Good morning, and a warm welcome for all here in the room, visible, and also a warm welcome to the invisible that are virtually joining our media and investor conference. I think the short video has brought everything to the point, and I will go and bring more, let's say, details into it, but it has been very well, let's say, aggregated here. But before I start, I would also like to share my sincere gratitude with our 33,000 employees. Many of them are also following this call here, and it is really amazing to see how committed and engaged our employees have supported the company with the many initiatives globally in 2025.
It is also, let's say, the source of the strength of the company in delivering in tough times also outstanding results, shaping for the future with the support of our employees. That's what makes me feel proud to be at the top of the company, but representing 33,000 employees. Now, let's look at the agenda, which will follow the sequence of sharing some of the highlights of 2025 from my side, but also then give some flavor to the strategy execution. And then very interesting, how are we doing on the business implementation? Key elements which are driving growth into this year as well as into the coming years. Also supported then by the regional manager, Christoph, Mike, and Philippe, which then will also give us a bit of flavor on what's going on in the regions.
Before then, Adrian is going to make a deep dive into the financials of 2025, then followed by the outlook for 2026, as well as then the Q&A session at the end of the session. But I think before I go into the highlights, I would like to emphasize here the strong foundation that Sika is built on, and is able to also then outperform the markets, increase profitability in the future. And I think, most prominent, Sika is the undisputed leader in the chemical construction market by far. This gives us a leading edge, access to big project, access across the channels as the brand stands for top performance, top value, and is recognized as a clear benchmark.
Wherever in a challenging environment, where complexity is increasing, Sika is the first source to go to, to help the specifiers, to help the architects, the contractors, to overcome those challenges, because they can count on us providing value-add innovation to overcome the pain points of the industry. This, of course, is what we bring to the market. Inside, it is this innovation drive, constantly challenging status quo. Always look what is out in the market, challenging our customers, our contractors, applicators, and see how we can remedy those pains with intelligent, innovative solutions, helping them to overcome those complexities. This is a key element which we also see represented in the appreciation of our customers when we look at the Net Promoter Score, that Sika has clearly ahead of anybody else in the market.
At the same time, talking about the market, construction market is a market that has a lot of influential elements in there. The higher the confidence in the future, the more investments flow naturally into construction. We are facing a period of a lot of uncertainty. Therefore, let's say markets are hesitant to invest. Not all of the markets, but some of the markets, definitely, and it is dampening, let's say, the construction, the activity short term. It's the cycle that we see that is influencing, let's say, the markets overall, but this is also an opportunity.
A down cycle is an opportunity, and we took this last year, and we installed an efficiency program, a productivity program, providing our organization a leaner and a more agile structure, and also investing into digitalization as a key driver for future differentiation potential in the market, with a clear aspiration to be in our market the digital leader. Just like we are the innovation leader, market leader, we drive for digital leadership. And this we took in 2025, and we will see also how nicely it will generate the potential for us to outperform the market, and also to generate the margins increase. The organic growth, traditionally and also ongoing, is paired with our bolt-on M&A strategy.
We have a fantastic track record over the past 15, 10, 15 years with many, many bolt-ons, and we will show later on a bit the flavor of how accretive and how strong the integration power of Sika is. This can be anywhere on the planet. This can be a mature market, this can be an emerging market. We have here clearly also established a skill set to spot the most attractive prospects, and then engage clearly based on KPIs that are oriented towards the return generation and synergy generation, and accelerating growth, and the best one for transactions. And then when we close, we instantly step in and drive then the integration and the synergy, and the expansion of the business via cross-selling, via channel activation and leveraging our global product portfolio. So this is the foundation.
This, this is why we are very optimistic and very confident about our ability to outperform the markets, as we have also stipulated in our midterm strategy by 3%-6% in local currency. Now, talking shortly and briefly about the markets and the fear of starting probably with where exactly probably a year ago, we were guiding before the tariff, let's say, uncertainty was revealed, and which had massive impact on the North America, but also ripple effects across the globe, with uncertainty related to tariffs going up and down. This has been a sentiment that has stayed for 2025, which then also triggers into a lack of consumer confidence, further increasing in China.
As you can see, almost 50% of the residential market reduction within two years, very much also here linked to the uncertainty of the global markets, which has also then triggered our reaction to the Chinese business. And towards the end of the year, as if not needed, another element that came with the longest U.S. government shutdown, that again was hindering projects to start waiting for permits, waiting for approvals, which was again an element that was unforeseeable. But it is what it is. Overall, we conclude last year's, for us, relevant market had a roughly 2.5% decline, given all these elements.
Nevertheless, that's where we come into our performance, and here our outperformance of the market with a 0.6% growth in local currency is a demonstration that even under severe, let's say, weather condition, the company can deliver. Also, on the operating profit, the EBITDA, if we take in consideration also the steps we took with the Fast Forward program, only a slight decline in the operating margins while we of course see negative leverage with a low organic or negative organic growth rate. Very obvious here, also visible, the strength of the Swiss francs has been, once again, let's say, a translation effect. But of course, when we look at the reported numbers, it is quite, quite heavy, with 5.4% FX implication in 2025.
I talked already a little bit about the actions we took. You know, the market is soft, it's, it's muted, but at the same time, this is the time. This is the time for strong companies to act, to prepare, because every cycle comes to an end. We took the decision in the second half last year, to shape the company, not only in China, where we have been rebasing the business, but globally, to say: This is the opportunity. This is the time where we can and must take, proactive steps, making a leaner, more agile organization. Also investing into our operational footprint in automation and efficiency, to be able then also to kickstart when the cycle turns up and take, advantage of a ready-to-roll organization.
We paired it also with investments on the digital front, as the digital journey can be accelerated, and we took the decision here to fast forward our digital journey with clear elements that we will show later on, also in transforming, our business, more digital and, aspiring for the digital leadership in the industry. And all these investments come with a fantastic return. You know, less than two-year payback and up to 100% return on the individual investments. Now, when we look into the regions, and here, if we look at the outperformance of the markets, 2.2% in local currency was the growth in EMEA. In EMEA, very clearly, we have pockets of growth like the Middle East, Africa, Central Asia.
We have parts of Europe that showed improvements towards the end of the year, Eastern Europe, the parts of Southern Europe as well. So here, momentum that has built up and is then also demonstrating our outperformance in EMEAs. The Americas, our second largest region as well, had a strong start into the year. So January was fantastic. February, until about the time of the months as now, was still going in the same traction. We had good momentum coming from 2024, building up momentum. Unfortunately, that was then softened over the course of the year, and there is also still a prevailing sentiment in the Americas. But in the Americas, we also have great pockets of growth, like the tech investments.
The investments into data center is booming, let's say, increasing the commercial construction spend quite, tremendously, while other commercial constructions are lagging. So the data center boom and our strong position as a forerunner and as a peace of mind, provider to the owners, the hyperscaler, give us here a leading edge. And just to give that a bit in perspective, you know, we have been participating in over 4,000 data centers globally so far, and let alone 400 last year, thereof, 230 in the Americas. So this is a pocket of growth of substantial contribution. Besides that, the Latin America, the markets are more resilient, like, just like, other emerging markets have demonstrated, here, a more resilience to the, the global, uncertainties. Which brings me over to Asia Pacific.
Asia Pacific reported a -5.2 in local currency. If you take the China construction market out of the perspective, it would have been a growth of 2.9% in local currency. And here, as I mentioned before, very much driven by strong momentum in Southeast Asia, in India, that is, partially offsetting the weaknesses in China. Now, when we talk about outperformance, outperformance of the market, a market that has been roughly 2.5% down, we compare us to the peers. So we have established this peer comparison for quite a while. And as you can see here on the left-hand side, if we take in all the relevant peers and their activities in the construction chemical market, we are outperforming our peers by roughly 2%.
In 2025, we don't have yet the full set of numbers, so this is still work in progress, and we'll probably also then shift a little bit as Q4 was not only for Sika, a challenging quarter, it was also for our peers, a challenging quarter. But more relevant, none of our peers that are in this list here is really active in China. So when we take, let's say, the comparable geographical spread of the peers and us, then on the right-hand side, you can see the outperformance consistently being almost close to 3% to the peers, which are in our expectation, also slightly above the market trends. Now, some of the highlights which we are particularly proud of is the increase of our gross margin. Our material margin increased to 54.9%.
This is a testimonial to the strength in value selling. This is the value that we bring through our innovation into the market. We are recognized as an, as a value provider, and the return of our customers by utilizing our products, our innovation, is speaking for themselves and, is driving this, material margin, progression in 25. But as you can see, also coming from, 23 to 25, steadily increasing our, material margin. I think a particular strength of the company is the strong cash generation. Also, in light of, let's say, lower, EBIT in absolute numbers, driven by the one-time, effect of Fast Forward, as well as the, the strong currency.
But when we look then what the company constantly delivers in the last three years, solid double-digit returns in cash, which is almost CHF 1.4 billion, that we can then redeploy into investing into our business, giving it back to our shareholders, as well as investing into bolt-on acquisitions. So that's underlying, I think, an element of strength that we are also capturing going forward. Another highlight we have not talked so much about, but our aspiration to be leaders in the industry is not only on financial targets-oriented, it is also, you know, our employee safety. In 2021, we launched a program. We set the high mark and said, "We want to be leader on safety for our employees." And as you can see, this is a journey.
This is a journey which gradually improves, and in the meantime, we have reached clearly above industry average standard, but we are not stopping. We want to make Sika the safest workplace in the industry, and we are investing heavily together with our employees to create this safety culture, which is progressing very nicely. It makes me very proud that our employees are supporting this journey, as this is not dictated by top-down. This is ground-up supported, and this is also when we look into what it means behind, let's say, the numbers, it means a safer and more, let's say, streamlined, a more process-oriented, a more, let's say, transparent organization, which leaves less up to chances.
That's, of course, also a value driver for other stakeholders, as this is a part of getting transparency and getting efficiency throughout the organization. Talking about the non-financial metrics, I think we can be proud we are constantly delivering on our non-financial commitments on the greenhouse gas emission reduction, Scope 1 and 2, the ones that we heavily influence. The water discharge reduced by 3%, waste disposal by 5.7%, and as mentioned, 14% on the safety side. These are all value accretive elements which are transferring into efficiency, into tangible also financial benefits for the company and its shareholders. Talking about the other element, the organic element, very important, reinvesting into the organization, investing into safety and so on. It's the bolt-on acquisition strategy.
We have been able to sign seven and close six of the transactions in 2025. I think here, most remarkable also, as you can see, two of them in the Middle East. This is a booming area. This is a double-digit growth area where these two acquisitions are spot on, not only bolt-on, they are spot on to market demands that are also expected to continue to grow in the near future. We also made a bold move in Scandinavia with two transactions, giving us here on the mortar side a very strong footprint. And as you may recall, we have a very strong adhesives and sealant footprint in distribution in Scandinavia. We are combining these two strengths and also aspire to be the undisputed leader in distribution with our strong brands in Scandinavia.
Here also, a very clear value and growth-driven acquisition, which the others then also supporting mature markets like in Singapore or HPS in North America. We invest in our own capabilities, our factories. Here, some of them are expansions into demand-driven geographies, like in South America, too, like North Africa, Morocco, a booming economy. Also here, covering more space in that country. Kazakhstan, as I mentioned, Central Asia, a booming area, but then also in China. Here, maybe I would like to elaborate. Suzhou is our main site. It's our headquarters, close to Shanghai. We have opened the factory for adhesives and sealants for the automotive and industrial manufacturing business. We have great success.
The plant opened in the second half last year, and we are gaining share with the Chinese OEMs, so that we are already now considering a further expansion of the capacity. As we see, with this fully automated, with this state-of-the-art, we are having good traction with the Chinese OEMs, bringing them top-level global innovation into their manufacturing processes. And it's just an example of our constant investment also in upgrading our operations, our footprint, and gain more efficiency and productivity. Now, let me quickly look in the last six weeks. I mean, here, the year just has started, but I think it's remarkable how the year started, because in the first six weeks, we have opened already five new additional plants, and that's just mentioned before, very much demand driven.
We have a very strong concrete market in the south east of the U.S. So Florida has a booming area. We put the most modern plant down for admixture. We fully automated capabilities in the plant near Orlando. We then also expand in Latin America, in Colombia and in Argentina, which is a constant growth platform for us. Bangladesh, in Southeast Asia, as well as in Africa, with a new plant near the Victoria Lake, 800 km away from our headquarters, also covering this strong growing market there in the East African market. And then, very exciting, I think we reported that just lately, the acquisition of Akkim in Turkey. Turkey is a powerhouse. It's an engineering powerhouse.
It's a powerhouse that is very influential in the Middle East, in Central Asia. This company has a fantastic footprint, has also a foot into Romania, so in the Eastern European market. And we are very happy that we are now able then soon to build on that platform, bringing our expertise, our technologies from the construction chemical side, together with the sealant and adhesives into the core markets of the Akkim, and in reversal, also bringing the Akkim products into the Sika world, into Europe, into other parts of the world, as they perfectly fit our portfolio for distribution. And as mentioned before, the seventh transaction of last year closed end of January. So Finja was a fast track acquisition, signing early December, closing end of January.
And it's a sizable, excellent platform, which we are utilizing now also to drive above market growth in Scandinavia, and utilizing this to leverage our synergies into the market. Maybe a short segue into the adhesives business. We haven't talked that much about adhesives business, but it is underlying, representing about 30% of our business. It is relevant or mission critical in all our markets. It's in all channels, has a very predominant position. It's an enabler. It's a typical enabler to move from traditional bonding techniques to techniques that enable multi-material structures, that enable also smart decarbonized buildings.
So it is a key element on the journey of all these industries, and it comes with very attractive, innovation-driven features, where we have here a clear leading edge, providing here state-of-the-art innovation, like the curing by design, that is enabling our customers to advance their design and their construction and manufacturing processes. In the adhesives field, it's all about the brand. If you go from D-DIY over to the big box, if you go into the professional, it is all driven by a few core brands, and Sika is a core brand on the adhesive side. Sikaflex is standing as a synonym for bonding in many market segments, and so that's the leverage potential, which then also enables us to take full advantage in all segments and channels. Now, quickly on the strategy execution.
I don't need to go deeply into. You have seen this. It is a reconfirmation from our side to our midterm targets, gaining and outgrow market share in a profitable way. That's in short, the message, as a takeaway. Also on the financial, as well as on the non-financial, very clear and transparent journey towards 2028 that we have always communicated. Now, in the background, you know, we have a strong position. As I said, we are undisputed market leader with 12% market share in a CHF 100 billion market potential industry. And it is highly fragmented, which means the winner can take it all if you act like, and that's what we do. We take market share out of the position of strength.
When you look into the different target markets, the eight target markets, you see a lot of differentiation, but there's the one common theme across all of them, and this is value add product focus. Now, in all these target markets, when you talk to contractors, when you talk to owners, when you talk to specifiers, architects, you will hear this common theme. Sika is clearly leading through value, providing exceptional value to the construction, to the manufacturing industry. That's what we stand for. That's what we are leveraging. That's our innovation drive. We are also very well-balanced when we look across the different markets coming from the infrastructure side to commercial construction, residential construction, and then also the manufacturing industry, the automotive and the industry segment, where we have a good share in the global business.
Also, when we look at the new construction and refurbish, mature markets are more leaning on the refurb side, emerging markets, more on the new, but also emerging markets like China, for instance, are moving very clearly into becoming more and more also refurbishment or renovation market. These are all elements that we balance very well and where we have the competencies to also bring this to the local market situation, and bring those competencies to the 102 countries that we have worldwide. The market penetration, the outgrow of the market, this picture you have seen before. I talked a lot about the leverage potential that the company has, that we are utilizing to cross-selling. Cross-selling, in simple terms, these projects have multiple needs of solution, from waterproofing, from bonding, from sealing.
It is here the clear aspiration to make us the one-stop shop for our contractor, for the applicator, and leverage our great recognition in the market. The multi-channel approach, I mentioned it before, it goes from the direct business all the way to the e-commerce business, where the brand is super relevant, where, let's say, the specific solution for specific customer is super relevant. We cover it all, and we benefit here also to leverage that across all these channels. Go where the money is. In very simple terms, it is the call for action for the local organization. Don't come back and tell us what is not going so well. Look for the pockets of growth, look for the activities that are still going strong and invest there.
And here, data centers as a absolutely clear, outstanding, element, which is happening everywhere as a, as a go-to, but it is also infrastructure spend is much less influenced by market downturns. Infrastructure spend is a way also to take advantage of the resilience of the infrastructure. Spend time there. This is the call for action for our local organization, you know? Don't explain, you know, drive business where you have pockets of growth and utilize the group-wide expertise to drive this. Key geographies, well, it's Europe, North America, China, always in focus, always, of course, key decisive, markets for us, to be very close to and demonstrate our leadership in these leading, geographies. And innovation above everything.
I repeat myself, innovation at the core, for reason being, driving value, driving, market share gains, and ultimately outperforming market, situations, whatever they are. I like this slide very much. We put this together in a simple term to demonstrate, you know, innovation is not coming just by saying so. It requires strong commitment and investment, and we are constantly investing into our R&D in our, 16 global technology center, which then also are influencing the, the 100+ , local, very local R&D facilities. 1,800 chemists, more than 5% of our employees are working, on the innovation path and spending substantial, money on innovation, CHF 280 million, our annual R&D spend. This is the investment.
What then comes out is innovation, is patents, is unique approaches, which then are converted into solutions which generate value for our customers, are protected by IP, but are then recognized. Ultimately, when we look at what our innovation power is delivering, it's delivering—it delivers 3-5 percentage point higher gross margin. It represents almost a quarter of the products with less than five years in the market. This is then also showing the power of innovation in our markets. An excellent example of this is an innovation that we brought just before COVID to the market.
It's a novel, it's a patent-protected waterproofing membrane, which can be used pre- and post-applied to basement waterproofing in a way that you have absolute peace of mind and no need to fear any water leakages. This is picking up pace with a 27% CAGR. It is a highly specified solution, so it takes some time until it spreads, but it spreads very quickly, especially in the Middle East. And I have here the picture of the Al Maktoum International Airport that is under construction in Dubai. This is a huge project. Almost 3 million square meters of waterproofing membranes are utilized. We are the sole supplier. We are here also adding another landmark construction building to the success story of the SikaProof A+ membrane system. Also, data centers.
I can't talk enough about data centers, you know? We love the owners because the owners love us. They love that Sika gives them peace of mind, that they get the highest reliable, performing solutions so that they can execute inside the shell by not having to care about the shell itself or disruption from the roof, from the walls, from the floors. That's why we have been very early the preferred choice, as we stand for this reputation. And the roofing, as a particular important part, has further advanced. We bring a self-healing membrane to the roof, which means that the roof membrane can also absorb and correct impacts from nature.
Hail, for instance, is here a painful, disruptive element, but also just the UV sunlight in Arizona is quite different than here in Switzerland. So these are elements that are super vital. On the other hand, the fibers on the concrete floor, these are taking out carbon emission quite heavily as we can replace steel. We also have lower maintenance costs. We have higher robustness of concrete floors with fibers, and it is very appealing to data center owners to advance here and also contribute to decarbonize their buildings. Coming back to M&A, bolt-on M&A, I think we have indicated that the last time also how accretive bolt-on M&As are. As you can see here, we look at the pre-synergies EBITDA multiple at the time when we kick off the integration.
Then within the third year of the integration, we achieve a 4x lower EBITDA multiple. So an improvement that builds on our possibility to accelerate growth, top-line growth, cost synergies, cross-selling synergies, and ultimately, they now also drive the EBITDA growth of the acquired company. This is, in our view, a superior way to provide capital returns, and we are lining up more to come in the near future. Akkim, just one perfect example of one that soon is going into implementation mode. The big one, MBCC. You know, we like to talk about the big one as it has generated tremendous synergy across the organization. Last year, our second, let's say, full year after the closing, we generated CHF 182 million.
When you look back when we signed the deal, we had 160 - 180 for the full third year as synergy commitment, and we have raised it twice now. As you can see, at the moment, we are already above the original third year synergy level, and we have increased the synergies by 25% over the last two years. Which is a testimonial for faster integration and also higher synergy gains on the cost side, as well as on the revenue side. Now, business implementation. Looking into some key elements, and I come back to the data center, because it's not only, let's say, the roof and the floor, there are many more elements, mission-critical to data centers.
As you can see, the flooring solution, the precast, many of them are precast solution, where we are with the precast, where we are then also with the joint sealants that are very important to, to make sure that there is no interference. The concrete itself, the admixtures, the fibers, fire protection, super relevant in data centers. That's why also the roofing systems are preferring our PVC roofs over other technologies as best-in-class fire protection solutions. And as mentioned, we have a reference list of more than 4,000 completed data centers worldwide, and here a fast pace with 400 last year in execution, 230 alone in the Americas, and more to come. And you will hear more then also from, from my colleagues from the regions.
This is a clear focal point for us to also outperform the markets in general. Not to forget the infrastructure. Infrastructure, megacities are suffering of lack of infrastructures in emerging markets. As we can see here, we have here Brazil as a good example, but you find it in Santiago, you find it in Southeast Asia. Everywhere there are infrastructure construction ongoing. The same happens also in mature markets. Here, the example from Munich, from the S-Bahn station in Munich the deepest S-Bahn station in Germany, also in Auckland. You know, this is ongoing, and these are high-profile jobs, where again, you know, the reputation and the possibility of Sika to be the, let's say, one source for many solutions, make us a premier supplier to those big projects.
It's also, as I mentioned before, an area where there's constantly flowing money, as the need for infrastructure upgrade or new infrastructure is endless and growing. Another important part are, let's say, the, the infrastructure in regards to ports. We see that the globalization, as we have experienced, is questioned and more and more ports are built for more regionalized or, let's say, for a new supply chain setup. Here, a good example from Vietnam. Vietnam is one of the, let's say, countries that is benefiting from moving out of China into, let's say, a more neutral, territory. So here, a lot of construction, ongoing, and when you look also what's going to happen in the near future in regards to, the port infrastructure. Again, ports are very, very, let's say, high-end, construction.
Here we talk about exposure to seawater, exposure to heavy-duty traffic. This is, again, a field where Sika has a leading edge and is very involved in taking benefit of those momentums. One that we have talked a lot when we talked about the China expansion of the retail journey, it is still ongoing in China. We will hear that later on, but it has made its way into Southeast Asia. When you look at the chart here, where we were in 2003, we had roughly 80,000 points of sale in Southeast Asia, Asia. We had 90,000 points of sale in China when we took over Parex in 2019. China is now at 280,000 points of sale.
But I wanna talk about our journey in Southeast Asia, which is already now at somewhere around 170,000 points of sale, and we are rapidly expanding our points of sale across Southeast Asia. And as you can see, it comes with results. It comes with double-digit growth in that segment, and we expect here a good mid-teen growth also for the years ahead of us. And it is not only an Asian topic. You will hear it is also spilling over into other emerging markets in EMEA or in the Americas. But let's now have the regions give us a bit of flavor of their growth initiatives. And Christoph, if you would like to kick it off with the largest region, EMEA.
So thank you, Thomas, and good morning, everyone. So I think giving a reliable outlook for EMEA for this year is a bit like crystal ball reading in these volatile times. Nevertheless, our main first and foremost target remains: we wanna outperform our markets. We wanna do better than our competitors. This is what we measure basically every every quarter. And here I would say we don't have to hide ourself, although of course we're used to different growth rates than the 2% that you have seen. So looking into this year I would say for Europe we will see, but I don't think we will see a big big improvement.
Markets, most markets will remain challenging, although there are some pretty good positive recovery signs mainly in Eastern Europe, I must say. So we had a very strong second half last year in Eastern Europe, so a lot of money from the European Union flowing east going into infrastructure mainly. And here, I must say, I believe that we will see a continuation of this. Also for the Nordics, we expect a recovery. We see this already, and here we're very well positioned with this recent acquisitions that we've done these mortar companies in Sweden and in Denmark. I think here we have a we built here a pretty strong position also in comparison to our competitors. And also France.
I think France comes out of 2-3 years of really soft markets, kind of recession also, and we have been suffering there as well, and we see signs of recovering. We also believe that 2026 will be a, will be a better market because there's quite a backlog of residential housing. People have to live, and there is not enough, there are not enough houses and apartments there. So we will see this the French market already improving here. Germany, I must say, we've been pretty positive actually. We heard about this EUR 500 billion that the Germans want to invest into infrastructure. We haven't seen so much of this yet, so quite some delays, a lot of discussions, bureaucracy, et cetera.
We will see when this comes. We're ready. We're there. This is our second largest market after France in Europe. We will definitely see continued growth in Middle East and Africa. You've seen it from Thomas. These are double-digit growth markets, and it's, of course, a big pleasure, you know, to see how we're doing there. And I think Sika has a very strong position in these markets in all of these countries. So wherever there is investment, we're there. We're having factories, we're having strong organizations. You've seen the Maktoum Airport from on Thomas' slide. I mean, this is probably our largest purchase order we have received so far from that region, and it's just the beginning.
So overall, we remain humble. I think it's probably the best strategy these days, although we wanna do better than all the EMEA markets, for sure. But we believe in a gradual improvement over the year, with definitely a stronger second half than than the first half. Talking about growth initiatives, how we wanna do that, and this is just a selection, but I would say it's some of the the key focuses that we have. Sure, infrastructure, this continues also in Europe, I must say. There is money. Sometimes I'm, you know, I'm wondering, I think European Union flows faster into Eastern Europe than it flows into Germany and, and, and France. Bureaucracy here is not really helping, but there are incredible projects going on. Was just in touch with our Romanian friends yesterday.
A lot of road repairs, bridge repairs, and these are big businesses for us in Sika. There is investment into energy everywhere, not just in the Middle East, also in Europe. Nuclear plants that are being built, and these are all mega projects for us. Airports, you've seen, water projects, and I would like to mention here also defense. I cannot speak too loud about this, but there are EUR billions going into defense, mainly in the East, also in the Nordics. There are infrastructure projects, roads, hangars for planes being built, and here Sika is very, very well positioned, huh?
So we're selling, for example, our epoxy flooring systems into these hangars that are being built for all these fighter jets that a lot of companies are buying. And then a bit a new topic for us, residential, linked to commercial. There are several really large real estate developments happening in the EMEA region. One we have listed here on the picture, it's called Ellinikon. This is a Greek investment, actually. It's a Greek investment company on the old premises of the Athens airport. This is a EUR 8 billion investment, and Sika has already started to deliver several million EUR, and this will take a few years. It's like a bit like an espresso machine, you know? Once you're in, they continue buying from you, and it's...
We have a very strong position. We're clear number one in Greece, and full range, and we just, luckily enough, we're just investing in a new, in a, in an expansion of our plant in Athens, so we will have a lot of capacity now to go after this one project. There are other residential developments, like in Ras El-Hekma in Egypt, at the Mediterranean, actually. This is a $35 billion investment from a UAE company, and it's a city, same like this Ellinikon, you know, with houses, with offices, marinas, roads. I mean, this is just paradise, of course, for us in Sika. We have dedicated people that work only on these projects and try to penetrate these projects to the, to the maximum.
Data centers, you heard it already, several times, so right now in region EMEA alone, we are actively working on 106 data center projects. Each of them gives us sales CHF 2-3 million, some even a bit more. Sika is very well positioned here. You know, these days everybody talks about data centers. We were... I would say we were the first company in the U.S. when this data center boom really started. Now, it's coming over to Europe, even Africa, interestingly enough. They're building data centers in Morocco, for example. And here we have all these references, and of course, this helps us to make sure we participate in these projects wherever they're being built. Pharma, also independent of the economies.
There are 30 big pharma projects happening in EMEA right now, also in the Middle East, and these are always mega projects for us. And then, of course, food and beverage, also independent of economies and how they're doing. Beer companies investing. My famous fish farms, eh? Everybody's always making fun of me, but this is a lot of money here for us. A lot of fish farms being built all over Europe, actually, and each project had several million CHF of sales potential for us. And last but not least, retail, distribution. Retail actually is doing, has been doing well. Whether there is a crisis or no crisis, people are investing into their homes to cheer them up themselves, and here our strategy is to transform our professional products into, let's say, more consumer products.
I added here one really fun picture from a pilot, which we were doing, actually, a pop-up truck store. We put the truck during one week in front of a, I think, three or four do-it-yourself stores in France. Only one product. It's actually a cleaning product for your algae and moss on your terraces. You know, they get green always during winter. You buy this product and, you know, fantastic. By the way, we sell it also in Switzerland, eh? So you can clean your terrace. EUR 1 million sales in eight days. We couldn't believe it, and of course, now this has encouraged us to further scale this up and do this kind of pop-up truck stores also in other countries.
So all in all, our job is to grow and not to be, depressed or pessimistic or so. Markets are what they are. It's our job to be optimistic and to beat markets, to beat our competitors. We have it all. We have the range, we have very good people, and that's why I remain positive also for 2026. Handing over to Americas, I think.
Okay. Thank you, Christoph. Well, it's always, it's always great to follow Christoph. We get the excitement going and moving already, early in the room. So good morning. It's now my pleasure to discuss the forecast for 2026 in region Americas. So as you know, we saw a very challenging market environment across the Americas in 2025, where markets were really constrained, and this was by economic, by regulatory, and trade policy uncertainty. And we say uncertainty. I believe I heard the word uncertainty more from our customers and partners in the last 12 months than I heard in the rest of my life combined. From tariffs, right up, right down the line, we had these difficulties. This uncertainty will certainly continue in the U.S., and, I'd say to a lesser degree in Mexico, in the first half of 2026....
While Canada and the rest of Latin America will be slightly more positive to start the year. You know, we've seen excellent growth really throughout Latin America, with the exception of Mexico, and Canada was very strong in 2025, and really starting the year incredibly strong in 2026, also led by some really nice infrastructure projects, and continuing to expand their market position in trade. We expect the U.S. market and Mexico to also improve in the second half of the year as our backlog of projects start to get released. Now, our markets in 2025 and now again in 2026 are largely driven by our continued success in mega projects.
Now, when we say mega projects, we classify these projects as those projects with a value exceeding $1 billion. So while we saw quite a soft demand overall in our baseline business, really throughout the region, these projects continue strongly and allow us to continue growth. So we've really. You know, Thomas mentioned, "Go where the money is," so we saw very, very quickly that our baseline business was not delivering as it should. Now we continued to gain market share, we didn't lose any customers, and we actually sold effectively there. But to really continue that growth platform, we needed new, new outlets, and these mega project offered that opportunity.
So, in fact, in the U.S., mega projects increased by more than 45% from 2024- 2025, and this project velocity is actually increasing now, and it's showing in our project backlogs for 2026. It is everything from onshoring, commercial and industrial production, and we see this a lot in the U.S. and in Mexico, to massive infrastructure projects going on throughout the region. And, we saw this also in Latin America, where previously, you know, there was not a lot of infrastructure development. When we see some geopolitical changes happening in many of countries in Latin America, we start to see this shift, where more and more money flows now into private construction, but also into infrastructure development within these countries.
And this really allows us to get into these big projects and continue a nice, nice growth story. So, you see here some really, excellent projects we were able to deliver in 2025, and these projects will continue to deliver growth in these segments in 2026. So, we see the data centers, and like, the others, I can tell you, I also really love data centers. I love everything about them. And they were really one of the things that, the key drivers to sustain the business, 'cause, and I would say the overall construction industry in the Americas in 2025. I expect that to continue strongly in 2026. So, we all know these data center investments, and it will continue to be a key construction sector driver.
So across the Americas, we delivered, I think as you heard already, 230 new data centers in 2025. So this fantastic order velocity is actually increasing into 2026. So we started the year going full out in our data center investment with new innovations. You know, Thomas showed a bit of the innovation that we do here. It allows us to bring more value to each and every project. So while these are already mega projects, our dollar take per project continues to increase each year.
As we bring new innovative solutions, it, you know, it's all about speed, it's all about technology, and, if there's a good solution, they're very open to, to these innovative solutions that then allow us to, to increase, the sales and bring value to the project. So in the middle here, you see the Jacksonville Jaguars Stadium, which is currently undergoing this, this massive refurbishment. This will take this to a, a really a world-class venue. There's a bit of a competition, in, in many of these countries, we see it in the U.S., we see it in Mexico, that every stadium has to be a bit better than the last one, and they're always pushing for that customer experience.
So, and now we see with our innovative solutions for every application, from from concrete flooring and roofing to engineered joints and sealants. In the past, we would've really celebrated winning a $1 million , $1 million type of stadium project, and we'd get very excited about that. Nowadays, with this full line of innovative solutions across the buying sector within these segments, and again, we have special teams dedicated to the specification of these projects, even some custom solutions for engineered joints. With these new innovations, we're allowed to take these same projects that we used to get a million dollars, and now we exceed $10 million plus. So, the dollar take per stadium really takes off, and our vertical market approach unlocks these opportunities for growth.
You know, we get in early, we specify, and then we work on the job site with the contractors, and there's always, you know, custom adaptations while you're on the site that allows us to, again, draw more revenue there. And this goes, you know, we always talk about the big ones, Jacksonville Jaguars, Buffalo Bills, the Raiders, as Estadio Azteca in Mexico, so there's always been, and then many in Brazil, but there's many of these big stadiums. But it's not just the pro stadiums we're looking at, it's the professional stadiums right down to the local sports arenas, and all of these need solutions. And when you really get into this stadium sector, you'd be surprised by how many stadiums are around the world. Then we talked about here at the bottom, you see the infrastructure.
You know, our infrastructure business really continues to bring growth everywhere across the Americas. And again, we see this more and more shift as infrastructure development becomes a key priority, particularly in Latin America, but also now in the U.S. and in Canada. As funding projects continue throughout 2026, you know, we see this nice development of the funding in many of these countries, so we expect a very robust infrastructure business in 2026 as well. Here in this picture, you see the TBM Tunnel project in Santiago, Chile. This is three separate metro lines running under the city, where we have a full array of products on these projects. We also have additional metro lines running in Lima, Peru.
We have one in Bogotá, Colombia, and São Paulo, Brazil, and a huge project now in Toronto. So you know, these big metros deliver huge sales, and they go on for years. So once you're in these big projects, you know, you have a long-term supply of your portfolio into these projects, but also it continues to generate more and more business. 'Cause when you're on-site with the contractors, there's always new opportunities for innovation. And then finally, our automotive team, we secured a record volume of new business awards. This ensures really a continued increase of our market penetration and innovation launches. So to really capture the additional content per vehicle. So you know what?
While the market is really sluggish, the build rates are sluggish in the market, as long as we continue to capture more content per vehicle, and find ways to enter these platforms, we can continue a nice market there. The soft vehicle production environment really overshadows a bit the robust opportunity pipeline, as OEMs reset their propulsion system strategies, leading to a long-term growth effect. So, while we'll continue to win new business and increase our market share across the region, even as the baseline business will be constrained by continuing uncertainty in the first half, we're really looking forward to a renewed vigor in the market in the second half.
I am confident that our outstanding Americas team is ready for the challenge and already running full speed into year 2026. Okay, so that's for the Americas. I'll turn it over to my friend, Philippe.
All right. Okay, thanks, Mike. So back to, well, now to Asia Pacific. If you look at Asia Pacific, we see very two different trends. On the one hand side, we see China. China is still depressed. The construction industry is decreasing compared to previous years. This is mainly driven by a weakened residential sector. We see here continued decrease in house prices and, you know, consumer confidence suffering from that point of view. We don't see any short-term trend reversal. There has to be kind of people saving less and investing in residential again, for us to see this trend reverse. On the positive side, we see some investments in infrastructure. We saw the launch of the 15th five-year plan by the Chinese government. Looking at, for example, urban renewal was one of the pillars that they want to invest in this.
It means that all the infrastructure that was built in the past years is up for refurbishment. It's investments in transportation and refurbishment of bridges and tunnels. It's also wastewater treatment and water infrastructure was specifically heightened there. So upside on the infrastructure side, but, but, you know, still looking at a depressed residential market. Then this is countered by a very dynamic market in India and Southeast Asia. We had a very strong year in 2025 in those markets and see here continued opportunities for us to grow. One of the opportunities was already mentioned by Thomas, also by Christoph, is that there is the distribution retail market. Here we had 170,000 points of sale that we were supplying the end of last year, 50,000 of which were opened alone last year.
This is a very accelerating area for us, using IT systems to track those point of sales, using IT systems to be in touch with more than seven million end users via WhatsApp or WeChat in China, to see their buying patterns, to see how we can activate them buying products from us. This is a continuing trend that we will push in this year, also in the coming years, also entering new markets such as Bangladesh or places like that, to profit from the know-how that we've learned, first in China and then in Southeast Asia. The other area of growth opportunities for us is industrial construction. We see many companies de-risking their supply chains, building factories in Southeast Asia. It is manufacturing factories.
This also then leads to port infrastructure, like Thomas showed in his slide, but also food and beverage, data centers, of course. Here, the legwork done by our US colleagues, where many of the Googles of this world they open and build new data centers, and specifically in Malaysia, Thailand, where we were able to supply our products as well into those projects. Large transportation infrastructure, if you look at the mega cities, of the 20 largest cities in the world, 15 are in Asia Pacific. This means, you know, congestions. If you're driven through Mumbai or other places, you spend a lot of time stuck in traffic. So these cities are investing in bridges, in tunnels, in subway systems, in water infrastructure, wastewater treatment plants, to cope with the growing city around them.
And this is happening in India, it's happening in Southeast Asia, in China, and many of those places. So we see a lot of airports, tunnels, subway systems being built in cities like that. The growing infrastructure refurbishment trend, I mentioned already in China, is an area where we can profit from, as this infrastructure has been built 20 years ago. And we see in the long term, or in the medium term even, the share of new build versus refurbishment projects going towards the area of refurbishment, where traditionally Sika has more products to sell than in a new construction of a bridge. Then the other point I'd like to highlight is the automotive and industry part....
Here the focus on Asian OEMs, whether Chinese, we mentioned opening of the new factory or the domestication of some of the production in our Suzhou factory, but also Korean and Japanese OEMs. Here we also see the highest growth rates were in Southeast Asia and India. This is then local OEMs, like VinFast, for example, in Vietnam, but also Chinese and Japanese producers opening their factories in those markets, and us being able to have the experience with them in their home market, being in the pole position to supply the products also in these new factories that these companies are building in those markets.
So with that, positive outlook for Asia Pacific, with the asterisks that, a big question mark still of how the residential market in China will evaluate, but we have quite some confidence that at some point, this trend will revert. Don't ask me for a specific date, because I won't be able to give you that at this point in time. But, nevertheless, and now back to Thomas or Adrian, sorry. Thank you.
I'll go first. Well, thanks to my colleagues here, and also a warm welcome to everybody here in the room and the ones following online. I will now deep-dive a bit deeper into the financial result, and I would say we have delivered quite a respectable set of numbers against, you know, near-term cyclical headwinds, as we have seen. The result demonstrates here a consistently high cash generation, and also how Sika is well progressed in executing its efficiency program as part of Fast Forward. Here are, again, some of the highlights, CHF 11.2 billion in sales, 0.6% growth in local currency, a decline in CHF, -4.8%, on quite adverse foreign exchange effects.
A further strong expansion of the material margin to 54.9%, up 50 basis points. An EBITDA of CHF 2.065 billion, or 18.4% on a reported basis, impacted by a Fast Forward one-time cost and some operational deleverage caused by revenue weakness, particularly in the second half, and particularly in China. Excluding Fast Forward cost of CHF 86 million, EBITDA was CHF 2.15 billion, and the margin 19.2%, only slightly below the previous year at 19.3%. Reported EBIT CHF 1.49 billion, 13.3% of net sales. Also here, impact of Fast Forward, including here some impairment charges and CHF 108 million included.
As well as net profit, CHF 1.045 billion, 9.3% of net sales, also here, impacted by, by Fast Forward. Very positively, a continued strong cash generation, with an operating free cash flow of CHF 1.36 billion or 12.1%. Actually, a slight, increase here in the strong, net sales, ratio that we already had in, 2024. Fast Forward cost measures, well on track, with related one-time costs all recognized in 2025. Our Fast Forward program delivers a strong return on investment with, cash payback costs of less than two years, and is expected to, already generate CHF 80 million of benefits in 2025.
And then lastly, here on the dividend side, the board of directors again proposes an attractive dividend with an increase of 2.8% to CHF 3.70 per share. Let me now talk about some of the individual elements in a bit more detail, starting again on the top line. Local currency growth of 0.6% breaks down into 1 percentage point of acquisition growth, while organic growth was slightly negative on group level, minus 0.4% for the year related to soft markets, mentioned, particularly China and particularly Q4. Acquisition growth was mostly related to the six transactions we completed in 2025 and contributed this 1%.
Foreign exchange impacts, as mentioned, significantly negative, -5.4%, or a translation of more than CHF 600 million to a reported year growth of -4.8% in Swiss francs. Quickly on the regions, Thomas talked about it. If we look at sales growth in region, in EMEA and Americas, quite solid, 2.2% sales growth across both region, also with organic growth in both regions, while the U.S. saw a negative trend in the second half of 2025, which was also, you know, partially attributable to a lengthy government shutdown. Negative growth in Asia Pacific was driven by a significant decline in the China construction business.
Without here China, construction growth rate would have been at quite a similar level of the two other regions. And also, notably here, foreign exchange impact the most negative in the Americas, driven obviously by the weak US dollar. Now, the development in China and the construction business, which actually declined by 18%, also had an impact on overall group. If you exclude here China again, on group level, we would have actually grown organically 1.2% versus the 0.4% on group level and reported. Now, turning to the P&L and moving down here from the sales line in full year 2025.
As mentioned, we have delivered an expansion of the material margin, with gross result expanding by 40 base points to 54.9%. Overall positive cost price spread was driven by our focus on delivering innovative value-add solutions and also modestly falling input costs, here helped by our structural procurement initiatives. The deflationary environment in China was compensated by a positive price contribution elsewhere. The dilution effect of M&A was actually minute, less than 10 base points. Reported operating costs, this includes personnel costs as well as other operating expenses, fell by 1.4%. Within these costs, Sika recognized CHF 68 million of Fast Forward one-time costs. Normalizing for this operating cost decrease was minus 3%.
Continued solid MBCC-related synergies, as well as efficiency measures, were offset by underlying cost inflation and some operating deleverage, particularly in Q4. On the personnel cost specifically, which increased by 1.7%, the impact of Fast Forward-related severance cost was CHF 57 million. Without those one-time costs, personnel costs would have decreased by 1%. Synergies, as well as operational efficiency measures, were not quite sufficient to negate underlying wage inflation of close to 3.5% across the group. Q4 in particular saw higher health benefit and pension cost, as well as negative accrual phasing impact versus previous year. Underlying organic net personnel cost increase was 1.7% on a local currency basis.
Other operating expenses decreased strongly by 4.6%, excluding Fast Forward one-time cost of CHF 11 million. Cost decline was actually faster than the rate of revenue decline at -5.2%. Operational efficiency initiatives and synergy delivery were the driver, while Q4 comparison was negatively affected by an insurance payment, and also some R&D credits in previous year Q4. As a result, reported EBITDA decreased by 9% to CHF 2,065 million, or diminished 18.4%. Again, normalizing for Fast Forward, 19.2%.
In looking here at the EBITDA bridge in 2025, starting on the left-hand side with 2024, 19.3 ratio, we delivered an organic material margin improvement of 50 basis points, driven by new product innovation, as well as structural cost efficiencies. M&A synergies coming from MBCC contributed 40 basis points. We saw the overall comparison number in terms of synergies compared to prior acquisition. The incremental contribution in 2025 was CHF 57 million, and in total, as Thomas mentioned, already exceeded original guidance of overall synergies. On the other hand, foreign exchange, including some hyperinflation effects, as well as the impact from a negative fixed cost leverage, reduced margins by 20 and 70 basis points, respectively.
The aforementioned Fast Forward cost had a negative impact of 70 basis points to arrive at the reported EBITDA figure. Now, if we look at the bridge here and exclude China, overall, the underlying EBITDA margin would have increased to 19.7%, so a clear improvement material margin by 70 basis points, while the negative leverage reduces here to -40 from -70. But it is, however, important also to highlight that the China construction business remains a profitable business with clearly double-digit EBITDA percentage numbers. Turning back to the P&L, looking at depreciation and amortization expense, which grew by 2.9% or CHF 60 million. Also here we have-...
Fast Forward impact of roughly CHF 22 million and slightly higher intangible amortization relating to bolt-on acquisitions. But organically, depreciation and amortization expense grew largely in line with sales. This is also the expectation going forward for 2026. As a result, EBIT was impacted here over proportionally with a decrease of -12.9%. Excluding Fast Forward, it was CHF 1.601 billion. If we look below EBIT, net interest and financial expense, this decreased by CHF 13 million compared to the same period last year. The decrease is largely related to lower debt and also the scheduled replacement of a Eurobond with Swiss bond. Financing also here, expectation going forward for interest cost to continue to slightly decrease.
A word to the group tax rate here, an increase to 22.9%. Previous year had a favorable one-time effect on the deferred tax position relating to a legal restructuring. Going forward, we also expect about a 23% tax rate overall. Quickly turning to the balance sheet, which reduced in size in 2025. This was driven mainly by two factors. Firstly, the continued appreciation of the Swiss franc, particularly versus the U.S. dollar, with approximately CHF 900 million of translation impact. Secondly, and in spite of a higher cash position here, lower current assets, particularly related to disciplined working capital management, balance sheet total fell by 5.2%.
The decrease in intangible assets is strongly attributable to foreign exchange as well, and shifts within the liabilities is largely related to financing and def financing activities, where we repaid, you know, a bond tranche and refinanced twice during 2025 with multiple tranches in the market. Shareholder equity reduced by 5.4%. Also here, translation driven, whereas the equity ratio remained at 44%. ROCE, impacted here by Fast Forward cost as well as currency-related EBIT impact, decreased to 12.3%. Now, turning to cash flow, quite a strong development.
As mentioned, CHF 1.36 billion, with a strong second half performance, given our focus here, particularly on working capital management, 100% conversion of our profit before tax into cash. Main contributors mentioned, net working capital management, and providing roughly CHF 70 million of cash versus a consumption of CHF 160 million last year, modestly higher, you know, CapEx and slightly higher cash taxes accounted for the difference. And in looking at the ratio again, a small increase on already a sizable level to 12.1%. On the leverage, while net debt reduced by CHF 300 million, 2025 net debt EBITDA leverage increased slightly.
If you exclude Fast Forward at the same ratio of last year. We have a strong investment grade rating and expect another, you know, strong free cash flow performance in 2026. This strong cash generation also affords us with some optionality as part of our capital allocation policy, which is focused on high long-term value creation for our shareholders. First priority is supporting organic growth and drive profitability through high return investment, but also, you know, highly value accretive bolt-on acquisitions, where we can demonstrate superior returns through cost synergies and revenue and cash acceleration. We have here a very well-proven playbook to deliver synergies.
We will continue to reward our shareholders with a progressive dividend policy, as you have seen, which allows for efficient capital management and steady increasing returns to shareholders. And we will consider share buybacks opportunistically where we have excess cash flow available after other uses, which also includes, you know, further deleveraging. The focus is simple: create the most value possible from these cash flows, and therefore, we will always weigh which route can deliver the greatest return to our shareholders. Briefly, again, on the dividend, as proposed, a dividend increase of 10 Rappen proposed by our board of directors, an increase of 2.8%.
50% of the proposed payout will come out of retained earnings, 50%, out of capital contribution reserves. Then lastly, before we turn to the broader outlook for 2026, a brief recap here of Fast Forward, which is a very strong return on investment and payback of less than two years and is well on the way. It will drive a leaner cost structure with benefits of CHF 80-110 million by 2028 coming from this activity, for which a one-time cost of CHF 108 million, including CHF 86 million within EBITDA, have all been recognized in 2025.
And the investment in accelerated rollout of digital platforms, technology, AI, and particularly also leveraging our global data pool, will accelerate innovation growth and enhance customer value. Investments will amount to CHF 120 million-CHF 150 million over the next three years and drive benefits of CHF 70 million-CHF 90 million. In combination, this is a CHF 150 million-CHF 200 million annual benefit by 2028, whereof about CHF 80 million are expected to materialize in 2026 already. With this, we'll come to the outlook for 2026. Handing back to Thomas. Thank you.
Good. Thank you, Adrian, and brief one slide, outlook for 2026. Talked a lot about all the efforts we have put in place. We are confident that we can deliver on the outperformance of the markets to 3%-6%. We have gauged this with the market condition, as we call them, muted still in the first half of the year, for sure. That leaves a local currency growth of 1%-4%. At the same time, increasing our EBITDA margin into the range of 19.5%-20%. This is our commitment, our confidence for 2026. At the same time, we reconfirm our strategic target of the Strategy 2028 for sustainable, profitable growth for the company.
And with that, we would now open the Q&A, and I hand over to Dominik, so that also our virtual participants have a chance to be lined up for questions.
Thank you, Thomas. And probably questions. Are there any questions? Alessandro Foletti, probably if you wanna start here, right in front.
Yes. Hello? Hello, yes. Thank you for taking my question. I would like to dive a little bit deeper, if you want, in the market outlook for this year. Your 1%-4% guidance implies a decline of the market. You mentioned that also in your press release. So would it be possible to go a little bit more in detail along the lines of what you have shown on your slide 23, where you showed 20% of the business is residential, 30% infrastructure, 35% commercial, 15% automotive? Maybe-
Mm-hmm.
What do you see in those four segments by geography, if possible?
Yeah. But I think it's a good segue by looking at the four segments. And if I start on the residential side, residential is, let's say, globally challenged, but the biggest impact still will be seen in the rebasing of our residential business in China. So you have heard it also from Christoph, and also to some part from Mike. The residential business is, let's say, in other parts outside of China, also, let's say, not booming, but it is kind of also leveling. Eventually, even showing signs to come back, like in France, when we look at the permit level, it seems that there is some movement, but nothing exciting. So the residential, out of the four segments, certainly the one especially also impacted by China being the most challenged.
When you go over to the infrastructure, I think here there is a good momentum. This is high in demand. They are big projects. There's a lot of renovation. Money is still flowing. Now, independent of the German complexity and release of money, I think here it's a fair bet that this segment will provide local currency grows above the others, probably even organic positive growth as there are a lot of activities in this segment. Similar to the automotive and industry sector, the industry is not really booming. I think we have to expect that those are the China production build rates will reduce.
Heavy incentives have been running out on the e-mobility, but when we look at the total markets, we expect probably slight declines in Europe and in North America when it comes to build rates. But the very strong new booked sales and the incremental activity, as I mentioned also in China, makes us confident that this segment will also, similar to infrastructure, contribute. On the commercial section here, I mean, we have the big outlier, that's the data center. That's a key contributor that is offsetting many other segments of the commercial construction, but not all of them. There, it's probably to say this is somewhere in between the residential and the other two segments.
In this regard, we see still some hesitation to put down big investments, still driven by uncertainties on where to place factory. The money, the projects, as I always mentioned, you know, is actually available. The projects are ready, but I think we still haven't yet enough clarity on how the new supply chain setup will look like, given the changes that occur currently. So this is probably the area where we have some mixed impact.
Just one follow-up, just one follow-up, then I pass on the mic. On China, you mentioned, I think in the slide, that the market was down 45%, and then I think, Adrian, you said you were down 18%. Is-
Yep.
Is that correct?
Yeah, 45% is just indicate... in, within two years, you know?
Ah.
Like we talk here about the new build, the new consumed, you know, the not the empty apartment. We talk about the apartment space that has been occupied by new owners that has reduced by 45%, with an acceleration in the second or in 2025. So in 2025, on itself, it's roughly 20-25% decline, and-
Of the relevant-
Yep
... residential market in China?
Yeah.
Mm, only residential?
Yes.
You were down 18?
Yes.
Of this 18, how much is self-induced by reducing prices and reducing point of sales, et cetera?
Yeah, we rebased our business, focusing on margin protection, on quality, and that is part of the 18% decline.
Thank you. Next question goes just to the neighbor here, Yannik Ryf from ZKB.
Thank you for taking the question. The first question is about data centers. You mentioned it a couple of times in your slides. I mean, how large is your exposure right now there? How much of total revenue? What do you think, how large it can get? So that is the first question. And the second question is more towards capital allocation. I mean, under which circumstances would you consider a share buyback? I mean, if you look today at your share price, do you think you will generate higher returns with those bolt-on acquisition than doing a share buyback?
Okay, I take the first question. As data center contribution to the group is quite significant. It has increased from a low single digit to a mid-single digit contribution. In the Americas, it's even reaching almost a double digit contribution. It is a momentum that we want to take advantage of, as we see that this booming data center will probably last another couple of years, and will probably then also be followed by a boom for energy infrastructure, which is foreseeable as a follow-up to this massive capacity that is built globally. That's the consumed energy needs to be kind of available and deployed close to those data centers.
I guess on the here, the capital allocation and the share buyback, specifically, I mean, I sort of laid out here the elements and also the priority. And if you do look and we look at this really from a return perspective on the bolt-ons, we can clearly demonstrate here that strong returns actually superior here, even at this level. But this is a, this is a constant, you know, revaluation we do, because at the end of the day, it is driven by sort of the most effective use of capital.
There is a question from Remo Rosenau, Deutsche bank.
Thank you. On your guidance of 1%-4% growth in local currencies, which includes acquisitions, and the acquisition contribution will most likely be higher this year than last year. You made two quite relatively larger deals in January, and one is not closed yet, but still it's almost CHF 300 million. You have spillovers from last year's seven acquisitions, so the acquisition effect could well be around 3% in 2026. So this 1%-4% then translating to an organic growth of -2% -+ 1%, which seems not very high.
Maybe here quickly on the sort of the M&A contribution, here, and you mentioned the transactions, I mean, the one in Turkey is unlikely to close before the third quarter. So I would say sort of currently, in that sense, in the bag, if you assume closing at that point is roughly 1.5%. There is not that much spillover, but of course, that is the element we have, you know, currently ongoing.
Okay. So in your calculations, you have 1.5? Okay, fair enough.
Yeah.
Then the impairments, I think CHF 21.8 million was in the fourth quarter due to Fast Forward. In the full year, it was almost CHF 30 million, however. It's not a big number-
Yeah.
But what is the difference then?
It's just not related to the program. That is the only difference. It's smaller machinery impairments in other places.
Okay. And then on this peer comparison you did in order to demonstrate that you are doing better than your peers, do you have a list which peers you have taken there? Because it was not in the presentation.
We do. We do have the list. It's just the list that is in the annual report. These are the Obermatt peers, and out of those, roughly 25, we selected the ones that are closest to our business. It's roughly 10 out of them are in our peer comparison. It is also important that we have, let's say, reported figures that are related to our business. This is a selection of 10.
Okay. And the bigger group-
And always the same.
... is available in the annual report.
This is, I mean, this is part of the total list, yes.
Okay.
Yeah.
Good. Thank you.
Mm-hmm.
Thank you very much. Next question goes back here on this side again, to Patrick Rafaisz from UBS.
Thank you. Two or three questions. The first one would be on the guidance, right? You already described that H1 will be challenging, then hopefully a more dynamic H2. Just wondering, how would you define then the organic outlook for H1 and Q1? I'm trying to understand how much catch-up you need in the second half to get to the range.
No, it's a fair point. I mean, we expect that, given also the elements from the prior year, where we had a strong start in the Americas, especially in the US, where we had also, let's say, the rebasing in China not yet taken place. So our assumption is that we are going to see organic negative growth in the first half, more pronounced probably in Q1 than in Q2. But that's then going to turn into positive in Q3 and Q4, given also the comp base will be different, quite different in the second half.
Thank you. That's, that's very helpful. And then, also on the guidance and targets, I think, sensible move to abandon the 20% that was originally formulated, right? By putting it into a range. But, but still, right, if, if we, if we maintain the midterm plan with the 20%-23%, is this just pushed out by one year? Because I remember in November, we discussed that the Fast Forward program was being implemented in order to safeguard the 20%, right? In the absence of operating leverage. So it... But probably negative leverage was worse, China on top, right, the deteriorated. But yeah, can you update us on the timeline for the 20%?
I think you got it. You know, I mean, in Q4, with the events in Q4, we had a more pronounced negative leverage than anticipated, which we also have to consider, since the market has fundamentally not turned over New Year, so that we are here also safely advised to consider still, let's say, some negative operating leverage. Even so, we have, I think, means in the pocket that are able to offset some of that, but not all of that. That's why we also look at the range from 19.5%-20% as being a range that is incorporating still some negative leverage, which would, if you go to the upper side of the guidance, of course, reduce and bring us close to the 20%.
Looking further out, I think this momentum of generating synergies across the organization, structural savings will continue, and we also expect that this negative leverage that we still anticipate for 2026 will also reduce or even turn into a positive in the years to come. So the likelihood, you know, our commitment to the range in the midterm is strong.
... the way I read this is that you remain committed to 28, but you wouldn't say today already that 27 will be a 20 for sure?
No, it is too early. I can't say what the markets are going to do. I think we have learned the lessons, you know, lately announcements about what happens in the Middle East, you know? This is just another year where a lot of confusion comes around, and I can't say how 2027 will turn out. Indications I get from my visit to China is that probably 2027 could be a turning point in the residential market in China. Could, you know. I think also when I look at all the activity that are lined up, there could be a tremendous uptick. We see this as a cycle, a short-term cycle, but how long this cycle lasts is really something we have to be cautious in making year predictions and statements.
Our outperformance of the market, that's to me, the substantial element that we need to focus on, and then be a bit more hesitant in making our guidance for the global economic evolution.
Thanks. A very quick one, on the one-offs. Maybe I missed it in the annual report, but did you provide the distribution across the regions or the segments of the CHF 86 million?
Yeah. We didn't provide the details here in the annual report. In terms of the one-off, it's roughly CHF 30 million each in EMEA and the Americas, CHF 15 million-CHF 20 million in Asia Pacific, and on corporate level, between CHF 5 million and CHF 10 million.
Okay.
Thank you very much.
Thank you, Patrick. Then, let's move to the virtual attendance. We have here Ben Rada Martin from Goldman Sachs, who will basically start with the first question.
Hi, good morning. Thanks very much for the questions this morning, Thomas and Adrian and Dominik. My first was just on APAC margins. You know, the margin of the region dropped from 21% in 2024 to 18% in 2025. I guess post the program changes, is it right to think that there's a path for that, the region to return back to 20% EBITDA margins? And my second would just be on, on working capital. Great to see some success there, in improvements in 2025, back down to 18% of sales. Is there scope for further improvements there, or is that the right level of, of efficiency when we think about, working capital? Thank you.
Yep. Yep, happy to, you know, take the two questions here. Yes, on the margin, there is a path. Obviously, we talked about the impact on China. Also Fast Forward, well, progressing, also refocusing here on the business, and obviously China is having an impact here, but also making progress in other markets. That's the clear ambition on Asia Pacific margins.
On working capital, yes, I do believe there is more scope, also here, you know, structurally in terms of efficiency on, let's say, the warehousing, the supply chain side, the continued focus here on receivable, you know, collection and management, but also structurally working on the payables, I would say is sort of a, you know, stepwise further improvement is clearly targeted.
Great. Thank you.
Perfect. And the next one, the next question goes to Arnaud Lehmann from Bank of America.
Hello, I hope you can hear me. It's Arnaud here.
Yes.
I have three questions, if I may. Firstly on China, it peaked at 11% of sales. I think it's gonna be about 9% of sales now. Do you have a level after restructuring, how it could look like in terms of contribution? Is it gonna be 5-6% of sales once you conclude your restructuring and considering the ongoing pressure in the market? That's my first question. My second question is on the price-cost outlook. We're seeing some raw materials related to oil and after recovering this year. Are you planning some price increases to offset that? And lastly, you highlighted adhesives as a particular area of interest. Obviously, you've announced the Akkim acquisition.
Do you plan to do more acquisitions in the adhesive space? Thank you very much.
Okay. Thank you, Arnaud. I take the first and the third question, and talking about China, of course, naturally, we've actually taken our roughly 10%, 11% contribution from China. Short term will be reduced to 9%, 8%. Please also consider that in China, we have the growing automotive industry business helping to offset. So I don't anticipate a decline further down, but it will be a high single-digit contribution, and once also then the residential market is returning to growth, probably still be somewhere at the same level as before. So here, the China contribution is, for us, very relevant. Our China business in China is healthy, is profitable, and it is also the base for us to expand with the Chinese players outside of China.
Here, not only the automotive manufacturer that are building factories around the globe, but also the Chinese main contractor that go abroad and that become main contractor on large projects in Southeast Asia, Middle East, Africa. Just as an implication, this Abu Dhabi airport is in the hands of a Chinese main contractor, and you need access to the main contractor, and if you are not with them in China, you are at a strategic disadvantage, as you don't have the relation to the decision makers. Of course, you need a local presence in UAE to capture on those.
But so the China, let's say, aspect is for us of long-term strategic relevance to have a, a good representation and of course also grow with the Chinese player as they take more share of the global economy going forward. Similar to what we have seen in the 1990s, 1980s, the Japanese, the Koreans. This is just following the nature of the most competitive players in the market. And then your last question,
Sealing and bonding acquisitions.
Sealing and bonding acquisition, yes. I mean, this, of course, we like the adhesive segment, and we highlighted it, but it is one aspect of many that we consider. And as I outlined, our selection process for the prospects and then ultimately advancing has many more aspects in there. And if we have a choice, then we certainly provide preferences. But in these regards, this has been a fantastic prospect that is now coming to realization. No, it is not the signal that the next five transactions will be in adhesives and sealants. We look where we do have the best return, where we have the best opportunities to make those bolt-ons accretive and value-enhancing, and therefore, we don't exclude any of our technologies nor any of the target markets.
Maybe then on the question as to price cost spread. I mean, on the input cost here, I mean, you mentioned oil price, but of course, it's also quite volatile. Typically, our base case is rather flat-ish development, but particularly also given geopolitical events, you know, can have an impact here, also in regards to let's say, capacity and utilization. But you know, broadly speaking, at least for the next few months, that would be our expectation. As to pricing, we will continue to value sell. We will of course also continue here to manage input cost increases.
In China, we have seen quite a deflationary environment in 2025. It's probably going to stay a bit longer, not the same magnitude, but expecting here some price impact in other parts of the world. So slightly positive, all in all, for 2026.
Thank you very much. Very clear.
Okay, two more questions from virtual attendance. This is Pujarini Ghosh . First one from Bernstein, and then we come back and have a final round of questions here for the room.
Hi, thank you for taking my question. So I have a few. So could you provide an update on your Fast Forward program? How has it been progressing in the first few months? So basically in terms of the headcount reduction, the capacity optimization in China, and then also, how are you progressing on the digital investments, you know, and the benefits that we were expecting for 2026? So my second question is on the margin guidance, and could you, you know, potentially talk through the puts and takes from go, for going from the 18.4% margin in 2025 to the guidance of 19.5%-20% in 2026? And my last question is on the material margin.
So you've always, you know, maintained it in a very close range of 54%-55%, but it has been steadily increasing. So how should we think about, you know, the progress in future? Thank you.
Okay. Thank you. The first question, the Fast Forward question, of course, this is a program that is not over in a couple of weeks. It has many elements to it. We are in the middle of the cost implementation, cost-saving implementation, especially with a strong focus on China, also in consolidating the footprint in China. This is all considered into our 25, let's say, cost accrual, the execution, also the closing and transfer of capacity is something that needs to be well managed and is taking place now in the first few months of the year. So this is progressing.
Front-loaded activities, and here again, in China, has been the fundamental, let's say, change in the approach to the market. We have implemented, a more agile, a more, granular sales approach. We have, reduced from seven layers to four layers in making sure that we capture the, the opportunities in the various provinces, cities, with smaller, sales team that are also with smart incentives, guided, away from the former, let's say, top line growth incentives that have been very successful during many years. So here, these things have been implemented. These things are active, as we speak, but the more structural elements, by the nature of it, takes, more time.
Also, outside of China, the elements where also headcount reduction have been included require time to transfer responsibility, but also to respect the legal requirements in regards to union contracts and notice period. So this is still ongoing in the first months of the year, but will then cease and be completed in Q2 of 2026.
Good. Then, specifically on your sort of margin or margin bridge question, yes, clearly in 2025, I mean, Fast Forward, the one-time cost, CHF 86 million in EBITDA did have here an impact, so the starting point will be rather at 19.2. It will also mean that we have here a structurally lower cost base, so we're expecting about 60-70 basis points of contribution. In 2026 from Fast Forward, we'll have a smaller incremental element still coming from MBCC acquisition. The synergies, 20-30 basis points.
The new bolt-ons should be sort of rather insignificant in terms of the dilution in terms of material margin, and this is a bit connected to your last question here, as I was referring to the underlying input cost development and here a slightly incremental pricing impact also here. You know, a slight potential to increase although we're sitting here, as you commented, at the upper end of sort of the broad guidance range, but this is not obviously, you know, carved in stone. And then last, we have the leverage piece, and here, this is clearly related to the top line fixed cost leverage.
If you know, we're at the lower end of the sales guidance, 1%, this will most likely mean sort of a similar type of negative leverage as in 2025, as opposed to the upper range, where clearly this would be lower and be commensurate with, you know, closer to 20% overall EBITDA.
Thank you.
Okay. Thank you very much. Let's come back. I see there is one last question that we have from virtual. This is Vitushan from Baader bank. Please come up with your question then.
Hello, everyone. Hope you hear me. Thanks for taking my question. It's clear that the U.S. [audio distortion] market, CAGR for 25, notably in the fourth quarter. However, according to what I understood, most of the projects have been postponed and not canceled. Thereby, I was wondering if you have further informations on this? I mean, this is clear, that, if the projects have been postponed, there is a big chance of, for them to, to materialize in the future. I wanted to know if you have any further, visibility on those, please. Thank you.
Okay, I think that's a fair question, and to be clear, I mean, the government shutdown hasn't put those projects at risk or changed the mind of the owners. It has delayed the implementation of the projects, and therefore, fundamentally, these projects are going into execution just with a certain delay. Because also after the shutdown, until this backlog is then reestablished, it takes a bit of time. But it's not that these activities, due to the shutdown, would have been, let's say, now canceled.
So excellent. Thank you very much. So before I give it back to Thomas, let's do a last round here in the audience, and the question goes out here, on this hand side, please. First one.
Thank you very much. I'm Tise Griffiths from Federated Hermes. I have two questions. You talked a lot about digital transformation and innovation, but there wasn't a lot of talk about how you're using AI or leveraging or seeing increased opportunities for using artificial intelligence. So could you expand on that and talk about how you see that affecting your position in innovation and digital transformation? The second question relates to the confirmed targets for sustainability, and it was great to see the performance on your Scope 1 and 2 emissions, as well as your water disposal. We've seen quite a few companies in this sector cite a lot of challenges, including high energy prices, unfavorable public policy. We've also seen just general reduction in investment.
It'd be good for you to expand on if these factors have weighed in on your reconfirmation of your sustainability targets, especially in particular to your climate targets as well. Thank you.
Mm-hmm. Good. I think we, we are going to, communicate, over the course of the year, much more on our digital transformation, as this is the investment part of the Fast Forward that makes us most excited, that is structurally changing, let's say, our competitive, ability in the market. Most, pronounced and most advanced is our, ability to work on the innovation side. We have our 16 global, technology centers, which, in the past used to make their experiments, stand alone and shared outcome, shared, fantastic innovation in forms of product, formulations.
With AI-enhanced tool, we have now the possibility to actually select every single data point of an experiment and put it into the data lake so that every, let's say, effect on experiment level can be utilized for then other experiments and shortening the development cycle. At the same time, also catching effects, which may, on the original purpose of an experiment, not have been a target, but could be a target in another prospect. So this availability that everything that in these 1,800 chemists go on when they every day make tests and verify, they have a clear target on what they want to achieve. But this system, this centralized system, is now collecting all the data that are constantly generated, and then they can be, let's say, utilized for different purposes.
For saying, "Okay, I, I need this effect. I, I, I have a substrate. I need to bond to this substrate, and where shall I start?" And this can then trigger into this massive information that is available to say, "Here have been experiments," and you can dial in, and you can shortcut massively development time and enhance also the scientists with, let's say, initial start bases, where they otherwise would start at scratch and try to compare through the traditional way in looking into products and innovation that have been established. This is very tangible. This is ramping up. We have here a very strong, let's say, innovation culture in the traditional R&D, enhanced with data scientists that are kind of pairing themselves with the, let's say, the nature scientists.
This is having great traction, and we will come back on that as this is constantly evolving. But this is one of the three major transformative elements. The others are on supply chain excellence, you know, ease of doing business, being able to bring the customer the value instantly where needed, and shortcutting traditional ways of having inventory through several steps, rather bringing it to where it is consumed, which is the construction site, at the given time, at the given slot, and allowing so also that efficiency for our customers is increasing, net working capital is decreasing. These are things on the supply chain, on the automation of our process inside and towards the customer.
And ultimately, the sales excellence, so the interaction with our customer, also having much more, let's say, outside in, inside out information to also bring more leads and, possibilities to our customer by having all this, let's say, access into the market data, and also show, the relevance, where they probably have, the best possibility together with us to win, business for them. So it is a, it's a incremental sales aspect. Instead of waiting for the customer to come to us, actually also utilizing our capabilities to bring business to the customer. And, these are elements that we are working on. This is, in the making.
It requires a strong foundation, a strong, harmonized, database, which we also have part of our investments going into establishing the lake, which then becomes for the machines and for the tools that we want to utilize, then the base. But it is fantastic. We have a market-leading position across the globe, across the technology, across all the segments. You know, we have the strongest insight data lake at hand, and we want to utilize that, and then empower that with external information, which makes it, unique, towards the market, the value we can, provide to our stakeholders. Not only contractors, but also architects, specifiers. They're still living in an ever-growing complexity world, and this is de-complexizing, the world for them.
Thank you. Then just a bit on the challenges around your sustainability targets and-
Here, I think there's a fundamental difference between us, is we are not energy heavy. We are not, let's say, upstream. We are not on the heavy side. Our own energy consumption, as you have seen, we can steer that quite nicely. Our Scope 3 challenge is a challenge that we actively address with our suppliers, as this is the input there. We have it in our hands also to extend the life of our products and therefore also improve the Scope 3, which is also, of course, the value for the customer. The longer it lasts, the better, the less renovation, the less running cost. A very strong aspect in the ROI evaluation of our customer.
And, and therefore, for us, whatever you see eventually happening at other companies that are scaling back, for us, actually, it's full steam in because it is accretive, it's performance enhancing, and it is also very relevant for our customers.
Thank you.
Okay. Last question, I'll be conscious of our time, goes to Martin Flueckiger from Kepler Cheuvreux.
Yeah. Morning, gentlemen. Thanks for taking my question. I've got three, actually. The first one is on data centers. You've been, Thomas has been raving about data center growth. And I was just wondering whether you could put your money where your mouth is and basically reveal what kind of growth you've seen in data centers in the U.S., in 2025, organically, and what kind of outlook you're foreseeing in this market for 2026? That's my first question. Then my second question is on. I guess that's for Adrian, is on the margin bridge again. Just wondering, at current spot rates, what kind of headwind from FX do you expect for 2026?
Now, you know, I'm not asking you to predict currency movements, just on current spot rates, what you're seeing there, and what kind of non-material cost inflation you think is a reasonable assumption, for this year. And then my final question is on your statement with regards to expected market decline in 2026. Just curious about how you define that market. Are you talking about global construction output growth or decline? Are you talking about construction chemicals? And, you know, if it is the latter, are you talking about the global market as such, or do you sales weight it according to your own exposures? Thank you very much.
Okay, I take the data center question. As you say, I'm excited. It is a strong contributor on the commercial segment, not only in the U.S., but across the board. It has a strong double-digit increase over the years, consistently, and we expect also in 2026 that this will double digit grow on that side. That's in particular on the roofing side, on the flooring side, waterproofing side, sealant side, all these aspects play here also. This is one of the, let's say, growth engines of our U.S. business. It's very significant, therefore, it's also creeping up in relevance of the total share of our U.S. business.
On your crystal ball question, here in terms of exchange rates, of course, and you said it, it's difficult to predict, but let's say at current prevailing rates, we're basically looking at sort of around 3%-4% negative foreign exchange impact as a best guess. But of course, this is quite volatile. In terms of overall inflation, the overall expectation would be to, you know, come down to, let's say, below the 3%. Obviously, on the wage side, we had a bit more than three still in 2025, but here I would assume there is going to be rather a bit of a reduction.
So probably around 2.5% in terms of, overall, overall inflation. On, let's say, your market question, it is, here, obviously, we are operating in many different markets, in many different segments. It is, what we would consider sort of our addressable market, not specifically, sales weighted, although there is a, a China, you know, element, in, and it's, really looking at sort of the, the most, relevant, indicators, which may also vary sort of across, here, the, the business. So it's a, it's an estimation, overall, which, we're, we're seeing here, and which this number is based on.
Okay, thanks. But just to clarify, my question regarding FX and non-material cost inflation headwinds were not related to, you know, impact on sales growth. I was just wondering, based on the chart that you've shown in your presentation for the EBITDA bridge, you know, whether you could put those bps down to those two drivers?
Yeah
... roughly?
Here we, I will show it's, it's roughly sort of a 20 basis points of additional impact. It was more on the OpEx side, actually, not so much on the raw material. With the expectation of FX to be not quite as severe, I would also see here that this is rather smaller, if any. I mean, we have overall quite a strong natural hedge in terms of, you know, cost base being where we sell. So, from an effect on top of translation, I would rather see this as a minor impact for 2026.
Okay. Thank you very much for all of your questions, and with this, I'm heading back to Thomas for a final remark.
Good. Thank you very much. I hope, you enjoyed the last 2.5 hours, and the insights that, we provided, the granularity and the question answered. We are very confident about 2026. We don't wanna talk so much about the markets as we cannot influence. We can influence many things, but not the market and not the ethics. We took decisive actions last year to, enable us to outperform the markets also going forward. Significantly, our peers, we like, the comparison. We are competitive, but we also see that, our organization is moving ahead and, gaining market share as a, as a key element.
Also, the name of the game in 2026, driven by innovation, driven by increment and value for our customers, for the stakeholders, taking pain out of their, let's say, daily life, that's where we are best in, and at the same time making sure that we are also benefiting and also our shareholders are benefiting by increased margins, as we grow our business in the market. With that, I close our session here, but I would like to invite and for all those that are here present and to join us for a quick small lunch, and we can continue to chat. And for those that are virtual, I thank you for participating, and I wish you a nice weekend, and see you sometime, somewhere in the near future. Thank you.