Elmos Semiconductor Ag

Good morning, ladies and gentlemen, and welcome to the ALMO Semiconductor ASB conference call regarding the results of the first quarter of 2021. 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. Arne Schneider, CEO.

Good morning, ladies and gentlemen. I would like to welcome you to our Q1 conference call. a very strong and promising first quarter 2021. It was actually a record quarter in terms of sales. Never before in the company's history were sales higher than in this Q1. As usual, you have the opportunity to ask questions at the end of my presentation. Ladies and gentlemen, the start of the year was characterized by the ongoing COVID-19 pandemic and the high demand for semiconductors. Since the outbreak of the pandemic in January 2020, everyone at Elmos has complied with the extensive protective measures in a very disciplined manner. This has enabled us to maintain our own production and business operations until today without any noteworthy disruption. Now we are prepared to offer vaccination for our employees, which will be the next important milestone in the fight against the pandemic. We have been ready actually for some time. We are just waiting for vaccines and the official go from the authorities. The first months of 21 are characterized not only by a high demand for vaccines, but also a very high demand for semiconductors across all industries. The increased demand has already started in Q4 of last year, but has accelerated due to the faster than expected recovery of the automotive market and the ongoing boom of office and consumer electronic products. The increased demand, combined with limited global manufacturing capacities for semiconductors, led to the current allocation situation. The entire semiconductor supply chain, including waste production, assembly, and testing, is currently under great deal of pressure. In addition, many customers would like to see increased inventory level. However, the current allocation situation, these wishes are, of course, totally impossible to fulfill. And therefore, I see manufacturers have to prioritize their deliveries based on the real demand. TAMOS is not the cause of line down. So that was certainly better than some others said. AMOS had a dynamic and successful start into the new year. Group sales increased significantly by 20.1% in the first three months of the year to 77.1 million euro. As I mentioned, Q1 marks a new record in quarterly sales. EBIT rose to 12.2 million euro in the first quarter based on higher volumes and positive cost effects. EBIT margin improved significantly to 15.8% compared to 11% in the previous year. The 5.7 million euro CapEx was more or less stable in Q1. Due to higher sales, the CapEx to sales ratio has declined. The investments in new machinery were mainly focused to increase the capacity and efficiency of wafer and final part testing at the Dortmund site and at our partner sites in East Asia. We will see very substantial investments in the course of the year as we prepare for this and next year's growth. The R&D expenses continue to remain on a high level, supporting the numerous serial launches and new development projects. After three months, we are fully on track with our new design wind activities, and we were able to acquire new projects in all of our segments, despite ongoing travel bans and limited customer meetings. The strong increase of the cash flow from operations in Q1 to €29.4 million was mainly driven by the higher income and decreasing inventories. The higher operating cash flow combined with stable cap expanding resulted in a significantly higher free cash flow of €22.4 million. Our net cash position increased at the balance sheet date March 31 to €60.3 million due to the fall of the free cash flow. Based on the current order situation, we anticipate another successful quarter with further increases in sales and EBITs. For Q2 2021, we expect, as announced already on Tuesday, sales of 79 million plus or minus 3 million Euro and an EBIT margin of 16% plus or minus 1.5 percentage points. While a reliable forecast for the second half of the year is not possible at the present time, statements or forecasting institutes are still not stable. The further course of the pandemic is unclear and the allocation situation cannot be precisely predicted. We do expect for fiscal year 2021 a very significant increase in sales and EBIT and think 2021 may well be overall the record year.

So with that, thank you very much and I'm opening the floor for questions. Operator, can you please open the line for questions, please? Yes, sure. Ladies and gentlemen, if you would like to ask a question, please press nine and star on your telephone keypad. In case you wish to cancel your question, please press nine star again.