Q1 2021 VAT Group AG Trading Update Call Transcript

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

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : Three questions here. First of all, on the order intake, is this now a situation where you start feeling uncomfortable having orders that -- with deliveries of more than 3 months? And are you therefore starting to kind of refuse or push back on certain orders? Secondly, what is the theoretical ramp-up that you can achieve this year in Malaysia? Is the 170 million, is that the maximum? And then on the manufacturing costs, Malaysia compared to Switzerland, what is the headcount cost that you have in Malaysia for an assembly worker compared to Switzerland?

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : And maybe just a very quick follow-up. How do you assess the risk that this is a peak cycle that we just see? DRAM prices and all component prices go through the roof. Everyone ramps up CapEx. A bit similar to what we saw in, I think, early 2018. Do we -- how do you assess the risk that we -- that everyone jumps on the opportunity to increase CapEx, and then 6 months down the line, all the semiconductor prices fall through the bottom and that it leaves a void with everyone? How do you assess the risk? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 15, 2021 / 8:00AM, VACN.S - Q1 2021 VAT Group AG Trading Update Call

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : I have one related to the purchasing behavior of your customers. So I would like to understand a little bit how much of the growth in order intake can be related to the -- some further hamstring purchases, as some people call that, or toilet paper strategy, that you stockpile a lot and then buy even more despite of ample reserves? So how much of that behavior have you seen in the past and going into the ramp-up? And why this time could be different, if at all? Because we all know that the visibility in this industry is low, but it's even lower, I think, on the downturn than on the upside. That's just a little bit of the color, please.

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : Yes. Just a comment on pricing maybe. So components or input costs are going up. How do your framework agreements work? Can you pass on each of these price increases directly to the customer? And do you then prioritize deliveries if you don't have such agreements with second-tier customers? How does that work exactly, the pass-through of costs?

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : So a year from now, if all your input costs are 50% higher, you still sit on the same selling prices? Or how does it work?

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : So that means do you prioritize deliveries? Is there like a ranking of customers that go -- come first? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 15, 2021 / 8:00AM, VACN.S - Q1 2021 VAT Group AG Trading Update Call

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : So I have a question with regards to 3D NAND, actually. So I have heard your positive comments about the DRAM space. And I'm a little bit surprised by being a little bit more -- or less enthusiastic about NAND. And specifically, I would like to know your view on the next step in the 3D NAND manufacturing from 128 layers, 160 and above at Samsung. So we know that Samsung has managed to edge so far all 128 layers in a single step basically, thanks to the superior chemistry that they have and access to hexafluoride compounds. And now going beyond, that is a big question mark, whether they will manage to do it in one step or not, and most likely not. So then I would like to know what would be the implications then for VAT and for the demand for valves? If you have the view on this space.