AT&S

Ladies and gentlemen, welcome and thank you for joining the Austria Technologie and Systemtechnik AG conference call on results for the first quarter 2026-27. Throughout today's recorded presentation, all participants will be in a listen-only mode. The floor will be open for questions following the presentation. I would now like to turn the conference over to Mr. Philip Gebhardt.

Thank you, Viara. Good morning or afternoon, ladies and gentlemen. Welcome to the AT&T SQ126-27 conference call. Today with us is Michael Mertin, CEO, and Gerrit Steen, CFO. Mr. Mertin will give an overview of the key developments, and Mr. Steen will comment on the financial figures and our guidance. As Viara mentioned, the presentation will be followed by a Q&A session. Now I would like to hand over to Mr. Mertin. The floor is yours.

Thank you very much, and ladies and gentlemen, a very warm welcome from my side. My name is Michael Mertin, I'm CEO of AT&S AG, now since a little bit more than one year, and it's an honor now to present you for the second time Q1 numbers, and now Q1 numbers for our new fiscal year 26-27. It's an extreme pleasure to do that with my dear and still relatively new colleague, CFO Gerrit Steen. And very early this morning, I read one of the first articles about the positive reaction on our quarterly numbers. And the headline was successful restructuring and turnaround. And ladies and gentlemen, I think this is correct and incorrect both ways. So we have a very positive first quarter, but it's just the delivery to promise. That's exactly what I promised to hopefully all of you a year ago. It's a very consequent way of developing a company from a peer supplier into a tech and innovation partner to its customers. of course doing the homework on the cost side, on the supply chain side, within all of our operations, etc. But it's a transformation of the company and all of its business models as well. And this is the core reason why our profitability is going up and why our sales are going up and why customers are so keen to work together with us. And this is of course strongly supported by the entire executive board and therefore also a very special thank you again to Gerrit Steen who is supporting me now since a couple of months and so we are both driving this kind of a success. So sorry for these initial remarks, I think this was important especially for me because I was the person giving you the promise a year ago. So now coming to the first slide, we had a very strong start into our new fiscal year with a revenue of approximately 550 million euros. This is a growth of 40% constant currency year on year. We had a very clear turnaround of our earnings per share. You already saw this indication in the last quarter of the last fiscal year, but now it's a very clear turnaround from a negative earning per share from minus 1.55 euros to close to a euro 93 cents earning per share at the beginning of the typically relatively weak first quarter. But you see, this is not a weak quarter, it's a strong one, and also in profitability. Our EBITDA went up by 134% was previous year, and we ended up with 165 million euros EBITDA, what is an EBITDA margin of a little bit more than 30%. told you that EBITDA is just one financial KPI and maybe not the most important for us. We want to deliver net profitability at the end, earning per share. This is what counts. We want to provide positive cash flows on the operational side for you. And therefore, the EBIT number, what is our internal core KPI for profitability, because it's the KPI that is easiest to access, We show you an EBIT of 73 million Euro, what is more than we reached in the entire last year. This is more than plus 500% versus prior year and it's an EBIT margin of more than 13%. I'm quite proud to tell you that all of the communicated projects are on track. More than this, there are more projects which we have not communicated so far and where I can't talk about so far until the ink is, as we call it, dry. So we have still a very strong market momentum and customer diversification is still going on. We have a couple of more projects in our pipeline in the three-digit million euro range. Interestingly, with the diversification, I promise to you, in both in customers and insights. So in customers slash technologies and insights. So more or less all of our sites worldwide will profit from these ongoing projects and both of our business units will profit from these increases as well. Maybe you remember that we announced a very defined China for China business. This has been successfully implemented, management is in place. and we had a very very positive head start better than expected and we see that this business will also be a strong pillar for the future we for certain political reasons of course we divided it internally from the remaining part of the business so it's a pure China for China business driven by our Chinese employees to secure our financial freedom and of course also to secure our shared equity we successfully placed a 400 million euro convertible hybrid bond interesting construction but very successful many of you and other investors have been keen to sign on for it so you will see later on from that also our financial situation significantly improved and gives us all the tailwind we need for further growth so next As I said, as a technology partner for our customers, not just supplying standard products, it is important not just to be in one of the market segments. We are all talking a lot about the substrate area, Of course, what is a very strongly growing area coming from artificial intelligence, supercomputing and advanced computing. But nevertheless, there is a lot of things around it where we are profiting from, from testing infrastructure, very high complex systems, very high complex PCBs, printed circuit boards, which are necessary to produce test equipment for all these ICs chips we have in the world. We have advanced PCBs for many of communication applications, for space applications, but also for applications with very high power demand. We have high power electrical embedded components in PCBs for power distribution within computers within artificial intelligence systems to bring down The necessary currents to handle and lower values, what is highly important. And here we are actually ramping up capacity not just here in Austria, but also in other countries. We already talked about optics. Optics definitely is key. It is already becoming key. You remember that I talked about optics from my first day on. because the 21st century is the century of the photon and photon's optical transmission is significantly more effective in the energy consumption on the one hand and it's significantly faster by a couple of orders of magnitude. So we are more and more stepping in the production of optical transceivers and we are going into the embedding of optical structures in the future as well, co-packaged optics. I will come back to this later on. And of course, we see substrates, which are not any longer just these small 50 by 50 millimeter substrates, which we know from the past. We are talking about more and more complex systems where entire chiplet systems are on top of these substrates, have to be interconnected, where we have to embed tens of components for the internal communication for pre-computation of data within a substrate. So this is going on as planned with a couple of customers already. So we are not depending on one or two customers anymore. And this bunch of opportunities is driving the entire business all over the globe for us. Next one, please. Let me come back once to optics. I know that a lot of you are keen on getting a deeper insight into technology, and we promise from time to time that our CTO also will give a talk to you diving a little bit deeper in technology. But just to understand what we're actually doing and where we are investing into optics, you know, pluggable optics, is what you have in your network. If you have a computer network at home, if you have internet at home, sometimes you already get an optical plug into your house connected to your router. And from there, you have the classical electronic distribution by cable. This is pluggable optics. Then you have optics on board. You saw this device on the last slide already. So we have optical interconnectors which can be placed directly on a board to connect two different boards to each other for high-speed communication. This is state-of-the-art technology and we are in it. The next step, what is actually ramping like hell, is so-called co-packaged optics. So the next step is not to have these optical plugs to be plugged into a board, but now we embed optical transceivers into circuit boards. So we put them directly into the board with micro plug-ins from fibers. This is what is actually the latest generation of technology, what we are also producing and we are also further investing in. But there will be a next step and this next step will change the world even more. And this is optical integrated on a board for chip-to-chip communication, for chip-to-memory communication, for the communication within an interposer. And also on this kind of technology we are actually working, we are talking about these technologies with our customers and exactly this kind of road mapping and also evaluating the future of technology possibilities is what creates the strong binding and the strong relation now between our core customers and ourselves. So I'm pretty sure that all these optical fibrics will be the future of computation for energy saving. This is one issue. The other one is for enhanced communication, what actually is the bottleneck for advanced computation. Okay, next one. Yeah, we are expanding and investing in almost all of our sites, actually. And so what is one of the most prominent ones, because we made an announcement of it, about it is the CULIM expansion. So our expansion in Malaysia, in the north of Malaysia, and it's the CULIM Campus, as we call it, 2.0. you see on the picture you see later on a little bit a bigger one on the right hand side of the left picture there is the plant what is already in use for AMD in the front you see R&D technology and some infrastructure and the big plant on the left hand side this is the new plant where the shell is already existing where we are actually what we are actually building out for a second big customer and and a couple of smaller customers. This is already financed. This is already announced. In Chongqing, China, we also have expansions. We are maxing out the resources we have over there. So under proportionally to existing investments or to new investments, just by adding some equipment, we can significantly increase our capacity for existing customers with existing that means on a relatively low risk level with a relatively low investment level and of course a high profitability especially a larger gap between EBITDA and EBIT a smaller gap sorry between EBITDA and EBIT we have an enhanced technology mix here so we produce substrates for artificial intelligence we produce substrates for servers and for high performance computer and for network applications as well. And we're actually looking for more capacity for embedded optics. But also in Europe, we are expanding. You already heard about this HDB3, Hinterberg 3 plant for substrates and also our R&D line. What is actually ramping and also here we are filling some bottlenecks to enhance capacity to the max. But more interesting maybe is that we are also investing in the classical technologies for high-performance electrical or high-power electrical components, which working like small transformers, I tried to explain it already, transformers helping us for better energy supply to high power consuming artificial intelligence processors and these small devices are produced on the basis of printed circuit boards with embedded components and this is actually done here in Hinterberg. We are ramping a huge production here and we will see the effects from Q2 and Q3 on as a contribution for our business of our business unit ES.