Q4 2022 Materialise NV Earnings Call
Speaker 2: The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 11.
Speaker 1: You.
Speaker 2: The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 11.
Speaker 3: Good day and thank you for standing by. Welcome to the Q4 2022 Materialized and V Financial Results Conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask the question during the session, you'd depress star 1-1 on your telephone. You will then hear an automated message advising your hand is raised.
Speaker 3: To withdraw your question, please press star 1 1 again. Please be advised that they's conference being recorded I would like to hand the conference over to your speaker today So are you buffering? Please go ahead
Speaker 4: Thank you, Kevin, and thank you for joining us today for Materialized Quarterly Conference Call. With us on the call, our freed von Kron, founder and chief executive officer of Materialized, Peter Lays, executive chairman, and Johann Albrecht, chief financial officer. Thank you, sir.
Speaker 4: Today's call and webcast are being accompanied by a slide presentation that reviews materializes strategic financial and operational performance for the fourth quarter in full year 2022. To access the slides, if you haven't already done so, please go to the Investor Relations section of the company's website at www.materialize.com.
Speaker 4: The earnings release that was issued earlier today can also be found on that page.
Speaker 4: Before we get started, I'd like to remind you that management may make forward-looking statements regarding the company's plans, expectations, and growth prospects among other things.
Speaker 4: These forward-looking statements are subject to known and unknown uncertainties and in risks that could cause actual results to differ materially from the expectations expressed, including competitive dynamics and industry change. Any forward-looking statements, including those related to the company's future results and activities,
Speaker 4: Represent management's estimates as of today and should not be relied upon as representing their estimates as of any subsequent date. Management describes any duty to update or revise any forward-looking statements to reflect future events or changes in expectations.
Speaker 4: A more detailed description of the risks and uncertainties and other factors that could impact the company's future business or financial results can be found in the company's most recent A-report on Form 20F filed with the SEC. Finally, management will discuss certain non-ISRS measures on today's call.
Speaker 4: A reconciliation is contained in the earnings release and at the end of the slide presentation. With that, I would now like to turn the call over to Peter. Go ahead, Peter.
Speaker 5: Thank you, Goli.
Speaker 5: and welcome to everybody on the call.
Speaker 5: Before turning to slide 4, which summarizes the highlights of our fourth quarter and our full year financial results.
Speaker 5: 420-22
Speaker 5: I would like to thank all our employees and in particular are you Kramer colleagues?
Speaker 5: for the amazing mix of perseverance and flexibility that they have shown throughout.
Speaker 5: The previous year, which was no them either.
Speaker 5: Your hand will walk you through RQ-4 results in more detail. In this introduction, I would like to focus on a few key numbers of our full year performance in 2022.
Speaker 5: and that's the macroeconomic and geopolitical total terminr pitcher in L.A.
Speaker 5: 2022
Speaker 5: Our total revenue grew by 13% from 205 to 232 million Euro.
Speaker 5: And the portability are preferred revenues from software sales, grew by more than 20% to almost 43 million euro.
Speaker 5: To my perspective, this is a solid top line performance.
Speaker 5: especially bearing in mind the difficult circumstances that resulted directly or indirectly from the war in Ukraine.
Speaker 5: In 2022, the increased costs of labour, of energy and of materials weighed heavily on our margins.
Speaker 5: In 2022, the increased costs of labour, of energy and of materials weighed heavily on our margins. Nevertheless,
Speaker 5: backed by a strong balance sheet and supported by a solid positive cash flow from operating activities of almost 25 million euros.
Speaker 5: We decided to stay to course with our growth strategy and not to compensate for these inflated costs by scaling back our R&D efforts.
Speaker 5: Obviously, this impacted our adjusted EBDA, which decreased from 32.5 million euro to 19 million in 2022.
Speaker 5: We are convinced that this was the right choice.
Speaker 5: And that we will see the first positive results of this decision as early as in 2023.
Speaker 5: When we expect both our revenues and our adjusted EBDA to grow robustly.
Speaker 5: I will come back to that in more detail when we discuss 2023 guidance towards the end of the scope.
Speaker 5: But now I would like to pass the floor to fit.
Speaker 5: who will walk you through some of the key operational achievements of our company in 2022, all of which we believe will form the basis for profitable growth going forward and coming as early as this year.
Speaker 5: li?my ooh ???
Speaker 5: Thank you Peter.
Speaker 5: Good morning or good afternoon to all of you listening to this call.
Speaker 5: or good afternoon to all of you listening to this call. Please turn to slide 5.
Speaker 5: Even with some serious challenges such as the war in Ukraine and its consequences on World Trade materialized kept consistently posting double digit growth in 2022.
Speaker 5: Despite the inflationary pressure, we kept investing heavily in a sustainable future through capacity expansion in our three segments and high R&D efforts.
Speaker 5: As we had planned at the beginning of the year.
Speaker 5: We expect these efforts.
Speaker 5: to result in sustained double-digit revenue growth and even substantially faster EBITDA growth in 23.
Speaker 5: while also reducing our climate impact.
Speaker 5: Let me review this in more detail.
Speaker 5: Materialized software went through a major makeover in 2022.
Speaker 5: We started a year with acquisition of Link 3D, which enabled the full integration of the Link 3D cloud-based MES platform and the legacy code base of a range of leading materialized software packages for AM.
Speaker 5: including the flagship Magix. Only 5 months into the year at Rapid we announced and demonstrated the CoEM platform that enables materialized manufacturing and medical and which also enables our software customers to integrate and automate.
Speaker 5: The AM manufacturing lines better.
Speaker 5: manufacturing lines better. In Q3,
Speaker 5: We took a note of significant step with the acquisition of Identify 3D.
Speaker 5: Identify 3D has a proven software toolkit that has been field tested by companies and government organizations to allow distributed, secure, additive manufacturing operations and supply chains.
Speaker 5: Its tools and teams will ensure that GoEM is the most secure operation system for AM production environments.
Speaker 5: And top of that
Speaker 5: The new Korean platform also accelerates the possibility to develop new software applications.
Speaker 5: Not only for materialize itself, but also for third-party developers that want to enhance Enelce as episode era developers can implement all ceiling?u to By
Speaker 5: This was demonstrated by the integration of 10 third-party applications on CoEM at Formnext 2022.
Speaker 5: Despite a war in Ukraine that severely disrupted our development activities, we delivered our cloud-based OpenCoEM platform in operational status in 22.
Speaker 5: This major achievement did come at a price however.
Speaker 5: The combination of extra expenses we incurred to attract additional talent and to continue to support our workforce in Ukraine, the high inflation on global scale and the rest of the country resulting from the integration of our existing sales and development teams.
Speaker 5: with the new LITRID and Identify-TID teams significantly impacted the bottom line of materialized software.
Speaker 5: Hence the decline of software historically healthy EBITDA.
Speaker 5: Love you.
Speaker 5: particularly in the last quarter.
Speaker 5: While the development work on our COEM platform will continue in 23, we are confident that the extensive efforts of 22 will result in a gradual and sustainable increase of our sales and EBITDA.
Speaker 5: Starting as of 23.
Speaker 5: and this due to the more scalable recurring licenses of the Koyim applications.
Speaker 5: Materialized manufacturing posted a spectacle of 16% internal growth in 22 on a business that reached 103.5 million euro.
Speaker 5: We kept combined our existing reliable and profitable rapid prototyping activities with continuously growing certified manufacturing.
Speaker 5: in selected vertical segments such as aerospace, medtech, alternative drive systems and wearables.
Speaker 5: Our additive manufacturing activities earned a net promoter score of 70.
Speaker 5: from their customers in 22.
Speaker 5: This is an extremely high mark in any industry.
Speaker 5: It also demonstrates that we have a customer base that is willing to trust us for future work in a world with increasing AM application opportunities.
Speaker 5: Blast your
Speaker 5: We made investments required to scale further the most meaningful manufacturing applications.
Speaker 5: We are more than doubling the plant size of arse étège in a second facility.
Speaker 5: where we can grow our capacity to support the new engine and traction systems for more sustainable energy sources.
Speaker 5: such as hydrogen in the yeast bowl.
Speaker 5: We launched a completely new materialized foot can suite for materialized motion in U3.
Speaker 5: The new fits plus insol line that enables better performing medical grade insoles as already hit the market.
Speaker 5: Our efforts to introduce new material within the IWAR market were once again recognized with two silmodeur awards in Paris, which can be considered the Oscars of the IWAR industry.
Speaker 5: Our new fitting app in iOS for custom frames was developed and launched at 100...
Speaker 5: optical stores
Speaker 5: Finally, we prepare for the launch of a completely new online sales platform in 23, in the God-Ellative Manufacturing Activity.
Speaker 5: Despite inflationary cost pressures, materialized manufacturing increased its EBITDA 31% on the strength of the diligent execution of our investment plans in more capacity and in more new profit.
Speaker 5: We are confident that the investments we have made in 22 from a solid base
Speaker 5: for further growth in materialized manufacturing, revenue and EBITDA in 2023.
Speaker 5: Meteer Lice Medical also consistently maintained its double-digit revenue growth rate at 16%.
Speaker 5: And it is forced to be the second materialized segment to exceed 100 million euro in revenue.
Speaker 5: At a sales level, the annual growth was even 20%.
Speaker 5: Reflecting a substantial increase of the third revenues, especially thanks to the 29% growth on the medical software sales.
Speaker 5: The biggest investment of materialized medical in 22 involves the installation and validation and will completely new production line for implants in the U.S.
Speaker 5: This line will become operational mid 23.
Speaker 5: In addition, materialized medical also made a considerable investment in new products.
Speaker 5: Our service to planning platforms are systematically being extended from the world station-based mimics engine light framework to cloud-based mimics platforms.
Speaker 5: that combine the benefits of our global clinical engineering services with an increased use of AI-based automation.
Speaker 5: At the start of 23, we were able to launch a new planning tool, Memmix and LightLung, that helps surgeons save long loops for patients with lung cancer.
Speaker 5: Despite the disruptive nature of the war in Ukraine, our global clinical engineering service teams did not miss a single surgery.
Speaker 5: due to capacity constraints.
Speaker 5: However,
Speaker 5: We could not prevent a combination of inflation, water-related costs, and our continued investment for the future from slightly reducing medical sebeda compared to last year.
Speaker 5: Also, for materialized medical, we believe that the investments we continue to make in the U.S. form a solid organization for revenue and EBITDA growth in 2023.
Speaker 5: At the staff level, we continued our investment for an aggregate amount of 6.9 million euro.
Speaker 5: in a new digital backbone that we began rolling out at the start of 2023.
Speaker 5: While we will still have transitions related to cost in 23 due to this rollout, we will start realising the first savings.
Speaker 5: of the improved system in our operations.
Speaker 5: This completes my discussion about our strategic advances in 22 and the plans for 23.
Speaker 5: complete my discussion about our strategic advances in 22 and the plans for 23. Please
Speaker 5: Turn to side six.
Speaker 5: During 22, materialized made substantial progress in enabling this choice for sustainability by AM to many companies around the world.
Speaker 5: We reduce stock levels by printing on the mount.
Speaker 5: Our systems helped reduce transportation by printing delocalized.
Speaker 5: We help reduce material use by printing first time right and personalize.
Speaker 5: in both our own production and the customer side.
Speaker 5: We are confident we will scale the benefits further.
Speaker 5: or while ensuring the reliable, the pitiful quality that the end customer expects.
Speaker 5: Materialized enables companies to rethink products and solutions in a way that reduces their impact on the environment.
Speaker 5: while increasing people's health and comfort.
Speaker 5: This can be achieved by using our software for production optimization or our manufacturing services.
Speaker 5: in eco-friendly materialized materials and processes.
Speaker 5: such as blue print.
Speaker 5: And we are not shy about measuring our results according to stringent standards.
Speaker 5: In 2022, we reduced our carbon footprint by more than 40% compared to our reference years of 2019.
Speaker 5: This indicates that we are well on the way to reaching our sustainability target of 50% production by 2025.
Speaker 5: indicates that we are well on the way to reaching our sustainability target of 50% carbon reduction by 2025 and now I bother to you.
Speaker 5: Thank you, Frit. I begin with a brief review of a consolidated revenue onsite server.
Speaker 5: As a reminder, please note that unless otherwise stated, I will review fourth quarter and full year results to compare the affiliates in 2021.
Speaker 5: For the quarter of revenue increased 10% to 62.7 million euros.
Speaker 5: Our software segments decreased focus on materialized medical increased 17 and revenue in manufacturing rose by 11%.
Speaker 5: For the quota materialized software, count it for 19% of a total revenue, materialized medical for 139 and materialized manufacturing for 42%.
Speaker 5: For a full year, revenue grew 27 million euro or 12.9% to 232 million.
Speaker 5: The 7.6 million euro increase of the third revenue from software license had made in the series compared to December 2021 and the scores shown licenseeers' performance of software and medical segment.
Speaker 5: Cross segment revenue from software products represented 27% of our total revenue for the quarter and 25% for the full year.
Speaker 5: Moving to slide 8, you will see a consolidated adjusted EBITDA numbers for the fourth quarter. Consolidated EBITDA, amounted to 4,258,000 euro, compared to the 0.5 million procu4 last year.
Speaker 5: Even a margin was 6.8% compared to 18.4% last year.
Speaker 5: Four years EBITDA was 19 million Euro in 2022 compared to 32.5 million in 2021.
Speaker 5: If it is a margin for the full year, reach 8.2% compared to 15.8% last year.
Speaker 5: I just have to EBITDA reflected the negative effects from the investments in our new businesses the Sling 3D and identify 3D, labor costs and inflation.
Speaker 5: Shred 9 summarizes the results of the two lines of your statement.
Speaker 5: Q4 software sales increased 90% due to the by 29% growth of the current sales from double 10 and that remote access to the current sales fall under 15 bones over emo, 14 million in total, and then 200 million extra-day.
Speaker 5: Over the few years, it has caused license renewal rates of more than 90 percent.
Speaker 5: underscoring the value of our software products to our clients.
Speaker 5: On the current sales decrease this quarter as we notice weaknesses in the markets' equipment sales.
As a reminder, we expect that perpetual sales will suddenly switch to a cloud and subscription subscription-based agreements with a temporary negative impact on revenue growth in the short term.
Software revenue decreased 4% to 11 million 690,000 euros, and was impacted negatively by 3.7 million euros in deferred CAD.
Even though it increased to a negative amount of $141,000 euro, it was impacted by the accelerated R&D investments in a new co-earned business, which in Q4 also includes the expenditures of Identify City.
And also by the effect of non-recurrent restructuring expenditures resulting from the consolidation of materialized and the link to the unidentified CD development and sales teams and a rise of capitalized expenditures. Moving now to slide 10, you will see that the quarters
The revenue from the medical software accounted for 31% of the second revenue.
Adjust the divider amount to 6.4 within euro, flat compared to last year.
I've given a margin decrease to a still respectable 26% as a result of a combination of various factors including a different sales mix, increased R&D and regulatory cost and inflation.
Now, the service line 11 for the low review of the Q4 performance upon the TLSL and the TRG Sport Eye.
Whether you also increase this gorgeous with double digits, by 11th sound to 26.8 million Euro.
The group was driven by M-PARTs manufacturing, which rose 23%. And are an AC-deck business that grew 20%.
Adjust the data for the quarter group to 1.5 million euro and either the margin was 5.6% compared to 4.1% last year.
Slight 12 provides the high-rise of our income statement for the 4th quarter and the full year 2022. For the 4th quarter, gross profit margin was 56.9% compared to 58.3.
For the full year this margin was 55,5%.
Operating expenses increased 28.3% compared to last year's quarter.
Executing our strategy, our executing our strategy, research and development expenses increased 67% compared to last year. Our sales and marketing spending increased 29%. GNA expenditure decreased 1%. Let other operating income
was 593,000 euro compared to 1.3 million last year. This quarter included 672,000 euro in payment costs related to capitalized development expenditure, image-elect software.
As it is out of these elements, the group's operating result was negative 1,550,000 euro compared to a profit of 4,976,000 in last year's period.
For the full year the operating result was negative 2,872,000 euro compared to a profit of 12.2 million.
of the fold and
3,436,000 euros, and included a currency exchange loss of 3.4 million euros. Mainly, unrealize and deflecting the change you were selling in Euro position on digital company positions.
This quarter interest income from our cash position offset the interest expense over that.
Incontext, income amounted to 402,000 euro compared to an income tax expense of 490,000 euro last year. This quarter included a different tax asset of 912,000 euro.
Net loss for the fourth quarter was 4,580,000 euros compared to a net profit of 4.8 million for the 2021 period.
For a four year, net loss was 2.2 million euro resulting in a four euro sum per share from a net profit of 13.1 million euro or 23 euro sum per share.
Now press start the slide 13 for the recap of bottom sheet and cash flow highlights.
In the fourth quarter of 2022, a balance sheet remains strong, has decreased to 140.8 million per liturant from 196 million or December 31 last year.
reflecting the acquisition of Link 3D and Identify 3D and borrowing CBU version of 18 million euro which is reduced at up to 81 million euro.
Casual from operating activities for a full year amounted to 24.7 million euro compared to 25.8 million last year.
Capital expenditure for the quarter amounted to 5.0 million euro and 24.8 million for the year and were not financed. Peter?
As an expenditure for the quarter amount to 5.3 million euro and 24.8 million for the year I would not finance. Peter. Thank you. You're home.
It's turn to page 14 for financial output.
Encouraged by our strong sales results in 2022.
and building on our continued investments in our existing and new business.
We believe that in 2023, we will post yet another solid top line growth of more than 10%.
with revenues totaling between 265 and 260 million euro.
Like last year materialized medical and materialized manufacturing in that order are expected to be the key contributors to our growth. We also expect the status of materialized software to grow.
but anticipate that as a result of our gradual switch to subscription based model.
The sales growth will not be fully reflected in our revenues in 2023.
Assuming that inflation stabilizes in 2023, our continued sales growth will gradually result in a stronger adjusted A-B-Dow.
If we currently anticipate, we'll grow by more than 30 percent, totaling between 25 and 30 million Euro and 2023.
with positive contributions from materialized medical.
materialized manufacturing and materialized software in that order.
Unfortunately, like last year, we must note that the developments in Ukraine will likely impact the European and global economy, as well as the important services that we source from our courageous workforce in Kiev.
Unfortunately, like last year, we must note that the developments in Ukraine will likely impact the European and global economy, as well as the important services that we source from our courageous workforce in Kiev. Thank you very much.
which cannot currently be predicted could have a significant effect on our results for 2023.
And on this note, operator, I would like to open the floor now for questions.
Thank you ladies and gentlemen if you have a question or a comment at this time please press star 11 on your touchdown telephone if your question has been answered you wish to be yourself from the queue please press star 11 again we'll pause for a moment while we compile our Q&A roster
Our first question comes from Gary Jensen with Lick Street Capital. Your line is open.
Hey, gentlemen, congrats on my results.
results. Thank you, Troy.
Hey, I guess in one of you guys, I saw during, I think it was Jonas' presentation that N-parts were up 22.6% year over year. Have you guys disclosed what percent of...
The manufacturing business is in parts, or what percent of total sales.
I guess the care more of what percent of manufacturing is in parts versus prototypes. One second, for me, to give you some curious numbers in there. Thank you.
It represents the unparted manufacturing at this moment represents almost 30% of the manufacturing segment revenue.
30% manufacturing is in purchasing.
And go ahead. Couple of times. Yeah. ACZ, which is not an important manufacturing.
And there are some different types of different types. A.C.Dec, which is not an important manufacturing.
All right, perfect. It's good to note how big that is. How about guys? And also just on margins, you know, obviously we've seen kind of gross margins come down slightly just because of a lot of growth in software. But when we're predicting that again for 23. So it's like you guys were at 55.5% for a gross margins for 22. We expect that to see stable one lower.
to start from the direction of the growth margin line. Yes, probably we expect them to improve the material because of the combination of two effects. We hope that the rise of our material costs.
due to inflation will stop.
And on the other hand, indeed, our product makes...
should again show an increased amount of software. Although I want to remain cautious there, because in the revenue mix, the growth as better indicated,
of software will not be as big yet as in the sales, due to the fact that we have to defer a lot of our sales of recurring licenses.
Got it. All right, one last question for me guys. This is on OPEC, I'm sure you did approach it that I addressed it on the prepared remarks, but I get that there was inflation, but it seemed like there was inflation all last year and you guys did a good job of managing the big OPEC's jump ups.
But something happened in the fourth quarter here, where we saw just a real big material increase. Was that truly all just inflation here? In the fourth quarter, we had a big increase in material costs.
in the fourth quarter here, which I just saw a real big material increase. Was that truly all just inflation theater? Yeah, in the fourth quarter we had a big increase in material costs.
I think some of the contracts we had were fixed prices for most of the year, but we were under influence of inflation especially at the end of the year because then they expired.
We also had in, or that already started in Q3, right? Where we had labor cost inflation has been applied in food, especially in Belgium. And that affected us on Q3, but also the full affecting Q4.
And while the annual adjustments in some partner sales agreements could only be adjusted to the beginning of a new year, we didn't have that effect in Q4 already. So that is the delay effect that we have.
Okay, so then going forward guys, should we think of the effects lines just growing slightly on on an absolute basis throughout this year?
Sounds like you're not going to try to cut back spending. We're going to continue to kind of stay on plan for the investment. So just kind of grow them slightly sequentially each quarter? Yeah. Yeah. I mean, there was a significant increase in particular in R&D, but as
also because of the acquisitions of identified 3D and link 3D breath. So mostly another up to take like that coming in 20-20 degrees so it will be a gradual.
a much more gradual increase, but we do not plan to cut back. And the increasing EBITDA margin will come from a stronger increase of our revenues. Understood guys, good luck going forward here.
gradual increase but we do not let you put back. And the increasing EBITDA March will come from a stronger increase or continue the increase of our revenues. All right, understood guys, good better let them put down here. Yeah?
One moment for our next question. Our next question comes from Noel Dils with STIHL. Your line is open.
Hi guys, thanks for taking my question. First, I was just wondering if you, hi, good morning. I was just hoping you could maybe walk through just how you're thinking, I know you talked about this directionally a bit, but maybe if you could just discuss in a little bit more detail how you're thinking about segment margins as we go into 23.
I guess specifically on software, I just want to make sure we're all thinking about, you know, how to think about where margins are going in 23, and then also, you know, how you're thinking about the longer term, the longer term cadence there.
Specifically on software, I just want to make sure we're all thinking about how to think about where margins are going in 23 and then also how you're thinking about the longer term, the longer term cadence there. Thank you. Um.
Well, we had to, I mean, the margins of our software segment obviously were very bad in 2022. Again, because of the significant investment we did there, including the acquisitions of Identify 3D and DING 3D, we do expect these margins.
to become positive again in...
in 2023. So there will be a good growth of the margins within software or be it that they will not come back to the 35% plus that we have seen in...
2023 so there will be there will be a good growth of the margins within software or be it that they will not come back to the 35% plus that we have seen in 2021.
However, in the longer term, 24, 25, we do expect to return back to the, let's say,
So, we have margins we had in the past. Does the delay effect that we have effectively from the switch of perpetual licenses to cloud and forgot to subscrive to increments and where on the first place the
The individual prices are not as high as they've been when you sell perpetual licenses. And then the second item is the technical one is where you cannot have the full revenue recognition as from the beginning. But there's one that it starts and it's growing. We have a kind of a snowball effect that we can count on.
in the years to go, but not yet, in 23 to the same extent. Okay. I'm sorry. Yeah. Well, you just took the Martin Profile of the other two statements. Medical has a, has a, um,
has a very solid margin which, relatively speaking, did not increase much in 2022 compared to 2021. We see some potential to grow the margin there in 2023 for medical.
very solid margin, which from relatively speaking did not increase much in 2022 compared to 2021. We see some potential to grow the margin there in 2023 for medical and also for manufacturing.
We expect that the margin will grow to a double digit level.
Okay, thank you. That's very helpful. And then I was just hoping you could expand a little bit just on the level of engagement and interest that you're seeing with the CoAM platform, just how that sort of trended relative to your expectations and how you're seeing that sort of as you look out to next year translate.
into just more sales and growth. Thank you. Well, we have really seen Korean enthusiastically accepted in the market.
And in the middle of the year we could only talk about the, let's say, opinion we hear of several customers. But by the end of the year we could say real orders. And yeah, we...
We recently announced that QuickParts, one of the biggest AM service providers in the world, has fully switched to core AM in all of its activities.
And that's demonstrating that go-m is really a tool that is enabling the bigger players to scale. Secondly, I'm very proud on the achievement of our team that in less than a year's time they could start the implementation of the product in such a way.
Very helpful. Thank you.
Thank you.
Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 11 on your touch tone telephone.
Any other questions? Please press Star 11 on your touchtone telephone. We'll pause for a moment for our next question.
Our next question comes from Alexander Kirmush with Kepler. Your line is open. Yes, hello. Do you hear me? Alexander, we hear you perfectly. I'm just wondering, so you expect an adjuster to be dealt with of 25 to 30 million for
and what do your customers are thinking at the moment? So, because I mean, a lot of your customers are related to CapEx budgets. So what are their CapEx budgets going into 2023? And maybe as a last question, I have several more, but maybe as a last question, what would be the current usage rate of the AC tech existing machinery as you're expanding that plant?
but it would be interesting to know what the current usage or capacity rate at the moment. Thank you for taking those questions.
Alexander, I will take your first question on the Ividar guidance as I already hinted at during the prepared remarks. A growth of the margin of the three segments will contribute to the 25 to 30. And I will take your first question on the Ividar guidance as I already hinted at during the prepared remarks.
I mean absolute numbers, medical open-to-beast most.
Then we see an increasing margin for manufacturing contributing seconds.
Then we see an increasing margin for manufacturing contributing seconds.
Third software rebounding but not yet to the level of 35% plus where there will be in a couple of years but still rebounding to double digit margins will be the third contributor to this growing EBITDA margin. Now what can make us over perform?
Two things. If we further overperform on review, that should with expanding margins, that should have positive impact on our EBDA. That would be excellent news.
And second, possibly not so good news, if we do not find the right talent to continue our investment programmes, because we will expand our margins and continue to invest as well, if we do not find the talent and cannot accelerate our R&D as much as we still want to in 2023, then that may have a positive impact on our margins for 2023, but we definitely will not be managing.
I'll just repeat the question maybe. It's just to wonder what your customers are thinking at the moment. So how their capex budgets are going into 2023? Yeah, well I think in most cases I want to say that we are not in the capex budgets but rather in the opex budgets. That's one of the consequences of our growing shifts towards cloud-based platforms.
We see in the market that...
There is uncertainty.
and people fear that the year 23 could still be a difficult year.
We can say we are rather optimistic because we believe we are in a large number of applications that are really very much on the rise even in difficult economic circumstances.
And then finally, with respect to your question on the capacity utilization of Actage.
That is really very high at a moment. Yeah, 85% and maybe even higher, which means that there is very little room on the existing capacity.
But that's exactly why we have started earlier last year, the expansion and during the...
the remainder of this year, we expect extra machinery to come in in order to increase the capacity. In the meantime, we also have some subcontracting opportunities to support
growth on very short notice.
I'm sure not. Thank you for that. I'll leave the floor to my colleagues. Thank you.
And I'm not showing any further questions at the time. Let's turn the call back over to Peter.
Thank you, operator, and thank you all for participating in the call today. As always, we look forward to continuing our dialogue with you, be it in one-on-one discussions or at any investor conference that we will be attending in the coming weeks and months.
Thank you again for joining and we wish all of you a good day.
and we wish all of you a good day. Goodbye.
Good bye. Good bye. Good bye. Ladies and gentlemen, so that's the conclusion of today's presentation. You may now just connect and have a wonderful day.