Ladies and gentlemen, welcome to the VAT Full Year Results 2021 conference call and live webcast. I'm Andre, the Chorus Call operator. I would like to remind you that all participants will be in listen only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing Star and One on your telephone. Webcast viewers may submit their questions or comments in writing via the relative field. For operator assistance, please press Star and Zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Mike Allison, CEO of VAT Group. Please go ahead, sir.
Thank you, and good morning, ladies and gentlemen, and thank you for joining this webcast of our Q4 and full year 2021 results. As you know, VAT has pre-released preliminary key figures, including orders, sales, EBITDA and EBITDA margin already on January 12th. You see that the final numbers are well in line with what we announced back then. Today, our CFO, Fabian Chiozza, and our Head of Communications and Investor Relations, Michel Gerber, join me on the call. Looking at today's agenda, we will cover the following three parts before opening for a Q&A session. I will start with the highlights of the Q4 and full year 2021 results, and then Fabian will go through the results and financials in more detail.
After these sections, I will continue with an update on our 2025 longer-term outlook before closing our formal remarks with the usual qualitative outlook for the current business year. Finally, we'll open for Q&A. Let's turn to slide 3 of the presentation, that's also available on our website. As we communicated back in January, VAT had an excellent 2021 reflecting the record results not only in Q4, but also for the whole of 2021. The business started very strongly into the year and never lost momentum throughout the quarters. This performance was driven by an unprecedented demand for semiconductor manufacturing tools. VAT, as a global leader in vacuum valves, harnesses technology leadership position to the full extent. While at the same time improving its internal processes that ultimately lifted our operational performance.
Because of these efforts, VAT again was able to increase its market share, and I'll come back to that later. VAT improved its performance and posted record results across all of its key performance measures from order intake, which was up 70% year-on-year, to sales with an increase of 30%, an all-time record EBITDA margin of 34.2%, and a free cash flow generation of nearly CHF 200 million. All of this was achieved in a challenging environment where the whole industry reached the supply and production capacity limits, and as a result, had to extend the lead times of many of the products and components in a way that was not anticipated earlier in the year.
Despite these headwinds, VAT was able to ramp the factory output of its production hub in Malaysia by some 70%, while at the same time also growing factory output in Haag by 25%. With this ramp, we've been able to serve our customers with the right quantities of products and services in the right time. I'd like to take the opportunity here to thank all our employees for the tremendous efforts in 2021, our customers for their unrelenting trust in VAT's capabilities, and all our suppliers who have gone the necessary extra mile for us. Ending 2021 on a high note in Q4, we are very confident that the growth will continue in 2022. The market assumptions remain positive, and we expect again to increase sales, EBITDA and EBITDA margin, net income and free cash flow substantially over 2021.
It is this confidence that has also allowed the board of directors to propose to its shareholders at the next AGM an increase of the dividend by 22% from CHF 4.5-CHF 5.5 per share. Chart 4 gives you a quick overview of the 2021 key figures and the segment breakdowns. Valves, our largest segment, accounted for about 81% of our sales as segment sales increased by about 29% year-on-year based on the strength of the semiconductor segment market. The full year segment EBITDA margin in valves increased by 1.6 percentage points to 33.5%. Global Service sales also achieved a record level in 2021. Overall, the segment grew sales by 35% year-on-year, driven by all our product categories. The upgrade and retrofit business led this with 42% growth.
The repair business also grew 36%, and spare parts were up 32%. The Service segment 2021 EBITDA margin increased to 45% compared to 42% a year earlier, benefiting from the recent introduction of new products and higher volumes. With this strong performance, our service business accounted for 19% of group sales, very close to the 20% we were aiming at. This is even more impressive if one considers that the service business typically shrinks as a percentage of the overall sales in a semi growth cycle. For the group orders, net sales, EBITDA, the EBITDA margin, and free cash flow were substantially up in the second half of 2021, and Fabian will give you more details in a few minutes. We also saw another increase in our spec wins with more than 110 awards in 2021.
This is not only an indicator for future business success and market share gains, but also even more proof that our close cooperation with all our key customers, coupled with our world-class innovation team, consistently delivers products and solutions that solve their biggest technology challenge. This is a win for VAT, but more importantly, a win for our customers. On slide five, you will see a split of our revenues into the different market segments. We showed you this chart before, and you will notice that we have, in 2021, included the industry segment into the valve segment, specifically into the Advanced Industrial business unit. In 2021, semiconductor related activities accounted for roughly 75% of our business, up from 70% a year earlier.
Advanced Industrials now account for about 14% of our business, reflecting the strong performance in 2021 after the challenging business conditions experienced in 2020 at the height of the COVID pandemic. Display and Solar currently is our smallest segment, with approximately 7% of group sales. From a geography point of view, more than 1/2 of our products and services end up in Asia, about 1/3 in the U.S., and the rest in Europe, reflecting the global semiconductor footprint. Turning to chart six and coming back to our market share gains in 2021. As I mentioned earlier, we continue to grow market share. Across all industries, we improved by three percentage points from 55%- 58%, and our market share in semiconductor now reached 75% after being at 70% at the end of 2020.
This is a remarkable result in such a short time. The three drivers of our success are even more pronounced today than in the past. First, we're the clear technology leader in an industry where rapid innovation is absolutely critical, and we continually increase our spending in this area. From design to material science, to particle management and elastomers, VAT provide the competencies and technologies required for the most complex new semiconductor processes. Second, customer intimacy. We invest in the account structures for our customers, providing the best applications and design engineering support to fast-track solutions for them. In 2021, we added three new key account teams and now cover the top eight OEMs in the industry with dedicated resources. Last but not least, our increasingly global footprint and value chain make us faster, more flexible, and a more reliable supplier.
I believe our performance through the COVID pandemic shows that we continue to deliver even in a difficult and unpredictable business environment. These three elements provide an unrivaled value proposition for our customers. Before turning to the more detailed financial slides, let me quickly summarize 2021 market development, putting VAT's perspective, performance into perspective. In semiconductors, the growth in wafer fab equipment spend accelerated at an unprecedented pace to between $85 billion and $90 billion for 2021, approximately 35% over the level spent in 2020. As we committed, our semi business grew around 40%, so considerably above market. This market growth is happening across all product segments like Foundry, Logic, NAND, DRAM, and others, which highlights the strong impact of digitalization across our industry.
Technology intensity is also driving a higher spend per wafer, which in turn is driving a higher investment level in the below 7-nm nodes, which you can see later in the presentation. In fact, the 7-nm nodes will be the main driver of WFE spending in years to come. That's wafer fab equipment. It's also important to understand the uptake of EUV into DRAM, and this increasing device and process complexity will also increase the capital intensity of this segment. I believe this will help with the sustainability of WFE spending, just as we saw in advanced logic and foundry in recent years. In display, the investment conditions remain challenging, with the market overall being down around 16% as fading LCD CapEx could not be offset by higher investments in OLED for flexible screens and handhelds.
Large display formats for TVs see more and more inroads from mini LED application, which is driving high investments again in LEDs. In solar, PERC remained the major technology. This is mainly due to cost advantages in the initial investment compared to heterojunction. The recent oil and gas price hikes should also accelerate the adoption of solar. For the Advanced Industrials markets, growth prospects improved across a variety of applications such as high-end coatings, electron beam systems, and in crystal pulling. In addition, research spending by governments continued, especially in the U.S., Japan, and Korea. This concludes my initial remarks, and I would now like to hand you over to Fabian for a more detailed look at the financials.
Thanks, Mike, and a very warm welcome to all of you who are joining us on this web call today. Let's start on slide 9 with a very quick recap of our key figures. Mike has already touched on the solid top line and P&L development, and I'll show you a bit more detail on that in a moment. The highlight in 2021 was clearly the free cash flow generation, reaching a record level of CHF 196 million, despite growth-related investments in working capital and a substantially higher CapEx level compared to a year ago. This free cash flow not only allowed VAT to reduce its leverage at year-end to 0.3x EBITDA, but also forms the basis for the 22% dividend increase the board of directors proposes to its shareholders at the upcoming AGM on May 17, 2022.
Chart 10 shows the development of orders in the fourth quarter and full year 2021, reflecting VAT's strong business execution, coupled with the buoyant market conditions in the semiconductor business and the economic recovery in the Advanced Industrials business that Mike described earlier. Q4 orders were up 45% sequentially versus Q3 2021, and 107% higher than in the fourth quarter in 2020. Overall, 2021 orders are up 70% year on year, reaching CHF 1.228 billion. With a book-to-bill ratio of 1.7 in Q4, our year-end order backlog increased to CHF 461 million, up 63% quarter on quarter and up 217% year on year. This backlog, together with the favorable market expectations, strongly supports our positive view for 2022. Turning to chart 11.
Here we see the development of orders and sales since the first quarter of 2018. We reached the bottom of the cycle in the first half of 2019, and since then, we've seen a steadily increasing growth trend. As you can see, the book-to-bill ratio has been at or above 1x since Q1 2019, with the exception of Q3 2020, where we had a knock-on effect from certain pre-orders in the first half of 2020, coupled with substantial sales growth in the quarter. In the fourth quarter of 2021, the book-to-bill ratio peaked at 1.7x, as just mentioned, and the full-year book-to-bill was at 1.36x. We have, however, to take this very strong order momentum in the last quarter of 2021 with a large grain of salt.
As already mentioned, our pre-release of key figures on January 12 this year, we estimated that at least 20% or CHF 80 million-CHF 100 million of the Q4 orders reflected extended lead times, year-end concentration of orders ahead of price increases, last-buy announcements, and a high level of advanced orders from smaller OEMs. A more detailed analysis of the order pattern at the end of 2020 now suggests that the magnitude of these pre-orders is rather at the higher end of this range. Chart 12 shows the development of net sales and EBITDA. 2021 sales are up 30% year-on-year, and the negative impact of adverse year-on-year FX movements, especially in U.S. dollar versus Swiss franc, had a negative impact of about 3 percentage points in 2021.
The higher sales were a major driver of an EBITDA margin expansion of 3.8 percentage points, together with the improved operational performance resulting from better fixed cost absorption and the efficiency and cost reduction programs we continue to execute across the whole organization. On the next chart, we see the sequential EBITDA margin development since first semester 2018. As you can see, we have constantly improved our EBITDA margin since its cyclical trough in the first half of 2019, and are moving towards the upper end of our target band of 35%. During the second half of 2021, VAT recorded a record EBITDA margin of 34.9% or 3.9 percentage points above the previous year.
With this development, we are not only confident about our 30%-35% target band between 2020 and 2025 that we communicated to you at our Capital Markets Day back in December 2020, but are actually increasing this band, as I will show you later. When talking about value creation, we closely look at the return on invested capital and the cash return on invested capital. With our prudent approach to CapEx and our capital-light model, we balance the invested capital with current and expected future earnings.
With 70% of our materials being purchased externally, we are able to maintain the invested capital at low levels. This allows us to achieve returns on invested capital and cash flow returns on invested capital that are substantially above our weighted average cost of capital, which we place at 10.2%, the same level that the external auditors used during their 2021 impairment testing. Let's now turn to some of the other financials on chart 15. Depreciation and amortization increased by about 6% to CHF 43 million in 2021, yielding an EBIT of CHF 265 million and corresponding EBIT margin of 29.4%.
Net finance costs of CHF 7.1 million were less than half the level recorded in 2020, reflecting the absence of foreign exchange losses recorded on loans and bank balances in 2020. Effective tax rate in 2021 was at 16% compared with 17% a year earlier. Taking that all together, net income increased by 70% to CHF 217 million, and then earnings per share to CHF 7.25. Our free cash flow generation is shown on chart 16. As I said at the beginning of my remarks, free cash flow reached another record level in 2021, despite significantly higher CapEx and investments in trade working capital to support our strong growth.
The trade working capital at the end of 2021 was about CHF 219 million or CHF 56 million higher than a year earlier, and thus represented about 24% of net sales. We intentionally have kept our trade working capital at somewhat slightly elevated level in order to build a safety stock in case the current supply chain challenges are not starting to ease over 2022 and to be ready to also handle any unexpected demand spikes as well. At 70%, the cash conversion rate measured as free cash flow as a percentage of EBITDA was above the guidance of 60%-65% given at the Capital Markets Day in December 2020, and is showing how efficiently VAT is generating strong and sustainable free cash flows.
When it comes to leverage on chart 17, there's a substantial improvement in net debt and as a consequence, also in our leverage compared to 2020. Gross debt declined by about CHF 60 million as we reduced nearly all of our drawings in the RCF during the second half of 2021, reversing the increase we have every year in late May when we pay out the dividend. As a result, gross debt represents basically only the carrying value of our CHF 200 million. Our leverage of 0.3x net debt to EBITDA was at the lowest ever since the IPO back in 2016, and substantially below the target level of 1x average over the year communicated at that time of the IPO.
With this, we have a very sound balance sheet and liquidity position available, which gives us the financial flexibility to continue to invest in our future growth. When summarizing our achievements in 2021, we can state that VAT continued to fully capture the strong market conditions, both in semiconductor and advanced industrial activities based on innovation, market leadership, and execution skills. Record levels were achieved in all our key performance indicators such as order sales, EBITDA margin, and free cash flow. Order backlog and positive market outlook 2022 bode well for another record year. The financial priorities for 2022, therefore, are to fully implement the new ERP system in Malaysia in 2022, followed by the go live in Switzerland in 2023.
Key focus for these upcoming steps is on the prevention of any production output interruptions during launch at our two major sites in Malaysia and Switzerland. Continued focus on cost and productivity improvements and trade working capital optimization despite ongoing growth. However, we are conscious that supply chain challenges may require slightly higher trade working capital levels to guarantee business continuity. Last but not least, disciplined approach to CapEx expected to be between CHF 65 million-CHF 70 million as we started the construction of our second production facility in Malaysia and will also start with the innovation center project and certain capacity expansions in Haag. Overall, we have committed about CHF 160 million to all these projects for execution over the period from 2022 to 2024. This concludes my financial remarks, and I'd like to hand back to Mike.
Thank you, Fabian. Let's move to slide 20. Let's look at how we performed against the four strategic priorities for the period 2020 to 2025 that we talked about at our Capital Markets Day back in December 2020. I'll also then give you an update on how we're tracking against those targets. Our claim in 2020 that over the next 5 years, we wanted to gain market share in valves, grow our service business above market, develop new adjacencies, and connect our products into stronger solutions for our customers, and to improve the operational footprint further. One year into this 5-year plan, I'm pleased to announce we're delivering across all four areas.
We continue to grow market share by 3 and 5 percentage points respectively across all industries in our semiconductor business, reaching 58% and 75%. Our service business has grown 35% alone in 2021, and is even 50% above the volume it generated in 2019. Here we clearly see the results from our service strategy with new products and offerings, as well as the growth of our serviceable install base. The adjacencies are also tracking above plan with 35% growth in 2021, mainly in advanced modules and motion components. We are also well on path to exceed this target. This growth will be further supported in the future from our upstream activities in ALD, where we have new products beginning qualification at Williams.
Lastly, but equally critical for our success, we continue to work on improving our operational footprint. The most obvious proof of this strategy is certainly the ramp of our factory output in Malaysia by some 70% in 2021 to around CHF 170 million. We expect this to increase to above CHF 250 million in 2022. We've also worked hard to make progress on the percent of supply chain sourced in best cost regions, and as we build the output in Malaysia, this number will grow further. Slide 21. Why do we need to update our 2020 slide? This slide you will see as a reminder the well-known megatrends that fuel the need for microchips.
These megatrends are now firmly embedded in today's society, and the recent developments around the Metaverse have the potential to even further increase the growth rate of these trends. Consequently, we see technology advancement in chip design on both advanced logic and advanced memory chips, requiring new and more advanced manufacturing tools. While at the same time, our insatiable desire for chips is driving exponential growth in unit shipments. These factors led to a sharp acceleration of WFE spending, which, although at elevated levels, is still at an affordable level for the industry. You can see from the chart that these expectations for overall amount of WFE in the year 2025 is now expected to be about 40% higher than it was back in December of 2020, and now well above the $100 billion mark per annum.
This is the main reason for our revenue revision. To put this into perspective, and as a good example on how the whole industry has developed, the largest Foundry player has announced a CapEx program for 2022 of $42 billion alone, which is larger than the total industry investment back in 2016. The other top three players have also announced similarly high budgets. The question on everybody's lips is: Are we building up too much capacity, and will this lead to a crash in 2023 or beyond? We believe this is not the case, and I'll try to explain why in the next slides. Slide 22. On the left side of the slide, we show a chart we borrowed from one of our largest customers.
It shows the immense growth in data generation out to 2025, and demonstrates how little the future data generation is actually driven by humans. In 2018, for the first time, machine-generated data outgrew the data generated by humans, and this trend has developed exponentially in the years since. On the right side, you see the development of the global IC production in units. The blue bars are in dollars, the green bars in IC units. In 2021, the IC market had a volume of about $650 billion, and is expected to reach the $1 trillion mark by 2030 at the latest. In line with this development is also the growth in units, which in turn drives the need for more manufacturing equipment. On this slide 23, you see some evidence of the statements I just made.
On the left side, you see the increase of silicon or chips in some commonly used devices, ranging from smartphones to auto or smart buildings. The compound annual growth rate of the dollar value of these chips within these devices ranges between 8%-18% over the period 2020-2025. It is a combination of the higher number of chips and more complex and potentially more expensive chips. It's clear the chip volumes are growing at unprecedented rates. However, the interesting trend is on the right-hand chart. This shows the increase in capital intensity over time as chips have become more and more complex and challenging to produce. This capital intensity is a major new driver of the increasing levels of WFE.
Advanced logic, which makes up around 50% of the market, has been the main driver of this. DRAM is also moving into this accelerated CapEx window. We believe this is an exciting inflection for the industry, and if it plays out, will stabilize WFE spending as investments will be driven by transistor complexity, which is node-to-node transitions, and not just by capacity. Flash is way behind in design rules, but the increasing number of layers is also a factor here in stabilizing CapEx. Here on slide 24, you see the latest market expectations for WFE by node size, published by VLSI Research, TechInsights. The fastest growth will be in the leading-edge applications for VAT has a very strong and leading market position, but also the so-called lagging technologies will see sizable investments over this time.
At about 12% CAGR between 2020- 2025, WFE is growing about twice as fast as previously anticipated. To stay ahead of the competition and to secure our expected future market share gains, we will invest heavily in innovation, and our success in this is measured by the specification wins we obtain. As a reminder, a spec win on a major new manufacturing platform will translate into revenues between 2-5 years after the design win, and will then generate a stream of business over the useful life, which is 10-20 years. Hardly ever is a component replaced during this time, and it would require re-qualification, which is an expensive and time-consuming process. Turning to slide 25, I'd like to answer the question: what does all this mean for VAT?
Firstly, we have confirmation that the strategy set out in 2020 is still valid, and that we are capable of executing on it. When reviewing the strategy in late 2021, the Executive Team, together with the Board of Directors, did not see any reason to make substantial changes. This means we continue with the four key strategic pillars. First, gain market share in Valves. Second, grow our Service business. Third, develop our adjacencies and Connected VAT products. And finally, improve our operational footprint further. However, the increase in WFE CapEx investment program in the semi industry will allow VAT to generate higher sales and operate on a higher profitability level than previously communicated. Therefore, VAT now expects its 2025 net sales to reach around CHF 1.5 billion, up from CHF 1.1 billion, or 36% higher than previously communicated.
This higher level of revenues, together with ongoing productivity improvements, also means that we now expect to have an EBITDA margin of between 32%-37% over the period, two percentage points higher than we communicated in 2020. These targets have been calculated using a U.S. dollar to Swiss franc exchange rate of 0.9 to 1, and they're based on an unchanged consolidation scope, so no inorganic transactions are included in these numbers. VAT will host a Capital Markets Day in the fourth quarter of the year, where we'll give you more details on all of our businesses also beyond 2025, an update on other key financial indicators. Slide 26. After this update on our medium-term targets, let me close our presentation with a look at the 2022 market expectations and how VAT is expected to perform.
The global semiconductor investment activity is expected to remain very robust, and 2022 is currently looking at an increase in WFE of about 20%. VAT's strategy to outgrow the market by gaining market share and expanding its adjacencies is expected to continue. In the service business, the strong semi market is driving most of the growth, and we expect all the sub-segments to grow higher activity, yielding in a service market growth of above 15% in 2022. VAT's Global Service business will harness the potential of its large and increasing install base and benefit from the high wafer fab capacity utilizations globally. The Advanced Industrials market is expected to show continuous growth driven by general economic recovery and especially in the scientific instrument and high-end coating area. Here, the market is expected to grow about 10%.
On top of that, we will continue to pursue our strategy to address targeted growth markets in higher-end industrial applications and processes. The display market is again expected to witness a weaker year, and the market is expected to be down around 10%. Solar, on the other hand, is expected to see some 12% market growth in 2022, driven mostly by PERC investments. Overall, VAT's display and solar business is expected to grow in 2022, mainly driven by a strong Solar and LED business and the execution of display orders received towards the end of 2021. So far, the first quarter has continued to see strong order intake, which confirms our statements that we expect to see sequential quarterly growth during 2022. Slide 27. On this slide, you see the summary of what I described on the previous one.
For the year 2022 and based on the currently expected market development, all our businesses are expected to grow. As a result, we expect substantially higher sales, higher EBITDA, and a higher EBITDA margin, as well as higher net income and free cash flow. CapEx in 2022 should be CHF 65 million-CHF 70 million to further ready VAT for the incredible opportunities we see in the next five years. The guidance for the first quarter had to be lowered compared to our initial expectations of CHF 270 million-CHF 280 million of sales. We now expect a sales level of CHF 245 million-CHF 255 million, which at midpoint is slightly down on last quarter.
Despite successfully increasing our factory output to support the initial guidance, the severe supply chain bottlenecks in the industry are slowing down the flow of capital equipment shipments, and as a result, we had to adjust our plan. We certainly continue to see challenges in our own supply chain, but we are absolutely not the bottleneck at this point, and we are confident we can support the increasing demand during 2022 and into 2023. As a result, we expect to see sequential quarterly sales growth through Q2 to Q4 in 2022. This concludes our prepared remarks, and I will now hand over to Michel for the Q&A.
Thank you, Mike. We now start the Q&A session, and you have the possibility to either ask your question via the operator over the phone or send your questions directly to me via the webcast chat function. As a reminder, please limit your initial question to two. Follow-up questions might be possible later in the Q&A. With that, I'd like to ask the operator for the first question from the phone.
The first question comes from the line of Didier Scemama from Bank of America. Please go ahead.
Good morning, and thank you for taking my question. I just wondered if you could elaborate a little bit on the Q1 guide. Obviously a small miss versus expectations and perhaps versus what you were expecting at the turn of the year. Can you elaborate on the sort of linearity during the quarter? I mean, did you see a deterioration from your customers as we progress through the quarter? Is there any sort of impact from the situation in Ukraine or Russia? You know, we hear about you know, rare gases coming from these regions. Can that impact some of the consumables of your customers, et cetera? I've got a quick follow-up. Thank you.
Okay. Thank you. When we guided back in January, it was very early January and, you know, that was off the back of a very strong Q4 order intake. At that point, we also had a very robust forecast from our key customers. Our capacity ramp was, you know, well on plan to enable even the top end of the guidance. What's happened since then, our customers saw really severe supply chain challenges, and that's reduced the pull from our consignment stocks. You know, that brings us back to around the CHF 250 million level that we guided. It's pretty hard for us to tell early in the quarter that was happening. We did see a weak January.
Things improved as we went through February, and we now expect a pretty robust March. That's the best we can see at this point. Q2 looks like it's again up as we expected and we hear from our major OEM customers that the second half is now substantially above the first half. I'd say it's a little bit more of a ramp into the second half than we expected. We did expect a stronger first half earlier in the year, but that's quite common in semiconductors that the quarterly profile changes throughout the year. At this point, we see very little impact at the moment from the Ukraine crisis.
VAT doesn't have exposure to any of the key elements, which is, I think neon gas and a couple of other palladium materials. I think at this point, the biggest risk for us is probably distribution routes and disruptions in the transport area. We haven't seen any so far, but you know, there's still a lot of time to go in March, and we'll manage that very heavily with our distribution partners.
Thank you for the color. I just wondered if you wanted to discuss a little bit how we should be thinking about OpEx, you know, inflation in salaries, any particular specific R&D programs you might want to bring forward, et cetera. Just help us understand, calibrate the OpEx for this year.
Maybe I can answer that question directly. You're absolutely right that there is increasing pressure on all cost lines. I think that includes raw materials, where we have already seen shortages in combination with inflationary pressure as we have alluded in our pre-release call back in January. Those cost increases, mainly in material, we will offset by our operational efficiency, but also a continued focus on cost discipline and our continuous improvement programs in combination also with some price increases that we have put in place to cope with that. On the OpEx side, VAT is, as you know from our P&L, very lean in our expenses.
I would say for both the distribution costs, but also the energy where we see the biggest hikes over the course of the last couple of weeks, we do not expect a significant impact. We might definitely see very challenging increases, but I'm confident that on the bottom line we are able to cope with those.
Thank you so much.
I think on the R&D side, yeah, we do continue to invest heavily there. We see fantastic opportunities for the company in the adjacencies that we're focused on. You know, we will adjust our spending during the year, as we see the quarterly sales profile to put in additional R&D engineers and things to ensure we harness these opportunities. I think for VAT, there's never been a better time with the competencies we have to target new areas of semiconductor, but also in the Advanced Industrials and service segments.
Sorry, if I could have a quick follow-up. Can you just give us an update on your capacity plans? You know, you've been talking about this in the last few conference calls, giving us a sense of at which point do you expect to get to CHF 1.5 billion revenue. You've got a 2025 target, but in terms of capacity, can you possibly get there before that?
Yeah. I mean, just a clarification of that. I mean, we're on track to meet the initial guidance that we had for this quarter. Our factories have ramped quite well. You know, I'd say by the end of the second quarter, we would have ramped our factories to be about the CHF 300 million level. So again, quite successful ramps of our own factories and our supply chain. As we then head into 2023, we would be up probably around about the CHF 1.25 billion, CHF 1.3 billion sort of level, and up towards CHF 1.5 billion by the end of 2023 from a run rate basis. I think we've got still capacity in our existing network.
We broke ground on the new factory in Malaysia. You know, that will come on stream at the beginning of 2024. I think, even on a very upside scenario for the next 2-3 years, we should be in a good place to meet the requirements of the industry.
Excellent. Thank you so much, gentlemen.
The next question comes from the line of Joern Iffert from UBS. Please go ahead.
Yeah. Hello, Mike. Hello, Fabian. Hello, Michell. Thanks for taking my questions. The first one would be please, on the adjacent products. Can you give us an update where we stand here in terms of total sales in 2022 versus 2021? And also if the semiconductor equipment CapEx would remain at maybe $80 billion-$90 billion, 2024-2025. Are you still on track to reach the CHF 150 million-CHF 200 million sales from adjacent products by then? And also if you can say that visibility has improved, that you really can achieve this. The second question would be, please, the order intake, just to quickly get our minds around your statements, when they're slightly above CHF 400 million, was including 1 million pre-orders.
Is it fair to assume that the order run rate, in Q1 should be around CHF 300 million as a base case? Thanks a lot.
Okay. First, the adjacencies. Yeah, we're making good progress on adjacencies. I'd say we're ahead of plan there. Roughly CHF 60 million in 2021, with the two major components being advanced modules and motion. I think we'll be on target for around CHF 90 million in sales in 2022 for those adjacencies. I think excellent progress. As I mentioned also in my prepared remarks, we started qualification with some new ALD products, which probably won't start gaining traction till 2023, but we see further fast adoption in that period. I think we're well on track to meet what we committed and in fact exceed what we committed.
It's a little bit independent from the total WFE number because these new products are mostly in the latest generation, 7 nm and below products. Even if it's a slightly reduced WFE number, the adoption is gonna be roughly the same rate. We really expect to succeed in these adjacencies. The second part of the question, the order intake. At this point, all I can say is the order intake in Q1 developed well. I'd say a positive book-to-bill ratio. We're still seeing strong demand from our core markets. I think there's a lot of supply chain challenges that our customers are facing that have to play out till we get full visibility on the exact numbers for the full year.
At this point, I'd say it's going in the right direction.
Thanks a lot.
The next question comes from the line of Craig Abbott from Kepler Cheuvreux. Please go ahead.
Yes, good morning. Actually, quite a bit of my two original questions have been answered. Just to follow up on the earlier question regarding what changed between January and now, you gave us a lot of detail there. Thank you for that. It sounded like the two main issues have been supply bottlenecks at your customers, but they're indicating they expect to resolve those, I guess, in the next quarter and be able to ramp up their investments faster in the second half. The second factor sounded like was the transport lines and distribution lines. I just wonder how much visibility do you have that these two, say, hindrances are likely to improve in the coming quarters? Thank you.
Yeah. As you can imagine, that's quite a difficult one for us to forecast. I think you can look at the announcements from the top five OEMs, and you can see they are all now talking about sequential quarterly growth. We also get visibility to their production plans. I can't talk about any of them specifically, but it's, I'd say a fairly typical pattern we see now is increasing into Q2 and then into the second half of the year. They are all making assumptions that the bottlenecks are improved. I think it's a challenge. I'd say the raw material areas are improving. We've certainly secured approximately one and a half years worth of aluminum, so we're in pretty good shape there.
I think the biggest challenge for everybody at the moment is still the electronic situation, which is really driving some unique. I actually see some common challenges across most of the OEMs. There's also some I'd say spot issues around things like plastics, resins, weldments. I think a whole generic set that should improve into the second half of the year because most of these suppliers have communicated capacity improvement plans. I think the one challenging one that's difficult to get our hands around is the electronic supply, which we're all monitoring very closely. So far, VAT's managed to do pretty well there. We haven't really had a major disruption from it.
We get a lot of surprises requiring us to reschedule things, but overall, we're managing to keep our planned output at the level we expect. On distribution, I think we've seen increases in costs, for sure. There's been a few slight increase in distribution timelines. And I think, you know, March is gonna be interesting to see how that plays out. For example, we just heard yesterday that Japan Airlines has stopped all flights to Europe. Now, we don't know what that means yet. These are the challenges we face on a daily basis. You know, but we're pretty resilient, and we normally find solutions to these. But it's kind of an unknown at this point what the knock-on effects from the situation in Ukraine could bring. Okay?
Next question, please, operator.
Next question comes from the line of Sandeep Deshpande from JP Morgan. Please go ahead.
Yeah. Hi. Thanks for letting me on. When I look at your presentation, you seem to be suggesting that the semiconductor part of your business will grow more than 20%, and then you've given these different parts, or rather the markets will grow. Given that semiconductors is more than 75% of your overall business, should we expect that you as a company this year expect to grow more than 20% at this point?
Yeah. I mean, I think that's a reasonable assumption around that sort of level. I mean, we do see the growth in our adjacencies. We do see the market share gains. You know, I think we can grow a couple of points above WFE. If you look at our customers, they're projecting somewhere between 15%-20% growth rates. We obviously don't know that yet, what the exact number is gonna be, and what the impact of the supply chain issues are gonna be. You know, if you use 15%-20%, then you can assume we'll be a few points above that. We do see growth in our display solar business and our Advanced Industrials, they won't be above semi.
They'll probably be, I would imagine around the 10% growth level. Our service, we expect more in the 15%+ level. All in all, it's shaping up to be another very, very strong year.
Thank you. When we look at the supply chain challenges that your customers are having, clearly you're not the challenge. Where are these? I mean, because we've heard from different players in the supply chain, semiconductors of course has been one of the elements, which is a problem. Others in other industries have talked about different metals, et cetera, being a problem in the auto market, for instance. Are there other challenges that are now developing because of the war? I mean, we're not talking necessarily of neon or palladium, but you know, just general metals or anything else which could cause further issues to this, you know, given like what you've seen, you know, from January to now, you've seen this, you know, correction.
We've just, you know, this unfortunate war has just started, and so if this continues, whether there could be further issues down the road?
Yeah. I think you have to segment the issues between the equipment markets and then the chip making markets. Obviously the chip making markets use a lot of precious metals and some of them are fairly highly sourced in Russia or some of the neighboring areas of Russia. I think that's still gotta play out yet to see if that's gonna have an impact. I haven't heard much so far on the impact there. I think on the equipment market, it's the issues are more around what I said earlier, chip supply and electronics. I think that's probably number one. Then you have a whole host of issues. Given that every OEM has different supply routes, you tend to get unique problems across the different OEMs.
That makes it for us, you know, extremely hard to forecast. You know, there are issues with resins for things like O-rings and we use that in our vulcanization. We've managed to secure what we need for our valve vulcanization. We're doing pretty well there. When I look at the list of shortages, it covers RF power supplies. It's into gas box components. You know, many challenges across the industry. We're trying to triangulate this with our volumes because, as I mentioned earlier, you know, we had a very concrete plan to deliver around CHF 280 million and we've had to ratchet some of that back. We're planning the staffing for that. We're planning the supply chain for that. It's a really complex environment we operate in.
Again, we're not the bottleneck and I think that's key. It's really key for our future share gains because it's the reputation that we have with our key customers to supply that is allowing us to continue growing and gaining share and to give them the confidence to work with us on new adjacencies.
Thank you.
The next question comes from the line of Timm Schulze-Melander from Redburn. Please go ahead.
Yeah. Hi there. Good morning, Mike and Fabian. Thank you for taking my questions. I just had 2, please. First of all, could you just share with us what percentage of your sales, you know, are on consignment? Then the second question was the impact of this delay in Q1. Could you maybe just talk to us about what that means for the FY 2022 margin and particularly the sort of first half versus second half seasonality impact? Thank you.
Fabian can talk about the impact on the full year. Percent of sales and consignment is really with our major customers that we do consignment. I'd say the top three or four. That typically makes up somewhere between 25%-50% of our sales into those OEMs. As a group level, it's probably only around 10%, I would think somewhere in that region. It's the delays we're seeing obviously in the consignment pools, but also a little bit in the slowdown of discrete orders. You know, we get instructions from them. We have windows that we have to deliver the product in. They're adjusting them. Sometimes they pull in, but recently we've seen them just being pushed out slightly, hence the revision of the guidance.
That's the approximate split we see. Then on the full year,
Yeah. Again, on the full year, I think we confirm that we do expect a substantial increase of the absolute EBITDA. If you look a little bit into the patterns of VAT, it has always been leaning towards a stronger second half year. I would assume that this will not be different this year with really strong increases that we now observe since January, both on material inflation, but on the other hand.
As cost elements, as I just mentioned before, like energy that is spiking and eventually also some increases on the distribution cost and the offsetting measures such as price increases, but also the contribution from our Darwin continuous improvement project usually have a certain lag into Q2. I do believe that we will see a continuation of the second half year run rate well into the first half in 2022. However, this will be challenged with the investments that Mike mentioned earlier, that we make into both the people, but also the structure, such as the new key accounts to fuel our future growth. Overall, slightly higher semester for the second half of this year is what I expect.
Okay. Maybe just to be clear. We are not expecting margins to be down versus the first half of last year.
No. At this point, there are no drivers or elements that would suggest that that margin is gonna be down, no.
That's super helpful. Thank you very much.
The next question comes from the line of Michael Foeth from Vontobel. Please go ahead.
Yes. Thank you. Hello, everyone. Just two questions. The first one is how should we read the lower number of spec wins in semi that you show for 2021? What are the dynamics there? What does it tell us at all? The second question is maybe if you could give us your view on the sort of growth path or revenue profile that you expect to reach CHF 1.5 billion in terms of cyclicality into 2023 and 2024. Thank you.
Yeah. The first one, spec wins. A lot of dynamics here. I would say if you look at the percent of wins that VAT has today, that is increasing year-on-year. That is the percent of overall opportunities, is certainly increasing year-on-year. I wouldn't pay too much attention to the absolute number. Obviously more is better, but there's a couple of things happening in the industry. One is the projects are becoming more complex. Because of that, our customers are generally consolidating their platforms, so they're using, instead of having four platforms, they're consolidating down to two, where they maybe harmonize the wafer loading and the transfer wafers. That means the spec wins are potentially bigger in volume, which is good for us.
You know, it means we get more economies of scale. It generally means they're more complicated as well. I think it's very hard for us to get an exact what I would call spec win efficiency, i.e., a number of spec wins compared to the total population. I'm not sure we wanna publish that number even if we had it, because it's pretty confidential. All I would say is, you know, on an annualized basis, we continue to grow, we continue to win more. You know, it certainly highlights our ability to keep growing market share sustainably over the next few years. The growth profile over the next 3-4 years for the strategic plan, I would say it's changing all the time.
You come up with a plan, like we did back in November, it's already changed. You know, the supply chain challenges this year will likely push out CapEx into 2023, which will probably make that a growth year now. We expected that it would be a flattish year when we did our plan. At this point, it's hard to see whether there would be a market correction. If we grow more linearly, I think it could mean a more stable environment, more stable growth over the next two to three years. Maybe 2024 could be a flattish year with an acceleration into 2025 again. You know, we'll gather a lot of data during this year.
We said we'll do a Capital Markets Day in the final quarter, and hopefully by then we'll get a bit more visibility into 2024. When I talk to my key customers right now, they're not saying much about 2024 and 2025. They're saying a lot about 2022, 2023. You know, some are saying they're sold out in 2022. And they're seeing a growing view that 2023 will also be an up year. So I think that's the best intelligence we have at this point.
Very helpful. Thank you.
The next question comes from the line of Sebastian Kuenne from RBC. Please go ahead.
Hi, gentlemen. Yeah, just two remaining questions from my side. One relating to the comment you just made that customers see 2023 as a potential growth year.
I know that Applied Materials made that comment, but do you hear this also from other customers? Is this now a consensus? Because SEMI, the organization, is still, I think, forecasting 2023 and 2024 to be flat or down. This would be my first question. My second question is on the use of cash. So the gearing level is now very low. Your dividend went up, but you already guide for an increased free cash flow in the current year. What is your thought on capital distribution, cash distribution? Thank you.
Okay. I'll take the first part of the question. Yeah, I think ultimately, the 2023 number will depend on how we do on supply chain during 2022. I have seen the announcement from AMAT about pause of 2023. I've also heard, let's say more planning numbers from two other OEMs that the likelihood of a growth in 2023 is increasing. I think the Semi and the VLSI guys, I mean, they get a mix of data from the OEMs and the fab or the chip producers themselves. They maybe have a less hands-on view than the OEMs have. I wouldn't pay too much attention to that.
I think we'll learn during the year a lot about the supply chain challenges and how the final view for 2022 will look. Will it be a 15% year? Will it be a 25% year? There's no question this year could be higher if the supply chain would have the capacity. If it's constrained at 15%, then I expect 2023 will be, you know, the same sort of magnitude in 2023. At the moment, I'm looking much more towards the OEMs than I am on the SEMI and the VLSI numbers.
Mm-hmm.
The second part?
Yeah. On the capital allocation, as you know, our sustainable value creation is based basically on the three pillars growth, profitability, and then also the capital allocation. I think here we continue to allocate our capital basically on three pillars, which is CapEx. Here, we have informed in December that we will make heavy investments this year up until 2024. We will spend roughly CHF 160 million to boost our future growth. We also announced that we will make substantial investments into R&D again, to develop the next generation of products where we will then consequentially also allocate some further capital.
Besides this, I have mentioned in my comments that we will see slightly increased levels of trade working capital in the, I would say, short to midterm. Last but not least, we will definitely continue with our goal to provide continually growing dividends to our shareholders. However, I think in light of the large investments and also the challenges we see in the geopolitical situation, we have made a conscious decision to increase the dividend by 22% or 1 CHF for this period.
A bit of a cautious approach. In your budget, maybe I can ask it a little bit different. In your budget for 2022, will you turn net cash positive by year-end?
Let's say, you have seen the strong improvement of our leverage over the course of last year. It suggests that we would definitely march in this direction. With the payout in May for the dividend where we'll receive then again an increase, but afterwards we should definitely be able to reduce it back and eventually then also be cash positive. Yes.
Good. Thank you very much.
The next question comes from the line of Jürgen Wagner from Stifel. Please go ahead.
Yeah. Hi. Thank you. Looking on slide 24, you mentioned 7 nm and smaller to be the driver for CapEx. What would be a multiplier for your Valve content in these future nodes versus older generations going into 2025? And then second question, you also talked about Connected VAT when you arrived at your 2025 target. How are you progressing there, and when could we expect sizable revenues? Thank you.
Okay. Yeah. Clearly, below 7 nm, and especially getting into 5 nm and 3 nm, many of the new platforms coming to market, they do have a higher percent of VAT components. But both Valves and our adjacencies, in terms of a multiplier, it's hard to give an exact number because it varies dramatically by platform, you know, if you're comparing different etch tools to different deposition tools. As I've mentioned before, we try to lump that into above market growth and, you know, we believe we can grow 2%-3% above market, as you net all of these activities. It's also quite hard to predict the final number because of the growth we're seeing in the mature nodes.
You know, things like the NAND market has been pretty robust, and that has, I'd say, some of the older technologies, as have the automotive and very mature segments, you know, which are sometimes in the 50 nanometer range. A lot of them, you know, don't have the record number of spec wins that we have with our tools. So it's quite a tricky number to pin down exactly. But I would say overall, you know, during that period, it will allow us to grow WFE sustainably above 2%-3%. On the Connected VAT products, I think we're making a lot of progress. The first thing, if you remember back to Capital Markets Day, is electrifying our valves.
In most of our main valve series now, we do have an electric option, and you know, that allows us to start integrating sensors and other components. I think during 2022 and 2023, we will start to produce more solutions products where we combine a valve with an advanced module and likely some sort of advanced sensor you know to increase the percent of VAT within the bill of materials of our key customers. You know, I get a lot of questions in the past about the percent of valves in EUV tools. You know, that's not growing dramatically.
When you look at the amount of VAT advanced modules in that type of tool, that will allow us to continually increasing the percent of spend on VAT. I think those programs are going well. Certainly, in the Capital Markets Day later in the year, I think we'll have some, you know, quite exciting examples that we can show you on what this is gonna mean for VAT into 2023 and 2024. We certainly got big ambitions, and I think we're putting all the right steps in place to ensure we have an array of connected technology to help our customers on their extremely complex journey to 3 nm and 2 nm.
Okay. Thank you.
The next question comes from the line of Robert Sanders from Deutsche Bank. Please go ahead.
Yeah. Hi, good morning. I just had a question regarding your backlog. You know, historically, that used to be, in terms of months of sales, somewhere around 3 months, 2-3 months. Now it seems to be more like 6. I was just wondering when you thought the backlog... What's your best guess of when you think the backlog will normalize in terms of months of sales? Because obviously a lot of the order intake you saw in Q4 was a function of longer lead time. I was just trying to understand when you thought orders would start to sort of normalize in light of the shortening lead times. I have a follow-up. Thanks.
Yeah. I would say it will be into the second half of the year. You know, that very strong order intake we had in Q4, a lot of those orders were for shipments across the entire fiscal year. However, you know, we are seeing, I'd say, reasonably high order intake so far in Q1, which is very, very positive. It shows the demand is there. It's just really a question of when our key customers can take that, and really dependent on their volumes. I think on average, it's gonna be Q3 till we get back to more realistic, maybe even into Q4. It's kind of a strange environment because you see those the backlog increasing, but we're not under any pressure.
I mean, I hardly get an escalation at the moment, you know, from key customers. There's always spot products 'cause we, you know, we make a few thousand different products. There's always gonna be a few escalations. When I compare that back to 2018, you know, we had a terrible time trying to keep up with demand at that point. We're absolutely not the bottleneck despite the backlog growing. Second half of the year, we'd expect that to come down.
Might just follow up with just regarding what you just said about sensors and software. I'm just trying to understand how this fits in with existing solutions that do measurement and control within the chamber. Is that complementary to what companies like INFICON do? And/or is it, are you gonna work together with these companies, or is it somewhat intruding on existing vendors' space if you start adding sensors and software?
I mean, that's a very, very key question for us. I always look at how do I monetize any additional hardware I put in the chamber. Clearly, our customers don't wanna spend more. You know, margin stacking of components that we interface to is not necessarily a good thing for them. I'm really looking at disruptive technology. How can I add things to our products that then fulfill a function that some other component's doing in the chamber? That way I can monetize it for VAT. Our main focus is not so much connecting to existing components within the chamber. That would be, you know, quite tricky from an economic value standpoint. We're really focused on disruptive.
I think I said, by the end of the year, I think we should have some quite exciting examples of how we're gonna do that.
Thanks a lot.
The last question for today comes from the line of Harald Eggeling from ZKB. Please go ahead.
Yes, thank you. One question, basically, back to the beginning. I realized yeah, incremental positive change in guidance tonality, with the prelims you stated for solid improvement in results. Now you're talking for substantial improvement in sales and so on and so forth. At the same time, you reduced your Q1 guidance. Could you please help me to understand this? Because from my perspective, when I look at truck drivers, the Ukrainians, traveling through Ukraine, inflation rising and so on and so forth, have I missed something? The second one is on inflation.
My basic take would simply be, could you simply elaborate if there is a cadence between price increases you are facing, for instance, workforce, inbound logistics, and the price increases you can pass through? Here also the question would be, are you passing through 100% or is it more like pain sharing? Thank you.
Okay. I think on the tonality, we're getting into very small margins of explanations here, but I think what's different even now, even though we've lowered the guidance for Q1, you know, when our key customers are saying they're sold out for the year, it gives us tremendous confidence that, you know, providing the industry can collectively solve these supply chain challenges, that we're gonna have a very, very solid year. Assuming that industry CapEx is in the 15%-20% range, which I think has increased since back in January when we did the pre-release, then that would result in a pretty substantial growth rate for VAT during 2022.
It's a strange feeling where I feel very strong about the year, but unfortunately we have to adjust the guidance for the first quarter. I you know think that's the only way to rationalize it. At the moment, the global demand for chips, and when I look at the end users, the chip makers all have very strong guidance, and they're also seeing improvements in chip pricing. Even in the memory sector, you know, we're seeing improvements in flash spot pricing and DRAM. I think that looks strong from an affordability standpoint and from a global demand standpoint. On inflation, Fabian, do you wanna?
Yeah. On the inflation and your first, I will address your question on the time lag. I remember that we started the discussion about aggravating inflation pressure quite early in the second half last year, and then we also defined the actions that we have to take as the discussions with our customers are usually spanning over you know several months up until we come to an agreement. The way that we drive this is we obviously also honor the symbiotic relationship we have with our customers, and therefore we will just not put the gun at their head and pass through everything as you would do potentially in other industries.
I think here we have a balanced approach where we work with our suppliers, prices with our customers in order to balance and absorb these huge pressures that you have observed and that we are now also seeing.
Okay. Thank you. One quick follow-up. Do you have a gut feeling what your customers are thinking how long the said situation Ukraine might last?
No. I think at this point, with all the uncertainties that we see and the rapid developments on a daily basis, it's just too hard to make a call both on our side but also on the customer side. No, we haven't really heard anything on that.
Okay. Many thanks.
Yeah. Thank you.
There's one last question from Marta Bruska, from Berenberg. Please go ahead.
Hello. Thank you for taking my question. I just wanted to confirm that I understood it correctly, that VAT secured 1.5-year supply of aluminum, and wanted to ask whether you have any visibility whether your customers, like ASMLs and other equipment makers, have managed to do the same. Because, you know, as we all know, you know, Q1 guidance, you know, you slipped a little bit, everything pushed into the second half of the year because of the supply chain bottlenecks getting worse, and we do need this aluminum for the frames in which the equipment sits, right? It's huge blocks of aluminum. With the situation in Russia, you know, perhaps persisting with...
As you've just said, we don't know, you know, what's your visibility into the supplies on your customer side, or is it likely to become another bottleneck now?
While it is correct that we've secured, I'd say more than 1.5 years' worth of aluminum, the good news for VAT is it's all produced and processed within Europe. It looks pretty solid. I mean, obviously we've been, just in the last week, diving into not just our supply chain, but our supply chain's supply chain to dig deep and look for any constraints. So far we haven't found any. I think that the key vacuum-based OEMs, which are the ones that use high levels of aluminum, look to be securing what they need. You know, there is still a lot produced within the U.S. and within mainland Europe, and also in Asia. I think aluminum seems okay.
I think the bigger problem is still the electronics situation and also let's call them unique point suppliers that do things like you know unique resins or unique plastics or stainless steels that maybe haven't put in enough capacity to deal with the exponential rises we've seen. You know I have a pretty detailed view of those constraints at our customers. And I can't go into too much detail but what I would say is the OEMs are systematically working through these constraints with the suppliers and ensuring capacity is coming on stream for the second half. You know we get audits almost every week to ensure that not just our main VATs manufacturing capacity but also our suppliers and sub-suppliers are ready to ramp.
I think we're taking it very seriously. SEMI has traditionally done a good job at managing these. The big challenge has been the electronic components. They're very difficult to substitute. You know, changing a microprocessor, for example, with complex codes, can impact the whole operating system of a process tool and take almost a year to reprogram. They've been really pushing the issues on the electronic supply chain. It's still questionable when that's gonna recover because as much as new capacity is coming on stream, we're seeing new applications driving more chip demand.
I thought we would be coming out of it, you know, into the first quarter, but I'm not seeing that yet, and it really feels like the second half before we get any relief there.
Thank you very much. It's very helpful. Thank you.
Okay, thanks.
Thank you everybody for joining us today in this conference call. We will conclude for today and our next announcement will be on April 14th with the Q1 trading update. Thank you very much and have a good day.
Ladies and gentlemen, the conference is now over. Thank you for choosing conference call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.