Sartorius Aktiengesellschaft (DIM) Earnings Call Transcript & Summary

So good morning, everybody. Welcome to the Sartorius and Sartorius Stedim Capital Markets Day 2025. My name is Petra Muller. I'm the Head of the Investor Relations Department, and welcome you today on our campus in Göttingen. So it's really wonderful to see so many of you have made the effort to come here in person. And of course, we also welcome the participants who joined virtually. So please be aware that the morning session is being recorded visibly and audibly. So in case somebody here in the room has any concerns, please reach out to one of the IR team members now. So we have an exciting day ahead of us, packed with insights into our strategy, into innovation and how we will drive growth and create sustainable value. We will kick off the day with a group session of the Executive Board, elaborating on our strategy and on the midterm targets. And we then will have also our first spotlight session on artificial intelligence. At around 12, we will -- sorry, at around 12, we will have a lunch break. That is followed by 3 more spotlights on single-use bioprocessing on novel modalities and on advanced cell models. The CMD will be concluded around 2:30. And now it's time to welcome our CEO, Michael Grosse, on stage to talk about his views on Sartorius after being the CEO for 9 months now. So welcome, Michael. You are CEO since July 2025. You joined from Syntegon, an international market leader in process and packaging solutions, and you bring a lot of extensive experience in various industries with you. So welcome.

Thank you.

So yes, let's start sharing a bit of your insights which you have gained over recent months. So what have you been most impressed by in the company? And what do you think needs most development?

Good question. Thanks, Petra. And again, welcome for this morning. Yes, I would say what stands out for me, and I think it's really something that has been with me now for the last 9 months is people. I have to say the amount of pride to be connected under this fantastic purpose of better health for more people, connected in their mission in order to simplify progress for our customers, for ourselves, for our stakeholders and unified in this level of bringing knowledge, technology, innovation and new ideas to the market. I think that is really something that for me stands out a lot and drives, I think, energy day in and day out. And even if you -- I have met a lot of people, including Annette, Annette is someone who works in the assembly of the lab balances for 30 years. And still, I would say, the level of pride and the level of energy to provide new ideas, share her knowledge with her colleagues, I think that makes us really unique family of people connected under one purpose. I think the other piece is that we love to find different ways. I think we love to find a new answer to new questions as much as a new answer to existing questions and thereby drive differentiated solutions, differentiated innovation. And I think that's as well unique. That is not a path that we like to follow. We want to basically create that path. At the same time, it is as well true that customers are facing new levels of pressures. There's, of course, demand for -- from the patients in order to speed up development of drugs, make drugs more affordable. There's complexity in regulation. There's pressure and uncertainty in terms of geopolitics and the markets. And all of that is about customers wanting us to be even closer to them. That's a great opportunity for us to step closer to our customers and be there day in, day out as a trusted partner to deliver speed, reliability and quality in order to drive value for them.

Perfect. Thank you. So today, the management will provide a strategy update. So what was the reason to initiate such an update or review?

Yes. You may argue that if we look backwards, I think we had double-digit growth for many years, margin expansion. So we've built a fantastic company with a great foundation and a great position in the market. At the same time, I mean, just recognize since we made the invitation for this event, a new round of tariffs, a conflict that became a war, rising prices on oil and energy and raw materials. The world is changing. It's changing faster and faster. Uncertainty is there. Technology is evolving at an unprecedented speed and will impact our industry in a never been experienced way as ever before. And all of that makes us driving a reflection about not only where we come from, but as well what choices we will have to make, where we want and need to allocate capital and resources to create value, more value and stay close to our customers in line with our commitment to simplify progress and help our customers on that journey.

So yes, I mean, you referred to the past and that we have showed sustainable growth. And of course, one might argue that Sartorius is back on track from a financial perspective. There's no need to change anything in an attractive market like we are in. So what's your take on that?

Yes. You may say that there's good reasons for us to be proud and complacent with good results. But the opposite is true. Good results motivate us, inspire us to deliver even better results. So it is now important that we have our strong quarters that give us headroom to further invest in digitalization, simplification, customer-centric innovation. And it's important that we stay ahead of that curve. We anticipate the needs. And I think shaping our future, making deliberate and conscious choices where the difference can be and where we improve the value, that is all about what we do right now.

So building on that, one last question for now, and then we are heading on. So how would you describe your guidance philosophy? I think that's something which really people are interested here in the room.

Yes. Thanks for that question. Let me take it. Well, it is all about our promise, simplifying progress. That's a commitment we make for our customers. That's a commitment we make to us, and that's a commitment we make to the capital market. Progress really means for us driving above-market growth, above-market profitable growth. At the same time, simplifying for us means to make that very predictable to really deliver on what we commit quarter-by-quarter, year-on-year. That means that we cannot and will not guide over aggressively nor we will be over conservatively. So anticipating the level of certainty or uncertainty in the market and at the same time, provide clarity in terms of the visibility and find a corridor that balances this off to simplify progress for you in the capital market.

Thank you. So thanks for this first insight. And now before we really move on into the presentation, let's have a sneak preview into the future of bioprocessing. [Presentation]

So wow, that's really a powerful film. And I think it is a strong reminder of the potential that lies ahead of us. And now our Board will present you why we think this is the case and what we will discuss today. So please welcome back Michael on stage together with the other Board members. So it's Alexandra Gatzemeyer, the Head of our LPS division, joined the Board in May 2023. She's a long-time Sartorian, holding with a background in chemistry and pharmacology and hold various management positions in the company before joining the Board. Then it's Rene Faber, the Head of the BPS division and the CEO of Sartorius Stedim Biotech, who has been on the Board since 2019. And he has a background in chemistry and also as Alexandra, long-time Sartorian and also holds various management positions. And last but not least, Florian Funck, our CFO, who joined Sartorius in April 2024 after working for the Haniel Group here in Germany for more than 20 years, also amongst others, as CFO, and he holds a degree in business admin. So the floor is yours. We are looking forward to your presentation.

Thank you, Petra. Yes, I felt as well what a movie. I really think a very powerful statement, how we depict the vision of the future of the biopharma industry. Let me start by saying preparing event like this is great fun, but it's great work as well. So at this stage, I really want to give you a big hand to all the teams that have been working day in, day out, night in, night out in order to prepare the event, be in front of the scene, behind the scene, communications technical part, engineers, scientists, all of that, please give them a big applause. So secondly, it is truly exciting. I really think for us as a Board, I think we have been working very hard over the last couple of months in order to try to see, look at the market, look at tons of data to drive the choices to create more value. And I really think, I would say we're all quite energized in order to share this. It's as well an opportunity to step back, look backwards and say, where do we come from? What was our path to success? What position do we have today? Understand what's happening around us in the market, adopt our choices, our strategy, our allocation of resources and capital to where it most value in the future and where attractive opportunities are. It is about giving you tangible evidence details and touch and feel for some of the choices we have been making for some of the innovative areas for some of the new products that we are working on, giving the context for those who as well joined the site to here, so to truly put clarity, context and tangibility to our strategy and our path forward. We will discuss more about our ambitions and goals. This morning, you have been seeing the published media release, including our midterm guidance. We think that these goals have been putting out there are definitely ambitious, definitely exciting. At the same time, we feel they are reachable, and we want to prove to you that we have, I think, a great and strong plan how to get there. Ultimately, it is all about continuing our path, delivering profitable above-market growth with the year 2026 at another transitional period in order to get back to our traditional growth levels. So with this, let's get start to talk a little bit about what are we actually building on. And I think one of the most fundamental pieces of guidance to everything that we do day in and day out is our ambitions to shape the future grounded in our purpose. And again, I think that statement of better health for more people is truly what connects us to our customers and what connects our customers to society and to patients. Secondly, it's very clear that there are patients, there are destinies out there of people that suffer from serious illnesses. And I think it is very clear that everything that anyone around this industry can do to accelerate drug development, discovery processes to bring life-saving, life-changing therapies to our patients and to society is worth any effort. At the same time, it is clear that affordability matters. So to help our biopharma customers in order to drive efficiency in manufacturing of these biologics is essential as well for the success of the industry. Last but not least, simplifying progress is our commitment and thing that you will observe in anything that we do. It guides the way how we make decisions. It guides the way how we develop work processes and workflows, and it should be something that is very visible in everything that you will watch today as well. Now we are today one of the only sized pure players in the market of biopharma. And honestly, we enjoy that. We like to be a pure play, and we like to remain a pure play with a level of a sizable and end-to-end portfolio. At the same time, we know that earning the position of a trusted partner from an end-to-end perspective requires you to be excellent in everything that you do in every single unit operation, you need to prove the value and you need to have superior innovation and capabilities. We feel that this combination of portfolio breadth, depth in the application knowledge, depth in the science is a prerequisite for us in order to have the scale that we've reached and to be a unique and differentiated partner in our industry. Our technologies are not only there in order to make the difference in a like-for-like comparison, but they're as well there in order to start for the customers, get embedded into their workflows, get validated and help our customers to live on a level of trusted partnership and products along their workflows. Now this paired up with our regulatory competence, our capabilities, our distribution around the globe and our proximity to our customers with our technical competence, our commercial scale and capabilities makes us the unique partner we are worldwide. With this, I would like to hand over to Florian to give us a bit of a view about our financial track record and our footprint.

Yes. Thank you, Michael. But of course, everything that I'm showing now is very well connected or the kind of result of what Michael was talking about. It is simply showing the effects of that pure-play position that we are enjoying. You can see it on the right-hand side, for example, looking how our sales vis-a-vis life science customers have evolved over the last 10 years, now standing at more than 80%. And you can also see it looking at the top line growth development, a 10-year CAGR of 12% and also looking at the profitability where we have been enjoying an increase of our operating margin of around 600 basis points in 10 years, so meaning on average, 60 basis points additionally. And this is a trajectory that is working in a 10-year perspective looking back. It is working roughly in a 5-year perspective looking back, and we are very confident that this will also work out looking 5 to 10 years ahead. There are so many important and structural drivers that we have built our strategy on that we want to go on this path of over market growth and a nice increase, step increase in profitability. Now this complete development, if we go to the next chart, thank you, is very much founded in the network that we've built. Of course, our origins lie somewhere here in Göttingen in Europe, but the company has evolved over the last decades being a real global player. This network that we have built out is the basis for our reach into the global markets, being able to have a resilient footprint, being able to serve the different regional markets, being able to being close to our customers. And you're seeing on the right-hand side, for example, the very well-balanced sales mix that we are enjoying. And as you know, there are several plants that are of specific importance to our business, namely Puerto Rico that is supplying consumables to the North American and South American markets. But also Songdo is going to play a very important role going forward in Korea, a plant that is just in construction now, and we are bringing it online then in beginning 2027. Also, of course, you know Göttingen and Aubagne. But you also know that we have been investing heavily into all of these plants that I've mentioned. And we are, therefore, ready and positioned for everything that is coming up. The platform is waiting to be leveraged, and we are looking very much forward to that. And with that, Michael, back to you.

Thank you, Florian, for that journey. And again, I think the true essence of what brought us that financial success is basically on that slide because it is all about innovation leadership. And again, we have 3 pillars to drive innovation. One is based on acquisition of technology. We don't buy revenue. We buy technology. We complement our capabilities and our technologies with selective targeted choices around our strategy and with outstanding level of capabilities that we find in the market. And we've done that in the past, and we'll continue to do that in the future. At the same time, we are building our innovation pipeline on our own development as well as on partnerships. And we'll give you a few examples throughout the day as well in the spotlight sessions. Now let's take a look on the left-hand side about the way of how we really have strengthened our portfolio in the past years. I want to start really with our focus on the drug development and discovery processes. Again, looking back more than 150 years, the whole company started more from the research and academia perspective with our balances portfolio and it's been there, and it's been there still today as the workhorse in many of the laboratories across the world. We wanted to create more focus around this, particularly with a focus on the biopharma industry, biotechs, academia, biopharma, CDMOs in order to help them as well in the early part of their work and their early workflow. So this is our recent acquisitions all in bioanalytics, which is really all fueled by the vision and clarity to fundamentally accelerate drug development and get better choices and faster choices of the most winning candidates and provide them and our customers really with a sense and with a whole set of reagents, consumables, instruments and more and more importantly, data analytics and artificial intelligence. ACM advanced cell models or new approach methodologies is another addition to that journey, and we will talk more about this in a spotlight session later on today. We're coming from an incredible leadership position in the market on the upstream bioprocessing manufacturing ability, of course, with our strong portfolio on bioreactors with the acquisition that we did on single-use technologies in the sterile bags and fluid management technologies, paired up, of course, with where we came from on consumables on single-use with separation technology. So it was very clear that an acquisition and an addition in chromatography makes perfect sense. And of course, we are building on that capability to be able that we have been bringing this to life, but as well now build and be the pioneer on continuous manufacturing and process intensification, particularly strengthening the position downstream in the whole industry. Last but not least, the one thing is to then be really a true end-to-end portfolio supplier with the focus areas that we just highlighted. And the other one is to make sure that we as well very well prepared and positioned for whatever the pipeline brings to life. And it's been very clear since many years that the area of advanced therapies, cell gene therapies, nucleic acids is the area in which a lot of movement, a lot of R&D work have been happening. So it's very, very clear that we want to be as well in a leadership position once these drugs will find their way into approval and find finally their ways to the patients for life-changing therapies. Own development is and will always play a key role in our core technologies. But as well, we are going and venturing as well to be pioneers in a few areas. And again, building on that last area of advanced therapies, you've seen the press release about Eveo, our answer to the challenges pioneering the space of cell and gene therapies, in cell therapy area. And I think it's really a great spotlight that you will see later. I think a fantastic piece of innovative work that will make a big difference in the market in terms of manufacturing cost, footprint, clean room capacity requirements. Cooperation, I think that sounds like a boring topic. I think it's one of the most exciting and I think as well most fruitful ways to innovate, knowing always that there is great brains outside the company. And here, I think probably the big highlight of our collaboration and innovation in the recent past is the work with Sanofi on Pionic, the platform that, in my mind and in our minds, will change the industry's life and realities, moving the borders of what's possible in terms of yield, efficiency, cost reduction and speed in manufacturing. This is really our answer to a big need in the entire industry. Last but not least, I think it is worthwhile to mention as well our collaboration with NVIDIA, with other institute universities in the area of artificial intelligence and data analytics, I think another spotlight that I'm sure you would look forward to. So I think the whole idea of covering that whole space here from early molecule development all the way to upstream, downstream commercial production is giving clarity to the customer that we are the pure player, and we have an end-to-end offering. But to deserve that trusted partnership, as I said earlier, you need to be outstanding in each single unit, in each single part of the operations and the workflows that are here. And the ability to be there early enough, understanding what's in the pipeline, making your brand, your products relevant, providing instruments, consumables, reagents, and over the time, particularly then as well in cell line development, process development to help our customers to develop those processes together with us with our leading gold standards in process development. And last but not least, to really see there, get spec-ed in deeply into the workflows and get validated processes to become really the partner then for the trials and for the commercial manufacturing. This is a sticky business model built on deep technology, built on deep application knowledge and built on a winning portfolio. So with this, I think we should lead a little bit through from start to finish. And of course, we start with the molecule development portfolio and what we do in early phase. Alexandra, over to you.

Thank you, Michael. And of course, if you -- as you said, we have very strong foundation and technologies. But how we would like to think about our portfolio, our offer into this market, it's not about technologies, but it's all about understanding the industry, understanding the market need, understanding the customer need. And we have the ambition to accelerate trial development. But what exactly it means? It means that now all the biopharma, there is much more competition. There's high requirements to be faster, to be more cost effective in the drug development. It's high pressure on automation of the workflows. It's high pressure to get additional insights to better understand how the drug is affecting the health organism, how the drugs really cure diseases. It's also a lot of pressure to make sure that we can make decisions earlier in the process of molecular and drug development and don't have this very expensive failure later in the stage when the candidates going into clinical trials because then a lot of money and a lot of time already spent probably on the wrong candidates. So if you think about this industry needs, about R&D needs and our wish to accelerate drug development, then we have a portfolio to address this. And if you think about portfolio in the bioanalytics segment, it's -- yes, it's 4 distinct technologies we're offering from live cell imaging to high-throughput screening, automated single cell peaking and cloning systems. But at the same time, all these instruments, Incucyte, Octet, CellCelector, iQue, they all can be connected in a workflow. And I can give you the example of cell line development. Cell line development starting from when you need to grow the clones. And CellCelector can work with one plate with 72,000 single clones at a time and then pick exactly what you need, grow it. And it's very accepted by the industry. It's accepted by regulatory because we can prove that we really choose the right clone. And then it goes into iQue where can we characterize this clone, which will choose and understand whether it's rightly producing us the molecules we are looking for. So this portfolio of bioanalytic instruments also Incucyte. This is definitely the instrument of choice if you think about life cell imaging. And what is the beauty of this instrument. This is an instrument you put in the incubator, you put their plates and let your cell line growth. You don't need to take it out to do image control across the days or weeks of cell line growing. But scientists like it not for that. The beauty of it, you have a software, which is very easy to use. So we address the need of users to support them in the right decision-making in a fast decision-making. And Michael was saying we have a collaboration with NVIDIA, and this is the instrument where we collaborate with NVIDIA very strongly. We have AI-powered modules on the Incucyte to support scientists to make decisions very early on a cell health. You don't need to wait long to decide whether your cell line will grow or it will be dying. So this is examples in addition also, we're now going into advanced cell models even further. We just launched last year Incucyte with first confocal microscope inside. This allow us to do 3D images of the organoids of the 3D objects. And the video which we show you in the very beginning, you saw this strange shape picture. This is actually true image we took by Incucyte of the organoid. This is what we can give now scientists to support their R&D and really accelerate drug development. Think about lab essential portfolio. This is very standard instruments. You can think about balances, pipettes, lab water, a lot of consumables, but it's absolutely necessary products in each of the lab in biopharma. You need to make sure you have connectivity of the data for all the products, for all the instruments we use, and we can provide it. You need to make sure you can do properly sample preparations before your reagents, before your samples goes into bioanalytic instruments, and this is what we can do. So we see this offering. We see this portfolio of lab products as very combined, very good universe, very good workflows to support the scientists. And then, of course, after molecular development, after drug development, cell line development, it all goes into bioprocessing.

Yes. And if it's about failing fast in developing a drug, right, from 10,000 candidates, you don't want to move ahead with a drug, which is going to fail in your Phase III clinical phase. In bioprocessing is about move fast, right? Once you identify as a customer, the right drug candidate to move forward, the race really starts to develop the scalable manufacturing process, develop a very efficient manufacturing process, manufacture materials for clinical trials, scale up that process. Race starts to make decisions where to invest, right? Is that candidate going to be a blockbuster or rather small indication? What is the right CapEx investment decision? Are we going to invest in large-scale stainless steel facility, knowing that on average, drugs are delayed coming to the market by 2 years. In a scenario of a stainless steel facility, it costs customer [ EUR 150 million ] that a delay in efficiency. So bioprocessing is really about efficiency, speed in process development and efficiency in manufacturing. And that's the mission we have is to help customers to move fast and make these drugs in a most efficient way. And it's, in principle, a simple guidance for everybody in the company, especially our R&D teams when working with customers to follow these principles of speed in process development, doing that by automating the workflows of customers. An example is our market-leading cell culture robotic system called Ambr, where instead of a process development, cell culture development facility of a size like this room we are all in, you reduce that to a machine, which is the size of the podium here with much less direct labor, much more data created. So that's how we think. That's how we work, and this is how we provide value in process development. In manufacturing, it's about yields, monoclonal antibodies in the history, if you look at the last 2, 3 decades, there has been a 15-fold improvement of the efficiency on how you make monoclonal antibodies. Is it efficient? It's okay today, but it will -- I think, will -- you can do it much and we can do it much better moving forward. What you see on that chart is a sample of a portfolio, which we have built over decades following these principles, picking technologies, which made us the leader in single-use manufacturing, particularly in upstream, made us now a real challenger in downstream technologies. And with the capabilities we now also have in digital solutions, AI kind of type of process monitoring, orchestration of processes. I think it brought us in a position that we are about to unlock additional really significant value by combining the capabilities we have, combining the single technologies we have into really the most efficient manufacturing lines for the most attractive modalities. More about that in a minute.

Thank you, Rene. How does that sound, guys? So we now move -- I mean, we look at the whole space now from molecule development all the way to upstream, downstream commercial manufacturing. And the next question is, of course, what about the business model? And I truly believe that I think the way of how we steer, evolve our business and business model with an 80% level of recurring revenues really gives us predictability, high cash-rich and margin-rich business with a clear stable foundation. And it is there to not only have been guiding our principle and guiding as well our success in the past, it is there as well to stay and be something that we want to continue to strengthen. This starts, of course, with a very strong top of the mark and again, like-for-like choose of the best breed consumable reagent portfolio that we have been building massively over the last 10 years through acquisitions and through further development and improvement and optimization. Then adding software. And I think it's something that I want to dwell a little bit on because we will talk about this later as well as part of one of our spotlight sessions. But for sure, so in my mind, in a way, there is another consumable that is a great value to our customers, which we think we need to take a leading position in, which is insights. Insights generated based on data, insights generated by the instruments that Alexandra has been talking about in the early discovery phase, the ability to extract data, organize this, analyze this, drive the right choices and decisions to speed up development, drive the process development, as Rene mentioned, and then use these models not only to basically design your experiments, but equally use these models, capabilities and softwares in order to create models that guide the manufacturing process, not only by, let's say, optimizing single-use operations and unit operations, but equally orchestrating the entire manufacturing process upstream and downstream and not only orchestrating, but equally looking forward to a vision in which autonomous manufacturing based on the optimization of these parameters and models that bring that steering back into each and every of the unit and into the brain of the process is really the future that we're working with. Now I think having said that, it's important to add service here as well because that's the way how we constantly on a daily basis, interact with our customers. This is our ability to provide technical insights close to them, but it's the idea of servicing the customer along their whole lifetime and journey. It's speed and delivery, it's quality, it's exchange, it's providing capacity, tests, whatever there is, including, of course, then maintenance and services in a technical way. Now this is an area that will be with us for the future as well. And this moves me to the next slide because the, of course, relevant question now is how do you make this stick? How do we make this business model sustainable? And this is definitely one of my favorite charts. You've seen some of this, and I think I just want to make clear that you may have seen slightly different data. What we've done here is we expanded that model. We previously only looked in the bioprocessing space. Now as you've sense, we really look at the whole universe of an end-to-end process, want to look at this in a more integrative way and thereby really including molecule development, cell line and process development, clinical trials and commercial production. Clearly, the majority of our revenues are and will remain to be produced in commercial production. That's the end goal. But of course, I mean, if we see as well the relevance that we have in each and every part of the process because that's the way how we drive our sales process, and that is how we increase the stickiness with our customers. Starting in the early phase to seed the business, be there with our brands, convincing instruments that help the researchers in the labs in order to find the right candidates, save money, save time, save cost, then really to win the spec when starting up with bigger volumes along the clinical trials, get validated into the processes, get the regulatory approval and move into commercial production, where it's all about scaling up. So it's really a seed train that we have really in the same way of the work as we do on biologics is this is the way how we're seeding our business with our customers. So with this, I think now we have taken a look backwards where we come from, what our leading position is today, what is it built on. So now it's time in order to look a little bit more into the market and understand the market fundamentals. We've done a lot of work looking into millions of data points, analyzing the perspective, looking into what changed. At the same time, there's a few structural fundamentals that are alive, that are intact and that will, for the next decades, guide our business and our business growth. Starting off, of course, with simply the demand. Demand is driven by consumers. It's built by a growth of the consumer base, it's driven by the higher level of age in this consumer base and therefore, the need and the demand for life-changing, life-saving therapies all around this. And I think that demographic, of course, is definitely on our way. The pharma market as well has a solid growth of around 5% year-on-year, the broader pharma market. And of course, it is exciting that we've really clearly chosen to be in the most attractive part of that market in the biologics, where we've seen the journey of biologics taking share from small molecules over the last 10, 15 years and will continue to do so. Our projection is that by 2030, 57% of that entire pharma market will be delivered and driven by biologics. Last but not least, it's as well clear that there is a massive pipeline out there. We'll take a look at this in a minute, at the same time as well, simply as well, the number of drugs and approvals has been increasing and in fact, doubled in the last 5 years compared to the previous 5 years. So all of this really plays into our cards. And now let's take a closer look into how modalities and how the biologics market has developed in the past and how we see it developing in the future. Now it's been clear that we continue to talk about around a 10% CAGR growth of that end market. This is, again, revenues of drugs in the market. And the majority of this is and will remain driven by the classical antibodies, monoclonal antibodies as much as other biologics. Other biologics, well, peptides, GLP-1s, you all know, vaccines, blood plasma and the likes, recombinant proteins. And then as you can see from that basis, you see as well the -- although from a small basis, the level of growth that we will see in advanced therapies, biosimilars and next-gen antibodies. So we're talking about ADCs, multi-specific bispecifics and the likes, advanced therapies, cell gene therapies, nucleic acids. This is where a lot of growth will come from in the end market. And despite all of the discussions about setbacks and volatility that is there, this is -- it will happen. It will happen. There is no doubt about this. So from the 26,000 molecules that right now are in research and in the development pipeline, almost 50%, around 50% are driven by next-gen antibodies and advanced therapies. So a great foundation for our future success.

Yes. Michael was talking about the market of biopharma. This is the market of our customers. But of course, the question is, what does it mean bringing it back to our level of market? So how is our total addressable market, our TAM developing? And from all the research that we've done, this is what we have come up with. So we are seeing that the market for our Bioprocess Solutions divisions is strongly growing 8% to 10% going forward and that the Lab Products & Services market is growing at a slower pace, 4% to 6%. In a blended view, this brings the market then to a growth going forward midterm of 7% to 9%. And of course, there are a lot of opportunities, also some challenges, and we might discuss how these challenges are looking like. But some clear takeaways behind the numbers. First of all, what's driving our market? Of course, volumes produced from our customers, clearly. And more volumes mean more equipment need. It means more consumable need. So this is, of course, a strong foundational pillar of our growth in our market. But there is a second important driver that also became clear. And this is the kind of diversity in modalities and also the complexity that this brings that's always good for an innovation-driven company like Sartorius, helping our customers to navigate and find the best way to get the best yields in different modalities. So volume and diversity of modalities really will be driving our business going forward. And of course, if we're looking at these markets, our customers are facing challenges because there's a lot of pressure on health care systems and on drug pricing. And you might say, okay, they will turn around and give us price pressure. First of all, this has been a game that has been going on for a long time, and you see that our margins are not sensitive to price pressure in a way. So there are ways in the system how we can work with price pressures. But what is also clear is that there is an imperative to get cost down on the customer side. And the only way to do it, really if you want to improve is to take the next level in the usage of technology. Once again, that is exactly what is driving our business as innovation and technology leader. And on the challenging side, we all are experiencing that the world is getting somehow more turbulent. There are more geopolitical dynamics and policy shifts that we are seeing. And this is a fact. Volatility is going up. And I think we simply have to acknowledge that. We must come away from, oh my goodness, what's happening post-pandemic, and then, oh my goodness, what's happening with supply chain constraints? What is happening with energy prices, what is happening with tariffs up and down, left and right. We have to acknowledge that there will be a lot more volatility and our reaction must be to build our flexibility muscle to be able to adapt to all these challenges. And I think we are on a good track to building that muscle. And this is also for us an imperative if we want to move into that successful future that I was describing. Now this was high level, but I have 2 colleagues, Alexandra and Rene, that will take that one level further down.

Yes. Now I start with bioprocessing. Now we are looking now into the future, right? Before we do it, let me take you back on the journey of what single-use technologies or manufacturing evolution has been in our industry. You will remember, it was 2007 when Sartorius acquired at the time, the pioneer in single-use technologies, Stedim. At the time, the industry was about to adopt the single-use bags in established facilities, typically large stainless steel facilities for flexibility, for benefit of less cleaning, less energy use, less contaminations because of the cleanings. It was the time when Sartorius was taking the customers and the regulators, hence and now moving, explaining how you do, how you change from a stainless steel vessel to a bag, what it means for extractables and leachables, we set the industry standards for regulators, for customers, how you deal with these new challenges and new aspects of biomanufacturing. And it became really a standard in every typical stainless steel large-scale facility. They all are equipped with the single-use flexible technologies in the steps where it makes sense. At that time, nobody was talking about single-use manufacturing. It was a flexibility of certain single-use technologies at that time. It started to change when first single-use bioreactors came to the market. At that time, Sartorius started a service offering called integrated solutions, again, taking customers and regulators together and explaining how you design a single-use facility, right? This was completely new for the industry, how you size the equipment, how you define what consumables you will need, how you put it in place, how you set up the supply chain and so on. And that type of single-use manufacturing evolved over years and became a standard mostly in a smaller scale, clinical manufacturing in the industry. And you see it on the left side, the penetration rate in this type of setup is -- became high. So 85%. It is an industry standard today and will remain industry standard moving forward. And then, of course, some customers started to make decision and implement and establish single-use manufacturing then in commercial production to supply commercial drugs to the market. There, the penetration rate is low today. Our estimate is less -- much less than 20%. And we believe this is the area which offers really an upside growth potential moving forward. Michael talked about the pipelines, which are very strong and important indicator for us to look into the future. What are customers developing today? What are they working on today? What is coming in 5 to 10 years to the manufacturing where our technologies will play a role. And on the right side here, you see that more than half of the 26,000 molecules and drugs in development are molecules which are either highly potent ADCs, bispecific, trispecific antibodies or molecules or drugs which will be made at lower volumes in commercial manufacturing, cell and gene therapies, for example. So with the improvement of single-use processing, the process intensification is something you will hear today afternoon in our spotlight session with the team. This further evolution and development and innovation in single-use manufacturing will open a new and additional growth, above-market growth potential for Sartorius to penetrate commercial manufacturing with the single-use technologies.

Moving to R&D. We see that R&D also evolving. There is several structural shifts and changes in the value pools, and I would like to address 2 today. These changes moving into AI and automation and advanced cell models, they are very much driven because biopharma R&D, as I said, would like to accelerate the speed and make better decisions. Thinking about automation and AI on the left-hand side of your chart, what we see -- the customers, they would like to see more sophisticated instruments, which provide more data. At the same time, they want to combine simpler processes, bench processes into automated workflow. So there is a different levels of complexity we can see in R&D labs -- and we do not think that it will be one or another model will change the life in the R&D lab. It rather will be decision on based which process we are talking about, which instruments we are thinking, is it very often used in a lab or rather specific, then a different level of automation and AI will be used. And what we see currently that the more AI comes into biopharma R&D, the more new questions is actually happening and the more questions scientists asking. So to say that everything will now happen in-silico using AI it's not because it's still more answers around biology would need to get. We need to do more experiments. We need to understand better diseases, drug actions on these diseases before we really can move in a full AI. But what is definitely happening, scientists would like to see processes connected between different instruments to have this cloud of the data lakes to really make the proper decisions of the combinations of the data from the different instruments. And also what we are working on, and you will hear more in our spotlight session today. On the right-hand side, advanced cell models, and we will talk today a lot about this. Of course, it's very much driven by regulatory. They would like to remove animal testing and have all the drug tested in the lab. But what it else providing to the scientist you can do really repeatable, reproducible, scalable experiments. It's not only about experiments to understand the diseases, but it's also to testing your drug candidates. This is about toxicology. This is about efficacy, and it's a huge market. And now this is not very new thing for the scientists. But if you talk to industries, if you talk to academia, who use this, it's actually rather difficult to work on it. It's a lot of manual work still in our lab to produce organoids at scale. It's a lot of training need to happen for the people who do this. So really, the need is there to have fully combined platform where you would have instruments to analyze all the outputs. You would have reliable models, which are stable over time, which is reproducible, which you can scale across the geographies you have different locations that you have reliable consumables and reagents and of course, then software to analyze. So there is a need for this mini universe to replace animal testing, but it's only possible when all the things combined together. We see this market as very attractive. We see it's growing double digit. And if we look only about toxicology testing, not thinking about other areas, we could see that it would grow until 2030 to EUR 200 million to EUR 250 million. And with this, thinking about our strong positions in R&D and bioprocessing, Michael, back to you.

Thank you. Now this is all about moving on really from where we come from, from the market perspective and our area of focus now in terms of the chapter of how we shape our future. Let me start really with the fundamentals of our strategy. So we've grouped our strategy into 3 buckets of strategic levers, starting, of course, from the most important area that has driven our past success and will determine our future success equally is our portfolio. And here, it's all about 2 big areas in order to drive innovation through partnerships, through own development as much as through M&A and focusing on our core capabilities while searching and leveraging on new growth vectors and opportunities that are in the market. Secondly, customer experience. That is something that we really feel we can equally make a difference and take a leadership position of really making sure that our customers experience the interaction with Sartorius as a pleasant, simple ways of interacting, getting delivery, getting speed, getting quality, seeing their needs reflected, their problems being solved in a unique and outstanding way and setting the benchmark in the industry for that. And last but not least, it's all built on operational performance and excellence in everything that we do. So we have been guiding the market for very good reasons on very few financial KPIs. And of course, on top of our ambition level will remain our financial ambitions in order to drive profitable growth above the market. enhance our cash generation and reduce leverage. That is the journey as we move forward. But I want to be equally clear for the other 2 blocks, we, as well enlarge our set of KPIs and our ambitions in terms of the experiences we want to drive for our customers, measuring reliability, measuring quality, driving operational excellence and productivity across the board. So we'll strengthen our commitment, and we will measure and follow through our improvements in all of these areas. All of this is driven by key enablers. And I think the one that I cannot lay out and emphasize more is people. I think in the end, everything goes down to excellent leadership and excellent capabilities and great attitude to collaborate and to bring value across the company and to our customers. This is something that really is driven by not only the quality of the people, but as well the culture and the level of engagement that we're able to bring. And here, clarity on where the direction of the company is, really emphasizing and socialize our strategy, get everyone on the page on the same board and therefore, drive clarity, focus, transparency and energy on the way there will give speed in the execution of our strategy and performance all along. Empowerment, I feel is another area that we feel is important if you want to drive speed. And I think Rene said as well before, in biomanufacturing, everything is about speed. in drug development is everything about speed and as well in front of the customers, everything about speed. So our own speed needs to as well really be in line with what we want to achieve in the market. So we want to demonstrate to our customers that we as well drive speed in our own execution. And therefore, empowerment and accountability and clarity in terms of shared goals and commitments is fundamental to our success. Last but not least, I think it's for the good reason as well a centerpiece of our future success. We very much believe and invest heavily in AI, in data analytics, in automation, across our own way of working and across our portfolio and across the workflows with our customers. This is definitely a big shift and change as we move into a different future. So starting from on the portfolio side. And as I mentioned here, I think we want to make a very clear distinction of growing the core is very much on our current strongest capabilities, our existing portfolio, deepening our capabilities, improving our products, finding new ways of optimize where we think we find a new answer to an existing problem, and really challenge wherever there is a contender and things we are safe, we're going to be really behind our competitors in order to make sure that we find new answers to problems of customers where they feel they are stuck. So we want to take another level there, very much around driving our business model, very much focusing on recurring revenues in this area. Expanding into future business is all about making selective choices of growth opportunities that we see as we move into the future. So it's very much about clarity in terms of which technologies, which emerging things are there that could be attractive areas to allocate selective amount of capital and resources to make a difference. And we do a lot of wise choices here, and it will be part of our spotlight sessions all along. All of this is, of course, as we say, we leverage much more AI, data analytics and automation in order to drive speed in execution, but as well make a difference to where value is being created. So I think with this, I would like to give a few examples now through Rene, starting now on in each of the pillars. So growing the core is a mission-critical element. So Rene, just give us a bit of a perspective on examples on how we do this.

Absolutely. So of course, thinking midterm, 5 years or so, it's a core, the business, which will drive the growth and which will drive the above-market growth. And we picked here 3 areas to briefly talk about. First, process intensification. Again, back to what I said about evolution of single-use manufacturing, process intensification being enabler of penetration and use of single-use manufacturing in commercial production is one of the core areas of our innovation moving forward. And I think what we are doing here is really changing, shifting the gears from competing on the performance of single product or single unit operations to offering customers the best-in-class, the most efficient manufacturing line for commercial supply of their drugs. And that's a very ambitious objective. Michael talked at the beginning, we are not a company which follows. We are a company which leads. So again, we will take our customers. We will take and do take regulators together on that journey, explain, help to adopt that innovation, and you will see today afternoon the benefits, and what we see, the challenges we also see still the -- still work to be done, but I think also will hear and see from the team why we are so bullish and optimistic about that we are doing the right thing, providing the right value to customer in that space. Of course, they are core single-use technologies, which we don't want to forget. We still make more than half of our revenues in classical stainless steel facilities today. They will be there. They will grow. We want to make sure that we address customers' needs there as well, protect our business. Example of a regulatory potential ban coming on PFAS containing materials. There are legacy filters still used in the industry broadly, which are PFAS-based. We have an alternative. We work now with customers, helping them to switch to the newest, more sustainable version of these products. We will move more and more to the critical -- and grow in critical applications, critical applications closer to the final product. A good example of that is freezing, freeze and thaw technologies where we leave the market already today, single-use bag where you put your drug substance, freeze it, ship it from a CDMO back to the originator or from drug substance facility to the final filling drug product facility. So there is a multiplicator in adopting that platform because it's used at the drug substance side where you make the drug and ship it to the drug product side where you need to thaw the product and formulate for final filling. Alexandra talked a lot already about bioanalytics. It's something we know the logic and the capabilities we have in automating the workflows of customers who are working around the bioanalytics. And also -- we see now more and more need to bring bioanalytics into bioprocessing. So in the future, you will see us utilizing the core bioanalytical technology, which we use in the instrument in drug discovery. We take that technology, we make it a bioprocessing sensor or headline analytical device to have, again, customers run smoothly manufacturing process. But now I'm already starting to talk about more emerging part, which Alexandra will talk about.

Thank you, Rene. Yes, as Michael said and Rene, we have very good growth opportunities for current business, but we want to look beyond. We want to look beyond 2030 and what else we can bring to the market. We are pioneer in a lot of things. And these 3 pillars, what you see on the chart, we truly believe we can be pioneer, we can be the lead in these 3 areas we choose to invest extra. Advanced therapy solutions, it's not only about critical reagents. And yes, we know the market of the new modalities over the last past years was fluctuating, was maybe not very stable, very much driven by different funding activities and finding unstability, but at the same time, we truly believe that this is the right way to go. We see that pipeline are growing. We see that customers invest in the new developments. We see that manufacturing looking for the new ways how to produce these drugs. And I hope you saw yesterday, we published the announcement of our new platform, Eveo, which exactly plays into this truly pioneering innovating automated systems for advanced therapy. Thinking about advanced cell models, I was just talking about what is the need there for the customers, what they are looking for. What will help industry to move from animal testing into the lab. And again, we truly believe we have a very strong position here. We have the instrumentation. We have 3D Incucyte, which can produce 3D images for better analytics. We have acquired MatTek last year. The leader in micro tissue technologies. We have all the reagents, again, we can use from advanced therapy solutions, and we know everything about plastic consumables. And on top, we have a proper software and AI capabilities. So you think about we can truly support customers with one offering to be the most successful in this. And then PAT and AC/QC, as Rene was saying, we have a lot of different technologies in our hands in the lab. We have Octet with BLI technologies for protein analytics. We have iQue with high throughput screening. We have certain technologies in BPS in bioprocessing area, which if we bring closer to the bioprocessing in at line, in line, we can support bioprocess, we can support production with faster batches release with better understanding of the quality, with better parameter setting to increase the yield and increase efficiency of the production. So we have 3 very strong positions where we absolutely believe we can excel based on the technologies we have, based on ambitions we have and the best of the customer understanding and their processes. But if you think about innovations, if you think about growth ambitions, as Michael was saying, it's not enough. We need to be sure we can execute. And thinking about customer experience, Sartorius, and long the company, as Petra was saying, Sartorius always has philosophy, we are not the supplier to our customers. We are a partner. We would like to listen what they need. We would like to understand and we would like to react on that. And if we listen to the industry, there was a lot of fluctuation, COVID time, after COVID time, but what exactly customer wants from us. They want very simple things, reliable supply, and it's not only about shorter lead time, but it's reliable, that it's right products in the right geographies, and we can offer it because we have such a big area, a lot of different production sites across the globe. So we can utilize this to provide the right products in the right place. That's about simplifying a way how to work with us. Yes, we bring AI into the lab. We support R&D, but this is what also customers want when they interact with us. They want simpler interactions, easy ways to connect, better transparency, faster time to reaction, better support, better technical and application support, and we have all the scientists in-house, and we can provide it. So we set up different initiatives to address these points to make sure we are simplifying progress. We are simple to work with customers. We are transparent, and we really hear their voice and can address it through all the areas within the organization. And with this, back to operational excellence.

Thank you. Yes. This will conclude our Shaping the future chapter with the last of the 3 pillars, which is all about operational performance and excellence, all about more cost-efficient, digitalized and lean organization. We're going to bring this together in a showcase that we call Factory of the Future, where we bring the latest level of thinking, technology and capabilities on artificial intelligence, on automation, on tools, on lean way of working together in order to showcase what efficient and lean manufacturing can look like. At the same time, it is critical for us all the time to look at our entire network of capabilities and capacity and competencies and make sure that we are continuously building a resilient setup that delivers in line as well with the new global order, I may say and call it. Simplifying operations, that's all about the bread and butter business of driving productivity is very much about the idea of being a lean organization, driving lean methodologies, optimize the way of working, avoiding duplications, drive value stream mapping. So all the tools that advanced manufacturing has to offer and will drive deployment across our manufacturing network. Last but not least, we will focus well a lot on sourcing, our ability in order to partner with our suppliers, leveraging and build partnership programs to drive cost, quality and availability. And all of that, again, supported and enabled by AI, digital capabilities that are the foundation for our operational excellence journey. So with this, we are opening into another chapter because now, of course, we want to bring this all together in terms of our numbers and our financial ambitions because you've seen where we come from and what position we have. You look at the market data and the way how we define our target addressable market in light of this and showing our strategy and our path to our success. Now let's talk about our numbers and our journey on top and bottom line. Again, the year 2025 was a year that has shown strong results overall, on the back really of, I would say, the vanishing phase of the post-corona and post-pandemic destocking. At the same time, we are and we still are in a transitional phase where despite that strong result in 2025, even the year 2026, and that you already know from the guidance that we have published this morning is not yet really fully in line with our midterm guidance, given as well the current situation primarily on the market side and the demand for equipment and the hesitation on CapEx investments. Now as we move from '26 forward and into the midterm, it's very clear that our confidence on the further improvement of top and bottom line capabilities is built on 3 developments in the market. One is truly that we've seen the stabilization of the equipment business. We have a lot of discussion with customers. There is a strong sentiment. We've seen glimpses, I would say, of the recovering market. And it's more the question, when exactly in the year we are seeing a larger tilting point? But our conviction is that 2026 is a transitional year into 2027, where we really feel we should be back into our normalized performance level and as well see something really in line with our midterm guidance. China, slight improvements, again, not yet, let's say, a reason to celebrate. But definitely, I think will be another year where we see less headwinds if we compare that with the years '24 and '25. Again, more sentiments as well towards not only the local market, but as well the Chinese customers who want to expand their capabilities and will work more with Sartorius, particularly driven our global regulatory competence and capabilities, our footprint across the globe in order to drive expansion of drugs and the pipeline that has been built and developed in China and from China and across the globe. Last but not least, the biotech sector, which was a bit of a concern in terms of the funding and the investments that went into that sector, particularly in the first half of 2025. I think we see more recently a little bit more of a, I would say, more positive sentiment in that market and with these customers. So hence, we really feel that we are on great track on deliver the top line growth that we have been foreseeing at the same time as well, delivering the margin expansion as we indicated, not only for 2026, but as well beyond. So external environment, see some slight improvements. At the same time, we remain very disciplined on our execution. You've seen the weapons and the tools that we built up on innovation, on new products, on improvements of existing products, on our ability in order to serve our customers even better. So therefore, it is all about now driving further into a future and into the midterm. So this is what we have been published this morning. This is a risky question I will ask now, but I do it anyway. So anyone in here that really felt this is not in line at all with your expectations? You see is always smart to ask the negative questions, but thank you for that confirmation. That's good to hear. Again, I think really based on those structural growth factors that we've seen in the market and the clear position that we have in the high-growth areas, we really feel rather optimistic that we are delivering this above-market growth per annum on the basis of all the great stuff and reasons that you hopefully have seen so far and that you will continue to see in the spotlight sessions later on. So starting off really with the Bioprocessing Solutions, Florian has explained a bit how we came to the conclusion of our addressable market size. And again, it's versus that market growth, we are seeing that our leadership in single-use solutions, process intensification, our advanced therapy solutions portfolio, this will drive an above-market growth of around 100 to 200 basis points. On the lab side, again, great innovations, great acquisitions, great focus now on the drug development pipeline as well, of course, still fueled as well by our abilities and opportunities that we see not only in the bioanalytics and ACM portfolio, but as well by our core business around lab essentials. But again, with these differentiated offerings, we will drive an above-market growth of around 100 basis points, leading to 9% to 12% of growth in Bioprocessing and 5% to 7% of growth in Lab Products and Services. That means for the group overall, with the focus on these areas in these 2 divisions, we see overall an above-market growth of 100 to 200 basis points, leading to an 8% to 11% growth, all, of course, in organic revenues expressed given the fact that we are where we are. So on the underlying EBITDA margin expansion, again, we see, of course, the further impact that we get to our operational leverage fueled by that growth. And therefore, the range, of course, is depending a little bit as well a bit on what we see on the volume side. We have, of course, impact by product mix. And last but not least, we have a lot of focus, as you've seen, on operational excellence, driving our journey as well towards lowering and reducing complexity and cost in the company. Now let's give a bit more flavor to the cost positions and our plans around driving cost. So Florian, why don't you enlighten us on these topics?

Happy to take that. And finally, a chart with decimals that I can talk about. And to some of you, this chart might look familiar because a similar chart we have also been showing you 2 years ago in our Capital Markets Day. And it is somehow taking a look back where are we coming from, and it's also then giving the perspective going forward. Of course, looking forward, and you have seen our margin ambition, not only for '26, but also for the midterm, it is a clear, steady growth and profitability that we are heading towards. And one important driver, of course, of that is fixed cost degression resulting in operational leverage. But before I go deeper through the different lines and how they will develop in our view going forward, let me take one look back, especially on the gross margin line or on the cost of sales position because we get oftentimes questions, especially comparing our gross margins that we report today versus the pre-pandemic times 2019. And the question goes like, look, guys, since 2019, we have seen that your gross margins are -- and the numbers are coming depending on if you're looking at on SAG level or on SSB level, I don't know, around about 600 basis points worse. Why is that? And is it simply a question of time until you fully reswing? And the answer is, wait a minute, because we are comparing somehow apples and oranges if we're looking at external margin. And it's not our fault, I'm sorry. It is simply regulatory around accounting because one important factor that is dragging our margin down in external reporting is additional amortization coming from M&A. And this additional amortization accounts for 260 to 280 basis points 2019 versus 2025. And this is why on this chart here, this effect is taken out. And you see there is still a 200 basis points margin differential to 2019. And the question stays, is it simply a question of time until we reach these levels of 2019? My clear answer, yes. And there is even more potential. And why are we still behind? I think one important point is the additional investments that we have done and the additional capacity that we've built is somehow also having a kind of mirroring picture in the margin. This is one part. The good message is the platform is there for growth. A second point is that we are still working somehow through inventories as in the pandemic, certain inventory has built up in very specific product niches. We are, of course, trying also to sell this inventory. But at a certain point in time, shelf life expires, and we have certain drags that we are seeing also on gross margin because of a gradual and over time cleanup of inventory. Is this a long-term thing staying in? No, definitely not. These dragging factors definitely will go away. And then there is a third thing because I was talking a lot about technical stuff here. There is a third thing that is really us working on the cost per unit. We are investing heavily in AI, that makes it easier to steer the processes to really get simplicity in things. We are heavily investing also into automation. And if you are imagining, and we will hear about that later, how our production process in bags, for example, has looked like 5 or 10 years ago and how this might look like 5 years ahead. And already today, we have certain lighthouses for this, you see and know that there is another game in terms of productivity and cost efficiency coming up on that. So we are quite sure that the gross margin will be going forward, a clear driver of our EBITDA margin accretion. Then going over the other lines, sales and distribution. When we are talking about our customers, I think it's not like a gazillion of new customers popping up every year. It is more of penetrating the portfolio that we're having. And the more you penetrate and the closer you are to the customer, of course, the more efficiency you can also get from sales and a lot of sales -- sales is permanent communication. And also here, there's a lot of complexity created where technology can help us to cut through this complexity and make things easier using, for example, agentic AI also in customer communications. For R&D, we have leveraged the R&D platform. The R&D cost rate has gone down compared to 2019. And we have deliberately taken the decision not to trim on R&D. I think you've heard a lot about our technological and innovative leadership that we are striving for. And therefore, these are the investments that we want to make. These are a clear commitment into this leading position. So we are not on a cash-out journey. We are really all in to be the innovation leader. Yes, I don't have to talk about overhead. This is a given, I would say, that we really have to also leverage technologies here, make processes simpler, bundle certain activities that should always cater for additional margin potential. So this is overall why we are really thinking that this 50 to 75 basis points on group level are well achievable. And now let's go for a second deeper down to net profit. And if you -- no, I'm sorry, if we are thinking about the top line growth and the EBITDA margin improvement that we are presenting here. And asking what will then fall down to EPS? You already see that there is potential for nice double-digit EPS accretion over time. But it's even getting better. Why? Because, for example, I was talking about amortization, which is clearly part of EPS. This amortization stays flat. And on a higher basis, you have more degression on the amortization. A second important cost component is interest. I will be talking in the next minutes also about our deleveraging ambitions. Clearly, interest will go down in absolute terms. So this is another tool to charge EPS accretion going forward. So this is then the beauty of the overall business model that works on every level of the P&L down to EPS. Talking about efficiency and giving you a little bit more flavor on why we are that confident on the efficiency. I would like to mention 2 topics. One topic is lean and CI. The other topic is everything around our growth platforms that we have installed. Many of you might remember the year 2024 when we said, okay, we need to do an efficiency program, Fit for Future to really rightsize the organization back after that huge kind of peak in business that was created over the pandemic. And we said, okay, we want to take EUR 100 million out of the P&L. You have also seen that we have well delivered on that. But in the same instance, we have taken the decision for ourselves that this must not be a onetime rightsizing exercise, but rather that we are really starting with a kind of mindset shift to make this a continuous exercise that we are operating on. And this mindset shift is also connected to a very simple word called stretch. And stretch means that we are starting into a year, giving us a cost reduction stretch target, where we do not exactly know at the beginning of the year where we will get the efficiencies and the cost savings from. The only thing that we know is that there is a lot of potential that we can get. And this kind of logic worked in the year 2024. It worked in the year 2025. It will work in 2026, visible already, and it will also work midterm going forward. This is a really solid base, a repeatable base that we will be working on in a CI and lean thinking. And then there is the powerful digital tools. And I cannot really give enough praise for my predecessors taking these decisions of building these digital platforms, building the digital platforms in SAP, building it in Salesforce, building it in Workday and also on other levels of our value chain. This is such a powerful muscle and platform that has built. And you know how much billions of development these software providers are investing in these platforms for only one reason, creating value for us as the users. And we have these integrated platforms. It is not like a mosaic of thousands things in SAP, more than 80% of the business on one installation, and this is really powerful as the basis. And the kind of 3 topics that I was talking about are really the possibility to get efficiency in the system. And they are then complemented by the topic of operational leverage and fixed cost degression. So we have many cylinders to fire on, on that journey to make the 50 to 75 basis points happen. Now CapEx investments, always also another topic. So that chart shows it on the left, EUR 2.6 billion, we have invested from 2020 to '25. And this is a lot of money that we have invested. But I think we have well invested that money, and you have to take into account that in that time frame, we have simply doubled our business, doubled our business, EUR 1.8 billion more sales. And the good news is that these investments were not done to simply cater for doubling the business, but these investments are putting us today in a position that we really have room to grow in the midterm and that this is somehow the basis and the platform we can then build the volume growth on. Now besides simple capacity addition from this EUR 2.6 billion, there are always 4 kind of motives or targets that we are following up. First of all, it's about global resilience or you might also call it regional diversification, which makes the network more profound and reliable. It's, of course, also to have redundant capacity not being dependent on one single location for key products that we're offering to our customers. It is also opening the way to introduce new technology. So operational excellence in practice to make these step changes to experiment in one location that then is setting the standard that we will transfer later on also to the other ones. And another point that is also a very important one, proximity to the customer. Proximity to the customer is here very important. And I think Songdo is a perfect example for that. I don't know, has anybody been, of you to the Incheon area at Samsung Biologics, for example, or Celltrion? Anybody seen that? Okay. Next time, we should send somehow a Google Earth picture of that area because what you're seeing is Samsung and Celltrion bringing on huge new factories for biologics. And then there is one construction site right in the middle of this area, and this is us. And this is, for us, an important cornerstone for our Asian Pacific strategy. We see Songdo as the future hub. And you can see here also what kind of products we are planning to produce there. These products will not be there from day 1 physically produced. We are always following a kind of step-by-step approach and the product lines that the customers have the highest need for in local production because of flexibility, for example, will be there first, but the others coming then online step by step. But even though not all of our assortment is there physically in production, the important thing is that we have the logistics and the warehousing for our complete assortment there on the ground. So this proximity and availability is there then for the core of our products, and this is the important step forward to begin. Yes, CapEx of the past, we have been talking through. Question is, how is CapEx of the future looking like? I would describe it in a way that Songdo is the last really big building block of that next level capacity building that we've done in the last year. The factory is coming online or the building is coming online end of '26, beginning of '27. And after that, we are expecting a normalization of our CapEx rate back to, I would call it, historical standards. And these historical standards are around about -- or have been in the past around about 9% of turnover. And you know how this is comprised, maintenance CapEx, 3%; growth CapEx, 3%; and 2% R&D. And this is, in a way, the targets where we want to be in 2028 again. And where we will see the year 2027 as a kind of transition year between the year '26 and going forward. So we are coming back from this elevated CapEx level to a 9%. And then I had some chats yesterday evening, and I got also the question of, well, when I look at competition, their CapEx rate is lower as of turnover. And my simple answer is, yes, that's true. But please keep in mind 2 factors. Factor number one, we are growing faster. Factor number two, especially when you're looking at U.S. peers, they have R&D not sitting on the balance sheet as we are accounting for under IFRS. So also here, some structural changes to be taken into account. Now CapEx is an important part of free cash flow. And if we simply build the different blocks of free cash flow generation together, I would like to stress that from everything that we are doing, there can only be one result, which is a very strong cash generation going forward. So we are seeing underlying EBITDA margin increase. We are seeing further lean thinking in our operations that will result in an underproportional growth of net working capital vis-a-vis sales growth. And I have been talking about a reduced CapEx ratio. So we have all the ingredients that really show the potential of Sartorius of being a free cash flow machine going forward. And then there's oftentimes the question on capital deployment. And you have seen, looking here at the chart, there has been a phase in the past where we have done a lot of M&A because we have identified certain key strategic areas that we want to invest in. We have mentioned them. It's bioanalytics, it's downstream, it's ATS, but these gaps are filled now. So there are no bigger white spots on our radar screen as we are looking at as of today. So M&A might be possible going forward. And we've done M&A also in the last year with MatTek, but this is more as a kind of add-on or to fill certain technological gaps on a lower level. Also, clearly, we want to further go on, on our organic deleveraging part. And this stays a priority. And therefore, I can assure you that we will be disciplined when it comes to CapEx spending, supporting what I was just talking before, going back to single-digit numbers again, and we stay committed to our investment-grade rating. When it comes to dividend, I think it is fair to assume that we stay broadly in line with the payout ratio of underlying EPS that we have also seen in the last years. Financing structure. You know that we are also diversified in this field. We are diversified in instruments, with the bonds being the kind of anchor instruments we are applying since 2023, but also looking at the maturity profile, it is well staggered. Average cost of debt, reasonable at 4%. And you also know that the first maturity of a bond is coming up this year. And I can tell you, and the colleagues from certain banks are here, we are well prepared to go down this path. Generally, liquidity is important, not only from a structural perspective here, but also in a short-term perspective. And you should be aware of the fact that we have a syndicated revolving credit facility of EUR 800 million. And as a kind of safety net, we are also enjoying EUR 1.2 billion of treasury shares that we have on balance that give us full flexibility in any direction going forward. Michael, I'm done with the financial part. Now it's your part.

Thank you, Florian. So now you hope -- I fully enjoyed as well the -- what did you say, the digital numbers, and also with something after the commerce. So that's a level of precision that our finance people, of course, enjoy and like. So hopefully, you can share a little bit the enthusiasm and the confidence that we have as we move into our midterm and we've form in our future and ahead from where we are, building really on a fundamental strong foundation that we've been building up over the past. I know it's a lot that you had to digest now in that session, and I think we are soon now opening the Q&A. But I want to leave you -- if you forget everything that you heard, still I want to make sure that you leave here not with a clear understanding about the proven strength that really continue to matter. And I truly say that I think one of the most fundamental building blocks and capabilities is and will remain our innovation leadership, very much centered around single-use technologies, very much centered now around as well our pioneering efforts in order to bring single-use technologies onto the next generation and the next level. And as Rene said, we are only at the start or maybe midterm with the penetration journey, particularly now seeing the opportunities fueled by our better positions, our strong capabilities, innovations in order to drive penetration, not only on the clinical phase side, but equally on the commercial side. So -- and again, the pipeline plays into our favor, with the majority of those drugs really requiring or being very beneficial with single-use technology. This is all based as well on a sticky business model with a high share of recurring revenues that will drive and remain with us as we are continuing to put a lot of focus on seeding and winning this back as commercial priorities. At the same time, for the future, we as well make strategic focus, disciplined execution to drive future growth and returns. It's very much about the areas of future investments that we have been highlighting and will be part of the spotlight that you will see further on. So really laser-sharp targeted choices where innovation technology will matter in order to look for attractive growth and as well make really conscious choices for capital allocation to accelerate value. At the same time, our journey, in order to go into best-in-class customer experience will strengthen that level of trust that we've built up over many decades now with our customers and will make us next to being an innovation leader, a leader in the interaction with our customers on speed, on reliability, on quality and performance. Along with that, our operational performance and focus now as well on the bottom line on driving the CapEx normalization, executing with care and discipline, improving cash generation, returns, deleveraging and EPS expansion and growth. Last but not least, really, we remain really focused on delivering above-market growth in the midterm based on those market fundamentals that we've seen along with the continuous margin expansion. So now I want to give you a very clear indication about the upside of being through all of that, and it should gauge maybe your appetite for questions because there's a coffee break, which is planned for 11:20, I think, yes. So let's see it, in give and take. But again, I think this is now the moment where I think we're going to open the floor and hand over to Petra for facilitating the Q&A. Thank you very much.

Thank you, Michael. Yes. So thank you very much for that interesting presentation. So we are now ready for the Q&A. Hands are already up, perfect. So there will be mics coming so that you can ask a question. [Operator Instructions] So now we are ready to go for the first question, and the mics are coming. So let's start with here on the left-hand side, Odysseas.

Odysseas from BNP Paribas. First, I had a question on the phasing of the midterm guide. So should we view 2027 as a year that you can perform within these targets? And would it make sense to think that you're more likely to do better in the early part of the midterm given that you have quite a big plant in South Korea coming online, but also with a bit of a reshoring kicker? And secondly, one for Florian. So you did mention that cleaning out your pandemic-built inventories is part of the gross margin expansion story. If I do the math, your inventory write-downs have increased for about 3 percentage points since 2019, which, by 2030, takes almost the entirety of the margin expansion you're implying with your targets. So I wanted to ask, are you being conservative on the margin side? Is there any reason why inventory write-downs should be staying structurally higher than what they were in 2019? Or are there any offsets on the cost side that might offset that margin gain from inventory write-downs?

Thanks for the question. So I'll start with the first part, really very much about the midterm guidance phasing, particularly with focus on '27. Of course, today, we will not guide for 2027. However, of course, our belief now and our hope for sure is, at this time, not having the full visibility of what 2027 really will look like. At the same time, it is the year in which we really hope that there was a more normalized market than what we've seen in this transition years '25 and '26. And therefore, we very clearly have the ambition in order to make sure that the midterm corridor that we indicated will be delivered in 2027. Now I think you are right in the sense, and it depends a little bit, yes, we have things that will impact our overall financial performance, given as well the conclusion of our high CapEx project that we're having. From an overall perspective, on the growth level, I would say the only question on where in that corridor we will be in 2027 will be very much as well from the current perspective be depending on lead times and order intake on the instrument side, on the equipment side, and then understanding if revenue realization will start 1st of January or maybe a bit later given the lead time impact of that. But that is, by and large, how we look at 2027 from today's perspective. Florian, over to you on the second part.

Yes, on the second part, Odysseas, the kind of inventory impact that we are seeing is a kind of sneaking out of the elevated levels in -- or surplus levels and inventories that we have built via the pandemic. You have been referring to numbers that built a ratio of reserves to balance sheet date. And inventory valuation is a very analytical thing. It is not like in banking where you're building reserves on your credit portfolio, it is simply accounting for what you are seeing in the kind of how inventories are turning, right? So what I can say is, first of all, the kind of distraction that we're seeing in margin coming from that washout of the excess inventory, they will go down over time. Now how will the overall reserve develop? This is also a question on how much really fast-moving inventories do we have. And what is the kind of composition of our inventory. We have been talking about effects in getting novel modalities in being more specified. This might come also with holding inventories for specific users. So I'm not here to promise you that the overall reserve that we are building is going down. I was more talking about the effects washing out in the P&L going forward.

Next one then, please. In the line, we got...

Ricki Levitus from Subbu Nambi's team at Guggenheim. So as we think about Europe, China and reshoring in the U.S., could you please walk us through what the midterm guidance is assuming for bioprocessing segment growth across these different geographic regions? And are there any meaningful differences that we should think about in the core drivers of the bioprocessing growth in those different markets?

Could you talk, Rene or...

Could you please repeat the...

So we had 2, reshoring U.S. and...