OC Oerlikon (OERL) Investor Update summary

Portfolio transformation and transaction rationale

• Agreement signed to divest Barmag to Rieter, finalizing the shift to a pure-play strategy and focusing on two core divisions since 2014.

• Barmag's divestment aligns with the 12-36 month separation plan and is expected to close in Q4 2025, subject to regulatory approvals.

• Barmag valued at CHF 850 million enterprise value, with an earnout of up to CHF 100 million based on EBITDA performance through 2028, for a total potential value of CHF 950 million.

• Proceeds will be used to repay a CHF 475 million term loan, with the remainder for general corporate purposes and potential shareholder distribution.

• The two divisions have distinct markets, customers, and business models, with minimal synergies or overlaps.

Strategic focus and operational impact

• Surface solutions will become more agile and independent, with a plan to right-size corporate costs and achieve CHF 13 million in annual savings.

• Overhead functions are being merged and all costs currently borne by Barmag will be eliminated.

• The company is positioning itself as a pure-play surface solutions leader, emphasizing innovation, sustainability, and a strong brand.

• Surface solutions benefits from a diversified customer base, scalable global footprint, and resilience in challenging markets.

• Focus is on organic and inorganic growth opportunities, especially in underrepresented regions and new industries.

Financial guidance and outlook

• 2025 guidance updated to reflect Barmag as discontinued operations; sales growth expected to be flat to low single digits.

• Operational EBITDA margin guidance for surface solutions is approximately 18.5%, reflecting the absorption of corporate costs.

• Medium-term sales growth target is 4%-6%, with continued focus on cost efficiency and resilience amid macroeconomic uncertainties.

• Expected tax rate for standalone business is around 27%; CapEx for RemainCo projected at CHF 115 million.

• Management structure remains unchanged for now, with a transition in executive leadership expected by H1 2027.