Good afternoon, everyone to Basler's Q1 2023 reporting. For those of you who don't know me, my name is Hardy. I'm CFO, COO of Basler. I would like to present you our Q1 results today. Before we start with the presentation, I need to refer to our disclaimer that all the statements I'm making today are based on assumptions made by the management board using information available at the point in time. These forward-looking statements are by nature subject to significant known and unknown risks and uncertainties. Yeah. Let's have a look to the agenda today. It's for those of you who join the calls on a regular basis, it's an agenda you know. We start with an executive summary, giving you the highlights of the Q1. We dig deeper into the financials, have a quick glance to our share performance and some further information. At the end of the presentation, I give you an outlook for the remainder of this year, also for the midterm. After the presentation, we will have plenty of time also for a Q&A session. Let's start with the executive summary. First of all, looking at the market environment, as projected in the last call, the wind is changing in our markets after, let's say, two years of boom and two years of very important demand, also fueled by the chip crisis. We see looking at the German industry, so all the German manufacturers for vision components, we see a decline in billings of 4% in Q1 versus Q1 last year, and a decline in bookings of 13%. You see here that the bookings are even the decline is higher than with regard to billings. It looks like that the industry is still on the way to slow down. I come later to this. The chip supply, this is on the other hand, good news, is continuing to be normalizing, so there are very rare cases of shortages. In most of the cases, the supply is much higher now than the demand, and we see a classic COVID effect that now stocks are piling up at our end, but also at distributors. On that side, we see more of a push from the supply rather than a gap in supply, what we have realized in the last weeks. What is very interesting and worth to mention and stress here is that we see very regional, high regional differences in the market. Let's go through this, starting with the China market. After the zero-COVID policy, we are still waiting for a stronger rebound. The rebound is still muted. Besides application of solar and electric battery, CapEx equipment. Electric vehicle battery, CapEx equipment. Consumer electronics and especially also lab automation is very weak. The overall economy is still waiting for a rebound of China. In Asia Pacific, we see a severe downturns in the area of semicon and consumer electronics and ends in the APAC region. This is a big portion of the overall economy. If you look at press releases also from Taiwan or Korea, there is a significant downturn happening at the moment. This downturn is not a normal downturn due to the high amplification of the demand over the last two years. The swing back is pretty strong and it's comparable to what we have seen back in the Lehman crisis times. In North America, the market is also weakening. We see stocks piling up at our clients in various industries. We see especially also here the down cycle in semicon electronics CapEx and also on the logistics side. This is very specific. The logistics market is in a down cycle because of also the first COVID wave. Everyone consumed via online retailers. This is now going into the different retailers and also in this, the money spent in the service sector. This industry is impacted. In Europe, in comparison to those other regions, we see robust and strong growth. Also, our numbers, I come to this in a minute, are very strong. Basler's performance in this environment. For quite some time we are running behind the industry in the first quarter of this year. Bookings are down by 39%. Obviously, we had a very high bookings made last year, but bookings are still weak. This year they are on a low level. We come to specific numbers later. Billings are down by 15%. The reason why we run behind the industry is our high exposure to weak vertical markets. Namely here semicon, electronics, logistics, and in China also laboratory automation. The region, a very Asia heavy business portfolio in our regional mix. What we also experienced in Q1 were quite some further cancellations from the Asian region, especially from China. These cancellations were from its magnitude higher than what we have expected. We see still these dynamics ongoing. All in all, the results were negative. Our pre-tax earnings margin was -3%. We have here to report the first time, I think, since Lehman crisis, one and a half decades, a red quarter. What was also for us a challenge was that in the first quarter, our hypercare phase of the change in the ERP system, and we had a successful go live. I reported this first of January or second of January. We are running at the moment, but essentially in Q1, obviously through a very hot and strenuous hypercare phase. In this hypercare phase, we had also continuous issues with the process in the outgoing goods area. This also led to a situation where we missed our internal revenue growth for Q1 by a large EUR 3 million because we were not able to ship those goods out. This obviously, then is another glitch in this Q1 reporting, where we would have liked to ship those products out. As I reported earlier, that this was a weak quarter is, and we gave already indication. We reacted already within the first quarter with a savings program. This program is on the road. It will give or will become effective starting in April. We are already have or we have already implemented these measures. Maybe just another topic because we get a lot of good feedback at the moment from our new sustainability report. I featured this in the earnings call, in the annual earnings call, but also here rating agencies have rated us higher now. I just wanted to give again a hint that you will find much more information in this report now. Also, the focus of the company is more towards this direction or steered towards this direction. As mentioned also in the last call, we have clear goals also for Scope 1 and Scope 2 to become net zero emission by 2030. Have a look. Yeah. With regard to the team, we had some new people coming on board in Q1, but very selectively. As also reported earlier, we stopped the hiring process due to the market outlooks at the moment. We increased the organization quite significantly over the course of the last two years by organic hiring, also by M&A transactions. The number of employees are in the range of 1,140 by end of Q1. This is approximately 150 employees higher than compared to end of Q1 last year. Q1 comparison, we have approximately 140, 150 people more on board. The mix, as you can see, has not much changed. The majority of our employees are working in the areas of sales and marketing, especially, also the acquisitions or the distributors have increased. At this percentage points here of 37%. R&D almost, 30% to 27% of our people in production and admin. Worth to mention is also the absolute investments. Due to the reason that we are, let's say, focused on the mid to long run, we increased our R&D departments and also the acquisitions that we did last year had some R&D people on board. That the R&D investment in total in Q1 is approximately EUR 10 million or was approximately EUR 10 million. With the weak revenue, it is 19% from sales. It is far above the steering point at around 13%-15% from sales. This comes mainly due to the mismatch of, okay, we increase the number on the one end. Also inflation is kicking in and on the other end, we see at the moment a downturn in the market. Our long-term steering point will not change. It is in the range of 13%, maximum 15%. We are heavily investing because we believe in our transformation. From moving from a camera company mainly, and having their clients mainly in the factory automation space to what we call a computer vision supplier for as a full range provider. We want to attack and serve multiple vertical markets outside the factory domain, also with a higher revenue exposure. I mean, we see at the moment what happens with the high exposure of factory automation customers in the semiconductor electronic space. We definitely want to be a more balanced and also earn and enjoy from the higher growth sectors, so medical, traffic, logistics and also retail. On the other end, as you know, we are increasing our portfolio. We are already offering a lot, a complete portfolio of vision components in hardware, and we are strongly, let's say, investing also into offering more and more software functionality, software tools and software frameworks for our clients. Coming more to the financials, starting top line with our order entry and our revenue streams. First of all, good news. What you see is the order entry decline that we have experienced Q1, Q3, Q4 last year. The lighter gray bars here, has turned, and we are now seeing that order entries are picking up again. However, with EUR 54 million order entry quarter, we are, let's say, at a low level, and this needs to increase further. And we expect it also to increase further, but not definitely overnight. It will take some time because of forward effect, also created, let's say, inventory in the supply chains, and we see still the tough decline in the semiconductor electronic space. I mentioned also that we had again quite some cancellations in Q1. These cancellations from its magnitude were higher than what we have expected. These cancellations come from old orders placed in 2022 or even in 2021. This is why we again show you here the correction, the corrected numbers that you can interpret the business development best. Revenue was EUR 56 million by and large. what you see on a low level. the average was more in the range of EUR 65+ over the course of the last quarters. I mentioned this earlier. What is also interesting with the strong European market on the one hand and the weak other regional markets, our regional revenue split has shifted quite a lot. It shifted 5 percent points from Asia towards EMEA, and it shifted roughly 2%-3% points from Americas. That we are now, let's say, below 50% in our revenue share in Asia at this point in time. With 37% on a record high level for Europe, for the European market and on a low level for Americans. With regard to gross profit and gross profit margins, we stay at a low level of gross profit margins, roughly 44%-45% points. This is below, let's say, the average and also the target figure. We expect to get back in the 50% area over the course of this year. What we are realizing is that with the lower demand on the one hand and on the other hand, with quite some strict push-ins from our suppliers, and let's say the spot buys we had to take and swallow the last two years, and some of them are still sitting on in stock, and we are eating them up. It takes longer than expected to get rid of those, let's say, high inventories and also high inventories that where spot buys are mixed in. There is definitely a longer slack effect, but we are expecting the gross margins to rise over the course of the year again. We also see headwinds from the Chinese renminbi. The Chinese renminbi has weakened against the euro over the course of the last six months. Here we see something. The combination of low revenue and relatively low gross margin led to a low gross profit of around EUR 25 million. Putting this all together, let's say on the one hand, lower revenue, lower gross profit margin, and also increasing organization has resulted in a quarterly loss of EUR 1.6 million EBT. Here you see the comparison against Q1 2022. Order entry, as mentioned, EUR 54 million, down by 39%. Sales EUR 56 million, down 15%. Gross profit margin was down by 5.5 percentage points. The gross profit in total, was 25% down to EUR 25 million. EBIT down positive, but on the other earnings figures, EBIT, EBT also net income are negative figures, with EUR 1.6 million in earnings before tax. Due to certain tax payments in certain regions and time delays, the net income is, was minus EUR 2.2 for the first quarter. On the cash flow side, I mean, we have here multiple effects, starting with the operational cash flow, a negative one. This operational cash flow was mainly negative due to the weak result and the earnings situation. On top of this, we still had also a lot of push in from materials. We had the glitch of not delivering because of the process issues on the outgoing products, so for finished products. In total, this resulted in another increase of inventory of around EUR 4.5 million-5 million. We had on that side also increase of working capital on the inventory side. On the other end, on top of it, we invested heavily. We had for the S/4HANA projects, so for the ERP change, and also for our building project to move in. We had certain investments in IT infrastructure and software. This also was a quarter with relatively high investments of -EUR 4.4. We had no extraordinary effects. If you compare it to the years before, Q1 2022 and also the Q3 2022, we had high investments, also in M&A transactions. We had nothing, no M&A transaction investments in Q1. This was more these bigger projects that led to a high run rate. The run rate is normally more in the, let's say, maybe 3% range than rather the 4.5% range. Here, a view on the cash account situation combined with the cash flow. We started the period of this year with EUR 29 million roughly in the cash account. We had a negative free cash flow of EUR 7.7 million. We paid back some loans, and we also had certain interest rates to pay. We were at the end of the period around EUR 19 million in our cash accounts. These are the financials. Let's come to the share price development. Starting with the beginning of the year, we were at around EUR 30 million. End of the quarter, we were at EUR 22 million. Not million EUR, excuse me. EUR 29.85. End of the quarter, we were at EUR 22 roughly. The reason, I mean, is our, let's say, guidance we have given out already. I guess then also the annual report figures we have shown. We are running behind the TecDAX index. Definitely our aim is to get back on track here and to increase the share price, but also to concentrate that the current, let's say, revenue situation, earnings situation is turning back into the growth story and profitable growth story. With regard to the share, maybe one more information, and you might have read it. We officially closed, let's say, our purchasing program for treasury shares, because we have not purchased in the recent past. We have also no excess liquidity for the coming months, also in these kind of market situations to further buy shares. This is why I want to give here clear messages to that we stopped the purchasing program. Let's see when we might reactivate such a program. At this point in time, we wanted to be clear that we are not purchasing shares and also we have not purchased shares over the course of the last months. Yeah. Let's come to the outlook. That might be the most interesting part for most majority of you. For the 2023 or the remainder of the 2023, we still see in general a gloomy market condition. I mean, we have seen now the 1st quarter, so our views have not significantly changed on what we have guided in March. We believe that the order entries will stay on a low level in the second quarter. Hopefully they will pick up further slightly, but nothing bullish to our point of view. What we believe is that the cancellation will phase out because we do not have much more risk exposure of old orders from 2021, 2022 in the hot phases in the regions where we are experiencing cancellations. We definitely believe this will pay out over the course of Q2. We expect a recovery in the second half of the year, especially in very weak markets. Semiconductor electronics, maybe also logistics. This needs to be seen. This is what we are hearing from our clients. This is what we are hearing from our sales force, also what we can see in the press when you look at the recent guidance from chip suppliers, you see also they also expect some signs of recovery in the second half of the year. We definitely believe that geopolitical uncertainties will remain. We also believe that our high competition and the competition intensity in China will stay high because we have a situation where the rebound is not as strong as expected. The market is not growing at, let's say, at the pace that this market is used to be. On the other end, many companies are fighting for the market shares in this market. We definitely believe this is gonna continue. On the gross margin side, I already mentioned this, we expect that the gross margins will step by step get back to a normal situation, but it obviously takes longer than what we have expected. We need to clear the inventories. We need also to get rid of the expensive spot buys over time. This also is very much, let's say, connected to the demand situation. If the demand is high, we will run through this faster. If the demand is lower, it takes some more time. We are not at the moment in a situation where we have to do more spot buys. This is over, but it's about when are the stocks turning. Yeah. Headwinds from China with regard to price pressure, also with regard to currency. It's not written here, but also the yuan renminbi seems to stay weak against the euro. All in all, I mean, the situation is visible in the Q1 report. We are suffering at the moment from a weak market, situation on the one hand, and also on the other hand with a large organization which with increase of cost of living. The cost base is climbed a lot due to inflation and especially also due to increase of the organization, which we have done with a midterm perspective. On the other end of the markets are very weak and we are at this position at the moment. Putting all this together, we confirm our guidance. The guidance, just as a reminder, is EUR 235 million-EUR 265 million in revenue. Earnings margin, 5%-8%. For this year, we lower our steering point of 12%, where this is our guiding principle for the long run. What we are in at the moment is definitely we are more in the area of the lower end of the guidance. This is obvious. We believe the markets will pick up in the second half of the year and hopefully we can give you better insights over the course of the year and narrow down the corridor. In order to keep the company at 5 percentage points profitability at the lower area of this guidance, we have and would like to mention this again, we have already taken measures on the savings program, and these measures will become effective in April, from April onwards. We are very confident in making progress. Yeah. Looking into the further future, I mean, we are very confident about, let's say, the future of our markets, the trends of automation, the trends of vision making inroads in many different applications. Obviously, we are having at the moment a situation of a significant downturn, especially in these electronic semiconductor logistics markets. We need to see how long this downturn will kick in. Based on an assumption that the markets will start to recover in the second half of this year, we believe then we will see another growth phase for our industry that enables us to keep our four-year plan here, which is to realize EUR 400 million in sales and also be back on a profitable growth track with earning margins of around 12% by 2025. Having this said, I come to the end of my presentation and would like to open the Q&A session. You can either write your question in the chat, so my colleague will read them then the question or you can also unmute yourself and make your questions verbally, which I obviously would prefer to have some interaction with you now. Yeah. Hello from the chat side. We still expecting questions. We have no questions so far, Adi. Any questions? The first one is here. Mr. Mast, would like to talk to us. Okay. Hello, Mr. Mast. Mr. Mast, you can talk now to us, we can hear you. Can you hear me? We have some tech issues here. Hello? Hello. Now I can hear you. Yes. Perfect. Sorry for that. My first question is regarding some good performance in Europe. Could you maybe elaborate a bit on the explanation on what support this good condition, given we don't have specifically very bright outlook here, as well? What are the main factors that influence this good performance, please? Yeah. On the one end, what I am seeing, I mean, the German and the European market is by far not so connected to the semiconductor and electronics industry. This, I think, is one of the main factors because we see in, let's say, other general automation, be it food processing or automotive, activities happening. This is one end. Another end is, and this is also with regard to the mood, I think, in the German and the European markets, is that definitely we've seen that larger projects in the space of, for example, electric vehicles, for example, also battery inspection, are being now, let's say, implemented in or there are plans to that they are implemented in Germany and Europe. Formerly these projects typically were realized in Korea and China. It's due to the geopolitical situation. I think this is also, at least at the moment, something where the mood is keeping upwards. For the another aspect that I'm seeing and believing is the European customers have. Were not, let's say, did not behave, for example, like the Asian customers in the chips crisis of overbookings, over-ordering, and very aggressive behavior. It seems to be that these more smooth management style led to a situation where the industry is less volatile and more robust at the moment. Also we have seen that in general that it took longer for the Europeans to get to reduction of a backlog. This is also another indication. What is surprising, is definitely, and this is something we have not seen in the past, that Europe can be so strong when other, let's say, CapEx markets in U.S. and specifically in Asia, are slow down. This is something where we are still very, let's say, look into this very cautiously. I can tell you up to now, the bookings are still high. I had a VDMA board meeting two days ago. The members of the board who come from different vision companies, either systems companies or components companies, are also still very positive. That's the situation. Okay. Understood. Very clear. Related to this, order cancellation that are quite high currently. Yes. Do you expect to change your policy going forward in order to secure more of these orders, for instance, to have some prepayment or is it something that you will keep as it is? I think what we have learned, I mean, we have also to say that there is more of an extreme situation we were in with this sharp supply when overnight more or less the lead times of our supply went from two months to one and half years. Also then the behavior of our customers. What we have definitely learned is to have a more strict governance also on checking the real demand of the customer. Because the issue in Asia is, and I mentioned this in one of the calls before, legally, we could, let's say, enforce to ship the products. The problem is in Asia with certain clients, you are risking that either these clients go bankrupt or these clients simply don't pay. You end yourselves in very long lawsuits, and you might not see the money. This issue I think will remain. I think it will be naive to think in certain areas of the world that you can just enforce. But the question is, how much exposure do you give yourself? Because we have obviously taken some risk in purchasing material. And how much do you check the validity, the real demand that those customers can at the end of the day or will take the goods and will pay for it. I think on that governance side, we definitely have changed our philosophy. I mean, now the market is also back to normal or to a swing back. If we see again such a boom, we have definitely learned our lessons out of this extreme. I have to stress this point again, it was an extreme situation. Another question for me is regarding these saving programs. Could you quantify a bit, what kind of saving do you expect for this year, please? Yeah. I mean, as you can imagine, it's continuous work. But just to give you a feeling, we are, let's say, targeting something around EUR 1 million per month in savings. The measures are very different. I mentioned this in the Annual Earnings Call. There is measures of reduction of bonus payments. There is reduction of working time. There is obviously other OpEx cost savings involved. So in all these mix, at the moment we are targeting or we are having implemented measures to reduce our, let's say, fixed cost base, roughly at around EUR 1 million per month. Thank you very much. Last question from me is regarding China. Do you mean that you lose market share currently? Do you have any tool in your favor in order to keep your position? Yeah. Yeah. In China, the situation is that we over the course. I mean, it's not actually one thing here. Over the course of COVID, so the last, I would say two and a half years, and especially in times when the borders were shut, we've lost market share in China against Chinese rivals. Not against Western, against Chinese rivals. What we are seeing, the situation in China due to the, let's say, market growth is lower than expected. Long time the borders were shut. The Chinese competition has focused on the Chinese market and was very aggressive. What we are seeing is we are coming into a position in China where we are no longer, let's say, the undisputed market leader in terms of volume. We have to focus on the clients who are willing to pay a premium for Western companies and to pay a premium for unique technologies. Here we see potential, definitely. We also have to say that not each and every customer is our best buyer there. That the customer is willing to pay a premium for a Western company. Here we believe we are, our positioning, let's say, can be only less aggressive than other areas because simply the situation is that you do not win just by price against a Chinese competitor in China if both companies go direct and so on and so forth. There are opportunities. I mean, there are customers looking for unique technologies. There are customers looking specifically for Western technology because they export machines into the Western world. There are also customers who are willing to pay a premium and like our, let's say Performance, especially when it comes to the software environment. I mean, you know the product pylon. Our software development kit, which is beyond what our competition can. Okay, very clear. Thank you very much, Hardy. We have another question concerning the competition in China. Maybe you explained it a little bit, but, could you explain a bit more in detail, Hardy? Mr. Kraft is asking the question. Yeah. I don't know if informations are missing. I mean, maybe also, again, for the group to bring everyone on the same page, for most of you, it's a repetition. I mean, we have certain rivals in China that are multi-billion companies. These companies have deep pockets. They are also willing to invest and offer products for a very aggressive price over a long period of time. These companies also know what they are doing in terms of R&D and product offering. We are against that. It's just, it's a very sporty competition that is challenging us, not just recently, over years already. We are taking this challenge. The specific element in China is that in China, these companies go direct like we go, so there is no indirect partner who also wants to have a margin and also wants to differentiate. In the market itself, these companies want to also be very aggressive to win market share because these companies also have ambitious goals. They have also some of them have IPO plans. This is the situation we are. This won't change in China. I mean, we see the geopolitical trends. We are not in the position to change these. We need to live and maximize. If we assume that the geopolitical stress will further increase, then the competition in China will most likely further increase. On the other hand, we have chances in other areas of the world. This game has, as always, risks and opportunities and challenges. I mean, we are in an industry that is very fragmented. Multiple different applications, thousands of potential customers and with lots of different products. It's a fragmented industry. In this fragmented growing industry, we are also positive that if we do the things right, we can continue our growth path. We are not ignoring that there are very strong Chinese competitors, that's just simply a fact. Yeah. Thank you, Hardy. We have no more questions here on the chat. Okay. If there are no other questions, I highly invite you. If you have some other thoughts, please contact us. We are approachable if you have further questions. I would like to thank you for your attention today, and looking forward to our Q2 earnings call. See you soon. Bye-bye.