Hello everyone, and welcome to Siltronic's conference call on its Q1 2021. Please note that this call is being recorded and streamed on Siltronic's website. The call will be available as an on-demand version later today. All participation on this call implies your consent with this. At this time, I would like to turn the conference over to Petra Müller, Head of Investor Relations and Communications of Siltronic AG. Thank you, operator, welcome everybody to our Q1 2021 results presentation. This call is also being broadcast live over the internet at siltronic.com. A replay of the call will be available on our website shortly. Joining me on today's call are our CEO, Dr. Christoph von Plotho, and our CFO, Rainer Irle. Following our usual procedure, Chris will start with some general remarks, and Rainer will provide some more detail of our key financials, followed by Chris again, updating you on our guidance and current market developments. After the introduction, we will be happy to take your questions. Please note that management comments during this call will include forward-looking statements which involve risks and uncertainties. For a discussion of risk factors, I encourage you to review the safe harbor statement contained in today's press release and presentation, and in our reporting documents. All documents relating to our Q1 reporting are available on the website. With this, I turn the call over to Chris. Thank you, Petra Müller. Welcome, everyone, and thank you for joining us for our Q1 2021 result call. I hope all of you and your families are healthy and safe. Before we dive into our Q1 figures, I would like to give you a short update on the tender offer of GlobalWafers. All requests for approval with the individual authorities, as stipulated in the offer document, have been filed. By now, Germany, Austria, South Korea, Taiwan, and CFIUS have already cleared the transaction. Approvals are currently pending from the merger control authorities in Japan, the U.S., China, Singapore, as well as from the German Federal Ministry for Economic Affairs and Energy. We still expect the transaction to close in the second half of this year. Ladies and gentlemen, let's have a look into the business update for Q1 2021. The quarter was stronger than originally expected. We achieved sales of EUR 316 million, 11% up compared to the last quarter of prior year. ASP was flattish. While wafer area in Q1 2021 was significantly up, cost per wafer area went down. Exchange rates did not have a major impact quarter- on- quarter. Our EBITDA came in at EUR 92 million. EBIT was up to EUR 54 million. Our net financial assets were EUR 538 million as of March 31st, 2021. As pointed out, we saw a strong wafer demand in the first quarter. Looking at the end markets, we see smartphone business recovering. 5G migration is accelerating. As always, new smartphone generations come with more content, more memory, and again, additional cameras. The server business showed only moderate growth, while PC, including Chromebooks, developed nicely. As we can all read in the news in the past weeks, the auto industry is recovering strongly, we see an increasing share of hybrid and electrical cars. On the industrial side, there is somewhat a mixed picture as a lot of different applications are subsumed under this heading. Overall, the situation is improving. When we look at the development by wafer diameter, 300 epi is on allocation, 300 millimeter polished and 200 are strong, and small diameters loading improved. ASP was flat quarter-over-quarter. With this first overview, I hand now over to Rainer for more details on the financials of our Q1. Thank you, Chris. Good morning, everybody. Q1 sales were really strong. Wafer area sold increased year-over-year and quarter-on-quarter. Prices were stable quarter-on-quarter. Of course, ASP was down year-over-year. Overall, sales reached EUR 316 million, up 11% to last quarter. Year-over-year, the euro appreciated quite a bit, resulting in headwind from exchange rates. Quarter-on-quarter, though, we saw relatively stable FX rates. Due to higher wafer area sold, COGS went up by 7.5% quarter-on-quarter to EUR 228 million. Compared to the higher wafer area sold, COGS increased under proportionally. Cost per wafer came down due to fixed cost dilution. Our gross profit rose to EUR 88.6 million in Q1. Gross margin was up to 28%. Our admin expenses were influenced by advisory services in relation to the tender offer of GlobalWafers. 12 million accrued in Q4 and EUR 2 million in Q1. We booked the cost, most of the payment is only due after closing. In Q1, non-operational currency effects were positive at EUR 4 million, that includes the hedging results, which were positive too. EBITDA was up to EUR 91.7 million in Q1, a 37% increase versus Q4. This was triggered by the higher wafer area sold. EBITDA margin was 29%, up from nearly 24% in Q4. Lower advisory costs in connection with the tender offer also contributed to that increase. Depreciation increased by EUR 1 million quarter-on-quarter. In line with EBITDA, EBIT in Q1 went up to EUR 54 million, with an EBIT margin of 17% compared to 10% in Q4. The positive contribution from the increased wafer area sold and the reduced cost per wafer area, along with flattish prices and a minor FX impact, led to strong results in Q1. In Q1, we recorded a tax income. Effective tax expense was low, as always, given that most profits are generated in countries with low tax rates. In addition, we recorded a deferred tax income. We apply, in principle, a careful approach to the measurement of DTAs. Given the improved outlook, we now believe that the value of certain future tax benefits, such as NOLs, has improved, resulting in an increase in DTAs that were booked in Q1. Net profit was EUR 58.4 million in Q1, compared to EUR 40.9 million in Q4. EPS came in at EUR 1.67 versus EUR 1.17 in Q4. The dividend of EUR 2 per share was accepted by the annual general meeting last week, and we paid dividends of EUR 60 million. Working capital went up in Q1 to EUR 235 million. Trade receivables and inventories increased simply due to higher sales. Trade liabilities went down due to lower capital. Trade liabilities also include EUR 2 million advisory fees for the tender offer payable after closing. Looking at our balance sheet, equity was nearly EUR 1.1 billion, with an equity ratio of almost 54% at the end of March. The increase is based on the profit and also on lower pension obligations. It appears that long-term interest rates saw their trough, and improving interest rates resulted in a reduced benefit obligation. The pension provision in Germany was discounted at 1.11% as of March, compared to 0.69% as of December. In the U.S., the interest rate was also up. Net financial assets went up by EUR 39 million to EUR 538 million. As of March 2021, pension provision decreased by EUR 180 million versus December due to higher interest rates in Germany and the U.S., and stood at EUR 449 million. If we used 3% interest rate to calculate DBO, it would be EUR 850 million, minus the assets leading to a pension provision of only EUR 120 million, more than EUR 300 million less. CapEx in Q1 was EUR 37 million. In 2021, CapEx of around EUR 250 million are planned. We will invest mainly in capability projects, epi reactors, and the expansion of a crystal pulling hall to replace older equipment. Our operating cash flow in Q1 increased to EUR 77 million, following EUR 31 million in Q4. The net cash flow in Q1 was positive at EUR 28 million. While we refunded customer prepayments during 2020, we recently received small amounts for new LTAs signed. With that, I would like to hand over to Chris. Well, thank you, Rainer. We are highly optimistic about the mid and long-term growth of our industry, backed by megatrends like digitalization, modern mobility, or connectivity. Excuse me. There are short periods of moderate corrections, for example, due to inventory and macro effects, but long-term CAGR will remain high. This year, we are also optimistic about the short-term business development and believe that there are more opportunities ahead of us than headwind. The pandemic with its mutants is still a risk, even though we might really see a light at the end of the tunnel in summer. The ongoing U.S.-China tensions are not favorable for nobody. End markets are developing nicely. Smartphones are recovering, and the higher share of 5G smartphones proves again that every new phone generation comes with more content. PCs are booming, and especially high-end computing and consoles are practically sold out for the rest of the year. We see some uncertainty on the memory demand of servers. Could well be that customers have to digest some more inventories first. Also Intel CPU release might have an impact on the demand. Industrial shows a mixed picture as always, and in the auto space, players are bullish despite the chip shortage talk. This could lead to some inventory buildup in the value chain. The trend to more automated driver assistance systems and electric cars is still intact. Looking on silicon area development on the device level, we also see a positive impact. NAND and power devices should develop nicely and contribute to wafer area development, while DRAM and logic won't contribute that strongly due to the density effect. After a strong Q1, we raised our forecast two weeks ago in our top release. We estimate that our silicon area will grow by at least 15% and that ASP will stay flattish. The strong euro will, however, slow down our growth path this year. Therefore, we expect sales to increase by at least 10% above the year 2020. Our EBITDA margin should be between 30% and 32%. Also, our net cash flow and earnings per share should significantly increase. The forecast for EBIT depreciation tax rate and CapEx remains unchanged. With this, we close our presentation and are now available for your questions. Operator, please open the Q&A session. Thank you. We will now begin our question and answer session. If you have a question for our speakers please dial zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask the question. If you find your question has been answered before, you can dial zero and two to cancel your question. If you are using a speaker equipment today, please lift the handset before making a selection. One moment please for the first questions. Our first question is from François Bouvignies, UBS. The line is now open for you. Hi. Good morning. Thank you very much for taking the questions. I have a couple. The first one is on your long-term agreements. When we look at your peers, like Shin-Etsu lately mentioned that they were signing new LTAs with significantly higher price than previously. I know what you said end of last year, that you would have some contract to renew, I think it was end of the year and beginning of this year. I just wanted to have your perspective on how long-term agreements are trending at the moment and the price. The second question is, at the beginning of the year, end of the year, last year, you mentioned about the oversupply of around 10% in 300 millimeter, if I remember correctly, something around that. Now you see more than 15% into area sold. I just wanted to check with you how you see the supply and demand outlook in the next 6- 12 months, given your updated guidance. The third question is on silicon carbide. It is a bit different, but you mentioned your power, silicon area share and power is a big part of it, among others. It seems that silicon carbide is not slowing down in terms of interest and share in the next few years. You had a review recently. You did not decide to make any significant investment, but I wanted to check with you if anything is changing given the trend that the market is going towards too. Thank you very much. Well, François, thank you for your questions. I will reverse the order by answering. I will start with number 3. We will not rethink our strategy regarding silicon carbide. Yes, you are right. It's impressive growth figures, but still from a very low level. It's like other products, like, for example, SOI, it's a niche and it will stay a niche. You need to keep in mind that GlobalWafers has activities in the field of silicon carbide, and we still believe that we will close the deal in the second half of the year. Consequently, it does not make sense if one of the two combining partners already has activities that the other ones start all over. The second question, I'm not quite sure whether I got it right. You refer to 10% underutilization, which was mentioned by me, which I clearly do not remember. We said in the later part of last year that utilization is north of 90%. In some case, we even said 95%, or different, whether we talk about 300 epi or other product categories. One thing is for sure, the basis is simply different. You know that we continue to invest in brownfield 300 millimeter, and our total available capacity in the average of the year 2021 in Singapore on 300-millimeter polish is simply significantly larger than it was prior year. Therefore, this is one of the reasons why we can justify an outlook with at least 15% area growth. You also mentioned 200 millimeter, and I mentioned in my speech that 200-millimeter loading is very high. In some categories even, it's basically close to allocation like 300 epi is too. As far as I remember, the calls given by some of our Asian competitors, they see a similar situation that loading is very high to full in 200 millimeter. As far as I remember, some of our competitors also mentioned that they won't spend money to increase capacity in 200 millimeter. I expect 200 millimeter to stay tight for the current year and most likely also for the years to come. Your first question was related to LTAs. I know that some of our Asian competitors were talking about significant price increases, which are necessary. In the past we in Siltronic, we did put more focus on implementing price increases than talking about it. What was mentioned by the Asian competitors, we didn't see anything of that in the market up to now. For the rest, you need to refer to mainly the Japanese competitors. Yes, it's true. We have to differentiate when we talk about LTAs, about two issues. One issue is running LTAs, which will expire during this year or beginning next year, and we are looking for a renewal. There are a few ones. We work on that. We have good discussions with customers. In one case, we even closed the discussions. We have a new LTA with higher prices for the years to come. Secondly, we talk about the so-called new LTAs, which are related to additional capacities which might come on stream available to the market. Most of them most likely linked to a greenfield, which is not yet decided. There we are in an open discussion with customers. I think in the meantime, it's fair to say that customers somehow accepted that these contracts will come at higher prices. The same story like always. It's about pricing, it's about quantity, it's about obligation, and it's about a new investment. For a new investment, we are not looking for a two-year LTA. It must be significantly longer than two years. I think this should answer your three questions. Thank you very much. I appreciate it. Our next question is by Constantin Hesse, Jefferies. The line is now open for you. Mr. Hesse, the line is now open for you. Sorry, I was on mute. Can you hear me now? Morning. Yes. Sorry. Good morning. Morning, Constantin. Morning. Morning. Sorry. A couple of questions my side. On 200 millimeter, with full loading there over the next few years, has there been any movement at all in spot prices there? Because that surprised me a little bit, that pricing wouldn't move at all with 200 millimeter full loading. Just some question there. Second question, just in terms of timing. What I'm trying to figure out is, are you already having discussions about Greenfield? I guess you answered that question when you were answering the LTA question, but the last time you gave us some numbers regarding the demand and the total shell capacity, which I remember being 6.8 for demand and 7.2, I think, for shell capacity. With the current volume outlook, it seems like that is going to be hit literally. It's going to be at mid towards the end of this year. I'm just wondering in terms of timing here, how will this work? Has this potentially shifted the shell capacity? Two questions. Good. Well, thank you. Now let's first answer spot 200 millimeter. First of all, I want to remind you that in our industry, unfortunately, there is no common definition for spot. When we talk about spot, it's without any contractual obligations. When the Japanese talk about spot, they include also quarterly contracts. Yes, 200 millimeter is short. Everything which is renegotiated will get price increases. This is true for quarterly contracts. This is true for six months contracts. If there might come an opportunity around the corner to sign an LTA for 200 millimeter, it will also be at higher prices. Now let's come to Greenfield. What did we say in the past? We said that in Q4 towards the end of last year, total shipment was 6.9 million wafers, same as in Q1. This year, I do not remember. Maybe I didn't even know up to now the figure from April, but my best guess is it's comparable, around 7 million wafers. Our best guess, excluding Mainland China, is a shell capacity of 7.2. I also said that we assume that this shell capacity will be fully equipped latest by the end of the year. Available capacity towards the end of the year, 7.2. This is something like 4% more than the shipments of the first quarter and does not reflect really demand growth. Of course, there is a difference between loading in epi and in polished. Epi is on allocation. Polished, there is a little room to move, but not a lot. If you further assume that also next year the market will grow, I can tell you from the five players in 300 millimeter, we do not know of any additional capacity which will come on stream. If we define the year 2021 is a shortage year for 300 millimeter, then 2022 will be shorter. This is nothing new. This is something we are saying since 2018, when there was a slowdown in the second half of the year of demand due to inventory correction. We told customers even then, the next shortage will come maybe a little bit later than we thought, early 2018, and the next shortage will be more painful for customers. Up to now, we were not successful in really signing deals with customers reflecting the need to invest in greenfield. We continue to work on that, but there is nothing new to announce. If you talk about timing, I can give you the answer. From today's perspective, the greenfield step will come too late. This is not a Siltronic statement, this is a statement for the wafer market. That's great. Thanks. Just on top of that, back in 2017, was the industry already in full shortage? That was brownfield, right? That was a bit different. Fair enough. Okay. Thank you very much, Chris. Yeah, you are perfectly right. We got into shortage in late Q3, Q4 2016. That was the moment when we announced price increases, but there, a relatively quick reaction at the beginning of the shortage, around 12 months, to bring additional equipment in from brownfield. During that phase in 2017, everybody did brownfield. In the later phase of that shortage, took a little bit longer than it was, around 15-18 months to bring additional capacity on stream. Now we talk about greenfield. Greenfield, if we decide today, if we decide to do and we start construction, then probably first wafers out in 2024, not before. For Siltronic, we don't have any possibility to increase overall output beyond what we already decided for the year 2021, 2022, and 2023. We have good reasons to believe that most of the competitors are in a similar situation. That's great. Thank you very much. We have a next question by Gustav Froberg, Berenberg. The line is now open for you. Hi, everyone. Thank you for taking my questions as well. My questions are relatively similar to what others have asked on the call as well, but I'll try and ask it in another way. Given what you just said, Chris, about timing of capacity, et cetera, and CapEx and so on, how are you looking to secure further growth beyond 2021, when it seems like you will be hitting full capacity? Do you have any other outputs or ways of adding incremental growth to the business? Does this now effectively mean that you cannot grow any further given the timing it takes to ramp up capacity, et cetera? Well, I think it's difficult. You should never say no. There's one thing we know. In the cells that we have in Singapore and in Germany for 300 millimeter, there is no open space in the clean room to add equipment, full stop. We can never exclude that our technology guys or technology ladies also have brilliant ideas which might contribute to a higher output. That's something you can never exclude. CapEx-wise, there is nothing we can do about it. I think your question goes into a direction, Siltronic will lose market share. My answer to that is only under the assumption that the others can create more output. I do believe the scenario for the later part of this year and 2022 is different. There will be more demand than capacity, which basically means the sum of demand will not be delivered by the wafer producers. Yeah, thanks. Just a question on your actual CapEx that you've guided for this year, the EUR 250 million. You talk about some replacement demand for machinery. Could you give us an idea of how much potential output that could increase for you? Or is it more a replacement in terms of gaining efficiency and that it will be better for your margin? I think out of the EUR 250 million, basically no euro will contribute to additional output. The additional output euro were spent in prior periods. Today we get the higher output. There is a big portion of, let's call it, maintenance of business. We have capability enhancement, which is leading edge, mainly for 300 millimeter epi. Also there, we have the same challenges as obviously also competitors have because they are singing the same song. It's not only about additional equipment for production, it's also additional production equipment for measurement. On top of that, the leading edge epi is becoming so demanding that out of the same number of equipment, you simply get less wafers. A certain portion of investment is only to maintain the output of epi. We continue to add epi reactors, but this is not additional volume sold, this is additional epi volume sold. As we need substrates for that, the polish number will be influenced negatively. That's also true for competitors who are adding epi reactors. Last but not least, Rainer mentioned the crystal pulling hall in Singapore. This is a story which started sometimes 20 years ago, because at the very beginning of 300 millimeter, rightly so, Siltronic decided not to invest in the first step into dedicated 300-millimeter crystal pullers. We converted 200 millimeter pullers very successfully, and we used them for many, many years. With the development of design rules, specifications becoming more demanding, some of this additional specification demand did translate into different crystal requests, which could not be fulfilled with older modified equipment. Our 300-millimeter activity in Singapore already has only dedicated 300-millimeter puller equipment, and we continue to add dedicated 300-millimeter puller in Germany because the specifications, the number of specifications where we can use older equipment is becoming lower and lower, and one day, most likely, it will even disappear. This is also a lot of money that we spend, but it's not additional output. All right. Excellent. Very clear. Thank you so much. Our next question is by Florian Treisch from Commerzbank. The line is now open for you. Hi, gentlemen. Thanks for taking my question. I have two. Unexpected around LTA in first place. The question is that you talk about these kind of renewing LTAs and new LTA for Greenfield. My impression was that obviously prices in the new LTA discussions are not yet high enough to trigger a Greenfield. For me, the question would be, when is the timing you can go for an opportunistic investment, i.e., without strong commitment, i.e., you also certainly have a responsibility for the industry to act at some point in time. The second question is around, basically if you are still in the driver's seat here. You said when it comes to silicon carbide, you have the second partner inside of the company, which is basically making the decisions, I would say. They are simply one layer higher in the hierarchy. Clearly, why are you still talking about Greenfield with clients? Why is that not something which needs to be done only by GlobalWafers and Taiwan will basically decide who will invest? Thank you. When I resume your first question, you basically speak about the responsibility that Siltronic has for the market, and I tend to not disagree with you. I want to remind you that our customers have a responsibility also for the market. If they don't participate in creating conditions which are favorable for greenfield investment, it's easy to say it's our responsibility. I think it's a shared responsibility, and I'm pretty convinced, no, I even know that customers share that view, that it's a combined obligation to the market. It's not only the supplier, it's also the customer. That's to your question number 1. To your question number 2, I fear that I didn't get it. Could you please repeat it? I heard something like GlobalWafers. I heard silicon carbide, but I missed the context. No problem. You said at the beginning of the Q&A, the question around silicon carbide, you said that you are basically two companies in one, i.e., Siltronic plus GlobalWafers. You will basically come up with a kind of combined silicon carbide strategy. The question for me is if that is also you can transfer this question to a Greenfield investment. Why are you basically still in discussion with a client? If you assume the deal will be closed in H2 2021, isn't that the point where you can say the responsibility is only in Taiwan? To get a better impression, how are you working together? I'm sorry, these are completely different issues. One was the question whether we enter a market where we're not present today. We always said in the past that we twice looked into it and we came to the conclusion not to participate, and we don't see a reason to look into it again. In the call earlier this morning, I added, and by the way, we still believe that in the second half, the closing will be done, and then the combined company has silicon carbide activities. Full stop. With regard to Greenfield, it's a completely different animal. Till the closing is not signed, we are competitors. There is no possibility to have, in this phase, common acting. Okay. Here I would agree. For now, but whatever, going forward, like one, two quarters from now, then you can act in concert. The question is, who will make the decision? You ask the question in two or three quarters. Okay, what is your view on it? Will you go for a standalone greenfield and GlobalWafers will go for a standalone greenfield? I cannot talk for GlobalWafers. Today, I speak for Siltronic, which I consider today to be a competitor to GlobalWafers and also to the other players in the market. Okay, perfect. Thank you. You're welcome. The next question is by Juergen Wagner of Stifel. The line is now open for you. Oh, he already left. Oops. As a reminder, if you want to ask a question, please press zero and one on your telephone to enter the queue. The next question is by Holger Schmidt. The line is now open for you. Mr. Schmidt? Yeah. The line is now open for you. Sorry. I was muted. I have one question, and it's with regard to greenfield investment. Could you just remind us around the necessary total amount of CapEx for such a greenfield investment? I think you already mentioned it, how long it would take. It will take until the beginning of 2024. What would be interesting is to see the total amount of necessary CapEx for this. We always talked about a figure which is around EUR 2 billion. Of course, it depends, what the share split between epi and polished will be, and it depends on which technology you will install over there. I think it will be for sure seven. It must be five, and we need to reserve space for 3 and 2 nanometer. We have to keep in mind, when you listen to competitors, everybody is at least thinking about greenfield. I do believe that we will see price increases on equipment. We already see in many places in the world that construction is becoming much more expensive. The steel for construction went in parts of Europe up between 50% and 70%. I think the figure of around EUR 2 billion is probably too conservative. Yeah, the day we make a decision, then we have a more precise figure, and then we will talk to you about it. Okay? Okay. Understood. Yeah. Thanks. We have no further questions, so I hand back to Petra Müller. Thank you, operator. Ladies and gentlemen, this concludes our Q&A session for today. Thank you for joining us, and we hope that you will join us again on our Q2 release in July. Goodbye. Stay healthy.