Good afternoon, everyone. Thank you for joining today's conference call. This morning we published our H1 2026 results. Joining with me today is our CFO, Burim Maraj, and our Investor Relationship Manager, Thomas Balmer. Together, we will walk you through the key highlights of the period before opening the call for questions. Let me briefly walk you through the agenda today. I will begin with an overview of the first half, followed by an update on our strategic progress. Burim will then discuss the financial results in more detail. I will conclude with our outlook, and then we will be happy to take your questions. Let me highlight a few key achievements from the first half. We delivered strong growth and improved all key financial metrics compared to the previous year. Order intake increased by 16.3% to CHF 247.6 million.
Market momentum improved, particularly in the U.S., while demand in Europe remained solid. Our sales teams did an excellent job in winning several large and complex projects. In addition, we successfully converted a number of engineering contracts into orders for complete systems. As a result, our order backlog increased by 27.8% to CHF 442 million. The backlog includes several major projects extending into 2028 and provides good visibility for the coming years. Net sales grew by 22.2% to CHF 165.5 million, or 24% at constant currencies. Growth was supported by both our existing businesses and acquisitions completed last year. Profitability improved significantly. Project execution was stronger than in the prior year. The contribution from Services & Consumables increased, and our efficiency measures delivered first results.
As a result, EBITDA increased to CHF 15.3 million, while net profit reached CHF 5.4 million. Overall, we are pleased with the first half performance. The strong order intake, growing backlog, and improved profitability gives us confidence in achieving our full-year targets. Looking at our segments, both businesses contributed positively to the first half performance. In Equipment & Solutions, demand remained solid, particularly for large and complex projects. Customers continue to invest in new production capacity for oncology drugs and increasingly for biosimilars. We also saw very strong interest in our E-beam technology. In Services & Consumables, growth was even stronger. The business benefited from healthy organic growth, contributions from acquisitions, and the continued expansion of our service offering. As a result, the service now accounts for almost 40% of group net sales and continues to make an important contribution to our profitability.
Together, these developments demonstrate the benefits of our increasingly balanced business model and support our long-term growth and margin ambitions. Let me briefly update you on our strategic progress. We continue to execute on the four priorities we presented at our Capital Market Day last year. First, we strengthened our market leadership by winning most of the larger fill-finish line projects in the U.S. market. Second, we continue to expand our addressable market through the development of our next-generation E-beam solution. In the third pillar, we made strong progress in Services & Consumables. The share of the group net sales increased to 39% there. As a highlight, we secured several multi-year service contracts, which is great to see our progress there. We also continue preparations for the launch of our Pre-Approved Services offering.
And finally, in the fourth pillar, we delivered our first digital twin project, supporting customers in improving equipment performance and productivity. This is an additional differentiation layer in our sales process. Overall, we are executing consistently against our strategy and are making tangible progress towards our long-term objective of growth, recurring revenues, and improved profitability. Let me now turn the call over to Burim to cover the financial results. I will come back with some additional commentary on the outlook later.
Thank you, Jonas, and hello everyone also from my side to this H1 financial results presentation. Let me start with the order intake and first briefly put the market environment into the context. The market activity was healthy in the first half, with particularly good momentum in the U.S., supported by investment in new production capacity, the regionalization of critical supply chains, and ongoing onshoring initiatives. Europe also showed a solid demand environment. At the same time, the market continues to normalize after the exceptional growth phase during COVID. Customers are more selective, decision cycles remain longer, and competition has intensified. Against this backdrop, we increased our order intake from CHF 230 million -CHF 247.6 million, which is up 16.3% year over year. We consider this as a good result, which demonstrates solid demand for our solution despite a more selective investment environment.
The largest contribution to growth came from Services & Consumables, as you see, which accounted for around CHF 30 million or almost 80% of the increase at constant currency rates. Equipment & Solutions contributed a further CHF 8 million to the growth. When we look at the book-to-bill ratio, it remains at 1.5 x after 1.6 x in the prior year period. The key message is that even in a more normalized market, order intake continues to run ahead of net sales. Together with a healthy order pipeline, this gives us confidence in our growth trajectory. With that overall picture in mind, let me turn to the regional developments. Starting with Europe, our largest market, order intake increased from CHF 125.3 million -CHF 138.6 million or by 10.7%. This confirms that the region continues to provide a stable base for the group.
The more pronounced development came from the Americas, where order intake rose from CHF 66.1 million to around CHF 100 million, an increase of almost 50%. As a result, the region's share of group order intake increased from 31% to around 40%. This brings the Americas back to a level broadly in line with the range we have seen historically. The prior year was subdued, as you all know, mainly because a number of customer decisions took longer to materialize during the first half year. Several of those decisions progressed into firm orders. In Asia, order intake declined from CHF 20.8 million -CHF 9.1 million. This fluctuation is largely driven by the timing of larger individual orders and should therefore not be over-interpreted in that point.
In summary, Europe remains a stable backbone with a solid increase while the Americas regained a more normal share of the order mix. Turning to the net sales. We increased sales from CHF 134.6 million -CHF 164.5 million, representing a growth of 22.2% year-on-year. At the constant exchange rates, growth was 24%, while organic growth reached 13.3%. This growth was broad-based, with Services & Consumables accounting for roughly 2/3 of the group net sales increase and Equipment & Solutions also making a meaningful contribution. Of course, the acquired businesses also developed very well and provided an additional contribution to the reported growth. Overall, the increase in net sales was supported by a healthy underlying business across both segments, complemented by the contribution from acquisitions. Importantly, the higher level of net sales was achieved while maintaining a strong order base.
As you see, the order backlog increased from CHF 346.1 million at year end to CHF 442 million or around 28%, which provides us good visibility for the coming periods. As you also see within this backlog, approximately CHF 15 million -CHF 20 million remains subject to potential cancellation risk. It is important to understand that this is the same exposure as we have already disclosed at year end and does not represent a new risk. The matter remains currently unsolved, and we are closely working constructively with our customer toward a commercially sound, mutually acceptable solution that supports the long-term relationship with our customers. Despite the strong increase in net sales, we enter the second half with a higher order backlog and good visibility for the coming periods. Now turning to the profitability. EBITDA improved from CHF 0.9 million -CHF 15.3 million, lifting the margin from 0.7% - 9.3%.
At group level, you see on the right side both segments, Equipment & Solutions and Services & Consumables, contributed to this improvement. In addition, strong revenue conversion, more favorable project progression, and the measures taken to improve the cost base supported the result. On the left side, it is visible in the cost development, and we see the operating expenses increase from CHF 135.7 million -CHF 154.5 million or by 13.8%. While the net sales grew by 24%. The key point here is that the net sales grew materially faster than the cost base, which results in an improved operating leverage at group level. At the same time, we are really clear that this 9.3% EBITDA margin remains below our target range.
The progress is, as mentioned, encouraging, but there is more work to do with our focus remaining in the second half on execution, mix, product mix, and also cost discipline. With the group level picture established, let me now turn to the segment performance, starting with Equipment & Solutions. In that segment, the order intake increased from CHF 160.4 million -CHF 166.4 million, or by 3.7%. Compared with the subdued CHF 88 million recorded in H2 2025, this represents a clear step up in the market activity. The Americas contributed meaningfully, as already mentioned, as customer decisions progressed after the longer approval cycles seen previously, and in parallel, prior year slot reservation, as we have announced, and engineering orders continue to convert into equipment orders.
When we look at the nature of the orders, the majority were for large and complex customized filling lines, and we saw particularly good demand in high-speed lines featuring with the E-beam technology. This demand was supported by new drug projects, especially in the core field of SKAN, the oncology applications, and increasingly also by biosimilars. This order development supported an increase in backlog of around 24%, from CHF 293.1 million -CHF 362.5 million, providing a substantial base for future execution. In the middle of the graph, net sales increased, as you see, from CHF 90.7 million to around CHF 100 million, or by 10.2%, supported by less project delays, better execution, and higher share of projects which came in in the value added or value-intensive phase.
This operational improvement also translates, as you see on the right side on the profitability, where the EBITDA moves from -CHF 9.1 million - +CHF 2.3 million, which is an improvement of CHF 11.4 million, and the margin improved from -10% - +2.3%. Equipment & Solutions is moving in the right direction, but profitability still has further to go. Turning to the Services & Consumables, a different picture. The segment Services & Consumables continued to develop very well in the first half. As you see in the order intake increased from CHF 52.5 million -CHF 81.2 million, or by almost 55%, with organic growth of almost 27%. The important point is the quality of that growth. The underlying Services & Consumables business remained strong, while the acquired businesses provided an additional contribution and broadens our offering.
Growth is therefore being supported by both the existing business and the acquired activities. When we look on the net sales, the same pattern is visible. The net sales increased from CHF 43.9 million -CHF 64.6 million, representing a growth of 47.2%, including an almost 15% organic growth. At the same time, the order backlog, as you see, almost doubled from CHF 40 million to around CHF 80 million, supporting activity in the second half. This development increased Services & Consumables share of growth net sales to 39.3%. This is strategically very important. Over the medium term, we aim to increase the contribution from Services & Consumables, and thereby strengthen the share of recurring business within the group. EBITDA on the right side increased from CHF 10 million -CHF 13 million, or by 29.7%. The margin remained healthy at 20.1%, compared to 22.8% in the prior periods.
The softer margin mainly reflects the product mix and a timing effect across parts of the Services & Consumables business. In other words, activities in that segment are aligned with our customers' operating plans, while the related personal costs are recognized throughout the year. As scheduled customer agreements are executed over the remainder of the year, we expect the related revenues to increasingly come through and drive the margin development in the second half. Overall, the segment Services & Consumables remains an important contributor to group growth and profitability, and its increasing weight in the group is, as mentioned, strategically relevant. Now let's have a look on the cash generation. On the left side, the operating cash flow was CHF 16.3 million in the first half, supported by the improved operating result.
A key structural feature of our business model is customer advance payments, which are an integral part of project financing and remains an important driver of operating cash flow. On the investment side, cash outflows amounted to CHF 13.6 million and primarily reflected continued investments in our Pre-Approved Services offering. Even after these investments, free cash flow remained positive at CHF 2.7 million. When we look at the cash and cash equivalents, which moved from CHF 94.1 million at year-end to CHF 88.5 million at end of June, the important message is here that customer advance continue to provide structural cash funding while the working capital remains controlled despite the higher level of activity. This cash discipline supports a solid financial position, which brings me to the balance sheet. Net debt stood at CHF 42.2 million at the end of June, corresponding to a net debt EBITDA of 0.8 x.
This is particularly relevant in the context of the acquisitions completed over recent periods. Despite those investments, leverage remains below one times, preserving capacity for operations and selective growth. On the right side, the equity stood at CHF 125.5 million, corresponding to a reported equity ratio of CHF 26.1 million. This figure needs a little bit of context that is materially affected by the accounting treatment of the acquisitions related goodwill. When we look at this KPI on an adjusted base, excluding this effect, the equity ratio would be above 40%. Taken together, the balance sheet remains solid, leverage is controlled, and the group retains adequate financial flexibility. Let me close by summarizing the key message of financial results from the first half year. The market remains attractive even as customer are more selective and decision cycles are longer.
Our order intake and order pipeline shows that demand for our solution remains healthy. Operationally, we made clear progress in the first half with higher net sales, improved profitability, and strong momentum in Services & Consumables. At the same time, our priorities remain clear. Drive margin improvement across the business, execute the backlog, and maintain cost and cash discipline. We have a good basis for the second half, and our focus remains firmly on execution. With that, I hand over to Jonas, who will take us through the outlook and our priorities for the remainder of the year and beyond.
Thank you, Burim. Let me provide an update on the market environment and our outlook. The long-term growth drivers in our industry remain attractive. The demand continues to be supported by increasing requirements for quality, for automation, containment, and regulatory compliance, including the EU GMP Annex 1 topics. In addition, the growing importance of biologics and antibody-drug conjugates and cell and gene therapies continues to drive investments in advanced aseptic manufacturing solutions. At the same time, the market is evolving. We have political discussions around drug pricing, which continue, and many high-revenue biologics will lose exclusivity. There is this passing phase coming over the coming years. We also see customers becoming more selective in their investment decisions as competition cost pressure increases across the industry. However, we see all these developments as creating attractive opportunities for SKAN.
In particular, we expect continuous investments in new production capacity for both biosimilars and innovative next-generation therapies. We believe SKAN is well-positioned to benefit from these market trends and to continue delivering double-digit growth rates. Our strong market position, technology leadership, and broad portfolio provide a solid foundation for future growth. At the same time, we are strengthening our competitive edge. We continue to advance our innovation project, we enhance our operational excellence, and expand our sales and service capabilities. In addition, we are establishing a new leadership structure with clear segment accountability. This will further strengthen the execution and increase our customer focus. Looking ahead, we will continue to accelerate the growth of our Services & Consumables business, and at the same time, we place a stronger focus on improving profitability and increasing our EBITDA margin.
Based on the attractive structural growth drivers, our solid order backlog and our strong first half performance, we remain confident for the current year. With that, we already come to the guidance. We therefore confirm our guidance for 2026 and continue to expect net sales growth in the high teens and an EBITDA margin between 13% and 15%. With that, we come already at the end of our presentation, and we can now go to questions and discussion section. I hand over to Thomas.
Yes. Thank you. We are going to Q&A. We will first take questions from the telephone conference. The moderator will inform you about what to dial to enter into the line. After the questions from the telephone conference, we will also take questions from the webcast. Participants in the webcast have a Q&A sign on the bottom left-hand side of their screen, and there they can write down their questions, which we will then answer. Please, operator, go on with the telephone questions, please.
The first question comes from Tanya Hansalik from UBS. Please go ahead.
Good morning. Can you hear me?
Yes.
Okay, great. Thank you. I have three questions, please. The first one, on the 2026 guidance you confirmed today, this requires an H2 acceleration on sales and margin uplift. Can you maybe go through for us the main drivers in the different divisions that will drive this better second half?
Well, the main driver is in the project business. As you have seen, we have a strong order backlog, and we have projects that will come in the value intensive phase, which will drive our net sales contribution or revenue recognition and therefore also drive the margin. We have also shown this in the last past years that the business driven by our order intake which comes typically at the end of the year, which drives also a little bit seasonality, will be the impact of confidence that we will make the second half year in Equipment & Solutions. For Services & Consumables, as I mentioned, is also second half lasted as customers or operation plan of customers.
The timing when they set the services to be provided is this year a little bit in the second half driven, and therefore we have also a strong backlog as you have seen, double the backlog, and we will execute or perform the service in the second half, which again will drive the margin growth.
Great. Thank you. The second question is, in Services & Consumables, can you discuss what were the impacts on the H1 margin on an organic basis? I think taking out Metronik, you would have had a lower teens margin
Yeah.
Which is well below the last five years. Yeah.
Yes.
I'll let you go.
You have to understand the EBITDA margin of Services & Consumables in the past years, it was also or 2024 was driven. We were at 28.9% EBITDA. There was an extraordinary impact from Aseptic Technologies, which is not anymore here. Now the contribution from Metronik is of course, is a positive impact, but also there, this business has also certain seasonality. As mentioned, also, the software business will have a positive impact in the second half and improve the margin at levels that we have also seen historically.
Great. Thank you. The last question is, can you provide an update on Pre-Approved Services? I understand you said approval we still expect this year. What about commercial revenues? When do you expect this, and how long will it take to ramp up to your targets for the business?
Basically, nothing has changed since the last communication. We are still working through these approvals, and we already started to do first production runs, non-GMP production runs. That is a very small revenue contributor, of course. But meaningful business will start next year, and then it will develop over three to four years, and we will see communicated. So we are on track there. It is a complex topic to bring this all live, but we are making good progress.
Thank you very much.
The next question comes from Estelle Bétrisey from Berenberg. Please go ahead.
Yes. Hello. Also two questions from my end. First of all, from the order intake for Equipment & Solutions, you mentioned the majority is for large and complex customized lines with duration going into 2028. Could you just please explain the nature of these extensions, what it means also for the lead times? Because I remember during COVID, these were around 18 months for larger projects and have recently gone down to around 12 months - 14 months. Just to understand.
Yes, of course. These larger projects that we did win in the U.S. are high-speed lines. In the U.S., they really increased the output of their productions. These super high-speed lines, they are typically then run at the limit what the technology can provide. Yes, typically, they still take 18 months- 24 months to deliver. But these are also, in some cases, new technologies that some of our partners provide in this project. We are a little bit cautious about what is the timeframe we need to deliver that backlog. Maybe it's a few months on top of the 18 months, when we talk about this last project.
Okay. Yeah. Thank you. Also, just if you could guide us on how you expect the split between both segments to evolve this year. If we should expect something around, like we have just seen right now, the 39% for Services & Consumables or more going back a bit more towards the full year 2025 split.
I did not fully understand your question, but I assume that you asked what are our targets for Equipment & Solutions margins and Services & Consumables, right?
I think just more on the split of the business, like you intend to go towards more of a 50/50 split in the midterm or long term.
Yes.
How does it evolve from the first half into the second half?
Yeah. We assume as the both segments will develop in the second half, as already mentioned, the split will remain more or less in this between 30% - 39%. But long or midterm, our goal is to have a 50/50 split between both segments, which gives us or makes us less dependent on the project business, on the fluctuation of the project business.
Okay. Thank you.
As a reminder, if you would like to ask a question, you may press star and one at this time. There are currently no further questions by phone, so I would like to turn the conference back to Thomas Balmer for any written questions.
Thank you. We have a written question from Ray Robertson from Chelmsford Financial Management, who asked, As we look over the coming years and if EBITDA margin rise into the teens, you expect, what do you think free cash flow will look like? Will it have a stable relationship to EBITDA? And what level of EBITDA conversion into free cash flow should we expect?
As we have announced that we were in an investment cycle until Pre-Approved Services is live. We were negative in free cash flow, now we are positive. We expect that the free cash flow will be also positive on a higher level, but, yeah, we will communicate later on when we communicate the guidance, the overall guidance in March. If there are no more written questions, I give back to the operator.
There is now another one coming. Sorry. There is a new one from Mark Foster [ inaudible]. Is the split between Equipment & Solutions and Services & Consumables also valid for the impressive order intake in the U.S., or are there differences?
I can maybe give a little bit of color to that. in the U.S., we clearly see that the investment climate is very strong. In the U.S. market, we see a lot of investment in new production capacity. So the order entry in that sense did grow much faster there than in the Equipment & Solutions part and in the Services & Consumables. You could even go a step further, saying that as the drug prices are a little bit under pressure in the U.S., the U.S. customers start to try to reduce their operation cost in a way, but they are still investing quite heavily into new capacity.
At the moment, there are no further questions from the webcast, so we hand back to the operator.
Thank you. We have one follow-up question from Tanya Hansalik from UBS. Please go ahead.
Yes. Hello, I wanted to follow up on Aseptic Technologies. You had quite a strong development in 2024. Can you maybe update us on how the pipeline is going and the interest for your biotechnology, when we can expect maybe this business to accelerate?
Again, thank you. Can you repeat the question? Sorry, I couldn't get it again. What was the question?
Aseptic Technologies, the business, how do you expect this to develop?
Yeah. The pipeline as we disclosed, it's around 400, or our customers, around 400 ingredients in the closed vials. It's more or less stable. We have still these eight drugs commercial in our close pipes. As you know, the whole funding had constraints during the last two years, which also impacted a little bit the development in cell and gene. Now it's picking up, and we expect also there that this will have a positive impact on Aseptic Technologies. But as you all know, cell and gene and the majority will not make it to commercial. But the good thing is that our pipeline is still on a stable level, and our consumer is still the majority of device compared to the eight products that we have commercial.
Thank you.
There are currently no more questions by phone, so I will hand back to Thomas Balmer for any more written questions.
Yes, we have more questions from Mark Foster [inaudible]. First question, is the value proposition for customers in the Pre-Approved Services still unchanged, meaning first 18 months savings of go to market?
It's still valid, yeah.
His second question, how has the competitive landscape changed over the course of the last 12 months, maybe from a technology and market share point of view?
Now, of course, we need to look into the different segments. Probably the question is more geared towards our core business, the isolator business. Of course, we are not the only one in the market. There are other big players. I'm sure you all also observe what's going on with Syntegon and some of our other competitors there. In the past, we were in a market where there was not enough supply, and the demand was very high. Now, I would say we are more in equilibrium between demand and supply. We actually have now tenders in the market, and we have to win. It's not just a given. We have to fight much more to win the business.
We were super successful in the first half year, and I'm actually super proud about our sales team, specifically in North America, where we did win most of the larger projects. Yes, there is more competition and good customer relationship. Strong project execution is more important than ever.
Then we have a question from Michael Schultz. He's pointing out that Full-Time Equivalents have been reduced by 61 positions compared to year end. Does that mean that personal expenses will go down in the second half of this year? Question one. Question two, were there costs related to this reduction in headcount?
Yes. The thing is, the headcounts or the FTEs have been reduced by 61, and the full impact will have an impact in the second half. It's a bit difficult also to compare because in the personal cost, we have also the acquisition included. When we look from a like-for-like comparison, of course, this will increase, and it will not be the full year effect. The full year effect of this decrease will have the impact only in 2027. It's also a meaningful reduction in 2026.
Okay, thank you. We don't have any more questions in the web call. As I can see, also no more questions in telephone conference. Therefore, I hand over to Jonas for his closing remarks.
Thank you all for participating in this call. I'm again very happy with our half year results. With that, we conclude the session for today.
Okay. Thank you very much.