Good morning, ladies and gentlemen, and welcome to the Kontron earnings call annual report 2025. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Mr. Clemens Billek. Hello, and a warm welcome from my side. Let me guide you through the 2025 financial results and the most recent company highlights. We made a big leap in operating cash flow. It jumped from EUR 99 million -EUR 168 million. That's an operating cash flow at a record high for Kontron. We've also made a leap in EBITDA. It jumped from EUR 192 million to EUR 237 million, including one-off effects, one-off impact of the COM transaction, among others, though. The backlog increased again. We had a book-to-bill ratio of 126, and the backlog reached a record high of EUR 2.5 billion. The working capital is pretty much fixed. It improved from EUR 350 million to below EUR 300 million, now stands at EUR 287 million. If you look at the company highlights, one of the company highlights is definitely the portfolio streamlining for 2025 and the reduction of low margin EMS, the service business revenues, and the deconsolidation of the COM business. At the same time, we strengthened the software solutions business, significantly increased, resulting in a book-to-bill of 147 at an organic revenue growth rate of 15.5% for 2025. Obviously, this was driven by two divisions: by defense and by transportation. At the same time, on the lowlight side is the GreenTec Division. We started the GreenTec restructuring in light of the recent weakness of the solar division. The software is gaining momentum, so we have several Cyber Resilience Act compatible products on the market already, powered by Kontron OS and AIShield. We have yesterday announced the share buyback program with expected duration until September at the latest. The total amount is up to EUR 50 million and a maximum of 2.9 million shares or 4.54% of the share capital. We might further extend the share buyback program depending on market conditions and the further share price development. Why did we resolve that share buyback program? Well, you've probably seen the current volatility and weakness in the stock market in general, but in particular for Kontron. Therefore, we have resolved, given the attractiveness of the current share price, to do a share buyback this year instead of a dividend. The decision is reevaluated every year. You're aware, we have as a rule of thumb, around 50% of net profit, at least the operational net profit, to be provided to shareholders either in form of a dividend or share buyback. Dividend was last year EUR 0.60 per share, or EUR 37 million. This is significantly higher with EUR 50 million for the share buyback program, but the profit is also significantly higher, also on operational level. We are buying on stock exchange and also MTF with the market-compatible price caps and maximum 10% above the average share price over the last five trading days, and we're buying up to EUR 24 a share. The lowest price we pay is the 10% of the average price over the last five trading days, and at least EUR 1 per share. The KPI for 2025, if we look at the revenues, we achieved EUR 1.6 billion, slightly down 4.6% against the backdrop of discontinued assets and discontinued activities of around EUR 129 million. That's in line with expectation on that side. At the same time, we booked new orders of EUR 2 billion with a book-to-bill of 1.26. The gross profit is slightly down 2.5% on an absolute basis to EUR 676 million. If we look at it on a relative level, the gross profit margin increased 41.2%-42.1%. If we look at the EBITDA, it jumped sharply EUR 192 million to EUR 237 million, but there are one-off effects included, obviously. If we deduct that, we get to an adjusted EBITDA of 220, roughly. The net result also jumped EUR 91 million to EUR 141 million, an increase of 55%. There again, there are one-off effects included. If we deduct that, we get to an adjusted net profit of around EUR 109 million. Last but not least, the operating cash flow, 70% jump, EUR 99 million-EUR 168 million. Looking at the consolidated group balance sheet, you see that the equity is 14%. The equity ratio jumped from 35.8% to 41.8%. The total net debt is down again. It went down from EUR 163 million- EUR 147 million, and the working capital also improved by EUR 63 million, from over EUR 350 million to below EUR 300 million- EUR 287 million. You have to bear in mind that that does not include yet the cash-in we expect from the COM business deconsolidation. We expect the cash-in from that deconsolidation at the end of the third quarter in the amount of EUR 126 million. That net cash-in is yet to come. Let's have a look at the numbers in more detail. Additional disclosures on the one-time effects. We had reported one-time other operating income, EUR 87 million. At the same time, there were further one-time costs associated with the income amounting to EUR 66.8 million, and we had one-time income impacting net income of EUR 15.5 million. All in all, the total income on net income was EUR 32.4 million. If we look at the R&D, you see that the R&D is particularly impacted by software solutions. We invest heavily in this segment. Over 50%, EUR 145,146 million was invested in R&D in this segment. We also invest 37% in Europe and 10% in global. The R&D spending for 2025 was also very high. Revenue growth breakdown. If we take out the EMS revenue reduction, where we went out of low-margin business and the closure of several small entities, we have to take those EUR 60 million into account. Then we obviously had the COM business deconsolidation and the disposal of the very small one service business in Hungary, where we left EUR 70 million, resulting in an organic growth on that basis of 3.2%. The status of the liquidity, we have EUR 260 million cash on hand and around EUR 200 million available lines, and we expect the EUR 126 million of additional cash inflow from the COM business deconsolidation. Let's also have a look at the KPI development over a longer period of time from over the last two years. From 2023, we had a 30% revenue growth, EUR 1.26 billion to EUR 1.6 billion from 2023 to 2025. The growth margin increased from 38% - 42%. We continue with the shifting rev mix towards software solutions, and the EBITDA jumped from EUR 126 million -EUR 237 million. Obviously also with a one-time effect of EUR 7 million. The net profit also improved significantly. It's 80% up, but obviously operationally only 40% up, in line with the development of the operating cash flow. The operating cash flow is also up 40% if you compare it from 2023 to 2025. The equity ratio is almost at the same level. It went slightly down it seems, from 34%- 36% - 42% currently, and is poised to further improve in 2026. The working capital significantly decreased. You may remember that second quarter 2024, it was at over EUR 450 million. That is fixed after many quarters of reduced inventory and improved working capital. We've been working on that quite heavily. The personnel has decreased. Obviously, we have started restructuring of the solar division in order to align it with the business and make it more agile. The net debt is currently at around EUR 150 million. Target is below 1x EBITDA. We are within the target range already. The portfolio streamlining, let's compare that. We've shown that already after the Q3 results presentation. We give you an overview of what revenues had been discontinued over the last couple of years, starting obviously with the IT service business deconsolidation, the disposal to VINCI in 2022, which resulted in discontinued revenues of EUR 390 million because we didn't have the IT service business anymore on our balance sheet. That discontinued business had a related gross margin of 30%. The group gross margin increased by year-end 2023 already to 38%, had seen a continuous rise over the last couple of years, and that was further supported by the discontinuation of the low margin EMS revenues and some IT service revenues. We discontinued EUR 60 million in 2024 at the related gross margin, which was very low, obviously, of only 15%. Reported absolute gross margin increased despite that because we have acquired KATEK as well to almost EUR 700 million. It's almost on the same level in 2025, despite the fact that we have also discontinued the COM business. We've deconsolidated that, but the gross margin rose a bit and is expected to rise 30% to 43% in 2026. All in all, we have disposed, discontinued EUR 579 million of low margin revenues. We used the proceeds of the disposals for acquisitions, and we made several share buybacks as well as dividend payouts. Looking at the development of the design win and the backlog development. Well, the design win pipeline increased to over EUR 8 billion for the first time. The backlog increased also versus the third quarter to around EUR 2.5 billion. What was driving that growth? Obviously, software solutions, in particular, the transportation, the defense division, but we also had some impact from 5G network access devices in the automotive sector, as well as in the energy equipment manufacturing sector with power control systems poised to get to EUR 100 million of revenues in the coming years. With that slide, I'm handing over now to my colleague, Hannes. Good morning also from my side. I will tell you more about the strategic topics, what's happening and where we are going. First, the overview on the three segments that we present. Segment one is Europe, and Europe has most of this reshaping of the portfolio issues. Let's say also a bigger part of KATEK is in that segment. Here we have over EUR 109 million, or we have EUR 109 million of revenues, what we reduced in the streamlining. Still, it increased in EBITDA because we are focusing on more profitable areas. What we did, we deconsolidated this year, JUMPtec, our computer modules, as well as some EMS locations and IT business. We closed eight companies within 2026 with minor or negative profits. Europe is by definition the broad base of IoT products, which represents half of the total revenues, and it includes a lot of Pan-European cost-efficient engineering, which is still the, let's say, highest USP of Kontron that we have 3,000 engineers at reasonable cost. In those devices, it's a big step, very important also for our software rollout because we want to install them or we are installing on all of our devices, Kontron OS. Some comments on 2025. Also, in this division at the moment, the highest volume business is defense for Bundeswehr and [BSI] security. If we talk about the order entry, the first six months in this segment, the order entry was soft, but in H2, came back quite reasonably. We see, let's say in the second half of 2026 and 2027, in this area, good growth again. Another topic that I have been asked a lot. It's not so important like for competitor Advantech, but we have currently EUR 30 million of delinquent backlog. That's shipments that customers ordered and we couldn't ship because of missing DRAMs, DDR4 or flash chips, or special CPUs, all on allocation because of the AI data center trend. So finalizing quite a lot of restreaming. Besides that, still increasing gross margin and profitability. Next segment is Global. That's for us, U.S.A. and China. We reduced here from EUR 238 million -EUR 213 million of revenues. That is the divestment of JUMPtec, that we did this year. In reality, the revenues were flat in that area. Profit raised a lot from EUR 23 million to EUR 37 million. If we reduce the special effects from JUMPtec, it's around 10%-11% EBITDA margin. We see in Asia and U.S.A. and especially Southeast Asia, much higher growth potential than in Europe, and we currently started a program to increase our revenue share outside of Europe from 14%-30% in the next four years in our strategic program. Very proud and very helpful for us that we are ITAR approved. ITAR is a standard for the U.S. Army. Only, let's say, loyal goods, companies to NATO are allowed to deliver to the U.S. Army, and we are considered as a U.S. company for that. So we have the ITAR approval. There's very little European companies who have ITAR approval. In the future, we will change our segmenting, but I will come to that in a minute, and we will report more KPIs on that. If we talk about North America itself, everybody talked about the tariffs of Mr. Trump. Well, we don't see them because most of our products are critical and important. They're all exempt by the NAFTA free trade agreement that we don't really have tariffs at the moment. I don't see any big impact from all these observations, tariffs up or down or whatever. The second thing in North America is, especially defense and aerospace is very strong in that area, and we're going to put even more effort on that. Asia, China, well, it's not so easy for a European company. We're doing 5% of our revenues in China, and we recently just came up with some more cooperation with Foxconn, one of the biggest companies of the world, to expand and help us to sell more in Asia. We also will start a penetration program for Southeast Asia. That's the dynamic regions like Indonesia, Philippines, Cambodia, Vietnam, Malaysia, which have the highest growth currently of this planet, and Foxconn will help Kontron to get more foothold in that. The most important segment for us is software and solutions. It's our focus. We are spending in that area almost two-thirds of the total engineering dollars, even though it's only 30% of our revenues today. We see the fastest growth in that area, and especially the highest profitability. Just with the change of the product mix, our gross margin is going on and going up all the time, increasing, let's say, 1% per year or more every year. We do half of our profit in that area. Per our 2023 mid-term plan, that should increase to 75% of the total group's EBITDA. The group consists of IoT technology specialized for vertical markets. Regular Kontron connects devices, robots, and everything. Here we do special functionality, special software to meet the requirement of vertical markets. This gives the higher value for the customer and the better gross margin for us. We do that in four areas. In defense, which is growing heavily. In high-speed trains, which is growing even more. In cybersecurity, which we hope will grow a lot. In GreenTec, where we did hope it will grow a lot, but it did not. This segment, despite the very good result, was still burdened by the performance of GreenTec, which is shrinking and losing money. We had an EBITDA margin segment of 17.5%. Excluding GreenTec, it would be 23%. The growth was 12.5%, excluding the shrinking of GreenTec, would be 18%. Why is it so profitable? There's also a significant software share, but not just software, it's a mix of the whole solution. We see Kontron as a technology leader in that area. If we talk about the four different areas within software, as I mentioned, is profitable, but it's not exploding yet. We think this new initiative of Cyber Resilience Act and more and more demand for security also in our unsecure times and what we have at the moment will give us a tailwind in that area. Transportation was very successful in 2024, was also very successful in 2025. We are meanwhile the undisputed market leader for high-speed train data communication. We still have a book-to-bill of 1.34 this year. We are the only one who really pushes and adopts to the standard of FRMCS. We are not the only one at all, but we are the only one having the full solution from the train to the radio access network, to the RAN, and to the service center. Particularly, there's no tender in Europe without asking Kontron to participate. Defense and aerospace had a lot of order entry in 2025. It is growing, but we see even faster growth in 2026 and 2027. That's also doing extremely good. For GreenTec, we decided to start a restructuring program and to stop this huge R&D spending, what we usually do in software and solutions. Kontron today consists of a segment Europe, a segment Global, and a segment Software and Solutions. We're going to unify this, let's say, mixed structure of regional/product wise separation to a new structure of smart IoT, including Europe and Global and Software and Solutions. The segment GreenTec, we will adjust and redimensionate and add part of it to the GreenTec, to the software division and part of it to ODM and industrial division. Part of this restructuring program. As you see, EUR 804 million in Europe and EUR 213 million of global together will make the EUR 1.077 billion of the new smart IoT segment because it includes also some part of the GreenTec. Why we do it? We want to be more transparent, and this is all a product segmenting. We still will give the information on Europe and other regions. You will get on top a second segmenting or key performance indicators on the region where we sell our products. The segmenting here will be split in the two in the future. You see the same calculation also with the EBIT. If you do the math, you will see that we lost EUR 8 million in GreenTec in 2025. What are the challenges of Kontron? Well, first of all, we feel safe because we had EUR 164 million of cash flow and we are really in a good financial situation to buy companies, to invest in technologies, and to buy back shares. There's two challenges what we face. The one is solar, the other is the chip crisis. About solar, we missed the 2025 plan by 28%, which had been picked up by the good performance in transportation, high-speed trains as well as defense. We generated losses in that area, and we will not bear that for the long run. We will redimensionate solar and combine the activities with other divisions. We use a lot of the wall box/solar engineers to also support our cybersecurity activities. Some of the GEs also will be added to the defense. We will maintain the business, so we will not withdraw from solar. We still see some chances with the rising oil prices to participate in that. We still have this, let's say, very good order backlog in the car industry, which is supposed to rise in 2026 with wall boxes. The restructure will be complete in 2026. We will reduce our 6,600 people to in the range of 6,100. There's areas like defense and software and transportation where we'll still significantly grow in FTE, but in this area we will reduce. Seeing that program, we think we will be back in this business to profit in Q4 2026, but it will create also some restructuring costs, and as I said, 500 people. We will keep the wall box business and current business and transfer to the software divisions. We will find that in the future with KPIs to give the exact numbers. Second challenge is the supply chain. A lot of high-tech companies are facing that. If you talk about fast DDR4 DRAMs, for example, they multiplied the price. A DRAM which cost you $20 is now $110, similar to flash chips. The lowest problem, but also problem, is CPUs. They're all on allocation. There's a lot of AI data centers built on this planet. They consume a lot of highly integrated semiconductors, that we also use. Just to see the impact on that, we were in a range of 12 million of unscheduled orders in Q4. No, sorry, not unscheduled. Delinquent orders or not shipped. Currently, it's EUR 29 million, which we will not ship in Q1 because we don't have the material. It is not losing that revenue, it's a delay of revenues. We currently, just one month ago, I was in Asia, and we started a program to Foxconn to help us in the allocation. The situation there is better. A lot of semiconductors they do themselves, and Foxconn has better access than us on that. That's the two challenges. Combined with other companies in the area like Advantech or SECO, I don't see that big impact. EUR 29 million is something like 5% of our business, so it is not that crucial. At least in Asia, they told me, "Yes, it will be expensive, but I can help you that you will be end of Q2, beginning of Q3, fully current, have no delegate backlog." The promise is we will get all the chips what we need, but they will be more expensive. That's our problems. Now I talk about the technologies and why is Solar not doing as it should. We are a high-tech company, the edge of technology. We have really leading technologies, and we start several approaches of them. Just if one of them works, Kontron has the growth what it had the last 10 years. If two of them work, we explode. There's always things which do not develop as we think, and that's more unsecure than, let's say, generating food or car tires or whatever. Yeah. Currently, we put our investment dollars into four areas, and we will not do any longer in connected Solar business. The highest chance for us is cybersecurity, where we see a lot of pressure. There's the NIS2 standard which came. There was the NIS before. Now, 2027, they will put the CRA standard, Cyber Resilience Act, which forces all critical components. All our customers are only critical. We do not have simple applications. So all of them are forced to be Cyber Resilience Act compatible, which is security standard, so data cannot be stolen. And we even have more secure systems for defense area. This is one of the key technologies where we spend a lot of our engineering dollars, where we see a lot of chances. At the moment, we see especially a lot of interest in the technologies, and it's on the way to come. If we talk about 5G connectivity, this is, for example, our railway technology. There is the European target of getting 30,000 km of high-speed railways. They all have to be controlled and connected by computers because human beings can make mistakes and destroy life. There's a lot of business to come. I would say this business is very secure. We don't want to lose it because we are already market leader. Defense, we spent a lot of effort this year developing special encryption method. Kontron is not doing weapons or whatever. We do data communication systems for tanks, for airplanes. We do control systems for high-speed drones and that's about it. We communicate data between computers and different military equipment and encrypting it so it cannot be hacked. That's our specialty here. Yeah, the general trend, IoT, edge computing, where we see the trend with ongoing, which it grows since 10 years, 10%-25% every year in amount of IoT devices. Let's dive a little bit deeper. Cybersecurity, as I said before, European Union regulations see it as a necessity to sell products in Europe. It's software which is installed and which is paid in run time licenses. The more we have installed, the more money we will get. In 2025, we had installed some millions of devices. We see 80 million by 2030 to come, which have huge subscription fees possible because there's EUR 1 or EUR 2, depending on the package, what customer wants on fees per month. Competition. Since the market is just in the race, there's many startups, companies like Microsoft and so forth, even cooperating with us, they are not interested in that market because it's dedicated to machine and mission critical. We are in the process. In July, we will start to install on all our devices. Just to give you an idea, we sell two million devices a year. Each of them has the software in it for free, and our target is everybody who wants to be Cyber Resilience Act compatible, he will enable the software and pay us EUR 1-EUR 2 per month. That's the business model. We have three products in this area. Our Kontron OS, it's an operating system. It's very powerful concerning security, and it's quite small and focused, so it can guarantee the security. It's not a powerful multi-gigabyte software like Microsoft Windows. It's a small software, but very hard for hackers. After we have that out, and one thing is, the more we have the install base, the more successful we will be. Advantech tried that. I remember Software AG had a product like this. They failed in really going into the market, probably a bit early. The market is coming now strongly, and we convinced also Ennoconn, our biggest shareholders, will deliver Kontron OS on all its systems, even Foxconn partially, and Congatec, the partner where we sold our modules, we're also cooperating to install Kontron OS. All together, that will be four million devices per year, having installed that starting July of that year. For our defense activities, we run VPX. This is a special standard of high-speed redundant computing. To make it simple, a computer like this, if you take a big hammer and Mr. Rambo or somebody very strong crashes it into it still will work. It's redundant in all areas and really harsh and so forth. The second thing is it has very high data bandwidth, up to 40 Gb, to send a lot of data. Why do we need so much data? It's a simple equation of the more bandwidth you have, the more bandwidth you can use for security, and with higher security, you can do a lot of encryption and making the data safer. If you use, let's say 80% of the bandwidth just to secure it will be almost impossible to hack it. Yeah. So you need high data bandwidth to be secure. The spendings are coming in not as fast as people say, but they're coming in heavily like I never have seen it in my last 40 years of career. All the countries, it's not just Germany, everybody's spending money in defense. FRMCS, let's say it's the lowest chance of our key technologies in terms of market potential, but the highest chance to materialize because we have already 50% of the market of the data communication. This new standard, FRMCS, will help us to extend it to service technicians along the railway, equipment and signaling equipment and so forth. Yes, with FRMCS it will grow. I feel we will win in that, because we are the leader in that. Key customers just to mention, Deutsche Bahn, SNCF, Network Rail U.K. It's all the rail companies in Europe which is our customers. Which brings me to the forecast. This year, we plan to achieve EUR 1.74 billion of revenues, here stated EUR 1.8 billion. Why? Because we have some quite good chances that wallbox will take off this year, but we don't know if it will be this year or next year. Depending on that, we see EUR 1.74 billion or EUR 1.8 billion. EBITDA plan is EUR 225 million, but in an operative way or organic way, which will be burdened by the solar restructuring cost for this year. I talked a lot about the technologies for the future, where, as I said, we hope that two of them will explode. Based on that, we see by 2030, EUR 2.6 billion of revenues. That's growing of 50%-60%, but we see another doubling of EBITDA to EUR 420 million and an increase in EBITDA margins. We will release also numbers on that, because the whole thing is driven by software and solution, which should be by 2030, 75% of our total EBITDA. We will release obviously the numbers on the three divisions in software and solutions. We'll release the number of devices, what we ship in that area. Also the numbers of software and cybersecurity installations, which gives you also the transparency to see which of these three key technologies grow up heavily and which are more slower going. Good. Thanks for your attention. If you have questions, please go now. Okay. Ladies and gentlemen, if you would like to ask a question, please press nine and the star key on your telephone keypad. If you would like to cancel your question, press three and the star key again. If you have questions, please press nine and the star key to ask the question. Okay, and the first question is from [Mr. Orlov Price from OK Consult]. The floor is yours. Thank you very much for the open presentation. Two questions basically. Very few people understood that the share buybacks are not in addition to the dividend, but instead of it. Given your rich cash position, is that decision final, especially regarding quite some fund managers are allocating only dividend paying shares, and so Kontron would not be eligible for them anymore. You know, of course, in the long run, your earnings are the value created, but on the short run for the price of the stock, it only matters if there are more sellers than buyers or the other way around. That would be the first question. The second one, regarding defense. Do you see any chance in getting business in that huge mess that Rohde & Schwarz created with D-LBO business, wasting about EUR 20 billion and not getting anything done? My understanding of the situation is right now it's being decided if that can be helped with external help or basically you need to increase dependence on American technology by buying the L3Harris Systems and basically waste all the efforts that have been undergone so far. You say that you're the leader in cybersecurity and especially you're deploying easy software, so that would be a match. Do you see any chance in capitalizing on that? Yes. We see a chance. We are let's say more in the both in bed with Rheinmetall and Rohde & Schwarz. We are a supplier of those kind of companies and not the person selling directly to the different defense companies like Deutsche Bundeswehr. We see a chance and for sure, also this Rohde business will be distributed to other German suppliers. We also with HENSOLDT and several companies in that area. I think it's positive, and we see that also already in our order entry. Talking about the dividend. Well, as you see, we already stated that this program of share buyback could be extended to more than EUR 50 million. We talked to several major shareholders of Kontron, and they preferred in the current situation, where Kontron is trading at 4x or 5 x EBITDA, to gain more value by buying back shares. If we have more money, we will buy more shares than 50 million rather than paying a dividend, yeah, at this level. This is also coming from our current investors, and obviously there's also investors who would have liked to get more dividend. We got the clear vote in spending as much as possible in share buybacks. Do you think there might be some middle ground of paying at least a very small dividend just for people to be able to stick to the stocks and still follow their own rules? Because if they like it or not, if you have a fund that only considers dividend-paying companies, you have to sell if you're convinced in the stock or not. A minimum dividend might be a middle ground to resolve that problem. That might be an argument, yeah. Cash-wise, Kontron can easily do both, but at the moment, it is what it is, and our shareholder meeting will take place in two, three months. Thank you for considering. That's fine with me. Thanks a lot. Bye. Okay. The next question is from Mr. Adrian Pehl from Oddo BHF. You can go ahead. Yes. Hi, gentlemen. Good morning. Thanks for taking my questions. Actually, first of all, on the topic around the Asian strategy, let's call it this way. Kontron has never been a stock necessarily where the Asian revenue share was so high finally, and now it seems like that this strategy is coming a little bit late in my view. I just wondered if you had already any kind of binding agreements, both to do more business in terms of revenues, and secondly on the component procurement that we're talking about, like DRAMs, et cetera, that will really secure that you have the supply in place. That's my first one. The second one is on the Europe segment. Obviously, we had the discussion in Q3 about EBIT loss, and it seems that in Q4 there was another EBIT loss and significant decline of revenues in Q4, even if you take out the JUMPtec revenues finally. I was wondering if that is something we should be considering also some cost measures and structural measures to take place. A question associated with that, I've got a little bit confused with all the kind of in the presentation on divestments, et cetera. What is the status, please, of the disposal of the remaining Austrian IT service business here? I might have one or two follow-ups. Okay. The Austrian IT services, well, let's say it's something what does not fit in the focus of Kontron. Times are not very good to get high prices. We are still talking to several interested parties, but we will not sell Austria under price because it's a performing entity making profit. There's no need to donate it to somebody. We are. Once we have a good opportunity, we'll do it, but not at a too low price. The other thing what we really wanted to do is, we are currently, let's say, cleaning up and some of the KATEK business what we acquired was not really that fulfilling our expectation, let's put it this way. This, we are currently reducing, and there is the most portfolio cleaning. As a high-tech company, we'll have a constant mix of product portfolio, particularly if you have the strategy to go from 25%, what we had 10 years ago, to 50%, what we will have in five years, yeah. That needs different product, that needs more technology, and that's what we call portfolio cleanup, but that's not something whatever will stop at Kontron, because there's a long way to go to the 50 or later even more percent of gross margin. If you talk about the revenues what you mentioned, well, there is one issue that for example, our software solutions business did grow 23% in 2025. That's doing extremely well. We had GreenTec losing 28% this year, and the other areas are more or less slightly growing 5%. That's the mix what we see. We have light and shadow, and 50% of the profits generated by cybersecurity, trains, and defense, and that 50% grow a lot. Now we have other areas like GreenTec, which is shrinking, and we don't, let's say, waste our time to try to get that rolling. It's much more dollars spent in defense will bring us better return. On Asia? Asia, it was never important for us. We had some business. For example, our solution for airplanes went well. Asia is still a good growing market, and that's why we are seeking a closer cooperation with Foxconn on the markets. Foxconn helped us to get Air China and those solutions. We're currently talking to some railway applications, and with specialized technology, price is not important. There's also good chances in China. I would say the lower-hanging fruits is really at the moment U.S.A.. Coming back actually to the GreenTec business or let's phrase it, the business you bought from KATEK, actually. On the side of wall boxes, what's the status with Volkswagen in that way? Obviously, call-offs has been very low. We have seen this already quite a while. Is there kind of a breaking point where you would, at some period say, "Hey, well, it doesn't really make sense anymore?" On the other hand, Volkswagen, I understood, has to fulfill finally the obligation of the volumes that have been put into contract. Is there any chance to do this? A question linked to that, which I think going into the same kind of logic. You've been saying that also the inverter business, you might see some good growth. On the other hand, I was just wondering, isn't there a chance now to put a good end to it and stop both wall box and inverter business? Wouldn't this be more clear-cut? The wall box, for sure, we will not stop. Volkswagen call-offs have been low, and we stated our revenues EUR 1,740-EUR 1,800. There is considerations inside Volkswagen to equip every car with a wall box. Mm-hmm. If that works, the volume will work very good. The new models coming, which is Cupra and ID. Polo, they might be equipped with wall box for every car what you buy. The volume is, let's say, growing a lot. If they don't do that, the volume will be not as high and we have to talk about how to solve the situation because our contract is binding. We see a chance that that will happen, and that would push wall box sales a lot. If you talk about solar inverters, well, from our... Hello? Yes, still here. Yeah. From our major customers, 60% are in major financial troubles. Even despite the good share price, the numbers of SMA Solar are not good. This business is not coming back that fast. We significantly reduce our cost. That's what we do, point one. We don't put big money in new developments. That's the second thing. In case of this, let's say, Iranian war will take the next five years, we see a renaissance of photovoltaic, and we will be able to participate. That's the idea. At the moment, we don't spend big money in great products we'll ship in four years, because we believe more it will not happen than it will happen. That's the situation. We will save the cost, yeah. We have 1,000 people in the area, and it will be, let's say, almost half after it, yeah. Right. Two final ones before I jump in the queue. Very quick ones, actually. In that guidance of EUR 1.75 billion-EUR 1.8 billion, how much of that is wall box related? Is it EUR 100 million roughly? It's 60. 60? Okay. No. Volkswagen is the gap. All right. Okay. Understood. Not sure if this is a question for Clemens. Actually, just a bit of housekeeping. On a one-off, obviously you had in 2025 this EUR 220 million adjusted EBITDA. I guess the market might have been expecting rather something like reported EUR 270, the delta being obviously the KATEK gain, but it was lower. I got a little bit lost on what else you put in as a negative, in terms of the adjustments that you did. Yeah, sure. This is slightly different than we anticipated when we announced the deal, because the taxes and the goodwill was not finally booked. There was a shift of taxes and goodwill in the end. Eventually, if you look at the figures, there is this EUR 87 million of one-off impact of the one-off operating income... Right. of this transaction. You have obviously also one-off costs this year, and that's around EUR 25 million of obsolete inventory stuff and other operating expenses. We have EUR 11 million of provisions and R&D overstated. We had to write it off in the course of the winding down of that business line. We had EUR 19 million of closing costs, not related to the COM business only, but we also wound down some subsidiaries, for example, in Lithuania, which was acquired by KATEK, but which didn't make sense in the long term. Mm-hmm. We have EUR 5 million of accounts receivable write-down as one-off and EUR 10 million other costs. That sums up to around EUR 70 million of one-off cost effects you have to deduct from the EUR 87 million, conceptually. Okay. On the other side, well, we said we have 40 million of special effects. Mm-hmm Those effects are not impacting all of the EBITDA. If you count together the EBITDA impact and the other impacts, which are below EBITDA in the finance and the tax costs, we come to EUR 33 million again or EUR 34 million. It's also that we estimated all the effects in EBITDA, but some of them are below and some are above. If you look at the net income, the special effect was EUR 33 million, yeah. Okay. Thank you. Okay. The next question is from Tim Wunderlich from Cantor Fitzgerald. You can go ahead, please. Perfect. Thank you so much. Good morning. I have only a few questions left. First of all, sorry if I missed this, but you talk about an M&A contribution in your guidance for 2030. Could you quantify the impact that you expect from M&A on your midterm guidance? When would you expect to execute a larger transaction once again? Is that already something that could happen in the course of this year? That's my first question, and then I have a follow-up. On M&A, yes, we had a very good cash flow this year, so we are looking at M&A again, and there will be something happen in 2026. Might be also something bigger. Let's see how it goes, but we are talking to some applications. If we talk about the whole plan until 2030, we assume usually our growth always in the mix of M&A and organic. Let's say, half M&A and half organic, which is slightly more organic. Okay. Understood. I think on one slide, you talked about the cybersecurity, the AIS hield, and the subscription fees that you're getting from that, and the targets, the goals that you have for 2030. I don't know if I follow the number correctly, but I think it was EUR 500 million subscription revenue by 2030, which seems to me to be quite high. Is that a blue sky scenario? Are you just talking about the total addressable market for you? If that is the case, what is the kind of realistic scenario that you're pricing into your 2030 guidance? We're doing at the moment EUR 140 million in our software department. Out of that, the subscription fees, depending how they're calculated for part of product or whatever, I'd see for this new product, this is a range of EUR 20 million at the moment. It is a cumulative number because if you install a software, let's say 26, you still will get subscription fee 28. Whatever we ship, all of them will come, and our idea is to convince a certain percentage of the shipped products and to have this 80 million installations, and they usually will buy the cheapest part, which is only K-OS. Currently, we have people who pay EUR 10 per month also, depending on application. The assumption is the big volume will be EUR 1 per month. That's where it comes from. What do we need for that revenues? For sure, we need to send patches, updates, and so forth. We assume here a gross margin of 80% in that area. Okay. I think you said the true revenue inflection point will only happen in 2028, right? Because first you give at least some of the software capabilities to the customers for free, and then after a certain period, you're going to charge. The volume that we already ship. This is the volume that we ship already, K-OS in 2025. We have already revenue this product. Okay. You're going to grow this business significantly already through 2028? Yes. All right. Understood. My last one is just once again regarding the IT service business in Austria and talking about selling this. I understand you're not that advanced in the process, but I just want to make sure. The possible divestment of this service business is not reflected in your revenue guide in 2026. Is that correct? Correct. The revenue that you generate with IT services software? EUR 78 million in last year. All right. That was very helpful. Thank you so much. Okay, the next question is from Malte Schaumann from Warburg Research. You can go ahead, please. Yes. Good morning, gentlemen. The first one is on the margin guidance. You guide for 1 percentage point decline in the adjusted EBITDA margin from 13.8% - 12.8%, but at the same time, you indicate to expect a growing gross margin up to 43%, so this is 1 percentage point ahead of last year. In between, you're losing then 2 percentage points in additional cost in the personnel expense or operating expense. Maybe you can add some more color, what are the moving parts here? Can you repeat? Yes. Your guide for EUR 225 million in adjusted EBITDA... Yes. o n sales of EUR 175 or EUR 180. Yes. That's a 12.8% EBITDA margin, which compares with your 13.8% margin achieved last year. That's one percentage point less. At the same time, you indicate to expect a 1 percentage point increase in the gross margin. In between, you then have to lose 2 percentage points elsewhere. This is... Yeah, where do they come from? a little more color would be good. Yep. Well, two issues. First of all, we planned again to increase our spending in these key technologies, what I mentioned. Here we see a 10%-15% increase in R&D cost. Well, what we do, and the second thing is despite the product mix, we have also cost for the restructuring. Anyway, the 25 that I mentioned. It's mainly R&D cost, I'd say. Restructuring is taken care of. Okay. Yeah. I think R&D is maybe 1 percentage point and restructuring is probably after adjusted, but yeah, I can follow up. It's the 25. It's not more. The number is calculated, yeah. Yeah. I think the 225 are excluding restructuring. Yes. Including restructuring must be EUR 200. Yes. Yeah. Very clear. Follow up. It is mainly the R&D spending what we talk about, yeah. Okay. On the memory part, can you share what is the memory volume you're buying per year for your products, semiconductor memory? I have the number of parts and allocation. This is not just memory, but also flash chip and some CPUs, and that volume is in the range of $120 million. Okay. Do you have a gut feeling how much of that is the pure memory figure? More than half. How much would that be? More than half. Do you see a price effect? I mean, memory prices are surging quite significantly, so is there a kind of margin headroom coming from that area? Well, first of all, Kontron is not impacted on this as much as, for example, Advantech or other embedded companies. The reason is simple. For a high-speed train, which consists a lot of it of software, nobody cares if the memory is $100 more expensive or not in a system of $50,000. So I don't see us impacted as much as others, but we are. We have quite good pressure and market power to pass on the prices to the customers. Okay. Are there some contracts maybe left where you are not allowed to pass forward the increased memory prices? Yes. Do you think you can mitigate these effects? No. Yes. No? There will be an area of one to two months, depending on contract, where we cannot pass on because we are already in the shipping period. Also the memories what we buy, the higher prices come with some delays. At the end, at the ramping up of what we call PPVs, Purchase Price Variances, we have this in our contract clauses all the time. There is some impact at the beginning, but that impact is already swallowed and done. Yep. Okay. M&A 2026, is something included in your guidance on the M&A side, or is that purely organic? Organic. Okay. Are there potential targets? Is there something you're currently looking at and which might be realized during the year? We're looking at software and solutions. We have targets in the train business. We have more targets in the defense business. The software business is too expensive. We cannot pay for that. The security business, it pays very high prices. So that's where we look at. As I said before, we invest 65% of our business in software and solutions for R&D. For M&A, we will also invest in software and solutions only. Okay. Thanks. Okay. The next question is from Veysel Taze. The floor is yours from Metzler. Hi, good morning. Veysel Taze from Metzler. A few questions left from my side. The first one, really on your Q4 performance, and more on the revenue side. In November, the guidance was around EUR 1.7 billion sales, and now we ended up the year with EUR 1.6 billion. EUR 100 million in the shortfall, so to say. What was exactly the weakness? Where did this come from versus your expectation? Wall boxes to Volkswagen, where we had the contract. They didn't call us enough in the second. It came almost everything out of that. So the entire... Yeah, yeah. The entire miss EUR 100 million basically to your GreenTec business, right? We had a plan of EUR 300 million. We had last year EUR 200 million. We came this year to EUR 160 million. The plan was to ship a lot of wall boxes to Volkswagen, which might happen this year if the Volkswagen Polo will ramp up. Most of it is that area where the call-offs didn't come as expected. Okay, got it. Related to this also, your 2026 guidance basically implies incremental sales, let's say midpoint, roughly EUR 50 million or EUR 60 million increase. This is really also, again, dependent from the wall box business, right? You said, I think, in one of the questions, it's around EUR 60 million in your guidance, the wall box business. No, it's not in the guidance. Our guidance is EUR 1,740. We guide conservative, and we say there is the Volkswagen business not in. The 60 million. 60 million more could be if it pops up, but the guidance... Okay. is 1,740, yeah. Okay. Got it. Basically, your guidance will be positively inflected if you get the wall box business from Volkswagen. Done. Yes. Okay. EUR 60 million from this. I understand. Then this EUR 60 million, I understand so far from your press release that this is loss-making still till Q4 2026, right? The EUR 60 million, if it would come. That would not make losses, the EUR 60 million, because then we don't make losses. The wall boxes will make money. The wall boxes won't make. Mm-hmm. The gross margins in GreenTec are not bad. They're quite good, but the fixed cost is too high, the R&D cost is too high. If we just ship the material, almost everything go to profit and we are not losing on that. It will help us on the bottom line. How much is in your guidance total GreenTec for 2026? Can you give a number? I mean, without the EUR 60 million, right? GreenTec will not go on and be our own division in 2026. There will be EUR 60 million going to... Actually, if you take the old business, right? I just want to get a sense of... Yeah. how your GreenTec business is really, in your expectations, is expected to develop year-over-year. That's just what I want. From the 160 in 2025, it might reach 120 in 2026. Okay. And- 100? Sorry, 120, right? You said. Yeah. Maybe. In that range. Yeah. No, it's fine. If this big contract is shipping, it will be 180. Got it. On your pure software business, really not the solutions, just software. How much was that in 2025? I think you mentioned the number, but I... 140. 140 million. Okay. In your 2026, what is your expectation this number will look like? It should grow at a pace between 180 and 200. 180, 200. Okay. Got it. This explains the gross margin improvement you are alluding to, yeah. Right? That's the. Yes. Okay. On your order backlog, I mean, your order backlog keeps growing, but at the same time, it does not really translate into sustainable top line growth. Can you just remind me a little bit from design win to order entry? When do you consider something as order entry and really tangible order book? The gap is basically on three bigger contracts. One is the Volkswagen, that's a contract of almost EUR 300 million, and it's not shipping as it should. Okay. That's obviously in the backlog because it's a legal order. The second is the NAD, the 5G for the autonomous driving systems. We got the 300 and we have two contracts, yeah. For the new generation of data connectivity for autonomous driving cars. We got that contract one year ago, or 12 months ago. We have to develop a lot for this. This is currently in design, and as we always stated, we'll start to ship in Q4 2026. The third is a lot of defense contracts for VPX, which are simply slow in the installations with Bundeswehr and other armies. That is also very, not bureaucratic, but, let's say very conservative areas, how they ramp up. We have a big pile of defense contracts in front of us. We have the NAD contract with us, and we have the Volkswagen contract with us, which is, let's say, delayed by the customer, not by us. Yes. Okay. The 5G module part, you were going to give a number, but I mean, if you're willing to share a number, if not, it's okay. But in the backlog. I told you it's around EUR 300. When we ship something, probably EUR 280. Yeah. Okay. Maybe EUR 280. We are getting engineering costs in that area. Got it. Okay. I think Tim Wunderlich was asking the question for 2030 software, the EUR 500 million. Are the EUR 500 million in your 2030 midterm outlook, or what is the software part there? In this outlook, we included EUR 300 million. EUR 300 million software. Okay, great. Thank you very much. We have software, but K-OS software will be more. The cybersecurity part? Yes. Cybersecurity EUR 300, and what would be then software? Well, we have currently EUR 140 million and EUR 20 million in this cybersecurity. There's a regular business and more than EUR 100 million on top of that. Okay. Got it. Okay, and then both with gross margin like you alluded to, around 80%, right? There's no difference. The standard business what we do in software has 67 at the moment. Okay. Thank you very much. Okay. At the moment, there seem to be no further questions. Oh, good. Thanks for your interest in Kontron. Thanks for your listening to our explanation, and hopefully to talk to you soon.