LPKF Laser & Electronics (Xetra:LPK) Q2 2026 Earnings Call

0:00 Claus Fietler and our CFO, Peter Memler. Claus and Peter will walk you through the business development for the first six months and provide an outlook for the current financial year. After that, we will open the floor for your questions in a Q and A session. The conference will be recorded and published for a period of two weeks on our website. And before we begin, please note that today's discussion may contain forward looking statements. These statements are based on current assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. We do not undertake any obligation to update these forward looking statements, except as required by law. With that, I would hand over to Claus.

0:48 Thank you very much, Petina. Hello, and welcome, everybody, to our first half year results. I want to give you, of course, key summary of what happened in the first six months. We'll dive a little bit deeper into the individual businesses, but, of course, give you a deeper insight what's happening in the advanced packaging sector, where we see our positioning and what we expect as the next steps. Let's get started.

1:16 First half of twenty twenty six, a challenging first half that we expected and anticipated in our planning. We had a weak core business. So the only growth sector we saw was in the electronics segment. And as expected and planned, we have a very weak year in solar because the transition to perovskite is happening, and we are in a transformation phase with welding so that burdens our revenue and earnings for the first half. One aspect of countersteering, and Peter will later give you more detail, is our NOSTA program where we reduce fixed costs, transform the organization, raise efficiencies.

2:04 We are about halfway through. The second phase is initiated and running, so we are on track here. Our strategic focus stays unchanged. We want to enter significantly larger terms than we do with our current market fields, and we wanna become strategically relevant in these fields, meaning offering more than a process that becoming a strategic partner to our company, to our customers. And this sector is, of course, advanced packaging with the transition to glass happening where we see now that we expanded our portfolio and with AI driving the market and the wafer starts strongly that we have a significantly larger TAM than we modeled a year ago.

2:55 I'll show you more details about it. Our midterm market ambition stays intact. Despite short term headwinds, we stay the course, enter a much larger TAM with advanced packaging and also bring our costs and our structure to a level that we reach a sustainable double digit EBIT margin by 'twenty eight. Let's come to key takeaways and insights from our markets. So what we see and also anticipated in our planning range is that we have a persistent macroeconomic and geopolitical uncertainty. We have, say, Iran situation in the first half, which, of course, brings uncertainty to our customers and into supply chain and causes cautious investment behavior.

3:47 When we look at the solar sector specifically, as expected within our planning, at the moment, there is very limited investment happening because transition to perovskites is running. We are positioned in perovskites both in The USA and in Asia with first prototyping lines, and the activities are going with a very strong efforts from our customers. Once perovskites are have reached maturity for high volume application, we see a very good market potential for a long period of time. That's also the reason why we basically managed through a very difficult year for solar where we expect and plan for less than half the revenue we had in our record twenty four solar year.

4:44 In the semicon industry, you can see it in the press. You see the public announcements of large players in the field. We are now in the phase where the transformation towards glass based packages for AI, for advanced packaging is becoming real. Joint ventures are formed, are getting capitalized. Large companies make announcement about their ramp up and volume plans. So we are now in the phase where LPKF needs to prove that our very good positioning that we have achieved supporting our customers in development for many years now gets transitioned into being qualified into the equipment stack and participating in the ramp up and in the high volume phase.

5:36 We have updated our market model based on the latest projections from analysts on wafer starts for high performance computing and are now looking at a total addressable market in 2030 that is very significantly larger than what we anticipated. Now it's time to prove that we are in the equipment stack and in the operations for this market. Overall, business development, advanced packaging with Lite being basically our entry ticket into that market. We have a very good positioning. A big share of the players in this market are already working and have ordered LPKF equipment for the development and qualifications.

6:29 We now, as mentioned, need to transition that into broad orders for the ramp up, and we have expanded our portfolio already now with additional process steps, basically, already at the start of this market, becoming more than a one trick pony, becoming a strategic player. Rapid prototyping, slightly lower revenue in the first half, but higher order entry. So, basically, we see ourselves on track here. When we look deeper into the markets, we see a healthy demand above expectations from China and Europe. We are seeing a weak US market, which is largely driven by uncertainty about availability of grants in the private public sector from The US.

7:21 But in the big picture, it evens out. In our SMT sector, which is dominated, of course, by our laser dependent link for PCBs, We saw, especially in Q2, an investment restraint and some shifts of projects due to geopolitical tensions, still see a clearly stronger first half, specifically in order entry and continue to stay the course, we see that laser dependent link is a long term relevant portfolio element for LPKF. We talked about solar as expected in the plant, a weak year significantly lower revenue, which also is that dominating factor why we have overall LPKF lower revenue in the first half, delayed CapEx decisions because people want to invest into perovskites once they are ready, and these activities are still in a qualification phase.

8:25 Welding, revenue down year over year, earnings negative. You know we had a large consumer business supporting us in this year in last year. We have made it into smart robotics that is giving us a good foundation for the year. We have to transition, and that's what we are doing this product line. We have to significantly change the cost structure. Peter will talk about it in a minute.

8:51 But we see that we make the right progress getting into consumer electronics, smart robotics, medtech that we can make our planning target for the year and set up the product line in a way that it can get back on a profitable growth path. A lot of this has to do with North Star and changing how we operate at LPKF. I hand over to Peter to give you more details about that. Thanks, Klaus. Operation, North Star program. The first restructuring wave is completed. We we really finalized it now in the in the first half year, the future organization in the second wave, and then we'll get to the next slide a little bit deeper on this. We'll we'll go in this sharpen and improve proof at the cap overall again.

9:42 Objectives is really

14:33 driven by what's happening right now in the advanced packaging market. I wanna give you a brief overview on our strategic direction where we stand, what next measurement points are ahead, and how we see this overall market as a total addressable market now. As you all know, LPKF has the clear strategy. We want to leverage the excellent technologies we have into much larger addressable markets. Larger meaning factor of 10 and more above what we currently have. One market that we identified is the advanced packaging market where a transition to glass as a material is happening. And we, for many years, have been providing to the market the right process solutions there as a pioneer, as a front runner with a strong IP portfolio.

15:29 We achieved in this ecosystem that you see here that the dominate part of players that have made an equipment decision here have selected LPKF, have for many years been working with LPKF to fine tune the processes, get all the qualifications done, and get ready to ramp. What we are now seeing as first of these players, by far, not all of them, have reached the the total process maturity to be able to place first ramp up orders. So first operational orders. And this, of course, is now a key measurement point for LPKF.

16:15 Nobody in the world doubts that we are a great technology partner. We know technology. But will we now also be chosen to be the operations partner and participate in the first ramp ups and in the very high potential that comes with high volume production for glass. So positioning is good, but with one process step, you cannot achieve the second strategic goal, and that means we need to become strategically relevant in this field. We need to be on the table in road map discussions. We need to be the go to partner to for whoever thinks about glass in packaging. So as you know, next slide, already in q one, we expanded our product portfolio.

17:06 We are offering now three process steps instead of one. The one is light. That's basically our entry ticket. Nothing more. And that, of course, comes from deep year long insights and discussions with our customers on where do they have true pain points and where can we offer highly differentiated solutions. So that's out in the market. That's done, and that's good because now is the time to position ourselves in a broader way. When we see the timeline and phases, we see them unchanged to what we already showed you a year ago. Next slide, please. 'twenty six is still a positioning year. I would say we successfully executed on the positioning.

17:58 Right now, the negotiations are running. It's the time where the first ramp up for ramp ups happening in '27 are distributed, and that's the information we want to provide to you as investors once the whole deals are done. Yes. We made it into the equipment stack. There will be other players who are not part of the front runner team who will place their ramp up orders in '27, and we will do the same, position ourselves, provide the best solution, win, and that's our ambition, the majority of the deals, not all of them. It cannot be a single source market to then be also the partner for the high volume phase, which we expect twenty nine, two thousand thirty with deals being distributed, of course, in advance around '28.

18:52 And at the same time, being there with a broader portfolio with ABF ablation, with glass glass bonding in roughly a similar timeline while using our market insights now to do the same first positioning then be there for the ramp up. When for us, the next logical step in this market happens, and that means the glass is used also as a medium for optical data transmission. Now when we look at the addressable market in that field next slide. A year ago, I was telling you, yeah, we did our estimate for 2030.

19:38 We see a total addressable market for equipment that LPKF can provide of about 500,000,000. Now it's a highly market driven by AI, so we updated our market model, of course, incorporating the much more tangible insights now we have into the production chains and our customer ambitions, of course, incorporating our expanded portfolio. But the biggest impact factor incorporating the latest public information from various sources about, hey. How do we see the wafer starts for high performance computing? So driven by AI developing for 2030.

20:25 And that number has been corrected upwards drastically. That's public information.

20:31 And, of course, our addressable market follows. What we show you here is the total addressable market for 2030. Total addressable market, meaning in 2030, suddenly everybody switches to 100% glass and installs all the necessary equipment in the same year. That's, of course, not what specific addressable market and the obtainable market looks like. Impact factors are what was the share of glass be in 2030. I talked to about a 100 investors who are very deep also in the semicon market in the past months, there, the estimates still go from bearish cases, like 30% glass in 2030, to very bullish cases of 80% glass in 2030.

21:26 In all these cases, it's a multiple in total addressable market and obtainable market for LPKF than our total combined markets right now together. So in any case, a very attractive case, and it depends on the shares that LPKF can achieve.

21:47 You know our positioning is good. There is competition. We are actively defending a lawsuit running our IP where we think people wanna take a shortcut. We spend ten years of r and d in that field. There, we see us positioned very well. But the most important next step in the market, and therefore, the share price already anticipated that in the past months is,

22:16 can we now win a realistic amount, a dominating amount of the first ramp up deals to basically also transition into a significant share of this total addressable market for LPKF. That's where we stand right now. The negotiations with the front runner partners are running. If you follow the press, you see that they form the entities, form joint ventures, capitalize them. So my expectation is that we can get very clear information out to you this year about here is the first deals we won. Well, one deal we already won in q one, but we want the broad market to basically deliver the proof point.

23:06 LPKF made it into the equipment step past the operational hurdle. And, of course, Peter and me make sure we stay ahead of the curve also in our capacity

23:19 that whatever case materializes, bearish case, bullish case, we are always there and can serve our customer needs. That's where we stand in advanced packaging. From my position, we found the right market. We are even a little bit lucky how much now the wafer starts go up, which boosts the total addressable market. Positioning was done well.

23:46 We are right now in the negotiations, and I think we have a very good chance of success to make it into the equipment stack. With that, I hand back to Peter to give you more details about the first half numbers.

24:06 Financial. Go to the next page. Overall, in the financials, when you see the first half year, the numbers, the volume is is low.

24:17 A general comment from my side. Basically, we knew and we planned and we expected in h one what is on the low level. Q2, we know that the solar business market and and and we we saw this coming. This is not not a surprise for us. We would hope that we get closer to to the 40,000,000. But but what Klaus mentioned in the beginning, we have to give political uncertainty in certain areas. We still have this continuous cautiousness of investment and behavior. And this is not that we're losing contracts. It's about that it's shifted, about making a decision to purchase more likely. The revenue, 36,500,000.

25:06 It's reduced in H1 compared to last year, majorly driven from Sola that we don't get one of the bulk orders in there.

25:16 This we see, and you will see this later on the first half year how Sola is doing. This consequently had an EBIT impact about between the adjusted EBIT minus 10,400,000 This is significant due to the revenue reduction. And here, we see already a positive impact of North Star, around 3,000,000 to €4,000,000 that we really can cover

25:44 the fixed cost reduction that otherwise, when you just make a calculation by reduce the volume, we would be looking a little bit more in the negative area in the adjusted EBIT. But this shows how important North Star is to getting the flexibility and the fixed cost that we're not getting always the big hit by a reduce of the profitability of the volume. Incoming orders. And, basically, good news is is that we are we are above the book to bill rate in there. Again, it's an it's a a missing a missing contract of of of the of Solar. Here we are I have some it's a it's a mixed information in market about good news and and and and and and disappointment about shifting, but there we are pretty good on track.

26:40 The free cash flow of minus 11,500,000, on the one side, we still have a a a very good asset management. On the other side, yes, we are we are reduced people. We're laying off people. There's a couple of catch out elements right now. What's what's financing the the transformation?

26:58 The 11,500,000 is in the range what what we're expecting. You but but, overall, we see that that the trend will go towards 27 in a in a much positive range. Orders on hands, it's it's on the same level as last year, 30 point 34,700,000.

27:21 We're working on this. This is one of the key elements in the second half year where we need to we are stable here. It's a good base for the for the next quarter, but we need to keep going to to low to increase the order on hands. Employees, you see this development for net 43 head counts where those 664. This is the wave one of of North Star, what I mentioned, majorly impacted, we reduced the

27:51 resources, fixed cost out. This was the wave one driven by by this element. This shows that we that we will be doing our homework to to reduce costs and improve profitability. Next slide. If we go to the to the working capital overview, what I mentioned, I mean, the inventory increased by by 22% to 23.9. This this is majorly driven by by preparing

28:17 the the additional volume selling for the second half of the year. Therefore, we need to increase certain elements of of inventory to be capable to deliver. This is a preparation, the main driven why we increase the inventory. Receivables, yeah, on one side, less less less orders, less revenue, less receivables, but we keep on a a very good level on on on on collecting data as the quality of our suppliers of payments behavior is is still on a on a very good level. That's the reason we keep the receivables on a low level.

28:58 Contract liabilities shows majorly that we that we're getting contracts in where we're getting down payments from from from customers. We try to collect upfront payment that that we're getting our contracts in a in a positive positive cash generation. This, we keep going, and this is the improvement. Trade payables overall follows a little bit the inventory and the revenue. You know? That's that's the reason we have we have a slight increase about trade payables. Overall, I'm I'm very positive about our working capital development in this circumstance as this company we are, and we are getting in a in a in a good way on this with the 20 22,300,000. When you just mentioned that we're increasing our inventory significant by 22%.

29:46 Next slide. Here, you see a little bit what we already mentioned a couple of statements before. This is our our our business segments here today. Electronics,

30:03 we are we are on the level that we are slightly increasing towards here. This is again, there's no pipe orders in there. This expectation about electronics will go to to to end of the year on '27, stable, slightly gross. You see that we're going on the on the slight improvement in the profitability, but electronics is still in a negative way because we are investing in the leading story. We're investing here still to to to get the advanced packaging ramp up going to preparing for this. Development,

30:43 there we have this this this behavior of investment of delaying the the weak US business in the in the development that's reasonably going slightly down in the volume.

30:56 This is government money funding what what's there's a really a behavior about stocking investment, holding investments. Nevertheless, when you look at the profitability and the EBIT, we do our homework here. We're reducing fixed costs here that that we're not getting an impact. We're improving slightly the profitability. We're doing a good job to to to to define countermeasures.

31:22 In betting, it looks terrible, but but this is in the expectation of our our first half year because in the in last year, we had this significant contract, one trip only big contract in Q1 last year from Consumer Electronics. We are on the way here. We are we have here significant in impacts in in in transformation costs. Therefore, the profitability right now is driven by the by the by the reduction of the volume mainly.

31:57 In the end, you see the drama in Solar, what we mentioned. We're losing roughly 80,000,000 compared to last year because of this this this transformation in mark market to towards the Periscope. No big investment done.

32:15 We we're really going, and you see this when you say 18,000,000 on on on volume reduction, profitability impact roughly around 6,000,000. You shall be doing our homework to reduce cost as much as we can with short term work, but this is this is some way expected. We know that this is coming, and we we have enough countermeasures and measurements. But there, you see our one hour our significant apex we have. And overall, we would have pushed a little bit slight higher volume. But, again, I think this the the range where we are in h one, it's it's not a surprise that we that we have this impact here. Claus, over to you. Thank you very much, Peter.

33:02 So to our overall guidance midterm aspiration, no change.

33:07 We were expecting a weak first half. We at least made a slight growth in other entries, therefore. It will not be a walk in the park, but we see our guidance for '26 as achievable. And we definitely say, yes, we know solar for this year is a disappointment also to our investors. We clearly see that perovskites offer a very strong opportunity for the future. So we are convinced it's the right decision to hang in there in a year where we are basically missing in the first half alone €20,000,000 from the solar sector. And of course, in the semicon market, we see that we now have the positioning to really achieve this year the transition into being part of the equipment stack. The addressable market looks very positive, and we see that AI is a driver that despite global uncertainties,

34:12 stays strong, goes strong and gives us a great opportunity. There, we fully stay the course. And as Peter mentioned, play to win or don't play, we continue to invest in this sector because this is where we see the future strong growth drivers for LPKF. And with that, I hand back to DiPetyna to basically guide our Q and A session. Thank you very much, Claus. Ladies and gentlemen, we are now ready for your questions. You can write your questions into the chat or you can give me a hand signal in order to speak directly. The first question comes from Lucas Spang.

35:07 I have unmuted you. Please do do it yourself. Thank you. Yes. Hi. Good morning to both of you. I would like to start with a leader order you mentioned for q two, which you received. Maybe you can share a little bit more light in terms of is this an order from a customer or partner? You have announced a partnership in the past. Can you share the amount of machines the customer has ordered? And maybe also in terms of the region this cuss this customer is coming from, can you share a little bit more detail? That would be my first question. Thank you, Luca. So, of course, I need to stay confidential. I have NDAs with all my customers.

35:53 Q2 orders, of course, we have portfolio orders constantly in light. So what we had in Q2 were not orders for ramp up purposes, for true operational hurdle purposes. They were basically individual portfolio orders. And what we considered was reporting to our investors is that one large specialty glass company ordered LPKF equipment, in that specific case, one machine, but potential even short term for ordering more. That we consider important because specialty glass is a raw material in the whole production chain that is currently in the course of ramping up for semicon market.

36:42 And it confirms for us if those guys who are developing the specialty glasses for this market also want to work in house with LPKF equipment, confirms for me that those guys want to tune their materials to the glass structuring process that they expect to be the dominant structuring process in that market. Another order we got was just from a university, which happens very much on the front of research and development in glass structuring. So it's another confirmation. If those guys order LPKF, it shows they work with what is now considered a little bit as the as a go to partner when you buy equipment.

37:30 I hope that answers your question, Lucas. And please forgive me. There aren't that many specialty glassmakers in the world. I cannot give you more details. Okay. And then second question is regarding GV's. You also mentioned this in your presentation. I try to avoid names, but I think due to this the description, you will know which players. I mean, we saw two announcements in July. One, beginning of July between a Korean player and a Japanese player for class four. This targeted production in the second half of twenty twenty seven and another JV announcement in mid of July between a Japanese and a Korean player for commercialization of t JV class substrate, also with planned mass production next year. And then also this Japanese player has a production or partnership with a big US semiconductor player. So how do you see these developments, and can you share any insights from your perspective to this?

38:38 I see these developments as absolute par for the course in our expectation of the market. The first players have reached the right maturity to now announce ramp ups, forms a joint ventures, capitalize them, and begin to issue CapEx to the supply base. And without, of course, mentioning any names, that's exactly where we are positioned and are now working, negotiating, winning deals to show our investors we are the ones who also are there for operations. And again, Lucas, I clearly see this is only the start. There are many more players out there who have a great business model but are not yet at the stage to say, can push the ramp up button.

39:30 Mhmm. Okay. And then last question on the guidance. On the revenue side, you need at least 68,500,000 of revenue in the second half of the year. Orders on hand were now at 34.7 at the end of June. So can you share your assumptions how you want to reach the guidance and where the revenue in the second half should come from? Yes. So basically, as you know, LPKF in every year has a much stronger second half than first half. It's in the nature of our game and on CapEx cycles through the year in many of our markets. We are working, as always, with weighted funnel method to weigh our opportunities, weigh the customer needs and so on.

40:21 And what we see is that the funnel has more than sufficient opportunities to make it in the guidance. We kept the guidance broad because, you know, every year, there was some sort of crisis. Oh, you have the Ukraine war, you had COVID before, you had the tariff situation. This year, it's Iran. So we were already anticipating in our guidance, hey. The next crisis will come. There will also be the next crisis in 'twenty seven. That's a world we live in. And it will not be a walk in the park in the second half. But looking at the funnel, looking at our usual seasonality of our business and revenue, Peter and me say we can stick to our guidance.

41:10 Oh, and I could We still are anticipating one solar deal out of Asia that goes into revenue for the second half. This is not a make or break from one deal. There are several smaller opportunities on the table. But this, we need to achieve because that is something that moves the needle in a relevant way. This would be single digit or double digit, William? Single digit, but it moves the needle. Yeah. Okay. Thank you. Thank you, Lucas. The next question comes from Bastian Braach. Thank you. So my question is on the additional leader processes.

42:01 How do you view the long term potential of these? You mentioned bonding, simulation, but also CPO a little bit later. How do you see that potential relative to the core glass structuring business and the longer term revenue mix within Leader? So when maybe we can go back to our 10 slide, Bettina. So Bastian, I see the potential of the additional process step not counting CPO, but just bonding and RDL ablation as significantly lower than the actual light process step. We also target in our internal model a lower market share than for light in these process steps.

42:54 This is still a highly attractive TAM. For me, offering these process steps is not only about, hey, I need to have additional revenue opportunities. It's also very clearly about, I need to go into the market with a strategic portfolio. Then I I'm now working with the largest OEMs in the world, companies that are several orders of magnitude larger than LPKF, and I'm in. So I need to offer also their purchasing departments a whole portfolio they can fit their factories with ON and not, hey, I'm bothering having a supplier in my supplier list for one process step. It's highly important that we show we are here to stay. We are here to do more for you.

43:47 And if you have a new production line, several of the steps you can get from LPKF. So to answer your question, in short, you see it here. The TAM is a fraction of the light TAM for RDL ablation. We also target a lower market share here because it's not as, let's say, disruptively differentiating as our light tools relative to competition, but it's highly strategically relevant. We cannot be in this market sustainably for long term as a one trick pony. That's what we firmly believe. Okay. Perfect. And maybe one additional word on the CPO.

44:33 When will that be relevant? So what time line are we looking at there? So I again, when we say CPO, I mean, there are the CPO, there are architectures out there right now. What when we talk about CPO, we are really talking about using the glass core in the substrate as a light transmitting medium for the individual dies to communicate optically. And these architectures are in the r and d phase. There are a ton of different architectures out there, and we all know 90% plus will die in the r and d lab. So we are really turning it around this time. First, fully understand the market.

45:21 We have the access now through our light tools. People are talking to us, then go into a positioning phase starting from 'twenty seven. We don't expect ramp ups with this technology before 'twenty nine and no high volume before 2030, 'thirty one. This is more what's the next big thing after glass, core glass interposer and basically expanding LPKF's footprint around glass and advanced packaging. Okay. Great. Thank you very much. You're welcome, Bastian. Thank you, Mr. Braat. The next question comes from Johannes Rees. Mister Rees, can you hear me, and can you speak? Can you unmute yourself? I I have removed myself. Sorry. It was. Good morning.

46:21 Although, maybe, one or two questions to to definitely to advance packaging. First, if you said that maybe also also we we see look to this joint venture. So what, TSMC said, regarding their customers based on class of struts. They will start the production next year in the conference call in q two. They mentioned this. So customers has your customers has to start to orders as a ramp up, and you said to one the customers ready to to start to ramp up. So for it's it's not unlikely that maybe in the second half, we should see the first orders. So first orders was a ramp up of, like, in the class structure. I fully agree, mister Rice. Okay. Short answer to it.

47:08 Okay. The market very well. So, usually, I can just confirm. Okay. Thanks a lot. Maybe coming back to the question we discussed before on the total away from parts attempt. Coming back to CPO, your stock has also maybe be pushed with regarding this topic because of what co package optics also for tonic market is maybe the hottest market at semiconductor at the moment. And, ODF not included, like, even the bonding in in in this 1,700,000,000. But isn't it not too wrong that at least a co package optic market could be maybe at the same size like the TGF market longer term? Not maybe in 2030, but maybe two thousand thirty three, thousand thirty four.

47:58 Yes. I hope this is true. But, usually, when when we do a temp estimate Yep. We do it based on solid facts. And if there's so many uncertainties in the model that it can be anything from floor to ceiling, we usually say no. That's maybe a justification to get active in a market, but it's not a quantified TAM I would like to show my investor base. These numbers are solid based on production flows. We know based on markets, wafer starts, HPC that are public. For me, it's a solid analysis of a potential. I agree with you. CPO could be even bigger than that one.

48:45 We do not see yet that we can say, oh, the production flows, the architectures in that field are tangible and mature enough that we would share our modeling with a broader audience. But we will do so once these markets mature more. And I fully agree with you. Photonics, it it's logical that in the future, five years plus, the individual dies in a package will communicate optically. It's there's no way around it. But for me, which processes actually win, which architectures win, it's it's obvious. There are so many architectures out there.

49:30 It it's only a fraction can make it into the market, and that's what we are finding out right now. It's clear. But most of the arch architectures point zero are based on class of fraud and so for you have a good positioning given maybe that you're already in the TGF TGV business. Absolutely. I mean, the glass core is for me the the the medium where the light will be used to transmit and guide between the die. That's our working assumption, and many players in the market agree. And then the big question is when you go to the individual process steps that are needed to combine a TGV glass substrate with, let's say, light transmission capabilities.

50:17 Yes. We say that processes that very well fit to LPKF's capabilities and how we are also perceived by our customers, that's the guys we should talk to. That this has a very good probability, and therefore, we also say focus on this topic. That's the next thing for LPKF. Do you see sector competitors are also focusing on this, I feel, your face maybe more competitions than in the TGV business? Yes. Yes. This is a topic where others are clearly also identifying here. We see the advantage that with GlassCore and the actual laser based processing steps for the glass, we have now a very good foothold and access to our customers.

51:09 So also a party, they say, hey, we anyway work with these guys. Let's also work with them on that field. That gives us an edge here. And we have a hopefully well earned reputation about high end technology, LPKF are the guys to talk to. And if all this maybe happens, you still you think you really can handle this with your with the capacity you you have around? You mentioned it's you can easily scale, but even if maybe your your TAM is realistic and you win a very high market share and even CPO comes on top, you are able to build the capacity.

51:54 Yes. Peter and me are intensively working on that topic. For the next two years in our modeling, our current capacity, we were, of course, preparing for that, covers even the bull case. But within the course of twenty seven, we need to come to a decision. We will need to expand our capacity. How exactly do we do it? Where do we do it? That's very much on our radar because we would never ever want to get into a situation where a customer says, hey, I want a lot more than expected, and we are not capable to deliver to their needs. So yes, this is on our radar.

52:40 And within twenty seven, need to come to a conclusion. One key element, Mr. Rice, is that the the capacity increase we we we we're planning. This is not something where we need a year or two years to to set it up. It's a major task. The challenge is is to get to get the people on board and train it. This is the the the the red line, what's drive the speed of of creating additional capacity for us because we don't have an we do not have an an investment or a CapEx in intensive production. It's it's an infrastructure production, just assembling focus on assembling.

53:27 It's more the the the resources to get import. Therefore, we are highly confident to be even fast enough to make calls like this. Super. Thanks. Also, it's, a a addition. Maybe another question to the possibilities which are coming with Parasite. Any idea how big this market could be, and any idea maybe when the ramp up could really start? Is this order in the second half? You mentioned in Zola, Periscard order, is it or is it a traditional one? And any any update on on the opportunity which you see ahead of in in solar with PowerScribe? Yes. So a word on how we see the actual addressable market.

54:12 You know that tandem technology, so combining it with a silicon solar cell or even a second perovskite or cadmium telluride cell, that's the architecture that everybody is targeting. And the efficiency improvement is very significant. So we did a market model where we say, oh, if 20% of the solar capacity would add tender. So would add a perovskite layer to say we want that additional efficiency boost. We would look at a high nine figure 10 just for ascribing equipment. And that is the reason why we say, okay, this is not a market to just say, let's give up because we have a weak year, but it very much depends on the penetration rate here.

55:08 So the model still has a significant error bar, but it's high nine figure. Our best year in solar was EUR 40,000,000. It's in any case an opportunity where we say good business rationale. We want to be present in that market. On the timing, we expect, but again, we don't have all the insights, but we know a bit about our customers and where they stand. We expect ramp ups to happen in '28 for perovskites. Mhmm. Two ramp ups. I mean, prototyping lines, are quite capable, are already in the field. And our clear target is it's tough enough. 20,000,000 are missing to basically get through '26 with the solar situation.

56:01 We need volume orders that we can get into revenue already in '27, and that's what we are working towards together with our customers. Okay. Finally, for the whole company, if maybe the North side wave two will be finished, Any idea where the breakeven of the company? I know it's depend a little bit on the mix since the mix is changing a lot going forward compared to the past. But where the the breakeven point could be at a 130,140,000,000 revenues? No. No. The the the breakeven point would be much below. Not not a 130. It will be below a 120,000,000, the breakeven, for sure.

56:47 Super. Thanks a lot, and all the best. I'm looking forward for, maybe the first ramp up orders for Lite in the second half. Send me open a bottle of champagne. Yes. Thank you very much, mister Reese. Let's turn to the questions we have received in the chat. The first one is also referring to the TAM. Can you give any reference on what percentage of market share you think you could achieve of this new market TAM for 2030? Yes. Our ambition, and it's openly communicated internally, is to get 70%. I know it's a high bar we set for ourselves, but given the positioning we have, it's definitely the goal we shoot for.

57:34 It needs to be a multiple source market. It can't impossibly be that the whole industry depends on a small company from Northern Germany. So even if we wouldn't achieve the 70 and we would achieve 50, it would still be a massive new opportunity. But 70 is the target we go for. Emma Sorry. Was There's another question in the chat. Yeah. I'll just read it out. Most likely, your free cash flow will be negative this year. If you have to ramp next year, it will also be negative. Do you need new capital to finance the growth? Basically, the the the cash flow would be improved next year due to the onetime costs we have in this year.

58:24 It will be negative right now in our our elements when you when you when you see this. We have a financing till '28. What has the the gross, what we're considered? Therefore, we are today, I must say, we are financed. But, nevertheless, if the if the ramp up will be much deeper, steeper, and going up, yeah, there's a a a challenge that we that we may need additional cash flow financing, but this is a case. And for this one, we will use all opportunities and and review and look at scenarios. How can we finance this?

59:10 Okay. You you mentioned this, the the the capital increase. Is this an option? Yeah. We're doing this permanently looking at at elements in the in the market for this case. But, basically, what we have today is defined as by our our our agreement with banks and our our credits. We have all debts we have on board today. Thank you, Peter. So we have reached the end of this call, and I can't see any open questions or raised hands at the moment. If there are any further questions, please raise your hand now. And that doesn't seem to be the case at the moment. So I would like to thank you very much for joining this call, and our next regular earnings call will take place on the October 29 at the release of our q three report.

1:00:04 Thank you very much, and goodbye. Thanks a lot. Bye. Bye bye.