Welcome to the Manz AG conference call regarding the first half-year results in 2022. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Mr. Martin Drasch and Mr. Manfred Hochleitner.
Good morning, everybody. Also warm welcome here from Reutlingen. Welcome to our financial figures for the six months of 2022. I think we have some interesting insights for you regarding the outcome of the six months figures for four months, but as well, for the future related topics. I think we will skip them then in the next minutes and see them in the presentation of the different divisions. Beginning, like always, we will with the numbers from Manfred. I will hand over to him, and he will give you some insights regarding the financial figures.
Yeah, thank you, Martin. Good morning, everyone. Also from my side, a warm welcome to our today's call. Let me now give you some further details about our income statement before we have a further look on the balance sheet and the cash flow statement later on. The revenues in the first six months of 2022 came out at EUR 126.7 million. This is roughly 11% higher than the revenues in the previous year, and the segment Mobility & Battery Solutions contributed roughly EUR 50 million to the total revenues, whereas the other segment, Industry Solutions, achieved revenues in an amount of approximately EUR 77 million.
Inventory changes in an amount of EUR 3.3 million and capitalized R&D work performed of EUR 7.8 million led then to a total operating performance of EUR 138 million. With the EUR 5.7 million, gains on foreign exchange rates are the main contributors under the other operating income, followed by approximately EUR 1.1 million of income from the release of provisions. The material cost ratio increased significantly from 53.4% to now 61.8%. The main reason is that the change in the mix of projects happened compared to the first six months of 2021, with an overall higher percentage of installed tools from third-party suppliers and increased costs in the execution of a customer order.
The increase in personnel expenses results mainly from a higher headcount in Germany compared to the previous year in connection with the regular salary increases in the course of the ongoing years. Although the absolute number of personnel expenses went up by 4%, roughly, the personnel cost ratio came down from 33.1% in June 2021 to now 29.7%, and this is mainly due to the higher operating performance. An amount of in total EUR 8.2 million coming from losses on foreign exchange rates. Royalties, travel, and IT costs were the biggest contributors under the other operating expenses.
Our new minority stakes in smaller companies contributes now in a relatively low amount of EUR 0.4 million and shows then the result which comes out of the result from this equity accounted investments of these new shareholdings which we have in these small companies. In the previous year, the already known one-time positive impact of EUR 14.3 million out of the sale of the shares in Talus led to an EBITDA of EUR 18.1 million. Without this impact, the EBITDA would have been at EUR 3.1 million, and is already mentioned in our three-month results. This year, the EBITDA includes a negative impact out of an impairment of EUR 1.2 million in connection with a defaulted insolvency claim.
In addition, we had an impairment on finished goods in Taiwan of roughly EUR 1.1 million. If we exclude these two negative impacts now this year, then the adjusted EBITDA would have been at roughly EUR +1.2 million, and therefore approximately EUR 2.6 million below the adjusted EBITDA of June 2022. Accordingly, the adjusted EBIT in June 2022 would have been at EUR -4.6 million compared to EUR -2.1 million at the end of June 2021. On a quarterly basis, we increased our revenues by roughly 8% compared to quarter one, whereas the EBIT went up from EUR -6 million in the first three months to a slightly red zero now in the second quarter, 2022.
In spite of the bumpy start in the first quarter, we see an improvement in the second quarter, which will continue now in the following quarters. Look at the income statement. Let's now move on to the balance sheet. The balance sheet total increased from EUR 205 million to now EUR 335 million. The main reasons on the asset side are increases in inventories and trade receivables. Whereas on the liability side, we see the increased results mainly from an increase in trade payables and contract liabilities. Due to the negative result, the equity ratio came down from 30.1% to now 22.7%. This ratio does not include the capital increase from Daimler Truck AG. The net debt remains stable compared to the end of December last year.
Now we move on to the cash flow statement. Starting from a cash position of roughly EUR 36.1 billion on January 1st, 2022. The cash flow from operating activities came out at EUR +11.4 million, which is good news, mainly due to an increase of trade payables and contract liabilities. That means with our operating activities, we earned money. The investment in capitalized R&D works under the IPCI project led to a negative cash flow from investing activities. Afterwards, the repayments of loans and new bank loans evened out the cash flow from financing activities at a level of roughly EUR 1.5 million.
Overall, mainly due to the mentioned strong positive cash flow from operating activities, our cash position increased to EUR 40.7 million at the end of June 2022. So far, let's look at the financial figures. I will now hand back to Martin for further insights into our segments at the end of June 2022. Thank you so far.
Thank you, Manfred. We will start with the segments and with our most important and from a growth perspective, most interesting segment, Mobility and Battery Solutions. As you can see, we have achieved revenues approximately of EUR 50 million, which is roughly EUR 10 million more than we had in the last six months in 2021. It's an increase of roughly 25%, and it's showing actively how increasing this market is. Unfortunately, the number should be much more higher, but due to effects which I will explain later, we were not able in the first six months to recognize and to put the necessary speed on the table to achieve higher numbers here on the revenue side.
At the end of the day, for the huge investments we have taken in development of new products which reflected that in higher fixed costs lead to a negative EBIT which for sure we will not see in the future again because we are working heavily to increase the revenues and so the coverage of the fixed costs. Nevertheless, we have here some really good opportunities actually on hand. You know that we have now shareholder Daimler Truck in months which will soon have a share of 10% of our capital market amount which is in here.
You also know that we have this announced already that we will have a strategic cooperation with Daimler Truck, which is intending to build up a battery production in Europe as well as in the U.S. Planning actually ongoing. For sure, what is already in the ordering process is the order for pilot and laboratory line, which will be built up in 2023 until 2024 to develop here a truckified cell with special conditions which are needed for the truck segment in this area. Also, our other customers here in the market and in Europe, we will see this afterwards on the overview of the market development, which are of high interest. We have a lot of yeah as well investments in the sales engineering phase and we have a lot of projects actually ongoing.
Also brought new people in here to satisfy the demands from the market. See here still a growing interest not only in Europe, also the Southeast Asian market is booming up as well as the North American market is accelerating. Main focus still for Manz is for the next two years the European market which is huge demands which are in front of us for build up of a battery manufacturing lines. As well, the module assembly lines are as well very increasingly demands we see here in this direction with huge potential for the upcoming years. The EBIT as announced is mainly influenced by the lower revenues. These lower revenues are coming from changes on the product side of our customers which lead them to longer engineering times and higher investments.
As well, we are influenced by the supply chain disruptions and also some postponements in major projects due to difficulties in the assembly and installation of the necessary FEPS, which are a little bit delayed also due to constraints and problems in the manufacturing of the needed material for these buildings. This leads then to a shift in the realization of the projects. These are the negative impacts we see here in the development of revenues and EBIT, but we are in discussion here with our customers to find solution to overcome these influences in the next six months. We will see here an increase in the next months for the revenues and then also a change in the development of the EBIT area. Coming to Industry Solutions.
In Industry Solutions, you see that we received revenue in the first six months of roughly EUR 77 million, which is an increase of roughly 3.6%. On the EBIT side, you see that we are here positive. This is influenced by the e-mobility sector which we have here in as well. Our good investments and developments we have taken in Asia for the FOPLP segment in the semiconductor area. Here we see a huge increase and also the first lines in the FOPLP area are delivered to the customer and are ramped up and are starting production. We see that our concept and our development of the machines was successful, and we see upcoming demand for this technology in the future and as well other possibilities in the semiconductor area.
In the back-end area, we see for future development as well. Positive and also for sure with the developments here in Europe and the announcement of new fabs. We also think about to hand over our technology from Asia as well here to Europe and see here also good chances to generate revenues in Europe for the semiconductor area with the FOPLP. On the business area industrial automation, we saw also a good development as well in the order intake area. We were here a little bit behind the order intake in Q4 2021, which we could compensate in the first and second quarter. Will also now lead to a better situation in this business area regarding the development of revenues and as well EBIT.
Furthermore, we see also huge demands in the area of e-mobility for industry automation due to the needs of module and pack lines, which are automated, assembled with equipment we deliver for as well cell contacting systems as well for inverter lines and other components which are needed in the area of the e-mobility, which is increasing heavily also due to the political decisions of the last months to have a change to e-mobility until 2035. Also the decision of some huge OEMs, which clearly announced that they will completely change their technology to the e-mobility and to electric driven solutions for their products at the end of the day. Coming shortly to the strategy, like announced already, our key strategy is for sure the topic of the energy storage area.
We see us with our developments and as well our potentials we have out of the IPCI program as the leading process integrator with a technology leading position in this area. We want to build this up furthermore in modular cell assembly technology and using therefore as well the digital transformation, which is needed to improve the entire line of the production to achieve also here, but not only related in the energy storage sector, also in the automation sector, higher OEEs and reducing costs for our customers at the end of the day to be in the future as well in the European area, as well in the global market competitive. The third pillar of our strategy is the inorganic growth.
As you will see afterwards, we already invested in some interesting technology fields which fits to our strategy, and we can use with our contacts and customers in the future, and are related to the growth in the segments we are actually delivering our machines. We will go further on with these developments and these investments and support these companies in growing with the technologies and competences Manz have. For sure, also we will see here in the future the need to have modular concepts for our equipment and technologies and processes we are developing to reduce costs furthermore. Reduce as well the time to market approach for the customers to have the products and the lines we are installing faster and as well in a better price segment available for our customers at the end of the day.
As mentioned before, a little overview regarding the expansion for the European market for battery cells. Only the cells, lines and plants which are planned in the European region. You know this graph from the past, we split it into the market in addressable, not yet addressed or not addressable lines for Manz. On the left-hand side, you see the landscape with the different pillars, which reflect the projects where we've gone or which are announced and will be in the future processed and developed and engineered by Manz, at least in the sales engineering phase. You see overall a huge demand with 1,200 GWh , roughly which are actually demanded from the market side.
135 are already addressed by Manz, means we are working with the customers on solutions or in sales engineering phase to develop the projects and the lines. We have 515 GWh, which are addressable, but the project is not in the phase actually for RFQs or still in the pre-development phase, so they are up to come in four months as a project. Roughly 600 GWh are not addressable to Manz due to maybe projects that are driven from Chinese cell manufacturers which bring their suppliers with them, so the supply already is set. Or just from a technology perspective, are not interesting for us to stay focused in the areas where we have developments and value add for our customers with our processes and machines available.
Overall, you see the market is still very demanding and I think also more to come. We also already hear from other customers that they plan to increase their line capacities due to the huge demand and as well the huge demand which is coming from the efficiency side of the cell. Higher energy densities and as well, cycle times of the cells are needed and this leads then to modifications as well in the product mix and in as well in the machines we have to develop for the future demand. Also, here you can see where we are in the area of the car industry of the e-mobility, where we deliver our products and where we see our core market segments in the e-mobility.
First of all, for sure, it's the module and the cell with the module and pack assembly where we delivered first line, but not only in this segment, as per the components which are needed to assemble a module like cell contacting systems, inverters and other components which needs to be preassembled and then brought to the lines for the module assembly are necessary here. Also, welding processes in the area of the pack assembly are interesting for us. As well, what we have in this area as well as a clear target product is the battery management system, which we see in sensors, which all need to be assembled in our machinery equipment in this segment of industrial automation are of a high interest.
Furthermore, we see also upcoming demands as already early involved in development of module and pack technologies that as well other assembly task and process task are addressed to Manz, which are potentials for future products and future projects we can handle then in this area. Regarding the inorganic growth, you know that we have done the investments and bought some shares in Q.big 3D and as well now announced officially in Customcells Tübingen. These are different segments. Q.big is in the area of digital printing, which we see as well for Industry Solutions and medical topics as interesting as well in the electronics area for functional printing.
The technology is in development that we can serve this market with interesting customers of the electronics area, which wants to develop with our competence and with CADIS in the back here, future technologies and lines which are supporting their products. As well for Q.big 3D, it's a 3D printing technology based on plastic particles and have the possibility to fast print solutions on a huge size. Also quite interesting market for the automotive industry to have the A, B, and C samples manufactured much faster than they can do this before. Also here we see good development and already sold the first machines to the customers and delivered them.
Most interesting here is our joint venture with Customcells in Tübingen, in our fab in Tübingen, as they are part of the Cellforce Group, where Porsche is one of the major shareholders, and they are actually installing in front of our building here in Reutlingen, their battery fabrication and with the investment here in Customcells and as well, their potentials and development capabilities in the electrolyte area and with as well in development of A, B, and C sample cells which are needed for the project release where we are then in the early stage possible and able to support our customers as well in this area are really interesting and have a huge potential for further order intakes which come out of such investments in the near future. Let's come to the outlook.
First of all, we want to have a look on the order intake, and as you can see, there is an order intake increase compared to the last six months or six months in 2021, with 5.4% in the Mobility & Battery Solutions. The second quarter was a little bit weak in order intake, but we see already now in the beginning of Q3, the first huge order intakes appearing and coming up, and as well, the demands and the final negotiations we are actually having with customers will change the picture in Q3 accordingly, and as well for Q4, we expect that we will fulfill our plans and the budgets we have set for Mobility & Battery Solutions due to the huge demand which is coming out of the markets.
For Industry Solutions, very good development in the last six months compared to the year before. Roughly an increase of 100% in the order intake area, which leads to a very comfortable situation in the entire month scope of nearly EUR 200 million order intake in the first six months of 2022. On the other backlog side, we see as well increasing situation. In Mobility & Battery Solutions, we have an order backlog of roughly EUR 172 million, which is increase of more than 50% compared to last year. Industry Solutions, also quite good, nearly EUR 127 million order backlog with an increase of also nearly 57%.
In total, we have an order backlog in the group of roughly EUR 300 million, which is a very comfortable situation and quite good. As well, as mentioned, the other side, we have planned to already realize and bring some of these revenues already from the backlog to the POC side, which was not possible so far. Also, I said we will change this picture in the Q3 and Q4, and we'll see here an increase of the development of the POC. Hopefully, with the order intakes, we can stay on the overall order backlog on the same level, which is actually the plan.
Coming back to the guidance, you have seen that we already announced that we have to change the guidance due to the weak processing of the orders in the first two quarters of 2022. Our new guidance, which we developed now in the last days, is an increase in revenues compared to 2021 in the lower- to mid-double-digit % range and EBITDA margin in the low single-digit % range. For the EBIT, we target now a balanced EBIT in 2022 overall. So far from Manfred Hochleitner and my side, thanks for your consideration and that you are listening to our conference call here, and now we are open to hear your questions. Thanks a lot.
Thank you. Ladies and gentlemen, if you would like to ask a question, please press nine star on your telephone keypad. If you would like to withdraw your question, press nine star again. I'll repeat one more time. Please press nine followed by a star key to raise your question right now. We have actually one question received, but I believe the questioner has just withdrawn his or her question. If you still want to raise a question, please press again. Yes, we have Zafer Rüzgar of Pareto Securities. Please go ahead.
Yes. Hello, gentlemen, and thank you for taking my questions. My first question is regarding the major order in Mobility & Battery Solutions. You mentioned in your H1 report and the related delays here. Maybe you can provide some more color on the volume you couldn't realize and also the amount of the cost overruns here.
It's not only one project, as said, it's influenced as well from the supply chain topics that we didn't achieve the revenues which we have planned in the budget planning of 2022. Mainly it's a delay and shift in one of the bigger projects we have achieved. This is two topics are in here. One is the product have changed on the customer side, so the cell design has to be adapted. This is now finalized. We have sign off of the cell now. As you can be assured, such changes in the product also have influence to the engineering of the machines.
This for sure didn't then bring us into the possibility to bring the bill of material into our systems and purchase the necessary material. Therefore, we have the delay in the product and it's well in the processing of our machines. The other topic is a delay in a building, which then led to a stop of eight-10 weeks of the project, which we need to recognize. As we want to stay cash positive in this project, we also delayed then the processing of the equipment accordingly. This was the other topic. On the ongoing running projects, we have several impacts out of PLCs and topics.
We get some strong support from our customers, especially from the OEM area, which are then trying to support us by lending us, for example, PLCs. Still, this leads then to a delay as this needs to be processed, as well. There are a lot of things going on, and as you also can assume, but this is nothing special. This is, I think, for all machinery companies or as well, everybody who wants to get material actually on the market needs to have a lot of people and a lot of resources, hunting parts, checking if they are really available. This is, as well, quite time-consuming, this double work, as there is no real trust in the market that if somebody confirms to you a date, that this will be really kept.
This is as well a topic which lead to a delay in this project. Overall, let's say the delay in revenues is for these reasons about EUR 20 million-EUR 30 million.
Okay, thanks. The second one is on the order intake in Q2 in Mobility & Battery Solutions. It was weakened, looks like, the lowest level in the recent past. This is somewhat difficult for me to understand, given the ongoing hype in the e-mobility industry.
Mm.
We see. What are the reasons for the lower order intake? Would also be interesting to know what do you expect in terms of orders for the rest of the year in this segment?
We are the project business, and we are actually working on RFQs on high volumes. There are for sure from the customer perspective necessary budget releases and approval necessary. This is quite time-consuming on the OEM side and the customer side, actually. This is one topic where it can be easily that the project gets shifted eight-10 weeks. For sure, we try to implement these topics, but not always this can be done quite sharp, that you can say, "Okay, this will be in week X, Y, Z." There is one reason for delays. The other is as you have already heard and seen that we are working with Daimler Truck, and this is a development project.
Also here, we had the target to have this in Q2 already in. This is a little bit delayed, but this is just the end of quarter. In Q2, we didn't achieve it, but this will follow quite soon. Also some other smaller projects were a little bit delayed in the order intake, but just some weeks. As said, we will accelerate this year, and we have also achieved some negotiations, just waiting for some POs that we can officially then announce the order intake. We expect an order intake overall until the end of the year in at least EUR 100 million additional compared to the numbers you have seen up until Q2 in this direction from the Mobility & Battery Solutions.
Okay. EUR 100 million in addition to the already around EUR 50 million we have seen in the first half, right?
Oh, yep. At least, yeah.
Okay, good. The third question is on your new guidance. You now guide the EBITDA margin in the low single-digit percent and the EBIT to be balanced. Considering depreciation and amortization of, let's say, EUR 10-EUR 12 million, your EBITDA should be in the double digit in absolute terms in order to achieve a balance in EBIT. Is that a fair assumption? How is your expected path for the rest of the year in order to achieve your targets?
Regarding the assumption of balanced EBIT, as you have seen, this is strongly influenced by the generation of revenues and which kind of revenues we can bring to the order books. As you have seen, there is a strong mix as well in the material cost area. We target this topic, you know also that we are working on the IPCI project. Actually, there's a huge workforce working in this direction, and also there is some open topics which of these developments we can use in 2022 already in orders. For sure this is planned, but let's see. It's a development project and not everything on the first time is working properly.
Based on these assumptions, we are convinced that we can achieve a balanced EBIT. For sure, we are trying to improve it. On the EBITDA segment, it's depending on the measures which I mentioned. But we see it actually as reasonable to keep the guidance like we have explained it before.
Okay. Can you provide a breakdown of your guidance on segment level? That would be very helpful.
No. Normally, we don't do this, but roughly, I think we will see at the end of the day that we will have a strong increase in revenues in the Mobility and Battery segment. We want to achieve here numbers over EUR 130 million. This is the target we have set. The other segment, Industry Solutions, with the good development and good order intake we have seen will then do the rest of the revenues to achieve this low double-digit number in revenue increase we have given in the guidance.
Okay, perfect. That's it for me. Thank you.
Thank you.
There are no further questions in the queue.
Okay. If there are no further questions, thanks for the participation. Thanks for your time. Looking forward to meet you in our Q3 numbers and have a nice day and a lot of sunshine and hopefully some cool drinks available. Thank you.