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.

Thanks, Markus, for that brief update on the financials. And let's now go deeper into our strategic update and the outlook. starting with some news from the metrology side. You know that metrology growth is something very present in our strategy. And I would like to give you a short recap what we already have done in the first quarter to have the full understanding about how we are developed. With the acquisition of Deskom Pro Engineering in the beginning of the year, we supported our organic growth in the acoustic methodology already. With this acquisition, we have been able to extend our business activities and our production line to a higher volume and already made a huge step forward for being prepared for higher volumes coming out of our qualification processes with customers from Asia in that field of business. With the acquisition of dive imaging systems in the first quarter, which already has been renamed to PVA Vision, we extended our metrology portfolio on the optical metrology side. And this is a metrology method which is not present in the semiconductor value chain yet, but it's it's needed for future applications. So we are jumping into a market with that method where we are already addressing something that is coming up over the next years. In the second quarter now, we stepped into a cooperation with Zentech Instruments. This also extends our metrology portfolio on the optical measurement side with a method called ellipsometry. This is used for the measurement of the thickness and uniformity of semiconductor coatings, and it's a non-destructive testing method. It means that you can reuse the parts that have been tested afterwards, and there are no contamination that are coming up with that method. So it's possible to use it in a highly automated way having a huge amount of parts that are going through that system. This is an already established method in the market, so well known in the semiconductor industry, and there is also an existing market behind where we are stepping into now with that method. together with zentech we are having a joint development project where we are placing an automated system into the market which will be launched in the beginning of 2026 and we will present that already on the simicon europe in 2025 to potential customers and Yeah, in total, you can see that there are huge steps already with the extension and creation of our methodology portfolio that we have had in the last half year. And that's something where we are very excited about to be that fast on that track as well next to that organic qualification process that we are still pushing forward. Second area I would like to give you more color on is on the R&D side. You know that we founded our PVA Technology Hub in 2024. And there are already several projects that we have started with that concept. The PVA Technology Hub is placed to have a more mid and long-term oriented focus on our R&D work and to have a view across all of our technology lines. In the past, we have been very focused on single technologies and single customer projects, more going into a timeframe of one to three years. And with that concept now, we are heading to a longer timeframe three to five years and above. We already started projects with future materials like silicon carbide. You know well about that project already. But aluminum nitride is also something that we are working with. And for that area, we found very strong partners with the Leibniz Institute of Crystal Growth in Berlin and Siltronic AG. to further develop processes and our equipment regarding this material. Aluminum nitride is something that is having a similar performance, even better than silicon carbide, but it's on a significantly earlier stage than silicon carbide. So it's going to high power areas, high frequency areas. It's an even more isolating material than silicon carbide. So going more in the direction of the performance of diamond, for example. And there is a field of use in the future that we see, And we are on the early stage, which means that we are now preparing ourselves to have the right equipment and technology available for the scale in the market. The second project that we finalized in the second quarter is the expansion of our collaboration with iMac. and our partnership with them. IMEC is the world's leading research institute for semiconductor technology located in Belgium. And we already have had a long time experience with them in the development of projects in the acoustic metrology area. You can see the results of that cooperation with the scale in the market that we are doing actually. And what we have done with that collaboration is extending they work with them to our whole technology portfolio, metrology portfolio, sorry. So it's including existing technologies like our optical technologies, our chemical technologies, but also new metrology, which are in an R&D status right now, or which will come on board because of future corporations or acquisitions that we are doing. With that, we are getting even more presence in the semiconductor value chain as an important actor and have the possibility to participate on future development projects for metrology in the semiconductor area. The second area which we extended in that cooperation is the silicon carbide as a future material. We are not talking about actual markets here. So silicon carbide actually is used more for e-mobility and the energy sector as a high performance material. We see more areas of use which are coming up in the future. And this is related to this collaboration. So we are closely tracking what is happening with that project and being also on a very early stage to and get our technology included in that future developments. So you see, PVA is changing shape, going more long-term oriented in R&D, and we are steadily making progress to stay on that track. Ladies and gentlemen, let's talk about our guidance 2025 and start with our operational focus on the second half of 2025, which will stay with an expansion of our metrology solution business. You know, we stepped into qualification processes with our technology and we are making progress with that. We get again positive signs for technology qualification and additional customers. And we stepped in further processes on the packaging side with our technologies, so we steadily will see increasing activities in our order book coming from that qualification processes. Already in the second quarter, you can see a significant amount, which is related to that positive development. Additionally to that, we are staying with the increase in our infrastructure, especially in sales and service in North America and Asia. We already made progress in that as well with adding people on our teams, qualifying people in our teams and ramping up possibility for 27 support levels. There is still some work to do, but we are on a very well track on that as well. And in general, we are working on the optimization of our processes, preparing our organization for future growth. On the financial target side, as already mentioned in the very beginning, we are confident that we will reach our guidance at the lower end of the target range, which we set at 260 to 280 million in sales and 34 to 39 million in EBITDA. So PVA in general is on a journey, on a continuous transformation process, being successful in the future. And last but not least, I would like to take the opportunity to thank Gerd Fiesern. Gerd has been with PVA more than 20 years now. Most of you know him very well, and he was building the investor relations department from the very beginning to where we are today in a high professional way. And he also took care about his own succession plan. And now we are shortly before his retirement. I know that he doesn't like to hear that. And Sebastian Gonzi now will take over the full responsibility for investor relations. And that's a great development on that side, but even greater is that I'm very delighted that Geert will stay with us. He has the motivation to bring PVA forward on certain areas and public affairs also is something that's very important for us. So I'm very happy that I have him on the team to create this department to a higher professional stage and be having the benefit for PVA also on that stage. So looking forward to work with both of them and in both departments. And yeah, thanks for listening now in our earnings call of the first half and looking forward to see most of you on the 2nd of September on our Capital Markets Day. And for now, we are here to take your questions.

All right, thank you very much for your presentation, Jaline and Markus. And as you said, we will now move on to the Q&A session. For a dynamic conversation, we kindly ask you to ask questions in person via the audio line, and the option to submit questions via chat is not available. and if you want to ask a question please press the raise hand button in the zoom call window i will then call you up and before you ask your questions please once again state your full name and your company thank you very much and first up we have michael coon good morning can you hear me yes yes good morning um

So essentially three questions. The first one is on, let's say, cost ramp versus sales ramp. You again mentioned your strategic investments and obviously the OPEX moving up. Is that, let's say, a dynamic thing that will continue throughout this year and into next year, maybe in two years, or will there be kind of a setup where you're satisfied with and where, let's say, the OPEX growth will slow down and then, let's say, an accelerated margin growth kicking in? That would be the first one. Second one on tariffs. Do you see any impact? And let's say, what are your mitigation measures? Obviously, if tools like OCOS where you can produce locally in the US would be interesting to get some more color here. And then lastly, on the ongoing qualification processes, you mentioned more processes underway. Maybe you could give us some rough indication on, let's say, the number of major customers you work with at the moment and let's say the number of FAPs you try to get qualified for over the next few months. Thank you.

All right, then let's start with cost ramp versus sales. So there are two major parts where we are investing. The first one is R&D, where we are heading to your percentage of roughly 10% in the future. So there will be an increase coming from now on still. And secondly, it's the sales and service part where we are especially hiring people, but also adding to it, which are then on the more steadily cost basis. But you're adding people means that there is a gradual increase over time as we're adding them from month to month now but it will come to your stable stabilization in 2026 and then we're obviously expecting the sales to ramp up here it's the people's job to bring more sales yes The second question was about the tariff situation. So currently, we're not seeing ourselves to be too impacted here. We saw some hesitation maybe, but as the situation now stabilizes, we see a steady demand also coming from the US. So in general, the risk is on our customer's side. As a GDP, as an example, is nothing we are regularly doing. And third of all, semiconductor equipment seems to be accepted from the tariffs. So that's also something which is helping us very much here.

And on the qualification processes, yes, we are working with all the major companies players in the market. We are already delivering systems to three of the most important players in the market in, let's say, higher volume size. And we are also working for qualifications with the last two players. So we are present in the US and Taiwan and Korea in Japan and steadily stepping into new qualification processes and ending technical qualifications because so it's a little bit maybe confusing from the outside because always when there is a new technology line or production line that we are talking about it's also kind of a new qualification so let's say it that way we are making progress we are steadily getting new customers on board which are and using our systems for their ramp-ups. And we are growing with the extension of these customers now.

Excellent. Thank you. All right. Thank you. And for our next question, we have a representative of Apos Capital. Please go ahead.

Yes, good morning. This is Johannes Ries from Arbus Capital. First, also, let me say thank you to GERFISA and BO Eden for 20 years for the great support and great cooperation and all the best for the future. But definitely, we will talk sometimes in the next 12 months or so. To my questions. You have mentioned that your order intake has improved month by month and that also the pipeline has increased. We are now in August. Have you seen the same trend also going on in July and maybe have signs that this trend go on in August?

Yeah, we can confirm that.

That's super. So what do you expect because there heavily on the order intake. So the book to bill is a chance that the full year the book to bill could be at least even or maybe even positive.

as the market is very challenging at the moment, we cannot exactly say on which number of book to build we will end up at the year end. But what we see is that it's getting better and better, picking up steadily. And we see still that significant market need in front of us. So a matter of time when that, yeah, let's say a little bit more close situation in investment decisions is calming down a little bit more and getting more active again. But we are confident for the long-term development of the company and that's why we are very focused on the strategic execution of our plans to address that market demand that we are seeing in front of us also when there might be some slowdown in the short-term view.

on the topic of metrology, by all the partnerships and acquisitions you have made, how much you have increased your total addressable market? And maybe also how much the addressable market will grow because advanced packaging is just at the beginning and you are focusing especially on the trend to advanced packaging, if I got it right.

That's a very great question, which we will give more color in our Capital Markets Day to talk about markets and perspectives in the future. And I think if you're not signed in yet, it would be a good idea to join.

But you have meaningful increase, that's maybe only from a direction, by this acquisition and partnerships you have announced as a total of a flexible market.

Yeah, so in general, yeah, we are not doing any corporations and acquisitions without increasing our presence in the market. And this is exactly what we are aiming to when we are getting new technologies on board. We want to have a significant presence in the market, extending our portfolio, getting more... Yeah, technologies on board to also have a full concept or even better concept for our customers to use focused on non destructive technology. So yes, we are increasing our markets position with that acquisitions.

are further ways maybe or further areas you are not present at the moment. I don't know if you, for example, coverage panel-based packaging or things like CPO where optics are co-packaged and things like this. Some other things you could add on to even increase the total addressable market.

Look, that's exactly what I said when we stepped into further qualification processes for the backend area or packaging area. There we are talking about the detection of exactly that area.

Super, maybe two last questions. First one, do you only targeting semiconductor, maybe factories and also maybe the IDM. So also we are talking with OSATs, with the outsourcing companies which are also, and also seeing not only do packaging, but also maybe the testing. Companies like ESE or MCOR also.

Yeah, so this is also something that is important for us and actors that we are talking with in the market. When we are talking about that significant volumes at the moment in that scale, it's more on other customers, like the big ones. But this is nothing that is not reflected in our books as well. So all the names you mentioned are well known on our side.

Okay, finally, how you are finished or maybe what you have to do further to build up your support and maintenance departments or maybe subsidiaries in Taiwan and Korea? Are you ready now to deliver a seven-day 24-hour support or is it still something to do and that holds a little bit back maybe the signing of the one-hour deal?

There is still something to do, but we are on a very well track with ramping a team. So we got a lot of people on board over the last months already, which are getting to qualification processes in-house. But as you know, it's not learned from today to tomorrow. And otherwise, it wouldn't be a very important technology on the market if that would be so easy. So it's a lot of work behind that, but we are making good progress. And yeah, maybe talking about 24-7 support, it doesn't mean that there has to be someone highly qualified all the time being on site at the customer level. it's more a concept where which has a lot of flexibility it has to be available for 24 7 and there has to be someone who is having a first view on the systems helping and then there have to be qualified people who are then supporting from the background coming in necessary so it's a more layer concept which we are working on we are already on the stage where we are um very well to support the systems that we are having in the field and that we are seeing in front of us.

At the end of the year, everything should be in place.

On the people side, hiring side, most of that will be done, maybe a little bit left in 2026. Also depends on the further development of the market and how fast we are going on. So we are ramping up our teams and capacities also in line with what we are seeing in front of us.

Great. Thanks a lot. Waiting for all the details on September 2nd. Thanks.

Thank you very much. Next up, we have Konstantin Hesse.

Good morning. Thank you so much for taking my questions. Also from my side, Gail, it's been a pleasure working with you. And Sebastian, looking forward to starting our interactions as well in the future. So on my side, I'd like to start on the order side again, I think, just following up on the previous question going into the second half. We've seen clearly an uptick here in Q2, quite a bit of a big one, actually, to 38 million for the quarter. When we look now into Q3, into Q4, and we're clearly still expecting growth for 26, I'm just wondering if you can give us a bit of an indication based on pipeline or even based on conversations that you're having. I think, Marcos, you just said that August, you can confirm that. I'm not sure if it was momentum or the magnitude continued in August, but if we can discuss a little bit of how we should think about this order intake curve for the rest of 25 relative to what we've seen in Q2. That would be my first question, and I'll take them individually.

So as I said, we are seeing a steady positive development on that order intake side, but also on that order discussion side. So from quarter to quarter, when we have been talking, we have had increasing incoming orders, but also level of discussions. in several areas this is related to on the one hand side the metrology area semiconductor related which is coming with the qualification processes where we will see also positive development over the next months coming from that and in the industrial and material solutions area which is related to aerospace and energy sector and there are also projects which are um yeah bigger decisions on the R&D side, on customer side. So this is something that's taking time and also positive development on the market situations. We cannot finally disclose when exactly we are seeing that pick up. But what we see is that on our side, we are having very good signs that there will be a pick up. and a further need. So let's see what's coming over the next months and staying positive also for the long-term run, because this is the focus area for us. We are in a transformation phase with that company and want to set up a long-term oriented and stable organization with a significant higher volume. And that's what we are preparing for also when we see a little leak in short-term development of the market.

I know short term, I understand industrials is a bit tough in terms of visibility, but on the metrology side, it's fair to say that you do expect to continue to see an increase into the coming quarters driven by these qualifications, basically.

We are seeing very positive development on the metrology side, semiconductor related, also in the industrial side for aerospace and energy, not so much on the material solutions side for the semiconductor area. This is more something that we are waiting for that pick up situation.

Understood. Then quickly on visibility of deliveries in the second half, I think first half we've seen sales being impacted by some delays. So in order to achieve your guidance, we have to see a significant acceleration compared to the first half. In terms of these delays and the potential recovery, Is this more hope-based or is it basically just a handshake and it's definitely going to happen in the second half? What I'm trying to get there basically is, is there a potential risk to the outlook due to continued delays potentially?

In general, we are very confident that there will be a pickup because as I mentioned, most projects in the industrial or material solutions business have longer lead times. So revenue is expected to come from the order book, not from the order intake. Obviously, there is a gap which needs to be closed with the order intake, like in after say it's or short term projects here in metrology with three to four months, we're expecting order intake, which will become say it's in the second half of the year. But in general, there is always a risk that there might be a project postponed or whatever. But for the moment, we're very confident that the guidance will be reached coming from the order book with the majority.

Understood. Then if we could quickly jump over to the crystal growing side of the business. I mean, if we look at Siltronics results amongst others, that is obviously a segment that is currently suffering quite a bit. So when we look at the potential underutilization that you're going to have in the crystal growing business, I'm just trying to understand how that dynamic works. So if you were suddenly, you know, if there are currently no orders for crystal growing, you know, Do all these people basically start working in metrology? How should we think about that? I'm just trying to understand the potential headwind on the margin side from the underutilization of that business.

And so crystal growing is happening in different areas. So we are a part of crystal growing in silicon, in silicon carbide. We just talked about aluminum nitride. Something like calcium fluoride are also important for us. So there are certain areas of development in that areas. And we also have continuous business in crystal growing area. Just What we see in the short term view is that there is not significant business on that field in the short term. In general, we see a high market demand in all of the areas which is coming up. Again, and especially, and that's probably the area what you are focusing on, the silicon side, we see higher demands coming, starting from 2027 and an investment cycle also with that, that should happen over the next years to support that.

I understand that, but obviously the business volume that you were delivering with Siltronic was quite significant. So is there potentially going to be a headwind on the profitability due to the underutilization of that business, or are people just reallocated to different businesses and different projects?

No, Konstantin, it's exactly the area what is in focus for our long-term development, getting out of that volatility in the market and having a steady business volume on a higher level. and getting independent from exactly these cycles. And with the business that we are having in 2025, we don't have any bulk orders or significant one-time projects with customers that are placed in our books. So already the level of steady-going business has significantly increased. And yes, we are pooling our capacities. We are not having people sitting around waiting for something. There are cross-qualification processes, especially for the metrology area, which is significantly increasing, where we are also using actual capacities to support the business development in all areas.

Perfect. That makes sense. Then lastly, just on free cash flow development for the rest of the year, just trying to think of the weighting of these OPEX investments. If you could just elaborate a little bit on what you expect for the second half, that could be great. Thanks.

Yeah, I think the pre-cash flow for the second half will be affected by CapEx investments we're having ahead of us. Here we are using our dedicated credit lines then, but pre-cash flow will obviously be affected. And with your up-picking momentum in metrology, there will be working capital increases, which will also impact our year free cash flow. But in case needed, we already mentioned that when we negotiated our credit lines last year, we anticipated that there might be a need for a temporary financing of the working capital. So we are prepared there.

That's great. Markus, just quickly on that point and the prepayments on metrology, how does that work?

So usually there is just a payment at the end of the project. It's rarely the case that metrology is pre-financed by the customer.

Okay, great. Thank you. All right. Thank you. Adam Jakubowski, please state your question.

Thank you. Can you hear me? Yes. Good morning. Good morning in the round. From my side also, a great thank you to Gerd Fisan. It was great collaboration with us 10 years. And to my questions. The first one, maybe follow up question to the delays you have mentioned in the report. Maybe you could give us some more details. How large was the sales volume affected by these delays and how many products are affected?

So you could say that the majority of the decrease has been affected by delays, which have all kind of reasons. So the facility on the customer side might not be ready for delivery. or our technician is not available to do at the end of June, the last test together with the customer. So it's a mixture, but these are all operational things which are easy to handle then.

Okay. So there are no any projects which are under discussion with the customer?

So no, we don't have any cancellations or whatever. So that's not the reason here. It's just operate from a quick operational standpoint.

Okay, thank you. The next question is, there was a strong increase in sales from after-sales services in H1. Are these sales kind of recurring based on service contracts and can this level therefore be expected for the coming quarters or even grow further?

You mean the investments or the volume coming from revenue?

Revenue.

Revenue. Yeah, so that's exactly why we are investing in that area. Also in the after sales region to have a higher capacity available of employees who are supporting the aftermarket, which we haven't had a focus on in the past. So we are expecting having an increase over the next years in that after sales region coming from after business support in contracts, taking care about the systems and being in a steady going or regular base and customer side.

Okay. Is there a ratio between the size of machines and of the sales services you are trying to achieve, we could expect for the future?

Today we are having less than 20% and in the direction of the next years, this will steadily increase. We did not disclose a final number on that volume that we will finally achieve in a certain year as we are in the ramp up phase and it's too early to say exactly when we are hitting which point.

Okay, thank you. Next one, in regards to your cooperation with Leibniz Institute and Ziltronic. You told us that that's something with a long-term perspective. Maybe you could uh give us more more insight in the time table of all these projects or it's can we expect the first marketable project products in four years in six years what what's the perspective

For us, this cooperation and following that future materials is something we are not the ones who are using that future material at the end. That's the customer who has the need in the chip production for higher performance areas. So material is getting more and more present as more industrializable it is. And working together in that cooperation means that we are on the forefront of having visibility about how that process work is developing, how the performance of the material is developing, and when the exact point of industrial use will be given. And we are also the ones who are providing the systems where these processes are developed. And so this is giving us a good position for the moment when there is a scale of that material. But we cannot disclose on which exactly time frame we see for that to scale. But it's a long-term oriented approach in R&D being on the very early stage part of such kind of development projects in the market.

Okay, so there are no concrete products in the horizon of this project.

There are concrete products behind that in crystal growth that we will provide to the market when that scale of the material will be happening.

Okay, I got it. Okay, great. Last one question from my side.

Please make it a quick one because we also have a couple of other people in line and we are quite short on time. So, if you could.

Could you explain the Fava investment plans in terms of capex for the rest of 25 and maybe for 26? That was definitely the last one from my side.

So here we announced that there will be approximately 35 million in 2025. We're having your two-thirds at least in front of us from this capex cycle and we're currently evaluating what's possible this year and what will maybe be shifted to next year. And also as in some parts we are seeing that your capex investments which were expected are not necessary for the moment okay thank you very much thank you adam all right um next up we have hardwood mirth

Hello, can you hear me. Yes, good morning. Good morning, I make it short, because I have just one question left when you look into your order book which you don't disclose anymore, but. How much of the order book at the end of the second quarter. does already relate to 26. So I would like to get a feel for you know, how your audio development in 2026 might develop.

So maybe let's comment on a general stage. First of all, there are no cancellations on our book. So that quite nicely developed when you just calculated from last year to today. And having a look to what is coming in and how that's reflected in or turning in sales, then you can take the things that are coming in from the metrology side, very short term oriented. So everything what we are getting over the next quarter will be happening partly or in a significant amount in revenue already in this actual year. And everything which is coming in from the material solutions side already starts to significantly count into 2026.

Not sure whether I got this correctly. I know about the cycles and the lead times. What I would like to know, how much is already in the book that is not relating to 2025?

There are already orders which are reaching into 2026, but the majority of orders are going for revenues in 2025. Okay.

Okay, thank you very much.

Thank you. All right, Gustav Frohberg, please.

Good morning, everyone. Thank you for taking my questions. Just two short ones. A quick follow up on project delays, postponements. Would you be able to tell us a little bit more about the type of products and sort of business area, business lines that the project postponements were related to? And then a quick follow-up on metrology and customer qualification there and also shipments. What semiconductor and market are you shipping into at the moment? Would this be more in favor of the memory side of the market, the logic side, or are you shipping to anything else? Thank you.

So here the delays are a mixture coming from all kinds of product lines. But again, as we said, it's just from an operational standpoint, there is nothing to worry about here. It's just that there were some deadlines. And if it's not completed at the 30th of June, it's not in the revenues. So that's all.

matter of time, not a matter of operations. Just being, having the close date on a special date, which is the end of the month. And sometimes it's a day later. where we are finally having that final acceptance. And that's just the reason why sometimes we are having a little bit more than expected and a little bit less than expected. On the metrology side, we are making quite progress with our qualification processes. You asked about in which area. We are working with all areas, so it doesn't matter which chip we are talking about, this kind of methodology is necessary for all of them. So we are working with the memory side as well as with the logic side. Qualification processes are happening at the moment, especially in Asia. With North American accounts, we are already in volume contracts. And we also stepped into further business already with Asian customers and further qualification processes, especially which is important on the packaging side. which is very exciting for us as well.

Great, thank you. Thank you. Okay, Lukas Spang is next.

Yes, hi, good morning. Just one question from my side relating to the order momentum you mentioned or we saw now in Q2 and you mentioned for the beginning of Q3. Is this on a broad base or is there also some cluster related to bulk orders and just a few customers?

No, no bulk order included in the actual development.

Okay, thank you. All right. And last but not least, Edwin, please.

Can you hear me now? Yes. Good morning, Edwin. Good morning. Good morning to you all. And also from my side, I wanted to thank Gert for the very pleasant cooperation the last... 10 years plus, I would say. Okay, a couple of questions from my side. Maybe on the silicon carbide. So we've seen troubles at Wolfspeed, of course, and Is that also implying a delay in the development of, let's say, the 8-inch wafers compared to the 6-inch wafers? And how are you progressing there? And how are the furnaces going for you in that part of the market? We know that in the semi part, the crystal pooling is not so good and the metrology was very good. Can you tell us a little bit more about Silicon Carbide as well?

Yeah, silicon carbide is an actual market for us, and this is something where we are steadily having also contracts for our systems, which we are providing to customers. We started a development project for six and eight inch processes, which are just having the idea to have a basic process for qualifying the systems in the market. And we are making quite progress with that. So we already stepped into eight inch development, which is also running very well. And we expect that we have results of that until the end of this year. For us, this development is also something that's reaching out to also different areas, not only silicon carbide. So when we are talking about aluminum nitride, for example, this development and the technology are already giving the foundation to step into that very early stage market as well. So it's more a general approach and future materials that we are having rather than just being focused on silicon carbide.

Okay, okay. So in aluminum nitride, we can also expect some more news in the CMD, for instance.

Yeah, we see that as well as a very important material for the future. So everything that's going in that wide band gap area, which is having the possibility to really work in that high performance area with a lot of heat, with a lot of energy is something that we see very important for, for example, quantum computing areas and AI chip technologies. And this is then silicon carbide, aluminum nitride, and all that materials are going more in the direction of the performance of diamond and giving more possibilities for the future. But all of them are not on the stage where we are in a really industrial phase, having a broad availability of the material in a certain size. It's all very small still. Silicon carbide is at six and eight inch and aluminum nitride even smaller. So with the development of that actors who are taking care about the processes and the use of the materials, there also will be a higher need of system technology.

Yeah, clear, clear. And also, from me, some questions on the metrology side. If you compare it to the last CMD, the last year, is the metrology side developing as you expected? Or are there sites maybe developing better or worse than you expected?

we're a little bit faster than expected. So I didn't thought that we're so fast with the qualification processes, which gives us some backwind in the year 2025 to compensate what we are not seeing on the material solution side, semiconductor related yet. So this is very positively developing also in the stepping into corporations and smaller acquisitions that are supporting the business on the long-term view.

Because there was an add-on question, of course, what kind of M&A would you still need to do? Is there something that you want to buy in metrology to get to faster industrialization?

There are certain areas which we are interested in. We are seeing that from a long-term perspective, not only counting into our targets 2028, so there's a steady process to increase our metrology portfolio on the long-term view. And we are always looking for areas where we have future development possibilities like in that dive imaging systems, which we just closed in the first quarter. This is already something that is taking care about problems in the value chain, which are coming up over the next years and not happening from today. So there will be a steady process also if it's maybe not counting in anymore. on that short-term perspective, I will stay with that approach.

Yeah, clear. And if you look at competition, I think that the KLA, for instance, was an onto as well. They were quite outspoken on the positive developments in advanced packaging. And I think that's an important area of view as well. Is it now getting more important than logic memory combined or is it still one of the three, so to say?

It's one of the three. But obviously, in advanced packaging, there are some areas where more metrology is needed because there are new process steps which they have to take care about.

Yeah. Yeah. It seems to be developing very fast, yeah. And then finally on the US, so there has been a long-term emphasis to increase sales there. I think you're delivering on that now with 16% of sales and 22% of orders. And let's say you just said that you're expecting that the Salesforce additions should be completed more or less end of this year. So should we see the full effect of the expanded Salesforce, let's say somewhere H2 26, Q2 26, or how should we see, let's say the expanded Salesforce transforming into two sales?

Sorry, maybe there was some misunderstanding on which area will be finalized when. So we are having the capacity for the support of our service for the metrology qualification, mostly done with the team in the direction of year end, beginning of next year, for what we are seeing over the next months as orders coming into support in the field. And the ramp up of our sales organization will take somehow longer. This is a transition process from being a very reactive organization to a proactive organization. And that means also process development in general that we are working on to set up a totally different market approach. In North America, we are making good progress because our technology is really needed in the market. Aerospace, for example, is something that is steadily increasing.

All right. Thank you very much. I'm afraid that's all the time we have for today. But thank you all for listening in. And before you go, please let me once again extend our invitation for our second Capital Markets Day, which will also give a thorough update on markets, strategy and financials on September 2nd in London and also online. So if you want to join, you can click the link in the presentation on our website. for today's call, or you can also always write us an email and we are always happy to accommodate you. So please do not hesitate to get in touch with us if you have any further questions. And thank you all.