Jenoptik AG

Good morning, ladies and gentlemen, and welcome to the JIN Optic conference call regarding the results of the first quarter of 2026. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Dr. Priska Sarpanec.

Good morning, everyone, and welcome to our Q1 2026 results call. I will lead you through our presentation and then, as always, Andreas, our head of investor relations, and I will be open for your questions. Now, let me begin with an overview and some key messages on page four of our slide deck. First of all, I'm very pleased to report that order intake was very strong for our OEM businesses in the first quarter, as we already indicated in our previous call at the end of March. Ramp-up in the semi-industry seems to be in full swing now, hence demand for our semi-equipment customers was particularly strong. But also, order intake in our biophotonics business unit was substantially up compared to last year. Revenues for the quarter were slightly down year on year, as we expected, and I had indicated on our last call. We are also pleased I can say with the evolution of our profitability in terms of EBITDA margin in Q1. Noting, however, as you know, that Q1 does represent a modest comp if you look at last year. Free cash flow in Q1 was down year on year, reflecting higher working capital needs in conjunction with our accelerating order intake. Now, taking a broader view at our company and at our strengths. we continue to believe that we have established very strong positions in certain end markets, combining a well-developed technological base with strong long-term customer relationships. And looking forward, we aim to further leverage this powerful foundation by focusing on our growth opportunities, particular areas like AI-driven semi-demand, which we are seeing right now, optical communication for data centers, defense applications, SMS expansion in the US, and also ARVR applications. Lastly, we confirm our outlook for 2026. Moving on to page five now. As I've just mentioned, we are overall very satisfied with the order intake development seen in the first quarter. And indeed, the total number reached almost 357 million on a group level. And that marks a record for us. Now, starting with semiconductor and advanced manufacturing, which you know is by far our biggest business unit. As you know, our lithography business was subject to certain supply chain fluctuations last year. And in Q1 2025, it was particularly weak. So in the first quarter of this year, we have seen a clear acceleration of demand in this field. In addition, Customer activity in our inspection business in SEMI has remained strong, as we already saw throughout last year. I would like to note that the order intake of around 180 million euro also includes one large order that we do not expect to reoccur in the coming quarter. Turning to our biophotonics business, order intake was also very strong last quarter, being up by almost 66% year over year. Importantly, we recognize positive momentum across our different business fields, meaning medtech, science, and defense. Here in the biophotonics SBU, we believe that we have seen that the strong dynamics that we've seen in the first quarter may also have been supported by certain early order effects relating to growing geopolitical uncertainties since the start of the year. We continue to believe that the quarterly volatility of order intake in this business unit will remain high going forward, partly because of a somewhat special order pattern in the defense space, as customers there tend to place few, but sometimes very sizable orders. Now moving on to our solutions businesses, both for metrology and production solutions, as well as smart mobility solutions, order intake developed broadly as we were expecting. As a result of all this, our first quarter book-to-bill ratio at group level went up sharply to almost 1.5, and our order backlog grew to €719 million. Please follow me now on page six to cover our revenue development. So, as we broadly indicated in our previous calls, Revenue was marginally down by 1% year-on-year to around 241 million Euro. Excluding FX effects and here especially of course relating to the Euro-USD exchange rate fluctuations, our revenue would have been up by close to 2%. Now if you look at a segment level, semi-business revenue was up by around 7% year-on-year and from a low basis, as I've already mentioned, in the same quarter of last year. Main driver was our semi-inspection business, but also digital datacom was supportive, albeit, as you know, on a lower level. Now let's look at biophotonics. Here, the comps were very high, driven by a strong dental business last year. Consequently, our revenue was down by around 11%. However, Both our life science and defense business fields saw good growth in the quarter. For metrology and production solutions, revenue development primarily reflects the continued difficult market environment in the European automotive industry. Finally, revenue of our smart mobility solutions business was almost up by 11%, and here we've seen growth across all regions. On the next page, page 7, we look at our profit development. So as you can see on the left side of this chart, the group EBITDA reached around 44 million euro, up by a little more than 22% compared to last year. This implies an improvement of our EBITDA margin by around 350 bps, which was primarily driven by three aspects. Firstly, of course, we didn't have the one-time relocation costs relating to the move into our new FAB in Dresden that we had in Q1 2025. Secondly, some improvement in our product mix, especially relating to our semi-business. And finally, across all of our business units, an overall lower cost base as a result of our cost reduction program executed last year. On business unit level, Based on the aspects mentioned before, our semi-business recorded a healthy EBITDA margin of 30.6%. Despite a certain decline in revenues, as I explained earlier, driven by the dental business, our biophotonics business continued to operate on a strong margin level of almost 22% in this quarter. Both our solution businesses recorded good progress in terms of profitability, given on the one hand tight cost control in regards to MPS and revenue-led operating leverage in the SMS business. The other line, which includes our corporate center as well as Protomax, saw an about 6 million negative swing in EBITDA year over year, largely relating to certain corporate projects and to a lesser extent to lower profits generated by Protomax. Now looking at key aspects of our PML, if you follow me please to page eight. Gross margin was considerably up year-on-year, which was primarily influenced by a general lower cost base, as well as the contribution by our semi-business, as I've alluded before. If you look at functional expense, I think we have remained fairly disciplined overall, with those expenses growing by 2% year-on-year, despite the typical low cost inflation impact, of course. or let's say our depreciation amortization was largely flat. The improvement of the EBITDA therefore fell through to the EBIT line, driving EBIT margin up to 10.7% in the first quarter. Looking at the bottom line, our earnings per share reached 29 Eurocent versus 16 Eurocent in the first quarter of last year. Now turning to page nine and looking at cash flow and balance sheet data. Let me start with operating cash flow. Given the strong order intake, our priorities have shifted towards optimizing our ability to serve our customers. Hence, we have been taking on more working capital compared to the end of last year, residing in reduced operating cash flow and also reduced free cash flow in this quarter. Adding on to what I just said, you see that our working capital ratio was up. at the end of the first quarter, but I would like to note that we consider this as temporarily elevated due to the support of the semi-ramp. On the remaining financial parameters, we have not seen any major changes, meaning all our financial situation overall has remained very robust. Finally, please follow me to page 11 to cover our guidance for 2020 and 2016. And here I would like to start with some general remarks first. So with regards to the order intake, of course, we are very pleased that we saw what we saw in the first quarter. But in the sense of managing your expectations for the coming quarters, I would like to reiterate that we saw a sizable kind of annual order in semi, meaning it broadly covers a full year demand in that quarter. We also think that some early order effects, as I have mentioned before, in biophotonics business have been supportive. So, net-net, we do not believe that such an order intake level is generally representative for the coming quarters for the group. Secondly, when it comes to revenue, please bear in mind that particularly in the semi and biophotonics business units, it will be fairly relevant what kind of mix of orders we are going to see in order to judge the revenue conversion. Since, as you may know, our factories are currently operating at different utilization rates. Thirdly, we think that macroeconomic and geopolitical uncertainties have clearly more accelerated rather than decelerated since the beginning of the year. With applications, for example, in our automotive related activities, which are being difficult to predict. So overall, We continue to expect our revenue in fiscal year 2026 to be up in the single-digit percentage rate versus prior year. And on profitability, we expect our EBITDA margin to be in the range of 19% to 21% on a full-year basis, and we expect our capex to be slightly down below last year's level. Our main undertaking with regards to capacity expansion is our classical optics site in Jena, where we are expanding our high precision cleanroom production, which mainly relates to our semi-business and which we expect to come online in 2027. And with that, I would like to hand over back to our operator and to start the Q&A session.

Thank you. Ladies and gentlemen, if you would like to ask a question now, please press star 9 and pound key on your telephone keypad. If you would like to cancel your question, please press star 3 and pound key. You can also use the die-in function on the webcast if you would like to ask a question by phone and raise your hand to ask a question. The first question comes from . Go ahead.

Hi, good morning. I was wondering, would you be able to share how large that order was in Q1 in Semicon and Advanced Manufacturing? The second question would be, in the past, I think you always gave what proportion of the backlog you expect to convert into revenues in a given year. Are you willing to share that number with us again this time? And then the final question would be around, you mentioned product mix in semiconductor being favorable to margins in the first quarter. So I'm wondering, given what you're seeing in the orders, should we anticipate the mix in semis to change and sort of what that implies for margins going forward? Thank you.

I will start with the first question, which was related to the large order that I've mentioned. And obviously, it's hard to give you very specific details here on the call. But what I can tell you is that it's a low double-digit million amount that we are talking here. And I think the main message being that we do not see this recurring in the upcoming quarters. I think that's clearly the message we wanted to send with this. As for the backlog question, I don't have the number at hand here. And as I mentioned also in my remarks regarding the outlook, it very much depends on the output that we're able to get in our factories given all some different utilization levels. I think what I can say here is, I'd like to reiterate, our backlog has increased. We have a strong backlog, which gives us a good foundation, obviously, for the remaining three quarters. But at this point, I'm not able to give you a good estimate of how much we're going to convert into revenue. As you know, our revenue guidance is confirmed at the single-digit percentage range versus last year. I hope that helps a little bit. And on your last question regarding product mix, I believe this was regarding product mix in semi. We have seen a strong inspection business in Q1. I've already alluded to the demand trend in lithography, but we have not yet seen the impact of that in Q1. But bear in mind, if we look at mix, you also have to keep in mind that the previous year lithography was also affected by the move into the Dresden FAB. And this is not only the one-time cost that I've mentioned, but of course also the loading level was different in Q1, given both the business momentum, but also the effects of the move. I hope that helps a little bit.

Perfect. Thank you very much.

The next question comes from from .

Yes, good morning. Can you hear me? Yes. Okay, good. I got some audio problems this morning. Okay, so for the current, maybe not in the first quarter, but do you see customers, a change in the customer's order padding? For the instance, customers beginning to place orders earlier than expected due to potential capacity constraints, which are in discussion, already reserving slots for 27 Anything you recognize in that sense?

Thank you, Marta, for your question. Let me give you a general answer. I think you've seen that we have seen a very record order intake across the company and particularly in SEMI. But we've also mentioned that in our biophotonics business, we believe that we have seen a certain early order impact and we think that may be coming from, for example, geopolitical worries that could also affect some of the supply chains of our customers. So I think we see some effects of that. With regards to the semi-market, I think it's really hard to tell at this point, but I would believe that the ramp-up dynamics that we've seen also in previous cycles would also be valid in this cycle. So in that sense, I would say cautiously, yes, that some of the orders, let's say, that we see in Q1 may also be of a, you know, semi-ramp being at full speed, and there are some, let's say, some effects of that that customers tend to place their orders even earlier in a steep ramp-up phase rather than, let's say, in a stable or ramping down period.

Okay, understood. And then touching on ARVR, I mean, that had been a topic which never really took off during the past couple of years, and now you mentioned it specifically in your comments and quarterly reports. So what are you seeing in this area, and what are the potential implications? benefit from increasing orders? Is that sustainable or do you expect further potential ramp up then going into the year?

Yeah, so I think maybe a little bit of a longer order there. I think maybe reiterating what we have seen over, let's say also what we discussed in our Q4 call in March, you know, I think we see a stronger Stronger noise, stronger momentum, also stronger customer inquiries for augmented reality versus virtual reality. There's a couple of major OEMs launching devices in the AR space over the last couple of quarters and months. So we see augmented reality actually more dynamics as compared to VR dynamics. Having said that, yes, we see more more interest, more conversation. We also mentioned that at the industry conference at Photonics West, I believe at the end of January, there was definitely more dynamics discussed. But from an order input point of view for us, it's early days. And while we are very well positioned, I would say particularly in the waveguide testing space, we've only seen, let's say, modest order input take as compared to the previous years. And we have not seen or not also anticipating any major VR orders coming in in the near future. So I would say it's a bit of a balance picture, but the good news is that various players are launching AR devices that I think are in some ways also accepted well by the market, although it's early times to tell about that.

And then in the other business area, probably that refers to Protomux, the order intake has picked up a bit in the first quarter. Is that the one time thing or do you see more sustainable recovery in the market that customers are now be able to order at higher levels again?

Yeah, thank you for your question, Malte. I would say it's too early to call this a trend. You know that we've had basically four consecutive difficult quarters in 2025 in Protomax, including as well a cancellation that we pointed out in Q4. Now, what I see in Protomax in Q1 is encouraging. It's a good first step in the right direction. I would also say that some of the RFP requests are potentially going up a little bit, but I wouldn't call this a trend at this point. It's too early. And I would say the general muted investment environment for the US OEMs remains the same, as well as the geopolitical tension or I would say the certain reluctancy to go across the border to Canada for your supplier. So those two things, I don't really see a major change in the trend, but I think it's encouraging that we have seen an uptick in demand in order in taking Q1 for the first time quite honestly in a couple of quarters. So overall, let's say slightly optimistic on Protomax.

Okay, sounds good. Last question on the gross margin. I mean, probably there were some mixed effects, especially coming from the semiconductor business. Lithography probably becoming a bit stronger in the next couple of quarters. So what should we think about gross margin progression throughout the year? Was that more than 35%? I think it was the highest gross margins in quite a number of quarters. So what would

should we expect for uh for the occurring quarters yeah um thank you for a question so um i think when you compare year over year obviously you know q1 as you know the semi business i've just mentioned it before was very much affected by also the move to dresden so the micro optics business was not uh firing on on all cylinders operationally and then you know we had the demand-driven trends there. So it's not really a fair comp to look at last year's quarter one. Now having said that, I would say we have seen a good gross margin in Q1 and I would expect, I'm not guiding you explicitly on gross margin, can't do that, but I would expect the normal fluctuations that we've also seen in in, let's say, the good semi-quarters last year to continue also into the next quarters here. Yeah, so ballpark number, I think we're at an okay gross margin right now.

Okay, thanks.

For the moment, there seems to be no further questions, so I might repeat one. If you would like to ask a question now, please press star nine and pound key on your telephone keypad. There is one more question. The question comes from from . Please go ahead.

Good morning, and thank you for taking my question. Hello. Good morning, and thank you for taking my question. Giving the very strong order momentum and the recent guidance raised from one of your key customers, could you provide a bit more color on the full year 2016 growth expectation? Should we interpret the current single-digit growth guidance more toward the upper side rather than toward the low end? Thank you.

Good morning, Marissa, and thank you for your question. Let me try to help you along with that. Now, obviously, maybe first of all, we have not changed our outlook, and we are expecting a single-digit growth, and that is valid both for the group and also for our semi-SPU. So I would say all the ranges are in play as of today. We are, I would say, encouraged by what we've seen in the demand picture in the Q1. Now, I think, as I've also said in my remarks, the focus now, as is also true in typical semi-ramp-up phases, is on execution. Operational execution across all of our sites. And our team is fully focused on that. That will also, let's say, be a determinant on where we land within our total revenue for the semi-business. Meaning where in the range that I recognize is a wide range at this point we will land is to a large extent next to, of course, the mix of orders that we are getting, also relevant how we will be able to convert those orders into revenues and that obviously in a perfect world you would have a balanced utilization across all our sites. Clearly we have different technologies here at Play, we have different customer products, so this is not the case and that will determine a little bit the phasing on the one hand, on the other hand also the total outcome for the where we land in the guidance. Okay, thank you.

The next question comes from Luis Gilardi. Okay, it seems that he has a question. So there are no further questions in the queue.

Okay, well then, thank you very much. Maybe summarizing very quickly, we had a very good start to the year. Dynamic demand in our OEM businesses. And even though this very high momentum is unlikely to continue at this pace, it provides us with a very strong foundation for the successful fiscal year 2026. And with that, I would like to thank you for attending our call. And we are looking forward to seeing a lot of you on the road during the next few weeks. Thank you very much.