Q3 2023 VAT Group AG Trading Statement Call Transcript

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

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : I have a few questions and I will ask them straight away so you have a bit of time to maybe prepare. First question is on year-on-year demand; if you could split this to volume, pricing, FX. You mentioned FX 8% tailwind you mentioned. Maybe you can give us the volume component. Secondly, service is what's surprisingly soft down 20% quarter-on-quarter. If you could quantify the destocking effect of it. It doesn't seem to be all just lower utilization. There seems to be a very strong destocking effect still going on and maybe it's a way to quantify? Third question is on China. You mentioned strong demand for lagging-edge equipment from those clients. What is the current share of China and how did it change over the last 12 months? And the last question is on profitability for the rest of the year. I think you mentioned earlier that you don't plan to cut staff in Malaysia. You have the short time labor in Switzerland, but you don't cut staff in Malaysia. What does that mean for utilization there and what does that mean for the margin in the second half?

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : Yes. Maybe to simplify, what is the volume component in demand? I mean you have the 50%-plus drop in total orders. But is there pricing? Is there volume? Is pricing coming down from the level or... If you can imply what do you expect for Q4 and going into 2024 if pricing drops?

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : And just to come back to China briefly, is this -- in your best estimate, is this China stocking up on the valves that they might need for future WFE equipment or is that valves that China use today in equipment for solar display microchips?

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : And finally, on Malaysia funding the utilization margin?

Question: Timm Nikolaus Schulze-Melander - Redburn (Europe) Limited, Research Division - Analyst : Thank you, Mike, for everything in recent years. I have just 3 quick questions if I could just take them in order. You've talked a number of times about pricing stability long-term contract pricing. So does that mean that the only way you're able to offset cost inflation is through productivity or are there some areas in which you can respond with raising prices to your customers?

Question: Timm Nikolaus Schulze-Melander - Redburn (Europe) Limited, Research Division - Analyst : Got it. Very clear. The second question I had was just on China. I missed the number you gave in terms of percentage of semi sales. And then just within your China business where you're shipping to domestic toolmakers, which is the sort of dominant process technology that you ship in China? And then I have one last follow-up, please.

Question: Timm Nikolaus Schulze-Melander - Redburn (Europe) Limited, Research Division - Analyst : Okay, great. And then maybe just 1 last one, please. Just on EUV. Is there any change in your chip set between sort of 0.33 NA EUV and high NA and just maybe anything you've seen in terms of call off activity in the last 6 months?

Question: Timm Nikolaus Schulze-Melander - Redburn (Europe) Limited, Research Division - Analyst : Great. Very helpful. And all the best for the future.

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Just a short one. Is there a margin difference on display orders versus the average of the Valve segment? If you could comment on any [integrated] industries.

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Mike, but actually my question was whether there is any margin difference or is that the display orders from the content business side so perhaps a little bit below the average group margin? I know you don't disclose that and if you don't want to, then that's certainly fine, but I was just wondering whether there is any?

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Fantastic. Thank you so much. And I think I won't still see you before you have left so wishing you all the best.