Earnings Call: Q2 2021

Jul 29, 2021

Good afternoon, ladies and gentlemen, and welcome to the Extron SE Results of the First Half twenty twenty one. 1. Let me now turn the floor over to your host, Guido Pickard. Please go ahead. Thank you, operator. Welcome to Exteron's presentation of our future and First half twenty twenty one results. I'd like to welcome our CEO, Doctor. Felix Clavas as well as our new CFO, Doctor. Kristian Danja. Have a good start, Sisiran. As the operator indicated, this call is being recorded by Extron and is considered copyright material. As such, it cannot be recorded or rebroadcast without permission. Your participation in this call implies your consent to this recording. Please take note of our safe harbor statement, which can be found on Page 2 of our results presentation slide deck as it applies throughout the conference call. This call is not being presented immediately via webcast or any other medium. However, we will place an audio file I would now like to hand you over to Felix Kalle for opening remarks. Felix? Thank you, Guido. Let me welcome you to our Q2 2021 results call. I will start with an overview of the highlights in the Roger and then hand over to Christian for more details on our Q2 2021 figures. Finally, I I will give you an update on the development of our business as well as our guidance for the year. Let me start by giving you an overview of the Development in Q2 on Slide 2. During the Q2 'twenty one, we continued to note a strong order momentum Throughout all our business, but in particular, in GaN Power, in LEDs and in data communication. The overall semiconductor market has seen the same strong chip demand across the board. Orders in Q2 came in at €139,000,000 An amount slightly above the high level of Q1 'twenty one. Some of these orders We're of large volume, which led to the trading statement and the increase of our guidance on orders, revenue and EBIT margin in June. Revenues developed as expected. At €68,000,000 that were higher than the €50,000,000 we have recorded in Q1. We expect the revenue figures to substantially increase in the quarters to come, with Q4 being the quarter with the highest quarterly revenue of 2021. The current level of customer inquiries is a good indication That orders will also remain very strong in the coming quarters. We, therefore, have increased our guidance for order intake once again From €420,000,000 to €450,000,000 to now between €440,000,000 €480,000,000 In Q2, we have fully implemented the structural changes of our OLED subsidiary, Apeeva, as announced in our last earnings call. That is, We have closed the operations of Apeba Korea and reduced the team size in Apeba to a smaller size. This move enables us to focus the Apeba On the differentiated key components of the Chinese market preserving the upside of this technology. At the same time, The running cost to operator Piva has been significantly reduced to a low single digit meridians amount Until the customer project starts, including one off charges, we will see The cost of OLED in 2021 within the high single digit €1,000,000 range that we have previously mentioned. Now let me give you a quick update on the COVID-nineteen situation at Extraon. Our strong internal safety measures continue to prove effective In mitigating the risk of infection within our premises, we have offered a first vaccination to all interested employees at our premises Germany and continue to offer a regular testing twice a week, resulting in the execution of more than 1200 cobalt tests, all of which have been a negative result. From July onwards, many of our employees are back to the office. At the present COVID level, we target an occupancy rate of about 50%, and we get feedback from many of our people That the personal face to face interaction, always adhering to strict safety standards, is much appreciated as it brings energy and spirit back to the context. We continue to operate all functions of our business without Any significant effect related to COVID-nineteen. Also, our supply chain continues to be stable, delivering on the preordered component as a group. However, we will continue to watch development of global pandemic very carefully, And we remain to be ready to take further measures if necessary. Now I will be handing over to my new colleague, Doctor. Kristin Danlinger, who took up his position as Chief Financial Officer of Extron in May of this year. He will take you through the financials of Q2 and half one. Christian? Thanks, Felix, and hello to everyone. Let me please quickly introduce myself as this is my first quarterly earnings call for Extron. I joined Extron on May 1 And have used my time here to get familiar with our business and its financials. Due to Investor Relations being part of my responsibilities, I'm looking forward to soon be communicating with many of you on a regular basis. I was born in Austria in 1979. My wife, our 3 children and I live in Cologne. I studied business administration in Lindt, Austria and the U. S. A. And the early doctorate in law. Among other roles, I was responsible I was a regional CFO in the Austrian Engle Group Before joining, Extron, our CFO of the Pfutz Malper Group. I look forward to playing my part in ensuring that we continue to shape the future and in doing so, successfully Realize our potential growth opportunities on our address market. But now back to our financial results of the second Quarter of 2021. Starting on Slide 3, our income statement. As expected, total revenue for the quarter was €68,000,000 compared with €56,000,000 in quarter 2, 2020. Gross margin of 41% this quarter was 1 percentage point higher than the 40% in the same quarter last year. The difference is mainly due to the higher share of products with better margins in Q2 'twenty one. Operating expenses in the quarter increased from €20,000,000 in Q2 2020 to 20 €2,000,000 in Q3 'twenty one. This is mainly due to charges of €3,000,000 From the Q1 announced structural measures executed within Aperviva. G and A expenses increased to €7,000,000 in Q2 '21 from €5,000,000 in 2020 influenced a higher variable compensation and also some charges resulting from the structural measures within our table. R and D expenses of €16,000,000 in Q2 was €1,000,000 lower in the comparable period in 2020. Apart from charges of €2,600,000 from the previously mentioned structural measures, This is in line with regular fluctuations we have in R and D. Net other operating income was €2,000,000 in the Quarter which was stable compared to the same quarter in 2020. We recorded an EBIT of €6,000,000 for the quarter compared to €3,000,000 in Q1 2020. The further improved outlook has led us to recognize further €3,400,000 of deferred tax assets, Which leaves us with a net profit of Q2 for Q2 2021 of €8,000,000 compared with €3,000,000 in Q2 2020. Turning to the balance sheet on the next slide. In line with the increased order intake and the expected output, inventories have risen to €126,000,000 from €79,000,000 The end of 2020. Advance payments received to customers increased 222,000,000 You rose from €51,000,000 at the end of 2020. This represents about 42% of backlog. Our cash balance, including other financial assets and post our €12,000,000 dividend payment in May, Increased to €348,000,000 at the end of the quarter from €310,000,000 at the end of 2020. Please note that we have shifted financial assets in the amount of €60,000,000 from non current assets to current assets Due to a shorter remaining maturity of the respective financial instruments. Moving to Slide 5, We chose our cash flow statement. We generated free cash flow of €18,000,000 in the quarter, Primarily reflecting our current profitability and an overall reduction in working capital, which includes, I. E, An increase in customer deposits of €22,000,000 and an increase in inventories for future shipments of €28,000,000 With that, let me hand you back over to Felix. Thank you, Christian. I would like to give you an update on the key developments In our advanced markets before concluding with the outlook for the rest of the year. As mentioned at the beginning, we continue to see Strong momentum from all our end markets, but in particular, for systems for the production of gallium nitride power electronics. Most of our customers from that space have made the decision to adopt GaN Power Electronics on a broad basis, resulting in substantial capacity investments throughout the industry from foundries to integrated device manufacturer. Several customers have now placed volume orders in the range of 5 to 50 tools in size. In the end markets, we are already seeing a strong expansion of products being offered based on GaN technology. They range from high performing chargers for portable consumer electronics to energy efficient power supplies of data centers and telecom base stations Just remain 2 prominent applications. In the area of systems for the production of silicon carbide power electronics, We've made further technical progress on the true performance. In addition to that, we have received repeat orders from some customers for our 6 inches Silicon Carbide solution, and we've been able to win additional customers. Given all that, we expect to benefit from the volume ramp trends of Some large industry players. We see these developments in power electronics as only the start of a broader substitution Waves of silicon power electronics by white bandgap materials, GaN and SiC. This is the beginning Multiyear growth opportunity for us. In our optical electronics business, we have recorded strong demand From the optical data communications market in Q2, the global build out of optical data communication networks continue In order to serve the massively growing data volumes, we expect this momentum to continue throughout 2021 and also in 2022. On the 3 d sensing side, we see some moderate demand in 20 '21, driven by individual tool orders from customers. We expect larger order momentum in this area Once the rollout of VCSEL for the world side of smartphone begins, this is in preparation today, but it may take 1 to 2 more years A particular application for that functionality is missing as of today. Finally, we have recorded some large orders in the area Our red, orange, yellow mini LEDs, which are used, for example, in fine pitch LED displays. Our customers are continually expanding their capacities At scale. On the other hand, microLED deep state technologies are still in the R and D phase. We expect Significant volume in this area from 2023 onwards with 'twenty two as a position here with further R and D activities and some pilot line build up. We are happy to be in such a positive environment with strong demand momentum from our addressed markets. With that, let me move to our guidance on Slide 6. In June, we have issued a trading statement in which we increased our annual guidance. Due to the very positive order development, we increased our annual guidance on orders again From between €420,000,000 €460,000,000 previously to a new range of €440,000,000 to €480,000,000 Revenues are expected to be between €400,000,000 €440,000,000 with an EBIT margin between 20% 22% of revenue. We expect our gross margin to be around 40% of revenues. Out of the €295,000,000 backlog, we expect to turn about €235,000,000 into 'twenty one revenues, Taking first half of the year revenues of €117,000,000 and the assumed after sales business of about €30,000,000 into account, We still need about further €20,000,000 to €60,000,000 of orders to be converted into revenues to reach the expected revenue range. In summary, we are looking forward to significant growth of 2021 revenue and EBIT Quarter to quarter within this year as well as compared to the previous year. With that, I will pass it back to Guido before we take questions. Thank you, Philippe. Thank you, Christian. Operator, we will now take questions, please. Gladly. Ladies and gentlemen, the floor is now open for 1. One. And the first question comes from Geraldine Menon from Liberum. Your line is open, please. Hi, good morning or rather good afternoon and thanks for taking the question. My first question is on the GaN power market, which clearly is doing extremely well for you right now and there's a lot of demand out there. But I'm just trying to get a comment on how you see this market evolving. Is it likely to be reasonably smooth? Are people are your customers going a little bit ahead of themselves and Ordering too much this year, especially when you say that customers are ordering between 5 50 tools, the high end of that seems Quite high. So what I'm trying to get at is, will we see some digestion into 2022? Or do you think we're still at a very early stage of this of the evolution of this technology? And so it will continue to be Quite linear for some time to come. And even if we do get some kind of a sort of digestion phase in 2022, I just want to know what your views are on silicon carbide, especially your comment that You would expect to benefit from the ramp of some major industry players. Is there a timing for that? Is that likely to come through by 2022 or will that be further? And then I have a very brief follow-up. Thank you. Thank you very much for the questions, Janardan. Let me take the Gann Power question So the question about the digestion phase or continued order momentum. I think that very well, I think it's clear. I think we have a view on the market That we all share, right, the starting point with the quick charger, the fast charging and now other applications are being opened And being added, of course, we do not look into the detailed order books of our customers, what orders they get From their customers, but what we do see from the market is that gallium nitride power electronics is currently experiencing A very broad adoption in the market. The quick charger for mobile devices was the 1st market. Now other applications in the high power domain, which are efficiency driven, are being added, data center, data centers, telecom base stations. I clearly would expect that, that is a multiyear trend because we all see that the desire to go green and to go energy efficient It's not only driven by a few companies. We see it across the European Union, say, the Green Deal. We see it now by the Biden administration, right? We all see that all the big silicon valley players with their data centers want to go zero emission. So very sure that that's going to take a strong momentum. And furthermore, we do see that our customers are working on opening up additional applications, Be it on GaN ICs integrated circuits based on gallium nitride for power electronics devices Obviously, low voltage devices. That being said, very clearly, the adoption of GaN Power is at the beginning, and I That's a multiyear trend here. Now how exactly that translates into orders on a quarter to quarter basis? That, of course, I cannot tell you. I can only give you the big picture, yes? But I would like to say on GaN. On silicon carbide, I Took your question a bit related to a timing of potential order momentum. Also here, it's always difficult To predict exactly on a quarter to quarter or half year on half year basis when exactly customers are playing orders. So I look rather on the big picture of the market. And here, we very clearly see that we all know that silicon carbide experiences biggest order momentum from automotive application, be it charging powers, be it onboard chargers in the car or be it the main inverter, And we do see that a large number of EV models are going to be launched in 2023 and in 2024. And with the usual lead time of about 9 months or so, our customers will need to get the tools up and running, qualified and the lines established. When exactly that translates into orders for us or orders placed to Extron once again on a quarterly or half year basis, I would not be able to tell Okay. But you have confidence that you will benefit from the ramp of some major industry players Outside of your historical large customer? And then my Follow-up is just 2 if I can. 1 is on silicon carbide systems again. Where are you on 8 inches silicon carbide systems? I mean a brief follow-up on tax rate is you have these tax benefits that you have brought forward. If you maintain this sort of profitability, what should we be modeling as an effective tax rate for you over the next over this year and next year? So 8 inches wafers in reasonable quantity and with good process results are running in our Airline and Lab, So your first question. And the second question, I'll pass to Christian. Thanks To take that question, first time for me, but I would recommend to use, as we do for our internal To use a 15% tax rate, that is not taking into account swings that result out of adjustments on deferred tax assets. Understood. And just on the silicon carbide side, when will when do you think it will move into commercial volume or Commercially available, your heating system? We are shipping 1st volume system in the first half of twenty twenty two. Understood. Thank you very much. The next question comes from Uwe Schupp from Deutsche Bank. Over to you. Yes. Good afternoon, gentlemen. I've got two questions, please. Firstly, on the supply chain and secondly also on the silicon carbide competitive front, if I may. So firstly, on the supply chain, can you just comment, generally speaking, on what you're seeing out there with regards to times, given that the constraints that I think we can hear and read about every day in the newspaper. So how have lead times developed lately? In terms of maybe in relation to that, can you also talk about whether certain customers have tried to make sure that they absolutely get The machine in time, in other words, do you think that you have seen double ordering here and there or even on a broader basis? And then secondly, on the silicon carbide and really related to Jonathan's question, I think we have heard now From several competitors that your main competitor on silicon carbide may have issues on the 8 inches tool. Is that something that is that you've heard as well and that you would comment on? Or probably no is the answer, if I may. But let me put it in a positive way. Do you see a certain chance for you to get a kick start as this market gets in bigger volume next year? Thank you. Thank you very much, Uwe, on those questions. So let me first comment on the supply chain question. So with respect to Constraints lead times along our own supply chain and then potential double ordering of our customers, right? So We have been preparing very well our own supply chain with respect to order volumes in 20 '21 and also in 'twenty two. And because we have taken precautions and we have Taking action, yes, it was an active act from us, so to say, proactive activity that we have started. Due to that fact, we are, so to say, well set, so to say, yes, To secure all the volumes for 2021 and also going into 2022, yes? So we have been proactively taking that. And due to the proactivity, we now really benefit from that, yes? The counter side of that is we have been able to communicate to our customers all the time, yes, we are able to ship, and yes, we are able to ship At reasonable lead time. And due to the fact that we have been able to give such messages to customers, I was just 2 days ago on the phone with a Very large North American customer who also said, well, we see with other equipment vendors, lead times doubling towards 12 months or 12 to 15 months. I said, well, not from Extron. We are well prepared. Give us the order when we need it. And so therefore, I would I mean, you never know exactly when is the double ordering, yes? But I would rather and also given the messages that we give to customers, I would not assume that there is double ordering. I would rather assume it's ordering based on the demand that customers have, Yes. Again, this is my own assessment, but I've given you the logic and the reasoning how we come to that And in which perspective, on which context I give that to you. Now let me come to the question on silicon carbide. I would not want to comment on the performance or the wafer transition of a competitor, yes? There is always Competition in the market, and it's always important to take the competitors very serious. But very clear, our aspiration is Our equipment is capable of doing both 6 inches and 8 inches wafer size. That It allows our customers to buy our equipment now, use it initially for 6 inches which is Today, the dominant wafer size in the ramp up of silicon carbide and then later on convert the equipment To 8 inches if the customer, for example, decides to switch a line and 8 inches wafers become available, we all are aware that today availability is limited. And therefore, we very much expect and target to benefit actually from the wafer size transition to 8 That's very clear. Thank you, Felix. If I could have a follow-up, please. In previous upturns over the last 1. 15 or 20 years, there was you made frequently use of the good market environment and adjusted your pricing accordingly. I I was just wondering whether on a year over year basis or over the last 2 years, you've done this again and adjusted your prices Not only to reflect the rising raw material price input costs. So I think we need to find good Time to adjust prices, meaning at point when we have made an improvement on our Equipment or deliver an additional performance such that such a price increase can very well be justified in front of the customer, yes, Rather than just saying you get the same piece of equipment with the same piece of performance, but now a little more expensive, Yes. This is not the strategy that we are pursuing. So we rather than just across the board raising prices Linked price increases to performance improvements, performance gains and generation changes of tools, Which I think you all are very well aware is what we are actively driving across our portfolio. So yes, there is opportunity for that, But not just across the board, but on a very well linked also to a customer benefit. That's very clear. Thank you very much, Felix. We have another question from Oliver Voyhan from Alta Research. Your line is open, please. Yes. Thank you for taking my question. Can you hear me? Very well. Okay, very good. Two questions, if I may. So the first one is a follow-up on the order book. So Compared to the end of last year, the order book more or less has doubled in size, the order backlog. And at the same time, prepayments increased like 2.5x. So my question there would be, is it that you're Taking higher prepayments on each system or maybe not showing all of the orders here have collected prepayments on the order book Because of execution risks. Thank you. It's a very good question. And so the prepayments or the ratio of prepayments to order book Fluxway simply given due to the fact that we do not have the exact same policies with all But there is a certain range. So like you know also on prices or margins, you have a certain product mix, yes, or mix behavior. There is mixed effects on the payment behavior. In the mix, there is different regional habits, for example. There are different habits by some large key accounts and so on. So it's rather a, so to say, a random or like a mix effect, Yes. From regions, from customers leading to that one, then a systematic effect out of which you could read a systematic pattern or something like that. Okay. Fair enough. Second question is on your margin guidance. As I understand, the gross margin guidance of 40% was based on an exchange rate of $1.25 to euro. Now we've been around $117,000,000 $180,000,000 for a while. So if we would extrapolate that into the rest of the year, would that mean That you would consider upgrading the gross margin guidance? So we will definitely stay with our guidance Throughout the year at the x rate of 125, yes, this is we have fixed that rate for the year and it's, to say, our And you will call it budget rate. We will stay on that one. So we will not change the guidance throughout the year. Nevertheless, it's, of course, what we would very much appreciate. The eurodollar exchange rate Comes unfavorable for us. We will recognize positive effects out of that one. Tristan, do you maybe know how large these effects could be? Right now, we as you said, we're planning for 125. We are expecting To give you an approximate number of $120,000,000 additional sales in U. S. Dollars We have factored in with 1.25 rate. So you can do calculations and your expectation was the exchange rate Well, the good thing is that the overall exposure to the U. S. Dollar has been consistently going down with Depending on customers, but also an increased proportion of revenues and orders coming from Europe It is also limiting that exposure. Okay. That was very clear. Thank you. The next question comes from Andrew Gardiner from Barclays. Good afternoon, gentlemen. Thanks for taking the question. I just had one in terms of the perhaps medium term outlook and how you're planning for capacity. Felix, the guidance that you've now given us for the second half of the year, as you pointed out, is quarter on quarter increase in Shipments and revenue in the Q3 and again in the Q4 and quite a steep trajectory of that Perhaps around €200,000,000 or so of revenue in the Q4. How are you then thinking about Planning for 2022, you've already told us in the Q and A that you've got your supply chain ready for that. You've got the parts committed. In terms of your own sites, what do you are you really stretched at that €200,000,000 or thereabouts in the Q4? Do you need to add more capacity to make it a bit more comfortable in terms of meeting these larger volumes? Just a bit more insight as to What the latest order surge means for your planning in 'twenty two and beyond? Yes. Thank you very much. And I think you captured the situation quite well, yes? So we will definitely see the largest output In systems and then, of course, in revenues, meaning in euros in the Q4, as we've indicated and you caught. And also very Yes, I think we just need to do the math, yes, is we still we have a nice or we have an excellent and a big order backlog, yes? Big part of that, we will work down, and a small part of it goes into next year. And of course, we just have raised slightly our Order intake guidance for the second half of twenty twenty one, which then, of course, with our typical lead times of 6, 7, 8 months. And again, we stay, as we discussed, supply chain wise on the same averages that we had in the past, yes? So we will ship a big part of that, What we are now taking is order intake. In the second half of twenty twenty one, we will ship as revenue in the first half of twenty twenty two. This is just clear. This is our normal period. So we will have a good start revenue wise in the year 2022. So capacity wise, coming to your question, we fortunately have a very flexible production model, yes, which allows us to To absorb such high volume, concretely, let me give you two facts here. We have, out of The current facilities that we at Extron have in the past, yes, many years back, shipped already a total of 4.50 units. So that, of course, was a big peak with a lot of efforts, but such quantities have been shipped out of our facility. And already now, in the 4th quarter of this year. We take one additional measure, which is we have activated a remote top floor. So some part of pre assemblies, which take time, and by taking time, occupy shop floor space. We put that on a remote shop floor, just some Assembly, some modules, you could say, are being assembled there, which means then that the big systems, as you all know it from photos, yes, it's big, I would say, like a With us, yes, they need a couple of weeks less spending on the shop floor in our facility, and that means more systems in the quarter, so to say, can be finished So you get the idea how with very little add on measures or flexible add on measures, We can, so to say, vary and extend our capacity, yes? And in the Q4, we do that, and it works quite nice. Thank you, Felix. Perhaps just a quick follow-up related to the same topic. I mean, now that some of the customers are giving you Particularly large orders, as you mentioned, in the GaN area. Are they I know you as you said, right, your normal lead time is 6 to 8 months. But are they giving you longer visibility than that given the they are planning for significant High volume ramps themselves and going to need consistent tool deliveries, even if it's not committed orders per se, are you getting Better visibility into the long term plan of your customers? Yes. You indicated with your question 2 very good points. If it's such large orders, very often, we stretch them so that not all, let's say, you mentioned the example of Ten systems, not all 10 are shipped, let's say, within a month because, of course, our customers themselves cannot budget 10 systems to be installed in the factory and then with their people being ramped up and put into volume, right? So it's rather than spread over a certain period of time, Let's say, whatever, 1 quarter or so, yes, that step by step, every week or every 2 weeks, a certain number of units use the factory, go to the customer install, Yes. Simply from operational standpoint at the side of our customer also. And Yes. Some of our customers do give us a longer term visibility. However, other customers Continue to surprise us with how sudden they make a decision to order a large quantity, let me put it that way. So in other words, we can, out of that, not derive a certain pattern or not derive a certain visibility Beyond the 6 months that we typically give as an indication. Okay. Understood. Thank you. And we have a last question, which comes from David O'Connor from Exane BNP Paribas. Your line is open, please. Great. Good afternoon and thanks for taking my question. Felix, I'm just curious, given the broad based strength you talk about across The business. I'm just wondering why did the order intake for the second half is guided 25% below the first half. Maybe can you Give us some of the puts and takes around that or maybe even if there was any pull forwards in the order intake into the first half given the Total flow chain across the industry. And I have a follow-up. Thanks. Yes. Thank you. Very good question. So as said, we typically have a visibility into for 6 months forward. So we have a good visibility now for the Q3, yes, for the Q4, it's a moderate visibility. Based on these data points, this is the estimate, I think you've done the math, yes? If you add it up to the high point of our guidance, it's now coming €480,000,000 is the high point of the guidance for order intake, €260,000,000 is shipped, meaning another €220,000,000 to go, right? On average, €120,000,000 per sorry, €110,000,000 per quarter, Which is a little below the first half. We believe the first half was characterized by some very large volume orders. There could be some in the second half, maybe, maybe not. We don't know it yet. However, we would not expect that these Volume peak orders that we've seen that also surprised us in the Q2, hence the trading statement. We do not expect that such The fact reoccurs in the second half, and that's the reason why we have given the guidance. This is what we currently see in terms of the volume. And still, we believe it's a very good volume, and we are here on a long term trend. Okay, got it. Understood. Thanks for that. And maybe just within that order, very strong order intake, Is there was there any pull ins there by customers? I mean, we did hear about pull in from other 2 vendors. So just wondering if there if we Experience a similar factor in the Q2 order intake. So we have not seen a fact that orders that have been placed to us have now been moved forward by a quarter as an order. That effect we have not seen, yes, if that is what you mean as a pull in. Nevertheless, we have seen That some customers have placed orders with us and asked us for a very short selected some selected customers have asked us For very short lead time, simply saying, dear Extron, we have been surprised by end customer demand ourselves. We have an aspiration to increase our volumes faster than we initially had planned. So could you do us a favor and ship the equipment not within 6 So 8 months, but let's say rather 3 to 4 months, yes, in some selected cases. And In not all cases, but in quite some cases, we have been able to make that possible, which, of course, Then we support our customers and it's our desire to really support them in such manner. Okay, got it. Thanks for that. That's helpful. And maybe if I could squeeze in one last question just on the backlog. Close to The previous LED peak. Can you just maybe give us a split of that backlog across the end application, LED, opto Telecom and Power, just to give us a sense of kind of where the percentage of the backlog, where it lies from an application standpoint. Thank you. I must admit that I don't have data on the exact backlog split, but I think the backlog that we see is Probably strongly correlated to the order intake of the first half, and I have that split here in front of me. And that will that is, to a very large part, a little less than half of it is power electronics, GaN and SiC. Then I think around the 20% is on the LED side. And I would say about 25%, 30% or so is on the telecom side. So very clear also, as we have written in the report, Power Electronics being number 1, telecom, datacom number 2 and LED being number 3. That's very helpful. Thank you. Thank you very much. With this, we would like to conclude today's call. Thank you to all of you attending. Please note that our next earnings call will be on November 5, 2021, our Q3 2021 quarterly results. Thank you and