PVA TePla AG

Good morning, everyone, and welcome to the earnings call of PDA Teflon AG for Q1 2026. My name is Sebastian Gonzo, and I'll be moderating today's call. And as usual, CEO Janine Ketter and CFO Marcus Kohls will first walk you through the results for Q1 and share their outlook on the rest of the year before we will then open the floor for your questions. And a quick housekeeping note before we start, this call on our website within the day. And with that, let's get started. Angeline, over to you.

Thanks, Sebastian. And I have to say this time not good morning rather than good evening as I'm joining this call from the U.S. this time. Last week would have been more comfortable when I would have been able to join from Asia. But I hope the line will be stable. Otherwise, the colleagues in Bettenberg have to continue with the presentation. And you see... We are very busy to execute our strategy. With having said that, it is even more exciting for me, for the, how our office. With inspection tools for HVM, for advanced logic, we stepped into the next level of semiconductor industry and achieved an order volume of 60 million. And in material solutions, R&D related activities around compound semiconductor materials significantly start to contribute as well. With that, we achieved a record auto intake of 121.6 million during the first quarter. And what makes it important to say is that it's not one order that's related to that order intake. It's different customers, different technologies, which are included in that development. And so a broader base of orders that we are handling with now. As expected, We started the year with a lower level of revenue and also earnings caused by strategic investments in our sales and service infrastructure and the organization, but also a lower order momentum from 2025, which is now starting to run through our books. And this investment in our strategy will continue this year and also we will have included some further one-off effects during the year. which will phase out until year end, so we will have a fresh start into 2027. With the higher order momentum that we are seeing at the first quarter, we further underline our guidance that we gave to you at the beginning of the year, and we are very confident that we will achieve that guidance. Starting with the first quarter, we also changed our segment structure. So far, it was and industrial systems, and the very market-oriented approach that we have been running with that structure. So each entity in the group was assigned to a segment, and with the strategic development of our metrology business, which is more and more growing, we changed the focus from a very market-oriented approach to a technology-oriented approach. And this also finally reflects how we are managing the company today. So it's also, it's not only giving transparency to you, it's also how we are seeing the company and how we are managing the company that is showing in that second structure now. And the material solution side, our systems are used for the production of advanced materials in the aerospace market. for the production of high-performance components used to build up the grid infrastructure and most important today in the semiconductor market to produce bulk material such as indium phosphate, for example, which is important for the communication between data centers. It's also including the production of semi-grade graphite and plasma solutions for back-end-oriented applications such like On the metrology side, we provide a broad product portfolio to the semiconductor industry. And most important there is today tools for the inspection of 2.5 and 3D structures in advanced logic and memory. I wanted to bring everyone on the same level. So this earnings call is really focusing on the financials of the first quarter and our new segment structure. So I'm happy to hand over to Markus now, who will show you how these segments are reflecting in our numbers.

Thank you very much, Jaylen. And good morning from my side. Before we start with the financials as a regular, I would like to take the chance to point also out some specific characteristics of our new segments and how these are affecting our financials. In material solutions, the system lead time with 12 to 18 months are way longer of those in metrology with four to eight months. Reason being here is that in material solutions, our systems are tailored to the specific needs of our customers. And this means there is an engineering phase Then custom fabricated parts are ordered and received. The assembly can start afterwards. And finally, the installment on the customer's side happens. This whole process takes usually 12 to 18 months. On the other side, in metrology, the systems are way more standardized. So lead times are way shorter with four to eight months. This high degree of customization also reflects in the revenue recognition. A material solution often the revenue is recognized over time. And this is not happening in a linear fashion over the time. It's based on a cost to cost measurement, which means that the engineering and the assembly phase only contribute proportional less than when to phases where the parts are received. So it's usually an S curve we are seeing in the pattern how the revenue is recognized. On the other hand, in metrology, revenue is recognized at a specific point in time, which means when the system is delivered or when it's installed at the customer side. Payment terms are also different. In material solutions, we are receiving prepayments, usually in a structure of 30, 60, 10 or similar, But if it's a larger project, then the prepayments are tailored to the project to ensure we're always financed. And metrology, there are prepayments very uncommon, so it's usually not what we're seeing here. What both segments have in common is that the service revenue is around 15% of the total revenue. With this in mind, Let's start immediately with our group revenue. So we're seeing a slight overall decrease year over year of around 6.6%, or 6.7%, sorry, from 59 million to 55 million. And the picture in both segments is a little bit mixed. In material solutions, we're seeing a decrease of 10 million or 24%. And this is primarily caused by what I just explained. The order intake end of 24 and in the first half of 25 was rather low, which means we're currently with the order intake from Q3 and Q4 in the engineering phase, which is only contributing in a lower degree to the revenue, but this will change in the upcoming quarters. In metrology, revenue is up 6.4 million or almost 39%, This is driven especially by the acoustic metrology. Q1 will be the low point of our revenue in 2026. Looking at the order intake, we are very happy to report our second strongest quarter in company history. And what also makes us very proud is that it's not the pending on a single customer or technology, and we're seeing more or less a 50-50 split between the segments. In material solution, synthesis for compound materials played an important role, and in metrology, the order intake is acoustic-driven. Here, we're seeing some catch-up effects from Q4-25, but also first orders for HBM, but as we pointed out in the last call, Delivery here is agreed for 27, so the usual pattern of four to eight months, the metrology doesn't apply to these orders. Taking a look at the development of the order intake, we see the very strong increase from Q1 25 to Q1 26 with an average rate of 27.5%. And quarter over quarter, it's an increase of 33%. As we said, in metrology, there are some catch-up effects in 2027 deliveries. This is important to keep in mind. For Q2, in material solution, we already secured additional orders for compound materials in the semiconductor industry, which includes further orders for indium phosphide. But here, we would like to point out that material solution is a project business, which depends on They're important investment decisions and so it's more lumpy and doesn't show a regular run rate like we're expecting in metrology, which is also expected to return to a level of around 30 million within pickup in the orders in late H2 2026 onwards. Coming to the group profit, our gross profit decreased from 19.5 million to 15.6 million, which is primarily caused by the low level of revenue. And as we said, this is a temporary effect. And this also affected due to a lower absorption of our fixed costs, a slight decrease in the gross profit margin from 33% down to 28.5%. And due to the high degree of fixed costs in our overheads, this immediately affects our EBITDA, which reduced from 8.2 million down to 1.4 million. So the overhead levels were around what we have seen in Q3 and Q4, so there is no big change here, but with the reduction in the gross profit of 3.9 million, and additional 2 million in the sales and administrative costs, which makes the FTE buildup we've seen in 25 fully visible. We have an immediate impact here. And also included are one-off items. We explained those in the last call of around 1.3 million, where the largest portion is coming from the restructuring of due to the closure of our site in Coburg. Coming to the individual segments, material solutions, the revenue is especially affected by the order intake in late 24 and early 25. As we said, this is a temporary effect that is also affected based on the lower gross profit and an increase in the overheads, our EVTA, which reduced from 6.6 million down to 1 million. At the same time, the order intake more than doubled from 24.8 to 69 million, which gives us great confidence that we're here seeing only a temporary effect, and based on the order book coming from Q3, Q4, and also Q1, In metrology, we're seeing an increase in the revenue of 38.2% from 66 to 23 million. The EBTA decreased at the same time from 3.4 million down to 2.2 million. Here, the scale-up of the organization and especially one-offs from the restructuring played an important role. Looking at the order intake, we can see that this almost tripled from 21.3 million to 62.7 million. So I would like to close the financials with an outlook on Q2. Here we are expecting that the order intake in metrology will return to the regular run rate, roughly 30 million. In material solution, the order momentum will continue, but as I said, due to the characteristics of the segment, we're seeing a higher volatility here, which will be visible in the order intake. Group revenue is based on the conversion of our order book, expected to grow substantially quarter over quarter and year over year, and with the higher volume of revenues, profitability is expected to improve on all levels quarter over quarter. For the full year, we guided 255 to 275 million in revenue and then EBITDA between 26 and 31 million. We're confirming this guidance and based on the order intake we received in Q1, and as a side note, most of these orders were or projects were already discussed when we published our guidance, so they have been factored in. It gives us great confidence to achieve our goals for 26, but also gives us great visibility for 26, the alpha beyond 26. So that's from the financials, and we're happy to head into the Q&A together with you now.