Montana Aerospace AG (MTASF) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Montana Aerospace 9 Months 2025 Earnings Call. I am Valentina, the Chorus Call operator. [Operator Instructions] 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 Michael Pistauer. Please go ahead.

Welcome everybody to 9 months 2025 earnings call of Montana Aerospace. This is the first earnings call is a pure-play Aerostructures company goal, which many of you know, we followed consequent since 2023, and we are extremely happy to announce that this time, we have achieved this goal to be pure-play aerostructures company. Yes, balance sheet is still heavily impacted by the carve-out of the Energy segment. We will go into detail of those aspects. But still, we think aerospace is doing great. And we are more than positive but and confident that we will also, in the future, outperform our peers in aerospace. Let's -- to date, the aerospace earnings call, as always, Kai Arndt and me, Michael Pistauer, will guide through and we are happy to answer your questions after the presentation. of Montana Aerospace earnings in 2025. Where are we right now? We announced our strategic transition into a pure-play Aerostructures company already in 2023. And the reason for this statement and strategy was pretty clear. We think that aerospace as an industry has a extremely long-term perspective, not many other industries can share this long-term perspective was we connected with long-term contracts, which we will then also discuss a bit later on. And we think we can outperform the market, consequently, something we treated in the past few years. And we can outperform for the future, we think because of a special setup. Why? We do have a very special approach to the market. We are situated in the meantime, transition we had in the last 2 years as a global player, still local to local, something which is under the light of tariffs and other developments, more important than ever and also adds additional market share to our portfolio. We are one of the few ones in our special area we are in, with fully -- as a fully integrated value chain, something which is also for the future, we think the market still and the supply chain stays shaky is more and more important to pass that up at the end with our customers, which are the Tier 1s and OEMs in aerospace industry. And last not least, we have not only best-in-class entities, but most of our assets are situated in so-called based cost manufacturing footprint countries. Price pressure is something which is constantly on in certain price pressure for us with situations or set up like we have is a positive momentum, which also brings us some tailwind into our development. And we have a very clear core, which helps us to perform better and better together with our customers. Let me elaborate on the carve-out, which is definitely one of the crucial topics within our balance sheet in the 9 months results. And we think that the carve-out is highly accretive for the company on an Aerospace. Why? We have achieved enterprise video in the cavort of EUR 204 million. And before we go into the details of additional impacts, let me shortly elaborate the transition history. In 2023, when we announced with Montana Aerospace is elaborating into a pure-play Aerostructures company. We tried a so-called carve-out IPO in the Energy segment. We fade -- we phased out of the reason that the carve-out IPO within the stock-listed Montana Aerospace was not accepted in the market and by the investors. We can have consequently M&A possibilities work out and more than 30 interested parties went through a very deep diligence. Many of them strategist like Siemens, GE and other companies were not able to participate in the carve-out due to the market share of energy segment and therefore, the fear of consequences of trade commissions in merger control issues. After 2 years' time, we choose the highest -- by far the highest offer they have received. Yes, with some impact, but on the other hand, by far the highest offer. And also because we had some time pressure, time pressure, which was given by the [indiscernible] we were able with this condition precedent or are able, with this condition precedent, to shift some debt into equity with no diluting impact for the Montana Aerospace, which I would like to explain. So all in all, we achieved with the carve-out of energy, EUR 23.7 million into [indiscernible]. We avoided as a Montana Aerospace equity injection, which was planned and also guided of EUR 30 million. This is done by the new shareholder. We have an opportunity for unscaled untapped earn-out component, which is also to be paid either by good performance of the Energy segment for M&A transaction or an IPO of the Energy segment by the shareholder to Montana Aerospace. And here, we calculate with an amount of EUR 40 million plus already to happen, hopefully, in the next year to come. And further, we have been achieved our -- as a goal, as a pure-play aerostructures company, which gives us provide us, I would say, the fact of the condition precedent to fulfill the debt equity swap with the pension state fund in the amount of more than EUR 66 million, which otherwise would have been cash effective to pay back. So all in all, we think with an amount totaling up of clearly over EUR 320 million, a very accretive topic for Montana Aerospace, and therefore, we are quite happy also to announce. Cash impact is a bit delayed as the closing of the transaction was late in September, 2025. The net debt impact will be around 25% of the total amount in Q4 2025.and around 75% is expected to happen within the first half of the year 2026, most likely even in the first quarter 2020, which also lead us later in the guidance or I would say, very optimistic and positive guidance on net debt or net cash with onetime net debt EBITDA this year and even a net cash position together with the operational business and the Aerostructures cash flow in 2026. Let's go into the details of the first 9 months of 2025. And here, we see again a P&L, and please note this P&L is showing only anymore the Aerospace business. Montana Aerospace also as it will look forward looking without the energy segment with the pure-play aerostructures company, which is [indiscernible]. And what we see is in sales, stronger than the market growth with 15.5%, the net sales of EUR 712 million. And as announced, the overproportional development of the EBITDA. Yes, the quarters are not any more completely the same. There is a kind of a seasonality with a strong second quarter and a very strong fourth quarter to be awaited expected, mostly even EBITDA, which also then bring us related to a very strong EBITDA guidance for 2025 and also for 2026. The result, which shows the result of the continued operations from negative to positive within 1 year. And please note that the results still includes heavy impact of a noncash impact we have to suffer with [indiscernible] is the FX impact, which is in the financial result. I did repeat my specific within the financial result, you find a position of almost EUR 30 million of negative impact, which results out of IC loans or intercompany loans from Montana Aerospace to its entities in U.S. dollar. And as the dollar changed dramatically within this year, from around FX 105 by the beginning of the year to at the end of December date of 117, more than 10% of this almost EUR 300 million loans are evaluated differently, even so they will never have a negative cash impact for the Montana Aerospace as shown in the result. And still then with this EUR 30 million impact, we show a continuous operations result of 3. Otherwise, it would have been 33 or even more. CapEx, and here, I would like to stress the CapEx without the industry segment for comparative reasons, slightly lower than last year, and I would say, exactly in the area of our guidance where we say always even with small additional capacity increases are at the level of EUR 40 million to EUR 60 million on a yearly basis, which is far below our depreciation, therefore, shows the strong cash flow, operational cash flow, possibility and potential. Net debt, including the total company as it is on the years and or in this case, the 9 months end thing shows a quite significant decline in comparison to the last year 2024. Please note that within this year, we had decide also the carve-out of ASTA, our Energy segment, an impact, which was net debt related. There was an earn-out component of the -- out of the ASCO transaction, ASCO was bought by Montana Aerospace within the year 2022, 2023. There was always an earn-out component within our balance sheet, sheet in the amount of EUR 30 million. And this earn-out happened to be paid out by July 2025 in the amount of EUR 28 million. It's a bit less than what we expected. But nevertheless, of course, this impact was also something which impacts the net debt. Without that impact on a like-to-like basis, the net debt decrease would have been even over EUR 100 million to be more specific, EUR 30 million -- almost EUR 30 million, lower than what we see right now. Free cash flow shows the total impact of the transactions I just told. On the one hand, the earn-out component, but also the impact of the carve-out of the Energy segment. Nevertheless, without the impact of the Energy segment. The free cash flow shows at the level of EUR 2.8 million without the impact of the additional earn-out component for the ASCO segment, the free cash flow would show an amount of over EUR 30 million. So on an operational basis, we are -- on an operating basis, we are extremely happy with the development and, I guess, if you look at the details, it shows the strong position as the Montana Aerospace has. And additionally, with the pretty strong contracted sales of over EUR 7 billion, where Kai is giving also some more color on it in just a moment, we think we have prepared more than positive for the future. Details on the results, I would -- is it is aerostructures. I would like to hand over to Kai Arndt to give you more details on the development of the industry and of Aerostructures, Aerospace, Montana Aerospace in the last few months.

Good afternoon, and everyone, before I start with the details, and let me also give you some remarks -- personal remarks from my side. Of course, everybody is under the impression of the today's share price development. I'd just like to mention that I'm not focused on a day or a week or a month or a quarterly development I'm definitely focused on the sustainable development of the company. And I guess, we have all the right to say that for the last half year, and there's absolutely no reason to questioning or getting negative on our business model. So we stay positive and there's a good right to do so because we see what is happening in the market. And there's no changes in the last months. So the OEMs still publishing the same rates. Our market position is getting stronger and stronger. We are winning more work packages because the customers like our business model, and it's extremely difficult to be a copycat and do the same business model wherever in the world. I guess this is still very underlined by the recent development and the recent packages we are winning. And as said, there is absolutely no reason for getting pessimistic for the future are getting negative on our business model. I don't see that. We are winning the packages we want to win, and this is definitely also reflected in the margins we are able to create. And I guess this is giving us the right to stay positive on the business model, and we will continue the way we have chosen just a couple of years ago. Why are we a bit more pessimistic for the future? I will come to it on the next pages. Let me start first with the current development of the quarter 3 compared to 2024. You've seen that we are close to a 20% increase quarter-by-quarter comparison and also a 17% increase in our EBITDA. As Michey already said, traditionally, the strongest quarter of the year is the fourth quarter, and I'm staying positive that we will at least achieve the guidance for 2025. There is no reason we shouldn't not achieve it. We see what's coming in. And therefore, I'm quite positive that we said, at least achieve the guidance for '25. And let's move ahead and then we can see about our rate assumptions and the guidance for '26. I don't see the next page now. Okay. No. Yes. So here, as already discussed and mentioned, there is always the influence of the energy business. And as you can see, if you compare quarter-by-quarter, operationally, I guess, we are doing pretty well in line with what we expected for the different quarters. The trajectory is absolutely healthy and definitely, it will continue like this. And for the fourth quarter, as already mentioned now a couple of times, it should even be stronger than this one. Okay, what does this mean now for the outlook in terms of really the rate assumptions and the guidance for 2026, I guess this was one of the biggest questions and maybe a reason for some questions also later on. If I come to the guidance, as I said a couple of minutes ago, from the environment we are in, you don't see any changes from the big OEMs. You don't see that they adjust their delivery announcements for '25 but also for '26. But if I see one, if I look a little bit deeper into the market, I also see that Airbus announced around more than 50 gliders in to [ lose], I saw photos of one of our biggest customers, Spirit AeroSystems and [indiscernible] where I see more than 200 [indiscernible] largest on stock. I see that the supply chain is still influenced by fast enough shortages and so on. And also, we see some discussions we have on the extrusion side in terms of the volume demand for 2026. So if I combine everything of the information we get from our customers, but also from our supply chain. I think this is the reason why we probably we are a bit more conservative than the complete market. But I'd also like to say in the last 4 years, there was not a single time in one of our earnings calls that we had to come with the winning warning. It was only one time and this was a positive one. And I guess in terms of professionalism and also in terms of the conservative approach we might take in here, I guess this is simply what we see from the supply chain, but also from the OEM. And this has been embedded in our planning for 2026. We are not that much focused on the revenues. And just to be also very clear on this one, we are focused on our margins. We are focused on the generation of cash flow, and we are focused on a lot of projects which are in the pipeline and where we are in very, very good discussions with our customers. And I'm quite positive that in the near future, you will see a lot of announcements coming from our side in terms of maybe new projects where we're engaging ourselves and also in terms of new contracts, we will be able to sign with the big OEMs. This is definitely giving us the baseline and the fundament for the way forward. And I'm ready to take every challenge or every question on '26 and onwards. But again, I guess, we are in a very, very healthy position and I'm quite positive that we at least achieve the guidance also for '26.

Shortly a bit more details before we come to the guidance also on some numbers. You see here the cash flow of Montana Aerospace development, which was already discussed by Kai. The quarter 3 was still impacted in the free cash flow, not only by the Energy segment, but also as we said, by the so-called earn-out component concerning ASCO and taking this one into account. Also, the free cash flow would have been above the year 2024. As you see on the next page is a constant development of the trade working capital and also of the net debt. So trade working capital since our high peak 2 years ago, we constantly worked down EUR 365 million in quarter 3 2024 versus EUR 328 million. by Q3 2025. In absolute terms, the reduction of almost [ EUR 40 million ], sorry, concerning percentage, of course, considering the change of our -- now from a 2 segment to 1 segment business, there is a percentage change which is in line also with what we guided and what we expected to be prepared also to overcome certain difficulties in the supply chain of others with our stock we have and therefore, been able to supply another scale. Net debt constant reduction. The outlook already for this year is to be -- which will come into the guidance in a second, is to be at the level of onetime net debt-to-EBITDA and consequently, together also with the proceeds of the carve-out, which we said already are expected to happen on the net debt level in 2025 by around 25% and around 75% of the remaining amount by beginning of '26, we think that we will end up with the net debt level of positive cash level of higher double-digit amount by end of 2026. So no net debt in future, but net cash, which provides us additional firepower for not only dividends but mostly for additional activity, either in CapEx or in M&A's. The build rates, which were discussed by Kai. So market development. I said it's a bit still not in line what were the announcements of the OEMs, and that's also something we keep on going for the future. Concerning our expectations, we think there's a steady development upwards, so more bitrate of the OEMs, but not as fast and not as steep is sometimes announced or hoped. And this is on a -- so therefore, there is market growth, yes, not as deep as sold. But on the other hand, still also concerning the shakiness of the industry, additional tailwind for our businesses, which gives us a situation where we can choose between the possibilities on the market and the packages, which we think is quite favorable and positive to [indiscernible] up with the OEMs. Finally, we come to the guidance. The guidance now as a Montana Aerospace aerostructures, pure-play company. So we slightly increase even our, I would say, single segment industry company, the sales to above EUR 900 million or around EUR 900 million. In 2025, heavy growth also in comparison to last year. Aerostructures segment, we think and guide for adjusted EBITDA of around EUR 160 million. Therefore, exactly once again mirrored what Kai already announced to be expected a very strong quarter for 2024 '25, mainly in the EBITDA and on the other hand, also concerning net income and free cash flow, and therefore, also be guide with a positive net income by year's end on the operation and the business as it is on the continued business. And as already said, net debt of around net debt onetime EBITDA by the year's end 2025. 2026, again, impacted by growth but the focus is on cash flow strong and also EBITDA, strong growth pays to over EUR 1 billion on aerostructures, aerospace, Montana Aerospace and the adjusted EBITDA growth of EUR 185 million. Please let me explain that our assumption for this EBITDA also is based on a certain FX and certain tariff situation. We calculate with a U.S. dollar of 1 19, which is in comparison to the last guidance we gave at the beginning of 2025 at 1 05, much weaker comparison to the euro or, let's say, 13% difference. What does it mean in the business or industry, which is in general a U.S. dollar-based industry. 95% of the sales in this industry, not only for us, but for everybody, is U.S. dollar-based. Even companies like Airbus, invoiced and calculate fully in U.S. dollar. So out of a sales volume of around EUR 1 billion, we do have a long position in U.S. dollar of around 30% or, let's say, equaling more than EUR 300 million. In this EUR 300 million, now having an FX impact, which we at least expect with 119 versus 105 amounts for more than EUR 30 million, almost EUR 40 million. On the other hand, we still think that even though the tariffs with -- after first shock, I would say, in the first months of 2025, had shown that general aerospace is in most parts, excluded. Nevertheless, certain supplies and other topics in the full value chain are still impacted. So over here in comparison to the guidance of end of 2024, beginning of 2025 for the year 2026, we see or calculate with an impact which is versus almost double-digit million euro amount on EBITDA. So on a like-to-like basis, same FX or lower FX in case of this development, and then maybe eased or stable development of the tariffs, the EBITDA would be up by more than almost EUR 40 million. And therefore, I think this EUR 185 million adjusted EBITDA with this conditions precedent or assumptions is mirroring a very strong EBITDA and growth for the year 2026. Last but not the least, and already mentioned today, strong cash flow. Operationally, with decent CapEx and a more stable trade working capital, therefore, strong cash conversion on the EBITDA. And on the other hand, the impact of the carve-out, therefore, we calculate with higher double-digit million euro amount on a net cash position by the year 2026. Saying that, we would end the presentation, and happy to answer your questions. Thank you very much.

[Operator Instructions] The first question comes from Josh Sullivan from JonesTrading.

Yes. So just to be clear, we strip out the FX and tariff noise on the '26 guide you said you're conservative on guidance. But is that the same position you were sequentially on the conservatism? And just to be clear, you're incrementally positive on build rates in the Aerostructures segment generally?

For the bill rates, I would like to hand over on to Kai. But before we start, we go over to the build rates on the FX, yes, we calculate with an FX of 1 19 to the euro, which means a very weak U.S. dollar. This was by end of September, beginning of October, I would say the forward-looking exchange rate. So saying that if the development is like right now, not as weak concerning the U.S. dollar, we would have, of course, the positive impact out of it, so sustain it like right now, 3 points less than the 1 19 already impacts many million euro amount additional EBITDA. Of course, we hedge to a certain extent. So for instance, this year, we hedged most of our sales at 1 07 for the total year's average. But of course, hedging is only possible for a certain period of time. And therefore, right now, the guidance is based on a full FX impact of 119. For the build rates, please, Kai.

Yes. Thank you, Michey. Yes, as mentioned in my little speech just a couple of minutes ago, there is some variance in terms of how we see the build rates because we have so many different work packages ending up in a different set of the aircraft, if you just compare the wings for the 737 [indiscernible] the 737 then there is a big variance, a big difference in terms of the volume demand for 2026. I like to be very clear because I guess this is the name of the game today and all clarity, I guess we -- overall, we have roughly a discounted build rate of, I would say, 10% in most of the packages and some other areas like extrusion, we see even a stagnation in terms of the demand from the supply chain. And this was one of the reasons why we has a more conservative approach for 2026. We are flexible enough if the volumes are increasing more than expected. Then, of course, we are flexible enough to deliver even more. But for the budget assumptions, we were very details in all of the different work packages, we more or less have different assumptions in terms of the build rates, especially when it comes from exclusion to machining to detail parts and assembly, there's always a different set of rate assumptions because we see what's demanded by the customers, but also we see what is happening in the supply chain. Overall, I mean, there is a steady increase from '25 to '26, which is still -- and given the industry we are in, I guess, a very good place to be, but it's maybe a little less than anticipated by some of you.

And then maybe in the remarks, you mentioned you're winning more work packages. What is Montana's ability to take share here as you see it build rates generally accelerating over the next couple of years, Spirit being absorbed, fractured supply chain? Can you just talk a bit about those work packages you're winning and how we can think of the work package opportunity for Montana over the next couple of years?

Yes, with [indiscernible] because this is explaining the business model we are we are in and what we can deliver to the customer. And I guess it's always the customer who's giving us then the bigger packages and, of course, is willing to pay for it. that's the main topic. So a couple of years ago, we are winning packages which were maybe in the machining, maybe in the extrusion, maybe we won also some packages in assembly for Vietnam, but none of them were really vertically integrated. Today, we are winning work packages from the raw material until the final delivery which, of course, is giving us then the chance to also create higher margins because it's a demand situation for customers, but also for us. This will continuously go like this. We are approached by the customers for these kind of work packages. And we are definitely refusing single work packages out of one technology. That's not longer what we are after. We want to have the full packages, everything under our control, and that includes also the supply chain. So whatever we can build on our own. We want to be independent from any supply chain terminal. You see that today, and I guess it will continuously happen in the next 3 years that there will be suppliers which underrated their inventory situation, and there will be some impact from the supply chain in the next 2 years, at least that's my hands. And we can go after packages where we are more or less independent from those impacts and this is recognized also by the customers. You mentioned the Spirit takeover by Boeing. Yes, of course, this will open up a complete new field of business because I -- my guess is, after the takeover Boeing has to clean their portfolio, and they are searching for reliable partners. We are in discussion with Boeing on some of the packages and I'm very, very positive that we will find solutions also in the near future on them. What does it mean? I guess we will see the impact of these work packages maybe in 18 or 24 months. It will not influence the '26 numbers. But for '26, I guess, with the current worst-stage we are quite happy.

And then I guess just one last one, I'll get into the queue. Can you just make any comments what you're seeing in the space market. And as that economy grows where your exposure is and what your expectations are there?

Yes. I guess you heard me saying in the first quarter earnings call and also in the second quarter earnings call, we are absolutely happy that we are winning more and more market share in the space industry and the space market. On the other side, we always said that this is not the core business we are in because yes, the changes in the space market for work packages are so fast. And I would say it's a 10x multiple compared to the aerospace business in terms of design changes, and it's by far faster. So they are looking for flexible partners. This is why we are winning the packages. We are faster than anybody else in the industry. And for the moment, we are quite happy of winning even more were packaged even more market share with the space business. But as I said, I don't think on the long run, I'm not quite sure if this will be a sustainable inflow of revenue than EBITDA. So this is why also on the space. we have not this steep increase in '27, '28, '29, which is maybe and some other guidances visible. But I guess, we are in our field in the industry for the space. I think we are also market leader on this one. Well, that's clear enough?

Next question comes from [indiscernible] Wider from Berenberg.

Maybe on Q3 free cash flow, can you just run through the competition of the EUR 39 million cash costs relating to the asset divestment firstly?

Yes, this is no problem. It's just explained. Of course, we looked at the impact in the cash flow statements directly in the statement we published today. There's, of course, the disposal impact of the so-called discontinued operation as the net cash impact, but it's also the acquisition of intangible assets and property and plant, which shows a position in there. And together with the changes in assets, which you dispose, you come up then with the total impact of this EUR 39 million. So it's minus the cash which you -- which we sold. So the impact is mostly that there was some cash impact also given to the -- when you dispose the asset, IFRS looks at it in the case of what went out in this moment. And at the moment of the transaction, there was a cash payment or net cash, which was at ASCO of around EUR 50 million. So this is part of the cash flow statement. On the other hand, there was also a lot of debt, which was acquired by the new, let's say, shareholder or part of the Energy segment, which also flew out, but it's not in the cash flow statement. So therefore, it's really hard to read. -- sorry about it, but hopefully, it explains. So you look at the balance sheet as it is. The cash flow statement, of course, shows already the cash impact directly, but are not the disposal of net debt. The disposal of net debt is in the cash flow from financing activities. And there you also have the impact of the reduction of the net debt out of the Aster transaction.

That's helpful. The second one is on free cash flow. So you helpfully guided to higher double-digit million net cash position at the end of FY '26. Can you just run through what you expect in terms of free cash flow for this year and next year, please?

On an operational basis for 2026, we guided for EUR 185 million adjusted EBITDA or you say EBITDA. IFRS, there is a CapEx in the amount of higher double-digit amount included in the cash flow. There is a low taxation still, there's also -- it's not part of the cash flow, but also a lower interest rate expected. We have -- we can collate with something around minus EUR 50 million financial result of the -- it was all in '26 and [indiscernible] collate with a high -- the EBITDA -- sorry, with more or less stable trade working capital in absolute terms. Even though the sales are increased, therefore, a better percentage. And if you sum it up, you come to operational cash flow, which is in the amount of triple-digit amount million euro and even if you deduct on a, let's say, comprehensive cash flow discussion also deduct taxes and interest, you're at a high double-digit amount million euro cash flow our cash in 2026. So high cash conversion on the EBITDA. We always said that we intend to have a cash conversion of the EBITDA of 50% plus is that's I think something we can achieve in 2026.

Then the last one is just on the build rate assumptions. You mentioned no big changes in discussions with variance. Can you just comment about what you're seeing on the A320 with Airbus build rates in 2026 and 2027?

Yes, with pleasure. Let me just add one comment to your question to the cash flow generation because I have your market study in front of me, which you published on the 17th of October. And I definitely like to say there's no reason that I doubt what is in your own paper, and we are, by far, generating the best cash profile in the next 5 years. So the compound average growth rate in comparison to all our peers is by far higher and this will remain. So there's no reason why we should put this in question -- and even if you then compare the PE ratio, this is by around 9% in 2030 compared to the median, which is around '25. So this is why I'm always coming back to the environment. I'd like to speak with data and respects. And this is your own market study. This is why I just wanted to come back to it and give you some add on this one. In terms of the rate assumptions, I mean there is clearly the path forward for the rate 70, 75 on the A320 was published. They want to achieve the 75 million by the -- I think it's by the end of '27. Currently, they are evolving in this direction. As said, we have some different work packages, which we are delivering to Airbus. As I start with the ASCO work packages, which is being movable. So the flat,the flat tracks, we are delivering for the A220 and A320 out of ASCO Belgium. And there is a huge difference in terms of what we see as the announcement and what we see as the demand coming from broad in the U.K., where they are assembling the other things. This is exactly what I was talking about when I was talking about the differences in terms of what you see as an announcement from the OEM and what we put into the budget. And I guess our budget assumptions are still very realistic, very serious and professional. So I definitely stick to them. We are in talks with Airbus if there is a higher demand coming up because the inventory levels are going down, then, of course, we are ready to deliver more. But I guess we if you talk and raise, I guess, we are always a little bit behind the announced rate of Airbus because the inventory levels are so high, especially in the assembly areas of Airbus themselves. If you take the 737, for example, I mean I'd like to remind everybody the difficult times we have been through in the last 3 years with all the turmoil [indiscernible] was in the door blowout last year. And this created so much friction in the system. And my hunch is that in every of the single suppliers, and I'm talking about more than 10,000 suppliers still, there are so many different levels of inventory, and this is seen also in the demand coming through our extrusion facility that we need to be very careful with how we plan the volume and how we distribute it to the supply chain. This is why we definitely also see in terms of the 737 announced rates, we are roughly always 5 shipsets month behind what Boeing is seeing in their announcement. This is simply based on the fact that we deliver a lot of part into the fuel large. And as said, there are still around 200 through the largest in digital. And I guess it will take at least 2 years until they have burned down the inventory to a normal level. And then of course, we will participate also in the rate announcement which are given to the market. So this is the logic we have been implemented in the budget. And I definitely guess there is some room for opportunity, no doubt. But after 4 years or 5 years in a row where I guess not of the OEMs delivered to their announcements, I guess that our conservative approach was always the right way to go.

The next question comes from Aymeric Poulain from Kepler Cheuvreux.

I've got 3, please. I've got to say understand your guidance for 2026. So could you help us just with very simple numbers, what volume do you expect in terms of shipset in 2026 growth -- in terms of growth for volume? What the pricing you would see, what the FX assumption that you have for 2026? And then on the I'd like to better understand your hedging policy because, again, I didn't understand your explanation. So I think you said 100% of your sales is in U.S. dollars. 70% or so is naturally hedged. So you have an exposure of 30%. And last year or this year, it said at 107. So you have no exposure on the EBITDA of that dollar effect. But next year, you expect 119. So a big drop in the sales coming from the dollar effect, but you didn't explain what the hedging policy was and how much was your exposure in terms of hedging to the dollar. So that would be helpful to have this number, please? And then the last question is as volume should nonetheless increase over the next 2 years, when do you expect full capacity utilization to be reached, please?

Maybe I'll start again at the rates and the utilization. I like to start with a very complete example, which I mentioned already the shipset we are delivering into the new movable or the wins of [indiscernible]. This year, we will end up with around 640 shipsets on the A320. Next year, the current demand from Airbus is around 720 plus. This is what we have budgeted for. This is what I was talking about in terms of the rate assumptions and maybe the rates which are published these rates might be a bit higher, but this is not what we see in terms of the demand coming from the OEM directly. So the second question, was it again on the rates? I'm not...

It was to make -- because you give figures, but in terms of the translation in the model, it's impossible to actually see what volume growth you actually assume because you say, okay, there may be some effect, but we have also hedging -- sorry, FX that have to impact your '26 sales. So would you be able to just give us simple numbers like volume growth, pricing, FX that will help understand the '26 guidance perhaps a bit better, please?

Okay. I mean in terms of pricing, that's not easy in the call to give you a pricing assumption, but you see the revenue growth, you see the EBITDA growth. You see the margin evolution year-by-year, and this should give you some boundaries about how we manage the different volumes. And when it comes to the FX and the impact from the -- of the FX, I'd like to hand over to Michey here.

Yes. Simply said, as it considering the pool rates, so let's say, for us necessary bitrates and we calculate around. It depends really on the work packages or the certain parts because certain areas, a lot of inventory still in the supply chain, sometimes more, sometimes less. And I said, we are a bit more conservative concerning our expectations of the build rates of the OEMs. But we can calculate with around 10% growth on the pull rates 2026 versus 2025. So with A320, depending again from 2. We calculate with less than 800 ship set on a yearly basis in 2026. Again, a bit depending up more down from which part we are discussing calculating always in a certain amount of inventory in -- with the OEMs or Tier 1s. For the 737, better growth, but still definitely not the 42, which is announced there. So also here, we calculate with less than -- around 40 or less than 40, depending again on the parts. All in all, plus/minus around 10% growth from the pull rates, which is expected if it comes stronger, we are happy -- and also from the outlook, we don't think, for instance, a calculate with more than below 70 build rate for the A320 for the next years to come. So also here, we are a bit more conservative. Nevertheless, we think that we can always grow faster than the market in this area. Concerning FX, yes, sorry about it. It is complicated, but it's the way we are -- it's the world in the meantime we are living in. You're right. almost all of the sales is calculated by invoiced in U.S. dollars aerospace industry is, in general, a U.S. dollar-based industry. Even if we invoice to term and whatever here, it's based in the U.S. dollar. If we invoice to Airbus, it's based on U.S. dollars. So it's a U.S. dollar business and all those contracts everything is done in the meantime in U.S. dollar. It changed also in the last years more in mind to test the direction. So around 95% of our total sales are completely U.S. dollar related. By saying that, you're right, most of it is naturally hedged. So around 70% of the total sales is naturally hedged because we also try to supply or calculate our structure -- base structure concerning all the entities on U.S. dollar phase. So the remaining amount is around 30% of our total sales. And therefore, as we invoice and have less with dollar on our cost side. It's a U.S. dollar long position. The U.S. dollar loan position, you're right, this year, as we have hedged most of the amount for this year is around 107, calculated to the euro. And next year, we took the forward FX rates, which is usual also for this basis for the year. '25 and we calculate and give our guidance on a 119 FX rate. So 105, which was the beginning of the year [ 2019 ] is 13% up or, let's say, less sales yes, for the total amount. And of course, also an impact on the open position of 13% difference. Taking to simplify the calculation, the EUR 1 billion on total sales, 30% loan position. So it's EUR 300 million, EUR 300 million multiplied with 13%. It's almost EUR 40 million. So let's say, it all impacts up and down more than EUR 30 million, which directly, of course, impact the EBITDA, yes. You receive less, that's a simple topic. And this is also part of the guidance. So we calculate that on a like-to-like basis, if you want to compare it to the old guidance of 250, let's try a bridge and the bridge was like 250 for 2026 based on an FX rate of 105 and more or less no tariffs. So if we compare this one, take the Energy segment out because this is not part of the guidance anymore. I reduced the remaining amount by the impact of the FX, which is around EUR 30 million. I reduced the remaining amount by around double-digit amount of tariffs, which we at least -- which we calculate all the security reasons in 2026, even so Aerospace is mostly excluded, but some supplier. So we end up on a like-to-like basis, 2024 guidance for 2026 and 160. Now we show 185 which means we are EUR 25 million better than what we expected at the beginning of the year. And this, I guess, signals the strong position we are in. Well, saying differently in case the FX would be 15 to 107 again. And the tariffs on the supplies are coming not as strong as we expect for the guidance 2026 then we would end up with an EBITDA of 225. Now coming to your last question, which is our hedging or hedging structure. We can't hedge for the next 10 years, times. What we can do is always to try best to mitigate the impact on the next year, which we do. And therefore, until the bigger loan position is creating we try to hedge naturally as good as possible. We try to increase this share, which is more or less in line with our local-to-local strategy. Therefore, I think that also for the future, with less impact on the loan position, which has to be hedged by financial instruments will remain, but not for the year 2026 yet. And the amount then is financially hedged as good as possible. So any time we see a good development below 119, which is the amount we calculate with for 2026. We try to hedge as good as possible our sales and therefore, the impact on the EBITDA. Hopefully, this explains. We had already some positions hedged at the favorable development we had in the past few weeks at 115, 116 , but not all of the volume. And therefore, there's still some other positions. But there's already now a point part of the positive hedging impact affected and will not happen to influence our -- will happen to influence our EBITDA. Therefore, also with the guidance with those hedged amounts should be more than secure and even over to be overachieved in 2026. Sorry, that's a complicated world in the meantime, concerning the changes of the FX. It was not as heavily audit on these topics in the past, but the industry changed. The industry changed concerning tariffs. Concerning more local to local, the industry changed concerning everything in the meantime, even Airbus, the European company everything to dollar. And therefore, also, we have to guide on that point.

The next question comes from Christian Bader from Zürcher Kantonalbank.