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.