Semiconductor's quarterly conference call and audio webcast to discuss the company's 2015 quarter, 4th quarter and annual results. The audio webcast is available on Besi's website, www.besi.com. Joining us today are Mr. Richard Blickman, Chief Executive Officer and Mr. Corte Hennepe, Senior Vice President, Finance.
At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, ladies and gentlemen, this conference is being recorded and cannot be reproduced in whole or in part without written permission from the company. I would like now to hand over the call to Mr. Richard Brinkman.
Go ahead please, sir.
Thank you. Thank you all for joining us today. I will begin by making a few comments in connection with the press release we issued earlier today, and then we'll take your questions. I would like to remind everyone that some of the comments made during this call and some of the answers in response to your questions may contain forward looking statements. Such statements may involve uncertainties and risks as described in the earnings release and other reports filed with the AFM.
For today's call, we'd like to review the key highlights of our Q4 and year ended December 31, 2015, and also spend some time updating you on the market, operating initiatives and the outlook. First, some overall thoughts on the year and the past quarter. In 2015, Besi maintained solid profitability despite a difficult industry environment. We generated revenue and profit of 300 €49,200,000 €49,000,000 respectively with high gross and net margins for our industry sector of 48.8% 14%, respectively. Besi ended the year in a strong financial position with total cash of €157,800,000 or €4.10 per share, which represented 22.1 percent of our year end stock price.
Revenue in 2015 decreased by 7.8% versus 20 14 due to a sharp a sharp industry downturn starting in the Q3 combined with weakening economic conditions in China, which particularly affected order levels for smartphone applications. However, increased revenue from Besi's new TCB and die sorting systems helped counteract unfavorable industry conditions and brought better balance to our product application mix. Other areas of product strength included next generation singulation and trim and form systems and plating systems for solar and 3 d lithium battery applications. Strong profit and margin levels were realized due to successful execution of ongoing Asian supply chain and production initiatives, a further reduction of European based cost and timely restructuring actions taken during the year in response to both adverse industry and currency movements. Our Q4 2015 financial performance was solid as operating profit exceeded guidance in an uncertain semiconductor environment.
Revenue was up by 7.9% sequentially as growth in a number of diverse product lines and applications partially offset some lingering weakness in specific smartphone applications. Gross margins reached for the first time 50% due to material cost efficiencies and foreign exchange benefits. In addition, operating expenses continued their quarterly sequential decline from a 2nd quarter last year peak as a result of Besi's headcount reduction program and European overhead reduction initiatives. Excluding deferred tax adjustments, q4 2015 net income was strong at €10,900,000 up €4,600,000 versus the 3rd quarter. Operating initiatives were implemented in 2015 to reduce cost levels so that we could more profitably manage through the recent downturn.
In the 4th quarter, we reduced headcount by 5.5 percent versus the Q3 and decreased sequential baseline operating expenses as we had guided. Gross margins were above guidance and at the high end of our corporate target range of 45% to 50%. As a result, we had healthy adjusted net margins of 14% in the 4th quarter and 13.4% for the year despite a less favorable market environment. Given strong cash flow generation, our year end cash balances and near term liquidity needs, we propose to pay a cash dividend of €1.20 per share for the year 2015. The total consists of a €1 base dividend and €0.20 special dividend and represents our 6th consecutive annual contribution to shareholders.
The 2015 payout ratio is 94%, of which the base dividend represents an approximately 80% rate, a level equal to 2014 and at the high end of our dividend policy range. At a year end stock price of €18.56 the proposed dividend yields 6.5%. In addition, we bought back 225,779 shares through year end and 407,831 shares cumulatively through February 23, 2016. In total, we've allocated €60,900,000 €118,200,000 in 2015 and the past 5 years respectively to dividends and share repurchases underlining Besi's commitment to enhance shareholder value. With that, I'll turn the presentation over to Cor Tehillepur, our Senior Vice President, Finance.
Cor?
Thank you, Richard. Besi's Q4 2015 revenue was up by 7.9% versus Q3 'fifteen and was at the high end of our guidance range. The increase was primarily due to higher demand for epoxy die attach and die sorting systems for smartphone and high end server applications and increased plating shipments for solar applications. Revenue declined by 12.6% versus Q4 'fourteen, primarily as a result of lower demand for smartphone and mainstream electronics applications post the large 2014 industry capacity build. Orders increased by 3.2% versus Q through 2015, due primarily to renewed growth by Asian subcontractors for die attach and molding systems used in smartphone, mobile and automotive applications.
Orders decreased by 5% versus Q4 'fourteen due to lower demand by European and US IDMs amidst less favorable market conditions. Per customer type, sequential subcontractor orders increased strongly by €13,800,000 or 73.8 percent, while IDM orders decreased by €11,400,000 or 20%. Besi's revenue and orders decreased by 7.8 percent 14.5 percent respectively in 2015 versus 2014 due primarily to the industry downturn and lower demand for smartphone applications. Orders by IDMs and subcontractors represented approximately 60% 40% respectively of Besi's total orders in both 20152014. Given the globalization of our business in recent years, ForEx movements have become more important.
As you can see on the next chart, the euro is becoming less prominent as a transactional currency for us. About 65% to 70% of our revenue is denominated in US dollar, which has been relatively consistent. However, on the cost side, as we move more and more production personnel and supply chain to Asia, the Malaysian ringgit, Chinese renminbi and Singapore dollar will represent an increasingly larger percentage of our production costs and operating expenses in future years. Basis gross margin in Q4 increased by 1.3 points versus Q3 'fifteen and by 6.2 points versus Q4 'fourteen despite market headwinds. The increase primarily reflected material and labor cost efficiencies from the continued movement of personnel and supply chain costs from higher cost European markets to lower cost Asian markets combined with net foreign exchange benefits.
Similarly gross margins improved by 5% points to 48.8% for the full year 2015. From a ForEx perspective, sequential margin growth in Q4 'fifteen was favorably influenced by a stronger dollar versus the euro on the revenue side and a weaker ringgit in Swiss franc versus the euro on the cost side. For the year, we benefited from a stronger dollar versus the euro on the revenue side, which was partially offset by a significant increase in the Swiss franc versus the euro on the cost side. Q4 'fifteen operating expenses trends continued the favorable development we had anticipated in Q2. As shown on this next chart, Besi's baseline OpEx and excluding the impact of variable factors such as currency, R and D capitalization and amortization and incentive compensation decreased from a peak of €26,100,000 in Q2 'fifteen to €22,600,000 in Q4 'fifteen, very consistent with 2014 quarterly levels of
€21,000,000 to €23,000,000 On an
aggregate basis, OpEx is following a similar pattern declining from a peak of €32,000,000 in Q2 'fifteen to €26,500,000 in Q4 'fifteen. Much of the second half twenty fifteen improvement is from our headcount reduction program as well as a reduction of new product R and D spending from peak levels in the first half of the year. Headcount is one of Besi's largest operating costs. In 2015, we reduced aggregate headcount to 5 point 7% versus 2014 and European headcount by 8.8%. Since 2011 Besi has reduced high cost European and North American fixed headcount by 20% and its percentage of total fixed headcount from 48 percent to 37%, consistent with our Asian production and supply chain transfer.
We anticipate further declines as we fully realize our corporate vision of European Centers of Technological Excellence and Asian Centers of Production and Supply Chain Expertise. Besi's net income increased by €3,400,000 versus Q3 'fifteen, primarily as a result of our revenue increase, improved gross margins and lower operating expenses, partially offset by a higher effective tax rate caused by a deferred tax revaluation at our Swiss operations. Asia's effective tax rate was 20.6% on a reported basis and 10.7% on an adjusted basis in Q4 2015 versus 13.3% in Q3 2015. For the year the effective tax rate on an adjusted basis was 12.9% versus 11.8% in 2014. We expect our effective tax rate to range between 10% 15% in 2016, absent any additional deferred tax revaluation adjustment.
We significantly improved our cash position in 2015 even with almost €61,000,000 spent on dividends and share repurchases. As compared to year end 2014, Besi's net cash position of €136,500,000 increased by €18,500,000 or 15.7%. In addition to strong profit levels, cash flow generation also benefited this year from improved inventory management throughout the organization. And with that, I'll turn the presentation back over to Richard.
Now I'd like to spend a couple of moments updating you on the market and our strategic priorities. The latest VLSI forecast estimates that the assembly equipment market contracted by about 14% in 20 15 to US3.4 billion dollars after a very strong 2014. The current 2016 estimate looks for a further decline of 3.9%. Although this is a significant improvement from their initial forecast of a decrease of 10% as market sentiment improved during the Q4. VLSI expects a large rebound in 2017 2018 with the market growing by almost 25%.
We had a good year on the development front in 2015 with a number of key new product introductions. Perhaps the largest contribution was from TCB Systems, where we have developed the fastest, most compact and most reliable machine on the market with the highest throughput potential. We have an installed base of 35 systems in production, which confirms our leadership position. In addition, we developed and received orders for 4 next generation wafer level bonders from a large Asian subcontractor with industry leading sub-five micron accuracy for high production environments. We also developed a flip chip system with sub-five micron accuracy and refreshed our die bonding and packaging portfolio with new models that are both faster and more accurate than the competition.
Further, we successfully developed with a large U. S. IDM, new die sorting and die lid attach systems to help package high end microprocessors and received a substantial amount of follow on orders. Finally, we received important orders from leading soda producers and Asian Research Institutes in the second half of the year for newly developed soda plating lines as well as an initial order in the Q4 for a new 3 d lithium ion battery plating line. We will continue work in 2016 to further advance our R and D capabilities in all of these promising areas.
We executed a number of operating initiatives in 2015, which aided profitability. First, we implemented a 10% headcount reduction program during the year in response to both adverse currency and market conditions, which will be completed in the Q1 of this year and is expected to generate €12,000,000 to €14,000,000 of annualized savings. 2nd, we commenced production of certain die bonding product lines in China, specifically tailored for the local market, which were previously made in Malaysia. We plan to manufacture additional lines in China this year, which will both increase our addressable market and aggregate production capacity. 3rd, we completed the transfer of certain die bonding functions from Switzerland to Singapore by year end, which will greatly reduce structural costs and reduce our exposure to the Swiss francs.
4th, plating production was fully transferred from the Netherlands to our factory in Malaysia with the objective of improving gross margins to the mid-40s range as well as capturing more Asian business. And 5th, Besi initiated the transfer of remaining die sorting production from our factory in Austria to Malaysia, which should be accomplished at the end of this year. Finally, we estimate that we have successfully transferred by year end approximately 75% of our supply chain purchases from European to Asian vendors, which has benefited gross margin development. As you can see, we continue to explore a number of options to reduce structural costs in our business model and see additional opportunities for margin improvements in the years ahead. Now a couple of words about our guidance for the Q1 of this year.
Leading industry analysts currently suggest a modest industry downturn of approximately 4% in 2016. We believe that the trough of the most recent down cycle was reached in the Q4 last year and are cautiously optimistic for 2016 based on a better anticipated than anticipated 4th quarter revenue level and favorable order trends through February of this year. However, visibility remains very limited in a highly uncertain global economic environment. Besi's Q1 2016 guidance calls for revenue that is expected to be within a range of +5 percent, -5% versus the 4th quarter levels. Sequential operating profit will decrease slightly due to somewhat lower gross margin based on our anticipated Q1 2016 product mix and ForEx movements and higher operating expenses from Besi's share based incentive compensation plan.
Absent the increases in the share based compensation expense, operating expenses are estimated to be flat sequentially. Longer term, a new technology cycle has begun wherein customers increasingly demand below 20 nanometer device geometries for which new advanced packaging equipment and solutions will be required. Higher sales of advanced packaging systems are forecast to serve growing areas such as smartphones, automotive electronics, cloud computing, data mining, wearable devices and of course the Internet of Things. Such trends play to our strength as a technological leader and offer new opportunities for revenue and market share growth. In addition, we continue initiatives to generate even more profit and cash flow from our business model in 2016 and the years to come.
That ends my prepared remarks. I would like to open the call now for some questions. Operator?
Yes. Ladies and gentlemen, we will start the question and answer session now. The first question is coming from Mr. Felix Holter, Kempen. Go ahead please, sir.
Hi, yes. Good afternoon, everybody. I have a question regarding your market shares. I understand it's pretty early in the year to provide the famous slide with the market shares per segment. But maybe there is a way you can comment on your early thoughts about the market share of your relevant segments.
The second question is on the FX effect on your gross margins. In historical presentations, you gave us a number for that. Is there a way, Cor, you can help us with that?
Okay. Let me first respond to the market share. If you look at the overall decline of revenue of 7%, percent roughly. And if you look at the total markets, expect a decline of about 14%. And if we look at revenue reported by companies in our sector, Overall, we have not lost any market share rather we should have gained some market share.
But what's more important, if you look at level deeper, where have we been more successful? And that is in particular the new technologies. If you look at TCB, if you look at EWB, the fan out, that is the highest end of the world in the high end flip chip. Also in the 12 inches epoxy die bonding world, in the ultrathin packaging, Singulation has gained significant share last year. But as you said yourself, the final numbers are not yet known.
But from our own analysis, we have certainly had a good portion of that market. But for us, as you know very well, it's far more important where is the profitable part of the market. Market share in a world of technology is only relevant if that brings you to stronger profitability. In other words, return on the development investments we do over the years in new emerging technologies. And that is particularly interesting if you look at the development of Besi, where we can achieve 50% gross margin in probably the bottom quarter of this cycle.
So we look more at profitability than that we look at overall market share percentages. On your second question, the ForEx effect, yes, we have some formulas. But as you know, we are impacted as a euro company, 1st of all, by the U. S. Dollar as the main currency for industry.
We have the Swiss francs, which is an important part of our specialty development of epoxy and soft solder. And then we have the Asian currencies, especially the ringgit, where most of our production today is taking place and to a lesser extent, the Chinese renminbi for the other part of our production in Asia. We have done some calculation efforts that an increase in a dollar versus the euro had an impact of about every cent had 0.5% influence on the margin. Today that ratio is a bit different, also because of other currency moves visavis the euro. We in general look at about a 50% impact in both directions.
So an increase of the margin or U. S. Dollar by 10% should have a margin impact of 5%. But then it also has an effect on the industry as a whole. The stronger U.
S. Dollar is usually an indicator of a stronger momentum in the industry, because it is driven by the overall U. S. Economy. So less favorable development in the U.
S. Economy has a significant impact on the growth of the semiconductor equipment needs. So there are many more factors to then just simply have an impact of an oil price.
Okay. Thanks very much. And then maybe a short follow-up, when do you have the new market share data?
Usually, it's published around April, because then all companies have reported. Some have different calendar years. So historically, VLSI in April publishes the overall market shares.
Well, Japanese companies have a year that ends at April 1 usually. So that's why it takes a while before all numbers are known.
Right. Okay. Cool. Thank you very much.
The next question is from Mr. Hans Slop, Rabobank. Go ahead please, sir.
Yes. Good afternoon. A question on your solar activities. Could you indicate how much solar representatives of your 2015 sales? And what do you expect for 2016?
And second question is on the, let's say, the business with your Asian subcontractors and especially the smartphone segment. What have you seen following the Chinese New Year? Do you already see things improving? Or are things still a little bit slow?
Okay. The first, solar is still below 5% of our overall revenue. However, if you understand the application we are currently successful in, It is a process which replaces the silver grid on solar cells by copper plating. The industry has started to develop this alternative since about 5 years and we have developed that with major companies in the solar world around the world. And with 3 full production systems currently partly installed and one still to be installed, this could ignite a significant breakthrough in the years to come.
But for 2015 2016, it's still below the 5% of Besi's overall revenue. Your next question on the ordering after Chinese New Year. Yes, as usually after the Chinese New Year, the next round of investments both in technology and capacity in particular has developed. And because of that also VLSI last week has turned its expectation from or its market climate indication from cold to a bit more warm. So the tide is turning somewhat.
But it's still early days. We are not yet at the end of February.
Okay. Thank you.
Next question is from Mr. Nigel van Putten, ING. Go ahead please sir.
Hi, good afternoon. I have a follow-up on the end market. So first on mobile, similarly to the soda question just asked, could you give an indication of the percentage of revenues that went into the mobile market in 2015? And then I guess I'll do the follow-up immediately. So more generally on the technology investment you expect for 2016, do you expect or do you have indications that the new introduction or the introduction of new smartphones will result in positive order momentum in 2016?
Yes. 2015, the overall mobile, the percentage of revenue is at around 20%, which is significantly lower than 2014. 2016, we expect similar levels maybe somewhat lower, but we can already foresee that in 2017 there will be a major investment round because the technology used in the models for 2017 looks like they will be more different than the models in 2016 versus 2015. You can read a lot of publication about what is happening on that front in processors at TSMC, but also others, but also with other components in those smartphones. So 2016 may be a similar level to 2015.
And in preparation for a rollout of a more significant generation change in 2017. So around 20% of our revenue in total.
Okay. Thanks. It's very useful. And then I guess more broadly, because you seem to be diversifying the revenue base a lot more in 2015. And with mobile flat, could you perhaps give indications of where you see particular growth or relative strength this year and maybe also weakness?
Well, automotive is off on a good start. There's a lot of additional electronics in automotive, also hybrids and electrical, etcetera. We see major investments in the next generation cloud servers with very strong growth expected in that area in particular in 2017 2018. So yes, those are the 3 cornerstones of our business involvement, apart from medical and solar and other applications of semiconductor devices, but that is roughly the picture.
Okay. Thanks. That's very clear. And then last one on Stack Memory. I think some other companies have commented that they expect that market to also ramp particularly into 2017.
You obviously have a bit of a different position as you already have equipment in high volume manufacturing. So two questions on that. Do you agree with that time line that 2017 should be the year that Stack memory ramps? And also, how do you think 2016 will compare to what seems to be a very strong 2015?
Well, that picture is a picture we very well recognize. I think we also in the last quarter update guided in a similar way. It is still early days. The stacked memories on top of logic are very expensive high end modules. They have huge benefits in terms of all kinds of performance criteria.
We have positioned our product at the most in volume successful product at this point in time. Whether that will get wings is still to be seen, because it's a very expensive high end product application. So we are always a bit careful and conservative in this industry. In our experience so far, these developments don't take off overnight. They need to be it takes a long time for it to become real mainstream.
But the forecast is, as you mentioned, it's expected that 2017 2018 will be significant growth. Well, we'll see. We'll be very happy.
All right. Thanks. And then maybe on the 2016 versus 2015?
Similar to 2015, probably a bit more broader, also subcontractors probably will set up the first lines, so the move from IDMs to certain subcons, but still in a qualification low volume initial phase.
All right. Thank you very much.
There are no further questions at the moment, sir.
Okay. Well, then I thank everyone very much for taking the time. And if there are any further questions, don't hesitate to contact us.
Sorry, Mr. Bergmann. There is an additional question coming in. I want to answer that. Okay.
Mr. Phillips Holter, Kempen. Go ahead, sir.
Yes. In that case, I have a follow-up. On your R and D spending, it already went up a bit in 15. Can you give some guidance on where that should go in 2016? And I have another question on your order trend.
You mentioned a favorable order trend through February. How should we read that the word favorable? Is that compared to last year? Is it sequentially? Is it can you maybe, well, try to quantify that a bit more or say something more?
Yes,
yes. R and D spending is roughly the same. So no big changes, focused on all of our products, but no, let's say, from customer they're all driven by our key customers. So R and D spend in your models should be the same. The order trend is related to the Q4, so sequential trend.
That's the most helpful. So it states what or it is what it states. We see a favorable development. So if this continues, it's compared to Q4.
Yes, exactly. So that's flattish.
Well, it doesn't have to be flattish. It can also be higher.
Yes, sure. Right.
So it's not negative? No, exactly. Positive.
I get the point. And if I may, another question on your gross margin. You are now at 50,000,000 and in your the Analyst Day of last year, you said you were targeting the 45,000,000 to 50,000,000. Do you still believe there is further upside potential to that margin? Or is that is this actually I understand it benefited from mix and a bit from FX.
So yes, what's your view on that?
Let me repeat again the key in the or the key reasons for margin development. Number 1 is the product position. If your product is unique and significantly outperforming competitor choices for customers, Your pricing power is the best. Secondly, cost. Everything in the world every day becomes more expensive in general.
So with moving operations to Asia, more experience in Asia, supply chain, move to Asia, also qualifying lower cost suppliers, better suppliers is a constant move both to up the margin and by product position and lowering your cost. On top of that, you have influences of ForEx. And yes, they have been favorable at some point in the past 2 years, but that doesn't influence our overall strategy. There's a third element very important is the common parts, common platform strategy. More and more, we are able to develop systems using same hardware and software components and that reduces structurally the cost of our systems.
So that picture in total and if we and we always it's also in our presentation. We are still far from perfect. We are still years behind in ASM Pacific, Curac and Sofa, our Asian operations, I would not say infancy phase, but we are just above the infancy phase. So there's a lot more savings, cost reductions to be achieved. So if we maintain a very strong leading product position, further cost reduction should kick in and should even potentially bring higher margins than what we have achieved so far.
So that's the total picture.
All right. Thank you.
The next question is Mr. Edwin De Jong, S&S. Go ahead please.
Good afternoon, gentlemen. Some questions from my side left on TCB, for instance. How many clients do you now have in high volume manufacturing? And could you maybe share some details on how many systems are in the order book? And also on the fan out wafer level packaging machine, are you still the only one who is in high volume manufacturing or is competition entering?
Maybe some color on the competitive environment there. And also the number of systems in the order book, please. And the last question is on dividends and payouts. You still have a large cash position and net cash position, EUR 1 or
would you
consider extra share buybacks or special dividends if this position maintains this level? How do you look at paying back?
Okay. Well, I'll try to answer question 1 and 2 and core number 3. TCB still till date there is 1 customer producing in decent volumes. Other customers are developing and testing. In EWB, the picture is a bit different.
Since already 19 2,007, we have at 6 different customers fan out systems installed. And recently there are increased activities on yes certain logic processor which may be produced in an EWP solution. Still higher cost, higher cost than a flip chip substrate solution. So the verdict is still out whether that becomes a real volume or not. But we are involved in anyone in that forefront in both, but again in low volume.
And we got both of these machines are around €1,000,000 right?
They're about €800,000 €900,000 per machine. And it's very important because in the competitive landscape, systems are available, which cost significantly more 50%, 100% more, but have half the throughput of our machines. So we are in a very strong competitive position at this moment. On the dividend score,
Yes. Basically, we are at year end at €36,000,000 net cash. We always in our model, we say we need €60,000,000 to €80,000,000 depending a bit on revenue level, net cash as a healthy buffer in order to be to run our business even when times get very rough. If you look at the dividend, 120, which is 94 percent of net profit means that around 47,000,000 of dividends will go out, you end up 10 at 89, still above the 60 to 80, but we also still have our share buyback running. And if you look where we are at year end compared to what we've indicated, that means another €10,000,000 around share repurchase and then you're back compared to year end levels at around 80,000,000.
Now if you then look at the expectations for and
if you look at the
guidance for Q1 further then you can be assured that this is the model we keep. So we will remain our net cash at level of €60,000,000 to €80,000,000 unless revenue will be significantly higher. So if the cash flow allows it, we will look again at our cash in this model. So €60,000,000 to €80,000,000 buffer. What is our dividend?
What is how does that compare to the different policy? Can we do something additional or not? That depends on the cash flow of the moment. And if there is a significant surplus, we could again consider share buyback. So those are the metrics that we are looking at basically on a quarterly basis you could say.
Thank you. And maybe on the number of TCB machines and wafer level packaging machines in the order book, Is there any number on that?
No. We don't publish individual numbers, but it's an ongoing that's what I can say, ongoing orders.
Thank you.
Next question is from Mr. Nigel van Putten, ING. Go ahead please, sir.
Hi, again. Yes, just one follow-up on the order book. Momentum seems to be building, but still from a relatively, I guess, lower level in the Q4 or Q1 as we're still kind of early days in the recovery. So my question would be, do you expect strength to continue perhaps into the second half? So if you compare the first half to the second half, would it make sense at least to believe that those could be similar or perhaps even stronger into the second half?
Well, again, this industry is highly volatile, cyclical, however you want to call it. If you look at the 2 independent analysts in this world, Philisar Research and Gartner, yes, the expectation is that that should happen in that way. Some of us have been a bit longer in this industry. That may also change. It depends very much on economic developments, the big picture.
But if we leave that aside, then yes, the model today is a transition year 2016 from a slow recovery to a next growth cycle. That's how the world looks like. And we are ready for that in both ways. If it comes, we can benefit enormously. If it delays, we have cost structures under control, further cost reductions in progress.
That's how we look at it. We're involved in the right technologies, also in the right mainstream segments today. And that's as good as it gets.
Right. But because the ramp is stronger into 2017, you expect less of the sort of typical seasonality where the first half will be stronger. I mean, 2016 could be a sort of equal year, 1st half, 2nd half or perhaps even stronger in 2nd half?
Well, we have seen these developments in the past where we had typical the first half stronger second half tail off, we also have had it the other way around, a slow first half and a strong second half into a strong first half next year. Those have been patterns in previous cycles.
Very clear. Thanks a lot.
Thank you.
Next question from Mr. Hans Slop, Rabobank. Go ahead please.
Yes, a follow-up question on your cost base. If I remember correctly, you have a €12,000,000 to €14,000,000 total cost savings plan. My question is how much of this has been effectuated in 2015? And how much additional cost savings should we expect in
2016? €10,000,000 close to €10,000,000 has been achieved from the programs initiated in 2015 completed in 2015. And another from those programs €2,000,000 to €4,000,000 to be realized in the 1st 6 months. Then we have additional programs in place, as we mentioned, the move of certain products from Austria to Malaysia, Also other savings and moves in Asia, which should support another €4,000,000 to €6,000,000 savings on a comparable basis. So less savings this year compared to last year, but all fitting into the same philosophy.
Okay. Very clear. Thanks.
Gentlemen, this was the last question.
Thank you all very much. Once again, any further questions, don't hesitate to contact us. Thank you all for your time. Bye bye.
This concludes the basic conference call. Thank you for attending and you may disconnect your line now.