Half Year 2026 Tecan Group AG Earnings Call

August 11, 2026

Speaker #1: Ladies and gentlemen, welcome to the Tecan Group Half-Year Results 2026 conference call and live webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants are in listen-only mode and the conference is being recorded.

Operator: Ladies and gentlemen, welcome to the Tecan Group Half Year Results 2026 conference call and live webcast. I am Sandra, the conference call operator. I would like to remind you that all participants have been listed only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit any questions in writing by the relative field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Martin Brändle, Senior Vice President, Corporate Communication and Investor Relations. Please go ahead, sir.

Speaker #1: The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone.

Speaker #1: Webcast viewers may submit any questions in writing via the relevant field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast.

Speaker #1: At this time, it is my pleasure to hand over to Martin Brandle, Senior Vice President, Corporate Communication and Investor Relations. Please go ahead, sir.

Speaker #2: Thank you, and good morning, everyone. Thank you for joining our conference call this morning. We are pleased to share and discuss our results for the first half of 2026 with you.

Martin Brändle: Thank you, and good morning, everyone. Thank you for joining our conference call this morning. We are pleased to share and discuss our results for the H1 of 2026 with you. Joining me on the call today are our Chief Executive Officer, Monica Manotas, and our Chief Financial Officer, Camila Japur. Before we begin, let's quickly go over a few formalities as usual. The press release announcing our financial results was issued this morning at 7:00 AM Central European Summer Time. Both the press release and the 2026 interim report are available on our website, tecan.com, under the investor relations tab. Additionally, the PDF of the presentation slides, which we will be discussing during this call, is available for download.

Speaker #2: Joining me on the call today are our Chief Executive Officer, Monica Manotas, and our Chief Financial Officer, Camilla Shapur. Before we begin, let's quickly go over a few formalities, as usual.

Speaker #2: The press release announcing our financial results was issued this morning at 7:00 a.m. Central European Summer Time. Both the press release and the 2026 interim report are available on our website, tecan.com, under the Investor Relations tab.

Speaker #2: Additionally, the PDF of the presentation slides, which we will be discussing during this call, is available for download. I'd like to remind you that this call is being webcast live on our homepage, and the link to the replay will be available shortly after the live webcast on our Investor webpage.

Martin Brändle: I'd like to remind you that this call is being webcast live on our homepage, and the link to the replay will be available shortly after the live webcast on our investor webpage. With that, let me now turn it over to Monica Manotas. Monica?

Speaker #2: With that, let me now turn it over to Monica Manotas. Monica?

Speaker #3: Thank you, Martin. Good morning, everyone, and thank you all for joining us for our 2026 half-year results presentation. As Martin just said, I'm joined here today by Camilla Yapor, our new CFO.

Monica Manotas: Thank you, Martin, and good morning, everyone, and thank you all for joining us for our 2026 H1 results presentation. As Martin just said, I am joined here today by Camila Japur, our new CFO. Welcome, Camila. You hit the ground running from your start on 1 June, and it is great to have you here and also as part of the leadership team. Together, we will take you through our performance for the H1 of 2026, our views for the rest of the year and beyond, and also give you an update on our transformation program, Rewired. At our capital markets update in March, we explained to you how we intend to reignite growth at Tecan with our Rewired transformation program. I am pleased to say that our solid results with above-market growth in the H1 gives us good reason for confidence.

Monica Manotas: Thank you, Martin, and good morning, everyone, and thank you all for joining us for our 2026 H1 results presentation. As Martin just said, I am joined here today by Camila Japur, our new CFO. Welcome, Camila. You hit the ground running from your start on 1 June 2026, and it is great to have you here and also as part of the leadership team. Together, we will take you through our performance for the H1 of 2026, our views for the rest of the year and beyond, and also give you an update on our transformation program, Rewired. At our capital markets update in March, we explained to you how we intend to reignite growth at Tecan with our Rewired transformation program. I am pleased to say that our solid results with above-market growth in the H1 gives us good reason for confidence.

Speaker #3: Welcome, Camilla. You hit the ground running from your start on June 1, and it is great to have you here, also as part of the leadership team.

Speaker #3: Together, we will take you through our performance for the first half of 2026, our views for the rest of the year and beyond, and also give you an update on our transformation program, Rewired.

Speaker #3: At our Capital Markets Update in March, we explained to you how we intend to reignite growth at Tecan with our Rewired transformation program. I am pleased to say that our solid results, with above-market growth in the first half, give us good reason for confidence.

Speaker #3: Now, let me quickly walk you through today's agenda. I will start with a short introduction and the headline financial highlights for the first half of 2026.

Monica Manotas: Now let me quickly walk you through today's agenda. I will start with a short introduction and the headline financial highlights for the H1 of 2026. Camila will then take you through the financial results in more detail. After that, I will come back to give you an update on our Rewired transformation program, our outlook for the rest of the year, and our targets for 2028. As always, at the end, we will have time for your questions. Our performance in the H1 was solid. I am pleased about the above market growth in both segments. Profitability is sound, yet reflects the cost of our Rewired program and of IT investments. A look at our results. Group sales came in at CHF 427.5 million, up 3.4% in local currencies, with both our life sciences and partnering segments contributing to comparable growth.

Speaker #3: Camilla will then take you through the financial results in more detail. After that, I will come back to give you an update on our Rewired transformation program, our outlook for the rest of the year, and our targets for 2028.

Speaker #3: As always, at the end, we will have time for your questions. Our performance in the first half was solid. I'm pleased about the above-market growth in both segments.

Speaker #3: Profitability is sound, yet reflects the cost of our Rewired program and of IT investments. A look at our 427.5 million francs, up 3.4% in local currencies, with both our Life Sciences and Partnering segments contributing to comparable growth.

Speaker #3: Order entry was 444.3 million francs, up 3% in local currencies, keeping our book-to-bill ratio above 1 in both segments. Adjusted EBITDA was 64.5 million francs, corresponding to a margin of 15.1% of sales, slightly ahead of last year.

Monica Manotas: Order entry was CHF 444.3 million, up 3% in local currencies, keeping our book-to-bill ratio above one in both segments. Adjusted EBITDA was CHF 64.5 million, corresponding to a margin of 15.1% of sales, slightly ahead of last year. Basic EPS was CHF 0.99 and adjusted EPS was CHF 2.62, both below last year's levels. Here, FX was an important headwind, but Camila will take you through the key drivers. Operating cash flow was CHF 17 million. As Camila would explain in more detail, the significant decrease in the H1 of 2026 was mainly due to changes in working capital. These factors are non-structural. Operating cash flow has historically been strong, and it will remain strong in a future-proof Tecan. Overall, a solid H1 with good above-market growth.

Speaker #3: Basic EPS was $0.99, and adjusted EPS was CHF 2.62, both below last year's levels. Here, FX was an important headwind, but Camilla will take you through the risk drivers.

Speaker #3: Operating cash flow was 17 million francs. As Camilla will explain in more detail, the significant decrease in the first half of 2026 was mainly due to changes in working capital.

Speaker #3: These factors are nonstructural. Operating cash flow has historically been strong, and it will remain strong in a future-proof Tecan. Overall, a solid first half.

Speaker #3: With good, above-market growth, there are areas for improvement, which we are addressing with Rewired. But we remain financially very strong, and this allows us to invest in future-proofing our company while returning capital to our shareholders in line with our capital allocation strategy.

Monica Manotas: There are areas for improvement which we are addressing with Rewired, but we remain financially very strong, and this allows us to invest in future-proofing our company while returning capital to our shareholders in line with our capital allocation strategy. Let's now take a look at our end markets. As a reminder on the format of this slide, the slide is intended to show how we expect our end markets to perform this year. The arrows in each customer segment represent the expected change versus last year. There are two arrows for each segment, representing the lower and the upper end of the expected range. Overall, in H1, trends developed as we expected. Markets have been largely constructive and continued to recover. Now, let me share some color on how we performed in each segment in H1.

Speaker #3: Let's now take a look at our end markets. As a reminder on the format of this slide, the slide is intended to show how we expect our end markets to perform this year.

Speaker #3: The arrows in each customer segment represent the expected change versus last year. There are two arrows for each segment, representing the lower and the upper end of the expected range.

Speaker #3: Overall, in H1, trends developed as we expected. Markets have been largely constructive and continue to recover. Now, let me share some color on how we performed in each segment in H1.

Speaker #3: I will start in the middle with biopharma and diagnostics, since they are the most relevant for us. In biopharma, we grew high single digits.

Monica Manotas: I will start in the middle with the biopharma and diagnostics, since they are the most relevant for us. In biopharma, we grew high single digits. We are seeing the recovery we were expecting. The diagnostic segment continued to grow steadily, and we delivered mid-single-digit growth in this segment. Moving on to academia and government, there we saw a double-digit decline. Relative to our expectations, our view is that for lab automation, this segment performed on the lower end of the range. Finally, in med tech, we grew in the mid-single digits. We continue to see healthy growth in the market for this segment. However, concentration of our business among a few customers means our growth can reflect single customer decisions more than the overall market dynamics.

Speaker #3: We are seeing the recovery we were expecting. The Diagnostics segment continued to grow steadily, and we delivered mid-single-digit growth in this segment. Now, moving on to Academia and Government, there we saw a double-digit decline.

Speaker #3: Relative to our expectations, our view is that, for lab automation, this segment performed on the lower end of the range. And finally, in MedTech, we grew in the mid-single digits.

Speaker #3: We continue to see healthy growth in the market for this segment. However, the concentration of our business among a few customers means our growth can reflect single-customer decisions more than the overall market dynamics.

Speaker #3: Now, looking out to the second half of 2026, while we have seen some signs of acceleration in the market, we believe it is too early to call a change in trend.

Monica Manotas: Now looking out to H2 2026, while we have seen some signs of acceleration in the market, we believe it is too early to call a change in trend. With that, our assumption is that for the full year 2026, the markets will perform as we anticipated at the beginning of the year. On the whole, I am pleased with the development of Tecan and of the market environment so far this year. Our performance has been solid. We are confident in our ability to grow above the market, yet we remain prudent. With this, I would like to hand over to Camila Japur, our CFO, for the detailed discussion of our results.

Speaker #3: So, with that, our assumption is that for the full year 2026, the markets will perform as we anticipated at the beginning of the year.

Speaker #3: On the whole, I'm pleased with the development of Tecan and of the market environment so far this year. Our performance has been solid. We are confident in our ability to grow above the market, yet we remain prudent.

Speaker #3: Now, with this, I'd like to hand over to Camilla Yapor, our CFO, for the detailed discussion of our results.

Speaker #2: Good morning, everyone. Thank you, Monica. I'm pleased to present a detailed overview of Tecan's financial results for the first half of 2026. Let me start with sales and order entry on slide 6.

Camila Japur: Good morning, everyone. Thank you, Monica. I am pleased to present a detailed overview of Tecan's financial results for H1 2026. Let me start with sales and order entry on slide seven. On the left top of the slide, you can see the reported sales for the group of CHF 427.5 million, representing a decrease of 2.7% reported figures, but an increase of 3.4% in local currencies. Growth momentum was sustained in Q2, with sales up 3.4% in local currencies. Moving to order entry, H1 reached CHF 444.3 million, up 3% in local currency with book-to-bill ratio of 1.04 and above one in both business segments. Important to say that Q2 order growth was stable year on year in local currencies, despite a tougher comparison base and Q2 orders exceeding Q1 levels. Moving to slide seven, where you look at segment performance.

Speaker #2: On the top left of this slide, you can see the reported sales for the group of 427.5 million Swiss francs, representing a decrease of 2.7% in reported figures.

Speaker #2: But an increase of 3.4% in local currencies. Growth momentum was sustained in the second quarter, with sales up 3.4% in local currencies. Moving to order entry, the first half reached CHF 444.3 million, up 3% in local currency, with a book-to-bill ratio of 1.04 and above 1 in both business segments.

Speaker #2: It's important to note that Q2 order growth was stable year-on-year in local currencies, despite a tougher comparison base, and Q2 orders exceeded Q1 levels. Moving to slide 7, let's look at segment performance.

Speaker #2: Let's start with Life Science Business. Sales grew 3.1% in local currencies, outperforming the broader lab automation market. The growth was driven by continuous strong performance in the biopharma and diagnostic customer segments, with sales in academia and government declining as expected.

Camila Japur: Let me start with the life science business. Sales grew 3.1% in local currencies, outperforming the broader lab automation market. The growth was driven by continuous strong performance in the biopharma and diagnostic customer segments, with sales in academia and government decline as expected. The life science business was sequential improvement, with Q2 sales increase of 4.6% in local currency year over year. From a regional perspective, H1 sales in Europe remained stable, while the US delivered approximated 1% growth in local currency. Both regions experienced an acceleration of growth in Q2. Asia was the main growth driver, with Japan posting very strong results and China achieving mid-single-digit growth. In Asia, liquid handling instrument, including both standard platforms and our Labworks customized solution, were major contributions to this positive development. Now, let us talk about our partnering business.

Speaker #2: The Life Science business saw sequential improvement, with Q2 sales increasing by 4.6% in local currency year-over-year. From a provisional perspective, half-year sales in Europe remained stable, while the US delivered approximately 1% growth in local currency.

Speaker #2: Both regions experienced an acceleration of growth in the second quarter. Asia was the main growth driver, with Japan posting very strong results and China achieving mid-single-digit growth.

Speaker #2: In Asia, liquid handling instruments, including both standard platforms and our Labworks customized solutions, were major contributions to this positive development. Now, let's talk about our partner in business.

Speaker #2: Sales increased by 3.6% in local currency, supported by solid growth in Diagnostics and MedTech. Q2 delivered growth of 2.4% in local currencies, despite an increase in the challenging comparison base.

Camila Japur: Sales increased by 3.6% in local currency, supported by solid growth in diagnostic and med tech. Q2 delivered growth of 2.4% in local currencies, despite an increasing challenging comparison base. Looking at our different offerings, we saw a continued good growth in Synergence services for complete system, and we saw the highest growth in our partner CDMO services, which also benefit from a lower comparison base in prior year. In Cavro OEM components, sales decreased again as we had some supply challenge, and we were unable to ship all of the planned backlog. Order entry was solid, as reflected by a book-to-bill ratio above 1 in both segments throughout the first half. Now let's change gears to profitability. Before we talk about EBITDA, I would like to comment about our gross margin and OPEX.

Camila Japur: Sales increased by 3.6% in local currency, supported by solid growth in diagnostic and med tech. Q2 delivered growth of 2.4% in local currencies, despite an increasing challenging comparison base. Looking at our different offerings, we saw a continued good growth in Synergence services for complete system, and we saw the highest growth in our partner CDMO services, which also benefit from a lower comparison base in prior year. In Cavro OEM components, sales decreased again as we had some supply challenge, and we were unable to ship all of the planned backlog. Order entry was solid, as reflected by a book-to-bill ratio above one in both segments throughout the H1. Now let's change gears to profitability. Before we talk about EBITDA, I would like to comment about our gross margin and OPEX.

Speaker #2: Looking at our different offerings, we saw continued growth—good growth—in synergized services for complete systems, and we saw the highest growth in our parameter CDMO services, which also benefited from a lower comparison base in the prior year.

Speaker #2: In our OEM components business, sales decreased again as we faced some supply challenges and were unable to ship all of the planned backlog. Order entry was solid, as reflected by a book-to-bill ratio of above 1 in both segments during the first half.

Speaker #2: Now, let's change gears to profitability. Before we talk about EBITDA, I would like to comment on our gross margin and OPEX. Gross profit margin declined year-over-year from 36.2% to 33.9%, driven mainly by material cost inflation, inventory valuation, FX, and tariffs.

Camila Japur: Gross profit margin declined year-over-year from 36.2% to 33.9%, driven mainly by material cost inflation, inventory valuation, FX, and tariffs. The decline in gross margin was partially offset by a lower OPEX that had the benefit from FX and reduced accrual and improvements from Rewired. Our adjusted EBITDA reached CHF 64.6 million, just CHF 1.1 million below year-over-year. The adjusted EBITDA margin increased to 15.1%, is likely above the 15% reported in H1 2025. This was achieved despite headwinds from FX and tariffs, which had combined negative impact of 170 basis points. Nevertheless, underlying profitability improved by 108 basis points, primarily as a result of sales volume increase, a favorable product mix, and the first benefits realized from Rewired transformation program. Let's move to page 9.

Speaker #2: The declining gross margin was partially offset by a lower OPEX that had a benefit from FX and reduced accrual, and improvements from Rewired. On adjusted EBITDA, our adjusted EBITDA reached 64.6 million Swiss francs, just 1.1 million below year-over-year.

Speaker #2: The adjusted EBITDA margin increased to 15.1%, is likely above the 15% reported in half-one 2025. This was achieved despite headwinds from FX and tariffs, which had combined negative impact of 170 basis points.

Speaker #2: Nevertheless, underlying profitability improved by 108 basis points, primarily as a result of sales volume increase, a favorable product mix, and the first benefit realized from the Rewired transformation program.

Speaker #2: Let's move to page 9. I want to introduce these new slides to provide greater transparency on the reconciliation from reported to adjusted EBITDA, clearly outlining the impact of our transformation and IT investment.

Camila Japur: I want to introduce this new slide to provide greater transparency on the reconciliation from reported to adjusted EBITDA, clearly outline the impact of our transformation and IT investments. You can see in the table on the left side that the difference of CHF 17.9 million to adjusted EBITDA is mainly explained by the cost of CHF 7.6 million related to Rewired transformation program, including restructuring expenses. In the second bullet, we see investments to upgrade our SAP R/3 to SAP S/4HANA and the new CRM system. This project, named Elevate, was launched in 2024. In the last line of the table, we also have the positive effect from the tariffs refund of CHF 0.5 million. As you may saw in the press release, we expect a further refund of around CHF 6 million in H2. Now, let's talk about Rewired. As previously communicated, implement Rewired requires upfront investments.

Speaker #2: You can see in the table on the left side that the difference of CHF 17.9 million to adjusted EBITDA is mainly explained by the cost of CHF 7.6 million related to the Rewired transformation program, including restructuring expenses.

Speaker #2: In the second bullet, we see investments to upgrade our SAP R/3 to S/4 HANA and the new CRM system. This project, named Elevate, was launched in 2024.

Speaker #2: In the last line of the table, we also have the positive effect from the tariffs refund of half a million. As you may have seen in the press release, we expect a further refund of around $6 million in the second half.

Speaker #2: Now, let's talk about Rewired. As previously communicated, implementing Rewired requires upfront investment. These costs are a combination of cash and/or cash items, and are necessary to deliver the sustainable improvements and returns we expect from the program.

Camila Japur: These costs are a combination of cash and non-cash items and are necessary to deliver the sustainable improvements and returns we expect from the program. The total OPEX to deliver Rewired is estimated at CHF 45 to 60 million, and in H1, we booked CHF 7.6 million. First savings from Rewired are materializing, increasing our confidence that the program will generate long-term value. My focus in the coming months will be on establishing disciplined cost-based tracking and developing a comprehensive understanding of all underlying cost drivers to position Tecan for sustainable growth and improved profitability. Then, I will be happy to share more quantitative progress of our Rewired execution with you. Changing to Project Elevate, I would like to stress that while Rewired is a comprehensive transformation program, Elevate is our ERP and CRM modernization project. Elevate non-recurring costs in the first half were CHF 9.9 million.

Speaker #2: The total OPEX to deliver Rewired is estimated at 45 to 60 million Swiss francs, and in H1 we booked 7.6 million. Our savings from Rewired are materializing, increasing our confidence that the program will generate long-term value.

Speaker #2: My focus in the coming months will be on establishing disciplined, cost-based tracking and developing a comprehensive understanding of all underlying cost drivers, to position Tecan for sustainable growth and improved profitability.

Speaker #2: I will be happy to share a more quantitative progress update on our Rewired execution with you. Turning to Project Elevate, I would like to stress that while Rewired is a comprehensive transformation program, Elevate is our ERP and CRM modernization project.

Speaker #2: Elevate non-recurring costs in the first half were 9.9 million Swiss francs. Differently from Rewired, where we are investing in the first year in the reset phase, for Elevate we are moving to the final stage of the project, with go-live anticipated in the first half of 2027.

Camila Japur: Differently from Rewired that we are invest in the first year in the reset phase, for Elevate, we are moving to the final stage of the project with go-live anticipated in H1 2027. Both Rewired and Elevate are critical to strengthening our foundation and supporting our strategic ambitions. I hope this view helps to increase transparency of our strategic investments. Now, moving to our segment profitability on slide 10. Let's start with life science business. As illustrated in the chart in the bottom of the page, the adjusted EBITDA margin was 13.8% of sales. This segment absorbed most of the negative impact from effects and tariffs that were partially offset by positive contributions from higher volumes and operation improvements under the Rewired program.

Speaker #2: Both Rewired and Elevate are critical to strengthening our foundation and supporting our strategic ambitions. I hope this view helps to increase transparency of our strategic investment.

Speaker #2: Now, moving to our segment profitability-only slide 10, let's start with the Life Sciences business. As illustrated in the chart at the bottom of the page, the adjusted EBITDA margin was 13.8% of sales.

Speaker #2: This segment absorbed most of the negative impact from FX and tariffs, which were partially offset by positive contributions from higher volumes and operational improvements under the Rewired program.

Speaker #2: In the Partnering Business, the adjusted EBITDA margin increased to 18.7%, driven by higher volumes, a favorable product mix, and operational improvements resulting from Rewired, despite adverse FX and tariff impacts.

Camila Japur: In the partnering business, the adjusted EBITDA margin increased to 18.7%, driven by higher volumes, a favorable product mix, and operational improvements resulting from Rewired despite adverse effects and tariff impact. On slide 11, we will talk about net profit and earnings per share. Before talking about adjusted figures, I want to explain the factors that impacted the non-adjusted earnings. All reported earning figures include EBIT, net profit, and earning per shares were affected by higher costs related to Rewired transformation program and Elevate project. Reported net profit of CHF 12.3 million was also impacted by negative effects from effects hedging below the operating profit line. Now I will talk about the adjusted numbers that you can see in the chart. Adjusted net profit declined by 3.5% to CHF 32.5 million. Adjusted earnings per share were CHF 2.62, down 1.5 year-on-year.

Speaker #2: On slide 11, we will talk about net profit and earnings per share. Before talking about adjusted figures, I want to explain the factors that impacted the non-adjusted earnings.

Speaker #2: All reported earnings figures, including EBIT, net profit, and earnings per share, were affected by higher costs related to the Rewired Transformation Program and Elevate Project.

Speaker #2: Reported net profit of 12.3 million Swiss francs was also impacted by negative effects from FX hedging below the operating profit line. Now, I will talk about the adjusted numbers that you can see in the chart.

Speaker #2: Adjusted net profit declined by 3.5% to CHF 32.5 million. Adjusted earnings per share were CHF 2.62, down 1.5% year-on-year. The decline in adjusted earnings per share is lower than the decline in adjusted net profit, as the number of outstanding shares was reduced through the ongoing share buyback program.

Camila Japur: The decline in adjusted earning per shares is lower than the decline in adjusted net profit as the number of outstanding shares was reduced through the ongoing share buyback program. In my last slide on page 12, I will talk about cash flow. Before diving into the numbers, I would like to highlight that Tecan maintain a strong financial position to continue investing in our transformation program to future-proof Tecan, while also returning value to shareholders through dividends and our share buyback program. Let's start with operating cash flow that is positive but significantly lower at CHF 17 million, with cash conversion also declining compared to previous period. This was mainly due to higher accounts receivable for increased sales late in the period and inventory build-up to enhance operational resilience amid supply chain challenge and higher payments, including tax payments related to a prior period.

Speaker #2: On my last slide, on page 12, I will talk about cash flow. Before diving into the numbers, I would like to highlight that Tecan maintains a strong financial position to continue investing in our transformation program to future-proof Tecan.

Speaker #2: While also returning value to shareholders through dividends and our share buyback program. Let's start with operating cash flow, which is positive but significantly lower at 17 million Swiss francs, with cash conversion also declining compared to the previous period.

Speaker #2: This was mainly due to higher accounts receivable from increased sales late in the period, an inventory build-up to enhance operational resilience amid supply chain challenges, and higher payments, including a tax payment related to a prior period.

Speaker #2: These factors are non-structural, and operating cash flow has historically been strong. Days sales outstanding increased slightly from 45 to 47 days, mainly reflecting higher accounts receivable concentrated at the end of the quarter.

Camila Japur: These factors are not structural and operating cash flow has historically been strong. Day sales outstanding increased slightly from 45 to 47 days, mainly reflect the higher accounts receivable concentrated in the end of the quarter. The change corresponded to a normal fluctuation. I also want to reinforce the message that cash flow generation is a key focus area for me, and we will continue to drive actions to maintain healthy working capital. Now moving to investments. In H1, it amounted CHF 4.3 million. This includes CHF 25.7 million invested in property, plant, and equipment and other intangibles, which cover the new consumable production line in the US and investments related to Elevate project. Cash flow from finance activities in H1 include the dividend payments of CHF 37.2 million and the purchase of treasury shares of CHF 30.5 million.

Speaker #2: The change corresponded to a normal fluctuation. I also want to reinforce the message that cash flow generation is a key focus area for me, and we will continue to drive actions to maintain healthy working capital.

Speaker #2: Now, moving to investments. In the first half, it amounted to CHF 44.3 million. This includes CHF 25.7 million invested in property, plant, and equipment and other intangibles, which cover the new consumable production line in the US and investments related to the Elevate project.

Speaker #2: Cash flow from financing activities in the first half included dividend payments of CHF 37.2 million and the purchase of treasury shares of CHF 30.5 million.

Speaker #2: This reflects our commitment to attractive shareholder returns, while ensuring the capital strength to transform and expand our business. I also wanted to talk about net liquidity in the last 12 months, comparing June 2025 versus June 2026.

Camila Japur: This reflects our commitment to attractive shareholder returns while ensuring the capital strength to transform and expand our business. I also want to talk about net liquidity in the last 12 months, comparing June 2025 versus June 2026. We saw a decline to CHF 73.5 million in the H1, reflecting the combined impact of all mentioned effects. Before I hand back to Monica, I would like to reiterate my confidence in Tecan's strong position and our ability to successfully navigate this transformation journey. I am confident that as part of Rewired, we can deliver sustainable, profitable growth. Thank you.

Speaker #2: We saw a decline to CHF 73.5 million in the first half, reflecting the combined impact of all mentioned effects. Before I hand back to Monica, I would like to reiterate my confidence in Tecan's strong position and our ability to successfully navigate this transformation journey.

Speaker #2: I'm confident that, as part of Rewired, we can deliver sustainable, profitable growth. Thank you.

Speaker #1: Thank you, Camella. I would now like to give you an update on our Rewired transformation program and share our outlook for the remainder of 2026 and beyond.

Monica Manotas: Thank you, Camila. I would now like to give you an update on our Rewired transformation program and share our outlook for the remainder of 2026 and beyond. As a reminder, we launched Rewired in the Q1 to future-proof Tecan and to help us excel in both innovation and execution. This three-year program is designed to generate more than 4% CAGR versus our 2025 baseline, taking us to our 2028 targets of CHF 1 billion in sales and 20% adjusted EBITDA margin. It is built around three pillars. First, it is portfolio discipline. We are building on our strengths, investing in scalable, differentiated segments, and exiting non-core businesses to drive focus from a talent and innovation perspective. Second, commercial excellence. We are building an organization that outperforms the markets through sharper segmentation, value-based pricing, and a more agile go-to-market approach. And third, operational excellence.

Speaker #1: As a reminder, we launched Rewired in the first quarter to future-proof Tecan and to help us excel in both innovation and execution. This three-year program is designed to generate more than 4% CAGR versus our 2025 baseline, taking us to our 2028 targets of one billion francs in sales and a 20% adjusted EBITDA margin.

Speaker #1: It's built around three pillars. First, it's portfolio discipline. We're building on our strengths, investing in scalable, differentiated segments, and exiting non-core businesses to drive focus from a talent and innovation perspective.

Speaker #1: Second, commercial excellence. We're building an organization that outperforms the markets, with sharper segmentation, value-based pricing, and a more agile go-to-market approach. And third, operational excellence.

Speaker #1: Creating scalable, resilient operations on a lower cost base, and which convert growth into margin and cash. And underpinning all three pillars is a performance culture.

Monica Manotas: Creating scalable, resilient operations on a lower cost base, and which convert growth into margin and cash. Underpinning all three pillars is a performance culture. Successful execution relies on ownership, accountability, and collaboration across the organization. Now let us look at the progress we have made against each of the three pillars since our last update. Here are some highlights. On portfolio discipline, we closed our Boston design site in April. This was a site we acquired in 2021 as part of the Paramit acquisition that housed dedicated early-stage design functions for medical devices. We have also advanced the planned exit from selected Tecan Genomics activities, with the process progressing as planned and our customers continuing to be served seamlessly throughout. On commercial excellence, we are building out the ecosystem to position Tecan as the partner of choice for AI-powered labs.

Speaker #1: Successful execution relies on ownership, accountability, and collaboration across the organization. Now, let's look at the progress we have made against each of the three pillars since our last update.

Speaker #1: Here are some highlights. On portfolio discipline, we closed our Boston design site in April. This was the site we acquired in 2021 as part of the Pyramid acquisition, which housed dedicated early-stage design functions for medical devices.

Speaker #1: We have also advanced the planned exit from selected Tecan Genomics activities, with the process progressing as planned and our customers continuing to be served seamlessly throughout.

Speaker #1: On commercial excellence, we're building out the ecosystem to position Tecan as the partner of choice for AI-powered labs. The first concrete milestone is agentic AI for Introspect as part of our NVIDIA partnership.

Monica Manotas: The first concrete milestone is Agentic AI for Introspect as part of our Nvidia partnership. We are also collaborating with Nvidia on the further development of Physical AI capabilities. In parallel to the Nvidia partnership, we are advancing a growing portfolio of AI-driven initiatives with technology partners and customers, where we position Tecan products as key enablers of AI-powered laboratories. For example, in Japan, Tecan collaborated with a customer to develop a biofoundry, which is a highly automated factory for biology that integrates robotics, AI, synthetic biology, genome engineering, high throughput testing, and data analytics. Tecan technology serves as a core component in this innovative setup. In terms of geographic expansion, in May, we expanded our direct presence in India with a new local sales and service team based near New Delhi, an important step in one of the world's most dynamic life sciences markets.

Speaker #1: We're also collaborating with NVIDIA on the further development of physical AI capabilities. In parallel to the NVIDIA partnership, we are advancing a growing portfolio of AI-driven initiatives with technology partners and customers, where we position Tecan products as key enablers of AI-powered laboratories.

Speaker #1: For example, in Japan, Tecan collaborated with a customer to develop a biofoundry, which is a highly automated factory for biology that integrates robotics, AI, synthetic biology, genome engineering, high-throughput testing, and data analytics.

Speaker #1: Tecan technology serves as a core component in this innovative setup. In terms of geographic expansion, in May we expanded our direct presence in India, with a new local sales and service team based near New Delhi—an important step in one of the world's most dynamic life sciences markets.

Speaker #1: Operational excellence is focused on scalable, resilient operations that convert growth into margins and cash. Efficient operations and a lower cost base are a priority for us.

Monica Manotas: Operational excellence is focused on scalable, resilient operations that convert growth into margins and cash. Efficient operations and a lower cost base are a priority for us. At the end of March, we divested our precision machining site in California and consolidated that manufacturing capability in Vietnam. Our US-based pipette tip production has been operational since Q2, giving us more responsive, resilient supply for the US market, including a meaningful reduction in CO2 emissions. We continue to advance on our previously initiated investment in a harmonized SAP enterprise architecture. The project is an important step, and as Camila explained, its cost is recorded under the Elevate program. To drive the work on all three pillars, we have also made progress in strengthening our performance culture.

Speaker #1: At the end of March, we divested our position machining site in California and consolidated that manufacturing capability in Vietnam. Our U.S.-based pipette tip production has been operational since Q2, giving us more responsive, resilient supply for the U.S. market, including a meaningful reduction in CO2 emissions.

Speaker #1: And we continue to advance on our previously initiated investment in a harmonized SAP enterprise architecture. The project is an important step, and, as Camella explained, its cost is recorded under the Elevate program.

Speaker #1: To drive the work on all three pillars, we have also made progress in strengthening our performance culture. Examples from the first half of the year include clear P&L ownership by the businesses with aligned incentives, ownership of the innovation roadmap by the businesses, also with aligned incentives, and tighter cost discipline.

Monica Manotas: Examples from the H1 of the year include clear P&L ownership by the businesses with aligned incentives, ownership of the innovation roadmap by the businesses also with aligned incentives, and tighter cost discipline. My first year as CEO has clearly confirmed the potential of Tecan. To realize this potential, to future-proof the company, and to drive long-term value, we launched our Rewired transformation program in the Q1 of this year. Following the implementation of initial measures in the Q2, we expect these to contribute to our full-year performance and serve as the foundation for accelerated growth and profitability. We will continue to share proof points as we progress with Rewired. With this, let me turn to our financial outlook for 2026. We continue to expect sales growth in the low single digits in local currencies for the year, and our aim is to grow above the market.

Speaker #1: My first year as CEO has clearly confirmed the potential of Tecan. To realize this potential, to future-proof the company, and to drive long-term value, we launched our Rewired transformation program in the first quarter of this year.

Speaker #1: Following the implementation of initial measures in the second quarter, we expect these to contribute to our full-year performance and serve as the foundation for accelerated growth and profitability.

Speaker #1: We will continue to share proof points as we progress with Rewired. With this, let me turn to our financial outlook for 2026. We continue to expect sales growth in the low single digits in local currencies for the year.

Speaker #1: And our aim is to grow above the market. Our results in the first half confirm our confidence in our performance and in our adjusted EBITDA margin outlook of 15.5% to 16.5% for the full year 2026.

Monica Manotas: Our results in the H1 confirm our confidence in our performance and in our adjusted EBITDA margin outlook of 15.5% to 16.5% for the full year 2026. We now expect a slightly lower negative impact from tariffs than previously assumed. At the same time, we expect positive effects from higher sales volumes, a favorable product mix, and the initial benefits from our Rewired transformation program. Based on these developments and based on what we delivered in the H1, we currently expect to close the year towards the upper end of our guided range. Now looking forward beyond 2026. We also confirm our outlook and targets for 2028. CHF 1 billion in sales, representing a CAGR above 4% from our 2025 baseline in local currencies and a 20% adjusted EBITDA margin.

Speaker #1: We now expect a slightly lower negative impact from tariffs than previously assumed. At the same time, we expect positive effects from higher sales volumes, a favorable product mix, and the initial benefits from our Rewired transformation program.

Speaker #1: Based on these developments, and based on what we delivered in the first half, we currently expect to close the year towards the upper end of our guided range.

Speaker #1: And now, looking forward beyond 2026, we also confirm our outlook and targets for 2028: $1 billion in sales, representing a CAGR above 4% from our 2025 baseline in local currencies, and a 20% adjusted EBITDA margin.

Speaker #1: Beyond 2028, we confirm our ambition of mid- to high-single-digit sales growth and an adjusted EBITDA margin above 20%. Now, to sum up the first half, I am pleased about the progress we achieved.

Monica Manotas: Beyond 2028, we confirm our ambition of mid to high single-digit sales growth and an adjusted EBITDA margin above 20%. Now to sum up the H1, I am pleased about the progress we achieved. We grew above the market. We have good momentum in life sciences and partnering is on track. We have a significant opportunity to realize the full potential of Tecan. Rewired is progressing well, and we expect it to contribute materially in 2027 and 2028. While I am pleased about our performance in H1, I am still prudent about the market recovery and continue to expect it to be gradual. What I am certainly confident about is our ability to execute and deliver on our commitments. We are now very happy to take your questions.

Speaker #1: We grew above the market. We have good momentum in Life Sciences, and partnering is on track. We have a significant opportunity to realize the full potential of Tecan.

Speaker #1: Rewired is progressing well, and we expect it to contribute materially in 2027 and 2028. While I'm pleased with our performance in H1, I'm still prudent about the market recovery and continue to expect it to be gradual.

Speaker #1: What I am certainly confident about is our ability to execute and deliver on our commitments. We are now very happy to take your questions.

Speaker #2: We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue.

Monica Manotas: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and 2. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question. Webcast viewers may submit their questions in writing via the relative field. In the interest of time, please limit yourself to 2 questions. Our first question comes from Ayesha Noor from Morgan Stanley. Please go ahead.

Operator: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question. Webcast viewers may submit their questions in writing via the relative field. In the interest of time, please limit yourself to two questions. Our first question comes from Aisyah Noor from Morgan Stanley. Please go ahead.

Speaker #2: If you wish to remove yourself from the question queue, you may press star and two. If you are asking a question by phone, please disable the loudspeaker mode and turn off the volume of the webcast while asking your question.

Speaker #2: Webcast viewers may submit their questions in writing using the relevant fields. In the interest of time, please limit yourself to two questions. Our first question comes from Counselor Aisha Noor from Morgan Stanley.

Speaker #2: Please go ahead.

Speaker #3: Good morning, Monica, Camella, and Martin. Thanks for taking my question. My first one is on the Rewired program. Could you give us a feel for the sustainability of the cost savings you've generated from this program, and could there be upside to this program versus when you first announced it? And what are the one-off or restructuring costs you've earmarked for the period versus the $8 million you booked in the first half?

Ayesha Noor: Good morning, Monica, Camila, and Martin. Thanks for taking my question. My first one is on the Rewired program. Could you give us a feel for the sustainability of the cost savings you've generated from this program, and could there be upside to this program versus when you first announced this program, and what are the one-off or restructuring costs you've earmarked for the period versus the EUR 8 million you booked in the H1? My second question is a bigger picture one on AI, which I notice you've highlighted a lot more in this quarter presentation with this Nvidia partnership, which all sounds very exciting. How are customer conversations trending here? Do you see this resulting in, for example, higher automation requirements, expanded project discussions, et cetera? When do you think this could materialize more concretely in your order growth? Thank you.

Aisyah Noor: Good morning, Monica, Camila, and Martin. Thanks for taking my question. My first one is on the Rewired program. Could you give us a feel for the sustainability of the cost savings you've generated from this program, and could there be upside to this program versus when you first announced this program, and what are the one-off or restructuring costs you've earmarked for the period versus the EUR 8 million you booked in the H1? My second question is a bigger picture one on AI, which I notice you've highlighted a lot more in this quarter presentation with this Nvidia partnership, which all sounds very exciting. How are customer conversations trending here? Do you see this resulting in, for example, higher automation requirements, expanded project discussions, et cetera? When do you think this could materialize more concretely in your order growth? Thank you.

Speaker #3: And then my second question is a bigger-picture one on AI, which I notice you've highlighted a lot more in this quarter's presentation with this NVIDIA partnership, which all sounds very exciting.

Speaker #3: How are customer conversations trending here? Do you see this resulting in, for example, higher automation requirements or expanded project discussions, and when do you think this could materialize more concretely in your order growth?

Speaker #3: Thank you.

Speaker #1: Yeah, thank you for the questions. Aisha, let me start with the rewired piece, and I can give an overall context. Maybe, Camella, you can add some perspectives as well there.

Monica Manotas: Yeah, thank you for the questions, Ayesha. Let me start with the Rewired piece, and I can give an overall context. Then maybe, Camila, you can add some perspectives as well there. Overall, I am happy with the way things have started on Rewired. On your question around sustainability of savings from what we've seen so far, if you actually take a look at the first savings that we've seen have been really through the exits of the businesses that we talked about also in March and what we've started to execute. Those costs come out of the system. Those are certainly sustainable. That's a permanent kind of cost-out that we will see out of those. As we continue to execute, you will start to see more of those coming through.

Monica Manotas: Yeah, thank you for the questions, Aisyah. Let me start with the Rewired piece, and I can give an overall context. Then maybe, Camila, you can add some perspectives as well there. Overall, I am happy with the way things have started on Rewired. On your question around sustainability of savings from what we've seen so far, if you actually take a look at the first savings that we've seen have been really through the exits of the businesses that we talked about also in March and what we've started to execute. Those costs come out of the system. Those are certainly sustainable. That's a permanent kind of cost-out that we will see out of those. As we continue to execute, you will start to see more of those coming through.

Speaker #1: So, overall, I am happy with the way things have started on Rewired. On your question around the sustainability of savings, from what we've seen so far...

Speaker #1: If you actually take a look, the first savings that we've seen have been really through the exits of the businesses that we talked about, also in March, and what we started to execute.

Speaker #1: So those costs come out of the system. Those are certainly sustainable, so that's a permanent kind of cost out that we will see from those.

Speaker #1: As we continue to execute, you will start to see more of those coming through. I mean, as we said, we launched the program in Q1, so we technically really just have one quarter under our belt.

Monica Manotas: As we said, we launched the program in Q1, so we technically really just have one quarter under our belt. Yes, you're right. We do continue to review the program to see if there are other opportunities to be added, obviously being careful on ensuring that we don't miss the focus of the team on the execution side. It's a balance that we're playing. Overall, very happy with how things have launched. Camila, do you want to-

Speaker #1: And yes, you're right. I mean, we do continue to review the program to see if there are other opportunities to be added, obviously being careful to ensure that we don't miss the focus of the team and the execution side, to balance that we're playing.

Speaker #1: But overall, very, very happy with how things have launched, Camella.

Speaker #3: Yeah. So just complement this before you mention the AI piece. So on top of that, I want to highlight that the focus incoming months will be to establishing a discipline cost-based tracking and a developer comprehensive understand of all underlying cost-driven that we have in the company.

Camila Japur: Yeah. So just to complement this before you mention the AI piece.

Camila Japur: Yeah. So just to complement this before you mention the AI piece. On top of that, I want to highlight that the focus in coming months will be to establishing a disciplined cost-based tracking and develop a comprehensive understanding of all underlying cost drivers that we have in the company. This will also enable us to give more transparency about the numbers, how they trend, right? But I need a bit more time, right? Then you also asked about the cost, the restructuring cost. I would say for Rewired program 2026, it will be similar level in the H2. We reported the total cost, and for 2026 it's a bit lower than the average for the three years. I think and I'll, yeah.

Camila Japur: On top of that, I want to highlight that the focus in coming months will be to establishing a disciplined cost-based tracking and develop a comprehensive understanding of all underlying cost drivers that we have in the company. This will also enable us to give more transparency about the numbers, how they trend, right? But I need a bit more time, right? Then you also asked about the cost, the restructuring cost. I would say for Rewired program 2026, it will be similar level in the H2. We reported the total cost, and for 2026 it's a bit lower than the average for the three years. I think and I'll, yeah.

Speaker #3: This will also enable us to provide more transparency about the numbers and how they trend, right? But I need a bit more time, right? And then you also asked about the cost, the restructuring cost.

Speaker #3: I would say for the Rewired program, 2026, it will be similar—level in the second half. So, we reported the total cost, and for 2026 it is a bit lower than the average for the three years.

Speaker #1: I think now, yeah.

Speaker #3: Okay.

Speaker #1: AI.

Monica Manotas: Okay.

Speaker #3: And then I'll turn it over to the second question around AI. This is a really, really exciting topic for us, and certainly, we see it from the side of the opportunity in how automation can play a role.

Camila Japur: AI.

Monica Manotas: Then I'll turn over to the second question around AI. This is a really exciting topic for us, and certainly we see it from on the side of the opportunity of how automation can play a role and just seeing the excitement from a customer's perspective. I would say maybe two sides. Certainly what I see on the customers, primarily on the clinical diagnostic side, they have been really excited to see the capabilities that we've added to our Introspect tool because these customers tend to have larger fleets in their labs, and they really are focused on efficiency and optimization. They don't have the ability to have manual processes, just something that relative to the volumes that they handle just wouldn't work.

Speaker #3: And just seeing the excitement from a customer’s perspective. And I would say maybe two sides. I mean, certainly, what I see from customers, primarily on the clinical diagnostic side, they have been really excited to see the capabilities that we’ve added to our Introspect tool.

Speaker #3: Because these customers tend to have larger fleets in their labs, and they really are focused on efficiency and optimization. They don't have the ability to have manual processes—just something that, relative to the volumes that they handle, just wouldn't work.

Speaker #3: So they definitely rely on automation, and a tool like this really allows them to truly understand all the opportunities from an efficiency perspective of the fleet that they have.

Monica Manotas: They definitely rely on automation, and a tool like this really allows them to truly understand all the opportunities from an efficiency perspective of the fleet that they have. We have more things coming as part of the collaboration with Nvidia. I mentioned Physical AI, but there's another piece that we're talking about that we're calling Discovery Introspect that will allow for faster processing of larger subsets of data. Again, something very much targeting this subset of customers. Then on the side of our biopharma customers also, they are very excited to see how they embed AI in their drug discovery process. Here we help them by ensuring that we make the validation of the results as optimal as possible.

Speaker #3: We have more things coming as part of the collaboration with NVIDIA. I mentioned physical AI, but there's another piece that we're talking about that we're calling Discovery Introspect that will allow for faster processing of larger subsets of data.

Speaker #3: So again, something very much targeting this subset of customers. And then, on the side of our biopharma customers, they are also very excited to see how they embed AI in their drug discovery process.

Speaker #3: And here, we help them by ensuring that we make the validation of the results as optimal as possible. Again, there is no way for them to be able to manage all of this if they are accelerating the in silico bit if the validation doesn't leverage automation and AI as well.

Monica Manotas: Again, there is no way for them to be able to manage all of this if they are accelerating the in silico bit if the validation does not leverage automation and AI as well. But the connection of those two to create that closed loop is where our value add from an AI perspective comes into play, and they are interested in the concept of autonomous labs. All of that is certainly in the conversations. You ask how much of this is truly maybe converting to business. I would say it is at the very beginning of the process, but I would say all of the customers have this in mind because they see the benefits in different ways in what they do. Stay tuned because we have more things that we are working on from an AI perspective to continue to partner with our customers. I hope that helps.

Speaker #3: But the connection of those two, to create that closed loop, is where our value add from an AI perspective comes into play. And they're interested in the concept of an autonomous lab.

Speaker #3: So, all of that is certainly in the conversations. You ask how much of this is truly maybe converting to business. I would say it is at the very, very beginning of the process, but I'd say all of the customers have this in mind because they see the benefits in different ways in what they do.

Speaker #3: And stay tuned, because we have more things that we're working on from an AI perspective to continue to partner with our customers. I hope that helps.

Speaker #2: It does. Thanks so much.

Ayesha Noor: It does. Thanks so much.

Aisyah Noor: It does. Thanks so much.

Speaker #3: The next question comes from Harry Gills from Berenberg. Please go ahead.

Ayesha Noor: The next question comes from Harry Gills from Berenberg. Please go ahead.

Operator: The next question comes from Harry Gills from Berenberg. Please go ahead.

Speaker #4: Thank you very much for taking the questions. As we start to think about 2027 growth, I have some related questions on what we're seeing on the order entry side.

Harry Gills: Thank you very much for taking the questions. Just as we start to think about 2027 growth, I have some related questions on what we are seeing on the order entry side. I guess order growth slowed from 6.7% in Q1 to stable in Q2. Although I appreciate the book-to-bill was above 1 and there was a sequential improvement, but just trying to understand with tougher comps on the order side also into H2, how should we think about orders as we move into H2 with we are seeing the underlying improvements in certain areas of the market, but also the tougher comps. Then maybe by division, I noticed you said life sciences orders accelerated in Q2. Is the broader slowdown maybe to do with your largest customer in partnering or does it reflect any underlying slowdown?

Harry Gills: Thank you very much for taking the questions. Just as we start to think about 2027 growth, I have some related questions on what we are seeing on the order entry side. I guess order growth slowed from 6.7% in Q1 to stable in Q2. Although I appreciate the book-to-bill was above one and there was a sequential improvement, but just trying to understand with tougher comps on the order side also into H2, how should we think about orders as we move into H2 with we are seeing the underlying improvements in certain areas of the market, but also the tougher comps. Then maybe by division, I noticed you said life sciences orders accelerated in Q2. Is the broader slowdown maybe to do with your largest customer in partnering or does it reflect any underlying slowdown?

Speaker #4: So, I guess order growth slowed from 6.7% in Q1 to stable in Q2. Although, I appreciate that the book-to-bill was above one, and there was a sequential improvement.

Speaker #4: But just trying to understand, with tougher comps on the order side also into H2, how should we think about orders as we move into H2, with seeing the underlying improvements in certain areas of the market but also the tougher comps?

Speaker #4: And then maybe by division, I noticed you said Life Sciences orders accelerated in Q2. So is the sort of broader slowdown maybe to do with your largest customer and partnering, or does it reflect any sort of underlying slowdown?

Speaker #4: I'm really just trying to get a sense of confidence in terms of the orders and the backlog in H2 as we start to think about 2027 growth.

Harry Gills: Really just trying to get a sense of confidence in terms of the orders and the backlog in H2 as we start to think about 2027 growth. Thank you.

Speaker #4: Thank you.

Speaker #3: Thank you for the question, Harry. I'll give you an overall view. There's a lot to unpack there, but I would maybe start by saying I feel good when I think about the launch point into H2.

Monica Manotas: Thank you for the question, Harry. I will give you an overall view. A lot to unpack there, but I would maybe start by saying that I feel good. When I think about the launch point into H2, I feel good about what I am seeing, a combination of the order behavior, but also the continued expected recovery of the market. Maybe that is a high level. You are right in what you are saying, that sometimes you have to take into account the comp that is slightly different in the different segments. When I think about life sciences, maybe as a start, I would say that definitely we saw an acceleration, I think you mentioned, and we mentioned it in the prepared comments in Q2 versus Q1.

Speaker #3: I feel good about what I'm seeing—a combination of the order behavior, but also the continued expected recovery of the market. So maybe that is a high level.

Speaker #3: You're right in what you're saying, that sometimes you have to take into account that the comp is slightly different in the different segments. So, when I think about Life Sciences, maybe as a start, I'd say that definitely, we saw an acceleration.

Speaker #3: I think you mentioned and we mentioned it in the prepared comments. In Q2 versus Q1. And I think the kind of underlying that is it goes to the recovery that we are seeing in the market because we did see better results out of the instrumentation part of the portfolio.

Monica Manotas: I think the kind of underlying that is it goes to the recovery that we are seeing in the market because we did see better results out of the instrumentation part of the portfolio. With orders accelerating in Q2, I feel good about the second half. Of course, we want to keep an eye on how the markets continue to recover. There were a couple of things from a comp perspective, particularly consumable side. As customers prepare to take advantage of the new capability in the US, we know that they placed some orders in the first half that perhaps we are not going to see in the second half. I still expect consumables to grow higher than the overall average.

Monica Manotas: I think the kind of underlying that is it goes to the recovery that we are seeing in the market because we did see better results out of the instrumentation part of the portfolio. With orders accelerating in Q2, I feel good about the H2. Of course, we want to keep an eye on how the markets continue to recover. There were a couple of things from a comp perspective, particularly consumable side. As customers prepare to take advantage of the new capability in the US, we know that they placed some orders in the H1 that perhaps we are not going to see in the H2. I still expect consumables to grow higher than the overall average.

Speaker #3: So, with orders accelerating in Q2, I feel good about the second half. Of course, we want to keep an eye on how the markets continue to recover.

Speaker #3: And there were a couple of things from a comp perspective, particularly on the consumables side, as customers prepared to take advantage of the new capability in the US.

Speaker #3: We know that they place some orders in the first half that perhaps we're going to see, or we're not going to see, in the second half.

Speaker #3: So I still expect consumables to grow higher than the overall average. But I know that there are some dynamics there that will have an impact in H2.

Monica Manotas: I know that there are some dynamics there that will have an impact in H2, but overall feel good, I guess, particularly on the side of what we are seeing in terms of acceleration of the instrumentation part. I think that is a good signal for market recovery. On the partnering side, you made the point around the largest customer. That is definitely playing a role. We always knew that this year was going to be a little bit skewed from a growth perspective, just given how the comp worked out in 2025. H1 was always going to be stronger than H2, and I think that is reflected in the order entry levels. No surprise there. We continue to stay obviously very close to that customer as we think about H2 and then obviously the prospects going forward.

Speaker #3: But overall, I feel good. It is particularly on the side of what we're seeing in terms of the acceleration of the instrumentation part. I think that's a good signal for market recovery.

Speaker #3: On the partnering side, you made the point around the largest customer. That is definitely playing a role. We always knew that this year was going to be a little bit skewed from a growth perspective, just given how the comp worked out in 2025.

Speaker #3: So, H1 was always going to be stronger than H2, and I think that is reflected in the order entry levels. So, no surprise there.

Speaker #3: We continue to stay, obviously, very close to that customer as we think about H2, and then, obviously, the prospects going forward. When I think about what we're seeing on the synergy side, I feel good that our customers are also seeing the recovery that we're seeing in the market.

Monica Manotas: When I think about what we are seeing on the Synergence side, I feel good that our customers are seeing also the recovery that we are seeing in the market. I feel good about the expectations for the H2. We see some of our big customers having strong success in the market. That is going to reflect well for us. As Camila made the comment around Cavro, we have a backlog that we could not ship in the H1. That would add to the expected results in H2, is that we have a catch up that we need to do there. That will help overall the H2 results. It is exciting to see what some of our customers, both on diagnostics and life sciences, are doing in terms of components. I feel good about that business as well.

Speaker #3: And I feel good about the expectations for the second half. We see some of our big customers having strong success in the market, so that's going to reflect well for us.

Speaker #3: And then, as Camilla made the comment around CAVRO, we have backlog that we couldn't ship in the first half. So, that would add to our expected results in H2, as we have a catch-up that we need to do there.

Speaker #3: So that will help results. And it's exciting to see what some of our customers, both on diagnostics and life sciences, are doing in terms of components.

Speaker #3: So I feel good about that business as well. I hope that gives you an overall sense of how to think about H2.

Monica Manotas: I hope that gives you an overall sense of how to think about H2.

Speaker #4: Yeah, that was super helpful. Thank you. Could I just ask one more question, and then perhaps I can join the queue again? It was helpful when you said you sort of expected to deliver towards the higher end of the margin guidance.

Harry Gills: Yeah, that was super helpful. Thank you. Could I just ask one more question and then perhaps I can join the queue again? It was helpful saying you sort of expected to deliver towards the higher end of the margin guidance, so that is the sort of base case. However, I noticed the sort of underlying improvement you have tweaked down from 50 to 150 to 40 to 140 basis points. I was just wondering if there is a specific reason on that, just given H1 seems to progress very well on the adjusted EBITDA side of things.

Speaker #4: So that's the sort of base case. However, I noticed the sort of underlying improvement you've tweaked down from 50 to 150 to 40 to 140 basis points.

Speaker #4: I was just wondering if there's a specific reason for that, given H1 seems to progress very well on the adjusted EBITDA side of things.

Speaker #3: So, we are very comfortable with our guidance now, and I think the first results of Rewired give strength to our confidence. This is why I also mentioned that we expect to be more in the upper range of that guidance.

Camila Japur: We are very comfortable with our guidance now. I think the first results of Rewired give strength, our confidence. This is why I also mentioned that we expect to be more in the upper range of that guidance. As I joined in June, my focus now is to really have a very good grip and understanding of our cost base, and track this in a very disciplined manner. We believe that with the solid results in the H1, that this will continue in the second one. I prefer to take a more conservative approach here for guiding the upper range of that bridge, but not change the guidance.

Speaker #3: But as I joined in June, right? So, my focus now is to really have a very good grip and understanding of our cost base.

Speaker #3: And attract this in a very disciplined manner. We believe that with the solid results in the first half, this will continue in the second one.

Speaker #3: But I prefer to take a more conservative approach here, more guiding the upper range of that reach, but not changing the guidance.

Speaker #4: Thank you. Super helpful. Thank you.

Harry Gills: Thank you. Super helpful. Thank you.

Speaker #1: Thanks, Harry.

Monica Manotas: Thanks, Aaron.

Monica Manotas: Thanks, Harry.

Speaker #2: The next question, Councillor Jan Koch from Deutsche Bank. Please go ahead.

Monica Manotas: The next question comes from Jan Koch from Deutsche Bank. Please go ahead.

Operator: The next question comes from Jan Koch from Deutsche Bank. Please go ahead.

Speaker #5: Good morning. Monica, hi; Camilla, hi; Martin. Thanks for taking my questions. I would like to come back to the phasing in H2. Could you help us to better understand the phasing of, especially, sales and order intake in Q3 and Q4?

Jan Koch: Good morning, Monica. Hi, Camila. Hi, Martin. Thanks for taking my questions. I would like to come back to the phasing in H2, and could you help us to better understand the phasing of especially sales and order intake in Q3 and Q4? Given the tough comparison in Q3, do you expect order intake growth to improve sequentially? Secondly, great to see the sequential growth acceleration in life science. Aside from exposure to the Academic and Government channel, are there any life science businesses that haven't returned to a more normalized growth rate yet? Could you also update us on the current sales exposure to the A&G channel in both the life sciences and the partnering businesses?

Speaker #5: Yeah, given the tough comparison in Q3, do you expect order intake growth to improve sequentially? And then secondly, it's great to see the sequential growth acceleration in Life Science.

Speaker #5: Aside from exposure to the academic and government channel, are there any life science businesses that haven't returned to a more normalized growth rate yet?

Speaker #5: And could you also update us on the current sales exposure to the ANG channel in both the Life Sciences and the Partnering Businesses?

Speaker #1: Okay. Do you want to take the phasing? I can take it. Maybe I'll start on the first part, which is the phasing of the numbers.

Monica Manotas: Okay. Do you want to take the phasing? Maybe I will start on the first part, is on the phasing of the numbers. I guess maybe as a general comment, I expect this year to look more as how the business was looking before all the ups and downs during the pandemic and following, which means at the very high level, we tend to have a bit more weighing on, from a sales perspective on the H2, than we do on the H1. That is the expectation overall. There is really nothing to highlight Q3 versus Q4, other than maybe keeping an eye a little bit on the comp that we saw primarily on the partnering business.

Speaker #1: So, I guess maybe as a general comment, I expect this year to look more like how the business was before all the ups and downs during the pandemic and following, which means at a very high level, we tend to have a bit more weighting, from a sales perspective, on the second half than we do on the first half.

Speaker #1: So that's kind of the expectation overall. And then, there's really nothing to highlight between third quarter and fourth quarter, other than maybe keeping an eye a little bit on the comp that we saw, primarily on the partnering business.

Speaker #1: And it was, for part of the business, a little bit higher in the third quarter. And for the other part of the business, it was a little bit higher in the fourth quarter.

Monica Manotas: For part of the business, it was a little bit higher in the Q3, and for the other part of the business, it was a little bit higher on the Q4. That would be the only watch-out as we think about the H2. As I said, I feel really good about what we are hearing from our customers in terms of the prospects and how they are doing in the market to deliver on our commitments in the H2. I hope that gives you a little bit of color from a phasing perspective. If I take the second part of the question, which is on the life sciences, I think you were asking what are the areas where perhaps we are not yet seeing a recovery. Certainly, I would say that maybe two aspects there.

Speaker #1: So that would be the only watch-out as we think about the second half. But as I said, I feel really good about what we're hearing from our customers in terms of the prospects and how they are doing in the market to deliver on our commitments in the second half.

Speaker #1: So I hope that gives you a little bit of color from a phasing perspective. And then, if I take the second part of the question, which is on the life sciences, I think you were asking, what are the areas where perhaps we're not yet seeing a recovery?

Speaker #1: And certainly, I would say that maybe two aspects there. One is on academia and government, as I mentioned in my comments. I think this is the area that is lagging from a recovery perspective.

Monica Manotas: One is on the A&G, as I mentioned in my comments. I think this is the area that is lagging from a recovery perspective. We saw weakness, quite honestly, pretty much across the board in all geographies, perhaps except APAC or the Asia region, except China. When we look at what is going on, it is clear that it is not even throughout, right? There are certain institutions that have funding, so it is really a matter of looking where the funding is and really supporting those customers in that perspective, and that is really the work that the team has been doing. We are following very closely, the sources of funds and ensuring that we start to see that flow, and keeping an eye on that. Maybe the second area in life sciences we are keeping a very close eye is the development of the growth in instrumentation.

Speaker #1: We saw weakness, quite honestly, pretty much across the board in all geographies, perhaps except JPAC or kind of the Asia region, except China. When we look at what is going on, it is clear that it's not even throughout, right?

Speaker #1: There are certain institutions that have funding, so it's really a matter of looking at where the funding is and really supporting those customers from that perspective.

Speaker #1: And that's really the work that the team has been doing. We're following very closely the sources of funds and ensuring that we start to see that flow, keeping an eye on that.

Speaker #1: Maybe the second area in life sciences we're keeping a very close eye on is the development of the growth in instrumentation. And there, as I mentioned, we did see quite a difference in the first quarter versus the second quarter.

Monica Manotas: There, as I mentioned, we did see quite a difference in the Q1 versus the Q2. It is really nice to see how that has improved in the Q2, and I think that is really a good testament of the overall recovery, particularly what we are seeing in the biopharma segment.

Speaker #1: So it's really nice to see how that has improved in the second quarter. And I think that's really a good testament to the overall recovery, particularly what we're seeing in the biopharma segment.

Speaker #5: Got it. Thank you. And one quick—oh, sorry—yeah, one quick follow-up, if I may, regarding the supply chain issues that prevented you from shipping all orders.

Jan Koch: Got it. Thank you.

Monica Manotas: You take that, Jan, or call it.

Jan Koch: Oh, sorry. Yeah, one quick follow-up, if I may, regarding the supply chain issues that prevented you from shipping all orders. Could you quantify that impact and have these issues now been resolved?

Speaker #5: Could you quantify that impact, and have these issues now been resolved?

Speaker #1: Yeah. So the issues relate particularly to supply with a couple of major suppliers that we have within CAVRO. We do see an improvement overall, but we expect that recovery to take place throughout the second half.

Monica Manotas: Yeah. The issues relate particularly to supply with a couple of major suppliers that we have within Cavro. We see an improvement overall, but we expect that recovery to take place throughout the H2, so I think it is going to be a gradual one. That is what I would say. I mean, from the perspective of the size of it, maybe just to give you a sense and maybe you have a sense of the size of Cavro. It did put Cavro in total negative, so you should see that going back to positive territory as we recover overall.

Speaker #1: So I think it's going to be a gradual one. That's what I would say. And I mean, from the perspective of the size of it, maybe just to give you a sense—and maybe you have a sense—of the size of CAVRO, it did put CAVRO in total negative.

Speaker #1: So, you should see that going back to positive territory as we recover overall.

Speaker #5: Got it. Thank you.

Jan Koch: Got it. Thank you.

Speaker #1: Thanks, Jan.

Camila Japur: Thank you.

Speaker #2: The next question, Councillor Sebastian Fogel from UBS. Please go ahead.

Camila Japur: The next question comes from Sebastian Vogel from UBS. Please go ahead.

Operator: The next question comes from Sebastian Vogel from UBS. Please go ahead.

Speaker #6: Hello, and good morning. I've got two questions. The first one is on the margins. If we—I mean, it's not easy, but nonetheless—to think about how margins were looking in June or May compared to the average of H1 that you gave us.

Sebastian Vogel: Hello, good morning. I have got two questions. The first one is on the margins, if we. It is not easy, but nonetheless, to think about how margins we are looking in June or May compared to the average of H1 that you gave us. Is there any sort of ballpark indication that you can provide us? The other question I would then take afterwards.

Speaker #6: Is there any sort of ballpark indication that you can provide us? The other question I would think to then take afterwards.

Speaker #3: Yeah, it came on strong more at the end of the quarter, but this is because of the fluctuation in revenue that we have more concentrated at the end of the quarter.

Camila Japur: Yeah. It came strong more in the end of the quarter, but this is because of the fluctuation in revenue that we have more concentrated in the end of the quarter. That is the main reason. The volume helps, right? Yeah.

Speaker #3: So that's the main reason. And our volume helps, right? So, yeah.

Speaker #6: Sure. But are we talking about, whatever, 50 basis points higher than the average, or more like 100 basis points higher? Or is it just some sort of—yeah, any additional granularity would be great.

Sebastian Vogel: Sure. But do we talk like whatever, 50 basis points higher than the average or more like 100 basis points? Or is it just some sort of granularity? That would be great.

Speaker #3: We don't disclose on that detailed level, Sebastian.

Camila Japur: We do not disclose on that detail level, Sebastian.

Speaker #6: Sure. Then my second question is with regard to the underlying improvements that you were showing in the waterfall charts. And as you said, right, you have about 180 basis points in the first half.

Sebastian Vogel: Sure. My second question is with regard to the underlying improvements that you were showing into the waterfall charts. As you have said, right, you have 180 basis points in H1. You guide for 40 to 140 basis points for the full year. Is that just outright overall massive conservatism or is it something to be expected to see these 180 basis points going something like, yeah, the midpoint maybe in the 90 camp?

Speaker #6: You guide for 40 to 140 basis points for the full year. So, is that just outright overall massive conservatism, or is there something to be expected to see these 180 basis points going something like, yeah, the midpoint maybe in the 90 camp?

Speaker #3: Yeah. So, as we mentioned, we are very confident in the guidance for the second half and the full year. And we believe, as Monica mentioned, that we will be more on the upper part.

Camila Japur: Yeah. As we mentioned, we are very confident on the guidance for H2 and the full year. We believe, as Monica mentioned, that we will be more on the upper part. I just started in June, so I want to have a better view of our cost drive, cost base to feel very confident to change guidance at this stage, but we are confident that we will be in that range, more in the upper part.

Speaker #3: It's my—I just started in June. So, I want to have a better view of our cost drivers, cost base, to feel very confident to change guidance at this stage.

Speaker #3: But we are confident that we'll be in that range, more toward the upper part.

Speaker #6: Got it. Many thanks.

Sebastian Vogel: Got it. Many thanks.

Speaker #2: The next question, Councillor Delphine Lelouet from Bernstein. Please go ahead.

Sebastian Vogel: The next question comes from Delphine Lelouet from Bernstein. Please go ahead.

Operator: The next question comes from Delphine Le Louët from Bernstein. Please go ahead.

Speaker #4: Yes. Hello. Hi. Good morning, everybody. Just to get back on the tariff, please—can we get a sense of the seasonality going into H2? And can you confirm that approximately 90% or 95% seen so far in H1 was dedicated to Life Sciences?

Delphine Lelouet: Yes, hello. Hi, good morning, everybody. Just to be back on the tariff, please, can we get the sense of the seasonality getting into H2 and to confirm that approximately 90% or 95% so far that we have been seeing into H1 was dedicated to the life science? This is the first question. The second question deals with the investment which is ongoing, both regarding AI and regarding IT infrastructure. Can you give us a sense of how big is that for the Rewired and the Reignite and how much we should think about that getting into 2027?

Delphine Le Louët: Yes, hello. Hi, good morning, everybody. Just to be back on the tariff, please, can we get the sense of the seasonality getting into H2 and to confirm that approximately 90% or 95% so far that we have been seeing into H1 was dedicated to the life science? This is the first question. The second question deals with the investment which is ongoing, both regarding AI and regarding IT infrastructure. Can you give us a sense of how big is that for the Rewired and the Reignite and how much we should think about that getting into 2027?

Speaker #4: This is the first question. The second question deals with the investment, which is ongoing both regarding AI and regarding IT infrastructure. Can you give us a sense of how big that is for the Rewired and the Reignite initiatives, and how much we should think about that going into '27?

Speaker #3: So, let's start with tariffs here. In the first half, as you saw in the bridge, it was a negative impact of 50 bps.

Camila Japur: Let's start with tariffs here. In the H1, as you saw in the bridge, it was a negative impact of 50 bps, and we got a bit refund that is not visible in the bridge, right? Because this is adjusted. For the H2, the impact should be lower. We estimated around 30 bps, which lead for the full year impact of 40 bps. This reflects the most recent change in the tariffs communicated, right? When it comes to investments, for the Rewired program, as you know, this is a journey, is a 3 years program. Our expectation is that in 2026, we are more in the lower end of the spend. 2027, that will increase because there are a lot of transformation going on in the company. It will be a high impact in 2027.

Camila Japur: Let's start with tariffs here. In the H1, as you saw in the bridge, it was a negative impact of 50 bps, and we got a bit refund that is not visible in the bridge, right? Because this is adjusted. For the H2, the impact should be lower. We estimated around 30 bps, which lead for the full year impact of 40 bps. This reflects the most recent change in the tariffs communicated, right? When it comes to investments, for the Rewired program, as you know, this is a journey, is a three years program. Our expectation is that in 2026, we are more in the lower end of the spend. 2027, that will increase because there are a lot of transformation going on in the company. It will be a high impact in 2027.

Speaker #3: And we got a bit of a refund that is not visible in the bridge, right? Because this is adjusted. But in the second half, the impact should be lower.

Speaker #3: We estimated around 30 bps, which leads to a full-year impact of 40 bps. And this reflects the most recent change in the tariffs.

Speaker #3: Communicated, right? When it comes to investments for the Rewired program, as you know, this is a journey—it's a three-year program. Our expectation is that in 2026, we will be more at the lower end of the spend.

Speaker #3: '27—that will increase because there are a lot of transformations going on in the company. So, it will be a high impact in 2027.

Speaker #3: For the IT investments, what we call the Elevate program—that is, SAP S/4HANA and the CRM system—here we are more towards the end of the program.

Camila Japur: For the IT investments, what we call Elevate program, that is SAP S/4HANA and the CRM system. Here, we are more towards the end of the program, so our expectation is to go live in the H1 of 2027. I expect the spend for half at similar level than we had in H1 of 2026. That's just to give you an idea.

Speaker #3: So our expectation is to go live in the first half of 2027. And I expect the spend per half to be at a similar level as we had in the first half of 2026.

Speaker #3: So that's just to give you an idea.

Speaker #4: No, no. Perfect. Thank you. Very useful. Thanks a lot.

Delphine Lelouet: No, but perfect. Thank you. Very useful. Thanks a lot.

Delphine Le Louët: No, but perfect. Thank you. Very useful. Thanks a lot.

Speaker #1: Ms. Delphine, on the tariffs point, you are right that the majority of the tariffs are borne by our Life Sciences business. That just has to do with the way the contracts are set up on the partnering side.

Monica Manotas: Delphine, on the tariffs point, you are right that the majority of the tariffs are borne by our life science business. It does just have to do with the way the contracts are set up on the partnering side.

Delphine Lelouet: Mm-hmm. Thanks.

Speaker #4: Thanks.

Delphine Le Louët: Thanks.

Speaker #2: As a reminder, if you wish to register for a question, please press star followed by one. We now have a follow-up question from Harry Gill from Bernberg.

Delphine Lelouet: As a reminder, if you wish to register for a question, please press star followed by one. We have now a follow-up question from Harry Gills from Berenberg. Please go ahead.

Operator: As a reminder, if you wish to register for a question, please press star followed by one. We have now a follow-up question from Harry Gills from Berenberg. Please go ahead.

Speaker #2: Please go ahead.

Speaker #6: Hi. Thank you so much for taking the follow-up. I think you noted mid-single-digit growth for the life sciences business in China. Could you maybe just discuss what you're seeing in the different end markets—maybe academia and government versus biopharma—and how sustainable that growth is?

Harry Gills: Thank you so much for taking the follow-up. I think you noted mid-single-digit growth for the life sciences business in China. Could you maybe just discuss what you are seeing in the different end markets, maybe A&G versus biopharma, and how sustainable that growth is? Thank you.

Speaker #6: Thank you.

Speaker #1: Yeah, thanks for the question, Harry. So, you're right—we did see that business return to growth. When I think about the market dynamics in China, I don't really think anything has changed relative to perhaps what we discussed at the beginning of the year and even towards the end of last year.

Monica Manotas: Yeah, thanks for the question, Harry. So you are right. We did see that business back to growth. When I think about the market dynamics in China, I do not really think that anything has changed relative to perhaps what we discussed maybe at the beginning of the year and even towards the end of last year. I think that what changed is more our team's understanding of how to win in that market overall. So when you actually look at the overall results by segment, we see that the driver of the growth for us has been on the biopharma side, which is nice to see. I think I have shared in the past that China is very much at the forefront when it comes to innovation. When we actually first started to see the concept of robotic work cells applied into autonomous labs, it was actually there, in China.

Speaker #1: I think that what’s changed is more our team’s understanding of how to win in that market overall. And so, when you actually look at the overall results by segment, we see that the driver of the growth for us has been on the biopharma side.

Monica Manotas: So when you actually look at the overall results by segment, we see that the driver of the growth for us has been on the biopharma side, which is nice to see. I think I have shared in the past that China is very much at the forefront when it comes to innovation. When we actually first started to see the concept of robotic work cells applied into autonomous labs, it was actually there, in China.

Speaker #1: Which is nice to see. I think I have shared in the past that China is very much at the forefront when it comes to innovation. When we actually first started to see the concept of robotic work cells applied in autonomous labs,

Speaker #1: It was actually there in China. So our offering there, including what we have through our LabWorks team, resonates very well with the customers over there.

Monica Manotas: Our offering there, including what we have through our Labworks team, resonates very well with the customers over there. That's why I think that's what's driving our growth in biopharma, which, I think from a market perspective, I think it is sustainable. I think it will be a matter of us continuing to execute well and execute to continue to gain share in both. I think on the academia side, it hasn't really changed. The concept of local continues to be important, and typically what our customers will need to do is they will have in tenders a certain minimum requirement of the made-in-China piece, and then they work with us to figure out how our piece fits within the total to increase their chances of getting the funding.

Speaker #1: And that's why I think that's what's driving growth in biopharma. I mean, I think from a market perspective, I think it is sustainable. So I think it will be a matter of us continuing to execute well and execute to continue to gain share in I think on the academia side, I mean, it hasn't really changed the concept of local is continues to be important.

Speaker #1: And typically, what our customers will need to do is they will have, in tenders, a certain minimum requirement, right, of the "Made in China" piece.

Speaker #1: And then they work with us to figure out how our piece fits within the total, to increase their chances of getting their funding. We had a very nice win in the first half from one of our academia customers—a tender that they put out that helped on the orders.

Monica Manotas: We had a very nice win in the H1 from one of our academia customers, a tender that they put out that helped on the orders. We haven't shipped the product, but that should help in the H2 from a revenue perspective on the academia side. But as I said, I think when you think about the overarching dynamics, I don't think they have changed. It's really more how we manage the dynamics and win in that market.

Speaker #1: We haven't shipped the product, but that should help in the second half from a revenue perspective on the academia side. But as I said, I think when you think about the overall or the overarching dynamics, I don't think they have changed.

Speaker #1: It's really more that we have managed the dynamics and win in that market.

Speaker #6: Thank you.

Harry Gills: Thank you.

Speaker #2: The next question comes from Laura Pfeiffer from Octavian. Please go ahead.

Harry Gills: The next question comes from Laura Pfeifer-Rossi from Octavian. Please go ahead.

Operator: The next question comes from Laura Pfeifer from Octavian. Please go ahead.

Speaker #5: Yes. Hi. Good morning, everyone. Thanks for taking my questions. Maybe just coming back to the sales guidance—you have not changed the wording, and you have not mentioned either that you would expect to be at the upper end.

Laura Pfeifer-Rossi: Yes. Hi, good morning, everyone, and thanks for taking my questions. Maybe just coming back to the sales guidance. You have not changed the wording, and you have not mentioned either that you would expect it maybe to be at the upper end, as you have done with the margin. Here, I am just wondering what degree of conservatism is still embedded in that implied growth rate for H1. When I take the midpoint, it is probably only 1% growth required in H2. What would prevent the strong momentum you have seen in H1 from continuing or maybe even accelerating? The second one is on Paramit, specifically maybe on the largest customer. Can you discuss a little bit more here the sales and order development you have seen and also what we should expect for the rest of the year?

Laura Pfeifer: Yes. Hi, good morning, everyone, and thanks for taking my questions. Maybe just coming back to the sales guidance. You have not changed the wording, and you have not mentioned either that you would expect it maybe to be at the upper end, as you have done with the margin. Here, I am just wondering what degree of conservatism is still embedded in that implied growth rate for H1. When I take the midpoint, it is probably only 1% growth required in H2. What would prevent the strong momentum you have seen in H1 from continuing or maybe even accelerating? The second one is on Paramit, specifically maybe on the largest customer. Can you discuss a little bit more here the sales and order development you have seen and also what we should expect for the rest of the year?

Speaker #5: As you have done with the margin, so here I'm just wondering: what degree of conservatism is still embedded in that implied growth rate for H1?

Speaker #5: I mean, when I take the midpoint, it's probably only like 1% growth required in H2. And what would prevent the strong momentum you have seen in H1 from continuing, or maybe even accelerating?

Speaker #5: And then the second one is on Paramid, specifically maybe on the largest customer. Can you discuss a little bit more here the sales and order development you have seen, and also what we should expect for the rest of the year?

Speaker #5: I think, if I remember correctly, in March you were expecting rather flattish sales trends for the largest customer. Just wondering if that has changed at all.

Laura Pfeifer-Rossi: I think if I remember correctly, in March, you were expecting rather flattish sales trends for the largest customer. Just wondering if that has changed anyhow. Thank you.

Laura Pfeifer: I think if I remember correctly, in March, you were expecting rather flattish sales trends for the largest customer. Just wondering if that has changed anyhow. Thank you.

Speaker #5: Thank you.

Speaker #1: Yeah. Thanks, Laura, for the question. So, I'm going to start with the sales guidance. I would say that here, as I mentioned in the prepared comments, I'm being prudent from a market perspective.

Monica Manotas: Yeah. Thanks, Laura, for the question. I am going to start with the sales guidance. I would say that here, as I mentioned in the prepared comment, I am being prudent from a market perspective. We are seeing the recovery, but this is something to be watched, just because I am not ready to call out a change in the trend, and that then plays a role in what we are expecting from a total sales perspective. That is the overall comment from a market perspective. I want to be prudent and continue to see as the market continues to recover.

Speaker #1: We are seeing the recovery, but this is something to be watched, just because I'm not ready to call out a change in the trend.

Speaker #1: And that then plays a role in what we're seeing from, or what we are expecting from, a total sales perspective. So that's the overall comment from a market perspective.

Speaker #1: I want to be prudent and continue to observe as the market continues to recover. With that said, obviously, we do have some differences from a comp perspective to be careful about, particularly on the partnering part of the business, which ties to the second part of the question. We always knew that we would have a harder comp from a second-half perspective because our largest customer had a stronger second half in 2025.

Monica Manotas: With that said, obviously, we do have some differences from a comp perspective to be careful about, particularly on the partnering part of the business, which ties to the second part of the question, which we always knew that we would have a harder comp from a second half perspective because our largest customer had a stronger second half in 2025. As it relates to Paramit, as you said, we have been guiding for a flat number in 2026 versus 2025. We had really strong growth in the first half, as Camila mentioned, and this was particularly even more so in Q1, just because a matter of how the comp actually worked in 2025. We did see, as we expected, a strong H1 with them.

Monica Manotas: With that said, obviously, we do have some differences from a comp perspective to be careful about, particularly on the partnering part of the business, which ties to the second part of the question, which we always knew that we would have a harder comp from a H2 perspective because our largest customer had a stronger H2 in 2025. As it relates to Paramit, as you said, we have been guiding for a flat number in 2026 versus 2025. We had really strong growth in the H1, as Camila mentioned, and this was particularly even more so in Q1, just because a matter of how the comp actually worked in 2025. We did see, as we expected, a strong H1 with them.

Speaker #1: As it relates to Paramid, yes. So as you said, we have been guiding for a flat number in 2026 versus 2025. We had really strong growth in the first half, as Camila mentioned.

Speaker #1: And this was particularly even more so in Q1, just because of how the comp actually worked in 2025. So, we did see, as we expected, a strong H1 with them.

Speaker #1: As we reviewed the next six months with them, and looking particularly at how they're seeing the product mix—because, as you know, from a demand perspective, they really have no issue with how they're seeing the growth—which is really great to see.

Monica Manotas: As we reviewed the next 6 months with them and looking particularly at how they're seeing the product mix, because as you know, from a demand perspective, they really have no issue with how they're seeing the growth, which is really great to see. But as we look at our deliveries and how they are expecting product mix, right now, the latest numbers are coming in just slightly below the 2025 numbers. That doesn't change at all the expectations of the Paramit or the CDMO Business from a full-year perspective. So they will make up that small difference with growth in other customers. But that's what the latest discussions with them are.

Monica Manotas: As we reviewed the next six months with them and looking particularly at how they're seeing the product mix, because as you know, from a demand perspective, they really have no issue with how they're seeing the growth, which is really great to see. But as we look at our deliveries and how they are expecting product mix, right now, the latest numbers are coming in just slightly below the 2025 numbers. That doesn't change at all the expectations of the Paramit or the CDMO Business from a full-year perspective. So they will make up that small difference with growth in other customers. But that's what the latest discussions with them are.

Speaker #1: But as we look at our deliveries and how they are expecting product mix, right now the latest numbers are coming in just slightly below the 2025 numbers.

Speaker #1: But that doesn't change at all the expectations of the Paramid or the CDMO business from a full-year perspective. So, they will make up that small difference with growth in other customers.

Speaker #1: But that's what the latest discussions with them are.

Speaker #5: Okay. That's helpful. Thank you.

Laura Pfeifer-Rossi: Okay. That's helpful. Thank you.

Laura Pfeifer: Okay. That's helpful. Thank you.

Speaker #2: We now take the last question for today's call, which is coming from Daniel Yelovkan from ZKB. Please go ahead.

Laura Pfeifer-Rossi: We now take the last question for today's call. It's coming from Daniel Jelensperger from ZKB. Please go ahead.

Operator: We now take the last question for today's call. It's coming from Daniel Jelovcan from ZKB. Please go ahead.

Speaker #6: Yeah. Good morning also from my side. First of all, Camila, a good start in retrospect. I only heard very positive things from investors when you were with Ublock.

Daniel Jelensperger: Good morning also from my side. First of all, Camila, a good start in retrospective. I only heard very positive things from investors when you were with u-blox. So yeah.

Daniel Jelovcan: Good morning also from my side. First of all, Camila, a good start in retrospective. I only heard very positive things from investors when you were with u-blox. So yeah.

Speaker #6: So yeah.

Speaker #1: Thank you.

Monica Manotas: Thank you.

Speaker #6: And so, first question: I didn't really understand the negative hedging costs. I mean, when you're losing the top line on the margin in terms of forex, shouldn't there be a positive hedging gain below the EBIT?

Daniel Jelensperger: First question, I did not really understand the negative hedging costs. When you lose on the top line and on the margin in terms of Forex, should there not be a positive hedging gain below the EBIT? That is my understanding. Can you maybe explain the bridge, how that happens? First question.

Daniel Jelovcan: First question, I did not really understand the negative hedging costs. When you lose on the top line and on the margin in terms of Forex, should there not be a positive hedging gain below the EBIT? That is my understanding. Can you maybe explain the bridge, how that happens? First question.

Speaker #6: That's my understanding. So, can you maybe explain the bridge—how that happened? First question.

Speaker #1: So this is zero versus spot, and then—but we have the cash, it's not impacted. So we have an average, right? This is zero.

Camila Japur: This is zero versus spot. The cash, it is not impacted, so we have in average, this is zero. Now we have as the dollar is going up now in the later phase and month, then we also have the negative impact of the hedging contract. This helps in the cash flow. We do have a large exposure to dollar, a net exposure of around 160 million, so it is important that we keep the hedging contract to mitigate that impact. We do not disclose more details about it in this call. Yeah.

Speaker #1: But then we have the US dollar going up now in the later space and month. Then we also have the negative impact of the hedging contract, right?

Speaker #1: So, but this helps with the cash flow. We do have a large exposure to the dollar—a net exposure of around $160 million. So it's important that we keep the hedging contract to mitigate that impact.

Speaker #1: But we don't disclose more details about it on this call. Yeah.

Speaker #6: Okay. Okay. And last question. On the academia side, I mean, a lot of peers have now said that there is a budget which is keyed to 82% to late-stage clinical work.

Daniel Jelensperger: Okay. The last question on the academias. A lot of peers have now said that there is a budget which is geared to 82% to late-stage clinical work and 18% to early discovery work at academias. Can you elaborate a bit on the impact on Tecan, on where are you more geared? That would be helpful. Thank you.

Daniel Jelovcan: Okay. The last question on the academias. A lot of peers have now said that there is a budget which is geared to 82% to late-stage clinical work and 18% to early discovery work at academias. Can you elaborate a bit on the impact on Tecan, on where are you more geared? That would be helpful. Thank you.

Speaker #6: And 18% to early discovery work at academia. So, can you elaborate a bit on the impact on tech, on where you are more geared?

Speaker #6: That would be helpful. Thank you.

Speaker #1: Yeah, I can take that, Daniel. And I assume you're talking about NIH funding. Is that correct?

Monica Manotas: Yeah, I can take that, Daniel, and I assume you are talking about NIH funding. Is that correct?

Speaker #6: Yes.

Daniel Jelensperger: Yes.

Daniel Jelovcan: Yes.

Speaker #1: Yeah, so, I mean, we did see earlier this year that there was approval for this fiscal year on a budget that was slightly higher than the previous year.

Monica Manotas: Yeah. We did see earlier this year that there was approval for this fiscal year on a budget that was slightly higher than the previous year. I think what our customers are telling us is they do not necessarily see the actual flow of the funds, and there has been data out there showing that. That is really the key watch-out as we look forward in supporting our customers in this segment is how will they then start to see the flow of funds into their projects? Because one thing that is very clear is that if you think about the priorities in what the administration wants to see accelerated from a research perspective, it is things related to AI and automation. I think it is how we expect to see those funds flowing through, and that is really what they are not seeing, and that is driving their level of conservatism.

Speaker #1: I think what our customers are telling us is they don't necessarily see the actual flow of the funds, and there's been data out there showing that.

Speaker #1: So that's really the key watch-out as we look forward in supporting our customers in this segment: how will they then start to see the flow of funds into their projects.

Speaker #1: Because one thing that is very clear is that, if you think about the priorities in what the administration wants to see accelerated from a research perspective, it's things related to AI and automation.

Monica Manotas: Because one thing that is very clear is that if you think about the priorities in what the administration wants to see accelerated from a research perspective, it is things related to AI and automation. I think it is how we expect to see those funds flowing through, and that is really what they are not seeing, and that is driving their level of conservatism.

Speaker #1: So, I think it's how we expect to see those funds flowing through, and that's really what they're not seeing. That's driving their level of conservatism.

Speaker #1: Certainly, a watch out, especially as they start conversations about the next fiscal year and our customers actually figure out how to prepare their brand proposals on the basis of the new rules that are in place.

Monica Manotas: Certainly, a watch-out, especially as they start conversations about the next fiscal year and our customers actually figure out how to prepare their brand proposals on the basis of the new rules that are in place.

Speaker #6: Okay, okay. But your exposure is more geared toward late-stage clinical work or early discovery?

Daniel Jelensperger: Okay. Your exposure is more geared to late-stage clinical work or early discovery? Interesting.

Daniel Jelovcan: Okay. Your exposure is more geared to late-stage clinical work or early discovery? Interesting.

Speaker #1: Yeah, it tends to be more early discovery. But when you think about the academia exposure, it's roughly about 15% of the life sciences business.

Monica Manotas: Yeah, it tends to be more early discovery. But when you think about the academia exposure, it is roughly about 15% of the life sciences business. We really have no exposure on the partnering side, so that works out to be roughly about 5% for total company.

Speaker #1: We really have no exposure on the partnering side, so that works out to be roughly about 5% for total content.

Speaker #6: All right. Thank you.

Daniel Jelensperger: All right. Thank you.

Daniel Jelovcan: All right. Thank you.

Speaker #3: Thank you very much. With that, we would like to conclude today's call. Thank you very much for your participation, and we wish you a great day.

Martin Brändle: Thank you very much. With that, we would like to conclude today's call. Thank you very much for your participation, and we wish you a great day. Thank you.

Speaker #3: Thank you.

Speaker #1: Thank you.

Monica Manotas: Thank you.

Speaker #2: Ladies and gentlemen, the conference is now over. Thank you for choosing CorusCall, and thank you for participating in the conference. You may now disconnect your lines.

Monica Manotas: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

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Half Year 2026 Tecan Group AG Earnings Call

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