Mycronic AB (publ)

Hello and welcome to the presentations of Micronix Q4 report. My name is Sven Tjatkovich, I'm the Director of Investor Relations at Micronix and with me today I have Micronix CEO Anders Lindqvist and CFO Pierre Broson who will be presenting today. And with that I hand over to Anders, please go ahead and present Micronix Q4 report.

Thank you very much, Sven, and welcome, everyone. Very happy to present the report today. So the agenda is as usual, talk a little bit about the quarter four last year, going a little bit more in details on the different divisions. Pierre will talk about the financials, a few words on sustainability, and then we move into the question and answer session. And as usual in the presentation that you can find on the website, we have also a market update. which we will not present, but it's there. So when it comes to quarter four, we had quarter four of 2023 delivered a lot of records. We had the best ever sales of close to 2 billion. We had the best ever EBIT, a little bit above to 620 million. We have a very good EBIT margin at 32 and still have a very good backlog at a little bit more than 4 billion. And in that backlog, we have 27 systems. After the quarter, we also received four more orders for five machines. It was one Precision 8 Evo for the display industry and then four SLXs for the semiconductor industry so we are really filling the backlog as well um a comment on the order intake so we had a decline compared to the quarter at the quarter four in 2022 of as much as 43 which can look quite dramatic but that quarter was exceptionally high so the current order intake close to 1.5 billion is more or less on an average level for for our companies still happy with that. If we go a little bit more into details on the different divisions, so the strongest contribution both to sales and to profit came from pattern generators division and we had a lot of focus on execution in the last quarter four. We had commitment to deliver eight machines to our customers, and we fulfilled that commitment totally, so we didn't slip on any order. We delivered six SLXs and two precision eight display writers. Because of that exceptionally high delivery, we also had exceptionally high sales, almost close to 900 million. Also very good gross margin of 68% and record high EBIT of 510. And order intake was still strong, although compared to the same quarter last year, down quite a lot. But that was an exceptionally high quarter. We have orders for four mask writers, one Precision 8 and three SLX in debt. So still a good backlog of more than $3 billion that we will continue to deliver on. So we are very happy with the result here. HiFlex also a lot of records I think I will actually start not with the financial information but we launched a new product last year and this is quite a big launch for us it's a new completely new pick and place machine that is both faster but also more flexible than the previous one and we believe that this will be perfect for the current market That was launched on Productronica, which is one of the world's largest fairs within electronics production, and we received very good feedback on the launch of that machine. For the quarter, good order intake, 360 million, which is up 11%, and extremely good deliveries, beating a very strong quarter in the same period last year. So we increased sales by 7%. Gross margin to very high and good level, 46%, and EBIT close to 100 million, which is a really good result. And because of the extremely high delivery in the quarter we had a little bit we have a backlog of 120 million which is slightly lower than normal I would say which is typical after such a good quarter. but very happy here. On the high volume side, we still have, as before, we struggle in China. The market in China has not yet really recovered. We are still, the consumer electronics segment is slow. We have good demand from the electric vehicle industry customers, but the consumer electronics segment is much, much bigger. effect we see so we focus a lot here on international expansion setting up subsidiaries and sales coverage in in other countries mainly targeting the electrical vehicle industry Despite that, the order intake went up with 29%, but that is also compared to quite weak quarter the previous year. Sales down 18%. We managed to maintain the gross margin at 40% and EBIT down to 32%. And backlog more or less stable at 662%. So no big change in that one. And all that corresponds to an EBIT margin of 10%, which is a little bit lower than what we're used to in this division. Moving on to global technologies. Here we have a little bit of mixed result, and that mix is depending on the demand. We see in both business lines very good demand driven by AI. In the dye bonding, we saw both ordering intake and we managed to turn it into sales already in the quarter. And PCB test, which is our other business line, the demand for Normal electric testing and substrates has been quite weak, but AI demand, which is impacting the high layer count PCBs, much more advanced PCBs, has been very strong to compensate partly for that. For the whole division, order and take up with 84%, sales up almost 40%, gross margin also stable and a little bit improving at 39%, and EBIT of 12% or 37 million. which is quite okay. It's moving in the right direction here. Order backlog close to 300, which is also a good level for us. So moving on to the future a little bit. So with that backlog we have and the order intake and the trends that we see, we believe that this year we will deliver a sales of 6.25 billion. at the end of the year, and this is at current currency rates. So with that, I will now hand over to Pierre Brusson to talk a little bit more on the financials.

Yes, good morning from my side as well and happy to deliver a little bit more insights to the financials. We had a very strong ending of the year, ending the 12-month curve a little bit above our outlook or slightly above the outlook that we have communicated before of 5.5 billion, executing very well in particular in the patent generators in the fourth quarter. Also very happy to see that we continue to grow our aftermarket business. This is a strategic initiative that we run in several of our divisions. Of course, the relative share goes down when we sell a lot of equipment, but the important thing here is that we continue to grow the recurring base. If we look at it quarter by quarter, here you see the standout quarter that we had in Q4 and delivering A sales level of almost 2 billion and an EBIT margin of 32%, 620 million. Distinct record in absolute terms, both in sales and in profits. If we look where this comes from in the profit and loss statement, you can see that this comes from both volume increase and margin improvement. We had in particular a high share of pattern generator sales, which supports an improved margin on company level. We had also very good margin and good volume in the high flex division. and we had a good volume in particular in the global technologies division so the outlier was the the high volume in this case where we did not see the same level of increase we're also happy to see that we can deliver this with a relatively stable cost base overall and that the fall through of this gross margin that we generate is very good down to the bottom line Here you see it division by division. And we have mentioned before the increase in patent generators profitability in the quarter, which was high, of course. And we have then the HyFlex division, which was up against the previous record quarter. So this was a strong comparative. but managed very well, executed, turned orders quickly into sales. You can also see that the backlog is relatively small on the HyFlex going out of the year. So it was really good execution on the orders that came in. High volume, we declined in sales and we have seen that we haven't really turned the corner in full in China. There are some positive signs that we have a higher request for quotations, etc. already in the fourth quarter. So maybe we have at least turned the bottom. there and that we can start to pick up. If we take global technologies like Anders mentioned, we have a strong demand from the AI related investments. But apart from that, the traditional business is somewhat weaker. A year where we have delivered very strong results but we've also managed to deliver a very strong cash flow throughout the year. We have even a positive working capital despite the strong growth we have here and this is to a degree related to that the customers are paying a certain portion of the orders in advance. So this is very supportive to this and we are in a very solid position with more than 2 billion in cash at the end of the period and with strong result and a strong revenue outlook for the next year we have also decided or proposed to increase the dividend to 450. With that I hand the word back again to Anders.

OK, thank you very much, Pierre. And some final words from my side. So we also put a lot of focus on sustainability. As you know, we also have sustainability targets in our long-term goals for the company. And what was happening in quarter four is that we put a lot of focus on diversity and inclusion, which was also the highest rated topic in our internal global employee engagement survey. and it shows our ambition and our activity to be an attractive employer. We also completed our materiality assessment, which is to support the forthcoming requirements with the CSRD directive. And this will also form the basis for our sustainability reporting as of this year already. It's quite some work that goes into that, but all for the best of everything. So that was the part of the normal presentation. So we can move into the question and answer session here.

Thank you, Anders. And thank you, Pierre. So now it's time to move to our Q&A session, as Anders said. And we will start with Handelsbanken and Fredrik Littell. Fredrik, please go ahead and ask your questions.

Thank you very much. Congratulations to a very nice, strong report. Love to see that. I will keep myself to two questions and then get back into line. I have more questions than that, but if we start with HyFlex, it would be interesting to hear a little bit, if you could give a little bit more color on the new products that you launched in Q4 that also got good reception. If you feel that that is sort of changing your addressable market scope, Is it other ASPs? Do you have other gross margins on it? Something that gives us a little bit more flavor would be interesting to hear. And if we stay with high flex, 46% gross margin, I'm not sure I've ever seen that in that division. So if you could talk a little bit about the mix, and maybe if you have any software contributions or something in the quarter of its only volume. Thank you.

All right, so starting on the product side then. So the highlight of QWERTY 4 was this launch of a new pick and place machine. We call it the A40. That machine is almost 40% faster than the previous fastest machine. So that's a big lift and also more flexible. So there's no compromise really on flexibility. So we're still... work in the high flex area and it's more flexible that it can pick more strange components or more larger components and odd components and so on which is a trend especially maybe on the electrical vehicle side where you have big power on the on the components, a large power components that has to be assembled on the board as well. So we believe that we will have a more competitive offering, of course, and also go a little bit into we will not step into the high volume market with that machine, but we're getting closer or can step into more of the high volume market. And we can also meet our customers demand to increase production speed. And when they ask for so it's also defensive launch, you can say that when they don't need to move to to high-speed machines or super high-speed machines that we can still manage that. The contribution financially has not been large yet because we launched it in November last year and so that is not visible in the numbers, but we believe that this will be a good product. We also do some upgrades and freshen up our current range. We have done a boost on inspection equipment. I've seen sales increase on that one. We also have an increased focus on our material handling equipment, the storage towers and so on, which is also giving a very good margin contribution. So it's a little bit here and there, but looking forward, we believe very much in this new pick and place machine.

Just to follow up on that one, you say it's a good product. I'm sure it is a good product, but do you feel that it sort of, you talk about that it sort of improves your competitive position where you have your strength in the high mix. Do you feel you can have another price point on it, another gross margin on it when sales starts to sort of move in here?

It's definitely more expensive than the previous machine because it generates almost 40% more throughput and also more flexibility. So it has a much bigger value to the customer. Okay, perfect.

Thank you.

If we speak about the quarter as such and the strong gross margin that we have, we have a benefit of having a higher volume, higher throughput covering the fixed cost base, which is essentially similar. We also had a number of successful initiatives related also to jet printing and certain accessories, which is a bit margin supportive in relative terms. Not so much on the software side, so that is not the case.

Perfect, thank you.

Okay, so now we will move over to Carnegie and Mikael Lassén. Please go ahead, Mikael, and ask your questions.

Thank you. Good morning. Just one quick follow up, first of all, on the margin question for the high flex segment. So if we assume that sales will be maybe roughly the same in the coming couple of quarters, then the margin should be well above 40%, 41% that you have been for a very long time. Is that how we should think about it?

I think, yes, if we can deliver this type of volume, we can also be distinctly above 40, yes.

Okay, so there is some form of fundamental change in what you have done there so you can maintain a high gross margin. I mean, historically, we have seen that sales could go up and down and the gross margin would be more or less unchanged. So you would scale on OPEX to reach higher EBIT margins, but now you can maintain this higher level, right? It's not a fair assumption.

If the number is precisely the same, but we should be on the right side of 40, yes.

Okay, got it. And then I have a question on the market conditions and the outlook for pattern generators and what you're commenting on the display market that you see slightly lower activity. Can you elaborate a bit on that, what you see and the outlook?

I think if you look on the display side, we have had quite a lot of orders recently. And if you look historically, this is how it has looked like. And I think we will see the same pattern going forward. We still believe that in the long-term perspective, the display market will still be attractive. And the market as such, the photo mask market, is still increasing in both volume and value. We also see bigger demand for high-end photo masks and also localization efforts on manufacturing of photo masks, which means that China will be most likely a bigger producer of photo masks than before. So long term, I think we still see a good market here.

Okay. I was just wondering if you compared to the very unusually strong Q4 last year, that obviously is a bit lower than that, but maybe it's, I don't know what you're referring to, if it's in absolute terms going forward or if it's compared to that very high.

No, I looked very much forward and maybe on a two to three years perspective.

Okay, okay, got it. And... But when we look at the order intake, you have received a lot of replacement orders. I'm just curious if you can say something about the installed base of slightly older machines, the LRS type. How many that could be still left to replace?

I mean, we don't give out exact installed base by unit, but we do have replacement programs also in the more medium term perspective with customers.

Okay. And then I'm curious about the global technology segment. It was a very significant improvement in sales in Q4. And I was just wondering if you can Talk a bit more about the AR related demand. And if you can be a bit more specific, what is actually happening there? What do you mean with that comment? For example, what type of applications, what type of end customers are relevant for you?

So it is more or less the same end customers as we usually have, but the products at the end customers are a little bit different because of the AI computing. So it's very much about data transfer and computing power. So in the PCB test, it is a much more powerful PCB, which is this multi-layer or what you call it, high layer. boards that is a more complicated board to test and that has increased quite a lot on the PCB test side. On the die bonding side, it's the traditional equipment that we sell, but the customers have large orders because of the AI computing expansion in data centers and so on. So it's driven by that. On the other hand, we see that the traditional data common telecom markets and PCB test markets are a little bit weaker at the same time. So it's a little bit plus and minus at the same time.

Okay. Thank you.

OK, thank you, Mikael. Now we will move over to ABG Sundahl Collier and Bradley Ware. Please go ahead and ask your questions, Brad.

Thank you. Morning, gentlemen, and congratulations as well on today's very strong result delivery. And thank you for taking my questions. I'm going to be a bit cheeky and kind of ask two questions, but with a couple of sections on them. So my first question is generally around cost discipline. and the margins in patent generators, but also in the group in general, as we've already discussed in HyFlex. Can you please just elaborate on some of the reasons driving this improved profitability and are they sustainable? And I'll throw some bait at you and feel free to comment on them or anything else, but is it higher average selling prices due to more optionality? We have discussed the production process before, and I think there's a continued underlying improvement in the production process. And actually, can you comment if you've had any conscious price inflation with what's happened in the last couple of years? Have you actually increased prices as well?

And we can talk a long, long time about on this topic, I think so. But if I start a little bit on the patent generator side, we have scaled up the volume in particular of the semi con related equipment. And this, of course, also generates some benefits in the supply chain, in the operations and so on in the installation phase, as well as we learn how to do this in the most efficient way. And this pays off in improved margins. We have a focus on aftermarket in several of our divisions. This is something which is really good for our customer base, but it's also good for our margins. So it's margin supportive. So this is a conscious initiative that we continue to drive. If we take the high volume division, which has had a declining volume, We have had a very good cost control, very strict cost control on the OPEC side. At the same time, we try to grow this business outside China, and we are investing. You see partly that the administrative costs are a little bit higher, et cetera, et cetera. So we are doing conscious cost initiatives where applicable, and we are also trying to develop the business where we need to develop the business.

Understood. Just maybe two follow-up questions around this thematic. The aftermarket in SMX, is it at the same level as group at 29% today? What can you comment there, please?

Sorry, can you take it one more?

So SMX aftermarket revenues, is it consistent with group revenues of 29%? I'm assuming it's still lower, but...

It is still a low base because you have typically installation and you have a warranty period before it starts to run into a service contract. So this is in itself a supporting thing that will come over time. So it is lower than the other part of pattern generators.

Okay. And sorry to force this issue, but again, have you had any unusual price increases due to the disruptions we faced over the last few years on your product sales?

on components coming into us, inflationary adjustments, or that we have imposed on our customers?

Yes, the latter.

No, I think we haven't imposed specifically due to component shortage, but of course we try to place our...

our products where the market is and and corresponding to the value that we can generate to to the customer and as such then there has been some price increases yes understood okay okay uh my second question and thank you is uh just um trying to better understand china and its impact on your business um so the first part of this question really is can you just talk us through the underlying changes in demand during 2023. I recall the first half was pretty tough in China. There seems to be some broader market information that Q4 is seeing an improved performance by many companies from China. So I just wanted to know how those broader trends are impacting your underlying business. And then the second part of that question is, Regarding the 2024 guidance, I think we can mathematically calculate the impact from patent generators on the group guidance. But I'm just trying to understand your assumption about, you know, the old assembly solutions, the other three businesses and kind of how should we understand their performance in the coming year, please?

Okay, two things. Shall we start with China a little bit?

Yes, please.

High level China consumer electronics, which is an important market for our high volume division, has been very weak. It's still weak, but a little bit of positive indications. Let's see how this goes going forward. If we take the other important area, which is the Semicon side for patent generators, has been investing very much. So there is a significant portion of the Semicon sales, which relates to China. So very mixed for us in China.

Understood. Okay, thank you.

If we take the outlook question and the old assembly solutions divisions in relation to that, I think we work very much with the divisions and we try to look at the opportunities that we have in the respective divisions. And I think we have, of course, we have a growth plan for all our divisions, more or less. I think we are in a strong position in the niches that we are operating. And we do see from where we come that the basic scenario is that we should be able to grow in these divisions.

My underlying work, and I'm not as detailed as some of these other analysts in the market, but based on the patent generator order book, which is higher than last year and deliveries, I get the impression that the underlying assumption on the other three businesses is kind of very flat, which, again, based on industry data, we'll see how that performs. But I don't think you've got any. I mean, of course, you're looking for long term growth, but I think I don't see much growth in the guidance coming from, you know, flex volumes and global technologies.

You may call it modest growth, but that's OK.

OK, I'll jump back into the queue. Thank you very much.

Thank you, Brad. And now we will move over to DNB and Anders Rudolfsson. Please go ahead and ask your questions, Anders.

Yes, thank you very much. Unfortunately, I have some technical issues, so I have to go directly with my phone. Sorry for that. But We have perhaps touched upon this already through Michael's question, but it's actually 12 months ago today that the order momentum started. And since then, you have released 22 orders with different size of them. And it's something like $200 million up to $250 million in order value. So my question is, what's actually behind this enormous momentum? And the second question will, of course, be then, and you perhaps answered that already a little bit, but how long can this continue?

I think you referred to patent generators in that case. And it's mixed between semiconductor and display industries. I think on the semiconductor... industry which we addressed with the SLS Xmask writers, we have had very good momentum. And we believe that this can actually continue for some time. On the display side, it is a little bit more up and down. And we had a peak around this time last year. But we continue to take orders in that segment, not maybe at the level as we had in Q2 22. there's still activity on that market, maybe back to a more normal level.

And you also mentioned that you have seen better gross margin and up to a level now where could it be sustainable and can it actually improve further?

It will also depend a little bit on the mix. We have different mask writers for the semiconductor industry. We call them SLX 1, 2, and 3. And depending on the size of these, they have a little bit different gross margin. So we will also depend a bit on the mix of semiconductor mask writers that go out. We do believe that we have improved the cost base and that we are more profitable than when we launched the Semicon mask writers.

Fortunately, but I'm finished there and thank you again for congratulations to a very strong report. Thank you.

Thank you.

Thank you, Anders. So now we will go back to Handelsbanken and Fredrik Littell, who had some additional questions. Please go ahead, Fredrik.

Thank you. Maybe a continuation on Bradley's question on cost and price and everything. I recall, and correct me if I'm wrong, that you did some changes to your sort of production logistics processes in 2018-19 or something like that. Is that a fair assumption that you have since been able to sort of improve the productivity in your specific sort of assembly capacity that you have? So have that improved the last few years and Is it significant? Because I mean, you did a few deliveries in Q4 here. So could you talk about that in general?

Yes, I think in production there's a continuous effort to be more efficient in all divisions all the time. And I think we have been increasing our efficiency in every division. If you talk pattern generators, we've had this big delivery in Q4. It was a little bit of a struggle, but well planned and well executed. And our capacity, because of improvements, is much higher now than it was before. any time before actually and very much compared to 2019. There is no way that with the processes and setup we had in 2019, we could have never delivered the quarter for as we did last year. It's very much also due to lead time reduction. Even though there is a significant lead time of our product, we feel that we're more in serial production on the on the patio generators with different flows, different setups and different layout. But we still we still do it on the same amount of square meters as before. So so that really improves efficiency.

Is it also the same FTEs that is behind the production or so have you increased the productivity in terms of employees?

I would say value per employee has most likely gone up quite a lot, but we also have increased the number of employees to meet the demand.

My second question then, you introduced new laser technologies in your PG machines in the fall of last year or 2023? What's the traction right now? We have listened to you and how you have described it before, but it would be interesting to hear where we stand right now.

Yes, so that technology will go into all of our mask writers over time. So already in the SLX since before and also now in Precision and we will also look on FPS equipment. And also for most equipment, it's possible to upgrade them. We have received so far an order for seven machines to be upgraded and that is still going on. These upgrade sales will not have a significant impact on result and revenue. It will have a significant impact on climate, of course, or carbon dioxide emissions from the installed base. So it's still contributing to our targets, but not so much to the money.

OK, thank you.

OK, thank you, Fredrik. I believe that Bradley Ware at ABG Sundahl Collier said that he might have some more questions. If you do, please go ahead, Bradley.

Thank you, Sven. Yeah, I do have one more question or maybe two. I guess the question is about the balance sheet. And during 2023, there was a lot of one-off cost for growth initiatives. Just wanted to know if you could give us an update on some of those initiatives. For example, you know, the possible listing of Axon versus kind of underlying, you know, group growth initiatives, please.

If we take the largest portion of the cost that we had in 23 related to business development, this was related to an acquisition that did not materialize in the end. That's something that can happen. If we then take the listing of Axon, this has not incurred material costs. We have been slowing down the pace on this project a little bit. But this project is still very much alive and we will continue the project.

Okay, and sorry, just to confirm the work done on that potential acquisition that has officially closed, has it?

Yeah. Sorry, I should correct myself. I will not comment on whether it's a closed deal or a no deal.

Okay, understood. And maybe just one kind of strategic question. I'd like to ask these to both handlers and Pierre, but recurring revenues, you know, 30% SLX is still obviously, you know, expanding the installed base. So it sounds like it's going to drive up recurring revenues within this division in the future. But have you given the market any guidance in terms of what is optimal or normalized, you know, when – when everything is running efficiently, is 30% as good as it gets for Micronic. And for the avoidance of doubt, the profitability is excessively better than group profitability, whether you can just deny or agree with that final statement, please.

We will not comment on the profitability on aftermarket. I think you can look at other companies and maybe draw some conclusions on that. I think for us, we want to drive the aftermarket as high as possible. If we happen to sell a lot of equipment and thereby reducing the share, it's not a problem because it will generate more aftermarket over time. So we don't really have a percentage target. We want to drive up the aftermarket business.

But there's still potential. As you said, SLX is not fully covered as we still sell a lot of new equipment and they're still in warranty agreement. Some divisions have lower than average and could definitely improve. So yeah, so it's still quite a lot of upside on that side.

Okay, I think I'm done. So thank you very much, gentlemen. And once again, well done. Thank you.

Thank you, Bradley. And now we will move over to Carnegie again and Mikael Asien, who has some additional questions. Go ahead, Mikael.

Yes, thank you. I just had a follow up on capital allocation. If you can maybe say something, how you plan and think around the values in acquisitions, investments and dividends. You have, I think, 1.9 billion in net cash.

Yes, correct. No, I think we have the mission to drive this company to become a larger company. We have set out a route to 10 billion. This will require certain acquisitions, and we are actively looking, but we will not just do an acquisition to do an acquisition. We will do things that we believe in that has the right possibilities to succeed within Micronic. So we are not desperate to do the acquisitions, but clearly there is power to do the acquisition in the balance sheet today and with the commitments that we have from our bank as well. So we feel good about that. We also have certain organic opportunities to explore further, which could also consume some of the cash in the balance sheet.

Thank you.

Thank you, Mikael. And now Fredrik Littell at Handelsbanken has an additional question. So over to you, Fredrik.

Thank you. We could have questions all day here, but I'm going to keep myself to one more then. I think I understood alluded to a little bit describing the slx potential going forward and i remember you said at one point that a lot of the already received contracts on slx is a lot about enlarging the installed base the capacity out in the world rather than that you have sort of started to replace old machines Can you sort of update a little bit on that if I understood you correctly and how you see that progressing going forward?

Thank you. Yes, so the photo mask production for Semicon has expanded. really, as Pierre said, a lot of the sales have been going to China, but also to other countries and also to new customers, new type of companies that were not existing before. And all that is new capacity, actually, or new capability as well. Not only capacity, but also capability of doing a different type of semiconductor and different type of granularity or precision on the layers and so on. So that has been driving a lot of our sales. There is still an enormous installed base in the world of much, much more than on a display side and also quite much older at the same time. So that is still a potential, of course, to replace that. You can also say that, of course, instead of replacing also new capacity will maybe a little bit replace the old installed base by maybe retiring other machines rather than replacing them, which we haven't seen yet, but it could be the scenario as well. But anyway, there's still a potential very much on the installed base side. But majority of our sales so far has come from expansion.

Thank you. Very clear.

Thank you, Fredrik. And Bradley Ware at OBG Sundahl Carrier has another question. So go ahead, Brad.

Yeah. Apologies, gentlemen, but I just wanted to follow up on Fredrik's question regarding the SLX market. Again, when this initiative started back in 19, there was a clear gap in terms of gross margins and EBIT margins between the two divisions within PatentGeneros, between display and Semicon. there has been a lot of effort put and it seems like the margin gap is closing. I haven't seen a 58% EBIT margin in patent generators, if my analysis has served me correctly. So can we just talk please about, you know, display used to be 70% gross margin, 50% EBIT margin business and SLX was much lower. And I think to help us understand this improved efficiency and increased volume and scale, to try and, you know, analyse better financial performance. Can you give us any guidance, please, in terms of what's happening? You know, are we seeing new highs in display? We're seeing, obviously, improvements in S&X, but maybe a little bit of guidance would be helpful, please. Thank you.

Yeah, I think there is a gap still between the profitability in the two sectors. Of course, working hard on the cost base and having, like we had now, six SLXs going out in a quarter, that really supports the flow buildup. And we learned the installation work and so on. So if we can reduce the cost base, the gross margin increases nicely. So I think that has been a good thing. We have also the mix between the SLXs if we sell more of the high margin SLXs it also improves a little bit so it will shift a bit from quarter to quarter should be prepared for that and of course that is our ambition to make these as good and as profitable as possible for us so it's more of a change on the SLX side than what you see on the

on the display side display side is more as it has been before okay thanks again okay so with that we have now reached the end of the presentation of my chronix q4 report thank you very much for watching