Comet Holding AG (COTN) Earnings Call Transcript & Summary

[Presentation] So the last time we saw each other here, roughly 12 months ago was nearly a blue sky scenario for the semiconductor industry, but also for Comet. Since then, I'd say 2023 has not only put us but the whole semiconductor industry to the test. So welcome, ladies and gentlemen, either here in the room or on the screen following the webcast. Thank you for joining us. A special welcome to the two boys we have in the audience. I probably know that it's [indiscernible], the future rate today. So we have [ Timo ] and [ Jan ] in the audience also following our presentation. I'm sure you want to know more about Synertia. So you've seen some introduction here regarding Synertia, but you will hear a lot more from both our CEO, Stephan Haferl; as well as from our Division President, PCT, Joeri Durinckx. So the program, as follows, will have an hour with CEO and CFO after a short break. Then you will see the three division presidents presenting on the progress in their divisions. You will, after that, have ample time for a discussion for a Q&A, and we invite you after that, unfortunately, only those here in the room and not on the webcast, for [indiscernible] outside, where you can continue the discussion with our management. As usual, I also need to point you to this disclaimer. So we will make any statements today, so you can read it by yourself, just cautious with what is said today, that's not predicting exactly the future. With that, it is my pleasure to hand over to our CEO, Stephan Haferl. Stephan, please.

Thank you, Ulrich. Thank you. And also a very warm welcome from my side today, ladies and gentlemen, whether you're here or on the webcast. I thank you very much for being here today with us, spending time with us. I'd like to start briefly by introducing my colleagues who will also be on the speaker's podium today. So starting with our ad interim CFO, Nicola Rotondo, get up. I can't see you, you're not that tall. Joeri Durinckx, President of PCT; Dionys van de Ven, President of IXS; and Michael Berger, President of IXM. So they will join me on the podium later on, and especially as Ulrich mentioned before, you'll hear quite a lot about Synertia from Joeri later on. Now it seems to be the case just from experience that it is darkest before the dawn, so 2023 has been a very difficult year for us, not only for us but the entire industry. Now not to divert from this today, we focus today on the long-term outlook. And indeed, we see a very wide and long runway ahead. So growth opportunities are ahead. I will speak about four things today. Filling out 3 quarters of an hour. The agenda covers Comet at a glance. So for all of you here who are not too familiar with Comet, I'll give you a nutshell introduction to Comet. Followed by our market trends and developments, then a glance at our strategy, and then I will close with some remarks on the outlook and our targets. So let's get started for real. Now, Comet in a nutshell is a group highly focused on two technologies: plasma control or RF power and X-ray technology, X-ray inspection. And we're fully committed to enable most and foremost the semiconductor industry. We operate and go to market with three divisions, so PCT, plasma control; IXS, X-Ray Systems; and IXM, X-ray modules. The three divisions serve four principle end markets, however, with a very clear focus, and I will repeat that on and on during the day on the semiconductor and electronics industry. PCT is a leader in RF power solutions, with customers primarily in the front end, so the beginning of the semiconductor industry. IXS is a leader for high-end X-ray and CT system solutions, enabling, in principle, nondestructive testing in various industries, focus semiconductor coming from aerospace automotive, and also kind of all sorts of lab applications. And so it is from R&D to production, right? And IXM is a leader for high-end X-ray sources for nondestructive testing of parts in industries such as again, semiconductors, electronics, automotive, aerospace as well as security inspection. Important, all three divisions have their main focus on the semiconductor industry, which is, by far, the group's main market in terms of revenue today but also in the future. So we cover, with our three divisions, the entire value chain for the semi industry and are positioned very clearly for growth. PCT, as mentioned before in the front end, where our key strategic move is forward integration, moving up the vertical, starting from the vacant capacity to the matchbox, and now with Synertia, the full RF subassembly. Both X-ray divisions focus on PCBA inspection, so printed circuit boards in the back end of the industry. And in the middle of the whole value chain, we address the emerging opportunities of advanced packaging. I'll talk a little bit more about that later on. So with IXS on system level, with IXM on modules level, both independently as well as collaboratively. This presence along the entire value chain enables Comet to address some of the same customers with different technologies, benefiting from our good reputation that has been built up over the past 75 years. While both X-ray divisions continue to increase the semiconductor share of revenue, they continue, obviously, to profit from the legacy markets such as automotive, aerospace and security. This will not change. And especially, the automotive space and the growth of electric vehicles is a market where all divisions have a very interesting stake. So firstly, the semiconductor content is rapidly increasing in such cars to the benefit of PCT. Secondly, fail safe electronics is bringing business to both X-ray divisions. And thirdly, batteries are offering great business opportunities as well to the X-ray divisions. Now you may ask, but why do our customers have a steadily increasing demand for our products. Now for decades, chips scaled according to Moore's Law. You'll hear a lot about Moore's Law today. And Moore's Law is just about linearly, on the surface, shrinking devices and interconnects. This approach is, however, increasingly, as you get smaller, and smaller, and smaller, facing a lot of challenges. And so over the past decade, new topologies and architectures to continue more scaling law into the third dimension have been created, improving performance and power consumption per unit area of silicon as well as reducing costs per device. Now this integrated scaling approach to performance, power, area as well as cost is the current paradigm, and has resulted in micro processes and systems on chip with vastly superior performance, but all requiring more plasma, which is extremely good for us. In addition, this approach also requires new systems for quality testing to enhance product and process yields. This is the point where really superb opportunities arise, open up for both X-ray divisions. And the reason why we are also extremely happy to have all three divisions under one roof that target the same high-growth industry. Now some figures. Today, Comet generates around 65% of net sales in the division PCT, followed by IXS with 22%, and IXM with 13%. So around about 2/3 from PCT, and 1/3 from the X-ray divisions. All divisions command strong market positions. Plasma control technologies is a clear #1, with vacant capacitors and impedance matching networks, or in short, matchboxes. And in a vastly more fragmented market, IXS is among the top three in all markets served, while IXM occupies an undisputed position as #1 in metal ceramic X-ray tubes. To be close to our customers is very important in our industry. Therefore, we have a rather large global presence for the size of the company and generate most of our sales outside of Switzerland, even outside Europe, despite our headquarter in Switzerland and strong European footprint. Now the most important markets for the semiconductor and electronics industry are Asia and the U.S. with about 50% and 38% of group sales, respectively. Now the large contribution from Asia is they are not only due to Asian customers, but also to Western customers who have expanded their local presence in recent years. So in a nutshell, this is the Comet Group, as we stand here today. So let's take a look at our markets, trends and developments, with a focus on semiconductors only. Now why is Comet benefiting from today's trends in technology? Now, the current changes in technology requires, as I mentioned before, more plasma processing and more X-ray inspection than ever before. 3D and nano semi structures are acquiring better and more plasma processing, be it on the etch side or on the deposition side. Heterogeneous integration or advanced packaging, or in short, AP sets limitations to conventional inspection requiring X-ray CT to develop and control both processes and products. So basically, as you go 3D, go out of the plane, there are limitations to do optical inspection. You can't see inside. So what do you do? Well, use CT, use X-ray. And then finally, the electrification of our society, as exemplified with EVs, increases the need for failsafe electronics industrial demand for X-ray inspection. So in simple terms, Comet is sort of in the sweet spot with its technologies for enabling the digitization and electrification of our society. Now, digitization of society encompasses the widespread adoption of digital technologies and data-driven practices, affecting how businesses operate, how we, as people live and interact with technology, or how governments and organizations provide services. Many applications, from AI to the Internet of Things, have one thing in common, and that is an outrageous appetite and need for silicon, resulting in a projected growth in semiconductor revenues from $574 billion in 2022 to the much talked about and fabulous $1 trillion in 2030. Now despite the correction, despite the dip that we are going through in 2023. As part of this growth story from humble beginnings in medical, starting in 1948, we expect to grow with our customers our semi-related net sales to more than 80% of total group sales in the next 3 to 5 years. Obviously, the lion share of this will come from PCT. However, both X-ray divisions will significantly increase their sales into the semi market. Now why are we so confident about this? Well, confidence comes, among other things, from the number of fabs or the factories where they churn out all the semiconductors that are under construction. Now between '22 and '24, 82 new fabs will have been built and will come online or are already online, kind of underlining, putting an exclamation mark -- exclamation sign to the industry's confidence in forecast for strong demand growth for microchips. Now further growth will also continue until 2030 with a further estimated 100 new fabs that will be built. And with AI, becoming the ultimate productivity tool for probably generations to come, this may even be conservative. Now in the short term, however, the ongoing market correction has turned the semi industry pretty much on its head. And this mentioned build-out has been slowed, impacting the order intake throughout the value chain as we have seen this year. Now clearly, with more favorable market conditions and improved balance of supply and demand for semiconductors in the not-too-distant future, a significant increase in incoming orders for equipment manufacturers, and therefore, also Comet is anticipated. Now for investments into wafer manufacturing equipment. So our market, this means for '23, a significant decline, expected to be around 12% and even higher if lithography is excluded. Return to growth is expected in '24 as the increasing number of fabs coming online in '24, and then also the ones that have been slowed and postponed in '25 will have to be equipped, equipped, among other things, with products from Comet. Now while the estimates vary widely, market observers agree that wafer fab equipment spend will increase significantly in the coming years. And the nano growth rate of 9% is forecast for the period from '23 to '27. So the foundation for future growth for all divisions, but especially for PCT products, has therefore been laid. So really good business ahead, and that is the reason why we are very confident. Also, our X-ray divisions have an equally good foundation with their focus on the semi market and especially advanced packaging of silicon devices. Advanced packaging offers several advantages over traditional packaging methods, especially a semiconductor devices become more complex and demand higher performance. Between '22 and '27, the AP market is forecast to grow by around 11% annually. So even faster than the wafer fab equipment market. Growth is driven by the need for further miniaturization. So think about computing on the edge, has to be very, very small, and also improved performance and cost efficiency. These needs make advanced packaging a major enabler for further performance gains in high-performance computing, artificial intelligence, or in general, just smart devices. Market Intelligence says that AP in -- or AP revenue will thereby surpass revenues from traditional packaging technologies in the next 5 years. What makes AP or advanced packaging highly attractive for X-ray inspection. Well, optical inspection, as I mentioned before, has been a very powerful tool over the past many, many, many decades and used for quality assurance. And this method, as mentioned, is sufficiently fast and powerful. However, it does not provide 3-dimensional insights. And as advanced packaging, sort of high definition, is using the third dimension, you stack those elements. There is no way that you can see inside in between the different layers that you stack. So X-ray inspection will become a complementary method that provides actionable information for IC process development and process monitoring. Not to forget, one goal of our customers is to speed up time to market and increase yield. And inspection plays a very crucial role, especially within advanced packages where there is more complexity and inspections are very, very much more challenging. Now given PCT's existing exposure to many of the market leaders in advanced packaging, such as TSMC or Samsung or Intel, access to these customers, through previous contracts by PCT is vastly facilitated. And therefore, again, it is [ vast sense ] that we have all the three divisions under one roof. Now let me not leave out developments causing uncertainty in our markets. And with the ongoing trade conflict between the U.S. and China, but also armed conflicts, a rethinking has taking place in politics. Semiconductors are being considered as highly strategic, rightly so. And therefore, governments in the U.S., China, the EU, and other countries have launched regulations that support programs to promote regional development of semiconductor production and expertise. What can result from this, clearly, is the creation of overcapacity, something that is not very much liked, and usually is the start of a downturn cycle, or in general, a misallocation of resources. In addition, new regulations are constantly being created or modified. So this development creates clearly uncertainties in the entire semi ecosystem. And probably, one of the most globalized industries of all. For us as well as for our suppliers and customers and their customers, this means to constantly think in scenarios and to prepare for possible shifts in the global semiconductor market. So far, we have coped very well with the effects of the different trade restrictions. It came as a shock, October last year, and caused quite a phase of confusion and also lowered revenues towards the end of last year. Of course, despite the fact that we have been coping well, we must keep an eye on the developments and deal with them proactively. However, despite all the uncertainties, it should be noted that semiconductor production is in a structural growth phase. Investments around the globe are increasing as the U.S. and China, but also Europe are making funding available for domestic semiconductor production, design and research initiatives to localize the chip value chain, which is considered as so strategic. So accordingly, we see some short-term disruptions, but expect the opportunities that come from that in our sector to outweigh the challenges for Comet. So to summarize, Comet is well positioned in markets with a highly attractive growth profile. Our served available market, so on the right side, is expected to grow by 83% from '22 to '26, compared with the total available markets growth on the left side of 35%. Now a growing market penetration of Synertia, and the focus of IXS and IXM on the semiconductor market are opening new revenue streams for Comet. These, obviously, all the ingredients of our success story. So with all that said, what's the strategy that we pursue to tap into this huge potential offered by our target markets. Now, before I get into this, what is our goal? What do we want to achieve? Simply put, we want to become the undisputed market leaders, addressing our full potential in all verticals that we serve. So for PCT, the full plasma excitation and control chain. For IXS, CT systems, the best ones you can have in order to address this emerging opportunity of advanced packaging inspection. And for IXM, the full X-ray source chain from X-ray tubes to modules with a special focus on semiconductors. So to get into the strategy, let's back up to 2019. Now after a strategic review in 2019, we decided to pivot and focus Comet on the semiconductor industry. An industry, again, offering much higher growth rates and profitability than our traditional markets like aerospace and automotive. Well, we defined measures, driving us forward, powered our medium-term goals for 2025. And bundle them into our Boost strategy program. Now with today's Capital Market Day, we can proudly point to many achievements in the program, amongst others, the launch last year of the RF power platform, Synertia, or the successful divestment of the loss-making eBeam division, just to name a few. We have achieved a large part of our goals in a market environment that was very challenging during the last years, especially also this year. Now based on these achievements, taking into account the ongoing market correction, based on our expectations for the 2023 financial year, and lastly, our midterm plans and the market trends that I just talked about, we communicated today our adjusted midterm targets. The new targets have a time horizon until the peak of the next semi cycle, which is estimated to be around 2027. But because the overall economic development and its impact on our industry is rather unpredictable, we refrain from giving a precise year for the next peak of the cycle. We are, however, very, very confident to achieve at the next peak net sales of CHF 800 million to CHF 900 million, at an EBITDA margin of 25 % to -- bless you, 25% to 30%, and a return on capital employed of 30% to 35%. Now this reflects a slight increase of the midpoint of sales, EBITDA margin and ROCE compared to our previous midterm targets. So the targets are set, but how will we get there? Now first and foremost, we reaffirm our strategy and focus on three main elements in the implementation. These are growth, efficiency and culture. To accelerate and achieve aggressive growth going forward, we further expand our product portfolio with market-leading products to win our corresponding verticals in all three divisions. Or in other words, we very much invest into R&D and customer intimacy so that the R&D dollars are well invested. Not less important are efficiency gains at all levels of the organization with special attention on our customer focus. Nothing worse than spending a lot of money in R&D for products that customers don't ask for. So how do you know what customers need? You have to be very, very close to them. And that means you have to be out there in the world where the customers sit. And finally, we further promote a value-oriented corporate culture that reflects our three values of challenge and empower, customer focus and trustful collaborations. Now let me focus at individual elements of our strategy, starting with growth. Our growth strategy is, as I mentioned, aimed at expanding our share of wallet in the semiconductor industry with new leading products. In PCT, we focus on forward integration with Synertia and the generation 3 match. We are driving market penetration with the major players in the industry, but also with regional champions in other areas such as in Asia. Another dimension is -- and that is a very important strategic move for us is to reduce dependencies by broadening our customer base. Regional reach as well as market segments served. Specifically, we want to reduce our dependency on the memory market by gaining a higher share in the logic market. We want to become more balanced and thus perform much better in a downturn, and there will be future downturns again. The two X-ray divisions have common goals, expand the product portfolio for the semiconductor industry, penetrate the market with these products, while on the other hand, serving opportunistically the traditional markets, so aerospace, automotive, as well as security for IXM. For IXS, it is very important to focus on more profitable growth than in the past. And the semi market allows for this, especially advanced packaging where the value add of X-ray inspection is much, much, much higher than, for instance, for castings in the car industry. For IXM, forward integration is key into the semiconductor chain and will be achieved with products offering better resolutions for the very demanding requirements of the semi industry. So the top priority for the entire group is growth in the semi market with a technologically leading portfolio close to the customer. Now diving deeper into the critical success factors for growth, the central driver for the group has been the launch of PCT's Synertia platform, entering the market for high-frequency generators, a market worth approximately $1 billion at this point. Together, with our market-leading positions in vacant capacitors and matchboxes, Comet has become the only company in the industry that can deliver out of one hand, in-house developed and manufactured all three components that form an RF subassembly. Now for our customers, this means that they can pretty much source all components for the generation and control of high-frequency power out of one hand from a single source. In other words, customers can rely on RF subsystems with perfectly tuned components. You will hear a lot more in a bit, in Joeri's account on the PCT division. Now while Synertia is a very important growth driver, going forward, we should not forget the matchbox business, which is today, the backbone, basically, of PCT, but to a large extent, also Comet, and truly a stepping stone for PCT's forward integration strategy. Now with a very dynamic growth forecast, some years ago, we made a decision, around 2019 to move our high-volume matchbox production from San Jose, California into a leased production space in Penang, Malaysia. This allowed the PCT to serve more efficiently its customers while benefiting from best cost manufacturing in Malaysia. The initial site launched actually its production in 2020. And after reaching full capacity utilization at the end of '22, capacity was doubled by leasing yet another floor in the building where we are. Now with the good experience made, we recently decided to plan a further expansion in Penang to meet the projected growth in demand over the next few years. Now we recently acquired a plot of land in Penang and entered the planning phase for our own new building. We are thereby not only examining further expansion for the assembly of matchboxes, but also a second site to produce vacant capacitors as a business continuity plan. Very important, in addition, looking forward and towards 2030, we are planning Penang to be our main hub in Asia, a location for business activities and shared services for all three divisions. Now growth is one element of the Comet investment plan. Another is efficiency and profitability. And 2023, has shown we are not yet able to maintain profitability at an acceptable level in a downturn. Strengthening Penang and expanding in best cost regions is one, but not the only way to transform Comet into a more resilient, better performing and scalable organization. In 2023, various measures to improve our efficiency and profitability were taken, probably too late. So besides expanding Penang, we closed one site in the U.S., and four consolidated locations in San Jose into one to improve our structural costs. Workforce adaptations were implemented to adapt for the lower demand as well as further lean activities were both initiated and implemented. 2023 has also shown that additional efforts will have to be taken to improve our resiliency such as, what I mentioned before, expanding our share in the logic market or streamlining our operational model and further pushing the digital transformation of the company. All these measures obviously require respect for the most valuable asset, our people. Attracting, retaining and managing talent is essential to our, to Comet's success, as all the technical aspects of which you will certainly hear much more later on. We must, therefore, not only digitize the company but create a digital work culture. Create and nurture our own talent pool and further foster a learning culture to keep up to date with the latest knowledge. So our Boost strategy framework focuses on growth, efficiency and culture, but we want to do this in a responsible and sustainable manner. And therefore, a final element of our strategy is sustainability. The targets we have to find in the short to medium term, and they deal primarily with the use of electricity from renewable sources. By 2025, we want to achieve 80% electricity from renewables, and by 2030, 100%. These targets are just the first steps on the way to a Net Zero world by 2050 at the latest, but preferably much earlier. Now with the eco design initiative, so creating products that consume less power and the planned commitment to the science-based targets initiative, we will implement tools that will help us to define and implement measures to achieve our climate-related goals. All in all, we see ourselves well on track to making sustainability an integral part of our business to tackle the large challenges of Net Zero ahead of us. Although we focus and talk very much about climate and climate targets in our sustainability program, there are all other aspects of ESG, and they are not left out. We believe we are already well positioned in the social as well as the governance dimension, having launched various programs in the last few years. And thereby, let me especially point out our focus on occupational health and safety, which are firmly anchored in the organization. So in summary, I can say that we are continuing to implement the focused strategy defined in 2019 with all our strength and have already numerous successes and great results. We believe we are on the right track, and we understand that adjustments must and will be further made to become stronger, more resilient and also more successful in every possible market environment, also downturns. Now this brings me to the outlook and our targets. Now market indicators, and we live and die by market indicators in many ways, suggests that the semiconductor market has recently bottomed out. And is resuming its growth path, although from now, currently at a very modest pace. As shown in the graph, inventories, in this example, NAND memory have been reduced along the entire value chain. And as a result, demand for semiconductor devices has slightly risen again on a month-to-month basis. Another sign is the forecast on the supply and oversupply of NAND devices in H1 '24, which in previous cycles, has proven to be a good indicator of a turnaround in the market, and therefore, also for investments in new equipment, which is where the incoming orders come to us. Forecasts assume that NAND components will change from oversupply to undersupply in the first half of next year. And for DRAM chips, the other sort of memory, reversal is expected 1 or 2 quarters earlier, which means that our business will certainly improve over the course of '24. So with all said so far this morning, we firmly believe in our growth story, we published our forecast for 2023 in the Q3 trading update a few weeks ago. Now given the unexpected strength and duration of the ongoing correction, 2023 is a transitional year. The medium-term targets for, 2025, communicated in 2019 are being adjusted, as I mentioned earlier today, slightly upwards and postponed. At the peak of the next semi cycle, again, estimated to be around 2027. We expect net sales of CHF 800 million to CHF 900 million, an EBITDA of 25% to 30%, and a ROCE of 30% to 35%. Again, due to all the macroeconomic uncertainties, we've refrained from indicating when the peak exactly is going to be, 2027 may be a good bet. Beyond this time horizon, we want to continue our growth strategy and develop Comet into a company that will generate net sales of over CHF 1 billion before the end of this decade. The instruments, the organization are in place and the implementation of the existing strategy, with additional measures, is key to achieving this goal, and we are working on that. So with this, I will close my part of the presentation or my part of this morning. And hand over to my CFO, Nicola Rotondo. Thank you very much for your patience for my long presentation, and I believe we will take Q&A later on. Thank you. Nicola, please.

So good morning to all also from my side. Happy to be here and to guide you through the financials. But before that, let me share some personal considerations. I started at Comet in 2010. So just a couple of years later than you Stephan. And since then, actually, we have seen many things. Most of them went well, some of them did not. However, if you look at from a long-term perspective, we can say that the evolution was quite impressive when it comes to sales, profit, returns and share price development. Now does this make us happy? First reaction would be, yes, of course. Second reaction is, yes, but, and what I mean with that is that we have not yet found the right setup to manage those recurring semi downturns. And so that means that besides R&D, business development, market penetration, we want to further deepen operational excellence to become more robust and more resilient to manage those recurring downturns. So having said that, let's go into the finance. So Stephan just talked about those targets. I'm not going to repeat them word by word. But basically, what this shows is, on one hand, we have adjusted them a bit upwards, and it shows our commitment still to the strategic goals that we did communicate back in 2019. And what is important for me to say, to repeat what Stephan said, basically, we want to reach those targets at the peak of the next cycle. So we do not stick to a specific year. And basically, he based on the underlying assumptions that you see on the chart. So this is our commitment. At the end of -- at the peak of the cycle. Now with that, let's go and see the making of those targets. Now on this chart, you can see nicely the evolution of our top line since the last 10 years. And from 2012 to 2017, you see that we increased our share in semi that happened basically by PCT, mainly going up the value chain, so from capacitive into the matchbox business. And that was the main driver for that steep increase that you see in that period. After that, between 2017 and 2022, we further increased our share, and that was driven by the strategy, focus on semi that we did announce back in 2019. And so since then, also for IXM and IXS, those markets became more and more relevant. What's next to come? PCT, of course, they will continue to grow according market trends. And in addition, with Synertia, they are going further up the value chain. And also for IXM and IXS, they are going to increase the share in those markets. And at the end, we are targeting a value above 80% in those focus markets. So in summary, what you see here is really the transformation of the company towards high volume and very profitable markets that we did achieve based on our traditional core competencies, so I think it was really a nice transformation that we have seen in the last 10 years, and that will continue. So what does that mean for profit and return? So how did this sales increase? How was that reflected in our profit and returns? If you look at the EBITDA margin, you see that from 2017, actually, the curve is getting steeper. Why that? That is basically driven by the increase of those markets being semi and electronics, which have, by definition, the higher profits compared to the traditional markets. Now while it is good to look at EBITDA margin at the end of the day what counts is that we are generating high and sustainable returns. Those we are focusing on the KPI ROCE, which is also part of the long-term incentive plan of our top management. And what you see here is that back in 2012, actually, we did before very badly, not even covering our cost of capital of 9%, and after that, started to increase, started to increase, to achieve in 2022 a value that is above the top quartile of our peer companies. And I think that was quite an impressive evolution when it comes to return. And our aim is to further increase that value, to further increase ROCE and with the target that we have set we are convinced to generate high and sustainable returns. In fact, covering the cost of capital almost 4x. Now how is the divisional contribution related to those targets that we have seen. We have we, of course, a detailed bottom-up planning on one hand, compare that also with the overall market trends that are relevant for our company. And the outcome is what you see here. So when it comes to sales, the shares of the divisions in the top line actually will not change dramatically compared to 2022. That means, in other words, that the divisions are assumed to grow at a similar pace during this next period. When it comes to EBITDA and return, also there, basically, the picture is not going to change fundamentally compared to today. Of course, I accept they're ongoing, of course, to recover from the rather low values that they have -- sorry for my voice, for the rather low values that they have in '22 and with that also give a significant contribution to the overall increase. Now while the presidents are going to talk in detail about the drivers that they have in their divisions to increase profit, what you see here on this waterfall chart is the consolidated view for the group. And let me start with the adjusted number of the year 2022. As you remember, we had quite a high cost related to the trial expenses in '22. If we are normalizing this, we start with 21.8%. So that's the starting point of the margin increase. So that's the starting point. And the main increase, of course, is volume driven, that is going to happen. And in that volume, of course, the main increase coming from PCT having a share of 60%, 70% of the top line. As in addition to that, we are going to have this time in the next upturn, we are going to benefit from our facility in Malaysia in the full extent for matchbox production, so that will also yield an improvement compared to historical values. And in addition to that, in the divisions, the ongoing lean activities that they have will also further boost the EBITDA margin. On the other hand, as a tech company, we want to further invest in product development, basically to capitalize on all the opportunities, at least on some of those opportunities that Stephan just talked about and that the divisions are going to talk about. Next to that, and also that was mentioned, market development is key, right? So we want to be close to our customers because that is really key to bring our new developed products then into the market. And so all in all, what we can say is that, yes, the increase in EBITDA margin looks challenging, on one hand. On the other hand, based on the bottom-up plan that we did, we are feeling quite comfortable to really achieve those improvements that we have listed here. Now coming to some further KPIs, which we do not explicitly guide for, but are an integral part of our financial model. So what we see here are our two main investment areas actually. So it's CapEx, and it is R&D, or in other words, our capital allocation. Let's start with CapEx. CapEx, we are anticipating a bit an elevated level compared to historical values. And that is driven by the fact that besides the recurring capacity enhancement and replacement spends that we are going to have, we are going to add the facility and the related equipment that we are going to need for Penang. So that will be a major area of spend in the next coming years. And that we need a new building is actually a very good news. I remember back in 2019, when we, on one hand, announced the divestment of eBeam, and then had basically the building expansion in Flamatt. We were asked, what will be your capacity utilization of that building in 2025. Then we said, likely we are going to have still idle space. The fact that we are now going to build a building in Flamatt basically means that we are going to run out of space in Flamatt earlier than anticipated. So that's basically the good news. The other good story here is that we are adding, for the first time, substantial production capacity outside of Switzerland. And this is helping us also in rebalancing a bit our currency exposure. Another main investment area in the next coming years will be our ERP upgrade. And Stephan touched a bit related to the buzzword, digital transformation, digital agenda. To achieve that, basically, a new ERP is the cornerstone of that. And we are convinced that we can really leverage there, a lot of potential and further automizing all our back office processes that we have across all locations. You have to imagine that our current ERP, we did introduce back in 2009, '10, Stephan, we were part of that exercise, right? And that is still in place and does not have all this automation features that are now available. So with that move, we really believe to increase efficiency offer in all back-office areas. Let's now go to R&D. There. Basically, we are committed to fund R&D at the same level as we did today. Historically, in terms of ratio to sales. That is really our commitment. We are a technology company that is basically our core and that we want to keep. That means our product portfolio is going to continuously change, of course. And if we look at some statistics that we have done, we can say that within 5 years, roughly 50% of our top line is generated by new products. And I think, this really shows our technological leadership in that field. Now coming to some balance sheet KPIs. And before even talking about those, basically, let me say that right way, they are in a very good shape, really good shape. I mean if you look at the equity ratio, we never went below 50%. And so that is signaling strength and solidity of the company. Next to that, cash, also that is at very good levels. And as you know, cash is the oxygen that you need to act in an independent way regardless in which market situation you are. And also at a very good level is the ratio, net debt to EBITDA, very low, historically very low. And also going forward, we are going to keep that quite low. And now add to this, our revolving credit facility that we have, and you can see that we have really ample access to cash. So to summarize here, we have a very strong balance sheet, implying a rather low risk profile. And this, we want to keep going forward. Then some further relevant KPIs that are cash-related KPIs, mainly. We also have a focus on those. They did reach in 2022, I would say, good levels, and they are going to recover as soon as the semi upturn will take them again. That's basically as an introductory statement. So net working capital ratio, we want to also going forward, a target range of roughly 20%, I think. We believe this is a good level to be at. Then capital employed turnover for basically half of the equation of the return on capital employed, of course. Here, considering the rather elevated CapEx spend that we are going to have in the next coming years, our minimum target is to be at the upper end of our historical values. That's our minimum target. Ideally, we would even in that phase, be able to improve that, but our minimum target is really to be at the higher end of our historic levels that we had. And last but not least, or basically almost, the most important: one, free cash flow, free cash flow ratio measured in percentage of sales. There, based on our increasing sales volume, we are targeting a value that should be at least above 10%. So that's basically what we are targeting. And that is also allowing us, after having paid for third-party financing services, this is allowing us to keep a stable dividend payout ratio, which is, for us, very important. Which brings me to the very last take, guys. So at the end of the day, all what we have seen at the end, it should be reflected in increasing dividends and increasing share price, right? So when it comes to dividend, we still want to target that range that we had historically, and also made publicly available. That is basically what we want to keep going forward. And what you can see here is that historically, we never went below that range. So that really shows a strong commitment to what we're saying. On the right-hand side, what you see there is basically economic profit. And while ROCE is good to look at to compare with other companies in terms of benchmark, ultimately, the proxy to measure value creation in an absolute term is economic profit. And those, during our yearly strategic reviews, we always look at by how much are we going to increase economic profit in order to assess if our plan is appealing to the investor community. My take on this is the following: considering the sales growth that we are anticipating that is going to further boost the economic profit. Those, we are convinced that this is an appealing plan, and I'm sure that you do appreciate this. With that, I come to the very last slide. They summarize with one sentence. So we don't only have all ingredients in place. As you had said, Stephan, we also have the right financials in place to execute on our strategy in any given market situation. And with that, I conclude my part, and I thank you very much for your interest in our company.

So thank you, Stephan, Nicola. Before we continue with the divisions, we'll have a short break, and I will continue the presentations at 10:45. So in a little bit more than 10 minutes. [Break]

Good morning, everybody. I'm pleased to present to you how division IXM can continue to grow to technical leadership and innovation. With new innovative products, we will want to be able to expand our product portfolio into new high-growth markets. To achieve this, it's important to know the industry trends as well to adopt them, then also in our product portfolio road map. The two big trends that we want to cover as a group is digitalization as well as electrification. The global trends in terms of X-ray inspection can be well assigned to dispose trends, future mobility, hyper automatization, cloud and edge computing and machine learning as a service. Elevated from these trends, we see the following trends in particular for nondestructive testing to which X-ray contributes. The demand for high increasing components and assembling is high. In many cases, components cannot be longer manufactured by using traditional manufacturing processes like casting, molding or form from solid material, but are producing using 3D printing processes. Battery used in mobility solution must be tested, as the effects in the manufacturing process can leads to fire. Electronic assemblies and invalid components are becoming smaller and smaller, and the packaging density is increasing. The production process for manufacturing sorts components and assemblings is becoming more and more complex and error-prone. Therefore, a nondestructive testing is essential. Such measurement should be carried out as quickly as possible to not influence the production capacity. Therefore, they should be integrated into a production line. The collected data, should be then automatically evaluated in real time, detective and incorrect parts should be automatically ejected, and the necessary correction for correcting errors should be then automatically reported back to the facility lines. For all these trends just described, there is a job to be done in terms of X-ray inspection, which is a necessary condition for nondestructive X-ray inspection to be carried out. The smaller and smaller defects have to be dedicated and detected. New materials and also multilayers have to be X-rayed. The inspection has to be done as fast as possible. The equipment should be in operation around the clock. And the maintenance should be planned and dedicated with not having to shut down the system unplanned. In order to be able to offer our custom solution that helps them to fulfill the job to be done, the resulting requirements should be then integrated in our product portfolio road map. I would like to show you which trends we have adopted in the production road map and which transformation with regard to the solution portfolio in new markets we have already made and will continue to make. We have worked existing portfolio in such a way that we can continue to serve the existing customers and markets with new products, and defend our position as #1, by increasing both lifetime and performance. Since the start of the current strategy cycle, we have invested a lot in the development to transform our portfolio into new markets, be it electronic and semi market and battery with new products such as Open MicroFocus X-ray tube as well as the MesoFocus X-ray. By 2025, we would like to be entered the semi market with the open nano focus X-ray tube called FYNE, and to enter the electronic as well as the battery market with the integrated system in the nano and MicroFocus range called EXPLORER. The new product launched in 2021, as shown on the previous page, will contribute at least 41% in expanded sales -- expected sales this year. The following years -- in the following years, we would like to be able to further expand this share. Today, we assume, in 2026, we will be able to generate more than half of our revenue from the new product we have launched since the last year and will continue to do so. In the following, let me show you where we want to play and where we find ourselves in the market and production segmentation in terms of strategic focus market at the present time. We have set ourselves four strategic areas with regards to the implementation of the strategy. First, push into the semi. Second, expand our product portfolio to enter the battery and electronic market. Third, to expand the portfolio to improve our margin in the existing NDT market such as automotive, aerospace and security. And fourth, build up customer centricity in Asia. All this with the goal to remain #1 in the market of metal ceramic X-ray tubes as well as to transform our product portfolio. In that way, that we can improve our current position in the new markets and become #1 or #2. It's important to be as close as possible to the customer, especially for the battery, electronics and semi market. Asia plays a central role. Therefore, we have increased our presence in Asia in the last 2 years with the goal to be as close as possible to the semi market. We have established a shared commercial support team together with our colleagues from Comet Yxlon. For the battery market in Korea, we have built up a sales and support team and hired the market segment manager for China. And to further penetrate the electronic market, we have established a sales force in Japan and strengthened our team in China. Let me go now into more detail about the new product we have launched in the last few years in the market. First of all, I would like to introduce MesoFocus. We have developed MesoFocus for in-line battery and cell pack inspection, additive manufactured components for aerospace and automotive; and third, in-line inspection for dense material and small feature to be detected, for example, turbine blades for aircraft. MesoFocus is a unique technology that will help to drive growth and improve our margin. We expect to grow with MesoFocus by 125% in 2023 compared to 2022 and further anticipate that we will be able to double our sales with this product family in the following years. This year, we were able to win the innovative prize of the Canton of Fribourg with MesoFocus. In the following, let me show you a short film about MesoFocus to introduce you this technology in much more detail. [Presentation]

Another important product family that will contribute strongly to increase in sales this year is an open MicroFocus X-ray tube. On one hand, these are used in the automotive and aerospace industry to find smallest defect. On the other hand, we have been able to grow strongly with this product family, especially in the electronic market in Asia. With the open NanoFocus X-ray tube currently under development, we will help Comet Yxlon to enter the semi market. The start of [indiscernible] is planned for 2024. We expect this product family to contribute at least 45% of the new product mix in 2023. However, it's also important to be able to continue to maintain our position as #1 in our home market. Therefore, we have developed tubes that have a 33% higher performance compared to the X-ray tube we have today on the market, and allow up to 25% shorter exposure time. This, with a great advantage for our customer that -- of allowing them to make faster inspection to increase throughput, but also to allow them to operate and [indiscernible] maintenance more efficiency. With the XP and UP product series, we can further expand our market position as #1 in the stationary metal ceramic tube market. We were able to launch first prototypes this year, and have achieved market acceptance by several OEMs. The full potential -- the full product range is planned in the road map dedicated to at-line and in-line CT application for components in automotive and aerospace industry. With this remark, I have come to the end of my presentation. The highlighted initiatives today will enable us to be the powerhouse of X-ray in the future. I would like to hand over now to my colleague, Dionys. Thank you very much for your interest. I will be happy to answer any questions at the end. Thank you very much.

Good morning, everybody. Today, it's a lot about the future. And it is also future day. So I also would like to welcome some youngsters in the room because they might become an investor over time. They might become a peer in the business and they even might work for us. [Foreign Language] Having said that, also for IXS is all about the future. And we are actually in a position, already mentioned by Stephan, that because of Moore's law, you come into a situation that items are changing in the semiconductor world. Everything continuously have to be smaller and smaller, and writing smaller lines becomes very difficult. So that's why 3D advanced packaging becomes a standard. And to be able to look to the quality of products, new inspection technologies are needed. And I'm going to give you some insights on how we actually are going to support this trend. It is all about making our customers win in their own market, and therefore, we will win. So it's about seeing things better, for instance, with a great imaging chain for IXM, Comet X-ray. Seeing things faster by integrating software solutions that give information quicker, can be material handling, can be also data handling. And seeing things more, seeing all defects that are actually in a standard black and white image, not at the first glance visible. So we're seeing better, faster more. That's what we're going to deliver. Last year, I talked about these three priorities. And this year, I can actually share where we actually really have gained progress with these priorities. So it's all about customer experience. For us, that means, be there where the market is. For us, it also means that work with market leaders to actually serve them because then, they enjoy the tool, the solution that you have created. Invest in insights. As already mentioned, just the black and white image is not good enough. Giving insights into a product without destroying it, nondestructive testing is key in this business to improve productivity, to improve ramp-up time for a new product to be released in the semiconductor world. And that, at the end, results in two things: profitability for our customers and a profitability improvement for IXS. So where are we? To reconfirm that we are on the right track, you can look to how the markets are developing. Traditional markets like aerospace, automotive, as well as labs and R&D, they are interesting, but where it really is interesting for us is in the semiconductor world. So tuning our company towards the semiconductor challenge makes still great sense. And in 2026, where the market is growing with 123% compared to now. That's where we are going to play. Now we do that by investing where the market is. Already mentioned, the location is very vital, close to be to your customer and understanding their challenge. So over the last year, we strengthened our sales, service and application teams in Asia. We see investments rising actually in Europe and as well in the U.S. And we continue to invest in that. And this year and even in the beginning of next year, our Southeast Asia presence will be enlarged. Why? Because there, really this new technology is already insight products. And that's why we have to be there. So as mentioned, we are in transition. So the market is the right market. We have transitioned our product portfolio towards this market. We have invested in the sales service and application teams to actually deliver this best customer experience. And maybe you remember that we acquired, some time ago, a team in Canada, ORS, we have integrated this team. What is this? This is actually the key to success. And I'm going to repeat this. Just a black and white image of the volume does not do the trick. Getting data out of this black and white image. Getting insights where our customers can make decisions on, that's vital. And the Dragonfly software and the team associated with this, from a stand-alone software solution, as well as integrated in workflows for our systems will help our customers to make these decisions faster. We enable them to see things that they could not seen before. And one of my slides later in the deck will give you really this fact-based information where we see what we're doing. Now we, as you might know, work very closely with one of the market leaders in the semiconductor world. And we are increasing our installed base with them. That's a very good sign that we have a tool that they like. The second bullet that you see here, we get testimonials like, "I have never seen bumps like this" or "we finally get the insights we need in minutes". And next week, Tuesday, we're going to launch the first full semiconductor system on the productronica in Munich. That's, for us, a major milestone that we actually help our co-creator to do what they need to do. In a traditional world where still a lot of destructive testing is happening because you cannot look inside, making the transition to a nonrestrictive volume opportunity, and I mean that volume is they look not to a slice, but to a volume, a space inside the wafer. We give the information that they need to improve yields, to improve also productivity and time to market. Now we talked in this presentation of Stephan, a lot already around the trends, and I'm repeating some of them. It's getting smaller and smaller. And because of not able to write smaller lines, it goes into the 3D dimension. X-ray is especially suited for that because it gives the ability to look inside of this volume. And with the information that we can create, we can become faster for the customer to make decisions. We make them actually faster to make them decisions already in the R&D process as well as during the ramp-up phase for their production. Having said that, delivering insights creates with foresight and a possibility to drive zero defects. And that's key for this market. We have facts. It's publicly available that at this moment, wafer stacks are delivered to customers with a yield between 50% and 80%. And you have a wafer that costs sometimes even 20,000 per wafer, and you build 52,000 of that per quarter, and you have that type of yield, the problem is really there. They cannot do that differently at this moment. They have to produce because the customers wait on product and having the ability to look inside such a volume will drive zero defect. And that's what we are going to offer, and we are going to launch on Tuesday next week. And I know you all waited very long on this transition. So I'm very happy actually that we can show something that is alive and kicking. And it creates maybe, from your side, some confidence that we are on the right track. I'm going to talk now in one slide about killer defects and why X-ray is so important. So on the left side, you see defects that are typically in a 3D assembly package available. And in a natural, I would say, current ecosystem, people look, what Stephan mentioned, with optical equipment to these defects. But when you cover the defect with another prod, it's very difficult to look at. Of course, you can make a slice with a FIB-SEM, and then look inside. But that takes, I would say, significantly amount of time, up to 7 days. And not only that, you destroy the product. So optical often is related to destroying the product. And it gives you information on a certain position in a wafer. And when you see that it is good, it does not mean that it is good. You were just looking at a position where something was good. The opposite is also true. With traditional X-ray, you can actually look into -- from a 2D perspective, to the top side, for instance, for a part, but then you have to interpret what you see. And with the 3D solution, you can actually see the whole volume. And that's where the profitability lies because then you suddenly see, by not destroying a wafer, by being in a lab or maybe even being at line at the customer in the fab, you get results quicker that have valuable information to improve your process. Now in the next slide, you can see a little bit what happens during this production process and why it requires new test strategies. On this image, you see all balls are nicely straightened and correct. But when they apply heat in the manufacturing process, you see some balls, bumps, skewed, some balls get voids, some voids are actually not with the right interconnect. So here, for instance, you see a highlighted void. You see, what they call in this business, head in pillow, it looks like somebody is sleeping on a pillow. This is skewed, and here, there's something tilt. So why is this important? If you have a bad interconnect and you drive your car that has advanced quality systems, safety security systems in it, like ABS, and you go over a bump, and switch and interconnect loses, then your car maker may be they go in the wrong decision. Same for your smartphone. It's a big investment. It's an expensive tool. You would drop it and it breaks. You don't want that. So that's why quality of these products is very important. But at the end, it drives customer experience of the end user. Now with our software and our solutions, we actually can create statistics, while you do the production, while you do the R&D, you create not only the statistics, but you also give information back that you learn from the quality of the product. They can store that. And by overlaying traditional inspection systems on the information you find from X-ray, you make then a better decision. And the decision can be improving not only in what do you need to do in your production at this moment, that gives you also information to improve foresight, information into your design. So what needs to be changed in the design to drive zero defects. So X-ray is a magnificent tool to look into the volume of a chip, a 3D package, without breaking it, look into every -- every other day you want to look at, and improve your production and drive zero defects. Now at the beginning of my pitch, I talked a little bit about Dragonfly software. And what you see on this imagery on the top line, you see a comb, a hair approximately is 100 microns. So the thickness of your hair is 100 microns. And we have now the ability to look into 60, 30 microns. We do studies even going further, 6 microns balls, 12 micron pitch. When you have all that information, traditionally, you would see, I would say, the left lower corner, you see circles that are bold and you see some defects in it. But when you put something on top, it all gets blurry, you do not know where the problem is. With the Dragonfly software. We can create the images on the top and on the right side of this image. For maybe people like us, it's not so easy to understand what's going on there. But it makes it visible where the void is. It makes it visible where your tilt is, or where your head in pillow problem exists. And this, with the Dragonfly software, integrated in the workflow, you get this information almost real time. So from up to 7 days FIB-SEM, you go to 25, 15 minutes in X-ray without destroying the part. Having said that, driving zero defects, having a tool that is ready for this market to be implemented in their production, in their R&D labs. We are fully dedicated to deliver this inspection solution to this market, and we will drive not only zero defects, but also profitable growth. Thank you very much. With that, I would like to give the word to Joeri.

Thank you, Dionys, for the nice introduction. So good morning, everybody. Ladies and gentlemen, dear guest investors, as I'm standing here as the last person between you and the [indiscernible], this knowledge sharing day, we found ourselves what I deem the grand finale, the last presentation. Of course, a small Q&A. The semiconductor market is a really exciting market to be part of. It changes our everyday lives in so many ways, whether it's in our homes, whether it's in health care. Not even to mention electrification of cars, autonomous driving and so forth. I will talk about where our market is going. I will also translate this, and how this translates in exceptional growth for PCT. What we've achieved since the strategy was implemented. What we've learned also from that because I think it's important to look back. And then last but not least, what we need to do to achieve exceptional shareholder return going forward. With that, I want to do a quick summary. PCT started back, with vacuum capacitors for radio technologies in the past. As Stephan already mentioned, we then did a forward-looking integration into matching networks. And the next step in the evolution is, of course, moving towards the generator platform, which allows us to truly become a fully integrated RF subsystem supplier. But we've not only done a me-too solution, we've created a leading edge smart data-driven platform, which had today, based on the feedback of our customers, really is creating new standards of what an RF subsystem delivery system should mean. It's the only platform today which truly allows you to do real-time, insight, in the chamber, what is going on with your plasma. And when Stephan and Dionys are talking about smaller and smaller features, it becomes much more critical in order to have the data available. As you can see, PCT, we're active really in two sides of the business. One is the component market, vacuum capacitors. The other side is the RF subsystem, where we deliver the matchbox. And we have the Synertia platform, too. Looking where we are today with that market, it's proud to say that with our matchboxes, we have 40% market share. With our vacuum capacitors, we have 70% market share. We also, by continuously investing in R&D, have created a lot of IP behind. We have 120 active patents, and we continue to invest, and that results in a ratio of approximately one new patent every month for the moment. So that just gives you an indication that the heavy focus on the technology, the data-driven insight is yielding off. And that then, of course, translates also in design wins, because we continue to work, co-create with our customers, not only to protect existing market share, but also to gain future market share. And in 2023, we actually have achieved 43 design wins, of which approximately half are on vacuum capacitors, which then go into specific matchboxes for all our customers. The other half is in our matchboxes itself. And I will show you a little bit more later, but we actually have four real design wins today, also with Synertia. And the people who do that, and that just gives us an indication of the scale of investment in technology and future road map that we're doing, we have 175 engineers in R&D, which continue, of course, to create these design wins and achieve those IP, which I think is a very strong position to be going forward. I also wanted to take a quick step back in regards of the strategy for 2019. There were really three pillars where it was based upon. One was market share and share of wallet. As Stephan spoke already about it. We had to do a lot more work in regards of customer intimacy, how do we co-create with our customers, how do we work together with them, how do we make sure that we stay so close that for the technology inflection, they choose Comet instead of a competitor. And that, of course, when you do that right, and you do that not only with a Tier 1, but you do that with multiple other customers, will give us in the future that resilience against those semi cycles and be less dependent on memory tube. I can share a little bit more about that later. In regards of product portfolio, there was a strategy in regards to forward integration. With Synertia, we've created that fully modular platform. With Synertia, we've created the engine also to translate that into our next-generation match. So those two combined will give us the most powerful RF subsystem that is today on the market. That only does not allow us to be a modular platform, but also data driven, which is unprecedented today. Just to give you an example, the best-in-class RF subsystem today that doesn't talk to each other has a millisecond sampling rate. Our real-time FPGA-based data-driven insight, we talk about nanoseconds. When we speak to customers, that's the point that they say, same like Dionys with getting the insight, this is really the first time that we can see in the plasma, see what is happening, and we show them graphs where they say, we think there's something wrong with your generator, and we actually tell them no. It is the first time that you're able to see it, [indiscernible] it was there. So I think, the innovation and IP that is behind is extremely strong, and we've been able to execute on it. And then last but not least, the Asia presence. We've established the Asia Design Center in Korea to be closer to the customer. Not only do we support our Asian installed base, we've also expanded it because of the way they work, the communication and the integration with the other teams in order to support where it's needed. European in Tier 2. And also because of that, we were able to achieve some design wins. We've established a second China sales office, which I think is important. Taiwan sales and service to be closer to our end customers. The Penang manufacturing, which was already in extent spoken about, which was a great success, and I'll talk a little bit more. But more important, what the Penang facility did is, it forced us to move the supply chain also to Asia, which when we think about the future plot of land and the expansion, we now have a rock solid basis to build on. So from that point on, I think also, a great achievement. One of the questions you probably will ask, so I thought, that's anticipated, how do we make PCT a little bit more resilient towards the future? How do we make PCT more future-proof, more flexible, more scalable. And actually, one of the things that I think went wrong, how do we respond faster to the semi cycles. So with that, we took a couple of corrective actions. We're going to improve the TOM model, like Stephan already mentioned before. For global effectiveness, we're going to flip the organization, do a different setup and we will start to roll that out starting January. And combined with that, we're going to also optimize our whole primary process flow so that we have a much more lean end-to-end process, where also our cycle times with the customers become shorter. Our interactions with the customers becoming shorter, and we stay much more closer to the business, what's going on. Customer intimacy is a large focus area from my side, personally. I think if you work closely with the customer and you develop all customers, not only one or two, you can become much more resilient for the future. And I think, with the Synertia update later, you will see that in the last 9 months, we've put a lot of effort in that to ensure that our customer interaction and installed base is expanded so that we, in the future, we will see less dependency on memory. Last but not least, looking back to the past, I think some of our manufacturing sites are -- they are world-class, but they are not best-in-class when we think about Industry 4.0 and leading edge fully automated manufacturing. We have a high-end manufacturing site in Aachen, where we've implemented for the Synertia platform all those capabilities. We just want to expand those capabilities across our other sites, even up to the vacuum capacity manufacturing. While we are planning for the Penang facility, we're already taking that into account. So I think with those three major actions, you will see step-by-step, a function improvement over the next coming years. So that, not only Comet, but PCT specific, becomes way more resilient and is able to respond to the market trends much faster. Talking a little bit about plasma, specifically. Some of you, I spoke with during the break already. I think there is no secret in regards of the trends which are going on. We talk about AI, the buzzword of the future. But AI is really going to be one of the breakthrough technologies which we will see in the next coming years. We don't have enough people. The working force is degrading. Climate change is impacting overall efficiency of resources in the high-efficiency regions, like Northern Europe and America. So we, by default, need to get to weight more automated processes. Just to give an example, in order to drive AI, we need 5x more GPUs in order to collect all the data. These GPUs, like the only set, have a lot of yield issues. We need to move to chiplet technologies. And that then drives again more need for NAND and more need for memory. So this has a whole checking of consequences just off the fact, global warming, not enough resources, green society that will accelerate the whole AI. There is a vision that in the future, every device that we touch, whether it's Internet of Things, which is one of the next things that is on the list, will have a future AI chip in it, and there are people that are working on that to enable that. So the scale of what you will see and the growth that will come, I think, 1 trillion is easy achievable, 2030-ish, like I said. And last but not least, autonomous driving, huge growth driver. 2 years ago, $500 worth of chips in a car, projected to be growing up to 2027. I believe it's somewhere $2,500 per car. In a stable market, that's still a 5x growth in regards of content, which needs to go in. I think it's very clear. The number of teraflops goes up. When we go from Level 1 autonomous driving to Level 5 autonomous driving, we speak about the scale of 1,000, 10,000 increase in regards of capabilities. So just -- that will also drive a huge content. But how does it drive -- how does that translate for us? Dionys and the team were talking about scaling down. We used to be in a nano area. We're moving in the front-end semiconductor in what we call the unstorm area. Much more tinier scale, much more kind of scale means that we move to really single-level atomic layers in the devices. So now, one critical arc in the plasma can damage the device. Hence, why new processes are needed. It will also -- everything that I said, drive a change in the processes. The good news is for us that all those processes are RF plasma based. So that will result in much more RF content going forward. So looking at the growth from a trends perspective, we see a 50% growth by 2027, probably a 1 trillion market by the year 2030, 2030-ish. When we move from nano to anisole, you see that the complexity goes -- not only goes up, but the number of layers in a specific device go up from 178 layers today, up to 380 layers tomorrow. And all those layers require many more RF. By the way, the most complex device today is up to 1,000 players. So just to give you an example, when we talk about 2-nanometer technology, high end, that's just an absurd amount of layers that need to go in. Then we'll translate in WFE of 6.5% for all the related equipment. That gives then for us an opportunity because the CAGR for RF subsystems will grow with 7.5% going forward. We are extremely well positioned with Synertia because we have a platform that enables the data-driven insight that gives you the super fast response times, that gives you the first time, real-time insight in the plasma. So we are ready to support the change in the technology going forward with this. When we look a little bit back in time, I think around 2017, is the idea that got generated in regards of developing a platform based. And that -- I think people underestimate the value in that. No other competitor today has a fully fledged scalable platform, which is truly modular. We use all the same components in every generator. We just multiply them. That alone gives for our competitors -- for our customers a unique value because the matching chamber to chamber, equipment to equipment, independent from this power supply can be way more efficient. We also had to develop an infrastructure around it, which is called smartLABs. You cannot be playing in an era of IoT, data-driven technology if you don't truly have a fully data-driven platform. That data-driven platform requires smartLABs. We've established that already in Flamatt. We have that already in Aachen, too, where we basically can collect all the data and work around that. We have established in Aachen a truly 4.0-ready manufacturing site, fully integrated manufacturing, fully integrated device testing, with full back traceability. We did a product launch in 2022 with Synertia. And in the meantime, we did a lot of great product presentations. But I think what a lot of people forget is that we have the other businesses, too. So during that same time, we did not only invest in Synertia. We invested in dual output, dual frequency, new motors and drives for the matchboxes, ultrafast tuning for the matchboxes, new sensors for the matchboxes, which then again gives us a way better start because we're talking about Gen 3, next-generation match, which will use a Synertia engine. I'll talk a little bit more about that. But also on the vacuum capacitor side, we've launched three new products over the last couple of years, all tied about faster tuning, faster response time, better stability. Again, looking to our forward integration that will help tremendously with our competitive positioning because we have the technology in-house to make the fastest, most reliable, best repeatable match in the world. Combine that with RF generator, who has the same capabilities, that's a unique value proposition we have. Maybe to the slide you've all been waiting for. The product was launched in 2022. And in 2022, we very quickly got a couple of POs. That does not necessarily mean that high volume will come. And we try to explain it here, with the different stages which we're in, where you basically go to a customer demonstration. And depending on the customer, you can get an initial PO because he wants to play a little bit more. But others go to a long qualification cycle. I'm pleased to update today that we have made tremendous progress in regards of customer engagement on Synertia. I'm also proud to say that we have our first official design win, with a Tier 1 major OEM. We actually have four design wins, of which one in Asia and two in Europe, too. And we're going to a large number of qualifications at the same time. Plus, I think, which is more important even, is the bottom section. We have more than 50 active engagements with others which do not fit into the categories. So we didn't know how to put it on one side, a lot more cleaner. But that just is the fuel, if one of those customers flips, the market turns around, that we come at PCT are ready to get the next cycle of growth with Synertia. That said, it's a platform. We've done the first, we've now the gamma released for a high volume for 13 megahertz. There is much more to come. It doesn't stop here. We are working on a lot of new features, according to specific customer needs. We are working on AFT, auto frequency tuning. We have multilevel pulsing. We're doing up to eight stages multilevel pulsing, which no competitor has today. So we're doing a lot of advanced feature development in expansion to the existing platform. Two, also a big difference compared to last year. the product portfolio of Synertia is continue to expand. Today, we have the 13 megahertz, up to 5-kilowatt released for gamma, Customers can sell purchase orders, we can deliver. By the middle of next year, we will have the 27 megahertz, and the 60 megahertz also ready for gamma. Looking then to the match itself. Due to the progress we made with all of that, we can also update here that during that same time period, we will have the gamma release of the RF match Gen 3 also. We're actually already today having prototypes out, with three major customers in three continents. So we're well on track to execute and stay on track with that commitment like we made. Another thing, which we took a step back upon is with Synertia now, how can we monetize going forward, service as a business. Partially, also driven by being more resilient to semi cycles. We're actively working on developing the service organization, setting up the service business model behind. You should expect more over the next coming years. And then last but not least, with Synertia, we've also recognized, and that's where partially these 50 engagement comes from, that due to the modularity and the high configurability of the platform, we can actually go into adjacent markets without any issue. We can sell the generator there, too. Just less options, less features, less capabilities. And for example, we're talking about photovoltaic, where they use the same generators, PVD display, where they use the same generators, it's still in the high end. It's not semiconductor. But it's definitely adjacent markets, which are complementary and easy for us to exit access. Coming to one of my last slides, we spoke about our expansion in Asia. We are, as PCT also close to a lot of the Asian semiconductor end markets, whether it's Korea, whether it's China, whether it's Taiwan or even Penang, where most of our major customers are located and the big hubs are. We have our design center, which is based in Korea. As I mentioned, already supporting the European customers, and we have the high-volume manufacturing site in Penang, in the leased facility, like Stephan mentioned and Nicola mentioned earlier. The leased building in Penang was really a good opportunity for PCT because it started the engagement in 2020, and really allowed us to invest light there. It also allowed us to move fast and prove that the concept works. It was close to one of our major customers, and it allowed us to develop the regional supply chain at the same time. Now with the expansion like we mentioned, we can scale much faster. We can be much more resilient. We can also be much more in control for the future. So overall, we can increase our productivity there, and we will have a business continuity plan in place. And with that, I conclude, and I can proudly update that I truly believe that PCT is well positioned. We're in the right market, with the right growth behind, with the right products. And for the first time, we're able to execute as we committed with that. So thank you for that.

So thank you, Joeri, Michael and Dionys. So we're going now into the QA session, while my colleagues, they rebuild the stage a little bit. So three remarks before we start Q&A. First of all, please wait for the mic. We have people in the webcast, so wait until you speak. Second, state your name and your company. And the third is, please limit the number of questions to two so that everybody has time to ask a question. And now as I see that everything is installed. Thank you. I kindly ask my colleagues to the stage. So if I can't see you because of the light, just wave heavily, then we'll see you also in the back. Who wants to start with a question?

Michael Foeth at Vontobel. Two questions. One is on -- you talked a lot about resilience in the business model. And you explained where you see your peak margins. In future downturns, do you have any target for a floor of EBITDA margin that you would like to achieve or maintain in those downturns? And the second question would be regarding the PCT business. In your projections for peak sales, how much do you expect to generate with the Synertia platform? And how much with the service business that you alluded to?

Maybe I can start with the first question, and maybe you'll add a little bit to it before we go to the PCT question. Generic floor, I'm not able to indicate because it always depends, really, on the severity of the downturn or the correction. Needless to say that we are disappointed in how far we dropped this time around. And I mean, we were anticipating at least a double-digit EBITDA. So looking forward, with all the measures that we're working on in becoming more efficient, and especially also limiting some of the structural costs, we definitely believe that we should be able to keep drops on profitability way above having an EBITDA from peak to bottom. So basically, if we aim at 25% to 30% of EBITDA in the next peak that, in the bottom, we stay close to the 20%.

I think basically, nothing much more to add. And I mean, our goal actually should be that, even in a downturn, we are at least covering our cost of capital and out of that, and deriving what the minimum EBITDA margin should be. That is our homework that we still need to do. But basically, that is our guiding principle going forward as the next step, at least covering the cost of capital.

Ulrich, do you remember the question on? PCT question.

So what the -- in your peak sales, what sort of contribution you expect from the Synertia platform and from the service business, that you discussed?

So for the peak of the next cycle, we still stick to a market share, slightly more modest than last time communicated of 5% to 10%.

And then in regards of the service business, we do have already some service today. But I think we need to shoot for best-in-class performance, and that's somewhere around 2030, 30% of the revenue stream should come from the service.

Does that answer your question, Mike? Okay. Who's next? Then we have [indiscernible] an over there.

Doron Lande at Kepler Cheuvreux. I just want to connect on the market share regarding Synertia. Now we always talked about the 10%. Now it's more modest on 5% to 10%. Can this really be the ambition for such a groundbreaking platform?

Yes, you have to take the time into the context of that number. We're now at the bottom. As Joeri has spoken about, we are getting the design wins, and we're working hard to become part of the next ramp up and grow in the ramp. But if the peak is going to be around 2027, there is just so much time to win market share. So as I said just before, we've become maybe slightly more modest, and are talking of 5% to 10% market share until the next peak. Does that -- did I answer your question?

Yes. Second question maybe, regarding the design wins, I'm curious, can you maybe give more color on what's the scale, what would be a time line between a design win, and actual sales? And also maybe, how certain those sales would come in or can a customer still jump off this design win?

Sure. I can give a little bit more color. It's -- it's a design win with a major Tier 1 OEM. The Synertia will go out together with their new chambers early January. Unfortunately, we don't know how successful that new chamber will be, but we expect if there's -- system is successful, then our generator will be on it, and then we will be successful, too. Plus we're working on three other chambers for the same tool that goes out.

We have a question from Harold.

Yes, Harold from ZKB. I mean, you postponed the midterm targets to 2027. But I mean still, for 2025 is still an important year, I would say. And also, I think the initial RF Forward generator guidance was aimed at 2025. Assuming now we end up at, let's say, 400 million, and market recovery independent of RF generator, and your back-end business is bringing you to 500 million top line, 2025 assumption. And if I now take the lower bound of the new '27 guidance, 800 million. Discounted a bit, and then probably say it's 700 million for 2025, just my assumption. Then there would be a gap of 200 million between where the market would bring you, pure recovery. Plus your RF generator and the back end. So my interpretation is simply that this then would imply up end or the old RF Forward generator sales guidance of 100 million, plus, let's say, 80 million for the back end. How do you view this interpretation?

Well, doing some head calculation quickly on stage, in front of an audience, it's difficult to fully understand, comprehend your model. We indicated a year ago that given a mild downturn in 2023, that 100 million for RF generators in 2025 would be feasible. Now, given the fact that we are going through a pretty arduous time, a much deeper and wider trough in the correction, I would say for 2027, 100 million is absolutely in reach. But it all depends now on how the recovery is going to be, probably second half of 2024. And how aggressive the ramp up in 2025 will be.

And one word probably also on the back end?

So on the back end, that mostly pertains to what Dionys has spoken about. We already do, probably 55% of the business or at least of the incoming orders at IXS in the semi electronics space, probably closer to electronics than semi. And as I showed in my presentation, the transition over to advanced packaging is quite aggressive in the forecast, I wouldn't be surprised by 2027 if the advanced packaging inspection market is going to be approximately of the same size as the electronics part. So electronics today or in 2022, market size was estimated around CHF 200 million to CHF 220 million a year. And I wouldn't be surprised if advanced packaging is in that area. And we're aiming at a healthy market share in this arena. So I'm not going to give you any number to fill your model that I don't understand. But it is going to be a very important pillar in the growth aspirations and strategy of Dionys. And maybe I misstated some of the numbers, but you can jump in and correct me.

I can just, with one word, confirm it. Yes.

And we have Michael.

It's Mike from Stifel. I have just two smaller questions. You mentioned, Stephan, the market share 5% to 10%. I'm just wondering, is that -- has it more to do with the recovery of the market that you just cannot gain more because the market is recovering slowly, or also has to do with the competition? So I wonder, we've heard this year about Advanced Energy, for example, releasing also what they would probably call a smart generator. So maybe you can elaborate a little bit on what do you think about the competition there? And on IXS, just trying to understand a bit the economics there because you said, Dionys said like core developer of that product, I guess, which I think we can imagine who that is. But how does the economic then work? Are you able to sell it to others as well? Or does your core developer take a part of your profit. Just to understand because potentially -- probably it's a big one that supports you there. So I just wonder how that actually works in the market.

So first and foremost, you're probably alluding to the launch of the [indiscernible] platform at Advanced Energy. It's a very good product, definitely, like products are from Advanced Energy. As Joeri mentioned, we believe that we have quite a good leg up in terms of many of the features that are in high demand going into the next nodes and more complicated configurations, topologies and architectures of micro processes. So coming to the 5% to 10%, I think there are -- well, first of all, to answer your question, it is more a consideration of time to get to volume. And frankly, with the strong downturn, many of our customers have been very, very occupied and busy with other things than qualifications. So although we are super happy about the design wins that Joeri already talked about, we would have hoped to be there where we are today, already half a year ago, but that wasn't possible, given the fact that our main customers were scrambling to shore up their losses, and therefore, had less time for qualification. Does that answer your question?

To answer your question with respect to the co-creator, the development partner. The really good thing about that partnership is that it is not exclusive. And we have -- obviously, we see in that partnership beneficial on both sides. We help each other. But we also have other big leaders knocking at our door. And we actually, for this co-creation, we are selling tickets to be part of. So it's a different type of collaboration. So no exclusivity, and we can move everywhere.

Then we have a question from [indiscernible].

It's [indiscernible]. I got an easy one for Joeri. When you mentioned you won one chamber now and discussion for three, four. Can you put that into perspective? How big is the offering of these big semi-equipment manufacturers? So how many of those chambers you need to win to get to a 10% market share?

Well, that's indeed an easy question. But to give you an example, one product line at one of the big Tier 1 OEMs, one equipment type, right? They sell 250 a quarter, one system has six chambers, each chamber has three generators. So you don't need that money to get to high volumes. And more I can say about that.

Then we have another question from Sebastian.

Sebastian from UBS. Quickly, the first one is a bit more on the basic side, you talked a little bit about mix, memory, nonmemory, in that regard. And it would be great if you can just quickly remind us where you stand in this context. Never, I guess, I saw it correctly on one of the slides, you mentioned that you have sort of 40% market share in matchboxes. If I recall correctly, in the past, this number was a bit slower or smaller. Question there from whom you were gaining market share there? If you can shed a little bit more light, that would be appreciated.

The market share, I think it's not a secret that one of our competitors performed really bad throughout a certain cycle because of an issue. I think we gained market share from that.

And the mix between memory and non-memory?

In regards of what?

Of PCT over matchboxes and vacuum capacitors. In the past, you mentioned you have more memory, then you said you have less memory. And just was wondering, what's the latest there?

So I think, we still today have too much exposure on an OEM who is heavily memory exposed, but we're gaining traction with the logic side of the business. We're heavily focused on expanding our share. That's also what you see in the number of engagements which we're doing. The engagements are specifically targeting also the logic side of it.

And one last follow-up on that one, if I may. The last time, on the Capital Markets Day, you mentioned, if I'm not mistaken, you have 50-50 exposure to memory and nonmemory. Now you said you have less exposure to logic than that number, apparently. What went wrong in the meantime or what was now the view on these numbers?

So the last Capital Markets Day, we said that we are closing into a 50-50. That was based on the assumption -- assumptions that we made in calculating this ratio. As we see now, this assumption wasn't entirely correct. So we're still too much exposed to memory. And therefore, we have doubled down all our initiatives in order to strengthen our portfolio in the logic side of the market. But as I mentioned a year ago, no one tells us, none of our customers tell us, and you cannot tell from the tool itself, whether it is going to be applied in a memory fab or a logic fab. So we have to kind of make assumptions based on what we know from the customers, how strongly they are in logic and/or memory, and how much revenue we make with those customers. So it kind of remains a close book for us. And what we just know now in the down cycle since it hit us so hard that we are too strongly exposed to memory.

Thank you for the questions, Sebastian. Do we have more questions in the audience? Yes.

Nate from Octavian. So I have a question. You mentioned you also look at adjacent markets with Synertia. Can you maybe say which ones would be the highest opportunity? And also what are some of the stages there because you didn't really show in which phase they are.

Yes. So adjacent markets, I think I spoke already during the presentation. It's heavily PV, photovoltaic. Similar applications, ALD et cetera. Similar semiconductor, but less requirements. They use them also generators with less features, less advanced software capabilities, et cetera. And the other one is display. Those are the two. In regards of status, they're part of the 50 other engagements, we actually have some orders already today from those customers.

Can you maybe quantify how much should that leave to sales in the next 2, 3 years?

It's still in early stage. A lot of those companies, we do not need to go to a large qualification cycle with. They just give initial POs for small volumes. It's difficult to quantify how much percentage that will be in the next years.

Who's next? Sebastian, again.

So if I may, just two quick follow-ups on this earlier example on the numbers of chambers, and the numbers of generators going into chambers and so on. What would be sort of the average selling price for such a generator then going into this example?

So it really depends on the configuration. I would say, the average selling price is going to be in the low 5-digit with very good margins.

Got it. And one follow-up on the point with regard to the after generator and the competitive landscape. In the past, you mentioned that your product is like 2, 3 years ahead of your competition in that context. Now the whole rollout takes a bit longer. As we heard earlier on there, some competitors are following up there. How much of time you think you still have a bit of a head start? Is it still more like 2 years or actually has it expanded or actually it's down to 1 year? Any thoughts there would be great.

I'll give you my personal view on it. One, we look to the other solutions out there. It's nice to call it something new. When you , yes, do a lot -- a couple of gimmicks. I don't think they have catched up. It took us 7 years to come to a stage where we are today. I think it will take them at least the same amount of time to develop something equal.

I would confirm that. So when we went and took a look at [ APTA ] launch of what the new platform from our competitor, what they have achieved. They have caught up, but not close to us, actually. So if they want to take that next step and come to the same level, they have to do the same work that we have to do. Now, maybe they are more experienced and faster and can do that. Not having to start with a greenfield approach, like we did about 7 years ago. But there's still a number of years behind. I don't think we're in a position where we can say it's 2.5 or 3 or 4, but they are considerably behind on some of the features and the entire ecosystem that PCT built from factory to smartLAB to the platform itself. So there's quite some jump to make for them.

More questions in the room? I think from web -- from the webcast, no questions. So it's the last, I will call it the last and final opportunity to ask a question to the five gentlemen here on stage. I don't see any questions. So then, we can end the Capital Markets Day, roughly 10 minutes early. I hope [indiscernible] is already ready. Thank you for attending today's Capital Markets Day. Obviously, you have now time during the [indiscernible] to talk to management. If not all answer -- all questions are answered, feel free to contact me at any time, then we can discuss further on the topics that are important for you and also for us as a company. Thanks again. Looking forward to continue our dialogue. Also, thank you to those who are joining us in the web, and goodbye.