PVA TePla AG

Good morning, ladies and gentlemen, and welcome to today's earnings call of PVA Tepla. Today, CEO Jaline Ketta and CFO Markus Gross will present our business highlights for the first half of 2025, as well as the corresponding financial figures. And as usual, you will have the opportunity to ask your questions in a Q&A session after the presentation. And having said this, let me now hand over to CEO Jaline Ketta.

Thanks, Sebastian, and also a very warm welcome and good morning to our earnings call of the second half of 2025 from my side. Today, we will give you a brief update on our first half of 2025. And I would like to also take the opportunity today to remind you that our Capital Markets Day will be held in London on the 2nd of September. And it's possible to participate in presence or remote. So if you're not signed up yet, please take the opportunity to let us know if you want to participate. Before we are starting with the presentation, let me give you a brief general overview about our situation. The economic environment is still challenging. And investment decisions from potential customers and customers are still holding back. So hard to make the decisions at the actual moment still because there are uncertainties that our customers have to handle with. Despite that situation, we have ended with a very solid first half of 2025. And we are very well on track with our strategic execution of our long-term targets. Let's have a look to our agenda of today. We will start with the business highlights of the second quarter and the first half of 2025. Then Markus will give you a brief overview about the financials. And I will then close with our strategy update and the outlook before we are coming to your questions. The highlights of the first half can be divided into three categories. Let's start with the financial development. Again, we have been able to improve our gross margin to 33.3%, which is a very great development on our side, also in the operational business activities, becoming contracts which are having a better margin set up steadily. And our order intake increased by 43% compared to prior year. But what is even more important is that we are seeing a steady increase in our order book from month to month and also an increasing level of discussions with potential customers and potential contracts. Also when there still is a little bit uncertainty when these contracts are going to be closed. But this gives us confidence that there will be a market picker in front of us. The market growth is still seen by us and our management team. It's just a matter of when exactly is the point when that's getting to be cleared off again. On the strategy side, we also have had some very nice developments, especially in the metrology business, which is an important field of growth for us. We have had additions in our portfolio and stepped into corporations, which has also extended our metrology portfolio. And on the R&D side, we started some activities with strong partners in the area of future materials. Despite all the uncertainties in the market, We are very confident that we will achieve our guidance at year end at the lower end of the target range, which we set at 260 to 280 million in revenue and 34 to 39 million in EBITDA. So before we are going deeper into all of that, I would like to hand over to Markus for the update in the financials.

Thank you, Jolien, and a very warm welcome from my side. I'm happy to guide you through our financials for Q2 and H1 2025. But before we go into detail here, let me give you two important key messages. Our sales are down by 11.6%, but we believe this is temporarily. And much more important to us, the order intake is up by 42%. Secondly, EBITDA is temporarily affected by strategic investments in R&D and our sales infrastructure. But with the improvements in the gross margin, and if the sales would have been on the same level as in H1 2024, these investments would have been by large chunks offset by the margin improvement. So let's go into the details. Our sales revenues decreased by 11.6% to approximately 120 million. Main reasons here are project timing and revenue delays. And when we take a closer look at our segment split, we can see that semiconductor contributed by 68% to our sales and is down by 30.7%, which is especially impacted by cut-off date effects and postponed project acceptances. In the industrial segment, 32% of our sales revenues were made. And here we see a decrease of 6.6% year on year. with lower volume due to a weak order intake in 2024. When we take a closer look at our regional split, we can see North America with 16%, which is an increase coming from 12% in Q1. So we are here on track with our strategic goal to widen our footprint in North America. And finally, metrology continues to contribute significantly to our sales. When we take a closer look at the order intake, we can see an increase of 42.9% or 104 million in H1 2025. This means we have an increase in the semiconductor segment of 27%, which is mainly attributable to metrology. And looking at industrial, we see an increase of 79% from 2020 million to 39 million. Here we see demand coming from the energy sector, but also aerospace and advanced industrial applications like graphite purification for semi-grade applications. Looking at our product groups, we see that 51% of our oil intake is attributable to metrology. This means a five percentage points increase coming from Q1, but even more impressive if you compare the absolute volume between H1 2024 and H1 2025, that's a 28% increase in metrology. And looking at the regional split, we just mentioned the 16% sales coming from North America. Order intake is despite the US tariff situation with 20-20% on a very stable level. When we take a closer look over the development of the order intake in the last 12 months, we can see a clear and positive pattern here with a CAGR of 17.5% between Q2 2024 and Q2 2025. What's also important from this slide is the industrial segment has project lead times of 12 to 18 months, whereas the majority of projects, the revenue is recognized over time. But the majority of these revenues is recognized in the second half of the project runtime. And when we are taking a closer look at semiconductor, the majority of order intake is coming from the metrology business with lead times between three to four months. So we can expect from both segments an increase in sales revenue in the second half of 2025. Taking a closer look at the semiconductor segment, we can see that sales revenue decreased by 13.7% to 82 million. Here are two major effects at play. First, The crystal growing business, which contributed in large parts to our sales in the past, these projects are coming to an end and are substituted over time by metrology projects. And here we are seeing in projects, not only metrology, but in general in semiconductor in H1 at the end of June, cutoff effects, which are expected to catch up in the second half of 2025. We already mentioned that the EBITDA has been burdened by the strategic investments we already announced and are following on through. So we are seeing a decline in the EBITDA of 25.8% down to 13.5%. But with an improved growth margin from 31 to 33%, these investments would already have been offset as I already mentioned earlier. And with a very positive development of the order intake, which is up by 27% to 64 million, we're happy to give the message that the majority is coming from metrology and with an emphasis on customers from Asia. In the industrial segment, we're seeing revenues which are decreasing by 6.7%, approximately 38 million in H1 2025. Here, the weaker order intake in 2024 is becoming visible, but with the order momentum we're seeing for the second half, we're very optimistic that there will be revenues on a higher level than we are currently seeing here. The EBITDA improved by 5.9% to 5.4 million, which is a margin of 40.2%. And here we are seeing a favorable product mix with more attractive margins and also efficiency gains in our production facilities. And finally, the order intake increased by 79.1% to 39 million. And here energy applications, but also aerospace and the already mentioned graphite purification applications were part of the order intake. Taking a closer look at our group profit, we can see that the margin improved from 31.3% to 33.3%, and that despite the weaker sales, which is, from our perspective, proof of the competitiveness of our products. But due to the weaker volume, we're seeing a decrease in the gross profit by 5.9% to approximately 40 million. EBITDA is down by 32% in H1 with 15 million. And here we are seeing the impact of our strategic investments, which will pay off in the future. In Q2, the EBITDA was also burdened by foreign currency valuation effects, which are not realized at this point, and we're expecting to improve a bit over the second half of the year.