Ladies and gentlemen, we warmly welcome you to the 2025 results conference call and webcast of the Schmid Group. I am pleased to welcome the CFO, Arthur Schütz, and CSO Roland Rettenmeier, who will guide us through the presentation shortly, after which we will move on to the Q&A session.

Before we begin, I'd like to remind everyone that today's discussion will contain forward-looking statements within the meaning of applicable securities laws. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements.

Please refer to our filings with the US Securities and Exchange Commission, including our annual report on Form 20-F, for a discussion of these risks and uncertainties. We undertake no obligation to update any forward-looking statements except as required by law.

In addition, today's discussion may include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found in our earnings materials and filings.

With that, I am handing over to you, Arthur.

Thank you. Before we begin, a brief personal note.

I joined Schmid in January because I believe this company combines great technology, strong market positioning, and significant value creation potential. I also invested personally because I believe management and shareholders should be aligned.

2025 was a year of transitioning and repositioning of Schmid. We saw a significant recovery of our operations during the second half.

Over the last six months, we achieved some very important milestones. We secured solid financing for the group through our $30 million convertible announced in January, and we just announced a $30 million standby equity line, which allows us to secure funding if and when such funding is required.

We reduced our debt through various debt-to-equity programs. This call marks our first formal investor call, and we intend to engage with the market on a more regular and transparent basis going forward.

We also plan to provide quarterly trading updates on revenue and order intake. Over recent months, we have intensified our focus on margins and cost discipline, in particular our central costs, both German overhead as well as listing-related costs.

I will talk more about that during this presentation. Lastly, we are also strengthening our ownership culture and changing compensation of management and board to contain more share-based compensation and align everybody more with the interests of our shareholders.

That sets the strategic context. Let me now hand over to Roland, who will walk you through the technology drivers and why we believe our growth outlook is compelling.

Thank you, Arthur. I will give you all a short business update of Schmid.

Schmid is a trusted equipment provider for the electronics industry for more than 60 years, and we've continuously upgraded our platforms, the InfinityLine H-Plus and the InfinityLine V-Plus. While we continued the evolution of those product lines, we started investing and developing the next-generation equipment, like the C-Plus, the L-Plus, and the P-Plus.

In addition to this, this L-Plus panel-sized CMP equipment and the InfinityLine P-Plus, our next-generation panel level packaging equipment, were developed and well adopted by the market. This is leading to an above-market growth for Schmid.

We also recognize a shift from wafer to panel level packaging. High-performance computing and AI are driving the industry towards larger compute package sizes, like 120 by 120 millimeter.

These bigger packages are increasingly being manufactured on rectangular substrates, on panel. As producing them on wafer would mean wasting a lot of production area and material.

We currently recognize that several panel sizes, mostly 310 by 310, 510 by 515, and 600 by 600 millimeter, are being established by our customers, TSMC, Intel, and Samsung, as well as by their supply chain. As Schmid is providing panel level packaging equipment and panel level production equipment to the industry, this plays very much into our core competence.

We expect that this panel level packaging market will grow three- to fourfold by 2030. The enormous computing demand of AI and high-performance computing drives the industry towards larger and larger packages.

For example, see Nvidia and AMD, who introduce new product families about every 18 months, with compute units of increasing body size, as you see it on this picture. This is emphasizing advanced packaging on panel level.

We also see the demand for novel device architectures. This high-performance computing and AI computing are calling for denser structures on the wiring, power consumption, thermal management of the packages.

Chip on wafer on PCB and other developments are driving more complexity into advanced packaging, such as layer counts, modified SAP and SAP structures, combining in substrate-like PCBs. Schmid optimized equipment for these processes over decades and through different technological development cycles.

Thus, Schmid equipment is recognized as the most stable and best quality and highest yield equipment. As the cost for scrap material is significant, especially when you increase the body size of the package, the production yield our equipment is providing becomes paramount.

Our new products are adopted well by the market. As earlier mentioned, the new product families, InfinityLine C-Plus, L-Plus, and P-Plus, are well received by the market.

While our workhorses H-Plus and V-Plus are growing well with the electronics market, which is growing at about 10% year-over-year, it is these three products which will drive above-market growth for Schmid. We believe we are approaching the commercial inflection point where these products transition into meaningful revenue contributors for Schmid.

The momentum of AI infrastructure and optical modules, as well as the adoption of the new product families, are the reasons for Schmid growing stronger than the market. As shown here, we recognize great adoption and significant order intake for these new products starting in 2023, which was continuously increasing.

Based on current customer activity, we expect continued commercial momentum and potential addition order announcement for the next few products within the next few months. Q1 2026 showed a very strong market in China, and we expect, in general, a very strong second half of 2026 for Schmid through continuing AI server board demands and huge expansions in the area of flip chip BGA substrates.

With this, I'm handing over to Arthur.

Thank you, Roland. Let me start with a review of 2025.

2025 was a year of two distinct halves. The first half was challenging, reflecting a hold on most orders given high tariff uncertainty, resulting in revenues of only €16 million.

There were questions around which product category under the tariffs our equipment falls and what level of tariff applies for that category, which meant orders were pushed out. However, around May, orders started rebounding strongly, with the second half showing a strong and encouraging financial performance recovery.

Note that despite a challenging first half, we ended 2025 with a very strong order intake of more than €90 million and a very healthy order book of €51 million. In the second half, we saw revenues of around €50 million and an EBITDA margin of about 13%, getting somewhat closer to margins we have historically seen in 2022 and 2023.

Our EBIT margin in H2 2025 was 8.5%. As I will explain shortly, we believe we have levers to further increase that margin during 2026.

Turning to working capital. 2025 was not only an operationally challenging year, but also there was a nine-month strategic review period on a potential M&A transaction until October, which meant that no capital was raised either during the de-SPAC process completed in April 2024 or since the de-SPAC process.

The combination of improving business performance and no financing being completed led to a temporary working capital deterioration, particularly as we supported business recovery. As shown here, total working capital moved to negative €30 million at year end.

To support our growth trajectory and normalize operations, we estimate approximately €20 million of working capital investment will be required in total during 2026 before considering any additional growth investments. We have now mostly replenished that working capital gap.

Regarding the balance sheet, our priority has been to simplify and strengthen the capital structure. End of last year, we converted our liability to the private equity investor of our Chinese operation into equity, and our core shareholders waived €5 million of debt.

We are currently further significantly reducing financial debt primarily through the conversion of loans from our shareholders to equity. This will reduce debt in the next few weeks by a total amount of around €31 million.

At the end of this quarter, our debt profile will be substantially cleaner and mainly consist of lower interest rate property leases of around €10 million and the $30 million convertible announced in January, of which $18 million remain outstanding. Once this instrument is converted, pro forma debt would be around €23 million, which we regard as a sustainable leverage level.

Additionally, last week, we secured a $30 million standby equity purchase agreement with an institutional investor. This agreement gives us flexible, on-demand access to capital, entirely at our discretion, which is important because it provides us a prudent financial backstop while minimizing immediate shareholder dilution.

Shares can be placed flexibly at a 3% discount to average trading levels if and when investments are required. In short, our balance sheet is now in a good position and significant financial flexibility is available, and we're better positioned to support our next growth phase.

Alongside balance sheet improvements, we launched our operational efficiency program. This program not only intends to reduce costs, it is also helping to make us a leaner, faster-moving team.

Important to note that our manufacturing footprint in Germany remains right-sized and therefore unchanged. However, over the past two years, our German overhead cost base increased faster than revenues, particularly in G&A and R&D.

To address this, we initiated the so-called Spring program in January this year. The program targets at least €4 million in sustainable annual savings.

We can achieve these savings mostly through short labor programs and other voluntary headcount reductions and keep one-time restructuring costs to approximately €0.5 million. This means a very attractive payback profile and provides us an important margin tailwind for 2026 and beyond.

Additionally, we have started to reduce our listing-related costs, such as audit, legal, and D&O insurance, some of which have been particularly high coming out of the de-SPAC process. This is ongoing, and we will see some of the effects this year and more in 2027.

Finally, let me briefly touch upon our current trading. We delivered €18.2 million in revenues during the first quarter, with order intake of €13.6 million and an order backlog of €49 million at quarter end.

Please note that our order numbers always refer to equipment and processes, not service and spare parts, and also that Q1 historically has been our weakest quarter. Regionally, we continue to see very strong momentum in China, while some European orders have been shifted into the summer and second half of the year.

On current visibility, we believe that we will see a significant uptick in order intake during Q2 compared to Q1. Based on current visibility, we reaffirm our 2026 guidance: revenues above €100 million, adjusted EBITDA margin significantly above 12%, and order intake of approximately €114 million.

To summarize, we strengthened the balance sheet, improved operational execution, and see strong commercial momentum in our new product portfolio. We believe Schmid is entering an important growth phase, and we look forward to updating you on this process.

Thank you very much.

Good morning. Can you guys hear me okay?

Great. It's great to see the momentum in the business, the cleaning up of the balance sheet.

I wanted to ask maybe just on the current order book, how much of it is tied to advanced packaging and AI-related infrastructure versus your more traditional PCB and industrial electronics demand, and how should we think about that mix shifting over the next 12 months?

Thank you very much for your question, and I would like to answer that. About 60% of our order intake of the last 12 months is AI infrastructure or optical module-related.

This mix is expected to move towards about 70% by the end of the year 2026.

Got it. Great.

Then just on the panel level packaging adoption cycle, it seems like 2026 is maybe the start of an inflection and then more of that comes '27 and '28, but could you maybe just give us a sense where we are in terms of your customers really evaluating those technologies versus starting to see some pilot production, and then when you think that broader high-volume manufacturing can really begin?

For this panel level packaging, basically, two business fields currently converge. One is customers moving from wafer level packaging towards panel level packaging, and another is flip chip BGA substrate manufacturer implementing more functionality in their products, such as with glass core substrates.

We do see this already happening. We are already in discussion for Q3, Q4 bigger projects, already happening in order intake this year and ramping then 2027.

Great. Maybe one more question.

You brought up the glass core substrates. Can you just remind us what is the Schmid differentiation in the process capabilities there versus some of your competitors or some of the incumbents?

With our latest product developments like the L-Plus, InfinityLine L-Plus, is a full panel-sized CMP system, chemical mechanical polishing system, which is a key equipment for this panel level packaging with glass core substrates. As AI infrastructure and high-performance computing continue to demand more compute at lower power consumption and also improved signal integrity, we think this will happen, and glass core substrate are paramount to enable the next-generation compute units.

Great. Thank you very much.

I appreciate it.

Hi, can you hear me okay now?

Great. I think it was on slide 8.

Based on the expectations for the adoption of advanced packaging techniques, how would this typically translate into orders for prototyping and then ultimately, high-volume manufacturing? Which products in particular would you expect to see the highest demand?

These architectural changes we've shown on slide number 8 are multifaceted and have impact on the whole supply chain, from PCB to substrate to OSAT and foundry. Typically, the required processes are qualified in R&D, then industrialized in smaller volume, and ramped for higher volume in manufacturing.

This kind of qualification cycle can take from one year to several years. We currently see strong demand for complex HDI multilayer and substrate-like PCB.

We do already have intense discussion with flip chip BGA substrate player ramping new factories next year, which will require also the newer products like the C-Plus and the L-Plus I've shown earlier.

Great. Okay.

You talked about some capacity constraints at both facilities in Germany and China. Are you able to spell out the plans are to deal with those constraints, particularly considering the growth outlook for '26?

Arthur, are you going to answer this or shall I?

Sorry, go ahead.

Production capacity constraints are currently debottlenecked. In China, we are renting and building additional space and production floor to cope with the demanded capacity.

As Arthur mentioned earlier, we are having programs in place here for the German headquarters to increase our capacity as well. Most of the newer products, like the C-Plus and the L-Plus and also the P-Plus, are kind of just assembled and tested here, our manufacturing capacity is sufficient to cope with the demands we see for 2026 and 2027.

Great. Can I ask a question about the geopolitical environment?

Just whether particularly the Iran conflict is affecting access to materials that you need to build your tools and whether you're seeing any effect on demand from your own customers?

We don't see any impact on our business from this conflict.

Okay. Then just looking at your FY '26 order estimate, obviously, the Q1 intake is usually the lowest of the year and was less than a quarter of your full-year expectations, just curious to understand what gives you the confidence in that full-year estimate?

We are talking with our customers, we are working with our customers closely, and we see stepping investment in flip chip BGA substrates happening and starting in Q3, late Q2, early Q3 this year. We are already in negotiations for delivering bigger batches of equipments to our key customer who are ramping capacity for specially optical modules and AI server boards.

Okay. Then I think Arthur, you touched on this on working capital.

I think there was kind of a higher level of trade payables at the end of '25, which you've been paying down so far this year. Could you give us a sense of what kind of working capital requirements might be needed in '26 as your revenues are ramping?

I think in general, if you look at '22 and '23, we had sort of 7% to 10% working capital percentage of sales, and I think that's a good indicator of our future, including 2026. Keep in mind that on most equipment orders, we get about 30% of cash advance from the customer, so that obviously helps to keep the working capital at a pretty reasonable level.

Great. Okay.

Then just one final question from me. I don't know if you'll be willing to answer this one, but are you able to give us any kind of target gross margin and EBITDA margins that you'd be aiming for in the medium term?

What I would say is that if you look at '22, '23, we had around 20% EBITDA margin and, sort of let's call it 14%-ish EBIT margin. I don't see any reason that we wouldn't be able to achieve those margins.

Whether we completely get there this year is not something I can say at the moment, but definitely something that's achievable in the medium term.

Great. Thank you very much.

Hello?

Great. Thank you very much.

Hey, thanks for taking the question. On a little bit of a follow-up to the last question, but on the context of the $100 million revenue guide and 114 million of order intake, can you talk a little bit about the ramp from, I guess, today's 49 million of backlog to that target?

How you expect it, I think you mentioned you expect Q1 is typically seasonally weak. How you expect that to ramp into the back half of 2025?

Thanks.

Roland, do you want to comment or are you calling to answer that one?

Thank you.

I

I did not completely understand the question. Can you

The question was the ramp-up of the orders. I would say that clearly, we see this more back-end loaded.

As I noted, I think we can see that the second quarter is more order intake activity as Q1. In Q1, you have Chinese New Year, and you have sort of European holidays.

It's typically a weaker order intake. The second half will be stronger than the first half, and yeah, we generally see this more back-end loaded.

The reality is also there are some larger equipment orders where timing is always a bit unclear, it can be a little bit lumpy in any case. Unless Roland, you want to add anything to that?

No, I mean that's that's the nature of our equipment business. We have we have orders on hand until or order intake done until let's say July, August.

We can we can still convert it into revenue as our equipment is as Arthur earlier mentioned, we get 30% down payment, and we produce the equipment, and we recognize we recognize revenue when we ship the equipment. Orders taken until July, August will still be recognized as revenue in the in the fiscal year.

All the other orders, which will be collected later, will be taken as order backlog into the next year. For 2027, I expect that we'll probably take 60, 70 million order backlog into this year, which is which is always helping also our Q1 our weaker order intake in Q1.

Got it. Thank you.

Then on a related point, how do you see the mix shifting into the back half of the year? Is it expected to look similar to late '25 and the beginning of '26, or do you expect the remaining order backlog as it takes out to come with a different product mix?

The

the product mix will what we recognize, the product mix is is moving towards more AI infrastructure and optical module-related products, which means more sophisticated product lines of H-Plus, V-Plus, and also C-Plus. This is expected to move to about 70% in terms of the mix by the end of the year.

Order backlog for 2027 is expected to be at about, early 2027, what we will cover and and carry forward, is about 60 to 70 million euro of order backlog we will start into 2027.

Got it. Thank you.

Then just one more question. On the advanced packaging side, you highlight, well, the shift from panel level to wafer level.

Curious what you're seeing from your customers. Are they in the pilot and R&D stages, how the qualification process works, and yeah, curious how you see that ramp into potentially higher-volume manufacturing?

When you look at the whole supply chain, it's in different stages. We see panel level packaging already starting probably 10 years back in small R&D lines.

We do see a bigger project in the US, in Covington, with glass core substrates already running in small volume. We do see other big player driven by Intel and other big OEMs lining up now for small and then larger volume.

We do see this tipping point or the conversion then here in 2027.

Got it. Thank you very much.

Appreciate the time.

In the US, in sales side, on the sales side, we are we are working closely with the with the big player in the US from the OEMs to PCB and substrate manufacturer. We do see big investments also starting there in Q3, Q4 this year.

For example, TTM has announced some expansion, and also Intel is driving the the whole supply chain, not just in the US, towards the adoption of glass core substrates. Our US market work or our our US customer relation is is continuing, and we do see some significant investments also in the US happening.

Competitors, right?

Competitors or We

don't, sorry, talk about the customers. We can't name them.

There was also a question on competitors, which I think Roland can talk a little bit about.

Yes, we do have one European competitor delivering smaller equipment, more simple equipment on horizontal equipment. We do have competitors in Asia Pacific, in Taiwan and in Japan, also in China.

As mentioned earlier, Schmid has done a lot of lessons learned in the IC substrate business, and we are recognized by the market and by the customers as the premium equipment supplier for best yield output. As the complexity of those products is increasing and also the package sizes are increasing, yield is becoming paramount because you will waste a lot of material and a lot of money if you produce defects.

This is why we currently win projects even against low-cost competition, as our customers also can do the math and see when they buy Schmid equipment, they will have a better outcome of their whole investment.

Not much I can say. Yes, we do expect some coverage going forward, absolutely.

We cannot talk about qualification process or status with our major customers, but we are continuing on this. It's not just TRUMPF.

TRUMPF, we are cooperating for the TGV process, for the through-glass via process. There is also other market player who are offering this kind of technology.

Yes, we do see this is going beyond R&D and beyond smaller volumes. That's what I was mentioning with what we'll see in the second half of this year.

We expect larger orders for this kind of new device architectures.

I think nothing other than what's disclosed in the 20-F.

I would say that our production is not very capital-intensive. We have very little machinery here.

You can see that historically, our CapEx has always been around a million euro or less. It's a lot of assembly work, and therefore, any expansion would require very limited CapEx.

The other thing I would say is that our customers, as I mentioned, pay about 30% of cash advance for any order in general. There's some regional differences, and obviously, that helps us on the working capital side.

That's it.

Yes, they are indirectly our key customer, we are key supplier to their supply chain. As you might know, Intel is not maintaining any own facilities for panel production or PCB or substrate production.

They rely on Ibiden, AT&S, Unimicron, and similar player. TSMC is moving forward with 310 by 310 millimeter panel, also thinking about implementing glass in those kind of panel sizes.

Samsung, we are in touch, but also with Samsung supply chain more or less. We do see with SEMCO glass core substrates moving forward.

As mentioned earlier, this glass core substrate fuel the AI infrastructure and high-performance computing with lower power consumption and improved signal integrity. This will happen, and glass core substrates will be paramount to enable the next generation of high-performance computing at lower power consumption.

Thank you for joining our first formal investor call and look forward to speaking to many of you in the future.

Thank you very much.