VAT Group AG

Ladies and gentlemen, welcome to the VIP Q1 2025 Trading Update Conference Call. I am Sandra, the call school operator. I would like to remind you that all participants have been listened 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 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Urs Glandner, CEO. Please, go ahead, sir.

Ladies and gentlemen, good morning and welcome to BSC's Q1 2025 Trading Update Conference Call. With me this morning in our especially open innovation center are CFO Fabian Jotze and our investor relations team with Michel Gerber and Klickhofer BigClick. After my introductory remarks, we will start the Q&A session. The whole moderator will paste your questions in the order you enter them. So, let's start. We are pleased to connect with you again after the full year results against March 4th. Following the full year results, we had great discussions during our Zurich and London roadshows. We have focused on the technology and anticipated shifts relevant to our business this year. Since then, I've spent a lot of time with customers, namely in Asia, which is especially important during these times of uncertainty we are seeing. Our customers rely on us to be ready with our products and services in the locations they need us. And with ever-shorter mean time for engineering and new product introductions, nothing has changed there. My takeaway from these discussions is that our customers However, a new arrival has become relevant to Haris. Haris are likely to impact the demand for and pricing of consumer products. The exact magnitude is difficult to estimate right now. Nonetheless, the advancement of the next generation of chips and thus here his core growth driver is still in place. The overall demand for semi-conducted chips and therefore but we are seeing a slowdown in order impact of around 10% in the fourth quarter. This is due to the high level of confrontancies caused by the geopolitical situation and, for example, announcement of potential factory reshoring. The semiconductor supply chain is on a stand-by to serve where and what kind of demand will arise. Our customers are reflecting this situation as well, and lead times remain short. They expect us to remain on stand-by for deliveries. As we mentioned previously, we have seen a recovery for BSU from the bottom in 2023. The market seems to have fluctuated in the past two years around a record waiver-fed equipment of around $100 billion. It will be the mix of applications that will rise as it grows going forward. In this investment announcement by major hyperscalers, or the reconfirmation of the previously made commitments, is in our view a strong signal that AI will serve as a key driver of the technology transition and of investment in additional capacity. These long-term plans reaffirm that despite of all these short-term obstacles, the semiconductor market continues to grow towards the $1 trillion mark by 2030. In the advanced industrial business, we have seen a slowdown in orders compared to before. Again, the volatility from uncertainty in global trade has been easing into the business. Furthermore, U.S.-based research institutions have been experiencing cuts to their funding. All this is expected to be temporary, and we have had still expectations of a recovery and growth in our NDP business during this year. Global services completes the picture. Demand for consumables and repairs remains at the same level as in the fourth quarter, and fat utilization has gradually improved over the course of the year. The segment shortfall is due to the lower demand for refurbishments and upgrades, which, similar to the wealth, is related to uncertainty around investments in upgraded waste repair equipment. Let me repeat what I said as a full year result. First, the semiconductor market is doing well as demonstrated by our 2024 results. We still expect 2025 and 2026 to be growth years for VAT. It's up to us in the industry to provide the latest chips to bring in the next generation of electronics while mitigating the development in global trade. Second, we are progressing with our capacity and feasibility expansion. In heart, we just moved into an innovation center, a very impressive building, where we will get our R&D capabilities running faster. Innovation is what our clients expect from us and what distinguishes us in the market. Third, the thesis of the $1 trillion semiconductor sales in 2021 not even accelerated by additional AI investments in the years to come. The TUNAR meter adoption is in progress in logic, HCM capacities are fully booked in 2025, and our customers are preparing to introduce NAND shifts with more than 200 layers. All of these trends require a shift in wafer fabric business to a much more leading edge with higher backroom comfort. Let's turn to Q1 results that we published this morning. Q1 order intake of 242 million Swiss francs represents a modest improvement from last year's Q1 numbers. Group net sales came in just above the bottom of our guidance range for Q1 at 275 million Swiss francs. Compared to Q1 last year, our daily sales went up 52%, which ties back to what I said previously. Our semi-voucher business is doing well.

but we are still anticipating growth to pick up from there. The season against U.S.