Good morning, ladies and gentlemen, and welcome to Kontron's Capital Markets Day 2026. Thank you for joining us here in Vienna and also online. Today, we will share our Agenda 2030 strategy with you, and we warmly welcome our partners from Ennoconn and Intel. Each of the pillar sessions of today includes a short Q&A session, followed by a final executive Q&A at the end of the program. For questions for the participants here in the room, I would kindly ask you to take a microphone. Online participants may submit questions via the Q&A function. Now it's my pleasure to hand over to our executive management. Clemens, the stage is yours. Alex, many thanks. A warm welcome from my side to the Capital Market Day 2026 here in Vienna. Over 100 investors and analysts have joined us online, and around 20 analysts and investors have traveled all the way to Vienna to be here with us in person. My colleagues, Hannes Niederhauser, Philipp Schulz, and Martin Rausch, will start presenting the key messages regarding the status quo of Kontron and the Agenda 2030 strategy over the next 45 minutes. It will be followed by in-depth sessions on our key growth areas for 20 minutes each, including a Q&A on transportation, on software and cybersecurity, defense and Physical AI, and last but not least, our 5G Network Access Devices. They will be presented by the responsible Executive Vice Presidents for these areas. We have also a dear guest from Intel, John Healy, VP Client Computing Group, will talk about the collaboration in Physical AI between Intel and Kontron. Then finally, and very central for this Capital Market Day, key management from Ennoconn have traveled all the way also from Taiwan and will be presenting here in Vienna. We welcome Steve Chu, CEO and Chairman of Ennoconn, Nelson Tsay, President, and Joe Fijak, Executive Vice President and COO of Ennoconn. They will explain the rationale behind the additional investment in Kontron and their thoughts on the future increased collaboration and synergies between Ennoconn and Kontron. I wish you informative and inspiring three hours with us, and hand over now to Hannes. Good morning also from my side, and thanks for spending the time to listen to our presentation. It's the other direction. No. Yeah. I would like to start with giving some historical development. Myself, I'm 64 years old. I'm 25 years in that industry, and I saw a lot of things, and I hope to will see still much more inspiring things for the future. So I'm running Kontron since 25 years, and I want to give a feedback and an outlook for the next years in four-year steps. Most of it is connected to change of products, what we deliver, and change of technologies we're involved. In 2014, Kontron used to be mainly an IT service companies. We had offices in 18 different East European countries. Our revenues that time were at EUR 385 million and gross margin at close to 33%. Most of those revenues were allocated to IT, but we already had EUR 70 million of embedded revenues. EBITDA margin, as it was little internal technology, was at 6% that time, so not that high. We were 2,000 people. The share price that time in Kontron was at EUR 3.22. Also that time I bought some. In 2018, if do the first four-year step, the focus of Kontron turned more into embedded technology. We still did grow the IT revenues from EUR 300 million to EUR 460 million, but we had embedded an IoT revenues of EUR 600 million that time, so that was the key focus. The result of much more internal technology was higher EBITDA margins, over 9% that time, and 4,000 people worked for us. Share price did support that development, and we came at EUR 15.8 that time, so a good step forward. Earnings per share went to EUR 0.70, which that time represented over 20 P/E ratio. The next step in 2022, we fully went into IoT. We had divested our IT services, so EUR 396 million of our revenues had been sold to a company, Axians, another company in IT business because we wanted to have full focus on IoT. That year we did close to EUR 1.1 billion of revenues. We had extraordinary profit because we sold that division, we had some profit. Our share price stayed at EUR 15.29. I believe the market did not 100% know if we should see it positive or negative that we sold IT services. 2026 is now, so this year. We will be at around EUR 1.6 billion, and don't consider that as a forecast. I just want to show the trends where Kontron is going. What you see all this table is we ongoingly improve our gross margin. Why? Because we put more and more technology into the products. That gives higher gross margin. So from the 32.9, the start in 2014, we are now at 42. That is 9% up in gross margin. Most of our revenues in IoT, but we already started in new field, service level agreements and Physical AI. Our EBITDA margin, that's official forecast for this year, EUR 225 million, before this restructuring cost. We are meanwhile 6,400 people. Share price is at EUR 23.22 as of mid of the year. If we look at the long-range plan and the forecast for the future, by 2030, our main focus will be service level agreements, recurring revenues, and Physical AI. So by that time, we should be achieving EUR 2.6 billion of revenues. Gross margin is again growing to 48%, and most of these revenues will come out of service level agreements, AI, and just half of it still will be IoT. EBITDA margin, which also, like the gross margin, is constantly increasing with the higher technology content. By that time should raise to 16%. That would bring us to EUR 2.50 of earnings per share. That's a trend over the last 20 years, which I had the honor to be part of Kontron. Next slide, some feedback on the divisions of Kontron. Kontron is split in eight different areas, which have a common leadership, which have a common P&L responsibility, driven by our Executive Vice Presidents, and they are covering different areas of markets. Very old field within Kontron is industrial. We currently had the first half year, EUR 210 million with 8% of profit margin. This division was always very profitable, mostly above 10% of profit, and it will be back 2027. It is mainly, let us say, a small dip this year because we have a lot of German industrial customers, and you all know about the problems of automotive. We are not per se in automotive, but the suppliers like KUKA for automotive, the robot manufacturers, they are also suffering by little investment strategy of car makers and so forth. So Germany is washed down because since around four months, we see again increasing order entry and going back. So we are quite positive 2027, this division will be above EUR 500 million again. Another small division what we have is communication. This is less than EUR 200 million. It is more or less a stable business with slight profits. We see here a lot of work together to support other divisions because you need 5G and telecommunication in most of the things. Also, the train department using the knowhow of our communication department, the industrial department uses this knowhow, and so it has a crucial role within, but it is not the profit bringer. ODM, original design manufacturing, that is actually manufacturing services, but we expanded that towards engineering, offers engineering services. This division had losses. This is part of what we acquired with Katek. But we got extremely strong order entry in the first six months or the last six months from now. So, we see, especially in that division, very strong growth next year. That is also surprising. Why? One, there is a trend with all the tariff stories and Trump and everything what you see on this planet to localize again. We see a lot of outsourced production which went to China, to Southeast Asia and so forth, coming back to Europe. That helps in that division, so that is one. The second thing is, I believe we are Portfolio-wise or offering-wise, the best company you can have in ODM, Kontron has CPU and intelligent modules to add. We can design software, we can design hardware. We have the opportunity to design housings in the whole thing, in the whole engineering. The best of it, we have a partner which is the leading player at all in manufacturing, and that is Ennoconn/Foxconn. So I believe there is no company in Europe who can offer such a comprehensive way to offer ODM. If I look at the last five, six tenders, what we win or what we did, we mostly win it because we have advantage. With the help of Foxconn, we are also price competitive. So this one, we see strong growth. Green Tech, that was the biggest problem of Kontron the last year. The solar industry collapsed. From our top six customers, five are bankrupt meanwhile. We also did here major restructuring. That thing is over, so we are done with our cost-saving program, and we do not expect here big growth. It is sorted out and settled and completed. That is what I want to say. America, again, is something where we have big chances. Ennoconn was here for the last three days for strategic discussions, and one of the discussions is we will globally, especially in America, really work together to increase jointly our business. We have different things what we can offer just with the help of Foxconn and Ennoconn in the back. At the moment, Kontron can handle, let's say, customers of EUR 50 million per year or EUR 200 million of contract value over their lifetime. Together, we can handle EUR 1 billion customers, and there's not too many players who can do that. America, we see good chance here. Also in Asia, we will closely cooperate with Ennoconn, Foxconn. We will get very soon the channel for Southeast Asia, the 20 tiger countries. That will help our growth. In green, you see the most growing parts of us, where we really have technology advantage. Defense works very well. You will have also special presentations later on that. In defense, we are a really strong communication system manufacturer. We are approved with all the standards, AS 9100, ITAR, and so forth, and we are very successful. This business did grow over 30% the last year, and it's also very profitable. Second, software. Here, we put the most of our engineering dollars into it, so there are 600 engineers in that area. We expect strong growth by Cyber Resilience Act, by the security standard coming. That business at the moment is growing to around EUR 150 million, EUR 160 million, but we see it much higher in two years from now. Our most successful story, as we speak, is the high-speed trains transport division. Here, we will end up at EUR 260 million, EUR 270 million this year. When we started the business in 2018, we were EUR 100 million, so it tripled over the years. Meanwhile, we are market leader in Europe. That business, Kontron covers in FRMCS and GSM-R, more than 50% of the European market. The European market is, well, besides China, the biggest in that area. I told in the last earnings calls about our cost-saving program. Some words to that. It's completed meanwhile. We have 6,397 as of June. As of today, we are already less than 6,300 people, so we achieved our target. We will achieve our EUR 30 million of cost saving, which will be visible starting Q4, and fully visible just in 2028, but 75% will be visible now. That's success, and it's done. As you see, most of that was done in Green Tech division. Achieved the reduction. We have no more major layoffs planned as of today. We are growing more in people in defense and in our software areas and so forth than we reduce in Green Tech. Kontron is again increasing in headcount. As I said, 75% of the savings are visible already next quarter. 100%, 2028. Why? Because we also reduced our office space, and that takes time until we can stop the renting contracts. I want to put some words on R&D cost because that's one of the key advantages and also one of the reasons why Foxconn/Hon Hai likes Kontron. We spend, at the moment, 12% of our total revenues in R&D. We have a program to reduce that to 10%, and the program is simple. We will not fire engineers, things like that. We just have different locations. There's engineers in, let's say in San Diego, which we almost stopped, but those engineers cost $120,000 a year or hourly rates of EUR 90. Kontron has an hourly rate at the moment of EUR 49. That's by far the lowest in the whole industry, and we are targeting EUR 43. How do we do that? We have an engineering center in Macedonia. We do a lot of engineering in Malaysia, in Slovenia, and all over Europe and the East European countries like Romania, Bulgaria, costs are much lower. This way, the EUR 49 will go down to EUR 43. Even with the same amount of engineers, we can lower the cost to 10% of engineering. There will be no headcount reduction, but a transfer to software and solution. The specific green tech engineers, we also reuse in other divisions because they have precious know-how. It is clear that most of the engineering resources are spent for our software and solutions and for the game-changer products. That is a step before I still open is to work on the office space. This is a picture from my meeting in February in Taiwan at the headquarter of Foxconn. The very modest, smiling person here in the middle, Mr. Young Liu, is probably one of the most powerful people on this planet. Probably the Taiwanese Elon Musk, if you want to call it that way. Much more modest, though. The office is really not bigger than mine. I was surprised. We met there for focusing on our strategic future, and the other three gentlemen, the CEO of Hon Hai, plus the Executive Vice President, plus the President, they are here also to answer your question. Unfortunately, Mr. Young Liu did not make it to Austria this day, which I understand. But you have very powerful people from the organization to talk to you today. What did we discuss? Here, some history. in December 2016, this partnership started. That is the first time I met with people from Hon Hai/Foxconn. In December, we will celebrate our 10 years of partnership, which hopefully I will drink some sake, they will drink some beer. Since that time, it took a long time, 28% stake was their shareholding. Now, 10 years, they are always very careful. They decided to increase to 48%. So it became even more important major shareholder of Kontron. Target is still to stay below 50%. Why? We have a lot of government customers, like in the transport and train business as well as in defense. Taiwan is the good country, not China, but still, it is more important to have the majority and control here in Europe. That is why Hon Hai decided to stay below the 50 to support the business. They are here to answer your questions. In Kontron, there is no changes by that. The management is the same, the customers are still the same, company is still the same. Everybody can believe it is going forward. If you look at this 10 years partnership, well, especially in Taiwan, people really thinking long term what they say. By the way, also myself, with this tight-knit cooperation, I feel that my ideas about technologies are heard. So I am also in part of the technology discussions there. Why did Hon Hai go for that? There is four pillars identified, and that was the main reason of our two days discussion with Hon Hai the last day, how to increase our cooperation. The four pillars are we want to share technology and products, one. Two, joint force in the sales channels. We will take care of Europe. In America, we will cooperate. In Asia, Hon Hai will take over the head and, for example, open us the door to the 20 tiger countries around Singapore. Another big problem, what we have at the moment, we had EUR 50 million of delinquent backlog end of Q2. That even increased. At the moment, you cannot buy enough memory chips, flash chips, PCB allocation. Here it's good to have a strong friend. We both work on a plan to get that probably EUR 70 million today down to EUR 10 million, EUR 20 million to the end of the year, which is crucial to make our numbers. Supply chain is the third one, and global manufacturing the fourth one. Just to tell you, there's the first. I cannot tell the customer, but in the next, let's say two months, we expect a joint win of, we call it super account internally, of a EUR 400 million customer here in Europe. Ennoconn plus Kontron. Now I'm almost done. 50 seconds, that's good. Who is the most important partners for us? Where do we go for? For technology companies, it's always important to have really strong technology partners. First ranking here obviously is Foxconn and Ennoconn, our major shareholder. They are lead investor. Foxconn is a top 20 company, number one in DMS globally, and they convert more and more technology. We don't know it, but for example, the fleet of their own cars, Foxtron cars. Did you ever drive a Foxtron? It's like a Golf. It's a whole family of different products. Foxconn has its own semiconductors, silicon carbide, which is a very important technology in AI. By the way, half of the global AI servers built on this planet are built by Foxconn, and they're a leading player in robots. There's a lot of technology in Foxconn, and we have the chance to be in that, together with Ennoconn. Intel, I'm happy that we have a visitor from Intel here. My last 25 years, I said I'm here 25 years, Intel is 25 years. Same thing. We have a tight cooperation. We will show you today an AI system for training robots, with a small box who can replace old AI systems like this. Very powerful. NVIDIA, everybody knows NVIDIA, AI partner. Sorry, I forgot about MediaTek first. MediaTek is financially involved. MediaTek owns some shares in Ennoconn. Foxconn and MediaTek are connected financially, so they're part of the Taiwanese community. Besides that, they became the global number one in Arm CPUs. They are really one of the key players in Arm. They support us with our 5G connectivity as well as with Arm CPUs. Now I come to NVIDIA. NVIDIA is American company, also founded by Taiwanese people, and very close to Taiwan. They invested in MediaTek. That's also part of the Taiwanese community, and we are in the process to get more technology input via Ennoconn and Foxconn into NVIDIA. Good. With this. I'm just not done. Last slide. I do it quickly because I'm over time. We want to have over EUR 80 million of synergies together with Ennoconn. That's what we identified, and where we put a lot of different action items the last two days, how to achieve it. A lot of them are around technology. For example, to install KontronOS on also Ennoconn/Foxconn products. Second, to expand our high-speed trains to East Asia. We believe a lot in this cooperation ODM manufacturing, where we see a lot. We have the sales region what we expand, and especially the supply chain support, which is very important. All of it, EUR 80 million annual profit. This profit will be split between Ennoconn and Kontron. In the first year, we will see EUR 31 million out of that. In 2 year, already EUR 62 million. In 3 year, we will have the full EUR 84 million, and that one will stay, EUR 84 million improvement to now. Thanks for your attention, and I am forwarding now to Clemens. Hello again. Let me start on the financial policy with the cash flow expectation for the second half of this year. Cash flow at Kontron is always heavily impacted by H2. It is very strong always in the second half of this year. This year we have been affected strongly by the supply chain crisis. That is why I want to give you an outlook and more color on the measures we have defined to give you more clarity on what the second half will look like this year. By the way, it is also expected to be extremely strong this year. We have defined actually three areas where we see measures we have taken already and we are about to implement. We will reduce the inventory by around EUR 50 million by year. That is our expectation, including reduction of delinquent backlog. You are aware that we had significant backlog at the end of the first half of this year. It amounted to slightly above EUR 50 million. That will be significantly reduced over the third and especially fourth quarter of this year. Secondly, we are centrally optimizing the payment terms. We are aiming at more than 90 payable days across the entire groups. That is the payables. On the receivables side, we aim at 60 days for receivables. To have the payment terms optimized with our suppliers and customers, which will result together with divestments of Green Tech Resources. You are aware that we are restructuring there. We are taking down resources. We are selling some of the resources there. That, in total, will result in cash inflow of EUR 40 million in the second half of this year. Last but not least, as a third block of measures, we are focusing on PPVs, purchase price variances, in order to tackle the challenge we face with the increasing material prices, particularly with a view to chip prices rising. We are adding on average 10% in material overhead to our sales prices for our customers. Let us jump to the next slide. I also want to give you more clarity on the midterm forecast. We have already provided at the beginning of the year, when we presented the full-year figures, our midterm guidance until 2030. Let me give you some more color on the dynamics in the midterm guidance. The guidance for 2026 is obviously EUR 1.6 billion, with EUR 550 million coming from software solutions and EUR 1.05 billion coming from smart IoT. All in all, we expect EBITDA of EUR 225 million before restructuring charges. That implies software solutions is generating 19% EBITDA margin, smart IoT 9%, roughly 9% EBITDA margin. Our outlook for 2030 is EUR 2.6 billion. Thereof more than EUR 1 billion coming from software and solutions. We expect EUR 300 million, so roughly 5% of the annual revenue base to add on revenues via M&A over the next four years. So on average, around EUR 70 million per year. Then we expect that smart IoT will grow by around 6% to EUR 1.3 billion. So growth software solution's very strong, around 16% at least over the coming years. It's a CAGR rate. Smart IoT growing by 6%, totaling revenue growth over the next four years of 13% double-digit growth. The EBITDA is expected to be at EUR 420 million by 2030, with over 22% of EBITDA margin in software solutions and over 10% EBITDA margin for smart IoT. Let's also look at the dividend policy. With a new core dividend policy, as Ennoconn asked for dividends rather than share buybacks, that's why we are aiming at a progressive dividend growth in the coming years. You're aware that in 2024, the dividend was at EUR 0.60 a share. For 2025, there was no dividend proposed as we executed a share buyback program. For the fiscal year 2026, so for the running year, the dividend proposal is expected to be at EUR 0.65 per share. With this growing dividend policy and dividend payout ratio of between 40%-50% of the net profit, we expect to have a dividend, according to our long-range plan, of EUR 1.5 per share, implying a yield of over 7%, dividend yield of over 7% by 2030, given the growth in our EBITDA. The funding for our dividend, the funding source, is our free cash flow. Just to give you an idea on the cash conversion rate, we aim at having 75% of our EBITDA translated into operating cash flow. Obviously, you have to deduct the CapEx from that as well. With that outlook on our core dividend policy, I'm handing over to Philipp now for the sales strategy. Thank you, Clemens, and good morning. My name is Philipp Schulz. I'm the CSO of Kontron. That's a function that we created freshly in June. We reorganized our board responsibilities to reflect the challenges of the market strategies and the addressing of our different markets in a more harmonized way, thereby coordinating our efforts better. That's not the only change that we did. We did also implement very talented VPs for dedicated areas to coordinate our setup. As you have understood from Hannes' presentation, we have a lot of acquisitions during the last 25 years. There is a lot of independent companies that need to be harmonized and coordinated, and that's what we're doing. Right? We created the VPs for sales for the Cyber Solutions, one of our biggest growth areas, to coordinate all the efforts and have all the entities participate in those efforts with one direction. Also, the second VP of sales is for Electronics². That is an umbrella that we use for EMS and ODM, more strongly ODM, but also DMS services together with our partner, Ennoconn, where we can offer really a huge offering from development to the final build of products for our customers in a wide range of not only technologies, but also a wide range of locations. This is one of the best sales arguments that we currently have is our local setup that we can span three important continents with local production for our customers. Some of them are sensitive to their sourcing, because they are government or they are having social responsibility targets. Some of them want to utilize the biggest and best and fastest and cheapest production areas, and that is also okay for us. We can offer them both, and therefore we are a more interesting partner than just local ones. We have a regional sales setup. What does that mean is, the three areas we target independently. Europe is one big sales region, North America is one big sales region, and we have, obviously, Asia as well. We have been talking, Hannes mentioned that we are partnering more strongly now with Ennoconn on together using our power for the Americas, and having strongly in the lead Ennoconn for the Southeast Asia and Asia markets, and that will enable us to address with more power on those markets where we currently lack. We will see in the next slide that we are not equally distributed on revenues. We know that, we are addressing that, and we are strongly trying to change that. What is also new is that we are enabling a cross-entity cooperation more and more. Formerly independent entities are working together. They are knowing of each other more and more. They are bringing the technologies together and using them for cross-company projects that are bigger than just small building blocks. You will see some of that also in the defense portion we will be talking about today, where we bring together different building blocks to create bigger solutions that not just create more revenue, but also higher margins, and most importantly, help the customer to be more speedy. So the integration times and integration cost for our customers are going down. We are referring between those entities, of course, software sales and sales for a full-blown critical network solution is completely different. We know that, but we also have implemented a referral system because, especially in the railway business, we see a lot of opportunities for hardware that Kontron produces and provides that was formerly not addressed directly. So with a referral system, we get much faster to those opportunities, and that is creating a real drive right now, where we find opportunities in our existing partnerships. We are also creating or growing our partner network, especially in areas where we are not present. You will see in the regions where we are strongly with local entities, we also have strong sales. We are less successful where we do not have local entities. We need to grow with partners because we will not be able to spend on all the target areas to build new facilities there. What is our current focus areas in sales? You heard it many times already. Defense, defense is the one with the most momentum today, and the second one is software and cyber resiliency. There, our strategy is bundle wherever we can our own products, our own hardware platforms, Ennoconn's hardware platforms, other partners and third-party platforms we are providing with software and using their channels or a partner like Intel where we build systems together that are using our software to showcase what those bring to the table. All right. A very quick look at the overall segment structure and the growth that we envision. Clemens was already talking about the margin situation and the growth that we foresee until 2030. The green arrows indicated those are the main focus areas for the high double-digit growth. But we see, as Hannes said, a recovery in the industrial. Very important, Germany seems to come back, right? We see it also in the RFQ activities there. ODM is getting a lot of huge contracts right now. North America, main focus area, lagging a little bit behind in Asia together with Ennoconn will be the focus of the next years. All right. That was a quick overview from my side. Martin Rausch will take you into technology. Thank you. Many thanks, Philipp. My name is Martin Rausch. I would like to go briefly over the technology strategy of Kontron, and it is a pleasure for me to present the introduction for our four platform pillar presentations later. It is the transportation with our core technology on the RF/FRMCS, our software solutions, then our defense and Physical AI competencies here together with our partner Intel, where we show you a demo. And last but not least, our 5G Network Access Devices for connected vehicles in the automotive. What do these four technologies have in common? The first, they will drive our Kontron revenue growth with really excellent profitability by addressing our current main issues, let us say, from the customer side and solving customer problems. The other one is this Kontron technology help to keep the physical world, let's say, with the connected and secure operational, and this all in a real-time and mission-critical environment. Why Kontron wins? So often, Kontron is seen as an embedded hardware supplier, EMS supplier. But right now, we can offer really a complete portfolio and can act as a one-stop partner across our complete technology stacks. It consists right now already a big hardware portfolio, then the connectivity with our 5G technologies, then our overall software solutions, and last but not least, the engineering services from maintenance and service updates and so on. This we will extend in the future with service level agreements to have really then reoccurring revenues. Here again, a little bit more on the technical side, our integrated technology stacks. Again, the basic, our broad portfolio on the hardware, with the secure IoT hardware devices. Then the glue, let's say, is then the software. We have a broad on software services, which my colleagues will present later. Then add on the services. Last but not least now, to all of our technologies, we will bring in Physical AI grid, and get here a big, huge benefit for our customers. I have to go back here. To summarize now really our game changer technologies, I would say the big advantage is really that, as you can see in the numbers here, this will boost up our revenues for all our four core technologies on the transportation, on the software, defense, and 5G. What we do is really in addition to these growth investments in our key technologies, we will reduce, as Hannes already mentioned, our R&D spendings from the 12% right now to 10% of the revenue. How we would like to do this? First, Hannes already said that we will boost more the synergies of our internal resources and boost up our low-cost countries there. Second one, for sure, platform approach is always important in the technology, so that we have a broad technology platform here. Last but not least is really the strong cooperations. Saying that Ennoconn is here today, saying that Intel is here today, and this is the three pillars, let's say, to boost our revenues, invest heavily in the game changer technologies, and in addition, reducing our spending from 12%- 10%. Therefore, I would like to hand over to our EVPs for the transportation, Richard and Michael. Thank you, Martin. My name is Michael Jeske. Good morning. My name is Richard Neussl. What is Kontron Transportation doing? We are the leading supplier of end-to-end critical communication solutions. A lot of passwords. What it stays for, railways building dedicated networks for two purposes. One is for the internal voice communication. The other one is using the data network we are building for the train operation. This is for the demands in the future. With our technology, we are also supporting the railways to improve and have more efficiency on the train operation. What we are offering with this one, where we are addressing a multi-billion EUR market over the next years. Kontron Transportation is having a full end-to-end solution. We are having our own products, hardware, software, but also the full service chain. We are providing the full stack, which is, in that sense, unique in this industry. We are, with our FRMCS activities, engaging the market quite early. You will see a lot of upcoming opportunities, and with the engagement of Kontron in the standards, we have already built now a very strong knowledge to be in a position to capture all these tenders, which are now ongoing already in the trial phase, but also coming into the next years. What is also important to say is that the new network and the existing one will run in parallel for a certain period of time. The knowledge Kontron is having is to ensure the customer to do a smooth, tailor-made migration from the existing network to the new one, which is important because we talk about train operations to have a secure, reliable network. That is the third part we are having, and we are using now this knowledge to also enter new markets. One of the examples mentioned here, India started to build also some high-speed trains where we, with our MTX technology, you will see in the demo later on, are already part of this program. This is on the one side, the new technology, but we are also having a unique position in the existing market. As was already mentioned, we have a very strong market share. Currently, I think we are winning most of the tenders. The existing technology will be still used by the railways to, one, is to maintain it, to upgrade it. We are also seeing now, even in Europe, tenders for replacing networks from our competitors. We, even in this market, gaining market shares or having the position of market share. With this knowledge here in Europe, we also start to expand to other markets. Also through our cooperation with Ennoconn, we are having now some activities. Thailand is one of the GSM-R projects where we are selected as one of the technology providers. We have really here a strong, unique position in this industry with our end-to-end solutions and the knowledge and installed base we are having. FRMCS is data transmission for mission-critical solutions. It is based on different components. Kontron Transportation covers here the 5G RAN. RAN is Radio Access Network. This is all along track side. We provide our own VDR platform with our own 5G core, and based on this 5G technology, there are railway-specific components. We have our own patented white space technology. This is important for the coexistence for at least one decade between GSM-R and FRMCS. FRMCS did specify different frequencies, what is not same like the mobile phone specification and all this makes FRMCS for a railway-specific product, that Kontron is very strong inside. About the railway market. As I said, one is the existing technology. What we know and the current status is till 2035, 150,000 kilometers will be replaced with the new technology. Where, as said before, we have a very strong position, but it is still the tenders to come. Why we are so unique in this position? Railway, it is not about providing a 5G network. It is not like a mobile network. It is really to ensure rail operations, and that we have to understand how the system need to work, and we have the full end-to-end understanding. This is the experience Kontron Transportation is having. This is really quite unique. It is not about a 5G network. It is really to understand what is important to ensure that the trains are running and even there is more efficiency on train. It is a strong demand all over Europe, globally, to bring more passengers on the train, and the experience we are bringing in, bringing us also in this position, having quite a lot of attention from our customers to helping them in this transition. It is not about technology, it is also about the knowledge how to run such networks, number one. Number two is there is already technology is available. MTX is one of it, where you start to use FRMCS technology even today. Here we are by far the leading supplier in railway. I think in Germany, we are serving 1,000 kilometer already, train operation with this technology. It is called MTX, where we already start to build these FRMCS components on the existing network. This is one where we are really driving the whole standards and moving towards FRMCS. Of course, there is a lot of funding in this way, and we are also pushing to get with this investment cycles, capturing some fundings, but also using it for the upcoming tenders to be in a good position. Last but not least, this long-term customer relation. You will see it on the reference list. We have now signed a few, I think three, four at least, contracts up to 2040. It was already announced. It was SNCF. Deutsche Bahn is not announced yet. It was signed this year. ÖBB, Irish Rail, and there is more to come. With this long-lasting contract, it is not only about the contract to maintain the network, to further upgrade. It is also a commitment from our customers to work with Kontron up till 2040, which gives us a very good access to the customer to discuss how to do the migration to FRMCS. This is also, I think we are the only one offering such long-lasting support contracts because we gained the knowledge how you ensure that this aging technology is further supported over the next 15- 20 years. This is a bit the estimates, what is the market potential till 2041. So it is EUR 5.5 billion. What you see on the slide is it will start in Europe, and then we are seeing after 2032, Asia and other markets will come to introduce FRMCS. So this give us some indication, and we are now focusing on Europe for the full FRMCS deployment. There is some pre-FRMCS versions, but full FRMCS deployment will start in Europe and other markets will follow later on. Kontron Transportation stands on the pole position for entering the FRMCS market. With 75,000 kilometers and 21 cores in Europe, we cover more around 50% of the whole market. Worldwide, we have installations on 90,000 kilometers on track side. This success is based on our, we have almost 340 people in R&D and engineering to provide all these technologies, to do all these rollouts and also the long-term customer support Richard mentioned before. The electrification pushed transport to railway. For us, it results in a lot of opportunities. Our success based on a strong backlog, what we even can increase. So between end of 2024 and now, it did increase by more than 50%, and opportunities rise up even stronger by 75%, almost from December 2024 until now. Our forecast for the upcoming years reflects a market shift from GSM-R to FRMCS. Already next year, we will invoice the first POC, the proof of concepts, with some railway infrastructure providers. Latest in 2033, we expect that FRMCS part will make 50% of our business. On our references, you have on the one side this long-term support contract or long-term customer relation contract, as said with ÖBB, SNCF or Irish Rail, which is very important to have the base. On the right side, we have also very important references in terms of FRMCS. Number 1 is, as I mentioned before, you are having the coexistence between the existing technology and the new one. Here together with Deutsche Bahn, SNCF, which are, I would say, the key players in Europe in this industry, we are testing to have this smooth migration. There is also technology white space Mike was mentioning, which only Kontron is providing, a lot of our competitors to ensure really this technology migration and have a smooth operation during the period of time and using the both technologies. This is the reference number 1. The second one is this end-to-end knowledge, where we had some tests also in Germany. It was in that time still under Digitale Schiene. They are now integrated to Deutsche Bahn, where we tested this end-to-end capabilities on FRMCS, not only providing one box to have the end-to-end. MORANE2 is a project funded by European Union, also initiative all over Europe. I think it is four countries involved. It is Spain, Germany, Netherlands, and Sweden, with five tracks, where there is currently the test, the standard ongoing, where they are testing how the standard works in the field. Kontron is involved in all the countries. We in providing our MTX in all the countries, and we are testing our access technology in Spain on a high-speed train on a conventional line. We are the biggest contributor also here, in this European funded test to prove the standard and how this is really implemented on the field. We are one of the main driver here also in this new technology and also during these field tests in these 4 countries. This is about the slides, and now Reinhard will give you a short intro on our technology. Okay. My name is Reinhard Steiner-Krause. I will present to you now the FRMCS product portfolio, not on slides, on real products beside me. FRMCS is built on four major building blocks. The first what I present is the FRMCS Transport stratum. The Transport stratum is built on the 5G core. The 5G core, so to say, is a Kontron software development, in-house development, and will be installed on the vDCR based on the MA1310 product, also from Kontron. The second part of the 5G radio is the base station. Along the track, you need to imagine how many sites you need to cover all the tracks, the 100,000 kilometers. You need every 2, 3 kilometers a base station built on an RRH supporting the railway frequencies N100 and N101. Also in-house development from Kontron Transportation. The BBU is also the MA1310 used from Kontron Canada. The second building block is the FRMCS Service stratum. This is based on the MCX application server, which is doing the call control for the FRMCS system and also SIP core as a foundation for the call exchanges and the interworking function outside to the FRMCS world. This software is also based, depending on the deployment scenario, in a data center or on the Kontron vDCR solution. The software deployed on the vDCR is also in-house R&D made software from Vienna and R&D centers in France. Everything in-house, researched and developed. The third part is the interworking function, where we have the opportunity to connect to the 5G core or even for other deployment scenarios like secondary lines, also connecting it via the public networks, and make the operation happening also for smaller railways. The last building block is the front ends. This is the dispatcher station. This is the main station for this front end in the railway, to establish calls, different kind of calls. To have the MCX services like the MCX voice calls, video, and data services. Data services are also very important for the operation of trains because in future we have the autonomous train and also the existing ETCS level 2 operation. This will be transported via our MCX system. The dispatcher, to say, is the communication instance towards the train. Trains are simulated now on our mobile phones here. Also our MCX app is installed there, which is developed in Vienna. Here I have prepared a call scenario where you see on the landscape these four trains here on the side, on the mobile phones, and they are, to say, dynamically via a circle can be called then like this and you see this is now working. This is not a fake. This is a real operation, to say, in the network of what we have on the trains. I think this will complete now our presentation, and I will hand over back to Richard. Thank you, Reinhard. Now open for Q&A. Yes. Thank you very much for this insight. I am just looking around in the room if we have any questions. Thank you. Thank you so much. Good morning. Tim Wunderlich from Cantor Fitzgerald. I have a question on FRMCS. I was wondering, is this technology for Kontron, is it going to be higher margin than the GSM-R? Will you face less competition in this area, going forward, so when it starts? What is your view on the competitive intensity in Europe? I think it is more a principle question. Do you believe that introducing a new technology compared to a legacy one, bringing higher margins? I think by default, the margin on FRMCS will be more challenged because we are introducing something compared to a legacy, aging technology where the margins are higher. We are expecting lower one, which is, I think, what usual in this one. The competition, yeah, we are seeing Ericsson is try to enter the market. We also see from our customer feedback that the experience we are bringing in, yeah, because one is to provide a 5G technology. On the other side, the experience we are bringing in, it is quite unique. But yeah, there will be more competition than the GSM-R. This is- The competitor is mostly Ericsson? Nokia. Nokia. Huawei, some Chinese, Asian are not really playing a role? In Europe, to our understanding, the railways try to avoid, primarily focusing on European technology. Okay. Understood. Another question, I guess maybe for Hannes or Clemens. You talked about the very strong order intake in the ODM business over the last six months. I am just wondering, that sounds fantastic, but is that going to be dilutive to the margin? How selective are you when it comes to winning contracts in the ODM business? My last question would be also relating to ODM and the services. You talked about Green Tech restructuring being finalized. Is the downsizing of ODM and services, is that also finalized? Are you happy with the current setup now? That would be it. Thank you. Third one answer, simply, yes, we are happy with the setup. We are currently at 6,400 people. We still see this Green Tech and slightly ODM going down another 100, 150, but at the same time, we see our software and solutions going up 150. We are at a headcount level which is fine and which next year will go up again. Yes, we are happy. Cost-saving program is finished. Second, ODM. We do not have margin pressure here. We have very unique approach to these customers. We won two big contracts recently, against Zollner, a company three times as big than us, the market leader in Europe. Why? Because it is that one-stop approach. I tell the guy, "If you do 10,000 pieces, you do it in Germany. If you do 100,000 pieces, you do it in Bulgaria. If you do 1 million pieces, you do it in China." We can offer all of that and we can often when we say, "If you want to have a local production," that was a main issue. Let us say Dräger, for example, yeah. Dräger is a medical company. They also sell in China. With the new policy, they want to have products made in China. So we can offer to produce in China, we can offer to produce in America, we can produce here. Now, to your questions on the margins, we did not win on price. We were more expensive than Zollner in this other contract what I am talking about. The really key is this one-stop shop. We design the product. In this specific case I am talking about, there was a OSM module in, some technology and intelligence. We have that. Yeah. Zollner has to design it. Second, we have the software. We have 2,000 software engineers. Zollner has 50. We have much more engineering approach. The last point is, in the background, Foxconn, when there is chip allocation Guess what? With Foxconn, we have much better chance to get parts. Our ODM margins, just to say you a word, we started with something like 22% of cross margin when we took that over from Katek, and our target is to be over 30%, and we will make it. Any other questions in the room? Yes. Hi. Thanks. Daniel Lion, ERSTE Group Research. I would also like to start with the transportation topic. As I understand, all or most of your contracts already include FRMCS, the option to expand to FRMCS going forward. I still do not understand fully to what extent this optionality is really tied to you, or if there is any chance, going forward, that Nokia wins back the clients that you actually won now with the GSM-R offer. As I understand, Nokia still obviously focuses a lot on FRMCS, but less on GSM-R. So how do you see the situation? How do you see the market share gains really being defendable going forward when FRMCS really starts kicking in? Compared with full communication market, the railway communication market is a really small niche market. Yes. It has not so many participants like the public mobile market. This explains our position. We are focused on this market. We have this long railway history with a close connection to the customers. For the other suppliers, this is, let us call it market extension. Yes. The question is how many intentions they put into this basket. Yes. They do not have the experience with the railway operators. For instance, in the public mobile market, innovation every year is a driver. In railway industry, this would be a killer. Yes. You cannot explain, "We have a new technology. Next year, we will make a big update. You can change all your locomotives. This is where we see our strong position in the market, and also where we can realize these high margins. Another word, I am old enough when UMTS licenses come on the market, and we were asking what to do with this capability, with this capacity. We will see a strong revenue increase because of a lot of new application based on FRMCS technology in the future, what extends our possibilities for revenue based on this FRMCS technology. Okay. Thanks. When we look at the definition of the standard, which has actually been postponed now to 2029, when it really should come out, you can put more color on that as well. How does this relate to the timing of the implementation? When are you really going to step up business, your revenues, and making business with FRMCS going forward? The good thing is, trains would stop if they would not have neither GSM-R or FRMCS. If FRMCS will come later, then the entrance to the market will delay. But the train companies, they need the GSM-R technology. We see also, not all train lines in Europe and not in the world are equipped with this modern technology. Then the business goes on with GSM-R technology. We are in all these gremiums where we would not say influence, but participate on the definition. But we have these two horses then, with GSM-R. Also when implementation of FRMCS would start today, there is another at least one decade for GSM-R, where they need this maintenance contracts, I guess, Richard, you said until 2040. Also there are developments possible to extend this lifetime. We will not dry out of business because they have to maintain the GSM-R networks and have also to make new setups. And then the last one to FRMCS, now that you actually broaden your internationalization, when I understand it correctly, you always partner or team up with other companies for the implementation of FRMCS outside of Europe, right? Just provide more details, yeah, on that. Or how does actually the offer that you want to grow outside of Europe differentiate to the European offer? Is it any different? Is it different in terms of, I do not know, margins? Is it different? So maybe you can just share a few words how this internationalization actually looks like. What we with our own resources will keep focus on Europe, because I think in what we are doing now, it is like India is a market where we are having a long-lasting local partner who is having then some capabilities, doing the local activities, which would be, I think, out of Europe and building something for the setup is here, going outside of Europe, working with partners, and sometimes in cooperation. India is also a project together with Siemens. In this business, quite often you have a close cooperation with the different signaling companies, and we are also very close with all of them. Is it Hitachi? Is it Alstom? Is it Siemens? So we also then see which kind of part they can take over, that we want to keep our cost base. It is get a bit out of control if you are going all over the globe. We want to focus with our own and have selected partners for the offering, which not hurts very much because our part here is mainly software. We are selling the software to India, and then we are having some local service fee on top of it. So this is also quite good margin business. We are not selling the services which we are then doing locally with our partner and focusing on our software, which we are developing here. This is the approach we are having for this market. The roots are in Europe, this is true, but also with a strong connection with Foxconn partners. We have the possibility to enter these markets. And there is a difference. In Europe, you have a very narrow, defined range of sets, what has to be established. In worldwide, it is a little bit different. So there we see other frequencies. But our products are easily adaptable to these different requirements. Okay, thanks. Then maybe a clarification, a question to Hannes or Clemens. When you state profits in your guidance, what do you mean by profits? Is it EBITDA or is it net profit or EBIT? What slide are you referring to? I guess it was mentioned on several slides, where you state profitability and not explicitly state the- The one I mentioned was EBITDA and was written above. Yeah. There's some with EBITDA and some where only profit is mentioned. I assume it's EBITDA, but We generally refer to EBITDA. Are you going to provide some kind of a bridge towards the Agenda 2030 guidance later on? Or do we need to discuss this now? It's probably, in the interest of timing, we should keep your question for the last Q&A round. Okay which is slightly longer. Okay, perfect. Thank you. Okay, thank you, everybody. We have one more question in the room, sorry, for transportation, and then we will move on. Hello, my name is Reinhardt Pilz. I am a private investor since a couple of years. I think one question on the slide, the bridge to It is not transportation, sorry. Is it okay? It refers to you, Clemens? Okay. So it is not specifically to the transportation. I will do it at the least of the meeting. Thank you very much. Yeah. Okay, thank you. We take any general questions at the end of the executive. Huh? Transport question. I think we have one more. One more question. Okay. Thank you. MPCM. One question for the transport team or two questions. Is there a risk that revenues might face a phase of slower revenues due to a scale down of GSM-R before the scale-up of FRMCS will take place? No. Like I said, the trains need whether GSM-R technology or FRMCS technology. We always have to continuously process the tracks. It has to be equipped with one of these technologies. This means if FRMCS comes later, we will have more new GSM-R setups. Even now, we still roll out GSM-R. Europe has this challenge to bring goods from the Atlantic to the east side of Europe with heavy goods. We see projects close to the Black Sea harbors. The rollout of GSM-R still is ongoing and will last until FRMCS will take over. They cannot live without technology, and they cannot wait for something. Okay, good. On the market, you showed a slide referring to the market share. Maybe you can share your expectation, what the market share in FRMCS might look like, seeing that competition is still quite dynamic with Ericsson potentially entering the market. You won quite good orders. What is your expectation for your market share, maybe in Europe, once the transition takes place? It's No, so we have a strong. Yes. Okay. No, I want to answer on that. We talked about Ericsson, we talked about Nokia. Nokia is for a long time in the GSM-R market. As of a fact, there's a big difference for us, the trains is our major target. Nokia takes that as a side effect of doing 5G, doing 4G, doing 6G. They have a product lifetime of four or five years. Our customer expect 20 years. The whole process of Nokia is giving them so much trouble. Actually, I was negotiating several times of acquiring Nokia. It's not their focus. Nokia has big problems to run projects with 15 years of lifetime. Also with Ericsson coming into that market, they're not yet. I'm not afraid of that because they will have the same problem than Nokia. Okay, good. Last question. What is the mix between front-end systems and systems along the track in the business, typically? I mean, the main business is along the track. The revenue drivers are really the equipment along the track. I do not know about the percentage, but this is the main driver for the business. Okay. Thanks. Thank you, Richard and Michael. Now we move on with the software part. Stage is yours. Okay. Hello, everybody. My name is Bernhard Günthner. I am the EVP of Cyber Solutions. I am Michael Jacob. I am the VP Sales of Cyber Solutions. You heard that, part of Philipp's team and reporting directly to the CSO. We were talking about IoT stuff, and everybody talks about IoT. I do not want to go too deep into the numbers, but from our point of view, the IoT market is still a very strongly growing market. I am not talking about revenue numbers, I am talking about devices. You see there is still a lot of devices that need to be connected, and not only connected, but they also will have to be securely connected. This means what we are targeting for is to provide not only software, we are targeting to provide systems that are secure. We are targeting to provide cybersecurity to our systems. Of course, we are heading to provide secure fleet management and device management. The core for that is our KontronOS system. The KontronOS is not just a software, it is not just a board support package. It is really a platform where our customers can build their own system and infrastructure upon. That is exactly what we are targeting. We want to provide our devices, everything that we are delivering should be equipped and will be equipped with the KontronOS infrastructure, meaning not only an operating system, but also an infrastructure behind, including service level agreements, including remote management, including device management, and also including software development resources for our customers, including software development resources for our customers so they really can use the whole Kontron infrastructure so that the customers can focus on their own core business. What is behind all of that? Besides that there is some real stretch regarding cybersecurity, from a legal point of view, there is also some pressure coming up. This means, especially with the NIS2 Directive and with the Cyber Resilience Act, of course, mainly focusing on European regulations. There is a very strong pressure for the majority of our customers that they really need to dig into that, and they really need to even retrofit installed base. This means everything is coming up. This is not something that we invented. This is coming from the market. This is coming from regulations. As I said, the majority of the customers, they will have to take care for that. This is exactly where we can help our customers. This is exactly when we can provide our CRA-ready solutions, where we can come up with consulting, where we can help our customers to do the tailored solutions and stuff like that. This means we have to also go to the next level, and that is what I call is platform thinking. This is exactly the way that Kontron is marching on. From past, we were delivering secure hardware. We were delivering proven and well working hardware. Today, we are combining this with an infrastructure and with software so that the customers have a ready-to-use system. The next goal is that we really are providing an infrastructure, and this is something that our customers more and more appreciate because they are more and more focused with too many regulations, with too many additional workloads that really keeps them away from focusing on their own business. The question is: how can we manage that? In the past, Kontron was known for really doing projects, doing tailored solutions for every customer. Every customer had a tailored solution. With this approach now, we have to go a little bit different because time is crucial. This means time to market cannot be two years. Time to market should be three or six months. We can only fulfill that if we use existing solutions. That is why we have created bundles. We call them IoT bundles. It is not only one flavor, it is different flavors of bundles that we can simply or fastly adopt to individual requirements. Basically, these bundles are consisting out of three pillars. Of course, usually it is Kontron hardware. Then on top, we will use the KontronOS. Very important also for remote management and the whole administrative stuff is our Kontron Grid. You can also see that on web. Unfortunately, I do not have the time to go too much into detail on that. In a nutshell, cyber resilience is the key. Cyber resilience will play a game, and we will be the biggest supporter for our customers. As Hannes said, our goal is to be the Windows in the industry with our KontronOS. We have a different approach to Windows. Our approach is we have security by design. This means when we started, we always had the focus that we have a secure system. Secure does not only mean secure against attacks, but also operational security. This is also crucial because it is 24/7 operation. Future-proof also means that we will update and support. We just heard from the transportation. It is not 5 years lifetime, it is 20 years lifetime, and that is also what we are doing. Taking up this operational security feature. One example is our AI Shield, which is pretty much one of the examples of these IoT bundles ready to go. IoT application bundle, basically because we have the platform is still our proven hardware together with the KontronOS, together with our KontronGrid for fleet management. This is the basic framework and the basic platform that we are supplying. On top, we deliver with the AI Shield, kind of a firewall concept, IDS concept, where we can put some extra cybersecurity features into productions and also into machine networks, for example. The AI Shield basically is similar to a firewall, but not with static rules. It is with dynamic AI-driven rules. It learns basically from the network and from the infrastructure, and it can detect abnormal behavior in the network and in the devices that are around in here. This is a perfect example for the way we are going. It is the basic IoT bundle, and we are topping applications on top that are ready to go and give a real benefit in terms of cybersecurity to our customers. Exein, that is the company we are cooperating on that, they give us the AI flavor for detecting this malicious software and malicious behavior of devices in the network. It is a perfect combination of the approach also for the sales, where we are going for, that we deliver the platform and we combine that with applications from our partners and from the network and from distributors to get these applications to the field. We have a whole lot of push to the market and also to the sales to sell on the software and cyber solutions. We have our own Kontron sales force with hundreds of sales managers coming from different entities of course. We have partner networks. We are investing heavily in growing these partner networks. We have partners, we have distributors. Of course, we have some direct sales also. All of these guys, we want them to have these message spread to their customers and also to their markets. What we did is we said we have to unify the entire sales story in a way that it can be scaled throughout our partners and throughout our distributors in here. On the right-hand side, you see this is the portfolio. It is all around the cybersecurity in that case. KontronOS you know, KontronGrid you know, the hardware of course. You see on the left side, there is managed IoT bundle, the connectivity bundle, some of these application bundles that we are going to the market. These are solutions and products that we have. Of course, we also found out that consulting is a very big thing because, especially if you look into CRA, you find customers that are really still at the very beginning of CRA, that probably have already heard about the CRA and have a cert team maybe, but they do not know how to develop products and put them to the market. This is one of the things. We found out that with our experts and the knowhow that we have, we also have to help these customers on a consulting basis. You say? That we help them in a certain, yeah, how to develop secure software, how to test security software and these kind of things. But we also found out, and these are the two first stages, that we have to have some puzzle pieces also for the sales process and also to help these customers, even before we can really sell them the core products of us. You see that we have CRA readiness scoring calls. We have strategy calls. We have consulting packages that we can sell with our expert. We have gap workshops. It all tends and have the goal to really quickly go guide this customer through the journey and help them to get and buy our products at the very end. So that's what we standardized, that we have all the materials ready, and that's where we scale with our partners and distributors. One success story that we will share with you is coming from the same universe, basically. We, together with the partner Bechtle, we won a deal with TeamViewer. Also, again, the basic framework, the basic platform is the Kontron hardware together with KontronOS, together with the Kontron fleet management. And we were adding the application of TeamViewer to have an edge device for TeamViewer to be sold to have access to different facilities. So this is a perfect combination of an application and the market access of a partner and our basic framework. Combining that, and that's what Bernd already told us, we can be really quick on the market with that. The whole concept from the idea to the first go to market was within only 3 months because we have these pieces ready to go. We just have to add the application of TeamViewer. We have to prove some quality cycles and all of these things, and then we go through that. And the win was through the Kontron ecosystem, the Kontron distribution system. So that's what we do. We have to reduce the time to market with these ready-to-go components, and then we can grow into different markets, different regions with different partners and distributors. So this was one of the big successes, and it really scales a lot at the moment. We have a lot of requests over this channel to really sell this off the shelf. In total, in summary, we are totally attacking the market with this solution approach. We are not attacking the market with a single product, with a single hardware, with a single KontronOS, with a single KontronGrid. The solution approach is really in the forefront. And that's what we are trying to take, and this is also, if we are talking about application bundles, about ready-to-go application bundles, that will all be in the background. What we do is we roll out the customer journey to all of the sales entities, of course, of Kontron itself, but also to the partners and the distributors. We will harvest through the existing customer base, of course. We will invest our energy into these bundles and also the support infrastructure, the certifications, everything that you need to have this universe in hand. We, of course, have to do something, especially on the legal framework, because customers expect not 3 different terms and conditions if they buy a hardware, an OS, and a grid. They want expecting one terms and condition for everything. Everything is at the moment. We see that until 2027, also maybe 2028, under the big flag of the Cyber Resilience Act in Europe, but also for companies coming from Asia and U.S. importing into the European Union. Of course, they have to fulfill the Cyber Resilience Act as well. Also the other markets have their own cybersecurity regulations, which are more or less that regulated as we do in Europe, but they still have something in place. There is a whole market for that. What we do is we will further invest into AI-driven bundles. We will have a speech later on. Next session will be about our robotics bundle. This is, again, one of the applications bundles that we put in front and say, "Okay, this is how we approach the market." Visions is a different thing and these kind of things. That is our vision for the software and solution business. Yeah. As said, key is standardization. We can only address a very large customer base if we have a standard, and this is where we have to educate our customers. We know that because our customers usually they know, they are used to write 20,000 pages of requirements in order to make sure that they really get what they want. We have to turn it around, and this is our effort that we have to go. We have to educate. We have to do advisory. We have to really communicate with the customers. We have to train them, and that is what we do in order to really have a ready-to-run solution, and this is key, standardization. This is the only way also to help us to use our partner network to sell the product. This is why we also can promise to our customers that we have a very short time to operate. Okay. Thank you very much. Questions? We see many questions. Okay, we take two, if that's okay, and then we will take the rest of it for the executive Q&A. Thank you. Thanks. Yeah, thanks for the insight. Maybe a little bit top-down or just to understand how the overall market situation looks like a little bit. Can you talk about competition, about the approach competition takes? Is it similar to yours? Yeah. Is it different? What's your USP in terms of competition? Yeah. How does the market actually, the TAM looks like that you address? Just to get a little bit of a feeling of where this can develop. Yeah. Unfortunately, we don't have the time to answer this in 20 minutes, so I will try to be very short and very precise. Our USP is that we have really the one-stop shop, that we have the platform. If you look at the market, and we did that, and we have the experience from more than 20 years. There's always some company and some vendors that are offering a particular solution. Like a super operating system for real-time operation or a super fleet management system, but it's only a piece of the puzzle. When you go with Kontron, you have one contact. As Michael said, you have one contract, and you have one responsible person. We know that from projects in the past, there's interfaces, things are not working, and then you have to talk to three or four different customers, and this is our USP. The key is really to have the environment ready. It's not about the technical thing, you know. To make a Linux system running on a hardware, well, there are a couple of companies that really can do that, but to really have the environment enhanced with documentation, with the certifications, with security-proven environments and these ideas. This is the key, what we have, and there are just a few companies that have that in their hands as we have it at Kontron. Is this the majority of the market aiming for such a solution? Yes. We have a whole lot of possibilities at the moment when we go out with this message. We send, okay, they exactly want somebody who is solving problems. These companies that we are addressing, like, well, we have the example with TeamViewer. They have their own IP. They want to keep their own IP. They want to keep investing their money into their own IP. We are infrastructure for them. We are solving them a problem which is bigger and just sourcing single pieces of the puzzle. That's the message we are giving, and we got a whole lot of positive feedback from the market with that. Will it be bigger somehow? What, do you mean numbers regarding devices or numbers? No, what would be the value of the market that you are targeting and is there anything like? Sorry. Is there anything like a market share that you are targeting, just to attach some numbers to it in order to get a feeling of? Of course, the numbers is 500 million devices. That's our target. This is, I would say 50% is new devices that we are selling, and the other part comes from the installed base. It's EUR 500 million. Euros. Sorry. Thank you. You're Yeah. We got to be like that. Yeah. Can I have another question actually on that topic? Because you were saying that you are Sorry, I'm behind the No problem. Behind the monitor. Because you were saying that you're already thinking on tackling the retrofits that your clients have to do. I was just wondering, first of all, technically, on what sort of hardware can you roll out your solution, which is Cyber Resilience Act compliant? Is it requiring special chipsets? Is it one-year, two-year-old hardware? Can it run on five-year-old hardware? Just to have an idea how that's going on. A question linked to that, if that's currently approached, what is the potential from the installed base Yeah. which is probably quite large at Kontron to grab some revenues from that? From a technical point of view, we started with the KontronOS already some eight years ago. This means that when we started with that, we always kept it very lean and thin. This means the hardware requirements for the operating system, they are quite low. This is what we always had in mind, that we would go for rolling out this for the installed base. This means, normally, you don't have to go for a hardware upgrade. This is also one of the root causes why we built that. To be precise on that, CRA is not the relevant factor on that. It's more the NIS2. Because these devices are already in the field and they are operated by somebody. These guys, these companies, they have to make up their mind how they increase their security level to fulfill NIS2 regulations and all of these things. Upgrading the software portion and also make the fleet of their own devices manageable and these kind of things, this has already put them to a very high level on NES. So that we kept the system, as Bernd said, really flexible and to adopt also to the existing install base. But we do not make these old products CRA ready because lifetime of CPUs and these kind of things, so they are not CRA ready anymore. But, for the operators of the system in the NES2 environment, this is really important key factor, and we are ready to go there. Yeah. Also very important, the biggest effort is usually on customer end because they have to adopt their application to the KontronOS, and this is where we are also able to support them. To make really the transition as smooth as can be. Okay. Thank you very much, Bernd and Michael. Thank you. This leads us to our next point in the program, the defense and Physical AI pillar with Intel. Thank you very much for joining us today. Hi, John. Hi, Philipp. How you doing? Thanks for coming. My pleasure. Great to have you here. Great to see you. We will guide you quickly through the defense and aerospace and physical AI portion. Why do we do that together? It is very simple. Defense devices that we are producing are basically physical AI devices. They are much more complicated and maybe much more relevant to critical operations in the defense area. The concept is the same. I am very happy to have John here from Intel. He is the Vice President of the Client Computing Group, and he is especially targeting the industrial and robotics. That is what we are talking about today. We will start off with defense, and what is changing in the market. Defense was a no-no just four years ago. That changed rapidly, especially on the ITAR content. We were not showing our defense portion. Now we are explicitly talking about. So much can change in so short time, unfortunately. On the other hand, for us, it is a great chance to bring together what we have in our group. Procurement in this industry has changed dramatically. Formerly, it was years of development. Our longest term contract from a PO to the mass delivery, that we can remember was 16 years. That was a very long time. Now we are talking about eight, nine, 10 months, which is extraordinarily short. There are new customers on the market. We call them the neo primes, AI-driven companies that are building hardware all of a sudden. Drones and all kinds of sensors that are in the field. Everything needs to be connected nowadays. Tech driven Platforms require a lot of compute. That compute is not in the data center, because it is very hard to maintain a data center in a battlefield, so it is on the devices, on the people, in the equipment that is flying around, driving around, or on the water. To maintain that speed, we have a lot of COTS, commercial off-the-shelf products. We are dealing with speed there, obviously. We want to be fast on the market, but we also want to cater to export restriction fears of our customers, because many of them export to many countries. The tighter you are locked into a restriction, the worse the outcome for our customers. We are trying to standardize our products, offer them to a broad customer field, and therefore make them commercial off-the-shelf, which helps them avoid certain barriers. Of course, there is also lower entry barriers for suppliers when you do not have to worry about all the standards anymore. The U.S. military has started initiatives like going from four years of RFQ time to announcing 90 days decision-making. That was last year at one of the big trade shows. The army announced that. Everybody was shocked. The whole ecosystem of the old primes is not ready to do that. The new AI companies, they are ready because they do not know the standards, so they do not have the burden to be compliant like the old ones. There is a lot of changes there going on. We are seeing a lot of capabilities that we bring to the market. I showed two things here today. This is standard what we did, like three years ago, we were focusing on little computers or servers that go into something. The customer was usually building a system, and he wanted some compute. We gave him a compute platform or a power supply platform, and then he had to integrate that. Nowadays, he is asking for the complete system because he does not have the time to integrate it himself, so he buys a complete system from us, and it saves him round about 18 months of development time, which is critical in this current situation. A little bit about the market that we are targeting. You see that we are very strong in the regions where we actually have facilities. We are focusing on the NATO universe. We are not dealing with other players in the market. Main focus, obviously, is North America with U.S.A. and Canada, with most of the primes and the startups. The U.K., Germany, France are traditionally very strong with us, but we are starting to get more traction with also Italy, Spain, and the Nordics. Overall, we see for the embedded world, for the embedded compute in defense, around about EUR 700 million yearly, and EUR 470 million yearly in Europe. Globally, that is total addressable market is even EUR 2 billion to EUR 3.1 billion. Strong growth between now and 2034, and a lot of diverse customer base that we can cater to. What is Kontron bringing? We are bringing to our customers global scalability, as mentioned before. We are bringing defense products from their former home in France to the U.S. to be a real U.S. product. Also together with Intel, we are also getting chips, which make most of the value of a computer in this shape, out of the U.S. So we can offer real U.S. or Western-made products there. These kind of customers really require that, and that makes us basically a full U.S. provider, but we are also a full European provider. Both markets we can cater to. We are dealing with standards. We have a lot of standardization activity with the industry together, and we are complying with the standards of the Army, Navy, and the whole Department of Defense around the world, especially the NATO universe, that set the standard that they can use and combine for certain applications. Seldomly we are selling, or basically never we are selling to a military directly. We are going to primes or the second tier to the primes to bring the systems with them. We are not a defense contractor because we do not provide any defense system, but we provide the compute platform for the new requirements there. Just to give you an overview of the four main areas that are very important currently, autonomous systems is the main driver for us. Counter-drone activity, very strong growth. Sensor fusion, what means that? Is basically in former times it was radar and nothing else. Now it is all kinds of sensors that are combined into AI compute mission command and control systems. The last portion is then the command and control system. Those are the focus areas that our products and solutions go into, and what they are sharing is basically that we are doing mission computing with that. We are doing edge AI and sensor processing. To that a little bit later. All of that needs to be securely connected. Encrypted. It needs to be on an open standard architecture so that the provider can use different applications to make his solution. I will explain that on a better example over here, because in this box, for example, there is several different arrays that can do certain things. One of them is a power supply, one of them is a computer. One of them is a graphics card. One of them is a radio frequency module. One of them is a network switch. Depending on what the customer needs, he can custom build his box with those building blocks that we provide. But we do not only provide those building blocks, we also provide the housing, we provide the power supply, we provide the switches, we provide the compute, we provide the GPU, the graphics processor. So he can combine whatever he wants to create that computer that he needs. He needs a computer for mission-critical communication, that is one flavor. He needs one for image processing, that is another flavor. Depending on the solution, he will design a different box, and with our lineup, we can cater to those needs very easily. Going quicker here. We want to boost the defense business. We are currently around about EUR 150 million this year. We are going into the direction of EUR 400 million. We do that by combining our building blocks of the different entities into bigger solutions that gain more revenue. That is one. We are expanding with current customers that are expanding their projects, and we are winning a lot of new projects in the field. You see a fighter jet here. I can tell you that we have one of those little boxes on a fully autonomous fighter jet that will be built in Germany with a huge customer, and that is going very fast and very well. And will have a huge content, because autonomous flying is another ball game with a lot of compute needed. So there are some customers that are really moving fast, and we are moving fast with them so that we feel comfortable with projecting that growth pattern. Last but not least, the box that I showed you is not even on the market yet. It is so fresh because it is a new standard, VPX Plus. The bigger box next to it, that is, for example, very suitable to be in a tank. There is a German tank maker that relies on that for communication, for example, and for image processing, where this box is in. This can also go on airplanes very easily, but this one could potentially be this small as well, in the smallest footprint, so it is scalable. This is a relatively big system, but it's very light, so it can go into drones, all kinds of drones and robots in the military field. It's fanless, so it's cooled by the induction. You can drop it from two meters onto concrete and nothing will happen to it. All of those things are built into that new standard, and that's VPX Plus. It's up and coming, and we're trying to partner with Intel, like we partnered on the robotics AI box that we will be talking shortly with Intel to develop that and bring that to the market in no time, basically. Great. Thank you, Philipp. Maybe I'll move on and talk a bit about the world of AI. The theme and the shift that we're seeing that's so profound now is the move from embedded computing of old, and we've partnered with Kontron for years in building solutions for embedded computing, through to the increased usage of visual inspection with computer vision and forms of digital AI, which mostly predicted and generated to this new world of physical AI. What's so exciting about physical AI is it opens up a wide variety of application categories across multiple different markets. Because now with physical AI, devices can sense, can reason, can act, and take action based on the distribution and consumption of AI right at the edge. That's where we partner with Kontron on building solutions that take the advantages of Intel's technologies, compute technology and AI technology, with the vast experience that Kontron have of building industrial solutions and the integration of those solutions to deploy capabilities to the multiple markets that we service. So it's very exciting to continue to collaborate on opening what is now a very vast and growing opportunity as physical AI is in some ways only limited by our imaginations. So I think about the work we've done over the years. We've worked on multiple different solutions with Kontron. We've multi decades of experience working in examples. You see some here with manufacturers looking to increasingly automate their manufacturing line, building technologies that enabled Kontron to build an edge to enterprise solution to enable a manufacturer to fully automate how they managed data and insight across their entire manufacturing process, leveraging technologies like our 11 series core product in their platform as they brought that to market. Our advanced AI inspection, which we've worked together on in enabling markets to take better advantage of the physical inspection of their device through high definition forms of computer vision. So for predictive analytics, for quality inspection, for enabling 100% sampling of deployment of product as it runs down the production line. Here again, we've worked with Kontron very closely to ensure technologies like our computer vision suites and our OpenVINO acceleration libraries are enabled through the platforms and product they bring to market to create these kinds of capabilities and solutions in market. Then last but not least, is an example from healthcare, where we work together to ensure we're enabling the increased inspection and diagnostic support that applies across multiple different forms of health provisioning, from oncology to diagnostics for every form of implementation of support for clinicians as they build and enable better support and diagnosis for the healthcare provisioning for their patients. Here we've worked across a range of products from Kontron's edge servers to their Workstations to enable products like our 12th and 13th gen product, to enable this level of insight and image development, and image expansion, and analysis through AI to be enabled. Just a set of examples of where we work close together. The approach we take is very much in lockstep with how we work with Kontron. We will invest in the reference implementations. This is an example from robotics, where we look at the necessary hardware, size, form factor, and power footprint required to enable robots to be built at the hardware level, and then invest in the modular software componentry to enable the building blocks for solution delivery. That's replicated in the work we do with Kontron in taking our roadmap, which increasingly provides for levels of integration for AI support at every point across the scale, from entry level to very high performing, and enables that to be implemented and represented across the portfolio of product that Kontron bring to market. So just a sample here of products that have been built across the power and performance. Look a bit of view to the future that take advantage of the investments we continue to make in our roadmap and bring solutions wrapped around those capabilities to the market to enable our customers to implement solutions that are really taking the best of breed and best capabilities of our technology, implemented through Kontron's footprint and product. No better is an example of that, is as we work together on bringing physical AI to the real world, with a particular focus on robotics and the work, Philipp, we've done together to bring that reference implementation to an actual commercial product. Yeah. I am very happy to show you for the first time, it basically came off the printer yesterday. Basically coming out of the beflex prototype shop that we run within the Squared Electronic empire. This box is many things, but it is also a revolutionary, right? Because it is the first Panther Lake robotics AI solution that we have on the market. We are first to market with that. We both talked about that and decided to do that, embedded world in March, and already we are here, which is an extremely fast development cycle for a complex system like that. What does it do? It is an edge device, right? So it is in the industrial compound. It is fan-less, so it cannot go any dirt in there. It is very, very small. It is a miniaturization. So yes, it is another box, but what does it do? It basically replaces an AI computing server, right? In former times, and we will show you in just a second, a robotics training that we do with a box like this was requiring a server, a complete rack server, formerly, to run a model, like these two gentlemen will just show us, that is needed in order to train a robot with a visual inspection, a visual language model. Right? You all know ChatGPT, the large language models. The technology we are talking here is visual language models. So those are much more consuming for the AI, but we managed together with Intel, and they miniaturized their AI compute into their CPU. Right? Normally you would need a CPU, a GPU, like NVIDIA, which is the market leader in that for sure. But at the edge, there is one thing that counts, and it is price. Right? You cannot have an edge device that costs you $25,000. This box will be priced at least a third of that price. Right? So it is really, really the revolution in bringing the cost down and performing solutions that formerly were done with a big graphics accelerator, that was necessary to do that. And with that Yeah I think we can That is something we can do. Give you a short presentation of what this What we are demonstrating, as Philipp said, is shrinking the need of a model training and implementation. Physical AI, an example, down to a footprint which is fan-less, lower power, can live in a ruggedized environment, and enables true physical AI to be deployed at the edge. TCO, total cost of ownership, is reduced, complexity of implementation is reduced, and sustainability of the implementation in market is based on the heritage we have built together over decades of knowing that these applications have to live in deployment for long life cycles. What the team will demonstrate, Albert, is the work we have done to show how a model can be trained by the operator, and then implemented to enact an actual activity or the performance of the robot based on the training that has occurred. All of that is running on the new Panther Lake based box. Albert, explain really what we are seeing here. Yeah. Absolutely. Here we have our Physical AI demo station, which is all running on the Kontron KBox that you can see here standing in the corner, all locally. On the table, we have two Trossen robotic arms. We have a camera and we have two components laying here. We want to I'm sorry, I'm blanking a little bit. We want to train a robot to perform this task by itself. We are training the model to pick up this part, and then place it inside of it. On the KBox, we are running Physical AI Studio, which is our open source solution around Physical AI to train the models and to manage data sets, and whatnot. Yeah, in order to train those models, we go through a process that is called imitation learning. I am going to demonstrate that where we perform the task that we want the robot to learn by itself. In this case, I am going to pick up the blue component, and place it over the black piece inside of it. This might be a task that you see in a factory, for example. We repeat this process a couple of times to collect more data. From that data, we can then train a model that we can deploy on the KBox, and then the robot can do it by itself. As Max will show now, we trained this model already overnight to do the task. Yeah, here the robot is basically running the model to perform the task by itself. Yeah, let's try that one more time. We can also move it around, so it is adaptable, of course. Yeah, as you can see, this robot has still a little bit to learn. But yeah, the main takeaway is here that we can run those large models on the KBox device. The robot is in elementary school right now, but he will be soon graduating, with the speed of AI advancing. One last word to that. This KBox is not just designed together with Intel, but is also running KontronOS as the operating system, is running KontronGrid as management software, and on top of that, we are running the AI stack of Intel. So we are showing that the robotics set-up for a joint box together with Intel is potentially the new standard in the industry for edge AI devices. Yeah. Very exciting. Thank you very much, Appreciate the collaboration. We are open to your questions. Thank you. Do we have any questions in the room right now? Yeah. Yeah. Hi. Basil Taser. I am not sure if I got that correct. Is the module already in production, so out of prototyping and you have already customers for this? This is the first prototype that is functioning, that came off the line yesterday. Okay. It is not in production yet, but it will be very soon, and we have already customers lined up for that. Okay. Can you give a little bit Agenda 2030 vision for this product line? I mean, production 2027, volumes visible already 2028, or how should we think about the ramp of this product? So. I mean, you shared some top numbers, but would be great to have a little bit- So. On volumes. How do you price the product as well with your customers? Yeah. So very hard to say because it's a standard product, but it can be scaled by customer to their needs and their computing requirements, and that will change the pricing, obviously. But I can tell you that the BOM cost, so the parts of components that are in that, is round about a third of if you do the same thing with an NVIDIA system. So it's priced substantially lower than that, and it has a smaller footprint. It has also not the capability of a server, for example. So it's targeted to be executing models in the field, not so much doing the training and learning and building the model like you need a huge data center for. So what we're seeing is currently the boom that makes us headaches with chip allocation, also from Intel, by the way, and maybe we can get some afterwards. The data centers are collecting all the chips currently. So that's the boom currently because you have to develop and train the models. Once they're deployed, they will run on those smaller edge devices, and that will be a game that we both are together very well positioned to get. So I expect very high growth of that, but with the industry being the industry, so some of them are moving faster, some of them are slower. It's really hard to predict for exactly this box a volume for 2030. But I think that we will be replacing, I will be bold here, we will be replacing standard only computing boxes by AI computing boxes per 100%. Because even if you don't need it now, you will want to have a little bit of AI capabilities in your system if you need it later so that you don't have to replace the hardware then. One second. Just talk to the microphone so everybody can hear you. Thank you. Just a brief follow-up. The use case you demonstrated looks like you must have a lead customer for this product. It looks like warehousing or something. Foxconn has a lot of employees, server manufacturing, you can standardize a lot. Can you talk a little bit about what could be the first use case, at least? It looks like a very advanced product. It is very simple. Everything in an industrial environment, like a camera that does quality checks. Currently, you have to connect it to a server. The server has latency and so on. Now you can bring that complete model to that camera that is inspecting your production. What you have seen first with, for example, in an automotive setting where you have cameras inspecting the parts, they need to have a connection with latency to a data center or to a server room, and that makes those systems very expensive and very hard to deploy and to change. With that complete flexibility, you can mount it on a humanoid robot. It is very light, and it fulfills all the functions that a humanoid robot needs. It has all the connectivity for cameras and sensors that exactly that kind of application needs. It is a very universal box, and therefore, it has not one specific use case. Any further questions in the room? Hi. I would like to understand how this relates or how this becomes visible in your figures, starting from order intake or maybe in the pipeline, trickling down to order intake and then into the P&L, compared to other parts of the business. As you said, that lead times might become shorter now going forward, and this is a standardized product. So what does this mean compared to Obviously, the different extreme would be transportation maybe, but how would this be reflected then in the three KPIs that I mentioned? Very good question. First of all, it will replace products that are not able to do AI. Because the requirements of our customers go into that field every day. So that's number one. This product itself can be scalable, I would say, market readiness in the SBC. We will manage to go from prototype to gate five readiness until the November show in Nuremberg. That's where we are going to market with that. From that, it depends on the customer adoption. I cannot give you a number right now. Okay. Thank you. Due to the time and the schedule, we will now thank you very much, John and Philipp. Thank you. and Albert for this demo session. We have now Christoph Caselitz with the topic of 5G NADs. Thank you, Christoph. If I may correct you, it is not NAD, it is NAD, but this is a small difference. As Alexandra already pointed out, I am heading the NAD business, which stands for Network Access Devices, and at the same time, the automotive business. Hannes already explained how much this company has changed under his leadership, and you saw a lot of examples, and this is another one. Network access devices are not just another product area of Kontron. It is a strategic position that none of our competitors has. What is it about? Network access devices sounds a bit boring, let's be honest. But imagine 5.6 billion people are communicating over smartphones today, but 22 billion machines and devices are communicating. The span is getting bigger every year. Thank you, but I do it myself. The span is getting bigger every year. The cellular part of IoT devices being connected is just 22% today. The rest is Bluetooth, Wi-Fi, and whatever. But the cellular part is the fastest growing. It grows by 16% in 2024, and in 2025, it was already at 20%, and it is exceptionally growing over the next years. We are positioned in this cellular area for IoT devices, and we connect cars, we connect machines, we connect railways. FRMCS is not possible without this FRMCS device that is onboard. The whole world is going to be connected. Every device, every bicycle, every whatever. This is where we are positioned in. Today, we are in 5G. 5G, don't worry, I am not going to explain the whole chart, but if you talk about 5G, a lot of people think about fast internet and these kind of things. It is not only about that, and it is not only one standard. It is several families where we are all present in. On the top end, you have the mobile broadband, in the middle, you have RedCap, reduced capabilities, which is also going to play a role. On the left downside and on the right downside, you have devices that have low latency, so connected cars, automated driving, and these kind of things. But we are not standing now on 5G only. We are already developing 6G. 6G is not a product issue today, it is just a development issue. If you see how fast AI is developing, then you will see in the next years how fast 5G is going to go into the niche because of capacity. 5G was never designed for AI. If you hear about 5G Release 18, Release 19, and these kind of things, they will have features on AI, but they were never designed for AI. 6G has already 20 different definitions inside for AI, and this 6G will be the first time where it is not only delivering capacity, it is delivering information. The network is delivering information. Of course, network security will also be one of the leading factors for 6G, where we have just entered in. When is 6G going to come? We all know it is going to be Release 20, Release 21 of the 3GPP. This is around 2030, 2032. But it is a complex development where we are already in. If you look, and this is just a short overview what we are doing, this is similar to the semiconductor industry. You have different chipsets that you are developing at the same time, and we are doing the same here. Release 16 is more or less frozen or completely frozen, is in rollout. The same is true for Release 17, and then we will have Release 18 and 19, which we are also developing already and before it ends. Then we have Release 20. This is not our own definition, this is the 3GPP definition, the releases that are defined. Then we are going to enter into 6G. This is different chipsets, this is different software stacks, this is different certification and customer training. So it is quite a complex area, but it also provides you with entry barriers for competitors or new competitors, because you will hardly enter into that area if you have not been in one of the previous releases. As I said, we are connecting cars, we are connecting other vehicles. We are doing FRMCS as I was showing you already. We were the first one that had been delivering. There is hardly anybody else still such a modem for FRMCS. You saw the picture with the partners from Hannes. One was missing that I would like to add to. This is Qualcomm, is a strong partner of ours, and Qualcomm has been together with us starting the semiconductor platform on FRMCS. We both have developed that, and therefore we were in the position to be the first one in the market that delivers a modem for FRMCS. Other mobility functions you see here, also agriculture. In Release 18, we will also have connect through satellite, so narrowband NTN and broadband NTN. This is going to be part of the Release 18. Because in agriculture, also in trucks and fleets, and maybe even in transportation, you will need this kind of satellite access. This is still in the starting position. But we have already first requests also from car manufacturers that want to have a satellite connection on top of a 5G connection. If we talk about trust, what is trust? I am not talking about perceived trust against U.S. or China simply because we are European. No, this is not what I am talking about. I am talking about reliability. I am talking about reliability in delivering, in software updates, in firmware updates, long-term availability of these kind of things. This is what Kontron is standing for. We are glad that we have everything in our hands and close in our hands. We have this in development since 25 years already in Berlin. We have a 5G factory also in Europe, meaning in Germany. We have a factory in Düsseldorf that today is already market leader in electronics for CarLoCS, for kick sensors and these kind of things. We are delivering these kind of electronics, and this was a good familiarity to our NADs, and we are producing them there. We will have R&D and manufacturing in Germany, and that puts us in a unique position where our partners know how to rely on and where to rely on. We are the only company that will produce NADs, cellular NADs outside of Asia. There is nobody else, and this is not because we are insane. We have this in our hands. We know that we can compete even with Asian factories given the scale that we have in the factory with 1 billion components per year and these kind of things, and 50 product families. We have done the investment already. This is not a laboratory, this is reality that we have there. In the portfolio, I have mentioned the different releases on 5G already. I just want to point your eyes more on cyber resilience and AI usage. We are using AI in the factory already, and we are using AI already in the development in several areas. In the manufacturing, we are still at the beginning, but we are rolling that out. Again, here we come to trusted. We have a long-term roadmap, we have long-term support from our semiconductor partners, and we have the trusted cyber resilience implementation in our NADs. This is what we are building on when we have won several contracts also with automotive companies. I am not mentioning the area, but big companies also from Asia that said, "This is what we want. This kind of trust is that we are building on." They wanted to have the R&D and the manufacturing in Europe, and this is why they have awarded us. If you look to the market potential, I was talking about these 22 billion connected IoT devices with exceptional growth over the next years. You cannot do everything as a company, even as Kontron, but we are present in the major areas where we need to be. FRMCS, the colleagues were mentioning that is going to start by 2030, going to be rolled out. For us, it is still a smaller business. It is just an investment because we do not have any revenue on this one. We, as a NAD business. In automotive, we are in 5G, and we are on all of these releases that I talked about. This is a business that is going to speed up, I think. Because in the past, you had a release that was going for seven years, and this is now coming in shorter cycles and this is also the reason why we need AI in the development, and this is the reason why we are rolling it out, and we need to come to a more platform approach. This is what we are working on in order to be faster in the rollout of new releases every second year. As I told you, we have an AI in the factory already, and AI in development. You can see what the different areas here are. Through 6G, we are going to roll out also AI in products. I am really curious, I cannot give you the answer how long 5G in this AI boom is going to last. This is so extraordinary growth that we see here, that I expect in a few years, the 5G network is going to slow down on this one. Again, the good news is once 6G hits the market, 6G was designed for AI already, then I think we will see a complete cellular network based on AI. That brings me to the end. You have any questions? For now, we do not have any questions in the room. Okay. One second. You already won some larger contracts in automotive, so maybe in a three, four, five year perspective, where do you see larger business opportunity? Is it the automotive part where you already gained the orders, or will it be the rather on the industrial IoT side, where the device volumes might be much larger? In both, but we currently have enough to do to fulfill all the orders and RFQs in automotive. Because it is not that, just to give a name, that Mercedes-Benz has one platform and it rolls out one NAD. There are six, seven different projects in Mercedes-Benz. The same is true for Volkswagen and for every company. Because every new family, every Golf or whatever, just to name something, is going to have a different NAD with millions of devices. To answer the question, the industrial part is the fastest growing part, but of course, from a margin and revenue perspective, also the smaller part. We build and focus on automotive at current, and we will take opportunities in industrial. Thank you. There was one more question. Yeah, thank you. On previous slides you showed on occasionally you showed EUR 100 million revenue targets short term and EUR 1 billion target medium term. Can you put this somehow in relation towards- EUR 1 billion I've hopefully not shown. Then I have a problem with my incentive. No, no. EUR 1 billion is a- No, maybe this. We have shown a EUR 300 million target. No, no. By 2030, but. This could relate to the market as well, yeah? That is what I wanted to ask. Yeah. What do these figures really stand for, yeah? What is reflected in Or maybe asked differently, if you show here that 100% of cars might be or should be equipped by 2035 with Yeah 5G connectivity, what does this mean in terms of market value? I can go back some slides. I do not have it here. Well, first of all, we need to see that we do not have access today to China. China is a closed market and none of the Western players has access currently to China, to the Chinese car manufacturers. You need to deduct China and then take the volume of automotive, so of the automotive in the, let us call it western part, or Asian and western part, excluding China. Then you have, well, 100 million already today, and this is, depending on the further development, growing in single-digit numbers, at least. If you ask me what the volume or the potential for a NAD is, imagine a 5G NAD today is sold without options at EUR 70. If you include options, then you would go up the way to EUR 100. I think to have a chance to be profitable, you need somewhat like 2 million per year. Our target, of course, is to go to 5 million per year. This is what we are targeting at. How does this relate to your current capacity and requirements to build out this capacity? No need to worry about that. The current capacity in the factory is not a problem. The capacity in R&D is always a problem, as you can. Otherwise, you would have too many people. Here we need to work on AI and special tools that we are already rolling out in order to make that happen, to have more families at the same time. Qualcomm, by the way, and MediaTek are also working from their side to have more platform approach. Yeah. Let me add here, Christoph. Daniel, you are aware that we are thinking and we are planning with around EUR 300 million of revenues. Obviously, this is a planning which could be even much more revenues. Obviously, we want to be also on the cautious side there. As Christoph pointed out, we are well-equipped and don't need significant CapEx in order to produce 5 million per year. Yeah. We are planning to achieve that target with the existing capacities, basically, without having to do a significant CapEx investment on top of that. And what really helped us, especially in manufacturing, is that we have an existing manufacturing side that is leading in this part of the industry with the electronics for CarLoCS. SMT lines and so on are all the same. And we have this capacity, we just needed to invest in RF testing and these kind of things. So we feel rather comfortable. And one last question about maybe the operating leverage of this development. So when you move now from, let's say, 2 million units, or less than this at the moment maybe, to 5 million, you stated 10% margin, EBIT margin, related to NADs. So what does this mean going forward in terms of profitability? So where do we go? Well, it's a scalable business. Yeah. Of course. Yeah. Yeah. That is my question. Yeah. I am not- We are planning with around 10% EBITDA margin going forward. Obviously, there will be additional add-ons, as Christoph pointed out. Yeah. At least for the next four to five years, we are just ramping up this new technology. We will be able to keep that margin. We now see the 4G margins, of course, to significantly go down, but 5G is still starting up. So that will be the margin probably in the next couple of years. Then year five, it will probably- Yeah Start to slow down as the next generation of modules will kick in. Besides all this optimism that I hopefully could deliver, the U.S. and European car industry is also in quite an uncertainty. If you follow up the press, at least what is happening in Volkswagen, then every schedule is shifted on a, let us say, five weekly basis. I am really close to that. I am not pessimistic at all. We have enough opportunities that we can fulfill, and there is also enough pressure in the automotive industry to roll out these kind of devices because everything needs to be connected. There will be coming V2Xs on top, where cars communicate to each other, where cars communicate to pedestrians, and to bicycles, and these kind of things. This is part of the vision. Everything is going to be connected. This means that everything will have your 5G. Hopefully, but if I am standing next to the CFO, I am not giving any promises. This is dangerous. Thank you. Okay. Thanks. Thank you. Thank you very much. This concludes this session. Thank you very much, Christoph. Now I would like to welcome on the stage for our last content session for today, our colleagues from Ennoconn, to give us an insight on the strategic partnership, driving long-term growth together. Welcome, Steve, Nelson, and Joe. The stage is yours. Okay. Ladies and gentlemen, thank you so much. We are honored to be here to present as a majority shareholder, how we work together with Kontron. As you may know, in the year 2006, Ennoconn, we made a decision to invest Kontron, and that we own the shares is only 39%. But right now, last month, we invested another EUR 350 million, and right now our share is already up to 48%. That means we trust, we believe Kontron is a very good company. Ennoconn shareholder, as you may know, majority is Foxconn and also the U.S.A. Google, and the largest Taiwan IC design company, MediaTek. These three companies are the major shareholder of Ennoconn. So we can combine together all the resources, whatever the manufacturing, logistic, whatever the Google Cloud service, and also MediaTek IC design knowledge. We want to get all the resources, try to support Kontron. Before presentation, I would like to introduce my partner, my right hand, Nelson Tsay. He is the President of Ennoconn. And my left hand is Joe Fijak. He is Executive Global COO, taking care of all business. Before we want to show you the details, how we work together to be a one team, one family, I will show you a video. I simply let you know what we are and what technology we have, so you can briefly understand what is Ennoconn. Okay. Please. Taiwan is a global hub for semiconductor research, development, and manufacturing, and a global leader in Physical AI. Backed by a comprehensive industrial ecosystem and world-class technological expertise, it plays a pivotal role in the global semiconductor supply network. Headquartered in Taiwan, Ennoconn provides a diverse portfolio of intelligent solutions for high-tech industries. In the technological expansion of Edge AI, by combining the edge computing of Ennoconn, Smart IoT connects automation and robotics for highly integrated and flexible production, significantly boosting manufacturing efficiency. With the Smart IoT of Kontron for complex and rigorous equipment integration. KontronOS, suitable for industrial and aerospace applications, is a complete, rugged Linux-based operating system built specifically for edge devices and the Internet of Things. In smart factories, our intelligent systems can monitor and predict risks in real time. Through agentic AI and Physical AI, we deploy the computing brain directly onto the semiconductor production lines, empowering machines with autonomous decision-making capabilities and officially evolving the semiconductor smart factory to possess proactive early warning and self-optimization capabilities. This not only significantly reduces the time and cost of cross-border plant construction, but also ensures the ultimate operations required by advanced manufacturing processes. From our R&D centers in Taiwan to new generation wafer fabs worldwide, integrating our own factories and Foxconn's smart manufacturing, paired with cutting-edge technologies from strategic partners. Through strategic alliances with global tech giants, we are building a robust and highly integrated smart manufacturing ecosystem together. Integrating advanced autonomous mobile robots, AMR, to achieve seamless factory logistics and fully automated operations. In July 2026, we proudly hosted a grand forum in Singapore, focusing on AI applications in smart factories and the semiconductor industry. We are proving to the world the future of semiconductor manufacturing is a perfect symphony of cloud computing power, edge intelligence, advanced process, cybersecurity protection, and green energy. With AI technology and energy sustainability as its dual wings, Ennoconn is driving the global semiconductor industry toward a brand-new AI-powered green intelligent future. Through the video, you can understand we have a lot of applications. We need technologies. As Foxconn right now, they produce whatever consumer product, like iPhone, iPad, and something like a desktop notebook, or they produce the AI data center. Any kind of factory, we need the technology automation, AI. Kontron right now, they already developed a lot of technology that will fit in Foxconn. Meanwhile, Ennoconn right now, we are also the number one, the best partner of the U.S.A. retailing marketing partners. For the future, we were going to combine, integrate all the applications into using Kontron technologies. This is why after we invest 29%, last month, we invest another 19%. For the future, we were going to have a more strong synergy working together. Then we can go to market together. Okay. Next, I am going to briefly introduce about the presentation today. I'm going to talk about a deepening about calibrations and the earning upside. Nelson will talk about a joint technology platform driving high margins. Joe, he will present the global edge physical AI business expansion. Whatever we are talking about, only one purpose, we want Kontron to be the number one, the best technology, and then we can support and help go to market together. Okay. This is section one. You can see that I emphasize that one team, one family. Ennoconn, we are from Taiwan. Taiwan, as you may know, we are considered to be the best semiconductor and AI technology countries. However, we don't want to say we are 100% perfect. In Germany right now, we do believe we have many technologies we can leverage Kontron. For the future, one team, one family working together, all the technology is something we are better. For example, the manufacturing and the logistic, we are very strong to get a low cost component for Kontron. Also, we are very strong in manufacturing and also IC design. We can just using this strength or resources to support Kontron. This is the target, one team, one family to build up our relationship. The second, just like I mentioned, the major shareholder of Ennoconn, Foxconn, year 2000 investors, MediaTek, September 2020. Google, January in 2021. They provide the global supply chain DMAs for us. MTK, they provide the Arm-based CPUs, SoC, and IoT devices. Google, everybody knows, they are very strong for cloud service and the PaaS and a lot of the technology from Google. Okay? This is we get resources, and we are working together to support Kontron. This is the growth momentum for Ennoconn past few years. We are listed in Taiwan as of year 2014. During the past 12 years, CAGR for Ennoconn revenue is roughly around 38%, and the profit CAGR is 20%. We are right now ranking Taiwan the number one, the best investment company. We are also ranking number one, the best investment performance of the Foxconn 400 companies. All this is technology and scale. We just want to working together with Kontron. After we have the scale or technology working together, I do believe the investment to Kontron will be very, very valuable. Once again, I talk about Google and Foxconn and MediaTek. Cloud edge all integrate, and the semiconductor manufacturing upscaling. AI chips and the SoC Arm-based, we are working together with Kontron to design the next generation edge AI. The physical AI and edge AI go through Kontron and Ennoconn working together. We can develop a lot of applications about the automation, communication, defense, energy, medical, transportation, avionics, and also the infotainment. This is the target for our future. For the next few years, we will focus on these five pillars. These five pillars, we will generate another EUR 18 million profit for Kontron. First of all, the R&D organization. Some technology already existed and are very mature in Taiwan. We can just easily move to Kontron. Kontron, they don't need to spend all money and the time. They should just need promote to the market. For some high-end product, something like aerospace, defense, medical, then Kontron, we can just remain the R&D team to do the business here. The second, the product and the solutions, just like I said, we can just get resources, whatever from Taiwan or the companies, and they can just provide a product and solution for Kontron, and easily promote it combined with Kontron technology. The global supply chain, this is our strength. Foxconn, they are so huge. Every year, they buy more than EUR 200 million materials. We can just leverage their strengths, then we can buy low cost and easy to get supporting. As you may know, everybody are worried about memory. Everybody worry about Intel chipset, everybody worry about PCB. But these components for us, we don't have shortage. For Ennoconn, we don't have shortage. We can faster deliver to the marketing, so we can grow very stable. The same, we just want to move these resources to Kontron. So they can easily get resources, and then they can just deliver product to the marketing, to the customers. For global manufacturing as well, Foxconn, we have Europe, we have Asia Pacific, we have a North American factory. Everything, once we have demand, we can just easily leverage the resources of manufacturing from Foxconn whole group. Ennoconn as well, we have manufacturing site. We can also support Kontron as well. Go to market, this will be the most important. If you can prepare the good high technology and the excellent application product, then it will be much easier to go to a marketing. Next step, for Asia Pacific, for past few years, Kontron, we did not spend much time in Asia Pacific. But right now, just because we have Ennoconn working together, we can easily promote all the Kontron product and technology in Asia Pacific, because we are very strong footprint in Asia Pacific. Next. We can see Europe will be the center, because Kontron build up here is more than 60 years. So Europe will be the center, provide all the technology, and also applications, just something like KontronOS and FRMCS something. We can develop to Asia Pacific, also North America. This kind of combine, we can generate a cost effective and a restructuring our system. Then marketing and product expansion will be much, much easier. Next, I will try to invite Nelson to talking about the joint technology platform and the driving high margins. Nelson, please. Okay, good. Thank you, Hannes, and Intel, and all the partner right here. And thank you, Steve, as well. To summarize a little bit, I really thank you, all the team, to put it all able together, have been doing all the presentation. But right here, really, let me to move a little bit more in deep how Ennoconn and Kontron going to create more value, and margin, for all the shareholder, as well as for our customer, right? Couple, three dimensions that we can see from technology cooperation. The Ennoconn or Foxconn, our strength is pretty much on the compute level, including the system integration level. But Kontron, really in many area, especially the software level as well. Same as Philipp or Hannes just mentioned, the people, they need their solution yesterday, not tomorrow. Same as they're going to deliver the good to meet the military, everything from couple years to nine months. Technology, we strong believe that it will be a high synergy. From the base of the compute level to system level integration, and on the top is all the software and application behind it. Next, is pretty much product. We have all the hardware. But talking about cybersecurity, talking about edge AI, or thinking about the robot. If the robot get hacked, that will be a serious situation. We have the autonomy car for different level of the assistant drive or whatever, autopilot. Any hack will create a huge problem, especially on the edge side. We strong believe many of the production, especially overseas in Taiwan, I would say more than 50% of the box build or even a board level is produced in Taiwan, and APAC as well. How are they going to ensure their box, PC or the board level or the system or subsystem are ready for cybersecurity? We can see there is a huge cooperation then we can work in together. Other will be market expansion. APAC is our backyard. Many of them we continue to discuss manufacturing. Where is the manufacturing in general? It is still mainly not only for technology IT, but all others as well. We see there is a huge opportunity for Kontron technology can move in forward, especially with our backyard in APAC. Based on whatever we have been saw, determined on the left or on the right. From the rail industry, from the transportation industry, from many factory automation industry. Intel just mentioned about the healthcare medical. Many. We strong believe there is another area we can really working together with Kontron and the team to expand the product and solution and to help our customer go to market, and especially from the small factory point of view. Next, we are talking about AI. Generative AI since 2022. People are using ChatGPT, all kind of technology, I believe everybody use. That is pretty much on the AIDC kind of stuff. We find it out since this year. Same as Intel mentioned, same as Philipp did mention earlier. Really AIs come to the edge, the AI's data is really need to be execute or execution in the edge side. The edge AI or, say, edge device in general, or equipment itself. We still come to the bottom line, physical AI, we see the huge demand in general. Some of the question asked. How really grows? We have one subsidiary, the VICO. Their business growth, especially on the edge AI or AI associate, is more than double this year. That really we see a high, huge demand, especially in U.S. or North America market. Which we can working together with Kontron and the team, especially from the Flip and the team in the U.S. We are talking about the tier 1 account and how we can working together with our experience. That is come to next page. All the technology, we have Intel here, we have NVIDIA, we have the MediaTek in the pattern of technology stack. Kontron and Ennoconn is pretty much on the second layer. The key is, how we going to put all together for AI application, and especially to increase the industrial value. How are we going to deliver that EUR 80 million combine all together, EUR 40 million each. That is a key, and we strong believe that in the future. Based on, which is mentioned from the technology, from the product solution itself, combined with the market right here, and really on the top of the physical AI, then we can working as a team. Intel is one of our key strategic partner as well. Not only in the past, but we strong believe we will speed up, especially from the edge AI and device AI, and really come to the bottom line to deliver the turnkey solution for physical AI. That is pretty much to summarize. One platform, one possibility, and working smarter for all the partner, including some of the investor right here. We all know you might have many connection. At least, today, our presentation, hopefully, is that we can working together as a team as Steve just mentioned. One team, one family, and we will continue to deliver, not only increase the profit for all Intel, the Ennoconn group, including Kontron. We like to working as all the team, as a friend, as a family, but we all know that's two independent company, but we were working together from the shareholder point of view, total shareholder return, and that we will continue to working together. Thank you. That is my presentation. Next session is really talking about how we're going to deliver that physical AI to the market. Thank you then. Joe. Yeah. Thank you, Nelson. As we wrap up Market Day, it's great to have so many partners, investors, analysts here, not only in the room, but well over 100 people joining us from outside this facility. Let's get an understanding why we're so positive and optimistic about our business and our relationship with Kontron. 1959, that was the year Kontron was born out of BMW family. At over six and a half decades, the technology industry and Kontron have run a parallel path to get us where we're at today. Today, as you've heard from many of the guest speakers, you'll see what happens the next decade. Edge AI is entering a decade of hypergrowth. AI is here, it's for real. It's something for us to embrace and to engage in the markets. There's been a lot of great questions today. One of the things that I implore is to think about the Kontron business on a global scale, on a worldwide scale. Not only here in Europe, as Nelson mentioned. Philipp, as the new CSO, is empowered to engage and drive business in other parts of the world. Combined with what you see here, trillions of dollars are entering the investment space for physical AI and edge AI. You look here alone on the graph, you see in 2025, $36 billion in the global edge AI market. 2026, excuse me, $46.96 billion. In 2034, $445 billion. These numbers are real, with a 32.5% CAGR. You've seen a lot of technologies today that Kontron offers. You look at the structural growth engines from a edge AI perspective, and where Ennoconn can participate, working closely with our partnership with Kontron to provide opportunities to get to those connected devices with real-time intelligence, the IoT, 5G at scale, the data sovereignty, AI silicon evolution, and pilot and mass development. Again, there's been questions of Philipp with the new AI opportunity. That will accelerate to mass development and mass production. The next AI infrastructure cycle is not going to happen in the cloud, it's going to happen at the edge where Ennoconn and Kontron already operate. With that being said, it's important to understand that not one company will own the edge, but our partnerships with the leaders are going to be critical to that success. NVIDIA, who is number one in the world for accelerated AI ecosystem, Intel, who has billions of x86 processors already out in the market, and you heard some great points from John here today as a guest speaker, and MediaTek, who has over 2 billion connected devices around the world. That is where the real opportunity is for edge AI. It is moving from the cloud. Flip talked about it. These devices are going to be critically close to where these devices sit today, where you can analyze real-time data, make decisions immediately, and make any adjustments or improvements. That is where our world is at today, and some of the key solutions are in the markets that we are at today. When you look at NVIDIA, right now the most powerful company in the world, we bring an outstanding relationship to the table as a part of the Ennoconn organization to expand into the Kontron organization. Nelson mentioned VICO. VICO is a leader with high-performance physical AI box PCs today that Kontron will have access to. When you look at vision AI, when you look at autonomous machines, ruggedized AI, and physical AI, NVIDIA is a world leader. Intel has over 200 billion current processors out in the field that require edge AI and that connectivity. It creates huge opportunities in industrial PC, the edge computing, the AI PC and control automation. MediaTek, one of our largest shareholders, second-largest market capitalization company in all of Taiwan. They are absolutely interested to continue to engage not only in some of the solutions that Ennoconn has been developing, but where can we enhance Kontron's effort, not only into Europe, but the entire global marketplace and including the largest marketplace in the world in the U.S. There will be serious efforts to work and coordinate with NVIDIA, Intel, and MediaTek, not only here in Europe, but in the U.S. and APAC. As we move forward, let us talk about the North American commercial strategy just a little bit. We are talking about scaling edge AI and physical AI across many of these vertical markets. They are real. You hear about the billions of devices, the billions of components that are out there. The Foxconn Golden Triangle. That Golden Triangle is Kontron, Ennoconn, Foxconn in a collaborated effort from the hardware platforms to deployable physical AI systems. When you look at smart retail, autonomous operations, here is a case study, a real case study. The largest POS software company in the world, a 150-year-old company. Ennoconn has a $650 million per year global contract for all design, manufacturing, supply chain, warehouse, and logistics. Multi-millions of devices out there from a smart retail and autonomous operations perspective. We are already in a collaborative opportunity with Kontron for both their software as well as some of the hardware devices so that we can look at expanding and exploring ways for NCR Voyix, our key partner, to expand their business into the AI realm. From the semiconductor fab and intelligent infrastructure perspective, again, we are talking about integrating the supply chain and manufacturing to take advantage of the growth and the opportunities that we all have together. Of course, how do we enhance and improve with such things as digital twin and AI facility management for the current facilities that we have? We have talked a lot about Foxconn. Foxconn brings the world's largest impact when it comes to manufacturing. We are going to bring many of these opportunities for improvements to the Kontron facilities and factories as well. With that being said, again, the three American growth engines include industrial AI, autonomous retail, and the intelligent semiconductor infrastructure market, which will create bigger markets, stronger customers, and higher synergies. At this point, what I am going to do is ask Hannes to please come back up here. Steve and Hannes will come together once again, as you have seen in some of the photos, and this one family approach that we have. Not only will we have a picture of them. By the way. Alive and in person, they can hug together. Hannes and myself, we are the same age. Okay. 1962. Yeah. Thank you. So, okay. Any question about Ennoconn, how we work together with Kontron? Oh, yes, please. Yeah. Maybe at this point, we can then officially enter the executive Q&A session. Very good. Thank you very much for this great presentation. Okay. We will ask Hannes, Clemens, and Philipp to join the podium and officially then open the Q&A session, starting with you in the room. Thank you. To start with Ennoconn, thanks for the insights you gave us. Actually, two things just to understand. With all these potentials that we've seen, actually, if only some of them materialize, I think the current share price is a bargain. Why have you decided just to enter a bid at a very low level to secure? You secured 20%. In addition, why not go for more? Is this a strategic aspect in order not to harm Kontron's business having a majority stake or more than 50%? Or what's actually behind this? Or should we expect that maybe a further stake might be added at a later point in time? I already had that in my presentation, but to say it again, the two most profitable and prosperous businesses of Kontron at the moment is transport and defense. European railway companies would not like to have Ennoconn more than 50%, it was a target to stay below there. That's the same about defense. That is a pure economical reason. Ennoconn wants to maximize its profit and not destroy Kontron. Okay. Understood. Thank you. Actually, a second one. With Advantech, actually, you have in Taiwan one of the biggest companies and a strong competitor to Kontron as well. Can you cooperate with both of them, or is Advantech a clear competitor to you as well as a Taiwanese company? That's a good question. We have a tremendous amount of respect for Advantech. Obviously, you've seen the growth that they've been able to accomplish. But we're very bullish on what we're doing, to be honest. As we respect them as a competitor, we believe there's a lot that we have to offer. From an Ennoconn perspective, to give you an example if you're not familiar, over the past 10 years, we've grown from $550 million to $5.5 billion. While we're respectful of Advantech, we've been able to find tremendous opportunities either that they participate in or don't participate in because we have capabilities, we have relationships that they don't have simply. Kontron, while they're a direct competitor to Advantech, obviously in Europe they have substantial market share that Advantech could not even think about touching. One of the things you have heard us talk about today is the U.S. and APAC. This is where we are going to fully load. We have had tremendous success from Ennoconn perspective. I gave you one example of a case study customer. One customer, EUR 650 million per year, that Advantech was not even a competitor in that particular environment. We are looking for ways not only to compete head to head with Advantech respectfully, but also how can we differentiate ourselves. One of the key areas is in the software. That is something that they do not represent. Kontron is a significant player and will be a giant player moving forward in the software business. Hannes, if you want to touch on that? No, I just agree to what you said. Technology-wise, I believe we are stronger. The second thing, with this new cooperation, we are able to have total contract value customers more than EUR 1 billion with the help of Foxconn/Ennoconn, which is simply too big for Advantech. Okay. Thank you. Thank you. Any other questions in the room? Adrian. Maybe I stand up that you can see me better. Adrian Pehl from Oddo BHF. Actually a question to Ennoconn. I did ask the management from Kontron already, but, since you are engaged since 2016, actually in Kontron, the question is, what was the trigger for you to invest right now? You could have done it five years ago, probably at much cheaper share prices. That is my first question. Yeah. As you said, there has been a 10-year history, right? We are coming up on that 10-year anniversary. The relationship has been strong from day one, but has really grown and developed quite a bit over the last 10 years. By the way, for myself, I am a proud member of the supervisory board of Kontron. What we have seen is the combination of the capabilities that Ennoconn has developed, the technologies we will develop, combined again, kind of in that parallel process of Kontron and what you have seen today here with the huge investments in AI and AI related, we believe now is the perfect time to take a larger step. Yes. As you may know, we invest the Kontron, which is, 2006, but during the first 10 years, we did a lot of things, okay? First of all, however, from Taiwan company to invest a Germany company, we do not know much about culture and regulation. Kontron let us know the details, how we can work together. At that time, we only had Foxconn, but the year 2020, we start have a new investor from the Google and NXP. Five years later, right now, we found that resources from Ennoconn, we are sufficient, and then we can do more things, working together with Kontron. That is why we discuss with Do you see that picture? We discussed with Foxconn chairman, Mr. Young Liu. He say, "It is okay. It is good timing." Okay. Since Foxconn, they also need a lot of smart manufacturing technology. We make decision to invest this year. I just let you know the history. Every five years, the condition now is too different, and the resource is different. That is why this is really a good timing, okay? More investment, and then we can work together, okay. And then, maybe a second question from my side is actually something more for the Kontron management. Because in the very beginning of the presentation, you said that industrials is growing next year to EUR 500 million again. I was just wondering what is the prerequisite, actually, all that kind of growth? Are you seeing more economic stimulus and better growth in the industry in general, or is it certain measures that you are taking? Because I think that has been a bit the weak spot in Kontron recently. Thank you. Industrial used to be always a very strong part of Kontron. So next year is not something extraordinary. We were growing all the time heavily. We always were over 10% profitability. Our positive feeling is just it is coming back to where it should be and where it was in the past. And we see that already in the order entry, so our confidence is high. One more question in the room. Thanks. I have a question till 2026. You told us that the delinquent orders are EUR 50 million at the end of the first half year. What would be the number at the end of the year and early 2027? The situation will be very difficult also next year. What can we expect in this situation already now till the end of the year? In Q3, our delinquent backlog even increased again. But we took already since two, three months, very intensive actions to cooperate with Ennoconn and with Foxconn. Ennoconn, by the way, does not have a delinquent backlog. They are in a much better situation with the Taiwanese ecosystem than we here in Europe. Our target by the end of the year, we should be now in the range of EUR 70 million, in the 50, but we think we will finish the year with, let's say, maximum EUR 20 million of delinquent backlog. Okay. That would be no problem for the guidance of EUR 1.6 billion this year, the EUR 20 million left at the end of the year? At the moment, how we plan it, no. Yeah. Another question. We have heard a lot of AI. What would be the focus in the next couple of years? We have remaining business in IT services. At the beginning of the year, we heard that maybe this business should be sold till first half of year, 30th of June maybe. Is there any new light on this, or are you intend to sell this business? Our IT services in the total is very small part of all of it. It is like a EUR 50 million. What we have left in that. Yes, if we have a reasonable offer, we will do it. At the moment, we do not have a reasonable offer. It is making money, so why would we stop to make money? Okay. One last question. In the presentation of the first half year, we saw EUR 25 million less revenues in the Green Tech business. So that would be about EUR 50 million on a run rate. If we calculate this EUR 50 million less revenues in the Green Tech, this 40% is are about EUR 20 million, which are not in the P&L on a full year base. On the other hand, we have EUR 25 million in savings. That is just EUR 5 million more. First half, we have EUR 7 million lost in the Green Tech divisions. How would be possible to run this business profitable again? No, in the Green Tech, 75% of the savings will be in Q4. Out of EUR 30 million, this is a run rate of 23. Yeah. In Q4, that will be EUR 6 million, if you just calculate the maths. This will help us in Q4 to be at the, let's say, break-even level. At the end, Green Tech, we redistribute the others. Just to let you know, we are not leaving the solar market, and we are not leaving the wall charging market. We still have businesses there, but we will not invest big money in new engineering. That's something where Ennoconn helps us a lot. By the way, we will have a much bigger product range soon in that area. Ennoconn products together with Kontron software, which will hit the market and be very competitive. Thank you. We also have some questions, I think, on the online. Yeah. Sorry, Vera. Vera from Erste Bank. I have a question regarding you have this guidance where the M&A is going to contribute around EUR 300 million until 2030. In which segment are you going to do this, or is this also in cooperation with Ennoconn as well, or with Intel, and so on? There's nothing fixed at the moment. We are talking to some company, but for sure, we are only investing in software solutions. Any region that you're specific? Sorry? Any region that you are putting more importance on? No. Americas or We have a plan around 5%, and yes, America is a focus for us. The ideal acquisition for us is a software solution company in America. Okay. Thank you. Can I ask you on the Agenda 2030 guidance as well? Previously, or some quarters ago, you mentioned that you are targeting 20% EBITDA margin by 2030. Currently, we are at 16%, as you showed. Can you just explain what changed in the assumptions? You heard it several times. Software is a scaling business. If you have EUR 100 million or EUR 400 million in software, it is almost the same amount of engineering what you need for it and logistics. We see economy of scale effects to get that up. Also, if we talk about service contracts in trains, well, if you have one server serving 10,000 kilometers of lines or 20,000, it is the same people doing that. It is all about economy of scale. Regarding dividend payouts, you just showed the DPS. Are you going to stick to the 50% basically? As mentioned before, we are targeting to have 40%- 50%, obviously subject to decision by the shareholders and suggestion by the shareholders. That is just the rough guidance we can currently give. By the way, we did that all the time the last years. We just, now the new thing is we are not going for share buybacks, we are going for dividends. Yeah. And another one on Green Tech. Yeah. So, actually when you read the slides, also from Q2 already, it seems that there is not too much innovation going into the products going forward. Is this the right perception? Why would we invest a lot of innovation in shrinking revenues? Yeah. That is actually the point. Yeah. So, when you have one-off costs or you are reducing actually workforce in the Green Tech, it somehow looks that you are fading out the entire business going forward. Yeah. We simply think it is not an attractive market. Yeah, sure. Exactly. That's my. That's why we will not put more money into that. We will cooperate with Ennoconn. That gives us a product range up to 30 kW in the solar inverters. The software which is there, we're going to still proceed and improve, but the big investments go into KUS, into GRA, into FRMCS, to trains and those businesses, not into Green Tech. Yeah, exactly. Okay, fine. Thank you. One more question. Thank you. Your 2030 guidance, EUR 2.6 billion if you strip out the M&A part, EUR 2.3 billion, which basically means you need to grow business around 9%-10% CAGR. Can you go through the different business lines and say which areas are expected to grow really much higher above that? On the software, you had in the presentation EUR 500 million, including hardware, but I am not sure what is the basis for this business. Sometimes you say it is EUR 50 million, sometimes EUR 80 million. What is the basis for this EUR 500 million business today? The last one on Ennoconn business. I am not sure if I got what exactly is Kontron technologically delivering into Ennoconn. We had the Kontron software part, but hard to imagine that it is just a software. What exactly is coming from device perspective if we take an automation and humanoid solution in manufacturing? What exactly comes then from Kontron into this module? The 10% growth is something we are calculating with. If you not talk about this year, and we had another crisis in year 2014. But in average, if you go back the last 20 years like I did, we have a 10% organic growth on the market. By the way, this market growth also now is much higher in America and in APAC regions, and we are doing the right things. We are cooperating closer with Ennoconn to strengthen that market to participating that growth. If you look at Advantech, their growth is not coming from Europe. It is coming from China, North America, and those regions. We think next year will be better again. We see that on our order entry, scheduled orders for the same year. That is one. We will participate to go higher, cooperating with Ennoconn is particular in America and APAC regions. We have the target to go to 25% in America of the total revenues, and that is just the beginning. We still see more. I had one slide at the beginning of this capital market day when I talked about all the different divisions, the eight divisions that we have. The highest growth last year and at the moment is for sure defense, where we are at a 30% growth area. That is really growing fast. Then really growing fast is transport and high-speed trains. Software somehow is not growing 20%, 30%. It is growing more in the single digit. Sorry, in 10+% area. What really will grow next year is this ODM division, like I mentioned. On the other side, Greentech revenues will further go down. We see that communication will stay stable, industrial will go slightly up. That is the summary on the different markets. Yeah. To answer the question, you mentioned about software, right? AI, how Ennoconn and Kontron are working together. Same as the KontronOS, the hardware, as I mentioned, one of the strengths from Ennoconn, we are in Taipei with many of the partner or subsidiary we have. We build a lot of edge AI or AI computing, but pretty much with OS, that is it, right? It does not matter if that is x86 platform or Arm platform. But in general, we do not have security in place. As I mentioned, security, especially NIS2, became important, right? Since next year, there is a kind of by law, like embedded to the CE, right? We like to have all our devices possible to pre-install the KontronOS. That is step one. Many of them, people are talking about infrastructure, talking about networking. KontronOS is not OS itself. It is not only cybersecurity, but KontronGrid and AI Shield, that is on the top, right? Same as Steve just mentioned, with Google. We are working with Google pretty closely, right? Google's reason to invest in Ennoconn, major reason is IoT. They like to have IoT come with software solutions, not selling hardware itself. Same as we do, same as Kontron, we like to provide more turnkey solution. Cybersecurity, especially it does not matter on the device end or end device or from networking standpoint, that is across all the industry. It does not matter what industry, what application they use, cybersecurity is key, right? Let us just give you one example. Talking about ODM, OEM, we can work together. We have been mentioned, right? Some of them, there is a strength and there is Advantech they do not have, right? Are they doing a local build, especially in Europe? They do not, right? We will leverage the entire group if there is a standard out the shield product, if that requests for mass production, and cost is kind of key to them, and we can do in APAC. Otherwise, we have many customers, they need a local service, as well, right? So that we will be working with Kontron altogether. Again, it is a kind of global network, right? One customer, they might have different need at different country or region. That is why, to answer them, there are many synergies, and we can see now that they compare with 10 years ago. Thank you. Thank you. Another question? I will go. There is a lot of questions piling up from the internet. I would like to answer that first. First question was, what EBITDA margins do you expect in the comms, in ODM, Greentech, America, and Asia in the next years? Communication is in a range of 0%-6%, so that is not high. I mentioned it, but we need it in a lot of other areas. That is why we have it. It is small. ODM is increasing a lot. We have to offer our unique sales position here with the one-stop shop. We believe already next year we will exceed 10% in EBITDA. Greentech will not exist any longer. We stopped that division this year, so we will not have specific data on it or nothing else. The target is really to not lose money with it, to be break even, and after the cost-saving program, that will be there beginning of next year. Greentech itself will be added to industrial segment and still do some solar systems, but target is just to, I always call it milk that business. We have customer accounts. We will follow them and make the contracts, but not fight for new ones. America should grow a lot. We have a program to increase together with Ennoconn. We have the special, we call it super account department for customers, which can be half a billion or a billion, where we combine forces of Foxconn and Kontron. Here, particularly in America, there are huge and big firms, much different than in Europe. We only have the smaller companies in Europe. Here I see also the potential to exceed 10%-15%. Asia we will have and had always in the 8%-10% range. Second question, would it be an option to sell transportation or defense business? What I can tell you is I am getting probably every two weeks, an offer for the transport business, and sometimes this is higher than the whole Kontron. The appetite for companies like our transport is high. But why would we go into big things? At the end, if offer of probably three times the value of Kontron, we would think about it. There is really interest in that, I can tell you that. Defense itself, I see less of a chance because defense in principle is hardening knowhow, what we have in other areas and adding defense knowhow. But also here, there is a lot of interest. Next question. M&A, what multiples are you prepared to pay? Would you continue to target turnarounds like in the past, or will the focus be different?" The focus is different. We have a clear strategy, A, to grow in America, B, to grow in software and solutions. Yes, it is different. Next. "Good morning. I noticed that you will increase the FTE figure to 10,000 by 2030. Could you please give us some insight to that increase?" It is very simple. This is not c an you be a little slower to delete it? The 10,000 people was just an extrapolation. Growing the revenues by 70%, we grow the people by 50%, which is a normal assumption of the last years, but there is not a detailed planning behind that. Next. "Both Kontron and Foxconn are focusing strongly on physical AI." Yes. Do you see Kontron becoming technology partner within the Foxconn ecosystem in areas such as? We are already on the way on that, so that is not future. That's today. We are working that heavily, and we will see already next year the first fruits out of that. Both questions before were for Kontron. Now two more questions for Ennoconn. I read it to you. They have to answer without reading it before. First, "What strategic role do you see for Kontron within the Ennoconn and Foxconn ecosystem by 2030?" Second, "Do you see an opportunity to scale Kontron's technologies globally through Foxconn's manufacturing and customer network, particularly in Physical AI and transportation? Yeah. As Hannes said, many of those discussions have already taken place. You saw an actual photo where we had a meeting with Young Liu, the Chairman and CEO of Foxconn, and as Steve mentioned, he was a huge part of the most recent investment opportunity. There was a reason for that. Through all the many years of conversations and discussions, not only with Young, but the executive management team and some of the subsidiary groups within Foxconn, they've recognized the technology that Kontron offers. That's one of the reasons why we're sitting here today. One of the reasons for the most recent investment is to absolutely continue to propel and introduce Kontron into multiple opportunities within the Foxconn ecosystem anywhere possible. Second, do you see an opportunity to scale Kontron's technology through Foxconn's manufacturing? Actually the same, right? Yeah. Good. So you can delete both. Next question. "One third of the cost for localized AI without training with Intel, does that imply one third less demand for chips as well for executing comparable tasks? I can answer that. The edge AI devices that we were talking about are additional on the market, right? It is scaling down the hyperscalers a little bit, but not really stopping that development. The edge AI development will be on top. Next question. "Why is Qualcomm not mentioned under the top partners?" Well, we did mention Qualcomm as one of the top partners. They are a particular part of our 5G network Release 16, as we mentioned before. Yes, it was in the presentation. Hannes, do you mind if I touch on that a little bit more? Sure. Not only is Qualcomm important, and of course, we really focused heavily on the conversation with NVIDIA, Intel, and MediaTek for obvious reasons. But the Arm ecosystem in particular, the relationship we have with Arm directly at the executive level is very strong. As it relates to Qualcomm, NXP, Renesas, and others, there will absolutely be opportunities for growth and expansion in other Arm-related products. But because of the investments, the partnerships that we have very closely with Intel and of course MediaTek, directly Arm-based competitor with Qualcomm, we see opportunities for all of them. Next question. "What is the issue with the claim against Volkswagen?" There is no claim, no litigation going on, but Volkswagen does not take the volume they committed, so we want some money from them. We are negotiating that and we will get significant money. That is in the pipeline. Last question. No shared files. Will you share the presentation? Clemens. Yeah, of course. Presentation will be uploaded to our website after the conference. Good. That were all the internet questions. Any here? Yes, I do have a follow-up. I will try to keep it short. On the defense part, how much of your revenue target, EUR 400 million by 2030, is already today fully backed by existing design wins? Our normal situation is typical contract is five years, so average, they are somewhere in the middle, three years, and we have very little contracted revenues for 2030. We can assume nobody kicks us out of the existing project. I would say that is still around 40%, which I feel 100% safe for 2030. It was specific for defense. That is lower, longer. Yeah, that is longer. In defense, we see the programs that are running up have already a significant contribution to the growth that we project. I would say it is at 50% of our growth is foreseeable if the programs materialize as they do. That is always the question mark, if the volumes are coming, depending on the militaries taking off those. At the moment, if this situation continues, we see a very strong and stable growth. If wars are ended and the stocks are replenished, it will slow down a little bit, but the programs will not go away. They will last for the next 15 years, so. The same is also valid for transportation. We have programs, as I said before, 10 years, 15 years, 20 years service level agreements from transportation. Here we have also quite high clarity for the future. Okay, good. Then on the mix between European and American customers, maybe rough guide, how much from the growth will come from Europe or the U.S. for defense specifically? I didn't catch you. The split between European and U.S. customers in defense is around 50/50. And that will remain more or less stable going forward? We hope to grow America much more because it's a bigger market. We want to try to at least keep that ratio or outgrow within the U.S. Yes. Okay. Last question on that, when will the growth come through? Do you have a specific year in mind? The average would be EUR 70 million more each year. Maybe it's not linear, a bit more back-end loaded. So when do the growth will surface and the revenues? Yeah. It's a step up once the development cycles are done and the programs kick in. I said before, there's always the uncertainty if it's a linear ramp-up or if they go completely directly to the high volume that they are projecting. Hard to predict right now, but we're planning a linear growth right now. Okay. Last question on the potential revenues synergies with Ennoconn. These would come fully on top on the revenue target? This is profit, is it EUR 80 million are shared with Ennoconn, so half of it will come on Kontron, but that will be on top. The top line as well? It is factored in in the EUR 420 million EBITDA of 2030. Okay. On the revenue level? I guess it is more than EUR 80 million. The revenue level, actually, this is more, and as I said, it is factored in in the growth until 2030. In 2027, well, we did not even release our planning, but it will be in-depth when we bring our forecast. Okay, thanks. Thanks for bearing with us. We have one more question out of the room. Hello, my name is Dominic Huber. As we also heard today, Ennoconn's relationship with Kontron actually goes back to 2016 when the two companies entered into a strategic partnership and Ennoconn acquired a 49% stake in Kontron Canada. Already at that time, there were high expectations regarding the strategic potential of the partnership, particularly in areas such as IoT, manufacturing synergies, and access to the Asian market. As a longstanding investor since 2013, I would like to go back in time a little further. In 2018, you have presented Agenda 2023 as a five-year plan. At this time, Kontron, or at this time S&T, was already generating around EUR 1 billion in revenue with a target of reaching EUR 2 billion by 2023. I know we were running from crisis to crisis in Europe and the whole world during the last six years, this isn't meant to be a confrontational question. But what makes you confident that Agenda 2030 will work out this time? You have to keep in mind that from that plan, what you mentioned, 2018, five years plan, meanwhile, we sold EUR 400 million IT business. If we would have kept that, we would be at the EUR 2 billion. The same result, the module business last year, EUR 100 million. That was the divestment what happened on that plan. I believe without that divestment, we would have fulfilled the plan. That's one. The second, we never measured really what it is, but looking at it, in 2016 when we met the first time, our Kontron was EUR 300 million of revenues. Now it's EUR 1.6 billion, and Ennoconn is even more impressive in their growth. It has paid back for both of us during the last 10 years, and we want it to pay even more the next 10 years. Are you confident to reach the Agenda 2030 and the commitment from Ennoconn is now bigger or stronger? Yes. Thanks. Okay. I don't see any further questions in the room. There's one more in the chat. Okay. Concerning your statement, we get significant money from Volkswagen for missed volume. Is this really included in your 26 guidance? Sure it is included because this is more or less damage. They pay for the damages degraded by making us that big money. Either we make the revenues or we get the money. That will cover the damages. It is included in the 26 guidance. Okay. I think we can wrap it up. Hannes, thank you for your closing remarks, and we invite everybody here afterwards to a working lunch in the reception area. Yeah. Hannes, thanks. Well, I would like to thank everybody to take your time. It wasn't a short meeting. We spent three and a half hours. The second, we really had to tell a lot because we had our partner the first time for a long period to answer all of your questions, and it's not that the simple people who came here. It's the CEO, the President, the Executive Vice President. It's also our Supervisory Board. Ennoconn really sent the top management to this Capital Market Day. I want to thank them for this effort. They did it to get more clarity to you what happens with the 20% what they bought and what we plan. Yes, we plan a lot. We spent two days. I want to thank you for listening to that, and I would like just to keep an eye on Kontron when all of that materializes. Thank you. Okay. Thank you.