Jenoptik AG (JEN) Earnings Call Transcript & Summary

A warm welcome to everyone here today in this call, and welcome to our Jenoptik Capital Markets Day. My name is Leslie Iltgen, Head of Investor Relations and Corporate Communications at Jenoptik. And with us today are CEO, Dr. Stefan Traeger; our CFO, Hans-Dieter Schumacher; as well as Maria Koller, Ralf Kuschnereit and Kevin Chevis. Together, they will present our new agenda 2025 called More Value in detail and will also answer questions you may have in our dedicated Q&A sessions. If you have questions, please send them to us via e-mail to Sabine Barnekow from the IR department just shortly before the Q&A session, as she will collect and forward them to the management team. Before we start, we would like to apologize for any inconvenience around us having to switch this meeting from a live event in Hamburg to a digital event only. As you can imagine, we would have loved to welcome you in person. But in particular, the current travel restrictions due to COVID unfortunately made it impossible. This, we regret very much and we want to thank everyone on this call for your interest in our company and are excited to see so many joining us digitally today. Also, let me remind you that this call will be recorded. A replay will be available on our Investor Relations website after this call. Before I hand over, please also pay attention to our usual disclaimer that you will find in the back of our presentation, which is now available for download on our website. I would like to start our event today with a short introductory film. But before we do that, I have great news. I would like to share with you. Jenoptik just successfully closed the acquisition of BG Medical and SwissOptic today. Thus, we reached another important milestone even faster than expected, which is a great success. So good news, good start to our events. And with that, I would like to start the film. Enjoy. [Presentation]

Dear investors and friends of Jenoptik, my name is Stefan Traeger, I'm the President and CEO of our company. I would also warmly welcome you to this event. As Leslie just explained, we have great news to start it off. We've just closed the acquisition of BG Medical and SwissOptic. So an interesting and I believe, very, very positive news ahead of the event today. Ladies and gentlemen, also from my end, let me apologize for having to switch to an online event on such short notice. Up until very recently, we were looking forward a big time to see you all at Hamburg live actually and in the flesh. However, when preparing for the Capital Markets Day, we thought pandemic was almost over, yet COVID -- yet again proved us somehow wrong. But you know what, it doesn't really matter to us. We will fight back. And ultimately, we will win as a company and as a society. We will not let us dragged down by this pandemic. Resilience is a quality that is now more than ever an important factor in our everyday's life. The ability to adapt quickly and fast is an ever more important characteristics of a successful company and a successful organization, successful society at the end of the day. Resilience and the ability to adapt quickly are attributes we at Jenoptik have demonstrated again and again in the last 18 months, almost 2 years since the beginning of the pandemic. Resilience and the ability to adapt will make us even stronger in the years to come. Back in 2017, we embarked on a journey. We wanted to almost reinvent it -- almost reinvent our company. We wanted to transform Jenoptik from a fairly diversified industrial conglomerate into a much more focused technology company. Today, we would like to share with you our thoughts, our ideas for the next stage of that journey. If you want the next volume in our strategy book, the next volume will call more value. So we can have the first slide, please. Slide #6 -- sorry, I'm on the wrong slide. We need to go to Slide #5 first. Thank you. Let's have a quick look back, a quick look into the rearview mirrors. When I started at Jenoptik in 2017, I kind of realized that before we even go into strategies and into financials, we have to address culture. Cultural aspects are very important. I think Peter Drucker once said, culture eats strategy for lunch. And quite frankly, I really believe that's true. If we don't have the right culture in the company, we can have the best strategies on planet Earth, we will not be successful. Therefore, we started to think about who we are, who Jenoptik actually is and what makes us hopefully very strong. We defined values, corporate value, so everybody was in the Jenoptik family should embrace. We want to be open, open for change, open for new ideas. And quite frankly, that's something that helped us big time in the last 18 months. We wanted to address issues proactively. We wanted to go about our challenges and our opportunities. We wanted to proactively manage our portfolio. And as we've seen recently, we've been pretty successful in that action. And we wanted to do that in a confident manner in a way based on the knowledge of our core strengths. We are really, really good when it comes to solving complex photonic optical challenges and transform that into industrialized products. That's when we're really strong. And that has been ever since, a value of ours. So open driving contract, those are all valued through all operations. You're on a mission and we define our mission as aiming to become the leading light really in the application of photonics and the emphasis on divert application. We're not reinventing photonics. We are not the first in optics, although I believe that we are one of the first, actually, is our heritage that they expect way back when Carl Zeiss opened up his a little shop here in Jena, Germany. But as I said earlier, we wanted to focus on the application of photonics and applying light and using light to do something with it, to measure something, to produce something to influence something, to communicate with years of light. And on that mission, we have a vision. It's our vision to bring brighter futures with the power of light to the world. In other words, we want to use our technological strengths and the power of light to help to make the world a better place. I know that sounds a bit pathetic, but an empathetic, but I really think that here, we actually do believe in sustainability and the sustainable business models, and we'll come to that a bit more in the future. So again, culture, its strategy for lunch. That's how we got started on this journey. However, such factors are important, there are the foundation for success, but they're almost meaningless without tangible economic progress, the financial results. In the last years, we have managed our portfolio actively, actually. Again, we just mentioned the closing of the BG Medical and SwissOptic acquisition. If I now can have Page number 6, please. On Page number 6, we have listed a couple of other events that happened between 2017 and now. We've acquired a number of companies, actually. We've acquired Five Lakes Automation in 2017. We have acquired Prodomax. We've acquired the OTTO Group. We've acquired INTEROB. And the recent acquisitions of TRIOPTICS in 2020 and BD Medical and SwissOptic in 2021 have individually been the largest acquisitions of Jenoptik in recent history. So we added a lot of portfolio. We've also taken other stuff of the portfolio. We have done quite a number of divestments, actually. We've deconsolidated HILLOS out of our balance sheet and out of our P&L. We have sold our nonoptical process metrology business. We've sold our crystal growth business. We have closed factories. We've consolidated our footprint, in particular in build in. We have consolidated 2 factories into 1. And finally, we managed to find a new partner for VINCORION, our military and defense business. It took a while. But we're glad to be able to report that we could sign a deal to sell VINCORION to a private activity firm just a couple of days ago. We are now an attractive investment also for ESG-related investor of which I believe is very, very important. But we had only called for translating our portfolio and changing our portfolio. We actually also had very concrete intangible financial goals. We set off based everything on the financials of 2016. When Jenoptik came out of 2016, the group has sold EUR 685 million. There's a profitability on EBITDA margin of 14%. And we set our goals, financial goals. We wanted to grow this business mid- to high single digit throughout the years. We wanted to expand our EBITDA margin a 200 basis points, as already discussed, transform Jenoptik into a focused technology group. I always said throughout the time, we don't like those guidance that call for sort of above the cycle or below the cycle or through the cycle. We set whatever the cycle is. We stick to our goals. We want to deliver no promises. Granted at that time, nobody has foreseen a global pandemic or economic crisis that some people call the biggest since World War II. Nevertheless, I think in particular, the way we managed in 2020 and the way we have developed the company in particular last year has shown that we can manage with external shocks. We can deal with the shocks. We can come out of crisis stronger than ever. We're now guiding for this year already on sales between EUR 880 million and EUR 900 million and an EBITDA margin of 19% to 19.5%. Those of you following us very closely know that they are one-time factor. That's something we always communicated. However, even if we strip out those one-time effects, the underlying profitability of our business is way above 16%. So we have delivered on our margin goal on the -- on our financial comments. In order intake, we will be above EUR 1 billion this year already. So financially, we achieved our goals little bit earlier, we have now also transformed our group in the focused technology group. And I think it's now time, as I said earlier, to talk about the future. A year ahead of time actually. We wanted to have the strategy going until 2022, but we figured that, firstly, we've achieved our goal, is not a bad thing. But more importantly, COVID did change the world, and we will see differences. And if anything, COVID acted as a catalyst to the digitization of our world, and we will benefit from that as a company. It plays straight into our core strengths and play straight into where we are good, where we are strong. Our strategy for 2025 or agenda 2025, if you want the next volume in our strategy book, let me call more value. In the next few years, we will focus even more on operational excellence. We will produce even more innovations in attractive market segments. And we believe that we can grow this company until the middle of this decade to target EUR 1.2 billion in sales. There's an underlying EBITDA margin of around 20%. Let me have the next slide, please, Slide #7. I believe it's always important to know one's strength and weaknesses before one defines new strategies and embark on new challenges. We have done that, and we have looked into our own sort of value, if you want. And we have one more time came to the conclusion and we are at our best when we can complex -- when we can solve complex optics and photonics challenges. We can help our customers to solve their problems that are very complex sometimes and turn those technological challenges into industrialized products. That's what we're really good at essentially, and we can deploy our strengths in engineering, and not necessarily give our best when it comes to squeezing out the last penny of every product. And don't get me wrong, we will continue to work on our cost position. That comes without saying. It goes without saying. It's pretty clear that every business, we work on our cost position. That's for sure. But we do know where our strengths are, and that is an engineering and not necessarily in generating economy of scales. We've got a threats in the marketplace. That's like every other company does or every other market does. The competitive landscape does intensify. There are all these discussions about decoupling of economies and all those kind of things. There is a consolidation in our industry going on, which, by the way, we would like to drive rather than be driven in, if that makes any sense. But we do believe that the opportunities outweigh the threats by miles, it's absolutely clear that there is an increasing importance of photonics in our world. Now daily lives, we see our products more and more and more. We see optics and photonics everywhere. You might not find our products necessarily at the checkout of your local supermarket, for example. But wherever you go, you see optics and photonics, whether it was this little devices that we all carry around or by the sheer fact that we do this meeting here online. Without optics and photonics, the digitization of all world wouldn't be possible. And as I said earlier, COVID act as a catalyst to the digitization. Therefore, as a catalyst to our marketplaces, to all technologies. The Internet wouldn't be possible without light. Light is used in modern Life Science and health care, in modern ways of producing products and goods in a more sustainable manner, saving our planet as much as we possibly can. Enlightened optics and photonics, our products and solutions, our technologies are used to enable safer and smarter mobility. Another term and another topic that we're going to talk about way more throughout the course of this Capital Market Day. So with that in mind, without strengths and weaknesses in mind. We look at our marketplaces. And if I can have the next page, please, Page number 8. Today, Jenoptik is acting in lots of different markets. If you count on the left side of the slide, you see that our EUR 880 million to EUR 900 million is actually distributed across 7 major markets that we referenced and the pie chart on the left side of the slide is our official Investor Relations representation of markets we serve. So we serve a lot of markets. And we've asked ourselves, can we drive and win. Not just play, but win in all of these markets at the same time with same rigor and consequence that are needed, or should we even further focus our activities. The topic of more focus runs like a red threat throughout our whole more light themes. The first part of the journey, Volume 1, was all about more focus on technologies. Let's focus our business on core competencies in optics and photonics that has been the topic of, if you want, volume 1 of our strategic agenda, with volume 2 more value, we're saying, let's focus even more. It's not just focused on core technologies, but let's also focus on the core marketplaces. It doesn't necessarily mean that we drop the ball and everything else, but it does mean that we want to be more selective in investing for growth. We want to be more selective to talk about our future core marketplace. Is the sale of VINCORION, we've essentially left the defense and aviation markets already. Well, a big part of the pie chart on the left-hand side of the chart was actually gone. Going forward, we aim to focus Jenoptik even more, as I said earlier, and until sort of the middle of the decade, we would like to focus Jenoptik on 3 core market segments, and it doesn't mean that we drop the ball and everything else, but we would like to focus, particularly our growth efforts on 3 core market segments. The first segment is something where we are really, really strong already, semiconductor and electronics. We aspire to bring the next level of digitization by photonics innovation to the world. And we aspire to have about half of the entire company focused on that core market segment in optics and photonics by the middle of the decade. We also want to build out our activities in Life Science and MedTech. We want to bring optics for companies in Life Sciences and MedTech, we aspire to be a leading photonics OEM partner in improving the lives of millions of people around the planet. In this strategic period, we aim to stay an OEM provider. We would like to make that clear right from the get go. We bring optics and photonics to companies in Life Science and MedTech. And as I said, aspire to be the leading provider of OEM companies, proving the lives of millions of people of around the plant. And last but not least, we aspire to become a global full solution provider in the market of Smart Mobility. Something that we already are very strong at. We would like to combine that last aspiration with the aspiration of ramping up, procuring revenue in services, in sales, in Smart Mobility to about 50%. So we aim to have about 50% of all our Smart Mobility sales and services by the year 2025 in recurring revenue. So as you can see, we will strengthen our presence in highly attractive photonic marketplaces, providing optics and photonics to those segments. Segments which are particularly suited -- their core competencies of ours, particularly suited to things we're really strong. And if you can please quickly go to the next page. Thank you very much. I don't want to read the entire sort of market attractiveness map to you. It will be made available online. I just would like to point out that we've done an intensive strategic study, market and strategy study, together with McKinsey & Company, we looked into lots and lots of different markets and segments in the establishment of our new strategy. So let's go to the next page right away. Keep in mind, we will focus on 3 core markets: semiconductor and electronics, Smart Mobility and Life Science and MedTech. And if you have a look at the right side of the chart, you see that, as I said earlier, we aim to have about half of the business by 2025 in semiconductor electronics. Now that's a business -- that's a market that everybody talks about it. It's a market that's fast growing. It's highly attractive at the moment. There is no need to dwell any more on the chip crisis and the fact that the world is hungry for more silicon chips. So it offers a lot of really -- a lot of attractive opportunities and entrepreneurial chances for us. However, we also know from the past that semiconductor and electronics can be pretty cyclical at times. It is an attractive marketplace, but it can be pretty cyclical. So in the spirit of resilience, one of the criteria when selected core markets have been to balance out the portfolio, to be resilient against external market shocks. And in our portfolio, we have already and will continue to focus on and maybe even more focus on 2 marketplaces that are highly attractive and provide sustainable growth, but on less cyclical actually, almost noncyclical. And that's Life Science and MedTech and Smart Mobility. So by 2025, we aim to have a balanced portfolio between cyclical and noncyclical businesses by about 50-50 each with highly attractive growth opportunities in semiconductor and electronics and the Life Science and MedTech and the Smart Mobility. If you look at that slide, you also see that there is about 75% of the circle colored in blue and about 25% colored in red. That is because we also balance out our business setup. If you think about our footprint in semicon and electronics, and keep in mind what I just said about our ways to go about opportunities in Life Science and MedTech it becomes clear that in those 2 businesses, you are pretty much a B2B player. We sell to key accounts. We sell to other companies who bring their products and solutions to the end customer. It's the same business model that we have in those segments. The business model that's hardware-dominated. It's not only hardware we do have services, we do have software in these businesses, but it's harder dominated. It's a business model that's characterized by key account distribution channels that enables us to leverage synergies in production across the different product lines. So we will keep those 2 businesses together in 1 bucket, if you want, in 1 segment or division, one organizational structure. It's very different in our Smart Mobility business in the part where we address challenging opportunities in Smart Mobility. Here, we are really in a B2G business very different dynamics, very different way of selling sales channels into a governmental account are completely different. It requires different people, different mindset from somebody that sells into, say, a semiconductor customer. So in our Smart Mobility, we also have different ways of addressing products. As I said earlier, it's way more about software. It's way more about services. So it's a different business setup. And therefore, we keep that in a different operation structure. So by 2025, not only are we going to have a balanced portfolio in terms of markets, cyclical and noncyclical. We also aim to have even clearer segmentation in our business setup. And if I can have the next page, please real quick. Essentially, what we are aiming to do and where we are -- yes, what we want to do over the next couple of months and years is to also change our business setup within the agenda of 2025 calling for more value. We will carve out the automotive-related parts of our light and production business and run it as a more standalone business setup under their own brand names. Prodomax and INTEROB are still operating under their own brand. And we propose and we will go ahead with branding our metrology business, which is geared predominantly at the moment towards combustion engines, although we are working hard on changing that. But at the moment, it's still predominantly geared towards combustion engines. We will give this business, its old brand name back, which is called Hommel. We will carve out INTEROB, Prodomax and Hommel from our current light and production division, brand it as a stand-alone business and merged the rest of light and production, particularly the optical metrology part -- optical metrology part and the laser processing parts together with our Light & Optics division into one big focused division that drives advanced photonic solutions for industrial partners or basically key account in the business-to-business fashion. Light & Safety will transform into a new division called Smart Mobility solutions. The role of the standalone businesses, Prodomax, INTEROB and Hommel, will be essentially to proudly produce the cash that we need to finance the growth in our integrated businesses. Value maximization is going to be the core topic and the theme behind those stand-alone businesses, Prodomax, INTEROB and Hommel, whilst driving growth and margin expansion will be the theme behind the integrated businesses in the advanced photonics solutions division and in the Smart Mobility solutions division. I said earlier that Smart Mobility, we aim to have about 1/3 of our business or 25%, rather, 25% of our business in that division by 2025. And as I said, we aim to have a total business size of around EUR 1.2 billion by the middle of the decade. It does mean that in Smart Mobility solutions we will have to grow big time, more than we can by just organic growth. So for Smart Mobility solutions, we expect to see a strong focus on M&A plays in the future, months and years. And the advanced photonics solutions in our core Optics business, we have invested a lot lately. We have invested into a lot of acquisitions, TRIOPTICS, BG Medical, SwissOptic to name the most important ones. For years to come, the role of photonics solutions -- advanced Photonic Solutions division will predominantly be to drive organic growth and margin expansion. We believe that we will also see some bolt-on acquisitions for that business, not necessarily large transformatory steps anymore because we've just done 2. So essentially, as I said earlier, large transformatory deals for Smart Mobility solutions and predominantly organic growth, margin expansion and bolt-on yields for advanced photonic solutions. The role of Prodomax, INTEROB and Hommel is going to be to generate the cash that we need to finance the growth in the other divisions. Let's go to Page #12, please, to the next page. Any good strategy is also based on additional nonfinancial factors. Sometimes they're called soft factors. actually don't like that much because it's not a soft thing. It can be a pretty hard thing, actually, to win the war for talent, for example. And it is a financial goal or a financial issue. If we want to win in the war for talents, we need to have the right compensation structures, for example. So later in the presentation, I will tell you how we are going to hopefully win in this war for talent, what we are going to do in terms of human resources and in terms of our workforce, in terms of becoming or staying a highly attractive employer in all marketplaces. I talked about operational excellence. I said that the focus will be even more on operational excellence, and we will make that even clearer by launching a Jenoptik business system. Every good business of a good company has a good business system. Every strategy starts with a great vision and a good aspiration, every strategy defines the game we're playing and how we win. But also, every strategy only becomes successful if we deploy the strategy as a business system or the right business system. And we will explain what we mean by that. We have started to build our own Jenoptik business system this year, and it really is going to kick off and kick in, in the years to come. It goes without saying that digitization and innovation is important. It's very, very important for our company. It's very important for our business. We are an innovation-driven businesses and marketplaces. And in the later part of the presentation, we'll show you what we mean by innovation. And with the sale of VINCORION, we will increasingly focus on ESG and making our business more sustainable as I said earlier and how we can help to make the world a better place and brighter futures with the power of light. So ESG will be an even more important factor in our communication and our discussions and in our business overall. And with that said, let's now go into some deep dives. The next few minutes, hours, we'll take the time and actually dive a bit deeper in those 3 market segments. We'll talk about what our plans are and our strategies are for semicon electronics, for health care and Life Sciences and for Smart Mobility. We kick it off with semicon and electronics. I would like to call on stage, although, unfortunately, can be only a virtual stage, but I would like to call on stage Ralf Kuschnereit. Ralf is an EVP in our company, and he runs our Light & Optics business today, and I think it's no surprise, and I'm saying that he is going to look after and be responsible for our new division to come, advanced photonics solutions. With that said, Ralf, over to you.

Yes. Thank you, Stefan. Good afternoon, and a warm welcome to everybody from my side. I hope the audio is good, and everybody can understand me clearly. So let's just go to the next slide. Exactly. So for the next few minutes, I would like to give you an update on our view and some of our activities in the semiconductor and electronics market and also already to the next slide. And I want to do that with -- starting with the aspiration that we gave us for the semiconductor and electronics market. So we aspire to bring the next level of digitization to the people by photonic innovations. And what that means is that we will use our photonic expertise in many ways and in many different applications to enable digitization and the use of digital technologies for many, many people. Well, so we just have here a list of different businesses listed, and like semiconductors, optical test and measurement. And on the next slide, I would like to put all these different businesses, applications a little bit into perspective with each other. And in order to discuss what are we going to do with these different applications and businesses. And what you see here is actually, I think, what everybody calls the BCG matrix, which is on the x-axis, we see the market share; and on the y-axis, we see the market growth. And I would like to start on the left lower corner. So this is what typically is called the poor dogs. And here, we see the laser machining business and -- which I would call the classical laser machining business, which is cutting and welding. And as you can see here, and that's, of course, a reflection of our position there. So we estimate the market growth is relatively low and definitely is our market share, relatively low. So that is the business where we believe it will be too much of an effort, too much of an investment to come to a better situation. And this isn't a business that we will not pursue much further and will exit over the next period of time. So if we move to the right lower corner, to a higher market share and relatively moderate market growth though, that's the quadrant that is typically called the cash cow. There, we have a different area that we call laser material processing. And this is -- what we mean with that is more specific, more high-end, more niche business that we are providing, for example, for preparation of dashboards. So it's -- there, we actually in that specific niche, we have a very good market share. But this is a market that will not grow instantly, but it is a very profitable business for us. So that is a business that we will continue and it will provide cash to fund itself and fund other businesses of ours, but it has a limitation in growth. If we then move up to the star quadrant, upper right corner, where this is where everybody wants to be. We have 2 businesses there. So the one is semiconductor business. And as you already see, where we have the dark blue check box, I'm going to talk a little bit more in detail about these businesses. So we have the semiconductor business, very nice growth in the recent years, and that's also what we foresee and a very strong position, and we see a lot of room to grow. So that is a strategic business for us, and we will invest and further grow it. And then next to it, optical test and measurement, which we expanded significantly by acquiring the company TRIOPTICS last year. It is a very strong pillar with a lot of growth potential and very profitable. So that's another star business where we're going to invest and further grow. And then if we move to the upper left corner, which is a very interesting field, the so-called question marks. These are businesses that have a high market growth or going to have high market growth where there -- we still have low market share. But very often, the market is only developing now. And I want to start here with 3 space optical communications. That is something that we have been involved for a while already, for theoretical applications, but also in space, which is now growing pretty fast. It's a very interesting business. We're already involved in trying to push it over more to the star area over time. But today, I want to give a little bit more overview about 2 very interesting areas and the one is augmented and virtual reality, where we are expecting a significant change and then even further out quantum technologies and what our position should be there. Well, with that said, I'll jump right into the semiconductor business and give you a little bit more insight about our views and perspective on the next slide. Exactly. So this gives a market overview about the businesses and the applications that are actually driving at the end of our business. And we're kind of -- we're going to peel the other a little bit to -- until we are at Jenoptik part of it. So what we see here is this, the innovation and the market growth in the products that we typically correlate with semiconductors, smartphones, consumer electronics, personal computing in the top row, personal computing, as we see growth rate, not so great, but on smartphones and consumer electronics in the area of 7%. And that is pretty much still interesting because smartphones have always new applications. 5G is coming worldwide. Gaming is a strong driver. So there is interesting and significant growth. If we go to the middle row of the chart, this is the infrastructure, wireless and wired infrastructure data centers. These are strong drivers for the consumption of semiconductor chips. And since we're not only using our smartphones, but we are typically using our cloud, these data centers are growing quickly and they're using up a lot of chips. And then if you go to the lower row, which is for me quite interesting. We see automotive, industrial electronics sounds a little bit more like a traditional business, but the growth rates are even bigger because there is some catch-up to do, and we all know that our cars have more and more chips. And if there are no chips, there's no car to be delivered. So overall, lots of strong markets. And in the right lower corner, you see kind of the summary of all of this. So we have a 7x growth rate that is predicted for the semiconductor like the chip market until 2025 in this chart. That is actually very consistent with what we said a couple of years ago, we were looking at the market, committing to the market to support semiconductors. There might be fluctuations in this market over time. I think we have to expect it. Most expert say that the fluctuations gets much smaller because we have a broader range of customers behind it. But one thing is for sure, we will -- at least we believe in that there will be an underlying growth even if there is some fluctuation over many, many years, if not decades. So we think that's a strong driving business for our business. And yes, we're going to the next slide to peel the onion a little bit. So here on the left-hand side, you see the dark blue curve that is in principal -- it's a different source, but it's the same -- currently, it's about semiconductor chip growth, the dark blue curve. And now if we go to the wafer fab equipment, so the equipment that goes into the factory that produces the chips, that growth rate is even predicted a little higher with 9.6% in this data here. And that is interesting, and there's a lot of reasons. So first of all, we just talked about the technology. I don't have to repeat that. We're all using more electronics, data transfer, so that drives the industry. But now we also have these geopolitical environment where continents and/or countries want to be more independent and self-sufficient with some political discussions in between. So China wants to be self-sufficient in the U.S., and Europe want to be more self-sufficient and less dependent on other countries. So that drives actually more growth for the factories in the different regions so that we see this interesting growth even beyond the growth of the ad product. And then there is even another technological reason, we think about the technologies in the fabs where we are supporting with systems and modules. So lithography is one of the important steps in producing a semiconductor chip and the steps that are needed to produce modern semiconductor chips with lithography are getting more and more. These are even sometimes factors in some of the chips. So if you need more manufacturing steps with a machine at the end, you need more machines, and that's driving it in addition. So overall, we're seeing a very healthy underlying -- we're seeing very healthy underlying trends and a huge demand in that industry. So we will keep driving our part for that, and let's go into the next page. Well, more specifically, if we look what exactly we are doing. So on the top, in the pillars you see we're producing modules and subsystems for the lithography step. As I just mentioned, we are also doing that for the wafer inspection. And then the right corner, right bar shows display. There's also inspection and lithography steps in display manufacturing. And we're active in all these areas. Technologically, we can use synergies between these different markets, and we are providing to the leading manufacturers in all these 3 areas our submodules. So these are long partnerships we're having, with most of them a very good relationship, which strengthens our opportunity to win. So what is our strategy to grow? Definitely, in all areas, we're trying to increase our share of wallet because the number of customers is limited, but they are strong and are growing and with more complexity and more innovation in the consumer -- in the customers' product, we can provide more innovation on the photonics and optics side to drive their differentiation, and that's the value we want to bring to the table. So like in most of our businesses, the secrets or the strategy to further grow is to be a good partner, which means we're close to your customers, innovate internally to provide new ideas for the customers and be strong in technology. And I think that fits very well to Jenoptik and has been very successful in the recent years. Go into the next page, please. Well, we just talked about our commitment to this market, and we have been and are still investing into this market because we are convinced that it's very strong. And we want to be ahead and be prepared for the growth of the next couple of years. So we actually invested into e-beam lithography system, which is a very, very high and very expensive piece of device that gives us differentiation also for the next generation of optics and micro-optic sensors. And we are actually doing a huge investment in building a new clean-room fab in Dresden directly in the hotspot of the chip industry to be prepared for the future growth there. So we have a location in Dresden, which is performing very well, but for future requirements and future growth, this is a necessary step in size and also in quality, vibration isolated, very, very clean environment. So we're going to be prepared for the next round in this technology. And last but not least, also the acquisition of SwissOptic gives us access and more volume in some of the customers because SwissOptic has been active in the semiconductor business before. Next slide. Yes. So in summary, for the semi part here, we are building on being partner, a partner in the whole network of the semi industry. We continue to invest to be a reliable partner and to be innovative in -- for the years to come. And just what the picture shows here and that has been approved by ASML. So we are actually proud. We received a supplier award this year, not long ago, a couple of weeks ago, which we see as a strong signal for our partnership and a long relationship. And specifically, this has been a sustainability award, which is kind of the theme, as you heard earlier from Stefan Traeger. That has to do with our commitment to raise our voice in CO2 footprint, but also hard facts on what the lifeline of our products are and if they can be repaired. So very proud of receiving that award, and we're thankful that we were allowed to show this here. Okay. Walk to the next slide. Well, that brings us to the second strong pillar that we have in this overall market semi conductor and electronics, which is optical test and measurement. And ambition here, we aspire to be globally recognized as the leading provider of application-specific optical test and measurement solutions for optics in high-end electronic products. Important part is you see probably a application specific. We, as Jenoptik, are typically in specific high-end niches that are though big enough, that we can create growth and we really focus on these to be successful and have a leading position there. With that, we can go to the next slide. Well, and we actually entered this in a major way or expanded in a major way with our acquisition of TRIOPTICS in the last year. TRIOPTICS has the gold standard in measuring and testing of optics, specifically for smartphones. And that is based on the long experience and participation in the market and huge investments into innovation. So they have fantastic products. Serial products that are capable for serial production and at the same time, also working with the standard of authorities of countries like in Germany the PTB to create standards and gold standards for the industry. And the interesting point we're going to look at in the next couple of slides, too, is that whilst the smartphone business is still a very interesting business. There is -- we see a strong growth in the virtual and augmented reality products. And we're going to be a strong and leading in that market, too. So that's why we're aspiring growth and the margin in that business above the group average. Next slide. this is just a little bit of overview to what this business actually is about. So if you look at the top row, this is -- these are the businesses that drive our Jenoptik business at the end. So it is the use of smartphones. Next to it, you see virtual reality. So a complete digital created image that will provide it to somebody wearing such a device. The next one is kind of indicating augmented reality device. So it's a mixture of seeing the real world and super position of digital data and then the car standing for a lot of sensors and cameras that go these days into cars. In the middle row, you see the components that are all required to make these devices work in that way. So it's from single lenses, plane optics, lens system, cameras and then also connectors and other mechanical parts that have to be measured to high precision. And in the bottom row, you see the portfolio of products that Jenoptik provides. On the left-hand side, a typical TRIOPTICS product, again, from the revenue perspective, the biggest part we have now and in interesting markets, but we -- next to that will be without going to details, product from OTTO Vision. The third in a row would be a product -- customized product from our facilities in the U.S., and then finally, the Opticline. So many different products that have a lot of synergies in technology and serving all these markets. Next slide. And this gives a little bit the total overview of the markets we're serving and the CAGRs. These are our estimates for the growth rates for us. And that is interesting because you see here very classical markets like on the right lower corner, mechanical engineering parts, on the left top corner, optics manufacturing, this is where we are in ourselves, which is a quite large business and a very diverse business, but lithography on the lower corner but there is also very interesting, very fast-growing markets that optics plays an important role and it's differentiating. And this is, of course, where we want to put a lot of focus on. So smartphones still an attractive market, till new innovations coming up. Automotive, more and more interesting. And then at the bottom, AR and VR really expected to come really to market in the next couple of years. Medical technology is a good let's say, noncyclical adding -- addition to it. So I think what this picture shows is that the -- this business or optical test and measurement addresses so many markets in itself already so that there is a little bit of balancing in the market if some of the other market -- if the markets here are cyclical. Okay. Next slide, please. Well, this is like a summary a little bit about the strategy we're having, at least for the biggest growth drivers in that in the industry here, mobile phones, driver -- advanced driver assistance systems and AR and VR. So on the mobile phone side, we are the leading high-quality provider. We, of course, want to not only defend but also expanded position in that mobile phone segment. And that we will do by continuously working on our relationship with the customers we have today through our key account system that we have. And we want to be more -- want to be innovative -- not even more innovative, we will be innovative. And it has been the business model from the very beginning. So being very close to the new developments of the customers, and then being ready to provide the required solution when serial production starts. That has been very successful. We'll continue that model also for the new innovations that are coming up. And for the automotive industry, while -- and even the AR industry, while using the same strategy, you can even say, as we saw in the semi business, the model we're driving always is based on our long-term partnership with our customers, understanding the customer needs, being part of the development cycle and then providing the serial production solution when it's time for that. And we definitely have to do more homework on the automotive industry so to increase our market share there. And there is a lot of opportunity coming up. And then the AR/VR, we want to be really early in the game because that is just developing right now as we speak. And we have to be very vigilant and be close with our potential customers to be ready there for serial production. Okay, next slide. Well, that will kind of transition us to take a little piece out of that because we want to speak a little bit more about AR/VR. And before I will do that, we have a little video of somebody who is much more famous, but he will probably drive the technology we can provide in a significant way. So somebody could start the video. [Presentation]

Yes. Thank you very much for the video. Can we go to the next slide then? Well, so the moment we look at this video. I think this shows how much drive is in that market to make that real. And we put our ambition out as Jenoptik aspires to be globally known for enabling consumer acceptance of AR/VR devices by ensuring outstanding quality of optical components. Why is that important? Because there's a couple of -- there have been a couple of barriers for adoption of that technology that we believe is -- will now be overcome. And companies like Meta or former Facebook will definitely have the power and the energy and the technology to do that. Let's look at the next slide. So what we have today, what's happening today, so on the left-hand side, you see what you call augmented reality. So you can even do -- use augmented reality with devices we have today, like our smartphones, tablets and so forth. I think Google Maps has the first application like that. So I know for recognizing the environment which direction they have to start into orientation. But this is still -- I'm looking at it. So -- and in the middle, what is called a mixed reality is really mixing the real view with digital content. And that -- the difference to the left-hand side is you're really getting into the experience, not just looking at it. And I think that was very nicely shown in that video. I mean it's a lot about gaming, but there's a lot of serious applications for that. I mean imagine we're now having a Teams meeting here or something similar. And many years ago, we bought big screens to have teleconferences if we could have some of that mixed reality. These meetings could work just in a different way with the experience and we could show new products and other things as if you were in the room. So I think there's a huge potential. And then on the right-hand side, we see virtual reality. That is a lot driven by gaming today, so a complete digital environment. but it could also be training, simulation, many, many ways that can be used. And we're already providing products for that on the right-hand side. and I will get in more details. If we talk about test and measurement, we are really in all of these already. So next slide. So why do we -- why do I believe that this is now ready for prime time. So there's a business driver. I mean we just picked, and there's no other correlation, the video from Facebook. I mean you need to transport your content. And companies like Facebook and others are depending, of course, on the platforms like an Apple, Samsung and so forth. So there's a strong dependency. So if you could have your own device as one of these content providers, you would have just different opportunities. So I think this is why there's a lot of pressure to build something like this. And that creates, of course, the competition in the market. So we are -- from a photonics and optic standpoint, we have been looking at these kind of devices 20 years ago already. But first of all, from a just sheer optics and photonics standpoint, the quality wasn't good enough. So if you use one of these devices and it's not perfectly made, you get kind of motion sickness. So that's why test and measurement plays a significant role here. And of course, the manufacturing of high-end quality cost-effective optics. And even more, there's a lot of technology necessary. I mean, the hardware is just one part. It is the content that will be provided by these companies the big social media companies and Internet companies we know there is enough content. But then there's also software and hardware on the device that needs to work perfectly to find orientation in the role and so forth. So the huge step that is necessary. But I think the benefit that this could bring is so huge that all these investments will be made. And if you look at the little, the 5 bars on the bottom, so the right 3 bars are not fully Jenoptik. I mean this is the content. This is the hardware and electronics part. Other companies will drive and most likely will be driven by the OEMs themselves to things like ,who we would call it, the control point. But if you go to the left-hand side, the testing, I think, is the one where we already have a good foot in the door. So there's a lot of opportunity for us to participate in the growth. And then on the component, we'll take a measured approach. We have context and are in business with some companies, but we'll have to dose how much we go into mass per manufacturing. But the testing will be something that we really want to be strong at, and I think we have a good starting point for that. Next slide. Well, and here you see a little bit what's expected in the market on the left-hand side, the virtual reality, so the completely closed head-mounted devices. -- a little stronger, right, in 2020 and a good growth of 16% CAGR with huge arrow bars, of course, these estimates. And then on the right-hand side, a smaller market today, but huge growth expected for augmented reality devices because that will be more for everybody, like a smartphone and therefore, a huge growth. And that all has to be managed, all has to be manufactured and we see -- it has to be manufactured with super high-quality because it's near to the eye. And we see, again, a strong position for us with our knowledge in optical test and measurement to support and enable this market. Next slide. Well, now one more thing in semi and electronics market, which is quantum technologies. This is something that is -- will be -- will take a couple more years until this becomes a real business for us. But I think it's already time to get even more engaged into it because it will be interesting and very interesting in the future. So we have to be involved as a photonics company. And our vision is we're inspired to be the photonics part of choice in industrialization of selected quantum technology solutions. And here, you see the main theme. So we again want to be a partner to some of the OEMs with our photonics expertise to support that next step into -- in computing. Next slide, please. So what you see here is though, there's actually 3 areas: quantum computing, quantum communication and quantum sensing. And let me try to do a 2-minute introduction into quantum computing. So what are we talking about? Because I want to explain why we're doing this and what we can expect. I mean today, every computer, our classical computer, we're sitting in front of today is built out of bits, right? So there's -- as you probably know, is 1s and 0s state in 1 bit, so it can be 1 or 0, then there is logic gates that combines 1s and 0s, and then the computer, if you do this in a smart way, can calculate something and the rest comes from it. Everything we're seeing today, Teams meeting is built on bits at the end. That's a computer. And in the computer, it's an electronic device, it's a transistors giving that -- creating that bit. While a quantum computer has quantum bits, so-called qubits. And the difference is the qubit can be 1 or 0, like the regular bit, but it can also be both at the same time, what you call in quantum mechanics, a superposition of both states. So I don't want to get too much into it or make it really complicated. But if you combine these quantum bits, who can be in both states at the same time, you can imagine that with our understanding in the detail is like because it can do both at the same time, it can kind of parallel compute. And if you put a couple of these quantum bits together, the power gets to tackle at things is so enormous that it can outperform any of the classic computers easily. Well, it's not replacing, and everybody who's in quantum computing says is not replacing regular computers, so there's no worry on that one. But it will be so powerful that it can solve some basic problems, and these are typically problems of nature like chemical bonds, biological systems, could help in medicine or even traffic or climate change, which we are really seeing it. So that's where this can go. And so what can accompany me like Jenoptik do in that area. But the point is a quantum bit is a physical system. It can be an iron in a trap, an atom in a trap or could be the photon that can have these states. And these photons and these quantum systems have to be created. They have to be manipulated, sorry, you have to read them out. You have to change them. And photonics and light is a very likely technology that will be used there. There's also magnetic fields that can do that, but it's very likely to do that. And honestly, nobody really knows what exactly will be used. But it is, I think, such a great innovation that it is necessary for a photonic company like Jenoptik to be involved from the get-go. So here, you see some numbers. They have huge and robust quantum computing -- quantum communication and something similar. It uses a different quantum quality entanglement. So you could transmit data quickly or encrypt it much safer and quantum sensing is similar. And we're not even talking about revenue outlook for Jenoptik, but it's like the flight to the moon. You need to be involved to be in the business at the end, and you might also have other technologies that can be derived from it. Now next slide. And we're already doing that. So again, our role would be we will provide optics technologies optical systems, lasers, other sources, whatever is required to partners, and we're actually doing this already. We are working with an innovator for trend line computers. We're already providing optics there. And then we believe that while we are having these discussions with these customers, we will learn where the trend goes. We will have to adopt and can adopt develop new technologies and then be in the business once this -- this will become a serial productive business. And we can combine this technology part with our connections to the other businesses like in biophotonics, like in data communications. These companies are thinking about all these technologies, and we can absorb all this information and processes to provide new solutions. Next slide. Well, in summary, in Quantum computing, it's in principle our business model to have this long-term relationship with our customers that we call partners in both ways. We are used to having long-term partnerships that -- and co-developing solutions with our customers and then going -- switching over to a reliable partner in shipping serial products. So that's again, like we do in semiconductor, like we do it for optic and testing measurement. We want to create this for quantum technologies in the long run. Okay. Thank you. I'm going to switch to the next slide. Thank you. So a quick summary here. So we have an existing business with -- in the area of quantum computing in -- through our contacts with huge customers in optical data communication photonics where we are having discussions and entering discussions in quantum computing. And we're expecting or hoping to get into more discussion in quantum sensing through our connections in the biophotonics. Okay. Thank you. Next Slide, please. Last but not least, I have another 2 slides on Life Science and MedTech. So we're leaving semiconductor and electronics. You see we're approaching the new area. And as we have today, our ambition is we aspire to be the leading photonic OEM partner, helping to improve the lives of millions of people around the world. Again, the same model we are supporting many of our customers with photonics solutions like pre-test for gene sequencing, lasers for medical applications and so forth, always shipping to the OEM that provides the medical product at the end. Next slide, please. And I'm really, really happy that we could announce the closing today. I don't have to repeat that, it has been said before. The acquisition of Berliner Glas and SwissOptic really gave us new opportunities in that field. So we accelerate to growth. So we could made a significant step in the size of the business. We can use our global footprint and combine it with the capabilities of SwissOptic and Berliner Glas and we are broadening our competencies in technology and again, our access to different markets worldwide. Next slide. And here, you can see, and I'm kind of taking the semiconductor partly with me. So the acquisition gives such a fantastic strategic fit, in my opinion, because it really covers both segments where we are active in and adds to it to create synergies. So let's start with the medical technology that we just talked about. So we are adding access to the dental and robotic surgery business, where we haven't been very strong yet. Through the Berliner Glas Medical, and these are relationships to the leading companies in that field. So very, very exciting and also without adding new technologies. And then through SwissOptic, we're actually having good synergies because we're addressing similar markets like ophthalmology, and there we can help us out with customer access and technologies in both ways. And overall, increasing the medical business for Jenoptik as we see on the next page. But before I go there on the semicon business, it is the same. So we're actually adding to our revenue with some of our critical customers. So we're becoming more significant through our acquisition, increasing our share of wallet and can strengthen our strategic partnership with these customers. We're going to get to the next -- in the last slide. And this is what we're thinking about for the Life Science and MedTech business in numbers. So we are expecting to close in 2021 with a revenue of about EUR 80 million in that business. And then we're adding the Berliner Glas business and SwissOptic business to it. It's a significant step, gets us far beyond EUR 100 million. And then if we look, we're talking about strategy 2025, the organic growth of the business we already had and then the business that organic growth of the business Berliner Glas and SwissOptic will bring us, and we jointly can create -- we are expecting to be at around EUR 170 million to EUR 200 million in 2025 as an estimate from organic growth. So that's the bottom-up planning. And then if we compare it to the target we set ourselves for that business. So we have a gap of EUR 100-plus million, where we will look now in the next couple of years how we can close this inorganically with strategic and bolt-on acquisitions to strengthen our position in that market. And with that, I would like to close that part of the presentation.

Ralf, Thank you very much. Thank you very much. Well, very, very interesting. I think it's very cool technology. We talk about semiconductor, we talk about artificial. We talk about virtual realities, mixed realities. We even talk about the Quantum world. We know that with Quantum, we're not going to make huge revenues in the next few years. But I'm strongly convinced that as a photonics company -- as an optics company, we can look ahead. And at some point, there will be an inflection point even for the Quantum technology, that's given to be. Whether it's next year, probably not, in 2025, maybe. In years after that, definitely. A lot of money going into that field at the moment, it's very exciting. And I'm pretty sure not just for us geeks and physicists here, but I think also for investors actually very interesting field. I think virtual reality, augmented reality, mixed reality is much closer close to an inflection point. We're approaching an inflection point when it comes to that new technology, not just driven by Meta, but other companies as well. Again, thanks, Ralf. Very interesting discussions, very interesting presentation, I believe, and also I think it's interesting and important to see how we develop in life science and MedTech. Let's be clear. With the acquisition of BG Medical, we already have almost doubled our footprint in life science and MedTech. The strategic promise that we made all the time. And a very important field for us, give sustainable growth, sustainable margin expansion. Now with all of that, let's switch gears a bit. Let's now come to another part of the market we are addressing. Let's now come to smart mobility solutions. Solutions that we drive again, to make the world a better place. Every person that's dying on the road is a person to many. Every death toll that we can reduce is a good thing. It makes the world better. Brighter future was the power of light is our ambition, is our vision and is what we pursue. And, in particular, in the field of smart mobility solutions, we can combine that with reoccurring revenues with more stable income flows with non-cyclicality. Kevin Chevis is going to present that part to us. Kevin actually came to Jenoptik with an acquisition himself, in a way, Kevin got acquired by Jenoptik, of course, Kevin himself, but his business, the business that he was running for a number of years. Kevin came to Jenoptik with an acquisition that the company did some years back in the U.K. Kevin is now an EVP of Jenoptik of the group and is running today our Life Science -- sorry, L&S business, our Traffic Solutions business, our Light And Safety business and is going to merge that and be heading the new Smart Mobility Solutions Division. Kevin, with that said, over to you.

Okay. Thanks very much, Stefan. And could I have the next slide, please. I hope everybody can hear me and see me well. I'm actually in the U.K. currently. I'm very, very pleased to be able to present to you our strategy over the coming years for Smart Mobility Solutions. Can I have the next slide, please. So it's important that we set out what it is we're trying to achieve. And our aspiration, as it says here, on this slide is to become a global full solution provider in Smart Mobility, equipping and servicing critical infrastructure with an innovative portfolio while earning at least 50% recurring revenue. And there's some important points in that statement. Clearly, we are targeted to grow and we're going to use the coming months and years to achieve that in quite a substantial way. And we're also making a clear statement that we want to be providing more services, more services equals more recurring revenue and more stability for the group as a whole. Can I have the next slide, please? So before I get into too much detail, probably useful to go over what segments of Smart Mobility do we currently operate in and to understand those markets and solutions and drive this in a more detailed way. And all of the markets we operate in have photonics at the heart of their solution. We design, manufacture, install and support high technology, high specification photonics devices at the roadside. And what increasingly we're doing is we are leveraging the data and the information that those devices capture and create, and add functionality to that and leverage that to provide services and solutions that our markets require. And the segments we currently operate in include traffic law enforcement, road user charging and civil security. So let me just take you through some of the drivers for those markets. All those markets grow and are expected to grow over the coming years. And when you consider traffic law enforcement, which is very much about speeding, red light enforcement, incorrect turns, all those sorts of functionalities. Are you wearing a seatbelt? Do you have a helmet on if you road -- riding a motorbike? All of those are driven by some quite interesting facts. And it's estimated that approximately 1.4 million people die each year through some form of traffic accident. And that actually means every 24 seconds, approximately somebody dies and up to 50 million people a year are injured or seriously injured as a result. So those are quite horrifying numbers. But they remain key factors to why this market will grow and continue to grow. And those numbers tell us that road traffic accident is the eighth leading cause of death on the planet, which is quite astonishing. And if you look at younger age groups, 5 to 29, that is the leading cause of death. Now interesting, whilst there are many human factors as to why road safety needs to be improved. It's quite -- there is a financial aspect to it. And it's estimated that in the U.S., the economic and societal impact through road traffic accidents is in the range of approximately $870 billion per annum, which is a huge number. So you can see that governments, policymakers, road designers and so on are very focused at trying to improve road safety, and we'll continue to do that. What's more interesting is that 90% of those deaths occur in low middle income countries. And I expect some of you will be familiar with the political initiatives called Vision Zero and others that are sponsored by different governments around the world. This is an initiative which aims to reduce deaths on a road to 0, possibly something which is possible. But nevertheless, as an aspiration is what politicians and policymakers are seeking to achieve going forward. And with that in mind, organizations such as the United Nations, the EU and so on, have a real focus on some of these low middle income countries. And there are now additional funding, additional projects, additional initiatives which aimed at reducing deaths and injuries on the road in these new countries. So the market drivers for traffic law enforcement are very, very strong and undeniable. Let me talk about road user charging. Most people when they first think about that consider road user charging to be tolling, paying to use the road. But it's true that is an important part of road user charging. And increasingly, organizations, governments and countries around the world want to improve their road infrastructure, but don't have the capital funding to achieve that. So more and more services are provided and more and more toll roads are being introduced to actually fund those road improvements. And again, with the cost of COVID over the last years and that still continues now, we see more requirements going forward to pay for the use of a road. But also in that road using charging marketplace, the 2 other important factors, which are highly political at this time, first is emissions control and the need for a road organization, a local authority, a government to reduce the emissions in a given area. And that's particularly popular at this time with COP25, all those sorts of initiatives. So we see growth in these areas, clean air zones, how do you enforce those? And you need Photonics technology to do that. Another part is congestion management. Increasingly, we see more vehicles, more congestion in city centers and other places. So we see more growth and more opportunity in the management and enforcement to that. So paying to go into a city center as -- in order to deter people to do that and therefore, reduce congestion. In civil security, again, a technology and market space which uses technology, photonics technology, combined with an intelligence database to prevent crime to help prevent terrorism. And importantly, our systems are increasingly used to locate abducted children, missing people, all those types of things. So they have a real value in making our society safer as we go forward. So all of those involve the use of photonics, all of them look at vehicles, their movements, what they're doing, where they're going, how they're doing it, classify them and have an output of some form or another. So that's the commonality between the markets within which we operate. So in general terms, we designed this technology, we install it, and we support it. And in some cases, we run some services around that in certain locations around the world. Can I have the next slide, please? So Stefan mentioned earlier, our target to grow our business to represent 25% of the group revenues by 2025. And this is an ambitious target. And but we do have a plan to support that. And you can see from this chart that we are able to achieve organic growth throughout this period. But it is absolutely clear, and it's absolutely an important part of our work and focus right now is to make acquisitions to achieve that goal of EUR 300 million of revenue approximately in 2025. And the way we're going to do that is to focus on 3 key things. I mean, firstly, we need to continue our progress with new technology, whether that's in the high-end marketplace of developed countries or in emerging countries where the specifications are somewhat less. Secondly, as we see an opportunity to provide more services. If we provide more services, we will have a bigger part of the value chain, and we'll have a bigger share of the wallet for the solutions that we provide. And thirdly, acquisitions. So acquisitions will be focused in 3 key areas. One would be entering new markets where we currently don't operate. Secondly would be acquiring technology or service provisions, which enable us to expand our value chain. Or thirdly, to broaden our technology portfolio and bring more technology to the market quicker and we can develop ourselves most likely. And so this slide shows clearly our current focus. But what is our growth lever. Well, we see in a number of countries, the opportunity to deliver the entire value chain of our services. So for example, in traffic law enforcement, where we currently deliver a technology solution, we install it and we support it. That's only part of the process. Following the generation of an incident, a ticket, a penalty notice, whatever happens to be, that then has to be validated and checked. It then has to be issued to the member of the public, and then there needs to be a process within which to collect the fines and deliver the cash to our clients. So we see a number of opportunities in different countries and different regions to expand that process. And by doing that, we will move ourselves up the value chain by 1 level. Now we're not expecting to do that in every country because in some countries, we work very well with existing partners, and we don't see that changing. But there are some opportunities in Europe and North America and various other places, where we can build out our value chain, increase the value and deliver higher growth for the organization. Next slide, please. So one of the things that we do in differentiating ourselves from our competition is that we have focused quite heavily in the last 18 months, 2 years are not just leveraging photonics expertise, but also our artificial intelligence expertise that we've developed over this time. And we've had some really fantastic breakthroughs. And it's quite interesting. Some things that we felt 2 years ago were not possible are now possible. And so we're driving our competitive edge by pushing this capability. And I put some examples here just to illustrate the types of things that we were able to do. So in artificial intelligence, when you want to read a number plate or locate a number plate, you need an awful lot of images and data to do that to a high level. And one thing we've done over the last year is we're now able to create our own synthetic data to do that training and that work. And the 2 key things that, that does for us. Firstly, it means we can go to any country in the world and within a matter of days and weeks, we can have plate reading technology to a high level available for that marketplace. That's crucially important if we're going to be going to some of the lower middle income countries where there is going to be more opportunity going forward. Secondly, with that expertise, we have a number of cases now where we're able to read number plates to 100% accuracy. And that years ago was felt completely impossible. So that's quite an exciting development. We're also using video analytics to do a high accuracy speed management -- speed measurement within video. And that's in a regulated end marketplace that's used for secondary verification of speed. But in emerging markets, we can use that as the primary speed measurement. And that means we can use a new platform, a lower cost platform and do all the measurements within video to a high accuracy level. And that will open up new markets for us, particularly in these lower middle income countries. And finally, something we've been very successful is reading number plates in very difficult lighting conditions. And building on patents that we already own, we're now able to read plates, which are not easy to see. And that when it's dark, they're almost impossible to see. But using the combination of these technologies, we can now do that. And it's interesting that in one recent trial, again, we achieved a performance of approaching 100%, which some years ago was completely impossible. So I'm really excited about those development. Next slide, please. Now as we approach the advent of connected autonomous vehicles, many people ask me the question, well, does that not mean when we all have an autonomous vehicle, there's no need for speed enforcement or red light enforcement and the like? And I think it's -- that question is the wrong question to ask because you have to look at the marketplace and see when and how is connected autonomous vehicle is going to arrive here. And the truth is no one really knows the answer. But there are many studies, many analysis that have been conducted by the lights of McKinsey and so on, who predict that the number of fully autonomous vehicles that would be for sale in 2040 could range between 10% and 90%. So what does that tell you? That tells you nobody really knows. And the second point that's important to note here is that during this period, there will be a mixture of non-autonomous, semiautonomous and autonomous vehicles driving on our streets. And if you take the 2040 example where it may be 20%, 30%, 40% of vehicles sold, are fully autonomous. We have many, many years where we still need to enforce the law on the road and maintain safety. And a combination of vehicles will create new challenges for us and new dangers on the road. What is clear to me is that some aspects of autonomous vehicles may come quickly. So we may well see logistic vehicles acting in an autonomous way, and we may well see transportation in the cities acting in an autonomous way. But they have to work with other vehicle on the road, and they will also need infrastructure to support them in driving around safely because they cannot see everything. They cannot see around the corner. And so we are actively working on a strategy where with a number of research organizations in various countries to influence and understand and start developments on what our role in that new world will be. And that's quite an exciting proposition. And we've already done some development, and we've already made some, and we're about to start a trial project where we will be working with an organization to assist in the driving of a vehicle in a city center where they cannot see around corners and various things like that. So we see a lot of opportunity for that going forward. So providing not just traffic re-enforcement for the future, but also the ability to look at a streets, look at the vehicles, look at the pedestrians, look at bicycles, look at motorbikes, sense what they're doing, predict what they might do, and they communicate with the infrastructure and vehicles to help us provide a safe landscape for the future. Next slide, please. So just looking at it geographically. As we go forward, we plan to further develop our position in North America. And this very much is by building out our value chain. We are already one of the biggest suppliers of speed technology in North America. We do have modern technology available, and we plan to build out our proposition to move up the value chain. That means our contract values will increase. The same thing is true in Europe. They are in a number of emerging markets and in Eastern Europe, particularly there are significant opportunities for us to get involved in the running of the services and thereby grow. Next slide, please. So what does that all mean for us from a financial perspective. We're already a strong company, and we already have something in the region of 44% of recurring revenues, and that has helped us be stable during this global pandemic, where it was difficult to get to client sites or it's difficult to purchase components. And that means we're a very stable business in that perspective. And on the basis we organically grow and on the basis, we make the acquisitions that we plan, by 2025, we should see recurring revenues on an annual basis of 50%. And of course, the more you have of those recurring revenues, the higher the level can be. So by 2030, it's quite feasible to see recurring revenues of around 60%. The important thing about providing services rather than simply providing technology to others is that there is a company, Jenoptik does have the financial strength to do that. So there's always some financial investment to install equipment in the early days. And then you get your recurring revenues as we go through year by year between 3, 5, 7 and in some cases, 10 years. So just to sum that all up, and I'm conscious of time, we have 4 key actions to achieve this growth. Organically, we're going to build out our value chain and provide the services I talked about earlier, especially in North America. We're going to continue to update our product portfolio and platform, and we will have 2 product sets, 1 for sophisticated high-specification markets and a new product set, which we'll launch next year for emerging markets, which have a different price point. And then we'll also seek to acquire organization which have either technology, market access or will help us widen our value chain exposure. So that's pretty much what I was going to say today. Thank you very much. I'll pass you back to Stefan.

Thank you, Kevin. Thanks for that inspiring presentation. As said, every death on road is a death to many. We have the technology. We have the means to help our governments, our communities to make our public places, our roads safer. And I think that's a very important goal and a very important ambition, very important vision. And it actually translates into even better economics for the company and even higher returns for shareholders. So for that combining a good vision with financial success, I think that's exactly what we want to do. We will now take a break and enable questions. Now that probably from a technology perspective, it's the most challenging part of today. Since we cannot be together in one room, we have to find a way to address question -- answer questions that you may have and given the fact that we had to switch to this online even really in a matter of literally hours, actually, we thought it's best if you send questions to the address that you can see on the bottom of the slide right now. Thank you for the slide. [email protected], so if you can please send your questions to that e-mail address. We're going to collect them and try to answer as much as we possibly can. We're also going to have a Q&A session later in the day at the end of the event. So if you have any questions, that pop up later, no worries, we can address them at the latter point in time. And of course, our Investor Relations team and all of us will be available for questions and one-on-ones or days like that throughout the next couple of weeks and months. But I'm looking towards the engine room here. We don't have any further questions at this moment apparently. So if you have any questions, please do send them via email to [email protected]. If there aren't any at this point in time, checking again, doesn't seem to be the case. Okay. So no questions at this point in time. That's fine. Then, why don't we do the following? We will take an hour break. I know that's a long time. On the other hand, we saw it, to sit in front of a computer screen the whole day is something that we all -- yes, on the one hand, get used to, on the other hand, I don't know, probably never get used to. Apparently, there is a question, Okay. Let's see the questions. So we have one question by now.

Yes, we do have some questions. First questions are coming from Florian Pfeilschifter from Stifel. First question. Looking at your 2022 midterm guidance and your overachievement here. How much more headroom potential is in your agenda, 2025?

That's very interesting question. Let's just answer it from a qualitative point of view. In our current guidance for this year, there is quite a number of onetime effects. Nevertheless, I think what you're referring to is the fact that the underlying EBITDA, even if we strip out all the one-timers is still above what we've promised to the capital markets for actually 2022. So yes, we are a bit ahead of time here, which is a great thing, I guess. Now how much potential is for overachievement in 2025, I would say we see it 2024. Of course, the current situation, the pandemic that we're in, nobody really knows how the next quarters and months are going to pan out. I guess it's best if I say what I did say in end of 2017 and 2018. At the time, I did say, look, I don't -- we all don't like these guidances that talk about the cycle, above cycle, below the cycle, through the cycle, whatever the cycle is. We want to be at EUR 1.2 billion -- around EUR 1.2 billion in sales in 2025, and we want to convert 20% of that to operate profit in terms of EBITDA. Now please do keep in mind. Now we talk about potential acquisitions, but we also talk about potential divestments. I mean [indiscernible] alone takes our substantial chunk of sales from our current top line. Yes, it should actually also approve the fleet average of the group in terms of modules. So if you take it all together, I think we have an ambitious yet achievable top. And that's how we went about the first chapter of our strategic journey here we said, we want to be ambitious yet also achieve what we promise. So I'm not going to sort of qualify and put any more qualifier on our mid-term guidance. We believe it's ambitious, given that we also talked about a lot of potential divest -- some potential divestments, some acquisitions. It's ambitious to get achievable on the top line. And its ambitious yet achievable on the margin quality. Let's also add to that. Not every acquisition might be lifting up margins right from the get-go. We also need to achieve synergies and those things. So again, is there room for more? There's always room for more. Are we going to fight for more? Yes, of course, we're going to fight for more. Are going to achieve more? Maybe. But what we promise is around EUR 1.2 billion in sales and about 20% of that to the operating profit in terms of EBITDA by the middle of the decade. I hope that answers the question.

There is another question coming from Florian Pfeilschifter. If you focus on 3 core markets. Wouldn't this call for a divestment of light and production respective Automotive business eventually?

Well, as I said in the beginning of the talk, we are going to carve out certain parts of our current lighter production business. We will run those businesses even more dependently. We will run in particular Prodomax, INTEROB and Hommel as independent brands. Prodomax and INTEROB are still running as independent brands anyways. And Hommel which is our former nonoptical metrology business has been rebranded into Jenoptik really just, what, 5, 6 years back, 6 years maybe. The products of Hommel are still known in the marketplace under the name of brand of Hommel. So we'll rebrand those businesses in -- and give them their own brand and operate it under their own brand, if you want. We will operate them in a more stand-alone fashion as I pointed out in the beginning of talk, their purpose or their role in the group is going to be to produce the cash we need to invest into growth and margin expansion and our more integrated businesses. And that's and they might do that for years and years in a row. Or maybe if somebody does want to offer us lots of years in a row in cash, well, then we have to talk. But that's something we have to do anyways as a portfolio company. We would then, of course, sit down and talk. But we're not here to communicate the plan to sell these businesses. They're good businesses. They're successful businesses. Some of them have even greater than fleet average profitabilities. So for now, we will run them in a more separate, more standalone fashion and their role and their purpose within the portfolio of the group is to generate cash that we need to finance the growth in the other businesses. I think that's -- and I hope that answers the question, at least qualitatively.

We have some more questions coming from Malte Schaumann. What is the first one? First 2 are referring to semi and electronics. What's the potential revenue contribution of the potentially high-growth markets, Quantum computing, AR, VR, free space optical computing by 2025? And what is the potential in the longer-term perspective? For instance, at the end of the decade? And the second one, TriOptics. What's the revenue competition from ADAS, automotive and AR/VR today? And which sales levels should these markets contribute by 2025?

Okay. Let me try to address that in terms of -- revenue contribution of the modern technologies. The question mark, I think, is what Ralf called it in his slide although, we have no question whatsoever that these are very important technologies. And just a question mark. I guess, the question is how we can grow it even faster. Now to the potential revenue contribution of those technologies, I think it really does vary. I mean in terms of free space optical communication, that's something where we are active already. So we do get revenue from that to date. It's not huge, but we do get revenue of that today. And we do expect that the -- in particular, the space bound free space optical communication on satellites is something that might take off in the next year, maybe 2, 3 years or thereabout certainly within the strategic period until the middle of the decade. I think -- no, I'm actually -- I'm pretty sure. I'm pretty sure. Same is true for mixed reality, AR/VR here as well. We are in the business already. We do have machines that help clients to build those devices. If the inflection point is next year or the year after, I didn't think I can -- of none us can really tell. I don't know. But I think the sheer fact that a company like Meta, that we have all seen in the video or all the other big tech players out of the valley are heavily investing into that is a testimony for at least the volume and the oomph behind that. Ralf pointed out, it's about being on the platform, but I think it's also about the availability of content. And that will be made available by those companies. So I think within the strategic period until 2025, we will see, I'm pretty sure, we will see a magic fairly, certain that we will see revenue contribution of that part. We also will see some revenue contribution of the Quantum technology. This, though, I think, is further out. I don't think like Quantum Technology plays a major economic role, a financial role for Jenoptik in the next 2 or 3 years. Nevertheless, we thought it's very important to show to you, to our investors and to everybody that's close to our company that we have technology even beyond what many people are talking about today. We just wanted to give you a glimpse of what we also work even if it's not necessarily going to be major sales distributor or -- contributor or I might just say it's contributor in the next 3 years or so. Will Quantum technology play a major role in the second half of the decade? I'm pretty sure. Just simply because of physics -- the law of physics, it's got to burn to. You will understand that I can't give you sort of tangible numbers in terms of how many euros per annum or anything like that, but I hope it at least quantifies the answer. The second part of the question had to do with TRIOPTICS and the composition of TRIOPTICS sales today. We're not disclosing that. We have some certain confidentiality agreements also with customers. But let me just say that TRIOPTICS is strong in classical optical testing. Quite frankly, all of us in the industry know TRIOPTICS from us using their machines. And it's also already fairly very strong and pass the measurement optics for mobile devices, in particular for digital things, the mobile phones that we all carry around. We do show the other options for TRIOPTICS here because there's always a discussion of how much more optics can you put on a mobile phone, right? I mean, there's only so many cameras you can just simply put in it, mine, the one that I just showed has already 4, right, 1 in the front and 2 in the back, 3 in the back actually. Maybe there will be more on it, and there's a lighter sensor and all of that. But there is a limit as to how many cameras you can possibly be popped on the cell phone, on the mobile phone. Therefore, TRIOPTICS is now also focusing on these other more future, even more future-oriented applications in terms of AR/VR or mixed reality where the quality of the image that your image in your, say, glasses or goggles is even more important and even more challenging to make simply because it gets smaller and smaller and optics becomes, the more difficult it is to produce highest qualities. So I hope fully that gives you, at least, a flavor and an idea. It's a shame that we can't show you TRIOPTICS today. We would have loved to actually show you the factory and show TRIOPTICS a bit more in detail. We have planned for everything. But yes, Monday morning, unfortunately, we have to say that, I mean, it's pandemic out there. But we'll certainly have at another point in time the opportunity to show TRIOPTICS to you to show the technology there, the products their, the people there, and we're really looking forward to invite you 1 more time to maybe Hamburg and show you that. Do we have another one here?

Yes, we have some more questions coming from Malte Schaumann, Warburg Research. The Next 2 are referring to light and production until. Early 2020, Jenoptik focused on the strengthening of the automation business and was even expecting another acquisition in the Asian region. What has triggered a change in the strategic view? And the second one, what are the operational advantages for integrating the optical metrology part, which was so far geared towards automotive applications with the other businesses, any synergies to be expected?

On that automotive market piece, I think that's essentially the gist of the whole discussion here. So when we started to think about our company in the middle of the decade. And when we start to think about the future of your Jenoptik, again, we analyzed our strengths and weaknesses. And I think we have certain strengths in the automotive industry, we have some weaknesses, I think that's pretty obvious. We have seen the fundamental changes in the business models in the marketplace in the last 18 months caused by pandemic, but also caused by external drivers in the automotive industry. Again, let me point that out we do not intend to sort of drop the ball on automotive entirely, right from here, and we are certainly committed behind the businesses that we have in there, and for them to be able to fulfill their role in life, the purpose that I mentioned earlier. Nevertheless, I think the outside changes in our marketplace, are fairly dramatic. We come to the conclusion and came to the conclusion that we should focus this business even more. We went about focusing Jenoptik from a diversified industrial conglomerate and transforming it into a focused technology group, focused upon optics and photonics at the end of 2017, beginning of 2018. At that moment in time, we were focusing on technologies, more than on marketplaces. And we are transforming this company to the point where we're in. We are saying that now that we are focused on being a photonics player, the next step in focusing this company is on focusing on growth markets. I'm not here to say that the automotive marketplace is not attractive. It's a huge marketplace, a huge marketplace. That's undergoing dramatic transitions. We have good businesses in that marketplace and that helps the electrification of the fleets because I think the company like Prodomax, for example, can produce and actually benefit from the trend towards ever more electric vehicles. However, in the long run, I'm not talking this year or next year. I'm talking really sort of the long run, middle [Technical Difficulty]. We believe that there is a limit to how much cars will be on this planet. And some people call it peak car, whether that's has been already in 2018 or '19 or whether there was lots of growth or less growth coming out of the current truck crisis. It's not probably to debate. I'm not a car person, we're physicists and we're optics people and photonics people. We sell products to folks in this industry. And from all we can tell there will be something called peak car. Maybe it has been already. So is this an attractive marketplace, Yes, it's a huge marketplace. One of the biggest industries that we have. Is it a fast-growing marketplace overall, I'm not quite sure. It's a marketplace that's been under a lot of pressure. Our businesses in these marketplaces require a lot of cash, times when we are -- have been starting projects with customers in the automotive industry requesting upfront payments and all that kind of good things that have been financed through by the OEMs, thereof. When we do a business or project in the automotive industry, we have to prefinance everything, everything. And that drains a lot of cash and it drains a lot of resources in Jenoptik. Now we can afford that. We always said, we can afford that. We have a lot of cash flow in other businesses. We can use them to grow market share in the automation industry, for example, automation integration businesses. On the other hand, the question we have to ask ourselves as management, the leadership of this company and in the best interest of our shareholders, the folks that put their investments and their trust into us. The question we have to ask ourselves is, is this the best use of the available resources or shouldn't we better invest that money, that resource into growing the businesses that are in much faster-growing marketplaces, into growing our semiconductor business, into growing virtual reality businesses, into growing smart mobility and into growing life science and health care. Again, let me point out, we're not here today to say, okay, by tomorrow, we'll drop the ball on it. The little business of ours, we need that business, we needed to produce the cash that we need to invest into the other business. We are saying though is we don't see that as a large growth opportunity for us. It's a value maximization play that we're intending to play on these -- with these businesses in the automotive industry. And maybe by the middle of the decade, we will be a bit more -- even more focused on marketplaces that are here for sustainable future growth and margin expansion. Any other questions in the queue?

We have 2 more questions from Malte Schaumann regarding the financials, but maybe as we will have the financial presentation later on, would be okay to postpone that to the second Q&A session.

Yes.

But we also have some other questions. The next 1 is coming from Stefan Maichl from LBBW. Could you also provide a margin guidance for each core segment by 2025?

At this moment, we're giving a new midterm guidance on the total portfolio of the group as we see it evolving. We guide for around 20% of the sales being converted into operating profit, EBITDA by 2025. At this point in time, we're not in a position to guide on individual segments. We really, at this point, wanted to give you an idea of how we see the company evolving, how we see developing without going too much into the margins of individual parts. What I will say, though, is we will help you in building your models by transforming it from today's light and optics, lighter production, light and safety and VINCORION setup into the new setup. So we intend to report in the new setup going forward, actually starting next year. But we will, like last time, when we've built these new divisions, we'll help you in adapting your models by providing enough and efficient bridges and guidance as to how to transform that.

Next question from Stefan Maichl was regarding the automotive related business to [indiscernible]. I think that question was already answered before. So I get to the next question, which is coming from Richard Schramm from HSBC. He has a question regarding Smart Mobility. In the presentation, Ralf has mentioned that from the markets for expansion, even though you obviously are not active there, what might be not have a reason because you can't earn that money there. At the end only, North American was explicitly mentioned as target market for expansion. But the acquisition there could be extremely or more expensive. Why do we expect that?

So we just think about the Africa as an example of a place where currently, there's a lot of investment into road safety. But frankly, it's a place where a lot of deaths on the road occur. And with emerging countries having more access to funds and more basically wealth, they spend more on road safety. We're not saying that we have a particular focus on Africa or anything like that. We're saying that there are emerging countries that with the availability of more wealth and more national income, they spend more on infrastructure. And with that, they spend more on road safety. What's important though is they -- the early days, at least typically don't require the same level of funny enough accuracy because we spend a lot of time and effort in our products to make them stand in front of a court of law. If I remember when I was doing a sales ride along with a sales rep of ours, just being on the road with him together observing how they sell products in this arena, it was pretty interesting to see that these salespeople, they don't talk a lot about technology actions. They talk about how Jenoptik helps the government or the related administrative bodies to make their tickets stand up in front of a court, should it be challenged by somebody. And frankly, that's a big driver for accuracy, for repeatability, for the technology we're using as in the competitors. And it appears that in some of those emerging countries, let's just say that it's easier to defend tickets in front of a court of law. So that's why we wanted to point out that in emerging countries, video-based, software-based technology is more important than what we use in terms of speed recognition. In terms of North America, I guess that's a different case. Kevin, did say that we're the biggest provider of equipment for road safety in North America and the U.S. by now already. We do that via a partner. Our partner in large parts of North America not everywhere, not in Canada, not in all states of the U.S., but in large parts of particularly the United States of America is Verra Mobility. It's well known that Verra Mobility has acquired a competitor of ours. So at this moment, we are still happily distributing and selling to Verra Mobility, and there are still happily purchasing equipment from us apparently. We don't think that's going to change dramatically in the next few weeks because those products are homologated and they need to be proven by Germany, the PTP and in the U.S. by the what's called the National Institute of Standards and those type of things. But we do foresee that we will use that opportunity in a way converting a challenge into an opportunity to build up our own sales channel. And if we build up our own sales channel there, we know from Europe, from our experience in Germany and the U.K. and all the European places, if we have our own sales channel and not via a distributor, we can actually make more sales. We can actually make more recurring revenue. We can actually be financially even more successful. So that's what we intend to do, and that's why Kevin managed and mentioned that in his presentation.

We've got another question from Stefan Maichl, LBBW. He's asking if there is a specific sales share target for the Asian market by 2025?

No, we don't have that at this moment in time. It is and continues to be a focus of ours. We always said that we are under -- centered in Asia. The business of TRIOPTICS helps us. Trioptics gives more than 50% of its business in Asia already. With the acquisition of SwissOptics, we now also get SwissOptics in China in Wuhan, a factory that we have. So we have an even stronger presence in China, which will help us to leverage our own presence in Asia. Is there more that we can do? Yes, most certainly. There's more production going on in Asia. So it's still a strategic target of ours to grow our Asian business. We carry that into the new strategic period. We watch with, interest is not the right word. We watch with concerns maybe the ongoing decoupling or the discussion about decoupling. There's almost like 2 hearts beating of me. There is a part of me saying, "You know what, world, if you want to decouple well, great, you need to buy our product 3 times now, not just once, but 3 times. If you want to produce chips in the future in Asia and America and in Europe, well, great, then gives us even more opportunities to sell product." On the other hand, as a human being, as a person, as a leader of a company, I just do believe in free markets, and I believe that the ongoing decoupling or the discussion about decoupling is -- I don't know. It's not the right thing in the long run for the world. So to answer the question, again, it will stay on the agenda. We do want to grow. We are committed to grow our Asian business, but we don't want to give a tangible concrete target in terms of quantitatively spelling out how our Asian business should look like in 2025. It should be bigger than what we have today in terms of present, so growing faster than the rest. But we'll have to see.

We also have some questions regarding the financials coming from Peter Rothenaicher, Baader Bank, even though I would put to the second Q&A session. But we also have 3 questions coming from Uwe Schupp, Deutsche Bank. The first question is, is the fiscal year 2025 guidance based on the old group structure or the new one? The second one, back in the 2017 Analyst Meeting, you indicated that one of the divisions will have their headquarters outside of Germany. Do you stick to that? And the third one, a few years ago, you sold us Prodomax and INTEROB as good businesses. Today, you indicate a potential for a carve-out. How high do you access -- assess the risk of an [ extraordinary ] goodwill write-down in case of an ultimate sale?

So the first one has been a division outside -- headquarter outside of Germany. Well, you can always debate what the headquarter of all Light & Safety business is. But what's certain is that Kevin and a big part of his leadership team is actually located in Camberley. So in a way, the headquarter of our Light & Safety business is in the U.K. today. Now that I don't I want to get the folks in Monheim getting the wrong impression here. Monheim is a very important part of Light & Safety. It's a large place for Light & Safety. But the leadership of the division is to one-half at least in the U.K., with Kevin being English and living and breathing and eating and then doing what already does in England, in Camberley, which is the headquarter of the division in England. And we have another part of leadership team in Monheim, next to Düsseldorf, between Düsseldorf and [indiscernible] in Germany. So if you allow me, I would say we kind of like fulfilled that promise to have this business more internationalized. I mean the fact where a company or a division has its headquarter, whatever the headquarter is, we don't define, by the way, headquarters, has been a vehicle for us to transport that we want to make a business more international. So I hope you accept that I kind of like tick that box by saying Light & Safety has its headquarters in Camberley at the moment and with the big part of the leadership team actually being in England, but it has an equally important site and place in Germany. So that was the first question. Second question has been...

Second was on guidance, [indiscernible].

Oh, guidance. So the guidance, we will talk about that in a bit more detail. Hans-Dieter is going to explain that. Essentially, again, if you take today's business, we do see [indiscernible] already. We know it already. So there is divestments. There might be a bit more divestments while I was talking about product line pruning. We talked about automotive industry. We have to see what that means. We do see potential acquisitions in both parts, yes, maybe even more in the Mobility segment, but also in the Photonics segment. And what we do see is around EUR 1.2 billion and the total portfolio of the group as it will be in 2025 and a margin of around 20% in terms of EBITDA of sales. And in the afternoon, later part of the day, we'll -- Hans-Dieter, in particular, will explain much more how that is build up and what goes out, what comes in and how we think about that from a financial perspective. The question INTEROB and Prodomax, I think that's a very valid one. I mean, again, let me point out, we're not actively putting Prodomax and INTEROB in a shopping window. This is not another, I mean, Korean saga. That's important because, yes, yes, we don't want to be in that position. What we are saying, though, is you want to focus us a bit more on the certain marketplaces. It doesn't mean that we don't run businesses and operate businesses that are not necessary entirely in semicon. We don't want to only be in semicon. It does mean, though, that the focus on investment and further growth is more on the markets as we described in the presentation. Yes, we were thinking about building a global business of automation integration for automotive industries. That's why we following and after the Prodomax acquisition followed on with acquiring INTEROB. Prodomax has already done a lot for us. The intent of Prodomax, after the acquisition of Prodomax, had been to essentially reduce the dependence of an uptick in particular in the automotive industry from combustion engines. In the past, in 2017, 2016 -- not 2016, before we entered into the Prodomax acquisition, around 80% of all activities in Jenoptik's Automotive business, maybe even more of 80% to 90%, were depending on combustion engines, internal combustion engines, diesel and petrol cars. Let's put in on table, that's where we came from, diesel and petrol cars. Now we can all have our opinions about electric mobility or hydrogen cars, about the importance of climate change. One thing is absolutely certain, the days of the gas, gasoline V8 engines are over. And that's what we figured. And that's why we said we have to do something with this business. We cannot just sit here and just wait and see it declining more and more. So at the time we embarked on adding new business to that and slowly and steadily over time, converting it into a business that's less and less dependent on combustion engines. And I think we've been very successful at that. I think today, in light of reduction, I would say, about 60%, maybe even a bit more, is not dependent on combustion engines anymore, is actually geared towards e-mobility and alternative engine vehicles. So that's great. We also wanted to use the integrating businesses to pull through more of our laser devices, photonics devices, and that worked us well. In the last 2 years, we've sold more laser-cutting equipment than in the 4 years prior to the acquisition of Prodomax, INTEROB combined. That's a success. The question, again, we have to ask ourselves though is, going forward, in the middle of the decade, 2025, to what extent do we want to continue to invest into that business or to what extent should we redistribute our investment into other businesses, sheer investment decisions. Nobody here saying Prodomax is a bad business, not at all. We love Prodomax. We love that business. It's successful. It's a great technology. It's financially successful. But we have to make investment decisions as a portfolio company. And if we want to be winning in a place, in the marketplace, not just playing, but winning in the marketplace, we have to make tough decisions, tough investment decisions. We cannot win everywhere. And the question that we have asked ourselves is, what if those markets we address today fit best our own competencies and provide the best chances for value maximization or rather for more growth and margin expansion. And that's what we're saying. We see the growth more in the Semiconductor business and the Electronics business, Healthcare and Life Sciences, and in Mobility segment. And we see the distribution on the contribution, the generation of cash more in the automotive-related businesses. And again, yes, that might mean, could mean that if somebody gives us, offers us and approaches us with offers for a lot of money, then we have to talk. But that's -- we have to do that anyways as the management of in a portfolio company. We have no concrete plants here to start a structured sales process for these businesses, but that could change, that might change, we have to see. The moment plants, they are running more independently, that they become -- they stay as successful as they had and become even more successful, particularly when it comes to our Metrology business, Metrology business is still in difficulties, and we've communicated it all the time. Our Metrology business at this moment is not in a place where it's contributing a lot to gross and margin expansion of the group. And we will change that. We have to change that. So I hope that answers the question. There's no plans to fire sale these businesses, there's no need for that. We believe that they have a good future. They stay within the group for now. And if somebody offers us a lot of money, then we talk.

There are still some questions from several people. Maybe we take just 1 more and skip the rest to the -- or shift the rest to the second Q&A session.

Okay.

The next questions are coming from Craig Abbott, Kepler Cheuvreux. He also had a question regarding Prodomax and INTEROB, which I think has been just answered. And the second question is referring to semi and electronics. In semi and electronics, you mentioned you plan to enter the display market. Could you elaborate on how complementary the technology will be with the optical modules that Jenoptik currently produces?

Right. I guess from a shared technology point of view, Ralf is a better position to answer that. Let me give it a try, and I hope I'm not talking complete nonsense here. But essentially, in terms of displays, we have a partnership with a large provider to help them building certain production tools, a bit similar, I believe, to the lithography tools, but not like the ones that ASML produces or others. It's a different type of lithography in parenthesis, I would say, producing large areas of display, technology, and now I'm getting on choppy waters here. I'm a physicist, so I'm supposed to be able to explain. But I refer to Ralf sitting over there. He is probably better positioned to explain it from a technology perspective. And I hope Ralf, I didn't talk complete nonsense stuff. It's similar to [ lithography ], but somewhat different.

Right. So...

You would need to unmute yourself before you start.

I did unmute myself. Can you hear me? No?

Yes, we can hear you.

Okay. Okay. Good. So yes, unfortunately, we cannot -- that's always a problem with the business where we can't disclose a lot about our customers or the technologies. But to the -- I understood the question, it's about the synergies. So for us, it's very synergistic. So at the end, it requires very high precision optics in the way of high-precision components that are then assembled into a high-performance lens. And yes, we have a lot of synergies with all the other equipment where we're providing, be it systems for, let's say, wafer inspection. So from a technology standpoint, it's very challenging, but it's exactly in the core of our capabilities. And yes, we can provide this to our customers and for -- in the system that it is entirely new technology for that. But we are -- we're using synergistically the technologies we can.

Okay. Thank you. I hope, Craig, I answered at least to some extent, of course, to as much as we can from a nutshell point of view. So with that said, we would like to take a break now. We'll be back at the top of the hour, 4'o clock in the afternoon, German time, which I think is 3'o clock -- 3 in standard time, so London time or wherever you are out there, 15 minutes break. At the top of the hour, we come back. We will focus on the more sort of group-wide initiatives that we talked about in the beginning. We will talk about how we're going to win the War for Talent, for example. We'll talk about how we intend to become even more focused on operational excellence. We'll talk about -- briefly about the new Jenoptik business system that we are going to roll out, and we have something very special for you in terms of technology and ESG. Unfortunately, we can't show you our products this time around, although we were so hopeful that we have you all in Hamburg. But I think we've got something interesting for you when it comes to technology, something pretty cool. So come back at the top of the hour. At the end, we'll also see the financials in more detail, and then we have another Q&A session at the end. So 4'o clock German, 3'o clock per London time. At the top of the hour, we will reconvene and restart. Thank you very much thus far. [Break]

The next couple of minutes, we talk more about factors that we need. We -- are we back in webcast?

Mr. [ Cheryl ], are we back in webcast?

Yes, we are live.

Okay. Welcome again. At the top of the hour, we are going to focus more on [indiscernible] from a corporate perspective. We will have more from a corporate perspective to support [indiscernible]. We'll talk a lot about HR in a minute. I do have an echo here, but I hope that's okay, because everybody else I have an echo here, but I hope you guys can hear me out there, and you can hear me right. So first topic, HR winning the War for Talent. And later on, we'll talk about the Jenoptik business system. Let's focus on HR. HR is a fundamental play. We need the right workforce. We need people that help us executing our vision. We need people to help us deploy our strategies. We need the right mindset. We need to right target systems. We need the right competition system. Let me introduce Maria Koller to you. Maria and I know each other since quite some time. We actually worked together in the past. We both have been, how do I say, shaped by former employee [indiscernible] Danaher, has worked for Danaher for a while. And those of you who know Danaher will probably agree that it has a certain impact on people and a certain mindset and a certain culture. So Maria will share with us our plans going forward, again, winning the War for Talent. It does include certain compensation structures that we want to propose and roll out. It does include even more focus on more value, on value creation, and then how we can pull people together to go into the right direction, in the joint direction and frankly, to be even more interested in our share price. Maria, over to you.

Thanks, Stefan. I'm very pleased to talk to you today, and I hope you can hear me well. So if you go to the next slide, as Stefan indicated, we will share with you today our plans from a cultural transformation point of view, how we want to deliver on our strategy, which you heard previously until '25. And before we do so, you can see on the next slide, we want to pause here a bit because we came along, actually quite a long way, since we started. And as you remember, Jenoptik has been a conglomerate of very rigorous businesses with very different business units, different sites and everybody of them operating in their own way with their own corporate culture. And when we started in 2018 by putting together the strategy for '22, we knew that our culture transformation will be one of our biggest challenge. And I want to share with you how far we came so far and what we have achieved and where we still have to put more focus on. We only did not put our new brand house on the wallpapers in every offices globally, we really worked hard because culture transformation doesn't happen when you talk about it, you really have to act differently. And you need a little bit of time in order to transform one after the other. So what actually -- what have we done? What we have achieved? I tried to put it here together in a different pocket, what have done to get more open, become more open, become more driving and confidence. So let's start with very simple basic things. We put together a performance feedback system, globally. No matter in which entity you work for us, if it's in Japan or in the U.S., the performance feedback process is the same. It's a very simple one, but quite effective. In addition, we rolled out our engagement service globally. We measure that now at least once a year, and every new acquisition, which shows us there's no discussion about it, joins our engagement survey so that we know where we stand, where we can improve ourselves. We also worked very hard on our diversity initiatives. What does it mean? We want to have more international profiles in our management positions and more females. And we launched globally a lot of initiatives in order to become better on our diversity initiatives. What else have we done? We used actually this year to launch a pilot and -- with LinkedIn Learning because the pandemic forced us to offer more learning opportunities globally for all of our employees. And actually, this January next year, no matter in which end do you sit with us, you can join the big database to learn and improve yourself on LinkedIn. We've done a lot of communication in terms of our culture transformation, that probably has not passed 1 week where our employees didn't read any sort of success story or model story we launched on Internet. And we prepared ourselves for mobile working even before the pandemic started. So right now, we are in the process to prepare ourselves in terms of new work and how we want to work and hopefully, the pandemic is gone at one stage in terms we call it hybrid working. What we started very early in the process is to align our target and bonus system globally. So right now, we only offer 5 different bonus schemes, and only our sales force still have individual targets. The rest of us that globally aligned financial targets. So when our Supervisory Board approves our budget in November, December, actually, everybody of us knows what the targets will be for the next year. There's no discussion about that. And that sort of globally aligned target bonus system helped a lot in terms of bringing everybody in the same boat and working together. Where we all spend a lot of time in the last 2 years is to get better in our administration processes. We call that project SPEED, and we worked in all our administration functions in the holding, but also in divisions. In IT, HR, finance, accounting, we launched projects to become leaner and quicker in terms of our admin processes. And as we speak right now, we actually launched yesterday our first phase on SuccessFactors globally, so that we get more transparency to our workforce, not only in Germany, but in every entity we operate in. And Stefan mentioned it already, we started this year to prepare ourselves and define which business system thus fits to Jenoptik. So we didn't just copy and paste the business system which is on the market. We took the time in [ EMC ] for almost half a year to define what we really want to do and how we want to get that started. We hired a colleague -- an ex-colleague of us in during the summer and actually launched already 2 very successful projects this year, so that with January 1, we are fully prepared to roll out our Jenoptik business system globally. And also this the new brand has some values. We changed our employer branding. If you follow us right now on the social media channel, you will find a different Jenoptik than probably 3 or 4 years ago, more color, more diverse profiles, more focused messages. What we also did is we launched some development programs for all hierarchies here, not only for the top executives, but also for new talent in order to groom them for the next challenge. And last but not least, we graded all our positions globally, which is important to compare ourselves internally, who is responding for what, who does what and make decisions comparable, but also with having that now in place, we know on a fingertip is, where do we pay in the market from a compensation point of view and where do we have still some action steps order to come closer to the mid-market. So that are all sort of the list of activities we've done this year, over the last 3 years, in order to come one big step further in our culture transformation. And if you go on the next slide, you actually see that we also measure what we do. We check on a regular basis on how we perform and where do we have to countermeasure and I picked Tier 4 KPIs we mainly focus on. So the first one is diversity. We mentioned how many internationals and females do we have globally in all our management position. We started that actually in 2020. And as you can see here, we moved closer to our first step of target, 30%, and our 25-year target is 33%. We do that on a quarterly basis. But we also measure ourselves actually with an external company with the female career index so far in Germany. They check us on how do we support females in management positions. And actually, we've done that now twice. And last year, we even have been nominated as the achiever of the year in Germany. So here actually it proves that we do a couple of things right in terms of our diversity initiatives. We also measure on a global scale, annually, our engagement score. And as you can see here, we started that in 2018, and we are doing the pro forma into the right direction. Unfortunately, we actually got a hit this year, even have been better last year, but we say that it's a little bit the corona blues, which all sort of -- all got us, but we definitely want to improve that also for the next years. And last but not least, we measure very carefully our voluntary attrition rate. So people, employees who are leaving us on a voluntary base, and we measure that globally. You can see here we decreased our turnover rate from 9% to 5%, which is actually a nice benchmark globally that people seem to be happy with us and want to stay with us. So where we are right now? If you go on the next slide, we could, of course, now say actually, obviously, we've done a couple of things right, but is that enough? And if we are honest to ourselves, all what we've done has really made us better in terms of open. We have a much more open culture as we ever had before. But saying that, we think we really have some room for improvement on driving and confident. So what we have discussed and actually also decided this, we want to use the next couple of years to get better in terms of driving and confident. So right now, we sort of are stopped and paused and say, what have we done good? Where do we have done better? And we are sorting out as we speak, to launch our SuccessFactors to be ready for next year, but also focus our experts and form an actually globally aligned talent management team to make us better and launch our initiatives quicker and faster as we've ever done before. And we also define right now leadership principles which actually go pretty much along with our new -- with our values over driving and confident, but will be more transparent and actually more accurate in order to -- for our leaders to understand what we expect and how we measure them. And we want to launch them next year. So we call actually our initiatives for next year, we call it driving, confident, performance, because we want to get better where we are right now, not in an arrogant way, but in a very confident way. So what exactly do we plan to do? If you go on the next slide, you see we have identified 3 sort of leverages where we want to get focused on. The first is the individual. Our previous initiatives, open driving and confident has been a very sort of bottom-up wave we rolled out for the company. What we have decided is we have to work closely with our managers. So we will launch very crystal clear leadership principles. There will be 10 of them, explain them, develop our managers there, but also sort of ask the questions, if that's really the company you want to work for? Do they really fit for us? Do we want to develop them and [indiscernible] crisp and clear as we done in the past. We also need to shift a little bit gears in terms of recruiting. Focus less on recruiting skills, but recruiting more mindset and potential because the world is changing so quickly, it's easier to train skills than sort of develop mindset and potential. Secondly, we have to work on organizational setup. Stefan and I are coming from a company where actually the organization setup was reviewed on an annual base. Is it the right setup for the strategy we have to find and agree on? So we have to do it in a much more systematic way as we've done it in the past. Review that regularly and also review the talent we have in our internal talent funnel. Do we have enough talent who want to do or are prepared for the next step? And I always say actually the talent funnel is at least as important as the order entry funnel. So we have to put more focus on that. We're also going to use every open positions we have as a chance to change. Is that open position a chance to change processes, change organization instead of just replacing it as it has been before. The nice thing is that this process of reviewing the organization, we can very nicely link the JENOPTIK Business System and put it in the standard work. And what we still continue to focus on is our processes. I think we came a long way -- we came across a long way. We have -- we are definitely better, fast and quicker but we still have to improve there. So processes will still be in our focus. And also for that, actually, that is a very nice and close link with the Jenoptik Business System. So is that all enough? No. What else do we have to do in terms of winning the war for talent? You will see on our next slide. We are very convinced that we have to offer a share-based compensation model to our employees. We have that right now only for a very limited and small group of people. And actually, the demand does come, of course, also from the German organizations, but especially our international colleagues are requesting that. So if we want to get better in terms of attracting talent, but also retaining them in Jenoptik, we are convinced we have to offer a share-based compensation model. And how are we going to do that? Let me say one thing. We want to really take enough time to explore the right set up, because you can do a lot of things wrong if you rush that through, and we don't want to do that. So what we will do this early next year, we want to explore all the options we have and you know them better than I do. There are options. There are [indiscernible]. There are different forms of restrictions you can link with that. You can do different target groups. There's a lot of things we have to explore together with our Supervisory Board and do decisions which model fits best for us, which model fits best for every target group inside the company and how do we finance that and also how do we administer that. So those questions we have to ask for ourselves, answer next year and we want to be ready for a rollout beginning of '23, not next year. Because as I said, we don't want to rush through, we really want to take time to do it right. We have defined the base for that. I think we are ready, but we have to get our options together and do some decisions. So those are the things we plan for the next couple of years. And I think we proved that we can do that because a lot of things have already happened. And after saying that, I'm handing back to my colleague, Stefan. Thank you.

Thank you very much. I think the things to take away our [indiscernible] . We have talked about hiring mindset, more than skill. Of course, in our business skill is important, we all know that optics people, you can't pick off the trees here, not even in Jena you can. There is a lot of talent out there, and we need skills, that's pretty clear, but we are fundamentally convinced that we can train skill, but we can't train mindset. We will focus increasingly on mindset and on getting the right people, and offer them all sorts of training opportunities and move them with us, take them with us. I believe it's good to have right skills. It's good to have the right mindset. It's important to have the right mindset. We will develop Jenoptik into a place where winning is key. If you want to win, come to us. If you are okay with just playing, maybe you find yourself another place. That said, talking about playing, talking about winning. Let's switch gears one more time and focus a bit more on operational excellence. And can we go to the next page, please? And go straight to the next page. Thank you. Maria and I, we both worked for Danaher. It's just one example of a successful, very successful company that employs the right business system. There are others out there. The business system is important for every company. I said in the beginning, it all starts with the vision and our vision is brighter futures with the power of light. An aspiration is important, we want to -- what we aspire is important. We want to reach for more. By the way, the word more, you can find everywhere in an uptick. Strategies are important. We need to understand the game we are playing. We need to know how we win the game we're playing because we want to win. But also important is how to deploy that, how to make it work in every day's lives. How to explain to everyone in an organization of his or her role in that game, in that team. Nobody wins alone. We all win only if we have the best teams with us, behind us, if you're a part of the best team. That's why the HR initiatives are so important. So business systems help all of us to solve the challenges, we as management fix, and to make sure that we all essentially go to the right direction. A business system gives orientation to the organization and helps all of us to turn strategy into reality, to achieve aspirations and to make visions happen. At Jenoptik, we have started to build the business system this year, was really just sort of tipping our toes into the water. We have started to run Kaizen in Jenoptik this year, again, just to sort of get used to the tools and get used to the terminology and tipping toes in the water here. Starting next year, though, we will roll out a new business system for Jenoptik. We are not going to go into too much detail here today. But what's important for me is we're not copying. Of course, most business systems are somehow based on Hoshin Kanri, on at the friends at Toyota, [indiscernible] do for a while and are still doing very successfully. But we want to build out our own system, a system that suits us and a business that fits our needs, a business that fit our marketplaces and our organization and frankly, also our DNA. It is very important. So if I can go to the next page, please. In 2022, we are starting the fundamentals. We're starting to build out the tools and processes we need. We're starting to build on our toolbox. Toolbox that our businesses are supposed to apply as it fits their needs. In 2023, we will focus on our customer. We will focus on our go-to-market and the way we bring our products to the marketplace. Go-to-market with a commercialization tools will be the focus for 2023. In 2024, we aim to overhaul our innovation process. We are an innovative company, and I'll talk about that a bit more in a second. We're in innovation-driven marketplaces. Nevertheless, we will continue to become better, continuous improvement even in innovation is what we're aiming for in 2023 -- sorry, 2024 we will start to focus and roll out innovation-driven tools. And finally, 2025 and forward, we hope that we have lean converted many parts for our company. So lean conversion is essentially the headline over and above Jenoptik businesses. Let me go to the next page and just quickly try to explain what deployment of strategies, Hoshin Kanri way of doing it means for us. Today, we communicated for the first time our Agenda 2025, our More Value approach. The new chapter, the new volume in our book of strategies for Jenoptik. The 4-year agenda. We aim for financial targets in 2025. We aim for growth and margin expansion for More Value until the middle of the decade. We used Hoshin Kanri to break it down into strategic planning every year. So every year gets its annualized targets. So that we can track how much we're making progress, how good our progress actually is towards 2025. And we use tools to break that down into monthly goals and actions. Every organization, every part of our organization, every business within Jenoptik will know, what his or her role is, what its role is in achieving our Agenda 2025, our more value ambition. We'll break it down from a 4-year target agenda to every annualized targets and into monthly action plans and what folks call Bowler Chart. I do know that works. I have seen it work. It's a very, very powerful tool, exhorting -- it's not something that you can just do it in an afternoon. But I know that it works. I'm absolutely convinced that, that will help us to make our strategies a reality, to deploy our strategies and to achieve our ambitions. With that said, switching gears one more time, I would now like to talk about innovation, our innovation power and how much we can make the world a better place? How much we can make sustainable business actually happen. We don't have a presentation though. You saw it for quite a while, how can we bring in this online way to you how much innovation power we have. And we finally came to the conclusion that it's best to put together a video. It is bit longer, 10 minutes or so, but it's worth every second, trust me. Please stay focused. In the next 10 minutes, instead of me talking, instead of my colleagues talking on -- over PowerPoint slides. We will just roll a video in which we will hopefully convince you that Jenoptik is both very innovative and very sustainable, and actually can take things to Mars. So let's roll the video. [Presentation]

I hope that has demonstrated vividly and where you can -- hopefully, you'll remember how innovative Jenoptik is, and how much we can contribute to brighter futures with power of light. Of course, we don't do that just because, we have a better cause behind it, we have big vision. But we also want to make sure that it translates into financial success. And our CFO, Hans-Dieter Schumacher, whom you all know will explain to you that all of that is going to translate into more growth and margin expansion. And into additional focus on value, maybe a bit more than that far. Hans-Dieter, over to you.

Thank you so much, Stefan, and a very, very good afternoon to all of you. And I'm still impressed by this video every time I saw it from my seat what Jenoptik is able to deliver. Yes. If you follow me on the next slide, please, you see our financial targets will be in alignment with our More Value strategy until 2025. Our ambition is to significantly grow our business organically and nonorganically and improve profitability. Our balanced portfolio offers more resilience against potential market fluctuations and drives growth. Having this -- having said this, our key performance indicators, revenue will increase from around EUR 0.9 billion -- EUR 1 billion to EUR 1.2 billion. We will increase our group EBITDA margin to around 20%. And this is the more value aspect, which we will add to the future figures we shared with you. We will increase our return on capital employed, excluding the goodwill to above 20%. Why is this so important? We all think that investing so much in the transformation of Jenoptik. And then the potential you have seen the whole day today, in this growth perspective, we need cash, we need cash flows, we need investments, we need the financing power. And therefore, we want not to forget that we need to have an investment on our capital employed because our capital employed will increase throughout the years to come. Therefore, we have made this addition to underlie the more value strategy until 2025. If you then share with me the next slide, you will see that the development of the group in the next year to the target of EUR 1.5 billion is ambitious. You first [indiscernible], you have already reached between EUR 800 million to EUR 900 million at the year-end. But don't forget, since we have signed the contract with STAR Capital of selling our VINCORION business to them. We have already booked them under IFRS 5, meaning from now on, already EUR 150 million to EUR 160 million in revenue is out of our top line. So meaning with the potential divestment, including VINCORION, we have done or will do a step-down in revenue of the group. And therefore, the target of EUR 1.5 billion is ambitious. You see it here, we have simulated it, it should be around 17% if you take these potential divestments, including with VINCORION into account. Our core business, our actual core business which my colleagues have presented to you, will grow at a CAGR of 7% to 8%, which is nice, which is good. You will see Berliner Glas and SwissOptic also had good growth, competitive growth rate in the years to come. And we will have some acquisitions to reach this EUR 1.2 billion target. So from our perspective, it's a journey, and it's an ambitious target. So it will be a mixture of further acquisitions and divestments as already explained here and there, we will have a portfolio adjustment. So all in all, and we have talked about some parts of the automotive business. All in all, from the year-end, including VINCORION to 2025 with CAGR of 8%, but we could take this divestment, including VINCORION into account 17%. Having said this, please follow me on the next slide. And here you see our profitability, our EBITDA margin with steady growth. And here on this slide. We have done some exercises to make it comparable for you. If you see the 2020 figure, EUR 121 million EBITDA with a margin of above 15%, it's an adjustment done. The reported figure has been EUR 112 million. But you may remember that in this year, we have EUR 19.1 million accrued for restructuring, which has already shown in this year and will show in the years to come, they are a positive impact on our EBITDA development. So we have taken into account this EUR 19.1 million as an accelerator, as a positive impact on the reported figure. But we have also around EUR 10 million impact of the short-term growth in the work because 2020 was the COVID pandemic on a very high level. So if you summarize this, you end up at an adjusted EBITDA of EUR 121 million or above 15%. And in this year, Stefan already mentioned in the beginning, that we are aiming for 19% to 19.5% EBITDA margin including the earn-out from TRIOPTICS and INTEROB. We have taken them out in this slide here to make it comparable and to compare apples with apples. And here you see that we are aiming for 16% to 17% underlying EBITDA margin in this year. And don't forget, if we are selling VINCORION and the closing will happen throughout the months to come. We will lose, obviously, some EBITDA and therefore, we will have a little bit less EBITDA. The organic growth will bring EBITDA to our group, Berliner Glas and SwissOptic obviously in the same manner, and the acquisitions are coming on top. And having said this, you'll see that we are aiming for around 20% in 2025. It's possible and it's coming from the focusing on our photonics growth segments. And it's underlined by the Jenoptik Business System, Stefan has just explained to you and Maria has talked about when she shared with us our intention on the human resources side. So all in all, it's a very ambitious target, but we think it's possible and we can deliver our promises as we have done in the past years. If you then follow me to the next slide, please. I'd like to share with you our return on capital employed targets. You see here some simulation. It's very important that you get it. It's a simulation because actually, we are undergoing the purchase price allocation exercise with Berliner Glas and SwissOptic group because we have today the closing. So it will be now in our figures for the month of December already in this year. And we have done a calculation there. We've done it with TRIOPTICS. And for further acquisitions, we have done a simulation based on the same ratios we have experienced with TRIOPTICS and Berliner Glas and SwissOptic. So it's a simulation. It's the best effort. It's the best guess. And you see here in addition, a very important information for you. You are always asking us about our working capital percent of sales because it's free cash flow relevant. And you're absolutely right that it is very interesting and very important performance indicator we have on our agenda. And you see here that over the period, our working capital in percent of sales will come down. And our target we are aiming for is clearly below the 13% line. We are -- in our simulation, it should be possible to reach around 23%. And where is it coming from? Obviously, our divestment and mainly our revenue in VINCORION, because in VINCORION we have inventory stocks available for more than 30, 40, even 50 years. If you imagine a Leopard 2 tank is driving 50 years, you need inventory to support your customers every day, every month, every year. They need your products and offerings and solutions, the same is with radomes of the Eurofighter. So if we are able to close the selling of the VINCORION, we will make our balance sheet in terms of working capital a little bit lighter, a little bit more in the right direction. So you see it here on the opposite growth and the acquisitions will add some capital employed without the goodwill. So all in all, we are aiming for the 20% return on capital, excluding the goodwill coming from 15% in 2020, probably around 18% in this year, we are aiming for around 20% in 2025. And this is very important because we have to handle this ambitious Agenda 2025 with the more value we have to handle it with the financing of the group. And I will show you now, how our firepower will develop and what our assumptions in this direction on the next slide, please. We have done a simulation also very important simulation on -- based on very important assumption, you'll see in the lower end of the slide here under the headline Assumptions, very important. And the whole time period here from '21 to 2025. We have assumed that we will not be above the target leverage of 3x EBITDA in relationship to net debt. This is very important because this is the line between an investment grade and noninvestment grade. And our intention is to stay always within the investment grade status because it helps us very much to finance this group. And in between, it may be a little bit above. We have the frame with our financing of the group actually. But this is -- our target is to keep the company around this leverage of 3.0. And if you see here the simulation we have done, we have set -- in 2021, we had EUR 270 million, around EUR 269 million firepower under this assumption with our EBITDA. And then we have done the acquisition and we have closed today Berliner Glass and SwissOptic. And then our firepower under the assumption of target leverage of 3.0 is done. At the year-end, we will be around 2.9, 3.0. Then we will get some means from some proceeds from the sale of VINCORION. We have [indiscernible]. So it will increase our firepower a little bit. We have potential divestments. We are -- we have done an assumption in the simulation what we will collect from these potential divestments. And then don't forget from our Annual General Meeting, we have an existing evolution we are allowed to increase our capital by 10%. And we have done the simulation and our assumption has been that we will do it based on a share price of EUR 40, and we are today, after today's meeting, [indiscernible] close already. Our capital increased 10% based on this share price because we have to take into account that there will be a discount on new shares, and we have calculated it 15%. But bring us another debt capacity. And then we have done the assumption in the years to come until 2025, very conservative that we only bring EUR 50 million per year from the operations and the cash and additional firepower, not having taken into account the positive EBITDA development in the years to come. Very, very conservative. But you see it here the result is that we can do our journey, our value journey until 2025, with the clear assumption that we will stay as an investment grade in the targeted leverage of 3.0. So from a financing perspective, we are ready to support, to underlie the strategy, more value until 2025. And this is very important. And having said this, I'd like to hand over to Stefan again, and he will summary -- he will summarize the Agenda 2025 for all of us. Stefan?

Hans-Dieter, thank you very much. We believe that we have ambitious financial targets as well. We also believe that we have ambitious targets when it comes to return on capital employed. We are going to report that return on capital employed to our investors and friends of Jenoptik in more detail going forward. Let's go to the next page, please. Summary of Agenda 2025 More Value. I hope that throughout the day, we've been able to convince you that we came a long way in the last 4 years. But there is ways ahead of us, miles to cover. There's a lot we can do and a lot of we want to do, a lot of we want to achieve. Volume 1 of the More Light strategy of Jenoptik is almost done. We've taken a lot of [ boxes ]. We delivered on a lot of targets. We're now wanting to start writing volume #2, More Value. We continued down the road with a focusing our business, focusing on technology, but now even focusing the marketplaces. Before I go into more of those details, let's go to the next page. We've talked a lot about market. We've talked a lot about market dynamics, a lot of our technologies. But there's also always a discussion about megatrends. And we're absolutely certain that there are megatrends in this planet, in this society that will drive the demand of photonics solutions way into the future. The digitization of our world. Something that, at COVID, unfortunately, one has to say, as a catalyst, something that grows ever bigger by the hour essentially. This digitization of our world wouldn't be possible without optics and photonics. The Internet would work without light. We don't even have to talk about the chip crisis. There's a growing demand for semiconductor and electronics applications in our world, the usage of augmented and virtual reality and all the things that we talked about earlier today, and in particular, Ralf alluded to, health care and life sciences. They are 2 fundamental trends. There are ever more people on planet Earth, and they come ever older. The older we get, the more stress we put on health care systems. And in order for our health care systems to be able to cope with that demand, they need to become more effective, more efficient and photonics and optics helps spot in that course. Don't even have to talk DNA sequencing or [ lifestyle imaging ] and all of those good things that we're working on together with partners around the globe. The fact of the matter is modern life science and health care would not be possible without Light & Optics. When it comes to manufacturing, we really have to find new ways of producing goods and services in a more sustainable manner. You want to preserve this planet. And for that, smart manufacturing is absolutely required, and it's not possible without life science -- without optics and photonics. We talked about mobility. We talked about the fact that every [ data ] on the road is there too many. We also talked about the fact that we need to find new ways of directing traffic. We need to find new ways of having highly congested areas cleared up, and may be for even charging a bit more if one absolutely has to drive into a congestion area and to a congestion zone. So Smart Mobility need solutions, and they are based on optics and photonics. We do believe that our markets will grow throughout the decade, and we can outgrow and we can participate on that growth big turn. So big, big mega drivers behind our business plans. If we can go to the next page, please. We aim for Jenoptik to focus increasingly over the years on 3 core markets. We aspire to bring the next level of digitization by contributing photonics-based, optics-based products and enabling the production of those devices. And we want this market to contribute about 50% roughly of the overall turnover of the group in 2025. It's a very attractive, fast-growing market. It enables a lot of profit, margin expansion. But we also know that it can be pretty [ simple ]. And to support the resilience of our group overall, we have 2 other interesting markets in addition to it. We aspire to be the leading provider of photonics solutions in terms of OEM partnership, really helping our large corporate customers to improve the lives of millions of people around the globe. And we aspire to become a global provider of full solutions when it comes to Smart Mobility, being not just a hardware provider in that part of our business, but expanding on our recurring revenue streams, even more focus on software and services going forward. We'll set up our businesses around business models. We'll group together our business-to-business activities, we'll drive gross and margin expansion predominantly, not only but predominantly focused on hardware and supplier of services with key account structures and key accounts customers. And we drive our Smart Mobility in a business-to-government fashion going forward. We believe that with that set up, we were able to produce about 20% of that around EUR 1.2 billion in sales by 2025 as an EBITDA margin. Margin expansion is important. We want to drive more value. We want to drive more ROCE, as discussed by Hans-Dieter. We aim to have a 20% ROCE, excluding the goodwill by 2025. So if we can go to the next and last page. In this next chapter, this next volume lever of our strategy book is the next stage of our journey. We want to create more value for our shareholders. We aim to do that by transforming Jenoptik not just into a globally leading pure photonics player and very additionally focusing on 3 highly attractive growth markets. Now let me find out one more time. We are not saying that we drop the ball on everything else by tomorrow. We have important businesses, for example, in the automotive industry. But we do believe that when it comes to investment decisions and return on capital employed, it's more attractive to operate in our new 3 core markets. The ROCEs that we can get from those markets are simply higher. Return on capital employed is more attractive in those segments. We want to grow organic growth, and we want to spice it up with nonorganic growth activities. We want to manage, continue to manage our portfolio. It does include acquisitions and divestments. We believe that there will be more acquisition maybe and large acquisition percentage. The Smart Mobility Solutions segment versus Advanced Photonic Solutions segment, where we did a lot of large acquisitions already in the last 18 months. We have demonstrated in the last 4 years that we can deliver on our financial targets, on our strategic targets. And the best proof of that is the expansion of profitability that we managed to pull out since 2017. We do believe that this journey continues. We will expand our margins. We'll step up our profitability. And again, put about 20% of sales into operational profit in terms of EBITDA by 2025. We can do that based on an increasing firepower, financial power that helps us to do both actually to do transformatory deals when needed and to do bolt-on acquisitions when it makes sense. And all of that together is the next volume again in our agenda, the volume we call More Value. That said, let me break here. We're now more than happy to receive even more questions. I know that we already got them. But before we go there, thank you very, very much again to all of you for joining us online. It would have been so lovely to see you all in Hamburg. We would have liked to show you our products in the flash to see you all to go for dinner tonight and to show you the TRIOPTICS tomorrow. Unfortunately, again, pandemic changed our plans one more time. But as I said earlier, we'll fight back, we'll win this game. There is no question about it. We are stronger than COVID all together. We will win that and will come out of the pandemic even stronger. Okay. Questions? I'm looking into, again, the [ end ] room here, and we'll get questions.

Yes, we have questions. I will start with [indiscernible] which were sent to us already during the first Q&A session. The first 2 questions are coming from Peter Rothenaicher, Baader Bank. To what extent does your sales target of EUR 1.2 billion for 2025 include sales of Prodomax into INTEROB, Hommel. And the second one, what investment in million euro would be necessary to achieve this target?

Look, I guess you will understand if I'm saying that we will not give any particular guidance on individual businesses or product lines, we've never done that in the past. But I think we can summarize how much sales contribution those businesses roughly are going to have or would have this year, we are going to help you, as I said earlier, in transforming our models. But Hans-Dieter, maybe you can help us and just roughly indicating Prodomax, INTEROB and Hommel together, how much sales are we talking?

Yes, I'd love to do. Thanks for the question. Actual on 2021 figures, we are talking about around EUR 100 million, EUR 110 million in sales. And this is what we did in the bridge on Slide #65 when I presented the CAGRs and the development of the sales revenues figures of our group in the divestment box, so to speak. You saw the EUR 150 million to EUR 160 million of VINCORION in this EUR 100 million, EUR 110 million divestments of the other businesses as an estimation, as an simulation because we did not say the year actually driving for value of these businesses. But this is the simulation. Hence, yes. This is the figure.

Thank you. There was another question, I think.

Yes. There is another question coming from Richard Schramm, HSBC regarding Light & Safety or future Smart Mobility Solutions. He is asking if there were no interesting targets for an acquisition because except for ESSA we did not make any major acquisitions during the past years?

Well, again, very interested question. Obviously, we cannot and will not disclose in more detail in which processes we participated. I can say that we have been interested in acquisitions for Light & Safety in the past already, not all acquisition processes. Now kind of successfully at the end, we participated, not always that we came to a successful signing of a contract. But we know that there are interesting companies and targets out there. Some of them have been sold. Some of them are still for sale, and we are continuing to fill our funnel in that segment.

Then we have another question coming from Stefan Maichl, LBBW. Could you provide some insights on the divestment process of VINCORION? Has there been strategic investors involved in the bidding process? Do you see any showstoppers ahead?

Yes. Look, I mean, VINCORION has been a longer process. So during the process -- unfortunately, I have to say, with this all required humbleness here. During the process, we've talked to a lot of potential acquirers, strategics, financial sponsors, all sorts of ideas have been discussed all the way to should we maybe even do a spin-off or all sorts of other ideas. We're grateful that we're now planning to partner with STAR Capital that is specialized on investing into midsized companies in this area and a partner that we believe can drive the future, can provide an even better future for VINCORION. I again will say that it's been a hard process. I mean, when we announced the project to sell VINCORION and the structural process, clearly, we did not even foresee the challenges that we face. VINCORION is an interesting business, is not just distressed asset in any way shape or form. But frankly, at the beginning -- and you will remember that at the end of 2019, I was saying in public that we're well on track, we're well underway in that process. But beginning of 2020, a lot of things changed. To name just a few, there was all the debate about America First and then later on the pandemic hit and the aviation industry basically went into a severe crisis. And let me just say that the upcoming general elections in Germany beginning of this year became even more challenging the discussions that we had with partners. Germany will have a new government pretty soon. It's an interesting combination of political parties, will be responsible for, for example, issuing export licensees for defense products, the Ministry of Economics that's responsible for that in Germany. That would be an interesting thing to observe. We're just glad that from now on we can observe it. We don't have to deal with it anymore. That said, I wanted to explicitly, again, thank our partners, that's our capital, but even more and much more the team at VINCORION. It's a great team. You guys have put together a great business, and they have been loyal throughout the hard process to be, as I said, put on a shopping window for such a long time is not an easy thing. It was not easy for customers, but in particular, for the management and the team at VINCORION. So I thank you very much to that team for being so dedicated and so loyal to the group. Any more questions?

We've got more questions coming from Malte Schaumann, Warburg Research. The first one refers to the guidance. It's including the contribution from new expected acquisitions, which you estimate to be between EUR 260 million to EUR 270 million. The current businesses, excluding divestments, should apparently reach revenue of roughly EUR 930 million to EUR 940 million by 2025. This target implies an organic growth rate of roughly 5.5% to 6% in comparison to an adjusted sales base of around EUR 750 million, excluding divestments, but including Berliner Glas and SwissOptic. Why is the organic growth of the group seen at only mid-single-digit rates given strong growth you expected in many end markets, coupled with an order intake of already above EUR 1 billion and the older structure, which probably translates into an order level of roughly EUR 850 million to EUR 900 million in 2021 for the new Jenoptik excluding divestments, including Berliner Glas?

Oh my God, I must say that, that was a complex question kind of complex statement. And I'm not quite sure I could follow all the calculations. The [indiscernible] here. So I probably should refer to Hans-Dieter for the details. But I think -- and I do hope that the bridge that we provided in the presentation give more clarity on that. We believe that the underlying growth rates, if you take into account divestments and acquisitions, is attractive and reflects our technology game here. There's always a debate. Can you drive further growth, faster growth maybe at the expense of margins? Or should we focus more on margins and maybe except less growth? We believe that with what we have put out as guidance is around EUR 1.2 billion in sales and 20% in margins and profitability. And in ROCE by the way, we found a good balance to drive overall value for our shareholders. But I think Hans-Dieter can explain a bit more what exactly that calculation has been. Hans-Dieter, do you want to take that?

Yes. Thank you, Stefan, and thank you, Malte, for your question. If you remember our slide, as Stefan already mentioned on Page #65 our bridge -- our revenue bridge, we have one main difference between your calculation and our calculation. We did not calculate [ EUR 120 billion ]. You did calculate EUR 120 million in terms of sales for Berliner Glas Medical and SwissOptics in 2021 already. You may remember that we just today closed this acquisition. So we have only 1 month to go in 2021. So it's a much, much smaller amount because it's only a 12 of the yearly figure. And in our bridge, we have the main impact of this acquisition in the years between 2022 and 2025. This is the main difference in your calculation because your assumption concerning VINCORION is closed and other divestments is also closed. This is the main. So the starting point Jenoptik's knew 2021 is not EUR 750 million. It's -- you see it in our figures, it's started with around EUR 630 million. This is the main difference. So this is why we said our organic CAGR will be 7% to 8%. And our CAGR then after these divestments will be 17%. This hopefully explains the difference.

The next question from Malte Schaumann is referring to the revenue contribution of business area, which will be faced due to weak market positioning. And the question is, of which time this is expected to happen? And are there cost burdens associated with this process?

Well, again, we have to what we've referred to. We're referring to the branded businesses. We may or may not face -- may or may not keep them in the portfolio. When it comes to the business line that Ralf had -- if that's what you're referring to, Ralf had in his metrics. Then the revenue there is not big. It's not a material contribution we're talking. Ralf, I don't know what you're referring to. If you're referring to the slide number has been rather than this BCG metrics at [ Prodomax ] business. And that's just one product line. It's not a major product line. And with respect to the other businesses that we will run more independently. Again, we're not here to give you a target to sell that. We're not here to accept any target to sell that. We may get a request. And if so we have to speak. That's something that we have to do anyways. But other than that, their purpose in life is going to be to produce cash and cash that we need to invest into growth for maximizing value their purpose in life.

The last question from Malte Schaumann is referring to the PPA effects regarding the latest acquisition of Berliner Glas and SwissOptic. Whether we can already give a ballpark figure for 2021 or the next years?

I guess, Hans-Dieter that's for you, but it's too early to tell, I would think, isn't it?

Yes, it is. I'm sorry, we cannot tell it today. But in the next weeks, we are able to do so, yes.

And then we have a question coming from Richard Schramm, HSBC. He is asking why we do give a target for the ROCE without goodwill?

Well, we just saw that we're talking about the underlying business. Hans-Dieter, I don't know if you have any more insight to share with that group here. It's always a debate with or without goodwill. We just saw that we wanted to do the underlying so that we don't have too many special effect in it with or without goodwill or without other effects. I guess that's the main explanation figure or...

Yes. And maybe in addition, Stefan, it's also -- it was also very difficult for me and my team to simulate ready for the Capital Market Days the impacts because we are not sure about the goodwill coming along with Berliner Glas and SwissOptics at the moment. It's a work in process, still work in process. So we calculated it, we simulated it based on our prior optics experience, but it may be a little bit different and the same with the potential acquisitions in the years to come. So it's just a matter of the simulation. And because we have realized this uncertainty, we just thought it would be better because we are more able to simulate more precise the capital employed with output risk, we thought this would be better for the 2 days event.

Thank you. And in particular, we see acquisitions will come, maybe, and no at all. The good might be at the point in time.

And we have the next question coming from Stefan Maichl, LBBW. After growth in the Berliner Glas, SwissOptic acquisition, could you provide more insight into the relevant financials of the business above all the EBITDA margin -- EBITDA we just mentioned, about the EBITDA margin.

Unfortunately, we're not in a position to disclose that. At this point in time, we have agreed with the seller, but we can only disclose what we have disclosed in our press release thus far. And we have to see post closing, what -- now that we actually can go into the business with the financial spring. Up until now, it was just between saying in closing, so you will understand that we don't have that much detail. We just closed it today so we need a bit more time to dig into the details.

And the second question of Stefan Maichl is referring also to the divestment of VINCORION possible acquisitions. Will there be essential impact of the acquisition? I think he is referring to Berliner Glas and SwissOptic and the divestment of VINCORION on the group tax rate in 2022, which was historically rather low.

Hans-Dieter, that's for you.

Yes. Thank you, Stefan and Mr. Maichl. Yes, probably our tax rate, I recently talked to the lady who is leading this team, this tax team. It's a matter of fact we probably will have activated all tax assets at the year-end. And we are thinking we are assuming that we are coming more and more to a normal tax rate as a Germany-based group. So our tax rate will increase in the years to come. In this year, it will stay at -- so to speak at a relatively low level, but it will increase already from the years to come. From 2022 and onwards, we will see more and more of the development in the direction of, let's say, 28% to 30% may be already starting at 2020. This is the 2 days perspective, but more to come, yes.

And then we have some more questions coming from Peter Rothenaicher, Baader Bank. What will be your reporting structure in the future? Will you report Life Science & MedTech sales and results separately? And will you report noncore, which means automotive activities separately?

We are going to report on the divisional structure, i.e., Advanced Photonic Solutions, Smart Mobility Solutions and the other nonoptic branded products or other companies that we mentioned, the more stand-alone businesses. We will report in that structure. We're not going to segment these divisions further in our reporting structure.

We've got another question coming from Malte Schaumann, Warburg Research. Referring to the VINCORION sales transaction valuation should reach an enterprise value of EUR 130 million, including an equity portion of EUR 65 million. Could you provide further insight on the composition of these EUR 65 million liabilities part, for instance, pensions, financial debt of kind of other obligations?

Here as well, we have agreed with the purchaser that we will not disclose any further details of the acquisition -- of the transaction at this point. The EUR 65 million that you have seen on the chart have been in the net proceedings, not equity value. There is an additional part coming from the pension schemes. So those are net proceeding, not equity value. But we have not -- we're not in a position to disclose any further details at this moment.

And then we have a question coming from Lasse Stueben, Berenberg. First one is referring to HR. What level of head count additions do you looking at to reach in the midterm guidance of EUR 1.2 billion? What is the strategy to find these employees given the highly specialized nature of the business and which areas will you be looking to add staff?

Maria, I guess that's something where you can help, in particular, how we find people and where we find them. Overall, we do not have a particular sort of guidance or target on head count. But maybe you can explain a bit more how we go about finding the right people and right -- yes, the right folks to keep them actually attract them, not just attracting them, but retaining them.

Actually, yes, true. So in terms of head count planning, we go online with this sales increase and also but deduct an efficiency increase. So that actually is pretty much aligned on how do we find them and attract them is we have actually now specialized recruiting teams in all our big countries. So we have in China, in Germany and in the U.S., we have dedicated recruiting resources. We do a lot of active sourcing right now, actually. We're getting better there. We align them, we work together globally and exchange strategy. So that's on the how we find them and how we retain them actually. We use a lot of what we have shown previously, and we hope, especially with the share-based compensation also will be more attractive going forward. But honestly, the culture change helps us the most in order to be an attractive employer. If the money is important, but that's normally not why people stay with us.

Maria, thank you. We have to be a bit mindful of time here. We still have a lot of questions in the e-mail inbox. We're trying to address most of them. But please understand that at some point, we would have to close the incoming, the receiving of new questions. We will carry on a bit more, but we'll have to be a bit mindful of the time. Let's see. There are way more questions. So next question.

The second question coming -- no, sorry, from Lasse Stueben regarding the R&D investment. Is there a new target for R&D investments, given one of the old pillars was more innovation?

Yes, good question. We have not communicated, we are not -- we do not plan to communicate a specific R&D target. We will continue our quest for more innovation. I would say that I think about 10% overall of innovation money, 10% of sales is a good number for our business. I don't think that will change much. So I would -- is that result having discussed that in detail here. I would think that the 10% mark is around right for our business.

Then we have 2 questions coming from Craig Abbott, Kepler Cheuvreux. First one, referring to Smart Mobility. Mentioned much of your North American operations have been in partnership with Verra Mobility, which has been acquired by a competitor. How significantly is the North American share of your current -- for your current Light & Safety operations, and how confident are you in being able to compensate for this potential loss of the business, assuming no potentially compensating acquisitions are made? I think we more or less answered that before.

Let me just clarify then maybe not Verra Mobility has acquired -- has been acquired, but Verra Mobility has acquired somebody who is a competitor of ours. The U.S. market -- and we're tracking the U.S. market, just to be clear. U.S. market is important for us. It's not 50% of the business, but it's an important market. And we have to act there. We have to do something about it. We intend to build up our own channels. And we, again, take it as an opportunity in a way now that we have to get our act together to actually build up our own channel, we may as well build up our recurring revenue stream there and maybe even drive up margins.

Okay. Then we had a second question from Craig Abbott. Regarding businesses earmarked for divestment, how optimistic are you there could be potential candidates to be acquired? The Hommel activities, given that the structural decline in the core end market is the same for all players.

Yes. I don't think we have said that we've earmarked those businesses for sale, but we have said that if somebody have an attractive offer, we talk. If not, then we just continue the business and maximize the value. So therefore, we're not too concerned about that question because it's not our first strategic intent to sell them. Those are good businesses. There are good teams in there, good people with an attractive position in particular. When it comes to Hommel and our metrology business for the automotive industry, we do believe that there is a chance that they will managed to be more and more geared towards like true mobility, and we will support that. We will maximize the value of that business and the rest we have to see.

So I think then we have the last question for today coming from Giorgi Tevzadze from EOF Partners. What would be starting adjusted EBITDA margin in 2021 for the core business, excluding the VINCORION and potential divestments? I'm getting at roughly 19%. So does that mean just 1% improvement until 2025?

Well, we're not disclosing those particular figures. In particular, we're not disclosing and guiding part of VINCORION EBITDA numbers at the moment. Obviously, that's something that you can see in our quarterly reports The group's guidance is that including onetime effects, we will guide for between 19% and 19.5% of EBITDA. But we also said all the time there are significant onetime impacts there. The underlying profitability stripping out all those onetimers is way above -- is above 16%. No, the question is way above or above it. It's above 16% that's for sure. 16%, that's for sure. On the slide, you have seen it somewhere between 16% and 17%. So I guess our slides are fairly correct, as we made the effort of, they're fairly correct. And everything else, I would like to ask you to remain a bit more patient. We have a couple of weeks left. And one thing for sure, we're going to work hard to achieve our guidance for the group. Things are getting tougher by the hour when it comes to supply chain disruptions. Thank God, we dialed into our models, certain contingency for that. We do hope that what we call the fourth wave in Germany now is going to ease off at some point. Frankly, we have another problem, not just supply chain, but by now, we have actually to fight with having enough people to put in front of the machines and stuff because the sickness rate is going up and up here, in particular in the east of Germany. So we centered our guidance. We have thank God enough contingency in it. We actually do need it. And everything else we'll report when we come to reporting our financials. And we're probably going to do an interim somewhere sort of early part of Q1 preliminary figures. And at that moment, we'll certainly be able to tell you more about the individual contribution. Okay. Well, I think we're coming to the end of it. Again, thank you very much for participating. I can't stress enough how much we value your participation and your -- the fact that you hop on this live stream online, we would have loved to see you all in the flash in Hamburg to show up our products and to show a bit more about TRIOPTICS. But given the recent developments, it became much clearer over the weekend that trouble is more and more of a problem. We hope that this whole discussion about Omicron and whatever the next variant might be is not going to change the world yet a another time. But if so, well, we will manage that, we'll fight back, and we will win this fight against COVID-19, I'm pretty sure. We here at Jenoptik, what we can. And I think we have demonstrated over the last 18 months that we are a resilient bunch. We have demonstrated resilience in our businesses. We have demonstrated the ability to adapt. I think we have demonstrated the ability to act and interact and to execute. I think that's the basis for future success. We do hope that like the videos that we put together, we think that it gives a glimpse of what we're able to do. And we are pretty certain that our next volume for strategic agenda, the agenda to [ 2025 ] staged through to 2025, which as I said, we entitled More Value will provide more value to our shareholders, all stakeholders involved. With that, thank you very much for tuning in today.