Jenoptik AG

XETRA:JEN

Earnings Call Transcript 2024-Q1

[Operator]

Good morning, ladies and gentlemen, and welcome to the Jenoptik conference call regarding the results of the first quarter 2024. [Operator Instructions]. Let me now turn the floor over to your host, Dr. Stefan Traeger.

[Stefan Traeger, executive]

Thank you very much, and a very warm welcome from our end here to our Q1 earnings call. With me today, as always, is our CFO, Prisca Havranek-Kosicek. Prisca will dive into the numbers in detail during the presentation. Jenoptik delivered a very solid first quarter 2024. We have seen strong revenue growth and profit margin expansion, primarily driven by our Advanced Photonic Solutions division, but also by a rebound of our Non-Photonic Portfolio Companies actually.

So sales grows very strong profit margin expansion. Order intake has been down versus prior year as anticipated on a somewhat softer-than-expected demand in some of our businesses, particularly in the Non-Photonic Portfolio Companies, and we will detail that later on in the presentation. We do expect demand to pick up even more in the second half of 2024.

Important for us, in order to deliver the midterm guidance for 2025, and we are going to expand on that in the presentation as well. For this year, though, full year guidance, we confirm our guidance for this year at this point in time. Just on a very sort of, important for us, operational note, we continue to successfully execute on our strategy of gaining more shareholders on our key customers and particularly in the semi industry, we managed to win another very important project in the semicon business. As you know, often, we cannot talk about these things. That's the case here as well. So we cannot tell you customer and project, but we just wanted to basically reiterate that we're continuing to execute on our strategies to expand on our key markets, to expand share of wallet with our key customers. So we're well under way in, as I say, execution of our strategies. So with that, let me turn the floor over to Prisca, who is going to detail the numbers, for us.

[Prisca Havranek-Kosicek, executive]

Thank you, Stefan, and good morning to all of you on the call. We have delivered a solid set of numbers in the first quarter of this year, and I would like to now cover our performance in greater detail, as always, starting with order intake and order backlog on Page 6. First quarter order intake came in at EUR 242 million, down about 15% year-over-year.

As Stefan indicated, we saw robust continued demand from our semi business, while order intake in our Optical Test & Measurement business as well as in certain life science and medical applications was lower than expected. Order intake at our Non-Photonic Portfolio Companies has been substantially down compared to Q1 2023, primarily due to project delays in the automotive industry. As a result, our book-to-bill ratio on group level has reduced to slightly below 1 with our NPCs representing the main driver here.

Now moving on to order backlog, which remains on a continuous high level overall. The slight decline of 2% year-over-year is mainly attributable to the situation around our NPCs, as I mentioned before. We expect to convert roughly 77% or in absolute terms, around EUR 560 million of this backlog into revenue within this fiscal year of 2024. Now turning to revenue and profit development on Page 7. Looking at the left graph, you see that our top line development remained strong with revenue up by around 9%. Again, we had no effect from portfolio changes, so this growth is purely organic.

Also, foreign exchange fluctuations had no meaningful impact on the top line development in the quarter and the main growth driver in this period was once again our Advanced Photonic Solutions division, which posted low double-digit growth, followed by our NPC segment, where revenues were up at a high single-digit rate.

Moving on to profitability on the right side of the slide. As you can see here, we've improved our profitability and the strong top line growth converted into substantial profit and margin improvement. Group EBITDA came in at EUR 44.5 million. EBITDA margin was up markedly by 180 bps, mainly driven by scale effects. I would like to add here that Q1 of last year represents a relatively low comparator and therefore, the level of margin improvements seen here in the quarter is not representative for the remainder of the year.

However, looking at profits from the divisional perspective, the main contributor in absolute terms was again the APS division as well as our non-Photonic Portfolio Companies. And Stefan, as you know, will talk about our divisional performance in greater detail later on this call. Now moving on to Page 8. I would like to give you a little bit more color on the drivers behind our margin growth. We saw gross margin approximately 40 bps down year-over-year, which from in-line item perspective was influenced by higher depreciation.

Here, I expect less of an impact over the course of the year, since Q1 isn't usually our strongest quarter revenue-wise. Looking into functional costs. As you can see here, we remain disciplined in our OpEx despite general labor cost inflation and our continuous investments into R&D. As a consequence, functional costs are growing at a lower rate than revenue.

Our other operating results improved year-over-year on the back of firstly, lower FX losses as well as a minor gain relating to the sale of a non-core real estate property. Moving on to the EBIT line, you see a marked increase in both the absolute terms as well as the margin. Further down the line, our financial result was a negative EUR 4.8 million compared to negative EUR 3.5 million in Q1 '23, primarily due to net negative impact from exchange rates. Finally, EPS reached EUR 0.27 per share, up around 29% versus prior year.

So overall, we reported a very solid set of earnings in Q1 2024. Turning to Page 9, looking at cash flow and balance sheet data. Starting with cash flow. As you can see, our operating cash flow pretax did not quite reach the outstanding prior year figure. Since we had some working capital related cash outflows in this quarter of this year as opposed to inflows in the prior year period. This primarily related to levels of advanced payments between this year and last year.

As a result, net working capital intensity increased slightly year-over-year but was stable versus Q4 2023. We are continuing to invest in our capacities, as you know, with our new semi fab in Dresden being the most important project. For the quarter, our accounting CapEx was at around EUR 20 million, slightly lower year-over-year because of phasing impact. And from a cash CapEx perspective, we see a reduction of around EUR 3.5 million year-over-year. As for example, lease agreements are not reflected here, and we have recognized a small inflow from the sale of a real estate property relating to the NPC segment, which was mentioned before. Overall, net debt position has slightly reduced versus end of last year as has our leverage, which now stands at a comfortable level of 1.9x. And with that, let me give back to Stefan to cover distributions and the outlook -- our divisions and the outlook.

[Stefan Traeger, executive]

Yes. Thank you, Prisca. And let's start as always with APS. And so if you follow me on Page 11 of our deck, please. You do see that APS delivered a really very strong first quarter this year, pumping a product like [indiscernible] machine actually. Posting EUR 200 million of sales in the first quarter is a very strong result of APS from an operational perspective.

Margins are still very strong. The increase in EBITDA to now EUR 40 million in the first quarter is primarily driven by volume. The margin percentage, it's essentially at last year's level, 19.7% versus 20% last year, so essentially at the same level. You can see that the order intake is somewhat down by minus 6.7%. Nevertheless, book-to-bill was still essentially at 0.99. So just a tad below 1. Important to note that the demand and the order intake in the semiconductor equipment sector has been robust. Decline in order -- somewhat decline in order intake is predominantly driven by our OTM business, mainly TRIOPTICS and some certain applications in our life science and medical sector to do with some laser business.

Overall, I'd say, again, APS, very strong results, nice double-digit sales growth, strong margins, order intake somewhat down, but not in semi industry, more in the OTM and laser business. If you go to Page 12, our SMS, our Smart Mobility Solutions business, we have a bit of a mixed picture here. You see that order intake is significantly down. Now that is in a project business, not too reasonable. It is significant, though, with minus 24.3%.

But again, is to do with [indiscernible] projects that we have posted this first quarter last year. So comparator has been skewed, Nevertheless, we still have a book-to-bill which is significantly above 1. So even with the decline in order intake, SMS has been growing backlog in the first quarter of this year. Sales are up by 4.6% to now EUR 24 million in the first quarter, that's a good result. EBITDA is now positive, but still around 0 in the first quarter. So that does need improvement in the quarters to come, and we fully expect that to improve in the second quarter and in particular, in the second half.

So by and large, SMS as I say, mixed picture, revenue is up, which is good, book-to-bill above 1. The -- keep in mind that Q1 last year has been a bit of an outlier with large projects being -- orders for large projects being posted last year. And EBITDA, we expect will further improve throughout the year. Now on Page 13, and NPS, here we do need to explain the order intake pattern a bit in detail, I believe. So you do see that the order intake is significantly down to now EUR 40 million, last year EUR 30 million. That's to do with, in particular, Prodomax and with the shift in the North American automotive industry.

In the U.S., there has been a strong sort of shift for postponing certain projects in the e-mobility sector, and that led to our customers, reshuffle their projects. So it's a temporary effect. It's not that sort of the demand has gone entirely, just a reshuffling of the projects, which resulted in Prodomax basically not posting any orders in the first quarter. So the order intake at Prodomax essentially just a tad above, in the first quarter, again, that's -- and it's important to clarify that.

That's to do with reshuffling of projects at our customers in the first quarter in reaction of a shift in the automotive industry in North America from e-mobility back to more combustion engines now. So we expect that to bounce back in the second quarter. We will see order intake in Prodomax growing again in the second quarter. Revenues are up by 9.4%. That's a strong result. And I think it's very nice to see the rebound of the EBITDA figure, profitability in the NPC companies is good.

EBITDA increased significantly with the margin in the first quarter of 17.1%. We're really happy with that. I did see that the efforts in NPC to basically restructure that business and bringing it back to a profitable business is paying off now, and we're very happy with that.

So again, order intake, temporary effect, predominantly are actually -- entirely Prodomax to do with shift to the auto industry in North America, expected to bounce back in the remainder of the year, revenue up and margin expansion. I'm very happy with that.

So if you take a look together on Page 15, you see our outlook. And we basically confirm our 2024 guidance. We do expect revenues to grow in mid-single-digit percentage range. We do expect EBITDA to expand to or to come in between 19.5% and 20%, including expected negative impact of approximately 0.5 percentage point for the move to the new site in Dresden. We talked about that in earlier calls. And we do expect capital expenditures slightly higher than in prior years. Last year, it had been at EUR 110 million so in that range, slightly higher than that, but I mean we're not talking EUR 200 million here. With that said, let me press the pause button here and we're happy to answer questions that undoubtedly you will have. Thank you very much.

[Operator]

[Operator Instructions] The first question comes from Craig Abbott from Kepler Cheuvreux. We lost him. The next question comes from Adrian Pehl from Stifel Financial Corporate .

[Adrian Pehl, analyst]

Hi. Good morning, everyone. I hope you can hear me well. A couple of questions actually. On Prodomax, I mean, given that this shift is happening. Just to understand the basics again of that business, I mean the shift back and forth from e-mobility to combustion, is that in principle, a net positive for the business? Or is the shift to combustion engine now something that we should think of potentially negative? And what does it mean for the current process of disposal of Prodomax?

And then on the second quarter, I mean, I know you don't give any quarterly guidance. But obviously, in the press release, you are referring still to some weaknesses in some parts of the business. I mean probably that is also referring to TRIOPTICS, I can assume, in Advanced Photonics. But should we still assume, however, that usually you have higher sales in the second quarter. So is that -- that's going to stay or should we brace for, let's say, Q2 being about in line on the top line level with Q1. So any comments on that would be really helpful. And then I might have 1 or 2 follow-ups.

[Stefan Traeger, executive]

I'll take this, too. So on Prodomax, just to explain 1 more time because you're right, [indiscernible] sort of the fundamentals here. Prodomax, it doesn't actually matter if the engine is combustion or electric drive train doesn't really matter. Prodomax produces -- production streets for body-in-white for the chassis of the car, doesn't really matter what type of car it is.

The shift to or postponing the project and e-mobility means that basically our combustion engine projects have to come in -- again, for Prodomax itself, it doesn't matter. It just means that projects have to be reshuffled. So no projects that were planned for later have to be brought in or sort of jumped the queue too earlier in the line basically which led to this no order intake pattern in the first quarter.

So there's not a fundamental problem. It's a temporary effect of projects getting in line or rather not in line for order intake. There is a positive effect, though with -- yes, more combustion engine demand for Hommel-Etamic. Hommel is actually depending more on combustion engine than e-mobility. So if that trend continues, then that's helpful for Hommel-Etamic, for Prodomax, as I say, it doesn't matter. It's more temporary effect of shifts in projects.

On the second question of Q2, I think we're typically a H2 skewed. So we're more sort of back-end loaded in sales all the time. So in the second half, we always have higher sales than in the first half of the year. On Q2, I don't think there is any particular pattern shift or anything. I think the second quarter is -- as you pointed out, we're not giving guidance on quarters. But in terms of sales, we don't see any deviation from the pattern that we typically have in Jenoptik.

And again, our year-end or our second half in terms of sales is actually always stronger than -- and I think there was 1 year of exception, since I am here. but other than that, we always have a much heavier second half than the first half in terms of revenues, sales. That's [indiscernible].

[Adrian Pehl, analyst]

Sure. And then actually, just very quickly, housekeeping on the financials, Prisca, you say that actually the result was up due to FX predominantly. But I was wondering on the interest cost side of things, are we on a level where we should think of, that is going to prevail throughout the next couple of quarters, so no change to the upside on interest cost, if you want so, in general?

That's my first question. And the second follow-up is a bit on the CapEx side of things. So obviously, phasing looks like that we go for, what is it, EUR 35 million per quarter on average for the next couple of quarters. Is that the right way of thinking about it? And a question linked to that, going into 2025, I had the impression that when I was speaking to investors that the narrative was that we should not expect CapEx to come significantly off in 2025? Is that something that we should factor in here?

[Prisca Havranek-Kosicek, executive]

Adrian. Yes, of course. I'll take those 3 questions. So maybe starting on the interest. I think you're right. We are -- we think we've seen the highest point in last year. So we would expect a moderate reduction. But of course, keep in mind that in our financial results, there's also FX impact in there. But if you just ask about the interest, then I would assume that we have seen the highest level, and I would see a small leveling off. I hope that answers that question.

On CapEx, maybe -- obviously, we are not guiding on quarter CapEx. But I think you -- we try to say that in my remarks, it's phasing impact. And we still expect to come to our guidance of slightly above previous year, '23, and that is driven mainly by Dresden. So I would expect CapEx to have some volatility by quarter, but overall to increase and step-up towards the end of the year.

[Adrian Pehl, analyst]

And for 2025, I mean, how should we think of the process in general? Well, obviously, you're building the fab, you're moving first equipment in, but then you probably depending on loading more equipment in and that keeps CapEx up next year? Or what's the rationale on how to face the ramp up there?

[Prisca Havranek-Kosicek, executive]

Yes. Let me take that a little as well. And as you will remember, at the Capital Markets Day, we said we -- after this one-off project of Dresden, which the major impact is in this year, we see CapEx generally level off towards maintenance CapEx levels. And we will see that. However, we have also said that we will see growth CapEx, particularly driven by the semi business, also in '25 and beyond. We also mentioned that there will be some infrastructure-related investments that we will have to take also in '25 and beyond. So those are the 2 levers basically up and down. But overall, we expect CapEx to reduce after '24.

[Operator]

The next question comes from Martin Jungfleisch from BNP Paribas. .

[Martin Jungfleisch, analyst]

I have 2 questions mainly on the APS side. So first of all, would you say that orders in APS, they have now troughed at this level? And would you expect improvement, from here the visibility is relatively limited. And then the second question is relating to the 2025 outlook. At what point when orders and APS don't pick up, would you consider the 2025 revenue and particularly margin guidance at risk to do APS orders need to be above, I don't know, like EUR 250 million or so in Q3 or Q4 to make it? Or was it a pickup in the first quarter of 2025 and also be sufficient?

[Stefan Traeger, executive]

That's an interesting one. So in terms of order intake of APS on -- Yes, I think we do believe that it's going to come back or bounce back in the second half. That's what everybody indicates, our customers indicate and therefore, I think it should come back to stronger [indiscernible] performance in the second half. But again, don't take that as a guidance.

We don't guide on a quarter-by-quarter fashion. Your 2025, I mean, you're going to close that rate -- when it comes to -- at this point in time, to have no reason to have doubts on our 2025 guidance. Of course, we always said, it does require a strong semi business and all the indications we have from our customers is that [indiscernible] will be strong in 2025, there will be a ramp, at least that's what we've been told by our customers, and we have no reasons to doubt that. So we stand there by our guidance for 2025 at this point in time.

[Martin Jungfleisch, analyst]

Cool. But just coming back on the trough level, would you say that the Q1 now in terms of the euro million orders and APS is some sort of trough level -- is it nothing you would control. .

[Stefan Traeger, executive]

I mean I don't have a crystal ball. I don't know, to be honest, I don't know. We hope, we think, can we promise? Of course, not. We don't know. But what -- yes, we have no reasons to believe, as I said earlier, that what was -- are not going to improve in the second half in APS. That's what our customers are telling us. .

[Operator]

The next 1 is Michael Kuhn from Deutsche Bank.

[Michael Kuhn, analyst]

I'll start with a follow-up call as you just touched on customers indicating, let's say, the pickup in demand. How specific are those conversations for now? And are you, let's say, moving into a more precise conversations there, especially in the semi space, but also in medical, where I think the Q1 reporting season was kind of mixed, and there were some weaknesses in one or the other areas. So maybe semi and medical, a quick update on customer conversations as we speak.

[Stefan Traeger, executive]

That's a good point. There's conversations about more sort of precise and tangible in the semi area. Here, we have a clearer picture, better sort of visibility, simply because we have more -- yes, more linked into our customers funnels and more visibility there. So in semi, all the household names are telling us hey, be prepared, 2025 will be a ramp. So be prepared, and we're telling all our customers, hey customer, if you need product in 2025, you need to order in the next few months. Otherwise, we cannot deliver in 2025. And those are the conversations that we have in the semi area.

Medical is a bit different. You're right. There is a mixed picture. Some of our customers particular DNA sequencing of our applications are a bit sort of in more shaky territory so that's sort of the lesser specific guidance, lesser specific discussions. And on the laser front, we have continuous weakness here. That is, by and large, a, I'd say, a like a oversupply in the industry for those specific lasers at the moment, overcapacity, and we have to see how we deal with that.

[Michael Kuhn, analyst]

Very clear. Understood. And then second question, as you also mentioned Hommel and Hommel benefiting from, let's say, a little revival in combustion engines. At the CMD, you mentioned the structure of Hommel with the fab in France that probably fits your set up a little less well than the factory in Villingen-Schwenning. Have you made, let's say, any progress over recent months in rethinking the structure of Hommel and, let's say, creating scenarios, how to transfer it into the future setup of the group that you want to reach?

[Stefan Traeger, executive]

We're working on that. We do have certain scenarios, certain options that we work on, elaborate, but you will understand that at this point in time, we cannot communicate that in public. .

[Michael Kuhn, analyst]

Understood. And I guess the same is true for Prodomax as well.

[Stefan Traeger, executive]

To different reasons. But yes, rationale is different, reason is different. One has to do with Labor Law and our own people and that we deal with them and the other has to do with the running process.

[Michael Kuhn, analyst]

All right. We'll wait for the relabeling into discontinued operations then .

[Stefan Traeger, executive]

Thank you very much. .

[Operator]

The next question comes from Lasse Stueben from Berenberg. .

[Lasse Stueben, analyst]

I just want to come back briefly to your comment on the orders in NPC. You mentioned that it's a temporary delay with the projects in the U.S. Can you just give some more color around the timing because it sounds like these projects take some time to shuffle around. So I guess it's not a matter of just 1 quarter. So I'm just trying to get a feel for, is this more than like a 2025 story? Or should we already see near-term, I guess, recovery in orders here?

[Stefan Traeger, executive]

I guess the best way to answer is we did get a large order in April.

[Lasse Stueben, analyst]

Okay. Got it. And then just -- you mentioned the restructuring. Clearly, the margin profile is looking very healthy. Is this the kind of run rate where you feel comfortable the sort of 17% or -- is there anything we need to be aware of kind of within the quarter with it obviously being project-based, so sometimes there are quarterly effects.

[Stefan Traeger, executive]

There is a small one-off effect, but less than EUR 1 million from -- basically, we sold property and that sort of there was a bit of a book gain of EUR 800,000 is very small. But yes, just to be fair, there has been a one-off effect in the EBITDA figure of EUR 800,000. Nevertheless, if Prodomax can continue to produce sales as strongly as they can at the moment, so in other words, if the demand -- the projects do come back as we anticipated, and again, as we have seen in April already, then we should be able to see that type of margin throughout the year, I think.

[Operator]

The next question comes from Malte Schaumann from Warburg Research.

[Malte Schaumann, analyst]

First one is also a follow-up on Prodomax. When we have seen the short-term impact from reshuffling of projects, you had the large order in April, you just mentioned. Do you see customers taking first -- with certain projects taking longer time to really think how they should proceed then going into '25, so that overall order intake volumes or project volumes remain a bit subdued to the uncertainty in the market from the shift towards combustion engines?

[Stefan Traeger, executive]

I'm not quite sure if I got the question right, but if you're basically asking, is this an ongoing effect .

[Malte Schaumann, analyst]

Does that effects last a bit longer than maybe a quarter.

[Stefan Traeger, executive]

Yes. I don't -- well, look, I mean we -- obviously, again, none of us can really predict the future. But I don't think so, actually. Because again, it has been to do it really very specific -- so let me maybe try to -- let me get back somewhat. So Prodomax takes orders only at the point in time when they know they can deliver. So when it's all planned through and the order intake -- so the whole production for the years laid out.

And when they know, at what point in time, they can put use and they can finish and they can ship, so it's basically the whole production floor is planned, more or less for the year. Now if somebody says just before sort of taking that order, for Prodomax books that particular order into its books. If somebody says, what? Stop, in the middle of the conversation. Well, we have to press the pause button on that particular project.

Prodomax cannot [indiscernible] within a matter of days, take another order or another project and book it as an order intake because, again, that's the whole reshuffling in Prodomax's production cycle. And that's exactly what happened. So it's to do with very specific projects from a very specific customer, and that customer said whoops, press the pause button on 2 very specific projects. And Prodomax cannot, within days, take another project out of the funnel and book it as an order because before they do that, they have to reshuffle the production plan.

I hope that does explain it somewhat. I know it's a bit complicated, but essentially, that's what it is. So they have a production plan throughout the year. And to change that, it's not a matter of days, it takes replanning of our own production plan. And only once that's all done, Prodomax books the order out of the funnel of projects they always have.

[Malte Schaumann, analyst]

Okay. And just a clarification, do you see more customers kind of hitting the pause button on a number of projects? Or has this really just been 1 specific project, and then you've had the impact in Q1 and the rest should be relatively okay in the remainder of the year?

[Stefan Traeger, executive]

This Q1 effect has to do with a very specific large project of, a, U.S. automotive car manufacturer. That manufacturer has postponed the whole platform, e-mobility platform by 3 years, 2 or 3 years. And as a result of that, the first-tier suppliers through this car manufacturer have changed their project landscape. And as a result of that, Prodomax can't book. So Prodomax doesn't sell to the car manufacturer, but to the Tier 1 supplier. And the Tier 1 supplier has to change its project because 1 specific large platform out of Detroit has been postponed by 3 years.

[Malte Schaumann, analyst]

Okay. Understood. That's fair enough. Then on your new semi project, I'm fully aware that you will not name any customers or so, but is that a project within existing customers that kind of the new customers, that a new technology, new application, you're in for an optic and maybe you can provide a potential revenue volume you might expect over time?

[Stefan Traeger, executive]

I mean there are almost no new customers in the semi industry. We are working together with all of them. So it's an existing customer, but nice to note it's a classical optical, not micro-optics, classical optical technology or classical stem cells. Boring -- how to say that. Normal optical, not micro-optical I don't know[indiscernible]. And -- we cannot give any specifics here, but we wanted to mention that because we always talk about the 1 big customers we're working with in the semi industry and yes, we all know how important that 1 customer is.

This is for another customer, and it's not micro-optics, it's not Dresden, but it's important for us to indicate, to share with you, with our analysts and customers and investors that we're also working very closely with other semi customers, and we can apparently be successful in winning projects also for inspection machines, for example.

[Malte Schaumann, analyst]

Okay. Good. Then on the -- I mean, you already touched on lasers and some other applications. Did you generally see -- I mean, there are certain areas of weakness. I mean, we talked about Medical in the past, TRIOPTICS. Did you see any change in the general trend in any of these applications that have developed a bit more weakly than the others during the past couple of months? .

[Stefan Traeger, executive]

In particular, in lasers, here, we're talking about our factory or laser diode factory. We have an ongoing -- as I say, overcapacity in the marketplace, basically, it's not just us, but the whole industry. We have an overcapacity in that marketplace. That's to do with Chinese laser, diode manufacturer is becoming ever stronger and being pretty aggressive. We still produce what we believe are technologically very advanced laser diodes, but yes, it's an ongoing trend. And we don't see that to get any easier in the next few quarters. So that's something that we are actually addressing actively. .

[Prisca Havranek-Kosicek, executive]

Maybe to add to that, just to add, we have seen that you asked about other pockets. I would say if we exclude semi, Stefan has already talked about semi, we have seen a somewhat lower demand, to some extent, also below our expectations in other pockets outside of the semi business in the APS special -- place in particular. So just to sort of also add that flavor.

[Malte Schaumann, analyst]

Okay. And has that weaker demand -- had that incrementally developed more weakly than initially expected? Or is that kind of the same weakness we were seeing already maybe in the second half of last year? .

[Prisca Havranek-Kosicek, executive]

Yes. I think that's very hard to pinpoint. As you know, we have multiple-end industries in there. We're continuously monitoring that. So I cannot really give you any nuance on that. We continue to monitor it. We have flagged it. And I think as we also heard today in the beginning of the call, I think a very important assumption is that our demand picture. And when I say demand picture in our business, that means order intake is going to be back-end loaded this year.

And this is a major assumption, obviously, for this year to a certain extent, but then also for the next year to come. So I just wanted to reiterate that again that when we talk about demand in our picture, it means -- in our business, it means order intake.

[Operator]

Next question comes from Craig Abbott from Kepler Cheuvreux.

[Craig Abbott, analyst]

Hopefully, it works this time. Yes, 3 remaining on my side. One was you've mentioned in past calls and at the CMD in the summer, I think that you're working on a new -- winning a new additional major OEM customer. And since you said you're servicing basically all major lithography-related semi players already. I would assume this would be non-semi, -- maybe you could confirm that and give us an update there. And then I have 2 more quick questions, please.

[Stefan Traeger, executive]

We're -- we're looking a bit [indiscernible]. I'm not quite sure if...

[Craig Abbott, analyst]

I think you mentioned the major OEM customers account for about 40% of your sales. And I think we were told that you were confident in being able to -- now in the not-too-distant future, when an additional major OEM customer. Maybe I slightly misunderstood that comment, could also be.

[Prisca Havranek-Kosicek, executive]

So I think the way I would phrase it is that outside of our the share-of-wallet growth that we still see in some customers in semi, we are expanding our share of wallet in customers in other areas and one of them would be bio -- medical. I think that remark was in the context of those.

[Craig Abbott, analyst]

Okay. Okay. That's helpful. And I was just wondering, and maybe partially missed this as well earlier. Could you maybe give us an update on how the project pipeline at TRIOPTICS with these automated vision projects is developing? That's the second question, please. .

[Stefan Traeger, executive]

Yes. Quick -- no particular change there. We're working together, as you know, with all the major suppliers but haven't seen a significant order intake in terms of double-digit millions or so for a project at this point in time, this year, unfortunately.

[Craig Abbott, analyst]

Okay. But it hasn't worsened either from the last call.

[Stefan Traeger, executive]

Correct. Same.

[Craig Abbott, analyst]

Okay. And one final quick follow-up from the previous questions raised by my colleague. Regarding your remaining laser-related activities that are feeling the impacts of these over capacities, I mean, could you give us a rough idea of how large these remain -- how significant they remain in the [indiscernible] optic total sales.

[Stefan Traeger, executive]

Around EUR 30 million in total. .

[Operator]

Next question comes from [ Sven Kemper ] from [indiscernible].

[Unknown Analyst]

I hope you can hear me well. I had a question regarding Smart Mobility. You mentioned missing projects. Does this imply global customers or a specific area? And when can we expect these projects to be realized. And the second one, just for my understanding, in the U.S., you repeat with Verra Mobility about that mistake. Can you remind me briefly of the competitive quality within the segment? .

[Stefan Traeger, executive]

Yes. So on the first one, maybe to clarify what I meant to say at least has been last year Q1, we booked a few large projects. It has been the biggest time, if I remember correctly. So a large project that we booked last year in Q1. And this year, Q1 hasn't seen that effect. So the comparator has been a bit sort of skilled, if that makes sense. By and large, it's good, and our smart mobility business is that we achieved the order intake pattern that we have seen in Q1 this year without major big projects, it's just ongoing business, which is -- makes for less volatility. Just to clarify that, the order that I meant was a large project that we booked in Q1 last year.

On Verra, you're right. Now we're actually in full competition with Verra. Up until recently, we were still supplying. Verra has been, as you might remember, has been our distributor in the past until they bought the competitor of ours. Now we're building up our own sales force there. We were very happy to report earlier this year that we won first tenders and won the first sort of project there. And we're building up that business as a direct business now in competition with Verra, of course. But we believe that we have superior technology or our cameras are just better. At least that's what we believe. And the first wins in the marketplace seem to indicate that our customers see that as well.

[Operator]

So at the moment, we have no further questions. So I would like to hand over back to your host, Dr. Stefan Traeger.

[Stefan Traeger, executive]

Okay. Well, thank you very much for being with us today. Again, in summary, I think, a strong first quarter, obviously, in terms of sales growth, in terms of margin expansion, as already anticipated and indicated earlier, our order intake has been somewhat weaker than last year. But again, we anticipated that. We communicated that upfront. We confirm our guidance for 2025 and looking forward to delivering a strong second quarter and hopefully also a very strong page to 2024. Thank you very much.