Earnings Call: Q2 2021

Jul 29, 2021

Good morning, and welcome, everyone. My name is Bernhard Schweitzer, Investor Relations contact from Inficom. I have the pleasure to host this Microsoft Teams session. Thank you for joining the Inficon web conference on its second quarter and half year twenty twenty one results. With us today are Lucas Winkel, CEO of Infikon and Matthias Strandler, CFO of Infikon. The management team will first present the results and then take Questions during the prepared remarks, participants are kindly asked to turn their microphones and cameras off. You should have received by now a press release On the Q2 half year results, together with the links to the accompanying visuals for this web conference as well as the half year report. All these documents are also available for download in the Investors section of the Inficon website. As we are in MS Teams session, you can post written questions during the presentation using the chat function. This should be the 2nd icon in the top right hand menu. Management will take these questions after their prepared remarks. You can also signal that you would like to ask a question over the microphone. We ask you to use the 3rd icon functionality to raise your hand. Just click on the Raise your hand symbol and you will be added to the queue of people who would like to ask questions. I would also like to inform you that we record web conference will archive the audio file later on the Infikon website. The oral statements made by Infikon during this MS Teams session It may contain forward looking statements that do not relate solely to historical or current facts. These forward looking statements are based on the current plans and The expectations of our management are subject to a number of uncertainties and risks that could significantly affect our current plans and expectations as well as future results of operations and financial condition. We undertake no obligation to publicly update or revise Any forward looking statements, whether as a result of new information, future events or otherwise. Having said all that, I would like to hand over now to Lucas Winkler. Lucas, please. Thank you, Bernard, Good morning, everyone, and thanks for joining us today to review our results for the Q2 of 2021. A year ago, I mentioned that the semiconductor market seems to be immune against the COVID-nineteen virus. Now we can certainly say, yes, this was true. In the meantime, we also see a nice rebound in all other target markets. In total, with revenues of over USD126,000,000, we reached another new record Level after the last month, just 3 months ago, and we grew in all markets and regions compared to the same but low second forecast of last year. Slide number 3, please. Here you can see the key figures of the reporting quarter. Sales growth was over 30%, but heavily influenced by foreign exchange rate changes. And therefore, the organic growth was lower and reached slightly over 26%. With the book to bill ratio of above 1, Our backlog increased to new record levels as well with the unfortunate consequences of increased product lead times. We currently spend much 1,000,000 more than originally planned to increase our capacity, maintain space, logistics, Tools and calibration capacities to catch up with our huge backlog and to reduce our product lead times again. Needless to say that we expanded our workforce as well. We are now more than 1300 employees around the world. We've record high sales volume, improved gross profit margins, but increased operating expenses. We finished the quarter with operating income of 20 $2,700,000 or 18 percent of sales compared to $60,000,000 or 16.6 percent of sales for the same quarter A year ago, net income reached USD 17,500,000 or 13.8 percent of sales. Matthias Franckle will review the numbers review in more details later. I now highlight some important developments in our target markets first. On the next slide, number 4, you can see the sales breakdown in our served 4 key markets as well as the regional sales trend. The contribution from the REC in outer market at the expense of a lower contribution from the semi and vacuum coating market Could lead to wrong assumptions. This is just a quarterless net shot. And the percent changes are compared to the same quarter as of last year, which was a weak quarter overall with the exception of semiconductor market. Therefore, the contribution to the sales mix on the semi side decreased, But what you can see is a nice rebound of the RSC and auto market, which now certainly has increasing contribution to the sales mix. The trend on the right hand side indicates a continuation of the importance of the Asian customers at almost the same size of the combined Americas and European market. Now let's do a quick analysis Market to market, starting with the smallest one. In the security and energy market, which is on Slide number 5, Sales increased over 100% year over year and more than 60% sequentially and reached US6.2 million dollars which is now much closer to the historic average quarterly business level. The majority of the sales is still coming from the energy, Especially from green energy and environmental applications. On the other hand side, on the security market side, Sales of our flagship product, the Hebside, continued to be low as expected, but we soon launched a new Hebside product Suite with improved performance and enhanced capabilities. The first tests were very successful, and we expect the 3rd, larger order from the U. S. Department of Defense by the end of this year. Therefore, sales wise, looking ahead for the full year of 2021, we will remain or the full 2021 will remain challenging, but we are happy to see further successes with our Energy and Environmental Monitoring activities. Now moving to the Refrigeration, Air Conditioning and Automotive market On Slide number 6, where sales increased over 58% year over year and almost 70% compared to the Q1 of this year Reached $26,400,000 a new quarterly record. The 2nd quarter last year has been Evidently impacted by the COVID-nineteen pandemic, now started at the end of last year, we see a full recovery in the REC market and the fast Growing business in the lithium ion battery testing as well as in the RIC after sales service market. While Asia was able to maintain the high business level, Americas and Europe did clearly grow. We expect a continuation of the positive business environment in the second half of the year based on the higher interest For new fully automated lead detection systems in the REC Manufacturers market, the growing demand for the lithium ion battery for both Automotive as well as mobile device market as well as market share gains with new innovative handheld Battery Powered After Sales Service Products. Hence, for the first time, we expect to reach annual sales level of more than $100,000,000 in 2021. Now let's go to the semi and vacuum coating market, which includes solar display optics And of course, a lot of semiconductor applications on Slide number 7, where sales increased over 18% year over year And 3.4% sequentially and reached USD 63,400,000 with Asia again Contributing the biggest part of the sales growth. A breakdown into the 2 main applications shows the same picture as in Q1. We issued a huge increase to the pure semiconductor customers by sales to vacuum coating customer, primarily OLED display manufacturers and optical coating manufacturers remained subdued. Equipment manufacturers As well as chipmakers continue to invest in the latest state of the art technologies for memory as well as logic chips. The China semi initiative continues, but the U. S. Trade and technology restrictions Made doing business with those customers more cumbersome and time consuming. Looking ahead long term, Semiconductor market will remain the most attractive growth opportunity for Inficon despite the uncertainty of the technology war between the U. S. And China. New chip designs, new material and manufacturing processes are asking for more accurate Process control and monitoring. We continue to work very closely with OEMs and end users to develop new sensors, solutions and methods to assure high quality mass production of new chips. The current supply shortages and already announced government Programs led to a record high announcement of new semi fabs to be built over the next few years. So we expect 2021 to be a good semiconductor year, investments in OLED, flat panel and optical coating technologies remain challenging. Finally, we had solid we had a solid Q2 2021 in a general vacuum market on Slide number 8, With sales slightly over $30,000,000 which reflects a year over year increase of 30% against A weak Q2 2020, but a 8% decrease against a strong Q1 of this year. After a strong mark free bond at the beginning of the year, we experienced a more normal business pattern in the reporting quarter. As you know, we sell analysis, measurement and control products for many different industrial applications through private label partners, Primarily vacuum pump manufacturers and via direct sales channels to the industrial OEMs and distributors. With 10,000 of smaller and mid sized customers, it is hard to see a certain trend in the market. Looking ahead globally, For the full year, we expect to be to have a very successful 2021. Let me close my part of the presentation with an outlook This year on Slide 9. Despite the uncertainty of the outcome of the COVID-nineteen pandemic and the China U. S. Issues, We are confident to reach new annual records. The semiconductor market will remain very dynamic and will keep us busy for the near future. Also the vacuum coating applications are not at record levels, the market itself is solid. The e car trend will continue And the need for safe energy supply systems offers plenty of growth potential. The same is true for green energy initiatives. Last but not least, we have already launched and will continue to launch more new products in 2021 that will help us to grow our business beyond this year. With that, I'd like to turn over to Matthias Trendle, who will give you more details about our financial performance. Matthias, please. Thank you, Lucas, and good morning, everyone. I will start my presentation with the Q2 financial performance, comment the half year results and close with the guidance for the full fiscal year 2021. As always, let me begin with the revenue segmentation on Slide 11. Revenues for the Q2 of 2021 came out at $126,300,000 compared to $96,200,000 our Q2 of last year. This represents an increase of 31.3%. Taking into account the positive currency impact, which is driven by the weakening U. S. Dollar of 4.8% and a small contribution through acquisitions, We achieved an organic growth of 26.3%. Mr. Ringler has already gone into the details of the developments in the different end markets. We can highlight that similar to the Q1, sales in all markets did grow, all double digit And the security and energy market even more than doubled compared to Q2 previous year. Compared to Q1, all markets except the general vacuum market did grow. With that, the Q2 2021 was after Q1 another new sales record quarter. Let's take a look to the regional sales performance. Europe reached 26%, North America 27% and Asia Pacific Ended with 45% of total 2nd quarter sales. Compared to Q2 previous year, we had the highest growth in North America with 36%, followed by Asia, 32%. Both regions, North America and Asia, showed a strong growth in semi and vacuum coating as well as in the refrigeration, air conditioning and automotive market. Europe showed also an increase in sales of 25%, mainly driven by 2 markets. 1 is the general vacuum market. And also here, we had a strong increase in refrigeration, air conditioning and automotive. Now let's go to slide 13. The gross margin for Q2 of 2021 reached 48.3% compared to 47.8% in the same quarter of last year. The margin percentage did slightly increase by 50 basis points, Higher volumes, a good capacity utilization in the market and product mix could compensate rising material costs, which are partially due to shortages and broker utilization, higher transportation costs and custom costs. So what happened on the cost side? We spent $12,600,000 on R and D in Q2, an increase of 34%. As a percent of sales, expenses increased slightly to 10% in the 2nd quarter from 9.8% in previous year. Additional headcounts, higher R and D material costs, negative foreign currency impacts plus higher external costs related to our development efforts did drive this increase. In SG and A, the expense level showed a $5,000,000 increase. Unfavorable foreign currency impact, which account for about 1 quarter of that increase. New headcounts and performance related costs in form of commissions and sales performance bonuses They drive this increase. The operating profit as a result for the 2nd quarter was at $22,800,000 or 18.1 percent of sales after $16,000,000 or 16.6 percent in Q2 of last year. This corresponds to an increase of about 43%. The income tax expense for the 2nd quarter was $4,900,000 which represents an average tax rate of 21.8%. The increase is driven by the profit and tax rate mix in our various international entities. The net profit therefore reached $17,600,000 or 13.9 percent. This compares to $12,900,000 or 13.4 percent in the prior year, a 36% increase in absolute numbers. Consequently, we see a similar development in earnings per share. They went up by 37% and stand at $7.20 in Q2. Now let's move on to the balance sheet highlights. Our net cash reached $26,800,000 which is 14,000,000 Dollar lower than end of last year, but also $14,000,000 higher than end of Q2 in last year. The operating cash flow, which you can see on the bottom right of this slide, reached a new record level of $29,900,000 representing about 24% of revenue. This is substantially higher than last year and improved by close to $19,000,000 The inventory turns improved further and reached 3.0 turns. The working capital closed at $142,700,000 Clearly higher than end of last year. The majority of that increase is contributed to a $10,000,000 increase in accounts receivables, which is due to the regulatory sales in the 1st 2 quarters and about $9,000,000 increase is due to higher inventory levels. The DSO day sales outstanding ratio is slightly higher and reached 52.1 days. The balance She shows a solid structure and has a 62% equity ratio and no long term debt. Those were my comments on the balance sheet in Q2. Now I wanted to give some comments regarding the half year performance. The net sales for the 1st 6 months of 2021 reached $249,000,000 compared to $188,800,000 in the same period of last year. This represents a $60,200,000 increase or 31.9%. As this includes a positive impact Of $9,500,000 or 5 percentage points from changes in currency rates as well as a slight positive impact from acquisition, the organic growth is 26.8%. In the first half of twenty twenty one, sales to all end markets increased. Semi and vacuum coating and refrigeration and air conditioning recorded the most significant gains. From a regional point of view, the majority of sales did go to Asia, where we reached €114,000,000 of sales and approximately 46% of worldwide sales. This represents a 46% increase compared to last year first half. This is mainly driven by a high increase in sales to the semi and vacuum coating market We had a 21% growth. In North America, we had a 22% increase. We reached the operating income in the first half of $47,400,000 or 19 percent after $30,000,000 or 15.9 percent last year. This is an increase of 3 10 basis points or 58%. Higher sales, a stronger gross margin percentage, partially compensated by higher operating expense Levels did drive this higher result. Our balance sheet continues to show a solid structure, no long term borrowings and approximately 62% equity ratio. As mentioned earlier, the complete half year report with more details is now available in our Investors section of the Inficon website. Finally, I conclude with the outlook. Mr. Winkler has already gone into the details of the end markets and our assessment. The business situation In all end markets, it looks quite positive. Also, the current economic situation remains nevertheless somewhat fragile. Inficon assesses the outlook for the current year optimistic. Therefore, we have increased again our guidance for the full year and we expect sales of around €480,000,000 to €500,000,000 with an operating income margin of 18% to 20%. And the last slide shows our corporate calendar and the upcoming dates. With that, I would like to close the presentation And we are now ready to take your questions. Thank you, Matthias. Thank you, Lukas. We have a queue of questions. We will take them in a top down order. I just ask Jorn, to Switch on his microphone and camera if he wants to do so and ask your question. Go ahead, please, Jern. Thanks, Bernard, and good morning to everybody. Thanks for taking my questions. The first one would be pleased on the gross profit margin. Can you tell us the path where you see the recovery towards 50%? What are the key things here? What do you think about current pricing power? And by when do we expect to achieve the 50% again? The second question would be, please, A little bit independent on the semi cycle or the macro cycle, you have a couple of new product initiatives. Can you tell us what you Expect here what the contribution will be in terms of revenues for the second half twenty twenty one and then also for 'twenty two And would be a ballpark of around €10,000,000 reasonable for 2022? And the third question is, just in general, what are you hearing from your sales teams, from your customers When you look into the first half twenty twenty two, are there any signs for an acceleration in CME or a slowdown in China? This would be also interesting. Many thanks. Thank you, Jorn. Let me go through the sales sequence, Starting with the first question regarding the gross profit development. What are the paths back to a, Let's say 50% kind of a threshold. I think there are 3 things that need to be explained why we are not there yet. First of all, there is a product mix that currently tends to work more the products With a below the average gross profit margin on the specialty OEM side, OEM in the Equipment manufacturer side where we usually have a below average gross profit margin and then usually with a time lag of a couple of months, We see then the semiconductor end users starting to invest even more again and then selling more of our solutions, which usually carry a higher Cross profit margin. 2nd element is clearly that our limitation of actually shipping more. So we could not fully use our volume leverage based on some internal capacity Limitations, but also based on some supply side limitations. And that also leads to the explanation that we currently pay a higher price for A lot of the electronic components just to keep our at least current shipment rate Stable. We have to pay more for our electronic components, buying them on the trade and crack market. And last but not least, with a record Backlog and with limited capacity, we sometimes have to use expedited shipments, Which does cost more as well compared with normal shipments, which lowers our gross profit margin at the same pace. And maybe the last element, back to maybe closer to 50%, is also similar to the first one on the product mix side. The more we sell to the end users, we usually sell more software products, and we expect to grow our software product In line with the capacity expansion on the semiconductor end user side, that should help us getting back to the 50% level as well. So It's a mixture of product mix limitations on supply side, but also higher cost on the freight side. On second question, new products, What can we expect? From a sales contribution point of view, it will be relatively low. As normal with new products, They need a certain time until they kick really in, especially if they are brand new products and not replacement products. If you include the replacement product, which is also which the biggest one will be the new Hexite family, Then we will clearly succeed your number of €20,000,000 in 2022. But if you exclude the replacement products, We might get close to the €20,000,000 with all the new products, but it's not guaranteed yet. And the last question, what do our sales guys say around the world? They are quite positive in China, By the way, not just for 2021, but also going into 2022 and not just in semi. Yes. China is really booming in all levels. And so they are quite optimistic beyond 2021. And all the others are very optimistic regarding the semiconductor market. And what they also share is the need For kind of alternative energies around the world and of course, which is a hype right now is really the lithium ion battery Market for both, for autonomous or e car driving as well as mobile devices, Which I think is more obvious in the market that these combined batteries need to be checked For perfect leak tightness before they get built in into those variables and e cars in order to be safe, Not catching a fire because of a unexpected leak. So overall, looking beyond 2021, For the time being, we are quite optimistic. Thanks a lot, Lucas. Maybe just one follow-up on the gross profit margin, please. So when do you expect to approach the 50 Send again, may I ask? I believe it will not be in 2021. We have to wait until 2022. Thanks a lot. Thank you, Jern. You may now take your hand down. And we have a next question from Michael Can you switch on your microphone and camera, Michael? Sure. You might go ahead with your question. There you go. Hello, everyone, and congratulations on the results. My first question is on along the same line as Jern's actually. Regarding the guidance, Actually, what needs to happen for you to reach the 20% EBIT margin guidance? I assume that operating expenses are unlikely to go down in the second half. So And you just said that gross margin is unlikely to reach 50% this year. So what needs to happen for you to reach the 20% EBIT margin? That's the first question. 2nd question is, can you give us an idea roughly what how much automotive is now Of the REC and Auto business and how much that is growing, I assume it's mostly battery driven. And the final question is if you could give a more detailed update on your Food Packaging business development, please? Okay. Thank you, Michael. On the guidance side, what needs to happen to reach 20%? Under the current circumstances, assuming that the shortage on the supply side is not going to be eliminated soon As well as additional tight situation on the freight and distribution side, the what really would help is Even higher volume. And in order to reach those high volumes, that's what we do currently spend a lot of money on is really adding capacity. We are now limiting ourselves in terms of what we are able to ship because we are running at full capacity. So we are expanding capacity. We expect the next smaller step will happen in September where we should have another round of investments Being ready to produce, especially on the calibration side, and that certainly will help. So you will see on one hand side Larger capacity, but the other hand side also increased CapEx spending to make it happen. So that really helps. And Technically, the product mix, as I mentioned at the beginning, a shift towards a little bit more end user driven business will clearly help. And that's what we expect Coming after the first big wave on the equipment manufacturer side with a delay of 3 to 9 months. And then and so those the product mix together with Some better product and then volume will help us to get close at 20%. On the automotive side, you're absolutely right. The majority now goes to the e car and battery testing market. I do not have A perfect number in my mind, but I believe it's in if you analyze what we have reached so far, we should be back at The €25,000,000 to €30,000,000 range in the automotive business out of this REC. So about 1 third Probably at the end of the day, we'll go to the automotive market. But the majority of the business is coming from battery testing, not Of course, nobody invests in a new diesel engine driven kind of Karsten, now the last question on the growth on the business sorry, on the food packaging side, How is business doing? It's doing much better than in 2020. So we will probably I don't know exactly, but Not doubled, but probably 50% to 60% bigger than in 2020, but it's still single digit. It's still Too small to make a big story out of it, but it's growing very nicely. Now we've got a lot of business from the coffee market side, From an application point of view, and we expand now to the U. S. From a geographical point of view. So finally, we get some business even in the U. S. Also, we are Kind of limited in doing demonstrations and seeing customers. But in the meantime, we have been able to at least Attract those coffee makers even in the U. S. To use our product. Perfect. Thank you very much. You're very welcome. Thank you, Michael, for your question. You may now also take your hand down. And the next question comes from Serge Lotzer. Serge, go ahead please. Yes. Good morning, everybody. I hope you can hear me Because I can't see me, but okay, let's start. You have increased your outlook by about €20,000,000 you help me what has driven this increasing outlook? Is it due to the DoD orders in security From the U. S. Or is it semi driven or it's RSC driven, what is your personal feeling? Where it comes from the additional SEK 20,000,000? Very simple. It's just semi and REC. No DoD at all. We expect And to the deal, we expect the order this year, but not shipments this year. So it's driven by the Proved all the situation on the semi conductor side as well as on the RSC and Automotive side. Okay. Got it. So no revenue recognition from security. When I compare this with the semi peers in Q2, I don't I know that you don't commend your peers, but VAT was up by more than 30%, ComEd probably close to 50% and you have 18%. So when I compare with the Swiss guys, you look a little bit weak. Can you explain where are you in the total market? Or what will drive acceleration again? Or why it has been a little bit weak compared To your peers or some of your peers? There are 2 things that I'd like to say here. First of all, we have 2 groups of main customers. And this obviously equipment manufacturers and their end users. We focus more on both sides. So we have about fifty-fifty mix, whereas our peers have more equipment manufacturer contribution. 2nd remark is coming From the fact that we do not disclose pure semiconductor figures, so it's semiconductor and display and Display and vacuum coating is not that great. And then last but not least, we do not disclose order intake numbers. And if we would have the capacity, we would have been able to ship more. At least that I can disclose. And we are now adding capacity to in order to catch up. And at the end of the cycle, we will see if it was a good approach or not, but are quite optimistic that we will catch up pretty soon. Okay. That sounds good and it's very helpful. Thanks. With that, You have touched also that you the discussion about the launch of new product. But as a former product manager, I always experienced that demand is declining Ahead of launching new products. So do you fear that you see now orders declining in the old or existing products before you have launched the new product that we get a kind of a dip, a short term dip? In I would say the majority of the new products, I would clearly say no Because those are made for hot markets like semiconductor markets. But I can say There is at least a certain truth to that in the security market where we are going to launch a new hepcite, and especially The U. S. Department of Defense knows that because they test those new products. Therefore, they might they will fall some of the next orders until we have released The new head site product, but that's the only exception. In all other applications like semiconductor products for mass spectrometer, solid detectors as well as Eyecher Measurement Products, the demand is so high that we do not see any decline in the, let's say, the older versions versus the newer versions. Okay. Got it. That's very good. Probably a last one from Matthias. I don't know, I missed something, but the short term financial liabilities increased from about €20,000,000 to close to €50,000,000 Can you explain me what happened here or whether you used this cash? Because you basically you have cash in their pockets now. Yes. That's a good observation. Yes, it's correct. It's increasing by €50,000,000 There were besides some general increases in liabilities, provisions and accruals, there is One thing that we have basically a short term liability or short term borrowing where we need which we typically need To finance to do kind of temporary financing of our dividends. That's the main reason why we see this €50,000,000 increase Or big, big portion of that is due to the increase in short term borrowing, yes, which is planned to be paid back within 1 year, of course. Therefore, it's short term. And yes, you are right. If you take a look to the gross cash, it's a lot with nearly $75,000,000 But I can tell you as a CFO, you always have the problem sometimes a problem or you have associated cost with Transferring these cash balances from other countries to Switzerland. And therefore, we use every now and then These measures are these tools. Okay. It's about the whole story that you can't repatriate cash from your foreign entities? You can, but it has a certain price. And therefore, we try to optimize and do the best we can do. So in that case, you are a lucky guy and don't pay any negative interest somewhere as you have spread it all over the world. Is this tender positive effect? That's absolutely correct. It's really spread it all over the world and it's never at the right place. It's also what I learned. And but the advantage is really spread and we basically face nowhere the situation where we have negative interest rates. Okay, got it. Thank you so much and bon voyage. Thank you. Thank you for your questions, Serge. Who would like to ask a follow-up question now? I don't see any hands up. Any further questions From the audience? Yes, Marta Brusca has another question. Go ahead, Marta, please. Hi, good morning. It's Martha Buska from Berenberg here. Congratulations on the very nice Q2. I was just curious If you could let us know a little bit of what's coming in terms of those new product launches For the second half of the year. And if you can comment a little bit about collaboration with ASML, with the UV It was the and they are very, very confident for this business and whether there are any changes on your side with regard to that, how is it developing? Thank you. Thank you, Martha. I think the best way to learn a lot about the new products It will happen if you visit or if you come to bolsters on our Technology Day, I think it's somewhere end of November Because then you can actually see what we talk about. But let me maybe just give you 2 or 3 indications. There are Many new products in line with harsher applications in the semiconductor area. We talk about harsh sensors that could survive CBD and etch Processing for mass spectrometer products. We talk about new optical based measurement principles again To be used in more harsh applications to get some vacuum quality indicators, which are brand new. And we talk about a new leak detector coming soon, especially for large vacuum tools For semiconductor as well as display manufacturers, we have obviously mentioned the Hebside, Which is a complete brand new family with a different concept of how accessories can be used. And last but not least, we also offer a certain type of services for To reduce particles again in the semiconductor area. And of course, the latest vape, which is already now on the market, just launched, is the this Dedicated lead detector for lithium ion battery testing that has been now officially launched about 2 months ago. And so those are products that we have. And I maybe should also mention a new line of Automotive handheld leak detectors that we launched at the beginning of the year, especially dedicated for service providers in the car industry. So those this is just a couple of examples. But again, please come and see those products at the end of November when we have the Technology Day here. On the ISML side, there's nothing new to be reported. We are fully integrated in their Product roadmap, we work on the next generation. And I believe now we are not the bottleneck. I think the bottleneck is now more on the ASML side. And so therefore, we just wait for their next step in order to launch the next generation Of the high performance EUV tool for the next generation of chips. And it's now, I think, almost Clear for everybody that even in the memory industry, if you really want to go to the high end version of the next generation memory chips, You have to use the EUV tool, which opens up a new market for us as well. And so we are fully integrated and fully linked to the MEL roadmap, and we're happy that they see positive, so that's positive for us as well. Thank you very much. May I have 2 quick follow ups? Sure. So I would like to Ask about your CapEx guidance for this year, please, if you could give us some indication. And then whether you have the impression that you're gaining more market share this year than in the previous year. So What I'm just trying to assess is how much my feeling would have been that you Probably could have passed a bit more of the extra cost to the customers if you wanted to. And then I'm just wondering whether you are Gaining a little bit more market share this year than you would have normally. What's your feeling on that side, please? On the CapEx side, it's certainly more than we have originally planned for. I don't have a few numbers in my head. I might have We refer to Matthias to give us a little impact, but I think it will be more than €20,000,000 but I don't have the exact number. Yes. Good guess. Last year, we had SEK 14,000,000. To give you a feeling, last year SEK 14,000,000. And so far in the first half, we had €30,000,000 So we can expect that this will be a number above €20,000,000 for 2021. And then the majority of the CapEx really goes to capacity expansion. And we are not Building a new building, but we are reusing some of the office space to be used as manufacturing Space which requires some investments as well. On market share gains, I think what I would like to refer to is we get More design wins than last year. So if you measure market share by the number of design wins, then I would say, yes, Again, market share, but that will not turn immediately into revenue because the design win is at the beginning of a new design. So the revenue will come over the next Few of years. And can we transfer some of the additional costs to the customers? Eventually, we could, but that would put our nice trend in gaining design win market shares at risk. So currently, especially for large OEMs, we stick to our original net pricing policy. And only for new applications, we go to a higher price level, but not for the existing design wins with existing products that we have in the market. It's very clear and sensible. Thank you very much, and I'm absolutely looking forward to the technology there. I would for sure be there already doubly Thank you, Marta. I see that Serge has another question. Yes, that's true. Good morning again. And only one thing, can you help me a little bit to understand the seasonality in the second half? Because on the one hand, comparable will become much stronger in Q4. And you also mentioned that you Capacity constraints that you will increase capacity now, but this is already ready for Q3. So it's a little bit difficult to get a good feeling What will happen? And also from the past, you know that you had project related sales, which were has been back end loaded. And can you help me To mix this out of capacity constraints, project related and basic. Let me try to help you on the The seasonality is in our after sales service business for refrigeration and air condition market, which has usually the peak In Q2, but that's from the market point of view. But it's a relatively small business line, so you usually do not see that. What is more important and it's now became even more important currently is the capacity, which is also tightly linked to the number of working days. And traditionally, Q2 and Q3 have a lower number of working days because of holidays in Europe and also vacation time During the summertime and so therefore, the number of average available working days is usually lower in Q2 and Q3. And together with our capacity constraints, that's currently the limiting factor. So having said that, I hope that You don't see any seasonality this year because we have extra measures in place to even utilize weekends and I have planned for extra shifts and pay some incentives so that people actually work at least on Saturday, not always on Sunday, Just to utilize our calibration capacity at its best. And therefore, I don't think that we will see Significant seasonality in 2020, 1, compared to the usual seasonal pattern. But just because we have extra measures in place, that's also one of the reason why our gross profit margin Cannot probably reach 50% this year because we have to pay more just to use our capacity better. And as I mentioned before, As of September, we should get the next step in additional capacity. And then hopefully, Q4 will be as traditionally our strongest Quarter again once the capacity is in place. Any back end orders? There's Efforts that we put in place by the end of the year just to make sure that the customer gets what they want. And as I mentioned, we have now a record backlog. So I think customer would take Any shipments that we are ready to ship. And so far, I think the focus is now really make it happen And spend the money to invest in the right capacity and prepare our staff to do even extra shifts just to make sure that Customers don't need to wait too long to get our products. Okay. Got it. But then at the end, the capacity comes to the stream for Q4, not for Q3, when it comes in end of the September. That's correct. That's why in Q4, we should have more capacity than in Q3. So that's why we expect the best quarter will be Q4. Okay, got it. Many thanks. Very helpful. Thanks again, Serge, for your Any further questions from the audience, please? If there are no further questions, then I would like to thank you for all the questions that you had and for your interest in Infikon. We had at the height some 47 participants in this web conference. So thank you for your attendance. And with that, I would like to hand over to Lucas for his closing remark. Thank you, Bernhard. Just I'd like to thank you as well. Always very interesting discussions. And thank you for your patience. And I'm really looking forward to see you face to face, hopefully, at our Technology Day November and before that, on October 21, we will release our Q3 figures. So I always you If you haven't had your vacation time, then I wish you a nice vacation time. And if you're already back to work, then I wish you a nice weather for the remaining time of the summer.