Huber+Suhner AG ($HUBN)

Ladies and gentlemen, welcome to the 2025 Full Year Results Presentation of the Huber+Suhner Group Conference Call and Live Webcast. I'm Mathilde, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Urs Ryffel, CEO. You will now be joined into the conference room.

Good morning, ladies and gentlemen, and welcome to Huber+Suhner's conference on the 2025 year results. We will follow also this year the same agenda as last year. With me is Richard Haemmerli, for the second time. He's our CFO since a year, and he will support me in doing a deep dive into the financial results. We have, in December, narrowed our guidance. And in January, as usual, we have communicated on our top line '25, so the novelty of this year's figures is probably limited. On this page, you see the key figures '25 at the glance. Those are the numbers that we are going to look into in more details together in the next 45 minutes. I will not go into the details here as we will do the analysis during our presentation. This is now the full set of P&L figures, with order intake certainly being a highlight and sticking out. Significant gains in order intake are due to a sharp increase in data center orders, but also the whole industry segment has contributed to the increase in order intake, which results in CHF 1.032 billion, a level which we haven't seen in Huber+Suhner's history. The increase represents a good 14% versus previous year. On net sales, we have to accept a 3% decline versus last year. Organically, we are flat. We have guided precisely a year ago at the same place for a flat development. And it proved to be that the Swiss franc created some headwind for Huber+Suhner in the range of 3%. Richard Haemmerli will elaborate on the impact of the currency during the last year. With the 600 -- with the CHF 864 million sales, we are actually okay because we always stated clearly that in '24, we had a large Indian business at hand. So we had to compensate for about CHF 100 million sales from '24 to '25, which we almost managed. And as we mentioned organically, we managed completely to replace this Indian project in the application of mobile infrastructure. On the bottom line, operating profit rose by 80 basis points. This is mainly due to the business mix, which was more favorable for Huber+Suhner based on the growth of the strongest contributing segment industry we could increase to 10.5% on the operating margin. Net income rose accordingly by 60 basis points. When we look at the history of our EBIT, you can see that we have a positive trend in our journey. We increased our midterm target range twice in the last 10 years, from 6% to 9%, to 8% to 10%, and to 9% to 12%, and there was just one miss in the year 2017. You can also see the impact of COVID in the year 2020 and then the sharp recovery in the following 2 years, where we had lower cost coming out of COVID restructuring and very strong market demand, mainly in the comm segment coming from North America and large 5G rollouts. But since '23, we are with, again, a positive trend coming from 9.1% in '23 to 9.7% in '24, to the 10.5% we report for last year. The Industry segment, already mentioned, as being the highest contributor, has increased again its contribution to our bottom line on the basis of strong growth in orders as well as net sales with clearly double-digit growth. All market verticals and all applications within the Industry segment contributed positively to the growth. In particular, our growth initiative, aerospace and defense, but also all other applications, such as test and measurement, high-power charging and all other niche applications summarized on the general industrial. The EBIT margin improved by 100 basis points, mainly on the fact that we could leverage the growth operationally. In the Communications segment, it sticks out that orders grew by 22% versus our already good previous year to CHF 418 million. The driver here was clearly the data center market. And within this application, it's our highly differentiated technology around all optical switching. Net sales have seen a similar decline by 22% to a level of CHF 270 million. This is due to the fact that we were just able to invoice for 2 months in this Indian large infrastructure project. So this project last into January and February '25 and came to an end as of March last year. The large orders from the data center market has not yet translated into higher sales, untypical for the Communications segment where we have very short lead times of about 14 to 16 days in average between order intake and sales. Those orders came in during the summer period and served Huber+Suhner to release significant investment in the ramp up. The operating profit declined by 20 basis points. In the Transportation segment, the story is quickly told. Actually, we see very little change in orders and in net sales versus previous year, and this is good news after the decline from '23 to '24. Railway showed a positive development, in particular, our growth initiative there, which focuses on communication solutions on trains and along the tracks. Automotive business was still low and had a very small decline versus previous year. Nevertheless, we managed to increase profitability on operating margin by 70 basis points versus '24, which is due to the better business mix as well as a cost-conscious business management. This the short summary on the 3 segments. If we have a look into the regions, we can see that Americas grew by 24% on the back of a decline in Asia Pacific. The explanation here is that the growth in the Americas was driven by Industry and Communication, while then the finished Indian project left its marks in the sales in the Asia Pacific region. Certainly nice is that our largest region, EMEA, grew by 6%. I will conclude my first part of the presentation with an update on our sustainability strategy. We have, as one of the pioneering companies, submitted already SBTi targets in 2017, which had a target year of 2025. I can confirm that we have achieved those targets. Consequently, we had to submit new targets for the future, which have been validated last year. They include a reduction of Scope 1 and 2 emissions by 55%, and the Scope 3 emissions shall be reduced by 25%. Also, together with those reduction targets, we have committed to a net zero target by 2015. Important is to mention that ESG reporting, the nonfinancial reporting for the first time is following the ESRS standard voluntarily. So it is supposed to remain on this level and be a report according to an internationally recognized standard. Nevertheless, we were able to reduce the volume of the report, which is quite unusual. So it's really a very condensed document consisting of a lot of information. We have also participated in 2 ratings, which are probably the most known in the market. EcoVadis, we achieved the silver rating, while for CDP, we again improved to A- after a B in the previous year. With that, I'm at the end of the first section, and I would like to hand over to Richard Haemmerli for the financial discussion.

Thank you, Urs. Good morning, ladies and gentlemen, also from my side. I'm happy to guide you through the financials of Huber+Suhner 2025. Starting with order intake. As mentioned by Urs, first time, we managed to get over CHF 1 billion in order intake, which equates to growth of 13.7%. When we look organically, the growth is even strong at 18.1%. The 4.4% are impacted by foreign exchange rates, copper and portfolio effects, whereas FX is the main driver here. Noteworthy, all the 3 segments had organic positive growth last year. When we look into sales, the minus 3%. Here, we see that the main driver for the negative deviation compared to the previous year was again the FX effect. Organically, the company were flat. Communication was -- had lower sales, mainly due to the Indian project that was very strong in 2024. Industry, however, had a lot of headwind also from -- one of reasons, one, the growth initiative A&D. When we look into the margin development compared to the previous years, we see an increase in gross margins throughout the time, and especially also in the second half of the year, despite lower volume, we were able to increase our gross margin for the group. Looking into SG&A, they were driven by investments. So while selling expenses stayed more or less flat compared to the previous year, the R&D expenses increased by about CHF 5 million as well as the administration expenses, which were mainly driven by investments into IT, our SAP core system. On the R&D side, we mainly invested into our differentiating technologies. Looking into the EBIT, on the left side, the EBIT bridge, you can see that industry EBIT improved most with over CHF 11 million, and this contributed also to the group EBIT increase of CHF 4.2 million. Communication, due to a lower volume, contributed with a lower EBIT in 2025, while Transportation, thanks to stringent cost management, was able to increase its EBIT contribution. On the right-hand side, you see a little bit our margin profile. Clearly, the Industry is still the dominating segment when it comes to margin levels. They were able to increase by 100 basis points as well as Transportation increased their margin while Communication slightly decreased despite much lower volume, was able to get to a similar level. Overall, the increase from 9.7% to 10.5% for the group. Now going below the EBIT on the financial results, they were more or less flat compared to the previous year with minus CHF 1 million. And then on the tax expenses, was minus CHF 15 million. Here, we had a stronger revenue to recognize in jurisdictions with higher tax rates. So that's why the tax expenses were higher in 2025 than in 2024. Overall, net income came in at CHF 74.9 million, an increase of 3.6% compared to the previous year. When we look at the tax rate, on the right-hand side, you can see that our effective tax rate is again lower than the expected tax rate, mainly thanks to R&D and other grants that we were -- that are nontaxable and we were able to book. Looking into investments, we accelerated our investments in 2025. So the investments amounted to CHF 55.5 million CapEx and -- which is a rate of 6.4% as a percentage of sales. When we compare that to the average of the depreciation over the last couple of years, we can see that we are clearly investing above this average and we're in a growth mode. Looking at the balance sheet. On the balance sheet, we see the net liquidity at CHF 211 million, which is 15% more than end of 2024. The balance sheet on the total is at CHF 867 million, with an equity ratio of 78%. Cash flow, that's also, to me, a highlight from last year. We had a very strong cash generation, also thanks to very good net working capital management. We were able to generate CHF 127 million of cash flow from operating activities, resulting in a free operating cash flow of CHF 70 million. Free cash flow ended up above CHF 30 million, CHF 31.3 million. When we look at the return on invested capital. Here, we see the positive momentum that started in 2023, and we were able also here, to increase our return on invested capital to 17.1%, well above our capital rate. And when we look into the dividends, the dividends -- the proposal to the AGM will be to increase the dividend to CHF 2 per share, which equates to 50% of our net income target. Summarizing, Huber+Suhner delivered 2025 solid operating performance in a challenging environment. This was mainly impacted by the FX development, but also the tariffs. And despite these effects, we were able to achieve a double-digit order intake growth. We're able to improve our gross margin. We generated strong free operating cash flow. And last but not least, we're also able to increase our return on invested capital. With that, I'm handing it back to Urs.

Thank you, Richard. And at this point, I will give you an outlook for '26, and I will share with you a view, a detailed view on the different markets and how we see them developing. But first, I would like to highlight again our highly attractive portfolio of market verticals that we serve. We are in the connectivity business, which, per se, is a growing market. And within this large field, we focus on applications, which allow for a higher degree of differentiation and high growth. In particular, I would like to highlight once more our growth initiatives, aerospace and defense, data center, rail comm and EV. In the last year, 3 of those 4 have performed well, contributing with positive top line growth and with above-average profitability to Huber+Suhner's financial performance. In particular, aerospace and defense as well as data center are 2 market verticals which catch a lot of attention these days in the market due to its favorable trends. I would like to highlight that these 2 growth initiatives have not been just selected recently based on the hype in the market, but we have named those growth initiatives from 9 years ago as being decisive for the development and the future of Huber+Suhner. When we look at the distribution after top line last year, which we usually do in a bit more detail, we report on segment level. And here, we give a bit more segment look through. In as far as the figures are concerned, you can see that due to the success of the Industry segment, the share of sales have climbed to 38%. This per se is good news as this is our highest margin business. The market verticals have developed favorably across the board, namely, as I mentioned, aerospace and defense, which has grown double-digit, and accounts now for 16% of our sales versus the 12% in 2024. But also the other market verticals have contributed positively. So while in Communication, we see the strong mobile network market of the past at a very low level and also the fixed network market per se is not very dynamic, there is one exception among the applications in the communication market, and that's data center. Here, the driver is obviously the huge investments in data center infrastructure driven by AI. And you can see the arrow pointing down overall as the communication equipment application as well as the fixed access network application declined, while data center started to show positive growth. The mobile network market accounted for 23% due to the Indian project in the year 2024 and decreased now to a level of 16%. In Transportation, we have 30% of our sales, 20% going to railway application and 10% into automotive. With that, I would like to share a bit more insight of the market trends in our industrial market verticals and applications. Here, Huber+Suhner focuses very much on high-tech applications, sometimes very niche, but allowing for a high degree of differentiation. This explains the high margin in this business segment. In particular, the A&D, as I mentioned already twice, has contributed positively, and we expect that trend to continue as the increase of defense budget is only starting to show effect on our business. It has to be repeated here that the A&D market is a very long cyclical market. So announcement from governments to increase defense [ efforts ] results in business for Huber+Suhner as a component supplier only several years later. Nevertheless, we have already seen growth. And I think we will see more growth going forward. This applies not only for defense, where we focus primarily on communication solution for army applications, but also for the growth in space around commercial satellite programs. An important factor for growth, next to the positive momentum in the A&D market, is that Huber+Suhner traditionally focused very much on RF technology, while the trend is going into complete solutions. With our 3 technologies: RF, fiber optic and copper cables, we see also the opportunity to leverage those 3 technologies in this market, selling complete systems and offering a one-stop shop for our customers around communication solutions. The test and measurement market, after a dip 3 years ago, has recovered nicely. And we are probably approaching a very good cycle in the semiconductor industry. Our prime focus in test and measurement is chip testing. We see opportunities in growing in this particular application with chip testing, but we also see opportunities to diversify our business into other test applications, such as lab automation, which is an initiative to supply not just the test lead, but complete test arrangements as well as other application in test environments. So the semiconductor industry is creating a positive trend and so does the broadening of our market focus. HPC, an application that Huber+Suhner pioneered and is the market leader for cooled highest-voltage cabling, is a market that we serve since the beginning from 8 to 10 years ago. The market has emerged, has gone through cycles, and we were happy last year with the development and the growth of the HPC application. Our ambition here is to stay the technology and market leader, growing with the market and also consequently benefiting from the replacement of those cables in the field after the aging of the cables. There is also an additional opportunity to develop next to the strong U.S. market or the regions such as Europe, but also China and India, where we have picked up business during the last year. Last but not least, we have a lot of smaller applications that we serve in our Industry segment, which focus on medical energy but also cryo and quantum computing. And those niche applications offer all a very high degree of differentiation, thus being attractive to Huber+Suhner from a margin point of view. In the Communication segment, connectivity is a core application for our global key accounts. That's why there are big efforts to standardize connectivity solutions in the communication markets, making them replaceable and offering second, third and fourth sources to our customers. We are playing in this field quite successfully, but our strategy in the Communication segment is to add business primarily on application based on highly differentiated technologies. Good examples here to mention are our OCS products from Polatis, an acquisition that was completed in the year 2016, and which proves to be a vital piece of technology for future data center architecture. There are other activities that we manage and where we are at the forefront. And in this context, I would like to mention hollow core fiber connectivity, so fibers which are basically not glass fibers but are hollow. The reason being that light travels with 50% more speed in air compared to the speed in glass, and those fibers are becoming more and more mature and need connectivity. So we focus on packaging those fibers in cables as well as being able to connect through standard connectors, those hollow core fibers with each other, but also with standard single-mode glass fibers. All these technologies will help Huber+Suhner to differentiate and will accelerate growth according to our plans in the Communication segment through the very high and continued investment in data center infrastructure. The mobile network market, which was our most important and dominant application in the Comm segment, is waiting for the next generation technology around 6G. We are 6G ready, but the technology is not yet ready to be rolled out. We expect that to be or to take place in about 4 years around the year 2030. Until then, there are still individual programs and projects to upgrade existing mobile communication infrastructure, from 4G to 5G standard, and also enhance the throughput of 5G infrastructure, but we don't expect that market to be very dynamic until there is a technology jump from 5G to 6G. In fixed network, the data traffic is doubling, which -- every 3 years, which requires continuous investment in the fiber network infrastructure, and we have solutions, very standardized, but also highly differentiated, and we are trying to benefit from this infrastructure build-out to be able to cope infrastructure investments in order to cope with the ever-increasing data traffic. And the last application that we focus in the Communication segment are equipment manufacturers. Those are the companies that supply electronics into networks and that has the products that make those network run. We go into those equipment. There is switches, there are routers, and all of them work electronically. With other words, typically, there is an optical signal coming to the equipment. The signal is converted into an electric signal and is then processed electronically, while it's again converted to optical when it leaves the box. And there are various products for us that go into this equipment, in particular, in transceivers, which do the conversion from optical to electrical signals, where we can offer advanced WDM technology through Cube Optics, an acquisition that we have completed in 2014, which is the clear technology leader for miniaturized WDM technology, to be included in transceivers of high data rates going to 800 gigabit per second and higher to 1.6 terabit. So in Communication, the strategy is clear. The profitability of 7.9% as reported in the last year, is to be improved according to our plans, and our strategy is to push highly differentiated technology, which shall improve not just top line, but also bottom line in this segment going forward. And last but not least, the Transportation segment. Here, we have 2 growth initiatives. The obvious one is the rail communication. This is a communication on trains and along the tracks. And here, we can also leverage the access and the availability of all 3 connectivity technology. Typically, the antennas are RF, the signal on the train is either an electric or an RF signal or an optical signal. And we are the market leader for antennas that go on to buses and trains. Around that, we are trying to broaden our business focus, supply complete solutions as we managed to do for Deutsche Bahn, a project that we announced a while ago. And there is additional projects in the market that we follow and where we would like to push through our one-stop shop strategy. The EV market is a market that has so far disappointed. We expected higher volumes by now. We don't see those volumes, but we see small signs of improvement in this market from a technology point of view, but also as far as the available vehicles is concerned. We believe that today, the latest introduction to the market based on Generation 2 platforms are competitive from a total cost point of view, which means that they are a bit higher in the investment, initial investment, which gradually can be recovered through lower operating costs. As the battery technology progress is still very fast, we predict that this market will still pick up and accelerate later, as originally planned, I have to admit, but we believe that it will still happen. That is why we hold on to this growth initiative, and we are positioned strongly in this market with designings, with important manufacturers of trucks and buses, with our mainly copper products. Then rolling stock, that's a stable market, very long cycles. We all know that this market typically has project durations for 4 to 5 to 6 years. The backlog of our customers like Stadler, illustrates how long cyclical this business is and how early those projects are being awarded for us. Obviously, the products that we supply to rolling stock, they are awarded and bought at a later stage. But it is a market that is actually very stable and where the momentum is currently positive. After COVID, where we have seen a dip, where nobody wanted to use public transportation, the momentum is back. And we don't see that market to go through the roof, but we see stable to modest growth in the rolling stock sector. Our initiative to diversify our automotive business into another application which has to do with autonomous driving is also delayed. We had great hope that this will pick up earlier, and I was also standing here some years ago, predicting by -- that by the year 2025, we would all be probably driving cars where we can turn the driver's seat around and read a book. This has not proven right. And still, we believe that autonomous driving is a great trend, and we hold on to this business. We have achieved early design-ins with Tier 1 suppliers from Germany, both announced. We have been able, during the last year, to diversify our customer base also with Asian customers, and we will see volumes picking up, not with the speed and not to the level as originally foreseen, but it's also a market that we predict to grow for Huber+Suhner. This is, in a nutshell, how we see the markets and the different applications. Although there is a lot of positive things in the market, we have to state here a disclaimer that has to do with the geopolitical conflicts, the economic uncertainty, in particular, through -- yes, so emerging trade barriers overnight, which may affect the investment climate in the market in several of our applications. Nevertheless, we are cautiously optimistic for '26. We believe that connectivity is a good place to play for Huber+Suhner. So no need for us to move into a completely different corner in the marketplace. We believe that the trends are in favor of connectivity, in particular, the applications that we focus on, where the key drivers are ecological mobility, seamless communication and personal safety. But we also believe that our long-term strategy with a very strong focus on customers and innovation, our technology leadership in technologies that prove to be currently in very high demand give us hope for a positive outlook. Furthermore, if you look at the order intake in '25 and the backlog, we believe that we have never started the year with a higher backlog, that also gives us confidence. And last but not least, the momentum in several markets is positive and in our favor. And that does not only concern the growth initiative, aerospace and defense and data center, but several other markets, as I have tried to highlight just before. And maybe a last point is that you remember our portfolio, which is relatively wide, that is a challenge for you all to remember the different applications Huber+Suhner is in. It's much easier to understand companies that follow just one application. But we believe in this strategy of balanced diversification. It's clear that not all the time, all markets are pointing up, but it gives us resilience. And we believe that right now, looking forward, we have really a very attractive portfolio of applications that we serve. And based on all that, our guidance for this year includes a midterm target range, which remains unchanged, from 9% to 12%. For the sales, we expect at least a 10% growth versus '25. And regarding EBIT margin, we expect a percentage value in the upper half of our midterm target range. With those words, I come to the end of the official presentation. I would just like to highlight the dates in our financial calendar and highlight one thing that doesn't take place every year. So again, after '24, we have again a Capital Market Day. Please note, this day, it would be a great pleasure for us to host as many visitors as possible this time in Pfaffikon. And with that, I would hand over to Chorus Call and start the Q&A session.

[Operator Instructions] The first question comes from the line of Louis Billon from Baader Europe.

So my question is on the -- concerning the Communication division and the optical circuit switch. So your competitor said that the market might exceed 1 billion by 2028. Do you feel comfortable with this stance? And what kind of market share do you expect in this market?

Yes, I don't know to which comment you refer. I receive comments every day. We hear every figure from a few hundred million to 2.5 billion. We believe that the market opportunity is real. We believe that the market opportunity is sizable. And I don't want to confirm any figure out of that range, but we believe in that market to be substantial going forward in the next few years.

Okay. That's clear. And second question. The number come from Lumentum. And my second question, if I may, it's on the Transportation division. Do you expect more order intake in 2026? Because when we look at the rolling stock manufacturer, it seems that they have not received as many orders as they expected in signaling in 2025. So they are expecting a catch-up in 2026. Do you expect the same catch-up again, especially in Germany?

We don't guide on segment level. But when you recall my comments on the different applications, we believe that automotive has seen the bottom of the valley as far as electric vehicles in the commercial sector are concerned. We believe also that our ADAS application will modestly grow, and for the railway market, we are cautiously optimistic, I would say, that we can at least defend the level of '25, and probably expect some growth from the growth initiative, rail communication. We have a question from the room, Mr. Fehrenbach.

Fehrenbach, awp. Can you tell us how much negative the influence -- influence you had through the U.S. tariffs in the past year? Some companies did maybe a more or less figure? And do you plan to reclaim these funds you may lost?

So on the tariffs front, I can confirm that we had negative impact from the tariffs. Nevertheless, we took a couple of actions to mitigate them. One is obviously to talk to the customer and increase prices. Second is Huber+Suhner has a very diversified production footprint, and we were able to shift production plates from here to there and also adopt the supply chain. So while there were effects, they were finally limited. On the question about whether we plan to reclaim, it is something we're going to look into and are also following the situation on what is possible.

But is it going to say low or mid-single digit...

So it was a manageable amount, and then you can see we were able to mitigate the effect.

[indiscernible].

Yes. From [indiscernible]. The share price, of course, has seen some stellar, very strong growth, over 100% up in 1 year. And you won't find so many examples amongst the Swiss industrial companies. What do you account this for? And have you found also new shareholders? And if yes, from where? And then I remember you, Mr. Ryffel, last time, I think you were cautiously optimistic about this fast charging stations. You said, in some areas, even people are starting to queue up. What is your expectation now for the current year? I mean, will people, especially now with the oil price, obviously, which has gone up quite a bit and people decide now on buying an e-vehicle now more than in the past? And if you allow one last question. Share of defense, I believe it's now 16% together with aerospace. What could it be in maybe in 2 or 3 years' time as the growth is now really showing in your results?

So we don't comment share price development. Our task is to manage the company. That doesn't mean that we do not follow the share price with interest. And of course, it proves that our strategy is seen positively in the market, and so is our positioning. I think there are several effects that have had an impact on the market perception of Huber+Suhner. One is certainly the broad growth in the Industry, which is positive the future of Huber+Suhner because I pointed out, this is the highest margin business. That's why it is our explicit strategy to grow above average in this highest margin business. Another effect was our presence with this highly differentiated technology in the data center market, which has caused a lot of attraction, and we have heard the previous question about the market potential, and my answer there was, yes, the market is real, the opportunity is real, and it's sizable. So I think these effects have had an impact in the market. HPC, I mentioned also at some point that we were happy with the development last year. Our ambition is to defend our technology and market leadership in this higher power application based on cooled cables, and we had a positive development in '25, and we are trying to duplicate this success of last year also this year. So I'm confident that the infrastructure is not built yet. And what was the last one? A&D, the share, we will see, I mean, probably 16%, as all other businesses are growing with the same pace. Now this is difficult to say. Hello?

Can we briefly return to the optical switch, please? The first question I would have is your ramp-up in the facility in Poland, could you provide us some details about the progress that you're achieving? And are you on budget with your own expectations? The second is, I understand that you're considering also the collaboration with the contract manufacturer to accelerate the ramp-up of the optical switch production at some time. Are you already engaged with potential candidates? And the last one is a more general remark and question. Your competition in optical circuit switching is moving at rapid speed, NVIDIA pace, so to say. And in terms of ramping up and scaling the entire product, are you convinced that your own Polatis entity is moving at the same pace? And are you holding your position? Or are the others catching up or even moving ahead of yourself?

Yes. So please understand that we don't give a lot of details about our ramp-up. But I would like to answer your first question by stating that we are, broadly speaking, on track with our ramp up. Whether we are ramping up with the same speed as our competition is difficult to judge because from what we hear, we believe that they move with the speed of light. But that is -- the question is, are these words or is it real? We don't feel that we are falling behind. That is statement I would like to make, and I would like to state that from a technology point of view, we stay at the forefront. And outsourcing, that falls under the category of the first step is something we do or we don't do, and we don't talk about it.

And the other question on OCS. So what I try to understand this hyperscaler order that you have announced in the summer, could you share more or less how much of that entire contract is already reflected in orders? And then secondly, also I'm afraid somewhat related, but if you look at the CapEx at least. Like a year ago, you said you would ramp up CapEx to build that factory in Poland. Is like a similar step planned? And what should we kind of pencil in for CapEx going forward?

Yes, we don't disclose that. You can assume that some of the CapEx went into our ramp-up that is, that has the objective to increase output of our OCS. The order of this hyperscaler in summer, you can try to calculate, we don't disclose that. We communicated that we have a significant commitment. Please bear in mind that we always said that in order to release the investment, we wanted commercial commitments in volume and in orders. And we are determined to stay in this market not just for 1 or 2 years. We believe that this market is highly attractive for Huber+Suhner for the next few years. And that's why the orders this summer probably represent an important milestone for Huber+Suhner in order to release significant investments to serve this first volume customer, but we hope that this customer will engage in a long-term partnership with Huber+Suhner going beyond the orders that we have received and booked this summer. There is also the opportunity to diversify our customer base. We will talk about that when it's confirmed. But you can be assured that we work on trying to win additional customers. And we are in talks, engaged with a wide range of large customers in the market.

Two follow-up questions. You've mentioned explicitly Stadler Rail. So is this -- may -- is this that the customer in the rolling stock business for you, maybe even the only one? And what makes it so significant that you mentioned it? And then, again, just as I asked the question before about, I mean, do you think there could -- what's your expectation really for the uptake of these electric vehicles now with the oil price being much higher, I mean, could it have an impact? I mean, obviously, this would also help your -- the charging business and the charging stations.

Yes, I mentioned Stadler because in a Swiss context, this company is best known. But I could have mentioned other railway rolling stock OEMs such as Alstom or Siemens or CRRC. So we are globally serving the railway industry, and we are a market leader for cabling. Stadler is an important customer, but definitely not the only one. And as far as the pickup rate of commercial vehicles, EV commercial vehicles is concerned, our market analysis shows growth of 14%, 13.7% or 13.9% during '25. We haven't seen that due to the fact that the inventories were full with our products that had to do with the peak in '23, still, but we expect that, that will certainly have an impact going forward on Huber+Suhner's business. So I say I don't want to stick out my neck too far and say it's growing by X percent. But as I mentioned, we believe that we have now the trough, we have now crossed the bottom of the valley. And the electricity also needs to be available.

You mentioned in your presentation prominently the progress in hollow core fiber. Can you let us know what has changed from last year to this year? And second, we were missing in 2025 follow-on business from your customer in India. Is there a realistic chance that this business will come in 2026?

Yes. So hollow core fiber is a new technology. And the market struggles with ramping up the production capacity of hollow core fibers. That also requires huge investments. And so that is currently the bottleneck. And the cost of hollow core fibers are still much, much higher than standard single mold fiber. But those that follow the communication market, they know that 30 years ago, also the standard single mold fiber had a completely different pricing. We believe that this market will evolve and that we are well positioned, but we don't expect '26 to be a boom year for this technology yet. And India is India. The market there is up and down. This project that we have completed was successful. And the follow-on order is still pending. It may come to Huber+Suhner, but it's difficult to predict. This government project, they follow the government logic, and it's not something that can be reliably planned. We just have to be ready. We are fighting for it, but no news.

Tommaso Operto, UBS. A question on the outlook. I mean you say at least 10%. Could you share what are like the moving parts and what the range could be potentially?

No. No, the guidance is at least 10%. And if we have more information, we will obviously share that with the whole market.

I would still have an understanding question concerning the CapEx ramp in Poland at Polatis. Can you allude on the CapEx because there was -- there were reclassifications done, I think, in Note 21 in the annual report. Maybe you can comment on them? And tell us the whole capacity in terms of millions of turnover that you will be able to realize, just for us to understand.

No, that information goes too far. So you can assume that from the CHF 55 million that we spent, some of that went into Poland and the ramp-up, but it's not our only opportunity, and we don't put all eggs in just one basket. So there are also other initiatives that deserve our attention and our investments. We report on spend and not on approvals. And I can share that the approvals in '25 were higher than the spend. So there is more to come.

And maybe a related question concerning the patterns of these contracts. There is no prepayment, there is just volume agreements, price agreements over many years with those lead customers or this one and hopefully more lead customers. Is that correct to assume?

That's correct to assume. [indiscernible]?

You also mentioned the WDM technology from Cube Optics. Do you already have sales from this technology or when will it be ready? When will we see more of it?

So my answer will not surprise you. Yes, we have sales, it's still small amounts, and we could achieve much more if we had the output. So it's another ramp-up topic.

Is the ramp-up already started?

It has started, and we are working on it.

And that's also in Poland?

No. That is in Germany. That's a Cube Optics initiative, and it's a highly automated and therefore, complex process, which explains why ramping up is not done overnight. I think we have addressed all questions from the room. Are there questions from the call? Christiana will read the questions from the call.

We have one question from the webcast -- I'm sorry, that's a clash -- from [indiscernible]. He is asking to comment on the number of employees that have increased. So where does the increase come from?

Yes. The increase is not significant. Obviously, Poland accounts for an increase. The decrease in India is not seen in our figures because the ramp-up was mainly managed with temps, which we don't report under our head count figures. Switzerland is pretty stable. There is a few people more in Switzerland. But the head count topic doesn't provide a lot of interesting insights, I would say. More? [indiscernible].

No, just because I think it was not answered yet, but I mean, have you gained new shareholders?

We have currently gained new shareholders, but we are not allowed to disclose that. Every shareholder that is above 3% has to be reported. And that's how much -- that's all information we provide.

I think what can be confirmed that the investor relations activities have picked up during the course of last year.

Okay. So it indicates more road shows or more...

Yes, also a lot of request for meetings. I think there is no further question, neither from the room nor from the call. Then I would like to thank you very much for your interest in Huber+Suhner, for attending in person or in the call. And as always, those that made it here to our press conference in person, we kindly invite you to a stand-up, small launch here. All other people, I would like to say goodbye, and hope to see you again latest in summer when we publish half year results. And if not there, then definitely at the Capital Markets Day. Thank you very much again. Have a good day.

Thank you.