Earnings Call: Q1 2021

Apr 22, 2021

Okay. Good morning, and welcome, everyone. My name is Bernhard Leitzer, Investor Relations contact from Infocom. I have the pleasure to host this Microsoft Teams session. Thank you for joining the Inficon web conference on its Q1 2021 results. With us today are Lucas Winkler, CEO of Inficon and Matthias Strenle, CFO of Inficon. The management team will first present the results and then take questions. Session. During the prepared remarks, participants are kindly asked to turn their microphones and cameras off. You You should have received by now a press release on the Q1 results together with the accompanying visuals for this web conference. All these documents are available for download in the Investors section of the Inficon website, www.inficon.com. Session. As we are in an MS Teams session, you can post written questions during the presentation using the chat function. This should be the 2nd icon in the top menu. Session. You can also signal that you would like to ask a question over the microphone. We ask you to use the 3rd icon function to raise your hand and then 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 this web conference to archive the audio file later on the InfoCon website. The aura statements made by Inficon during this MS Teams session 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 expectations of our management and 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 were as a result of new information, future events or otherwise. Having said all that, I would like to hand over now to Lukas Winkel. Lukas, please. Thank you, Good morning, everyone, and thank you for joining us today to review the results of the Q1 of 2021. I do not really want to talk about COVID-nineteen anymore, but it still bothers us much less luckily than a year ago, and the impact to our business became less cumbersome. Nevertheless, we still have many hygiene and behavior procedures in place And Home Office is still quite common as well. Now let's talk about the Q1 results, session where we presented in the press release this morning that we had growth in all markets, in all regions around the world, semiconductor from a market point of view and China from a regional point of view being the most prominent contributor to this growth. As Bernard already mentioned, you can download this information also from the homepage. And I will start with session. The current figure the current slide right now where you see where we had growth and what the result was out of it. In total, We did grow more than 30% over the Q1 of 2020, sequentially to a very strong session. Last quarter 2020, another 5%. And I think looking forward, even more important session. Also our big book to bill ratio was above 1. With improved sales And the gross profit margin now again over 50%, increased OpEx primarily on the R and D side. We ended the Q1 with operating income of $24,600,000 which is about 20% of sales after $14,000,000 a year ago, which was 15.1% in the Q1 of 2020. The applicable tax rate was an average one. Matthias will talk about it later. So net income was close to CHF 20,000,000 session. Now let's go to the next slide where you see the breakdown of our 4 target markets session. With semiconductor and vacuum now reaching 50% of overall Inficon sales, semiconductor being the heavy contributor, The vacuum coating part was relatively flat from a growth perspective comparing Q1 of 2020 with Q1 of 2021. Now the increase of the semi and vacuum contribution was basically at the expense of a little slower contribution from general vacuum, session. Refrigeration, air conditioning and also a little less from our security and energy market, which still is by far the smallest market that we serve. Regional wise, on the right side of this slide, you can clearly see that Asia again has been able or was able to keep this very high level that we already reached in the last quarter of 2020. And finally, now we see an improving tendency from Europe And also from Americas. Now Asia represents so Asia did represent in Q1 about 46% of overall revenue in the Q1 of 2021. Now let's go into the first market that we talk about, starting with the smallest one On Slide number 5, in the security and energy market, we did increase our revenue over a relatively weak quarter compared to a relatively low volume already a year ago. The major contributors in the Q1 was coming from energy application, not from security applications. So and those energy applications can be split into 2 elements. On one hand side, It's the alternative biomethane markets preliminary in Europe. On the other hand side, we had the landfill monitoring applications as well as And we had some environmental applications from China. That's also what we see if I look ahead for the full year 2021. We expect some delay in the new program from the U. S. Department of Defense with the new website. So therefore, our expectation for 2021 are not very positive. We are very positive on the energy side, But we keep kind of a cautious outlook on the security side because we know that there might be some delays On the introduction, not from our side, but from the U. S. Department of Defense, but we will know certainly more by the end of the fiscal year, which ends in September in the U. S. Having said that, for the smallest market, The expectation for 2021 are not quite optimistic overall. Now let's go to the session. The second market, the refrigeration, air conditioner automotive market, where we clearly had a nice first quarter at the record level, session. 23% above last year's Q1 and even more than 3% above the already strong last quarter in 2020 After the COVID crisis, which really had a big impact on this market during the second and third quarter as of last year, Now we clearly see a recovery, a rebound. It's almost like some catch up investments happened during the Q1, Especially from the automotive side, but also from the manufacturers of refrigerators and air conditioners that we see a nice rebound compared with The middle of the year 2020. On top of that, we see also a growing contribution from session. The e car manufacturers, especially on the lithium ion leak checking application side, session, which is by far the single growth market in this refrigeration, air condition and automotive market. There is certainly a shortage of session. High-tech lithium ion battery for e cars now in the market, and you probably have read in the newspapers how many session. New Giga factories are planned around the world. So overall, we expect a very nice 2021 reaching new record levels session for this year. So having said that, let's go to the 3rd market, which is by far our biggest, now reached a contribution of 50% of overall market, which is the semiconductor and vacuum coating, which does include besides session. The semi, also some solar applications as well as display and optics applications. The major contribution for this nice growth of 44% over the Q1 of 2020 was coming from increased CapEx spending in the semiconductor market, Now not just from Logic and Foundry, but also from automotive chip manufacturers, from memory chip manufacturers and other industrial chips that are used in a growing environment to catch up for the loss of 2020. Looking ahead, what we see now in the semiconductor cycle is a wave from different sites. We already know investments for high-tech applications such as 5 gs, Internet of Things, Big Data and so on. Session. Now combined with a memory market rebound, together with some subsidies from announced subsidies, let's say, from China as well as U. S. Into semiconductor capacity, created this, I would say never seen before kind of huge growth rate in the semiconductor market. We expect that we'll continue definitely throughout 2021, eventually going into 2022. Now having said that, on the other hand side, on the vacuum coating market, we remain less optimistic. We don't see huge investment going into OLED additional capacities, and we do not see a lot of capacities going into, let's say, old fashioned optics application. But on the other hand side, we see some modest increase in spending for new channel equity market where we sell our products throughout indirect and direct sales channels session. To 100,000 of different customers, most of them are not served directly. We even sell a lot of our products private labeled under the brand of our distribution partners, which are primarily vacuum pump manufacturers. So this diverse customer base that we serve Did show a nice increase in Q1, which was 23% above last year's Q1 and another 3.5% sequentially compared with the last quarter 2020. Now what we see This market for 2021 is an optimistic view that we have driven by The Chinese recovery on one hand side, but also some nice rebound in Europe. And we also have some products in new markets, such as the food packaging market, but also we have introduced some products into the life science market, and we even get some Therefore, we remain positive throughout 2021 regarding the general vacuum market. Now before I hand over to Matthias, I'd like to give you a summary of the outlook that we see for 2021. Session. Again, heavily driven by a very strong semiconductor market on all levels. We don't see any weaknesses there. We might have some double bookings just to avoid some shortages session, especially in chipset with a high demand. On the other hand side, I already mentioned that there are some subsidies planned In the U. S, Europe and China continues to invest heavily in catching up on the semiconductor technology side. So those elements really session. Lead to a very positive outlook for the semiconductor market for the full year, Combined with this nice growth trends in the automotive market, driven by the lithium ion battery manufacturers, Together with some recovery in the general vacuum market, we remain very optimistic for the full year 2021. Between $450,000,000 $480,000,000 and an operating income of 18% to 20%. With that, I'd like to turn over to Matthias Troendle, who'll give you more details on the financial results of our Q1. Matthias, please? Thank you, Lucas. Good morning, everyone, and welcome also from my side to our Q1 conference call. I will cover our Q1 financials and briefly comment also our 2021 guidance. My commentary starts with Slide 11 of the PowerPoint. As you have already seen in our press release, we achieved revenue of $122,700,000 in Q1. This compares to $92,600,000 in Q1 last year. This represents an increase of 32.5%. Taking into account the positive currency impact, which is driven by the weakening U. S. Dollar of 5.2% or $4,800,000 We achieved an organic growth of 27.3%. Mr. Winter has already gone into the details session. About the development in the individual markets, we can clearly highlight that sales in all markets did grow, most of them with a double digit growth rate compared to Q1 previous year. In particular, sales in the semi session. The encoding market increased significantly by 44% or nearly $19,000,000 Also compared to the previous quarter, session. All markets except security and energy showed growth. With that, the Q1 of 2021 was after Q4 last year Another new record sales quarter. Let us now turn to the regional distribution of sales. Compared to previous year, all three regions did grow. We had the highest growth in Asia with 65%, followed by Europe with 17%. Both Asia and Europe showed a strong growth in semi and vacuum coating as well as in the general vacuum market. North America showed also an increase in sales of 8%, driven by semi and also the security and energy market. Let's go to the next slide, please. The gross profit margin reached 50% in Q1, up 89 basis points versus last year and improved by 2 80 basis points compared to previous year Q4. Higher volumes, a good capacity utilization session. And the market and product mix could compensate rising material, transportation and still some COVID inefficiencies we had. What happened on the cost side? So we spent $12,100,000 on R and D in Q4, an increase of 32% or $2,900,000 As a percent of sales, expenses decreased slightly to 9.9% in the 1st quarter from 10% in the previous year. Focus on our development efforts with additional headcounts, higher R and D material costs, Higher external costs plus some negative foreign currency impacts did drive for this increase. In SG and A, selling, general and administrative, The expense level showed a $2,400,000 increase. Unfavorable foreign currency impact, which account approximately for 50% of that increase, session. Headcount additions and performance related costs did drive this increase. The operating profit for the Q4 was $24,600,000 or 20 percent of sales after $14,000,000 or 15.1 percent in Q1 last year. This corresponds to an increase of about 76%. The tax expense for the Q4 was at $5,300,000 which represents an average tax rate of 21.2%. Last year's $1,500,000 session. Tax, which represented a tax rate of around 12% was impacted by some favorable impacts coming from our German subsidiary. The net profit, therefore, reached $19,600,000 or 16% in Q1. This compares to $11,400,000 or 12.3 percent in the prior year, a 72% increase in absolute numbers. Consequently, we see similar development in our earnings per share. This went up also up by 72% and stands at of $8.01 in Q1. Let's move on to the balance sheet highlight on the next slide. Our net cash position reached $48,400,000 which is $7,500,000 higher than end of last year. Operating cash flow, which you can see On the bottom right, for Q4, reached a good level of $13,400,000 representing about 10.9% of revenue. This was substantially higher than last year and improved by $9,600,000 The inventory turns reached $2,900,000 and with that have been slightly better than in the previous quarter. The working capital, which consists of accounts receivables, inventories minus accounts payables, closed at $137,700,000 clearly higher than at the end of last year. The majority of that increase is contributed to a $9,000,000 increase in accounts receivables due to the record high sales we had in the current quarter. The DSO, day sales outstanding ratio, is slightly higher and reached 51.8 days that quarter. The balance sheet shows a good solid structure, has a 75% equity ratio and no long term debt. Those were my comments on the balance sheet in Q1. Finally, Final words on the outlook. Mr. Winkler did already go into the detail on the assessment of our markets and how we see the situation. Session. The business and the assessment of the development in our end markets looks quite positive for the started year. Also, there were some global session. Assessments the outlook for the current year optimistic. We expect sales of around $450,000,000 to $480,000,000 session with an improved operating income margin of 18% to 20%. With that, I would like to close the presentation. We are now ready to take your questions. Thank you, Lucas. Thank you, Matthias. We have a series of Questions. Marta Brusca was the first one to raise her hand. I would thus like to ask Marta to go ahead session. Marta, please. Hello. Good morning. Thank you very much for taking the question. Session. So I have a couple I would say 1 by 1, and it's more than 3. Session. So firstly, could you please tell us a little bit more about the security and energy and the market in particular With regard to the environmental type of applications growth profile into 2021, session. What sort of growth we are seeing there? And with regards to the security part, at which level the security sales session. I just would like to get a bit better understanding what sort of recovery potential we may see in 2022. Session. Good morning, Arthur. I certainly can take that question and Go into a little bit more details to maybe give you a little bit more flavor about what happened. As I mentioned already, The majority of revenue in the Q1 went to the energy market, not security market. I do not have all the details and usually do not disclose it, but it's clearly around the twothree of the revenue That is now energy and not security anymore, which used to be more like the opposite for quite long of time. But now It's clearly above the 2 thirds level that is now going into energy and environmental applications. Session. If you talk about the environmental, as I mentioned, they have 2 elements there. 1 is in the U. S, session. For the big cities to so we are a part of the program to get the pollution down in the big cities together with a partner in China. We don't do it ourselves. We use an integrator, which is also our major distributor in China session to get access to the Chinese government because, as you know, it became quite tough session. To ship American made products into China if there is a Chinese alternative. Therefore, we are using an integrator, a Chinese integrator, so that session. The final package is not seen as an American product. It's seen in the eyes of the government as a Chinese solution. Now we are a little bit more cautious about the outlook in 2021 based on the fact that We learned from the U. S. Department of Defense that eventually a larger project might get delayed, session. Not canceled, but delayed. They do the test already with the new product, but it's not clear yet when they are going to start The program itself, which is quite a big one, we are talking about the double digit $1,000,000 figure just for this program. And therefore, it might get postponed into 2022. Therefore, for the full year guidance on the security and energy market, I would not expect to being to see a huge growth at the end of the year. It might be at about the same level as 2020. Thank you. And what about your digital application when you had the new haptic device for session. I didn't understand the question properly. Sorry, for the civil application, so I understood session. So how the launch is going? That's the default form, more security application outside of the Department of Defense, we are still in the test phase because this will only happen with the new product, Now with the old one and the new product has not been officially launched. So we are still in the test phase to detect some drugs that could be detected. But this will be a small contribution anyway in 2021. If it will really work out, we might get session. Thank you very much. If I may just please very quickly on OLED, session. If that market can start to recover in the second half of the year, what sort of upside would you foresee for session. As I mentioned before, I'm not so optimistic about OLED. But if it would come back, surprisingly, of course, we take session. We will contribute in 2 ways. We will ship our products that are used at by the equipment manufacturers, We would, of course, be happy to take the orders, and this could be an upswing of €5,000,000 if it actually would happen. But I doubt that it will happen. Thank you very much. And just a quick one on Solal. That's the last one. Could you please give us an update of how much session. Solar is at the moment. And just to clarify, this €5,000,000 would be on the full year basis, right, for OLED? Yes, it's just OLED. On the solar side, we experienced an uptick in investments in new equipment session to make so called silicon wafer based solar panels, not thin film solar panels, but silicon wafer based solar panels, primarily in China. And it looks like that the huge installations that have been made session. In 2012 throughout 2014 now are used up because the demand for solar panel is still going up, But there was enough capacity in the market, and now it looks like the capacity is running out. So they have to replace some of the equipments. Session. And then so we see a nice kind of a rebound in the equipment manufacturer for solar on the ingot side to make session. Silicon ingots on but also on some edge tools to make those solar panels more efficient session. If you apply certain edge applications at the end of the day and as well as some coating applications to better to get the higher efficiency out of every single And the majority of those equipments are now made in China, so the market is in China. Thank you very much. I really appreciate it. It's super helpful. Thank you. You're very welcome. Thank you, Marja, for your questions. The next questions come from Michael Furth. Michael, please. Yes. Good morning, everyone. Session. Three questions. The first one on the semiconductor market. I was wondering how the demand for yield enhancement products session. It's developing given the shortage of chips in the market and how much that makes up of of your sales. I guess that's semiconductor end users. The second question is regarding your guidance change. I was wondering what has changed so much in the last 6 weeks only that triggered that €30,000,000 increase in guidance. And the last question session. If you are seeing any impact on Inficon from session, various component shortages in the market that you would experience. Thank you. Thank you, Michael. Yes, let's go to the list of questions. The first one, yield enhancement programs, which are usually based on 2 kind of product ranges that we sell or combination of them. It's usually sensors together with software, but we also have some stand alone software applications in the meantime. So This semi growth was, let me say it that way, less prominent than the growth In the equipment spending, overall, we had a huge increase, as you have seen. But the bigger part is Coming from the growth for equipment manufacturers and a little less to the end users. But it's very typical because there's usually a certain delay between when we see an increase on orders for equipment manufacturers compared with authors coming from the end users. Nevertheless, there are at least two elements that we see very positive. Session. As you know, we acquired a software company about 3 years ago that is primarily approaching with yield enhancement programs to the so called Tier 2 manufacturers. And many of those Tier 2 manufacturers are Chip manufacturers for the car industry. And there, we see a nice growth, of course, still on the relatively low level, session. But it's a growing software business, and it carries, of course, a very high gross profit margin as with all the software businesses. And this is also the part of the business where we have in the meantime, I would say the majority of revenue coming from so called Software as a Service with recurring revenue. So a lot of those Tier 2 manufacturers, they prefer session, a subscription based kind of model for their software applications for the yield enhancements. And so we clearly see get A positive kind of boost from those shortages. On the guidance change, I think there are many elements, not just one single one standing out. First of all, we got more promising outlooks, The second element is the announcement of investments around the world for new fabs, including some government sponsored projects, especially from the U. S. That triggered our, let's say, more optimistic view with even Some larger end users that have been disclosed, which we really appreciate. And I think the last element is also that we session. More optimistic about the growth even outside of semiconductor market, Meaning, what we see now in the general vacuum applications as well as in the automotive and air conditioning and refrigeration market session. We've increased spending on automated tools and more kind of session. Labor independent kind of investments, and that triggered our change of now being more optimistic, Not just on the semi side, but also on the semi side. We've one element I mentioned already before that we are a little bit more worried about session. It's the development in the security market because we expect some delay there, but that's a very small contribution. So overall, We became much more optimistic driven by the latest increase of forecast from our largest customers. Now unfortunately, there's also a negative impact on the shortage side. Yes, we are affected as well. We now go to the gray market. We are still able to ship the majority of our products. Luckily, I have to knock on wood, But we pay much more because we have to go through the gray markets and we have to spend some session. Expediting fees just to get the electronic components. And it's really a shortage on the mostly on the electronic side, not on the session. Thank you. Very helpful. Thanks. You're welcome. Thank you, Mikael, for your questions. Mikael seems to be a popular first name. The next Question comes from Michael Inouen. Session. We need to unmute first, I believe. Right. We don't hear you, Miguel. He cannot unmute. Session. Okay. Session. So I see the question and more details on inventory buildup. That's Not so easy to answer question because we do not have the details on how much of, let's say, the additional CapEx spend went into the orders that have been based on some buildup of inventory or even some Double ordering, just to be on the safe side, we have not a clear picture on that. So therefore, I cannot really answer the question. Is it €5,000,000? Is it €10,000,000? We simply don't know. Session. And if I told you that we expect some buildup of inventory and we expect session. On some double ordering, but that's a message that is based session. And even some information from our salespeople, especially regarding the ongoing dispute between the U. S. And China About what can be shipped to China and what should not be shipped. So how much of those orders are based session. On fear that they might not get the product anymore, we simply don't know all the details. But you can assume session. There have been some buildup of safety inventory around the world. How much? I'm sorry, I cannot answer that question. There is another. Yes. I see a question regarding is the Q1 the strongest. If I have to make a best guess, And I would say we will most likely have a little weaker second and third Quarter and again, a very strong last quarter. Typically, we have some seasonality during the spring and summer season. Thank you, Mikael, Lucas and Matthias, you've probably seen that Marta Brusca had another written question. Would you like to answer that? Marta asks about more details about the health application in general vacuum that you just have mentioned, the applications that see some tailwind from the pandemic. This is a very small business that We do not sell directly, but we sell to companies that are in the life science instrument manufacturer world. And there we get some additional gauge products that we sell to session. Those instrument and laboratory manufacturers around the world. I would not put too much emphasis into that, But it's just a nice addition that we see so far, but we are not talking about more than a single digit small single digit figure for the full year. Thank you, Lucas. I see that Steers Roze has another question. Session. Yes. Good morning, everybody. Only a quick one. You mentioned already, this was partly my question about the seasonality. But Is this related to sales or also to EBIT? Because you already had a good start in 2017, 2018. With the changed sales mix mainly with semi, can we expect session. That these margin level will remain on that high level? Or do you see also their weakness in Q2, Q3 because you started already session. Weak to the shortage and then this issue, the negative impact. So this will should disappear over the year, yes or no? There are 2 big impacts on the gross profit margin. 1 is clearly the product mix. Session. And so far, we don't expect a huge change in the product mix, at least for the next 3 to 6 months. And there's the second big impact coming more from the price side, either material but also on the sales price side. As you know, we had last year some negative impact from auction based pricing shipments in China. Session. And there might be less impact from that side, at least what we see so far. So we expect that We should be able to keep the gross profit margin at least a higher level than in the previous year. We keep the 50% throughout the full year remains to be seen. We certainly work on that because we also invest session. Automation and calibration tools, which would help them to keep our nice gross profit margin. And last but not least, We expect the pure software revenue to go up. And the more direct software or pure software that we sell, That's usually good for our cross profit margin. So I certainly would like to see the 50% throughout the year. Can we really keep that? As I said, it's not always that easy, but we do our most best to keep it. Then last, maybe there's at least 2 elements that we really do not really like. One is the we still pay quite a high price to customs. The details, Matthias would know, But I believe it's more than $500,000 just in one single quarter. And we still pay a Premium now for transportation and cost as well as getting those products which are session. So on the material and freight costs and customs costs, we will not get a release compared with 2020. Okay. Many thanks. This was super helpful. You're welcome. I see that Michael Voep has still his electron hand up. Would you like to ask a follow on question, Michael? Session. Yes. Thank you. I was just wondering, you mentioned that the vacuum part in Semi and vacuum coating is expected to be more or less flat for the year. I was wondering how much does the vacuum coating part now account for at all in that mix just roughly. And then the second one On the Americas region grew much less than Asia and Europe. And I was wondering what explains that relative weakness, if we can call it like that. Okay. Maybe to the first question, as you probably know from the past that it was usually onethree, twothree session. Vacuum coating to semi, now it's less than 20% going into the coating application and 80% plus is now session. Semiconductor related. So clearly, the bigger part is now semi by far. Now weakness or we should call it less session. It's twofolded, maybe best guess. 1st of all, in Asia, we clearly see a huge growth rate in China. Session. So China is the main driver in Asia, now being the single biggest sales territory for Infincon overall. Session. And that's not just for semi, that's for all industries. And therefore, I think That's really the locomotive on the Asian side is coming from China. In Korea and Taiwan, it's More semi related, but we are all aware of those large accounts. But in China, it's not just a few accounts, there are many accounts, even session. Some accounts that have not been known 5 years ago, new equipment manufacturer popping up, new lithium ion battery manufacturer popping up, session. A new chip makers, new device makers, so all levels, we clearly see session. A growth rate that we have never seen before, just China. Now If you compare that with Europe and Americas, I think in Europe, it's nice that we We see a growth coming after a weak 2020 recovery from COVID impacts. And there, it's across All markets, it's not related to 1 or 2. It's really across all markets, whereas in Americas, it's just Still behind, I would say. They had they did suffer also pretty heavy on COVID-nineteen issues. Session. Then as you know, there were these debates, the political debates in the U. S. That was not always positive, at least not for InfoCon. Session. And last but not least, the largest so we call them private label partners that we have, they are in Europe. And so we ship to Europe. The products might then end up still in the U. S. Or in Asia, but our direct Ship 2 Partner is a European partner. So therefore, it's not 100% true if the products are actually used in Europe or not. But our Larger private label partners are all in Europe, and therefore, that represents more world session. Kind of worldwide based growth and not just European based growth. Thank you very much. You're welcome. Do you still have a follow on question, Serge? I see your electronic hand is up. Sorry, I missed it. Take it down. I apologize. No problem at all. Laurent Picquart, yes? Session. Yes. Good morning. I have a question regarding your comments on Asia. I mean, most of the growth has been driven by China, as you just session. But in Asia, Taiwan foundries have announced huge CapEx plan for the I mean, for the current year, but also for the next year. This has not been seen yet By you, are you how do you expect this to be to impact your own business? It remains to be seen or it has Already been seen in your numbers in the past. Given the size of Taiwan, session. I think if you would do the business that we do in Taiwan per capita, I believe Taiwan has the highest Inficom revenue per capita. So having said that, Taiwan is, of course, relatively small, but very, very concentrated on a few large accounts. And I can assure you that our Taiwan business is doing very well. And on top of that, We will probably see the majority of growth coming out of those investments announcements a little later once the tools are installed. Taiwan is a typical market where chips are made, not necessarily equipments are made. The equipments are made outside of Taiwan, Most of them then imported into Taiwan. And then usually 3 to 6 months later, we see also the impact then on the end user side. So Taiwan will certainly contribute to the growth overall as a percent from a percentage growth point of view, still double digit, But in absolute terms, far behind the big China. Therefore, I did not mention that specifically. And a similar pattern we see in Korea. Korea heavily dominated by large memory and chip makers and also some display makers. Session. We clearly expect a nice growth in Korea as well, relatively spoken, but in absolute terms, session. Again, they are much smaller than in China. Thank you. You're very welcome. Any more questions? If not, then maybe I can draw your attention again to the upcoming events of InfoComm and would like to invite Lukas or Matthias for a closing remark. Thank you, Berhard. I, first of all, like to thank all of you for this session. Kind of new way of communicating with each other, even seeing us from time to time, which is better than just using the phone call. Session. And second of all, it's a little bit more lively if you do it over video conferencing. And you have seen session. I'm looking forward to eventually see you physically face by face sooner than later. And if not, you might see us again on the next session. We do conference when we disclose our half year figures and Q2 figures. Thank you very much. Have a nice day and a good rest of the week. Give us another minute, Lucas. Rolf Wenders has another question. Okay. Rolf, please. Can you switch your microphone on? Yes, it should be on. Good morning. I can hear you now. Yes, sorry for that late entry. Well, What came up to me is that, of course, you mentioned after the full year presentation that you wanted to start session. The year with the guidance cautious because it was early in the year. And then given the industry And even country information we got and you referred to you've now given An upgrade to that. Do you I mean, they have now most of these players have now given their guidance. Is there another wave expected? So is there for the half year, do you see or actually session. It's coming. Are you still conservative basically compared to your previous stance? That's kind of the session. Okay. First of all, you owe me a beer because you have asked your questions after we closed the call. Secondly, you know us, we are usually trying to stay, let's call it, a little bit more on the cautious side than being too optimistic. Having said that, and you're absolutely right, now we have already almost 4 months of bookings. And that was one of the reasons why we said now we really have to increase our guidance, but we still remain, I would call it, On the cautious side, a little less than maybe 2 months ago, but still a little less on cautious side. And session. If we see that the dynamics in the market will continue like it did for the last two quarters, We eventually have to adjust again by the middle of the year, but it's too early to talk about that. That's why but I would not consider session. Then 2 months ago, I would consider that about the same level of cautiousness, just with a little bit more certainty because we have already 4 months session of orders in our books. Yes. Okay. Well, that's great to know. And I look forward to paying my debt. Session. Thank you very much. Have a great day. Thank you. You too. Thank you. Is anyone else Inviting Lucas for another beer. More questions? No more beer. No more we are. Would you like to close the presentation? Okay. In that case I'll say in that case I'll say in that case now again, Lukas. Finally close it. Session. Looking forward for the beer, of course. The weather gets warmer anyway, so it's time to have a beer outside and have a very good weekend