Q1 2020 VAT Group AG Corporate Sales Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : Gentlemen, 2 questions. One is relating to the complexity of the wafer manufacturing equipment machinery, which -- there seems to be no disruption in the supply chain when I listen to your statements. At the same time, ASML seems to have some delays in deliveries and revenue recognition. So I'm a bit surprised that you're also confident that you see no major disruptions. Maybe you can elaborate a little bit on this. And secondly, I think a lot of clients are restocking on components just to make sure that the -- any disruption in the supply chain can be buffered with more inventory. So how much of the Q1 order intake do you think is kind of inflated by the fact that there's restocking by your clients?

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : I have 3 or 4, if I may allow for a little bit more this morning. So firstly, what gives you the confidence that the supply chain challenges will be sorted out in Q3 or the second half of 2020? Does this assume that the pandemic will be contained by then?

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Yes. So I understand that you are increasing resilience of your business. Do you think it would have been enough in case the second outbreak appears in autumn, November? Or also will these people get simply scared, they do not show up to work? That was an issue for some of the other companies that I cover.

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : That's very reassuring. And now going to the second question. I know this is something that you have relatively low visibility and we tried to get a little bit more out of you on that topic already before but I'll try again. How much of demand for your products is driven by the end demand in automotive and the smartphone end markets versus data centers? Again, just helping me to think about it in terms even of just the relationship would be very helpful.

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Right. The biggest issue is perhaps the smartphones or one of the larger ones slide. And how much would you estimate your exposure to that one?

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : And that would drive perhaps the majority of the market for the DRAM memory chips, wouldn't it?

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Yes. That's clear. Yes. I mean it would be just helpful to get a little bit more of the numbers behind it for rough comparison at least, but I'll try to dig into it and come back later. And then coming to the third question, it's about expanding to other parts of the vacuum chamber. You mentioned several occasions before. What is the total market potential? What would be some of the competitors or new peers you would be seeing there?

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : And then just the last one, out of curiosity, you mentioned that there is an increasing share of vacuum in -- manufacturing in the general industry. Assuming engineer by education, I was always told that vacuum is bad when designing manufacturing processes because it's just far more expensive to manufacture anything when you use vacuum versus not. So is that that my peers are stating industry are failing to come up with a better understanding of these -- of non-vacuum processes or would try to... without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. APRIL 16, 2020 / NTS, VACN.S - Q1 2020 VAT Group AG Corporate Sales Call