LPKF Laser & Electronics Stock

Hello, everybody, and welcome to our earnings call for the first 9 months of 2026. My name is Bettina Schafer, and I'm responsible for Investor Relations at LPKF. Here with me today are our CEO, Klaus Fiedler; and our CFO, Peter Mummler. Klaus and Peter will review our business performance over the first 9 months and provide an outlook for the current financial year and beyond. After that, we will open the floor for your questions. The conference will be recorded and published for a period of 2 weeks on our website.

Before we begin, please note that today's discussion may include forward-looking statements. These are based on current assumptions and involve risks and uncertainties. Actual results could, therefore, differ significantly. We have no obligation to update these statements unless required by law.

And with that, I would like to hand over to Klaus.

Thank you very much, Bettina. Hello, and welcome, everybody, to our Q3 reporting for the first 9 months of '26. As usual, I want to start with the main key takeaways and then go deeper into market and business development before we come to the financial numbers. So key takeaways from the first 9 months. We have a revenue of slightly above EUR 60 million, which is significantly below prior year and also reflects in the EBIT. As communicated, the main driver here is that we are missing large high-volume factory fitting in our Solar business due to the ongoing and driven with very high energy changeover to perovskite technologies.

In Advanced Packaging, where we are very well positioned with our, by now, 3 glass processing processes, what did we see? We see now that the promised transition from qualification and R&D period to first ramp-up deals is happening. We got and we announced that as well, an LOI from a leading Asian manufacturer that shows that we also make the transition into being the operations partner from being a multiyear technology partner. And as communicated, I'll have more details later. We expect that to continue. It is also a fact that we expected these orders earlier in the year and therefore, already to a larger part in revenue recognition. There were delays and they were driven by downstream processes, not by our processes that forced our customers to shift their decisions by a couple of months. Peter will later say more about North Star. It is clear that we need to set up the company with a more efficient cost structure and more flexibility.

First wave is completed. We are well on the way, and we will make a transition to a new organization form, to a more functional organization to continue getting more efficient in our cost structure. Due to the fact that an expected deal in the Solar business is now highly likely to shift into '27, we had to revise our outlook and are now guiding in a range of EUR 93 million to EUR 100 million with a negative EBIT between minus 7% and minus 2.5%. Background of that shift, I'll come later to. Our mid-term ambition is intact. We are now in the transition phase from positioning to ramp-up orders and later high-volume orders in the highly attractive and broad field of Advanced Packaging. We are doing the necessary measures on the cost side for our core business and see ourselves well on the way to reach a sustainable double-digit EBIT by '28.

Next slide, please. Let's talk a bit more deep about market situation, business development and operations in Q3. Overall environment is unchanged, and you all know it very well. We have persistent macroeconomic and geopolitical uncertainty, wars, fragile supply chains. That, of course, brings caution into the investment behavior of our customers with basically 2 fields excepted, and that's, of course, anything related to AI and to defense. As mentioned, in Solar, our customers prepare for the perovskite transition with high energy. Until that transition is done and ramps can be executed, we see limited investment in legacy technology and basically need to bridge this phase with strict cost measures, but also with supporting our customers to our best capabilities in reaching their goals for perovskites.

In the semicon industry, ongoing transformation towards glass-based is happening with strong energy. We see now that first players are positioning themselves, are placing ramp-up orders. You will find a lot of details of that in the press because it's a very hot topic. And we see, yes, also this year, it didn't come as communicated to us time line-wise when we did our planning for '26. But it's not like we talk about delays in, oh, it's shifting a year, a couple of months and now people are really moving in the direction we were preparing for. What does it mean for us when we come to business development? I'll have a bit more details later.

We have a really strong position in how customers were developing their processes, also to a big extent with LPKF equipment, transitioning it now into the operational lock-in. That's where we are right in the middle and are delivering the proof points this year. And that is extremely important because -- and I saw that very clearly at SEMICON West this year, even an LOI from a very large player, it massively increases our visibility in the market. It increases our credibility in the market. And it also brings us more and more in contact with established players in the market, where we are also considering forming potential strategic partnerships to improve our market access to improve the transition to high volume.

Looking at our core product lines, Rapid Prototyping. Order entry is up year-over-year. So we see that book-to-bill is developing in the right direction, but not full steam. While we are seeing a healthy demand in China, which is actually above plan and also Europe, the public sector orders in the U.S. are very weak given that budget availability in public research institutions is volatile in the U.S. at the moment. So we are seeing that order entry is increasing year-over-year. It could be stronger, and that's clearly driven by U.S. being in a volatile situation. Our SMT sector, which is depaneling, as you well know, and our StencilLasers, that's actually showing a very healthy year-over-year improvement in order entry despite, of course, a global investment restraint and geopolitical tensions. Some of our applications in SMT are related to the wider ecosystem of AI, and that continues to generate, of course, strong growth. We will show a growing business that is good, but the growth could, of course, be much stronger if the broad sector wouldn't be affected by the geopolitical tensions.

Solar, as mentioned, a massive gap. There's no other wording for that relative to our steady state, which we had for many, many years due to the perovskite shift, definitely a very good outlook when the perovskites are there. So we take the cost measures, support our customers to our best capabilities and basically bridge this phase. Welding business, we still see revenue down and earnings negative, driven by the fact that our classic area where we were active, automotive, is not in a strong investment phase. We see that the areas we are focusing on show now the progress we expected. In the robotics sector, we have been delivering the first batches of machines, which are in successful operations. We see a positive outlook in that area, truly going into high volume in the robotics sector, but we are still in a transition phase. We are not yet at a stage where we say this business is performing to a level that we expected.

And with that, I hand over to Peter to talk a little bit about operations.

Thanks, Klaus. For operations, overall, you see the development in the net working capital. And this is being pushed by the actual development of the revenue. The head count development is going down. This is majorly driven by the wave 1 of North Star that we reduced here in third head count, but this is really about competitiveness and cost reduction, this head count down to 651 head counts.

What I mentioned, the first wave of North Star is completed. We are really on track. We have cost savings now close to a little bit over EUR 8 million, and this will be now materialized over the time, but the measures are completed and the full impact will be next week and next year, but we keep going on this. Wave 2, North Star, there the leadership team is a functional structure is appointed. And now we are really working on the processes for really implementation continues and the start is planned for the 1st of January.

The new organization, as I mentioned, 1st of January, we still have a couple of discussions with the workers' council about this because it is changing from a business unit structure and a functional structure. But what's very important here is that we're talking about a transformation. And it's not only that we have another push in cost reduction, this step is a further step, especially when you look at our future in the Advanced Packaging, make us operational ready to being a high excellent operational company. And this is another step in the direction, get ready for the ramp-up in Advanced Packaging.

When you go to the next slide -- because we talk about a lot of times about North Star, that's the way of North Star. As I mentioned already, the wave 1 was really clearly cost saving. And I must say that, yes, we saw that we have a decrease of volume due to the Solar business, the perovskite decisions in the market, and we get ready. I mean North Star is a lot of help in the profitability to really to get this company stable. And the wave 1, I'm very happy to say that it's completed. We are done. And you see the line ramping up, the transformation wave 2 has started now and will be started on the 1st of January that we really implement all the measures.

We are ready for the measures. And the target is clearly a double-digit EBIT as we promised for 2028. And with the North Star, we are really in a pretty good way, I must say, to secure this double-digit EBIT in 2027 -- 2028. And I mentioned that the reason it's very important, wave 1 and wave 2 are 2 areas. Yes, both have cost savings, but the wave 2 is transformation towards the operational excellence and getting really -- make a further development, a further step in our product development area that we're getting -- gaining more output out of our investments in our products in the future. We are pretty good on track. I'm confident that we're delivering this what you see in front of you. And the full impact in our P&L will be in 2028. And this is our target. Therefore, all the measures will be completed in 2027.

Therefore, I will hand over to Klaus about a further view in the Advanced Packaging market.

Thank you, Peter. So just a little bit more details. Transition now from positioning phase into ramp-up phase, where are we? What's going on in the market? You know well that we already won one customer in the first half of '26. A second customer has now formalized his decision with an LOI, which is very important and will issue the POs in this year consequently. And with that LOI, visibility and also pressure in the market, oh, people are moving, has increased.

So what we are seeing right now is that several other players are making their operational ambitions more tangible are working with us. And we are also seeing, you know that we defend our IP. And if somebody is not playing game, we are also willing to take legal measures. We see that, and that's specifically a China phenomenon that also Chinese players, sometimes very short term are now approaching us in terms of, hey, we want to ramp, can you deliver? Are you ready? In terms of things are getting tangible in that area.

And what we also see, of course, it's a large market. We showed you the TAM that's confirmed by also other players trying to find their space in that market. That is a good sign for me. It confirms the market attractiveness. We see ourselves with our solutions clearly leading. So that is also good to defend our market share to win our market share. We will, and that is a constant process, always make sure that our core IP and all the IP around it needs to be respected in the market.

We have a great position. If people compare our technology against other technologies, we absolutely got to make sure that not somebody wherever in the world just copies our technology because it's great. And that we will continue to monitor and if necessary, to defend globally to keep our great positioning. I expect anyway we'll have that question in the Q&A later, that out of these players, my expectation is that in the first half of '27, 3, maybe 4 more will get tangible with their ramp-up plans and their equipment stack decision. And that's exactly where we need to stay the course. Show the proof points, show the transition, it's getting operational and we are in.

And as already mentioned here, our position that we are in now and not just the technology partner, that is now seen in the market as, okay, they made it. And now it's also time when we do market access, when we say which regions do we address in which way to see if certain strategic partnerships with established players in the semicon equipment market wouldn't strengthen our position and show a win-win, and that's discussions we are having as we speak.

And with that, I want to quickly come to the guidance. We told you we did not see that relevant revenue blocks, which are driven by Solar, specifically one China deal, which is hinging on a government approval, which was not present by end of Q3, which basically led us to the conclusion, no, it's no longer more than likely that we will have revenue recognition this year that we factored in also, of course, the effect that we get the orders in LIDE in the semicon sector, but later than expected.

We had to reduce our revenue guidance to EUR 93 million to EUR 100 million with the corresponding EBIT. But we see that in the strategic positioning, as we set it up, we are on track. The things are happening as we expect in the semicon sector. And in our core product lines, SMT and PCB Prototyping showing growth also in order entry, that's good. But all of those, we need to work and continue the course in our cost structures. And Peter showed you the graph. We are not done, but we went half the way already and that we got to keep continuing that all product lines can contribute in a positive way and the strong growth gets realized from the large market we developed in the semicon sector.

And with that, I hand over to Peter for the financial data.

When you look at the numbers compared to the previous year, I mean, it looks like a disaster. I mean when we look at the red numbers here. But one topic we need to say, we saw it somewhere coming that is in our plan that we are not growing this year due to the circumstances of the solar market, big portion, we saw it. Yes, we got in many areas, headwinds coming up, if it's Iran, if it's the budgeting in the U.S. institutes topics, what happened that didn't help. But overall, it was not a surprise that -- the 9 months revenue declined majorly compared to the last year from the Solar business that we really have.

And we had reported last year, we had this one huge contract in welding, what more likely was revenue in the first 9 months. This was a onetime impact, and we know this comes maybe every 2 or 3 years, a contract like this. It's not usual. When you look at the profitability, the EBIT going down to minus EUR 12.8 million. Here, we see that we have already this impacts resulting from the North Star. There is already a positive impact out of North Star approximately of EUR 5 million in there. That is really the countermeasures and that helps a lot. Otherwise, we would look much worse. But this shows that North Star is really on track on this area. Nevertheless, yes, EUR 60.3 million will lead to an EBIT margin of minus 21.2%.

Coming to the incoming orders, yes, we are preparing, and this is very important, the EUR 65.1 million, this is really preparing for the next months, too, because the quarter 4 is really an important month in this year for us. Free cash flow. Free cash flow is driven by the profitability right now. This is for sure that the losses are really mirroring in our cash flow. Therefore, this is following EBIT. You see it down in the employee numbers, 651 is more likely the step after wave 2, there still coming with wave 2, there will still coming a couple of reductions in the further steps.

Next slide. Coming to the business units to the segments. Here, I want to give you a picture as a year-to-year, a little about a view about what's happening when I really go there and what we're expecting. Electronics is stable in the year-to-year. Nevertheless, we expected a little bit more here due to what Klaus mentioned about the delay in Advanced Packaging. Here, we see clearly that this market is coming. The whole industry is going to glass, but it's a change and the change, sorry to say, it takes 2, 3, 4 months more. And this we are seeing here right now that we have a delay with commitments in certain areas from customers that they really believe they can make it in quarter 2 or quarter 3, but they shifted more likely a little bit later, and they really need to reverse and rethinking about the new structure with glass. And this we're seeing it. We expected a little bit more in electronics. But nevertheless, compared to last year, we are pretty stable.

In development, this is what we mentioned. There are positives and upsides and downsides. We see China. China and Europe is keeping strong and they're really supporting this business. That's the reason we have only a slight delay, but we have a significant impact out of the U.S. market. And here, we really see that institution, I mean, you saw it in the press in the past that institutions are really careful spending budget because they don't know if the budget is there or it's coming. And this is a topic what we're hoping that end of the year that in the quarter 4, this is a high peak that here we will get a catch-up in this area, but it's still a very delayed budget approval. This is not losing contracts. This is not -- we are -- don't purchasing. This is really hesitation in the market. Can I spend it? Do I have it? Again, profitability in the development, it's good. We are working on countermeasures. Even we are reducing the revenue slightly year-by-year, we're improving the profitability.

In welding, as I mentioned before, welding, we have last year in the 9 months, this huge contract from the consumer market. What's significant investment was this is missing. Therefore, we are dropping down by EUR 8.8 million. And this you see in the profitability. We are working on our product portfolio. We made the cost reductions here, what's really materialized. And now we're gaining market back in the existing markets, market shares back by better profitability and better competitiveness. And we're going in new markets like smart robotics where we see already successes, and we will go further in other elements, other markets to gain here a broader base on the market and secure that we get this welding back on track in volume. And then the profitability will follow because the cost savings we did, significant.

Solar business, looks dramatically, is dramatically, I must really say the situation with the investment stop. But this was -- Solar is a little slightly on this track where we believe that they are. This is planned. The EUR 11.2 million are not a surprise. It's not for the 9 months. This is really on plan because we know it's coming. And we're doing significant cost savings, short-term working in this company to keep the EBIT impact as good as this can. But when you look at this, dropping by volume by more than half and keeping on this profitability, this is a really good storyline, what we're doing to really make it happen because we see Solar still as a positive future for us as a company.

Going to the next slide. Working capital. Inventory, we increased the inventory slightly because that we are getting ready for the Q4. The Q4 is a significant quarter for us, being ready to deliver important topic. Therefore, the inventories went up. Trade receivables, must say still cash collection. We started the initiative last year that we're really getting in all the markets very good in cash collections, and we keep sustainable high performance on this. Therefore, trade receivables, we're collecting cash in and really this helps a lot, supports a lot our cash flow in this area.

Prepayment, as Klaus mentioned, is always following our order intakes. We're getting -- the order intakes increased in the quarter 3 and automatically because we have in our terms always down payments that we receive from the customers. Trade payables follows a little bit the business keeps stable because we increased the inventory. Overall, the working capital keeps stable due to the fact that we're preparing for Q4 deliveries.

Next slide. And then I would hand -- going to Q&A.

Exactly. So as always, we are ready for your questions now. [Operator Instructions]

So let's see if I can see hands raised. Yes, here we go. Johannes Ries from Apus. I have unmuted you. I can't hear you yet.

It works now?

Yes. Now it works.

Yes, a couple of questions about the big surprise. First, maybe on the Q4, you said -- you mentioned in the call is a challenging quarter that we see a higher risk that you maybe could miss even the reduced full year expectations, or is it only because it's a challenge to manage this growth you're expecting in Q4?

It's the latter. Clearly, we stand behind our guidance, Johannes.

Okay. That's the first question. Then on LIDE and SEMICON West, did I get it right? You have seen even additional interest because of the LOI you got and you have discussions with potential new customers, partly of China and maybe potential new partners.

That's right. So 2 effects I see. It's really -- we are new in the semicon market. Let's never forget it. And it's not that often that a new player comes in. So with this, I mean, the semiconductor industry is a village. Everybody knows, of course, who selected us. And that opened certain doors, which I was hoping would be opened in terms of, oh, couldn't we do something together? And this we are evaluating in terms of strategic partnerships can make a lot of sense in certain areas.

And what I also see at SEMICON West, but also right now, the frequency of customers, which we have on a long list and have some relation, but not on the front of the radar suddenly jumping up with very short-term requests, can you still deliver machines by very short time lines? Yes, we see that increasing, which is for me, par for the course. Very first players have now set the signal we are starting. And of course, then the others get under a certain pressure in terms of, okay, I have to move if I want to find a space in this industry.

Okay. Maybe 2 follow-on questions. First, after so many disappointments in the past and pushouts, which is not unusual for new technologies like glass substrate because of technical challenges, environment and so on, we knew it. But the market is now in a position, believe it when I see it. How big is the chance -- for the year, we have maybe 7 weeks left because today in 8 weeks, it's the 24th of December. How big is the chance that we see maybe a larger order for LIDE coming in this year? Or is it you are not brave enough to give such a forecast after all the experience in the past?

I'm definitely not brave enough, Johannes, but I want to give you insights what I'm seeing. So basically, yes, there are a couple of deals which would not be ad hoc deals because as mentioned, a typical ramp-up deal is in the middle 7 figure, that's not ad hoc territory for us. But what I see is some deals that are very hot and where also customers want to make decisions rather fast. Some of them in the Advanced Packaging area, some even in associated areas. I cannot give you more details due to NDAs. Yes, there is stuff still on the radar that is relevant for order entry and therefore, backlog for '27 still happening this year.

Okay. But the Solar contract, if I got it right, only side remark, it's more likely to come in '27, the pushed-out Solar contract?

Let me give you what I know, Johannes, because my crystal ball is as bad as yours, that the customer wants us, check mark. Conditions for contract, check mark. It's a government approval thing. And it seems there are new regulations in China and cadmium telluride technology is in a different bucket than perovskites. And it's a question now if the regional government or the central government needs to approve and nobody seems to know.

And one topic, Klaus, and this is a check mark we forgot in between, but it's very important. The customer has the money for investment, has its financing. It's not that he needs the government to finance it. This is the most critical for me, but he needs to get an approval.

Yes, absolutely. So Johannes, it's basically hinging on a political approval where I am, I want to be honest, out of my league to project how governments in China are deciding and even on what base. And therefore, I rely on my customer making the right moves and the right pushes. It's a large company. It's a company that should know how to get certain approvals. And I would be happy if I get it into the backlog for '27 in Q4, but this is something I do not dare to project, Johannes.

On perovskite also, there was a news 1 week ago or 2 weeks ago that Chinese government as a countermeasure to the maybe export bans of U.S. for semi equipment want to ban also solar equipment to deliver outside China, especially also perovskite. Is it positive or negative for the development of this technology? And could it lead to further pushout of the introduction? Or do you expect there's no impact?

Can I answer, Klaus?

Yes. Sure. Go ahead, Peter.

Okay. Now the financial view, Klaus, you maybe give another insight. Financially wise, it's a positive news because we are not counting in the future on the Chinese solar market. We take it as an opportunity, yes, opportunistic, but we are not planning with this. With this decision, clearly message is to the all Western solar companies, hey, don't count on Chinese. There could be a restriction that you do not get the equipment for your production. This is a message was packaged with this. But for the CFO, for me, for the numbers is due to the fact that I'm not really bringing in the future significant volumes out of China in my planning. Strategically, is it a good news?

Thank you, Peter. I can only confirm that for business outside China, it's actually very positive for us. And outside China is not only our large key account in the U.S. We see that India is getting very tangible at the moment with building their own thin film solar industry. I'm not talking about 5-year plans. I'm talking about right now, and that is very good. And also in the U.S., we see players beyond our large key account getting tangible when it comes to perovskites. Those players, of course, will look at the risk of getting a Chinese equipment in and will very likely come to the conclusion, no, this is not a business risk I can accept. And then we are positioned excellently.

Within China, we have to take it more cautious. We work with our Chinese partners. We support them in the best of our abilities. But China giving a clear message perovskites is our key area, and we are so far ahead in their view that we don't let this equipment be exported. Yes, that could also dampen the willingness to import key equipment to execute that industry. So as Peter mentioned, let's get more cautious also in the planning about the China outlook, but it clearly helps us in all business outside China.

Very helpful. Very short 2 questions and I go out of the Q&A. Maybe on the partnerships, going back to Advanced Packaging, the partnership with other players out of the semi equipment space, where could it be? Is it more technology to combine your products? Or is it more maybe in selling and supporting maybe your equipment that maybe you are added to the support activities or to your sales offering?

What -- again, these are scenarios, Johannes. This is not something where we have a committed plan. But as you know, it's a full process chain. And we are now respected as, okay, LPKF is part of the process chain with a key process. Now if we see other key processes that are not within our, let's say, scope in this process chain, and we would see companies addressing these processes who have a very strong position in the semicon market and excellent access to key accounts.

Then a strategic partnership with one of these key players in other processes in the process chain could be very beneficial for both sides because everybody knows, okay, for glass, those guys from Germany are the best. We could work together on qualifying process flows with us giving in all the glass processing, they're giving in their process and market it as, look, that's an integrated process flow with a proven and excellent yield. We would definitely benefit here with access to key accounts with players who are not a newcomer like us, but are in there for decades and know all the decision makers. That's our way of thinking, Johannes.

Finally, you didn't mention the other activities in LIDE at the semiconductor space. You mentioned only in a half sentence, the cutting of glass substrates and the bonding, don't talk about maybe the photonics, which is more ahead, but they're developing also like planned and they could be also especially for the cutting orders in the near future or in the coming months...

Absolutely. Absolutely. We have good results with these processes. The cutting is more short term than the bonding. That is clear. And we are positioning that at all the customers together with our glass structuring equipment, so with LIDE, and we see a good reception. So that's working out as expected.

Great. Thanks for all the comprehensive answers.

Anytime, Johannes, I know you also have great insight. So it's not only a Q&A where I'm answering.

The next question comes from Malte Schaumann. Mr. Schaumann, can you unmute yourself? I'm not sure if you are still here and hearing me.

But he's still on mute.

Yes, he is, but I have unmuted him. But maybe his questions have already been answered and he has -- not sure. And I can't see any other questions at the moment. If there are any further questions, please raise your hand.

I can see another question, so we will take that first from [ Thomas Brown ]. I have unmuted you.

I have 2, hopefully.

Yes, you have.

I saw in the statement reference to increased competition in LIDE. Could you just explain that, please?

Of course. I mean many players have realized now this is a huge addressable market for production assets. And of course, not only LPKF, but also others try to find their piece there. We see that they have now developed solutions, which they are actively marketing. And in the big picture, that's a good thing. It cannot be a single source market, and we stay the course. We want to clearly provide the best solution and therefore, get a dominating market share. But it's good and actually also requested by our customers from what I hear. No, please don't all buy LPKF. We need to have a good also risk management of the supply chain.

And that's where we see that players, which we also have on our competitor monitoring list, are increasing their activities, are marketing their solutions and also try to find a space in this whole production chain. As mentioned before, in the big picture, that's a good thing, that also confirms the attractiveness of the market, where we will very clearly always defend our rights and our work of almost a decade is when it comes to the IP. Please also provide solutions, but provide it with some alternative technology you've developed, which, to our knowledge, will be second best. But if anybody infringes on our core IP, which is granted globally and has already survived first attacks, then we will get active because that we cannot allow. I hope that answers your question, Thomas.

Yes. Sorry, just to get a bit more detail. So are you just seeing vague sort of increased marketing efforts? Or are you seeing new tools and tools with technical specifications that come close to yours?

I would say the former.

Okay. All right. Great. And then just on the downstream technical hurdles which are not your fault, but clearly impacting you. Why are you confident they'll be solved in the next few months?

They are solved because -- not solved. Solved would mean, hey, great yield, everybody happy. But we see that the customers who have again been delaying their equipment decisions have taken the decision now. They are moving ahead. And that means to the level of insight I have that they are at a yield level where they say, okay, we can ramp, but not yet at a yield level where they say, hooray, now I can go for high volume. And you will make yield improvements when you operate. You can only do so much in a lab, and that's the work ahead in the next quarter, the next 2 years that those guys get the yields now to true high-volume levels. But it's not a showstopper, Thomas. Otherwise, nobody would issue any PO for ramp-up. They would say, okay, back to the lab, and that's not the status we're in.

Understood. And last one for me. Just on solar, you've given us great detail on the Chinese delay. But if I'm not mistaken, we were hoping for U.S. orders as well. And I just wonder, are we still waiting for field tests, degradation data to sort of come in and validate the tools and therefore, the transition?

Maybe we didn't communicate that clearly. Let me give you the status. Our large key account in the U.S. is preparing with strong effort to get perovskites market ready. We are supporting that with prototyping lines and so on. And these orders are running as planned. So they are ordering all that equipment to get it to market readiness. No, we are not expecting right now any large order in terms of I'm building a new high-volume factory because that is something where they first need to finish their R&D qualification work and so on. And that's progressing with strong effort, but there is no delta between our expectations, what orders we get for right now and what we are getting.

What about Malte?

Malte Schaumann, I have unmuted you again. I'm not sure whether we have a technical issue here, but if you want, you can unmute yourself and speak.

Sure. Can you hear me now?

Yes. Yes.

Yes. First question is also on the competition -- competitive side. I mean it's first -- kind of the first time you mentioned that specifically in the quarterly report and in the press release. So what has actually changed that you -- that triggered that you mentioned this increasing competitive situation potentially? And does that -- does this have any impact on your expectation on the achievable market share? And do you see actually projects where the customer potentially might lean toward one of your competitors instead of maybe an initial expectation that you would get the project awarded?

So Malte, I see complete par for the course. Nothing that is outside my expectations. What did I tangibly see? I will not mention names, but I saw that one competitor now formally with marketing material said, look, and this is what I have to offer in that field and of course, tries to find in certain, let's say, segmented areas of the Advanced Packaging field now his space. And that's for me, par for the course.

And what I also see, and that is also not new, but confirms what I expected, you never get it in writing or in anything that you can prove, but you have your sources that from the end customer side, there is the need and also communication in terms of, please, guys, make sure that not only LPKF gets all the deals in that market, try to find some applications, some areas where also others can sell some equipment because we don't want this to be a single source market. And that's pretty much what I was expected -- what I was expecting. Others will come in. They will find certain areas, certain application segments where they also find a piece of the pie.

We continue to stay the course to say, no, we want the dominant piece of the pie. We will justify that with our performance. And we need to make sure because our performance is driven by technology that is well patented. Always our technology needs to be exclusive to us. Others should find their space, but please with alternatives that you develop yourself and not trying to do what we are doing. So Malte, no. The reason I mentioned it is because it's visible, others really come out with, and that is what we have. And that is par for the course for me how we expected the market to develop.

Okay. And actually, no change to the market share expectation you have for your products?

Absolutely not. There are deals out there. The first ones are distributed. I want to win the biggest part of these deals, clearly above 50%. Actually, I would begin to frown if I win 100% because then the market will say, look, this is a cluster risk. We don't like cluster risks, maybe take it a bit slower. If they see, okay, and if for some reason, LPKF would not deliver or whatever, at least there are some others who can also help us much safer situation for a market to develop.

Yes. Okay. Good. And another question, fresh -- maybe a short comment on fresh impression coming back from SEMICON West. So what -- is there anything that has changed your perspective on how the market will evolve over the next 6 to 12 months?

No. I still expect that with the first players having positioned themselves now, others will follow, and I expect this to continue. What was pretty clear for me in SEMICON West, look, this whole AI business is crammed with backlog and has restrictions due to the availability of high bandwidth memory, you know it very well, Malte. What I clearly see is those guys are not under pressure to as soon as possible, come out with a disruptive improvement in their performance. They are in a super comfortable spot in terms of, boy, we have much more demand than we can fulfill.

And that's also why our expectation stays intact. People will ramp now. First ramp orders will continue to come in, but we will need to wait and you know our internal planning for when we expect true high-volume orders. It will not be something where the market is under pressure. They must bring this out ASAP because the AI market is just basically in a complete allocation situation.

The next question comes from Klaus Schlote. I have unmuted you, Mr. Schlote. If you could do the same. Yes. Now you should be able to speak. But we can't hear you.

Mr. Schlote, can you hear us?

We still can't hear you, unfortunately, although everything seems to be on unmute.

Hello?

Yes.

Now it's working.

Okay. Sorry for the delay. This is the story of the talk is delay. Well, there was on the 23rd of September, there were 2 news out of -- coming out of LPKF. One was, I would say, positive that was at 14:11. And then there was one that was, I would say, negative, that was 14:26, which I see as not very good timing. One should put it in one news, both messages. In 20 -- in 14:26, it was a sentence that dealt with the possibility of capital increase. Then the share price of LPKF then was at between EUR 16 and EUR 17. And of course, we got then the trouble with the AI and technology, I would say, the -- taking some air out of the prices in the stock market, which took back also or brought back the share price of LPKF to recent level.

So let's say, about EUR 5 deeper. And -- but I would say the mentioning of a possible capital increase also put pressure on the price of LPKF. But you didn't mention a capital increase during the talk so far. So I would think that at prices of, let's say, above EUR 16, you are thinking again about a capital increase. And how urgent is that looking at the cash flow and the numbers you might get -- have more interest in doing actually a capital increase?

Thank you. Peter, do you want to take it or I take it?

Peter, you are on mute.

I take the first one about -- I mean, first of all, we are still in a clear area where we're financing our business as of today with all the elements we have. And even with the decrease of the volume, we are still in the green light and we have a storyline about financing our business with 2028. This must say this is safe, even the drop of the business, what we see right now in our numbers and the change of the guidance is covered, covered with this financing model. About, and this was an element if we're doing something and now, Klaus, your element, if we start doing something out of this range that we're going in significant investments, then we need to think about it. Then we need to think about it about additional elements to finance this one. But the running business right now is covered by our financing.

Thank you, Peter. And Mr. Schlote, to your question, first of all, when it comes to ad hoc relevant announcements of LPKF, there is no timing. There are facts and within 24 hours or even less, Bettina guides us there, we release the fact to the market. And if it happens to be 2 facts a couple of days apart, that's how it is. There are legal requirements, which we, of course, fulfill. And regarding a capital increase, we gave out the message in terms of, we, as a Board, entertain this idea if the conditions are right.

For our current plan of record, as Peter mentioned, we have an existing financing. And if we come to the conclusion, and that could also be related to the discussion about strategic partnerships, that we see business rationale in doing additional things that are not part of our finance plan, then, of course, this topic would be very much on the front burner. And yes, of course, it's also a question of having a share price that makes this a good idea to execute on it. I hope that answers your questions, Mr. Schlote.

It was not a couple of days. It was a couple of minutes. You can -- you should have a look at this on the 23rd of September. I think this is not -- was not very good move. Maybe accidentally, things happen sometimes, but maybe next time, you can get around this.

I can't see any further hands at the moment. So I assume that there are no further questions right now. And I think we can come to the end of this call. Thank you very much for taking part in this. And our next regular earnings call will take place on the 24th of March at the release of our annual report. So thank you very much for joining, and goodbye.

Thank you, everybody. Goodbye.

Goodbye.

Hello, everybody, and welcome to our earnings call for the first half of 2026. My name is Bettina Schafer, and I'm responsible for Investor Relations at LPKF. I'm pleased to be joined today by our CEO, Klaus Fiedler; and our CFO, Peter Mummler. Klaus and Peter will walk you through the business development for the first 6 months and provide an outlook for the current financial year. After that, we will open the floor for your questions in the Q&A session. The conference will be recorded and published for a period of 2 weeks on our website.

And before we begin, please note that today's discussion may contain forward-looking statements. These statements are based on current assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. We do not undertake any obligation to update these forward-looking statements, except as required by law. With that, I would hand over to Klaus.

Thank you very much, Bettina. Hello, and welcome everybody to our first half year results. I want to give you, of course, a key summary of what happened in the first 6 months. We'll dive a little bit deeper into the individual businesses, but, of course, give you a deeper insight into what's happening in the advanced packaging sector, where we see our positioning and what we expect as the next steps.

Let's get started. First half of 2026, a challenging first half that we expected and anticipated in our planning. We had a weak core business, so the only growth sector we saw was in the Electronics segment. And as expected and planned, we have a very weak year in solar because the transition to perovskite is happening. And we are in a transformation phase with Welding, so that burdens our revenue and earnings for the first half. One aspect of countersteering, and Peter will later give you more detail, is our North Star program, where we reduce fixed costs, transform the organization, raise efficiencies. We are about halfway through, the second phase is initiated and running, so we are on track here.

Our strategic focus stays unchanged. We want to enter significantly larger TAMs than we do with our current market fields, and we want to become strategically relevant in these fields, meaning offering more than a process step, becoming a strategic partner to our company, to our customers. And this sector is, of course, advanced packaging, with the transition to glass happening, where we see now that we expanded our portfolio and with AI driving the market and the wafer start strongly, that we have a significantly larger TAM than we modeled a year ago. I'll show you more details about it later. Our midterm market ambition stays intact. Despite short-term headwinds, we stay the course, enter a much larger TAM with advanced packaging and also bring our costs and our structure to a level that we reach a sustainable double-digit EBIT margin by '28.

Let's come to key takeaways and insights from our markets. So what we see and also anticipated in our planning range is that we have a persistent macroeconomic and geopolitical uncertainty. We have the Iran situation in the first half, which, of course, brings uncertainty to our customers and into the supply chain and causes cautious investment behavior. When we look at the solar sector specifically, as expected within our planning, at the moment there is very limited investment happening because transition to perovskite is running. We are positioned in perovskites. Both in the U.S.A. and in Asia, with first prototyping lines and the activities are going with a very strong efforts from our customers. Once perovskites are -- have reached maturity for high-volume application, we see a very good market potential for a long period of time. That's also the reason why we basically managed through a very difficult year for solar, where we expect and plan for less than half the revenue we had in our record '24 solar year.

In the semicon industry, you can see it in the press. You see the public announcements of large players in the field. We are now in the phase where the transformation towards glass-based packages for AI, for advanced packaging is becoming real. Joint ventures are formed, are getting capitalized. Large companies make announcements about their ramp-up and volume plans. So we are now in the phase where LPKF needs to prove that our very good positioning that we have achieved, supporting our customers in development for many years now gets transitioned into being qualified into the equipment stack and participating in the ramp-up and in the high-volume phase. We have updated our market model based on the latest projections from analysts on wafer starts for high-performance computing and are now looking at a total addressable market in 2030. That is very, significantly larger than what we anticipated. Now it's time to prove that we are in the equipment stack and in the operations for this market.

Overall, business development, advanced packaging, with LIDE being basically our entry ticket into that market. We have a very good positioning. A big share of the players in this market are already working and have ordered LPKF equipment for the development and qualifications. We now, as mentioned, need to transition that into broad orders for the ramp-up. And we have expanded our portfolio already now, with additional process steps, basically, already at the start of this market, becoming more than a one-trick pony, becoming a strategic player. Rapid prototyping, slightly lower revenue in the first half, but higher order entry. So basically, we see ourselves on track here. When we look deeper into the markets, we see a healthy demand, above expectations from China and Europe. We are seeing a weak U.S. market, which is largely driven by uncertainty about availability of grants in the public sector from the U.S. But in the big picture, it evens out.

In our SMT sector, which is dominated, of course, by our laser depaneling for PCBs. We saw, especially in Q2, an investment restraint and some shifts of projects due to geopolitical tensions, still see a clearly stronger first half, specifically in order entry and continue to stay the course. We see that laser depaneling is a long-term relevant portfolio element for LPKF. We talked about solar, as expected and planned, a weak year, significantly lower revenue, which also is that dominating factor why we have overall LPKF lower revenue in the first half, delayed CapEx decisions because people want to invest into perovskites once they are ready, and these activities are still in a qualification phase.

Welding, revenue down year-over-year, earnings negative. You know we had a large consumer business supporting us in this year -- in last year. We have made it into smart robotics, that is giving us a good foundation for the year. We have to transition, and that's what we are doing this product line. We have to significantly change the cost structure. Peter will talk about it in a minute. But we see that we make the right progress getting into consumer electronics, smart robotics, medtech. That we can make our planning target for the year and set up the product line in a way that it can get back on a profitable growth path. A lot of this has to do with North Star and changing how we operated LPKF. I hand over to Peter to give you more details about that.

Thanks, Klaus. Operations, North Star program. The first restructuring wave is completed. We really finalized it now in the first half year. The future organization in the second wave, and then we'll get in the next slide, a little bit deeper on this, will go on this, sharpen and improve LPKF overall again.

Objective is really we need to go to a cost reduction and flexibility of fixed costs because this is our really downturn. We have always -- revenue goes down, we have a dramatic impact in profitability. But we need to secure or support the future growth in advanced packaging. Very important that we have the balance to get -- to support this process the way we have planned to go.

The restructuring costs are in the range of 3% to 4% of revenue. This is on plan. We're working on this on the implementation. And again, the balance is going in there, getting efficient, but safeguard our innovation, our DNA. Overall, we are confirming our guidance and confirming the midterm target to reach 2028 double-digit EBIT.

Go to the next page. I think it's -- we need to give it a little bit more deep dive. Next page about North Star. North Star was planned in 2 waves. The one wave was really urgency, fast-track cost savings. This wave we completed. The Wave 1 was really rightsizing of engineering. We closed the production in Furth. We combined a new -- we added a new production line in Suhl, created synergies. We transformed the philosophy of the Welding business, more efficient products, getting down on the cost by product, and we want to really push strategic procurement and cost savings, go more strategic and bundling suppliers and get savings in there. Overall, we reduced our head count roughly about 10% in the first wave, and it's completed. But the actual data is 646 (sic) [ 664 ] head counts we have on board and this is completed. Very successful. We remain 1 month late, but this has to do with the negotiation with the workers' council.

The second wave, we started, the goal is LPKF fundamentals. And there are 2 focus areas. The one is that we're really concentrating on operational processes like operation, production, supply chain, sales, engineering, get faster, leaner and the quality. The second one is, and this is the DNA, what I mentioned in the slide before, innovation is the DNA of LPKF, and we will not go away from this. We will further invest in innovation, and there's no saving for us planned. But we want to get more excellent in there. We want to get faster in the innovation, closer to the market and getting more output of this. This Wave 2 results in a transformation in a functional organization. And we want to get really these levers. This is Wave 2 is planned. We had structured. We started now the alignment with our workers' council on corporate levels. There will be, yes, further head count reduction, but this is more on the smart move on, really, where we improve things. We will need less resources. But -- and this will clearly support our ramp-up in the advanced packaging, what's based on the efficiencies and processes.

I think overall, we are really good on track with North Star. We are on time and we will finalize the Wave 2 somewhere in '27, that we really can materialize all the activities and measurements in 2028. Therefore, we need to close it in the mid of '27 to be -- secure our double-digit 2028 target in EBIT. Therefore, I would give over to Klaus for an overview about advanced packaging.

Thank you very much, Peter. And as you all know, in the past months, our stock has been quite in focus on the investor side. And yes, Peter and me had a lot of investor calls in the past 3 months. This is, of course, driven by what's happening right now in the advanced packaging market. I want to give you a brief overview on our strategic direction, where we stand, what next measurement points are ahead and how we see this overall market as a total addressable market now.

As you all know, LPKF has a clear strategy. We want to leverage the excellent technologies we have into much larger addressable markets. Larger, meaning a factor of 10 and more above what we currently have. One market that we identified is the advanced packaging market, where a transition to glass as a material is happening. And we, for many years, have been providing to the market the right process solutions there, as a pioneer, as a frontrunner, with a strong IP portfolio. We achieved in this ecosystem that you see here, that the dominating part of players that have made an equipment decision here, have selected LPKF, have for many years been working with LPKF to fine-tune the processes, get all the qualifications done and get ready to ramp.

What we are now seeing as first of these players, by far not all of them, have reached the total process maturity to be able to place first ramp-up orders, so first operational orders. And this, of course, is now a key measurement point for LPKF. Nobody in the world doubts that we are a great technology partner. We know technology. But will we now also be chosen to be the operations partner and participate in the first ramp-ups and in the very high potential that comes with high-volume production for glass. So positioning is good, but with one process step, you cannot achieve the second strategic goal. And that means we need to become strategically relevant in this field. We need to be on the table in road map discussions. We need to be the go-to partner to -- for whoever thinks about glass in packaging.

So as you know, next slide, already in Q1, we expanded our product portfolio. We are offering now 3 process steps instead of 1. The one is LIDE. That's basically our entry ticket, nothing more. And that, of course, comes from deep, year-long insights and discussions with our customers on where do they have true pain points and where can we offer highly differentiated solutions. So that's out in the market. That's done and that's good because now is the time to position ourselves in a broader way. When we see the time line and phases, we see them unchanged to what we already showed you a year ago.

Next slide, please. '26 is still a positioning year. I would say we successfully executed on the positioning. Right now, the negotiations are running. It's the time where the first ramp-up for ramp-ups happening in '27 are distributed, and that's the information we want to provide to you as investors once the whole deals are done. Yes, we made it into the equipment stack. There will be other players who are not part of the frontrunner team who will place their ramp-up orders in '27, and we will do the same, position ourselves, provide the best solution, win, and that's our ambition, the majority of the deals, not all of them.

It cannot be a single-source market. To then be also the partner for the high-volume phase, which we expect '29, 2030, with deals being distributed, of course, in advance around '28. And at the same time, being there with a broader portfolio with ABF ablation, with glass bonding in roughly a similar time line, while using our market insights now to do the same first positioning, then be there for the ramp-up, when, for us, the next logical step in this market happens. And that means the glass is used also as a medium for optical data transmission.

Now when we look at the addressable market in that field, next slide. A year ago, I was telling you, yes, we did our estimate for 2030. We see a total addressable market for equipment that LPKF can provide of about 500 million. Now, it's a highly dynamic market driven by AI. So we updated our market model, of course, incorporating the much more tangible insights now we have into the production chains and our customer ambitions, of course, incorporating our expanded portfolio. But the biggest impact factor, incorporating the latest public information from various sources about, hey, how do we see the wafer starts for high-performance computing? So driven by AI developing for 2030. And that number has been corrected upwards drastically. That's public information.

And of course, our addressable market follows. What we show you here is the total addressable market for 2030. Total addressable market, meaning in 2030, suddenly everybody switches to 100% glass and installs all the necessary equipment in the same year. That's of course not what the specific addressable market and the obtainable market looks like. Impact factors are what will the share of glass be in 2030. I talked to about 100 investors who are very deep also in the semicon market in the past months. There, the estimates still go from bearish cases like 30% glass in 2030 to very bullish cases of 80% glass in 2030.

In all these cases, it's a multiple in total addressable market and obtainable market for LPKF than our total combined markets right now together. So in any case, a very attractive case. And it depends on the share that LPKF can achieve. You know our positioning is good. There is competition. We are actively defending a lawsuit is running our IP where we think people want to take a shortcut. We spent 10 years of R&D in that field. There we see us positioned very well. But the most important next step and the market, and therefore the share price already anticipated that in the past months is, can we now win a realistic amount, a dominating amount of the first ramp-up deals to basically also transition into a significant share of this total addressable market for LPKF? That's where we stand right now.

The negotiations with the frontrunner partners are running. If you follow the press, you see that they form the entities, form joint ventures, capitalize them. So my expectation is that we can get very clear information out to you this year about here is the first deals we won. Well, one deal we already won in Q1, but we want the broad market to basically deliver the proof point. LPKF made it into the equipment stack, past the operational hurdle. And of course, Peter and me make sure we stay ahead of the curve. Also, in our capacity that whatever case materializes, bearish case, bullish case, we are always there and can serve our customer needs. That's where we stand in advanced packaging.

From my position, we found the right market. We are even a little bit lucky how much now the wafer starts go up, which boosts the total addressable market. Positioning was done well. We are right now in the negotiations, and I think we have a very good chance of success to make it into the equipment stack. With that, I hand back to Peter to give you more details about the first half numbers.

Financial. Go to the next page. Overall, in the financials, when you see the first half year, the numbers, the volume is low. A general comment from my side. Basically, we knew and we planned and we expected an H1, what is on the low level. Due to, we know that the Solar business market, and we saw this coming. This is not a surprise for us. We would hope that we get closer to the EUR 40 million. But what Klaus mentioned in the beginning, we have the geopolitical uncertainty in certain areas. We still have this continuous cautiousness of investment and behavior. And this is not that we're losing contracts. It's about that it's shifted about making a decision to purchase more likely.

The revenue, EUR 36.5 million. It's reduced in H1 compared to last year, majorly driven from Solar, that we don't get one of the bulk orders in there. This we see, and you will see this later on, on the first half year, how Solar is doing. This, consequently, had an EBIT impact about the adjusted EBIT is minus EUR 10.4 million. This is significant due to the revenue reduction impact. Here, we see already a positive impact of North Star, EUR 3 million to EUR 4 million, that we really can cover the fixed cost reduction. Otherwise, when you just make a calculation by reduced volume, we would be looking a little bit more in the negative area in the adjusted EBIT. But this shows how important North Star is to getting the flexibility in the fixed cost that we are not getting always the big hit by reduced of the profit of the volume.

Incoming orders. Basically, good news is that we are above the book-to-bill rate in there. Again, it's a missing contract of the bulk orders of Solar. Here, we have some -- it's a mixed information in the market about good news and disappointment about shifting. But there, we are pretty good on track. The free cash flow of minus EUR 11.5 million. On the one side, we still have a very good asset management. On the other side, yes, we are reduced people. We're laying off people. There's a couple of cash out elements right now. What's financing the transformation? The EUR 11.5 million is in the range of what we're expecting. But overall, we see that the trend will go towards '27 in a much positive range.

Orders on hand. It's on the same level as last year, EUR 34.7 million. We're working on this. This is one of the key elements in the second half year where we need to -- we are stable here. It's a good base for the next quarter, but we need to keep going to increase the orders on hand. Employees. You see this development, 443 (sic) [ 743 ] head counts, where there was 664. This is the Wave 1 of North Star, what I mentioned, majorly impacted. We reduced the resources, fixed costs out. This was the Wave 1 driven by this element. And this shows that we will be doing our homework to reduce costs and improve profitability.

Next slide. Here we go to the working capital overview. What I mentioned, I mean the inventory increased by 22% to EUR 23.9 million. This is majorly driven by preparing the additional volume selling for the second half of the year. Therefore, we need to increase certain elements of inventory to be capable to deliver. This is a preparation, the main driven why we increase inventory. Receivables, yes, on one side, less orders, less revenue, less receivables, but we keep on a very good level on collecting debt. The quality of our suppliers, of payments behavior is still on a very good level. That's the reason we keep the receivables on a low level.

Contract liabilities shows majorly that we're getting contracts in where we're getting down payments from customers. We try to collect upfront payment that we're getting our contracts in a positive cash situation. This we keep going and this is the improvement. Trade payables overall follows a little bit the inventory and the revenue. That's the reason we have a slight increase about trade payables. Overall, I'm very positive about our working capital development in the circumstances this company we are, and we are getting in a good way on this with the EUR 22.3 million when you just imagine that we're increasing our inventory significant by 22%.

Next slide. Here, you see a little bit what we already mentioned a couple of statements before. This is our business segments here today. Electronics. We are on the level that we are slightly increasing towards here. This is -- again, there's no bulk orders in there. This expectation about electronics will go to the end of the year or '27. Stable, slightly grows. You see that we're going on the slight improvement in the profitability, but electronics is still in a negative way because we are investing in the LIDE story. We're investing here still to get the advanced packaging ramp-up, going to preparing for this.

Development. There we have this behavior of investment, of delaying -- weak U.S. business in the development. That's the reason we're going slightly down in the volume. This is government money, funding, what -- there's really a behavior about stopping investment, holding investments. Nevertheless, when you look at the profitability in the EBIT, we do our homework here. We're reducing fixed costs here. That we're not getting an impact. We're improving slightly the profitability. We're doing a good job to define countermeasures.

Welding. It looks terrible, but this is in the expectation of our first half year because in last year we had this significant contract, one trick pony big contract in Q1 last year from consumer electronics. We are on the way here. We have here significant impact in transformation costs. Therefore, the profitability right now is driven by the reduction of the volume.

In the end, you see the drama in Solar, what we mentioned. We're losing roughly [ EUR 80 million ] compared to last year because of this transformation, the market towards the perovskites. No big investment done. We're really going. And you see this when you say EUR 18 million on volume reduction, profitability impact roughly around EUR 6 million. You saw we're doing our homework to reduce cost as much as we can with short-term work, but this is some way expected. We know that this is coming, and we have enough counter measurements, but there you see our significant impacts we have. Overall, we would wish a little bit slight higher volume. But again, I think the range where we are in H1, it's not a surprise that we have this impact here. Klaus, over to you.

Thank you very much, Peter. So to our overall guidance, midterm aspiration, no change. We were expecting a weak first half. We at least made a slight growth in order entries. Therefore, it will not be a walk in the park, but we see our guidance for '26 as achievable. And we definitely say, yes, we know solar for this year is a disappointment also to our investors. We clearly see that perovskites offer a very strong opportunity for the future. So we are convinced it's the right decision to hang in there in a year where we are basically missing, in the first half alone, EUR 20 million from the solar sector.

And of course, in the semicon market, we see that we now have the positioning to really achieve this year that transition into being part of the equipment stack. The addressable market looks very positive, and we see that AI is a driver that despite global uncertainties, stays strong, goes strong and gives us a great opportunity. There, we fully stay the course. And as Peter mentioned, play to win or don't play. We continue to invest in this sector because this is where we see the future strong growth drivers for LPKF. And with that, I hand back to Bettina to basically guide our Q&A session.

Thank you very much, Klaus. Ladies and gentlemen, we are now ready for your questions. [Operator Instructions] The first question comes from Lukas Spang.

I would like to start with a LIDE order you mentioned for Q2, which you received. Maybe you can shed a little bit more light in terms of, is this an order from a customer or a partner you have announced a partnership in the past? Can you share the amount of machines the customer has ordered? And maybe also in terms of the region this customer is coming from, can you share a little bit more detail? That would be my first question.

Thank you, Lukas. So of course, I need to stay confidential. I have NDAs with all my customers. Q2 orders, of course, we have portfolio orders constantly in LIDE. So what we had in Q2 were not orders for ramp-up purposes, for true operational hurdle purposes. They were basically individual portfolio orders. And what we considered worth reporting to our investors is that one large specialty glass company ordered LPKF equipment, in that specific case, one machine, but potential even short term for ordering more. That we consider important because specialty glass is the raw material in the whole production chain that is currently in the course of ramping up for semicon market.

And it confirms for us if those guys who are developing the specialty glasses for this market also want to work in-house with LPKF equipment, confirms for me that those guys want to tune their materials to the glass structuring process that they expect to be the dominant structuring process in that market. Another order we got was just from a university, which happens very much on the front of research and development in glass structuring. So it's another confirmation. If those guys order LPKF, it shows they work with what is now considered a little bit as, yes, the go-to partner when you buy equipment. I hope that answers your question, Lukas. And please forgive me, there aren't that many specialty glass makers in the world. I cannot give you more details.

Okay. And then second question is regarding JVs. You also mentioned this in your presentation. I try to avoid names, but I think due to the description, you will know which players I mean. We saw 2 announcements in July, one beginning of July between a Korean player and a Japanese player for glass core with targeted production in the second half of 2027, and another JV announcement in mid of July between a Japanese and a Korean player for commercialization of TGV glass substrate, also with planned mass production next year. And also this Japanese player has a production or partnership with a big U.S. semiconductor player. So how do you see these developments? And can you share any insights from your perspective to this?

I see these developments as absolute par for the course in our expectation of the market. The first players have reached the right maturity to now announce ramp-ups, form the joint ventures, capitalize them and begin to issue CapEx to the supply base. And without, of course, mentioning any names, that's exactly where we are positioned and are now working, negotiating, winning deals to show our investors, we are the ones who also are there for operations. And again, Lukas, I clearly see this is only the start. There are many more players out there who have a great business model, but are not yet at the stage to say, "I can push the ramp-up button."

Okay. And last question on the guidance. On the revenue side, you need at least EUR 68.5 million of revenue in the second half of the year. Orders on hand were now at EUR 34.7 million at the end of June. So can you share your assumptions, how you want to reach the guidance and where the revenue in the second half should come from?

Yes. So basically, as LPKF in every year has a much stronger second half than first half, it's in the nature of our game and on CapEx cycles through the year in many of our markets. We are working, as always, with a weighted funnel method to weigh our opportunities, weigh the customer needs and so on. And what we see is that the funnel has more than sufficient opportunities to make it in the guidance. We kept the guidance broad because every year there was some sort of crisis. You have the Ukraine war, you had COVID before, you had the tariff situation. This year, it's Iran.

So we were already anticipating in our guidance, hey, the next crisis will come. There will also be the next crisis in '27. That's the world we live in. And it will not be a walk in the park in the second half. But looking at the funnel, looking at our usual seasonality of our business and revenue, Peter and me say we can stick to our guidance. Yes, we still are anticipating one solar deal out of Asia that goes into revenue for the second half. This is not a make or break from one deal. There are several smaller opportunities on the table, but this we need to achieve because that is something that moves the needle in a relevant way.

This would be single-digit or double-digit million?

Single-digit, but it moves the needle.

The next question comes from Bastian Brach.

So my question is on the additional LIDE processes. How do you view the long-term potential of these? You mentioned bonding, simulation, but also CPO a little bit later. How do you see that potential relative to the core glass structuring business and the longer-term revenue mix within LIDE?

So maybe we can go back to our TAM slide, Bettina. So Bastian, I see the potential of the additional process step, not counting CPO, but just bonding and RDL ablation significantly lower than the actual LIDE process step. We also target in our internal model a lower market share than for LIDE in these process steps. This is still a highly attractive TAM. For me, offering these process steps is not only about, hey, I need to have additional revenue opportunities. It's also very clearly about I need to go into the market with a strategic portfolio.

When -- I'm now working with the largest OEMs in the world, companies that are several orders of magnitude larger than LPKF. And I'm in. So I need to offer also their purchasing departments, a whole portfolio they can fit their factories with, and not, hey, I'm bothering having a supplier in my supplier list for one process step. It's highly important that we show we are here to stay, we are here to do more for you. And if you have a new production line, several of the steps you can get from LPKF.

So to answer your question, in short, you see it here, the TAM is a fraction of the LIDE TAM for RDL ablation. We also target a lower market share here because it's not as, let's say, disruptively differentiating as our LIDE tools relative to competition, but it's highly strategically relevant. We cannot be in this market sustainably for long term as a one-trick pony. That's what we firmly believe.

Okay. Perfect. And maybe one additional word on the CPO. When will that be relevant? So what time line are we looking at there?

So again, when we say CPO, I mean, there are CPO, there are architectures out there right now. What -- when we talk about CPO, we are really talking about using the glass core in the substrate as a light transmitting medium for the individual dies to communicate optically. And these architectures are in the R&D phase. There are a ton of different architectures out there. And we all know 90% plus will die in the R&D lab. So we are really turning it around this time.

First, fully understand the market. We have the access now through our LIDE tools. People are talking to us, then go into a positioning phase starting from '27. We don't expect ramp-ups with this technology before '29 and no high volume before 2030, '31. This is more what's the next big thing after glass core, glass interposer and basically expanding LPKF's footprint around glass and advanced packaging.

The next question comes from Johannes Ries. Mr. Ries, can you hear me and can you speak?

I'm sorry. Also maybe 1 or 2 questions definitely to advanced packaging. First, if you said that, maybe also if you look to this joint ventures or what TSMC said regarding their customers based on glass substrate, they will start the production next year. In the conference call in Q2, they mentioned this. The customers has -- your customers has to start to order, the ramp-up, and you said one or other customer is ready to start the ramp-up. Therefore, it's not unlikely that maybe in the second half we should see the first orders, the first orders for the ramp-up of LIDE in the glass structuring.

I fully agree, Mr. Ries.

Okay. Short answer to it.

You know the market very well. So usually, I can just confirm.

Okay. Maybe coming back to the question we discussed before on the total available market, the TAM. Coming back to CPO, your stock has also maybe been pushed regarding this topic because for co-packaged optics or the photonic market is maybe the hottest market in semiconductors at the moment. And only you have not included like even the bonding in this EUR 1.7 billion. But isn't it not too wrong that at least the co-packaged optic market could be maybe at the same size like the TGV market longer term, not maybe in 2030, but maybe 2033, 2034?

Yes. This is true. But usually, when we do a TAM estimate, we do it based on solid facts. And if you have so many uncertainties in a model that it can be anything from floor to ceiling, we usually say no. That's maybe a justification to get active in a market, but it's not a quantified TAM I would like to show my investor base. These numbers are solid, based on production flows. We know based on markets, wafer starts, HPCs that are public. For me, it's a solid analysis of a potential.

I agree with you, CPO could be even bigger than that one. We do not see yet that we can say, "Oh, the production flows, the architectures in that field are tangible and mature enough that we would share our modeling with a broader audience." But we will do so once these markets mature more. And I fully agree with you, photonics, it's logical that in the future, 5 years plus, the individual dies in a package will communicate optically. It's -- there's no way around it. But for me, which processes actually win, which architectures win, it's obvious. There are so many architectures out there. It's only a fraction can make it into the market, and that's what we are finding out right now.

It's clear. But most of the architectures 2.0 are based on glass substrate and therefore, you have a good positioning given maybe that you're already in the TGV business.

Absolutely. I mean the glass core is, for me, the medium where the light will be used to transmit and guide between the dies. That's our working assumption, and many players in the market agree. And then the big question is when you go to the individual process steps that are needed to combine a TGV glass substrate with, let's say, light transmission capabilities. Yes, we say that processes that very well fit to LPKF's capabilities and how we are also perceived by our customers, that's the guys we should talk to. That this has a very good probability. And therefore, we also say focus on this topic, that's the next thing for LPKF.

Do you see that your competitors are also focusing on this? Therefore, you face maybe more competition than in the TGV business.

Yes, yes. This is a topic where others are clearly also identifying here. We see the advantage that with glass core and the actual laser-based processing steps for the glass, we have now a very good foothold and access to our customers. So are also a party they say, "Hey, we anyway work with these guys. Let's also work with them on that field." That gives us an edge here. And we have a hopefully well-earned reputation about high-end technology. LPKF are the guys to talk to.

And if all this maybe happens, you think you really can handle this with the capacity you have around. You mentioned you can easily scale, but even if maybe your TAM is realistic and you win a very high market share and even CPO comes on top, you are able to build the capacity, yes?

Peter and me are intensively working on that topic. For the next 2 years in our modeling, our current capacity, we were, of course, preparing for that, covers even the bull case. But within the course of '27, we need to come to a decision. We will need to expand our capacity. How exactly do we do it? Where do we do it? That's very much on our radar. Because we would never ever want to get into a situation where a customer says, "Hey, I want a lot more than expected," and we are not capable to deliver to their needs. So yes, this is on our radar. And within '27, we need to come to a conclusion.

One key element, Mr. Ries, is that the capacity increase we're planning, this is not something where we need a year or 2 years to set it up. It's a major task. The challenge is to get the people on board and train it. This is the red line that drives the speed of creating additional capacity for us because we do not have an investment or a CapEx-intensive production. It's an infrastructure production, just assembling, focus on assembling. It's more the resources to get on board. Therefore, we are highly confident to be even fast enough to make calls like this.

Super. Maybe another question to the possibilities which are coming with perovskite. Any idea how big this market could be, and any idea maybe when the ramp-up could really start? Is this order in the second half you mentioned in Solar perovskite order or is it a traditional one? And any update on the opportunity which you see ahead of in Solar with perovskite?

Yes. So a word on how we see the actual addressable market. You know that tandem technology, so combining it with a silicon solar cell or even a second perovskite or cadmium telluride cell, that's the architecture that everybody is targeting. And the efficiency improvement is very significant. So we did a market model where we say, oh, if 20% of the solar capacity would add tandem, so would add a perovskite layer to say, "We want that additional efficiency boost," we would look at a high 9-figure TAM just for scribing equipment. And that is the reason why we say, okay, this is not a market to just say, let's give up because we have a weak year, but it very much depends on the penetration rate here. So the model still has a significant error bar, but it's high 9 figure.

Our best year in Solar was EUR 40 million. It's in any case, an opportunity where we say, good business rationale, we want to be present in that market. On the timing, we expect -- but again, we don't have all the insights, but we know a bit about our customers and where they stand. We expect ramp-ups to happen in '28 for perovskite, 2 ramp-ups. I mean, prototyping lines, which are quite capable are already in the field. And our clear target is, it's tough enough, EUR 20 million are missing to basically get through '26 with the solar situation. We need volume orders that we can get into revenue already in '27. And that's what we are working towards together with our customers.

Okay. Finally, for the whole company, if maybe the North Star Wave 2 will be finished, any idea where the breakeven of the company? I know it depends a little bit on the mix and the mix is changing a lot going forward compared to the past. But where the breakeven point could be at EUR 130 million, EUR 140 million revenue.

No, no. The breakeven point will be much below, not EUR 130 million. It will be below EUR 120 million, the breakeven, for sure.

And all the best, I'm looking forward to maybe the first ramp-up orders for LIDE in the second half. Then we open a bottle of champagne.

Yes. Thank you very much, Mr. Ries. Let's turn to the questions we have received in the chat. The first one is also referring to the TAM. Can you give any reference on what percentage of market share you think you could achieve of this new market TAM for 2030?

Yes. Our ambition, and it's openly communicated internally, is to get 70%. I know it's a high bar we set for ourselves. But given the positioning we have, it's definitely the goal we shoot for. It needs to be a multiple source market. It can impossibly be that the whole industry depends on a small company from Northern Germany. So even if we wouldn't achieve the 70% and we would achieve 50%, it would still be a massive new opportunity, but 70% is the target we go for.

Sorry, there's another question in the chat. I'll just read it out. Most likely your free cash flow will be negative this year. If you have to ramp next year, it will also be negative. Do you need new capital to finance the growth?

Basically, the cash flow will be improved next year, due to the onetime costs we have in this year. It will be negative right now in our elements when you see this. We have a financing until '28, what has the growth, what we're planning considered. Therefore, we are today, I must say we are financed. But nevertheless, if the ramp-up will be much deeper -- steeper and going up, yes, there's a challenge that we may need additional cash for financing, but this is a case. And for this one, we will use all opportunities and review and look at scenarios on how can we finance this. You mentioned this, the capital increase. Is this an option? Yes, we're doing this permanently, looking at elements in the market for this case. But basically, what we have today is financed by our agreement with banks and our credits we have -- our debts we have on board today.

Thank you, Peter. So we have reached the end of this call, and I can't see any open questions or raised hands at the moment. If there are any further questions, please raise your hand now. And that doesn't seem to be the case at the moment. So I would like to thank you very much for joining this call, and our next regular earnings call will take place on the 29th of October at the release of our Q3 report. Thank you very much, and goodbye.

Thanks a lot.

Bye.

Bye-bye.

Hello, everybody, and welcome to our earnings call for the financial year 2025. My name is Bettina Schafer, and I'm responsible for Investor Relations at LPKF. I'm pleased to be joined today by our CEO, Klaus Fiedler, and our CFO, Peter Mummler. Klaus and Peter will walk you through the business development for 2025 and provide an outlook for the current financial year. After that, we will open the floor for your questions in a Q&A session. The conference will be recorded and published for a period of 2 weeks on our website.

Before we begin, please note that today's discussion may contain forward-looking statements. These statements are based on current assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. We do not undertake any obligation to update these forward-looking statements, except as required by law.

With that, I would like to hand over to Klaus.

Thank you very much, Bettina. Hello, and welcome, everybody, to our annual results 2025. I want to lead in with the key takeaways of the year. Looking at our revenue, we are at EUR 115.3 million, so down 6.2% from previous year and at the lower end of our adjusted guidance. Our EBIT improved from EUR 0.1 million to EUR 0.8 million adjusted EBIT, which basically shows that despite a decline in revenue, our cost-saving measures more and more are visible also in our bottom line.

I want to quickly lead into when you look at the right-hand side, our distribution across the regions. You can see that our business distribution, North America and Asia is growing, while Europe basically now constitutes less than 1/4 of our revenue. Dominantly, our markets, our growth are shifting step-by-step outside of Europe. When we look at order intake, we are at EUR 91.6 million, significantly below previous year, which also reflects the backlog. The main impact factor that we have here in order entry also in revenue for 2025 is that we are going through a slow phase in our Solar business, which is driven by the upcoming technology shift to Perovskites, I'll come to that in a minute, that reflected also our order backlog and our order intake, which was very strong in the previous years in Solar.

Looking at other business fields, despite, of course, the headwinds we had with the tariff situation, we had a moderate growth in Rapid Prototyping. We exceeded our planning and expectations in Welding, mainly driven by a large order in the consumer field coming out of China. Looking at advanced packaging, we don't make these numbers transparent yet, only for the packaging semicon sector, it's still in the low 8 figures. But from a positioning point of view, above our expectations. Looking at all the customers that are preparing for ramp-ups for glass and advanced packaging, over 80% are now qualifying with LPKF equipment, which gives us a sound basis for the upcoming ramp-ups. What we are doing, we basically treat this as an entry ticket into this market and are right now expanding our portfolio with the goal of becoming strategically relevant in the large growth field.

For ARRALYZE, we took the decision to discontinue our internal activities and transfer the business to a suitable external partner. That is driven basically by the fact that our market entry is targeted at academic customers, funding for public institutions in Europe and also specifically in the U.S. is quite shaky at the moment. So we see that this would be a longer way to get into this market as anticipated. We need to focus. We need to watch cost. So here, we took the decision to basically look for an external partner to continue these activities. Peter will say more about the North Star program in the course of this presentation. We have a good start. Part of the journey is completed. Part of the savings are already realized, and we are now in a second wave to secure a double-digit profitability in a volatile market environment in 2028.

And we also finished a new financing framework with our existing banking consortium to basically make sure we have the right funding for this transformation.

Now a couple more details on our market situation. You know the increasing global tensions that are happening. We had the tariff impact in '25. We currently have the Iran situation. So this clearly overall creates headwinds for LPKF. There is more reluctance to invest than in a normal environment, and the investments that are happening, the deals that can be made are increasingly generated outside of Europe. We are below 25% share of sales in Europe now. The semiconductor industry transformation towards glass-based substrates is clearly beyond the point of no return. So several external sources, all the announcements of the large players, drive it. Positioning is very good, but not yet in '25 reflected in true volume sales. The qualification of the whole process chain took longer than also expected by our customers, but is driven with full force and is making the right progress.

Our SMT markets were impacted because large-scale projects needed to reshuffle based on the tariff situation. This was just effect of, the demand is there, but given the tariff situation, all production chains could no longer be executed as planned. The tariffs would have destroyed the business case. So our customers needed to replan where do we do which process step in our business case. So we had delays in there, but definitely not the overall market drive going away. We see that it's only a delay and definitely not that projects are going away.

What do we see in the solar market? You know in the solar market, we are active in the U.S., but also in China. What we see in the U.S. is that also the tariff situation required a complete reshuffling of the operational flows of our large key customer, which definitely weakened investment and allowed them to -- or forced them to focus their activities on setting up their production chain that it works in this tariff situation. And also in China, we see that overall investment appetite is low and where deals are to be made, there's a strong push to local-for-local, so an intensifying competition for solar scribing. Overall, and that's now a continued situation that we see, we are operating in an environment with persistent volatility, geopolitical tensions and also fragile supply chains.

Looking at business development. In advanced packaging, our positioning, and we have mapped really every customer in the world that is active in the field, is working very well. We see more than 80% of customers choosing LPKF for their qualifications. We are also selling well into these qualification lines, but that's not yet the volume push we are now expecting for the future, but a very solid basis for this. We are seeing very clearly and also monitoring that many players definitely want a piece of that pie. So our IP situation and the work we put into this business in the past 10 years is now becoming very important to make sure we defend the market share we are targeting here. And as already mentioned, we know the full process chains. We know due to our contacts where also the future needs lie, we are using the opportunity to broaden our portfolio right now to become a strategically relevant partner in that field.

Looking at Rapid Prototyping, we had a positive development under expectations, but positive year-over-year. Strong North America demand, the U.S. government shutdown in Q4 dampened the order entry a bit in Q4, but the overall trend and our market positioning remains positive.

As mentioned, in Electronics, the tariffs delayed projects in the SMT market. We still could grow year-over-year with our cutting systems, but the over organic growth we clearly expect and which is driven by the fundamental shift away from mechanical milling to laser singulation, that was clearly dampened in '25 because a lot of production chains needed to reshuffle.

In Welding, automotive continues to be weak, and that was part of our planning. But our strategic shift to other application areas, consumer and medical, definitely worked well in '25. We are significantly above plan in that area, driven by a large bulk order. And we also were able to win a substantial volume order in the smart robotics field in '25 with further orders coming in '26, which gives us a solid foundation for this transformation we are in Welding.

Solar, we had a weak and significantly below-plan year in '25. Operational execution was perfect, but overall, the situation that the market is focusing on the shift to perovskites, but perovskites not yet being mature for volume ramp-up, that results in a phase of low investment demand. We consider the perspective for Solar very good with the transition to perovskites. So we definitely want to continue full force with our activities, but we had a '25, and we also expect a '26 where demand and revenue is significantly below historic figures. We are supporting all these customers with perovskites prototyping lines, of course, but that's a different revenue bracket than fitting a full high-volume factory.

Looking at operations. We launched our North Star program to structurally reduce cost. Peter will tell a little bit more about that, and we have already gone a good step along the way, but are continuing with a true structural change of LPKF to be ready for a world that is in constant volatility. We are targeting through these measures, but of course, also through the measures of realizing growth, specifically in advanced packaging, a double-digit EBIT margin for '28. And we are safeguarding our innovation investments. IP is becoming more and more important for us. We are focusing our markets. Definitely, the advanced packaging is set up the way we expect it to be set up, and we see a lot of future perspective in that market. There, we do a focus in areas where we do not see the progress, be it external factors or not that we expect, we focus stronger and also discontinue where we say this will not bring the payback in the time we expected it.

And as mentioned, syndicated loan agreement is redrafted, extended to '28, securing a solid financing for LPKF.

Next slide, please. Just a bit of an insight, advanced packaging field, you all know very well what we are doing with glass structuring with LIDE. We are still in a positioning phase, not due to us. Our customers confirm LPKF is ready, but due to the whole production chain needing to reach volume maturity, we see the ramp-ups coming, and I'm happy to report how that reflects in our figures when we look at Q1, Q2 results. We expect ramp-up phase '27, '28; high-volume '29, 2030. We have been positioning us with two additional highly differentiated process steps in that field to immediately broaden our footprint and gain strategic relevance, that's ABF singulation and glass bonding. And we are in a market assessment phase in co-packaged optics, the logical next step where the glass is used for data transmission between the individual chips in a package. Most of you will know that 3 years ago, we started already a partnership with a large U.S. semiconductor company. So we already have a track record and the right technologies for this field.

With that, I will hand over to Peter, who will walk you in more detail through the financial figures.

Hello, everybody. I want to give you a little bit more insights about our financial year 2025. And it shows a little -- really a diverse picture in our world. When we go to the next page.

As Klaus mentioned, that -- in the revenue, we had a challenging year. We are on our communicated guidelines on the lower end was still a raise towards Q4, but we are in the range. Klaus gave a little bit about -- feedback about this. And then later on, we showed a little bit more about our business units where the diverse picture comes from. The EBIT development is strongly hit by restructuring measures. We already mentioned that we started North Star -- and you see this on the lower end in employees where we -- on the one side, we are really reducing significant headcount, and these are special costs, restructuring costs, what we have here considered and therefore, this development of the profitability is really EUR 11 million of a hit towards previous year.

When you look at our adjusted EBIT margin, there we have an improvement towards previous year. Here, you can see that we already have in the North Star, in our cost reduction measures, we have already the input. And when you look at the development of the revenue that we are 6% below, but we could improve our adjusted EBIT that there you can see that we're really hard working on the so-called breakeven point to be profitable. And we really put cost out of this during the year, and I would say this is a good situation and a really good move we did, and therefore, we could improve our adjusted EBIT towards previous year.

When we're looking at our -- one of our really positive developments is, a lower element, is the free cash flow. Here, we must really say we did in our asset management, significant improvements and especially where we have a huge driver and I mentioned this in our DSO, where we really, on the one side, we're collecting much earlier the cash by the customers compared to last year, and we even made a significant improvement about collecting cash from so-called overdues receivables. There we did really a very good job, and therefore, we improved our cash -- free cash flow significant by 400%, even that we are still not growing towards previous year.

The orders in hand, and you see this when you look at the order income numbers before, we are still in a book-to-bill rate below 1, that shows and is reflected in our development in the order backlog and the significant Solar business where we have so-called big orders in there that shows that we really had a hit in our order backlog by minus 47% in -- towards previous year.

North Star, Klaus mentioned this, North Star is an overall profitability program we started. We see here already in the development of the employees that we are progressing here. We reduced by 6% our employees. There's still a way to go, but this is the first steps we are doing. And therefore, we have the right trend when we look at our revenue development today. Therefore, we made the first steps, and I'm really happy to show that we're developing in the right direction. Net cash follows the free cash flow, therefore.

Here we are about our working capital. Next slide. Here, working capital. It shows a little bit worse. First of all, I mean, the working capital follows in the structure, the revenue development to our business development. But we have two elements where we really made good progress on top of the development is our inventory and our trade receivable. I mentioned the trade receivable already this slide before, where we really improved our DSO by 40% by the significant measures. And our inventories, even in our inventory asset management, we improved despite the development of the revenue, we had -- and you see this in our DIO, we reduced by 10% towards previous year. Overall, it's a very positive development. Our working capital improved by 34% towards previous year. This is a good step and we want to keep this level now for the future because it was a really good approach in our asset management. Overall, very positive development compared to the previous years.

Next slide. Here, we see the diverse picture we mentioned. Klaus mentioned already in the beginning a little bit about the business development. But here, you can see really our diverse picture in our business units. When we look at Electronics. Electronics were short of the budget in our previous year, majorly hit by the tariff discussion about the investment, how the customer really looking at the investment, there was really a downside in our Electronic business. We're still pushing for the semi market. Therefore, the EBIT follows the reduction of the profitability a little bit more because we're still going -- investing in our semi business.

Second business unit Development. I must really say development really grows even in this challenging environment -- market environment we have with the tariffs. There was a growth. It's a very good story. And we had even measurements in here that we over-proportional growth the profitability in this business by -- from EUR 0.1 million to EUR 1.3 million. This was really a good story and a good push.

Welding. In Welding, Klaus mentioned this already, the growth of 30% towards previous year, majorly driven by an order out of the consumer electronics, must say we really executed this contract even very efficient. Therefore, you see the impact about the profitability, really the turnaround in the Welding business towards a positive business was really good improvement here and one of our good storylines we had in '25.

Now Solar. Solar, mentioned this is our downturn in this year -- last year because we had a significant hit, 1/3 of the business has gone. And here we go. When you really look at the number that we had a significant reduction of revenue, we still made a pretty good job that it's not a one-to-one extreme hit in profitability. There were certain cost reduction measures when done that the hit we received here is still in a range where I must say, we did a good job. Therefore, it's mainly driven from the diverse business. You see Solar is kicking us very hard this year.

So Klaus, I hand over to you towards the -- for growth.

Thank you very much, Peter. So basically, given the overall situation we see in our markets, we see headwinds in our, let's say, core business. The Iran situation we factored in, is definitely not helping. On the other hand, we see that the growth drivers, especially in the semiconductor field, but also in overall Electronics are intact. So we went to a conservative guidance of EUR 105 million to EUR 120 million, that's resulting in an adjusted EBIT of minus EUR 3 million to EUR 4.5 million. What do we see happening at the moment?

We clearly work strongly on both levers, the cost, but also the growth factors to work towards a double-digit EBIT in 2028. In the individual markets, what is our aspiration? What do we see? We see that the positioning in LIDE will now transfer into first ramp-ups. I'll tell you more about that when I am allowed to talk about Q1 and Q2 order entry, and we definitely take the strategic opportunity, expand the portfolio, use the deep market insight. This is the area where LPKF will be a strong and strategic player in the future.

SMT and our Rapid PCB Prototyping, yes, we see solid growth prospects, stronger in SMT because the shift from mechanical routing to laser depaneling is still having a long way to go and a lot of market to grab. Rapid PCB Prototyping has a dominating market share, we'll defend that, but we'll generate cash. We see good prospects there. Solar is a hit. Solar was for many years a solidly growing and nicely contributing business. It is going through a weak phase also in '26. And this is largely driven by the fact that new investments are not happening because people need to reshuffle their production chains due to the tariff situation and people expecting perovskites to be the new technology to invest in. So we stay positioned.

As you already saw in our '25 figures, we are managing the cost, despite significant movements in the revenue, but we definitely will support this business to the extent that we can grab the opportunities with perovskites when they become mature. But at least for '26, it will be a weak year for Solar, which definitely also reflects in the overall revenue of LPKF.

In Welding, yes, we need to completely restructure this. The old automotive-driven model is definitely no longer working. We are in the middle of executing that, and we will also consolidate our production sites. We will go from 4 to 3 production sites in this course, but we definitely see the growth perspective in other markets. We see the orders coming in, in other markets, which definitely help and build a foundation. The robotics example was one of those. And we will make this, again, a profitable contributor to LPKF with the foundation in automotive, but with the growth coming from new technologies, A-to-A in other markets as well, consumer, medical, also robotics.

And from the structural adjustments we are doing North Star, this is not just headcount reductions here and there. This is really setting up the company in a structure that a permanent situation of volatility in the macro environment we are operating in is something that LPKF is set up for and can absorb without short-term measures and, let's say, short-term cost reductions, but basically a model that is ready for outside challenges and volatility, but grabs the opportunities we have with the semicon back-end market being the dominating one. There, we will definitely stay the course and also continue what is necessary to play to win in that field.

Thank you. With that, I hand over to Bettina for the Q&A.

[Operator Instructions] And the first one comes from Apus Capital, Johannes Ries I assume.

I have a couple of questions. So first one of my preferred topics, I have no word about foldable screens. There was a pushout you explained last time that the old technology was still used. But I hear, for example, that the expectation that the Apple foldable phone will be a big success and maybe push -- increase the market by 2x. Therefore, it is an interesting market. Are you still on the way maybe to come in this market? And how is the actual situation?

Let me answer that immediately, Mr. Ries. We are definitely in this market or let's say, our customer, our partner is in that market and offering the glass technology there. But what we saw that beyond what was already invested, things are moving slower than expected. Of course, when I was in Korea, I asked them, look, guys, why is this -- why are you not getting more customer orders in?

Basically, people stay a bit more on the conservative side with the technology change than expected. The fundamental of glass being used in that field, we still see as clearly intact. Actually, I'm next week in Korea to also raise that topic again. So to answer your question, this is still an attractive business opportunity, but definitely progressing on the slow side.

Okay. Maybe on the more short-term interesting side, you have shown definitely interesting again, the chart about the different business areas in semiconductors could develop. But if I look at the market, the topic photonics is really heating up heavily. Could it be that this CPO topic could come a little bit earlier than you have on the chart?

So of course, we are monitoring and also participating in co-packaged optics since many years. What we see at the moment is that a lot of different architectures are evaluated, shown at conferences, sometimes even shown in customer presentations. But having an architecture where we say this has a high probability of winning and making it into high volume, that we don't see yet.

It's like VHS and Betamax. There's still a high risk that you bet your money on Betamax and then it's VHS and your investment doesn't pay off. So we are still in a market assessment phase. We are working with customers on a sampling basis, on a technology alignment basis. We do not see the point yet where we can with confidence say this technology will be a winner. This is where we invest in as LPKF. But we see that, that phase will be reached towards '27, and then we will definitely start the right activities to position ourselves with true volume offerings.

Okay. The second thing I missed in your reporting was a statement you have made in the past that you expect the LIDE business maybe leads you to a low triple-digit sales. Is it -- you only talk about the margin. Is it still your expectation? Or is maybe the expectation come a little bit down?

No, it's absolutely my expectation. You know we are very broadly networked in that market. First customers have now shared their volume demand profiles for the coming years. Some customers are still hashing it out. And what we see as numbers that are thrown on the table is absolutely in line with our previous market model, and that is also the number you were just mentioning.

Super. On perovskites -- how's your visibility? Is there a good chance that this business really could start to fly in 2027? Or is it hard to say?

My personal expectation is that it will not be ramped in '27, but in '28. Our clear goal is that we get high-volume orders for fitting the factories also already into our '27 revenue. We will have a slow year far below what we had in good years like '23, '24 and so on this year. And my -- I need my customers, my customers need me. And I will need to make very clear to them, look, guys, I can compensate maybe one very slow year like '26, even though it's in the big picture, of course, a big hit we take.

But for '27, my clear goal is to have high-volume orders in the revenue. And that's what we are working towards. And it, of course, also depends on the progress our customers are making in the technology development.

Very clear. Another area of Welding with the reorientation and rightsizing Welding, could -- is it possible with the new customer sectors like consumer, for example, that this business could return to the growth path, at least maybe slow growth in next year?

Well, next year, we will focus -- or this year, let's say, we focus on finishing the transformation. And we do not go in with very high revenue expectations, but with realistic ones. For '27, yes, absolutely. We will operate this business on a far superior cost structure. We will use synergies in our production footprint, which also helps here. And yes, we see that in the markets we are now targeting, orders are to be gotten, and we have the new technology out with [ ATA ]. So yes, our -- otherwise, we wouldn't do it. If we don't believe that this can be a growing and profitable business, we would discontinue. But I absolutely see that perspective. And the foundation of nice large high-tech orders in sectors like we had in '25 in the consumer field like we have now in '26 in robotics tells me, yes, this is a viable plan.

Very fast question, then I'll move out. On ARRALYZE, has the cost to downsize maybe to move out with your own activities or to reduce your own activities already included in the '25 figures or is more to come? And how far you already on the search for a partner?

So the costs for ARRALYZE are out now with Q1. So we started this activity, decided in Q4 and immediately went to execution. Execution is now finished with Q1. So the dominating part of the cost is out with end of Q1. We are in talks right now with an external partner who has an awesome network in the biotech field now, on the right partnership, and we have the clear goal to finish also this in the course of '26.

The next question comes from [ Tim Wunderlich ].

Can you hear me now?

We can hear you, hello.

Johannes already asked a lot of the questions I had on my mind as well. But I just wanted to get back to LIDE, and you made this interesting comment that you are going to -- will be able to tell us more about LIDE in Q1 and Q2 because there's some initial ramp going on. Could you just at least now today give us a quick introduction about what this is really about. Is it pilot production with some of the South Koreans. Is it -- what kind of volume could we see with these orders in Q1, Q2 when it comes to LIDE? And also for the full year, do you expect LIDE to show strong growth? And sorry, if you've spoken about this, my internet connection was down for a few minutes, so I may have missed something during your presentation.

Any time, so I have to watch Bettina's face now closely because already this morning, she scolded me, look, you're not allowed to give too many details. So what are we seeing?

Basically, '25, we were ready with end of Q1. We got confirmation from our customers, yes, your machine qualified, all great. But our customers took longer than they expected and already also planned, to really get the whole process chain qualified. So that held us down in '25. We had good orders, but still low 8-figure portfolio a machine here, a machine there, not what we really wanted to achieve.

What I now see for '26, and I'll be in Korea, actually, I'll fly on Sunday to confirm all these plans that now customers are saying, okay, we finally figured it out. Let's go into first investments for true production purposes, but this will not be, hey, here's a PO for 100 machines. This will be, okay, we buy a little bit of a higher amount, but still single-digit machines per customers to go into a true production flow, try it out, get the yields to where they should be. And there, I see a handful of customers being ready for that now. And now I need to be quiet. Otherwise, Bettina will tell me not to say it.

When we talk about Q1 and Q2 results, I will be able to also show you tangible numbers there. So this is what I'm seeing. How much we still get into '26 revenue or which ones will be top line '27, we are figuring that out, and we'll have a clearer picture on that by the middle of the year. But the overall picture in the market, I mean, you read what the OEMs are saying. They are all locked-in on glass now. And I see happening in '26, the first production start, but on a moderate volume, learn it and then go into the full investments in '27. I, of course, see, yes, we have a good positioning, but it's very rare that such a large market opens up in the laser field. So a lot of competitors want a piece of the pie, that's good because it cannot be a single source market if the people respect our IP and technology.

A lot of our energy and also strategic thinking now goes into whoever wants a piece of the pie and tries to take a shortcut by copying us, we will definitely get very active in making sure this doesn't happen that we -- the key strategic goal is transfer this in the ramp-up deals into our target share now and not have a cheap copycat basically steal the pie. This is what we will be doing. And we definitely will be able to show what's happening in the order entry. I will make my picture by middle of the year what will still be operationally in revenue in '26 for what will be backlog for '27. I hope that answers your question, Tim.

Maybe a quick follow-up. Did I understand you correctly, you're talking about a handful of customers. So we're going to see not just one customer ordering machines in Q1, Q2, but we're going to see several customers?

And regarding competition, I've also read a lot about this with Schmidt and Philoptics. And I think there's a bit of concern in the market that you are losing market share. So can you just confirm that this 80%, I think it was market share, at least when it comes to the customers in this early stage, can you confirm that you have kept this very high market share?

So we have the fair now when people buy equipment for qualifying the process. That's what we see. We have a very good market overview. And yes, other players are going in. If they go in with their own technology they developed, fair, that's good. It cannot be a single source market. Again, if it's competitors copying us, there, we will be very active in avoiding it. How do I see it?

We have a good overview also from our customers, how our machine performs, how competitive machines perform. My personal target is 70% market share. So I'm better than that in the positioning, but we need to be realistic. People want alternatives. The market is too big for single source. It will be slower if it would be single source. My goal is 70%. And I have to -- I need to be measured against, do I win that now in the ramp-up orders against what competition is offering or will be offering? From what I see right now, our machine is just superior in key KPIs that the customer wants. So I see nothing speaking against.

On the other hand, again, we are a German company. All the action is in Asia or the U.S. So there, we have a disadvantage. And this, we need to balance smartly.

Okay. Sorry, did I miss the answer regarding the number of customers that are...

Of course. So our total number of customers that bought from us is clearly two-figure. It's a lot of customers that bought individual machines. We are doing our internal assessment which customer we see as mature enough to really push the button on ordering first capacity expansions for true production. And there, I see a handful at the moment, but it will definitely not be one or two customers. It will be more.

So more than -- sorry for being -- for sticking with this point. So more than one or two customers that you're already going to see in the first half or that you expect to see in the first half of 2026?

Bettina told me this morning, "Klaus, you cannot be that specific." I ask for your patience when I report Q1 and Q2, then it's a done fact, and then I will be able to speak more specifically.

The next question comes from Bastian Brach.

So my question is also on the LIDE and especially on the expanding offering in singulation, you talked about a lot and maybe co-packaged optics in the future. What is your first feedback from customers, especially your existing customers who also ordered LIDE products? And do you see the singulation ramp-up in parallel to the expected LIDE ramp-up? Or is it more like a little bit delayed or further in the future?

So for the singulation, that's the ABF singulation, this was actually a customer pull. Our customers, we sometimes work with them for more than 5 years. They are very open where they stand and where their pain points are. And they specifically asked, for example, in ABF depaneling, look, we have a pain point. We need a mass production process for this. Are you able to do it? So there, of course, now with the sampling that is running, we create very high interest because the customer was asking, we need solutions for this process step, what can you do for us?

For the glass bonding, that is -- so the ABF depaneling is parallel to the LIDE, maybe with a couple of quarters delay because people have figured out a workaround for this ABF singulation, which they don't want, but they don't want to wait with ramp until they have the final process for that, but it will be a slight delay. That's basically the same production chain where LIDE goes in. The glass welding also creates high interest, but that's one generation further in the architecture, that I would see with a certain delay and not fully parallel to the LIDE ramp-ups. Does that answer your question?

The next question comes from Malte Schaumann.

First question is also on the perovskites side, but how many customers -- tangible customers are you speaking about perovskites technology?

So I see two very large customers that really put very sizable investments into getting that technology to high-volume maturity. One customer in the U.S., one customer in China. And a lot, a handful of smaller customers that are investing in this technology, but I would expect them with a certain delay. They are more in the follower bracket and not in the "I push ahead and want to be first-to-market" bracket.

And do you see the large customers having or following kind of a similar time frame for the introduction of the technology?

I need to be careful now because it's a key account business, and I'm bound to confidentiality. I see both customers having the same ambitions in terms of when do we want to ramp as soon as possible. I see one customer clearly ahead in technology. So my personal bet is that he will be the time-to-market winner. And please don't ask about the customer.

Maybe a comment on competition. How do you see, especially in the Asian markets, regional competition?

So in Asia, it's brutal. There are a lot of companies who basically say, "Hey, I can do that. And of course, they want to buy getting into that market. We are long established for decades. Sometimes they put the equipment to the customer just for free, just to somehow get in. Our advantage is that none of them has a proven track record. Basically, you buy the PowerPoint. The disadvantage is they are brutally aggressive in pricing, and you know there is a political preference in local-for-local in China. And that is to be taken very serious. That's why we did the Allegro ESSENTIAL, to be price and cost competitive. And that is also why we need to very clearly market our KPIs that directly transfer into money for the customer, throughput dead zone.

Otherwise, the locals will do everything to get their share. In the West, I feel very comfortable with the competitive situation. I don't see any viable competitor in the Western countries who is close to our offering.

Okay. Then on welding robotics, can you quantify what the market potential might be in 2 to 3 years? Do you have some visibility, the opportunity?

Yes, I can, but I am skeptical about hockey sticks. You can take usual projections in growth for AI-driven robotics, the numbers are public and basically then scale our business exposure. For the moment, what we have is there's a credible frontrunner in that field, and he is now doing his ramp-up of production with our equipment. We are in the process flow. If this guy realizes his ambitions and LPKF is a chosen supplier, yes, it could reach a very attractive volume, which is definitely in the 8 figures. But at the moment, again, focus is here lean and mean cost structures for Welding, maximum synergies, set it up for smaller ambitions than in the heyday of automotive and then take it from there.

Thank you. So I think we have time for two more questions in the chat that reached us.

The first one refers to the Electronics segment. Could you say something more on expected order intake in Q1 and Q2 on Electronics? You already see an uptick in revenues in Electronics in Q4. What part of the financial guidance for '26 is driven by Electronics revenue? You might want to be careful again, Klaus, in answering this.

Bettina, you already told me. So how do I answer? I see the fundamental growth driver in Electronics, and that is specifically our laser depaneling very intact. I see that the large-scale businesses, which we were expecting in '25 and which then got delayed due to the tariff mess that they are coming and that I see them in the order entry.

I clearly expect growth out of this area relative to '25, and we will have headwinds again this time from the Iran situation, where the impact is not yet fully quantifiable at the moment. So please let me report my Q1 order entry figures for this sector when I have them, and Bettina will allow me to talk about them. But this is definitely something where I say overall setup, I'm bullish, but I need to be cautious about the headwinds we're going to have by whatever is now the fallout of this Iran situation.

And the next question refers to the Solar segment. What is the expected path for Solar over the quarters in 2026? Revenue in Q4 was very low.

Well, first and foremost, this is a large key account business. Revenue over quarters, you usually have 1 or 2 very strong quarters where you ship the large machines and then you can have a weak quarter. This is not a portfolio business where you can derive anything useful out of the sales for 1 quarter. We went in with a realistic and not too high revenue plan for '26 for Solar. So we are not hoping for, oh, a big order will come out of the blue. We are realistic here.

And we absolutely see as of right now that they are in even slightly above plan, but we still -- we are not fully operating out of backlog yet. So a large part, we are already operating out of backlog against plan for Solar. We need still a couple of purchase orders for this year, and this is what we are strongly monitoring, but which we see progressing. The tenders have been opened. So it's on track, but not done yet.

Okay. So we have reached the end of this call, and there are no further questions as far as I can see. So I would like to thank you all very much for joining this call and the next regular earnings call will take place in only 4 weeks on April 30 at the release of our Q1 report. Thank you very much, and goodbye.

Thank you, everybody. Goodbye.