Thank you very much for joining Manz AG's conference call regarding the publication of the financial figures for the first quarter of 2023. My name is Axel Bartmann, and together with our CEO, Martin Drasch and Manfred Hochleitner, we are very happy to welcome you to this call this morning. As usual, first our CEO, Martin Drasch and Manfred Hochleitner will give a short overview on the operational and financial development in Q1 2023. Afterwards, you will have the possibility to ask them your question. To ask a question, please use the Raise Hand feature of Microsoft Teams. You can find it usually this icon on the upper navigation bar.
A standard setting, the option to turn on your camera and unmute yourself has been disabled. We will call on people to ask their question and unlock them later on camera and microphone options. Please make sure to unmute your microphone yourself once this option has been given to you. In addition, of course, you can also use the chat function and ask your questions via chat. One last point before we start the conference, this conference is being recorded. I would like now to hand over to Martin Drasch and Manfred Hochleitner.
Thank you, Axel. Good morning. Welcome from my side to our first quarter number call here. We will start directly with the highlights of the first quarter. We split it into our divisional setup. We see here we had a good and really good start in the overall three months numbers of 2023. This was based also in the division Industry Solution based on our industrial automation part, where we had a quite successful start of U.S.-based OEM customer, which started our production or his production with our tools here. Which was on time and in schedule, which was a good success for us in the U.S. market, which is booming. We will see here in this regards further information later in the call.
Also we had a successful SAT at a tier one customer for assembly line for cell contacting systems here in Germany, which shows how good this development for cell assembly systems and the growth market is here as well in Europe. In electronics, this is our Asian-based business we have. We see a high interest from quotations. We see now that this downturn we see the last or we saw the last 2 decades due to the quarters is now improving. We see the market is coming back, which was highly impacted of the trade war and other topics out of Corona. We see this market is coming back and a really good development for incoming requests for quotation.
Additionally, we received the approval from a subsidy program in Taiwan from the Taiwanese government to further improve our FOPLP measures and the copper plating tool, which we have developed here for bigger sizes in the future. Also, we see with this program that we can increase the speed of our development program for this topic and increase the competitiveness of Manz in this direction. For the mobility and battery solutions, as you have seen, we have received a multimillion EUR order from Daimler Truck, with whom we have a cooperation agreement for the development of their cell production. This is very important for us that this is moving ahead. Additionally, you have also seen that we have made a swap deal with Customcells Tübingen, where we have some stakes in with the Customcells Holding.
There we changed our shares into the holding structure, this is a very good development for us as the Cellforce Group, which also is a part of Porsche at the end of the day, is part of this construct. We therefore see huge opportunities in the future to increase our business with the Customcells Holding and the related other companies in this business. For the KPI developments, you have seen that we have a little bit weaker order intake compared to the first quarter in 2022. This is due to two topics. One of our first of all is that the order intake in 2022 was on a very high level compared to the last years before.
On the other side, due to this Inflation Reduction Act, we saw some deviations and shifts of planned order intakes, which have not been made like discussed with our customers. There is, for the Q1, a little bit weaker number. This also then reflects in our cash and cash equivalence as this down payments from the order intakes is important topic for us. This will then improve in same amount than when we receive the order intakes from our customers, where we have actually the negotiations with. The revenues, as you have seen, is on a very good level. We have received EUR 76 million of revenues, which is quite approximately 25% higher than the amount we have had in the Q1 of 2022.
This for sure also has some good impact on our EBIT and EBITDA numbers, which improved a lot compared to the Q1 numbers in 2022. Far from my side about the highlights and the KPI performance, developments. I will now hand over to Manfred Hochleitner to give you some more details and insights into the financial figures.
Thank you, Martin. Also from my side, a very warm welcome to our first quarter call here today. As Martin already mentioned, the revenues came out roughly at EUR 76 million, so a strong increase of more than 25% compared to the first quarter of last year. The growth, as Martin already mentioned, is mainly driven by a higher demand in our segment industry solutions, whereas the growth in the segment mobility and battery solutions was lower due to less order intakes in the past months.
The other operating income includes the positive one-time effect of the share swap, which Martin Drasch just described and mentioned. The positive effect is due to the significantly higher fair value of the shares in Customcells Holding GmbH compared to the shares in Customcells Tübingen GmbH. Very good development on the material cost ratio side. The material cost ratio is roughly at 57%, and is significantly below the ratio of last year. The reason for this is mainly a change in the product mix compared to last year. We had a lot of repeat orders from existing customers, which led to this significantly lower ratio compared to the last year.
Aside from that, we see now that material costs have stabilized compared to the strong increase of last year, this is already included all in this number of 57%. The operating expenses are mainly influenced by losses on exchange rates and a loss provision for projects and execution. We think that we can roll back these loss provisions in the next couple of months. Overall, as Martin already mentioned, we achieved a very strong positive EBITDA of EUR 8.3 million compared to minus EUR 2 million in the previous year. The EBIT increased by more than 200% and reached a number of EUR 5.4 million, which led to a positive net result in the first quarter 2023 of EUR 4.4 million. For the overall view on the P&L, let's move on now to the different segments.
We start first with the segment Mobility and Battery Solutions. As we already mentioned, the growth here is relatively moderate due to less order intake in the past months. Overall, and given the current market situation, with a shift from Europe to North America based on Inflation Reduction Act, this proves a solid progress of major customer orders nevertheless. The EBIT of this segment ended up at EUR 0.4 million, which is a growth of roughly EUR 6 million compared to last year. The EBIT includes, as I already mentioned before, the effect of the share swap to Customcells Holding in the EBIT number.
Aside from this, we see important new orders, as Martin already mentioned, from Daimler Truck and from Renesis, an Italian customer that wants to build several factories for power supply companies in Italy. This diversification on various industry segments of automotive and non-automotive is one of our strategic key factors here for the further development of this segment. In the segment Industry Solutions, we see a very strong growth of 41%, so we ended up at EUR 47 million of revenues. A very strong growth compared to last year. Also, the EBIT shows a strong positive result of EUR 4.9 million, which corresponds to an EBIT ratio of 10%.
The main reason is that, as I already mentioned, we have here repeat orders from existing customers with a good mixture and healthy mixture of new customers with new orders like Ambient Photonics for a production line for organic solar cells. We see that this segment has a very healthy structure right now and has made a lot of progress in executing new orders and, yeah, maintaining also a good relationship with existing customers. The same is true not only for the German market, but the same, as Martin already said, is also valid for our markets in Asia. We see that this market is recovering and, we see also their increasing demand for our technologies, not only in flat panel display industries, but also in the chip and semiconductor business.
Having a look on the balance sheet, there is nothing too spectacular. We see that the balance sheet total came down from EUR 344.8 million at the end of last year to now EUR 330 million. On the asset side, we see a reduction of our materials in stock. After the global supply chain challenges, we have now focused on reducing stock again, so we are coming back more and more to normality again. Our trade receivables reduced by EUR 4.5 million, and due to the lower order intake, we see a decrease also in cash from EUR 33.6 million to now EUR 16.5 million. Correspondingly, both the trade payables and the contract liabilities were reduced by EUR 17 million and EUR 13 million respectively.
Based on this, our net debt increased now from EUR 10.7 million at the end of last year to now EUR 38.1 million. The positive net result led to an increase of our equity ratio from 29.7% at the end of 2022 to now 32.4%. On the cash flow side, as I already described, we see we have less order intake in the past months. This led to a negative cash flow from operating activities with -EUR 20.9 million. This is mainly due to a reduction of liabilities, which could not be compensated by new cash in from new order intakes.
The pre-financing of our IPCEI projects led to a negative cash flow from investing activities of -EUR 5.5 million, the outflow of cash was mainly compensated by a high usage of our financing lines, which is shown under the cash flow from financing activities in an amount of EUR 9.4 million. At the end of the first quarter 2023, our cash position amounted to EUR 16.5 million. So far, the overlook of our numbers, let's move now on with the strategy and outlook. I'll thank now for this to Martin Drasch.
Thank you, Manfred. We will go on with our strategy. Short wrap up and a reminder how we are acting. As you know, we are high-tech equipment manufacturer, and we drive with our innovative solutions, growth markets. That's what we are doing. We have for this one two segments. The one is our mobility and battery solutions, and the other department and division we have is our industry solution. In the mobility and battery area, we really target to go to the top three of the EU and U.S., supplier for the integration of production equipment. In the industrial solution department, we are the renowned solution provider for assembly and production solutions.
This is based on our four pillars, which are the actively sizing of opportunities in these new and growing markets where we are in, and the realization of business potential in the mature markets. For sure, then our technology-driven setup, where we have a lot of R&D and development capabilities, where we define the solutions and technologies for the businesses of our customers. Based on them, the good solutions we have in the market, we see also a huge opportunity in the future by further expanding our service business in this direction. That's the overall strategy, and let's go a little bit deeper. We see there in the future, further potentials and growth markets in industry solutions, especially, we see here a huge growth potential in the automotive market, driven by the transfer from the combustion engines to the electric-driven cars.
Therefore, the electric powertrain components are a huge growth potential for us, such as cell contacting systems or inverters. We see here with our solutions, we have now several years already in the market as a proven concept with our LightAssembly platform, where we can integrate different processes like laser processes, soldering processes, but also screwing and assembly solutions in a modular line to adapt this setup then to the needs of our different customers. We are quite fast in a solution definition process and can deliver to a very short time to market the demands from our customers. We see also a huge ongoing strong demand for assembly solutions, also in the non-automotive market, especially also here for power electronic production, for example, inverters, for solar productions, for example.
This is one of our areas where we are in. Also a lot of industry productions need now a higher assembly technology to modularize and to standardize their business to really reach out here for lower costs. That's what we also see as a huge potential. Like described in the last quarters already, first order intakes in the digital printing technology now really moving ahead. We see a lot of demands from different customers and also from different markets for this technology, where we have the target to make the quite good quality and performance of the printing heads in combination with our fast and precision assembly technology and also conveyor technology, to really to advantage for our customers.
Here we also see a huge demand in the semiconductor area, which is actually coming up for the functional printing of layers in this area. Also this leads then to an excellent position, which we already had in this FOPLP and IC substrate market, where we already saw a lot of order intakes also here with this technology, which is now in production already in the markets. We see here further demands from our known customers, which asking us for further equipment to increase their production setup in different areas as well. In Asia, in the U.S., and also here in Europe, we see some increasing demands. This is underlined here on this graph. You see this on the left-hand side, our planning and market research we have done for the cell contacting system worldwide.
You see here nearly a doubling of the numbers from 2023 to 2027, which gives us here a good opportunity with our already developed technologies and knowledge we have in place for different lines we already have in production with our customers to achieve here in the future further order intake, which is needed with more models coming up from different OEMs in this direction, where they need to have this cell contacting system, which is one of the keys also for the battery management system of module and tech solutions in the OEM area. As well also for industrial productions where batteries packs are in the cell contacting system for industrial solutions also is in our focus in this direction.
On the right-hand side, you see also, the graph which we see for the development and the growth of the inverter, which is also needed to make out of AC/DC current. This is one of the most important topics which is then leading to a better performance and also range of cars. At the end of the day, the less we have in the inverter processes, the better, sort of, the range, for the cars and therefore, also this product is, quite interesting for us. We also have here some lines delivered and in production. We see also here, especially in the U.S., actually, a demand which is, growing for RFQs, for our solutions and technologies we have already developed and in place here. Coming to the growth potentials in our mobility and battery solutions.
As already stated several times, there is a huge market development on lithium-ion battery cells, and we see here a market demand for battery cell assembly equipment, which has reached now and forecast of all almost $9 billion for 2026, which is a CAGR from 2022 to 2026 of roughly 20.1%. With this growth, which is now really in the starting position to get now realized in several areas, but especially also in the U.S. market, driven by the Inflation Reduction Act, which we will come later a little bit in for more details, what's going on here and what's then here the opportunities and chances for Manz in this direction.
This market is really booming, and you see this also on the sales numbers of our OEMs here in Europe, but not only in Europe, also in China. In U.S., the numbers are increasing and therefore, the battery cell production equipment is of a high need to really fulfill this growth demand from the OEM side. As you have seen already, we have a quite good network with our European turnkey suppliers, and we are actually the only one which can deliver entire gigawatt fab out of Europe with our partner network with GROB, Dürr and Manz. Therefore, we have now developed and finalized our setup for 10 gigawatt line, which we can offer now out of this partnership.
The majority of this equipment is now available, and we are already here in discussions with some major customers which are interested in the solutions this partnership can provide. What we see as really chance now is the really fast start of the North American business we see related to the battery cell manufacturing, which is clearly stipulated and also clearly also driven by the Inflation Reduction Act. We expected this 1 year ago, earliest in 2 to 3 years. Due to this subsidy program from the U.S. government, we see this as really now starting.
We have here already a huge number of RFQs coming in from different directions for demand for module lines and as well battery cell lines, which are then covered by the subsidy program and which is of high interest, which I will show you a lot later on, a little bit more details what the impact are. This is from our side what we see here, and we are quite well prepared for this market as well in the U.S. We saw it, as mentioned, a little bit later in the U.S., but nevertheless, with our preparation and anchor machines we have developed here, we see also a good chance now to modify our equipment, and it is also UL-ready for the U.S., market.
Coming now to the overall market view, which we have seen, you know our graph here. We have splitted the European market, which we serve now, in an addressable market served by Manz, in a addressable market not yet served by Manz due to time constraints and as well the readiness of the end customers to send out their RFQs. For the not addressable market, where we due to decisions of the end customer or product driven special features which we cannot supply as a not addressable market in the different areas. Also, you see where the headquarters of these different cell suppliers are set.
Overall, we have seen already in the last months, a still growth of the announced installations in Europe from 1.2 gigawatt hours to now 1.4 gigawatt hours. There are more than 46 projects announced in the EU, which are planned to start for cell production in Europe. What we see here is from our point of view, and this is clearly also our target here in Europe, Germany will be the largest market for the installation of these battery cells, which is good for us. This means short connections with customers and a very good connection network with our setup of our companies we have here. We have really short connection lines to the different customers.
Also France and Spain is quite interesting for us in this direction to have further businesses. What we also see is that some of our customers, and this was mentioned before, now move their planning, which was planned for a fab in the EU now to the North American area versus the European region. For example, here FREYR and Northvolt, Tesla and Volkswagen have announced this, that they prioritize now the installations of their fabs first in the U.S., and then in the second row, they focus the European market. This leads us now to the overview for the Inflation Reduction Act, which I mentioned to you. We show this in a graph and to show a little bit the opportunities and as well risks this means for Manz.
The table has to be read like the following. If a customer plans an 8 gigawatt hour installation per year, then the sun-funding and subsidy level in the EU, which is the blue line, and the green one is the U.S., part. You see that there is roughly 2-3 times higher subsidy level in the U.S., on this 8 gigawatt installation compared to the EU. And if you go to a nearly 50 watt gigawatt hour installation, you see that the subsidy level is nearly 10-15 times higher than compared to the EU in the North American area.
This is clearly that this leads then to the decision process of our customers to prioritize the U.S., market as due to this fact, and their end product is nearly 30% cheaper compared to a production in the EU. This is really not taken already into account. Also the energy price level in the U.S., is more stable and secure than in the European Union, actually. That's the reason why and very visible now for everybody, I think, why some of our customers hesitate to place orders for installations in the EU and transfer now their plannings to the U.S., market, which leads to some delay in some projects.
Nevertheless, with this setup, I think, even then the competitiveness of this end product in the global market is better with this base. Coming to the expected market overview in the North American area, what we see. Also here you can see that already some projects we had seen as addressable and are working already on this one. Due to this, let's say, change in this Inflation Reduction Act and now more clarity how this works and who will work with this one, we modified it, and we made this in a little bit a slideshow. Where you can see that a lot of not addressable projects due to the IRA are now in the addressable region.
Also the already served projects we have in means that we are working here on RFQs, and orders for our customer have increased due to this fact nearly by 50% due to this change in the prioritization from our customers. Coming now to the order intake and order backlog situation. Like already announced, we have a little bit weaker Q1, like also reflected in the industry. Quite good order intake still in the mobility and battery area with EUR 30.2 million. Also you have seen we have announced the further order intake, and this is the shift between the quarters and also quite really good order situation and RFQ situation in our pipeline. Still growing. A lot of demands coming in. Industry solutions is a little bit weaker.
This is also due to the fact that we are quite selective in the industry automation area, where we had a quite good order intake in Q4 and Q3, which we are now working on and processing. We have still some very low situation for order placements in the electronics area. Means in the Asian market, which we see now really covering up, but still behind our expectation we have seen in the last, in the last quarter here. We are working here actually on also several projects which we expect for Q2 as an order intake to really pull this in and to increase the order intake situation to our planned level.
For the other backlog situation, you see we're still working on a quite good base with an overall order backlog, end of Q1 by over EUR 300 million. Mobility and battery solution with EUR 190 million roughly, and over EUR 110 million in the industry solution area. In mobility and battery, still the project of Britishvolt is reflected as we have so far not yet reached an agreement for the cancellation of the project with our customer. Coming now to the guidance. As you know, our guidance which we had published a few weeks ago. We see an increase in revenues in the lower double-digit % range and an EBITDA margin in the mid-positive single-digit % range, and the EBIT margin we see in the low-positive single-digit % range.
With our Q1 numbers, I think this is a quite good start into the year, which reflects that we are here on a good way to fulfill our guidance we have given for 2023. That's from our side now all. We are now happy to receive your questions. We see that there is a question from Mr. Ritzka. You should now be able, Mr. Ritzka, to unmute yourself and raise your question.
Yes, that's it. I think you can hear me. Good morning.
Yes. Yes. Good morning.
Thank you for taking questions. Two questions from my side. The first one on Sunlight Group. Can you provide some insights about this project? I mean, we have read about that in the social media and now know about the gigabyte size, but can you share some details with regard to the volume and time schedule, et cetera? It would be also interesting to know how much of the Q1 revenues related to this business.
SYSTEMS SUNLIGHT, as you know, they are coming out of the solar industry and using our production line to assemble modules for energy storage in their regard. That's their business model to invest into solar parks and also the related energy storage area. We have in total 4 lines from this customer in order. 2 are already received the SAT level. The rest is actually in the progressing. Most of the revenues are already processed. The order, the volume of the revenues in Q1 was roughly EUR 3-4 million for this quarter. We already received further RFQs from this customer to increase their production equipment as their business is going really well.
The good thing is that this is then a complete repeat business. No modifications on our lines or just minor topics related to the sites where this equipment will be installed. Customer is quite happy because we delivered in time and quality to this customer that he's able to provide his solutions to the market.
Okay, thanks. The second one on your order intake. To get a more clear picture on your figures, can you shed some light on the volume of potential orders so far that are impacted by the reluctance of your customers due to the Inflation Reduction Act? Basically, what is the amount of orders of your European customers that is currently held back here?
We know this very, very detailed as this was in our planning for Q1 already, and also Q4, which we had the RFQs with our potential customers here. This is an amount which is around EUR 100 million of potential order intake, which is actually on hold. We have already done the RFQs and are in the stage of final negotiations for, let's say, the related e-equipment. Due to this Inflation Reduction Act, we have some discussions regarding where it will be installed. This for sure, as you know, most of the customers in the U.S., they would like to have also other components. For example, the UL topic, which is a special standard for electrical equipment, needs to be recognized.
Also some of the customers in the U.S. prefer then Rockwell or Allen-Bradley or other PLC components, which then needs to be adapted. To roughly EUR 100 million of potential order intake is due to this Inflation Reduction Act discussion shifted.
Okay. When do you expect these orders of EUR 100 million?
We are still in negotiations and reworking with our customer. It's also a topic which is coming up now, as you have seen, this table I showed of the subsidy levels based on if you have a 8 gigawatt, 20 gigawatt or 40 gigawatt. This is also a topic which they are discussing now. If they start with a bigger setup, so increasing the order volume, due to the fact that then the subsidy level is higher. Therefore, there are still discussions going on, but we see some good potentials for Q2 to have at least some of these decisions and negotiations done. Also part will be in Q3.
Okay. Thank you. Maybe one further question, if I may. On your recent order from FIB. You mentioned in your press release that there is a letter of intent signed with the customer to deliver 3 additional lines. Does that mean that we can multiply the current order by 3 and end up with EUR 75 million, or will be the final amount significantly higher than that?
We are still in discussion as this is, we call it a turnkey line. Where also, let's say, the complete intra logistic is part of the business, which is in the first order not fully reflected. We are already discussing with the customer some amendments and extensions of the order. Due to the different sites and also different setup of these production sites, there is a potential that even this volume can be 10%-15% higher than the published number we had received for the first order intake for the follow-up LOIs. For the LOI, which we have received. By the way, this is not the end of the story. This is for further European countries. There is a plan and also for North America.
We received now an RFQ demand from this customer to have here this concept further lines installed. Actually we are working on a plan how we can schedule this by quarter to receive their further order intakes from this customer and also to deliver to the U.S., several of these lines.
Okay. Were your partners GROB and Dürr also involved in this contract?
One of these partners is already in for the electrode manufacturing. He will supply here coater and the dryers. The others, or GROB, is actually not in as this is not a module line, it's a pure assembly line. Depending on the further plans of the customer for the module assembly, this is a further potential also to have here a part of the equipment delivered from Harro or from the partners in this direction.
Okay. That's it from my side. Thank you very much.
Welcome.
Thank you, Mr. Ritzka. Currently nobody else has raised his hand. If anybody else wants to ask questions, please use the Raise Hands feature. This is not the case.
Okay.
Thank you very much for your attendance of our today's call, and we will now close this conference call.
Thank you very much.
Bye-bye.
See you next time. Bye-bye.