My name is Barbora Blaha, responsible for investor relations, I will walk you through the call. Before we begin a brief housekeeping note. There will be enough time for questions after the presentation, if you would like to ask a question. You can use the raise hand feature in Zoom during the Q&A. As always, this call is being recorded and a replay will be available on our webpage. A few words on the agenda, we'll start with an overview of our half year results 2026. Alain will then review the financial performance, Anne will conclude the presentation with an update on market development and our business outlook. Following the presentation, we will be happy to take your questions. We expect today's call to last approximately 60 minutes. With that, over to you Anne.
Thank you very much, Barbora, good morning to everyone also from me. It is my pleasure to talk about our half year results today. Let's start with a look at the team. As Barbora mentioned today, Alain and I will be here on the call to guide through the results, I'm very happy to draw your attention to our newest member of our executive team, Boris Corpataux. Boris is not new to Bachem. In fact, he's been with Bachem for more than 20 years. We were very happy to appoint him to our new Chief Commercial Officer, starting in this position on August 1st. I've personally worked together with Boris for many years, I'm extremely pleased that we found such a capable internal candidate for this position. Let's look at our half year results.
We achieved CHF 326.4 million sales in the H1 of the year, which is a growth of 4% compared to the H1 of 2025. In local currencies, it's actually a growth of 7.3%. We also achieved EBIT of CHF 82.8 million, we invested almost CHF 150 million in CapEx. Alain will talk more about the EBITDA and the CapEx numbers in his part of the presentation. Let me put the H1 year sales into perspective. If we go to the next slide, we see the H1 sales results of the previous years. Some of you may still remember that the H1 of 2025 was an unusually high H1 of the year.
We are very pleased that despite this fact that we are having a very strong reference H1 year to compare to, we still achieved a growth of 4%, even without contributions of Building K. We are very happy with the sales of our first half year. If we look where these sales are coming from, you see here that we had a very strong growth in CMC Development, where we achieved more than half of our H1 year sales. Commercial API was a bit lower than the H1 of 2025. Again, this is according to our expectations because the Building K sales, which we always said we would expect in the H2 of the year, are contributing primarily in the Commercial API sales category.
With this, I think we are exactly where we expected to be with respect to our H1 year sales, and also with the contributions of these individual categories. We are very pleased with the growth that we have seen in the CMC Development based on the strong pipeline, and we expect Commercial APIs to be much stronger in the H2 of the year. Let us look a little bit into where we invested and where we continue to expand our capacity across our site network. In Bubendorf, we talked a lot about it already. We are ramping up our Building K production. We could produce first Commercial GMP material in the H1 of this year, and we are very pleased with how the ramp-up is proceeding.
Along the rest of the site in Bubendorf, we are working on several CapEx projects to reduce specific bottlenecks, and we are also continuing with our operational excellence initiative to unlock further capacity. We were also extremely pleased to announce last week that we are now moving our Sisslerfeld project ahead, and that we are really bringing it to life. We signed an agreement with the partner to supply large volumes of peptides as part of our strategic collaboration. We will invest more than CHF 500 million, and we expect commercial production in 2030 out of our Sisslerfeld site. We are also continuing to invest in our U.S. sites. Both in high volume capacity, that is primarily at our Vista site, and we are also modernizing and automating our small volume production at our Torrance site.
Overall, we are very pleased with our progress, both in terms of sales as well as our site advancements. I will then here hand over to Alain to talk a little bit more about the financial numbers.
Yes, happy to do so. On the first, we see the usual table with the key figures. Anne already talked about the CHF 326.4 million that we have achieved on the sales top line in the H1 of the year. The EBITDA margin of 25.4%, we go in a little bit deeper later. On the net income, we have stabilized this number. So, we have a slight increase compared to the previous year. The cash flow from the operating activities resulted in CHF 104.7 million, and there were also more than 200 new colleagues joining Bachem in the H1 of 2026. When we go to the EBITDA margin and the drivers behind, we have overall a dilution of 370 bps compared to the previous year as Anne mentioned, a very strong H1 in 2025.
We did grow on the top line, what we see is the dilution from the costs that are necessary to cover the future growth of the company, that is mainly happening in the COGS area. We have added new people to absorb all the future growth. We have added or invested in maintenance. We have invested also in smaller capacity increases, optimization of the overall organization. We see these 2.1% points that the COGS have an impact on the margin dilution in the H1. The marketing and sales numbers or cost expenses have been stable, there is no impact from this side. On the G&A other income, we also see a dilution of 0.6% points, which is mainly driven by strengthening our global organizations.
We added specific support functions to absorb the growth of the company, it's also we had some shifts between different areas from a cost, where we recognize the costs now. The R&D, we see also the dilution is 0.5 % points, it's still in the band wave or the range we gave that we invest 1.5% - 2% of our overall sales into R&D, which is a very important factor. We do our own innovations. We have a look on process optimization, it's a very important factor to keep our leadership as an expert in the tides business. At the end, we still have the strong Swiss franc, which also impacted on the currency side by 0.6 % points, which led us to the reported 25.4% EBITDA margin that we have achieved. In local currency, the margin was 25.9%.
As we have now seen, the US dollar and also the euro are getting stronger versus the Swiss franc. We expect the top line impact from the currency effect to be about CHF 20 million, with two-thirds of that impacting the EBITDA. Let's have a look at the cash flow starting from the EBITDA of CHF 82.8 million. We paid our taxes, CHF 9.3 million in the H1 of 2026. The change in receivables is not material, this is also based on the slightly higher top line no big impact. We see the inventory change, CHF 80.9 million impact on the cash flow. One-third of that number is related to raw materials, but also supplies, which is very important because we need that material to progress now also in building K with the higher demand in production capacity.
Two-thirds is lying in the work in progress, semi-finished and finished goods. This is all material products that will be supplied to our customers in the next few months. Also important, the part with the raw material is partially pre-financed by customers through their contribution as prepayments, which you see we have added another CHF 86.2 million from our customers in prepayments mentioned support to our working capital, but also our future CapEx initiatives that we will still have in the next few years. The change in payables is reflecting mainly two points. It's the growing company, on the second, also the higher activity on purchasing materials, but also other costs overall to support the company's growth. The operating cash flow ends up with CHF 104.7 million. What did we do with that money? We spent more than this, CHF 166.2 million in capacity increase.
A big number of that is going into direct capacity, be it buildings. Be it equipment, and this is where we also will spend in the future our main part of our cash. On the financing side, we paid out CHF 67.5 million as dividend from the last year, FY 2025. We had drawdown loans from banks of CHF 150.7 million in the period. All of this leads us to a net increase of cash in CHF 20.6 million in the first six months of the year. Looking at some key numbers on the balance sheet, we just talked about the drawdown of the bank loan.
We had CHF 52 million cash and cash equivalents at the end of June, but we also had outstanding borrowings loans from the banks and also the main shareholder of CHF 208 million, which leads us into CHF 157 million net debt, which is representing a leverage ratio of 0.8x, also reflecting and showing that Bachem still has a financial flexibility in that sense to grow the company.
The prepayments, we added the CHF 86 million, the balance by the end of June was CHF 455 million from the customer side, CHF 142 million out of that is declared as a current position, which means this money will flow back to the customers in the next 12 months based on the supply of products. The balance sheet and the equity ratio. The equity summed up to CHF 1.5 billion by the end of June, which is representing an equity ratio of 62%.
Now, the last slide on the CapEx overview, we spent 45% of our overall sales into capacity. We invested CHF 148 million in the first six months, and we will continue to invest there. It's a main factor for the growth of the company, for the higher market demand. We will invest in further capacity increases. 90% of these CHF 148 was invested in capacity, as mentioned, building and equipment in the first six months. The outlook now 2026, we estimate a CapEx of CHF 350 million-CHF 400 million. It's a little bit a lower number than we anticipated a few months ago, and the main reason there is that the Sisslerfeld now. We started it Anne mentioned, we announced it last week. But first, earlier this year, we thought that it's going to be a little bit earlier and that's now why we spend a little bit less.
Overall on the midterm, the overall CapEx is not changing. With that, looking forward, what's coming, the outlook back for Anne.
Thank you very much, Alain. Let's start the outlook by looking a little bit into the market. We are still in the phase of strong growth, both as a company, but also the market. A lot of that growth is still driven by what is very often nowadays called diabesity. Type 2 diabetes and obesity. If you look primarily at the U.S., you still see that there is still a very large growth expected in number of patients, and also not all patients currently are having access to medications. With this growth both in the U.S. as well as in the rest of the world, we still see an unprecedented demand for peptides, and that means as a CDMO and CMO, we are still having the responsibility to look into large-scale capacity expansions, but also into advanced manufacturing technology to unlock further capacity.
A lot of this growth is actually also then spilling over into other areas outside of diabetes and obesity. If we look at the next slide, we see an overview of the peptide pipeline. A lot of that pipeline, especially the late phase pipeline, the phase III, is actually driven by metabolic diseases. You can see here, 37% is in metabolic areas, meaning it has overtaken the historically strong oncology area. We see also still growth in other areas, and you can see here also the peptide pipeline per se is still growing overall. We see with recent approvals that also other indications in other disease areas are being treated by peptides, and the interest in peptides as a modality goes far beyond metabolic diseases. The same is true for oligonucleotides.
Looking at the oligonucleotide pipeline, you can see here it's a less mature pipeline. It's a less mature modality, but we see a really strong growth in phase I and phase II projects. Over the next few years, we expect this then also to reflect in phase III and approved products. The distribution between different disease areas is much more diverse for oligos, but also here you can see that metabolic and cardiovascular indications are on the rise. With that, we expect that also some larger indications and respectively some larger volumes will drive the oligonucleotide market in the next couple of years. What does it mean for us as a CMO and CDMO for the priorities of the remaining year of 2026? We are in a very strong position with respect to orders.
We have all orders for the remaining year of 2026 in our books. The main priority and the main focus is actually on the seamless and high-quality execution of the existing orders of the existing contracts to make sure that our customers are in a position to ensure their safety, their patient supply. We talked about the successful ramp-up of Building K. We expect this to continue in the H2 of the year. We are also continuing to work on the construction of the phase II while we continue production of the phase I. We expect then to see a strong contribution from Building K for the H2 of the year.
With the announcement of last week, we now also expect to really advance the Sisslerfeld project, to accelerate it, and to really bring it to life from an also construction point of view. In parallel to all these activities, we are working on our strategy update, which will then be the ground for Bachem's next chapter, and we are looking forward to presenting that at the Capital Markets Day in November. We are already at the outlook for the full year 2026. We expect our sales to grow 35%-40% in local currencies. This is a refined guidance from the guidance of 35%-45%, which we gave earlier this year.
This new guidance is now actually reflecting that we have much better visibility on our production plan for the rest of the year, and we are very confident that we are achieving this still very strong growth of 35%-40%. For the profitability, we are still expecting our EBITDA margin to be in low 30s in local currency, so unchanged to what we communicated earlier this year. With this, I think I hand it back to Barbora to start our Q&A session.
Thank you, Anne, and thank you, Alain. Let's move directly to the Q&A. Again, to ask a question, please use the raise hand feature in Zoom, and when invited to speak, please ensure that your microphone is unmuted and to kindly state your name and company before asking your question. Let's start with the first question with Daniel Jelovcan. Your line will be unmuted now.
Hello. You hear me?
Yes.
Yes.
Very good. Thank you. Three questions, when I may. The first one, I was a bit puzzled in your main segments with the development. Of course, I understand the dynamics in Building K ramp up, but the Commercial API down close to 20%. Why was that? Is the base business not growing? This one is typically growing somewhere mid-single digits, that is why it was quite below my estimates, to be honest. Maybe I ask one by one. Thanks.
Yeah. The base business is still growing, but we will see the base business growing primarily in the H2 of the year. We had a very strong growth in our development area and in our pipeline, which we are very happy about, but the contribution for the Commercial APIs will be primarily in the H2 of the year, and we expected it that way. We also expect that for the full year, the distribution between Commercial API and CMC Development will be not fundamentally different compared to what we have seen last year. A much stronger contribution to our Commercial API business in the H2 of the year.
Okay. Fair enough. Also related to commercial, when you talked on slide 18, the 94 approved peptides. Do you disclose in how many you are involved? Probably similar to your market share, or maybe I am on the wrong side.
Yeah. No, we are not disclosing that information. The 94 is peptides that are approved worldwide. Some of them are chemically manufactured, some of them are made recombinantly, but we don't disclose which ones and how many of those we are making.
Okay. On a follow-up on the 94, probably there are not so many fermented, right? It's probably most are chemical synthesis. Is that the correct assumption?
To be honest, I couldn't answer that question for sure. I'm sure we can look into that with the marketing department, but I cannot from the top of my head tell you what is the number of chemically synthesized versus recombinantly manufactured products.
All right. Okay. Yeah. The last one on inflation, raw mats, and so on, how is that developing now and going forward? Maybe a question to Alain.
It's a good question, but we don't see a big impact from there. The inflation and the costs on raw material. Of course, it's fluctuating, it's sometimes higher, sometimes lower, but we don't see a big impact from that side, also not the salary point at the moment from inflation in Switzerland. It's not something material for the company. Going forward, maybe more the price pressure on top line than the costs on the COGS side.
Okay. Supply chain-wise, Strait of Hormuz or so? Coming from China, is that not an issue?
We didn't see a huge impact for us because we were already having other ways around the Strait of Hormuz, we did not have issues on getting the material that we have asked for to secure production.
Okay. Thanks a lot.
Good. Thank you, Daniel. The next questions comes from Zain Ebrahim. Zain, your line will be unmuted now.
Morning. Thanks everyone for taking my questions. Zain Ebrahim, JP Morgan. Two from me, please. My first question is just on the full year guidance and just to understand the reason for the revision more on the sales guidance from 35% - 45% to 35%- 40% Is that reflecting maybe lower contribution from Building K? Why is that given that you mentioned the H1 has developed in line with your expectations? That's the first question, the second question would just be to understand when you mentioned the Building K ramp up in the H2, contribution to the guide is that mainly from the first manufacturing lines, or do the phase II contribute partially to the end of this year as well?
Maybe I start with the second question. Yes, the contribution from Building K comes from the phase I, from the first line. We are still finalizing construction for the phase II, that will then start to contribute next year. To the first question, yes, the H1 went very well, we also have very strong expectations for the H2 of the year. The challenge that you have every year at the beginning of the year is that you need to make a rather accurate prediction on the full year sales. At that time, you have a good idea on what are the products, what is the product mix, what runs on which manufacturing line. We are now in a much better position to know exactly what the production schedule for the H2 will look like.
We know the products, what lines they're running and what are the number of changeovers. Based on this much better visibility on our production schedule, on the detailed production schedule, we are now in a much better position to say exactly which of the products that we manufacture this year will actually go out and will be delivered and sold this year, and which maybe will then be delivered and sold in the beginning of 2027. It's really no material change. It's just a much better visibility on the detailed production schedule.
Very clear. Thanks very much.
You're welcome.
Thank you, Zain. The next question comes from Tanya Hansalik. Tanya, your line will be unmuted.
Hi, good morning.
Tanya? Oh, okay.
Yes, we can hear you.
Okay, great. Yeah, I have maybe two or three. The first question is, I don't know if you can answer it, on the Building K, on the first part, can you confirm if you've been able to book revenues for these customers already? That would be the first question. The second question is, you left the EBITDA guidance unchanged, I'd like to know what are the important factors to consider here, and how confident are you in the Building K output and yields? The third question was on the pricing discount letter sent by a big GLP player to suppliers. Be interesting to understand for the large scale contracts, are the price and minimum commitments for these five-year agreements, are these binding or are these based on moving forecasts, adjusted based on demand? Thank you.
Maybe I start with the first question on Building K. I think we said earlier this year, and we can confirm this now, that the sales out of Building K will contribute only in the H2 of the year. Yes, production was already happening in the H1, but there was no sales contribution out of Building K in the H1. That will be then only in the H2. Maybe I also take the third question and then let Alain comment more on the EBITDA question. We don't disclose any details on our contracts with respect to what prices are fixed or not fixed. You can generally take into account that prices are usually a question of volume, so very much volume linked. Other than that, I cannot confirm or comment on any pricing mechanisms on individual contracts.
Maybe before taking the second question add to this third question, if there's a difference if you have minimum order quantities or the minimum order values and both contracts are values. Even if the price changes, it's just the quantity differs and not the value of the minimum order in that sense. On the EBITDA margin, we gave a certain range, which is low 30s, 30%-33% maybe. If we achieve the top line now, this huge growth of around 60% in the H2, the economy of scale, the operational excellence, and also keeping the marketing sales the G&A, the overhead cost stable. As long as we achieve, and we are confident as Anne, mentioned this top-line growth the EBITDA margin will follow there.
We still have ramp-up costs for the next phase of the building, we are hiring more and more people also now for the phase II. This will be a constant hiring process and always having some growth costs in our P&L in there. We are confident to achieve this profitability guidance that we gave here.
Thank you.
Thank you, Tanya. Let's take the next question from Fynn Scherzler. Fynn, your line will be unmuted.
Yes. Hi, morning, and thanks for taking my questions. Fynn Scherzler from Deutsche Bank. I have two on Sisslerfeld. Essentially, can you tell us anything else on the contract that you won that was not already in the press release? Whether it's a new product, an existing product, a new customer, whether it's multiple products. Any additional color here would be helpful. Or maybe you could comment on the CapEx phasing of the project. Then related to that, on Sisslerfeld, my understanding is that the land that you have there is quite large. My question is, are you essentially happy for now with the large contract that you won, or should we expect that you are looking for additional contracts in similar magnitude in the near term? Thank you.
Yeah. We are very happy with the contract that we recently signed with this partner. However, this does not mean that this is the last contract that we expect to see for Sisslerfeld. We are still in discussions with a number of other potential partners, I think this is a very meaningful first step in Sisslerfeld. As you mentioned, the land that we acquired is very large. There is much more space for future additions and future buildings, we are very happy with this very first step that we do in Sisslerfeld. Unfortunately, there's not more that we can disclose on either the partner, the product or other contractual terms as we agreed to keep those confidential with this partner.
Maybe I can answer the question of the phasing of the CapEx. We are now ramping up. We are also hiring many people for Sisslerfeld as we have signed this contract, and the team will grow there. Those are in-house hours that are capitalized. We see now start of those CapEx, and I would say distribute then within the 2027 to 2030 equally the CapEx, maybe a little bit lower at the end, but in the three years between, I think it is an equal portion of the CapEx there.
Thank you.
Thank you, Fynn. Let's take the next question from Sibylle Bischofberger. Sibylle, your line will be unmuted.
Thank you very much. Good morning, everyone. Thank you for taking my question. I have also a question about Sisslerfeld. I remember a couple of years ago, you expected to invest CHF 1.2 billion, partly financed by Cosmos, partly financed by you. Is this still the plan, or did you change the strategy and now you start investing step by step depending the contract? You start now with the CHF 500 million. If there are new customer contracts signed, you will increase the size? I have another question, maybe one by one.
The overall investment in the Sisslerfeld site, once it's fully built out, and we are talking a very long timeframe here, will probably be way more than CHF 1.2 billion. This first step, the CHF 500 million, really allows us a significant growth and even has room within this building for additional partners. Ultimately, of course, we always said we grow in line in lockstep with the market. If this first building indicates that it's not large enough. Of course, we will add further buildings. Again, we will do that together with partners in making sure that we have volume commitments for those buildings. There's a lot more space for a lot more buildings in Sisslerfeld, but I think it's important that we make this first step happening. We are very excited that we now can do that.
Then about CapEx in the H1 of 2026, how much was it Sisslerfeld, and how much was it Building K? Could you say something about that?
Sisslerfeld was mid-single digit. It was not that much.
The most part is Building K?
The biggest part is Building K, yes. I think it was about 70% was spent in Bubendorf, which is not only Building K, we have other, as Anne mentioned, debottlenecking and other projects in the complex, but about 70% of that investments have been done in Bubendorf, and then the main part is Building K.
Thank you.
Sisslerfeld, it was not that much, it was the energy tunnel, because we said we just go ahead with the bigger CapEx investments until we have signed the contract and a partner supports there, also financially and for the future production.
Okay, thank you. The other question is about oligonucleotides. Could you say something about the development?
Again, here we're very pleased and very happy with the development in our oligonucleotide pipeline, both in terms of numbers and quality of projects, but also from a contribution. We see also here that oligonucleotides are proceeding very well from a sales and also profitability point of view, and they are also the main contribution for oligonucleotides we see in the H2 of the year. Again, here we have the orders for the full year already in-house, also for oligonucleotides.
Thank you very much.
Thank you, Sibylle. Let's take the next question from Charles Pitman-King. Charles, your line will be unmuted.
Hi, Charles Pitman-King from. Thanks so much for taking my questions. Two from me, one mostly, I think, just a bit of a clarification. Just in terms of the FY 2026 reduction of CapEx spend to CHF 350 million - CHF 400 million, can you just confirm that this relates to the push out of the Sisslerfeld? You mentioned it was due to a delay on Sisslerfeld spend. Is this because it took you longer than expected to find or to sign the contract with the anchor customer? Can you just maybe give us a little bit more information around the discussions you're having? Are decisions from customers being pushed out because of macro or other changes in the market? Any detail there would be helpful. Then there's just the second question.
Following the recent announcement of Samsung Biologics to enter the synthetic peptide market versus Vir's likely acquisition of PolyPeptide, I'm just wondering how you're thinking about the potential for rising competition within this market, given their cash questions are likely to be resolved. But also, if you can give any detail on how you're thinking about high volume versus small volume, given that competitor is more of a small volume provider, and you mentioned in the release today an intention to expand in the U.S. with some small volume capacity solutions. Thank you so much.
Maybe I start with the CapEx, the lower guidance or outlook that we gave now is yes. Mainly it's the lower CapEx now anticipated for Sisslerfeld, but it's also on some of the projects we had contingency included there early this year, which is now not been used. It's not because we are heavily delayed or we did not pursue CapEx projects. It's really mainly depending on unused contingency and the Sisslerfeld, which now is later. Maybe why did we have expected it earlier this year, or it became later than we originally anticipated is that was a big contract and it's also even on the other side, maybe it's a big company. It takes some time to go all through levels and to negotiate these contracts.
I think from a timing wise, we were still pretty fast, even if we cannot say more than that on the timing, it always takes some time and now we are happy that we signed now and announced that last week. This is always difficult to look into the future, even if it's January to July is only five to six months, which is like tomorrow many things are happening in negotiation. I'm sure everyone is aware that this can happen. Maybe for the other, I hand back to Anne.
Thank you, Alain. Yeah, maybe just to add to what you mentioned, I fully agree. I think given the size of the deal, I think the negotiations were extremely fast and efficient, and the primary deals or deal structure was actually agreed pretty early on. As you can imagine, with a contract of that size, it takes a little bit of time to get through all formal approval processes within the two companies to get then to the final signature stage. On the question on the potential Samsung PolyPeptide acquisition, we always are consistent that we don't comment on individual competitors. I think what is fair to say is that we see the competitor landscape in our business changing. We have consolidation happening. We have new entries entering the peptide market, which is not very surprising. It keeps us on our toes, right?
We are not afraid of competition. Competition is entering the market. Competition in the market is changing or consolidating. We just need to make sure that our offering remains very attractive and competitive. Alain commented earlier on our R&D activities. We are still very much believing that a strong focus on innovation, manufacturing, technology, having the best processes and the best equipment is what will ensure that we are successful in the long term.
Thank you so much.
Thank you, Charles. Let's take the next question from Chris Richardson. Chris, your line will be unmuted now.
Hi. Thanks very much for taking my questions. It's Chris Richardson from Jefferies. Maybe just the first one, assuming the H2 business or sorry, the base business in H2 grows to a similar extent or even a bit higher as it did in H1, the implied contribution from customer A and building K is roughly CHF 200 million. Can we expect that kind of run rate per half year from customer A and building K, or is there some nuance to that? I've got a couple more questions, but maybe I'll ask them individually.
Yeah. I think we need to be a bit careful with conclusions of that nature, because keep in mind, we always said the sales will only contribute in the H2. That does not mean that we didn't produce in the H1 of the year, right? You cannot make the assumption that next year it will just be double that because a lot of the production actually happened or started in the H1 of the year. It just didn't hit the sales or the top line. I think you need to be a bit careful with making just the conclusion that next year we will do the same in both half years.
Is it fair to assume maybe sorry, just as a follow-up that it's ramped up in quite a linear fashion so that the average utilization rate is hence 50% from the year, going from nought to 100% through the year?
Yeah. Utilization rates of 100% are usually not realistic. In an ideal plant, we usually target 85% utilization, and the ramp up is very much dependent on the project. There are no general utilization ramp-up rates, right? It depends on what the customer expects. It depends on the process and what the rate and scale-up is.
Super. Thank you. Then maybe just a question on how the other lines in building K are progressing in terms of the next couple of years' worth of expansion, and then maybe how customer B and that planning is progressing, and whether validation is planned for to H26 or early next year.
We plan that the construction activities will be completed and then ramp up in the phase II will happen next year. I think we always said it will then take two to three years to reach full utilization.
Super. Thank you. Maybe just finally, appreciate you can't comment on the global pipeline and your exposure to it, can you maybe clarify how many phase III projects and how that number's changed since year-end when I believe you had 16?
We don't disclose pipeline results at the half year. The only number that I have for you is the same that you just mentioned, which is what we published for the full year 2025.
Wonderful. Thank you. Actually, sorry, maybe I'll just ask a quick follow-up on Sisslerfeld. Sorry. Given the CapEx change was due to a delay rather than any change of scope of Sisslerfeld from a larger project, as some have already mentioned on the call is it fair to assume that maybe a CHF 500 million Sisslerfeld expansion was the plan as of full year?
Yes, that is correct. It was about the CHF 500 million.
Yes.
Okay. Super. Thank you so much.
Thank you, Chris. Tanya Hansalik, she has a follow-up question. Tanya, your line will be unmuted.
Yes. Thanks for taking my follow-ups. One was on the Sisslerfeld as well. Could I ask about the CapEx guide until the end of the decade? I think you previously had said around CHF 400 million until 2030, but then this was with CHF 800 million-CHF 1 billion investment in Sisslerfeld. I appreciate now we've got the first part, and hopefully there'll be more. But yeah, what does this mean in terms of the midterm CapEx guide?
Maybe I need to disappoint you a little bit. We will give you an update at the Capital Markets Day at the end of November. Right now, I would not change the forecast or the outlook we gave earlier this year or even last year, because Sisslerfeld was always a part in the outlook. You will see or hear more on the Capital Markets Day for another five years looking into the future.
Okay, great. Thank you.
Thank you, Tanya. Another follow-up question is coming from Daniel Jelovcan. Daniel, your line will be unmuted.
For Barbora?
Yep.
Yeah.
Just on the prepayments, I'm not sure if you have ever disclosed that, but I guess it's only probably one or two customers with that methodology. Do you disclose the, let's say, until the end of the decade the percentage of CapEx with prepayments? I mean, other industry players talk about 25%-30% of CapEx is financed with prepayments. Is that ballpark the right number, or maybe you have disclosed it somewhere in the past?
No, we have never disclosed it. The point or why don't we, there's two factors. One is I mentioned CapEx contribution, and on the other hand, it's working capital contribution. There is more than just one or two or three customers now, because also prepayments in the biotech industry or with smaller customer, it's just a given in the industry that you always ask for a little bit upfront money to also to secure your costs in the future. That's totally normal. When we talk about the big numbers, as mentioned, the working capital contribution, which comes in once a year and we pay our bills for raw material and utilities, that's a percentage of the order confirmation that the customer gives us. We calculate the working capital contribution as a prepayment. This is like a rolling 12 months.
On the CapEx, we don't say how much, or how many in percentage of the total CapEx, because we don't want to reflect this to the outside. If other people do, that's fine. We just see not a benefit of announcing such numbers publicly. Maybe the numbers you have is from others are not totally wrong as a median number.
Okay. Thanks. It's quite relevant. I mean, your operating cash flow will not cover the CapEx over the next few years. I understand your-
Yes, we expect free cash flow positive in 2029.
Okay. You're still looking for non-dilutive deals.
Yes.
We have signed this CHF 500 million credit facility that we announced in April, and we have other options to finance our growth. Very confident there to get that. No sleepless nights because of that. Equity-linked increase or equity-linked instruments are not planned at the moment.
Okay, thanks.
Thank you, Daniel I see a last follow-up question from Zain Ebrahim. Zain, your line will be unmuted.
Great. Thanks for taking my follow-up. A follow-up with just on orals, in terms of oral peptides, you talked about them as a key growth driver overall. Can you talk a little bit more about your exposure, like whether you're exposed to any of the oral GLP-1s, not necessarily commercially, but even just clinically, how we should think about that. I think you mentioned oligonucleotides has made more H2 weight. Just wanted to understand what's driving that being more H2 weighted. Is that just customer need or is that partially Building K related as well? Because my assumption was that Building K deferral into H2 is mostly peptide related, just wanted to clarify that.
Yeah, that is correct. The oligonucleotide sales is not related in any way to Building K. It's just basically phasing of customer demand or orders. On the oral question, there is no such thing as an oral peptide, right? For us, we are manufacturing peptides, some of the peptides in our pipeline are intended for a dual mechanism. Some of them have plans for both injectable and oral applications. For us, we basically deliver a peptide to a customer, then the customer decides if and to what extent this peptide that we delivered goes into an injectable or into an oral application. In the end, for us the peptide that we manufacture is exactly the same peptide.
Understood. That makes sense. Another follow-up and final follow-up, I think inventories increased quite significantly in H1 2026. Can you just comment on, I think about just over CHF 500 million, how much of that is finished goods versus raw materials and work in progress?
I don't know, to be honest, off the top of my head. I saw the difference where it increased, but to be honest, we can send you that if it's not in the half year report.
Okay. Very helpful. Thanks a lot.
I think about 20% is in raw materials, and most of the rest is semi work in progress semi and finished, but we can send you the table.
Great. Thanks a lot.
Okay. Thank you, Zain. I don't see any other questions. Before we close this session, let me briefly highlight our next event, which is the Capital Markets Day on November 26th. Please also refer to the legal disclaimer on the screen. With that, I would like to thank everyone for your interest and see you at the CMD in November. Have a nice day. Thank you.
Thank you very much, everyone.
Thank you very much