Basler Stock

Welcome everybody, from Ines and myself, to our half year reporting. We are both happy to present today very good numbers and also a sound outlook besides all noises around us. Before we start with the presentation today, I also would like to remind you with regard to the disclaimer, that all statements that we are making today are views and assumptions made based on available information at this point in time. All forward-looking statements that we are making are by nature subject to significant known and unknown risks and uncertainties. We have prepared a presentation for you today. We start with an executive summary. I will then hand over to Ines, digging deeper into our financials. Also, the share development will be presented by Ines, then I take over again for the outlook.

We have today, as always, time for Q&A session at the end of the call. Let's start with the numbers and let's start with the executive summary and the market view that we are in, or that we were in the first half of 2026.

First of all, to say that the market ran better than expected. If we look at the numbers from the German vision industry, bookings are up 25% and billings were up 9%. There is a great momentum. We also see PMIs around the world in the, let's say, important economies that we are acting in are above 50 and trending positively. We see especially a strong development in semicon and consumer electronics and logistics, and then data center hardware production, which is driven by AI-related CapEx investments.

We also see ongoing high competition intensity, especially in the Asian region. You know that the U.S. tariff situation is somewhat uncertain still. The geopolitical frictions, unfortunately, are rising, we have not seen any significant impact on our business so far. What is, let's say, coming on top now, besides the geopolitical environment situation, are more and more constraints on the supply side. We see in general, lead times are rising. We also see some bottlenecks on certain materials.

We recently, just shortly before the earnings call here, we also experienced last week, the earthquake in Japan that had a disruption on the supply chain of one of our important sensor suppliers, Sony. On the FX side, also in the second quarter, we saw a development where the U.S. dollar and Chinese yuan were, let's say, not in favor, let's say neutral to us. We saw a headwind from Korean won and yen continuing. They are devaluating against the euro.

What does it mean for us? Again, strong statements here. Bookings are up 60%, billings are up 36% compared to first half year last year, which means we are clearly outperforming the industry. We have a strong order momentum, it even accelerated in this second quarter, which gives us a good momentum and fuels the start into the third quarter. We also see very good business momentum in all regions, it's widely spread. However, by far the strongest momentum is in China, related to the Semiconductor and Electronics industries.

With regard to the gross profit margin, we were continuing our high level in the second quarter, in total, we achieved 51.6%. We are clearly up compared to last year. EBIT almost quadrupled. This is a strong indication also of the scalability of our business model. Ines will dig deeper into the numbers itself. Also, the free cash flow was strong, even though we had also an increase on receivables. So far, the geopolitical situation, especially on the Iran war side, had no impact on our business.

However, we have seen with the earthquake happening last week in Kumamoto, that a disruption in our supply chain occurred. This is currently under investigation and under recovery measures. We believe that this will have an impact on our production and supply in September and October. However, we are working hard to mitigate the risk.

With regard to the team development or organizational development, we just progressed with a mode that we also reported in the first quarter earnings call. We try to keep the organization in its size as it is and scale up the revenue and also improve the gross margin, and by that, obviously also improve the bottom line results. You can see that we only increased, compared to mid of last year, the organization by and large 20 people or FTEs. The split amongst the different function has not significantly changed. What we are scaling is our R&D investment, we keep it from an absolute, in an absolute term, we keep it at the same level. This means at the moment, with a higher revenue level that our R&D quota, gross quota, is by and large 10%, 9.5%, compared to 13.3% last year.

These investments are made into multiple different product and technological directions. We have invested and have launched products in the first half of this year in the direction of line scan systems, so-called TDI Vision Systems, for high-end applications, especially focused on electronics and semiconductor applications. We also have launch products in this 3D realm, namely the Stereo mini. This is mainly logistics applications that can be solved with such a stereo camera, 3D camera type or system. We also have entered into a new interface technology. It is called GMSL. This is in the mainstream products that we are offering. This interface has high real-time capabilities and also high bandwidth to transmit data.

Last but not least, we also announced to the public one of the key innovation programs we are working on. We also launched this on the GTC, at NVIDIA. This is all about simulating all our components in the Omniverse world in order to enable our clients to test virtually all the products and only order hardware and build up a real system once they already know what they want to choose. These innovations and products have been presented in multiple different occasions. Some of them are stated on this slide. This brings me to the financials, and happy to hand this over to Ines.

Thank you, Hardy. Welcome also on my end. Here you can see the development and also the distribution of our sales. As previously mentioned, we have a pretty good order momentum. Order entry was up 59%. Revenue is lacking a little bit behind, but above 30%. As you also heard, there is a growth in all of the regions. For the order entry, we really have every region above 30%. Here, China is especially sticking out.

Taking a look at the overall revenue, of course, the overall number is there with EUR 152.4 million, but we also have a little bit of a distribution change, with China picking up a little bit of a share. Now being 29%. We see in general that the order entry is above the revenues. It is still monitored, but our customers are also placing the orders a little bit into outer quarters, so that we can now have a starting with a good backlog into our next quarters. Here you can see the development again. We have, as I said, we have a positive book-to-bill and also a positive momentum in the order backlog.

Jumping into Q3 now with not only a good backlog, but also beginning weeks of very good demand. This now has to be matched with the supply, as you heard, and as you will hear again when we go to our outlook session. So far, we need to catch up with our billings, but 36% above last year and very good development so far.

Gross profit margin, this is really to my heart, because we made the second quarter above our plan. You all know that we are aiming for this 50%, and now for the second time, with a very good revenue also. We have a good grip because we did not increase our workforce and can really leverage now. We, of course, also have the help from the currency so that we do not have further loss. Second time is in Q1, 51.6% above the 50 and well above the margins of last year.

A little bit of a different picture this time in the EBIT. We announced already last quarter that we will not see that especially high EBIT margin again because we already assumed that something is going on. Here you can see that we have a push rule from the gross margin, this EUR 1 million that we get out of gross margin also ends up in our EBIT. We had a pickup due to a variable salary structure and also due an efficiency project to increase the automation all over. That is why you are seeing the EBIT margin lower than the EBIT margin of Q1 and on a cost level that we are also perceiving at least for Q3 and then having maybe another point in there for Q4.

Good. I think this is a summary, we ran all over, right? Again, to point out the gross margin, when you take a look, it is 5 percentage points over. Also the EBIT margin still, last year, we were coming in with 7.7%. Now, not only two-digit but above the 20 with continuing trend in not increasing the cost base so much. Here also some talks.

You might have all looked into our balance sheets, maybe some talks to the operating cash flow here. Overall, it's up, but our short-term asset structure changed a bit. We are, of course, monitoring and steering our working capital and working capital days for the days and receivables are up. This is coming through two factors. We discontinued our factoring because of a cost analysis that we have behind there. You see some of the factoring part, which sat previously in there now walking into the accounts receivables. We also still have the same trend in China, with customers requiring longer payment periods. That doesn't help too much in the days of receivables. Steered against with other short-term financial receivables, helping here in the picture and also getting a good grip on the accounts payable side. That positive trend in the OCF and with that, of course, positive trend also in the free cash flow where we want to have it.

Here, this is a summary of the first picture now as a table, as you already know it. Maybe here to point out, we have our liabilities to banks decrease to plan. We are currently now running at EUR 40.6 million on a decreasing path because we are getting our debts down by the quarter. Cash equivalents up, could be a bit higher if we would have higher conversion rate in the receivables, but definitely positive trend in here. That's why also being up in the net debts with a positive effect now only being left EUR 10 million.

Jumping to the share. This is no more changes or not a lot of changes as usually. You know that picture, we don't have much fluctuation in this one. We had a lot of fluctuation, of course, in the quarter. We were ending up, 5th of August, we were at EUR 26.8. Today, a little bit of a rally, huh? We watched EUR 24-EUR 26 up and down a bit, but I think the overall trend is visible and very positive from our point of view, matching to the picture that we have. Now coming to the outlook already.

Thank you, Ines. Taking over again for the outlook and maybe giving you, first of all, an assumption that we base our outlook on.

First of all, we expect for the remainder of the year, the computer vision market to develop positively. We see step-by-step a broader recovery. It all started more in semicon, consumer electronics, data center, hardware, and logistics, but we see step-by-step Capex investments also in other area happening that is fueling the demand for automation and for our products. We foresee that the trade and geopolitical conflicts will not be solved. They will most likely rise over the course. The uncertainties will stay high, and combined with the Middle East conflict, makes the H2 difficult to predict. To a certain extent, however, we have seen so far, as mentioned earlier, no significant impact from those conflicts.

Currency volatility, we assume that more or less the currency will stay where they are at the moment, the currencies that are important to us, so that we continue to have weaknesses for the Korean won and Japanese yen and a relatively stable situation for Chinese yuan and U.S. Dollar. We believe that the supply chains will tighten more over the course of the next months. It's very important that we stay close to our suppliers, that we have a good supply and demand planning to have good transparency and match those two worlds together.

With regard to the earthquake, maybe here some more information. Exactly a week ago, an earthquake happened in the Kumamoto area, which is one of the main areas in Japan where semiconductors are produced and also semiconductor machines are being produced and developed. There is one crucial foundry for us. This is the Sony image sensor foundry, one of the leading foundries in the world to supply the world with image sensors. Due to the earthquake, this Kumamoto fab was shut down. It's still shut down and under inspection.

However, there is already ongoing measures to bring this foundry back on track, and the forecast from Sony is that the Kumamoto foundry will be back to its original productivity by mid of August. We talk about two, three weeks of impact, not months. We are on a daily call with Sony, what this means to our supply chain, but we have to put this into our assumption that there will be a disruption that cannot be caught up in the next months, as the foundry was running at 100% utilization already.

With regard to competition, no change. We foresee continuing high intensity of competition, especially in China and the Asia Pacific region.

Putting this all into consideration and with our year-to-date results, we are increasing again our guidance for 2026 from originally EUR 247 million-EUR 270 million, now to EUR 270 million-EUR 290 million revenue and EBIT margins in between 12.5%-14.5%. Beforehand, we were projecting 9.5%-13%. This top line is considering the hits on the supply chain. There is a clear statement from us that it's not a demand bottleneck at the moment, it's more a supply bottleneck. However, we are strongly convinced to get to these numbers, which is a significant increase compared to last year, obviously.

On the EBIT margin side, we are also considering, besides the variable incomes that we will have also a bonus payment to our employees. It's not accrued yet, it's just that we reflect this in our guidance to give appropriate transparency about the thinking that we are having. We are definitely proud to present this. We are very convinced to get there, and it makes us even more convinced to get to our midterm guidance. This guidance is now one and a half years old, and we have the ability to get there already this year.

What does it mean? This means to us, we will wait for another one or two quarters until end of the year to update our midterm guidance. Obviously, in the light of the current numbers and the current development, this looks weak to us. Please bear with us that we also want to investigate further a little bit how the markets will develop over the next two quarters.

This brings us to the end of the slideshow, and we are happy to open the call for the Q&A session. Our colleague, Jan, will moderate this. You can either put your questions in the chat or even better for us, please show up your hand and raise your question verbally.

Indeed. Correct. We already have one person raising the hand. Let's try this. I will unmute you, Malte, and please try then to unmute yourself.

Couple of questions. The first is on the order intake in the second quarter, which was very strong. Where we can elaborate on which applications drove the upside or the further increase in comparison to an always very strong first quarter. More or less the EUR 10 million additional orders you booked into the second quarter, was it across the board? Did you see increased pull-forward effects? Anything you can highlight?

We can directly jump into this. What we are seeing is what I mentioned. It's a combination of a wider spread CapEx investments in many different verticals, actually. Even an acceleration of the key industries that are driving the growth at the moment, namely CapEx investments in semiconductor, CapEx investment in consumer electronics, so tablet, smartphone assembly, and other gadget-like parts and such. We also see significant momentum and increase in the AI-related hardware CapEx production. All machines that are needed to produce the semiconductor, but also downstream to produce hardware for data centers that are in the current planning and needs to be equipped in the next quarters.

These are the key verticals. We also, from an order entry, got good momentum from the logistics side. This is mainly happening in the U.S., this is what's behind this even higher momentum in Q2 compared to Q1. There is also another effect into the Q2. This is because of the fact that the supply constraints are rising, lead times are rising, customers start to order a bit earlier. The horizon of orders that we have in our order books is longer than normal at the moment. This is also another effect that happened in Q2.

Okay. Is that quantifiable? We pull forward the fact that, I don't know, maybe 10%, 10%-15% in that range?

It's pretty difficult, but in the range of 10%-15%.

Okay. With respect to the Sony issue, your guidance, the upper end of your guidance range said EUR 290 million sales this year. Does this represent the maximum capacity you might produce with respect to the supply shortage for image sensors? Or is there additional kind of caution baked into, like you did earlier in the year with respect to global conflicts or whatsoever?

Yeah. The main bottleneck we are talking about at the moment is really on the supply side. The guidance we have given out at the moment is, to a certain extent, let's say under uncertainty in a way that we don't know exactly at the moment, the impact on the supply side from Sony to us. They are still in investigation. Based on the current knowledge, we have made best guesses. The EUR 270 million-EUR 290 million is our best estimation, based on information that we had last night, or yesterday afternoon, actually, because we got daily information the last week. This is what's put in this forecast. Yeah. It might get worse, it might get even better. This is what we see as a reasonable corridor for our guidance.

Okay. You're more or less backed into the full outage for two to three weeks, with an impact then on the late Q3 and Q4.

There is a full outage of two to three weeks, and you also have to consider that there is work in progress that was shaped by the earthquake. This work in progress is still under investigation, and we have no clear information about what does this mean exactly to us. We have assumptions that are very much shared with Sony, and I think these are sound assumptions. We will learn over the course of the next two, three weeks, what is really the impact on the work in progress. What does it mean for our supply, to our production planning? This comes on top of a two to three weeks outage.

Okay. Understood. On the gross margin, that was obviously pretty strong in the first half of the year. Now the second half might have a bit lower loading due to the capacity or supply issues. What are your thoughts about the gross margin expectations one should have for the second half of the year?

In there, you saw that the gross margin was pretty stable, right? We had the EUR 75 million-EUR 77 million revenue. We are basically really leveraging all of our indirect labor in the gross margin and have a flexible temp approach in the direct labor. If the revenue is going down, it doesn't matter if it's demand or supply, the coverage of the indirect labor will, of course, be lower. We are definitely not expecting this level of 51%-52%-ish being down, depending on the revenue level, even below 49%, 48% in the baseline.

As we said, we have baked in also into our EBIT outlook. We have baked in variable bonus payments, let's say. Not normal variable salaries, but these will also go to the gross margin folks, so to people also in production. That's why we are also expecting a hit to the gross margin whenever we decide that we are going to do that in the corridor. Really possible that we are seeing a 47%-49% in the next two quarters.

Okay. To the supply chain in general, what are your thoughts about then going into 2027, you see to support stronger growth? Obviously, order entries are supporting higher quarterly run rates. What's your view on the supply chain then going into the next year?

The view is definitely that the situation will not get easier. We are already working with our suppliers on the next year currently. We are positive that, with starting early working with our suppliers, that we create a situation where we would be able to even increase production volumes compared to this year. Then it's depending on the demand that is kicking in. It's not getting easier, to be honest. As you know that the semiconductor processes are long. We talk about 30 weeks process time and for many semiconductor manufacturers, the buffer stocks are empty or low. It's foreseeable that the situation, if the demand stays high, that the situation in 2027 is definitely not getting easier.

I am checking the chat, and I see that Lasse Stuben is also raising his hand. Let me try to unmute you so that you can ask your question.

Just a slightly bigger picture question. How are you thinking about the sustainability of the demand you are seeing at the moment? We have seen situations like this in the past where, maybe you would have started increasing headcount. You have clearly decided not to do that really in a big way, at least in the first half of the year. Just trying to get a feel for, I guess, generally, the outlook for OpEx based on your view of demand into the second half. Which seems like it stayed strong, but maybe also into 2027. How you're thinking about sizing the organization accordingly?

With regard to the demand, Lasse, when we talk to our clients at the moment, I can say that all of them continue to be bullish for the second half of this year, also for next year. To be honest, we as a management team, with the backlog that we are having, with this feedback that we are seeing in the market, we are also very positive for the remainder of this year. It's more the question how we manage the supply in order to best match supply and demand.

For next year, I think it is wise to stay careful at this point in time because the demand is significant, as we can see. We know how the, let's say that the average compound annual growth rate in our industries used to be around 7%-8%. We believe there is no reason why this will significantly change in the future. This means after such a high up cycle, there will be also a down cycle. The only question is when does it kick in? It could run the full next year, this up cycle, but it could also kick in next year. The only thing we can do as a management team, and we are committed to do, is to be very careful with our fixed cost structure. To make sure that we can manage all the volatility appropriately and can, let's say, with full throttle, further continue our strategic path even if, let's say, a downswing will happen. This is how we see it at the moment.

That's why also you see some cost positions increase because we are investing in times into consultants instead of our own people wherever possible, because we assume that this could turn around, right? We also have an efficiency program that won't stop, by the way, next year, but that we can flexibly steer in and out of cost depending on the demand, so that we can take some of the costs out without hurting the current setup. That's also possible.

Just let me also make this statement. We don't want to be too conservative here. The momentum is good. There are a lot of challenges to meet the demand. There is, on the customer side at the moment, an ongoing momentum also in the start of the third quarter.

Okay. Understood. The second question, just on China. It looks like you had sort of a slight or decline sequentially in revenues in the second quarter. I just wonder, was China more impacted on the supply chain side of things than maybe products for the rest of the other regions? Just generally, you mentioned sort of intense competition in China. Maybe you can talk about, clearly the market is growing very strongly, but sort of what are the competitors doing, and just what's changed in China, if anything at all?

It is not a demand situation at this point in time. We see also the demand continue to be strong, even accelerating in the second quarter. It has to do with our supply chain. Many of our products that we ship to China, not all, but many of them are delivered through our Singapore production site. We had more limitations on the Singapore production supply chain compared to the Ahrensburg, the German supply chain. This is the reason for the revenue situation that you were mentioning for China in the second quarter, Lasse.

Okay. Clear. Thank you. Final question, just again, coming back to the supply chain. I wonder, are you seeing much inflation on some of these components already like we've seen in the past? It doesn't seem to be the case, just looking at your gross margin. I'm just wondering, looking into the second half, are you expecting any inflation on raw materials and your ability to pass that on? Whether maybe you've already done some price increases, if any at all.

In general, for the situation that we are in with regard to the supply shortages in the world, I think we are still in a moderate situation with regard to input price increase at this point in time. We still have net savings. This is also one of the reasons why the gross margin is rising. However, we foresee that also our suppliers and expect our suppliers to approach us in the second half of the year. Typically, they come around the corner in the fourth quarter for next year's contracts.

We foresee that we will see also a higher amount of suppliers approaching us on price increases. We need to see how much this will be, how good we can defend. With the current volume increase that we are showing and demonstrating, we have also a negotiation lever at our hands. Some of the larger chip makers, the negotiation power that we have against them are relatively weak or relatively small.

Sorry, maybe one final one. Generally, I think we can call this an up cycle by now. Even though it's just two, maybe three quarters. How does this differ from previous cycles, be it 2022 or 2017, in your opinion? Does this feel any different to the past?

Yeah. Compared to the COVID situation, at least, I would say that there is not this single impact happening, like what COVID happened and the unnatural demand spike. I think we are having more natural demand spike. However, the investments into AI-related CapEx, you also see this from the big companies involved, what their CapEx budgets are building, cloud computing or data centers. I think this is, to a certain extent, special. The other industries, logistics, consumer electronics, kind of normal. This kind of investment cycle I think needs to be closely watched.

There's one additional question from Lukas Spang.

I would like to follow on the questions regarding outlook for second half and customer behavior. Thanks for the clarification regarding gross margin in Q3 and Q4. I think that's also helpful for understanding your assumptions. Due to the bonus topic, which could come up in the second half, is there anything else we should keep in mind regarding the margin in the second half, besides this effect?

I think the biggest push factor again is the leverage factor in the gross margin. Yeah, because we are really, currently happens what we always plan for, right? Not increasing the workforce, and leveraging the existing workforce with what we had with investments also in processes behind. This is what you're currently seeing. This is the 51.546% are made for around EUR 75 million of revenues. The workforce, especially in the indirect labor, won't be that flexible. We have a flexible direct labor workforce, more or less, but not indirect labor. This is really the biggest effect. We could turn down in some of the OpEx positions, when we would see fit.

Again, if we are reaching or steering to the forecast or the prognosis that we are currently having, this is really an investment in the future that helps us with not increasing people and scaling via processes. That's why if it's not really decreasing, there's no more hit planned, let's say, or foreseen and also no cost blockers in also that we haven't in our hands so far. No.

Okay. Then on the customer behavior, you also touched this topic in the answers to Malte. Regarding the customer behavior, if on placing their orders, are we just talking about, let's say, one or two quarters earlier, or are customers already placing orders for 2027?

There are exceptions where they place already orders for 2027, it's kind of a frame contract they want to make visible to us. Maybe normally the vast majority of our order books are for the next two months, to be delivered for the next two months. At the moment, I would say the vast majority of the order books is within the next three to four months. There is a one to two month in addition. This also brings then us to this 10%, 15% of the orders happened in Q2 that are placed because of a longer horizon.

Do you see this on a broad customer base, or is this, let's say, maybe just bigger customers who are showing this behavior? Anything you can share?

Typically, it's more the larger customers that have also a certain, let's say, monthly run rate with us, and also want to secure their supply, and they have visibility to their businesses. Normally, or typically, it's the larger customers, not the smaller ones that act on a project base also.

I'm currently checking. I have one in the chat as a written question. I guess it has already been tackled a little bit. The question is EBIT margin for half year one is above 20%. Forecast 2026 EBIT margin is only at 12.5%-14.5%. What are your expectations for the EBIT margin in the second half of the year? I guess this has been tackled already.

Maybe, Frank, you asked a question a little bit earlier. Maybe if you would like to precise something, maybe you can raise your hand. If not, I would assume that the question was already replied to, if this is okay. I am checking. Right now, no one raising a hand, no questions in the chat. As always, you can send your questions, of course, through our website if you have additional questions at any time. Yes, I see no additional questions right now.

Okay. If there are no additional questions, we thank you very much for your attention today, also for the questions you asked. Whenever there are more questions, please don't hesitate to contact us after the call. Yeah, we are strongly committed for, let's say, making the best out of the third quarter and reporting also, again, good numbers to you in a quarter from now. Thank you very much.

Thank you.

Talk to you soon. Bye-bye.

Hello, everyone. Good afternoon. Ines and I are warmly welcoming you to our Q1 reporting and it's kind of a stellar reporting. But before we start, I have to hint you on our disclaimer that all the statements that we are making during this call are based on information we have at this time. There are forward-looking statements that by nature are subject to significant known and unknown risks and uncertainties. Let's start. We start, as usual, with an executive summary. I will after that hand over to Ines. She will do a deeper dive into our financials, our share development. And also the outlook that I will present at the end of the presentation. And then we have also enough time for hopefully lively Q&A session at the end of the call.

Let's start with our executive summary and with the market environment. And first of all, it's worth to mention really that we are seeing a broader market recovery in many vertical markets. We see manufacturing PMIs increasing and they are in the major economies above 50 and we see a positive trend. The German industry for vision components grew in bookings by 20% and in billings by 9% in the first quarter, which is definitely a larger or a stronger growth than what was expected from the participants in this industry.

We ourselves see as we have also high exposure to the Asian market especially a very strong development in semicon, consumer electronics, logistics and data center hardware production. And we also see obviously high competition intensity especially in China and Asia and we see also the U.S. tariff situation still unstable and also the geopolitical frictions rising. And so far, we see there was no impact on the vision industry especially of the Iran war so far, but I mean we will remain cautious for the second half of the year.

On the FX side, the situation in Q1 was more pleasant than last year especially the dollar and also the Chinese RMB were a bit better on our side or were stronger against the euro. However, we still saw Korean won and Japanese yen pretty weak and further devaluating against the euro. We see a new phenomenon due to the strong demand. We also see starting bottlenecks in the supply chain and lead times become longer for many components and some of the components are short and already under allocation.

How do we do in this market? Basically we are tripling what the German industry is showing; bookings 64% plus, billings 30% plus. So we clearly outperformed the industry with a very strong momentum and also this momentum has accelerated in Q1 and you have seen that we have a positive book-to-bill ratio. The highest growth area remains China, but we also see a more broader growth and also strong business momentum when we look at the order entries in all areas actually. Some financial highlights, but Ines will give you more insights.

Gross profit margin significant improvement to 51.5%. Our EBIT almost tripled EUR 17.6 million, which equals a 22.7% EBIT margin. And the cash flow, I mean seasonal-wise is always a bit weaker and especially in the light of the strong growth and growing accounts receivables, at EUR 4.8 million. With regard to the organization, we see the company as projected. We more or less keep the organization stable. We here and there add some expertise. But in general you can expect from us and this is also what we have here now what you can see in Q1, we more or less keep the organization stable. Also the split is more or less stable.

Compared to Q1 '25, there are some increase here in admin and decrease in sales and marketing. This is mainly based on or due to regrouping people in our sales organizations when they are working on the admin side. So what does it mean for the R&D quota? Actually it's going down so by and large 10%, but it's going down because the revenue is so strong. This means we are further also investing, investing roughly EUR 30 million also this year in new products and new technologies. Q1 is not, let's say, the most prominent quarter for new product introductions, but we have introduced couple of new innovations and products.

On the GTC recently, we have shown our Basler Vision Simulator. This is an omniverse simulator of our products in order to enable our customers to save time when they are in the design phase and try to find the right collection of components to solve their problems. And also on the other shows, LogiMAT in Stuttgart and also the Vision Show in China in Shanghai, we demonstrated our new product or product systems; the TDI light scan system, Stereo mini and also a GMSL vision system or product system approach.

With these innovations, we clearly move ahead or move further on our strategic journey from a single component company to a more product system-oriented company acting in different vertical markets. And we are also here making strong progress besides of the good results that we are demonstrating.

This brings us to the financials. Ines, please take over.

Thanks, Hardy. So I'm pretty glad to be guiding you through the financials today. This even makes a finance smile a bit. So I'm reading through the lines here. So this is our distribution that we usually show and reading through the lines, you can see that EMEA and Asia held basically their share from the last quarter's distribution. That basically means that EMEA and Asia are growing with our average. You've seen the billings 30% up. So this is the story behind EMEA and Asia. You see also a shift between Americas and China.

As Hardy already said, so China was our strongest growth region. In Americas, we had a slight decrease in the revenues compared to prior year. There's robust order entry looks a bit different. So we are also there in Americas and China really on the uptake. But here this is where the distribution comes from and we are expecting a little bit of a leverage out in the next quarter when we turn the orders. So this is basically the picture. I can remember when I was here 1 year ago so we guided you through and I said like don't expect the same picture in Q2. I may be repeating my story, but from a different angle.

So what we've seen last year is that we came with a good order backlog from Q4 and we had a larger revenue than we had the order backlog. So this was also the story this year. So when you take a look at Q4 2025, we carried over around EUR 9 million into Q1 and we turned it around. But also especially in the last days of the quarter, we got a good order intake and here you can see even a higher order intake than the revenues coming in and helping us of course with Q2. So we see a little bit of a trend that the orders last us longer not by a big influence, but we also expect a good turn in Q2, but not exactly what we have seen in Q1 here. That was really a very good quarter for us.

Coming to the gross profit and the gross profit margin. Top line is good, bottom line is better and it starts with gross margin. So here you see really the uplift from 28.2% in Q1 last year to now EUR 39 million and this is EUR 11.6 million that we just gained out of gross profit and we really passed through to our EBIT. Where does it come from? We said that the EUR 8 million to EUR 9 million was really coming from volume effect and we have about EUR 1 million to EUR 2 million is really leverage. So we did see our -- or you saw our employee number not rising. So we have had a good leverage also of our ops employees here. So this helped us.

And we had also a little bit of an uplift from the revenue structure from ex rate impact. So it didn't get worse, it got a little bit better. So this is where we had really the impact here. And it's basically the same picture in EBIT because we made it. We passed from the EUR 11.6 million nearly everything through. So we have EUR 11.3 million more in our EBIT despite inflation going on et cetera, but we nearly have it. So that means we were losing a bit in the OpEx, but we wanted to hint you also that we are investing currently in automation and efficiency projects. So that's in the OpEx and will also be in the OpEx at least for this year and also basically next year.

And we have selective hiring ongoing wherever required so that we don't further decrease our FTEs, but really have the positions wherever we really need them to generate the top line and our bottom line. So this is the overview. I think again hinting maybe to our EBIT margin stands at the revenue of EUR 17.7 million, which is 30% above what we had and now the EBIT margin of 22.7%, 12.2 points up. Also very good net income and the earnings per share of course up and also a good EBITDA. So I just it's above 27%, which is also in a range that we would like to see.

So going to the cash flow. We have added to our KPI overview here the indicators for days in payables, receivables and inventory. Here something to add maybe for our days for the working capital. Our days of inventories are down to 82 days from nearly 100 days, right? This is now a direction where we don't want to have it lower, to be honest. but we decreased the inventory days here. We also had a little bit of a decrease in the days of receivables so we came from 59 days and now have 57 days.

But you see of course the majority coming from the OCF from our operating results and a nearly steady ICF, which includes, by the way our acquisition in Alpha TechSys and the share price here that we had. And a very good free cash flow also for a first quarter where we usually have the outflows, of EUR 4.8 million. So this is the overview we talked you through. Maybe here to hint our net debt we were able to decrease. We have the net debt down to EUR 13.9 million. We are paying down our liability to banks while still keeping the cash steady in comparison to the quarter of last year. So overall, I think also from the balance sheet good overview.

And this takes us to the share. So here no real news here, which is some bad news, but no real news here. This is pretty good news. We had the opening price EUR 15.32 on January 2 and we closed on May 6, EUR 23 so which is pretty much of an uplift. So really [indiscernible] I would say and gives us of course hope to reflect our picture.

And with this, Hardy, back into the outlook.

Okay. Let's start with the outlook. Thank you, Ines. First with the assumptions so what do we expect for the remainder of the year. So after the numbers we are seeing and the macro trends, we expect the computer vision market to grow at least in the high single digits in 2026. For the first half year, most likely it will be in double-digit growth. We also believe and assume that there will be a broader industry recovery and the leading growth, however, comes from semicon consumer electronics, data center hardware and logistics applications.

Definitely I mean we have to face that the trade and geopolitical conflicts will most likely rise. This is also concerning us even though we see no direct impact at the moment while the second half of the year becomes pretty difficult and harder to predict in the light of all these conflicts. So as we have a relatively short view of all the order books at hand for about 2 months, we can only project the second quarter, but the third and fourth quarter is harder to predict at the moment. We assume also currency volatility will be happening up and downs especially Korean won, Japanese yen, they are weak already; but we also need to keep an eye on U.S. dollar and on the RMB obviously.

We also believe the supply chains over the course of the year will further tighten if the market stays that strong. So it will definitely be challenging and here and there we also will see bottlenecks that might constrain a certain revenue contribution in a certain quarter. And we also believe the competitive intensity will stay high especially in the Asian region. Under these assumptions, we recently -- 2 days ago we increased our former guidance and the former guidance was given out shortly after the Iran war has started or the conflict started. So we were pretty cautious. And then we had a good March. We had also a good semi April.

So this is why we are confident to increase our revenue guidance from formerly EUR 232 million to EUR 257 million formerly and now we increased it to EUR 247 million to EUR 270 million. And this also means as we keep the organization size more or less stable making this happen, this would mean on the EBIT margin side also an increase from 6.5% to 10% EBIT margin before now to 9.5% up to 13%. So this is a significant step, we feel confident to get there and this would also bring us a much closer step obviously to our midterm guidance where we projected 1.5 years ago to realize roughly EUR 275 million and at least 13% EBIT margin by 2028.

So let's see how this year will go. We will concentrate first of all on this year; but we are well on track obviously to our midterm guidance. You have seen the China exposure. So this midterm guidance is given in the light that the China market will stay open to us. But the recovery that we were anticipating in this midterm guidance is starting to happen now in 2026.

With this outlook, we come to the end of the presentation and we are very happy to enter our Q&A session. And our operator and colleague, [ Jan ], will give some information how to do it.

As always, you can ask your questions in 2 ways. You can raise your hand with the Webinar channel and I will hand you through in that case. The second option is that you just simply send your question via the chat, I will read it out. So I think I have the first question from Lasse.

A few questions. The first one is one of the markets you mentioned that's doing better is consumer electronics. Could you shed some -- I understand the whole the semicon and AI hardware business I think the trends are clear. But in consumer electronics, I mean what is driving the better growth there? Is this sort of customers upgrading some of the production infrastructure that they built 3 or 4 years ago and haven't touched since COVID or is there anything else that's going on there, changing form factors in devices or anything else? Maybe we take them one by one. Maybe that's easier.

Okay. Makes it easier for us. So the consumer electronics sector is mainly driven by what we are seeing about 2 factor. One factor is new devices, but this is not only new phones, but it's also about new devices in earpods for example or other wearables. And the other topic that we are seeing is that after the backlash in COVID, we come out into a situation where more people start to buy into these consumer electronic goods again and the demand is rising. So this is also what you can see in the annual reports of the consumer electronic companies. And this is causing some further investment in capacity and also causing willingness to invest also in new devices and production capacity of new devices.

Okay. Understood. And then the second question is on you referenced supply chains a few times. Is that also -- can you explain sort of which components specifically you're starting to see shortages or tightness in? And this question to some extent relates to the outlook as well because when we now look at the outlook, assuming you have good conversion of order intake in Q1 into revenues in the second quarter which you do typically have, it does mean you're still guiding for quite a bit of a revenue and margin slowdown in the second half. So is that largely related to the supply chain or is there anything else going on?

Yes. So with regard to the materials that are shown or the situation on the supply market, I mean in most of the cases at the moment we only see longer lead times on the supply chain and also our lead times increase a bit towards the customers. So this is why also customers start to enter their orders a bit earlier and we have also to order a bit earlier the material. However, there are also some short materials. I mean there is obviously the memory market. I mean it's in the press all over. And we also see shortages on PCBs at the moment because the PCB manufacturers are also trying to allocate the capacity where the big business is and this is AI at the moment, AI-related hardware.

And last, but not least, we also see specifically for the vision market also as the demand is pretty good, shortages on the imager sensor side. And altogether, this means for us much more intense management on the supply side. I mean we are in a premium position especially when it comes to specialized material for vision products that we have a leading position and that we are on the top list of the suppliers. But it's definitely a situation with such a growth that we are demonstrating here where we come to the limits of what is easily realized.

This also brings us to the margin topic. Maybe Ines, you can add later some comments as well. But connected to the material, we definitely at the moment at least anticipate a bit of higher input prices due to these shortages that we are seeing and also our, let's say, progress of improving gross profit margins by renegotiating materials. It's also not the easiest time at the moment to get back to our suppliers and have a strong negotiation level. This is 1 point from the margin and maybe you have some more, Ines.

So you've seen our gross margin now being at 51.5%, right? But we forecasted or we did a scenario where it's easily possible to be even at 46% or even a little bit lower. So depending on the input prices, also depending on lower volume that we are seeing. So you have quite already from the gross margin a big lever. Of course we would also try to hold with OpEx investment against that, but it's definitely possible when the top line slows down that we also have a hit from the gross margin. So you see, I would say, a cautious or a more cautious approach to H2 and we are of course looking forward to manage also the expectation that we are internally having and combining it with the challenges that we see.

Okay. Understood. And then final question, I guess going on from what you're saying about H2. How is I guess the momentum been coming out of the first quarter? Have you noticed sort of a 1 big order intake quarter and then you expect it to kind of soften through the year? I know your visibility is somewhat limited, but just to give a feeling of is this 1 big quarter and then we kind of normalize or do you think this is a sustained kind of cyclical upswing because I guess generally PMIs are okay, but they're still not fantastic. So if those do come back, you should see a broader recovery. So I'm just trying to get a feeling of your view on that.

Yes. So Lasse, what we have seen is definitely if we look at the different months of the first 4 months of the year, we see definitely kind of an acceleration trend towards throughout these first 4 months. So we had pretty good order entries in March and also in April. So this means for us that we are definitely under the assumption that this is a broader trend. However, to this extent at the moment, I think it also starts to heat up a bit because there are rumors of supply chain constraints. Our lead times are increasing at the moment. So our customers buy a bit earlier. So there are certain, let's say, amount of extraordinary bookings inside. But in general, we believe the trends can continue depending a bit on the iron situation and the follow-up effects, but the market itself seem to be strong.

Okay. The next question, Malte Schaumann is raising his hand.

Just following up on the last discussion. Would you say that given the current positive trends early in Q2 that another quarter with more than EUR 80 million in orders might be possible or would you say that there was an accumulation of several positive effects that led to this high figure in the first quarter so that this appears to be very unlikely??

I think another quarter to this extent is possible, but not likely.

Okay. Then on the gross margin, would you at this point in time -- I mean you laid out that several scenarios exist. But at the current point in time, would you more or less confirm -- and we have seen the strong first quarter margin. Would you confirm more or less that full year gross margins are more or less expected at the level of 2025 or any deviation from that forecast already visible?

You mean on 2025 or the first quarter of 2026.

Full year '26 versus '25, I think in the last call you more or less said that gross margins should largely remain flat in the year.

So that also unfortunately depends on H2, right? So currently we're trending better. We had a good expectation for Q1, but we are a little bit better than also our internal expectation. But then again so that depends a little bit on the mix that we are having. So we had a very good order intake from Americas. When that's turning, that's usually helping just on the mix with the gross margin. But really it depends on H2. So if the volumes are down for the supply chain or market reasons. So that doesn't help because then we can't leverage anymore. If we have pressure from input prices, that doesn't help. So I would still say the expectation holds, I currently can't say that I would expect it way better than we had forecasted by the end of 2025.

Malte, we need to consider that we had a high turnover from China and the RMB was much better than what we expected. I mean the RMB was stronger against the euro. And also due to the high revenue, we had significant degression of our fixed costs in operations. Those 2 effects have helped us a lot also to significantly improve. And I mean the 1 effect is depending on the revenue side and the other effect I mean it's not really in our hands of the RMB situation. But I mean we have 1 quarter that was much stronger than what we expected so it gives us a good chance to improve the gross margin this year compared to last year definitely.

Okay. Understood. And is there 1 segment in the market that runs below expectations? I mean everything seems to be great, but is there something that is a bit weaker than this year?

Not on the vertical side. What we are seeing is -- I mean from the market trends, we are seeing definitely that the German market is below other regions and it's obvious it's because of the weak automotive and also automation industry. Fortunately, we have in Europe quite some business also outside Germany and within Germany, our business is not so highly exposed to automotive. This helps us that this headwind that other companies are seeing much stronger that you can't see it so much in our numbers.

Okay. Then on OpEx remained pretty stable in comparison to the quarters you have seen last year at around EUR 22 million in Q1. So what's your expectation then? You're adding some costs obviously here and there to cater for the higher growth for the next few quarters so progression throughout the year?

We expect selective hires as we mentioned and we also -- and this is considered in our guidance. If we are depending on where we are in this guidance, we also will have higher variable income. So this will increase OpEx and this is considered in our guidance already.

So the investments for the automation project, right? So you've seen from all the quarters, we expect or we had in Q1 the lowest share of OpEx from the automation project going on. So of course if we see the market cool down, there's always a way to stop something or to delay, but there will also be some increased kind of OpEx in the next quarters coming. But overall, it's not that we are jumping majorly I would call it. But of course we have to take care of the variable salaries that we have in there.

I'm also checking the chat and I see 2 questions from Bruno [indiscernible]. So one, I'm not totally sure what I get, but I just read it out. So since several quarters we had restocking, but now you speak about the electronic industry. Can you give product examples country by country so concrete examples of new demand for your products?

Bruno, maybe you need to add you mean our new products or consumer electronics products.

Okay. Maybe in the meantime, we give some time to in consumer electronics.

So in consumer electronics, let's say, as I mentioned earlier, what we are seeing is we see an increased offering from the consumer electronics companies in accessories, wearables around the smart devices. And we also see this being -- or the production capacity for those devices are increased. We also believe that new devices on the mobile side are being tested, but it's very secretive. So we have no insight, but we just see that we see more and more projects kicking in.

On the demand of our products, what we are mainly seeing. I mean in this market, we sell mostly mainstream products. And in this mainstream product, there is a combination of Sony sensors with pretty high sensitivity and also the 5 gigabit Ethernet connectivity. And these products are already launched or we have launched them 2 years ago and the customer have started testing and building up systems and now these systems are deployed and this is why the revenue is ramping up.

So the next question from Bruno is can you give an EBIT margin guidance for 2026 and after?

'26, we have in the presentation so 9.5% to 13% I mean this is for 2026. And after, I mean so far we stay with 13% like our midterm guidance and we will see over the course of this year what we will do with our midterm guidance and keep you posted, but this will be at the end of this year or beginning of next year, not now actually. We definitely don't want to go below 13%. We want to keep 13% or increase. But to what level we need to see this is kind of the balance of our growth investments compared to profitability.

Okay. Perfect. I had a positive sign from Bruno so the question seems to be replied to. I am seeking for additional questions, but it doesn't seem so. So there are no additional questions at this point. So as always, you can send out your questions of course via the website if you have additional questions, but seems to be fine at this point.

Could I ask 1 follow-up? This is Lasse from Berenberg. One final question. Do you think are we already at the stage of sort of overordering? I mean you mentioned that there's maybe some extraordinary order intake. Are we -- I'm just thinking back to the last sort of upcycle where we ended up with a lot of over ordering and the whole supply chain became bloated, if you will. Do you think is it too early for that or I mean it's obviously hard to say, but generally your feeling on whether orders are genuine or not?

So I think with regard to the Q1 publication, I think there are very, very limited over-ordering if not even none in it. However, starting from April, we believe we are seeing overordering because there are some unusual patterns in the order behavior of certain customers so that we believe now with entering Q2, we are starting to see this phenomena and we definitely need to keep you posted when we report second quarter to what extent we believe there are those kind of overordering or exaggerations inside. In Q1, more or less fine.

And then just on the supply chain things side, how do you now -- I guess having learned from the past, how do you deal with that differently than you did? Are you accepting that you might lose some orders because your lead times are longer because you don't want to overorder from your own suppliers? Like how do you deal with those potential overordering?

We have more and more -- I mean it all starts with challenging the demand of the customer and flattening out in case we believe it's kind of overordering or pulling in to an extent where in some cases, we might even need to get kind of prepayment to know whether it's serious or not especially in the Asian region. And from the supply chain perspective, I mean we did this already last time. We are very close to our suppliers and we have to make choices. And I mean having seen the situation last time and being in charge of the operations still, I would be definitely a bit more careful this time in just ordering and try to do everything we can for our clients because I have seen that at the end, not all clients are valuing this at the end of the day if the markets are turning.

Yes. No additional questions popping up in the meantime. So I think we are good at this point.

Okay. Then we are at the end of the call. If there are more questions, don't hesitate to contact us. Ines and I are happy to meet you again 3 months from now. And we wish all of you a nice afternoon. Thank you. Bye-bye.

Thank you.

Thanks. Bye.

Hello, everyone, welcome to the Basler's Annual Report 2025. We will wait for another 30 to 60 seconds, and then we start the call.

So it looks like that we are complete. A very warm welcome to the Annual Report 2025 of Basler. I'm very happy to present today our numbers of last year together with the new management team. And we are also proud to present you good numbers, also a sound outlook. And before we start the call, I have the obligation to hint you to our disclaimer here that all statements that we are doing today are views and assumptions made by the Management Board using information available at this point in time. So the forward-looking statements we are doing by nature are subject to significant known and unknown risks and uncertainties. And having this said, we start with the presentation. And the agenda is like always, we start with an executive summary. We go then through the financials and the share price or the share development and also the dividend payout. And at the end of the presentation, we come to the outlook before we have enough time for a good Q&A session.

Let's start with the executive summary. So and start with the summary with the environment that we had in 2025 looking back and the best indicator we have at hand is the German vision components industry, so all the German manufacturers selling vision components worldwide and their bookings, all in all, were 0, so flattish bookings and billings are -- have been at around 6% plus. So in a nutshell, what we have seen worldwide last year is a relatively weak demand. Also the PMIs, the manufacturing -- industrial manufacturing PMIs were flattish, around 50. The overall market was relatively weak, but we have seen some vertical market niches where the market picked up. It was namely semicon, everything around AI related and advanced nodes related to production machinery, logistics and warehousing, especially in the U.S., consumer electronics, battery production for mobile devices. And last but not least, in the second half of the year, we saw a lot of pickup in the area of AI-related hardware production for data centers.

So compared to previous years, we have also seen last year a relatively normal inventory situation at our clients. So we have not seen any muting effects. And we have also seen that the delivery times have come down to normal, relatively short even in the second half of the year. So we talk about 2 to 3 weeks delivery times that we have. The ongoing high competition intensity is nothing new. We see it especially in the Asian region. And the news, the Trump news kicking in last year in April with regard to U.S. tariffs, this situation has caused some -- on top of the geopolitical stress, some uncertainties, additional uncertainties, and last but not least, we had relatively strong headwinds due to the currencies, U.S. dollar, Chinese renminbi, Japanese yen and Korean won, they all devaluated against the euro. So this gave us quite a strong headwind last year.

So our performance in this environment clearly outperforming bookings, 22% plus, billings 23% plus. And we have seen over the course of the year, we had a strong start, but then also the momentum in the second half of the year, especially with the booking increased again. So that the strong regions, U.S. and China over the full year. In addition, Europe kicked in, in the second half of the year, gave us a good order momentum also in the fourth quarter. We also made not only on top line, but also on the gross profit margin, further progress, 47.4% against or compared to 45.1% the year before. And this was negatively affected by FX. Without FX effect, this would have been much stronger high actually. The earnings before tax, EUR 16.2 million compared to last year, actually where we've made quite significant losses a big improvement, sound profitability with 7.2%.

It's not where we want to go, but we are proud that after 2 very stressful years and red numbers that we are back in black with those sound profitability. Not only profitability, we also made progress on the cash flow side, even though the billings raised significantly and therefore, also our receivables raise, we were able to realize a free cash flow of EUR 18.5 million, which is definitely quite a strong number. The reason behind is also lying in the inventory reduction. So these are our -- is our executive summary for the financial statement, but we also made good progress on our nonfinancial numbers. You can read carefully also our sustainability report 2025, you can download it on the website. We have made good progress on our net zero emission ambition for 2030. We have reduced our carbon footprint by 15% compared to the base year 2022 location based.

And if we look at the market base, so the energy that we have bought, we even reduced it by 63%. On top of it, we installed a solar panel system on the rooftop of our car park here at headquarters. We finished this project beginning of the year. So the anticipated reduction for this year is, by and large, 240 tonnes, so quite significant move and investment we did in that direction as well. And also the rating agencies, we have increased our ratings. So all in all, also here, very pleased about the progress. So having this said, I will hand over, as you know Ines, you know myself to give also Kai, our new member in the management team, the opportunity to introduce himself, and he will also continue the executive summary presentation.

Warm welcome also from my side. Short introduction. My name is Kai Stroder. I have some 15 years experience in deep tech businesses, especially optics-driven businesses. The focus was always to establish new innovative business models. And that is basically what I do here today at Basler. I focus on the team, I focus on the processes to enable and establish new business models and new technologies to broaden our portfolio, to deepen our tech expertise and to scale the business. What we have done in the last year was not under my responsibility -- this is also not my responsibility; however, also very important. So the measures of the former Board are visible now. So we reduced the headcount, the FTE. So we are in the target setup, maybe to highlight, we have reduced a little bit the R&D costs in the FTE. This is not due to the fact that we lower our investment in the R&D, but we have to refocus on different capabilities. That is still an ongoing process since technologies change and yes, we still have to focus also on the new technologies, new patches, more software driven maybe.

So we have got ongoing processes to adjust also this. Administration, sometimes a pain point has just risen a little bit. However, it's also due to the fact that we do and we will centralize some functions, which have been localized and we bring them back into the corporate center and that may be also an indicator where it have risen. But overall, we are on good track and in good shape. And it shows that it is also possible due to the improved EBIT margin to have potential on the FTE side, and we will still leverage these potentials also in the next future. To the interesting part of our product portfolio. Overall, the message is that we have got a very broad and still very robust product portfolio. So we had invented the 3D stereo ace, which was a logical, let's say, extension to the existing product portfolio.

We have very good numbers on this 3D business already in the first -- and in the first year. It shows that we are able to fill the gaps in the portfolio. We are working hard on this, that we are also ready for the next evolution of this product portfolio. We cannot disclose anything right now, but the numbers clearly show that we have got a very, very strong basis where we can leverage potential and get the required, let's say, cash to invest in a very, very strong and innovative product portfolio in the near future.

On the market access side -- there was the acquisition of the Alpha Techsys entity in India, which was a very smooth process. We are very happy to have the team on board. The post-merger integration process was very successful. We have integrated it into our go-to-market unit, EMEA, and they are working very closely already. Team is highly motivated, very young, very experienced also on the other hand. So we think that was a really good strategic move and the first discussions, numbers and impulses from this market are very promising. And I think we will still have an open eye on other opportunities. So we will keep you posted. But as of today, that is the story. It's -- jumping a little bit.

It's a bit sensitive, sorry for the group here.

Yes. So the Board has picked up the -- or the new Board has picked up the transition to this target where we want to be this full range system or solution provider. So we are focusing not only on our core, on our camera systems, but also on the accessories on the adjacent parts. We are working still to find some really good scalable business cases in our pillar markets, which are on this X scale.

However, we cannot disclose too much, but there are dedicated resources working on this that we don't only have broader portfolio, but also a deeper portfolio in some focus areas. And the latest numbers show that we are right in this approach that we have identified the real sweet spots of technology where we can leverage our potential, and we will really focus on this and continue this effort during the whole year with some initiatives which we will disclose later.

Okay, so this brings us to the financial part, Ines I hand you over the mouse here.

Thank you, Hardy.

It's sensitive. Be careful.

So let me pick up the financials here. Waiting for this good picture, sorry for that. So here, you have the total sales and distribution of the region. We ended up in the end at EUR 224.5 million. So really upper right side of our guidance. So that was a good one for us. And for the first time, you're also seeing region split up also displaying China now. So you might recognize beforehand, we always have Asia, including China. So now for us, China is growing bigger. So you see the increase to 26% of our revenue from the 23% of last year.

Also pretty good improvement we see in Americas in the split of our revenues because when you're losing a bit of gross margin in China because of the regional mix, we are gaining a bit through the Americas. So that's a good level for us. All right. So then here, you can see from 2024 and now also 2025, the whole year by quarter, our bookings and our billings. Let's focus on the Q4 and also in comparison to what we've seen in 2024. So we ended the year with bookings of EUR 65 million. That was a pretty good outcome for us because it was not only with the expected regions, but also EMEA picking up in the end. So we had a pretty good mix and pretty good increase from China, Americas and EMEA. And revenue being more or less equal to Q3 with EUR 56.5 million and a very good increase to the Q4 of the year before. So with this one, we are picking up more or less EUR 10 million to carry over in addition to Q1 to give you a little bit of an expectation what you will hear from the outlook in the later slides.

So here we go with the gross margin. So overall, I would say we had a good result, could have been better, of course, but a good result with 47.4% overall. So last quarter above our target of 48%. So as you've seen, the currencies definitely gave us a headwind there. So that cost us some basis points there in the margin. But overall, we ended at a good one. So you will see also in the outlook that we are expecting pressure on the gross margin as we still have the currency ongoing. So currencies is not so bad as they were at the end of Q4 last year, but also not coming back enough to help us currently, but being a good move depending on the regions where we are in to have a positive contribution, of course, also in the leverage of our resources.

EBIT and EBT margin. So you're still seeing the EBT. I'm just talking to that in a sec. So here, we ended up at 7.2% also on the right-hand side of our guidance, but in the guidance, a mix, as you can see throughout the year, right? So we started with a very good one, the currency being strong in the beginning and then weakening overall and revenue helping in the end. Q4 was influenced also by increase in OpEx due to better variable salaries, but still above the 5% line so that we had 7.2%. To give you a little bit of an idea, so this means an EBIT margin, so with interest of 7.9%, so 0.7% in between.

So from next year onwards, you will see us presenting the EBIT as our KPI in order to be able to better drive the operational results in a more meaningful way, I would call it -- so here we have an overview. I think we talked about that already. Let me point out the gross margin again. So a pretty good walk even despite the weak currencies with 47.4%. That was also due to a lot of negotiations with suppliers and material savings we had in there. Yes, so we are keeping the pressure on the OpEx, right? So really, you've seen the FTE coming in, in relation to '24, so not increasing the workforce too much and really leveraging we have in order to scale and the again EBIT again with 7.2% being targeted to hopefully up next year.

And then earnings per share, by the way, we will see that for the dividend of EUR 0.38 in comparison to what we had last year. Here the cash flow -- the cash flow lacks a bit of a comparison with the ICF because we had our acquisition of the subsidiaries in Q3. So that's a bit skewed and Q2 and Q3. So we had in 2024 around EUR 4.2-ish million of one-offs, let's call that. So pretty stable one here. You see in Q1 still in 2025 to recap here, we had an increase in receivables so that we didn't have the push through collected throughout the year. So to have a nice OCF ongoing and also around EUR 18.5 million in free cash flow. That was impacted still by the increase in receivables, but good outcome and above the target.

Yes. Here again, so same picture more or less. I think this is also important to see the coverage that we have here, cash flow from operations. As you've seen in the graph, cash flow from investing, you see here the exchange rate effect on the cash holdings. So that's a hit to us with EUR 1.5 million. Otherwise, in comparison to last year, we would even been at EUR 20 million. Cash flow for financing being down. Also here, you see in the liabilities to banks, we are paying off our debt currently and have therefore a lower basis to our banks. So next one, let me pick some of the numbers. So the first number that I want to highlight is Goodwill. You see that the Goodwill is down, but this is no impairment. So this is really also an exchange rate effect as we have some of our Goodwill positions not in euros.

And then maybe let me pick out the inventory balance here. So this is really down from the 38.8 million, which was 140 days in inventories in 2024. We really work through that trying to reduce the risk and be faster with the customers. So we ended up at around 100 days, 101. This is more or less also on our target as we don't want to drive that too much down in order to be able to deliver in time, but downside here a little bit is the receivables. Always good to have receivables, but the days in receivables went up from about 54 days into 64 days. That's mainly due to China and that will also influence our business in 2026 to give a little bit of expectation here with China being increasing and also delivering good performance in orders and revenue, we are unfortunately also seeing higher days in China here. So that's the major impact that we are seeing.

Going to the liability side. Again, you have long-term liabilities to banks, which are decreasing as we are paying off. You also see change in leasing liabilities, and you might have also recognized also in our report that we have 2024 adjusted. Our adjustment has no cash flow impact, but it's related to our leasing assets and our leasing liabilities, which had to be stated differently. So you see here changed balance for the leasing liabilities short term and long term. And maybe again to the trade payables, they were up a bit -- so helping with our cash flow but probably being managed a little bit down in terms of days throughout this year again.

With that, I would be jumping to the share session. shareholder structure, no major changes, right? You will recognize this picture with the of Norbert Basler Holding at 53% and also no real changes in the different positions we are having. This was a good picture for us despite being down currently a bit. We started the year with EUR 6.09 and we ended up at EUR 15.30, not exactly where we want to be, but good direction also, of course, in relation to the TecDax performance. And share dividend, we are now back to our dividend policy. Dividend policy, the normal one would be 30% of the net results, which we now also did. This is from the EUR 0.38. This is EUR 0.11 that we are going to pay out as a dividend, as adjusted for 31.5 million shares.

Maybe before we come to the outlook, also a quick summary. I mean we are pretty proud to have achieved this comeback being back again and back and sound profitability, also growing top line far above market, having a strong free cash flow, reduced our debt and also our net debt position. So everything goes in the right direction. And we have rightsized the company. We now concentrate on growing top line, hopefully also being able to improve further margin points, gross margin points with the same organization, so step by step growing also profitability.

So in the outlook, let's come to that. What we see for 2026. So we see an environment and the first bullet points are about the environment where we believe the computer vision market can grow mid- to high single digit in the first half year. To be honest, with this current environment around us, we are having problems to predict the second half of the year. And I guess you know why with all the geopolitical conflicts and now also combined since the recent weeks with the Middle East conflict the second half at this point in time is pretty unpredictable, but we are positive for the first half.

The currency volatility, we -- I mean, we estimate that the volatility will be high. There will be up and downs at this point in time, the main currencies that are important for us against the euros appreciated a bit against -- or compared to last year, at least most of them, Korean won not, but the rest. However, the volatility, we think will stay high. What we believe is that the industrial manufacturing PMIs will improve a bit, will be slightly above 50 for at least the first half of the year. And our own position, we -- I mean, in our assumptions, we will be able to defend and win larger project opportunities also at 2026. You might remember that we have one of the growth drivers last year was winning larger projects with key accounts that we have and especially in the field of electronics, battery, logistics and data center hardware production.

Also, yes, we assume the intensity of competition will stay high. I mean, as we have a high exposure to Asia, we are working in this environment. We show that we can be successful in this environment, but it's by far not easy. So there is some noise in the line here, but I continue with the forecast. So the guidance that we do or give under these assumptions and also under the assumption that -- we had to increase salary in -- around the world because of cost of living adjustments from 2025 to 2026. And as we are highly personnel intense, this lowered a bit or increased, let's say, our breakeven point or lowered a bit our EBIT margin. But taking this all into account, market environment, own position and this cost of living, we believe we can be in the corridor between EUR 232 million up to EUR 257 million in terms of revenue. And this would give us a gross -- an EBIT margin of 6.5% to 10%.

For those of you who follow us for a longer time, they will recognize we switched from EBT to EBIT margin in our guidance. And we have made this change because we believe it's giving a better indication of our operational business. There is nothing behind in terms of that we want to increase debts by far or something, it's just that we believe it's a better parameter to measure the operational business of the company. Looking into Q1 and setting expectations here, we believe we will have a strong start into Q1. Obviously, as we have already seen certain weeks, we have, as I mentioned, had a good momentum at the end of 2025. So we give here the indication that the numbers for Q1 will be at or above what you see here on the right hand of the -- right side of the guidance.

So this also brings us to the midterm outlook, which remains unchanged. In 2028, we are striving to achieve EUR 275 million and an EBIT margin, we just changed here also from EBT 12% to EBIT 13% margin by the way that I mentioned already, we want to focus now with the rightsized organization on top line growth, on gross margin improvement in order to get there and also continue to have strong cash conversion rates.

Obviously, this depends on certain market conditions and the main assumptions -- the 2 main assumptions here are that we have the access to the Chinese market will remain and that we will see a 2026 with market recovery, which at least in the first quarter, it looks good. But as we -- as I have mentioned, there are still uncertainties in the world that we all know of. Yes. So we are committed to get there. We are passionate about it. And closing our presentation slot opening the Q&A session for you or for us. And [Jan], our colleague in the background here will moderate the session so you can either jump in by audio or you can also use the chat function.

[Operator Instructions] So I have a question in the chat and the question is what is the portion of revenue with new products? This is coming from [Frank Hill].

So the question is always when you talk about new, what is new. So it's always a definition. So what we measure is an indicator where we take products that have been launched or have been to the market 4, 5 years or younger. This might be long -- sound long to you, but you need to anticipate that we work in a design and mechanism where our customers design the product into their machines, then they need to finalize the design and then ramp off. This portion is by and large, 20%. It depends also a lot on the seasons, but this should give you a good indication. And normally, our product life cycles are 10, 12, 13 years.

All right. So we have additional questions. One is coming from Lasse Stueben. I try to unmute Lasse, so maybe you should do it on your own, right? It seems to work.

I have a question on China. I think if I saw the numbers correctly, you're roughly -- you almost did EUR 60 million in China in '25. I think from memory, that number sort of in sort of past peak cycle times was somewhere around EUR 80 million or EUR 90 million. So it seems like you've made really good progress there with good growth year-on-year. I'm just thinking for '26, I mean, how has Q1 kind of started and in particular, how has activity been since Chinese New Year in China because that's typically a stronger period for order intake?

And then also generally, more broadly across the regions in Q1, what is driving the -- it seems like order intake has been very strong in the first quarter as well. So what's kind of driving that strength? Is that the same markets you saw drive strength last year? And then the final question is on the EBIT guidance. It seems that just given the revenue outlook that there's probably room for that guidance to have been a bit higher, but I guess you're factoring in a bit of conservatism. So I guess my question is how much conservatism is in that EBIT margin guidance?

Should we share -- Ines, I'll do China and growth driver. You do EBIT? So let's start with China, Lasse. So you're correct. In high times, we were at around EUR 80 million, almost EUR 80 million a couple of years back. So we were then -- business was declining and then successfully coming back last year. So the main drivers that we saw last year and also that we see right now are mainly around AI production, hardware production for data centers, consumer electronics, especially on batteries for consumer electronics. These are the main drivers, actually, what we are seeing in the first quarter actually is that the momentum keeps strong, even a bit stronger than last year.

From a market perspective, we recently had also our Shanghai show last week. So one of the main trade shows, there's a lot of traction at the moment. And there seems to be also more consumer electronics kicking in after Chinese New Year. What does it mean for the long run? To be honest, I mean, it's very, very volatile. We are -- let's say, positive for this year, but going beyond this, I think it's we need to make sure that we -- this is also why we are so strict in keeping the organization as it is because we know that China is a very volatile market. But for now, we are running a good business. We have also found success recipe to grow further the business and it looks good for the short term. So growth drivers in general -- there is some noise in the room here.

Yeah, I hear it too. Maybe someone in the background. This sounds better.

So growth drivers in general from a vertical market perspective, we see still logistics for 2026. We see consumer electronics, also smartphone assembly coming in and we see also definitely hardware production for data centers. And on top of this, we see in Europe, maybe also some traffic projects kicking in. I mean it's not a worldwide phenomenon. But these are still also the main verticals kicking in.

I would be picking the EBIT guidance question. So I would like to give you a hint on 4 topics that we have figured in there. So the first one is currency, right? So this is figured in with our forecasted rate and currently, currency helps a bit. So that could influence, but we still didn't increase the guidance especially in H2, it's really tough for us to foresee and we didn't want to change that. Then the second one is tariffs. So that might also give -- so that last year, it was in our numbers for about 7 months, right? But this time, we have the full year, we are passing it through, but it's also giving a hit to our -- to the margin in the end, not to the euros, but to the margin.

And I would also like to call out that we are seeing price pressure from China and of course, currently an increasing or a good market in China and good numbers from China. So the regional mix also having impact on us. Is that conservative? Might be the case. If we have a change in especially these 3 parameters, it could look better in the end. But currently, we have the assumptions in for these 3 parameters that lead us to the guidance.

We have a second question from Malte Schaumann. Malte I'll hand over to you.

Also on profitability, the factors you just mentioned affect -- only affect the gross margin. So maybe you can share your expectation for the gross margin, which stood slightly below 49% last year. So what's then the expectation for the current year given the factors you just alluded to?

Yes. So we basically want to hold the gross margin. So there are the effects that I named that have pressure on it. But of course, we have economy of scale effect. So we are not planning to increase our workforce larger than would be reasonable here. So we have a good leverage on there. So this is going against it. But with these negative effects that we are seeing, so plus/minus what we had last year.

Maybe one additional aspect besides beyond the gross margin topic, the -- as mentioned earlier, we also increased cost of living by and large 4.8%. As we have a relatively high cost position on personnel costs, this also needs to be digested and needs to be also considered when doing the math.

Yes, exactly. That would have been my next question. So below the gross margin at OpEx level, is that around 5%...

Correct.

Slightly more increase something you baked into your forecast into your budget?

Yes. This is reflected in the guidance, roughly 5% also.

Okay. Then let me ask with respect to the 2028 guidance. I mean at the high end of this year's guidance, you expect maybe EUR 30 million more in sales, but only 2 percentage points more in profitability. Looking at your '28 targets, you would need an additional EUR 20 million in sales, but which should then lead to a 3 percentage point hike towards 13%. Maybe you can elaborate a bit on that, what then needs to happen to really make that jump from assuming maybe 10% this year at the high end to then 13% with less sales on top.

Yes. So a pretty good question that you're raising here. I think what doesn't help us is again a currency change. So currency needs to stay as is, also price pressure in China and the regional mix staying basically the same. We are currently also having a share of cost in our OpEx and for some portion also in the gross margin to have structural -- how do you say, structural projects ongoing that are making scaling possible. So that is not going to people, but really into processes to be as effective in scaling. And from our expectation after costing a bit and having a bit of cost that will really enable us with more or less the same workforce to grow into that revenue.

Also with regard to the gross margin, as I mentioned at the moment from plan-wise, we are planning by and large to keep the gross margin. Our ambition is a different one, but the one -- our ambition is to grow the gross margin step by step further towards 50%. However, one need to be careful, obviously, in our guidance, what we promised to the market. But over a long period -- longer period of time until 2028, we also -- I mean, we work hard, and we also believe we can grow the gross margin also step by step, not in the same hikes and steps we did in the last 2 years. This is by far too much, but step by step to go to in the area of 49% to 50%. We believe it's possible, but it's a continuous work to get there.

Okay. Understood. And then in terms of data center hardware revenues, can you share the number? What's the actual revenue share of that application?

We want to -- not 100% disclose it, but it's in the area, let's say, of higher single-digit percent points.

Okay. And that was mostly linked to China, is that right? Is it linked to China?

Yeah. Definitely.

Okay. I'm scanning for additional questions, but no one raised the hand so far, and I don't see any additional questions in the chat. So maybe we just wait some additional seconds. So this is the right moment. I see one question. Maybe I will try to unmute you, [indiscernible] just rolled it into the chat, but maybe you can speak out.

Can you hear me? I have a couple of questions for you. The first one is the following. The current 2026 guidance factor into somehow the current situation and the war in Iran or it is based on the original budget done before the war started. And linking to this, have you seen a change in the bookings pattern in March compared to January and February, and the second question is related, let's say, to the memory shortage issue. I mean, is this something that could affect Basler and to what extent?

Yes. So maybe coming to these points. So the Iran conflict, at least for now is in our guidance. This is why the range is relatively high. And maybe for some of the people, they might see the lower end of the guidance being low. But this is exactly the reason, the unknowns of the Iran war at this point in time and especially what this means for the second half of the year. So it's included. So from the bookings, January, February, we haven't seen or also in February, March, we haven't seen impacts -- negative impacts due to the war situation so far. And last but not least, the memory questions, yes, everyone is talking about it. For sure, the memory question has -- can have a potential direct impact and the potential indirect.

So if our clients, for example, do not have enough memories independent of what industry they are in, they might slow down the production and they need a lower amount of production capacity. This can have lower demand impact, which we don't see today, but we are watching out and things are happening. And the other one is how are we affected by the memory shortage and as our products use also memories. So the situation is that in the range of the guidance, we see a high likelihood that we are able to achieve this even knowing the shortage of the memories, which means we are in constant contact for months already with our suppliers maneuvering through this situation. For us, it's not a new thing. We already work on this topic for a couple of months. And this means we are relatively sure that we can deliver in the range of the guidance that we have given out.

Does it answer your question, [Claudio]?

Yes. Thank you.

Okay. Checking again for additional questions. None so far, but giving a shout out. Okay. It doesn't seem so. But in any case, you can always reach out to us through the website and the traditional contact forms. So I see no additional questions right now.

Okay. Good. Perfect. So in case there are no further questions, we thank you very much for your attention today. We are definitely looking forward to see you again in 6 weeks from now for the Q1 results and wish you a nice afternoon. Thank you. Bye-bye.

So, it looks like we are complete. Welcome again to our 9-month earnings report from Basler. Before we start, we need to make our legal advice here that all the statements we are doing today are based on views and assumptions made by the Management Board using information available at this time. So, we make forward-looking statements that are, by nature, subject to significant known and unknown risks and uncertainties.

Having done this, we're going to start with our earnings presentation. Happy to have you here. We have good news to present, and we will start with an executive summary, then dig deeper into our financials, have a quick glance at the share performance, give an outlook, and then, we have obviously quite some time also for Q&A.

And I'm handing over to Dietmar for the executive summary.

Yes. Thanks, Hardy. So, hello, everyone. So, let me get started with the presentation, and let me get started with some personnel and personal matter, which is regarding the future setup of our Management Board. Many of you know that the Basler Management Board has been a long-standing Board for really many years. I myself, when I joined the company in 1993, I would never have imagined to complete this year my 26th year as CEO in this company.

Yes, you may have read it. I will leave that position by end of this year and will hand it over to Hardy, my long-time colleague, who I have, let's say, created much of the success together with that we have achieved over the last years. So, motives are personal. Decision already is, let's say, being discussed internally for quite some time.

Ultimately, let's say, my goal with this measure is, after these 26 years to make sure that we have, let's say, a high energy, very capable Board together also for the future. I'm 62 years old now, turning 63 next year. So, I want to make sure that we have enough, let's say, engine in order to continue the growth that we have been showing most of the years in the future.

So that will be possible due to 2 aspects. So, with Hardy, we are practicing continuity. Hardy is with us also for more than 20 years, know the markets very well, knows the organization very well; has been, let's say, crafting the culture together with me for many years. So, this is making sure that we can show continuity.

And on the other hand, we have 2 relatively new or entirely new persons on the Board with Ines since beginning of this year. So, Ines is bringing significant financial competence to us, which is great to see. And our new CTO, Dr. Kai Stroder, so -- in his mid-40s, have been working with Zeiss for 18 years in various positions. So, he will bring in also recent knowledge about, let's say, optical technologies, but he is also, I feel, a strong entrepreneurial character and will be, let's say, be a great addition to the team in order to, yes, create and shape the future of our company in order to get us to the next level.

So, my personal reasons are, I want to also do, how should I say, a readjustment of my personal dial, having more time also for my family, for myself. But as it looks, the major shareholder, the Basler founder family will suggest to the shareholder meeting next year to, let's say, vote me into the Supervisory Board, again, with the concept of continuity of keeping the network that I have in the market, keeping my technology know-how available for the market and also the customer contacts that I built up over the years.

So, I will be very happy and proud to do this. And so, therefore, it's -- yes, it's a changeover in a way, but it's also a very continuous changeover. Overall, I think in the very best interest of all stakeholders of our company, and we are very convinced, so I can speak also on behalf of the Basler family that we have put together a good setup at the Management Board that will be leading us in the future.

Yes. So, that being said as an introduction, let's come to the overview regarding the first 9 months. So we will start, as usual, with an overview regarding the market conditions. So we refer here to the market numbers that the VDMA, the Verband Deutscher Maschinen- und Anlagenbau is compiling on a regular basis. And what you can see here in the headline is that the bookings year-over-year in the European, we could say, computer vision market have been flat, minus 1%, whereas the billings have started to grow due to some large projects in the market. So, growing at 9% year-over-year.

So, I would say these are still, let's say, mediocre numbers. So, the market demand is still characterized by rather low demand from all verticals, aside of the high-tech industries, especially the AI market and the industries that are delivering into the AI market like especially the semiconductor industry. So, we are talking here about new semiconductor manufacturing technologies that support, let's say, this GPU technology that we are hearing from NVIDIA and others.

So, aside of the semicon market, we see also that the logistics warehouse market is improving, is already, again, in a rather good shape. And what we are also happy to see, because it's one of our important markets has been over the last many years, the consumer electronics market is, again, showing signals of life, of new investments. This is particularly true for the subsegment of the batteries for consumer electronic devices, but we are expecting also a healthy demand next year for the next-generation smartphones and general mobile handheld devices.

So, what we also can see the Purchasing Managers' Index is around 50. So that means that we are still in stagnation territory from a general demand point of view. Yes, the EV battery production that we have hoped for here in Europe is possibly not happening, at least not nearly happening to that extent that was originally expected. Yes. So, general market environment, mediocre. I think that sums it up pretty precisely.

So, regarding inventories, here we can say those have reached normal levels again. So, there are no, how should I say, effects that would delay new purchases anymore. So, we have had this effect for at least 18 to 24 months. So -- but that's gone now. So, we are back to short order to delivery periods, which is good. So, we have no artificial effects in the demand situation anymore from inventories.

There are competition in the market, toughest competition is still coming from Asia, especially from China, no change here. But I think there's also no news. So, we have been living with this for many years. We see it also quite sporty in a way that we need to master that competition. If we master that Chinese competition, we will be mastering any competition. So, you always have a leading competition. And since 5 years or a little bit more, yes, China is the country where the toughest and most capable competitors come from.

U.S. tariffs, yes, it's a -- how should I say, it's hardly predictable what's going to happen here. We have seen first news on the 10% tariffs, then there was the learning that metal, let's say, machinery is treated differently. That's to a limited extent, also true for us. But so far, we can say that we can handle it pretty nicely, so -- meaning we can explain this price effect to our customers. We are very transparent what is our cost, what is the additional cost coming from the tariffs. And we can say vast majority is accepting it so far.

Yes, what else? Foreign exchange rates, so we have headwinds from the U.S. from the dollar to euro relationship, Chinese renminbi, Japanese yen, Korean won, all the same, weakening approximately 16% against the euro. So, significant headwind, also significantly diluting our bottom line margin. But as you will see from Hardy later on, still very positive change versus last year. But if we would not have had these currency effects, it would have looked quite a bit better, though. But yes, it is what it is, and we also have to live with this and manage it properly.

So, this is the market situation. Let's then look at the Basler numbers. So year-over-year, like Hardy said, pretty positive picture. So, we are proud to show here a bookings growth of 29%, which is really remarkable and a billings growth of 23%. So, this performance is clearly better than what the market has shown, and we are part of that market data that we've shown to you. So maybe the market is overall, if anything, then a little bit weaker than that. So, very good performance. So, we are really proud about what we have achieved here bookings and billings wise.

So, you remember last year was a very problematic Q3 that has been different this year. So, we have been able to show good numbers also in Q3, led by demand from the U.S., from China, but also Europe is showing a good upward trend. So -- and as the margins in Europe are good, this is helping us, especially on the gross margin side and then also on the bottom-line profitability side.

Gross margins improved to 47.8%. So, previous year, 46.4%, diluted by the FX. So, it would have been even better than that if the FX would have been more favorable, leading then to a pretax result of EUR 13.4 million for the year, which is then equal to an EBT margin of 8% and after all, strong free cash flow. So, the real asset test, strong positive cash flow of EUR 12.4 million versus EUR 1.5 million [indiscernible] in the previous year. So quite good numbers. And happy to tell you about this so that you also can see in the numbers that the things that we have done over the last 2 years are leading to results.

Yes, what you can see here on Page #7, how we have developed from a personnel size. You see here on the left-hand side that the staff size was 896 versus in 2025, end of Q3 2025 was down to 814 FTEs. So major effect coming from the second cost cutting in the last year. Since then, our headcount is more or less -- so apart from the normal fluctuation, is more or less stable. So, we will keep it here and grow our revenues with that existing staff. So, no hirings expected in the near future. So, we are still working on productivity gains. And yes, I think that will remain for some time if the markets don't overly positively -- are not developing overly positively.

So, R&D quota has also come down. Last year, let's say, higher numbers of FTE, lower revenues, so R&D quota of 15.5%. This year with higher revenues, lower FTE -- headcount, down to 12.4%. So, this is, let's say, an improvement already. But also here, we have to say we want to further trim this slightly. So, not going to grow in the future according to our current plans.

Yes, which leads me then to the strategy page that you may already know from previous calls. So, you have here that, let's say, chart that shows you the strategic path of the company. So, on the Y-axis, you see the portfolio expansion. So having started with cameras, adding all of the other hard and software components that are necessary to build a vision system. On the X-axis then the verticals, let's say, the customer groups we are talking to.

Most importantly, the factory automation, the medical, ITS, intelligent traffic systems. So, we've talked numerous times about logistics. And on the very right-hand side, you see potential future markets mentioning here explicitly retail and agriculture. So, if we are able to grow our share of wallet with the existing and new customers, then this will be one dimension of our growth.

And if we are successful of growing our market share in vertical within certain verticals or to expand into new verticals in parallel, this would then be the second dimension of our growth. In both of those dimensions, we are determined to leverage. Taking us then to the intended target position, upper right-hand corner, which is the full range computer vision technology provider.

All right. So, then Page #9. one of the, let's say, very important elements of our growth strategy has been the direct go-to-market that really differentiates us from most of our competition. So, you can see here most of the M&A transactions that we have been doing over the past years. And again, majority of those acquisitions has been go-to-market oriented.

So, very left-hand side, in '19, the acquisition of our Chinese distribution partner; in 2022, Korean distribution partners; then again in 2022 in the second portion then last year, French distribution partner, Italian distribution partner and now on the very right-hand side, the latest chapter to that book, which is the acquisition of the majority of Alpha TechSys, which has been or who has been our sales arm in India.

So, India seems to become a more and more important market for Basler following the decoupling trends. So, don't get -- do not get all of your eggs into the China basket. So many producers are moving also into India. And we want to leverage that growth opportunity by that acquisition. So, we obviously want to grow it in the future, but this gives us a good foothold to get started from. So, we are very excited about that and are very happy that we were able to close this transaction.

Yes. So that's it from the executive summary point of view, and I'll turn it over to Hardy, who is going to walk you now through the financials -- through the details of the financials.

Yes. Thank you, Dietmar. And I'm doing this also on behalf of Ines. She can't be here today because she's on her deserved vacation, [ presentation, hasn't ] joined us. Yes, let's dive into the financials and start with the overall top line and the regional distribution. Dietmar has given already some glimpse on it.

In total, we achieved EUR 168 million. The growth driving regions, actually, if we look at the first 9 months, were clearly Americas. You see this also in terms of the distribution from 16% sales share last year to 22% this year. And then, within Asia, we have kind of a shift. China was a growth driver. The rest of Asian region were more flattish. And we said already in Europe, the situation is that until mid of the year, the region was relatively quiet. This is also why the sales share went down in the first 9 months, but we see definitely since mid of this year, picking up situation. So, most likely, the distribution will shift a bit also in the direction of EMEA until the year-end.

Yes, let's have a deeper look into our bookings and billings. Start from the top line here on a quarterly basis. And yes, let's have a look at the third quarter actually, which is normally or is a seasonal weak quarter for us typically, and it was very weak actually in Q3 last year due to this basis effect, but also due to the good performance this year, we talk about even bookings up 43% quarter-on-quarter or quarter-over-quarter compared to last year and billings 29%.

What you can clearly see is, since Q3 last year, we are step-by-step on an upward trend. I mean, the order entry situation and also billing situation sometimes is a bit stronger. But in general, we are on an upward trend here coming from last year's around mid-40s quarterly bookings and billings, and we are now in the mid-50s up to 60 range, which is definitely bringing a lot of stability to the company.

I mean it's not the level where we want to be with the current organization. This is also clear. We want to increase even further, but we are really proud of what has been achieved already and that the measures we have taken are clearly paying off and that we are outperforming the market. What you can also realize is that even in Q2 and in Q3, the bookings were higher than the billings. This means for us, we have a little tailwind entering the fourth quarter. So, the fourth quarter itself, we will talk about later in the outlook.

With regard to our gross margins, if we look at that also in Q3, even though we have currency headwinds, we were able to further improve to 49% in Q3. This also brings us to a sound gross profit in absolute terms of 27.6%. So almost the level of Q1 where we had pretty high revenue at around EUR 60 million revenue. And we are definitely step-by-step working further on our gross margin. We believe we can get back to the 50%.

I mean it's definitely depending a bit on how strong the headwind of the currencies are. And you know that we are also under competition. But also here, we see clearly an improvement happening even though we don't have a lucky situation on the FX. To give you a feeling, the FX this year in terms of margin cost us in between 2% to 3%. So it's substantial.

Yes, this brings us then further down in the profit and loss statement to the earnings before tax. On the line, you see the gross profit and the earnings before tax margin, almost 10% again in Q3. We were at that level in Q1 already, Q2 was a bit weaker due to lower gross profit margin and also lower revenues. And typically, we have also in the third quarter, a little bit less in personnel costs due to overproportionately taken vacation in those quarters -- in this third quarter. So, this is definitely bringing us back in the black numbers and not just around the 0 line, we are really back into the black numbers.

Yes, so summing this up in this grid here, order entry up 29%, sales up 23%. So, bit of a tailwind we are having, as mentioned. Gross profit improved significantly above also here sales because of a better gross profit margin. EBITDA tripled, also worth to mention, definitely. And earnings situation, I mean, the comparison is always difficult when we had a loss in the year before, but we are above our plans with the 8% earnings margin. I mean you know that we want to get back to double-digit numbers, but we are on a good way here. We are not there, but we are on a good way.

So, cash flow is a bit smaller than I expected it here on the slide, but we're going to manage it. You're correct. The cash flow is good. So, let's have a look also here in the 3 different quarters of this year. We started the year with a high revenue uptick. This was -- and this created a low, let's say, operational cash flow because the accounts receivables were growing first. This is why we started the year with also negative free cash flow, even though it was a positive result and also a very good revenue level.

But over Q2 and Q3 now where the revenue level more or less stabilized or went a little bit back even to the strong compared to Q1, you see that now the accounts receivables are cashed in, and this is creating significant cash flow, operational cash flow on top of our results that we have created and also on top comes step-by-step reduction of our inventories, which are still -- and has been also beginning of this year still be on a high levels because of the impact of the chip crisis first and then the demand slowed down, and we had overproportionately high inventories, but we are also step-by-step managing them down.

This all boils together here in quite sound operational cash flows with a stable investing cash flow of, by and large, EUR 2.5 million every quarter. We are here getting to EUR 5.4 million and EUR 9.2 million free cash flow in the last 2 quarters.

Also summing this picture up, cash flow and liquidity. We started the period or this year actually, with approximately EUR 21 million cash account, had a strong operational cash flow of EUR 20 million, investments on a run rate level, I would describe it like that. And then we are -- we ended up with EUR 12.4 million free cash flow, which is above our earnings after tax. So we are, at the moment, having really high free cash flow rates compared to the earnings after taxes.

With regard to the cash flow from financing, still a higher EUR 9 million payout. This is mostly paying back loans, so not interest rates. This is mostly paying back loans and then some leasing and interest rates. So, we are constantly reducing our debts. The cash account ended the end of Q3 with almost EUR 25 million, even though we are paying back our loans. And you can also see the structural wise in the lower part of this table here.

At the moment, our liabilities to banks are EUR 47.5 million or at end of this period. So you can see the reduction compared to last year. Cash account is growing and our net debts are down to EUR 23 million roughly. So, below our expected onetime EBITDA for this year. So also structurally, we are making a lot of progress in our balance sheet, in our financing situations.

Yes, this, at the end of the day, also is, let's say, having an impact on the share price. But before we come to this, just structural-wise, no big change on our major shareholders. And from the share development, we -- also since beginning -- mid of the year, we made another big jump.

So we already had quite some improvement from beginning of the year around EUR 6. I mean that was also pretty low value. We all know the reasons why. But step by step also until mid of the year with our progress in the first 2 quarters, we made already quite some step. And then recently in the third quarter also, the share price improved and ended up at EUR 17.8 per share by end of the period.

Yes, this brings us already to the outlook. Let's have a look and just a quick reminder on the U.S. tariff situation. I mean the situation in Q3 was more or less stable. We mentioned already last time in the Q2 report that we also managed the increase from 10% to 15%. We are able to pass it through to our customers or most of our customers. We are also thankful of the -- that the customers are understanding the situation, and we are very transparent with this, and this is valuing -- our customers are valuing that we are very transparent with this situation.

This made us also flexible. Whenever the tariffs change, we can change it again. We will have, over the course of the whole year, a negative impact of approximately EUR 0.5 million because it took us also some time to make the changes. And there are also, as Dietmar mentioned, some new stuff coming in, steel, copper, and it takes some time to adapt. And there, we have an impact, but it's a limited impact.

The larger impact, and we mentioned this already, is definitely more on the macro economy that we are still seeing our customers holding back decision-making for investment decisions. So the market demand is muted by the situation. And we have clearly, since Q2 after the announcement, a weakening of the currencies we already mentioned, especially in the U.S. and in Asia.

Yes, what are the market assumptions for the remainder of the year? I mean it's only 2 months left, but I mean, in line with the trade associations, we are foreseeing a sideway development of our markets, more or less. We also believe the PMIs will not pick up significantly and that it will change also the currency situation.

In general, we see also that the verticals will stay relatively quiet besides, let's say, electronics batteries, so consumer electronics, battery production, logistics and semicon AI. So, in a way, no change to what we have seen from a pattern perspective in the markets in the first 9 months. Intensity of competition will stay high, maybe even increase, especially in the weak markets where everyone is fighting for projects.

And we will also continue to have a low visibility because the inventories are down. Customers have also relatively low inventories, but they also just fly, let's say, in a foggy situation. So they decide very short notice to release orders because they also know that we can deliver very fast. So this means for us, delivery times are typically 2 weeks and our foresight is approximately 1 to 2 months, but not longer.

So this is the situation we are in. But we are confident even though we see these market conditions, due to our performance in the first 9 months and also due to the project landscape we are seeing and the progress we are making, we have increased second time in this year our guidance last week. So the new guidance is EUR 220 million to EUR 225 million on the top line. Beforehand, the corridor was pretty wide, EUR 202 million to EUR 215 million.

And on the earnings side, we will -- also we decided that we are able to have an uplift here, 5.5% to 7.5% is our new guidance. Beforehand, we were in the range of 2% to 6%. The reason because for those of you who are deeper into the numbers might think the earnings margin is a bit -- might be a bit conservative. But typically, what we know from the fourth quarter, I mean, we have also the situation that on the OpEx side, we get more invoices from our suppliers because everyone is cleaning desk at the year-end.

This needs to be anticipated. It's also a low vacation season. And on top of this, there is also year-end auditing, and we have a new auditor since beginning of last -- or last year was the first time our auditor is Deloitte. We are still in the situation that Deloitte needs to get to know further the company, and we also need to consider in our year-end guidance that they find something that leads to depreciation of intangibles or depreciations also on the inventories, and we are taking a careful look at this. This is included in our guidance.

Yes, the step forward. Actually this year makes us even more confident to reach our midterm plan to reach EUR 275 million in the year 2028, and also to be above 12% when we are there. Actually, we anticipate at the moment that getting to 12%, for that we need roughly EUR 250 million, EUR 260 million in sales. So we will be hopefully along the way already at the mark of 12% earnings margin or earnings before tax margin. And yes, we are keen on to, let's say, keep our talented team together and grow further the top line.

I mean what is not in our hand, but where we cross fingers is that the access to the China market remains because it's becoming, again, a substantial portion of our business, and it's also a growth driver at the moment. So, this is something that needs to be mentioned here that this is a key assumption we base our midterm plan on. Yes, we are looking forward to get there.

And this brings me to the end of the presentation, and we can open up our Q&A session. And for that, our colleague, [ Yan ] will give some instructions, and then we can directly enter into it. [ Yan ], it's your turn.

Yes. Thanks. Hi, everyone. [Operator Instructions] So, let's check maybe the chat first. Okay. No questions so far. But we have one question over here. So, second -- okay, so Malte Schaumann.

My question basically is around the environment. I think with the Q2 report, you indicated you have several larger projects in the pipeline, logistics and on the semicon side. So, first question is, have these materialized more or less as planned in the second half? Or are these currently materializing as planned in the second half? And then the environment, especially in AI-related semiconductor space has improved throughout the third quarter. And is that something a trend that you also see in your order pipeline, project pipeline?

Yes. What we can definitely say is that the projects we see in the area of AI chipset production and, let's say, hardware production for data center equipment that this has become true and that this is also accelerating at the moment as this fits together with the landscape of investment announcement that you also can read in the press. I mean, all these investments at the end, these are announcements at the moment, but they will lead -- they need to increase in production output.

And what we are clearly seeing is that the investment -- the CapEx investment into that direction, into this market is accelerating at the moment, and will also have a positive impact on the fourth quarter of our results. What is -- I mean, we have also larger projects in the landscape of batteries for consumer electronics. This typically -- these are projects that come more in end of Q4, beginning of Q1. So, there is, at the moment, still a question mark whether they'd come, to what extent they come and also when they come exactly, whether it impacts this fiscal year or not.

And in the logistics, typically, there is no big investments in the -- typically at the year-end season because that's Christmas season where the fulfillment centers are busy. So, it might lead to bookings, but we don't anticipate at the moment super strong billings coming from that segment. Hopefully, this is giving you more insights, Malte.

Yes, I think that fits to the picture. So, you also see near-term demand relating to the AI. So, I think that fits to some other comments for near-term CapEx.

Yes.

Yes, I think that's good. That's basically my question. And Dietmar, all the best for your future activities.

Yes. Thanks, Malte. Always a pleasure to meet you.

Okay. I'm currently checking other questions, but none so far, to be honest. No raised hand. Wait one second. So, [ Bruno ], you're still muted by yourself, but you wanted to ask a question, I think.

Are you hearing me?

Yes, we do.

Thank you very much for this very, very clear presentation first. And just want to ask a general question. I mean you have experienced since, let's say, 8 to 12 months or a little less, a strong rebound and, let's say, a new stability in your business. What I want to understand is what was the real reason of that? I think the first reason could be the fact that you decreased your cost. So, a rebound in activity overproportionally give you good results. Is there other reason because you seem to be so conservative on the market that naturally, I ask myself, why there is this miracle that the recovery came. Do you get my question or is it too complicated?

Yes, I think -- and we can shed some light on it. So, [ Bruno ], I think -- I mean, short term, definitely, we had to reduce personnel because we oversized the organization. We sized the organization for EUR 300 million revenue. This had to be done actually. And -- but that is not the root cause, I would say and also will not lead us from here into the future into better numbers.

The reason is, first of all, we see a revenue impact because there is no longer a distortion and muted demand from higher inventories at our clients. So, this year is the first year for, I would say, 2 years now where we have the direct demand that we serve. And then we have been outperforming, let's say, our competitors in the trend markets and verticals we mentioned here, logistics, AI-related stuff, also consumer electronics battery. But what needs to be really underlined, I mean, as we are also long in the business, the broad base business has not picked up yet. This is to come, nobody knows when. And what we are doing at the moment is we simply, let's say, further improve the performance for top line results, efficiency gains and I mean, do our best in winning market share and further growing the company.

And what's in front of us is really a broader market recovery, but we simply don't know whether it comes next year or the year after next. But that's definitely also something we have not seen yet. It's more here winning market share, having reduced our cost base. The inventories are out and outperforming our competitors, especially at larger clients in the, let's say, dynamic verticals.

I mean, [ Bruno ], also some words from my side. By the way, nice to meet you again. A couple of additional factors maybe. So, we managed to stabilize and grow China business again, so which was very weak last year. And so we have made progress in winning large-sized OEMs again, which is a very, how should I say, encouraging signal. So, we have also seen that our strategy starts to play out in a way that we sell to our existing customers simply more than the camera.

And I mean, back to the strategy page with the full portfolio approach, that was always on our mind, let's say, to utilize the customer base that we have and simply sell them more from one source, from our source. And our sales force well understands it, step-by-step better to execute this strategy so that we can see it in our KPIs, let's say that this, call it, non-camera business, cross-selling quota, different terms that may be familiar to you, that this is growing. And so, this is also making us hopeful that we, let's say, further can build on this progress. I hope that helps.

That's very, very clear. So, for me, the answer, if I can summarize, is a very good management you have done in this difficult crisis. And secondly, it's your cost reduction plus your new strategy that it means -- because you didn't suffer from -- you were able, through the new strategy, not to suffer too much on prices. I am correct or not?

Yes.

Yes.

Yes. And like Hardy said, it's always also a matter of, let's say, can you leverage the current growth verticals probably and Malte mentioned it that, let's say, the semiconductor manufacturing for AI investments is mission-critical for growth. So, if you are not in that market, then you will have a problem to outperform the division market. We are in that market in different regional markets with large leading machine builders that are dominating in this sector. So yes, you need to be at the right place at the right moment in time. Otherwise, this is not possible.

[Indiscernible] Yes. Yes. Yes. But it's nice to have all these figures.

Okay. Good. I was looking into the chat, and we have 1 question that was written into the chat. It is, how do you use AI technology in your own organization? And will it change your organization significantly?

Yes, I think there are 2 sides. Maybe -- I mean, it's a multifaceted picture, obviously. But, I mean, on the one hand, we are using AI technology in our pylon for our customers. So, we have it built in our products in order to enable our customers to use AI image processing algorithms in the future and train their models what is good, what is bad.

This is still very early stage, to be frank. I mean we are not having significant top line impact at the moment. The roles are also need to be found what is our job, what is the customer's job in the future. So, it's early-stage investments. Does this change the world in the future? Yes, we believe it will change the future. We have also some other innovative stuff in mind at the moment, based on Omniverse technology, but this will take some time. So, I would like to also set the right expectation to capital market here. I mean, we are fascinated about it, but with regard to impact on short-term results or short-term top line won't have a big impact.

The other element is what do we do internally as an organization in order to drive efficiency, to drive also effectiveness to make better decisions? Here, we are also at the starting point, I would say, we are, as a tech company, obviously open to AI technology. We want to utilize it. We are starting in different areas and functions of the company to use AI functionality, and we believe this can have a very strong impact on productivity gains. And this is why we are also a strong believer that with the current organizational size, we can realize much more top line without having the need to significantly grow the organization, but at the same time, stay innovative, being able to contribute a larger top line.

And this goes for admin, but also for product generation and R&D agent-based software development. So, there are really fascinating new methods available. And yes, we are very much looking forward to, how should I say, to scale this.

Thanks for your reply. This question was coming from [indiscernible]. So, if you have any additional questions, please raise your hand. But in the meantime, no additional questions coming in, no raised hands so far. So, just looking for some additional seconds, but it seems to be good.

Well, not -- and maybe we can wait for a little moment, but I would like to use the opportunity to thank everyone here in the call for being with us, also for putting trust into myself over the last 25 years. I mean, it was Norbert and myself who took the company public in 1999. So, it's been a long time that I spent also with you guys and with colleagues from various investors.

So, working with you has always been, how should I say, insightful for me. Many times, I got rightfully challenged by you. And those challenges are very worthwhile for me, in order to double check whether we are really making enough progress, whether we are doing the right things, whether we have headroom that we can leverage and such. So this interaction with you guys who look at our company from a purely number-based point of view has been a major contributor to my work. So therefore, I would really like to thank you for that dialogue and also for being, let's say, our partners for such a long time. It has been an honor to work with you. And yes, looking forward to continue that work in my new role. But as for today, thank you very much for that.

Thanks Dietmar. No additional questions so far. So maybe these are wonderful closing words for today.

Yes.

In case of any additional questions, the e-mail address is -- so you can reach out to us, of course. But I think for today, our questions seemed to be [indiscernible].

Okay. And thank you, [ Yan ]. Thanks to the whole participants here. Yes, see you then in the call for the 12 months. And as mentioned, if you have further questions, please do not hesitate to contact us. Thank you very much.

Thank you. Have a good day. Bye-bye.

Thank you. Bye-bye.