't get any new business. So they were leaving on all products -- the products we are making, sometimes they can live 30 years, 40 years, so that's fortunate. But a product line that was going -- that was getting older and going slowly, slowly down. Nevertheless, this was worth EUR 130 million still, so quite a large business. So the customer said, that's the situation. But we are quite happy to see Cicor first because, obviously, the financial situation is much stronger, and we are relieved of the situation. Plus Cicor has a very high performance, industrial performance and very good reputation. So we're quite willing to give you the chance to show us a huge change in your way to do on-time delivery and then why not continue to work together for the future. That was the statement, the first month. So we applied the PMI structure, the PMI process, which is very, very structured in administration, sales and suppliers in the culture and in the operational business excellence. Some examples in administration, IT, we made sure that IT was secured properly with cybersecurity, which is quite important to most of our customers. IT was based in Eolane on a Google platform. We transformed it to a Microsoft platform to be like Cicor. We worked on the compliance. We worked on the legal part as well. It was a bankruptcy process and 2 sites plus the headquarters, which is a legal entity by itself, we were taking as an asset deal. The rest was a share deal, but those 2 sites, 3 sites were taken as an asset deal. So the day of the decision of the court, the 3 entities disappeared, and we created from day 1 new entities from scratch. So that wasn't that easy. That means that with all suppliers and with all customers, we had to recreate all the links, all the invoice system, all the finance system, all the ordering system. So quite a lot of work to be done. In terms of changes, so I talked about the supplier part. In this bankruptcy process, most of our suppliers lost money, of course. Some of them lost some money, some of them lost a huge amount of money. And of course, Cicor was not responsible for it and was not responsible to solve this problem. This is part of the administration. But for the suppliers, it was not that easy and some of them wanted to cease part of the money back or all of their money back. So we had really 2 months of very hard negotiations to make them understand that they had lost it. It was part of the administration, but we were an opportunity for them to continue and to recover the rest. And even with the support of Cicor and the large company that they were working for to grow a lot within Cicor. So after those 2 very hard months, this crisis with supply chain, we were able to restart very good relationships with all our suppliers. The big change and the big success was about the culture, the culture of our plants. Eolane was very hardly structured with a heavy headquarter with very many people in the headquarters and all the decisions were made at the headquarters. There was even 2 levels, one regional level and corporate level of headquarters. So in the plants, the people, they didn't have the procurement that was centralized. They didn't really have finance that was centralized. They didn't have sales. All the salespeople were in the central structure. They didn't even manage their unions that was done by HR people in the global system. So they had, in fact, operations and no real decisions, no real impacts on what was going on in the business. So that was the big change. For Cicor, the sites are really the engine of everything. So one site should be autonomous, should be able to work with these customers to develop these customers, to service customers and to work on the profits on the people and develop the perennity of the sites. So we had to select one leader for each site and then build around him, new competencies that were not there. So at management team with sales, that was new, with a real finance guy who was not dealing only with P&L, but with cash, so everything in his hands. We worked with HR to really have the grip on the employees and the development of the employees, and procurement. So a complete new team and the change of spirit of the people saying, well, now you don't depend on central. You don't have to wait for them to decide. You have your own fate in your hands, and you are accountable and responsible, and this is extremely strong. The people reacted very well to this. They said, why, we didn't understand what was going on. We didn't have any input impact on our actions, and now we can. And that was probably the main change that was making this success. The other part is the focus on customer to have the plans responsible to develop their customers and to satisfy the customers. And this is as well a big change that was taken over very quickly. Of course, there's the reporting system, the financial reporting system is important. We don't change the ERPs, so that's key. But a very strong reporting system was in place to make sure that everybody talks the same language. That was quite a challenge for the people on the sites to understand that. But very quickly, it was taken over as well. And we had during the PMI, a lot of communication, a lot of exchanges. We had at the beginning twice or 3 times even a small meeting with the top management of Cicor to make sure that everybody was aligned, that we could quickly get the support that was needed, so that was critical to the success. So what's the result after 6, 7 months? We went back to the customers. And again, we got quite the same reaction from the customers. And in fact, they were all very surprised of the speed of the change. The on-time delivery changed drastically in a few months. So they're still waiting for it to be consolidated, but they're all very happy of the reactivity, to have teams that listen to them that react, that can make decisions, that's completely new to them. And they're thrilled about the results. Many of them are really surprised by the speed the changes was done. There's even one customer that told me, when we have more time later, we need to sit together and I would like to hear how you, at Cicor, were able to make such a drastic change and such a quick change. So that's a very good result. Some of them got Cicor out of the black list. So they opened new orders to Cicor. We already got some during the last 2 months. So new orders are coming in. So that's quite new to the teams, and that was a big celebration. Some customers are a bit more traditional, a bit more reluctant. So they want to see a consolidation of the result during 2 or 3 or 4 months longer to make sure that they would give us orders again, but we've seen a complete change in the way customers look at us. What are the key success factors of this change? First, I think the preacquisition plan. You've seen Alexander and the team, they know the business perfectly. They've got more than 30 plants, so they know what's going on the plants, how you run a plant, how you make it profitable, how you make it perform towards customers, plus all the plants they see in their M&A adventure. So they really know perfectly what should be done in each plant. That means that when they had in mind how we want to turn around Eolane, everything was already in the head. We didn't take 2/3 of the headquarters. We eliminated it from Eolane. So we started from scratch without managers from their headquarters, and that was quite a risk, but it worked perfectly. So this plan was extremely well for us. And then the culture. The culture -- the vision is extremely clear, extremely simple, even simplistic, you could think it's simplistic. So everybody understands very quickly what is the vision, what needs to be done. And we even had at the beginning, some people saying, well, can you explain a bit better what is the strategy for Cicor? And I said, why, you've got those 3 sites, and that's it, and that's easy, easy to understand, easy to apply. The customer focus is extremely important. We have -- we are working with customers who are a bit linked to their suppliers. They are very difficult products, high mix, low volume, they cannot change easily. So if you perform well in terms of quality, on-time delivery, there's no reason why they should give you. And the autonomy. The autonomy is really key. So all the plants have everything in their hand to be able to do their job, to satisfy their customers, and it's very pragmatic. As we said, there is no -- at the time of the integration, there's no team of 20 people coming from the headquarters, changing the ERP, setting global procedures, group procedures that everybody has to follow. We take what is going well. We just followed the global guidelines and the synergies of the group. But this autonomy makes it very easy and very simple to be integrated, and that's probably the main key success factor, I think. We did for Eolane, something a bit new to the group. We did -- we implemented a light managerial structure. So with a team of steering committee or management team for these global 7 sites, which are 8 now, which is with functional directors, one sales director, IT director, financial director. It's a very small team, but with the complexity of this takeover, it was quite important to have this global view, and it's probably a good way for the future as well when Cicor is growing to have those light regional management teams. The support of Cicor Group was essential during the whole story, as I mentioned, to have Cicor there, helping directly or pointing out to the different plants in the operational excellence. Marco Kechele, the COO, is a real benchmark by himself. He knows so much. So when there's an issue, he just points out saying, well, if you do that, I've seen 3 factories trying to do it. It didn't work. So if you do it, I offer you a beer, but don't spend too much time because I'm not very optimistic. On the other hand, if there's something that is not going that well, he says, well, this, that plant in another place can do it much better. I give you the contact, give them a phone call, and they will help you to progress very quickly. So that's this network way of working, and those synergies are extremely, extremely efficient. And finally, when you have a decentralized company like this, you need to rely on people, especially your local and these managing directors are very important. They need to be extremely loyal and transparent. If you have so many to manage directly, you cannot control them too much. So if there is a doubt on their way of behaving, that cannot work. So loyalty, transparency is critical. And then competencies, that's entrepreneurs, they need to manage everything about the company. So it's quite a level of competence. So you really need to make sure that you have the right guy and the right team around them to be sure that the company will evolve properly. And out of the 5 we put in place, we have to replace 2 to make sure that we had the right level for the future for Cicor. So that's the story of this integration. And now Cicor has bought Valtronic, so there's a new plant in Morocco. So we are integrating us, so we're reversing the process ourselves. In terms of finances, so the acquisition was done in April. So the first month -- the first quarter -- the first half semester was quite difficult in terms of finances. We had one month, as I said, in some plants that were difficult to start again because we didn't have the supplies. We didn't have all the volumes. Some customers -- we couldn't invoice to the customers because we were not created in their system. So -- and we continue to lose some money at the beginning, and we lost CHF 2.5 million in the first half of the year. The second half improved drastically. We're quite profitable now. And globally, at the end of the year, we will be slightly positive for the whole year, which is quite an achievement. The group is expecting from us in 2027, to be at the level of the margins of Cicor, obviously. I'm very confident in 2027 that we will reach this. When I see the results we have today, when we have volume, our plants are in overcapacity, most of them so far because we need more volume. But when we have volume, the profit is there. And the new business that we will acquire will absorb the fixed costs very quickly and will be very profitable. So 2027, we'll be at the margins from Cicor. 2026, we're expecting to do half the way, which will be a bit more of a challenge because acquiring new business is slow. Our customers, even if they change their mind, we are in businesses where new orders come after 6 months, 12 months, 18 months. It's quite slow to -- quite slow to grow. So the volumes won't be that big next year, which will make it a bit more difficult, but we'll be at half the way so single-digit profit. Thank you.

Thank you very much, Franck. So now you heard really this piece about M&A, what have we done, what do we plan on doing and how does it work, how does the integration work. I must say, you may wonder why on earth did we engage with Eolane. Of course, I had first customer calls end of last year already, so December months before the court hearing about this. And customers said that, if you bring that business to the Cicor level, we will give you many orders. We will give you a lot of business. And what Franck has told as a story is that actually, yes, they are doing exactly that. They are coming back. So changing direction now a little bit with 2 quick talks about markets, health care and aerospace and defense because we really want to give you some firsthand input on what do we know about these markets, how do we see them and how do we think we can drive this market. And Stefan starts this off with the medical market based on hearing aids.

Thank you. Good afternoon also from my side. Or better, good evening already, in the meantime. I talk today about the hearing aid market, where is Cicor in the hearing aid market, what we do in the hearing aid market and actually what makes us so strong in the hearing aid market. Before I go more into the hearing aid market, a few words about the global med tech market, because the hearing aid market at the end is a part of the global med tech market. Global med tech market is USD 700 billion and is expected to grow over the next few years, 7 to 8 percentage, so that we will see roughly USD 1,000 billion in 2030. Now what is important for us? Important for us is not the global med tech market, it's what's the global electronic assembly market for the global med tech market. And this is still a high number at USD 70 billion. So roughly 50 percentage of this electronic assemblies are manufactured in-house by the OEMs, and roughly 50 percentage are outsourced to contract manufacturers like Cicor. So -- and even if we take this 50 percentage, we still talk about the potential market of USD 35 billion. So when -- let's say, being a leader in the market, we try to be focused on some of the subverticals within this hearing -- within the global med tech market. And one of these subverticals is, for us, the global hearing aid market. And if you see the number of the global hearing aid market, USD 10 billion, it's actually very little compared to global med tech market. It's a bit more than 1 percentage. Similar expected market growth by 2030. So expected size is 15 billion in 2030. And the addressable potential for us for Cicor as a contract manufacturer is roughly USD 1 billion. Also here, we have roughly 50 percentage of the electronic assembly or of the part and manufactured in-house by the OEMs, but also here, 50 percentage, roughly USD 500 million is a market we can address. And I'll show you later how we address it. It's -- and I see -- I mean it's much more clear, in the USD 500 million market, we can generate a leading position, definitely. When we go into this a bit more into the worldwide hearing aid market. So starting on the left side with the people in the world with hearing loss. So there are roughly 1.3 billion people in the world with mild hearing loss. So this is actually many of us. If you ask my wife, most probably me, as well. So there are many, 1.3 billion. We have 455 million (sic) [ 445 million ] with mild -- with a moderate or severe hearing loss, and we have a group of 35 million with a profound or complete hearing loss. If you go now to the market segments. Within the hearing aid market, we see actually on top, the OTC market. This is a relatively new market, FDA approved 2022. Hearing aids, OTC stands for over the counter. And these are lower-cost, self-fit hearing aid, over-the-counter hearing aids without prescription. So easy to get. As I said, it's a relative new market. I mean it's a big amount of people can be addressed, but there is also actually growing competition from consumer electronic brands. If you go to the mainstream market segment, and this is actually the classic hearing aid market, the classic hearing aid you know. This market is dominated by 5 global players. So we say the big 5. And this is -- Sonova from Switzerland, this is WSA, this is GN ReSound. This is Demant from Denmark, and this is Starkey from the U.S. Those 5 players actually dominate the hearing aid market, the classic mainstream hearing aid market. There for sure, there are also start-ups. There are smaller hearing aid manufacturers, but those big 5, they dominate the market. And we have the third market segment are implants for the profound and complete hearing loss. These are partially specialized companies like Cochlear or like MED-EL, but also Advanced Bionics, which is part of Sonova as well. So when we see these numbers, I mean, what's the conclusion. We have sold in 2024, worldwide sold a number of hearing aids, 22.5 million. We have actually 480 million people with a disabling hearing loss. And it's expected that this number grows to 700 million by 2050 because the population is getting older and the noise exposure is also getting higher. And at the moment, below 20 percentage of the people are wearing -- of this, 480 million people are wearing a hearing aid. So here, we talk about the massive underpenetrated market. And the growth, I already mentioned, I mean, the demographic change will increase the number of people needing a hearing aid, but we also have a growing middle class in emerging markets like China, India, Indonesia, which have more money and can afford a hearing aid as well. So -- and we have a decline in stigmatization, so in the past 30 years ago, it was a stigma to having this little device behind the ears. But today, it's not so much anymore. I mean young people, anyway, they walk around with the earpods and later on changing the earpods by hearing aid. It's not a big step anymore. So it's -- and these are the market drivers and actually shows you a bit why this market is so interesting. So what is our position? Cicor position in the hearing aid market. So we are -- I mentioned before, we are actually mainly in this mainstream hearing aid market and implants. So we are serving 3 of the big 5. I mentioned before, we are serving -- 3 of the big 5 are our customers. We have very -- many other customers in this segment as well. I mean there are suppliers with specific components, manufacturing specific components for hearing aid, but there are also some start-ups we have in our portfolio. There are also some smaller manufacturers of hearing aids in our portfolio. What we also have is a very, very solid sales pipeline. Annualized USD 30 million is in our sales pipeline, only with hearing aid customers. These are new businesses with existing customers, but we also have new customers in our pipeline. And when we see a bit -- when we see a bit the numbers from 2020 to '28, I mean 2020, we had a low single-digit revenue in USD. We could grow in this segment until 2025 in an average of 15 percentage per year. And with this very solid sales pipeline, it's all the projects we have in the pipeline, with all the potential additional business we can acquire over the next year, we expect that actually this growth will accelerate. So we expect to have 28 percentage of average growth in this segment over the next 3 years and makes it to a high double-digit million sales revenue for Cicor. So what do we do? I mean, why we are so strong in this field? Miniaturization is key at the end, miniaturization, because you don't want to have these big devices behind the ear, you want to have small devices, right? And what you see on the left side is our capability in plastic injection molding. It's very important. I have some example here with me so that you really see how tiny the parts are we manufacture. So we do -- we do the toolings for these plastic parts. I mean, what you see here is actually a demonstrator, which just shows how, let's say, how small the holes can be we mold on it. And by the way, you see this part also here inside. I will give it around. We can do high-precision molding in-house, we can reach an accuracy of down to 3 micrometer, and human hair is 70 micrometer. So our precision, our accuracy is 25% smaller than -- 25x smaller than a human hair in diameter. And I give that around. So happy to get it back. So it gives you a bit of flavor on how tiny the parts is we manufacture. We manufacture over 100 million such plastic parts per year. So this is almost 300,000 per working day in our factory in Indonesia, mainly. Another expertise we have in the field of hearing aids is actually the decorative capabilities for these plastic parts. So we have in our factory in Batam, we have 2 spray paint lines. You -- I mean the most of the hearing aids at least, a bit better hearing aids, they are painted. And you see here on the right side, the robot painting the hearing aid housings, and this is what we do in our factory in Batam as well. So we have 2 spray paint lines, one is for the hearing aid housings and one is for the accessories, I'll talk 2 slides later about. We also do some other decorative parts like pad printing, laser marking. But actually, what we can offer to our customer is really a one-stop shop solution, from the tool manufacturing, molding, painting and also on subassembly, I will show later on as well. The second part is the -- are the PCBs. And the PCBs, I mean, the requirement is exactly the same from our customers. It's miniaturization. And with our flexible and rigid UHDI PCBs we still manufacture in Switzerland, 6 million pieces a year, we can reach the demand of our customers, having, for example, 25 micrometer line and space. And the next level of the miniaturization is embedded PCB. So embedded PCB means it's not only a PCB, we also have a die, or in that case, 2 dies in the PCBs. So this is the next level miniaturization. This is a technology we developed in-house, and allows actually to have a much higher level of integration, much better energy consumption, and this is important as well because you don't want to charge your hearing aid every second hour. And here, this is also an example I can share with you. These are 66 of these parts in this size is -- and the next one is accessories. We do for our hearing aid customers, complete accessories. What you see on the left side is an AI generated picture for hearing aid charger. We do for our customers, everything. These are usually full turnkey solutions. We manufacture this. We develop this product. We manufacture these products. We test them and ship them out. And we also have some other assembly services like micro subassemblies, as you see the picture on the right. These are operators under microscope. They do some subassemblies, micro subassemblies. Overall -- I have one more example. So this is a charger we manufacture in our factory in Batam. Overall, you see we have a lot of services which perfectly fits to the demand of the hearing aid industry, and that generates actually the strong position we have in the market and helps us to further strengthen this position.

Thank you, Stefan. So this was a flood of also pretty technical things, but it shows you that being a leader in a market means to really adapt the specific capabilities that totally match the strategies of the customer. And it works very well. You have seen the impressive pipeline and the expected growth that we have here. Now we are going from dedicated solutions being very small to dedicated solutions that are very big in a different market. The principle is the same, but the application is different. And we have Jack Symonds, who will present what we are doing in aerospace and defense. Jack?

Hey, Alexander. Good afternoon, everyone, and thanks for having me. Apologies, I can't be there to speak to you in person. Now very quickly, I'm Jack Symonds. I'm the VP sf Sales here in the U.K., looking after our broad range of customers in the aerospace and defense market. Been with Cicor since the acquisition of Axis in 2021. And before that, joined Axis as a graduate. Next slide, please. So the last 12 to 24 months, really, we've seen the aerospace and defense market growing probably unlike anything we've seen in recent memory. And this is reflected in the news we see, in the press we read. Everywhere we look, those projections for increased requirements in both aerospace and defense, with a particular emphasis on requirements for European nations to build up their defense capabilities after what's been a period of chronic underinvestment, for a business with really strong heritage in aerospace and defense supply. This is a positive thing, especially at a time when we, at Cicor, are opening up access to further domestic markets with aerospace and defense specialization in Europe and beyond. Next slide, please. So we know that to thrive in this market, the purpose and drive of what we do must go beyond the pure commercials. So we're manufacturing life, mission and system critical products. We understand that most of this technology is designed to either take or to save a life. We say that really seriously. This is really why we remain end user-focused and tuned into the wider goal, which really is safety and security at home. It's easy to do this when we recognize the products we build in their context and put ourselves in the shoes of the end user. So whether that's a commercial pilot who's flying blind in bad weather, relying on our sensors to bring the passengers home, or a young soldier in the field that needs Cicor technology to function as described every time to remain effective. Our customers are the best in the world. I'm sure lots of salespeople will say that, but I really believe it. A true network of OEMs and brands responsible for the delivery of the most important technologies in the field. So Cicor partners with organizations such as those shown on the screen for long-term engagement. Many of the customers listed there have been trading with Cicor for 20 years, 30 years, some for even 40 years. And we focus almost entirely on enabling their programs and their products to be successful. And then ultimately, we will share in that mutual benefit. So Cicor has seen significant growth in the aerospace and defense space since 2021, and that's primarily through acquisition as some of the speakers have already spoken to. Each time adding a new platform to address the domestic market and to further leverage our connected network of aerospace and defense experts across the group. Well-targeted acquisitions coupled with rapid and focused integration means that best practice sharing starts on day 1. Commonality of customers and contacts across the European marketplace accelerates those growth opportunities as customer programs remain connected on a local level. The Cicor Group and shared resources and shared engagements allow us to plug into those customers, both regionally and globally. And as we've already spoken about today, best cost options are also available as part of the group. Romania, Morocco, Tunisia and Vietnam, and that really means we can serve the full range of aerospace and defense opportunities available. Some selective references now. So due to security and export control, most of these examples stop short naming the actual platforms. However, hopefully, I can provide a bit of a flavor of the critical work Cicor does today supporting the European industrial base for aerospace and defense. So just zooming in on a couple of examples. Electronic warfare is a real growth area for aerospace and defense primes at the moment. Cicor supplies multiple customers, multiple programs, all looking to address that modern battle field through additional use of technology, whether that's active electronic warfare for offensive effects or actually manufacturing the complex RF circuits that counter those technologies. And another one very close to my heart, the ejection seat technology, Alexander has already referenced it, but Cicor is very, very proud to produce the electronics for roughly 60% of the world's advanced ejection seats. This is across a real broad range of platforms, including all the fast jet programs you'll have heard of F-35, F-18, F-16 and T-45 in the U.S., but in Europe, Rafale, Gripen and Eurofighter, the pilots of those aircraft all rely on Cicor technologies to feel safe and ultimately, to bring them home. So what you see on your screen now, hopefully -- so next slide. What you see on the screen now is a real example of just one very large aerospace and defense prime customer for Cicor today. Go ahead. So the blue dots represent customer locations and the Cicor logos represent our various sites delivering into them. So our pan-European footprint gives this customer exactly the access to the capabilities and capacity they need, where they need them. We're providing this customer with domestic supply into multiple sites here in the U.K. across France and in Switzerland, but we're also serving their sites in the Netherlands and Belgium from centers of excellence in Spain and Switzerland. Their spend is significant with Cicor today, is set to grow as they plug into more and more of what Cicor can offer. Next slide. I thought it might be interesting to take a closer look on what defense contracting can mean in terms of time scales. I think it's very different to my colleagues, what they experience in the medical and the industrial market segment. So this is a real life time line for the suppliers engaged on the U.K. Ministry of Defense program, so the Ajax AFV, which is essentially a small tank. So from the point the U.K. Army identified the need for a new vehicle, all the way through to the first significant production runs and the delivery of those vehicles into the field. And while 15 years may seem like a ridiculous time lapse from tender to delivery, this sort of procurement cycle has major benefits for specialist suppliers within aerospace and defense like us, unlike the other segments. So Cicor begins to benefit from value-adding work from the point of supplier selection, which you can see is many years before any real volume contract was awarded. We were engaged in design support, prototyping efforts, generating some moderate revenues before production have begun, but really cementing the relationships and the integral nature of Cicor supply onto this platform. Each opportunity to engage throughout the time line is viewed certainly from our sales teams here as an opportunity to make Cicor more and more important to their customers' program. And once the volume EMS contracts are placed, more often than not, the customer is single sourced to Cicor. The Bedford site where I am today, continues to manufacture these products with very little threat of competition. Cicor has a healthy pipeline of aerospace and defense opportunities all at different stages of maturity along this typical time line. And yes, this is reflected in the growth we see in the sector. Coming back to one of the graphics that was on my first slide, zooming in. We can see a real steady and sustained ramp-up in order intake at the prime contractor level across Europe. The different colored blocks represent massive players in the field, and you'll recognize most of them were on the customer list for Cicor too. So if we consider that Ajax illustration, we expect this to be mirrored in EMS opportunities, order intake and ultimately, sales over the next decade and beyond. And finally, so if we consider the uptake in demand, the types of customers we work with and the criticality of that supply selection process, why do the best customers in the world seek out and partner with Cicor? For me, the answer is quite simple and yet very difficult to replicate. Cicor can offer everything a global aerospace and defense player is looking for. We have the presence locally, regionally and globally. Cicor has a presence in all the most important areas, U.K., Spain, Mainland Europe, the Nordics, U.S.A., Asia. We have the capability. So over time, we've built a broad range of highly complex capabilities, and these are carefully matched to the technology needs of aerospace and defense customers, both for their products today and looking forward to programs into the future. I was with a particular aerospace and defense customer here in the U.K. last week, we were discussing the technology needs for a program that won't go live until 2037. We have the competence Cicor. Cicor has a proven track record, decades supporting the most important aerospace and defense projects and customers. We're really strong on compliance. It's a highly regulated market, and Cicor's aerospace and defense sites meet all the internationally required standards and accreditations that you absolutely must have to work on these sorts of programs. And finally, it's the consistency. Through demonstrable performance into the aerospace and defense sector, the reputation that Cicor carries forward is built on tangible deliverables and not marketing. So the outcome of all that is the shared growth of Cicor and its customers and ultimately, financial success. However, throughout this journey, the purpose remains absolutely consistent. We have responsibility to best enable the safety critical products successfully into the field and into the hands of the end users that rely on them. Thank you.

Thank you very much, Jack. That worked actually perfectly well. So now you have seen 2 very different verticals. You have seen hearing aids and you have seen aerospace and defense. But what you can also recognize is really that doing and shaping our organization that is absolutely tailored to the needs of that specific customer group, that's where success is coming from. And just very briefly, that's the picture I've shown. That's the USP of Cicor. The combination of these 3 elements: applications that matter, you saw them; high mix, low volume at scale, we discussed it; and pan-European market access. Now I won't spend much time here. This is just the repetition of what we have shown in multiple announcement. There's nothing new here. Q3 results, our very strong order intake in the month of October. We mentioned that in the media release, especially from aerospace and defense market. That's what you see here in the second bullet point, and keeping our guidance for the year unchanged despite some of the headwinds that we are seeing in the market. So thank you very much. With that, I would open the floor for questions. And I propose we start here with the room and then we can go to our online colleagues, and Jack will also take questions.

Could you shed some light on the M&A scouting process?

The M&A scouting process is partially systematic, but partially event-driven. There is -- there are moments in the life of a company or a life of a business owner where you are looking, where there is an openness. And what we normally do, we try to keep in touch with many players in the industry over years. Sometimes it takes years before there is a maturity and the decision to sell a business. So we don't like auctions. We are telling people normally who the sellers, who do advisers that auctions we said, sorry, we won't participate. We are happy to preempt this, make a very quick offer and et cetera, but we don't participate in auctions because the winner is the guy who's overpaying. So that's what we never do. So it's really a very, let's say, personalized process company by company, business owner by business owner that we do. [indiscernible] One second.

With regard to the new acquisition, there is one large shareholder that is not on your side. Do you have any reasons? Is this a price or is it anything else?

So the only thing that I can say about this is that the offer is clearly highly beneficial not only for Cicor shareholders, but also for TT Electronics shareholders. What I like to say and what I said the other day, a rational decision would be to sell, to accept, but not everybody is rational. So we'll see. We'll see. I cannot say more, and we will know in 2 weeks.

Did you have contact with this group?

This is more the matter of the TT Chairman to hold contact with the shareholders, but we cannot really comment on specific individual companies.

I understand that.

I think you've done some deals to add development capabilities. I remember in the past, you've talked about turning the business from an EMS into CDMO, so yes. How is that going? You didn't mention that. And I think in the past, it was part of your growth strategy, but also part of the -- such to increase margins. Is that working? Or is that something that...

It continues to be. And if you look at the pipeline that Stefan has shown on hearing aid accessories, you saw this big pipeline expected 28% CAGR for the next 3 years. That is exactly the result of our ability to develop because hearing aid manufacturers consider a charger or a remote control or a TV streamer as non-core. Core for them is the little device that you have behind or inside your ears. So they're extremely happy to not develop these in-house. So we could not have this pipeline without the R&D work. Today, it's 200 men and women doing hardware, software, design, mechanical design and so on. So we are a considerable engineering organization. But Stefan, I think you can talk about what you're doing in that vertical and R&D?

Yes. I mean, we see more and more that this is requested. I mean this is a very good example because this is a non-core product for our customers. And they don't -- I mean, they don't have the resources to do it in-house. And it's not only in the field of hearing aid, it's in many other fields that actually this is requested because we shouldn't forget that actually, it's still a challenge to get enough development engineers for many of our customers. And so they really have to decide what I do in-house and what I outsource. And this drives a lot of the pipeline we have currently.

So yes?

I have a question on this acquisition. For your existing customers, current existing customers, what are the advantages if Cicor doubles in size? So that you can offer more products, have the other production sites nearby there, their hubs, or what are the advantages?

We can offer -- very important in the future, we can offer the capacity. We can offer the enlarged capability to industrialize large programs. We can offer the enlarged footprint, especially talking to the U.S. And we can offer complementary capabilities because TT does some products like cable assemblies for aerospace and defense, extremely important, and Cicor's relatively weak in this area. That's very synergistic with the core offering of assembly. So there is a number of elements that we can do. And you have seen ejects -- one chart, the complexity, because these aerospace defense companies are incredibly complex in this setup. They have been created through M&A, partnerships and so on, are running many programs in many locations. And they have a strong desire to reduce the number of suppliers, to rely on a very small number of totally strategic suppliers. The reality is that a large prime, a large integrator can have dozens of suppliers, can have 50 different suppliers in the field and they want to bring it down to a small number, maybe 10 or so ejectors. Jack?

Absolutely. Absolutely. Couldn't say better myself, Alexander. The more plug-in points we can have into these large primes, the better.

Thank you very much for the presentation. It was very informative, and we feel very well-serviced clients. I wanted to ask a question, which is not so much on expansion, but on slimming down potentially because you're looking into acquisitions. What about the other side of the coin, carve-outs, not only, let's say, optimization because you will grow in double hopefully, if all the approvals are received. And I saw that you have something like 20% -- 15% to 20% other noncore businesses. Is there active thought around that? Or it depends on how the core business is developing?

So talking about our present business that -- at Cicor that we call as other markets, the 17%. A very important portion of that is what we call transportation, which is both a railway infrastructure, but also some off-highway vehicles, which we consider highly attractive market opportunity. So that is already a portion of that. The remainder -- yes, yes, we are still in Swiss watches. We still do PCBs for your good Swiss watch that if you don't have a mechanical one. And we still do that. There is a little bit of history in there. And honestly, we are also a bit opportunistic in saying as long as we can make good money with that, it's okay. The noncore business of TT, which is distribution, there, we announced that it's about 1/4 of the TT Electronics business that after a successful, which we hope successful acquisition, we will put under strategic review and then decide what to do about it.

You highlighted earlier in the slides that HANZA is copying your model a little bit during deals now. I think there have been other transactions, M&A transactions, even at times that relatively pricing multiples. Does that endanger a little bit the roll-up strategy? Do you find less targets at very low multiples or less targets that offer interesting post-merger benefits?

Yes, it shows that. It is true there are a few companies having the same model, Scanfil. Kitron has just announced an acquisition. HANZA is a bit special. Now I go deep into -- HANZA is 50% mechanical products, not electronics. So they're not really a pure play. But there are certain regions in Europe, especially the Nordics, Scandinavia, where multiples are becoming untenable, and that is something that -- where we are saying, let's look for a special situation, for example, where a business owner looks for a successor, where for him, it is very important to have the right acquirer, a company with a very good fit, where he is giving up some of the price and many do, but getting the right fit. We are not participating in this race to the top 4 multiples, absolutely not. And yes, we have seen some of these acquisitions. And for some of them, we say, obviously, we don't think they are accretive, don't -- won't name which one, but it's so -- that's something we won't do. This is something -- we look at this TT Electronics acquisition Peter has mentioned, at least 30% EPS accretive, that's what we like. We don't like the dilutive transactions. So the answer -- the short answer is yes, it gets more challenging. But of course, we have now the platform and the reach into different countries, that we can look for these opportunities in Germany, U.K., in Nordics and Spain and in France. So I'm confident that we will find other acquisition opportunities that fit our moat. But we will not participate in the price raise. So I propose we take these 2 more questions, and then we move online after this.

With the all-cash offer, you announced a capital increase of CHF 75 million. Do you plan a capital increase with subscription rights? Does OEP take part in this capital increase? If this transaction is a success, afterwards, you would have a leverage of around 3x net debt to EBITDA. Does this mean that you would have to stop further M&A activities for a year or 2?

Let me level at various points. Let me take one after another one. First, you have announced in the scheme doc that we -- in case of a positive vote, that we would do a capital increase for all share offer. So for this equity or with this bridge that goes to equity, and that is a capital raise of CHF 75 million to CHF 100 million. That's what is in this scheme doc. We have also announced in the scheme doc that at end of 2026, the leverage would be between 2 and 3x, okay? So not above 3x, but between 2 and 3x. Why? What are the 2 extremes? The 2 extremes are -- the 2 is obviously, if all TT shareholders would vote for -- go for the shares, we would still do the capital increase would end up at 2x. If obviously, all the shareholders would go for cash and we would do the capital increase would be 3x. That's why we came to this range, exactly. And then on the -- there was nothing disclosed regarding structure, preemptive rights, and we will do this one in beginning of the year, depending on the situation. There was no -- nothing mentioned on OEP.

But if you could do such a big acquisition, that would mean that you have to pause with further acquisitions for a while.

Maybe I can say something because the reality is that with the free cash flow generation that we do, we could still do some acquisition and deleverage the balance sheet at the same time. So -- but there's nothing announced to that extent. They are the targets. We want to have net debt leverage below 2.75, so that's very clear. And the rest, it's driven by opportunity that we have. But the business that you -- what you have seen, we are very cash -- very strongly cash-generating.

If you look at the time line, we are talking here first half '26, right? We want to integrate properly within 6 months. We always said and then we deleverage between 2 and 3x. And as Alexander said, we want to remain from the leverage below 2.75. So there is -- that gives the key data points. But you can see, if there are bolt-on acquisitions, there is a way. And -- but priority is always first create a value and with proper integration and then go on in terms of going for other acquisitions.

We have one more question over there.

My first question has been answered in the meantime. But I have a second one, and that has to do with the operation of TT in Cleveland in the U.S. Can you tell me what went wrong there in '24? They didn't manage to get the...

Yes, it was -- it has been announced that this site had lost one customer for whatever reason, and that they had to adapt the cost structure to that. What we are saying, we have looked into the sites in detail. Peter has said it already, it's a friendly transaction, so we were allowed to do so. And we see a good path to success here.

And then what would be the product that you would then produce in the future there?

What they are doing, they are mostly in the core markets. So industrial, medical, aerospace, defense, and that the rest of the businesses. So I would propose that we -- cannot, okay. You don't have any questions online? Okay. So we continue here. That's good.

TT has issued a trading update recently that reads a little bit weakish for 2025. I think they said they will reach the guidance, but needs to be glory Q4 or something like that. And it also reached a little bit weak for 2026, if I read between the lines. Were you surprised by this? Is this kind of something that is part of your assessment of TT?

We were not surprised about this because, obviously, we got current trading updates on everything, order book, et cetera, as part of the diligence, as part of this process. So we were not surprised. For us, what really matters, as Peter mentioned, that is the minimum cost savings, certified by 1 of the big 4 accounting firms of GBP 13 million or 240 basis points of margin of TT Electronics that we can develop, and that can be developed in this special setting between TT Electronics and Cicor because it is really because we have the same business model, because we have operations in the same country, because we have this decentral, very lean business model that we can drive. So we were not surprised. And the value of the transaction in the combination, specifically TT and Cicor, is absolutely there. So there's no change in our assessment and there's no surprise. I understand that the TT Board has to -- has a fiduciary responsibility, and they have responded appropriately. Very good. Thank you very much. Do we have one online question in the meantime? Nothing. Okay. Then thank you very much to all of you here and also those online. I think we bombarded you with quite some stuff. Of course, this will be online and we'll have, behind that door, the opportunity for more conversation before maybe everybody is disappearing to the Christmas market outdoors. So I want to thank also my colleagues, Peter, Stefan, Franck and also especially Jack in the U.K., for their presentation. And yes, enjoy the rest of the evening. And I look forward to the conversations we're having. Thank you very much.