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Good morning, ladies and gentlemen, and welcome to the Manz AG Conference Call regarding the First Quarter Results 2020. [Operator Instructions]Let me now turn the floor over to your host, Mr. Martin Drasch and Mr. Manfred Hochleitner.
Thank you very much. Also, a warm welcome from my side. I hope everybody from your side is well. So as you have already seen, we have announced today in the morning, our Q1 numbers. And as far as you can see, we had a quite good first quarter, and we are very happy to show you now a little bit more details. Manfred Hochleitner will start with the financial numbers. And afterwards, I will give you a little bit more deep insight in our views and also the perspective we see in here. So Manfred, please take over and show us the numbers.
Yes. Thanks a lot also from my side. Good morning, and hope you are all well and healthy. So let's have a first look on our income statement on the P&L. The revenues of EUR 61.6 million were mainly driven by the segments, Electronics and Energy Storage and include projects mainly related to the e-mobility sector.So we can clearly see this in our next slide and with the change in contribution of revenues that we change from a pure solar company also now to a significant contribution of the automotive-oriented segment, what we have announced already in the past months and years that this will be also a very important pillar on our group strategy. Further, our ongoing projects in the lithium-ion batteries make also a significant contribution to the current level of revenues, mainly driven by the consumer electronics applications for lithium-ion batteries.So the reduction compared to 2018 results mainly in lower revenues in our flat panel display business in Taiwan and in China and could only be partially compensated by higher revenues in the Energy Storage segment.The other operating income is more or less on the same level as in the same period of 2019, and contains mainly subsidies and gains on foreign exchange rates. We see a significant improvement in our material cost ratio, which came down from 61.7% in 2019 to now 53.5%. We finally see here a positive impact of our global strategic programs, which you all know. This is the make or buy project, the design to cost approach and also a clear result of our repeat orders in the Energy Storage segment regarding consumer electronics applications for lithium-ion batteries. So the reduction in net operating expenses results mainly from lower freight costs, lower travel expenses and lower write-offs on bad debts.Our joint venture in Taiwan in the Contract Manufacturing segment increased business and profitability significantly compared to the first 3 months of 2019 so that their contribution went up by roughly 71% from EUR 1.5 million in the first 3 months 2019 to now EUR 2.6 million. In total, we can present today a strong increase of our EBIT from EUR 0.6 million in 2019 to now EUR 3.5 million, which is an increase of almost 4.5x compared to the first 3 months of 2019. So this leads to a very strong positive net result of EUR 1.6 million in the first quarter 2020. This is the best result, which we achieved since 2014.Let's then have a look on the revenues and EBIT contribution of different segments. Solar is impacted by the delays in connection with the current corona crisis. So we see lower revenues and consequently a negative impact on the EBIT in this BU.Electronics made a significant jump into the positive EBIT figures compared to the first 3 months 2019, despite of the fact that revenues went down significantly. This is in connection with the order of HKC in the flat panel display, which made a big contribution in the previous year but with a lower margin. And this year, we see what we already have announced, a significant positive contribution of our order for battery management system for a Tier 1 supplier in the car industry, which made good progress in the first 3 months 2020.In the Energy Storage segment, as I already said, we see not only a big jump in revenues, but also a very healthy development of EBIT contribution. This is mainly driven not only by the e-mobility segment or mobility industry, but also driven by our repeat orders for consumer electronics in the lithium-ion battery application.Contract Manufacturing is more or less on the same level. As I already said, we see here the good contribution of Talus, our joint venture in Taiwan.And Service is not on the level which we wanted to achieve, but we see that there is, again, a change in product mix and we currently have started an internal program to bring Service EBIT into a reasonable level of positive numbers again. Having a look on the balance sheet, there is not much change. We see that the equity ratio is more or less on the same level compared to end of 2019. In net working capital and net debt, we see an increase there mainly driven on the net working capital side by the progress in the project and related increase of current assets. And the net debt increased mainly in our sites in Slovakia and Taiwan. This is mainly driven mainly in Taiwan due to the impact of the corona crisis because we had delays there with the progress of processing orders there due to the stop of certain sites, mainly in China. So this is released now due to the infection rate in these countries, having now reached almost a 0 level. So that we expect that this net debt will come down again in the second quarter 2020.Having a look on the cash flow, we see that we have negative cash flow from operating activities. This is mainly driven by a decrease of trade payables and contract liabilities. So we just used the down payments further from our ongoing orders. We expect that this will change again when we have significant new orders coming in, in the next months. Compared to the previous -- to the year -- to the period of the previous year, there is not much change in cash flow from investing activities and from financing activities. So this is the normal usage of financing lines, mainly driven also by the corona crisis in Taiwan. So that at the end, we have cash position of roughly EUR 34 million by end of March 2020.So for a quick overview of the development of our -- great development in the first 3 months 2020, and I will hand now back to Martin for a deep dive into the different segments. Thanks a lot.
Thank you, Manfred. I would like to give you some more details regarding Solar. So in Solar, as you already know and we already showed in our numbers, we presented to you for the full year 2019 and our explanations there, is that we are here impacted mainly during the whole time of the pandemic with the coronavirus since the last month before the start of the Chinese New Year because there we needed to stop the installation phase on-site in Chongqing, and also the development of the building establishment for our second line in Beijing was impacted by the stop by the coronavirus.And this is, for sure, what you see also here in the numbers. We made a very good progress so nearly all of our lines are already in place and already the hookup and the installation started, and we needed to stop it. We see now that this will change as now in China, it's mainly open, infection rate is going down. And already, we are in discussion with our customer how we can start the sites again with their team, with our team that we can bring the lines into production as soon as possible and then make necessary revenues, which we have expected in this business for the full year 2020.We have -- so far, we have put in our expectations into our guidance here. So if we can start in the next weeks with the installation, we are here also completely on track. And I'm sure that with the next steps in the installation, we will see that the first modules will come out in the next months and that we can show and proof to our customer that equipment will produce the necessary quality of -- and efficiency of the modules.The other business in the segment is also impacted by the coronavirus. Our order with Baosteel is also on hold actually. This is the installation for sheet metal, where we have laser scribing on the sheet metal for our [ transformatory ] business. We also expect here in the next week that we can restart with the line customers finishing the clean room and then we can also have here a restart of production and generate the necessary revenues, which are missing here so far in the first quarter, just assuming this would be not the case. The EBIT and the EBITDA would look much more better, as you can assume. But as I said, we see that this will be solved soon and that we then can generate the necessary revenues.Then let's have another look on our segment Electronics. As Manfred already explained the shortfall on revenues, mainly due to our development in the order with HKC, mainly most of the lines are already produced and delivered to the customer. Only a few ones are still in production. As we reported the last several times that there was also a stop caused by the trade war in this point of time, which made it impossible for us to deliver the machine, but this is also now solved. And we are here in the final stage of production and delivery. Some lines are already installed and in place, and we are looking forward to have here also a good progress. And on the other hand, it's, for sure, also the business we have in the automotive industry for the cell contacting system.As we announced last time, we achieved a quite important milestone. We showed to our customer here that the machines are capable to handle all process steps in the necessary quality for automotive industry and the automotive standards. This was then the release to start now the installation and the commissioning on-site with these machines. And the next milestone is then here to have the line up and running and ready for production, which will be the case end of June. And therefore, we see here also a very good development and also a good development in our EBIT and our revenue situation we see here. And we see also here a good interest and also quite high interest from other customers on our processes and developments we have made here that we see that there is a very high chance in the future that we will sell similar equipment and processes with other customers, as well for the cell contacting system and also other areas in the automotive powertrain installation phase.Then I would like to step forward to the segment Energy Storage. So as we announced the last time already our segment Energy Storage is the most interesting for the future. I think this is clear for everybody. We invested here highly in the development of our processes and machines, especially to be able to support the direction of production of safe cells.Our elimination process here is now ready to be sold. We have good tests and could show this to our customer that we reach the necessary parameters of the machine, which is expected, but also in other areas, where developed -- where we developed machines for our customers we made quite good progress, as well as in the production and delivery of our machines we have, from long-term customers, and we delivered from our entity in Slovakia.Okay. I just get the information that the tone is not anymore to hear. Just 1 second. We just clarify if there is a technical issue. Okay. It seems like now everybody should be able to hear me again. Sorry for this technical problem. So again, for the segment of Energy Storage, I think that we made good progress for sure. We invested the last quarters and last year a lot in this technology, but with the clear focus that there is a huge possibility for machines for Energy Storage in the future, not only in automotive industry, also in the storage industry as well in the other industries, which are using cells in the future and also with the strategic decisions we have made to have cooperations in place to be able to deliver them at the end of the day machines in the gigawatt scale is a clear plus for Manz. And our long-time experience we have in the development of such machines in our process now is here a clear advantage we have and we get feedback from our customers. We are discussing further projects, actually, that this is a clear benefit, which we will be able to make benefit out in the next weeks and months.Then shortly for the segment of Contract Manufacturing. This is mainly driven by our business in Talus, which is really developing quite good. As you know, semi industries also had some hurdles, but still the growth path is clear. And we see this also in the development of order intake in this area from our customer, Lam Research. So our forecast is quite good, and we will increase also our team here that we are able to help our customer mainly also in direction of China, which there is plan to have been a very good progress there in higher amount of equipment, which will be bought and delivered there.So we are prepared to do this. And as well, we have a clear strategy to increase the business to keep our production floors completely equipped that we have here a clear solution to decrease our cost structure we have. This is a clear strategy we also follow now in China. We prepared this, and we have now already get the first Contract Manufacturing contract in Manz China, which will help also there to bring good workload on our shop floor here and to have also positive development for this business segment in the future.Then let's hand over to the Service department. Service department is also quite heavily impacted by the corona crisis. As you know, in China, nobody was able to travel. So we also were not able to travel as well in China and in Taiwan, but most of our installed machines are actually, in the last 2 or 3 months, this had a huge impact. And on the other hand, it's also clear that we keep our team here in place also for the restarting of the lines. We will have them in the CIGSfab and in the CIGSlab. There is a huge amount of service revenue coming up in the future to really have these machines then under warranty and under service with full-service agreements. We are preparing, already have discussed with our customers here. So there is also a huge possibility for the future to make further business. On the other hand, with the increasing numbers of machines we sell as well in Electronics as well in the Energy Storage department, there will be a higher amount of machines in the market. We can service them. So we reorganized the team actually to really come over this phase until the CIGSlab and CIGSfab will be in production that we have our capabilities and our experience of the team still here and that we can make use and profit out of this in the future then.So far for a little bit more deep dive into our segment, then I would like to give you an outlook for our order intake. So in the order intake area, you can see that the order intake compared to the first 3 months in 2019 is increased about by 10%. And for sure, you can also see that in the Solar segment, we are very, very low in the order intake, as we have announced that we first need to finalize the machines and really get the FAT for our lines in Chongqing, then we can discuss with our customer further about a follow-up order. So the expectation was here not to have a huge order intake. In Electronics, also due to the trade war, what I explained, this is mainly in Taiwan, we see also a little bit reluctant order intake phase, but we are in discussion here with a huge amount of customers which are interested in the machines also for display, which is interesting in future for the automotive industry. So especially for the high-quality displays in the generation 4 and 5 and 6. So there we see a strong increase of the demand.Where we were able to increase our order intake is also in Energy Storage, where we see also very high-density of discussions we have actually with a lot of customers, which plan to place the orders. On the one hand side, they are very pushy on the time line. On the other side, they also struggling with there impacts on the corona crisis. So we are in discussion here, and we see that there will be decisions made in the next weeks, and we see here quite good chances to see further intakes in this area.For Contract Manufacturing and Service, it's a day-by-day business. So this is not really plannable for the future, but we see also that we have here also the good order intake in the last 2 or 3 months.On the order backlog, we have an order backlog of EUR 153 million actually on hand. This is a little bit lower like the year before, as we are awaiting huge orders in the other segments, especially in Energy Storage. We see this as a positive number so far, even if it's a little bit reduced, but there is more to come and we need also to process our orders. And this is from our point of view, a big advantage compared to the last year that these projects, and there are quite big projects and challenging projects, which we have on hand. The order processing is much more better than we had this in the years before. The profitability of the projects increased ways and also our material cost is reduced. So this is a clear good sign from our view. And as I said, we are expecting further orders to come that order backlog will be increased in the future.Regarding our guidance for 2020, we will keep it unchanged what we have showed to you in our 2019 annual report. As we said, we will see a slight to moderate increase in revenues compared to 2019, and we expect the positive EBITDA margin in the mid single-digit percentage range and the positive EBIT margin in the low single-digit percentage range.For sure, as I explained it already, we are also affected by the corona crisis. What we can see so far and so -- how we can look in the future and discuss with our customers, we have this effect what we can see, are considered in our guidance, which we show to you. Also reliable assumptions about the future actions of our customer about possible further restrictions, including political restrictions can currently not be made. Economic effects of the crisis on the group and the forecast can also not be adequately determinated at the present, and the further development is constantly evaluated by the management Board. And from our point of view, we made some decisions in the past, which we evaluate actually as positive.Also our shutdown, we have made very early to really bring, again, calm into the company and a much more structured process, how to handle the corona crisis, to discuss this with our customer and then have now after Easter, this ramp up, again, with full power and much more structured and efficient processes was also highly appreciated by our customers. And so far, we see no impact on the time line for our customer project, which is also very positive from our point of view. And we will handle this in the future in the same manner. And so we think that the corona pandemic should be at least what -- from the perspective what we can see today should be from Manz' side under control.So far from the explanations from my side and from Manfred's side. We would like to thank you very much, and now awaiting your questions.
[Operator Instructions] And the first question comes from Zafer Rüzgar from Pareto Securities.
First of all, congratulations on the strong numbers. And I would say you set the bar very high with these figures. I have 3 questions. Maybe we can take them one by one. My first question is related to Electronics, very impressive EBIT numbers here. And maybe you can provide some more insight on the earnings drivers here in this segment? Is it mainly related to phasing out effects as you are here in the final stage of your -- of the major order or some other issues? I mean if we look at the more than EUR 2 million figure, this is already higher than the full year guidance for that segment and how we should think about that for the next quarters? Is that the new run rate?
So mainly, the main driver for this positive EBIT is in 2 directions to be seen. The first direction is Taiwan and HKC for the Electronics business that we were able to restart. And also then this is a repeat order of machines. So similar machines, we could have better margins on the material [ cost ]. We had also much more better, let's say, negotiation possibilities in this time in China. So we achieved much more better prices here.This is what was one positive effect, but the really most positive effect is coming out of our cell contacting system line. This is due to that we achieved the quality which was expected. And also, on the other hand, the order volume increased, and we could then, based on the developments we made in the last 1.5 years because this is really the time line, how long we developed on these machines, we could now generate the necessary revenue. And we also here a very good material cost ratio and as well as what we see is that we needed less time than expected in the commissioning and installation time, which then had a positive effect for this project.We see this also very likely that this will go in this direction further. We expect also here some further order intake from this customer as he is already now discussing increase of the capacity of the line as well that there is some further modifications. These are different systems we are producing on our line, and there are 2 more to come, which needs to be integrated into our machine. And this will, for sure, help because development is mainly done. So the engineering for this very low experience is here. Knowledge is also here, and this also leads then to the direction that we will see similar numbers again also in the future.
Okay. And then the second question related to Solar. Yes. I guess the final question is, what is the main restriction for the finalization of, let's say, the installation of the machines? And I would guess it is the travel ban or do you have local team here, which is able to finalize the installation and do the commissioning of the machines?
Firstly, for sure, it's the travel ban, but as well, there is still a quarantine rule in place that means everybody who is entering China needs to have 2 weeks quarantine. And also if you would go back, you would have the same thing. So this is, from the one hand side, increasing the time line as well the cost structure of the project, and therefore, it's a hurdle.But on the other side, for sure, we have also a local team. It's also quite huge. So 30% to 40% of the team is local. But on the other hand, we need also to have our European partners and suppliers to be able to reenter. And this is actually the discussion what we have with the customer, how we find a suitable way to have progress here with a new time line, which needs then to be agreed on. And for sure, what we also will discuss is the additional costs we are facing here as this is not due to Manz, and this was not expected and for sure not also calculated. But we are here in quite good discussions with the customer.He has a big interest to restart now for sure, because actually, on his side, the view is, okay, here it's safe, you can start. But if you cannot enter then you have another problem. But I think in the next weeks, we will be able to restart here.
Okay. Good. Okay. And my last question related to Q1 -- Q2 looking into the quarter, is the current development so far according to plan? And would you consider Q2 more challenging than Q1? And this is also related to what I said at the beginning, you have a very impressive Q1. And I guess, more eyes are focused on, if you are able to repeat that again in Q2 and in the following quarters.
Actually, Q2 will be more challenging than Q1 for us. Besides, we have had this shutdown, which was the right decision, what I mentioned. But for sure, there are uncertainties in front of us. Nobody knows if there will be a second wave coming up. If we will face such things again, how our customers will react. So far what we can see, it's under control. But to predict this, it's quite difficult and we have not so far the numbers for April. We are looking forward. Processing is again under control, but I think it's more challenging what we will face in Q2 than what we have seen in Q1.
And the next question comes from Karsten Iltgen from Bankhaus Lampe.
Yes. So also from my side, well done on the figures. Really nice to see, and let's hope this is going to be sustainable, but pretty good so far. Yes. I mean you -- are there any one-offs in those results? I know you were looking for compensation payment from your customer. Is there anything like this included in those results? Or are those really very clean figures? That's the first one.
The figures you have seen do not include any onetime impact. So the achievement was pretty operational and no impact out of any compensation payments or claims are included in the numbers.
That's great. Very good to hear. And then on Electronics, you just commented that you would see this pretty much sustainable. So the EBIT margin of almost 10%, is that really something we could assume for the full year now because the previous guidance was substantially lower?
What we see so far, yes, it's going in this direction. Hopefully, no impacts, no stops or any other things. But what we have on hand so far and how the development of the most important project in electronics is, as of today, we see there a very positive trend.
And in that segment, I think you mentioned that the automotive customer is going to finalize this current project in June. So also Q2 is then looking fairly stable here in Electronics? Or is it going to be also weaker because of corona?
No. Actually, we are also here. And as I mentioned, we are in really good and also already very far discussions with follow-up customers, which are not the same customer like we discussed before. It's others, which are interested in the technology. It's really a pity that we were not able to make our fair, our open house, which we have planned in beginning of April, because there was a huge interest and the customers would like to see the machines up and running and would have been very impressive. And I'm sure this would have helped already to convince more customer even in the times of corona to really cooperate and work together with Manz. But we will do this now in another way. We made videos. We will present this to our customers to convince them. But actually, what we see is there is a huge interest in this area, especially in the cell contacting system, but also in the automation lines. We are offering also in our laser equipment in the medicine area. We have really, really huge requests and also a lot of requests from customers.The question is only when they will really place the order, as everybody is, yes, looking forward that is getting -- it's again opening, and they can come back to, let's say, normal business. But so far, I think there are still some doubts. But in the next weeks it's -- at least what we hope and what we expect is will be solved, and then I think we will see there some follow intakes.
If you would not see those orders, I would say will be delayed because of corona, which is going to have sufficient backlog that Q2 could be flattish over Q1 or would then -- in Electronics? I'm just talking Electronics [ as normal ]. Would Q2 be down?
No. Q2 is not impacted. If there would be as I said -- or as you said, a postponement of decisions from customer, this would have not been a huge impact on Electronics.
Okay. And then same question for Energy Storage. My understanding would be that there should -- also mean there not be a big impact on Energy Storage, correct? A negative impact, I mean.
Yes. Yes. Correct.
Then the question is, where would be any negative impact? I mean, in Solar, it can't become any weaker. In Contract Manufacturing, things look smooth roughly. So where is any -- where is the weakness?
Again, we would like to be a little bit conservative. We have seen really good numbers in Q1, and we made really hard work in the crisis to achieve these numbers. So far, we were not impacted. But again, for me, it's not predictable if this will go in this direction or if some of our customers maybe will postpone the delivery of machines. We have also faced this last year. And then we had some, let's say, pain in this area.I think I could give you also a good, yes, perspective into the future that we have this so far under control. But if there would be, again, a shutdown or something like that, for sure, this would have been an impact. And as we cannot predict it so far, we are a little bit more conservative here. If it's going in direction like we see this in the news, everybody is talking about reopening really all the customers we are having are pushy and want to see us back on site like on Solar, and if this is going in this direction and we can achieve what we have, let's say, described a little bit, then we are positive for Q1. But I think there are some challenges. We need to discuss this with the customers. We need to adapt our time lines. We will have discussion about additional costs and how we can rearrange a restart on site and how we can accomplish the targets they give us. So there are some uncertainties in which we, for sure, cannot really predict on the actual day.
Great. It's good to hear. Understood. Then on your order backlog, especially in Energy Storage, there has been news in the last weeks that some of your customers received subsidies from the European Union for some development projects. Is there also progress with those subsidy programs when it comes to actually production facilities? And do you expect something nearer term or what's the expectation?
We are still in discussion for the subsidy program as well directly and as well with our potential partners. There are 2 different programs of the IPCEI, and there are further projects we are working on. The development is quite good. Even if we talk here with our government areas here in Germany as well in Baden-Württemberg, but also on EU level because also our entity in Italy is part of this subsidy program. There is a huge interest to do this much more faster than we have seen this under the IPCEI one. So there is development. We are filing, we are answering the questions and hopefully, we will get the decision the latest end of Q3. Hopefully, maybe a little bit earlier how the subsidy program is done. And the amount we are filing for is quite huge, and we see good chances. Also all potential partners, which are in this program name Manz as a potential partner for development of the necessary equipment and machines.The good thing is there are not too many battery machine producers in Europe. And this is a big chance for Manz, even if we get then subsidies from the European Union, which is absolutely necessary if we want to really make the battery business also a sustainable business for the future in Europe, then we can play here an important role. And the good thing is, as I said, we see a good progress there and high interest from all government areas to realize and make the decision quite soon.
Great. And nearer term, I mean, you mentioned -- pointed to end of Q3, do you also have an order backlog for the nearer term, which could come into order?
We have an order backlog here we have won. And we are also in discussion with our long-term customer for the projects. This is also quite interesting here, and we're not talking about the cylindrical small cells. We're also talking about the 21700 solutions we have developed in the last months, and there is also a huge interest from different areas, also from the automotive industry. There is interest in this technology. And also there is -- we are in discussions with them, and they are very, very, yes, front leaded, we are very far here and it's really in the final stage. And therefore, I expect the order intake as -- from Energy Storage will improve in the next weeks. There's a huge pressure, actually.
And the next question comes from Florian Pfeilschifter from MainFirst Bank.
And also from my side, congratulations to your good results in the first quarter. I have only a few follow-up questions now. And the first one would be on Solar. You would now expect roughly only a 4-month delay because on the last call, you said the delay to be 4 to 6 months. Are you more certain on the 4 months lower range?
Yes, this is due to the real good development of our discussions with our customer and also, let's say, that some restrictions which were in place at this point in time in China, where even if you're coming out of another region, you have to have this 2 weeks quarantine. And this is now, let's say, more open. It's just from Taiwan, there is still a restriction on going. But inside China, you can travel, and this releases a lot of pressure from our side and gives us more possibilities to restart the line.
Perfect. And so would you expect the first panels for the customer to be produced in 2020 now instead of 2021?
That's also the good signal because this was also to be discussed with our customer that this is a clear target we want to achieve. We are here in the final discussions with them, how this could be achieved in which way and in which amount, that the lines must be up and running because for sure we will not achieve in 2020 that complete lines. We have 14 total lines in this production fab up and running. This will not be possible, but at least some of them, and this is actually the discussion and as I said, then also the impact for the cost because, for sure, we will face a much more higher cost than we have expected 3 years ago when we negotiated the order.
Okay. And regarding the Energy Storage segment, do you expect a full acceleration already in the second quarter? Or do you think this is more back-end loaded this year due to COVID-19?
My wish would be that we can finalize the discussions. We have really on a far stage so far. But again, this is up to our customer, and we cannot push our customer to really place the orders. I have -- I understand our customer that they have also some doubts, and they need to follow restrictions and they check also their markets and the decisions of their customers. So for sure, this is to be balanced.So from our point of view, we are able to handle what they expect. It's up to them now to make the decisions with their customers. And I expect that this will accelerate when all the regulations, let's say, is solved, then we are coming back to normal business. And I think there will be an acceleration. But if this will be in Q2 already the fact or this will be maybe postponed to Q3, it's a question I can actually not answer. But I see a lot of positive effects, which make it more, yes -- or that we can hope that this could be the fact already in Q2.
Okay. Perfect. Then on Contract Manufacturing, the roughly EUR 3 million in EBITDA, do you think this is a stable run rate for the next quarters here as well? Or is this maybe even improving backed by the strong semi development?
Yes. As I said, it's mainly driven by Talus. What we see here is that there is a huge demand coming up out of China and as well as our customer, Lam, is directly impacted in as they are actually in California, and they had also a shutdown given by the government and they are very strong impacted by the shutdown. And they move now a lot of this equipment to Talus, and they are really happy to have Talus in that we are able to scale in a very fast manner, and they use this. So even I could imagine if this is going in this direction further that this could be an increase. But actually, we can assume that this will stay stable in Q2.
All right. And lastly, on the order intake. So for your guidance, there's still roughly EUR 70 million missing. When can we expect for the order intakes and in which segments to have this basically full for the year?
Yes. The one million dollar question, yes. As I said, we are really working hard with our customers. We are really in discussions. We have negotiations ongoing so we expect this quite soon. But again, I cannot predict. It's up to the decision-making process of our customers. We feel very comfortable actually in the negotiations. We get the feedback that we are in the leading position, but it's up to them to make them.So I cannot really predict if this will be next week or in 4 weeks or in 8 weeks. But at least in this time frame, we expect the necessary order intake that we can achieve what we -- I already gave to you that we can keep our guidance here. So we are quite, yes, sustained that this will be the place so far.
Okay. Perfect. So basically, by the end of the second quarter, we should have all the order intakes to reach your guidance for the full year?
Hopefully, yes.
Roughly. Roughly.
The next question comes from Lukas Spang from Junolyst.
Two quick questions from my side. First question is related to the Energy Storage segment. At the end of last year we also received big orders from the lithium-ion battery segment. Can you give us a feeling how much from these orders are also revenues in the Q1 numbers in the Energy Storage? Or how much of the revenue in the Energy Storage is related to the lithium battery order?
All of revenues we have in there are based on lithium-ion battery equipment we have made, but I think you reflect to the cylindrical although we have we have got end of the year in 2019 from this project. And we already announced this a few days ago that we are very good in the order processing here, even by corona. Most of the machines are produced in Slovakia, and there we hit all our delivery dates and mainly 50% of the orders we achieved in -- from this customer already delivered. And also the revenue amount of the total order we have received there in this amount is approximately on this level. So there is more to come in the next weeks and months. We have this already in production. We have this scheduled, and we see here also a very happy customer because he is also producing without any impact from corona. And he's also quite good perspective in the future, and, yes, I don't see any impact there.
Okay. And then maybe a second question to Mr. Hochleitner concerning the amortized development cost. These were very high compared to Q1 2019. So is this for the coming quarters level we should expect? Or will this go down?
So I think you're referring to the full amount of amortization depreciation, right, in the P&L?
Yes. The EUR 2.1 million.
So this is not only -- you mean the depreciation on -- which I have shown on the first slide, I think.
No only the positive amount. So the [ impact cost ]...
Yes. Yes. This is why I'm asking. So it's not only the write-off or the amortization of capitalized development costs, but this number includes also the amortization from right-of-use assets. Maybe you remember that there was a change in the IFRS 16 and now we have to capitalize the right of using leased buildings, mainly here in Germany and then to write it off. So this is not only this number. And there is also included the cost of obtaining a contract. So that means we have to also capitalize the so-called sales commissions now in the balance sheet and also write these costs off. So this is also included in this amount there.
Okay. So the level is quite the same?
So just to answer your question, again -- so the short answer, this is not an extraordinary write-off on amortization on capitalized development costs. This is a normal monthly write-off, which we see there here based on a 3-month time frame, and there is no extraordinary write-off included there.
The next question comes from Charlotte Friedrichs from Berenberg.
Actually, most of them have been answered already. There's just one left. I was wondering about the press release that you had in late April, you also talked about working on a new prototype for battery production, which is aiming for basically higher overall productivity. Can you give us maybe a few numbers around that, sort of what kinds of improvements are you looking for? And what roughly is the time frame that you are expecting?
Mainly the development, which we are doing as we see in future, it's not any more the equipment, which will be necessary for laboratory. So we're talking about now really mass production equipment in gigawatt scale. So one clear target what we have is to increase the throughput of the machines because the cost and the OE and such parameters are really then important for the decision-making process of our customers that the efficiency, quality and as well, the throughput of the machines has increased. Because if you need to do this on a footprint of a laboratory line with huge surfaces, which is then a disadvantage for our customers here in Europe, where surface is quite expensive.So we try to really bring with the same footprint, 3 to 4x footprint through our machines. This is the one development. And the other thing is going into the direction of bringing new technologies into this process, such as if you have to cut electrodes, this is done in the past mechanically. So we developing here a process to do this by laser. So you have no reuse of the tools. You do not have to sharpen them. You are much more sustainable here. You have also much more quality aspects if you use such machines because you can -- also for the tab welding, this is where you connect the different layers of a cell together. You can then also have -- if you do this with the other development we are doing to have a tab welding with laser, which is done actually with ultrasonic to improve this that you also can then ensure the quality in the production processes. And mainly, a lot of them is related to our experience of Industry 4.0. At the end of the day, if you produce cells, and this is actually a big topic in this battery manufacturing industry, and then at the end of the process, you find out that your cell, your pack, your module, whatever it is at the end of the day is not in quality, then you only can destroy it.The earlier you detect that you have a problem and you can rework it then your throughput is much higher and also the efficiency of your line and then, for sure, the cost for the battery and for the pack at the end of the day will be lowered. And there, we are working now really on processes and machines, which meets to the expectations of our customers. And therefore, we are -- see us here in a very good position as these developments are now nearly in the stage of testing, and we see this in the next 2 to 3 months that we achieve here than our targets. And now then ready to deliver this equipment without any high further development costs because it's then -- mainly its adoptions on the size of different cells and demands of customers but the machine itself is then ready for sale, yes.
So, did I understand you correctly in the beginning, the throughput will be increased by effect of 3 to 4? Or did you not say that?
Yes. This is our target, yes.
Okay. Okay. And then basically testing over the next 2 to 3 months and delivery would be ready afterwards. Okay.
Ladies and gentlemen, at the moment, there seem to be no further questions. [Operator Instructions] Okay. I think there are no further questions. So I will hand back over to your hosts.
So thank you very much for your questions. It was very interesting to have this discussion with you. As I said, we are really working here in the direction to bring our company back on track to keep this level of performance what you have seen here even in the real challenging times of corona. But so far, I think we could show you that this is, from Manz' side, under control.We would like to thank here also our employees to really working together with us during this not easy times, and they will stay some weeks and months. And therefore, I hope also that you stay well. I wish all the best to you, and hope to talk to you in our Q2 numbers presentation in a few months. Thanks a lot, and have a nice day.
Thank you, and goodbye.