LPKF Laser & Electronics SE (LPK) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to our conference call for the first 9 months of 2024. My name is Bettina Schafer, and I'm part of the Investor Relations team at LPKF and your host today for this call. [Operator Instructions] The conference will be recorded and published for a period of two weeks on our website. Klaus Fiedler, CEO; and Christian Witt, CFO, will now give you an overview of our business development in the first 9 months 2024. And before we start, as always, I would like to point out that any forward-looking statements in today's presentation are based on information currently available. These forward-looking statements are not to be understood as guarantees of future performance and results. Ladies and gentlemen, I now hand over to Klaus Fiedler. Please go ahead, Klaus.

Thank you very much, Bettina, and welcome, everybody, to our 9 months report conference call of LPKF. Before we dive into an update of the business and market situation and the numbers, just a couple of words on the change in the Board that was announced yesterday. This is a process that already started many months ago, where there was a mutual agreement between our Supervisory Board and Christian Witt that he would not go for a third term at LPKF, giving the Supervisory Board the opportunity to set new actions in the CFO role, giving Christian the opportunity to pursue his career with other opportunities. The search for a successor is well underway, and we expect that the interim period will be only a few months. And I want to congratulate Christian to his new role, and I'm very sure we will stay in touch.

Good. Thanks very much, Klaus, for the congratulations, yes. Happy to take on the new role. Glad for all everything I could do with LPKF, and I'm sure we will stay connected very well, as you said, also over the next and longer time.

Thank you very much, Christian. And with that, let's dive into an update of our business. What is our business performance after the first 9 months? We see ourselves with a solid business performance despite having a challenging environment in many markets, and automotive being here clearly one of the markets that is currently going very slow. So in the big picture, what do we see? The megatrend of artificial intelligence and consecutive changes in the semiconductor market drive a strong demand for our LIDE products that is very clearly a growth factor that we see here and now. On the other hand, the ongoing reluctance to invest in the automotive sector forces us to make a slight adjustment of our guidance because we don't see this appetite for investments in automotive picking up in the short and potentially also midterm. We are working with high energy on tangible measures to reduce our fixed costs to adapt to this market situation and also our overall efficiency. We are in the implementation phase. We are seeing first results in September, and we expect to see the full outcome of these measures in '25. Looking at revenue, we are slightly above last year year-on-year, and we are in line with our guidance and forecast for what we projected for Q3. When we look at order entry, we had a slow first half in our markets. I will say a couple of more words about it in the next slide. But we expect order entry in our Electronics and Solar segments to clearly improve in the coming months. And we don't, on the other hand, expect any short-term improvements in the Welding segment due to its exposure to the automotive sector and takes the consecutive measures to keep our costs in line with the current market situation. When we go to the next slide, a bit more details. What's going on in our markets. In Q2, I reported that we had a well-filled pipeline, but a slow order conversion in electronics and prototyping. That picked up significantly in Q3, despite the overall EMS market still being slow. Reason is clear, we are replacing legacy technology with future technology. So even when the overall market is slow, we take a bigger and bigger piece of the pie, and we saw that in our order entry in Q3, clearly better, but we still see, especially in the EMS market, a strong volatility. So people are clearly watching their CapEx expenditure very closely. Pipeline-wise, we have the strongest pipeline ever. So the market interest is clearly there. We see, and that converts into POs, a strong demand in LIDE for both advanced packaging and other applications. So this one really is on a growth path. By and large, I see that we about doubled our sales this year relative to last year, and we see the fundamental trends getting stable and very tangible. So LIDE, for me, is well on track, and it's helping us also as a growth factor in an overall difficult market. Thin-film market, thin-film solar continues to grow. We see that China is currently being very hesitant with CapEx. So we see that deals for '25, we usually would have expected for Q3 are on the table, but go a lot slower due to the availability of financing. The current changes that China made also in their interest rates and other measures to basically boost their economy, we see that things are moving a bit faster now. But overall, with China, we need to closely monitor the market situation. Markets for laser welding with the automotive exposure is very clearly below expectations. And we don't see that automotive will improve in the short term. So we are preparing accordingly. Medical markets are picking up. So here we see a better outlook towards '25. And just last week, at the Fakuma trade show, we announced a new product line and the new technology behind this product line that should significantly increase our addressable market to counter this current market slowness. And our first biotech product, ARRALYZE, it's now under operation and verification in several application fields. It's still a difficult path to get order conversions. We are new players, but we see that we are getting significantly closer here, and we are constantly adapting our market approach to really make the most out of this great opportunity. In business development, strongly increasing order entry for LIDE was to be expected. What for me is a very positive signal here that now many very large companies are taking strategic decisions which technology to use to address this upcoming disruption in advanced packaging. These companies do very extensive technology due diligence processes and winning the orders for them. I just got another one in yesterday shows us that our positioning with LIDE against a competitive market is correct. So here, we see the growth path very nicely on track. In perovskite, as a new thin-film solar technology, which could trigger a significant growth in that market, yes, it continues to be in strong focus. A lot of companies are working on it, but with a CapEx constraint behind that we didn't see 3 quarters ago. So people are focused on it, but no longer spending immediately, I need to get a line in place. They have gotten more conservative in their approach. And we see increasing competition in China as always when a new potentially very large market pops up. We see ourselves positioned as a very clear technology leader, but still need to observe very closely where competition is standing because price-wise, they, of course, have an advantage versus to LPKF. The technology shift to laser depaneling from legacy technologies in Electronics is continuing. That means even when the EMS market is a slow market at the moment, due to the replacement trend, we see the demand is now in Q3 back to where we expected it. Our legacy products, for example, our stencil lasers for classic EMS, Solar mass production. That is a slow market, but it's beginning to pick up now towards '25. We see requests for bulk deals and so on. So we see an upside trend. But in the running year, that was clearly a market below our expectation. And as mentioned, automotive industry laser welding, significantly below expectations. The deals that are there, we see ourselves positioned quite well, but the overall addressable market is very low at the moment. We need to adapt in our cost structure. So when we look at operations. Operations is running smooth this year, on track, no significant bottlenecks. Still now end of October, we are flexible to accept POs in many sectors and bring them into revenue. So that's good. We have short-term measures to reduce costs implemented, and we are implementing, as we speak, also structural measures. We need to basically come to a better fixed cost structure with the right measures. So adapting to each market accordingly, not with the one size fits all. And this is in the implementation phase now, but also in several areas in continued evaluation. We need to get lean wherever we see a tangible opportunity. So that's our overall market situation. In the big picture, I see that we are largely able to compensate slow markets with our growth drivers. But we have markets like automotive that currently are so slow that it's not a full compensation, which allows -- brought us to the decision that we need to slightly reduce our guidance. And with that, I want to hand over to Christian to say a couple of words on the numbers.

Thanks, Klaus. Let's have a look at the numbers. Looking at sales, year-to-date sales are just slightly above '23. EBIT is down about EUR 2.1 million. Main reason here is that we have about EUR 1.1 million less in operating margin and about EUR 1 million less in -- due to restructuring and consulting costs, which we have shown below the adjusted EBIT. Looking into the operating margin, the key drivers there, and we'll see that later on as well, is that from last to this year, we do have some increased spending on ARRALYZE, where we are moving into the business as well into the commercialization basically. And in LIDE, mainly based on the project, which we are doing with the semiconductor company, which we announced in early 2023, which is a 3-year project. So that's just the 2 drivers behind the lower operating margin. Fixed cost reductions. We have first smaller effect visible already in September '24. We will see a bit more throughout the end of the year. And the main effects of our expected full year savings, we will see during 2025 already. Some will not be fully visible in '25. For example, if you have material savings and you still have stock and purchase orders already issued, well, then you have to wait until this is used up. So some of it of the full year effect will kick in, in late '25, but the very most part already in the full year of '25, it will be affected. Looking at our free cash flow, that's much less negative in Q3 than it was last year. Key improvement here is that we are doing better during the year in working capital, and that's basically due to an improved receivables position. Headcount. Here, the increase is mainly not building up personnel here and there. It is mainly a fact that we have in-sourced some previously outsourced service capacities in Asia, which will become an integral part of our future consolidated service strategy in Asia. And on the other hand, we have, as mentioned before, some additional spend in our semiconductor project as well as for the commercialization of ARRALYZE. Order intake in Q3 is -- during the Q3 is slightly weaker, and that is basically due to Welding and the Welding weakness, which -- the weakness in order intake, which in the market, which Klaus has mentioned already previously. Looking by segments at revenue and EBIT. In Electronics, we see an improved order intake in Q3 as expected. And we see that we continue with our deliveries as planned. So operations are running smooth. LIDE continues well. The major part of deliveries we will have in Q4. So if you were in our factory, you would see quite a few machines either being finished or not see them any longer. We have some additional costs that I mentioned already on the project-based semiconductor topics. Looking at Development, demand recovery is as expected, same as in Electronics. We are still suffering on the year-to-date basis from a weak first half of the year. ARRALYZE, as mentioned previously, is under operations, a certain -- sorry, certain application fields are in operational verification at the moment with customers -- with prospective customers. So that is progressing. And we still continue to see that our investment in the commercialization of ARRALYZE affects the EBIT negatively in Development. And you can clearly see that in the change '23, '24 as well as in the full numbers. Welding, slow market, competitive environment, as described. Cost reduction measures here have been started and are effective. So that's working as it should. And on Solar, it's relatively a few comments. With solid performance, solid deliveries, we have improved profitability through higher sales and improved gross margins here. So we've recovered some of the issues we had early on. So that's good. And as you can see, we already have a good chunk of solar sales of the year done by Q3, and we have more deliveries. So we have no risk of any bulk deals going from this year into next year. That is all done because it's all delivered. Looking at cash flow. We still have a high level of net working capital due to the production for Q4, but as well due to preproduction, which we are doing for the solar deals for first half of '25. We have clearly improved collections in Q3, especially in Solar, and we are in an okay position there. We will see a clear improvement of working capital again towards the year-end, nevertheless, with a higher-than-usual inventory due to the topics mentioned. And I think with that, I would hand back to Klaus to talk about the guidance for the year 2024 and beyond.

Yes. So for the guidance for 2024, we now see a revenue of EUR 125 million to EUR 130 million. And in some areas, like Solar, this is all out of backlog and no more volatility in some areas, and that's why we still give a range in October here, like our Electronics sector, like our Development sector. We see the pipeline converting and we are watching basically daily do the deals now turning to POs as planned. So we still give a range here. Our adjusted EBIT margin is 3.5% to 6.5% slightly, but under proportionally reduced. So we see the effect also of our cost reduction measures. Midterm aspiration stays unchanged. We want to scale into large addressable markets. That's a strategic approach. We see that this approach is now getting very real in semiconductor, and we see it in this year, but we see that large volume deals are still to come. We see ourselves on track here. We are at an earlier stage with a similar approach with ARRALYZE, where we just realized our first deals, but see as well that we here built a scalable business that addresses a 9-figure addressable market. And that's exactly the strategy we want. We have disruptive and unique technologies. Very clearly, we see that they get accepted in the market. We need to leverage that into a large addressable market. So in our midterm aspiration no change. In the short and midterm, yes, we have to work on our fixed cost structure, and we are doing that to compensate for slow markets in several of our areas where I see ourselves positioned well against competition, but where there is less business to be distributed due to the overall economic environment. So no change here for the midterm aspiration, slight reduction in our guidance for full year '24. And with that, I hand over to Bettina to guide us through the Q&A.

Thank you very much, Klaus. And that means we are ready for your questions. [Operator Instructions] So I can see two hands. [indiscernible] with you.

[Foreign Language] English. I listen to sometimes...

Yes, yes. Let's stick to English. Fair to everyone.

[Foreign Language] Maybe a couple of more follow-on questions. First, maybe on automotive, can you give us a feeling of the size of automotive in the Welding business. You mentioned you have [indiscernible] for filling maybe about the size of the more critical or problematic area you're facing at the moment. And also maybe some more details about this new line of products you have brought to this trade fair, which could also be maybe involving a growth driver. And maybe I have 4 questions, maybe I put them in a row and then you can answer them. The third one is regarding display. Again, I heard nothing about LIDE and display. Maybe you can also update us a little bit on the developments there. We have this one partner, which is a focused partner in this space. Is there any maybe step forward has achieved in the last 3 months? And how you see the development maybe from today's view for next year? And finally, on semiconductor, you have this additional cost. If I understand right, it's more only maybe project cost to adjust machines for special customer needs. But maybe I think I'm not totally wrong. If you go maybe in the larger orders you mentioned and this business picks really up, the margin should be not so bad to my experience with semiconductor equipment companies. If you deliver what they like and you have a great -- maybe a good yield and a nice throughput, they're willing to give you also quite comfortable margins. So those are the four questions.

Okay. Let's see that I got them all. So in the current year, we, in our Welding business, dominantly address automotive and medical markets. And we have a good footprint in the medical market. The medical market is cyclical in its investment. So in this year, there was little investment in the medical market. And it means our sales are dominated by more than 80% by the automotive market. And this is a market where there was just far less business to be distributed, and that includes electric mobility than we anticipated. So we have a strong exposure. Looking into '25, I see the medical market with more appetite to invest, which should shift this balance more away from the automotive exposure. You were asking about new technology, new products. Basically, we introduced at the Fakuma trade show a technology called absorbent to absorbent. Without boring you with technical details, what does it mean? It means that you can address a lot more applications that are currently addressed with other welding methods, be it ultrasonic, be it even maybe gluing or hot gas welding, with laser welding because now you can weld together a lot more different plastics than the current technology can. This should significantly address the -- increase the addressable market. We have won a lead customer who is pushing strongly forward. I don't see that it will move the needle too much in '25, but we are making steps into this new application now to get the fundamental growth drivers boosted also independent of the automotive market because this technology finds applications in automotive, yes, but also in many other markets, like consumer, like medical. So broaden the addressable market when you have an overall not too happy market environment, that's a strategic approach here. Then you were asking, hey, what's going on with display. So as you know, with display, we took the approach. We partner with a large display company. We do a common technology development, which is done now. So we are a qualified technology. And this display company then goes out, wins the deals with device manufacturers where our technology is in. That's what's running right now. The technology is pitched to several opportunities that are out there in the market. We are supporting in that activity, but not actually in the driver seat. And I expect that we won't have to wait too long anymore before we say, okay, now here's a first deal. If it will be immediately a large one or if somebody says, hey, I try it out in this high-end series or something, we will see. But we are now a qualified supplier in that field and the technology brings the USPs that the customer expects. So this is on track now to get into an operational mode. And now [indiscernible], you have to help me with the fourth question. My memory fails me.

No. So fourth question was you mentioned that there are -- so profitability in Electronics is, at the moment, burdened by project cost, but...

Oh, yes. I got it. I got it...

Onetime cost, if you're up and running in the normal business and the business picks up with semi companies, I should expect the margin should be quite good because for semi, it's much more important that the yield and the throughput is good and then they are willing also to give you good margins.

So yes, we are absolutely happy with our margins in the semiconductor sector. We provide value to the market. This is not a market where we say, oh, it's cost up or something by far or not. This cost that you're seeing, we are having, and I think we also made a talk about that last year, a large project running on some future technology with a large semiconductor company. This is an execution well on track. And to get that project now executed and the first machine ships, there are some onetime costs that we absorb in the project, and that's what you see here. This is not a structural cost where we say it affects our business model, which is very healthy in the semiconductor industry when we get to scale. But already right now with the sales we have in LIDE is clearly a positive contributor to our bottom line and not start-ups that needs to be subsidized.

And to clear it, you have definitely much more customers than this one you mentioned. Last time you spoke nearly all relevant guys because glass substrate maybe is a new standard in the future is looking at your technology.

Absolutely. We see ourselves really well positioned. And as mentioned before, we have competition and never ignore your competition. I see large companies, big global conglomerates really going to very detailed diligence processes on saying, look, I want this market, what is my right technology. And then, after they did all these comparisons, they by and large, all come to LPKF and say, yes, this is a technology that is the best for this application. Here's a PO for the first machine. The volume deals are still to come when they fit factories. But now they make the technology decisions. And there, I see our strategy and our technology is working. Bettina, have we got more?

Yes. The next question comes from Florian Sager.

I just got 2 quick questions. The first one would be, you mentioned in your press release that there continues to be strong demand for LIDE, but do you see any impact at all right now from this deteriorating environment for semis? I mean we have specifically a large U.S. IDM that cut CapEx over the summer and is struggling, and we've seen impacts of that with other companies as well throughout this earnings season. Do you see any impact of this? And then I have a follow-up.

Basically, what we see is a strong CapEx restraint in the front end, so in the silicon part, while we are basically acting in the back end, in the packaging part, and we see that this really disruptive mega trend of. The customers of the semicon industry expect performance improvements generation by generation. These performance improvements are now much more driven by the packaging than by the actual silicon. And everybody says, look, this is the trend we must be on. And even from companies where CapEx is very tight, this is prioritized. This PO comes, there is no delay. So no, I don't see that. When it comes to fitting full factories, this will mostly not be the semicon guys in my view. This will be players that also now basically provide substrates to the semicon industry, some of them established with the current technology. Some of the new players who say, oh, a disruption, I can grab a new market for me. So this will most likely be supply chain CapEx for the semicon industry and not their own CapEx. So at the moment, Florian, no, I see that this market is currently cautious, but I don't see it with what we are offering.

That is good to hear, relief. My second question is on ARRALYZE. And I mean, to me, it sounds like this is coming along nicely, right, the technology. Maybe you could give us some more thoughts on the intended time line here for meaningful revenues? Is that, I think, '25 too soon here? Or when -- what sort of time line do you have in your head on this?

So my approach is get that business to 8 figure as soon as possible because then we are a player, then we have credibility in the market, and then we can leverage a lot of strategic options we have to get this technology into true, let's say, commercial medical applications. Am I happy? I'm happy with the customer response and everybody saying, oh, wow, that's great and so on. And I would have expected a faster conversion cycle. We learned that qualifying that product, let's say, in a way that the customer says, oh, wow, great, here's a PO, is strong and resource-intensive effort, and it takes longer than we anticipated. I accept learnings. We are new in the biotech market, but we got to adapt to that. So what we are very actively doing at the moment is looking for options to basically accelerate our market access. That could be distributors, it could be partnerships and so on because the sooner I am at a level where the technology is established in a segment of the market, the faster I can leverage it to its true potential. And I expect visible contributions from ARRALYZE in the next year, but not yet at a level where I say like LIDE, oh, now it's really moving the needle in the overall LPKF picture. It's at an earlier stage, clearly than where we are with LIDE. Does it answer your question, Florian?

Yes. Very clear.

Are there any further questions from you?

No, sorry. That will be all for me.

And I have seen there's one question in the chat. I will read that out to you, Klaus. The semiconductor business is slowly moving towards using glass substrates. Is this a potential growing business field for you?

Yes, it definitely is. And it is the main growth driver I see behind LIDE. This is how we positioned ourselves. This is where we build the relations and develop technology a year ago, and this is where we now see that many companies are going out to their stakeholders with statements glass core is the future. We want to turn it now into operational use, and we have positioned ourselves for this moment for years, and we now begin to reap the benefit, and I see it in a nice way also in my top line already this year to compensate with growth that we were not even expecting at the level we see it right now. Yes, this is exactly what we are offering. I can read it, time frame for that development. We are now ready with machines. We have several variants of operational machines in the market. We have a track record with these machines of many years. And we see that currently, the whole ecosystem around glass core is positioning itself. Our part in this new value chain glass structuring, I see that I have a really good positioning by being selected by many companies as we want this technology. This, of course, means they buy a first machine and then qualify it in their environment. But that's basically the foundation to then be positioned for the volume yields to come. And I see myself positioned very good right now, but that's a risk to get complacent. I also need to be at the same strong lead to my competition when the volume deals are distributed. So we continue to invest in technology development here. And we learn from the exposure to the customers right now that also when the volume deals are distributed. And if you ask me, when are the high-volume deals coming, everybody asks. Read what the semicon companies are announcing. There are aggressive guys. We're going to ramp that up in '26, which would mean that it would need to order the assets next year and maybe even get them installed. There are others that are more cautious towards the end of the decade. Likely the truth will be somewhere in between. It's important that we are ready that we can shift also in volume. And believe me, we are prepared and that we keep our clear lead towards competition. Don't ignore the competition. A huge market to be distributed, everybody wants a piece of the pie. Bettina, there were more follow-up questions, I couldn't read.

Yes. But let's go back to the people who raised their hands first. [indiscernible], I have unmuted you, and you can ask your question if you unmute yourself.

Yes. Yes. Thank you. Can you hear me?

We can hear you well.

Can you answer for the next year 2025, the change of working capital and CapEx, what can we expect? Is it -- could it be similar like in the last year as a change in working capital and CapEx? And regarding your short-term debt, so what's the average interest rate? And do you expect to have a similar level of short-term debt and long-term debt? Or do you like to optimize it?

Okay. Very quick answers. In terms of working capital, we will go down step-by-step and the target level, which we see for the group, is between 10% and 15% of annual sales. We will not restart by the end of next year, but we will make a good step in next year in order to reach that level. In terms of CapEx, we are a CapEx-light company. So to -- for any production here, what you need is floor space, climate -- some climatization and water and air -- pressured air. That's it. So we have floor space. So we don't expect any significant needs for CapEx in the next year. So it will be a similar level as before. So that assumption is fine. In terms of debt, we have a syndicated loan contract as this has been published as well. And we cannot reveal interest rates. That's business secret also with our banks. But you can assume that this is a market and market-based interest rates. In general, structurally, we are a debt-free company. You see that we have a net cash position, which is slightly negative, not just slightly negative. And with what we've just explained, which Klaus has also just mentioned what we are seeing to come, we want to keep that net cash position to strict positive and will only have small working capital fluctuations causing us into smaller short-term debt or net financial positions, which are negative. So no structural issue there. No long-term debt. We'd rather go for the same model that we have some working capital-based financing with banks, and we intend not to need it.

Thank you very much. The next question comes from Robert-Jan van der Horst.

So I have actually a follow-up question on the LIDE discussion with the semiconductor industry we just had. I'm just also thinking about time lines. So I would be interested in -- from what you just said, I kind of think that well volume -- sales for volume production will probably be more prominent in 2026 than 2025. So I was just wondering if you're looking at the potential for next year since there's a kind of limited number of players and you're already having some, as you said, pilot line equipment shipped in Q4. Do you expect the next year to be similar or to be like way more in terms of total volume from those pilot lines? And the other thing I would be interested in is if you could give us an idea about the competitive landscape as you mentioned that as well. I think in the last call, you said you still feel that you're like 2 to 3 years ahead of competition. I would just be interested in, is there like an alternative really to LPKF, especially when it comes to the real small structures that your -- the technology can do that is currently like on the market? Or are they just in an earlier development stage right now?

Sure, Robert-Jan. Let me answer that. So fundamentally, I see LIDE on a clear growth path. I don't expect that semiconductor volume deals will already be distributed and revenue relevant in the next year. That would be super aggressive. So I do not plan for that, but I will be ready for it if it comes. That you can bet on. I expect that display against traction that we see in revenue in the next year. And that you also continue to enjoy a good portfolio business. Portfolio business, meaning customers buying one machine, either for a small application that is not on our strategic radar or for saying, oh, I want my first machine in place for true advanced packaging. And help me out, second question was?

The second question was on the competitive landscape as far as competition, like technology-wise to come close to what you can do with LIDE for glass packaging, especially.

Sure. I would need my equity story slides now. We have a beautiful table. And then we'll give it to you in a nutshell. There's a list of KPIs that customers really need to address this advanced packaging market. And key ones are you need high precision, you need high throughput and you need a totally crack-free process. When you have a micro crack in glass, then the subsequent process steps will lead to high yield loss. That's what they want. That's what they need. We have IP on the core technology for LIDE that specifically gives users highly precised and crack-free process. Our competition, of course, needs to find another way and what they are using usually leads to the pre-damage and therefore, cracks in the glass. And that gives us an excellent positioning where people say, look, we need these KPIs. Otherwise, I have no yield in my line. And semiconductors industry hates low yields. You throw away a lot of valuable stuff then. So this is what positions us very well. I don't only see it as a lead, but we have basically fundamental IP on this approach. That is good. There's still competition in Taiwan, in Korea, and we should always be aware that buying local is something many customers prefer to buy in foreign. So we are watching very closely what they are up to. We are watching where they position themselves in other KPIs, where we could have an open flank and we very actively address it in our technology development to basically offer the best overall solution by far, not by 10%, by far when it comes to the volume deal decision here. And just to close, what really helps me at the moment, intangible closing deals is -- I'm not pitching -- look what my R&D lab can do stuff. I am pitching an operationally validated process with a multiyear track record, uptime, CPK values, yield curves, that an operations decision-maker can really based on facts and figures with high confidence implement in his factory. And there we are just clearly ahead to what competition can offer. I hope that answers your question a bit, Robert-Jan.

It does. Thank you very much.

Only the paranoid survives, it's a semicon industry.

I can see one more question in the chat. Is the reduced cost base of EUR 5 million to EUR 7 million already in place as of 1st of January? Are the onetime costs for the cost measures all in 2024?

Let me briefly go for that one. We have some smaller savings, which we already see in September and in the next 3 months. We have the largest part of the savings, which will start to be effective early '25, not 1st of January, but early '25. And we will have some which are -- which will be effective late '25. For example, if we have material where we still have significant stock, then the deal for new material will only kick in, in the P&L after that stock is being used up. Majority will be effective in early '25. And when it comes to onetime costs, that matches it perfectly. We will have onetime costs. We have onetime costs in Q3. We will have onetime costs in Q4. We are already incurring some. And we will also see still some onetime costs for implementing the cost reduction measures in at least the first quarter of 2025. I think that's to be expected. And after that, there should be only remainders. That's our current expectations, how the distribution of cost will be in the different years and when the different parts of the savings will kick in and become fully effective. I hope that answers the question and enables any modeling.

Are there any further questions? I can't see any hands. I can't see anything in the chat at the moment.

Well, if there's no hands and no one in the chat, then from my side, I would like to say goodbye to the round here in my current function as CFO of LPKF. Thanks very much for the collaboration and the discussions and questions over the last up to 6 years, which I've covered the function of the CFO here in LPKF. And as I will take on the role as CFO of Comet in Switzerland as of 1st of January, and that's also a semiconductor equipment company and it's a mid-cap company, so I might see some of you if you are more into DACH and not just into Germany, then happy to see any of you also in my new role. Thanks very much, and goodbye from my side.

Thank you very much. Also, goodbye, and see you soon. I'll stay with LPKF for sure for the coming years. See you in the next call. Thank you, everybody. Bye-bye.

Thank you very much. Goodbye.