Dear ladies and gentlemen, thank you for standing by. I am Anna Engström , your operator today. Welcome, and thank you for joining the AT&S conference call on the results for the fiscal year 2023/2024. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. If you would like to ask a question, you may press nine star on your telephone. If any participant has difficulty hearing the conference, please press zero pound for operator assistance. I would now like to turn the conference over to Mr. Philipp Gebhardt.
Thank you, Anna. Good morning, afternoon, or evening, ladies and gentlemen. Welcome to the AT&S full year 2023/24 conference call. With us today are Andreas Gerstenmayer, CEO, and Petra Preining, CFO. Mr. Gerstenmayer will start with a brief overview of the key developments as well as the market updates. Afterwards, Ms. Preining will comment on the financial figures and our guidance. As Anna mentioned, the presentation will be followed by a Q&A session. Now I would like to hand over to Mr. Gerstenmayer. The floor is yours.
Thank you very much, Mr. Gebhardt, and a warm welcome from my side wherever you are joining us this day for our annual earnings call fiscal year 2023/2024. So if we move to the first slide, here you can see the overview about the key developments of the last fiscal year. What we have really experienced was kind of a roller coaster in the market. We had quite some challenges to master after a very solid H1. The second half of the fiscal year was really a difficult one because the demand deteriorated significantly. I will come to the details later. The main impacting factors, on the one hand side, was a high level of inventories. Everyone can remember the chip shortage just a few quarters ago, I would say.
Now we are in the other direction, so things have changed significantly over the last quarters, and this is what we had to deal with: markets in mobile devices, industrial applications, but now recently also automotive has shown significant fluctuations in terms of demands. Nevertheless, every cycle, every crisis has an end sometime, and we have gone through several cycles over the last couple of years already. Somehow we are experienced dealing with such situations. Our experience was when we were prepared for the recovery, we could take benefit from the uptake of the market and can benefit from the turnaround that is on the demand side. This is exactly what we are doing.
We are preparing ourselves, on the one hand side, also for having the necessary capacities and technologies available, continuing with our new factories in Leoben, the IC substrate, R&D factory, and the Kulim location and the factory we are preparing there. But we still have the view that despite we expect a certain improvement on the demand side end of our fiscal year, the price pressure will be with us for a while. This is what our market intelligence tells us, and this is why we are also pushing more intensively on our efficiency and cost optimization programs. We have communicated a year ago that we started them, and now we are putting more pressure on it to implement faster and more intense the activities. We have defined two phases.
The first phase last year was more the volume adjustments and being ready for the lower volumes, and now it's really efficiency kicks that we bring in. We have communicated end of last week that for certain reasons we are intending to sell our plant, our flex PCB plant, in Ansan, Korea. Unfortunately, we have to announce that we will not be able to propose paying out a dividend to the AGM this year. I think this is just a logical sequence of the performance we have to show. Following that, with a weaker market and the anticipated carve-out of the medical business, we need to adjust the midterm guidance. Nevertheless, I want to state here already, still AT&S is growing, growing significantly. If you take the numbers later from Ms. Preining, you can clearly see that until 2026/2027, we are almost doubling our revenue line.
I think this is not that we are suffering significantly. We have a performance issue. We have a price pressure issue, but it's not that AT&S is not a growth story anymore. So this is what we foresee for the upcoming years and also quarters. So turning to the next slide, let me talk a little bit about the market and explain to you what happened there last year and what is our expectation for the running year. We are talking about value here. In the next two slides, PCB market development, we have seen an 11% decline last year, 2022-2023, mainly driven by price decline, 7%, and 4% volume decline.
What we expect for the year 2024 is an uptake of the market, which is on the one hand side the positive message, 7% in volume, but still price pressure that pushes down the growth by 3%. So overall growth expected is around about 4%. If we move on to our substrate business, here you see an even more drastic drop from last year. This was mainly driven by the, I can say, quite some surprising decline in the server market starting in summertime last year. I have not seen any analysts that had that on the radar screen, and we had to deal with that very sudden effect. Volume was down by 16%, price decline 10% for the entire substrate market.
But on the other hand side, what we foresee for the running year, volume uptake of 15% and still heavy price pressure by 7% ends up in 8% growth for the year. You see a big dip of 26% last year. It's kind of recovery. I would say it will be a little bit more backloaded at the end of the fiscal year by 8%. The good message here is that the impact on AT&S was not one-to-one. We could clearly outperform the market. So the impact on our pressure on the top line was not that big than it was in the market. But still, if you have that decline, price pressure is increasing, and this is what we are dealing with with our programs.
On the other hand side, we also can clearly see in the substrate business, which is definitely one of the growth drivers of the company, that if we continue with the forecasts we see with our outlook we have from the market and the customers until 2026/2027, AT&S can become or can achieve the target of becoming a number three player in the industry. This is well on track, and our expectation is that this is achievable. On the other hand side, and this is supporting what I just said, we are continuously able to expand our customer portfolio. We just recently added a large US technology company to the portfolio. We also have seen the entering into some other well-known operating customers in the AI sector, not the very large ones, but still good enough and large enough that it's significant for us.
Unfortunately, we cannot tell you the names, but I think they are not so endless companies that are relevant. I would say 10 to maximum 15, so the experts in the industry can assume who that could be. Turning to the next slide, substrate end markets, now we talk about units because the long-term forecast is not available in value. It's only available in units, but still a picture we want to share. You see the decline on the server shipment last year, -19%. The expectation also from the unit numbers is an increase or recovery of 8% in the running year. There's a lot of reasons underneath why things are growing or developing like they do. We also see that certain spending patterns have completely shifted from the traditional server business more to AI business.
We see also that spending on the server equipment side, we are not talking processors or GPUs now. We are talking about the server equipment that has a certain limitation because these AI servers are significantly more expensive, and the carriers, the cloud providers have limited budgets there, so they can just afford a less amount of servers in numbers. Subsequently, the numbers of substrates and of GPUs, CPUs is smaller when it merges, when it moves more to the AI-driven focus. Still, the cloud spending is strong, but as I said, with certain limitations in numbers or units. So notebook is traditionally after the COVID peak, a weak situation. We had the decline in 2021/2022 by 19%, 2023 again, 13%, a slight recovery expected now for 2024. What we see, the good message is we have seen the general inventory has somehow stabilized.
We see some kind of bottoming out. So the growth should be realistic, 3% this year and CAGR for the next coming years also 3% in units. Yeah. Nevertheless, we have good messages as well. I think we constantly generate the one or the other success. For us, it's, as I said already, really significant that we could onboard new customers in the area of artificial intelligence. You can now combine this new AI customer thing on the top with the lower part with the new power electronic solutions things because across the entire technology and product portfolio of AT&S, we can somehow benefit from this strong trend. The one is the computing power, CPU, GPU, all these kind of things. Like we see it also with the well-known company AMD, we can state here.
On the other hand side, we see it from the infrastructure, energy efficiency, energy supply, energy management is important in the server, in the cloud, in the data center area, especially when it comes to artificial intelligence, but also getting more and more interest in electric vehicle drivetrains and things like that. I think it's still a success story how we ramp Kulim and Hinterberg plant. We are on track. We can, by all the turbulences of the market, clearly state that we will come on stream on time. And some other areas like optical modules, which is important for the data centers, high-speed data transfer, are also entering into our technology portfolio, and we could generate nice leads there. So now it's a bit more technical, the next two slides, but I still want to keep that because AI is generating also more opportunities for AT&S.
The experts amongst you, I think, will know that artificial intelligence or the large language models, they have different ways to operate. First of all, you need to train them. For the training, typically GPUs are used, especially for the large models. And later, when the things are operating, when they're interacting with the users, it is called inference, which is just you ask the model something, it's answering something, and so on. And in that area, also CPUs are nicely used because they are more flexible and they can also support the workload there very nicely. So this is also the expectation that when it comes to artificial intelligence, not only GPUs will be the future, also CPUs will become again more and more important because they are more cost-efficient.
The cloud providers have more competition when it comes to their suppliers, and energy efficiency and everything when it comes to operations is better. In addition, as I said above already or in the last slide, there is a significant need for infrastructure equipment. The big thing in the AI area is, on the one hand side, power consumption, on the other hand, data transfer, high-speed data transfer. All that is in our portfolio, and we can support by having or providing our technologies around embedding PCBs with integrated optical modules and so on and so on. Last but not least, there's another new trend which is not so strong in terms of revenue so far, but we are preparing ourselves. As I said in the beginning, we prepare for the times after the crisis. Also, technologies are important there.
And this is the on-device artificial intelligence, which is more about voice assistants, digital assistants, personalized recommendations, all these kind of things that will in future be more localized on the devices, not so much in the cloud or the internet anymore. The advantage is security, personal data, which are on the device and not in the cloud, response times, and, and, and. This is a strong trend that is entering into the market. Let's see how that evolves. But also there, we can support the market with everything what we have in our portfolio from substrates to PCBs. And this is heavily supporting our future development. So turning to the next topic, selling the plant in Ansan. I think the details we have communicated probably I'll talk a little bit more about the rationale behind why we decided to sell the plant.
It's mainly, typically a company also sometimes needs to ask the question, how is the portfolio of products and businesses composed? Where do we put our money into? What is the investment focus? And what is the main growth and value driver of the company? And this is true for Korea. We did the portfolio analysis and came to the conclusion that thin flex PCB is a nice technology, but it's not in the sweet spot of AT&S because there are no synergies with anything either in R&D or in production or. So this is a very specific niche. And we decided to provide this business the opportunity to grow further. We also sold it at a certain point in time to find the better owner who can support by providing synergies, by dedicated investment, a better opportunity for the business to grow and for AT&S.
We will have the opportunity to focus our growth on the core business that we drive forward and where our growth is mainly derived and generated from. So this is the process we initiated. We have some non-binding proposals available. We are now entering to the binding bidding process, and over the next couple of months, we hope we can close that one as well. Last but not least, from my side, as I said in the beginning already, we have initiated last year this saving program of EUR 440 million for two years. We have generated EUR 250 million until the end of the last fiscal year. As I said in the beginning, this was also a heavy focus, how can we right-size the company according to the volumes we see in the market by also adding efficiencies.
Now it's a very hard focus on real sustainable savings where we can really generate or can create a better competitiveness of the company for the future. So whatever is re-entering whenever we are re-entering a different market environment and volumes are taking up, this should not turn around the cost savings like we generate them and implement them with the second phase of the program. Subsequently, we had to also decide that we need to release around about 1,000 FTEs globally. This is a combination of SG&A functions and operations people mainly focusing on the white-collar side more because the first phase was more on the blue-collar side. Nevertheless, Kulim and Leoben, as I said in the beginning, are not included in that. They have a clear focus to ramp on time, for sure, with the right quality and technology.
They need to focus on a very efficient ramp, so spending less by still meeting the targets and the schedules. Yeah. This is what I wanted to summarize. I think it was not really a very successful year, but also want to clearly state here our team did a great job navigating through that, lots of ups and downs. We could clearly see that the AT&S team is very experienced in managing such turbulent times. That can also make you confident that we will be able implementing the next phases of our measures and activities quite successfully. As I stated in the beginning, every cycle, every crisis has an end. It's visible already. The question is how fast recovery will be, but we are prepared and we will get back on track again. I hand over now to Ms. Preining. She will run you through the numbers.
This is also not so nice today, but I think the future is better.
Thank you, Mr. Gerstenmayer, and a very warm welcome also from my side for the full-year earnings call today. Well, where did we start? Where did we come from? Last year, 2022/2023, was the best year of AT&S yet. Hence, the decline in revenue is clearly below our expectations. However, the trend of the year 2023/2024 was clearly jeopardized by headwind topics like price pressure, server inventories, inflation, interest, plus very much planned so higher startup costs due to our big CapEx programs. In numbers, we have been able to close the year with EUR 1.55 billion, which is below 30%, 13% of the previous year. The picture on the revenue side is very much mixed. Mr. Gerstenmayer has shown in the market slides earlier how the market has developed in the PCB and the substrate area.
While we in Electronic Solutions , you do know by 1st of April 2023, we have changed our reporting structure into two BUs, Electronic Solutions and Microelectronics. For Electronic Solutions , in principle, our PCB portfolio, we closed the year 19% below the previous year. However, and I think this is very much important to mention, the year 2022/2023 was very successful for Electronic Solutions . So here we are below the market trend. On the microelectronic side, however, you have seen the significant haircuts the market has provided to the substrate part of the business with roughly -26% if you follow the official market trends. However, we have closed the year with -2%, which is a clear testament to our large CapEx programs, the CapEx investment spent in Kulim and Hinterberg on the IC side of the business. EBITDA-wise, we closed the year with EUR 307 million.
This is also below a previous year, as stated, clearly not as well supported by FX like in the year before, plus higher startup costs and definitely under pressure due to the lower top-line development. In the end of the day, that leads us to -EUR 37 million net profit. On the lower part of the slide, you see the quarters and the development of the quarters. Clearly, on the positive note, we see +14% over Q4 2022/2023. However, this was a very weak quarter, but nevertheless, as the pattern is pretty much the same in the curve of the quarters, we see a clear increase in sales and, more importantly, also in the EBITDA, which is a translation of the efficiency programs we have announced pretty much a year ago.
Turning the page, as this is a full-year earnings call, I would also very much like to compare the previous year to the year 2022/2023 to the year 2023/2024. Here you can see in numbers, -13%. I have mentioned it earlier. However, the drivers are very different. In the business unit, Electronic Solutions , we had to face a very unfavorable mix and volume plus price pressure. While in the business unit ME, as I have stated already, we have a very positive product mix and volume development, however, jeopardized by high price pressure. Now, if you go back to the earlier slide of Mr. Gerstenmayer where we have stated the -26% keeping it flat, plus having also faced huge price increases, you can see that the quantity increase must be significant.
And again, this is also what we see where we see the beauty of the business and the investments in Kulim and Hinterberg. What is also very important to mention on the EBITDA adjusted margin, we pretty much kept it flat from the year before, even though a large part of the decrease is based on, excuse me, price pressure, which usually goes directly into the EBITDA. So you can imagine that the cost-saving programs really nicely paid off, and therefore, we were able to keep a, let's say, flattish EBITDA margin year -over -year. Turning the page. Now, looking at the business units, firstly, Electronic Solutions on the quarterly development, we see a flat development Q4 2022/2023 to Q4 2023/2024. However, also here, a nice increase in margins. As stated earlier on this full year, we see -19%, which is below the market trend on PCB.
But as also mentioned, we had a very positive year, 2022/2023, in Electronic Solutions . So we start from a different pace. On turning the page on Microelectronics, clearly, the most important number on that page is +46% quarter-over-quarter, plus the fact that revenue-wise, on a full year, we closed only with -2% in a very harsh pricing environment. That gives a lot of positive spirit to the team as the quantity increase, as stated, has been significantly. On our financial position, as we show regularly at the investor calls, here you can clearly see that we not only deal and use our resources when it comes to assets, manpower, but also more so on the financial side, very, very diligently.
So we still are able to show EUR 1.258 billion cash and cash equivalent and unused credit lines by 31st of March 2024, which is still a very solid cushion for the years or for the quarters to come. Turning the page on the maturity side, the picture you already are aware of, we have currently roughly 36% debt instruments at fixed interest rates. We monitor that very carefully in a degressive interest curve situation. So we have a very close handle on the development on that side. While currently, our financing costs are a little shy of 5%, which is in the current market environment, I would think still a good situation for AT&S. Turning the page. One slide I'm personally very, very proud of.
The earlier quarters now are no longer shown, but we started at 22% net working capital and brought it down to single digits, currently 9.3%, showing that we also, as stated, on the cash side of the balance sheet and the working capital side of the balance sheet, we very diligently use the resources available. 9.3%, still single digit, is very low. It's supported by the current market situation. That's also clear. But looking forward, this is clearly something we would like to maintain. However, I personally don't think we can stick to single digits forward-looking. On the balance sheet, on the four KPIs we show on that slide, it does not come as a surprise to you that our asset base has increased significantly by 12% given that we have invested heavily in Malaysia and Austria.
The two ratios I think everybody's most interested in is the equity ratio and the leverage. Equity ratio is currently a little above 20%, clearly below our own ambitious target. But in a time where we heavily invest and in parallel see a market weakening, that's a clear mathematical logic. We have always said that the equity ratio can be below 30% for certain periods. Similarly, on the net debt, on the leverage, we closed the year with 4.6 times below our expectations. That's very clear. But again, same reason, heavy investments at par with current weakening of the market. Turning the page on the cash flow, clearly, the highlight of that page is the strong working capital management where we have been able to overachieve the previous year. Investing activities, you're well aware that the year 2022/2023 and 2023/2024 were the most CapEx-richest ones we had in AT&S.
The years to come will be significantly below those levels, and all the other KPIs fall into place due to those two, so cash flow from operating activities and investing activities. That brings me to the last two pages, the guidance for the current year, 2024/2025. We guide a revenue of EUR 1.7 billion-EUR 1.8 billion, adjusted EBITDA margin of 25%-27%, clearly supported also by our efficiency programs, startup costs for Kulim and Leoben in the amount of EUR 80 million, and a net CapEx spend of EUR 500 million, which includes, of course, our large CapEx programs, but also maintenance CapEx for the existing plants.
Over the page on the midterm guidance, which has been adjusted last week, Friday's ad hoc, the revenue now is guided to be at EUR 3.1 billion EBITDA margin, no longer adjusted, but EBITDA margin, as you do know, 27%-32%, and the ROCE above 12% after steady state and ramp-up of production. The Net Debt/EBITDA , so the leverage below 3, as initially or as also always stated, it can temporarily be above, and an equity ratio of 20%. Now, on the last point, we have already received a lot of questions. The 20%, firstly, both guidances, the one for 2024/2025 as well as the one for 2026/2027, refers to current company structure, so does not include any portfolio decision.
On the midterm guidance, equity ratio of 20%, this is a testament of the fact that we will repay the hybrid in the year 2026/2027, hybrid, as you do know, in the amount of EUR 350 million. With this, I have come to an end on my part, and I would now hand back to receive questions.
Yeah. Thank you, Mr. Gerstenmayer. Thank you, Ms. Preining. We will now start the Q&A. In order to give everyone the opportunity to raise questions, we would like to ask you to limit yourselves to two questions. You know the game. Once we are through, and if there are still questions and time, we will start another round. Now, I would like to hand over to Anna to handle the session.
Thank you very much. Dear ladies and gentlemen, if you have a question for our speakers, please press nine followed by the star key on your telephone keypad now to enter the queue. Once your name has been announced, you can answer a question. If you find your question is answered before it is your turn to speak, you may press nine followed by the star key a second time to cancel the question again. So one moment for the first question, please. The first question comes from Daniel Lion of Erste Group. Please go ahead.
Hi. Thanks for letting me on. I would like to focus a little bit on the IC substrate demand side. When talking to our major clients or reading the statements of your major clients, they're a little bit more pushy. They've maybe always been regarding the rebound of the market.
So they're actually positive to see second quarters, not towards the end of the year, but second, we are third quarter already. So your second quarter, your first quarter, to see a rebound and then actually moving into 2025, AMD is actually even more bullish, having a strong pipeline with its MI300 accelerators. So is it a cautious statement from you that you would expect the rebound starting towards the end of the year, or is it still lacking visibility that clients really don't tell you exactly when they will need what? Because obviously, at a certain point in time, all the new nodes that are introduced and all the new products that are being introduced to the market should find a certain demand as well.
And so a little bit more color, maybe, of what you expect in terms of sequential development and rebound potential towards the year-end, fiscal year-e nd?
Okay. Thank you very much for the question. So how do we compose our predictions? It's twofold from the market point of view. First of all, we combine the analysts' reports and the forecasts we receive from the customers. And secondly, we also need to keep in mind that some of the big customers will be served out of Kulim, which will come on stream end of the calendar year. So impacting revenue is quite limited from Kulim. This is the reason why you cannot one-to-one combine the forecasts of the customers with our revenue predictions.
On the other hand side, as I said in the beginning, we can only refer to the numbers we have available from customers and analysts, and that is painting the picture we have currently and what we have communicated.
Okay. On the PCB side, how does it shape out there? Because when we see that dynamics, also reflecting to some extent on your big client there, it seems like he might be losing some of the market share that he gained last year. And of course, you have the benefit of maybe the iPhone SE in the fourth quarter again, if we will see an update, which usually happens every second year. So would you expect the levels that we've seen actually last year to come back, maybe not this year, but maybe moving further along?
Do you see yourself actually maybe gaining additional content that would increase the scale maybe in platforms that you already supply to? How would you see actually the situation? Because it seems like there's a commoditization actually ongoing that puts pressure on price, and we don't really see the unique growth that could catch up or compensate for this commoditization that is ongoing.
Yeah. I think PCB market is a little bit different pattern than we see in the IC substrate market. We have definitely more competition there due to, as you rightly said, certain commoditization of technologies. So the big innovation is not there currently. This we have seen already last year with a significant price pressure, as I stated in the beginning already. But on the other hand side, you also need to consider that that market has different patterns over the year. We have the seasonality.
We have a share allocation topic. So typically, big clients have four, sometimes five suppliers. We have also experienced in the past quite different allocation of demand shares. And for sure, finally, the customer needs to be successful in the market out there. So as I said in the beginning, our expectation, and this is built in in our outlook, is that we most likely can keep a significant market position, maintain a significant market position, and we do not see significant declines between the years there.
Okay. Perfect. Thank you very much.
Welcome.
Thank you very much. Next question comes from Jürgen Wagner of Stifel. Please go ahead.
Yeah. Good afternoon. Thank you for taking my question. On your contract liabilities, how should we model them, or when will they reverse? Then margins in your Microelectronics division, what would be a normalized margin once the inventory correction is over, let's say, next year? Thank you.
Both very, very good questions. Questions we do receive very, very often. On the first one, contract liabilities, unfortunately, I have to tell you at that point, we do not talk about our contracts. What I can tell you is that level that we have been able to achieve by 31st of March is in line with what we have always said. Now, we have received the lion's shares already, and you cannot expect increases like in the past. Unfortunately, as you can easily imagine, these are very nice contracts we have been able to achieve in the past, and we cannot talk about those in details. However, I do absolutely understand your questions as we reach roughly EUR 900 million in that respect.
So I do reckon, but please understand that we cannot disclose the margins, sorry, the contract liabilities, and the depletion of the very same to the public. On the IC substrate margins, I would hand over to Mr. Gerstenmayer.
Okay. So typically, we have a midterm guidance on the entire business, so we are not breaking out substrate margins. It's a similar challenge you have put on Ms. Preining with the other question. And I know it potentially is a little bit insufficient for you, but this is not the level what we are guiding.
Maybe just to add that much we can clearly state is that in 2026/2027, our large CapEx programs all linked to IC substrates are on stream. And the EBITDA no longer adjusted, but EBITDA margin then is also clearly impacted by Kulim and Hinterberg.
Okay. Thank you.
Thank you very much. The next question comes from Patrick Steiner of Kepler Cheuvreux.
Good afternoon, ladies and gentlemen. Two questions from my side. I would take them one by one if possible. First one is, I mean, given your quite high leverage and the cancellation of the capital increase, can you give us some more information on the exchange with your banking partners and how they support this chosen path, for example, with some kind of changed financing agreements with them or anything like that?
Well, also very good question. You do know that, as we have always stated, we don't have hard covenants. So with EUR 1.26 billion cash equivalents and unused credit lines, we are quite well equipped, if you allow me to say so, for the time being. Yeah, you're right. With 4.6x leverage, the world gets more expensive. That's also true.
So far, we have clearly the support of our house banks, I would say. And on the contrary, we are in very good terms also with additional leads to secure further financing in case needed. And that all will very much depend on the outcome of the potential portfolio decision and the proceeds thereof. But for the time being, that's all I can tell you. We have very strong business partners with our house banks and additional banks, no hard covenants. Step-ups, clearly, yes. And with 4.6 times interest, will be more expensive. That's also a given. But I have not heard anything that our financing partners are no longer supporting us if this is what you're aiming for. On the contrary, we are in negotiations with other leads to increase financing in case needed.
Okay. Great. Thank you very much. Second question would be, I mean, you also mentioned that you are going to intensify the cost-cutting program, including the headcount reduction of up to 1,000 full-time equivalents. I may have missed this, but you didn't give us an update on the total expected cost savings. Can we apply the EUR 250 million saved in 2023/2024 to the current year, or what's the expectations on this? Thank you.
I think it's shown on the one slide. This is the two-year program of EUR 440 million. We stated that we achieved EUR 250 million in the last fiscal year, which is implemented and supporting the business already. And we have this remaining EUR 190 million to be achieved with the additional programs. And as I said also, the first part, there is always a mixture. When you have these volume declines, you need to right-size the organization.
And the second part is then focusing more on the sustainable savings and efficiency gains.
Okay. Thanks. But didn't you have the EUR 440 for the two-year planned previously already? And on Friday, you said you wanted to intensify the cost-cutting. So I thought there was some kind of difference between that.
From the measures we take, we go significantly deeper. And as I said, we now cut out additional 100 people, which needs to be sustainable on the mainly white-collar administrative part. And definitely, this is what we are pushing forward on a sustainable level.
Okay. Understood. Thank you very much.
Thank you. The next question comes from Łukasz Cinikas of Pekao Investment Banking.
Hi. Good afternoon. Two questions from me. First one, how do you see demand and performance shaping up for the substrate business as a consequence of the recent news in terms of reducing the use of CPUs in servers in China from the major Western players? And second question about maturing debt this year. Is it mostly credit lines or promissory notes? And do you intend to roll this debt mostly over a longer term?
So for your first question about the demand for CPUs out of the Western world for China, this we need to observe closely. So far, we do not really have a clear picture about that because basically, when it comes to high-performance computing, China does not have own sources for that. So whether they have something in the backhand or not, we don't know. And its visibility is not there.
But basically, we see also that with the first APUs for mobile phones, they have been somehow successful, but still, the processing power is not on the same level. So when it comes to CPUs for notebooks, PCs, and potentially servers, there is no product in China available. For me, the question is, how do they replace that? And this is for us not transparent currently. We are investigating that. But there's no indication that they have in high volume this technology available already. Okay. The other one is maturing.
The other question is on the maturities. Just correct me if I got your question right. You were asking the split in debt instruments and other components, right? Was that the question?
Correct.
Okay. Perfect. So there is the lion's share clearly in debt instruments, but you do also know that we have leasing obligations, which we need to fulfill.
A smaller part is with financing partners. But the lion's share is clearly on the debt instruments. And this is, as you stated, split it into loans, into promissory notes, in revolving credit facilities, so all the products like a bunch of flowers. The other way around. Sorry.
Okay. Great. Thanks.
Welcome.
Okay. So if there are no further questions, we will conclude today's conference call. Thank you for your participation and questions. If you have any further questions, please feel free to contact our IR team, Johannes Madner, and me anytime. Thanks again, and goodbye.
The conference is no longer being recorded.