So let's start. Good morning and welcome, everyone here in Zurich or wherever you are on Zoom. Welcome to the full-year results presentation of Bachem. Together with me on the stage are our CEO, Thomas Meier, and our CFO, Alain Schaffter. My name is Barbora Blaha. I am responsible for Investor Relations, and I will walk you through this event. Before we start, some housekeeping. So there will be enough time for questions after the presentation. And for anyone joining online, you can type in your questions in the Q&A section on Zoom, and we will then answer them during the Q&A session.
And as always, this presentation will be recorded, and the recordings will be uploaded on our homepage, bachem.com, later today. With that, a quick overview of the agenda. First, Thomas will get us through the full-year results. Then Alain will do the same from a financial point of view. And Thomas will end the presentation with some words on the market and business outlook. We anticipate that the entire event will take around 60 minutes. And for all of you attending in person, we have organized an Apéro Riche after this presentation, so around 12 P.M . And with that, I am happy to hand over to Thomas.
Back here in Schmiden Zunfthaus after the 21st of November, somebody just reminded me it was snowing back then. We don't know whether we get some more snow today. I hope not. But anyways, great to see you all. We're going to focus today on the results of 2024 and on our outlook, mainly. The results of 2024, it was a strong year for Bachem. We achieved our financial goals, mainly due to a good operational performance in the second half. There was a very strong showing of the capabilities that are within the organization. I'm pleased with that result, and I'm also pleased with the progress of our capacity extension work that we are doing globally.
Based on this entirety of the information and data, we also confirm our forecast for 2026. A good year, but of course, still lots of work to do. When we say a good year, we're looking at CHF 605.3 million revenue, and especially at a good profitability with 29.1% EBITDA, slightly ahead of what we were expecting. In addition to delivering financial results, we are building the team for the future. You can see that at the bottom right, we added 201 new FTEs to the company, and we are focusing on strengthening the important capabilities in the organization. And I think we made progress there.
We hired experienced hands and brains, and they are working together with the organization to grow it into a company that can achieve the CHF 1 billion. If you look at the product categories, we have seen strong showings in all three categories: Research & Specialties with CHF 43.8 million, a plus of 7.5%. Then CMC Development, CHF 234.4 million, a plus of 3.0%. Especially the Commercial API business with CHF 327 million and a plus of 5.8% in Swiss francs. All product categories are growing. The market is strong, and it's really in our hands to further improve our performance going forward.
If we deep dive a little bit, Commercial APIs, we have seen good and strong sales of originator products. They are now underlined with contracts, long-term contracts, and are based on a partnership approach. We have seen, as I said, a strong showing of the operations in the second half, and that was based on operational excellence initiatives that are rolled out globally. Again, on shift work extension, where we bring in bottleneck operations our organization to a 24/7 shift mode. In the second half, especially in the U.S., we started that shift work in the Vista facility.
That is very necessary, but it also is an investment in the future, and it takes a little time to really get hold. And we also have generic assets. That's kind of a stable business where we serve different customers, and we can deliver pretty much off the shelf, and it helps us with the operational planning. In the CMC development, we see several assets entering late-stage development in large indications. That's the story of the peptides. We are moving from a relatively small market into very large mass markets into the most important modality for pharma. It's nice to be part of that. It also means there are investments needed.
We also have seen, and I think that's very rewarding for everybody who's a bit of a science geek, that our innovation that we produce in our own labs and on our own dime, they get introduced in the CMC projects and will help us to produce peptides more efficient, more green in the future. We feel encouraged to keep this initiative with internal process R&D to grow into the futures. We also have seen on our second product offering, the oligonucleotides, that we are now a better established player there.
We are seeing progress towards late-stage projects and also newcomers who are ready to work with us and appreciate our knowledge and our deep understanding of the CDMO business. And we have seen for the research and specialties, we have seen trading business where we sell starting materials to mainly producers of generic peptides and want to keep that business. If we look at the half years, it's quite striking that we haven't seen much growth in the first half year for four years, pretty much, and always had very strong showings in the second half.
We, of course, work on having a better first half. I think is an intention we have every year, but I hope this year we will see some growth in the first half of 2025. Also, if we look at the distribution of our top customers, I think it doesn't come as a surprise that the top five are growing. The top five, they have now 44%. It's still very balanced between those top five, but I believe that we will see a further growth of those top five going forward with one or two big customers taking a larger share as we go and execute towards our larger contracts. It should not come as a surprise that peptides are very much in vogue, that our pipeline is growing.
We are now at 170 products. We are happy about that. We want to help patients. We want to help customers. That's a great situation. At the same time, as you can imagine, we are pretty much at high capacity utilization. We are very, very focused on picking the right assets, and currently, I believe this is the best pipeline to secure our long-term growth. Sustainability is important, and I think it's rewarding. If you look at the graph on the left side, that we are coming down in terms of energy consumption, wastewater disposal, and water consumption. If you compare those numbers to the FTEs that are in our company, so you see a growing company with better data on sustainability.
We also worked very hard to make our operations safer. And the measure we take there is lost time incident rate, LTIR. That's an accepted rate measure in the industry, and we brought that down from 1.5 to 1%. And we want to continue to improve that rate because it's important that everybody goes home safe after workday. Now to the capacity expansion. We have capacity expansion in Bubendorf. I think everybody knows we are building a new manufacturing building there, predominantly for peptides.
This is going to transition from commissioning and qualification into test batch in the Q2 of 2025. In the existing campus, we're going to continue to work on operational excellence initiative and going to continue to use the network approach so that we can use all our sites for existing customers and make the most of all capacity that we possibly have. In Vionnaz, that's in the Valais in Switzerland, we increased the production of starting materials in 2024, more complex starting materials where we feel that we can make a difference in terms of quality and costs.
We transferred them into the facility, and they are helping the network with those starting materials, which is typical small molecule chemistry. And in addition, we will take the part that was damaged by the fire back into operation as planned in 2025. I said we increase our network globally, so we also invest in the United States. We have two sites there in Vista and Torrance. In Vista, we are investing in medium to large-scale peptide manufacturing. There are large extension projects going on and also ideas to further expand that site. And in Torrance, we clearly shaped this site into a small and early-stage peptide manufacturing site.
So they do development work. And the American customers, of course, they appreciate to work with American colleagues in similar time zones. So we think this is a very good asset in our global manufacturing network. Overall the sites, we worked on operational excellence. We share our technical knowledge when it comes to investments, and we harmonize shop floor management globally. We take initiatives from the U.S. and bring them over to Switzerland and vice versa.
We go on a very structured process there, and we are sure that there are still lots to gain, and it's especially important when we go into more mass market CMO business that we learn how to really optimize our processes from an execution standpoint. We work on our third site in Switzerland. This is the Sisslerfeld site in the Canton of Aargau. And we assume that we have construction applications given to the municipal government in 2025, and with that, I think I pass it on to Alain, who explains us all the numbers.
Thank you. Yes, the numbers, so let me do a little bit more deep dive on some details on the financials we had in 2024. I think the key figures you all saw today, first time, more than CHF 600 million in sales with an overproportional growth in EBITDA of 176.3, 29.1%. O n the net income, also driven by a positive impact from the dollar, we are almost now with a 20% net profit ratio compared to the sales. The earnings per share 1.60, which we also said the dividend to increase by CHF 0.05 per share to CHF 0.85.
And the cash flow from operating activities, we deep dive a little bit later with CHF 146.3 million in 2024. The EBITDA margin, so what happened in this year, it is when we start from the 28.9% in the last year in 2023, we see a positive impact from our COGS of 20 basis points. So Thomas mentioned it, operational excellence on one hand should give more output on the top line, but also has a positive impact on our cost. So we see the contribution out of that. Marketing and sales, we kept underproportional compared to sales in this year. R&D kept stable at 1.9%.
Thomas mentioned also very important also for the future that we invest money, our own money. We don't capitalize that. That also goes through the P&L, and it's an important factor that we have at Bachem. On the G&A, we see a dilution of 20 basis points, and that's we also, as a growing company, we have to invest in existing teams. We have to have new departments maybe that were not there before just to support the growth of the company to go to a one billion company soon. This ended up in a 20.9% EBITDA margin, slightly higher than the previous year.
Again, 2024, the Swiss franc were stronger, and on the local currency, it would have been 29.4% as a margin. Cash flow, we start with EBITDA, CHF 9.6 million higher than in 2023, CHF 176.3 million. First of all, we all have to pay taxes, so we paid CHF 14.7 million in cash out for income taxes. And then on the receivables, we see the impact from the second half. We had high sales in the last few weeks of the year. This has an impact of CHF 59 million in the accounts receivables increased. This money now is inflowing in 2025, but that's an impact here from the high sales at the end of the year. The inventory looks high, CHF 104 million.
A large part of that is pre-financed by customers through prepayments, and it's about 70% is raw material. This is needed for the production in 2025 to have the production ongoing and to secure the supply chain for our customers. Change in prepayments, we had CHF 110 million net cash inflow from prepayments from our customers, partners to support, as I mentioned, working capital, but also to support the CapEx that we are investing in. On the trade payables, we had also an increase by high not paid invoices by the end of the year. This money was outflowing then in the first weeks of 2025. This led us to CHF 146.3 million operating cash flow.
We used that for mainly CapEx. We spent CHF 284.6 million in CapEx last year, and to cover that cash need, we also sold now all the securities we still had from the capital increase in 2021. Has all been sold now, but that was supporting the cash out for the CapEx. It was CHF 133.2 million, and also in spring, we paid out a dividend of CHF 60 million. So at the end of the year, we had a change in cash of negative CHF 62.5 million. On the balance sheet, the 62.5 million led into cash of CHF 95.2 million still at the end of the year. We see the working capital slightly decreased by roughly CHF 19 million in 2024.
We see CHF 200 million decrease in the cash, as we mentioned, to invest in the future. And on the net working capital, we see the increase, as I mentioned, inventory, accounts receivable, inventory, about what I mentioned, CHF 73 million in the balance sheet is raw materials increase. And on the other hand, we also increased our prepayments on the liability side and also the trade payable. And to mention the increase in the inventory should not be a common thing.
That was an extraordinary impact we had this year to fill our inventory, our stock, to make sure that we can produce in 2024, and it should normalize again during this year. On the prepayments from customers, as mentioned, CHF 110 million more. We have now together CHF 286.4 million received from our customers as prepayments to support our financial needs for the future. The equity is slightly increased to CHF 1.4 million. The ratio went down to 72%, and this is based because the balance sheet increases by all the investments we do at the moment, and we at the end of last year and still today, we don't have any bank loans from an external party.
The CapEx overview, we spent almost 48% of our sales in 2024. It was CHF 292.2 million we invested. Mainly CHF 250 million was for capacity, so infrastructure, equipment, and it's also including now, Thomas mentioned, Vista. We have kicked off a project. This will also be in the future a higher demand for investing there in capacity. We started with Sisslerfeld, and therefore we see an outlook of above CHF 400 million for 2025 and also stabilizing on that level for the next time. Talking about the outlook, Thomas, back to you for some market.
Thank you, Alain. Yeah, I mean, look, I understand. Sometimes we are not as fast as we wish or whatever, but if we look just very realistically towards the markets, what's happening out there is just, I would say, revolutionary. And some people listed here what happened in the pharmaceutical market, and it kind of starts with the HIV drugs. And maybe some of you remember T20 was a peptide who helped against HIV. It never got really big, but it changed the market for peptides quite dramatically by bringing the idea in that for the first time we need tons of peptides.
And that was a long time ago. And in between with the other ones we listed up there, peptides were never really in the center. But now with the incretins, amylin, PYY, it's all about those peptide drugs that help to lose weight, but also help other tissues like the heart, like the kidneys, or probably even in the brain against dementia. So that's why they were called by the economists the everything drugs. Right now, there's such a great excitement about peptides in the market. Everybody's investing, and Bachem is in the middle of it. So I think our positioning with tides, with peptides and oligonucleotides is spot on.
And we certainly are leading this market from the technological understanding and how to scale and how to bring them to good quality and reliable. In addition to growth, there are other drivers that need experts in the field. And that's what is shown here. It's the chemical complexity. We see those molecules tending towards molecules that are too complex for recombinant manufacturing. That means they're moving away from biomanufacturing to chemical synthesis. And that's where Bachem is strong. That's for peptides and for oligonucleotides. We do chemical synthesis.
We want to bring process innovation because we understand, historically, we were set up to produce a few hundred kilograms. Now we are talking several tons. So it's a different dynamic in there. It needs different tools, different capabilities. And we want to tackle that from the process chemistry side, from the engineering side, and from the execution side. So all those three pieces need to come together, and that's where we're working every day to make this in harmony and as seamless and smooth as ever possible. This step from a smaller company that's very specialized into a 24/7 strong company to produce peptides and oligonucleotides in large quantity.
And we also see new medical applications. It's really not just the weight loss hype. There's much more out there. We see late-stage projects for inflammation and also for cardiovascular health that are oral peptides, and that means they need a lot of peptides. And there are more oral peptides to come. So I believe the growth and the growth in chemical synthesis of peptides will continue. Going back to the weight loss and diabetes metabolic franchise, we took the liberty to guide you through 2005. Our American colleagues at Bachem were involved with the exendin exenatide molecule.
From there on, it was a little bit of a slow ramp up, but if you look at 2027, we see a host of different molecules, and I think it's not even complete. There are more to come. The market is really growing, and everybody wants to get into that market. And the data that comes out, I would say, is just amazing. And this calls for experts like us. This slide should help us through the complexity of how can you maximize the output. Sometimes people ask me how many square meters of capacity you have, and then there's a linear equation of how much we're going to have as output. And I think that is a little bit of a simplification of something that's way more complex.
So what we want to bring together, as I said, we want to work on all different questions from molecular complexity, from having the right starting materials going into the process, having the right reaction volumes, not too big, not too high. We want innovation also in equipment because we are not at the end of process innovation, equipment innovation, and we want to bring better process and operational excellence together.
And if you do that all right, all of those, I'm sorry, all of those different influence parameters, if you optimize them, you will be astonished how much more you get out of one unit than just somebody who does something where he doesn't have the full understanding of what is necessary. So a really complex situation, many influence parameters, something for geeks or people who are deeply interested.
And that is where at the bottom of this, the second right, the second to the left column, the trial-based CDMO, that's where it's important for us to invest money to understand all those intrinsic details and then move that up in something of a co-development with big partners to the CDMO business or also to the CMO business, which we brought in into our company probably five years ago, where we also accept processes from the outside and just execute on large volumes. This is our mission, what we want to achieve. Those three operating modes, CMO, CDMO, trial-based CDMO, all of those are an essential part of our business going forward.
That brings us to the priorities in 2025. It's clearly our top priority on the top right corner there to conclude our major CapEx projects. The first line in Building K is on top of all our minds. We are moving from commissioning and qualification in first test batch in the Q2 of 2025, and we want to do that by emphasizing on safety and efficient operation. Another target is to continue to have a resilient supply chain. We are working together with our analytical department, with our external suppliers to make the best quality necessary to produce at high level and with high efficiency those molecules.
And if this all comes together, we still see a path to over CHF 1 billion in 2026. We have the CHF 605 million we achieved. That's on the very left of this chart. Then we see an organic growth of that business, and having the new large-scale facilities operational, we can execute on what is CHF 450 million contracted sales. And that will bring us over this CHF 1 billion. If operationally things fall together in 2026, we still believe that's possible. There's more we could do, and that's why we're working on Sisslerfeld. We want to bring this site operational towards the end of this decade. This brings us to a very clear outlook for 2025.
This is 10%-15% sales growth and the profitability in the high 20s. And the outlook for 2026, as I mentioned, we still believe the CHF 1 billion is possible and our EBITDA margin ahead of 30%. With that, we are at the end of the presentation. Thank you guys for bearing with me. I'm fighting a little bit of a bacterial infection, so I didn't mingle with you outside before the event, and I will excuse myself after the Q&A. And now we do the Q&A with all the energy we have.
Thank you, Thomas. Thank you, Alain, for your insights. And we open to Q&A now. For those of you in the room, there is a mic, so please just raise your hand. And for those of you joining online, you can type in your questions in the Q&A section on Zoom, and this is activated now. So the first question comes from Laura from Octavian.
Thanks for taking my questions. Laura Pfeiffer from Octavian. Maybe first on your sales guidance of this 10%-15% local currency, can you indicate a little bit what are the building blocks of this guidance? So what is your assumption for the base business growth and if and what amount of the Building K revenue it includes? So I think a little bit of better understanding of the components of growth would be appreciated. And the second is on the EBITDA margin target, you say high 20s.
Here, I would just like to have a clarification. What is your definition of high 20s? I would say it's 27 to 28, but yeah, just keen to hear a little bit more flavor. And also related to that, what are the key drivers and the key headwinds on the margin?
Okay. What's in our guidance was the first question. Our guidance includes our entire budget and business plan for 2025. And I think it's understood that we cannot talk about individual customers and so on and so forth. All I can give is a little granularity on Building K. There are no substantial sales from Building K in there. We're going to transition into the test batch phases, and we will continue with validation in 2025. Validation is always a little bit slower. You need time to release those batches, and that's why we have not substantial sales volume in there, and on the margin,
I can take it. The margin, I would say the usual definition is 27-29. I would say 28 should be the bottom. Why do we then say the high 20s? It's we are now in the phase of bringing this online, having maybe more uncertainties. So if there is something happening, it could be below that, but 28-29 should be the high 20s, narrow definition that we have.
And just because we talked about Building K, I think it's important to reiterate that we gathered here on the 21st of November, and we gave you the stepping stones how to bring this Building K into operations, and since then, we made good progress. We are still on the same timeline. There have been no big negative surprises. You have a gazillion of different things that need to fall in place, and right now, those things are lining up pretty neatly, so we remain cautiously optimistic.
Thank you very much, Sibylle Bischofberger from Vontobel. I have also a question about the outlook. Could you give us any information about if currency remains as they are at the moment, how much FX effect would be on the top line and on the margins? And secondly, is it fair to assume that depreciation and amortization will increase strongly starting 2025 because of Building K? Does this mean that EBIT margin will decrease? And maybe any flavor, how much? And then sales development throughout the year, is it fair to assume that sales will be very much back-end loaded, m eaning in the Q4, we will generate much more sales than in the first?
All right. Those were a bunch of questions. I surely remembered the last one. We're trying to grow sales in the first half year compared to last year. I mentioned that through the presentation. But overall, the pattern we have seen in the past that the second half is stronger, I think will remain for 2025. We work on balancing this out, but we will see where we're going. And on the depreciation, yeah, of course, it will increase. I wouldn't say dramatically because it only starts when Building K is up and running. So that's based on the guidance we gave. You can maybe have a pro rata calculation, but it's not a big thing that happens in 2025. And sorry, the middle question was ?
Right now, we are at the average. I think the actual dollar, especially the dollar rate, is at what we had last year as an average. So right now, if it stays as it is, I would say a report and local currency should be the same. So no impact.
Thanks, Daniel Jelovcan with ZKB. Three questions, but maybe one after the other. So Vista, you made some interesting comments a few days ago. It was more probably marketing release, but interesting information about the capacity. Is Vista fully up and running now on a commercial scale? That's basically the question.
Oh yeah, Vista is a success story. We have a strong team there now, and as I said, we introduced shift work. So that is nicely executing, and we are investing more into capacity there because we see room for the team to grow.
So it's ready?
Oh, no, it's producing. [crosstalk] it has already been producing.
Okay. I wasn't sure so.
Of a larger expansion project right now there.
Some investors tell me that the production in Vista is also for one of the big boys in GLP-1.
We can't comment. We're working on a broad portfolio of products, and we work in a network situation. So for some products, we work in the U.S. and in Switzerland.
Thanks. Second question. I didn't really get the even higher CapEx of more than CHF 400 million for this year. I mean, I assume that Building K, the unit A, as you showed on the CMC, that the biggest cost blocks are over because you are testing and so on. So the pipes and all the equipment, that's done. So I ask, is this higher CapEx for unit B and C, which you also probably will continue, or is that somewhere else which I don't know?
I would say, thinking that now we are in test batch phases, that there are no CapEx anymore is maybe a wrong assumption. Because as long as there's so what you can do is during these investments, you capitalize these costs that go until final commercial production can start. So there is still during this year. And yes, we have in parallel Unit A, B, C. This is going in parallel stages. So the huge part of that 400, of course, is going to Building K.
We mentioned Sisslerfeld, which was also a substantial amount, what I just mentioned, Vista with a few tens of millions that we invest in 2025 also there to increase capacity, which partly is also co-financed by one of our customers that we can up and running.
Okay. And the last question, just to be sure, when you talk about current prepayments and non-current prepayments.
That means financial definition, current means within 12 months from the spot date.
That's what I saw. But that means that in 12 months, the latest you will ship to the customer because you got the prepayment or you got the cash from that prepayment, correct?
Yes.
But you didn't for non-current prepayments because that could be the case in four years?
Or even longer, yeah.
Or even longer.
I mean, we said that the payment for customer B, where the contract goes until 2031, the last payback will be in 2031, which is seven years from now. Yes.
And this number you showed today, non-current prepayments, which you showed for the first time, thanks for that. Very interesting. That means this is not yet a cash inflow, right?
No, the inflow is here, but the payback as a deduction from the invoice has not happened yet.
So the whole CHF 286 million we have received, yeah. You have received?
Yeah. We have received and spent it on the investments.
And this is a liability now in the balance sheet?
Yes.
Okay. Sorry. Thanks.
Yeah, Konstantin Wiechert from Baader Helvea . Thank you so much for taking my questions as well. Maybe starting first on Vionnaz, where you restart the production, could you just share with us how that really impacts your P&L in 2025? Is that adding back notable revenues, or should we rather think about that reducing your raw material bill as you produce more precursors at this site?
I think we're going to focus on the precursor part of the business.
Thank you. I guess a lot of what's already asked about the Vista, but if I'm allowed a couple of questions, I would just try to ask it in a different way once again. What part of or how much can we expect to contribute Vista to the 2025 guidance now and the investments that you're making here? Will we already see also revenue contributions from that in the second half of this year or starting from 2026? Maybe just a bit of timeline on the investments that you said, few tens of millions.
Yeah. So the revenue is in our plan. We're not going to break that down to the different manufacturing sites. The additional capacity will come on stream for commercial manufacturing, not in 2025.
Okay. Thank you. I'm just asking a bit around this because, I mean, you really grew your revenues in the last years already through squeezing out everything in Bubendorf, particularly. So I guess it's at least interesting that you say no material revenues from Building K in this guidance. That's why I'm asking. If I'm allowed one more question, the increase in raw materials seems nonetheless to be pretty strong. I think in the last years, it was always like 13% to 16% of net sales revenues, but now it's like 24% or more. So what's really the rationale behind this?
Are you expecting raw material prices to increase, or should we maybe expect some of your batches now also to take more than one year from start to release? What's driving this?
I think it's several aspects. One is the longer-term view. And as mentioned, that Vionnaz was not, because of that fire, able to produce everything. So we had to buy it from somewhere. It was just to secure when we needed it. It was also when do we need it was a question. We wanted to be sure that we have it in our books. And there were also contractual agreements. As I mentioned, a part of that has been paid by customers. So when you get the money, you should also find some ways to use that money. And that's why it's a huge amount. It's CHF 73 million in there. But yes, we need to use it now in 2025 and 2026 to decrease that level again.
Okay. I'll leave it there for now. Thanks.
Any other questions?
Thank you. Rupen Boyadjian from Finanz und Wirtschaft. For the CHF 400 million CapEx, would you need some capital measures, bank loans? How do you finance that?
Yes, we need money. I mean, we saw it. It was already this year at test training . We have customers who support us financially. This will continue. But we need additional financing. And as mentioned before, equity-linked is not an option right now from the board. So we are discussing. We have open credit lines, so we can use banks right now. And we are in discussions with banks to support that financial need that we have in the future.
And does it come because Building K is more expensive now? I think originally it was said it would cost CHF 550 million. Is that still the case, or is it now much higher?
No. It's much more. Yeah.
Okay. How much can you?
We said it's about CHF 750 million to CHF 850 million.
And what were the cost drivers to make it more expensive?
I think that's something we talked about at the CMD. It was the change in scope and the complexity we had there. And that's why also we received financial support from the customers who have driven the change in scope. Thanks.
Thank you. Thomas Rong from GAM. I have a question on the topic of today, U.S. tariffs. May you talk a little bit about what that might have as an impact on Bachem? Probably you have a flow of products between the continents, so that we have some impression of what that could mean.
All right. Yeah. Tariffs, we observe the field very carefully. I think it's important to mention also that what we produce are complex active ingredients for drugs, so it's not just a consumer product that you can shift from one product to another. So we believe that if tariffs really happen and we are impacted, we are in a position to find solutions together with our customers, and the long-term impact, we will see. I mean, we stay committed to invest in Switzerland and the U.S., and we think that's the best strategy going forward.
But probably it would be difficult to switch away from your capacity since capacity is tight in the fields.
I think that was kind of what I tried to articulate.
Let's take some questions online. Charles Pitman-King from Barclays is asking, can you provide some detail on why you believe investors should remain confident in the ability of Bachem to deliver on its stated CapEx targets given higher cash outflow in 2024? Will you have to raise again? How at risk is the dividend? Will CapEx reduce from next year?
There's a bunch of questions. I think you should remain confident in the company because we are executing according to our plan. As I said, we achieved the financial target for 2024, and we're making really substantial steps in delivering this Building K, which is not a small feat for a company like Bachem, and the progress there is very, very tangible. The questions about dividend and so on, maybe Alain, you have ideas.
I mean, the financing we already discussed before. The dividend, it's something that the board gives a proposal to the shareholders, and the shareholders decide on how much the dividend is and if there is one. So that's not in our hands from that perspective.
Charles Weston from RBC is asking, phasing for 2025. This was already a bit answered, but you said growth in H1, but will it be less H2-weighted than 2024?
I don't think I want to comment on that. I did not in the presentation.
And again, something to the tariffs. Any increased desire to dedicate more CapEx in U.S.? What would be the potential impacts there?
As I said, we are investing in the U.S., and we are evaluating how much and how fast.
Zain Ebrahim from JP Morgan is asking, where are you with respect to potential debt financing for Sisslerfeld?
As I mentioned, we are in discussions with different banks for a solution. Right now, we have enough open credit lines that we can draw down for the next time coming.
Thank you. I just have a follow-up on the Sisslerfeld. It seems that you don't start construction probably before late year. So how are your negotiations progressing with the partnership, and what is the plan here, and also how advanced are you?
As I mentioned, I think the demand for peptides is certainly out there in the market, and we are trying to make this happen in the approach we have over the last two years. I cannot comment on any more details.
Yeah. And Konstantin again, if I'm allowed two more questions. One would be on I've seen that Eli Lilly has reduced prices for their Tirzepatide products. So maybe just your thoughts on also maybe looking into the future. Obviously, you don't have to comment on this particular company or potential customer, but in general, do you expect that at some point there will be also pricing pressure for you if your customers are forced to reduce prices? And then maybe a second more interesting question regarding also the huge CapEx announcement that we lately saw again from Eli Lilly.
How's that changing your view or plans for Sisslerfeld, maybe especially in terms of reactor size that you are planning to install there and therefore also flexibility to produce other products in those capacities?
Yes, thank you. I think, and that is just my reading of the situation, we still underestimate the potential that's in the market. Those stocks are going very big. If you think as a real mass market, as I said, of course, you need to sharpen how you execute because it goes into a volume game where prices and cost structure is crucial. So we are in the process of accommodating this, but we anticipate that will happen. I think we are well positioned to do that. And the additional investments of Novo Nordisk, of Eli Lilly in the U.S., are to me, and I don't have more insight than you have, are to me just another statement on how massive this company sees the potential future growth going forward.
If you look at the numbers, 20 billion, this is not a small feat. It's really quite big. And I think it speaks to the strength of the market.
Maybe a follow-up. Maybe a follow-up online. I didn't quite understand the inventory comment. Inventory outflow was three times what it was last year. Appreciating it's been funded by customers, but is this an indicator of growth in 2025, or is it just normalizing to higher level?
The inventory inflow, I guess, the increase in stock. As I mentioned, it's contractually agreed in some cases, and it's pre-financed by our customer. And this will be used now in 2025 and even in 2026 material. So we have it now in stock. We don't need to buy that much anymore. And it should not happen anymore in that amount of money.
Then another question online. How do you perceive the industry's enthusiasm for next-generation obesity peptide? Has it changed in light of recent initially disappointing data from Novo CagriSema? Have you seen any change in demand or conversations?
No, as I mentioned, I remain optimistic for the market. I see a lot of innovation happening, and I think we are only at the onset of what we will see going forward.
Okay. Any more questions here in the room?
Doesn't seem to be the case. Thank you very much.
And to conclude, our next events are the Annual General Meeting on April 30 and the Half-Year Report 2025 on July 24 and the mandatory legal disclaimer. And now we're looking forward to speaking to all of you at the Apéro. And thank you very much for your attendance. Thank you.