Jenoptik AG

Ladies and gentlemen, and welcome to the Jähn Optik conference call regarding the results of the first half year 2026. The conference will be recorded. At this time, all participants have been placed in 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. Prisca Havranek.

Good morning, everyone, and welcome to our call on the results for the first half year 2026. As in the past, I will lead you through the presentation and then Andreas, our head of investor relations and I will be open to your questions. But before we go into detail here, I would like to hand over to our new CEO, Dominik Dorfner.

Thank you, Prisca, and good morning to everyone. I'm very pleased to introduce myself to our investors and analysts on the occasion of our first year results release now that I've been officially on board since August 1st. I've already had the chance to meet many Genoptik colleagues at several different sites and even different continents over the past weeks, and I have gained some first good impressions of Genoptik. What I saw during the first interactions impressed me. Firstly, I saw great people, highly dedicated to their business as well as highly motivated. So for me, that represents a strong basis. Secondly, I saw strong technologies. In optics competencies, for example, in optics are just impressive. And so is its ability to turn science or physics into solutions that truly add value to our customers. And finally, I'm personally convinced that there is a great relevance of photonics for many industries we serve and its importance may even accelerate in the future. Or maybe in more simple terms, I'm convinced that photonics is an attractive industry with a lot of growth potential. So for me as a physicist, joining Genoptik is a dream. For me as a manager, it means potential and ambition. So what ultimately drives me is finding out what is possible, shaping and building the courage and this is what we are striving towards together as the INOPTIC team. As I said earlier, I already had the chance meeting and talking to many people in the company and for the next few weeks my focus will be on listening, getting to know even more people, customers and to understand all of our business in full. Finally, I'd like to to comment on a matter that has been mentioned in the news in the recent weeks or even months. You might know that we are currently undergoing some sort of a strategy process update which is in full swing already and we expect the UNOPTIC Executive Board to be in a position to communicate key findings and outcomes towards the end of the year at the earliest. So please bear with me and my colleagues that we may not be able to answer questions relating to that matter in the very near future. Thanks to you and I'll now hand back to Prisca for the H1 results and also later the Q&A session. Thank you.

Thank you, Dominik. Now let me start with an overview on page 4 of our slide deck. First of all, we saw exceptionally strong order intake dynamics, particularly in our OEM businesses, to continue also in the second quarter, overall exceeding our expectations. The ramp-up in the semi-industry continues to be in full swing as far as we see it, but also order intake in our biphotonics business unit was substantially up compared to last year for reasons I will address a little later in this call. I am pleased to report that revenues for the first half year were slightly up year-on-year for the first time in a while, driven by our semi-business and SMS. We are also pleased to report a strong improvement in our profitability in terms of EBITDA margin, noting however that profitability in the first half of 2025 represented a modest comp. Free cash flow improved slightly year-on-year, reflecting besides higher profits and others. Looking forward, our near-term focus is clearly on our capacity expansion projects in our OEM businesses, as well as maximizing output in the light of the significantly increased order backlog. Furthermore, as Dominic has already mentioned, We are currently reviewing our businesses including strategy with outcomes expected towards the end of this year at the earliest. And finally, we continue to focus on and address our commercial opportunities besides SEMI, for example in optical data communication, defense applications, as well as our SMS business in the US. Regarding guidance, given what I've just been stating before, we now expect to reach the upper half of the initial guided revenue range and EBITDA margin range. Now moving on to page five. As I've just mentioned, we saw particularly strong demand in semi and advanced manufacturing as well as in biophotonics continue in the second quarter, driving order intake on group level up by more than 50% year-on-year, overall exceeding our expectations. Now starting with semiconductor and advanced manufacturing, as you know, by far our biggest business unit. Order intake was driven by both our lithography business as well as continued strong customer activity in our semi-inspection business. And given that we mentioned in our last call that Q1 benefited from a large annual order, I think it's not a surprise that Q2 was a little below the order intake levels recorded in Q1. turning to our biophotonics business. Order intake was again very strong, also in the second quarter. Therefore, H126, where we report a 45% increase year over year. Its performance was to a certain extent driven by very high demand for our portfolio related to the defense end market in the first half year. In addition, we also saw an overall positive order intake dynamics in the medtech and life science field. Here, a lower momentum in the field of dentistry was more than compensated by a multi-year order in the low double-digit million range that we received in the MedTech space. Similarly, as we discussed in the first quarter, we believe that there also may have been certain early order effects in conjunction with growing geopolitical uncertainties since the start of this year. Also let me remind you that we continue to believe that quarterly volatility of order intake in this business unit will remain high going forward, partly because of a special pattern in the defense industry, as well as a certain volatility that you usually see while running a concentrated key account business model. Now moving on to our solutions businesses. For both metrology and production solutions, as well as smart mobility solutions, order intake develops broadly as we were expecting, with both business units reporting low double-digit order intake growth. So overall, as a consequence of these developments in demand, our H1 book-to-bill ratio for the group went up sharply to 1.4, and our order backlog grew substantially to around 825 million euro. Please follow me now to page six to cover our revenue development. So, where SQ1 revenues were still slightly down year-on-year, as you can see on the left side of this slide, we returned to growth in the second quarter. This leads to an overall modest 1% growth at the half-year point. Excluding effects from currencies, especially relating to the euro-dollar exchange fluctuations, revenue growth would have been up by close to 3%. At a segment level, Semi-advanced manufacturing revenue was up by around 10% year-on-year, driven both by our lithography as well as our semi-inspection business. Digital Datacom was supportive, albeit on a lower level given the relative size of this business compared to the other two businesses. Now, let's look at Fire Photonics. Here, in the last year, as you know, we benefited from a strong dental business. Given this base effect, the METEC business did not quite reach the prior year's levels as we were expecting. On the contrary, a strong development in defense partially compensated for this. However, overall revenues were still down by almost 5% year-on-year. For metrology and production solution, Revenue development primarily reflects the continued difficult market environment in the European automotive sector. Nonetheless, given the typical seasonality in the MPS business overall and considering the overall robust order intake in this business, we expect the second half of 26 to be better than the first half. Revenue of our smart mobility solutions business was up by almost 11%, driven by almost all regions. On the next page, page seven that is, we look at our profit performance. As you can see on the left side of this slide, the group's EBITDA reached around 99 million Euro, up by a little more than 25% compared to last year. This implies an improvement of our EBITDA margin by almost 400 bits, which is primarily driven by the following elements. Firstly, of course, we see the benefits of the overall lower cost base resulting from our cost reduction program executed last year. Secondly, we see our product mix improving, especially relating to the semi business. And finally, Please remember, the first quarter of 2025 was influenced by one-time relocation costs relating to the move toward Dresden Fab, which we didn't have in the first half of 26. On business unit level, based on the aspects mentioned before, our semi-business recorded a very strong EBITDA margin of close to 32%. Despite a certain decline in revenues, as I've explained earlier, Our biophotonics business continued to operate at a strong margin level of almost 22% in the first half. In the SMS business, we also saw a good move forward in terms of margins, as top line growth was driving operational leverage, while in addition, R&D expenses were lower year-on-year. MPS remains slightly loss-making, given its modest revenue development in the first half. And as I mentioned before, we believe The second half of the year performance may be better than what we have seen in the first six months. The other line, which includes our corporate centers, as well as Protomax, we saw an about 8 million negative swing in the EBITDA here and here, largely relating to certain corporate project costs, as well as provisions related to share-based compensation, while Protomax is no relevant factor here. Now looking at key aspects of our P&L on page eight. Cross-margin was considerably up year-on-year, which was primarily influenced by a general lower cost base, as well as a higher contribution by our semi-business, as I have already alluded before. On the functional expense side, we remained very disciplined. However, those expenses grew by 3.7% year-on-year, as we had to recognize higher expenses for share-based long-term incentives, amongst other things. EBIT for the period and the review grew faster than EBITDA, given slightly lower depreciation and amortization. Therefore, EBIT was up by 56% year-on-year, while the respective margin jumped to 12.3% in the first half. Bottom line, our earnings per share reached €0.69 versus €0.42 in the prior year. Now, turning to page nine. and looking at cash flow and balance sheet data. Let me start with operating cash flow. The trend in the first half year is very much mirroring what we reported in the first quarter already, meaning that the strong order intake has led us to shift our priorities towards optimizing our ability to serve our customers. Hence, we've been taking on more working capital compared to the end of last year, reciting in a reduced operating cash flow. Adding on to what I just said, you see that our working capital ratio was up at the end of the first half, and I would like to note that given the ongoing semi-ramp, we expect this ratio to trend to slightly above 2025 levels in the second half. Free cash flow, however, was slightly up year-on-year due to low investing cash outflows. that the first half of 2025 was still including considerable cash outflows relating to our new FAPs in Dresden. On the remaining financial parameters, we have not seen any major changes compared to the end of last year, meaning that overall financial situation has remained very, very robust. And finally, please follow me to page 11 to cover our specific guidance for 2026. So, even though order intake is not a guidance KPI for us, as you know, I would like to make a comment here. It is clear that we are very pleased with the dynamics that we have seen in the first six months of this year. However, I think it is fair to note that we received some orders surprisingly early, that is, they were originally expected to come later in this year. We believe that the very strong order intake dynamics in the first six months may not necessarily continue in the upcoming two quarters. Now, on basis of our performance here today, we now expect our full-year revenues to reach the upper half of our initial guidance range of single-digit revenue growth. That means we are now expecting revenue growth of between 5% and 9% for this year. The prime driver is our semi and advanced manufacturing business, where we now expect to develop better than we expected earlier this year. Also reflected in this updated guidance is the continuing weakness in our automotive related businesses, which is very relevant for our MPS business unit. In line with our updated revenue guidance, we also expect our EBITDA margin to be in the upper half, of the original guidance range of 19 to 21% on a full year basis. That is, we expect our EBITDA margin to come in at between 20 and 21% this year. We left our guidance on CapEx unchanged, meaning CapEx remains expected to be slightly below last year's levels. Please be reminded, however, that amongst other things, The main capacity expansion project at the moment relates to our classical optics sites in Jena, where we are working on expanding our high precision cleanium production, which mainly relates to our semi-inspection business. And with that, I would like to thank you and hand back to our moderator to start the Q&A session.

Gentlemen, if you have joined by telephone and would like to ask a question, please press star 9 and pound key on your telephone keypad. If you would like to withdraw your question, press star 3 and pound key. If you are connected online and listening via the web interface, please click the telephone handset button and then the raised hand icon. This will allow you to ask your question verbally as well.

One moment for the first question.

The first question is from Michael Kuhn from the Deutsche Bank. Mr. Kuhn, your line is open now.

Thanks for taking my questions. Firstly, to an order intake, you mentioned a bigger, let's call it, one-time order in biophotonics. and let's say early orders in SEMI. Would there be anything in the SEMI space which you would regard like a one-time bulk order or is it just early ordering just to get a better idea here?

Thank you for your question, Michael. Yes, let me reiterate. We have received a large order in Q2 in the biophotonic space relating to our MedTech business. The remarks regarding pull-forward orders is less relating to the SEMI space. It's actually more relating to the biophotonic space in particular, both I would say in the defense as well as in the life science and medtech area.

Okay, so SEMI is kind of the, let's call it, run rate that you would see for now.

I think what we have to keep in mind there is that we have had an exceptional annual order that we have already pointed out in Q1, as you remember. And while I do not see any particular move forward of orders, I think let me remind you of what general dynamics we have also discussed in our Q1 call, meaning that in a semi ramp up, of course, it could also be that some customers are putting in orders that are maybe mainly there to secure capacity. Because as we know, in a ramp up phase, that is a criteria. But don't interpret this as a specific pull forward of orders in SEMI from the second half into the first half. That remark was mainly meant for the biophotonics business.

Okay, that's very helpful, thank you. Then on orders again, if I look at the 60 to 65% conversion of the backlog that you're targeting, that would leave, let's say, roughly 100 million of orders still missing to get to the sales target. What visibility do you have by now and let's say in which segments you would still need to collect orders turning into sales quickly to deliver on targets.

Yeah, thank you for your question, Michael. Now, I mean, with above 800 million backlog, we have a very, very strong backlog to execute both for the first half, but then, of course, also into 2027, as you know, right? So I think to your question, the answer lies on the one hand on the mix, on the one on the other hand also in the differences between our businesses in the solutions business and the OEM businesses as you know the solutions businesses tend to have you know shorter I would say lead times for orders so as we have pointed out for example in the MPS business during the course of last year and that to a large extent may also be true for this year that we can still get orders in that then convert into sales till this year, as it's a different cash cycle than we, for example, have in our optics business. And that explains, obviously, the gap that you may see from converting the backlog into revenue to the, depends on where you sit yourself in the guidance range.

Absolutely, it does. Last one on strategy and having listened to the introductory remarks. So, strategic review taking place, no, let's say, findings to be announced before year end and you said earliest year end. So, that would make me think a CMD at some point over the course of next year. Is that the right way to think about it?

Yes, let me cover that for Dominic for now. We have said that at the earliest, at the end of this year, and obviously at this point, we cannot specify this any further. We are very aware of the requirements of the capital markets to get information, but of course, also please allow for us as the new executive team to go through our proper processes. So I can't give you a more specified answer than what we have already said in the call earlier.

Fair enough. Thank you very much.

Thank you. The next question is from Maisa Keskes from OdoBHF. Your line is open now.

Good morning, everyone. Thank you for taking my question. I will ask regarding Prodomax. So could you provide more colors on the business? It appears that the business saw some order intake in Q2 as well. Should we view this as an early sign that the situation is improving or it's still early to call a sustained positive trend?

Thank you for your question, Martha. So I think it is a similar answer that I have given you in the Q1 call. And that is, it is encouraging, you're fully right, that we see an uptick of orders also in Q2 after also an uptick of orders in Q1. Bear in mind that we have seen before that four to six quarters with very, very subdued order development. I wouldn't call this a trend yet. The geopolitical and economic situation for the end market in North America has not changed in any substance that I'm aware of. So while I'm encouraged by the trajectory we've seen in Q2, I think it's too early to call this a trend. And on our strategic intent, maybe also preempting that question, Nothing has changed on the strategic intent to divest this business over the course of time.

Okay, thank you. The next question is from Martin Jungfleisch from BNB Paribas. Mr. Jungfleisch.

Yeah, hi, good morning. Maybe to start, just on demand in the semi-space, if you can just talk about briefly how your discussions with your main LITO and inspection customers have developed over the last few weeks. Are they signaling increasing demand going into 2027? Are they asking for more capacity? Are they worried about not having enough supply? And then also, I guess, if you would say that visibility has extended into 2027. That's the first question.

Thank you Martin for your question and I'll definitely try to give you a little bit more color around the dynamics of the demand in CEMI. Now I think maybe starting with the obvious you've seen in this year that the lithography business has recorded very strong orders and of course it's also a revenue driver also in the first half. And you know that we have gone through the supply chain adjustments that we went through 2025 and we now expect to grow the lithography business. So nothing changed there. If you ask me change in order dynamic or let's say demand between Q1 and Q2, I would say it's broadly the same dynamic that we've been seeing since early of the year. on your question about visibility. I think we are in the semi-business, keep that in mind, right? Things as you have seen can change and I cannot give you any more flavor onto more or less visibility into the next couple of quarters on the geography business. Overall, of course, maybe let me finish with that. Overall, of course, we see this as a proof point that The semi ramp up is in full swing. I've already mentioned that early in the call and we will support our customers and focus on the ability to deliver both.

Okay, now that makes sense. And then I guess our customers increasingly worried about supply. I mean, you mentioned some capacity topics in your prepared remarks and can you maybe discuss also on capacities? How does that look like today in inspection and lipo? both physically the space but also on headcount.

So let me remind you, as I've also mentioned earlier in this call, we have specified our guidance to the upper half and have explicitly mentioned that this is amongst other things based on a better than expected performance in the semi business. So that is clearly one large driver of the of the specified guidance in the upper range. So that means we expect, I would say, a higher growth in our semi-outputs in this year and, of course, also a step up implied into the second half of this year. So that means we, of course, have capacities. As you know, we have a broad production footprint and, as you know, capacity and loading and also MIG is not the same across the system. So we are doing our best to obviously balance the demand as best as we can and are adding capacities in the terms of people and machinery where needed. Having said that, a ramp up in SEMI is always a team effort between the customers, us as suppliers, and our supply chain. And I think we have a good momentum going there basically due to cater to that demand.

Okay, cool. And then maybe my final question is really on photonics. If you can just talk about your microlens arrays a bit. I mean, demand must be quite strong, given what's happening in the data center space. Can you just provide some color how this business has performed in H1 and also on the capacity point, if you have enough capacity to cater for demand in the next one or two years? and also in terms of customers, can you talk about the number of customers you have in this business and if you have seen additional customers actually coming to you and asking for a product?

Yeah, just that I get that right. You were referring to the microlens arrays that relate to our optical data communications business, correct? Right. Yes, okay, thank you for the clarification. Yeah, what I would reiterate, also what we have discussed, giving a bit more flavor, is that we see a growth in demand in that business. We are also seeing a growth in revenues. I've mentioned that in my remarks, obviously on a significantly smaller base, but it is supportive. and we will be growing on any other and we cater to multiple customers you know so there is obviously not one customer but we have a way of customers there on any more longer term or strategic considerations with that regarding that business I would ask you to allow us to do our strategy update process and then to potentially communicate more when we have the time at a capital market day or something like that.

Okay, sounds good. It's included in the process. Okay, thank you.

Next question is from Olivier Calvet from UBS. Your line is open now.

Yeah, hi, Prisca. Welcome, Dominic. Just a couple of follow-ups left. Maybe firstly on the ordering take. So, you know, should we understand your comments in semis as implying you do expect semis order intake to remain at this level of, let's call it, 170, 180 million seen in Q1 and Q2? I appreciate the little double-digit sort of one-off in Q1. that would be the first question and then if you could comment on your current utilization levels in the inspection and lithography operations respectively that would be also helpful and if you could comment I think you said so you know you expect to convert 60 to 65 percent of your backlog at group level into sales in Fugia 26. Just wanted to confirm if this was also the case for your semis backlog. That would be question sort of two and three. Thanks.

And maybe let me start with the last question first. So as I said before, we have a strong backlog in particular in the semi space, given the order intake that you've seen. So the The name of the game for the upcoming quarters, particularly in the OEM businesses, is execution and output. So that is, of course, next to the mix and the loading in the plants, what determines the end of the year and not so much any, let's say, major gaps in backlog. In the solution businesses, we have a different business dynamic. and as I answered the question before, we as normal have there of course a shorter time to convert orders into revenue. So that's what it relates to. So on the utilization levels, as I said before, I mean we have different loading levels across our factory footprint and what we are doing is adding machines and people for the near term. You'll also see that basically coming into the system in the second half of the year as we are sort of continuing our ramp up. You know that we have a fairly new factory in Dresden, right? So we know that, and you remember that we were ramping it a little bit slower than we were initially anticipating when we came online with the factory beginning last year. So now we are of course adding also to the ramp curve there in Dresden. We have, I would say, in the classical optics in Jena, as you know, we have already made a small capacity expansion at the beginning of this year. And as I've also alluded, we are working on additional capacity for the classical optics. And by the way, this caters both to inspection and the customer here in Jena that's underway.

Can I ask just on that the timing of the expansion?

So we have had an additional facility coming online in the beginning of this year. And I would expect any additional facilities not to be affecting the next couple of quarters. This will take a little bit of time until we have these facilities ready.

Thanks. And then on the order intake level in the second half?

Yeah, I know. I think I've cautioned in the prepared remarks that obviously with the record level that you see at the moment in SEMI, we cannot necessarily expect the same record exceptional levels. That doesn't mean that we don't expect good demand in SEMI for the upcoming quarters as a result of the ongoing SEMI ramp in the industry.

Next question is from Lasse Stuben from Bärenberg. Your question, please.

Hi, good morning. Could you just give a bit more color on that multi-year order in Medtech just to get a flavor of kind of what that is and sort of which end market we're looking at here? The second question would be on the margin level in Semicon, very strong in advanced manufacturing. very strong in Q2, I guess not that surprising given the uptick in revenues, but just wondering if there's any key drivers there, be it volume or a mix or a combination of both. And then finally on NPS, if you could touch on this briefly, revenues were quite soft as you mentioned in the quarter, but then orders were actually slightly better. So just wondering sort of what the key drivers are here. and if that kind of 40 million euro run rate in the quarter of revenues is what we should be expecting for the coming quarters or maybe a slight uptick given the increase in orders in Q2. Thank you.

Yeah, of course, Lars. Thank you for your question. Let me start with the MPS question. I think the main message here from my side is that we expect a better H2 compared to a modest H1. and that is driven by both, all lines of businesses there, so both the optical testing as well as the automotive related businesses. That is true for that and also historically if you look at the, we tend to see a certain seasonality in that business towards the third and even the fourth quarter. So I expect a second, a better second half there. Having said that, you've also seen in my remarks that we still see, I would say, a deterioration of the demand situation in automotive compared to what our expectations were when we started the year. And we've also factored that into our updated or specified guidance. The order index situation is actually quite encouraging. And that basically is, of course, one of the reasons why I am expecting a stronger second half than the first half across the MPF. on your question on the large annual order in the biophotonics business. I'm a bit in a bind here, I'm afraid. You know that we have a concentrated key account strategy with key account customers. So what I can tell you is it is in the med tech space, not in the life science space, and it's not in the dental space. But I am afraid I cannot give you more flavor on that. I hope that helps anyway. and then on margin level in semi you're right and we've seen a nice margin accretion in semi as we have also expected and as we've also previously alluded to if semi is firing on all cylinders obviously you know we can also land a tad above the let's say the 30 range that we round about have sort of put out there So I'm confident that the good development that we've seen in the first half, we will also continue to see in the second half. Bear in mind, however, that, of course, certain lag effects we will see in factor costs. For example, the collective agreement in Germany that kicked in in Q2 and also certain other factor costs, including, obviously, additional FTEs that we'll see coming online over the next couple of quarters. But overall, I would say happy with the profitability development and the margin development in SEMI. I hope that helps to answer your question.

Very good. Thanks very much.

The next question is from Craig Abbott from Kepler-Chevreux. Your line is now open.

Yeah, hi. Good morning, Prisca. Good morning, everyone. Yeah, three remaining questions on my side. Actually, I had earlier a number of questions about the ramp-up of capacity at the Micro-Optics Plant in Treason, but a lot of that's been answered. I just want to do a quick follow-up there, because we're seeing quite significant capacity increases by other semi-equipment suppliers. I mean, we're talking magnitude 25, 30 percent quarter-on-quarter sometimes. And I just want one last question on that front is, so are you able to find the headcount that you need, the FTEs that you need, particularly with a view to 27? We all know how dynamic the WFE CapEx forecasts the next year are. And also, if your supply chain is able to feel comfortable that your supply chain is going to be able to keep pace in terms of expanding their capacities as well. That would be the first question. The second question, please. Just to remind us again, in your, both in lithography, well, probably not in lithography, but in the inspection side, is Eon Optics applying in any way to Chinese semi-equipment OEMs? And if not, is this an issue the company is trying to address? And could you maybe share with us your chances there? being able to become part of that ecosystem. And thirdly, the defense optics. I suppose the mantras remain strong, but if you could give us some color on how you see them continuing in H2 and into 27, we'd appreciate it. Thank you.

Thank you for your questions. Maybe I'll start with the SEMI first. on the FTE for Dresden. So can we in general find enough people at this point? And I would say the general answer is yes. Of course skilled operators are not always easy to find. We have our apprenticeship program which of course we are also stepping up. So by and large I would say we have an okay labor situation where we're able to staff the positions that we require. On your question or your sub-question on the supply chain now, I mean the broad expectation is that our supply chain continues to wrap up basically in lockstep with us, right? That's the general aim and for now I would also say that we are not tangibly constrained anywhere in the supply chain. But of course, given the high level of order dynamics that we're seeing, there may be certain risks. And we are certainly, and the teams there are certainly working on mitigating those. But for now, I see us ramping up basically in lockstep with our supply chain for the major part. I think then you had a question on, I hope I got it right, about inspections. sales into potentially China. Did I get that correct?

Yeah, directly to the Chinese semi-equipment OEMs, not indirectly by the Western OEMs.

Okay, thank you for clarifying, Craig. So, by and large, we do not sell to Chinese suppliers overall in our semi-business. That's a strategic decision that we made a couple of years ago. and for now, the decision is intact. That's across our semi-business, I should say. And then last question, defense optics, if I got that correctly. That's correct, yes. Yes, thank you, Greg. So, I mean, defense has been strong, we've seen that, right? And I don't you know having said that defense orders tend to be let's say sometimes concentrated and sometimes multi-year in nature I do not anticipate you know let's say you know I would say I would expect over the over the short to medium term the defense optics business to grow obviously from a revenue point of view that's clear but also from an order intake dynamic, what I would say is don't extrapolate the biophotonics or the intake for the future. Because as I said, there's various factors to keep in mind there. But overall, I would say fairly bullish on the defense dynamics. I hope that gives you some flavor.

It does indeed. Thank you very much.

Gentlemen, at the moment there seem to be no further questions. Maybe let me quickly repeat the instruction. If you have joined by telephone and would like to ask a question, please press star 9 and pound key on your telephone keypad. If you are connected online and listening via the web interface, please click the telephone handset button and then the raised hand icon. There is one more question from Martin Jungfleisch from BNP Paredes.

Your line is open now. Hi again. Maybe if I can add too, if there's time. The first one is on trioptics. Can you talk about what the demand trends you're seeing in AR VR? I mean, Meta has launched the Ray-Ban glasses. I think Google is coming with new smart glasses as well. So it seems like the market has picked up a bit there. and I know the business was initially hinging a bit on an uptake in AR VR. So maybe if you can talk about if you have seen an inflection point there already.

Thank you for your question, Martin. So regarding our business in trioptics, what I would reiterate is a little bit what I said in Q1. You know, we do see in the industry broadly more dynamics, which is, I think, considered a positive. but we do not anticipate you know more major order intake from AR VR in the business in the very near future but our project is full and we are executing on a variety of projects in that space which of course gives us a nice dynamic overall the optical testing equipment of course that's sort of the legacy trioptics business is doing well, I would say across, in particular the optical testing space and inspection space. So that would be a little positive. I would say that the commentary we provided earlier this year remain intact.

Okay, sounds good. And just secondly on pricing, there's some semi-suppliers that have raised prices over the last couple of months. to offset input costs and can you talk about potentially some price increases in some of your classical businesses and semis and if these are offsetting input costs and if input costs are even going up for you?

Yeah, Martin, I understand your interest. However, given the very concentrated nature of our business in semi, as you know, I'm afraid I'll be a little vague in the color I can give. So what I can assure you is that that we have very constructive conversations with all of these customers, of course, depending a little bit also on the demand situation, and that I reiterate what I said around the good profitability we've seen in the semi-business overall. But I'm afraid I cannot go into any of the commercial details with this customer base here.

Okay, no, that's fair. Thank you.

There are no further questions in the queue, so I would like to close the Q&A session now and turn the floor back over to your host, Dr. Prisca Havranek.

Thank you very much. And let me close the call with reiterating our key messages. We delivered a solid Q2. The ramp up in SEMI is in full swing and we see strong customer activity in our biophotonics business. Although H1 should not be extrapolated into H2, we returned to profitable growth in H1. and our near-term focus is on added capacities and our ability to deliver. We have specified our guidance in the upper half of our range. And with that, I thank you for attending our call and I look forward to seeing many of you in the role together with Dominic over the next coming weeks. Thank you very much.