Half Year 2026 Kontron AG Earnings Call
Speaker #1: Ladies and gentlemen, we warmly welcome you to the H1 2026 earnings call of the Kontron Agi. I am pleased to welcome Kontron CEO Hannah Sederhausen and CFO Klemens Belek, who will guide us through the presentation shortly.
Speaker #1: After which we will move on to Q&A session via audio line. And with that said, I'm handing over to you, Mr. Belek.
Speaker #2: Hello, and a warm welcome from my side. Let me guide you through the most recent results and company highlights of Q2 2026. We're at significant growth in key markets in Q2, especially in defense, with around 32%.
Speaker #2: Software grew with 16% and also transportation grew with above 10%, around 11%. We achieved an adjusted EBITDA of 55 million. If we compare it to the Q2 2025 figure, it's a growth of 20% of like-for-like basis, and it's also 20% if you compare it to Q1 2026.
Speaker #2: The backlog increased further, with a very strong book-to-bill ratio of 155, implying a growth of 55% year over year on our books. And we ended the second quarter with a record backlog of around 2.8 billion.
Speaker #2: Worth mentioning is also that we got our first EU OEM as a customer for our 5G network access devices, so it's a major it's a big sleep forward.
Speaker #2: In our perspective, for our 5G network access devices. And we had also worth mentioning another contract, first contract for cyber resilience, worth around 20 million in the first half of this year.
Speaker #2: With regards to the green tech restructuring, we expect savings of more than 30 million now on an annual basis, starting from 2027 onwards. We've made a big leap towards achieving our goal of reducing our staff in the green tech division by 500 FTEs.
Speaker #2: We have already concluded contracts layoff contracts or laid people off, total amount of FTEs who left the company within that framework of the restructuring program is 424 as we stand now.
Speaker #2: So we are quite confident we will achieve our goal of 500 people out of the 900 people in that business area. Defense, that business segment is much into the spotlight in 2026.
Speaker #1: The concluded complex layoff contracts, or laid-off people, total amount of FTEs who left the company within that framework of the restructuring program is 424 as we stand now.
Speaker #1: Therefore, activities. Therefore, on on an adjusted basis, we an adjusted basis, we had 372 million had 372 million of revenues in of revenues in Q2, implying a moderate growth Q2, implying a moderate growth to the 373 million to the 373 million in the second quarter this in the second quarter this year.
Speaker #2: In 2026, we'll be it will be the first year we'll have more than 200 million of revenues significant growth, obviously expected in that specific area of business, also going forward.
Speaker #1: So we're quite confident we'll achieve our goal of 500 people out of the 900 people in that business area. Defense: that business segment is much in the spotlight in 2026.
Speaker #1: If we compare year. If we compare those 373 million those 372 million of billed revenues in the second of built revenue in the second quarter to the 580 million quarter to the 580 million of of booked focused orders, orders, with the implied with the implied book book-to-bill ratio of 155, it's an continuation contract devices an enormous growth in enormous that specific growth, specific metric.
Speaker #2: And last but not least, demandatory tender offer period has ended, around 19% of the shares have been initially tendered now. We'll see what is the final result.
Speaker #1: In 2026, we'll be— it will be the first year we'll have more than $200 million of revenues. Significant growth, obviously expected in that specific area of business.
Speaker #2: Enercon will not have a majority after the tender offer that's clear. The collaboration will nevertheless be much stronger. We expect significant synergies going forward and expect synergies of around 40 million to materialize in the coming years.
Speaker #1: Also, going forward—and last but not least—the mandatory tender offer period has ended. Around 19% of the shares have been initially tendered now.
Speaker #1: In defense and software, in particular, also—particularly with 5G network access devices—513 devices will be contributing going forward to that. Gross forward.
Speaker #1: We'll see what the final result is. Enercon will not have a majority after the tender offer—that's clear. The collaboration will nevertheless be much stronger; we expect significant synergies going forward, and expect synergies of around €40 million to materialize in the coming years.
Speaker #2: Let's have a look at the major KPIs for the second quarter. Revenues were at 396 million. In Q1 Q2 2025, but obviously with the consolidated decomp business and we have sold our Bulgarian and Hungarian IT service activities.
Speaker #1: At the gross profit margin of 42.6%. So, that's despite the lower revenue pace. The growth target is slightly topped up; we managed to get 6.2% more growth target. Gross profit now stands at €159 million.
Speaker #2: Therefore, on adjusted basis, we had 372 million of revenues in Q2, implying a moderate growth to the 373 million in the second quarter this year.
Speaker #1: Let's have a look at the major KPIs for the second quarter. Revenues were at 396 million in Q1, Q2, Obviously 2025, but obviously with the consolidated account business, it's always obvious that and we've sold our we've sold out Bulgarian and Hungarian IT service Bulgarian and Italian IT services activities.
Speaker #1: slowly but Slowly but steadily. And I think in Q2 we surely. And I think in Q2 we'll made a further progress in that meet a further target at that area.
Speaker #2: If we compare those 373 million of billed revenues in the second quarter to the 580 million of booked orders, with the implied book-to-bill ratio of 155, it's an enormous growth in that specific metric.
Speaker #1: EBITDA-wise, point. EBITDA-wise, well, well, we reported EBITDA of we reported EBITDA of 98 million, but as you're 98 million, but as you're aware, we have deconsolidated the aware, we've been consolidating to comp business in the second quarter.
Speaker #1: So that comp business in the second quarter, so that has a significant has a significant impact, obviously. impact obviously, operationally. We had achieved Operational: we had an EBITDA of around 46 an EBITDA of around 46 million, compared to our million, compared to reported EBITDA of 47, gross profit EBITDA of 47, but but we had restructuring charges, we had not reached our significant restructuring charges also in significant profit charges base in the second quarter.
Speaker #2: So we have now booked orders of 518 the second quarter alone. We stand at book-to-bill of 155. That was obviously impacted in particular by transportation, but also by defense and software.
Speaker #1: the second quarter. Adjusted by Adjusted for that, we have 55 that, we're 555 million implying a gross of million implying a growth of 20%.
Speaker #2: In particular, also 5G network access devices will contribute going forward to that. Growth profit, despite the lower revenue base, growth profit slightly jumped up.
Speaker #1: Same 20%. Same picture with regards to the net picture with the net result. We had result: we had reported 69 million of net reported 69 million of net result in the second quarter result in the second quarter last year, but heavily last year, but heavily impacted impacted by the comp by the comp business consolidation.
Speaker #1: metric. So we have now booked orders So we have now focused orders of of 518 in the second 518 in the second quarter alone, with standard quarter alone.
Speaker #1: We spent booking a total of 155. That was obviously 165. That will obviously be affected, impacted in particular by the particular financial transportation, but also by interpretation, but also by defense and software.
Speaker #2: We managed to get 6.2% more growth profit growth profit now stands at 159 million. At the gross growth profit margin of 42.6%. So that's actually quite high, also historically.
Speaker #1: Gross profit: Despite the lower revenue base, gross profit slightly increased. We managed to achieve 6.2% more gross profit; gross profit now stands at €159 million.
Speaker #2: We are moving towards a higher 40 level there, slowly but steadily. And I think in Q2 we made a further progress in that area.
Speaker #1: Operating cash were there. Operating net flow was growth was obviously heavily impacted obviously heavily impacted by the supply chain crisis, the chip by the supply chain prices crisis.
Speaker #1: We had 14 crisis, with 14 million positive last year, now million positive last year. Now we had minus 5, we're minus 5 million. I have to mention that we million.
Speaker #2: EBITDA-wise, well, we reported EBITDA of 98 million, but as you're aware, we have deconsolidated decomp business in the second quarter. So that has a significant that had a significant impact obviously.
Speaker #1: At the gross profit margin of 14.6%, so that's actually quite high, also actually quite high, also historically. We are moving—historically, we're moving towards a higher 40 level there, higher 40 level there.
Speaker #2: Operationally, we had achieved an EBITDA of around 46 million, compared to our reported EBITDA of 47, but we had restructuring charges significant restructuring charges also in the second quarter.
Speaker #2: Adjusted by that, we have 555 million implying a growth of 20%. Same picture with regards to the net result. We had reported 69 million of net result in the second quarter last year, but heavily impacted by the comp business.
Speaker #2: Deconsolidation adjusted by that, it would have been 28 million operationally. Compared to the 21 million reported, or 28 million adjusted by the restructuring charges, we are more or less at the same level as we were last year.
Speaker #2: Operating cash flow was obviously heavily impacted by the supply chain crisis, the chip crisis. We had 14 million positive last year. Now we had minus 5 million.
Speaker #1: business. The consolidation Adjusted by that, we could have adjusted by that, it would have been 28 million been 28 million operationally. Compared to operational.
Speaker #1: Compared to the 21 million the 21 million reported, or 28 reported, or 21 million adjusted by the restructuring charges, million adjusted by the restructuring last we are more or less at the same level as we were level as we last year.
Speaker #2: I have to mention that we have not adjusted EBITDA on net result by the delinquent backlog, which is actually the backbone or the reason for that for that operating cash flow being slightly negative.
Speaker #2: Please bear in mind it was also negative in most second half first half in the in the last years, implying the seasonality of the business.
Speaker #1: I have to mention that we have not adjusted EBITDA on net have not adjusted EBITDA on that result by the delinquent result by the net network, which is network, which is actually the backbone or the reason for actually probably the reason for that operating that operating cash cash flow being slightly flow being slightly negative.
Speaker #2: Let's also have a look at the pool H1 figures. For 2026, revenues of 781 adjusted by the deconsolidated comp business, we had 729. That's a very moderate plus, but more or less same level like we have reported.
Speaker #1: Please negative. Please bear in mind it was bear in mind it was also negative in most also negative in most second second half, first half, the first half in the last half in the last years, years, implying the seasonality of the implying a seasonality.
Speaker #1: business. Let's also have a look at the Let's also have a look at the full H1 two H1 figures. For figures. For 2026, revenues of 2026, revenues of 781, adjusted by the 781, adjusted by the deconsolidated comp business, we consolidated comp business, we had had 729.
Speaker #2: Which is around 737 million for the first six months of this year. Order entry 992, also very strong book-to-bill ratio of 133 over the entire period first half of this year.
Speaker #1: That's a 789. That's a very moderate plus, very moderate, but more or less same—plus more or less same level, like we have, level like the net reported.
Speaker #2: Gross profit slightly down. We were strong in Q2, obviously we're in most metrics strong in Q2 than we were in Q Q1. Gross profit was at 311 million.
Speaker #1: Which is reported which is around around 737 million for the 737 million. For the first 6 months of this year. Order first 6 months of this year.
Speaker #2: EBITDA reported 146 if we deduct the again the impact of the comp business. Deconsolidation we get to 91 versus the reported 84 million EBITDA adjusted by the restructuring charges, we were at 101 million for the first half of this year, implying a growth of around 11%.
Speaker #2: Net result, here we have pretty much the same picture with an adjusted EPS growth of 3.7% and the same picture with regards to the operating cash flow we already saw in Q2 was for the full first half of this year, 16 million plus last year, minus 14 million this year in the first half.
Speaker #2: Let's briefly look at the key balance sheet metrics. Well, equity was slightly up from 746 million at year end to 749 million. Equity ratio you see is pretty much unchanged at 41.7%.
Speaker #1: Net 11%. Net result: here we have pretty result, here we have pretty much the same picture with an much the same picture with an adjusted EPS growth of adjusted EBITDA growth of 3.7%.
Speaker #1: And the same 3.7%. And the same picture with regards to the operating cash flow. With €2,000 operating net, we already saw in Q2 that growth in Q2 was, for the full first half of this year, 4.2% here.
Speaker #2: No total net debt and working capital was heavily impacted by the supply chain crisis and the build-up. You see that especially in the inventories inventory was built up by 47 million, and that impacted also net debt and working capital.
Speaker #1: Let's briefly half. Let's briefly look at look at the key balance sheet the key balance sheet metrics. Well, equity was slightly metrics. Well, actually, it was slightly up from up from 746 million at 746 million at year end year-end to 749 to 749 million.
Speaker #2: So the working capital development and the total net debt development is impacted by the supply chain disruptions we expect significantly lower inventory at year end.
Speaker #1: Equity ratio you see is pretty million. Equity ratio was pretty much unchanged at much unchanged, 41.7%. 41.7%. Total net debt and working capital was Note that net net working capital was heavily impacted by the supply chain heavily impacted by the supply chain complexity built up.
Speaker #1: Equity ratio you see is pretty million. Equity ratio was pretty much unchanged at much unchanged, 41.7%. 41.7%. Total net debt and working capital was Note that net net working capital was heavily impacted by the supply chain heavily impacted by the supply chain crisis and the build-up.
Speaker #2: Also due to the help of Foxconn and Enercon. And we have a strict inventory management in place in order to lower our exposure in that area.
Speaker #1: You see that especially in the inventories, actually inventory inventory inventory was built up by 47 was built up to 47 million, and that impacted million, and that also also net debt and working capital.
Speaker #1: Over the end entry period, 992, also very strong, 992. Over a very good book-to-bill ratio, short continuation of one—that is, 1.33 over the entire reasonable period, first half of the year.
Speaker #2: Also in view of the current supply chain crisis. Let's look at some of the additional disclosures. To give you more color on that for the first half of this year, just to explain what impacted the revenues in the first half last year and why we deducted it.
Speaker #1: So the net net working capital. So the working working capital development and the total capital development was also net debt net net developed development is impacted by the supply chain is impacted by the supply chain disruptions, we expect significantly structure.
Speaker #1: First half of this year. Gross this year, gross profit: slightly down. We profit slightly down. We were strong in Q2, were strong in Q2, obviously obviously we were in most metrics strong in we're strong in Q2, Q2, then we were in that we were in Q1.
Speaker #1: Q1. Gross Gross profit was at 311 million. profit was 311. EBITDA EBITDA reported 146, reported 146, which if we deduct the, again, we deduct the.
Speaker #1: And we have strict nanoparts, and we have significant inventory management in place and inventory reduction in place in order to lower our exposure in that, because of the lower exposure that we are at.
Speaker #2: Well, the deconsolidation of the comp business amounted to 39 million, and the sold IP service units in Bulgaria and Hungary amounted for 13 million.
Speaker #1: Also, in view of the current realizations and improvements in the supply chain due to the current crisis, let's look at some of the pricing. Let's look at some of the additional disclosures to give you more color on that.
Speaker #1: Again, the impact of the comp the impact of the comp business deconsolidation, we get to business deconsolidation is 91, versus the 91 versus the reported reported 84 million 84 million EBITDA adjusted by EBITDA adjusted by the restructuring charges, we the restructuring charges.
Speaker #2: So that's why we were able to have a moderate growth of around 1.1% on the back of the adjusted figures. If we adjust by green tech, so you see on on the right hand side of that chart, the green tech actually declined quite sharply from 70 million to 45 million.
Speaker #1: We were were at 101 at 101 million. For million for the first half of this year, implying a the first half of this year, implying a growth gross of around of around 11%.
Speaker #2: In the first half of this year, adjusted by that, we had an organic growth of 5%. I already mentioned that we have not adjusted by delinquent backlog.
Speaker #1: So, €13 million. So that's why we were able—that's how we were able—to have a moderate gross, to have a moderate growth of around 1.1% on the back of the adjusted 1% figures.
Speaker #1: 16 16 million plus last million last last year, minus 14 year, minus 14 million this year in the first million this year, the first half.
Speaker #2: Delinquent backlog, so the orders which were actually due but could not have been shipped due to chip shortage. Increased further from 33 million after the end of the first quarter to around 50 million at the end of the second quarter.
Speaker #1: If we adjust by green previously—if we adjust by the green tax—you can see on the text, you can see on the right-hand side of that chart, the green right-hand side.
Speaker #2: But we expect that to not go significantly up from that level due to the measures we have taken. Some more color on the EBITDA.
Speaker #2: Reported EBITDA was 84 million, but we had restructuring charges for restructuring the green tech business for around 17 million. Adjusted by that, we have we had an adjusted EBITDA of 101 million euros.
Speaker #1: quarter. But we expect But we expect that to not go significantly that to not grow significantly up from that level due to the after that number due to the measures we have matter we have taken.
Speaker #1: We expect significantly lower inventory. At lower inventory at year-end, also due to the help—also due to the health of Foxconn and of oxygen Enercon.
Speaker #2: Status of our liquidity. We have 172 million cash on hand. There are still 142 million of available lines. And we expect we still expect the 126 million additional inflow from the comp business deconsolidation.
Speaker #2: As already announced. Let's have a broader look at the KPI development over the last two years. You see that while we have divested around 60 million of revenues from entities we have divested, we are we're catching up.
Speaker #1: million. Adjusted by that, Adjusted by that, we had an adjusted we had an adjusted EBITDA EBITDA of 101 million of 101 million euros. Status of our gross.
Speaker #1: disclosures. To give you a more color on that, for the For the first half of this first half of this year, year, just to explain what just to explain what impacted the revenues in impacted the gravity in the first half last year and why we the first half last year and why we deducted it, well, the deconsolidation of the captured it, let's do consolidation of the comp comp business amounted business at the amount of to 39 million, and the 139 million, and the sold IP service sold 19 units in Bulgaria and Hungary amounted service for guarantory amount of for 13 million.
Speaker #2: We have now at 7037 million again at the end of the second half. First half of 2021, the gross margin is up above the level we had previously.
Speaker #1: Let's announced. Let's have have a broader look at a broader look at the the KPI development over the KPI development over the last last 2 few years.
Speaker #1: You see years. You see that while we have that while we have a range of divested around 60 million around 60 million of revenues from of revenue from entities we have entities we have divested, we are invested, we are catching up.
Speaker #2: It's now at 42.2. If we take the isolated Q2 2026 alone, it would have been already at 42.6% actually. And we expect further improvement based on the growth to come on the further growth to come from the soft and service revenues.
Speaker #1: That chart with green tech tax actually declined equities is quite quite sharply from 70 million sharp, 17 million to to 45 million. In the first 45 million.
Speaker #1: We have now caught up with our €737 million again at the end—€737 million again at the end of the second half.
Speaker #1: In the first half half of this year. of this year, adjusted Adjusted by that, with an by net with an organic organic growth of growth of 5%.
Speaker #1: First half of second half, first half of 2021, the gross 2021, the gross margin is margin is up above the level we had up above the level we had previously.
Speaker #2: EBITDA EBITDA was on adjusted basis at 101 million. See a steady increase. Ongoing improvements. Although the H1 2026 EBITDA was impacted by the restructuring charges of 17 million.
Speaker #1: I 5%. I already mentioned that we have not already mentioned that we had profit adjusted by delinquent charges by net working network, backlog. Delinquent backlog, so selling to a network through the the orders which were actually due orders which were actually due but could not have been shipped due but could not be shipped due to chip to chip shortage, increased further from shortage.
Speaker #1: It's now at previously. It's now at 42.2. If we take the 14.2. If we take the isolated isolated Q2 Q2, 2026 2026 alone, it would have been already alone has been already at 42.6%, 42.6% actually.
Speaker #1: Increased further from 33 million after the end of the first 36 million after the end of the first quarter to around 50 million at the quarter to around 50 million at the end end of the second of the second quarter.
Speaker #1: actually. And we expect further And we expect further improvement based on improvement based on the the gross on the further gross growth that come on the further growth from to come from the software and service the software and service metrics.
Speaker #2: Net profit same picture. We are now at 49 million. Slightly above what we have achieved last year. Equity ratio is consistently above 40%. That's actually our target.
Speaker #1: revenues. EBITDA: EBITDA was, on EBITDA was on the adjusted basis, at 101 basis of 101 million. See a steady million. See a steady increase.
Speaker #1: taken. Some Some more color on the more columns EBITDA. EBITDA. Reported EBITDA Reported EBITDA was was 84 million, but we had 54 million, but we had restructuring charges, restructuring charges for and so restructuring the green restructuring tax tech business business for around 17 for around 70 million.
Speaker #1: Ongoing increase ongoing improvements. Although improvement. Although the the H1 H1 2026 EBITDA was impacted by 2026 is more impacted by the the restructuring charges of 17 restructuring charges million.
Speaker #2: We had been below that significantly below that in 2024 and 25 and just got over 40% at year end 25 and going to stay there on that level.
Speaker #1: Net than net profit: same picture. profit. Same picture, we're We are now at 49 now at 49 million. Slightly million. Slightly above what we have above what we have achieved achieved last year.
Speaker #2: Working capital slightly up due to the supply chain crisis, but still significantly below and below below the level we had in 2024. We don't expect to get to that to get back to that level actually.
Speaker #1: Status of liquidity: we have availability. We have €117.172 million cash on hand. There are €1 million net in hand. There’s still €142 million of available, €642 million of available lines.
Speaker #1: Equity last year. Equity ratio is consistently ratio is consistent with the last above 40%. That's actually our 6% that we got targeted. target. We had been below We had a bit that significantly below lower significantly lower than that in 2024, and in 2024 and 2025, and just got over 2025, and just got over 50% 40% at year-end 2025 and going to in 2025 and stayed stay there on that level.
Speaker #1: lines. And if And we expect we still expect the we expect to still expect 126 million additional 126 million additional input from inflow from the comp business the comp business deconsolidation, as already consolidation as already announced.
Speaker #2: So we're going to stay and rather further reduce the working capital and especially the inventory. Operating cash flow. Well, it's seasonally weak. Q1 is and Q2 is always seasonally weak.
Speaker #1: Working up. Working capital slightly up due to the capital slightly up due to the supply chain supply chain crisis, but still significantly crisis, but still significantly below lower in below the level we had in below the number that is moving 2024.
Speaker #2: It was better last year. This year it was burdened by the supply chain crisis, but we expect still 100 million of operating cash flow by year end a positive obviously.
Speaker #1: We don't expect to in 2024. We don't expect to get back to that level, to get back to that number, actually.
Speaker #1: So we're going to stay— we're going to stay and rather further and rather hold, and reduce the working capital and reduced working capital rate, especially the— especially the inventory.
Speaker #2: On the personnel side, FDEs we are now for the first time below 6,400. We we're going to see a a slight further decline on that level.
Speaker #1: inventory. Operating cash flow: well, Operating cash flow, well, it's it's seasonally weak. Q1 seasonally weak. Q1 is and Q2 is always seasonally is Q2 is also seasonally weak.
Speaker #1: It was better weak. It was better last year. This year it was last year. This year it was burdened by the supply worse than the supply chain chain crisis, but we expect crisis, but we expect still still 100 million of 100 million operating cash operating cash flow by flow by year end, a year-end positive, positive process.
Speaker #2: But we have made a huge leap towards achieving our goal of reducing the 500 person in green tech already. The net debt situation well pretty much unchanged to last year, but you likely going to see a further decline as we still expect the cash inflow from the comp business deconsolidation.
Speaker #1: obviously. On On the the personnel side, personnel FTEs, we are side, we're now for the first time below now for the first time below 6,400.
Speaker #1: 6,400. We're going to We're going to see a see a slight further decline of that slight smooth line on the level. But we have made a level.
Speaker #2: Let's have a look at the backlog development. The backlog now stands at 2.8 billion. Almost 2.8 billion. A very strong improvement especially in Q2 obviously.
Speaker #1: The network. The net net debt debt situation is situation: well, pretty much unchanged well pretty much unchanged to to last year, but we'll likely going last year, but we likely to see a further won't see a further decline as we still expect decline as we still expect cash to catch inflow from inflow from the the comp business comp deconsolidation.
Speaker #2: Design wins. You you see a a small hike from what you see a hike not so small is actually from 8 billion to 7.6 billion.
Speaker #1: Let's have a look at consolidation. Let's look at the backlog the backlog development. The development. The backlog now backlog now stands stands at 2.8 at 2.6 billion.
Speaker #2: That is because of the comp business deconsolidation. What the the customers which were transferred to Conga Tech in the course of the transfer of the business.
Speaker #1: Almost 2.8 million. Almost 2.8 billion. A very million. A very strong improvement, especially in strong improvement expected in Q2, obviously. Design Q2. Design, wins: you see a small hike you see a small hike from what you see a hike, not so from what you see a hike not so strong small, actually actually, from 8 billion to from 8 billion to 7.6 76 billion.
Speaker #2: But it's growing again. It's now at 7.6 billion. If we look at the coverage for 2026, you see that we still have an open backlog of 875 million.
Speaker #1: billion. That is because of the comp That is because of the comp business business deconsolidation, consolidation. What the what the customers which customers which were transferred were to conquer to Concatec, the course of this, the course of the the transfer business.
Speaker #2: The revenues for the first half amounted to 737 million. So total 1.6 billion. We have a coverage of 100% already. Despite the fact that we have delinquent backlog of 50 million.
Speaker #1: business. But it's growing again. It's now at But it's from the end, 7.6 billion. 7.6 billion. If we look If we look at the coverage for at coverage 2026, you see that we 2026, you see that we still still have an open backlog have backlog of of 875 875 million.
Speaker #2: We had delinquent backlog of 50 million at the end of the second quarter. Looking at what actually impacted our strong backlog growth. Well, we we got the first customer in 5G network access devices in Europe.
Speaker #1: The revenues million. The revenue for the first half amounted to first half amounted to 737 million. So 747 million from total total 1.6 billion.
Speaker #2: European OEM will be equipped with our 5G network access devices. We won several contracts 100 million contract with a major European railway rail company.
Speaker #1: We have a coverage 1.6 billion. We have a coverage of of 100% 6% already, despite already, despite the fact that we have delinquent the fact that we have 7% backlog backlog of 50 million.
Speaker #1: We had a delinquent backlog of $50 million at the end and a net backlog of $60 million at the end of the second quarter.
Speaker #1: We have made a huge leap toward achieving our reduced input, keeping our goal of reducing the 500-person target in green—500 million in green tech already.
Speaker #2: And one smaller but quite important contract for Portuguese railways. It's Portuguese railways traditionally always was part of the Nokia Nokia part of the business.
Speaker #1: devices. We won several We want to contracts amongst 100 million expect 100 million contract with contracts with a major European a major railway rail railway company company.
Speaker #2: So Nokia lost that part and it was actually awarded to Contram. And we also got some further rail modernization project in Belgium and we secured the first 20 million cyber security contract already in Q2.
Speaker #2: With that, I'm handing over now to my colleague Hannes.
Speaker #1: So Nokia lost business. Last that part, and it was actually awarded network and it was actually rewarded to Contron. to contract. And we also got some And we also got some further further rail modernization projects in rate Belgium.
Speaker #1: Good morning also from my side. I will give you more on the tech delay and business side some backup. What you see here it is the the segments what we are currently having.
Speaker #1: And we development and we secured the secured the first 20 million first 20 million cyber cybersecurity contract security contracts already in already. With Q2.
Speaker #1: With that, I'm handing over. Can we go now to my colleague, to my colleague Hannes?
Speaker #2: Good
Speaker #1: I say content would be in a very good shape. If we would be only in our software and solution segment which is growing strongly even 30% the defense transportation and software cyber solutions also in double digit growth.
Speaker #1: Unfortunately we also suffering some reduction in the green tech business in the solar and e-mobility business which is down 36%. It is quarter already from a low level but still down.
Speaker #1: Looking at the quarter, looking at what actually impacted our strong, actual invested dollars backlog from growth—well, growth: We got the first customer in, half amount, 5% network 5G that would access equity price devices in Europe. A European OEM will be equipped with our 5G network access in Europe.
Speaker #1: That gives us the standard growth rates what we have. On the long run we invest currently two third of our business in software and solutions.
Speaker #1: And we expect to have up to 70% of our profitability out of the segment the next four years. Talking into the two different areas smart IoT the the bigger segment is where we come from.
Speaker #1: and And one smaller, one smaller but but quite important contract quite important contract with for Portuguese railways, Portuguese railways. Portuguese Portuguese railways traditionally railways traditionally always was part of operate most part of the Nokia part of the Europe business.
Speaker #2: Already, it's quarter already from a low level, but still, the level is still down. That gives us down-to-standard suspended growth rates with the growth rate we have.
Speaker #2: In the end, on the long, long run, we invest — currently, two-thirds of our business is in investment software and solutions, and we further expect to have up to 70% of our profitability out of those segments in the next four to seven years.
Speaker #1: We put some energy there also to reduce lower margin business with with gross margins below 20%. We don't do that anymore. And that that's an additional business where we are in since more than 10 years.
Speaker #1: Talking
Speaker #1: into two different
Speaker #1: areas, smart
Speaker #1: IoT,
Speaker #1: One development where we increase on our let's call it standard product and get the USBs we are in the process to include our cyber resilience act compatible security software in all of that products by definition starting 27.
Speaker #1: Tom?
Speaker #1: The biggest segment is where we come from. We put some energy there also to
Speaker #2: Good morning, also from my side. I will give morning. I will give you more on the tech delay and business side some backup. What you see you what you see here is the segments that here.
Speaker #1: We reduce lower margin business with gross margins below 20%. We don't do that anymore.
Speaker #1: And that's an additional
Speaker #1: No critically mission critically applications are allowed to be shipped in European Union without a a car compatible concept. And Compton in this area is the first one in in the world market that we do that.
Speaker #1: business where we have been for more than 10 years.
Speaker #1: One, development where
Speaker #1: We increase our, let's call it,
Speaker #1: spinner product and get the USBs. We are in the
Speaker #2: The way we are currently having, I say, the Compton segment, I would say, would be in very good shape. If—very big if—we would be only in our, beyond software and service segment, which the segment is growing strongly, growing even 30% in defense.
Speaker #1: process to include our cyber
Speaker #1: resilience app compatible
Speaker #1: security software
Speaker #1: About the supply chain which covers mainly the smart IoT business. Well you heard that everywhere. Particular high-end memories DDR4 DDR5 flash chips as well as Intel CPUs and and some big or strong CPUs are on our location.
Speaker #1: in all of that product.
Speaker #1: By definition, starting '27, no critical mission-critical applications are...
Speaker #2: further Transportation and software cyber solutions also in transportation growth. Unfortunately, we unfortunately also suffering some sufferings and in reduction green tech business the green tech in the solar and business e-mobility business, which and which is is down down it 36% in this quarter.
Speaker #1: allowed to be shipped in the European
Speaker #1: Union, without a car-compatible concept,
Speaker #1: Compton in this area is the first one in the world market that would do it.
Speaker #1: that. About the supply
Speaker #1: It's driven by the AI demand some memories increased prices by by huge portions and yes it's hard for us to get those and the price issue we are not worried because we can afford the price increases also to our customers.
Speaker #1: chain, which covers
Speaker #1: mainly the smart IoT
Speaker #1: Business—well, you heard that everywhere. In particular,
Speaker #1: high-end memories, DDR4, DDR5, flash
Speaker #1: chips, as well as Intel CPUs, and big or strong
Speaker #1: But if you don't have the chips you cannot ship. We have 54 million of scheduled orders and just to to to answer we our target is to answer questions at the end of that meeting but I had one question before from one gentleman Mr. Tobias Talis.
Speaker #1: CPUs are on our location. It's driven by the
Speaker #1: AI demand.
Speaker #1: Some memories
Speaker #2: years.
Speaker #1: increase prices
Speaker #1: by huge portions. And
Speaker #2: Talking
Speaker #2: the
Speaker #1: yes, it's hard for us
Speaker #1: to get those, and the price issue we are not worried about, because we
Speaker #2: smart
Speaker #1: can afford the price increases also to our customers.
Speaker #2: the also
Speaker #1: But if we don't have the
Speaker #1: Who said he's disappointed and said now quickly but the other questions we do afterwards. The 54 million of deliquent backlog what we have we expect that crisis to get even more tougher on our hand.
Speaker #1: chips, you cannot ship. We
Speaker #2: reduce
Speaker #1: have 54 million of
Speaker #1: scheduled orders,
Speaker #1: and just to
Speaker #1: Our target is to answer questions at the end of that meeting, but I had
Speaker #2: and that the
Speaker #2: additional one
Speaker #1: one question before.
Speaker #2: development of
Speaker #1: From one
Speaker #1: gentleman who said he
Speaker #1: We increased our cooperation a lot with Foxconn the ultimate investor in Compton. And starting in two months we will be part of the PLS program from Foxconn that we have access to their supply chain and their parts which will help us to get that higher and better to get a better supplier.
Speaker #2: increase
Speaker #2: our we
Speaker #2: are
Speaker #1: disappointed in that. Now, quickly, but the other questions we do afterwards. The
Speaker #2: our competitive security
Speaker #2: software in
Speaker #1: $54 million of delinquent backlog, what we
Speaker #2: all of the
Speaker #2: products
Speaker #1: have, we expect
Speaker #1: that crisis to get
Speaker #2: mission
Speaker #1: even more
Speaker #1: tougher on our hand.
Speaker #2: without
Speaker #1: We
Speaker #1: So my thinking is the supply chain crisis will be not relieved in the second half of the year it will become probably even worse but on the Compton side I see maybe to to hold it stable or even decrease it because we will have access to all the parts of Foxconn.
Speaker #1: increased our cooperation a lot with Foxconn, the ultimate investment.
Speaker #2: and do
Speaker #1: company, and starting
Speaker #2: that
Speaker #1: In two months, we will be part of the PLS program from Foxconn that we
Speaker #2: which covers
Speaker #2: mainly the business.
Speaker #1: have access to their supply chain and
Speaker #2: Well, but we have a high end.
Speaker #1: to their parts, which will help.
Speaker #2: model as well
Speaker #1: us to get that higher, and
Speaker #1: In two or three months from now. And this 54 million in our forecast it's not included it's a chance to get better if we ship it.
Speaker #1: ...better to get a better supplier.
Speaker #2: as big
Speaker #1: So my thinking is, the supply...
Speaker #1: chain crisis will be
Speaker #2: strong it's driven
Speaker #1: not relieved in the second half of the
Speaker #1: year. It will become
Speaker #2: by
Speaker #1: probably even worse. But on
Speaker #2: demand
Speaker #1: And if we ship it the impact would be around 60% of that material is in. So it would be a 30 million of cash flow.
Speaker #1: the Compton side, I
Speaker #1: see maybe to
Speaker #2: pricing by
Speaker #2: huge and
Speaker #1: hold it stable, or even increase
Speaker #1: it because we will have
Speaker #2: yet it's hard
Speaker #1: access to other parts of Foxconn.
Speaker #2: to because
Speaker #1: Then the other input is profitability which in that order is around 10 to 12% of EBITDA. And obviously 50 million of more revenues. But my best guess is we are quite happy if we can reduce it somehow because at the end on the world market as it is crisis even to increase.
Speaker #1: In two or three months from now.
Speaker #1: And this 54
Speaker #2: forward
Speaker #1: million. In our forecast, it's not included; it's a
Speaker #2: but if you don't
Speaker #2: have we have
Speaker #1: chance to get better if we ship.
Speaker #2: 54 million
Speaker #1: it. And
Speaker #2: scheduled
Speaker #1: If we ship it, the impact would be...
Speaker #2: and
Speaker #1: Around 60% of that material is in, so it would be €30 million of cash flow. Then the other...
Speaker #2: we but I have
Speaker #1: Talking about the miracle is also in that segment but all the the tariffs of Mr. Trump never turned out to be as serious than it looked at the beginning.
Speaker #1: input is
Speaker #2: question before
Speaker #2: from who
Speaker #1: profitability, which in that order is
Speaker #1: around 10 to 12% of
Speaker #1: EPA. And obviously, €50 million of
Speaker #2: said is
Speaker #1: more
Speaker #1: revenues. But my best guess
Speaker #2: this the
Speaker #1: we are quite happy if we
Speaker #1: We never had really big tariff payments to ship there. We are prepared. We have local factories. In the USA as well in Canada for NAFTA.
Speaker #1: can reduce it somehow, because at the end of the
Speaker #2: 54
Speaker #1: World market, as it is, crisis even to increase.
Speaker #2: we expect
Speaker #2: that
Speaker #1: Talking about the Americas, also in that segment, but all...
Speaker #2: crisis more on
Speaker #2: our end
Speaker #1: And we even are ITA approved. So we we don't see any risk for that. We are considered local. On the long run it's one of our strategic target to increase USA significantly because that's simply a region with higher growth than Europe and we have a great technology so we have to utilize it over the global markets.
Speaker #2: we
Speaker #1: the tariffs of
Speaker #2: increase
Speaker #1: Mr. Trump never turned out to
Speaker #1: be as serious
Speaker #1: than it looked at the beginning. We never had
Speaker #2: and starting in two
Speaker #1: really
Speaker #2: months
Speaker #1: big tariff payments shipped there. We are
Speaker #1: prepared. We have local
Speaker #2: excess supply
Speaker #1: factories. In the USA, as well as Canada, for NAFTA. And we
Speaker #2: chain which will help
Speaker #2: get the higher and
Speaker #2: better supplier so my
Speaker #1: The same target for with America software and solutions is already the strongest EBITDA contributor will be the biggest one in 2030 and keep in mind we started that segment in 2020 when we were listening to our customers who said they want to have more market specific products.
Speaker #1: even are ITA approved, so we don't see any...
Speaker #2: thinking is the supply chain
Speaker #2: crisis not
Speaker #1: local. On the long run,
Speaker #2: release the second half of the year.
Speaker #2: it will become probably even
Speaker #1: It's not about a strategic target to...
Speaker #2: better but on the contrary
Speaker #1: increase USA significantly, because that's simply a region.
Speaker #2: side see
Speaker #2: make to hold it
Speaker #1: with higher growth than Europe
Speaker #2: stable increase it
Speaker #1: and with great technology, so we
Speaker #2: because we
Speaker #2: have
Speaker #1: have to utilize it over the global markets. The same target
Speaker #2: in
Speaker #2: and this 54
Speaker #1: for with
Speaker #2: million not
Speaker #1: America. Software and solutions is already the
Speaker #1: And and solve certain regulation and certification and specification areas for them. So the segment consists of IoT technology specialized on vertical markets. We are covering three areas.
Speaker #2: and get better if
Speaker #2: we and
Speaker #2: if around
Speaker #1: The strongest contributor will be the biggest one in 2030.
Speaker #2: 60% and the other
Speaker #1: And if you don't mind, we started that segment in 2020, when we—
Speaker #1: One is defense. The other is high-speed trains and train infrastructure and the third is security systems. Also this area was burdened by by Green Deck because 25 Green Deck was part of the segment which we dissolved.
Speaker #2: is
Speaker #1: We're listening to our customers, who said they want to have more...
Speaker #2: profitability around 10 to
Speaker #1: market-specific
Speaker #2: 12%
Speaker #1: products. And solve
Speaker #2: and
Speaker #2: obviously
Speaker #1: certain regulation and
Speaker #1: Certification and specification areas for them.
Speaker #2: but my we
Speaker #2: are quite
Speaker #2: happy
Speaker #1: So, the segment consists of IoT technologies, specialized in vertical markets. We are covering three areas: one is
Speaker #1: There's still some things overleft. More than half of our engineers working in that areas. The 3,000 engineers 2,000 engineers work in software and solutions.
Speaker #2: because talking
Speaker #1: defense, the other is high-speed
Speaker #2: about but all the
Speaker #1: trains and train infrastructure, and the third is security.
Speaker #2: the tariffs
Speaker #1: systems. Also,
Speaker #2: Trump
Speaker #2: never
Speaker #1: EBITDA margin is 17%. Could be even higher once 26 is over and Green Deck is is is less. We have a significant software share in that area.
Speaker #1: this area was burdened by Greendeck.
Speaker #2: serious we
Speaker #1: Because 25, GreenDeck was part of the segment, which we—
Speaker #2: never big
Speaker #1: dissolved. There's still some things
Speaker #2: tariff we
Speaker #1: overlapped. More than
Speaker #2: have factories in the
Speaker #1: See ourselves a technology leader. Chip crisis is not important. We had just yesterday a management meeting on the transportation business. Well if a system costs one one station or one one server farm costs 30,000 euro and the price increases 100 euro nobody cares.
Speaker #2: US
Speaker #1: Half of our engineers are working in that area—the 3,000 engineers. Two thousand engineers work...
Speaker #2: and any
Speaker #1: in software and
Speaker #1: solutions. EBITDA margin is 17%. Could be even higher once '26 is over and GreenDeck is
Speaker #2: that we risk for that, considered—consider on
Speaker #2: The long—it's one of our
Speaker #2: strategic
Speaker #1: We have a significant software share in that area. CRSL for technology leader. Chip crisis.
Speaker #2: USA
Speaker #2: because we
Speaker #1: It's like AI. We are in that business and that's a crucial statement. Most of this revenues happen in Europe. We have a leading technology which is worldwide leading but we ship it in only in Europe which is the slowest growing area of the world.
Speaker #2: have a
Speaker #2: great the
Speaker #1: is not important. We have just
Speaker #2: same America
Speaker #1: Yesterday, there was a meeting on the transportation business. Well,
Speaker #1: If a system costs one station, or one server farm costs...
Speaker #2: software is
Speaker #1: 30,000 euro,
Speaker #2: already in 2030
Speaker #1: So we started in this first six month to expand to other areas. We won the train line in Egypt from Aswan to Alexandria. Together with our partner Siemens.
Speaker #1: And the price increases by €100—nobody cares. It's like AI.
Speaker #2: and
Speaker #1: We are in that business, and
Speaker #2: 2020
Speaker #1: that's a crucial
Speaker #1: statement. Most of this
Speaker #1: Revenue is happening in Europe. We have a
Speaker #2: big
Speaker #2: product
Speaker #1: We are currently in process of winning in India. A project with our partner in Siemens. And we won a project with our train in Thailand.
Speaker #1: leading technology, which is
Speaker #2: and
Speaker #1: Worldwide leading, but we ship it.
Speaker #2: certification
Speaker #1: In only Europe, which is the slowest?
Speaker #1: growing area of the world.
Speaker #2: so. One
Speaker #1: So we started in
Speaker #1: So our real target is now to expand to to the global areas with software and solutions. If we talk about security it's the same thing.
Speaker #1: this last six months
Speaker #1: to expand to
Speaker #1: other areas. We
Speaker #2: is high
Speaker #1: won the train line in
Speaker #2: school
Speaker #1: Egypt from Aswan
Speaker #1: to Alexandria.
Speaker #2: security also
Speaker #1: Together with our partner
Speaker #1: There's a high interest particular by our ultimate shareholders in our cyber security software. And and there we see very good chances in the Asian rim.
Speaker #1: Siemens, we are currently in the process of winning.
Speaker #2: this
Speaker #1: in India. The project with
Speaker #1: Our partner Siemens and we won.
Speaker #2: because
Speaker #1: the project with our train in
Speaker #1: Thailand. So
Speaker #1: our real target is now
Speaker #2: there's
Speaker #2: still more
Speaker #1: to
Speaker #1: And defense is a bit tricky. We clearly have to decide and and Compton only sells to NATO countries. So that's America and Europe nothing else.
Speaker #1: expand to the global
Speaker #2: than so
Speaker #1: areas with software and
Speaker #1: solutions. If we talk
Speaker #1: About security, it's the same thing. There's a
Speaker #2: after a
Speaker #1: high interest particular by
Speaker #1: By 2030 that should be 30% 75% of our profitability. Talking about some words on cyber security here you see that anyway first half year we had 16% of growth.
Speaker #1: our ultimate shareholders in
Speaker #2: big
Speaker #1: our cybersecurity
Speaker #1: software. And there
Speaker #1: We see very good chances in the Asian rim, and defense is a bit tricky. We...
Speaker #2: less
Speaker #1: We clearly have to decide and count on only sales to NATO countries.
Speaker #2: chip we had
Speaker #1: So that's America and Europe, nothing else. By 2030, that should be 30%, 75%.
Speaker #1: Also in EBITDA we are in a process to integrate it on all products. That's the target. There's certain products where we we are very successful already.
Speaker #2: just
Speaker #2: well
Speaker #1: of our profitability.
Speaker #2: 30,000 and the
Speaker #1: For example all the aeroplanes the 6,000 aeroplanes were we are supplying our flight service they have already car and KOS included. Also in let's say more cheap products where windows would be too expensive they're using car and and our software the Compton OS that's for example in elevators everything what is some modules so very small and and inexpensive embedded computers with a price of of 100 to 200 euro there KOS is in.
Speaker #2: pricing we
Speaker #1: Talking about some words on cybersecurity here—you see it anyway.
Speaker #1: First half year, we
Speaker #1: had 16% of growth,
Speaker #2: are in that business
Speaker #1: also in EBITDA. We are in the
Speaker #2: a
Speaker #2: crucial most of the revenues
Speaker #2: in Europe we have a
Speaker #1: process
Speaker #1: to integrate it in all
Speaker #2: technology which
Speaker #2: is but we
Speaker #1: products as the target. There are certain products where
Speaker #2: should
Speaker #1: We were very successful already. For example, all...
Speaker #2: area so we
Speaker #2: started in this first six
Speaker #1: the aeroplanes, the
Speaker #2: months
Speaker #2: to expand to other
Speaker #1: 6,000 aeroplanes
Speaker #1: were we
Speaker #2: areas we want
Speaker #1: are supplying our flight servers. They
Speaker #2: the train
Speaker #2: line to
Speaker #1: have already car
Speaker #2: Alexandria to
Speaker #2: gather so. We
Speaker #1: and KOS
Speaker #1: included. Also
Speaker #2: are in
Speaker #2: India the
Speaker #1: in, let's say, more
Speaker #2: project and we want
Speaker #1: cheap products, we are
Speaker #2: to train island
Speaker #1: Windows would be too expensive. They're using car.
Speaker #1: In our security boxes it's in all the wall boxes what we have it's in. And now also in all the validators. So we do fare collection systems in our our train area.
Speaker #2: so our
Speaker #1: And our software, the Compton OS—that's for
Speaker #2: real
Speaker #2: technology expands
Speaker #2: to global area with
Speaker #1: example, in an elevators.
Speaker #2: software solution if
Speaker #1: Everything what is some
Speaker #1: modules, so very small
Speaker #2: we talk about
Speaker #1: and inexpensive,
Speaker #2: security there's a
Speaker #1: And this fare collection systems is is run by KOS. Because it should be secure. So what we see is step by step more and more applications going into car.
Speaker #1: embedded computers with
Speaker #2: high
Speaker #2: particular in our
Speaker #1: price of 100 to 200
Speaker #1: euro. They're
Speaker #2: cyber
Speaker #2: security
Speaker #1: KOS to see. Our security
Speaker #2: and
Speaker #1: Box, as it's seen, all the
Speaker #1: The other front we are let's say shortly before convincing Enercon and the Foxconn world to to use more car. There is also some blue chip customers of of Foxconn Enercon who are interested in car.
Speaker #1: wall boxes, what they have, it's
Speaker #1: in. And now also in
Speaker #1: all the validators. So we do fare collection systems in our train area. Fare...
Speaker #2: really so that's
Speaker #2: America
Speaker #1: Collection systems is run by KOS, because it should be.
Speaker #1: secure. So
Speaker #1: I see we are enlarging our base for sales on on the car software quite a lot. We're multiplicating with with other companies. Like Foxconn like Enercon and also CongoTech where we sold last year some modules will go that direction.
Speaker #1: What we see is step by step.
Speaker #2: about talking
Speaker #1: step, more and more
Speaker #1: applications going into
Speaker #1: car. The other front, we
Speaker #1: are let's say
Speaker #2: about first
Speaker #1: shortly before convincing Enercon and the Foxconn world
Speaker #2: half
Speaker #1: to use more
Speaker #1: car. There is also
Speaker #2: 60% growth
Speaker #2: also
Speaker #1: We hope it will become a de facto standard. Defense had the highest growth last year or the last six month. More than 30%. And we are keeping getting strong orders all the time.
Speaker #1: some blue chip customers of
Speaker #1: Foxconn, Enercon who
Speaker #2: we
Speaker #1: are interested in car.
Speaker #2: integrate all
Speaker #1: I see we are
Speaker #2: products where we have
Speaker #1: enlarging our base
Speaker #1: for sales on the cars after.
Speaker #2: various all
Speaker #1: quite a lot. We're
Speaker #1: multiplicating with other
Speaker #1: companies like Foxconn, like
Speaker #2: the 6,000
Speaker #1: Enercon, and also CongoTech, where we sold last year some.
Speaker #2: aeroplanes
Speaker #2: we are
Speaker #1: Because the backlog increased by 30 million by shipping 80. So that's a book to build quite quite high. What is our strength there? Well we came with VPX high speed and very high encrypted secure communication system.
Speaker #1: modules, will go that direction.
Speaker #2: supplying they have
Speaker #1: We hope it will become a de facto standard.
Speaker #2: already
Speaker #2: car
Speaker #2: included
Speaker #2: also cheap
Speaker #2: product where
Speaker #1: Defense had the highest growth
Speaker #2: Windows
Speaker #1: last year or the last six
Speaker #2: and that's for example
Speaker #1: 30%. And we are keeping
Speaker #1: Meanwhile we qualified free factories of Compton Canada USA and also one in European Union and Slovenia. To be compliant to AS 9100. This is a standard let's say very complex because the armies are very picky.
Speaker #2: elevator everything
Speaker #2: was some modules
Speaker #2: very small
Speaker #1: increased by $30 million, by shipping
Speaker #2: inexpensive
Speaker #2: embedded prices
Speaker #1: 80, so that's a book to build.
Speaker #1: quite high. What is our
Speaker #2: 100 to 200
Speaker #1: strength there? Well, we came
Speaker #2: there
Speaker #2: us now security
Speaker #1: with
Speaker #1: VPX, high-speed and very
Speaker #2: parts all
Speaker #2: the we have
Speaker #1: high-encrypted secure
Speaker #2: and
Speaker #1: How their products are produced. They want to supervise it. Can be every minute that somebody from the army comes in and checks what we do.
Speaker #1: Meanwhile, we qualified three factories for Compton Canada,
Speaker #2: validation and this
Speaker #1: USA, and also one in the European Union and Slovenia.
Speaker #2: vehicle because
Speaker #1: So we are in forefront of that and I believe there's not a lot of AS 9100 factories especially in Europe. Second thing what we see is that European companies especially France is going a direction don't buy American buy European Union.
Speaker #1: To be
Speaker #2: it's so what we see
Speaker #1: compliant to AS9100. This is a
Speaker #2: Is step by step more, and
Speaker #1: standard. That's a
Speaker #2: more applications going
Speaker #2: into car the
Speaker #1: very complex because the armies are very picky—how their
Speaker #2: other we
Speaker #2: are let's say
Speaker #2: short to to
Speaker #1: Products are produced. They want to
Speaker #1: Supervise it. It can be every minute that somebody from the army comes in.
Speaker #2: use there
Speaker #1: And and that gives a a stronger tailwind also in Europe as we are European supplier. Will it go on? Yes. You see on the big backlog that that defense is at the moment bringing a lot of of of new projects.
Speaker #2: is some blue
Speaker #1: and checks what we do.
Speaker #2: chip
Speaker #2: customers
Speaker #1: So we are in the forefront of
Speaker #2: to I
Speaker #1: that. And I believe there's
Speaker #2: see we are largely
Speaker #1: not a lot of AS9100.
Speaker #2: based for sales
Speaker #1: factories especially in
Speaker #2: from quite a
Speaker #1: Europe. Second thing, what we see,
Speaker #2: lot
Speaker #1: is that European companies, especially in France,
Speaker #2: other companies
Speaker #2: like and
Speaker #2: also will
Speaker #1: For example we have a lot of publicity. We won this Helsing unmanned drone product which which had been built from the different European Union countries.
Speaker #1: Union. And that gives a
Speaker #2: go we
Speaker #2: hope
Speaker #1: stronger tailwind also in
Speaker #1: Europe, as we are a European supplier. Will...
Speaker #1: It's a jet drone and there is almost a million of equipment in in each of them. Train is our I have to say our pearl.
Speaker #2: defense last
Speaker #1: It goes on? Yes. You see in the
Speaker #2: year six months more
Speaker #1: big backlog that Defense is at the moment
Speaker #2: more than 10%, and we have months, more than
Speaker #2: are getting some orders all the
Speaker #1: bringing a lot
Speaker #1: of new
Speaker #1: projects. For example, we have a lot of
Speaker #1: publicity. We won this Helsinki unmanned drone
Speaker #1: Because when you look at all the projects what we won it's it's de facto there's no way around in Europe around Compton. We are technology leader.
Speaker #2: by shipping
Speaker #2: 80 quite
Speaker #1: product, which is built from different European Union countries. It's a jet drone, and there is
Speaker #2: high what is
Speaker #2: there well we came with
Speaker #2: we high
Speaker #1: almost a million of equipment in each of them. Train is
Speaker #1: It's TSMR the current position. We are the strongest. Nokia our competitor is more and more moving out of that market. And then FMCS the next standard which will arise 28 29.
Speaker #2: speed and very
Speaker #2: high
Speaker #2: secure communication
Speaker #2: meanwhile
Speaker #1: our I have to say
Speaker #1: our pearl.
Speaker #2: Canada
Speaker #1: Because when you look at all the
Speaker #1: But we have already around 100 million of of test orders. We bring it up and and at the moment we don't face any any competition or very little competition in that area.
Speaker #1: projects what we
Speaker #2: to be
Speaker #1: want,
Speaker #1: it's de facto there's no way
Speaker #2: compliant this is
Speaker #1: around the Europe around
Speaker #2: a very
Speaker #1: Compton. We are technology leaders in case TSMR. The
Speaker #2: complex how the
Speaker #1: current position we are
Speaker #1: the strongest.
Speaker #1: So that that works well. Our technology is good. We have a lot of references. And we run always also good every day market. It did grow only 100 only 12 million which looks low for that area.
Speaker #1: Nuclear, our competitor is more and more moving out of that market. And then
Speaker #2: use they want to supervise
Speaker #2: it
Speaker #2: checks so
Speaker #1: which will arise 2028,
Speaker #1: 2029. But we have already
Speaker #1: around 100 million
Speaker #2: we are
Speaker #1: of test
Speaker #2: that I believe
Speaker #2: that factory
Speaker #1: orders to bring it
Speaker #1: up. And
Speaker #2: especially
Speaker #1: At the moment, we don't face
Speaker #2: second
Speaker #1: any competition or very little
Speaker #1: Look at the backlog which which turned 70 million up. So that's a 1.8 in the book to bill. So that area depending on seasonality we will have a lot of of fun and and and good business over the next 10 years in that area I'm sure.
Speaker #2: the is going
Speaker #1: competition in the area. So
Speaker #1: that works well. Our
Speaker #2: If this is the direction it's going, don't buy.
Speaker #2: America American, buy European
Speaker #1: technology is good. We have
Speaker #2: and stronger
Speaker #1: a lot of
Speaker #1: preferences.
Speaker #1: And we always run a good EBITDA margin. It did grow only 12%.
Speaker #2: tail also in
Speaker #2: Europe really
Speaker #1: And additional path here is that we go international and not only Europe.
Speaker #1: million, which looks
Speaker #2: yes we see a
Speaker #2: little at the
Speaker #1: low for that area. Look at the
Speaker #1: backlog,
Speaker #2: moment of new
Speaker #1: which turned $70 million up. So that's
Speaker #2: product for
Speaker #1: 1.8 in the book to
Speaker #2: Yeah. Restructuring program. As I said Compton would be in a very good shape if we would have only defense and trains and and cyber security.
Speaker #1: build. So that area
Speaker #2: example this
Speaker #2: is product
Speaker #1: Depending on seasonality, we will have a lot of fun and good business over.
Speaker #2: which
Speaker #1: the next 10 years in that area,
Speaker #2: But unfortunately we have also renewables solar systems and wall boxes. We decided beginning of the year to adjust the headcount in that area. To the real business.
Speaker #1: I'm sure. In addition, the
Speaker #1: path here is that we go international and not only Europe.
Speaker #2: almost
Speaker #1: Yeah.
Speaker #2: train I have to
Speaker #2: Restructuring—yeah, restructuring as I progress. As I said, Kontron would be in very good shape if we would have only defense and, say, trains and cyber security—but cyber security.
Speaker #2: say because when
Speaker #2: Well we had 950 people in that. We are let's say less than half at the moment in that area. So most of the reductions went into that.
Speaker #2: You look at the project, what—
Speaker #2: we
Speaker #2: want the
Speaker #2: factory there's
Speaker #2: no
Speaker #2: But unfortunately, we have unfortunately we have also also renewable solar renewables solar systems and wall systems and boxes. We robots we decided beginning of decided beginning of the year to year adjust the headcount the pet in that area.
Speaker #2: around the
Speaker #2: We target to get savings of 30 million. And as of today I can say we will get them. They will pop in 27. We will finish the program in Q3.
Speaker #2: current
Speaker #2: position no
Speaker #2: clear and
Speaker #2: Then, which will FMCS—the next standard?
Speaker #2: arrive
Speaker #2: We will still have some cost in Q4. But next year we will enjoy the full 30 million of savings in in that area. This is covered with 25 million one time restructuring cost.
Speaker #2: we
Speaker #2: have
Speaker #2: past orders to bring
Speaker #2: So most of the of the action reductions went into that that. We we target target to get saving to get the 30 million. And as of saving and there's a the day, I can say we will get look at they them.
Speaker #2: it up
Speaker #2: and at the
Speaker #2: moment
Speaker #2: very
Speaker #2: little so that works
Speaker #2: But the 30 million we save every year. What did we achieve so far? We reduced 424 heads. Also 54 external people in that area.
Speaker #2: well technology
Speaker #2: They will pop will in in '87. 27 we will We'll finish the program. We will finish we still have some costs in will before but Q4, but next year we will enjoy next the full 30 million 30 of savings in that saving area area.
Speaker #2: Good, we have a lot of...
Speaker #2: reference
Speaker #2: and we
Speaker #2: run only 12
Speaker #2: If you see that we reduced from 6696 to 6397 you will realize that's only 300 people. What's the difference? Well with 124 people who are already settled and agreed on.
Speaker #2: million
Speaker #2: This is covered, this is €25 million in one-time restructuring costs, but the €30 million we save every year in construction. What did we achieve so far?
Speaker #2: low look at the
Speaker #2: back which is 70
Speaker #2: million up
Speaker #2: that's real so
Speaker #2: But it takes some some time until until they all leave the company. As better contractor situation. So with the 524 we are let's say pretty pretty close and we will achieve the 500.
Speaker #2: that
Speaker #2: depending next
Speaker #2: We reduced 30, which accounts for 424 heads. Also, 54 external people in that area. If you see that we reduced from 696 to 639, you'll realize that's only 300 people.
Speaker #2: 10 years area
Speaker #2: and addition after we
Speaker #2: This is for sure. On the solar product we are not stopping. It's still the let's say reasonable margins in that area. Unfortunately the volume is lower.
Speaker #2: go
Speaker #2: What's the difference? Well, 124 people who are 6 already already settled and agreed settled but on. But it takes some takes some time time until they all leave the and company company as better contractor as situation.
Speaker #2: We will maintain the business but not invest huge huge money in that area. We will focus on IoT connected inverters. And with our Hemp software making incorporating with thermal pumps and others.
Speaker #2: So with situation the 524, we—so it's a are at a pretty close and we will achieve the 500. This is for sure. On the solar products, we pretty on this other are not stopping.
Speaker #2: It's still, let's say, a reasonable margin in that area. product Unfortunately, the volume is unfortunately we lower. We will will maintain but maintain the business, but not not invest which money in that invest huge money in that area we will focus area.
Speaker #2: So that's our specialist anyway. But not we will not try to fight SMRs align that or SMRs program at this but all the Chinese suppliers.
Speaker #2: area to To the real the real business well we business, we had 950 had people in people in that. We are that that's at at less than half at the moment in that the moment so most area.
Speaker #2: We will focus on on IoT IoT connected connect invert and inverters. And with our hemp software, maybe incorporating we thermal with thermal pumps and pumps and that so others so that's our specialist that's anyway anyway.
Speaker #2: The division we will integrate more into different other areas. For example from the solar engineers we are not firing engineers. We always keep engineers.
Speaker #2: Some of them started now the design defense systems. To to cover all the the load what we have on on new contracts. The second thing what we did is our solar inverters from now on will be delivered from Bulgaria.
Speaker #2: The division, we will integrate more the into different other into different other areas for areas. For example, from example solar the engineers, we are we are not hiring engineers.
Speaker #2: On the wall boxes we have existing customers Porsche Volkswagen Volvo. We have huge orders from them. Well particular Volkswagen does not take the volume what they agreed on.
Speaker #2: We always keep engineers. Some of not some of them them started now the design defense started to systems. To cover all cover we the load what we have on new have new the contracts.
Speaker #2: So on this we are currently discussing. The situation still they are buying something and still it's profit. So we will not stop that. But we will go on with this connected wall box business.
Speaker #2: The second thing that we did is our solar inverters from now on will be delivered from Bulgaria. On the wall, second, in the boxes, we have existing customers: Volkswagen, Volvo.
Speaker #2: And we will solve it also with Volkswagen someday. We use our engineering resources which are quite strong in that area. Also partially in cyber solutions.
Speaker #2: We have huge orders from have huge orders from them them. Well, particular well some updated Volkswagen does not take the volume volume what they agreed on.
Speaker #2: So so this this we are currently discussing the discussing. The situation situation still they are buying something and still it's profit. So we will not stop that.
Speaker #2: So the engineers we are cannibalizing for other areas. Which doing more. I want to start with those slides. You heard the Danacon did a mandatory tender offer on Compton.
Speaker #2: But we will go on with this connected still and wall box business, and we will, we will someday. We use our engineering resources, which are quite strong in that area.
Speaker #2: Also partially actually in cyber solutions. So the so the engineers we are cannibalizing cannibalizing area for other which doing areas. Doing more I more.
Speaker #2: They did held 28 29% for 10 years. Asians are usually very long term looking. What they do. And now we have a 10 year partnership.
Speaker #2: I want to start want to start with those slides. with you You heard the heard Danacon did a did many mandatory tender on Compton.
Speaker #2: But we will—not, we will not try to fight SMS line that or SMS product this year, but all the Chinese—not suppliers.
Speaker #2: So there's a probably time for the next step for them. That's why they. Increase their their stake. They did the mandatory tender offer. It's not their target to take the majority of our shares.
Speaker #2: Because it would probably not good also for some of our clients to be owned Taiwanese. But they increased their shareholding. From below 30% to below 50%.
Speaker #2: And now we have a 10-year partnership. So there's—and we have a 10-year, probably time for the next step for the partnership—that's why, then, them.
Speaker #2: That's why they increased their stake. increase the state they They did the mandatory tender did it's not offer. It's not their the target target to take the majority of our take shares.
Speaker #2: And with this we also set up a plan to increase the corporation with Foxconn. First this process is not completed yet. Currently there's the pending approval from FDI.
Speaker #2: We below 30% below know 30% to below 50% 50%. And with and we also this, we also set set up a plan up a plan to increase the to increase operation with corporation fox Foxconn.
Speaker #2: That's the German authorities Bundesministerium für Wirtschaft. Second that might happen in the next weeks or month. Not month weeks. Five maybe one to two months.
Speaker #2: First, this process is not first this process is last completed yet completed yet. currently Currently, there's a pending approval from FDI. That's the German pending determine authorities, Bundesministerium für authorities Wirtschaft.
Speaker #2: Now after that there will be owning something which is maximum 49% but could be less. Because everybody is allowed to withdraw his tender until it's completed.
Speaker #2: So for the next four weeks still have to wait what will be the final shareholding. For Manocon we know it will be maximum 49 and minimum 30.
Speaker #2: Second, that might happen in the second that might happen next weeks next week or months not months month. Not month, weeks five week. Five, maybe one to two maybe months.
Speaker #2: Depending how many will withdraw it will be somewhere in the middle. It's an important milestone as a set already. It's 10 years when the first time I met the people myself from from Manocon.
Speaker #2: Now that that they there will be only will something something which is maximum 49% but could be less because next everybody is allowed to withdraw the standard until it's because until completed over the next four completed over the next four weeks.
Speaker #2: on They they did did held 28, 29 help percent for 10 28 10 years. years Visions are usually patient long very long-term looking. What term what they do they do.
Speaker #2: So we have to wait and see what will be the final form for, for MAN. We know shareholding—we knew it would be maximum, 49, maximum 49.
Speaker #2: In Shanghai I remember this day. We were competitors when we met and when we came out we were friends. So we will celebrate somehow this 10 year also or not celebrate but in our capital market day in September what we will hold in Vienna.
Speaker #2: It's minimum 30 depending how many will minutes 30 depending on withdraw it with somewhere in the somewhere it's It's an important milestone as I said a it's 10 already.
Speaker #2: It's 10 years when the first people, the first time we met the people, myself from Enercom. I remember this day.
Speaker #2: Also Anacon management will come to to Vienna to also answer your questions if you participate. Either by video or or in in live. It's a long term investment.
Speaker #2: Because it would probably not be good also for some of our clients to be owned Taiwanese, but they increased their interest, not from shareholding.
Speaker #2: We were competitor we competitors when we met and then we came came out with the out. We were friends so we friends. So we will celebrate somehow the same year were also or not celebrate but also in in our capital market day in our September but we will September.
Speaker #2: Obviously they use the possibility as our share price at the at the moment is not so let's say strong based on the on the burden what we have with Greentech.
Speaker #2: But we will hold in Vienna also hold Vienna Enercom management will come to also to Vienna to also also answer your answer your questions if you participate question by either by video or in video so life.
Speaker #2: But the seeded potential in in trains and in defense and in the other areas. And that's why they increased their shares. But they at the end have a forward looking long term investment strategy.
Speaker #2: The long-term long investor. Obviously, they use the obviously possibility as our share price at the moment is not possibility that's a so strong based on strong on the burden what we have with Greentech.
Speaker #2: And for example myself I have access to the CEO of Foxconn. I met him several times and that's that's also a good help for Compton.
Speaker #2: What what we're gonna do with Anacon we decided a program together. The first thing is our Compton S and our cyber security software. With our graph features.
Speaker #2: We want to offer that on the standard product of Anacon like we do on all ours. And we want to second as blue chip customers.
Speaker #2: I met I him several times and that's also a met that's a good good help for help Compton. What would we going to do with Enercon?
Speaker #2: In in in sizes what Compton cannot manage today like 500 million contracts 1 billion contracts. Who are interested and where we get access to offer them.
Speaker #2: We decided to program that together. The first thing is our Compton S and our cybersecurity software, first with our cloud features.
Speaker #2: We want to offer that on the standard product of Enercon, like we do in all ours. And we want on, and we too, second a stewardship customers in sizes what Compton cannot manage today—second, like 500 million contracts, 1 billion contracts.
Speaker #2: I'm currently negotiating with one American company who is close to a billion customer. Per year. And and yes they have interested in graph. Second we have I said before we want to get our security software and our software solutions.
Speaker #2: Who are interested and where we get access who to and offer offer them. I'm currently negotiating with one American them company who is close to a billion customers per this per year and year.
Speaker #2: Into the global world and not just Europe. And Foxconn slash Anacon will help us on that. We want to get our Varnix products to China.
Speaker #2: And yes, they have have interest. yes Second, we have, I said before we want to get before, we want to get our security our security software and our software solutions into software solution into the the global world and not just Europe.
Speaker #2: And to Southeast Asia. This is the market which growing the fastest in in the aeroplane flights. And and that's one of of the market growth.
Speaker #2: We have already our first line in in China. Running. And this Thailand project what I mentioned before is a corporation with Anacon and and Foxconn.
Speaker #2: the but But we see the city the potential in drains and in defense and other potential other areas and areas. And that's why they increased their shares.
Speaker #2: So with with their help we they will help us to to penetrate better Asia. On the Foxconn side they do a lot of products.
Speaker #2: And to and to Southeast Southeast Asia. This is the market is growing the Asia this fastest in the aeroplane flights. And that's one is and that's of the market growth.
Speaker #2: but But at the end, they have a forward-looking long-term investment they invest strategy. And for example, myself, I have access to the and CEO of Foxconn.
Speaker #2: As you might have seen they designed even a line of cars. Which will be the Polish Volkswagen. Government owned and half Foxconn owned factory.
Speaker #2: So with their this so help, they will help us to penetrate better we Asia. On the Foxconn penetrate side, they do a lot of the products.
Speaker #2: Producing half a million cars in Poland. And and with our connected wall boxes we try to support here as well. So in the robotics area security is also important.
Speaker #2: As you might have product is it might seen, they designed even a line of cars. Which seem which will will be be Polish Volkswagen.
Speaker #2: And and AI data centers. Is is also for for our products at IoT equipment very important. So we see several technology bases also to cooperate with Foxconn.
Speaker #2: Government-owned and half Polish government Foxconn-owned factory. own Producing half a million cars in Poland. producing And with and with our connected four our boxes, we try to support here as well.
Speaker #2: We we didn't even put the dollar number there. Because we we don't know if we are successful. 0.1. But if we are successful we'll be huge.
Speaker #2: Compton will be also allowed to speak on the next Foxconn technology day. They do something like Apple every year. Or we we did co show at the Computex show in in in Taiwan.
Speaker #2: So, we see several—so, technology bases—also see technology to cooperate with Foxconn. We didn’t even put a basis—we didn’t put a dollar number there because we don’t know if we are successful.
Speaker #2: Just meanwhile the biggest computer show of the world. Another area where we cooperate is O ODM. You might know that the Compton with its factories in Germany and Europe.
Speaker #2: Global Europe and Foxconn slash Enercon will help us in that. And we want to get our Vernix products—we want to product to China, to China.
Speaker #2: Also with the business what we acquired from Cartec. We are among the top five players in Europe. We will expand that offering also with Foxconn services in in higher volumes and lower prices.
Speaker #2: one of we We have already our first line have a in slide in in China running. And this China running and Thailand project that I mentioned before is a corporation with Enercon and Foxconn.
Speaker #2: Another area where, meanwhile, we cooperate is ODM. You might know that area, you might know Kontron will have factories in Germany and Europe, also with the business we acquired from Cartec.
Speaker #2: And we will offer this ODM including engineering from our engineers in Europe. Where Compton is is quite strong and has a lot of capacities.
Speaker #2: We are among that we the top five are players in players in Europe. We Europe we will expand that will expand the offering also with offering also with Foxconn services and higher Fox higher volumes and lower prices.
Speaker #2: Foxconn and Anacon will help us in the in the sales in Southeast Asia and China. In America we will combine our sales forces. And particularly look at at blue chip customers.
Speaker #2: And we volume, and we will offer—this will offer ODM, including engineering from our ODM engineers in Europe. But our engineers in Compton are quite strong and have a lot of—Europe is quite strong and has a lot of capacities.
Speaker #2: Where we have to target there is one I just talking to and I told you there's two more we want to find this year.
Speaker #2: Finance cost is a big thing. Well in Europe finance cost is almost double to Taiwan. We're four 400 million of debt. Well if you get 2% of of relief here.
Speaker #2: connection So in the robotics area, so security is also security important. And AI data and AI data centers is centers this is also for our also products and IoT equipment our equipment very important.
Speaker #2: Foxconn and Enercon will help us in the sales in Southeast Asia and capacity China. In America, we will combine our sales forces and particularly look at blue-chip customers, where we have to target. There is one I was just talking to, and I told you there's two more we want to find this year.
Speaker #2: It's it's quite a good number. And as I mentioned before in the area of the supply chain crisis. PSL is the internal supplier list of of Foxconn.
Speaker #2: Finance cost is a big thing. Well, in Europe, finance cost is almost double compared to Taiwan. We have €400 million of debt. Well, if you get 2% of relief here, it's quite a good number.
Speaker #2: If we have access of that it will help us to manage this. Chip crisis better. We agreed to split the synergies half half between Anacon and Compton.
Speaker #2: Because we don't 0.1. But if we're successful, you know we will be huge. Compton will also be allowed to speak over the next—allowed to speak in the Foxconn Technology Day.
Speaker #2: And on the mid run this is not something you have to expect to to be fully present in 27. But mid run in the next years that will pile up to over 80 million dollars.
Speaker #2: Next, they do something like Apple every year. Or we did a technology co-show at the Compton Tech Show in Taiwan. Just meanwhile, the competition—this is the biggest computer show in the world.
Speaker #2: And as I mentioned before, in the area of the supply chain crisis, PSL is the internal supplier list of Foxconn. If we have access to that, it will help us manage this chip crisis better.
Speaker #2: So that's 40 million for for Compton. And I would say that will take a period of two to three years. Until we are there.
Speaker #2: Yeah. Which brings me to the end. We confirm our our forecast which was results like 25. That's 1.607 what we had. Well if we keep in mind just the the confirmed orders what we have at the moment.
Speaker #2: But mid-run, in the next year, this will pile up to over $80 million. So that's $40 million for Compton. And I would say that will take a period of two to three years.
Speaker #2: Until we are there. Yeah. Which brings me to the end. We confirm our forecast, which was results like 25. That's 1.607, what we had.
Speaker #2: It's around 612. If we would be able to ship something of our backlog it will be even 1650. So but the the forecast remains at the area of 25.
Speaker #2: EBITDA we told last time it will be organic 225 and reported 200 million. Deducting the 25 million cost of our restructuring program. So we confirm that one as well.
Speaker #2: We agreed to split the synergies half-half between Enercon and Compton. And on the mid-run, this is not something you have to—better this—expect to be fully present in 2027.
Speaker #2: Well, if we keep in mind just the confirmed orders we have at the moment, it's €1.612 billion. If you would be able to ship something of our backlog, it will be even €1.650 billion.
Speaker #2: Good. And since we had that that problem with the questions what you put in the chat room. But the function is not enabled on our side.
Speaker #2: We are more than happy to answer your questions now. I see here still a message of Mr. Peel. So please go ahead.
Speaker #1: Yes. Thank you so very much for your presentation. Ladies and gentlemen now it's your turn. Today we're taking your questions in person via audio line.
Speaker #2: So, we confirm that one as well. Good. And since we had that problem with the questions—what you put in the chat room—but the function is not enabled on our side.
Speaker #1: For that please click on the raise hand button below to ask your question. And if you're dialing in by phone please press Starkey 9 to raise your hand and Starkey 6 to unmute yourself.
Speaker #2: We are more than happy to answer your questions now. I see you still have a message, Mr. Pale. So please go ahead.
Speaker #1: We are starting with Adrian Peel. You have now been unmuted or sent the invitation to unmute yourself.
Speaker #1: Yes, thank you so very much. Now it's your turn. Today, we're taking questions in person via...
Speaker #1: audio line. For that, please click on the 'Raise Hand' button below to ask your question. And if you're dialing in by phone, please press
Speaker #3: Hi. Good morning everyone. Hi Hannes. Hi Clemens. Actually a couple of questions. First of all on the strong order intake that you had in the second quarter.
Speaker #1: start 9 to raise your hand and
Speaker #1: Star 6 to unmute yourself. We are starting with Adrian Peel. You have now.
Speaker #3: I was just wondering what were the largest three orders that you booked in the quarter. To help understand you know how the phasing of the execution of those will be.
Speaker #1: been unmuted or sent the invitation to unmute.
Speaker #1: yourself.
Speaker #2: So the forecast remains at the area of 25 EBITDA. We told last time it will be organic 225 and reported 200 million, deducting the 25 million cost of our restructuring program.
Speaker #3: And I suspect there were some multi-year contracts and maybe some prolongations in there. But anything would be helpful in terms of clarification on this.
Speaker #3: Hi. Good morning, everyone. Hi, Anna. Actually, a couple of questions. First of all, on the strong order intake that you had in the second quarter...
Speaker #3: And then a question of understanding actually Clemens you said in the presentation that open backlog was 875 million. Just to be very clear on that.
Speaker #3: quarter, I was just wondering, what were the largest reorders that you got in the quarter? To help understand how the phasing of the execution of those will be, and I suspect there were some multi-year contracts and maybe some organizations in there, but anything would be—
Speaker #3: So that includes in general the 50 million of delinquent order backlog or not. And let's let's let's keep those two. I will have follow ups on on on those ones.
Speaker #3: helpful in terms of clarification on...
Speaker #3: this. And then, a question of understanding actually, Clement, you said in the
Speaker #2: Okay. To your first question. We anyway release big orders what we get. So the three biggest in in the first half were we got the pre-digit order from railway company.
Speaker #2: question
Speaker #3: presentation, that open backlog
Speaker #3: was 875
Speaker #3: million. Just to be very clear on that,
Speaker #3: so that includes in
Speaker #3: general the
Speaker #3: $50 million of delinquent order backlog, or not?
Speaker #3: And let's keep those two. I will have follow-ups on those ones.
Speaker #2: today please
Speaker #2: Yeah. Well I actually I'm not supposed to tell you the name. It comes from the country where you are in. Yeah. And that that is is one contract what we want.
Speaker #2: Okay. and okay To your first first question we question, we end with these big anyway orders what we orders so the three get. So if we biggest biggest in the first half were got were we got them pre-digit order from railway companies well, actually, the I'm not supposed to tell actually the name from the country where you are you.
Speaker #2: press raise your hand
Speaker #2: and have
Speaker #2: Then we want another one with SNGF. Also pre-digit. We are in the process to win a third one from UK. Which will be significantly more than the other two.
Speaker #2: now good morning
Speaker #2: I will be helpful in terms of...
Speaker #2: And that is one contract what we want. in then we want Then we want another one another with SNGF also pre-digit. We are in the process to win a third one, the UK, which will be significantly more one significantly than the other more the other two.
Speaker #2: Then we have one pre-digit company project what we want that's not a train. This is this energy company what I mentioned. It's also over 100 million.
Speaker #2: So that's the three biggest. And also want to draw your attention to the cybersecurity contract over 20 million what we want. Which we also had with because it's it's a nice area.
Speaker #2: clarification on
Speaker #2: this
Speaker #2: that backlog
Speaker #2: 875 million just to be
Speaker #2: Besides that we have also defense contracts but I'm not supposed to talk about that.
Speaker #2: very clear on that
Speaker #2: includes in general
Speaker #2: the 50
Speaker #2: This is this energy company that I mentioned. It's also over $100 million, so that's the three biggest. And I also want to draw your attention to the cybersecurity contract—over $20 million—that we won.
Speaker #2: million
Speaker #3: Okay.
Speaker #2: Yeah.
Speaker #4: And with regards to your second question which was very clear on the open backlog. It's good that you asked that question actually. You asked if the open backlog of 875 includes the delinquent backlog of 50 million.
Speaker #2: Which we are also happy with because it's a nice area. Besides that, we also have defense contracts, but I'm not supposed to talk about that.
Speaker #4: No it does not. So that's on top of that actually. We were not able to. So the open backlog does not include it. And that that comes as a potential on top of that.
Speaker #2: Open backlog means for us customer that plays an order and say please ship it let's say November. And my manufacturing factory says yes we can ship it.
Speaker #3: Okay. And
Speaker #3: With regards to the second question, which was very clear on the open backlog, it's good that you asked that question, actually. You asked if the open backlog of 875 includes the—
Speaker #3: delinquent backlog of 50
Speaker #3: Right. Understood.
Speaker #3: million. We know it does not. So that's on top of that, actually. You were not able to. So, the open—
Speaker #2: It's confirmed orders.
Speaker #3: Very good.
Speaker #2: Good.
Speaker #3: And and then actually a question on on Enocon on the transaction. I mean so you you mentioned a bit the time frame. So let's say the decision on the regulatory approval should come anytime soon.
Speaker #3: Backlog does not include it, and...
Speaker #3: that comes as a potential on top of
Speaker #3: that.
Speaker #2: Open backlog means open for a US customer to place an order and say, please ship it, let's say, in November. And my manufacturing factory says, yes, we can ship—says yes, we it.
Speaker #3: I mean obviously you are probably quite positive on that this approval will will happen. But just some thoughts on I mean obviously you're doing quite some business on defense.
Speaker #2: Two, then we have one pre-digit, have the one-three company digit project, what we project, what we want, what want—that's not a train.
Speaker #3: All right. Understood.
Speaker #2: It's confirmed orders. Excuse can vary a bit.
Speaker #3: Probably in Germany you just mentioned actually Rail is is could this be a topic where the regulator says well we're not so sure about it.
Speaker #2: we
Speaker #3: Actually, I have a question on Enercon.
Speaker #3: the transaction. I
Speaker #3: mean, so you mentioned a
Speaker #3: bit the timeframe. So
Speaker #3: If we approve it or can they impose some remedies? That's the question number one on this. And the question number two just by you know how how how it goes on the Austrian market or Austrian law probably applies as well.
Speaker #3: let's say the decision on the
Speaker #3: Regulatory approval should come any time soon. I mean, obviously,
Speaker #3: you are probably quite positive on
Speaker #3: that this approval will happen.
Speaker #3: But just some thoughts on
Speaker #3: I mean, obviously, you're doing quite a bit.
Speaker #3: business on defense, probably in Germany. You
Speaker #3: So assuming that everything goes through and the company is somewhere in the vicinity of 40 to 45 percent or even more holdings. After the offer then is finally approved.
Speaker #3: You just mentioned actually, Rail. Could this be a topic where the regulator says, well, we're not so sure about it? If we approve it...
Speaker #2: got includes. Selling
Speaker #3: Are they allowed to buy further shares in a 12 months time frame until 50 percent? Or how is this going in terms of decreeping in rule?
Speaker #3: or can they impose some
Speaker #3: Remedies? That's question number one on—
Speaker #3: this. And the question number two:
Speaker #3: just
Speaker #2: them
Speaker #3: by how it goes on
Speaker #2: backlog does
Speaker #3: The Austrian market, or Austrian law, probably applies as well.
Speaker #2: Okay. I answered the first half of it. We don't see a problem with with FDI. At the end Canton is not a supplier of defense product.
Speaker #2: not
Speaker #3: So assuming that everything goes
Speaker #2: come
Speaker #3: through, and the company is somewhere in
Speaker #3: the vicinity of 40 to 45 percent, or even more
Speaker #3: Holdings, after the offer then is finally approved, are they allowed to buy further?
Speaker #2: We are not making tanks. We do not making jets. We we are not making the Helsing jet for example. We just do components or dual use products for them.
Speaker #3: until 50 percent? Or
Speaker #3: How is this going in terms of decreeping in rule?
Speaker #2: good And then
Speaker #2: Okay, I’ll answer the first half of it. We don't see a problem with FDI—50% FDI. At the end, the compound is not a supplier of defense products.
Speaker #2: Very dedicated to defense but it's not the a real weapon. And we are not the first person who ships to the German army. There is Rheinmetall and others in between.
Speaker #2: then question
Speaker #2: on the transaction I mean I
Speaker #2: mean so you mentioned a
Speaker #2: bit
Speaker #2: let's say on
Speaker #2: the I mean obviously you
Speaker #2: We are not making banks. We do not make jets. We are not making the Helsing jet, for example. We just do components or dual-use products for them.
Speaker #2: So we do not see a a a risk on that.
Speaker #2: are positive
Speaker #2: that happened
Speaker #4: Yeah. And with regards to your question on the greeting in for those of you who don't know it in while Canton is listed in Germany.
Speaker #2: but I mean
Speaker #2: obviously on
Speaker #2: defense
Speaker #2: actually sure about it if we approve.
Speaker #2: Very, very dedicated to defense, but it's not the real weapon. And we are not the first person who ships to the German army.
Speaker #4: Shareholders who have actually done a mandatory off and hold more than 30 percent. They are limited depending on their absolute shareholding by just up to 3 percent of the total shares within one year.
Speaker #2: it or when they
Speaker #2: some remedies
Speaker #2: There is Rheinmetall and others in between. So we do not—we see no risk on that. Do you—yeah.
Speaker #2: question and the
Speaker #2: question you
Speaker #4: And depending on the outcome of the takeover offer eventually Enocon is probably limited by that amount.
Speaker #2: know
Speaker #2: how so
Speaker #3: Yeah. And with regards to your question on the creeping-in: for those of you who don't know it, while Kontron is listed in Germany, shareholders who have actually done a mandatory offense—hold more than 30 percent—they are limited, depending on their absolute shareholding, to just up to 3 percent of the total shares within one year.
Speaker #2: assuming you think
Speaker #2: those
Speaker #2: and
Speaker #2: I have here is it okay? Adrian?
Speaker #3: Yeah. I'm fine. Thank you. I'll jump back into the queue. Maybe come back later.
Speaker #2: after you
Speaker #2: Yeah. I have here a question of Mr. Wild on the screen. He says please comment on your receipt your role at Enocon. What are the impacts on your current CEO role?
Speaker #2: buy shares in the 12 shares in the 12-month timeframe
Speaker #2: month
Speaker #3: And depending on the outcome of the takeover offer eventually, Enercon is probably limited by that amount.
Speaker #2: How much percentage of your time will the new CTO role take in future? Well to answer that I'm not the CTO as you think from a German perspective.
Speaker #2: I have, and here it is. Okay? Adrian?
Speaker #3: Yeah, I'm fine, thank you. I'll jump back into the queue and maybe come back later.
Speaker #2: Yeah. I have here a question from Mr. Wild on the screen. He says, "Please comment," I said, on your CTO role at Enercon. What are the impacts on your current CEO role?
Speaker #2: The Taiwanese law has a board. The board consists of supervisory board and it consists of the operational management board. I am not on the board of Enocon.
Speaker #2: How much percentage of your time will the new CTO role take in the, please take, future? Well, to answer that, I'm not the CTO as you might think from a German perspective.
Speaker #2: So don't consider me as a CTO like we know in Europe on Enocon side. I am more and and that is some something to the to the Taiwanese role I'm more advisory in that.
Speaker #2: The Taiwanese not law has a board. The board consists of a supervisory board, and it consists of the operational management—the operational, I am not board of Enercon.
Speaker #2: And in the whole Enocon slash Canton management they considered me to be a very capable person on understanding technology and supervising that. Me I'm fully committed to my CEO role in Canton.
Speaker #2: So don't consider me as a CTO like we know in Europe on Enercon's side. I am more—I, and that is something similar to the Taiwanese role—I'm more advisory in that.
Speaker #2: But obviously Canton cooperating in technology in my role of advisory there I advise them to use Canton OS and CLA compatible software in similar things in this products.
Speaker #2: And in the whole Enercon/Compound management, they consider me to be a very capable person in understanding technology and supervising them. I am fully committed to my CEO role at Compound.
Speaker #2: So that's what I do. So I still say 100 percent of my time is committed to Canton. And if I advise Enocon to to use Canton technology it's in the interest of Canton.
Speaker #2: But me, obviously, Compound, but cooperating in technology in my role of advisory there, I advise them to use Compound OS and CLA-compatible software and similar things in this product.
Speaker #2: This is a very clear statement. No I'm not in the role. If Enocon has some I cannot give any commands to anybody in in nobody reports to me in Enocon.
Speaker #2: So that's what I do, obviously. So I still say 100 percent of my time is committed to Compound. And if I advise Enercon to use Compound technology, it's in the interest of Compound.
Speaker #2: I'm I'm just advisor telling them what's the best technology to go for. Is this okay Mr. Wild?
Speaker #1: Thank you so much. We have another raised hand by Mr. Hinkle. I just sent you a request to unmute yourself. You may do so.
Speaker #2: This is a very clear statement. No, I'm not in the role. If Enercon has some, I cannot give any commands to anybody, and nobody reports to me in Enercon.
Speaker #1: And Mr. Wild says yes thank you.
Speaker #5: Yeah. Good morning. May I ask my question now?
Speaker #2: I'm just an advisor, telling them—still, I'm just—what's the best technology to go for? Is this okay, Mr. Wild?
Speaker #1: Of course.
Speaker #5: Fantastic. Thank you very much. Yeah. I got three questions partially follow ups to the question before. First of all on the solar business. Is it fair to characterize your future strategy as a as a run off of the of the solar business?
Speaker #1: Thank you so much. We have another.
Speaker #1: Raised hand by Mr. Hinkle.
Speaker #1: I just sent you a request to unmute yourself. You may do so. And Mr. Wild says, "Yes, thank you."
Speaker #3: Yeah, good morning. May I ask my question now?
Speaker #5: So it seems to me that this has no big growth potential anymore within your company. So that would be my first question. And secondly on the Enocon move two questions on that one.
Speaker #1: Of course.
Speaker #3: Fantastic. Thank you very much. Yeah, I have three questions, partially follow-ups to the previous question. First of all, regarding the school-out business, is it fair to characterize your future strategy as a run-off of the school-out business?
Speaker #5: Would you characterize the the future as a as a kind of partial integration of Canton and Enocon going forward? Or would you say it's still an ongoing collaboration between two independent companies?
Speaker #3: So, it seems to me that there's no big growth potential anymore within your company. So, that would be my first question.
Speaker #2: advis yeah
Speaker #5: So that would be my first question on that. And secondly do you have any indication that Enocon will keep the almost 20 percent that have been tendered in the process to them in the long term?
Speaker #3: And secondly, on the Anytime move, two questions on that.
Speaker #2: rate
Speaker #3: One, would you characterize the future as a kind of partial integration of control and Enercon going forward, or would you say it's still an ongoing collaboration between two independent companies?
Speaker #5: Or have they been a little bit surprised like we hear as analysts that so many so many owner share shareholders did tender their stocks to to the to the offer of Enocon?
Speaker #3: So that would be my first question on that. And
Speaker #3: secondly, do you have any indication that Enercon will one and
Speaker #5: So that would be my question. Thank you very much.
Speaker #3: Keep the almost 20 percent that have intended in the process to keep them in the long term, or has it been a little bit of a surprise, like we hear as analysts, that so many owner shareholders tendered their stocks to the offer of Enercon?
Speaker #2: To the first question our we are not leaving the solar market. We have customers there. We are making margins and profit in that area.
Speaker #2: We just don't do as much revenues as two years ago. And I believe that's the same for any solar company in Europe. We do not want to leave that market totally.
Speaker #2: and that
Speaker #3: So that would be my question. Thank you very much.
Speaker #2: To the first question, we are not leaving the solar market. We have customers there. We are making margins and profit in that area.
Speaker #2: So we have the internal the word of keeping the product line alive modernize it but don't come with new models. And can it grow?
Speaker #2: We just don't do as much revenue as two years ago. And I believe that's the same for any solar company in Europe. We do not want to leave that market totally.
Speaker #2: Yes. We have good customers there like for example Viessmann. Viessmann is a growing company. So if they go up yes we want to do so as well.
Speaker #2: secondly
Speaker #2: We see if whenever when they talk about it for one year but whenever the European Union decides to put some some tariffs on Chinese inverters for us we we are ready and we can be there because we still have the products.
Speaker #2: So we have the internal directive of keeping the product line alive, modernize it, but don't come with new models. And can it grow? Yes.
Speaker #2: We have good customers there, like for example, Viessmann. Viessmann is a growing company. So if they go up, yes, we want to do so as well.
Speaker #2: At the moment European Union is very slow and and bureaucratic on that. So that that's on the solar. At the moment I don't see the big growth there.
Speaker #2: We see if, whenever, when they talk about it for one year. But whenever the European Union decides to put some tariffs on Chinese inverters, for us, we are ready and we can be there, because we still have the products.
Speaker #2: But the first step what we what we do is we cut the people into half and now next year we will have a a profitable scenario in that area.
Speaker #2: Don't Enocon collaboration?
Speaker #2: At the us at the moment, European Union is very slow and bureaucratic on that. So moment that's on the solar. At the moment, I don't see the big growth there.
Speaker #4: Yeah. I mean the the the question on the collaboration obviously it's not going to be integrate Canton is not going to be integrated into Enocon.
Speaker #2: But the first step, what we do is, we cut the people into half, and now next year we will have a profitable scenario in that area.
Speaker #4: We're going to do fully independent as Hannes also mentioned we're trying to collaborate on a on a several areas especially in technology and especially in getting our enhancing our revenue potential in particular in Southeast Asia.
Speaker #2: Enercon so collaboration?
Speaker #4: Yeah, I mean, regarding the question about the collaboration—obviously, it's not going to be integrated. Compound is not going to be integrated into Enercon. We're going to do it fully independently, as Hannes also mentioned.
Speaker #4: I think there's a lot of potential. It's well known that the key focus of Foxconn and Enocon is physically AI and robotics. So that's clearly what they are striving for is they have more than one million employees and they they are facing the demographic pressures particularly in China with hundreds of factories there.
Speaker #4: We're trying to collaborate in several areas, especially in technology and in enhancing our revenue potential, particularly in Southeast Asia. I think there's a lot of potential.
Speaker #4: So over the next couple of years they will they are going to put hundreds of thousands of robots of humanoid robots into their factories.
Speaker #4: And Canton has a lot of expertise in connectivity. Also serving customers as KUKA already. And yeah they want to dwell on our expertise and get our expertise to be implemented in their physical AI solutions as well.
Speaker #4: It's well known that the key
Speaker #4: The focus of Foxconn and Enercon is...
Speaker #4: physical AI and robotics. So
Speaker #4: that's clearly what they are striving
Speaker #4: For instance, they have more than one million employees and they are facing...
Speaker #4: the demographic pressures, particularly in
Speaker #4: China, with hundreds of factories there. So over—
Speaker #4: So for us it's potential but it's not going to be full integration beyond the level we currently have more a collaboration. With regards to the the 20 percent stake you mentioned below 20 percent stake well Enocon is not a trading house.
Speaker #2: yeah key
Speaker #4: the next couple of years,
Speaker #4: they are going to put
Speaker #4: hundreds of thousands of robots, of
Speaker #4: humanoid robots into their
Speaker #4: factories. And Compound has a lot
Speaker #4: of expertise in
Speaker #4: connectivity. Also serving customers
Speaker #4: as cooker already. And
Speaker #4: yeah, they want
Speaker #4: to dwell on our expertise and
Speaker #4: So they they make careful decisions when they invest in a company. Obviously it's not fully in their hands how many shares they will end up with at the end of the tender offer.
Speaker #4: get our expertise to be implemented.
Speaker #4: in their physical AI solutions as well. So for us, it's
Speaker #4: potential, but it's not going to.
Speaker #4: be full integration beyond the level we currently have more a
Speaker #2: focus
Speaker #4: It also depends on potential withdrawals. And they're interested in having a a stable long term shareholder base and a prosperous future for Canton.
Speaker #2: physically that's clearly
Speaker #4: collaboration. With regards to the 20 percent stake you mentioned, below 20 percent stake, well, Enercon is not a
Speaker #2: what they are striving
Speaker #2: for they're facing the demographic
Speaker #2: pressures, particularly in China, with hundreds
Speaker #4: trading house. So they
Speaker #2: of so over the
Speaker #2: Now you see that on the ten years what they took for the next step. But if you come to our meeting you can ask them yourself and have some coffee with them.
Speaker #2: next couple of years they
Speaker #4: may be careful decisions when they invest in a company.
Speaker #2: will hundreds of
Speaker #2: thousands of robots of human
Speaker #4: Obviously, it's not fully
Speaker #2: robots into the factories
Speaker #4: in their hands how many shares they will end up with at the end of the tender offer. It also depends on potential withdrawals. And they are interested in having a stable long-term shareholder base and a prosperous future for Compound.
Speaker #2: and has a lot of expertise
Speaker #2: in
Speaker #2: connectivity customer
Speaker #5: That's a good idea. Thank you very much.
Speaker #2: already and they want
Speaker #1: Thank you so much. We have another raised hand by Mr. Malte Schaumann. I just sent you an invite to unmute yourself. You may do so now.
Speaker #2: to dwell on
Speaker #2: our expertise and get our
Speaker #2: expertise implemented in
Speaker #2: their potentially not going
Speaker #2: Now, you see that on the 10 years, what they took for the next step. But if you come—not come—to our meeting, you can ask them yourself and have some coffee with them.
Speaker #2: to
Speaker #2: be
Speaker #6: Thank you. First one is on the when looking at the the other operating income was pretty high during the second quarter with more slightly more than 15 million American elevator went in there.
Speaker #2: more is not a
Speaker #3: That's a good idea. Thank you very much.
Speaker #2: trading house so they
Speaker #1: Thank you so much. We have another
Speaker #2: they
Speaker #1: raised hand by Mr. Malte
Speaker #1: Schaumann. I just sent you an invite to and
Speaker #2: Okay. That's it.
Speaker #2: obviously
Speaker #6: Yeah. I have a second one but let me start with that one.
Speaker #1: Unmute yourself. You may do so. I just sent you to now.
Speaker #2: Yeah. Yes. We had a lot or let's say the part of it which is higher than normal is allocated to the to the module divestment of last year's.
Speaker #4: the we look at the other operating income, which is pretty high during the second quarter with more slightly more than 15 million went in there.
Speaker #2: There were several things which still have to to be to be settled in the next year. That's meanwhile done on the way. Might go on even the second half of the year a little bit.
Speaker #4: Yeah, I have a second one, but let me start with that one.
Speaker #2: our. We have another race
Speaker #2: And as by by Fares you have to show the costs in the costs and to separate the other income in other income. So those two match and you will see by the time being other income reducing again but cost reducing in the same level.
Speaker #2: another this one is First one is on
Speaker #2: We were several things, which years, several still have things to be settled in the next year. That's meanwhile done on the way.
Speaker #2: the okay that's Okay. That's it.
Speaker #6: Okay. Then on the top line you had a sequential growth was rather limited in the second quarter. So what what what should we think about the phasing into the second half of the year seeing the deliquent backlog et cetera supply constraints in some areas.
Speaker #2: Might go on even the second half of the year a little bit. And settled as per IFRS, you have to show and as you have to the cost and the costs and to show separate the other income.
Speaker #2: it Yeah. Yes. We yes we have a have a lot lot or let's say the part of it which is part of it which is higher than higher than normal is allocated to normal the module divestment of last located last year's.
Speaker #2: In other income, so those two match and you will see, for the time being, other income reducing again, but costs reducing at the same level.
Speaker #6: So to give a better feeling about progression into the third quarter and then into the fourth quarter actually you need close to 900 million in sales to reach the target in the second half.
Speaker #4: Okay. Then, on the top line, you said sequential growth was rather limited in the second quarter. So, what should we think about the phasing into the second half of the year, seeing the delinquent backlog, etc., and supply constraints in some...?
Speaker #6: So how should we think about the distribution over the quarters to come?
Speaker #2: For this we have to dig into the different in the different divisions of Canton we are living in a world of of different speeds.
Speaker #4: areas? Give a better feeling about progression into the third quarter and then into the fourth quarter, actually, you need close to 900 million in sales to target in the second half.
Speaker #2: that in some
Speaker #2: Of light and shadow I always said. Yeah. If you talk about the the best horse at the moment is for sure the defense horse that's even accelerating.
Speaker #4: So, how should we think about the distribution over the quarters to come?
Speaker #2: We we're getting a lot of of requests there. So that that will go on. The the train business we have a lot of orders in there converting into revenues in the next period but it's also good.
Speaker #2: For this, we have to dig into the different divisions of Compound. We are living in a world of different speeds, of light and shadow, I always said.
Speaker #2: When we security will be probably the third one. Which is not that fast because it takes time. The rollout our security software to all of the different areas but in the long run I see that clearly as the I would say strongest division on on the long run or midterm.
Speaker #2: If you talk about areas, the best horse at the moment is for sure the defense horse. That's even accelerating. We're getting a lot of requests there.
Speaker #2: That will go on. In the train business, we have a lot of orders in. They are converting into revenues in the next period. That’s also good.
Speaker #2: Now if we talk on the other side our planted growth rate was almost nothing in in the half year. Yeah. Organically let's say was stable like you said.
Speaker #2: When we do security, we'll probably be the third one, which is not that fast because it takes time to roll out our security software to all of the different areas. But in the long run, I see that clearly as the, I would say, strongest division in the long run or midterm.
Speaker #2: That's even though we had those three very fast growing areas we are suffering by a 36 well 70 million to 45 million shrinking of solar and and wallbox business.
Speaker #2: Now, if we talk on the other side, our planted growth rate was almost nothing in the half year. Organically, they were stable, like you said.
Speaker #2: Yeah. Which obviously eats up the the growth on on the other area. So saying that I don't know where is the the bottom of it.
Speaker #2: That's even though we had said those three very fast-growing areas. We are suffering that offering by the by 36 well, 70 million to 45 million shrinking of solar and wallbox business.
Speaker #2: Several of our customers went bankrupt in that area. I don't hope hope that Volkswagen will go bankrupt but you never know. And that that I I still see not any light of the end of the tunnel.
Speaker #2: And and with the cost savings it clearly says that Canton itself had taken the decision we don't believe to pay this resources for some time and hope that it will get better.
Speaker #2: Several of our customers went bankrupt in that area. I don't hope that Volkswagen will go bankrupt—you never know. And I still do not see any light at the end of the tunnel.
Speaker #2: Which obviously eats up the growth in the other area. So, obviously saying that, I don't know where the bottom of it is.
Speaker #2: We believe we have to live at that low volume or even decreasing one. If it's decreasing we will have further reductions. Where we see a lighter at the end of the tunnel is more the industrial area and also the the ODM.
Speaker #2: And then, if the cost savings are clear, there's the company itself that has taken the decision. We don't believe in paying this resource for some time and hoping that it will get better.
Speaker #2: For example the the big energy contracts of the 100 million what I mentioned is ODM area. We also want to two other contracts close to 100 million in that area.
Speaker #2: We believe we have to live at that low volume even decreasing one. If that if it's it's decreasing, we will have decreasing we further reductions.
Speaker #2: Bosch for example. So the ODM area will turn to be a good profit contributor in in 27. And industrial yeah. I don't think it's over but but it won't get worse.
Speaker #2: Where we see a lighter at the end of the tunnel is more the industrial will area area. and And also the OEM. For example, the big energy contracts of the 100 million, what I mentioned is ODM area.
Speaker #2: We see at least a turnaround. So for for Canton I'd say we have the three fast horses which will give us good growth next year.
Speaker #2: We also want to two other also contracts close to 100 million in that area. Bosch, for example. So the ODM area will turn to be a good profit contributor in '27.
Speaker #2: And if there wouldn't be any more solar business then we will be back to 10 percent growth on the whole company.
Speaker #2: And two industrial, yeah, I don't think it's over, but it won't get worse. We see at least a turnaround. So for Compton, I'd say we have the three fast horses, which will give us good growth next to good year.
Speaker #6: Okay. And for the very near term should we expect for the third quarter already 400 million slightly above 400 million in sales and then another big jump in the fourth quarter or will it be more back and loaded towards the fourth quarter?
Speaker #2: What are you talking about?
Speaker #2: If there wouldn't be growth, if there wouldn't be any more solar business, then we would be back to 10%. Then we would be back to 10% growth on the whole company.
Speaker #6: About Q3 Q4 distribution of revenues.
Speaker #2: Well you we see the same seasonality than every year. And if you look look in the past the last five years of Canton we always had some 30 35 percent 32 percent of Q4 back and loaded because all the the the public contract are closed in that area and and finally calculated.
Speaker #4: Okay. And
Speaker #4: Expect for the third quarter, already €400 million slightly.
Speaker #4: Above $400 million in sales, and then another big jump in the fourth quarter? Or will it be more back-end loaded towards the fourth quarter?
Speaker #2: growth okay
Speaker #2: What are you talking 400 what are you talking about?
Speaker #4: About Q3, Q4
Speaker #2: It will turn contract assets into revenues. Yeah. So that that that but that's the same it's not different this year than the other years.
Speaker #4: distribution of revenues?
Speaker #2: For the very near term, should we...
Speaker #2: Very
Speaker #6: Okay. And then on the nuts 5G communication device business I think that was scheduled to more or less start in fourth quarter of the of the year.
Speaker #2: about
Speaker #6: Is that more or less in plan right now or has been been pushed out to 2027?
Speaker #2: for Well, we see the you we same analysis in every year. see if And if you look in the past the last you look in the five years of Compton, we past we always always had some 30, had 35 percent, 32 percent of 30 back because all the public contract are closed in that area and finally calculated.
Speaker #2: It will turn complete assets into revenues. So and so, but that's the same. It's that, but that's the same, not different this year than the other years.
Speaker #2: It's slightly delayed but but not a lot. We had just three weeks ago a very big artist the wrong word but opening of our NAT production in Düsseldorf.
Speaker #4: Okay. And
Speaker #4: Then on the month, the 5G communication device business—I think that was scheduled to more or less start in the fourth quarter of the year.
Speaker #4: Is that more or less planned right now, or has it been pushed out to '27?
Speaker #2: So that's up and running now. And we will start very soon the delivering the first NATs to Mercedes. And as well to Isuzu. So the the the production will go up.
Speaker #2: not
Speaker #2: okay It's slightly it's slightly delayed. But not a lot. We had we just three weeks ago a had two weeks ago a very big is the very wrong word, but big opening of our NAT opening of production in Düsseldorf.
Speaker #2: It will not be the the 10 plus million what I originally expected but I would say a 6 7 will will leave the door in Q4.
Speaker #2: So that's up and running now. And we are up and running now and we will start very soon. We will start delivering the first NATs soon, the S to Mercedes.
Speaker #2: And next year further increase. We do not have any reduction in orders in that areas. We still have the I don't know something like 250 to 300 million in in the in orders in as well we are talking two different projects currently with two German car manufacturers with significant volume as well to increase it.
Speaker #2: First Mercedes and as well to Isuzu. And so the production will go up. It will not be the 10-plus million production, what I originally expected, but I would say 6 or 7 million will leave the door in Q4.
Speaker #2: So that the market is intact. They're self-driving cars will come. And Canton will be a important player in that. Technology is good. That's what the customers tell us.
Speaker #2: And next year, plus, and next further increase. We do not have any year, any reduction in orders in that area. We still have the, I don't know, something like reduction, I don't know, €250 to €300 million in orders, I know, in as well.
Speaker #2: It will not ramp up with the speed they originally said but it will not be delayed more than one or two months.
Speaker #2: We are also talking about two different projects with two different customers currently. We have two German car projects with manufacturers. We have significant volume as well and expect to increase it.
Speaker #6: Yeah. Okay. Thank you.
Speaker #1: Thank you so much. We have one more raised hand by Daniel Leon. Please you may unmute yourself now. I just sent you invite. Can you hear us?
Speaker #2: That's and that's what the customers tell us. It will not what it will not ramp up with the speed they originally ramp said, but it will not be delayed more than one or two months.
Speaker #6: Daniel? Hello?
Speaker #2: ...significant. So the market is intact. They say that the self-driving cars will come, and Kontron will be an important player in that. Technology is good.
Speaker #4: Yeah.
Speaker #4: Okay.
Speaker #7: Now it should work. Hi.
Speaker #4: Thank okay thank you.
Speaker #1: Yeah. Hello. Now.
Speaker #7: Yeah. Hi. Good morning. Good morning. Can you maybe talk a little bit about the collaboration on on the financing structure as you mentioned that you want to put your your your financial abilities together in order to improve ratings?
Speaker #1: Thank you so
Speaker #1: much. We have one more raised.
Speaker #1: hand by Daniel
Speaker #1: Leon. Please, you may unmute
Speaker #1: yourself now. I just sent you a invite. Can you hear
Speaker #2: up
Speaker #2: you thank you so much
Speaker #4: Daniel? No?
Speaker #2: we have one more
Speaker #7: So how would this look like and what's what's timeframe would you expect until such a such a until you can implement this?
Speaker #2: question by
Speaker #3: I do work, hi.
Speaker #2: Daniel
Speaker #1: hello.
Speaker #2: please can you hear
Speaker #3: Yeah, hi. Good morning. Good morning. Can you maybe talk a little bit about the collaboration on the financing structure, as you mentioned that you want to put your financial abilities together in order to improve ratings?
Speaker #2: us Daniel us?
Speaker #6: Hi Daniel. Let me briefly answer that question. You referred to the financing cost potential in synergies which is. You mentioned around 6 million US dollars.
Speaker #2: hello yeah Yeah,
Speaker #2: hello so how this look
Speaker #3: So how would this
Speaker #3: look like and what timeframe would you expect until such a I think you can implement
Speaker #6: It's based on the fact that financing cost in Southeast Asia are significantly lower than currently in Europe but we are able to to get in Europe.
Speaker #6: So we see up to 100 basis more than 100 basis points actually of a savings volume by tapping on different refinancing sources in Southeast Asia as well.
Speaker #3: this?
Speaker #4: Let me briefly answer that question. You referred to the
Speaker #4: financing cost potentially in
Speaker #2: like
Speaker #4: synergy, which is. You mentioned
Speaker #4: around 6
Speaker #4: million US dollars.
Speaker #4: That's based on the fact that
Speaker #6: Timeframe well that's a question of around a year but also depending on the refinancing requirements of Canton of course. So it's probably a process which is going to materialize in the in the coming years at the total scale.
Speaker #4: financing costs in Southeast
Speaker #4: Asia are significantly lower
Speaker #2: this hi Hi, Daniel.
Speaker #4: than currently in Europe,
Speaker #2: Daniel
Speaker #4: If we are able to get in,
Speaker #4: Europe. So we
Speaker #4: see up
Speaker #2: financing
Speaker #2: potential which is mentioned
Speaker #4: to 100 basis, more than 100 basis
Speaker #2: around 6
Speaker #4: points actually of a
Speaker #2: million US dollars
Speaker #4: savings volume by tapping on different
Speaker #2: and space
Speaker #7: Mm-hmm. Okay. And maybe now looking at at your your targets obviously that to to increase synergies and and and cooperation with the Foxconn on on many levels.
Speaker #4: refinancing sources in Southeast
Speaker #2: finance cost southeast
Speaker #2: Asia
Speaker #4: Asia as
Speaker #2: significantly Europe
Speaker #4: well. Timeframe
Speaker #2: we are able to get in
Speaker #4: well, that's a question
Speaker #2: Europe so we
Speaker #4: of around a
Speaker #2: think up to
Speaker #4: year. But also
Speaker #2: 100 more than 100
Speaker #4: depending on the refinancing requirements of Compton, of course. So, it's
Speaker #2: points actually a
Speaker #7: So what are actually the actions that you are taking now to lift this this increased cooperation and and how should we think of gradually when when when should we see effects that this plays out on on your financials going forward?
Speaker #2: savings different
Speaker #4: probably a process which is going
Speaker #4: to materialize in the
Speaker #2: refinance in
Speaker #4: coming years at the
Speaker #2: south
Speaker #4: total scale.
Speaker #2: time frame
Speaker #2: well that the question
Speaker #3: Okay. And maybe
Speaker #2: of around
Speaker #2: here but
Speaker #3: your targets
Speaker #3: Obviously, that's to increase synergies and cooperation with Foxconn on many fronts.
Speaker #2: also course of it's
Speaker #2: Mm-hmm. Well one of the inputs I I gonna say in private issue I myself believe a a lot into this synergies between Enercon Foxconn and Canton I'm driving since 25 years to Asia and I don't speak Chinese but I understand the people there.
Speaker #2: probably a
Speaker #2: process in
Speaker #3: levels. So what are
Speaker #2: the coming year it's a
Speaker #3: actually the actions that you are taking
Speaker #2: total
Speaker #3: now to
Speaker #3: lift this increased
Speaker #2: okay maybe
Speaker #2: now looking at now looking at
Speaker #3: cooperation and how should
Speaker #2: your your
Speaker #3: we think
Speaker #3: of gradually
Speaker #2: target on many
Speaker #3: when should we
Speaker #3: see effects that displays
Speaker #3: out on your financials going forward?
Speaker #2: levels so what
Speaker #2: are your tips
Speaker #2: now to
Speaker #2: And I I know whenever they want to go for that it will happen. Yeah. So I believe a lot in the synergies and with having that information released I'm no more insider either.
Speaker #2: lift this increase
Speaker #2: operation and how should
Speaker #2: we think of
Speaker #2: it gradually when
Speaker #2: when when should we
Speaker #2: affect participate out
Speaker #2: Myself. And you will see the next days or weeks me on the buyer side of Canton I'm not an insider. There's no blackout period.
Speaker #2: Well, one of the—well, one input I'm going to—of, I say in private, I think the issue I prioritize, I myself believe—a myself believe that a lot, a lot into this synergies between this Enercon and Foxconn and synergy Compton.
Speaker #2: I'm driving, I'm trying, I've been going to Asia for 25 years. I understand I don't speak Chinese, but I understand the people there, and I know whenever they want to go for that, it will happen.
Speaker #2: And my positive belief is that this synergies will go through. Yeah. So so that's one. When will the synergies come? I mean we could have had synergies since 10 years.
Speaker #2: So I believe a lot in never so I believe a the synergies. lot and And with having that information with having released, I'm no this more insider either.
Speaker #2: We are cooperating and we are now closer cooperating. I believe it was not so much a restriction from the from the Canton side for three years I didn't see the CEO of Foxconn at all.
Speaker #2: There's no blackout not period. And my and my positive belief is positive belief is that this synergies will go that through. So that's one.
Speaker #2: No. Simply not talking to me. Last time he told me hey Hannes I'm doing 360 billion dollars. What can you do me to make better business?
Speaker #2: I'm Myself. And you will see the myself next days or and a weeks me on the buyer side of Compton. I'm not an week I'm insider.
Speaker #2: When will these synergies come? I mean, we could, when done, I mean, have had synergies since we—10, 10 years. We are cooperating.
Speaker #2: Yeah. And I have a 120 billion of net cash. Yeah. He's not arrogant. He's just facing the facts. Yeah. I told him we have a great technology and I believe I can help you with your cars.
Speaker #2: For three years, I didn't see side for three the CEO of Foxconn at all. Simply not talking to years me. Last time he told me, no last "Hey, Hannes, time I'm I'm doing 360 billion dollars." What can you do me to make doing what can better business?
Speaker #2: I can help you with your robots. And with AI and and my advisory role I convinced him. Yeah. So that that's why they're moving a little bit and that's why I'm also positive.
Speaker #2: years And we are now closer and we are cooperating. I not I believe it believe it was not so much a restriction was not too much restriction from the on the on the Compton compound side.
Speaker #2: How fast will go that go? You won't see that next quarter. Yeah. If we convince let's say this one customer what we are talking to in America well that will pop.
Speaker #2: And I, you and I have $120 billion of net cash. He's not arrogant. He's just facing the facts. And I told him, "You have a great—have that—we have technology." And I believe I can help you with your cars.
Speaker #2: We will have revenues with that probably in Q1 or Q2 next year takes time until you design in the software. Yeah. But for sure a Canton alone does not have access to a 1 billion customer.
Speaker #2: I can help you with your robots. a robots and with With AI. AI and And my advisory role, I convinced then my him. So that's why they're advisor so moving a little bit.
Speaker #2: And that's why I'm also that positive. How fast, that's—how will that go? You won't see that fast, you next quarter. If we want, if we—we on convince, let's say, this one—which, let's say, this customer that we're talking to in podcast America—well, that will pop.
Speaker #2: At least not for a critical part like a operating system. Yeah. So it will take let's say to materialize all the 40 million or even more it will take at least two to three years until we have all of that realized.
Speaker #2: We will well that we will have revenues with that probably in Q1 or Q2 next have in Q1 year. The climate bill you design in next next time the software.
Speaker #2: And we have to work hard and that's why I personally act also as advisor for technology there. So so all of that together you won't see that a big effect in in H1 27.
Speaker #2: Yeah. But some yes. And and 29 you will see it be deeply. The first thing what we touch is is the sales structures is America and the sales structures in Southeast Asia.
Speaker #2: and But for but for sure, the Compton alone has sure the company does not have access to the 1 not want billion customer. At least not to at for a critical part like a operating system.
Speaker #2: And we have to work hard. And that's why I least that's why personally act also at the I advisor for technology there. also so So all of that so together you won't see that a big effect in never H127.
Speaker #2: least so So it will take it will say let's say to materialize all the 40 million or even that or more it will even it will take at least two to three years take at until we have all of that realized.
Speaker #2: Yeah.
Speaker #7: Mm-hmm. Okay. But this this sounds actually very much like the the synergies and and the cooperation is is is driven by a closer cooperation of of top management levels.
Speaker #7: At least this is my impression or do you see any any development also that you start combining R&D or you you bring together parts of of or departments of both entities in order to to to increase the focus on on on synergies going forward or will this remain in the top level?
Speaker #2: And the sales structures in Southeast Asia.
Speaker #2: I But some, yes. but And 29, you will see it be deeply. The first thing what we touch some the is the sales first is the structures is sales America.
Speaker #3: Okay. But this actually sounds very much
Speaker #3: like the synergies and the cooperation is driven,
Speaker #3: by a closer cooperation of top management levels. At least this is my
Speaker #2: and very
Speaker #2: We do that. The the most critically area at the moment at PSL that's the supply chain where we are suffering deeply with the 54 million.
Speaker #3: impression. Do you see any
Speaker #3: development, also that you start combining R&D or you bring
Speaker #2: much driven by
Speaker #2: Yeah. And here yes we we will have access to the database they will have access to our database and the supply chain people is the first one who really work very closely on a daily base together.
Speaker #3: together parts of, or departments of, both entities in order
Speaker #2: close at least
Speaker #3: to increase the
Speaker #3: Will you focus on synergies going forward, or will this remain at the top level?
Speaker #2: or
Speaker #2: any you bring
Speaker #7: Okay. And then maybe one more on on on the debt you you you provided Combatec. How high are the chances to really see a payback in Q3?
Speaker #2: We do increase, we do that. The most critical area at the moment is PSL. That’s the supply chain where we are suffering deeply with €4 million.
Speaker #2: together
Speaker #2: And that, and here, yes. We here—yes, we will have access to the—we will have the database. We will have access to our—we will have the database.
Speaker #2: to to
Speaker #6: Daniel. We also saw in the chat on some other questions some other people were raising that question with regards to the 126 million. Of of the Combatec payment still outstanding.
Speaker #3: Okay. And then maybe one
Speaker #3: more
Speaker #3: on the debt you provided
Speaker #6: For the for the comp business. Well if they don't pay this year they have to incur a penalty of 7 million. We don't know 100% for sure but what we know is that the business is running quite well but having said that we don't know yet if Combatec is designed to get that route or maybe they have bigger plans because they obviously have to think about the refinancing of the entire that portion.
Speaker #3: Combatec.
Speaker #3: How high are the chances to
Speaker #2: data and And the supply chain people is the first one who really work very closely on a daily base this together.
Speaker #3: really see a payback in
Speaker #3: Q3?
Speaker #2: okay and then one
Speaker #4: chat some other questions, some other people were raising
Speaker #2: more on
Speaker #4: that question with regards to
Speaker #4: the 126
Speaker #2: provide
Speaker #2: combat
Speaker #4: million.
Speaker #2: how high
Speaker #2: to
Speaker #4: without spending. For
Speaker #4: the comp business. Well, if they
Speaker #4: don't pay this
Speaker #2: Daniel, we also saw on the chat—we also saw on the...
Speaker #4: year, they have to
Speaker #6: So they might even take the 7 million a penalty despite the fact that well Combatec is doing quite well. What we will get for sure is 41 million of payment this year and we'll see.
Speaker #4: penalty of 7
Speaker #2: some other questions other people were raising
Speaker #4: million. We don't
Speaker #2: the question with regards to the
Speaker #2: 126
Speaker #4: know 100% for sure, but
Speaker #2: million
Speaker #4: what we know is that the business is
Speaker #2: Of the comment of the Combatec payment.
Speaker #4: running quite well. But having
Speaker #2: without spending for
Speaker #4: said that, we don't
Speaker #2: the well if they
Speaker #4: know yet if
Speaker #4: Combatec is designed to get
Speaker #4: that route, or maybe they have bigger plans.
Speaker #2: don't if
Speaker #6: How they handle the 126 million in total. They it they have to pay 8.5% of interest anyway and if they don't repay by the third quarter we mentioned that already they have to incur a penalty.
Speaker #4: because they obviously have
Speaker #2: they have to
Speaker #2: incur of 7
Speaker #4: to think about the
Speaker #2: million we don't
Speaker #2: know 100% for sure but
Speaker #4: portion. So they might even take
Speaker #2: what we know is that
Speaker #4: the 7
Speaker #4: million penalty despite
Speaker #2: running quite well but having
Speaker #4: the fact that, well, Combatec
Speaker #2: said that we don't
Speaker #2: know yet
Speaker #4: is doing quite well. So
Speaker #6: That's that's a fact.
Speaker #2: Conga is deciding to get the
Speaker #4: What we will get for sure.
Speaker #7: Yeah. Okay.
Speaker #4: is 41 million of
Speaker #2: proof of maybe they
Speaker #2: have obviously have
Speaker #2: And by the way we do not have so so if it's not the a black box as I said I'm acting as a technology investor for Enercon and Foxconn that helps me a lot to dig what they do in technology.
Speaker #4: payment this
Speaker #2: to think about the
Speaker #4: year. And
Speaker #2: refinance of the entire that refinancing of the entire debt
Speaker #4: we'll see. How they handle
Speaker #2: portion so they might take
Speaker #4: the 126 million
Speaker #2: the 7 million
Speaker #4: Total, they have to pay 8.5%.
Speaker #2: penalty despite
Speaker #2: the fact that Cong is
Speaker #4: of interest
Speaker #4: anyway. And if they don't
Speaker #2: doing quite well
Speaker #4: repay by the third
Speaker #2: What we will get for sure is
Speaker #2: You know Combatec I'm also on the on the on the board as a advisor. So I know what they are heading for. Yeah.
Speaker #4: quarter—I mentioned that already. They
Speaker #2: 41 million
Speaker #2: payments this
Speaker #4: have to incur a penalty. That's
Speaker #2: year and
Speaker #4: a fact.
Speaker #2: we'll see how we
Speaker #3: Okay.
Speaker #2: have 26 million they
Speaker #7: Okay. Yeah. Perfect. That's for me for the time being.
Speaker #2: they have to pay 8.5%
Speaker #2: of interest
Speaker #1: Thank you so much.
Speaker #2: anyway and they don't
Speaker #2: repay by the first
Speaker #2: Does it also answer the question of Mr. Kepplinger?
Speaker #2: As I black as I said, I'm acting as a said I'm acting as a technology investor for Enercon and technology investor for any of Foxconn.
Speaker #2: quarter mentioned that
Speaker #2: already that's that's
Speaker #2: That helps me a lot. The big US, that helps a lot in what they do in technology—technology. Even Combatec, I'm also on the, even on the board as an advisor.
Speaker #1: Yeah. You did. Exactly. We have one more question in our Q&A box by Mr. Wilde. He's asking please comment the development of Contron OS licenses.
Speaker #2: a okay and by And by the way, we do not have. the way last half so So first, it's so face not a black it a box.
Speaker #2: So I know board, so I know what they are heading for.
Speaker #1: What is the current run rate of new Contron OS licenses per quarter?
Speaker #3: Okay. Perfect. That's from me
Speaker #3: for the time being.
Speaker #2: Yeah. The the licenses per product we wanted to release the number how much we do but this is not the a unique number. We have licenses who cost 50 cents we have others who cost 100 dollars a month.
Speaker #1: Thank
Speaker #1: you so much.
Speaker #2: Does it also answer the question of Mr. Keplinger? it
Speaker #1: Yeah, you did.
Speaker #1: Exactly. We have one
Speaker #1: There are more questions in our Q&A box by—
Speaker #2: Yeah. So we we are still standing in that area of of two to three million licenses on the field. But the more important number is how much is our license income.
Speaker #2: okay that that's for
Speaker #1: Mr. Wild. He's asking,
Speaker #1: Please comment on the development of Quantum.
Speaker #2: me thank you so much does
Speaker #1: OS licenses. What is the current run?
Speaker #1: rate of new Quantum OS
Speaker #1: licenses per quarter?"
Speaker #2: And you see our software revenues did grow 16% in in Q2. And I would say this is on on two areas. The licenses what we sell at the moment is more for cheap equipment like the SOMS where they cost only 50 cents one euro.
Speaker #2: yes
Speaker #2: exactly we have one
Speaker #2: more question time is
Speaker #2: a while he's asking
Speaker #2: We have flight number we have services who cost 50 cents with others who cost $100 a month. licensed so So we are still standing in we we are still standing in that area of two the area to three million of license licenses on the field.
Speaker #2: please
Speaker #2: comment what is
Speaker #2: the of
Speaker #2: Yeah, the licenses per product—yeah, we wanted to release the number, which we do. But this is per product; this is not the unique, not the new number.
Speaker #2: But the more of the field, but the important number is how much is our license income. And you can see our software revenues get close—software revenue closing in at 16% in Q2.
Speaker #2: The the other hand we have licenses in the very high end areas like defense where security is a big role. And and there the license cost several hundreds the expensive.
Speaker #2: And I would, Q2, and I would say this is on two—say this is two areas. The licenses area, what we sell at the moment is more licenses, more for cheap equipment, like the forms.
Speaker #2: So I I don't we we didn't release that number and we don't do it because it's well if you sell one license in defense it's the same than 500 licenses for elevators.
Speaker #2: Where they cost only cheap where the 50 cents, one euro. cost the The other hand, we have the we have licenses in the very high-end licensed very areas like defense where high security is a big role.
Speaker #2: For example. Yeah. So I I consider the the revenues is the more important thing. And and by the way most of our services software revenues are service level agreements.
Speaker #2: Yeah. That comes all out of that. Sorry for having more no better answer. It simply hard to describe it on on that area.
Speaker #2: And security there the license costs several and hundreds. They're expensive. So I they expanded so I I don't we didn't release that think we number and we don't do it because didn't it's well, if you sell one license in well defense, it's the same than defense same 500 licenses for 500 for elevators.
Speaker #1: Thank you. We have not received any more raised hands or questions in our chat box. So I would say we come to the end of today's earnings call.
Speaker #2: For example. So example so I consider the I considered the revenues is the more important revenue is thing. And by the way, most of our software the revenues are service-level agreements.
Speaker #1: Thank you so much for your interest in Contron AG. And if you have any further questions at a later time please feel free to contact Investor Relations.
Speaker #2: That comes all out of revenue that comes all that. Sorry up for having no better answer. It's actually hard sorry answer simply hard to describe to describe it on that it area.
Speaker #1: A big thank you also to you Mr. Niederhauser and Mr. Bilek for your presentation and the time you took to answer all those questions.
Speaker #1: Thank
Speaker #1: you so much. We have not received any more raised
Speaker #1: I wish you all a successful day and I'm handing over to the management once again for your closing remarks.
Speaker #1: hands or
Speaker #1: questions in our chat box. So,
Speaker #2: Well thank you as well for your attention. Best regards out of Austria. And looking forward to see you in a lot of other earnings calls and especially on our capital market day.
Speaker #1: I would say we come to the end of today's earnings call. Thank
Speaker #1: you so much for your interest in
Speaker #1: Quantum AG. If you have any further questions at a later time, please feel free to contact Investor Relations. A big thank you also to you, Sanita House, and Mr. Bilek, for your presentation and the time you took to answer all those questions.
Speaker #2: that thank
Speaker #2: you any
Speaker #2: Please come we will have great Viennese coffee for you and Viennese sweets and biscuits and food. Yeah.
Speaker #2: more or
Speaker #2: questions our
Speaker #1: I wish you all a
Speaker #2: so
Speaker #1: successful day. And I'm handing over to the
Speaker #7: And you have any questions in between just write to ir@contron.com. We're happy to answer your questions or just jump on the phone. We'll happy to answer your question also today if you have any on Q2.
Speaker #1: Management, once again, thank you for your closing remarks.
Speaker #2: thanks so
Speaker #2: much I wish you all
Speaker #2: Please come we will have please we will have great Guinness coffee for great for you you. And Guinness sweets and as we did and biscuits and this quick food.
Speaker #2: successful
Speaker #2: day well thank Well, thank you as well for your attention. Best regards out of Austria. And you and looking forward to see you in a lot looking forward to of other earnings calls and especially your on our capital market discussion market day.
Speaker #4: Any questions in between? Just write to ir@quantum.com. We're happy to answer questions or just jump on the phone. We'll be happy to help.
Speaker #4: Answer your question also today, if you have.
Speaker #4: any of your two.
Speaker #2: food happy to
Speaker #2: answer questions today if you
