FACC AG ($FACC)

Good morning, ladies and gentlemen, and a warm welcome to today's Earnings Call of the FACC AG following the publication of the full year financial figures of 2025. I'm delighted to welcome CEO, Robert Machtlinger; CFO, Florian Heindl; as well as Michael Steirer from Investor Relations. The gentleman will start with the presentation shortly. After the presentation, we will move on to the Q&A session in which you will be allowed to place your question directly to the management. We are looking forward to the numbers. And having said this, Mr. Steirer, I hand over to you.

Thank you, Ingmar, and thanks for the introduction. Good morning from my side as well to everyone, and thank you for joining us today. Welcome to the FACC Fiscal Year 2025 Earnings Call. As already mentioned, my name is Michael, and I'm joined by Robert Machtlinger, our CEO; and Florian Heindl, our CFO. As always, comprehensive financial information is available in our press release, which has already been published earlier today. And if we are unable to address all questions during today's call, we will be pleased to arrange follow-up one-on-one discussions afterwards. In this case, please contact our Investor Relations team, either Tanja or myself. With that, I would like to hand over to our CEO, Robert Machtlinger. Thank you.

Michael, thank you very much for the introduction. Dear ladies and gentlemen, thank you for joining today's earnings call of FACC for the financial year 2025. Before we go into the details of our presentation, which was shared earlier today, and you might have seen it. A few words on last year. Well, I think it was another year of dynamics in the global economy. So global tension was part of our fiscal year management activities, trying to react on time and quickly and in line with our strategy. I think as communicated and also published in various presses, there was some market dynamics ongoing from all the adjustments on various platforms, supply chain issues around the world caused by a couple of crisis, we are facing and still facing. Nevertheless, I think we predicted 2025 quite well. In our budgeting, we have considered certain circumstances, which finally allowed us to react quickly once it came to the one or the other adjustment. Let's jump into the last year's result. Well, last year, we announced "Unleash the Potential" which was a program we as the Management Board with our leadership team launched in fall of 2024. The program, as you well know, is called CORE, focusing on efficiency, cost reductions and profitability increases. 2025 was the first year where we had to unleash our potential and the potential is in motion. So the output in a still dynamic environment is a revenue growth of 11.3%. Total figures will be presented by Florian later. Over 3 years, and this is, I think, quite impressive, the total growth between fiscal year 2022 and fiscal year 2025 is slightly above 62%. So the dynamics of the market is giving us some tailwind. I think, we are growing faster than the market by itself, meaning that the strategic programs we brought on board during the crisis are also helping us to grow fast. Very positive also is a 49% increase of EBIT once comparing 2025 to 2024. I need to repeat my statement. This was not done in a stable environment. We had to deal with global dynamics, including supply chain issues, which is -- which are not only causing our customers, the one or the other extra effort, but also FACC very positive. The free cash flow was significantly increased. Efficiency. Numbers that we are sharing today is the result of what we have launched in 2024 and started to execute in the year of 2025. 11.3% more output with pretty much the same headcount in the group. So we only have increased headcount by 57 people across our global networks. That's the result of turning every stone. Being leaner in all aspects, increasing efficiency in Austria, but also in Croatia, our new Plant 6, which is up and running quite nicely. But also we, of course, are benefiting from the outsourcing of the one or the other package. I want to name one of it, the COMAC 919. Full production was produced in Austria until 2023, 2024. We have moved the project to China at the year of 2025. It was a steep ramp-up in our China operations to accommodate COMAC requirements. Structure. We are not only lean in what we do in operations. We also had a look into the FACC organization. We worked, especially in the second half of last year, starting in July to the end of the year to do a deep dive on FACC's organization. The Management Board with the leadership team agreed on the restructuring of the organization. The restructuring was put in place at the end of February this year, leading to a more agile, more accountable and more clear organization. The outlook. We will have a few slides later on. But nevertheless, the business is doing well. The long-term forecasts are good. There is high demand from the industry and the supply is not following up at the time being with airline requests. So looking into the next 5 years, and we normally do a conservative planning, we see continuous growth in the industry, also benefiting FACC and we as the Management Board have decided and defined plans to invest up to EUR 350 million into the business between the year 2026 and 2030. A few slides later on. CORE is the result or is the vehicle that is allowing us to perform. Nothing new to you. It's a couple of elements, reducing material cost, which is for us very important, passing on inflation effects to our customers by negotiating contracts above contract agreements. I think this is very fair and good discussions we are having with fair and reasonable settlements going forward. Increased efficiency, that's what we have to do in every aspect and in every location, efficiency is working. And I think a revenue increase of more than EUR 100 million with the same amount of people speaks for itself and lowering expenses across our business is the typical cost savings everyone is going for. Overall, in a nutshell, I think we are on track with our initiatives 2025, of course, was the starting point. 2026 will be another year of important changes. First of all, manifesting what we have done last year, but adding further activities and actions to continuously improve our market presence and our financial strength. Also, I think very important to mention here is the strategic investment in Croatia. We have, as you know, tripled the size of the facility 2 years ago. The facility is exactly doing what we have planned for. And I think the result right now is clearly visible and measurable in our Cabin Interior division, which we turned around last year with a good foundation going forward. In terms of potential in Motion, what does it mean in a quick nutshell, and again, Florian will elaborate a little bit more in detail in his speech. Revenue growth to close to EUR 1 billion, EUR 984 million to be exact, 11.3%. We have increased the EBIT by 49.4% in a still dynamic and challenging environment as a result from CORE and other initiatives and the free cash flow has significantly improved. And also to say, right now, all FACC segments, divisions are positively contributing to the group EBIT. In terms of people development, after a few years with a quite strong people and recruitment activities, the year 2025 is very moderate, just 1.5% total increase worldwide, nicely spread between the main hubs in Austria, but also our facilities abroad Austria. Overall, I think the efficiency measures we have put in place with the FACC Academy, with the FACC educational training is right now paying back. I think we invested in the years before to get ready for the ramp-up. This investment into people development right now starts to pay back. Overall, in 2025, we increased the headcount by 56 people, which is basically in the direct labor and not in the administration of our business or in the fixed cost area. In terms of our commitment towards our customers. We have a very unique situation at the time being. All industries are ramping up and all platforms are ramping up. This was never the case in the past 20 years. We either had a ramp-up on narrow-body airplanes, single-aisle airplanes or we had a steep ramp-up on wide-body airplanes, but it never went parallel. Right now, we have ramp-ups across all our platforms. If it's single aisle, wide-bodies, but also the Urban Air Mobility business is ramping up. So very unique situation. FSCC prepared for this. We have not missed a single delivery last year with big efforts we had to put in place before last year, but also last year. Secondly, Advanced Air Mobility. You are watching it for the last couple of years. We have good customers in this environment. We see step changes in the certification of the products. One product we are currently producing and we have developed is a logistic drone. Here, we have entered serial production environments already with a growing demand in 2026 and further good forecast for 2027. The passenger drones, our customers are in the middle of certifying their products. This is complex. This takes some time. But overall, also here, we see from one period to the other, a good momentum. We are producing serial production components for those platforms still on a lower rate. But once vehicles are certified, there is a good backlog with all of our customers, and we see a very healthy, sustainable growth in the years to come. Next-generation airplanes, we prepare today for tomorrow. We know something will pop up on new generation airplanes having a need for new technology. We're assuming by the end of the decade, probably not before 2028, but not too far beyond 2030, new platforms will be launched based on new technology, propulsion systems will be a key driver. Here, we are quite well positioned with all 3 engine manufacturers from Rolls-Royce, Pratt & Whitney, but also GE in the meantime. But we also are working intensively close with our airplane customers to define the lightweight and composite technology we need for the next platform. So we are investing in fully automated digitized production and operating systems. We do certain testing today to show technology readiness once we need it for our customers by the end of the decade. So all on track so far also in respect to this. A few slides on the market. Overall, as I said before, the market is recovering. Very strong, I would say, come back from Boeing in the year of 2025. As you can see on the chart, the gray bar shows the Boeing output overall. So this is positive, I would call it. And they are very focused on quality, on on-time delivery and on a stable ramp-up. Airbus had to adjust this year-end delivery slightly at the last quarter. We all know the reasons. It's a couple of bottlenecks in critical equipment, which will not go away immediately. It will keep us, but also our customers busy in the year of 2026. Overall, if you look into the forecast of both main platform OEMs, Airbus and Boeing, they are forecasting an output growth of around about 10% just in the civil market. The business jet market on the right side is also exceptionally doing well. FACC is the market leader on the midsized business jets, cabin furnishing with a market share of close to 60% and the midsized market is the dominating market in the business jet environment. Also here, we see double-digit growth for the year 2026 and 2027 with a little bit more moderate growth in the years beyond 2028. Overall, the firm order backlog on civil airplanes ordered from airlines with our customers further increased between December 2024 and December 2025. So another 686 aircraft have been added to the backlog. So this is another year where the book-to-bill ratio is bigger than 1. So airlines are ordering more airplanes than our OEMs currently can deliver and supply to the OEMs. What does -- and what the backlog increase of 686 airplanes mean to FACC? Depending on the platform and depending on the size of the airplane, this has a positive impact on the FACC order backlog. 686 airplanes in average is a volume increase of around about EUR 0.5 billion to the FACC order book as well. So the long-term perspective remains positive. In saying that, I would like to hand over to Florian giving you further details on the financial figures of FACC.

Thanks, Robert, for your remarks. Good morning, everyone. I will jump directly into my presentation, giving you a quick overview of the basic figures of the last financial year. On the left side, Robert touched it already in the beginning, we had a revenue increase of 11.3%, pushing us to a revenue close to EUR 1 billion. We ended up the year with EUR 984.4 million, which is almost exactly EUR 100 million plus compared to the financial year 2024. On the right side, you see the usual graph in terms of our operating profit, the EBIT which was also nicely improved. We ended up the year at EUR 42.3 million, which gave us an EBIT margin of 4.3%. So again, a nice development compared to 2024 and fully in line with our midterm guidance of pushing the company to an 8% to 10% EBIT margin by 2027. If we look at the certain divisions in terms of revenue, we have 2 divisions that had significant growth again, Engine & Nacelles and Cabin Interiors and one division, Aerostructures compared to 2024, which had a slight revenue decrease, minus 1%. Reason also explained in the last couple of quarters and also roadshows and meetings that we had. We had a little bit of a drawback in terms of NRC revenue, which is development revenues compared to 2024. We were not fully able to compensate that in the last 2 quarters of last year. So that gave us a little bit of a revenue decline. The underlying RC business is growing, and we will also see that in 2026 to come. In terms of EBIT in our divisions, also, Robert mentioned in the beginning, all 3 divisions contributed positive EBIT to the overall group result. Of course, with a little bit of a mixed picture, also again, reflecting on Aerostructures, and we made that clear in the last quarters, we had in the last year 2025, a material price problem, mainly coming out of the fastener environment in Aerostructures, which was pushing down our operating profit to EUR 7.2 million and basically halving the EBIT margin in that division to 2.1%. Going forward, we have a plan in place for 2026 and beyond. So we expect the margin to improve again, but it will take some time. Engines & Nacelles, and we have seen the picture also in the last couple of years is our most profit-generating division at the moment. For the last year, we generated EUR 21.8 million of EBIT, which translates into 12.1% EBIT margin. And of course, the big task for 2026 is to work on that and to keep that level and maybe slightly improve it. And last but not least, Cabin Interiors, we finally managed the turnaround after last couple of years with negative EBIT contributions or at least a black zeroes. We ended up the year with EUR 13.3 million positive EBIT, which translates into 2.9% EBIT margin, again, reflecting to our midterm guidance, which is unchanged by 2027, we are expecting an EBIT margin in Cabin Interiors around 7%. Revenue distribution, a familiar picture. Robert touched it also a little bit in his remarks. No big changes here. Also in 2025, the A320 platform was the bread-and-butter business of FACC contributing with 37% of revenue to the overall revenue distribution at FACC. All the other platforms are basically unchanged. Business jets coming in as the second biggest driver as it has been majorly driven by Embraer and Bombardier in that regard. I would especially highlight this development in free cash flow. It makes the CFO really happy to see that picture. We had a huge improvement in terms of free cash flow. So we -- in 2024, we had a free cash flow of roughly positive EUR 7.7 million. We increased the free cash flow by -- to EUR 59.1 million. This was, of course, no free lunch. It was hard work in all working capital areas, especially also in terms of inventory, where with another EUR 100 million on top, we managed to decrease the inventory compared to 2024 levels. Investments are also very well controlled in 2025. You see the graph on the left side. We ended up the year with CapEx investments of around about EUR 22 million. As Robert will outline later on in his closing and outlook remarks, this number will change going forward. It will increase because we have significant investments in front of us, and those investments will not hit in 2026. They will be distributed over the next couple of years, but you can expect the CapEx investment figures to increase in the next couple of years. On the right side, as just mentioned, inventory, we ended up the year slightly below the figures of the financial year 2024, so around about EUR 176 million of EBIT, but EUR 100 million of additional revenue. So well managed. Of course, I have to admit, we slightly missed our target that we gave ourselves going forward. We will keep pushing in terms of inventory. And of course, the target is to put another revenue increase on top of that and keeping our inventory stable, as you also can see in terms of the percentage rates compared to total assets, where we have been before COVID and where we are now in terms of the ratio of inventory in our total assets, there is still room for improvement. The Management Board has full focus on it. But of course, we know also Robert will touch it later a little bit. We still have problems in the supply chain. We need to take care of certain suppliers. We need to have certain buffer stocks on hand to fulfill our promises to our customers. Also very promising going forward was the improvement in net debt. You see that on the left side. So the company, as we have continuously told you, is on a deleveraging path, not only in absolute terms, but also in relative terms when we look at the leverage, leverage ratio for last year in 2025 ended up at 2.7. So we came down from the 3.6 in 2024, now 2.7. And of course, for 2026, we are also working on further improving that ratio and also further improving our absolute levels of net debt. This is one of the key pillars of the Management Board. We really want to get back to leverage ratios around 2 in the midterm, giving us a better financial profile. In saying that, I will end my remarks now hand back to Robert for his final outlook. Thank you.

Thank you, Florian, for the details. A few slides on the outlook, ladies and gentlemen. So overall, we, of course, have looked into the market again for 2026. We see a revenue growth also in 2026. The spread of the growth is still quite wide, 5% to 15%. We also had a similar spread at the beginning of 2025, and we narrowed down with the end of Q2 last year, and we have been very specific then in the last quarter of 2025. We see a similar dynamic ongoing right now. So we are prepared for changes up and down whatever the market is doing. Profitability, Florian mentioned, and I want to repeat. Our core project continues to be executed during the year of 2026, helping us in the company to develop towards our profitability target by the end of 2027. So there is no relaxation. There is further activities already ongoing and further activities, especially in the material supply chain will be rolled out during the year of 2026, helping us then finally in 2027. Build rates, we see build rate increases across all major platforms in the industry. The good thing is FACC is participating on every rate ramp-up independently on what program we are talking. So this is part of our resilience and platform strategy, having a balanced product portfolio. As said many times before, most significant and important platform for us is the A320 family. If you remind yourself, a few years ago, the platform was contributing more than 44% to the revenue. Right now, it's 37%. With the comeback of a couple of platforms in the United States, this ratio will be further balanced. Challenges in front of us. Florian mentioned, and I will repeat it supply chain stability. I think most of our suppliers are doing well, but some of our suppliers are still critical. Here, we have derisking strategies rolled out by double sourcing, but also resourcing in terms of criticality. Again, resourcing is not doable from one day to the other, because normally, there is certification and qualification engage. But here, we are up and running. And again, full benefit will be visible then in the next periods to come. High site cost and inflation is nothing new. We have adopted with our core project. We will continue doing this, especially in terms of further pushing digitalization, artificial intelligence and automization. And of course, a geopolitical tension where I have a few statements at the end of my statements. In terms of investments, we mentioned there is up to EUR 350 million of investments planned for FACC between today and the end of 2030. Those investments are certainly structured in investments into new technology, new products, gaining market share across our 3 divisions, which is normally causing some start-up investment. It's also planned to set up capacity and capability in Austria, but also at our other locations. To be specific, EUR 120 million of EUR 350 million will be invested into a brand-new fully digitized or automized aerostructures facility in Austria. This was a project we have launched in July of last year, being very holistic in our planning, considering existing capability we have, comparing with capability we have at other locations, doing assessments on access to train people, where we have quite a good workforce in Austria, highly trained and educated. Combination to R&D testing and qualification capability, but also, of course, considering the development of other markets and other locations over the next 30 years. So this facility will help us to cope with the ramp-up of existing projects. It will give us a future capacity for programs. We have signed up to with our customers, and we are currently in loading, but it also will be combined with an 8,000 square meter test facility where we are testing new technologies, new materials, new processes, robotic-assisted assembly, everything we need to show evidence to our customers by 2030 that the FACC future lightweight technology will be a mature and safe technology. So in saying that, I think we get prepared for the future. A few statements, and you might ask for it anyhow, and we prepared a little bit of highlights and the current situation on the Iran war. The entire world is watching it, so we do. And I think we don't have a crystal ball either. So we still can watch the current ongoing. There is several key factors that are still unclear, and we need to be reactive and agile in terms of the development. I can tell you, we are in regular weekly, if not daily contact with our customers to align on the market. So far, the indication we get from every one of our customers, we stick to the current plans. There is certainly already impact in the airline world because of routes that are not used for the time being, airlines that have significantly reduced their network because of the crisis. This is ongoing. It's kept isolated for the time being. The rest of the world, not including Middle East, of course, at this time, is flying with very high utilization of the airplanes. So, so far and for the time being, our customers are telling us there is a demand of 17,770 airplanes. There is not enough supply to airlines, and they are working on even reallocating airplanes if needed, if the crisis takes longer. The industry overview so far, looking into the Middle East -- I'm sorry, the Middle East accounts for approximately 10% of the global aircraft deliveries between 2026 and 2030. Also, the revenue passenger kilometers flown is in the range of 8% to 9% in that region. So even if there is a full shutdown for some time, there is limitations in terms of the global impact. We are, of course, more concerned on the global geopolitical impact of the war, meaning inflation, price increases and a cool down of the global economy, which is, I think, good in some markets, weak in Europe. So we are expecting a cool down for the next months to come. The intensity and what it means in all the details, I think, today is unpredictable. What have we done in FACC? Immediately after this activity started, we went into scenario planning in the Management Board together with our partners, but also our leadership team. There is various scenarios we have calculated considering a couple of things like we assume in most of our scenarios that COMAC programs and the Urban air mobility will be very little, if all are impacted from a crisis. We think COMAC needs to ramp up their production beyond 2025. I think they have a demand for the airplanes in their own market, and we think COMAC will push hard to use that momentum. Urban air mobility, I think, is a little bit separated from the normal civil transportation. I think all of our customers will stick to their plans, certify their product and try to enter revenue service in the next 2 years to come. And on the logistic drones, I think this is even more independent from the rest of the -- of traveling. FACC, as said before, we did various scenarios. The worst scenario we currently have planned is a scenario that could be as dramatic as the 911 impact, meaning a more significant reduction in airplane delivery output for 18 months. We know what we have to do in such a case. So adjusting variable cost, the fast way. Depending on the significant and such a worst case would impact the industry, I think FACC can manage this environment in a positive way. Of course, there will be impact to the profitability. In the short term, we don't see an immediate impact to FACC. During the last crisis, we have changed some of our contracting towards our customers, but also towards our supply chains, protecting us from certain super inflations. We have longer-term contracts in place as we speak that would mitigate some of cost pressures that could come. We have hedged strategies and material buffers for a certain time. Energy cost and availability is not the concern. We have hedged our gas and electricity pricing. If we would secure full demand until the end of the year now, the impact to FACC would be less than EUR 0.5 million in extra cost. I'm not saying that we do that. I think we are quite well hedged with a big amount of energy we need. Just looking into the last days, energy costs went down. So we are very active. And so far, I think we have a plan going forward. In conclusion, I think uncertainty remains high for the time being. Customer alignment is fully in place. The scenarios we have planned are showing positive results. And even the worst case, I would say, FACC, we think it will not be the worst case at this time, FACC would be able to manage. In saying that, I would like to conclude with this statement, and I think the floor is yours for raising your questions. Thank you for listening.

[Operator Instructions] And we have the first question, Bastian Brach. You should be able to speak now and place your question.

Robert and Florian, and congrats on the very strong year. Two questions for me. The first one is on Interiors, a very strong year in that department. And thank you for providing the 7% margin target in [indiscernible] And what do you need to reach that target? Is it just operating leverage due to higher revenue? Or is it shifting more work to Croatia or price negotiations with customers? Or what do you need to like raise it for another 4 to 5 percentage points?

Well, in Interiors, I think it's a mix of various actions we have taken. I think you already gave the answer with your question. We are still ramping up Croatia. We are currently using around about 65% of the installed capacity. We are further moving work operations from FACCs Plant 2 in Upper Austria to Croatia to have the full effect of the labor cost saving in this facility. It's not only, however, the labor cost saving that is helping us, it's also the greenfield setup of the facility, where we have been very focused to drive for lowest cost operations and a clean interior environment. A second element is the material cost. Interiors has more than 65% of the cost is in certain materials. Here, we have launched a resourcing and restructuring of the supply chain in the next 18 months, just by changing suppliers, certain methods and applying new technology. We have a material cost saving opportunity of around about EUR 10 million that will support interior profitability. And then on a couple of contracts that have been ended we have been able to readjust the contract terms and conditions on the pricing level. So also this, of course, will help the Interior division to meet our EBIT target and to be sustainable in the profitability once going forward.

Okay. Then on the CapEx distribution for your new Austria facility, when do we see the bulk of the EUR 120 million hitting your CapEx? And yes, how do you plan to finance it? Is it only on your strong cash flows? Or do you plan to tap into external sources? And also on the EUR 350 million investment plan you lined out until 2030. Does it include OpEx like R&D as well? Or is it just CapEx?

Thanks, Bastian, for your question. In taking up the first part of the question, how -- what is the cash flow distribution of the investment in the new plant in Austria. We will start building. We are in the middle of the planning process right now. Currently, we are in negotiations, starting negotiations, doing the planning. And the excavators will come to our ground later that year. So building starts in fall 2026. So the impact to 2026 figures in terms of CapEx is limited, I would say. Still, you will see an increase in the CapEx figures compared to last year, but the main cash flows out of this specific investment will be in 2027, 2028 and 2029. Also, the final fully loaded plant with all equipment in is to be expected in 2030. So if you want, this investment will be distributed over 4 years with the bulk to come in 2027, 2028 and 2029. So how to finance that? We are currently working on that. There are certain ideas, I would say. You know that our syndicated loan that we have in place is expiring in February 2027. Myself and the finance team, we are currently renegotiating the syndicated loan contract. And of course, you might know there are certain investment options or financing options in Austria that are very beneficial and partly government funded. So the vision that we are -- have here is, of course, to include maybe a new facility in this -- financing facility in this syndicated loan contract to cover for that investment. So you can expect going forward, a slightly different setup of the syndicated loan. Of the EUR 350 million total investments going forward, part of that is the new plant. And also Robert outlined in his beginning remarks, it's not only the existing projects that we are preparing for, but we're also preparing for certain new projects. Of course, there is also R&D included. We are preparing already for new manufacturing technologies of the future, for example, automated fiber placement, we are putting in place. This is also costing some money, but this is R&D investments in the end because it will give us the flexibility to prepare us, ourselves, the company for these new aircraft platforms that we expect in the 2030 time frame. So it's a mix basically, existing platforms, new projects and also new materials and new production processes of the future.

And we move on to the next participant. He's dialed in by phone. Elias New, you should be able to speak now and unmute yourself.

I hope you can hear me?

Yes, we can.

My first question would be on the revenue guidance for '26. I mean, given the wide guidance range you've given for revenue growth between 5% and 15%, I was just wondering whether you could elaborate a little bit on the assumptions that are embedded into this guidance also with respect to FX. I understand that engine supply availability is still the main issue, the main bottleneck. But any color on whether you would expect to end up in the top half of your guidance range based on where we stand today would be very helpful.

Well, this is a good question, I have to say. The wide spread and range between the 5% and 15% is certainly considering various aspects. So when we did the budgeting last year, we certainly could not predict Iran, but we saw there might be the one or the other hiccup, because there is various crisis areas in this world. So I think when we did budget planning before 2020, it was a budget. It was not driven so much by scenario planning, I would say. In the last 2 to 3 years, we learned that we better have scenarios available. We certainly put the budget in to measure ourselves in terms of where are we actually compared to plan. But we have scenarios available, and this is giving us the opportunity to react quick in case we see a change. I want to give you an example of last year. In the second quarter of 2025, and I think we talked about it, one customer told us that he needs to squeeze out a fair amount of airplanes from the planning because of various issues. And this squeeze out of those airplanes was impacting us from one day to the other with a EUR 45 million of revenue reduction. So just removing the revenue is the one end, but you need to react in terms of employment, material and planning. Since we had a scenario prepared that goes into personnel planning, material planning, we could work around it, and you have seen the result for 2025. So we still have been holding up to our guidance. So what does it mean for this year? I think we have a certain baseline that might be in the middle of the 5% to 15% somewhere if everything works nice. There could be an upstream if all would be even more perfect than what we have seen in 2025, but there is downstream as supply chain issues or geopolitical things. So I really need to ask for being patient with us. I think normally, and this is what has been the proof for the last 3 years. Rate adjustments normally are happening within the first 4 to 5 months of the year, meaning between January and May. That's what we have seen in the last couple of years. That's what we are expecting this year. The second half of the year normally is quite stable. So I think the spread is right, and I can promise you with the end of Q2, we will narrow it down and be more specific. But for the sake of keeping our flexibility adjusting if geopolitical something is happening impacting our industry, we want to keep this flexibility for the time being.

Okay. Just a quick follow-up on that. I mean, in terms of the impact that you're seeing from Iran, anything specific to mention in particular, with regards to increased cost pressures, et cetera? I know you alluded to it before, I don't know if my line cut out. But anything that you could share right now on any impact that you are calculating for Iran and the current -- yes, any discussions that we have on supply chains on the one hand? And the other part of the equation would be your assumptions for FX rates, particularly with regard to U.S. dollar and euro rates, which have been quite volatile over the past few months.

Well, I think FX, Florian will answer. In terms of flexibility, what have we done, just as one example. Normally, FACC is mainly working with FACC employed people, because we have to train them, we have to educate them, we have to qualify them. In the last couple of weeks and months, we have decided to use a little bit more contractors in our workforce, because our contractors' workforce is giving us more flexibility in adjusting if needed. We have implemented the last 3 years, flexible work times in across the FACC operations. So we are accumulating hours in certain high-yield phases. And if there is a phase where we need to support our customer, we have flexibility here as well. In terms of material supply, Florian mentioned, we are buffering some material here and there. And I said it before, it's hedged with contracts. So we have a hedging horizon and fixed price period with our suppliers, that would mitigate immediate impact from price increases and therefore, cost increases for FACC. So we got prepared over the last 2 years to be more resilient. Again, I think we need to watch the situation very carefully. We have scenarios in our drawers, and we can react quickly if something happens.

Picking up your question, Elias, in terms of FX for 2026. We already have our hedging in place. Basically, we are talking about an average hedge rate for 2026 of around about 1.15, which is basically a little bit better than the current market spot rates that we are having. So 2026 done basically. For 2027, we already have, of course, over the last couple of months, started our hedging activities. So we are also well underway in that regard. And if you watch the markets, the currency markets currently, of course, with any -- with daily news outflow from Iran and the U.S., basically, you see fluctuations in the FX markets. And of course, we use profitable environments, which we are right now, to be honest, around 1.16, 1.15. This is good for us to hedge the future. Our MTP planning going forward is based on rates of 1.20. We said that also in the last couple of meetings that we had. So nothing changed on that. And of course, we are preparing to mitigate those FX risks via hedging.

Okay. That's very helpful. And just on that sort of margin progression side of things, I mean, you mentioned the FX component there already. But just in terms of thinking about the bridge on how to get to the 8% to 10% margin by 2027, would it be your best guess that we should see a sort of linear progression towards that 2027 margin target across '26 as well? Or do you expect that to be more weighted towards 2027 with most of the margin uplift coming in 2027?

No, nothing changed here. As we have talked also before, if we would do so, it would be in our expectation, a linear movement. You can expect, and we said that also in our outlook, again, an improvement in terms of EBIT, especially also the same with the revenue guidance we are giving also as in the last couple of years, the first half year, we are a little bit unspecific in terms of our EBIT guidance. And also here, we will narrow that down as we have done it last year, later on in the year.

That's great. Very clear. And just final question from my side on the cost savings initiative. I was just wondering if you could give us some color on the status quo and the progress, particularly on the raw material side, which you've mentioned remains the most challenging and whether you still think that the full EUR 80 million for the savings program by 2027 is still feasible given the ongoing challenges within the raw materials component?

Yes. So program, as Robert also outlined and also I said, program is still up and running, will be up and running until the end of the year. Management and leadership team is pushing very hard. You know the 4 components in the program: material costs down, price increases, efficiency gains and fixed cost reduction basically. Of course, we have several different degrees of progress in the certain environments. Some of them, we already have overachieved our targets and some of them, we are a little bit behind the plan. And also to be transparent here, and I outlined it to you also, I think, in our last meeting, material costs is a pain at the time being. Supply chains are, to a certain degree, painful, and we need to carefully watch. And of course, we are working hard also here to achieve that goal by the end of the year because this is giving us the baseline for 2027, as we talked before, to achieve that 8% to 10% EBIT margin that we want to see in 2027. We cannot hear you, unfortunately.

We move to the next participant, Aymeric Poulain, you should be able to speak now and place your question.

I have a few follow-up on the growth assumption. I think you said that the highest visibility you have is on COMAC and the Urban air mobility. So what are your assumptions for growth in these 2 segments for 2026, please? Then on the margin guidance for 2026, you didn't provide a precise. Obviously, the range of revenue growth can make quite an impact on that given the operational leverage. But there are also some one-off pressures that took place in 2025 that might not recur in 2026, like the pricing recovery of the cost on material for aerostructure or some of the staffing one-off costs. So could you remind us of this one-off cost in 2025 and what -- how we should see this impacting the margin positively in 2026? The third question is on the investment plan. Obviously, it's a very large investment plan. And I think if I look at the staffing addition, it's probably more than 40% capacity increase potentially. So how confident are you that this increase of capacity can be filled? What kind of visibility you have on that? And what kind of return on capital do you expect given the fact that it might include some also some more automation and better quality assets? And finally, on the funding, you didn't provide a clear answer, I suppose, but I was under the impression that as free cash flow was to recover, there was a plan to also provide return to a dividend stream. Is that no longer the case? Are you going to be using most of the free cash flow to invest into growth? Or is there still a plan to restore dividend stream?

Thank you, Aymeric. I'll take questions one by one. Starting with the first, you're asking for a more specific guidance on COMAC and Advanced Air Mobility. As we also have said in the past, of course, we have different growth rates across our certain divisions. As Robert also outlined, basically, with all our programs that we're having and the product mix in place, we are growing stronger than the average market. This is, of course, especially true also for those 2 platforms that you mentioned. In terms of Advanced Air Mobility, also Robert mentioned in the beginning in his remarks, of course, we are -- especially with one project, and we talked about it already also at the logistics round, we are in an environment that I would call as a near zero production mode. So this is very promising going forward also for 2027, we expect to see another increase here with all the other projects that we have on the plate in the Advanced Air Mobility environment. Of course, we are at different stages in development. So that's the answer to that. In terms of revenue and price fixings, you mentioned in terms of certain issues, I guess you are reflecting especially on Aerostructures and the fastener impact that we had 2025. As we also said several times in the past in our conversations, we have a mitigating action in place with our customers. Also customers, OEMs are certifying additional supply on that end. Will it fully compensate us in 2026? Probably not because we also have a huge stockpile of fasteners that we in loaded to higher pricing from the past. So we need to eat that out of our inventory basically, but you will see improvements as we progress during 2026. Of course, we have price negotiations with certain customers ongoing. This is nothing unusual in the industry. We are doing that for several years. What we are experiencing is in the last couple of years, we had certain one-off payments and compensations from the customers. And of course, our aim is always to have it in the contracts as recurring price increases. The investment plan overall, we are very confident, of course, to fill that additional capacities. Why? Because the investment that we are doing in Austria is basically triggered by existing projects that we have in-house already. Why we are doing that in Austria is also explained in our press release that we sent out 2 weeks ago. We already have a modern Aerostructures plant right around the corner in St. Martin. We are building the new extension directly adjacent to this plant, meaning it gives us more floor space to be more efficient, to have a focus on automization, to have a focus on digitalization and push through the big Aerostructures parts that we have already in our portfolio. So we are not worried that we cannot fill up this plant with the existing project that we have in-house. In terms of return of capital, in general, margin improvements, of course, this investment will heavily contribute, because it gives us the flexibility that we need in terms of automation. This will improve the margins, especially also in Aerostructures going forward and in the end, work out nicely for our return on capital and all other profit KPIs of the group too. And again, 2027 midterm guidance unchanged. We want to be an 8% to 10% EBIT margin company, and we will do everything to achieve that. And last point of your question list was funding and dividend policy. So dividend policy at FACC is in place since 2014 when we had the IPO, telling us that we want to distribute 20% to 30% of the net profit to our shareholders. There were 2 dividends at FACC paid out, one in 2018 and in 2019. We are now proposing as the Management Board to pay out a dividend of EUR 0.10 per share for the last fiscal year. This will be resolved by the end -- by the AGM at the end of May and the payout date will be early June. So we are back on the dividend path. And of course, we want to keep that dividend paying path because this is our, I would say, one of our targets as Management Board. We want to be a reliable capital markets investment. And in our view, dividends are part of that story.

Thank you very much. And with watching the time running out, we kindly ask to send further questions to the IR department. And with having said this, a big thank you to your interest in FACC, and thank you to the gentleman for the presentation and answering the questions. I wish you all a lovely remaining day. And with having said this, I hand over to Michael for some final remarks.

Thank you, Ingmar, and thank you all once again for your participation in today's call on our 2025 results. And as already mentioned and mentioned earlier, we remain available for individual discussions should you wish to explore specific topics in greater details. Please let us know. We greatly appreciate your continued interest and engagement, and we look forward to our future exchanges. And maybe, Robert, I will hand over to you to the last remark -- the final remark. Thank you.

Thank you, Michael. The last remark is thank you for participating. Thank you for your questions. And looking forward to talk to you and hear you at the next call. Have a good day, and stay safe. Thank you. Goodbye.