Ladies and gentlemen, welcome to the Montana Aerospace 9 Months 2025 earnings call. I am Valentina, the Coros call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions in writing via the relevant field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Michael Pistauer. Please go ahead.
Welcome everybody to 9 Months 2025 earnings call of Montana Aerospace. This is the first earnings call as a pure-play aerostructures company, a goal which many of you know we followed consequently since 2023, and we are extremely happy to announce that this time we have achieved this goal to be a pure-play aerostructures company. Yes, fellowship is still heavily impacted by the carve-out of the energy segment. We will go into detail of those aspects, but still we think aerospace is doing great, and we are more than positive and confident that we will also in the future outperform our peers in aerospace. Today's aerospace earnings call, as always, Kai and me, Michael Pistauer, will guide through, and we are happy to answer your questions after the presentation of Montana Aerospace earnings in 9 2025. Where are we right now?
We announced our strategic transition into a pure-play aerostructures company already in 2023. The reason for this statement and strategy was pretty clear. We think that aerospace as an industry has an extremely long-term perspective. Not many other industries can share this long-term perspective. Also, we connected with long-term contracts, which we will then also discuss a bit later on. We think we can outperform the market consequently, something which we did in the past few years. We can outperform also for the future, we think, because of our special setup. Why? We do have a very special approach to the market.
We are situated in the meantime, a transition we had in the last few years as a global player, still local to local, something which is under the light of tariffs and other developments more important than ever and also adds additional market share to our portfolio. We are one of the few ones in our special area we are in who has a fully integrated value chain, something which is also for the future as we think the market still and the supply chain stays shaky, is more and more important to partner up at the end with our customers, which are the tier ones and OEMs in the aerospace industry. Last but not least, we have not only best-in-class entities, but most of our assets are situated in so-called best-cost manufacturing footprint countries. Price pressure is something which is constantly on.
Certain price pressure for us with situations or setup like we have is a positive momentum which also brings us some tailwind into our development. We have a very clear core which helps us to perform better and better together with our customers. Let me elaborate on the carve-out, which is definitely one of the crucial topics within our balance sheet in the 9 Months results. We think that the carve-out is highly accretive for the company Montana Aerospace. Why? We have achieved an enterprise value in the carve-out of EUR 204 million. Before we go into the details of additional impacts, let me shortly elaborate the transition history. In 2023, when we announced that Montana Aerospace is elaborating into a pure-play aerostructures company, we tried a so-called carve-out IPO in the Energy segment. We failed.
We failed out of the reason that a carve-out IPO within a stock-listed Montana Aerospace was not accepted in the market and by the investors. We then have consequently M&A possibilities worked out, and more than 30 interested parties went through a very detailed due diligence, many of them strategists, strategists like Siemens, GE, and other companies who were not able to participate in a carve-out due to the market share of the energy segment and therefore the fear of consequences of trade commissions and merger control issues. After two years' time, we choose the highest, by far the highest offer we have received. Yes, with some impacts, but on the other hand, by far the highest offer.
Also, because we had some time pressure, time pressure which was given by the fact that we were able with this condition precedent or are able with this condition precedent to shift some debt into equity with non-diluting impacts for Montana Aerospace, which I would like to explain. All in all, we achieved with the carve-out of energy EUR 203.7 million enterprise value. We avoided as Montana Aerospace an equity injection which was planned and also guided of EUR 30 million. This is done by the new shareholder. We have an opportunity for a so-called uncapped earn-out component, which is also to be paid either by good performance of the energy segment or an M&A transaction or an IPO of the energy segment by the shareholder to Montana Aerospace.
Here we calculate with an amount of EUR 40+ million already to happen, hopefully, in the next year to come. Further, we have then achieved our goal as a pure-play aerostructures company, which gives us or provides us, I would say, the fact of a condition precedent to fulfill a debt equity swap with the Belgium State Fund in the amount of more than EUR 66 million, which otherwise would have been cash effective to pay back. All in all, we think with an amount totaling up of clearly over EUR 320 million, a very accretive topic for Montana Aerospace, and therefore we are quite happy also to announce. Cash impact is a bit delayed.
As the closing of the transaction was late in September 2025, the net debt impact will be around 25% of the total amount in Q4 2025, and around 75% is expected to happen within the first half of the year 2026, most likely even in the first quarter 2026, which also leads us later in the guidance to our, I would say, very optimistic and positive guidance on net debt or net cash with one-time net debt EBITDA this year and even a net cash position together with the operational business and the aerostructures cash flow in 2026. Let's go into the details of the first 9 months of 2025. Here we see again a P&L, and please note this P&L is showing only anymore the aerospace business. Montana Aerospace also, as it will look forward-looking without the energy segment, with the pure-play aerostructures company which is mirrored here.
What we see is in sales a stronger than the market growth with 15.5%, the net sales of EUR 712 million, and as announced, an overproportional development of the EBITDA. The quarters are not anymore completely the same. There is a kind of a seasonality with a strong second quarter and a very strong fourth quarter to be awaited or expected, mostly even in EBITDA, which also then brings us later to a very strong EBITDA guidance for 2025 and also for 2026. The result, which shows the result of the continued operations from negative to positive within one year, and please note that the result still includes a heavy impact of a non-cash impact we have to suffer with or digest, is the FX impact, which is in the financial result.
For a detail to be more specific, within the financial result, you find a position of almost EUR 30 million of negative impact, which results out of IC loans, so intercompany loans from Montana Aerospace to its entities in USD. As the dollar changed dramatically within this year from around FX 1.05 by the beginning of the year to at the end of December date of 1.17, more than 10% of these almost EUR 300 million loans are valuated differently, even though they will never have a negative cash impact for Montana Aerospace. They are shown in the result. Still then, with this EUR 30 million impact, we show a continuous operations result of EUR 3 million. Otherwise, it would have been EUR 33 million or even more.
CapEx, and here I would like to stress the CapEx without the energy segment for comparative reasons, slightly lower than last year, and I would say exactly in the area of our guidance where we say always, even with small additional capacity increases, we are at the level of EUR 40 million-EUR 60 million on a yearly basis, which is far below our depreciation and therefore shows the strong operational cash flow possibility and potential. Net debt, including the total company as it is on the year's end or in this case, the 9 months end, still shows a quite significant decline in comparison to the last year, 2024. Please note that within this year, we had, besides also the carve-out of ASTA or energy segment, an impact which was net debt related. There was an earn-out component out of the ASCO transaction.
ASCO was bought by Montana Aerospace within the year 2022, 2023. There was always an earn-out component within our balance sheet in the amount of EUR 30 million. And this earn-out happened to be paid out by July 2025 in the amount of EUR 28 million. It's a bit less than what we expected, but nevertheless, of course, this impact was also something which impacts the net debt. Without that impact on a like-to-like basis, the net debt decrease would have been even over EUR 100 million, to be more specific, EUR 30 million, almost EUR 30 million, lower than what we see right now. Free cash flow shows the total impact of the transactions, the transactions that just sold. On the one hand, the earn-out component, but also the impacts of the carve-out of the energy segment.
Nevertheless, without the impact of the energy segment, the free cash flow shows at a level of EUR 2.8 million. Without the impact of the additional earn-out component for the ASCO segment, the free cash flow would show an amount of over EUR 30 million. On an operational basis, or operative basis, we are extremely happy with the development. I guess if you look in the details, it shows the strong position we as Montana Aerospace have. Additionally, with the really strong contracted sales of over EUR 7 billion, where Kai is giving also some more color on it in just a moment, we think we are prepared more than positive for the future.
Details on the results, as it is, Aerostructures, I would like to hand over to Kai and give you more details on the development of the industry and of Aerostructures, Aerospace, Montana Aerospace in the last few months.
Good afternoon, everyone. Before I start with the details, let me also give you some personal remarks from my side. Of course, everybody is under the impression of today's share price development. I just like to mention that I'm not focused on a day or a week or a month or a quarterly development. I'm definitely focused on the sustainable development of the company. I guess we have all the right to say that for the last past years, there's absolutely no reason to questioning or getting negative on our business model.
We stay positive, and there's a good right to do so because we see what is happening in the market. There are no changes in the last months. The OEMs are still publishing the same rates. Our market position is getting stronger and stronger. We are winning more work packages because the customers like our business model. It is extremely difficult to be a copycat and do the same business model wherever in the world. I guess this is still very underlined by the recent developments and the recent packages we are winning. As said, there is absolutely no reason for getting pessimistic for the future or getting negative on our business model. I do not see that. We are winning the packages we want to win, and this is definitely also reflected in the margins we are able to create.
I guess this is giving us the right to stay positive on the business model, and we will continue the way we have chosen just a couple of years ago. Why are we a bit more pessimistic for the future? I will come to it on the next pages. Let me start first with the current development of the quarter three compared to 2024. You see that we are close to a 20% increase in quarter-by-quarter comparison and also a 17% increase in our EBITDA. As Michi already said, traditionally, the strongest quarter of the year is the fourth quarter, and I'm staying positive that we will at least achieve the guidance for 2025. There is no reason we should not achieve it. We see what's coming in, and therefore, I'm quite positive that we, as I said, at least achieve the guidance for 2025.
Let's move ahead, and then we can see about our rate assumptions and the guidance for 2026. I do not see the next page now. Okay, now, yeah. Here, as already discussed and mentioned, there is always the influence of the energy business. As you can see, if you compare quarter by quarter, operationally, I guess we are doing pretty well in line with what we expected for the different quarters. The trajectory is absolutely healthy, and definitely it will continue like this. For the fourth quarter, as already mentioned now a couple of times, it should even be stronger than this one. Okay, what does it mean now for the outlook in terms of really the rate assumptions and the guidance for 2026? I guess this was one of the biggest questions and maybe a reason for some questions also later on.
If I come to the guidance, as said a couple of minutes ago, from the environment we are in, you do not see any changes from the big OEMs. You do not see that they adjust their delivery announcements for 2025, but also for 2026. If I look a little bit deeper into the market, I also see that Airbus announced around more than 50 gliders in Toulouse. I saw photos of one of our biggest customers, Spirit AeroSystems, in Wichita, where I see more than 200 fuel garages on stock. I see that the supply chain is still influenced by fast enough shortages and so on. Also, we see some discussions we have on the exclusion side in terms of the volume demand for 2026.
If I combine everything of the information we get from our customers, but also from our supply chain, I think this is the reason why we probably are a bit more conservative than the complete market. I'd also like to say in the last four years, there was not a single time in one of our earning calls that we had to come with a warning. It was only one time, and this was a positive one. I guess in terms of professionalism and also in terms of the conservative approach we might take in here, I guess this is simply what we see from the supply chain, but also from the OEMs. This has been embedded in our planning for 2026. We are not that much focused on the revenues, just to be also very clear on this one.
We are focused on our margins. We are focused on the generation of cash flow, and we are focused on a lot of projects which are in the pipeline and where we are in very, very good discussions with our customers. I am quite positive that in the near future, you will see a lot of announcements coming from our side in terms of maybe new projects where we engage in ourselves and also in terms of new contracts we will be able to sign with the big OEMs. This will definitely give us the baseline and the fundament for the way forward. I am ready to take every challenge or every question on 2026 and onwards. I guess we are in a very, very healthy position, and I am quite positive that we at least achieve the guidance also for 2026. Yeah.
Let me just shortly a bit more details before we come to the guidance also on some numbers. You see here the cash flow of Montana Aerospace Development, which was already discussed by Kai. Quarter three was still impacted in the free cash flow, not only by the energy segment, but also, as we said, by the so-called earn-out component concerning ASCO. Taking this one into account, also the free cash flow would have been above the year 2024. As we see on the next page is a constant development of the trade working capital and also of the net debt. Trade working capital, since our high peaks two years ago, we constantly work down 365 in quarter three 2024 versus 328 by Q3 2025. On absolute terms, a reduction of almost EUR 40 million, sorry.
Concerning percentage, of course, concerning the change of our now from a two-segment to a one-segment business, there is a percentage change which is in line also with what we guided and what we expected to be and to be prepared also to overcome certain difficulties in the supply chain of others with our stock we have and therefore being able to supply when others can't. Net debt constant reduction. The outlook already for this year is to be, which we come into the guidance in a second, is to be at the level of one-time net debt EBITDA and consequently together also with the proceeds out of the carve-out, which we said already are expected to happen on the net debt level in 2025 by around 25% into around 75% of the remaining amount by beginning of 2026.
We think that we will end up at the net debt level of a positive cash level of a higher double-digit amount by end of 2026. No net debt in future, but net cash, which provides us additional firepower for not only dividends, but mostly for additional activity, either in CapEx or in M&A. The build rates, which were discussed by Kai, show the market development. As said, it is a bit still not in line with the announcements of the OEMs, and it is also something we keep on going for the future. Concerning our expectations, we think there is a steady development upwards, some more build rate of the OEMs, but not as fast and not as steep as sometimes announced or hoped.
There is a market growth, yes, not as steep as thought, but on the other hand, still also concerning the shakiness of the industry, additional tailwind for our businesses, which gives us a situation where we can choose between the possibilities on the market and the packages, which we think is quite favorable and positive to part also futurely up with the OEMs. Finally, we come to the guidance. The guidance now is a Montana Aerospace Aerostructures pure play company. We slightly increase even our, I would say, single-segment industry company, the sales to above EUR 900 million or around EUR 900 million in 2025. Heavy growth also in comparison to last year. Aerostructures segment. We think and guide for Adjusted EBITDA of around EUR 160 million.
Therefore, exactly once again mirrored what Kai already announced to be expected, a very strong quarter for 2024-2025, mainly in the EBITDA and on the other hand also concerning net income and free cash flow. Therefore, also we guide with a positive net income by year's end on the business as it is, on the continued business. As already said, a net debt of around net debt one-time EBITDA by the year's end 2025. 2026, again, impacted by growth, but the focus is on cash flow strong and also EBITDA strong growth. Sales to over EUR 1 billion on Aerostructures, Aerospace, Montana Aerospace, and the adjusted EBITDA growth of over EUR 185 million. Please let me explain that our assumption for this EBITDA also is based on a certain FX and certain tariff situation.
We calculate with a U.S. dollar of 119, which is in comparison to the last guidance we gave at the beginning of 2025 at 105, much weaker in comparison to the euro, let's say 13% difference. What does it mean in a business or industry which is in general a U.S. dollar-based industry? 95% of the sales in this industry, not only for us, but for everybody, is US dollar-based. Even companies like Airbus are invoiced and calculate fully in U.S. dollar. Out of a sales volume of around EUR 1 billion, we do have a long position in U.S. dollar of around 30% or let's say equaling more than EUR 300 million. This EUR 300 million, now having an FX impact, which we at least expect with 119 versus 105, amounts for more than EUR 30 million, almost EUR 40 million.
On the other hand, we still think that even so the tariffs after the first shock, I would say, in the first months of 2025, had shown that in general, aerospace is by most parts excluded. Nevertheless, certain supplies and other topics in the full value chain are still impacted. Also here in comparison to the guidance of end of 2024, beginning of 2025 for the year 2026, we see or calculate with an impact which is worth almost double-digit million EUR amount on EBITDA. On a like-to-like basis, same FX or lower FX in case of this development, and it may be eased or stable development of the tariffs, the EBITDA would be up by more than almost EUR 40 million. Therefore, I think this EUR 185 million Adjusted EBITDA with these conditions precedent or assumptions is mirroring a very strong EBITDA and growth for the year 2026.
Last but not least, and already mentioned today, a strong cash flow. Operationally, with decent CapEx and a more stable trade working capital, therefore a strong cash conversion on the EBITDA. On the other hand, the impacts of the carve-outs, therefore we calculate with a higher double-digit million EUR amount on a net cash position by the year 2026. Saying that, we would end the presentation and are happy to answer your questions. Thank you very much.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two.
Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Webcast viewers may submit their questions in writing via the relative field. Anyone who has a question may press star and one at this time. The first question comes from Josh Sullivan from Jones Trading. Please go ahead.
Hey, good morning. Good morning, please. Yeah. Just to be clear, we strip out the FX and tariff noise on the 2026 guide. You said you're conservative on guidance, but is that the same position you were sequentially on the conservatism? Just to be clear, you're incrementally positive on build rates and the Aerostructures segment generally.
For the build rates, I would like to hand over to Kai, but before we start with the go over to the build rates on the FX, yes, we calculate with an FX of 1.19 to the euro, which means a very weak U.S. dollar. This was by the end of September, beginning of October, I would say the forward-looking FX exchange rate. Saying that, if the development is like right now, not as weak concerning the U.S. dollar, we would have, of course, the positive impact out of it. Saying like right now, 1.16, 3 points less than the 1.19 already impacts many million EUR amount additional EBITDA. Of course, we hedge to a certain extent. For instance, this year, we hedged most of our sales at 1.07 for the total year's average. Of course, hedging is only possible for a certain period of time.
Therefore, right now, the guidance is based on a full FX impact of 11.9. For the build rates, please, Kai.
Yeah, thank you, Micky. Yeah, as mentioned in my little speech just a couple of minutes ago, there is a variance in terms of how we see the build rates because we have so many different work packages ending up in a different set of the aircraft. If you just compare the wings for the 737, the diffuser ledgers of the 737, then there is a big variance, a big difference in terms of the volume demand for 2026. I like to be very clear because I guess this is the name of the game today. In all clarity, I guess we overall, we have roughly a discounted build rate of, I would say, 10% in most of the packages and some other areas like extrusion.
We see even a stagnation in terms of the demand from the supply chain. This was one of the reasons why we had a more conservative approach for 2026. We are flexible enough. If the volumes are increasing more than expected, we are flexible enough to deliver even more. For the budget assumptions, we were very detailed in all of the different work packages. We more or less have different assumptions in terms of the build rates, especially when it comes from extrusion to machining to detailed parts and assembly. There is always a different set of rate assumptions because we see what is demanded by the customers, but also we see what is happening in the supply chain.
Overall, I mean, there is a steady increase from 25 to 26, which is still, and given the industry we are in, I guess a very good place to be, but it's maybe a little less than anticipated by some of you.
In the remarks, you mentioned you're winning more work packages. What is Montana's ability to take share here as you see it? Build rates generally accelerating over the next couple of years, Spirit being absorbed, fractured supply chain. Can you just talk a bit about those work packages you're winning and how we can think of the work package opportunity for Montana over the next couple of years?
Yeah, with pleasure. Because this is by explaining the business model we are in and what we can deliver to the customer.
I guess it's always the customer who is giving us then the bigger work packages and, of course, is willing to pay for it. That's the main topic. A couple of years ago, we were winning packages which were maybe in the machining, maybe in the extrusion. Maybe we won also some packages in assembly for Vietnam, but none of them were really vertically integrated. Today, we are winning work packages from the raw material until the final delivery, which of course is giving us then the chance to also create higher margins because it's a win-win situation for customers, but also for us. This will continuously go like this. We are approached by the customers for these kind of work packages, and we are definitely refusing single work packages out of one technology. That's not longer what we are after.
We want to have the full packages, everything under our control, and that includes also the supply chain. Whatever we can build on our own, we want to be independent from any supply chain terminal. You see that today, and I guess it will continuously happen in the next two years that there will be suppliers which underrated their inventory situation, and there will be some impact from the supply chain in the next two years. At least that's my hunch. We can go after packages where we are more or less independent from those impacts, and this is recognized also by the customers. You mentioned the Spirit takeover by Boeing. Yeah, of course, this will open up a complete new field of business because my guess is after the takeover, Boeing has to clean their portfolio, and they are searching for reliable partners.
We are in discussion with Boeing on some of the packages, and I'm very, very positive that we will find solutions also in the near future on them. What does it mean? I guess we will see the impact of these work packages maybe in 18 or 24 months. It will not influence the 2026 numbers, but for 2026, I guess with the current work statement, we are quite happy.
Thank you. I guess just one last one, I'll get into the queue. Can you just make any comments about what you're seeing in the space market and as that economy grows, where your exposure is and what your expectations are there? Thank you for the time.
Yeah, I guess you heard me saying in the first quarter earnings call and also in the second quarter earnings call, we are absolutely happy that we are winning more and more market share in the space industry, in the space market. On the other side, we always said that this is not the core business we are in because the changes in the space market for work packages are so fast. I would say it's a 10x multiple compared to the aerospace business in terms of design changes. It's by far faster. They are looking for flexible partners. This is why we are winning the packages. We are faster than anybody else in the industry. For the moment, we are quite happy of winning even more work package, even more market share with the space business.
I said, I do not think in the long run, I am not quite sure if this will be a sustainable inflow of revenue and EBITDA. This is why also on the space, we do not have this steep increase in 2027, 2028, 2029, which is maybe in some other guidances visible. I guess we are on our field in the industry for the space. I think we are also market leader on this one. Was that clear enough?
The next question comes from [Artemek Weder from Berenberg]. Please go ahead.
Good afternoon. Thanks for the questions. Maybe on the Q3 free cash flow, can you just run through the composition of the EUR 39 million cash costs relating to the after-divestment firstly? Thank you. Yes, this is no problem.
It's best explained, of course, if we look at the impacts in the cash flow statements directly in the statement we published today. There's, of course, the disposal impact of the so-called discontinued operation as a net cash impact, but it's also the acquisition of intangible assets and property in plant, which shows a position in there. Together with the changes in assets, which you dispose, you come up then with the total impact of this EUR 39 million. It's assets minus the assets minus the cash, which we sold. The impact is mostly that there was some cash impact also given to the when you dispose the asset, IFRS looks at it in the case of what went out in this moment. At the moment of the transaction, there was a cash impact or net cash, which was at ask of around EUR 50 million.
This is part of the cash flow statement. On the other hand, there was also a lot of debt, which was acquired by the new, let's say, shareholder or part of the energy segment, which also flew out. It's not in the cash flow. It's not in the cash flow statement. Yeah. Therefore, it's really hard to read. Sorry about it, but that's IFAS. Hopefully, it explains. You look at the balance sheet as it is. The cash flow statement, of course, shows only the cash impact directly, but not the disposal of net debt. The disposal of net debt is in the cash flow from financing activities, and there you also have the impact of the reduction of the net debt out of the Aster transaction.
That's helpful. Thank you. The second one is on free cash flow.
You helpfully guided to higher double-digit year-end million net cash position at the end of FY 2026. Can you just run through what you expect in terms of free cash flow for this year and next year, please?
On an operational basis for 2026, we guided EUR 485 million adjusted EBITDA, or let's say EBITDA IFAS. There is a CapEx in the amount of higher double-digit amount included in the cash flow. There is low taxation still. There is also, it's not part of the cash flow, but also a lower interest rate expected. We calculate with something around minus EUR 15 million financial result in 2026. We calculate with a high, the EBITDA, sorry, with a more or less stable trade working capital in absolute terms, even though the sales are increased, therefore a better percentage.
If you sum it up, you come to operational cash flow, which is in the amount of a triple-digit amount, million EUR. Even if you deduct, on a comprehensive cash flow discussion, also deduct taxes and interest, you are at a high double-digit amount, million EUR cash flow or cash in 2026. High cash conversion on the EBITDA. We always said that we intend to have a cash conversion of the EBITDA of 50% plus-ish. That is, I think, something we can achieve in 2026.
Thank you. The last one is just on the build rate assumptions. You mentioned no big changes in discussions with OEMs. Can you just comment about what you are seeing on the A320 with Airbus build rates in 2026 and 2027? Yeah, with pleasure.
Let me just add one comment to your question to the cash flow generation because I have your market study in front of me, which you published on the 17th of October. I definitely like to say there's no reason that I doubt what is in your own paper. We are by far generating the best cash profile in the next five years. The compound average gross rate in comparison to all our peers is by far higher, and this will remain. There is no reason why we should put this in question. Even if you then compare a PE ratio, this is by around 9 in 2030 compared to the median, which is around 25. This is why I'm always coming back to the environment, and I like to speak with data and with facts. This is your own market study.
This is why I just wanted to come back to it and give you some add-on on this one. In terms of the rate assumptions, I mean, there is clearly the path forward for the rate 70-75 on the A320. Airbus published it. They want to achieve the 75 by the, I think it's by the end of 2027. Currently, they are evolving in this direction. As said, we have some different work packages which we are delivering to Airbus. As I start with the ASCO work packages, which is the main movable, so the flap tracks, the sled tracks, we are delivering for the A220 and the A320 out of ASCO Belgium. And there is a huge difference in terms of what we see as the announcements and what we see as the demand coming from Broughton in the U.K. where they are assembling the wings.
This is exactly what I was talking about when I was talking about the differences in terms of what you see as announcements from the OEM and what we put into the budget. I guess our budget assumptions are still very realistic, very serious, and professional. I definitely stick to them. We are in talks with Airbus. If there is a higher demand coming up because the inventory levels are going down, of course we are ready to deliver more. I guess if you talk in rates, we are always a little bit behind the announced rate of Airbus because the inventory levels are so high, especially in the assembly areas of Airbus themselves.
If you take the 737, for example, I mean, I like to remind everybody the difficult times we have been through in the last three years with all the turmoil Boeing was in, the door blowout last year. This created so much friction in the system. My hunch is that in every single supplier, and I am talking about more than 10,000 suppliers still, there are so many different levels of inventory. This is seen also in the demand coming through our extrusion facility that we need to be very careful how we plan the volume and how we distribute that to the supply chain. This is why we definitely also see in terms of the 737 announced rates, we are roughly always five ship sets a month behind what Boeing is seeing in their announcements.
This is simply based on the fact that we deliver a lot of parts into the fuselage. As said, there are still around 200 fuselages in Wichita. I guess it will take at least two years until they have burned down the inventory to a normal level. Of course, we will participate also in the rate announcements which are given to the market. This is the logic we have implemented in the budget. I definitely guess there is some room for opportunity, no doubt. After four years or five years in a row where I guess none of the OEMs delivered to their announcements, I guess that our conservative approach was always the right way to go.
Thank you very much. The next question comes from Emeric Boulen from Exane BNP Paribas.
Please go ahead. Thank you for taking my questions.
I've got three, please. I've got to say I still don't understand your guidance for 2026. Could you help us just with very simple numbers? What volume do you expect in terms of ship set in 2026 in terms of growth for volume? What pricing you would see? What's the FX assumption that you have for 2026? On the FX, I'd like to better understand your hedging policy because, again, I didn't understand your explanation. I think you said 100% of your sales is in U.S. dollars. 70% or so is naturally hedged, so you have an exposure of 30%. Last year or this year, it's hedged at 1.07, so you have no exposure on the EBITDA of that dollar effect. Next year, you expect 1.19, so a big drop in the sales coming from the dollar effect.
You did not explain what the hedging policy was and how much was your exposure in terms of hedging to the dollar. That would be helpful to have this number, please. The last question is, as volume should nonetheless increase over the next two years, when do you expect full capacity utilization to be reached, please?
Maybe I start again with the rates and the utilization. I like to start with a very concrete example, which I mentioned already. The ship sets we are delivering into the movables or the wings of Broughton. This year, we will end up with around 640 ship sets on the A320. Next year, the current demand from Airbus is around 720+. This is what we have budgeted for. This is what I was talking about in terms of the rate assumptions and maybe the rates which are published.
These rates might be a bit higher, but this is not what we see in terms of the demand coming from the OEM directly. The second question, was it again on the rates? I'm not 100% sure.
It was to make because you give figures, but in terms of the translation in the model, it's impossible to actually see what volume growth you actually assume because you say, "Okay, there may be some effect, but we have also hedging, sorry, FX effects that have to impact your 2026 sales." Would you be able to just give us simple numbers like volume growth, pricing, FX that would help understand the 2026 guidance perhaps a bit better, please? Okay.
I mean, in terms of pricing, that's not easy in a call to give you a pricing assumption, but you see the revenue growth, you see the EBITDA growth, you see the margin evolution year by year. This should give you some boundaries about how we manage the different volumes. When it comes to the FX and the impact of the FX, I like to hand over to Mickey here.
Yeah. Simply said, is it concerning the pool rates or, let's say, for us necessary build rates? We calculate around. It depends really on the work packages or the certain parts because in certain areas, a lot of inventory is still in the supply chain, sometimes more, sometimes less. As said, we are a bit more conservative concerning our expectations of the build rates of the OEMs.
We can calculate with around 10% growth on the pool rates, 2026 versus 2025. With A320, depending again from two, we calculate with less than 800 ship sets on a yearly basis in 2026. Again, a bit depending up and more down from which part we are discussing, calculating always in the certain amount of inventory with the OEMs that you want. For the 737, better growth, but still definitely not the 42, which is announced there. Over here, we calculate with less than around 40 or less than 40, depending again on the parts. All in all, plus minus around 10% growth from the pool rates, which is expected. If it comes stronger, we are happy. Also from the outlook, we do not think, for instance, we will calculate with more than below 70 build rates for the A320 for the next years to come.
Over here, we're a bit more conservative. Nevertheless, we think that we can always grow faster than the market in this area. Concerning FX, yes, sorry about it. It is complicated, but it's the way we are. It's the world in the meantime we are living in. You're right. Almost all of the sales is calculated or is invoiced in U.S. dollars. Aerospace industry is, in general, a U.S. dollar-based industry. Even if you invoice to a German, whatever, here, it's based in U.S. dollar. If you invoice to Airbus, it's based on U.S. dollar. It's a U.S. dollar business. All those, the contracts, everything is done in the meantime in U.S. dollar. It changed also in the last years more and more into this direction. Around 95% of our total sales are completely U.S. dollar-related. By saying that, you're right.
Most of it is naturally hedged. Around 70% of this total sales is naturally hedged because we also try to supply or calculate our structure or base the structure concerning all the entities on U.S. dollar FX space. The remaining amount is around 30% of our total sales. Therefore, as we invoice and have less US dollar on our cost side, it's the U.S. dollar long position. This U.S. dollar long position, you're right, this year, as we have hedged most of the amounts for this year, is around $1.07 calculated to the euro. Next year, we took the forward FX rates, which is usual also for this basis for the year 2026. We calculate and give our guidance on a $1.19 FX rate. $1.05, which was the beginning of the year to $1.19, is 13% up.
Let's say less sales, less for the total amount. Of course, also an impact on the open position of 13% difference. Taking to simplify the calculation, $1 billion on total sales, 30% long position. So it's $300 million. $300 million multiplied with 13%, it's almost $40 million. Let's say it's all impacts up and down and more than $30 million, which directly, of course, impact the EBITDA. You receive less. That's the simple topic. This is also part of the guidance. We calculate that on a like-to-like basis, if you want to compare it to the old guidance of $250 million, let's try a bridge. The bridge was like $250 million for 2026 based on a FX rate of 1.05 and more or less no tariffs.
If I compare this one, I take the energy segment out because this is not part of the guidance anymore. I reduce the remaining amount by the impact of the FX, which is around EUR 30 million. I reduce the remaining amount by around double-digit amount of tariffs, which we at least calculate out of security reasons in 2026. Even so, aerospace is mostly excluded, but some supplies are. We end up on a like-to-like basis, 2024 guidance for 2026 on EUR 160 million. Now we show EUR 185 million, which means we are EUR 25 million better than what we expected at the beginning of the year. This, I guess, signals the strong position we are in.
Or saying differently, in case the FX would be 105-107 again, and the tariffs on the supplies are coming not as strong as we expect for the guidance 2026, we would end up at the EBITDA of 225. Now coming to your last question, which is our hedging or hedging structure. We can't hedge for the next 10 years, simply said. What we can do is always to try best to mitigate the impacts on the next year, which we do. Therefore, the bigger the long position is creating, we try to hedge naturally as good as possible. We try to increase the share, which is more or less in line with our local-to-local strategy.
Therefore, I think that also for the future, a bit less impacts on the long position, which has to be hedged by financial instruments, will remain, but not for the year 2026 yet. The amount then is financially hedged as good as possible. Anytime we see a good development below EUR 1.19, which is the amount we calculate with for 2026, we try to hedge as good as possible our sales and therefore the impact on the EBITDA. Hopefully, this explains. We had already some positions hedged at the favorable development we had in the past few weeks at EUR 1.15, EUR 1.16, but not all of the volume. Therefore, there's still some open positions. I guess already now, a part of the positive hedging impacts affected and will happen to influence our EBITDA.
Therefore, also with the guidance, with those hedged amounts, should be more than secure and even over to be overachieved in 2026. Sorry, that's a complicated world in the meantime concerning the changes of the FX. It was not as heavily loaded on those topics in the past, but the industry changed. The industry changed concerning tariffs, concerning more local-to-local. The industry changed concerning everything in the meantime, even Airbus, the European company, everything to U.S. dollar. Therefore, also we have to guide on that point.
Okay. Thank you.
The next question comes from Christian Bader from Zürcher Kantonalbank. Please go ahead.
Yes. Good day, gentlemen. I've got three questions, and I'd like to do them one after the other. First of all, if I look at your guidance for this year, you talk about more than EUR 900 million.
After achieving EUR 712 million, which implies at least a turnover of EUR 190 million. While in the conference call, Kai said that he was confident that in the fourth quarter, the turnover might be even higher than the third quarter. This gets me to a group revenue number of EUR 960 million. Why are you guiding so conservatively? It seems so conservative.
Sorry, it was mostly impacted by the EBITDA. We concentrated on the EBITDA concerning our statement. Hopefully, it does not end up misleading. We expect a very strong EBITDA growth in the absolute and relative in the fourth quarter. On the sales, we are a bit more conservative, but you are right. There is upside potential. Nevertheless, concerning EBITDA, we think that we can more or less overachieve on a quarterly basis most of our last quarters by far. Okay.
My next question has to do with, again, with the guidance for next year. Can you maybe comment whether your adapted guidance for 2026 is purely based on the existing backlog?
Of course, there's some POs which are coming in, but I would say 95% as everything else is not possible. Otherwise, it's based on the existing backlog. We do have, you're right, the contracted sales basis, which is worth more than EUR 7 billion. What does it mean? We have contracts. We are more or less on exclusive terms for those parts by fact or single source by those topics. Of course, we are dependent on the build rates or pool rates of those OEMs and tier ones. If they pool less to a certain extent, we have to digest it. Therefore, we are always a bit more conservative concerning certain assumptions, also when we give our numbers.
On everything else, yes, you're right. It's based on the present order backlog. Just to confirm, you said 95% is based on the existing backlog. Yeah. Yeah. There's some ups and downs. I would say even up to 100%. Everything is based on contracts, but there are some points where they would like a bit more. Some parts are missing from some other suppliers, and then we try to jump in.
Okay. I see. My next question relates to the sale of the energy segment. I mean, you gave the percentages in terms of proceeds that you expect. What are the actual amounts of cash inflow that you expect?
The total impact on the net debt would be by far over EUR 200 million of the total of the transaction we have shown on this one page of total aspects. Yes, it's far over EUR 200 million.
Is that including the earnout or excluding the earnout?
It's including the earnout. Yes. Here, we have to be fair. It's including a certain amount of earnout. As we said, we calculate with more than EUR 40 million, but this is in this case with EUR 40 million, and this is including also the earnout.
Okay. But you reported a cash out of EUR 51 million from the disposal in the third quarter now.
As I said, the net debt reduction is not shown. IFRS in this aspect is, sorry, it's not our invention, not as easy to read, but the cash flow shows only if the cash is going out. Cash, but it's not showing the cash flow, the net debt, which is reduced by also the transaction as the asset for disposal also includes some net debt position.
Okay. That's it for me. Thank you.
You're welcome.
The next question comes from Beltrán Palazuelo from DLTV. Please go ahead.
Hello. Good afternoon. Thank you for taking my questions. I have a couple. First of all, regarding the aerospace capacity, let's say with a euro dollar at 1.19, could you repeat what is the current capacity? And if I'm not wrong, in October, you put up press release that you are increasing capacity of certain machinery. Just if we could know what is the maximum capacity and when do you expect to reach it? That would be my first question.
Yeah. I can take this. I can take this. I guess it's a quite easy one. We always said we are good for EUR 1.2 billion in terms of the installed capacity right now. It's an easy one to install further machines to increase even this capacity.
We have overall utilization right now, depending on the technology, I would say in some areas around 85% and in other areas still at 70%. There is still room for further load, for further volume, but this is where we are still. Yeah. This is still the volume we can produce.
With a euro dollar change, maybe instead of 1.2, 1.1, and so has this changed with a change in FX?
Yeah. Of course, there is a change in FX. Whenever the dollar is weaker, then of course, the revenue will also be influenced by it. Overall, I like to do the like-to-like comparison. We said in all of the last earning calls, we always mentioned it is around 1.2. Maybe with additional machines, it is a little bit higher. If you compare the like-to-like, it is still there.
Understood. Thank you. Thank you very much. Then my second question would be, you were talking about your integrated value chain. My question would be, how sustainable is your current competitive advantages? The second question would be, if you are long in dollar, and maybe I suppose that some of your competitors maybe are not as long as you in dollar terms, does the, let's say, the euro appreciation and your cost appreciation, does it erode your competitive advantages or not?
The value chain is something we constantly optimize. There is still room to move forward. Therefore, as we think our competitive advantage is still quite huge. Please note, if you would start on a greenfield basis right now, aerostructures investments, you would not see any sales before in seven years. It takes such a long time to install it, to get the certifications, to apply for contracts, then to industrialize.
It is a very long period of time. Of course, other companies do not sleep. They also try to mitigate this way or that way, optimize, not maybe in the value chain, but mostly concerning best cost manufacturing footprint countries. I guess our situation is extremely favorable, and there is a concentration of the suppliers to the OEMs anyway. There is enough, then more than enough to share. Here we are in a very strong partnership position where it is more selective in partnership discussions with the OEMs than competition. Concerning the FX, which you also mentioned, Bertrand, you are right. In case you would be as a company completely in U.S. dollar, naturally hedged completely, you would be, on the first glance, not having impacts out of the FX, but you would have other issues. At the end, it equals out.
For instance, there were other issues concerning also maybe then tariffs or other areas where you're then heavily impacted. We don't think that we are in contrary. I think that in comparison to our European and worldwide acting competitors, we have a much higher local-to-local basis than many of them. Therefore, also a higher chance on also percentage of natural hedging. Therefore, we think that we are quite good situated, but still it impacts.
Great. Thank you very much. Only two more. Sorry about the questions. Regarding now, maybe M&A, it's great to see that you conservatively are guiding for a high single-digit, not high double-digit, let's say, net cash position for the end of 2026. Of course, if your buyer pays you, a good point.
If I'm not wrong, say that maybe your max capacity, you do not want to go maybe over two times net debt. Of course, if you buy something, which if you buy it, and it's a U.S. dollar industry, you can buy it at a better multiple. Your firepower will be around EUR 500 million. What are your plans? What are you analyzing? It's good to see you in the next 12 months with a lot of firepower, but what are your plans? If there's no plans, dividends, buyback, if the stock were to.
Yeah. Thank you very much. Yeah. We will proceed to propose as a management to the general assembly a dividend for the year 2025 and therefore to be paid out in 2026.
We think it's feasible to at least propose it, and hopefully, it will be also decided. That's one aspect, but still it would leave us with a good cash position and a high firepower. What is it supposed to be used for? Yes, we are looking at M&A constantly. Also this year, we had, for instance, two larger targets where we quite put some effort into it, but at the end, we didn't pull back. We pulled back in terms of not letting us into a discussion to buy too expensive. Because we look at it, it must be always super highly accretive. Otherwise, we concentrate more on the second area, which is just to take over the workload and do strategic CapEx.
Right now, to give you a bit more guidance on that point, there are two topics which we look very carefully at right now for more strategic CapEx to integrate in certain areas in comparison to an M&A transaction. I guess we will see this way or that way something where we can show something to the market in the second half of 2026. This is the one point. For the EUR 500 million funding, I just received a letter for the firepower from a bank signed by also the management of this large commercial bank. They just said they gave us a line of EUR 500 million firepower for M&A. Not the only one who sees this firepower is Montana Aerospace. This was also printed in black and white also by a commercial bank to us.
We see the same that we have some firepower and we will do something with it.
Great. Thank you very much. Maybe the last question. Now that you have a great balance sheet, it will look even better going forward. What will be, let's say, the cash interest in 2026? Because it is quite puzzling to see year by year now that they are going to be in net cash, but let's say the cash interests are high. Yeah. Yeah.
You are absolutely right. We count with around impact of EUR 10 million-EUR 15 million on this. Still, you have to see even if you are cash positive, then by the year's end, on a monthly basis, you have to work with it. There is still some line which you need at the entities on a daily basis, cash pooling back and forth.
We count with a total interest rate of around EUR 10 million-EUR 15 million for the next year, also cash impacting the company. This is calculated from revenue impacts.
All the support. Thank you for the answers and the hard work.
You're welcome. We try our best at least.
Ladies and gentlemen, due to time restrictions, that was the last question for today. I would now like to turn the conference back over to Michael Pistauer for any closing remarks.
I think there are a lot of questions and therefore a lot of interest in Montana Aerospace. We're extremely proud and happy about it. We try our best also to outperform in the future. Now, as an aerostructures-only company, I guess also the, I would say, the evaluation of our development within our peers and our constant outperformance should be seen a bit easier.
We're looking forward to that one and hope to see and hear you in the next earnings call for the full year 2025.
Ladies and gentlemen, the conference is now over. Thank you for choosing Corosco and thank you for participating in the conference. You may now disconnect your lines. Goodbye.