Tecan Group AG ($TECN)

Hello, everyone. My name is Martin Brandle, I'm the Senior Vice President, Corporate Communications and Investor Relations here at Tecan. Welcome to Tecan's Full Year 2025 Financial Results Analyst and Media Conference and Capital Markets Update. A special welcome to those attending in person here in Zurich. I also warmly welcome everyone joining us through the live webcast. Joining me on stage and presenting today are our Chief Executive Officer, Monica Manotas; and our Chief Financial Officer, Tania Micki. Before we begin, let's quickly go over a few formalities as usual. The press release announcing our financial results and the highlights of the capital markets update was issued this morning at 6 a.m. Central European time. Both the press release and the 2025 annual report are available on our company website, tecan.com, under the Investor Relations tab. Our 2025 sustainability report was also published as part of the annual report this morning. Additionally, the PDF of the presentation slides, which we will be discussing during this call is available for download. I'd like to remind you that this event is being webcast live on our homepage. A link to the replay will be available shortly after the live event and on our investor webpage. With that, let me now turn it over to Monica Manotas. Monica?

Thank you very much, Martin. Good afternoon, everybody, and welcome to our event here. Thank you for your interest in Tecan and in our story. So as Martin was saying, we have 2 main topics that we're going to go through today. One is our 2025 earnings results, and Tania will take us through the majority of that, and I will take us through the capital markets update. But before we get into the details or the first section of the presentation, I wanted to start with this, which is our 2025 results at a glance. All these numbers were in the press release that you saw this morning. But just as a recap, total sales for 2025 were CHF 882.5 million, that's about a 1.6% negative growth in local currency. Adjusted EBITDA, CHF 142.1 million, that's 16.1% of sales. Our cash flow was a healthy CHF 138 million, so that represents 118% conversion. So I'd say that was quite good. We actually, as a result of some decisions that we made to streamline our portfolio and exit certain businesses where we were not creating value, we had a partial impairment of our goodwill that resulted in the charge of CHF 139.5 million that you see here. With that, we reached an earnings per share of negative CHF 8.74, adjusted would be plus CHF 6.87. On our AGM next month, our Board is going to propose to shareholders a dividend of CHF 3, which is stable versus last year as a sign of confidence in our future and commitment to return to our shareholders. So what does that all mean? I think you all know my background, right? I have in my 25-plus career in the tool space managed 8 different P&Ls, 9 with this one. I think I can say with a lot of credit that I have seen many different kinds of businesses in different types because many people say, okay, you come from a business that was in the billions, plural, no I have seen small, medium, large. I have seen some that are focused on instruments, some that are focused in reagents and consumables, some that are a mix, some that are more focused on commercial, some more focused on operations, some more focused on innovation. I, truly, I have seen it all. So I can say with a lot of credit that with what we have at Tecan, we are not performing at our potential. That is very, very clear for me. Now I will say that, yes, it's true that the markets in the last couple of years have dealt with some uncertainty. So that is fair. But that's not the entire story. We have had distractions and have executed inconsistently. And that has resulted in what you're seeing. Now the good news is we have a very strong market position, and our strategic relevance as it relates to our customers, remains very much intact. So 2 very strong things to build on. So that's why we're here today to talk about what are we going to do about this, the transformation program that we have launched that's called Rewired, we'll touch on that in the Capital Markets section. But the idea there is to get to a concept that you'll hear me talk a lot about, which is to future-proof Tecan. So what do I mean by that? What I mean is that we need to get to a position where no matter what kind of market we are experiencing, we should always be in a position that we over deliver versus the market. That is the goal here, and that's why we're doing the Rewired transformation. A couple of things that I'll mention around Rewired. First is that the name was very deliberately chosen because this is not a case where everything has to change. There's a lot of strong building blocks to build off of. And it's more of a case of retweaking, right? It's putting things, connecting things in the right way so that they generate the right results. And that's why we chose the name, Rewired. The other thing is we chose to do it as a transformation program to create the discipline, to create that muscle in the organization around a very disciplined and prioritized execution. This eventually, this is a program, and you'll see it when I present the pieces that we expect it to be about 3 years. The idea that this discipline is going to then become our overall discipline in how we do business. This will become our business system, so to speak, our new discipline in how we execute. So I mentioned that I feel comfortable that we have foundational items to work on, and that's what I mean here. One is our leadership position. When you talk to any customer in our space about who Tecan is, they will tell you that we are the gold standard for liquid handling automation and that is something strong that we can build on. The markets that we serve are very attractive. I already mentioned that, yes, we've had some uncertainties in the last couple of years, but the fundamentals are intact, and I'll share with you what I mean by that. But there's a third point here and it's the time now because what is happening with AI and technology is making automation go from a nice to have by our customers to a true need in order for them to be able to actually leverage AI and the new technologies that they have at their disposal to make something different out of their science. So this is why now is the time to think about how we're going to be future-proofing Tecan to take advantage of this opportunity. Now I wanted to go through this slide for those of you that perhaps are a little bit newer to the Tecan story. And this is who Tecan is. If you look at the left-hand side, you see our Life Sciences business. This is what I call our core or our backbone, right? This is where we have our Tecan branded portfolio. Again, when you think of -- you ask the customers who Tecan is, they will tell you, we are the gold standard for liquid handling automation. That franchise of products that includes instruments, consumables and services is what sits in the Life Sciences business. In addition to that, we have Tecan-branded detection instrumentation as well as the reagents portfolio. This represents about 40% of our total company. We service customers in the life science research space as well as clinical diagnostics. These are end users. This is where we serve pharma, biotech, the academia as well as clinical diagnostics, doing applications in genomics, proteomics and cell and tissue. That knowledge and expertise that makes us the gold standard in liquid handling automation on fluidics and robotics is what we use to leverage to create the partnering business. Here, we have tailored OEM systems and OEM components, both tailored and standard solutions. And we also have our CDMO solutions in this part. Here, this represents about 60% of our total, and we go to market with 3 brands: Synergence for our tailored OEM systems; Cavro for our OEM components; and Paramit for our CDMO solutions. The customers that we serve are more partners These are customers that eventually also serve end users in the life science research as well as IVD and MedTech spaces. And when you look at what is in the middle, this is what connects the 2 pieces, right? It's what we're calling our Tecan platform, which is made up of that innovation engine, which is a combination that know-how those patents, that expertise that we have in fluidics and robotics as well as that advanced engineering as well as software development capabilities. The culture of customer proximity, whether it's with end users on the left, on the life sciences side or our partners on the right through partnering, it's that proximity to the customers that makes us special to them. And that actually continuously feeds the innovation engine. So this is like a virtuous cycle between these two that makes each one better every day. The regulatory excellence, something that is used in both sides and very much appreciated by the customers and actually quite -- makes us quite unique because these customers are working in regulated environments. And our global manufacturing where we now have capabilities in the U.S., in Europe and in Asia. So with this, I'm going to turn things over to Tania, that will take us through the 2025 results.

Thank you, Monica. Good afternoon from my side as well. Of course, I did not have anything with my voice before, but now that I'm talking. So before Monica goes into more details on how we view the future, let me give you a little bit more detailed overview of our financial results for the year -- fiscal year 2025. I will start with order entry and sales. And Monica has mentioned already some of the numbers. But from the key drivers, what we have seen in 2025, order and sales development, we still were impacted by the muted market environment, especially for the life sciences instruments and instrument components. But let's look at the numbers more in detail. Order entry for the full year totaled CHF 900.9 million, reflecting a year-on-year increase of 3.8% in local currencies. The local currency increase was driven by a strong demand in diagnostics, especially in the Partnering Business. Life Science business segment also grew moderately in local currencies despite the headwinds from the academia and government. And I will address more the segment-specific details shortly. Overall, the group's order entry in the second half increased by 8.6% in local currencies. Reported sales for the group in fiscal year 2025, as Monica mentioned, decreased by 1.6% in local currencies to CHF 882.5 million. This is in line with our sales outlook. Sales in the second half increased by 0.4% in local currencies compared to the prior year period. The sales results were previously communicated in our trading statement on January 12, 2026, and have not changed. Let's now look at the sales performance of our 2 business segments. And let's start with the Life Sciences business segment. For the full year 2025, reported sales decreased by 5% in Swiss francs and 1% in local currencies to CHF 377.1 million. As I mentioned, academia and government demand was mostly the one impacting the growth because of their funding uncertainty, while biopharma saw stable sales and strong order entry in the second half. Diagnostics had also a strong order entry growth and solid sales, also fueling the consumables recovery. The book-to-bill ratio was slightly above 1 for the full year with moderate order growth in local currencies, accelerating during the second half. Sequential growth in local currencies was 9.8% when comparing the second half of 2025 to the first half. The Partnering Business segment generated sales of CHF 505.4 million in 2025, marking a decrease of 5.9% in Swiss francs and 2% in local currencies. Academia and government funding uncertainty as well as weak Life Sciences demand impacted the Cavro and the CDMO businesses. On the other hand, strength in diagnostics drove solid growth in our Synergence business. In the second half, medical accounts and particularly, our main customer contributed positively to the CDMO services, driving an increase in sales of 3.3% in local currencies in Partnering. Order entry was up mid-single digits for the year and in the low double digits in the second half of the year. As a result, the book-to-bill ratio was also above 1 for 2025. Our next slide addresses our adjusted EBITDA. Adjusted EBITDA reached CHF 142.1 million, which was CHF 22.3 million below 2024 levels. The adjusted EBITDA margin decreased by 150 basis points, now standing at 16.1%. Several key factors explain this difference and collectively impacted our adjusted EBITDA margin performance for the year. On the negative side, lower sales volume, but especially exchange rates impacting the margin by approximately 130 basis points, and U.S. administration imposed tariffs representing an additional unfavorable 70 basis points contributed to the decline. On the positive side, we benefited from a favorable product mix, price increases and efficiency and cost improvement. Excluding the combined 200 basis points headwind from foreign exchange effects and tariffs, the adjusted EBITDA margin was 18.1%, in line with our initial guidance. Let's now look at the segment profitability. Looking at the operating profitability, we can observe that key drivers are affecting both business segments similarly with the adjusted EBITDA margin development primarily impacted by the weak dollar and the tariffs. With that context in mind, let's move to the figures. In the Life Sciences business, adjusted EBITDA reached CHF 63.4 million. The adjusted EBITDA margin decreased to 16.5% of sales, primarily due to the external factors I mentioned. Cost control measures helped alleviate the impact of lower sales volumes and adverse exchange rate effects and tariffs. Moving on to the Partnering Business segment. Adjusted EBITDA reached CHF 89.7 million. The adjusted EBITDA margin increased to 17.7% of sales, driven by a positive product mix. Similar to the Life Science Business, segment adverse exchange rate effects and tariffs were partly offsetting the margin improvement. Let's turn now to the net profit and earnings per share on the next slide. Adjusted net profit was CHF 87 million, down from CHF 103.1 million in 2024. In addition to the lower operating profit, net profit was impacted by reduced financial results due to the translation of the U.S. dollar-denominated assets into Swiss francs. As a result, adjusted earnings per share were CHF 6.87 compared to CHF 8.08 in 2024. The number of shares outstanding decreased to 12.7 million from 12.8 million in 2024, driven by the share buyback program. Reported net profit was impacted by the noncash impairment charges that Monica mentioned before, of CHF 139.5 million that I will address in more details in the next slide. As a result of the impairment charges, we reported a net loss of CHF 110.7 million comparing to 2024, a positive net profit of CHF 67.7 million. Similarly, reported earnings per share went down to minus CHF 8.74 comparing to CHF 5.30 in 2024 due to these impairment charges. Dividends, based on the solid cash flows for the full year 2025 and has an expression of the confidence in Tecan's future and of the commitment to shareholders' return, the Board of Directors will propose an unchanged dividend of CHF 3 per share at the company's Annual General Meeting on April 15, 2026. Half of the dividend or CHF 1.50 will again be paid out from the available capital contribution reserve and is, therefore, not subject to withholding tax. Let's now look a little bit on the impairment and some more details. What you see in the first table, the EUR 139.5 million that we mentioned for goodwill and PPA impairment, as I mentioned before. Sorry, I'm lost in my paper. And so I will continue without the note, but the second table is basically representing the exit from non-value-creating activities at Tecan Genomics, and that represents CHF 5.3 million of write-off from our assets as well. And Monica will go a little bit more in detail on the impact from why we went into those non-value-creating activities, which ones and how that is going to look afterwards. Now finally, let's look at cash flow. Cash flow from operating activities was CHF 138 million comparing to CHF 148.5 million in 2024. As Monica mentioned, that is a solid cash conversion that we had as we improved to 118% of EBITDA, up from 100% in 2024. Our days sales outstanding decreased to 46 days from 52 days in 2024. And cash flow from operating activities includes CHF 61 million for amortization and depreciation as well as the goodwill and PPA impairment of EUR 139.5 million that I've mentioned before. Investment totaled CHF 76.5 million including CHF 10.2 million in newly capitalized development costs, CHF 25.1 million in property, plant and equipment and other intangibles as well as CHF 112.2 million repayment from our time deposits. Cash flow from financing activities included CHF 38 million in dividend payments. They also included CHF 33.4 million for treasury share purchases with CHF 24.8 million repurchased under the share buyback program from August to December 2025. It also included the CHF 100.1 million change from the bond financing. Thanks to solid cash flow management, our net liquidity position, which includes cash and cash equivalents plus short-term time deposits less bank liabilities, loans and the outstanding bond increased to CHF 160.8 million as of December 31, 2025, up from CHF 153.7 million on December 31, 2024. With this, I'm handing over back to Monica.

Thank you, Tania. And I want to take this opportunity publicly to thank you for being my partner during these first 7 months for me and actually, I should say, the next 2 months because I will still have you for a couple more months. I couldn't have thought of a better partner to help me understand the business very well, understand where are the opportunities and maybe the risks as we put together this plan for on a going-forward basis. I wish you all the best in your next endeavor. And I'm sure we'll be in touch. We will have a glass of wine and talk about how we both are doing, obviously picked by you, don't worry. And I am sure that all of you guys are interested to find out how the process is going for the CFO search. So I'm glad to say we've made a lot of progress. I am very happy with where we are. I will not share news just yet, but news will be coming fairly shortly, so stay tuned for that. All right. So I'll pick up where I left. I have talked about already the fact that I think that the 2025 numbers are not really reflecting the potential of Tecan. That's very clear. We have done the diagnosis already, and I've already said, okay, markets have played a role, no question. But I think the issue here boils down to distraction and inconsistent execution. That weakened our performance and also the confidence of the teams in, again, continuing to be waning in the market. The good news is the core is intact and financially, Tecan is strong. So as we think about the forward momentum, first and foremost, focus has been restored. So we have clear priorities. We already worked on a tighter portfolio, and again, into that as part of Rewired, and have a mechanism for disciplined execution. And we are here to talk about the path to profitable growth. But before we do that, I have a few slides where I want to give you some context on the markets. First, starting with what we expect in '26, and then maybe a little bit more kind of going forward, the secular trends that we see in the markets that we play. I think you've heard me talk before about the expectations coming out of '25 and into '26. I do expect that the markets are going to be gradually improving from now getting back to what we believe is a normalized level for us. But it will be a gradual step. I have actually said before, I think you've heard me that I expect the markets this year to be somewhere in the range of minus 1 to plus 1. And perhaps being a little bit conservative, and that's due to what I'm seeing in the academia and government space. I do think that things will get better this year versus last, last year, there was a lot of talk, particularly with our customers in the U.S. around what was going to happen with NIH funding, which is clearly, for them, an important component in how they fund their investments. Certainly, by the time we close the year, it was becoming clear that there was bipartisan support to keep the NIH funding closer to stable as opposed to the large cuts that were talked about at the beginning of the year. But what we see now is our customers are kind of expecting a little bit more of like true clarity on the level of funding to be expected. So yes, maybe I'm here and being a little bit conservative. This is one that we're watching very closely. But I do want to see that change in behavior of our customers in the U.S. before changing the view here. On biopharma. Again, these customers had a tough time last year. There were all these discussions about the need to give MFN in the U.S. By the time the year ended last year, it was clear like the majority of the large pharmas already had deals done with the U.S. government. That gives them a lot more clarity around what to expect in that market that is so important for them. And therefore, they will start to make clear decisions from an investment perspective. Some will say, there'll be more of them in the U.S. versus Europe. The reality is, for us, it doesn't matter wherever they make them, We will be there to take advantage. So I do believe that this market will be better in '26 than it was in '25. Diagnosis was strong for us in '26 -- in '25, sorry, and we don't really see a reason for that to change as we go into this year. And then for MedTech, for us, what's important here is the outsourcing trend, and we believe that that's going to be continuously there in '26 as it was in '25. So an opportunity for us to continue to take advantage. But as we think about these markets much more in the longer term, these are very attractive markets and those solid fundamentals are very much intact. We have, for a long time, talked in this space that we are living the century of biology. And that definitely still is the case. But I think that now we have an opportunity of putting together the century of biology with the technology advancements that we're seeing with AI and other digital tools that are making the demand for automation even more important for our customers. So that is something that is very interesting for us as we play in this market and in the area of automation. What we're seeing with biopharma customers is that they are using AI to accelerate the drug discovery and enable personalized medicines. That trend around personalized medicines is also impacting what our diagnostics customers are seeing, and they are also leveraging AI to drive companion diagnostics and in the end, enable earlier and more effective interventions. From an academic and government side, and these are the customers that tend to be the pioneers when it comes to scientific research, and they are actually taking advantage of multi-omics and new technologies that accelerate large-scale biological discoveries. And then on the MedTech side, we are lucky to be playing or to be having as a customer one of the pioneers when it comes to robotic-assisted surgeries. So all those advanced procedures, we definitely see continuing and devices like wearables that will enable more precise and more proactive care, again, connecting to what we're seeing in the diagnostics and biopharma side around personalized medicine. All of that, again, has the common denominator that as more throughput is needed because these AI models give more data and there requires more speed and higher throughput and more accuracy, all of that drives the need for more automation in all the segments. So I often get asked the question about what AI means for Tecan. So I thought I'd use this example here, which is how our customers in the biopharma space are leveraging AI in their drug discovery process. And you can see here in this chart, it's a very simplified diagram to show the drug discovery, development and manufacturing process at the very beginning, the first 3 steps are the discovery, then we have [ drug ] manufacturing with QC and then finally, patient testing. So our customers are using AI at the very beginning of the process to drive the lead and target identification. This is the piece that they're doing in-silico in the computer, right? They have disease targets that they're trying to connect with the leads that could be the potential drugs, right, for those targets. Of course, the computer, the AI-generated models can handle a lot of data. So there can be a lot of potential combinations that actually make it through. But all of that needs to be tested in the wet lab, and that piece is still remaining there. But of course, that is where we come into play in the lead compound generation, so that next step. Of course, to be able to manage that large amount of data that comes from the AI models, you need automation. Otherwise, the wet lab becomes the bottleneck in the whole process. And then there's a close loop in between those 2 because as you test things in the wet lab, whatever works goes in and then they feed again the AI models to try to create a better and better outcome when it comes to these pairs and then make it all the way down. So a lot of opportunity for us using this, particularly in the drug discovery, which tends to be our sweet spot. Now what we've seen with this is that our customers are pulling us downstream in the process as well. And I think what is happening is that because you're using those AI models at the very beginning, we are now seeing that the customers are using many more different types of therapies or types of drugs that come through. They have to be tested under more than one parameter, so more parameters to be tested in QC, and we're seeing that our customers are pulling us into that step of the process as well. And this is not something that we're saying that it is the future, and it will happen and comes to questions, okay, when is this future becoming a reality. This is a reality today already. Now share there 2 examples of customers that are already using us in these processes and where they are leveraging AI. And the first one is this customer called the Officinae Bio. This is a biotech company in Italy that supports advanced therapies in mRNA and cell therapy as well, and they are actually using affluent at the core of that closed loop system. So what I was mentioning there at the very beginning of the process. So again, very real example of today. And then the second one there is Cellares, and these guys are using a Tecan to create a QC platform. These are -- this is a CDMO that is focused in cell therapy manufacturing. So they're leveraging our Fluent in that step in quality control, as I was mentioning before. Not exactly what is normally our sweet spot or again, something where we're being pulled in by our customers because of the needs that have been driven by AI. So 2 very real examples. Now with that, I have talked about the market, right? It's a very attractive market, went through some uncertainties, but it's getting better and the trends are the fundamentals here, as you can see, are very real and made even more attractive through AI tools. which is more the reason to say that we need to future-proof ourselves now. So how are we doing that? It's through our Rewired transformation program. Our target for this program is to generate by 2028, CHF 1 billion in sales and 20% adjusted EBITDA. And the program is going to have 3 core components. One is about portfolio discipline. And this is really -- taking a look at our portfolio, looking at what are the areas where we can actually create value and ensuring that we're focusing our investments there, and then exiting businesses that perhaps do not meet that criteria. This is the piece that actually ties to the impairment that we were talking about earlier. We made 2 decisions last year linked to this particular part of the process. One was to exit the design activities that were part of the Paramit acquisition. So that's what created the partial impairment of the goodwill from the Paramit deal. And then the second one was to exit some of the activities that were done by Tecan Genomics, where we were just not creating value for customers that generated a write-off of about CHF 5 million that's in our P&L for 2025. The second portion of the program is what we're calling commercial excellence. And this means different things for the 2 businesses. But this is really what's going to be the engine that drives us back to generating growth by taking share in the market. It will be about getting -- doing sharper segmentation. We have opportunities in parts of the portfolio to do value-based pricing. And just overall, a more agile go-to-market, both in Life Sciences and in Partnering. And I have specific slides where you can see a few examples of what I mean by that. And then the third one is operational excellence. Very simply put, this is ensuring that as we grow that extra revenue flows through converted to margins and cash. But there's actually a fourth component here in the transformation. And this is what we're calling a performance culture. It's the common denominator, what connects it all. It's our people, right? It's really driving a culture of execution, of ownership, of accountability and collaboration. Our people are what's going to make this happen, and I'll share some of the things that we're doing there to ensure that we have a culture of performance. Now how are we doing this? What I'm trying to show here is year-by-year, what is going to be happening in each of the phases of the program. And I'll show you a few examples. This is meant to be examples of things that are happening to allow us to go from the big point, which is the 2025 numbers, you see them there, CHF 882 million for sales and 16.1% of adjusted EBITDA over to the 2028 targets of CHF 1 billion and 20%. 2026 is the year of Reset. This is this year. Here is where we are going to be doing things like, for example, the streamlining of the portfolio, which I have talked about already. We'll be accelerating the commercial share gain initiatives. And again, I'll share some examples of that. And we work on the optimization of production capacity in consumables, which basically means we're localizing our production in the U.S. for the U.S. market on the consumable side. This is work that has already started, and we expect to go live later this year. 2027 is the year of Recharge. And here, we will see having impact in these numbers, the advanced regional growth strategy. You heard me talk about this already. The optimization of our product cost, the discipline that we had lost a little bit, and we're bringing back that should give us opportunities on the gross margin side and then the acceleration of the R&D productivity, getting the returns on that investment that we're making on the R&D front. And then finally, 2028 is when we will be fully Rewired. And some examples of the things that we will see have an impact in that year are scaling into adjacent markets, realizing our growth for the new wins. Again, we've done some work already on rebuilding the funnels, particularly on the Partnering side, and we should see benefits from that already starting in '28 leveraging our CDMO site in Malaysia at scale to drive operational efficiencies. And finally, completing the work that we have started already around vertical integration, a lot of that of bringing, in-sourcing things into our Vietnam side to drive efficiencies and savings as well. So what I'm going to do here is help you bridge the starting point and the endpoint being 2028 from a sales perspective. And let me just explain to you what you're seeing here on the slide. So you can see, if you go here, that's the 2025 number. This is the starting point, CHF 882 million. 2028, you see the CHF 1 billion. So you see here the bridge in between. This is where we have the CHF 120 million, so I'll get into that. What we put up there, just so you get a sense of the reference is our growth -- market growth assumptions. So coming out of 2025, where we think the market did somewhere between minus 2 and minus 1, 2026, you see the minus 1 to plus 1 that I talked about, gradual improvement, as I said, '27 to '28, plus 1 to plus 3, and then post 2028, getting back to what we believe is normalized for us, the low to mid-single digits. That CHF 120 million that is in between, it's kind of split between Life Sciences and Partnering and rough numbers, we believe that we should get somewhere along the lines of 55% of that CHF 120 million coming from Life Sciences and 45% coming from Partnering. On the Life Sciences side, we have 3 categories of areas of focus, so to speak, from a revenue perspective. Core portfolio, so this is protecting our core, what's coming from new products and what's coming from regional expansion. On the Partnering side, also the protection of the core and how that's going to do over the period as well as the new wins. So now I'm going to double-click on each one to give you a sense of what have we included in each of these areas. And I'm going to start with Life Sciences core. You'll see here at the top, so you remember the contribution of each one of these into the bridge. And again, this one here is really about protecting and growing the core. This is in Life Sciences, the biggest piece. This is the growth that should be coming from the products that are already in our portfolio today. Of course, the first step is to ensure that we focus on the areas that will be adding value and discontinuing subscale businesses, which is what we did with the Tecan Genomics pieces. This, of course, the biggest part of this core in Life Sciences is our liquid handling franchise of instruments, services and consumables. That piece, if you think about between -- before the pandemic started and last year, grew in the mid-single digits. So we know that piece has value for the customers, and that can grow. So it's about protecting that. And here, we will do it by building momentum -- the momentum that we have in high-growth segments. For example, in the U.S., we found that in central labs that are focusing on genetic testing, that is a great opportunity for us. We focused the team in that area, and we've generated double-digit growth from those. So it's really looking for those areas that are truly growing and focusing. The next one, positioning ourselves as the automation partner of choice for AI-powered labs. And this is exciting because we have our tool of Introspect that we can use to this. Now we've had Introspect now for a number of years. We have over 1,500 instruments now connected or our customers have them connected to the tool. And now that we have this data, we can see and we can prove to the customers that when you have this tool to manage your fleet in the lab, you have increased quality, increased performance and increased efficiency in the lab, which is something obviously that resonates with the customers. And what we're going to do with the Introspect going forward is actually leverage AI tools. So if any of you attended SLAS in Boston a few weeks ago, you may have seen that we did a preview to the customers that attended of the new agentic AI for Introspect. There was a huge amount of interest from this so much that we had to add sessions after the event because we just couldn't accommodate so many people. This is one example of many that we have in the pipeline in trying to leverage AI to help our customers use the tool to manage their fleets in an easier way. And actually, on this, I'll share that you will see an interesting announcement coming from us around partners in this space. So one to watch. So stay tuned for that. And then the last point here on protecting the core is really this one around commercial excellence. So what I mean by this is we have tools like, for example, value-based pricing, which we can leverage for parts of the portfolio in Life Sciences. Our sales force effectiveness. You've heard us talk already about the fact that we've been investing as we do the new S/4HANA. We're investing in other digital tools, for example, Salesforce, that's going to allow us to do a better job at understanding the efficiency and effectiveness of our sales organization. So leveraging that tool is an opportunity. And then finally, key account management. This is something that we started already in our regions last year and we now have an opportunity to bring that more globally so that as we create better relationships with GSK in the U.K., we understand what are their opportunities for growth in the U.S. and pass on those opportunities to the U.S. team or as we see that Lilly is investing in Asia, we have that chance to actually pass on that opportunity from the U.S. team to the Asia team so that we can capture more growth out of the key accounts, lots of opportunities for us there. The second bucket of opportunities for Life Sciences is in new product offerings. And last year, you heard me talk a lot about Veya, which was a product that we launched last year and that we'll be continuing to drive growth in this particular category for new products. But today, I wanted to highlight a different new product, which is our robotic workcells. And this one is interesting because it combines expertise that we've had at Tecan for many years with our Labwerx team. We have over 30 years of experience doing integrations in that team together with our newly acquired FlowPilot software. These 2 things combined allow us to offer our customers not only the robotic workcells that have the liquid handler as the brain using our Fluent control, but also robotic workcells that don't need to have the liquid handler necessarily as the brain because we have the brain being our FlowPilot software as the orchestration for the tool. That in itself unlocks an opportunity that we estimate is north of $200 million of total addressable market in this space. So again, those of you that perhaps attended SLAS in Boston may have seen in our booth the showcase that we did for robotic workcells in terms of our capabilities there. So very exciting. And then the last set of opportunities for Life Sciences is in the regional expansion. So expecting to contribute between CHF 5 million and CHF 15 million. And this is the one that you've heard me maybe talk about started in 2024 with the investments that we made in South Korea that allowed us to deliver double-digit growth in '25. Last year, we made investments in India, where we'll do a hybrid model together with our distributors and targeting very much the biopharma segment in India. And then we will have others that are in the pipeline that we're reviewing to identify and where are the biggest opportunities. Now turning to Partnering. So here, we have the 2 areas. The first, I'll start with the core offering that should allow us to have an extra CHF 15 million to CHF 25 million of contribution. And what is included here is all the programs and products that are already in the market from our customers plus the new ones that are about to be launched, which, in the case of Synergence and Cavro is about 10 of them, and in the case of Paramit is about 5 of them. You remember that in this business, we actually -- once the product is completed and it's put in the market, the customers actually do the work on the commercial and marketing side. Our role is to ensure operationally they are supported to be able to win in the market overall. So here, it's all about intensifying our key account management to ensure that we grow and protect the share of wallet with those customer partners as well as managing the end-of-life products because, of course, we have some that have been in the market for quite some time. The customers will make their decisions of when it's time to get the next generation, and we want to be there for them to help them design and manufacture the next generation of products. And what I wanted to do now is to actually show you 3 specific examples that are included in this core offering that give you a sense of how synergies work between these businesses. And the first one is actually -- this is a customer that's in the life science tool space, focusing on next-generation sequencing. And they are entering the proteomics space, and they started this relationship in Life Sciences. Here, they used a Fluent platform and customized it to build the proof of concept for them. Once we knew that, that proof of concept was working, the relationship passed over to the Synergence team, who then built a fully customized solution for the customer. The second example is also a player in the Life Sciences tool space, and they were looking to make a high-throughput proteomic system for liquid biopsies. Here, the relationship started with Cavro. They had their design and they saw that our components would be good additions to the overall design. They actually -- in this particular case, they went for development and manufacturing with a competitor of ours. We started to have some challenges with the competitor. And because of the relationship that they already have with us, decided to give us the opportunity to manufacture that design that the other competitor had done at the Paramit site. And then the third example is one that this is a player in the molecular diagnostics space. This is one that started with Synergence. We have this relationship where we have designed the analyzer for the customer designing and manufacturing. When it came time for the next generation, they decided to actually go with a competitor of ours. And so they went and they started to have some challenges with that competitor. And we obviously still kept the relationship. So that resulted in them giving us the opportunity to manufacture the existing design through Paramit. And what happened here is that now that we have it with Paramit, we will have the door open again to when they're ready for that next-generation design to take back the business through Synergence. So again, another virtuous circle that will happen here. So all these 3 are included in this section of core offerings for Partnering. And then the last bit of the bridge for the Partnering side is the new wins and offers. And what we've done here is to take the funnels of opportunities for Synergence, Cavro and Paramit and figured out which ones are the opportunities with the highest probability of success that are later in the process. Remember, here, we're talking about a 3-year range. So it has to be things that are later on enough to be able to make revenues in this period. I think you've heard me talk into some of the other sessions that this -- the work to rebuild the funnels have been something that was very much a priority at the very early stages of my tenure because I know that this is an area from a sales cycle that is a little bit longer. And it's been nice to see, If I look at the funnels from the combination of these 3, Synergence, Cavro and Paramit, where we ended up 2025 to where we are now in '26, the funnels in total have grown about 50%. So this gives me a good indication that this work is paying off. And of course, we have to keep going because not everything is going to work in these funnels. So we have taken a subset here to make up for the part that we need to deliver the CHF 1 billion of commitment. So here, of course, we have to continue doubling down on these identified targets to take them through the end of the funnel, making sure that we keep the intense collaboration between sales and R&D. This is particularly important for the Synergence part of the business. We have to deliver on our innovation road map for the next-generation Cavro products. And finally, we will be establishing last-mile development services that will be tied to the Paramit offering. That's something that we have seen that causes stickiness, and it's something that our customers on the contract manufacturing side really appreciate because it helps them optimize the designs that come to us. Now I want to do something similar, but with the EBITDA. So you can see how we are bridging from the starting point to the target in '28. So very similar setup of the bridge. You can see here the 2025 numbers. I think that -- there. The 2025 numbers here, that's CHF 882 million at 16%. That's CHF 142 million. And then here, you got for 2028, the CHF 1 billion at 20%, that's the CHF 200 million. So this is roughly a CHF 60 million bridge that we have to generate. And here, we've done it in the same categories as we've set up the program, right? You have portfolio discipline, generating between CHF 5 million to CHF 10 million; commercial excellence, CHF 10 million to CHF 20 million; and operational excellence CHF 25 million to CHF 35 million. And then we specifically put out the number, there is something that will come through as market growth that would be CHF 5 million to CHF 10 million. If you think about this CHF 60 million. You can think about it that roughly 1/3 of it is going to come through the volume from the growth initiatives and about 2/3 of it should come from cost savings from the other initiatives in the program. So I'm going to do a click down on the operational excellence because it's the largest component here. So you get a sense of the types of things that are going to give us these savings. So it's very similar format then we used -- that I used before to present the program, Reset, Recharge Rewired. So in 2026, we have, as an example, the streamlining of the precision machining operations. We have 2 sites to do precision machining, one in California, one in Vietnam. We have consolidated our needs into the Vietnam site, and that has allowed us to exit the site in California. This one is already done. We are optimizing our production capacity in consumables. I mentioned this one already. This is about localizing production for consumables for U.S., so U.S. for U.S. And reinforcing our market-driven R&D, basically in very simple terms, what this means is that the ownership of the R&D pipeline or the innovation pipeline will sit clearly with the product managers, making it a market-driven R&D, of course, with very, very close collaboration with the R&D organization. 2027, our Recharge here, we will have the optimization of the product cost. I mentioned that already. Simplification of supply chains. And here, I was referring specifically to the work we've already started to -- we've already done the work of moving the manufacturing of our Cavro products over to Malaysia, but we still have to do the work of localizing the supply chain. So we expect that to be giving us benefits in '27. However, there is much more opportunities in other parts of the company to simplify the supply chain. So this is a broader term there. Acceleration of the R&D productivity. So the actions that we will take in '26 will give us benefits in terms of returns of the activities in R&D. Rollout of the harmonized enterprise architecture. This is S/4HANA and our digital tools like Salesforce that will allow us to establish our functional centers of excellence for the areas where it makes sense, and we have enough scale in some of the areas to make this something that makes sense for us. And then finally, for the year that will be Rewired, the main point of benefit is leveraging of our CDMO site in Malaysia at scale to drive operational efficiencies. And then we will have completed our vertical integration projects. All this has been consolidated into our Vietnam site from a precision machining perspective. A word on the cost. So here, you can see overall the cost of the program. But I think more important than the totals here is that each one of the items in the funnel, and as you can imagine, I have shared many things that are getting us to the bridge from an EBITDA perspective. The funnel is bigger than that because we know that some of the things we will choose to do maybe at a later point or they will not drive the exact benefit. So we need to have a higher funnel to ensure that we can deliver the CHF 60 million. Each one of those items, if it's there is because it has a clear return on investment case. You can see here the totals overall with these numbers, You see that we get a return or a payback of roughly 2 years, which I think makes perfect sense for a program like this, just again confirms the need for us to do this. So I spent a lot of time talking about Rewired, how we need to get ourselves future-proofed as Tecan. But if you remember in one of those first slides when I was presenting Tecan, one of the points that in that middle circle was the innovation engine. And I mentioned that, that's one of the things that makes us unique, right? That makes us who we are, and that gives us that status as the gold standard for liquid handling automation and drives the performance of the businesses. As we do all of this work on Rewired, we have to make sure that we protect our innovation engine. So this slide is about my commitment that that's what we're going to be doing. Of course, we have to gain productivity in R&D. I think if you heard me say before, one of the things that I saw coming in was that the level of R&D investment for me relative to the size of the business was fine, but the focus had to be on the return on those investments. As we work on those, we have to ensure that we protect our focus on innovation because it's the only way to be successful as a life science tools player. And what this slide shows is that we're going to be focusing that those -- that time and investment in innovation in areas that are growing faster than the average market to help us continue to win. In the biopharma space, it's things like analytical technologies in drug discovery and production and also bioprocessing. On the diagnostics side, we have things like molecular diagnostics in oncology as well as high-plex proteomics. And the academia and government, we have single cell and the 3D models and organoids as areas of opportunity. Of course, this is a non-exhaustive list, but just to give you a sense. A word on capital allocation. The point I'm trying to make here is not necessarily a change in the priorities. What you see here is the priorities as we've had them before. So organic growth is priority number one. M&A. Then number three is the dividends and share buybacks, so returns to shareholders. The point is really more about the focus on return on invested capital. When you think about what that means for the organic investments, it's really the entire program that I've been talking about, right, getting the company to the right level of profitability means that whatever we're investing or reinvesting back in the business is going to get the right return from an ROIC perspective. Similarly on M&A, there are 2 things here. One is that the focus that we're going to take from an M&A perspective is going to be around focusing on strengthening the Life Sciences portfolio. And the reason is that this is what makes up the core and the backbone as we get stronger in our Life Sciences portfolio, we will immediately have indirectly more opportunities on the partnering side. Then the second point on the M&A front is, of course, we will have a strict criteria when it comes to return on invested capital. And maybe a double-click here on M&A. I see 2 types of deals as opportunities. The first is what I'm calling scale-up deals, and this is where we would be adding a large new vertical that is adjacent to our core. So yes, it would be new, but it would be something that works within the workflows that we are already present in with our customers. And then the second one, I'm calling where we would be closing strategic gaps. So these would be more small to mid-caps and basically bolt-on acquisitions that address strategic needs across individual business segments. With again now, the priority is focusing on strengthening our portfolio of Life Sciences and having the right criteria for return on invested capital. Performance culture. So again, I talked a lot about the Rewired program and how this is going to work. It will not work without our people, right? Our people are the foundation for this transformation. And the key here is to deliver a culture of performance -- performance, ownership and accountability. And we've already started that process by ensuring that our business leaders have full responsibility and ownership of their P&L, top and bottom. They will drive the priorities for the functional leaders. We will continue to work in a matrix because matrix allows us to actually leverage the scale that we have to our advantage, but they need to be driving the needs and they need to set up what is the definition of excellence for a function. So that's already a change that has happened. And our teams were really looking for it. When I think about -- what I've heard from the teams as I've traveled around and what we saw as results in the Great Place to Work survey that we do, they were looking for that clarity, that ownership of responsibility so that they can drive the results that are needed for the company overall. We have a great team. I have -- as I've shared before with all of you been flying around the different areas and regions to get to know the teams in the U.S., the teams here in Europe and the teams in Asia, and they are a great team, they're experienced, they know the customers, they know our products, they know what it takes to win. So this is really, again, about ensuring that they have clarity on what success looks like so that we can be delivering together on this transformation. And bottom line is we want to be a destination for top talent. So anybody that wants to work in the Life Science tool space, they should think to come to Tecan first. I've been spending a lot of time talking about our targets by 2028, and I'm sure you're all thinking, okay, what does that mean for 2026, the year that we're in. So I talked about 2026 as a year of Reset. Now that does not mean that the ultimate target for this transformation, which is to always outperform the market will not apply in 2026. That's what we are trying to do here. So on the outset of a market growing between minus 1 and plus 1, which is the underlying assumption that we're making here. We are expecting our sales for 2026 to be growing in the low single-digit range, and we expect to generate an adjusted EBITDA margin of 15.5% to 16.5%. And you can see there a small bridge to share -- to show you, we expect the headwinds coming still from FX and tariffs, representing about 110 bps and then about 50 to 150 bps coming from the transformation program. That's what gets us to the range. So the recap, 2026, sales plus low single digits, adjusted EBITDA margin 15.5% to 16.5%. 2028, CHF 1 billion in sales, adjusted EBITDA margin of 20%. And then beyond 2028, we get to our mid-term guidance, we said mid- to high-single digits and adjusted EBITDA expanding from the base of 20% on a year-by-year basis as we will continue to grow the business. So I'll close with our ambition and commitment. Couldn't get to the end. We have a leadership position in liquid handling and laboratory automation that we need to leverage. We work in attractive markets where automation is now essential and AI is a catalyst for growth, and we are committed to transforming and future-proofing Tecan to deliver profitable growth for our shareholders. Thank you very much. And with this, I'm going to transfer things over to Martin to moderate the Q&A.

Thank you, Monica. Before we now open the floor for the Q&A session, I have a few remarks. [Operator Instructions] Please limit your questions 1 or at most 2 at a time. I know this will be very hard for some of you here in this room. However, I'm confident there will be opportunities to get the microphone back later if you have additional questions. [Operator Instructions] With that, let's kick off the Q&A, and we start here with questions in the room, up here.

Sibylle Bischofberger from Bank Vontobel. Yes, last year, a very important topic was always China. You didn't mention China now. Could you tell us how was it 2025, finally? And how do you expect the China to develop with the programs or program not being active?

Yes. Thank you, Sibylle. Can you hear me? Thank you for the question. So well, first, how we did in China last year, and then the comments are specific to Life Sciences, which is where we have the direct access to the market. And we did a decline of roughly about 10% in total. So it was not a good year overall for us in China. Now the result when you actually do one click down, the area where we did not do well was on the academia and government side, and that was -- it's the largest proportion of the revenues that we do in China. We actually did very well in biopharma. So as we think about the strategy for us going into 2026, again, it would go into that area or same focus in the areas where we find momentum is how can we leverage the areas of strength. We've seen a very, very interesting reaction and positive reaction from the Chinese market around robotic workcells. In fact, I think they were the first ones that started to -- where we started to see that trend not just in biopharma institutions, but we've seen examples of them using them in other parts like biobanks, for example. So that's what we're going to be doing in China. For us, it's extremely important to stay in China. So we have no interest in exiting. It's a market that is extremely dynamic, and we learned a lot by being there. What else is going on. I think I've shared before, whenever we see something interesting, we bring it over to Mannedorf to open it up, see what we learn out of what is happening from a technology perspective. It's a very dynamic market. So we do expect to stay.

Laura?

Laura Pfeifer from Octavian. So on the CapEx and production setup, could you please elaborate on your CapEx investments, how they will phase over time. And also what is included. I think you made mention to of a greenfield site. So I think more details here would be appreciated.

Do you want to take that, Tania?

Sorry, Laura. Can you repeat it because I was focusing on China?

No worries. No, I was asking on the CapEx, how it will phase over time, like the transformation program and also how your future setup will look like. I think you made mention of a greenfield site included in these projections.

So from an operational excellence perspective, the time line is a little bit longer for delivering on the initiatives because it can require, let's say, heavier lift on those. So from a CapEx perspective, you would see it more on the '28 -- '27, '28 with a starting point, but then a bigger impact on the 28th year.

I'll just add that. So we have not made a final decision on whether we would go greenfield or we would lease a site in Malaysia. We own land, so we have that option. We have space now in our site. So we can begin the transfer activities. Also we could actually move the warehouse that exists in our site today and that opens up space. So that allows us to get started. And then as Tania was saying then that decision, we can take a little bit later. And the CapEx, as you saw on the slide would be the higher CapEx if we choose the greenfield option, but that's what we are evaluating right now.

Maybe I'll leave it in that row. Harry?

Harry Gillis, Berenberg. I've got a couple of questions just on your '28 targets. How should we think about the phasing as we move there, particularly, I suppose, if -- you've given the guidance for low single digit and the sort of 16% margin at the midpoint, how should we think about the phasing of growth then in '27 and '28, particularly against the context of 1% to 3% market growth? And then equally on the margin side, I guess, with all these initiatives you talked about, how sort of front-end loaded are there? And what's the sort of step-up again, roughly between '27 and then '28? And sorry, if I could just squeeze in one more, but on the same topic. Like Monica, I just wanted to ask what your sort of guidance philosophy is at a high level? This is the first time you've issued guidance at Tecan. Should we think of these targets at the midpoint of a range of outcomes? Are they numbers you're highly confident in achieving the growth at least in '26? How much of this is underwritten by the order book and the visibility you already have today? Because I suppose we could say, over the last couple of years, visibility has been a little bit of a problem.

Do you want to take the first one on phasing?

So from -- let me start with the margin. From a margin perspective, I see it a little bit more balanced between '27 and '28. '27, probably an impact between 100 and 200 basis points, depending a little bit also on the timing of initiatives. As Monica mentioned, we did not fully define everything. But it's -- I would say, it's fairly balanced between the 2 years. On the sales growth, there could be a little bit more in '28 versus '27. But again, it's not a big difference between the two. So I would say, again, it's not like one is dramatic. It's not 10% and 5%. It's not like that. And then from the visibility that you're mentioning. Well, we had a solid order entry in '25, as we have mentioned it. So we have a good -- and we are at a book-to-bill ratio of above 1. We have a good backlog. I would say '26 is reasonably feasible.

Maybe I'll add there, too. The point is you're asking a little bit what my philosophy is around guidance and how I think about the visibility. And I think in this business, you have to separate Partnering from Life Sciences. In Life Sciences, it is much more of a -- we get the orders in 1 quarter. We deliver the revenue just in kind of high ways to look at this. So what we look at there is the trending and I think I've shared this before a number of times, there's one metric that I really like to see, which is the last 12 months of order entry that gives me a sense of that trending that is happening. And I see that being positive in -- actually in both businesses, but particularly on the Life Sciences side. It's important because it will give us a sense of, hey, there is a little bit of recovery in the market, and we are working ourselves, this point that I was making before around ensuring we focus in the areas that are working, are allowing us to see the difference in the trend in orders. So that's what I see on the Life Sciences side. I mean, of course, the guidance that we gave is for the entire year. What we have now started to do is provide qualitative updates so that would give us an opportunity to actually share if we're seeing things that are different because in this market, particularly for Life Sciences, it's something that happens quarter-by-quarter. But I think the trending that I see leads me to this position that, that ties to the guidance. When it comes to Partnering, we see much more of a -- because it's large customers, you can see much more of a kind of ups and downs that are maybe less smooth, I would say, than that we have in Partnering -- in Life Sciences. Here, I think we have to rely a lot on being extremely close particularly to the larger partners to understand how do they view their year and then ensuring that we understand on a quarter-by-quarter basis what they expect from us, not just so that we can be able to deliver to their own commitments, but also so that we can understand whether they're going to be making sense relative to our own commitments to the market. So with that information, I feel confident again that they will have the right level of orders to be able to achieve the numbers that we talked about. But same thing. If we see some things that make us believe that there is something different, this is why I think having those qualitative updates on a quarterly basis, I'm not having to wait for a midyear and our year-end will become very helpful so that we can keep you all updated. So I hope that's helpful, Harry.

Thank you both for the details. Can I go, Martin?

Yes. Sorry.

Thank you both for the details. [ Leone ] from UBS. I have a few more follow-ups for the 2026 guidance. So normally, you have a bit of a cadence between the first year and the second year. Can you maybe already give a bit of color in terms of what you're seeing entering the year now? Will H1 be a bit softer, both on top line and margin? And also on this one slide that you have, 39 that you showed, the 50 to 150 bps expansion or support for the margin. Can you maybe detail a bit more where this should come from? And also what supports the lower and upper end? That will be the first question.

Maybe I'll do top line and you can go to the margins. So overall, as we started the year, I think the first couple of months have come in pretty much as expected. I don't think as we modeled this year, there was such a huge difference between first year and second year, perhaps a little bit in Partnering, we had a stronger second half last year, so something to be taken into account. When I think about that from a market perspective. We recently got the results of the SDi report that usually gives a sense of overall market and also by various product lines that now goes into Q4 of last year. So we have the entire year. And we can see that Q4 came in slightly better, which is a signal for positivity of what to expect from this year. Again, I don't think it's going to be anything super different. I still believe it's going to be a gradual improvement. But those are, I guess, a couple of data points that show that what we have been estimating for this year seems still reasonable at this stage.

Now we switch roles.

I'll just answer the margin. So as Monica said, I mean, on the sales, we do not expect big differences. On the margin side, normally, we do not give numbers for the quarterly part. But let's say, from a half year perspective, what we have comparing to previous year in H1 are higher tariffs. So that would be, of course, impacting from that perspective. But then between H1 and H2, I mean, typically, we have a better H2 than H1. So I would expect something similar for '26 as well.

And this 50 to 100 bps support that you have on the slide, can you maybe give some components for that to understand a bit better?

From what we have for '25?

No, for '26. So those would be the examples that I've shared on the slide. If you think about the slide on operational improvements for '26. So for example, things like the decisions that we've already made around portfolio or the exit of the facility in California, the localization of the consumables into the U.S. should -- it will have a small impact in '26. But I think we should still be able to see a bit because that should come live in the second half of the year. So a few of the examples that were in that slide that should drive that.

Finally, Dani here.

Daniel Jelovcan from ZKB. So just one. The design business of Paramit, which was, I think, a CHF 140 million impairment, which honestly, I don't care too much of, but I still would be curious to find out what it was. Was that -- is that so important? I cannot imagine. I cannot imagine that an innovative surgical needs an outside designer for their robotic arms. So it's a bit difficult to understand as an outsider. And now you are here in kitchen sink and everything, fine. But still to understand why you killed that design business, which I think was okay.

Thank you, Daniel. Yes. So this was actually an acquisition that was done by Paramit only a few months before Tecan acquired Paramit. It was a company called Emphysys. And this was all part of the strategy that Paramit had to actually build the development side to go from being a contract manufacturer, which is what they were at their core to being more of a CDMO player. The issue that I think will -- maybe first to say, when we bought Paramit, there was a high expectation that, that business was going to deliver a high amount of growth or maybe over -- higher than the average, so to speak, again, because the idea is that the [ D ] gives you stickiness with customers. That idea in itself is correct. So the D gives you stickiness with the customers. But the Emphysys model was very upstream or much more upstream than where Paramit would sit. And so what happened was that it was very, very difficult to create a connection between any customer that was using the capabilities out of that design center and them actually being anywhere near to being ready for the manufacturing piece. It was like the 2 things were kind of here and here. And I think this was why it was -- it was difficult in itself to grow that business. And even more so, it was difficult for it to really be seen as a synergistic catalyst to growing the core, which is continued to be contract manufacturing. So that's why we made the decision.

Jan Koch, Deutsche Bank. Thanks for taking my two questions. I would like to come back to your guidance philosophy, and thanks for providing all the building blocks behind the 2028 margin target. But could you elaborate again on the strategic rationale behind that specific target. I'm just wondering why you have not chosen a more conservative approach after what we have seen over the last 2 years? And then secondly, could you elaborate on the competitive dynamics in the U.S. handling -- liquid handling market? Specifically, are you observing increased competition, especially from Asian players?

Thanks, Jan Koch. So I'll take the first question first. So I picked this target because I believe it's the right place for the business to be. In fact, I think that there is additional opportunity, but we have to take it step by step. And I think -- when you think about a player in this space and the areas that we touch, that is the correct set of expectations for a business like this. So that's why we are setting up the target at this level. It's true that not every part of the business will generate the same amount of margin, but we've looked at it from a product mix perspective, and I think this is the right level of aspiration. It will take time. This is why this is not something that I could say that we could do sooner. Some of the things that need to drive this value are enablers that will take a little bit of time for us to implement and we have to do it in a way that we protect the core that is actually making us successful up until this point. But I think if we were not aspirational in setting up the right target for the business, it would be wrong for our investors because this is what the business, a business like ours needs to be able to generate. So that's that. And now, I've forgotten your second question.

The U.S. liquid handling market.

So the dynamics, I think when I think about the key players in this space, I think the core competitors continue to be the same ones that for me in that space are particularly Hamilton, and I think Beckman would be the other one. It's been quite stable, and I say that probably because the customers in our space tend to be conservative. They know what they like and they go for the highest quality and the highest technology. But it goes to the point that was made here, maybe Sibylle asked the question about China. I mean we keep an eye on what is going on there because we know into that those players are very dynamic. But so far, we haven't really seen them get into that high-end space that we play in together with those other players.

Ingo Stossel from UBS. Two questions on my side. First, on your portfolio. Do you see any further areas that you might want to exit? And on the flip side, how much are you looking to add in the medium term by M&A? And on capital allocation, what do you mean by maintaining a strong balance sheet? I mean you have a good net liquidity position at the moment. Are you looking to lever up from here? Or how should we understand your guidance?

Sure. So on the M&A or the portfolio question, I think, first, we are going to continue looking at what makes sense. We took these decisions because they were the ones that were more -- the most painfully obvious that we need to make, and there was just no reason to wait any longer to exit those. But we will continue to look at the portfolio. And I think that as we get better and start to deliver on these commitments, the bar is going to get higher, and we will need to continue to make those choices. We don't really have others just yet, but we will continue to review the portfolio with that in mind. On the M&A topic, yes, I mean I talked about the M&A priority being something that will strengthen the portfolio, particularly on Life Sciences because this is where I see that we have the most opportunity to leverage the position that we've already created for ourselves, so we could use additional or stronger portfolio from that perspective. I don't really have specific targets just yet. But I will definitely think about that as we think about how we deliver on our commitments. And if things that play on that and have the right criteria when it comes to ROIC, we will definitely use it as part of the initiatives to get to our targets.

And the balance sheet?

Do you want something to add on, Tania?

Sure. I mean, while maintaining it strong does not mean that we won't be using leverage if we have the right target and the right acquisition. It's just about the fact that we are still focusing on delivering cash flow and maintaining. But again, that is the base for potential acquisitions.

Maybe Laura?

Just a follow-up. Laura Pfeifer, Octavian. So on your largest customer, what have you -- or what assumptions have you embedded in your guidance, both for this year and also for the mid-term?

So maybe I'll start with the mid-term. So that would have been in the core portfolio bucket, if you remember, the different pieces that make up the Partnering bridge. We were actually very conservative when it came to the assumptions for the largest customer and assumed a small decline, not because we right now are seeing anything that leads us to believe that would be the case, but we just wanted to be conservative in ensuring that we were looking at the rest of the components of the funnel and the ones -- the areas that would have the most probability of success. So that was it. When you think about this year, particularly for the largest customer, we are estimating it at this point to be roughly flat to last year.

Maybe Harry?

Harry Gillis from Berenberg. Just two really quick ones. You talked a lot about value-based pricing. What specific areas in the portfolio do you see room for that? And then on the CFO search, you said maybe an update sometime soon. What type of candidate have you been looking for? You've got the Life Sciences expertise. Could actually someone more in the manufacturing or restructuring experience help?

So maybe starting with the CFO search. Yes, I mean, overall, I want a candidate that is strong in overall financial acumen and understands transformations, understands how to drive change, I think, more importantly. The pieces on being a strong partner from a finance perspective, I think, are the obvious ones. But for me, this role is the most important business partner. And yes, I used the person, and Tania knows this, to be my closest partner when it comes to modeling something like this and driving the entire organization towards execution, being the right voice when it comes to understanding the business well and seeing the forecast that are coming from the various businesses make sense relative to what are the signals that are coming. So all that is all part of having strong business acumen. Maybe less specifically in manufacturing or less specifically in one area, but more just overall and having somebody that understands what change means to help us drive it here. And I've forgotten your first question. For value-based pricing, yes, this is an area -- it is more relevant to the Life Sciences, I'd put it in the context of that business. There are various parts of the portfolio where I think it would make sense. One that we're looking at right now is for the robotic workcells or the entire offering that we do for integrations as part of Labwerx. And I talk about that one in particular because I think this is one, when you're talking to a customer about a robotic workcell, they tend to be very open around the workflow that they're trying to accomplish with the cell and the pain points that they are trying to solve as they put together a solution like this. And to me, when you think about value-based pricing, this is the most important information that you can do because you create a value proposition on the basis of what is the value to the customer of solving that specific pain point that they are targeting. So that's just one example, but there will be others in the portfolio of LSB.

Maybe bringing in some questions here through the webcast and scrolling over the questions. Many were the same, so have been answered. One that is here remaining also is on the EBITDA bridge. And the question is, what are the drivers to get to the high end or the lower end of those specific improvements?

So I can take this one. I mean basically, it's about, in a way, worst-case, best-case scenario. Those amounts are very much a little bit depending on the timing as well as potential leakages like higher inflation or cost that we cannot right now anticipate. But we are fairly confident on the range.

Maybe another one. Thank you, Tania, for -- maybe, Monica, you. How do you plan to prevent Tecan from becoming a takeover target?

Very hard question to answer. I mean I will not be able to do something particularly on that other than ensuring that we focus the business on delivering on these commitments. I mean at the end of the day, independent of we're going to be a takeover target or anything along those lines, this is the right thing to do for the business. This is the right aspiration for an investment like Tecan because we have strength in the portfolio, strong customer relationships and it's about leveraging that. I think that's all I can say.

Another question from the room.

Yes, I have a few more housekeeping questions for CapEx and OpEx and net working capital. Just to double check, so the CapEx that you mentioned for mid-term, this is a fade towards -- so this will increase towards 2028 or you will have a decline in CapEx? This was not really clear in the beginning.

So as Monica mentioned, first of all, this was the higher side we've mentioned here, assuming greenfield which, of course, if there is no greenfield, it would be much lower. But I would say the bulk would still be between '27, '28, more in '28 than '27.

Okay. And similar dynamic for the OpEx?

OpEx, I would say, would be more stable or yes, distributed over the years.

Okay. And just for double checking. Tax rate, can you assume this will be fairly constant around like 19%, 20%?

Yes, if things are as, I would say, normal. But you have seen the -- and I exclude '25, you have seen in '24, for example, we were fairly low also because of the lower profits in the U.S. So it's very much related also to the restructuring charges that we will be taking. So from that perspective, I would say, normal level of taxes, yes, around 19%, 20%. But if you have, of course, lower profit on a statutory basis, then you have lower tax rate as well.

Maybe another one from the webcast. What risks do you anticipate from the Middle East conflict, whether in oil prices, metal pricing or supply chain disruptions?

Do you want to take that?

So at this stage, what we see, we do not have direct disruptions because we do not really have much of the business in the Middle East. Having said that, what we have seen is some increases in freight costs, and there could be some impact from energy costs as well, but they are not that material at this stage and they are not considered because we did not know about that before, but let's say, within the guidance that we have, we are still good with the numbers that we provided.

From the webcast, I think that's it. We have another question here. Mark?

[indiscernible] I would have an understanding question concerning the actual fluctuation rate and the expected one? And have you had so far unwanted departures? I mean, have you lost kind of key people that you would have loved to keep beside the CFO, maybe?

Yes. No. So far, that has not happened. I should knock on wood. No, to be honest, it has not happened. I mean we have some turnover that is normal for the business. If you take out the -- the one that is involuntary or voluntary turnover is low. So it's quite under control. We've shared with the teams, obviously, our aspirations because, as I said, they are going to be the ones that are making it happen. But I think it's overall a level of comfort from the size, not that they don't believe that this is -- it's quite aspirational, but they were looking for clarity. And they appreciate to have clarity on what success looks like here and working together as a team to get there.

One follow-up question on your largest customer. I understand that you're currently here or that this business currently pressured by the lower ASP of the new generation. But at some point, that negative impact should be washed out. So at what point in time do you expect there to be a higher correlation between the placement numbers and your, yes, sales growth with that customer?

Yes. The thing is that there are 2 things. So one, clearly, the fact that they have that difference of the new model ramping up, the old model ramping down is having an impact overall. But I'm not sure that it's really going to go to a 1-to-1 because we don't make the entire part or even a module of the instrument because this is made up by more than 1 piece. We make components that go inside and there are different policies when it comes to the stock levels that we need to hold, that they need to hold for the different parts. So that's why I find it even after we go through this particular period that makes it tougher I'm not sure if we would truly see a 1-to-1 for that reason.

Understood. But if we then just take the average over the next, let's say, 3 to 4 years, that would still mean you could grow that customer in the high single digits or low double digits?

Yes, potentially. And I think this is why the most important thing for us really is to ensure that they are successful in the market because if they are successful in the market, then we're going to be just fine.

And don't forget that we don't only produce those 2 products. We have other products as well, and we are constantly offering them other solutions as well.

More questions or did we exhaust the pool of questions here on the web we have?

Just like maybe one last question around your -- this year's guidance and your mid-term guidance in terms of risks. Have you priced in some buffer, especially for this mid-term target of CHF 1 billion?

So when I think about the components of how we get there, and actually, this applies both to the top and the bottom line for the bridge. The funnel that we have of things that will allow us to get there is bigger than, let's call it, the CHF 60 million of incremental, if you think about it bottom line, but the top line is similar because of the points that we were making before, we have to make sure that we have things done in the right order. Sometimes then we will get perhaps a benefit that will be lower than we planned. Perhaps we have some headwinds that come in like we have now going on with Middle East, there will be things that are unknown in this period. This is why we have modeled this with an overall buffer, meaning that the funnel of activities is bigger than what we showed there. One of the things, and Harry and I were talking about this offline, is the FX piece is for us totally unknown. So this is done on the basis of what we know today regarding FX. So that piece, I think we'll have to kind of see how it plays along the years.

Sorry to be annoying, I've got one more on that same '28 target. I suppose if the guidance for this year is low single digit and the market growth rate is minus 1% to plus 1%, I suppose at max, you're growing 2% ahead of the market. For '27 and '28, you gave 1% to 3%. And I think to get to that CHF 1 billion, you need to do more than 2% above that. Is that fair to think of? And I guess, what's driving the increase in above-market growth rate?

Yes. I think the way you think about it is that we are building an engine that needs to get better at taking share in the market. I think this is the piece that has been missing when you think about our performance in the last couple of years. I was sharing that we always need to be sure that we are over delivering versus market, and it's really hard to say that the last 2 years we've been doing that. So we expect that engine to get better as we think about the next 2 years. That's kind of maybe the underlying assumption in all of this. But yes, you can do the math of what would be the CAGR and depending on how we end, what it means for the next 2 years.

You know that if there is silence for 5 seconds, the Q&A will be concluded.

I will still be around for the [ app ].

Good. This seems to be the case. So we conclude the Q&A. Thank you very much for your participation. And before we close the session, maybe Monica, would you like to share some closing remarks?

Yes. Thank you, Martin. So thanks, everybody, for being here. Thank you for your interest in the Tecan story. And as I said, we're going to be around in the [ app ]. I'm here as well as Tania and Martin, and my team is here as well, so we can answer any other questions in a little bit more informal setting. I'm going to close and leave you with, again, those final words of what is our ambition and our commitment, right? I truly believe in that leadership position that we have. We work in attractive markets and now is a great time to be there when you think about the impact of AI and technologies for our customers. And ultimately, we are committed to transforming and to future-proving Tecan to deliver profitable growth to our shareholders. Thank you, and we look forward to talking to you soon.