Ion Beam Applications SA (IOBCF) Q2 2023 Earnings Call Transcript

Ion Beam Applications SA (OTCPK:IOBCF) Q2 2023 Earnings Call Transcript August 31, 2023 10:00 AM ET

Company Participants

Olivier Legrain – CEO

Soumya Chandramouli – CFO

Conference Call Participants

Laura Roba – Degroof Petercam

David Vagman – ING Groep N.V.

Simon Vlaminck – Degroof Petercam

Operator

Hello, and welcome to IBA’s Half Year 2023 Results Conference Call. [Operator Instructions]. I will now hand over to Olivier Legrain, Chief Executive Officer of IBA.

Olivier Legrain

Thank you, Olivier, and good afternoon, and thank you for joining us today on this result call. I’m joined today by Soumya Chandramouli, our CFO. And before we start, I would like to draw your attention to the company’s disclaimer on forward-looking statements. Here is an overview of today’s call. I will start with Idea performance and progress of the first half with a detailed look at the different business units.

Soumya will then provide commentary on the financials before I talk through the outlook and then open the line for questions. I’ll kick off with an overview of the first-half performance. There is a snapshot of the key financials. There’s been a modest uptick in revenues in the period related to solid other accelerators backlog conversion, strong dosimetry sales, and service revenue growth.

However, there is a significant phasing of our proton therapy revenue recognition to the second half of 2023. Alongside investment made at the group level to future-proof business as well as prepare for the acceleration in the second half. Proton Therapy revenue recognition has impacted our REBIT. The rate of growth has been relatively slower during this first half period. However, we are expecting a significant ramp-up in the second half.

Our REBIT was impacted by three factors: reinvesting for growth for the expected increase in the activity in the second half, timing of several projects that are planned to start in H2, and some unrelated customer-specific installation delays. You’ll recognize this slide from our full-year results. We remain committed to the key objectives laid out for each business unit. This is underpinned by a group-wide focus on digital developments as well as sustainability initiatives.

Moving on to strategic progress on this objective across the business units during the period. Dosimetry has had an excellent first half with excellent growth in order intake alongside product launches and upgrades. We will discuss the impact of Modus and ScandiDos in more details later.

With Proton Therapy, we have seen an encouraging increase in service revenues. Our commitment to Proton Therapy innovation continues, and we are pleased to start a new research partnership with Particle earlier in the year. Moving to RadioPharma. We are pleased to have launched an accurate cardiac imaging solution and reached another milestone with our joint venture, PanTera.

The industry has seen very strong revenue growth elsewhere, it has been pleasing to see the potential for our technology in a growing range of applications, including food irradiation more than 100 participants are expected to join our food irradiation Symposium in September.

Finally, at the group level, IBA has been investing into digitalization which includes, among others, the development of a business-wide predictive maintenance platform and the launch of a customer-dedicated web portal for industrial business. During the period, we continue to make good progress on our four sustainability related streams. And I’d like to highlight the B Corp recertification now in progress with target for 2024. Risk mapping exercise started with EcoVadis on our supply chain and the various ESG initiatives being taken at employee level.

Let’s take a look at the key figures for the first half. As noted, first-half performance was strongly impacted by a number of Proton Therapy factors, including timing of backlog conversion and investment in the business that I will comment more in details in the later. Elsewhere, other accelerator and Dosimetry performed very well with sales growth of 30% and 23%, respectively, and strong profitability.

The REBIT margin was affected by the combination of the low proton therapy backlog conversion already outlined alongside higher investment in sales, and marketing and R&D in anticipation of ramp-up in the second half of the year and beyond. Net cash sits at a healthy €61.7 million as part of a scheduled renegotiation and use €37 million indicated credit facility was refinanced in August, increasing to €40 million. Total unused credit line now stands at €44 million.

Let’s move on now to a deeper dive on the Proton Therapy business unit. Taking a look at the Proton Therapy market more broadly. So far this year, IBA remains a clear market leader with 60% market share in the Proton Therapy room sold. IBA also maintained its leading position in a number of rooms in operating and total market share. Proton therapy order intake for the first half was €59 million with three homes sold globally.

Revenue decreased by 6% in the period, while we expect the second half for 82 years has already been the case in the past few years, this effect was even more marked in 2023 due to three main factors: an anticipated second half phasing of five major projects with no major start shipment or completion of projects in H1, an unexpected shift of three projects from H1 into H2 for unrelated reasons; and order intake, which came late at the end of the first half.

In addition, there were inflation-related costs that were adjusted on project cost to completion. With a record backlog of more than €700 million, comprising 35 ongoing projects, there is continuing focus to accelerate conversion to revenue in H2 and beyond. As we have seen across the group, service on the other hand, continues to grow in Proton Therapy at 10%, a backlog of €670 million remains.

Now moving to other accelerator performance. Interest in IBA’s Rhodotron machine remains high, particularly in sterilization settings where it is meeting a significant gap in the market. Despite a slower intake — order the intake impacted by macroeconomic factors, revenue climbed over 72%. This was thanks to high order intake during 2022 and now increased footprint, meaning that service revenue is increasing. Demand for IBA’s RadioPharma solutions remains strong, and the business remains a market leader for accelerator of radioisotope production.

Accuracy, an integrated solution for Cardiac Pet imaging was launched back in May. Elsewhere, we were pleased to successfully install a Cyclone 30XP in Munich, Germany for the production of the Radioisotope as SCK CEN to 11. We have continued to make progress with our joint venture, Pantera, focused on increasing the global supply of actinium-225.

In the near term, this is enabling production for use in ongoing clinical clients. Longer term, it is hope that the partnership with a large scale — sorry, I skipped a line. I forgot to speak about the signed agreement with TerraPower Isotopes which will near-term enable us to produce doses for ongoing clinical trials sites. But longer term, this partnership is hope, it will allow large-scale supply of the into post period, we made a €20.4 million contribution to the capital of Pantera, mostly in kind with another €20.4 million equity was also brought in by our partner in the joint venture SCK CEN post period, we were also pleased to sell three of further machines, including Cyclon Cube, cyclotron in China.

Alongside the Cyclotron strategic collaboration has been signed with the buyer for the production of radioisotope for cancer diagnosis. Taking a closer look at the financials, I’m pleased to report a solid order intake of €29 million across systems, while this was weaker than last year for the same period, we’ve already started to catch up. As mentioned earlier, with three additional machines sold post period.

Equipment revenues increased by more than 20% to €4.3 million due to good backlog conversion. An installation started in the first half with 21 installation expected to initiate by the full year. The service part of the business performed extremely well, growing by almost 50% due to an increased installed base, several upgrades to existing machine and a strong replacement part business.

And the other accelerator slide, REBIT loss of €0.5 million includes impact from inflation, particularly in Belgium.

Let’s move on to the Dosimetry. It’s been a strong first half of Dosimetry with other order intake reaching another record of €37 million. The 20% uptick is linked to demand for conventional radiation therapy and Proton Therapy quality assurance solutions as well as 2022 Modus acquisition.

Sales are up 23% to €33 million with around €1.5 million attributable to Modus. Backlog also increased to a record high of €35.6 million, growing 47% from the end of 2022. This excellent level of sales contributed to Dosimetry REBIT increasing more than 200% to €3.2 million. On the product side, DOSE-X, a next-generation electrometer was launched in April, at ESTRO, we were pleased to demonstrate upgrades to patient QA software myQA iON 2.0 as well as launching a new radiation oncology risk management software called myQA PROactive.

During the period, we were pleased to build on the strategic alliance first signed with ScandiDos in last year in August 2022, signing a distribution agreement enabling users to buy the combined myQA iON Delta4 Phantom+ us directly from IBA.

I now will hand over to Soumya to take you through the financial statements.

Soumya Chandramouli

Thank you, Olivier. Good afternoon all. First, looking at the P&L, you will note that group sales grew by 6%. This is largely attributable to other accelerators backlog conversion, excellent Dosimetry sales and services growth, but was impacted by PT backlog conversion and the comparator with 2022, which included certain Rutherford related in. While G&A expenses were strongly controlled and even beat inflation, rising by just around 1%, there was an increase in sales and marketing and R&D expenses with inflation, a higher level of travel and marketing expenditure as we prepare for future growth and product development.

I’d also like to highlight the impact of currency fluctuations in the period, which had an impact on our financial results as well as the tax line has increased as we expand into new geographies, especially in Asia. The above impacts contributed to a net loss of €27 million for the period. Now moving on to cash flow. Operating cash flow of minus €43.7 million was impacted by a large inventory increase and an uptick in down payments to suppliers. As the company geared up to deliver projects in H2 and beyond, in particular, in the Proton Therapy and industrial businesses.

As outlined previously, H1 has seen significant levels of investment across the business including in digital costs. Cash flow here was also impacted by medical device regulation costs and by a minor acquisition in the Radiopharmaceutical business.

Finally, on the balance sheet, I won’t go into much detail, but I would like to highlight the solid balance sheet with a high level of inventory in preparation of backlog conversion and a net cash position of €61.7 million.

I now hand it back to Olivier to take us through the outlook.

Olivier Legrain

Thank you, Soumya. Looking ahead, we are confident that the second half will see strong performance, not just in Proton Therapy, but also in all our other businesses. underpinned by the quality of our backlog and the ongoing preparation by the full organization at IBA to convert into revenues. We are reiterating our midterm guidance today as laid out at the full year, aiming to deliver 10% EBIT on sales heavily weighted to 2024.

I would now like to open the floor for questions.

Question-and-Answer Session

A – Soumya Chandramouli

Laura Roba from Degroof has a question.

Laura Roba

Thank you, for taking my question. Do you quantify the impact of the postponement of the three PT system that we’re supposed to be installed in H1 on REBITs?

Soumya Chandramouli

Well, we don’t give specific numbers, but we can certainly several million euros. It’s calculatable in millions. Well, what I can say is that basically every project, if you look at one ProteusONE project, which is in the region of revenues of around €20 million or so and delivers over around three years. Well, there’s a big bump usually where around 30% of course, are recognized at shipment and at least to revenue-related revenue recognized also at the point of shipment. And since those have shifted to H2, you can basically more or less calculate what the impact of the shift of three projects into H2 would be.

Laura Roba

Okay. Thanks. And more questions on H2. How confident are you that these 8 systems will be installed?

Soumya Chandramouli

Pretty confident at wise we wouldn’t have mentioned it in the results call. I don’t know if you have any …

Olivier Legrain

I think what we can say is that, or six out of eight is fully under our control because we speak about what we call the outbounding phase. Outbonding phase means we are putting all the equipment into the boxes to be shipped and this is fully under our control. For two others, it depends on readiness of the buildings of the customer. So, this one, let’s say, a bit more less particularly some — less under control numbers we’re pretty confident that it will happen.

Soumya Chandramouli

We have a question from David Vagman online. David?

David Vagman

Good afternoon, everyone. Thanks, for taking my question. Maybe first to come back on 2023. Could you give us a rough idea of where, let’s say, very rough idea let’s say where the 2023 REBIT could land maybe give us a range — should we expect the REBIT to turn positive for H2, so basically? And then the full-year REBIT to maybe to turn positive? That’s my first question. And second question, given that all the PT project lending in H2, what level of equipment sales growth rebound should we — should we expect again a range could maybe be helpful.

The last question on the other accelerators. You had a very good — very high level of growth — this growth H1. Could you explain us why we didn’t see more operating leverage, so in terms of profitability? And how should we think about the profitability or the other accelerator so for the full year — at the full-year level, the margin side? Thank you.

Olivier Legrain

Maybe I’ll start by the last question, and I cannot be specific because we don’t give short-term guidance. But what you will see in other accelerator is a bit similar to what we see in Proton Therapy. So yes, we have seen growth in the first half, but we expect even more growth in the second half. And you have a bit of the same effect. Yes, we have inflation, but we have also prepared for that growth. Therefore, we have invested into these two businesses as well, same kind of narrative then on Proton Therapy. So, we have an increase of sales and marketing expenses and research and development, which basically has compensated for the operational leverage.

But once again, we’re doing it because we expect an acceleration of the growth in other accelerators as well. For the rest, I think I think it’s going to be a short answer because we don’t want to give specific guidance on short-term specific guidance. So, it’s difficult to answer your question, even with a range. Once again, and I think we have — we have already alluded to that, we can expect a second half very different than the first one.

David Vagman

And maybe a very quick follow-up, more on the general climate. So, we saw even if the book-to-bill remains above one for other accelerators, we saw quite a drop year-on-year, I would say. What can you tell us about the — in general, on the client side, the, let’s say, their willingness to invest? And so, we see some hospital clients struggling for other types of suppliers. Also, on the clinics, maybe the industrial clients, do you see them postponing projects, canceling projects due to inflation due to higher financing costs or macro uncertainties? Thanks.

Olivier Legrain

I mean in RadioPharma solution, we don’t see that. We have the same momentum around the world. We’re pretty spread around the world as well. So, we’re not very market-dependent. On industrial, we witnessed a bit of a pause. In terms of order intake, even though we are confident it will resume, there’s a bit of a bullet effect on the medical device or the consumable or the — how do we call the small medical device disposable medical device due to the post-COVID effect? So, they have built up significant inventory.

So, they are a bit less in a hurry to build up sterilization capacity. And indeed, so, I think from what we see in the market, we expect it to resume in the second half. But definitely, we’ve been impacted in the first half by a bit of a pause on the sterilization market when it comes to order intake.

Soumya Chandramouli

Maybe just to add on that. If you remember, the growth in the industrial business was coming from several angles. It was coming, of course, from a growth overall of the overall sterilization volumes but also from a conversion of existing technology to sell to rand. So, I think, indeed, as River said that on the volume side, it’s probably getting — it got slightly slower because of the affects you just explained. On the conversion side, we expected that conversion would continue as an industry trend. And as mentioned earlier on, for example, we are also seeing encouraging discussions on food irradiation. So, we’re also seeing that potentially there will be other avenues of increased volume than the medical one itself.

Olivier Legrain

Having said that, there is no change whatsoever in the plan to convert a big part of their capacity to [indiscernible], so it’s more of a pause than questioning the idea of doing the commitment remains extremely strong with the big gas.

Soumya Chandramouli

[indiscernible].

Unidentified Analyst

My first question would be on the other accelerators. I recall that in the past, you gave like a complete breakdown of the backlog also, in terms of other accelerators. And I think at the year-end ’22 that was still high, the equipment — how I assumed it would be €150 million to €200 million maybe. So, I’m a bit surprised because you mentioned, okay, we have a good increase for the other accelerators, yet it looks like, given the usual time frame, it’s a bit below the normal budget. Is there — address some delays on that front?

Olivier Legrain

No, no. I think it’s a buildup — it buildup of inventory to be able to deliver. You really — you are right. So, we see a much stronger H2 in order accelerator as well. So, we’ve seen an increase in H1, but we’ll see a stronger increase in H2.

Soumya Chandramouli

If your point was — is the backlog casework fast though, is there some problem there — not really because if you look at 2022, a lot of the backlog that we had at year-end came in the last months of 2022. And so, there’s a 12-month to 18-month gap between the time when we get it into order intake and it really delivers. And so there it’s just normal, we see that converting into revenue faster in each and beyond.

So, we should see a much bigger increase in revenues there also indeed. Because indeed, you mentioned that at some point the industrial has increased by 72%, Well, I think it will be stronger strong in H2.

Unidentified Analyst

Can you — because I think the operational cost, it was well flagged already last year that you were going to invest. How should we look and maybe first on operational costs going into the second half? Will that come down a bit? or remains stable whether you go up on an absolute basis? And then secondly, maybe a follow-up in terms of the gross margin mix, which was quite low.

Can you give a bit of dynamics of order rationale is because you have the highest gross margin with the shipments? Or if you can give some color on that.

Olivier Legrain

So, first of all, on the effects, you can expect a stabilization a bit. So, no decrease, no increase. But we have reached a bit the attitude — paying attitude, let’s say. So, we’ll see what inflation will give us for next year. We’re pre-confident there as well.

I think the first number we a bit back to normal, more like inflation plus but no major increase. When it comes to the mix, you’re right, I think we with a low level in proton therapy, we have to a lesser extent, let’s say, absorption of our overhead costs. So, with the acceleration of the backlog conversion, we will see an improvement of the gross margin, not only due to the mix due to the acceleration backlog condition.

David Vagman

Whether for the other accelerators, was there also gross margin contraction there because like David mentioned, I mean, you grew more than 30% and its profit margins remained stable in absolute base. Is it also because you have some gross margin contraction on that item?

Soumya Chandramouli

No, but there’s investment going on also over there. I mean we have heard during the call that you mentioned that we’re investing quite heavily in digitalization of that business also. So, that has an impact. And of course, we’re also ramping up in Industrial also because to meet the order intake that has come in over the last 18 months. We also had to ramp up on procurement on that side.

So, that’s also had an impact. But again, as we expect the revenues will increase over H2 and also — yes, to some extent, the margin percentages will increase because many of the contracts that we sold later on, later in 2022, had better margins than the previous sold one. I think we’ll also see an improvement over there.

Unidentified Analyst

Thank you.

Soumya Chandramouli

Go ahead, Laura.

Laura Roba

And just have one question from my side. So, you mentioned an uptick and an anticipated uptick in order intake in PC. Could you provide a bit more color on that? How does the pipeline incline like?

Olivier Legrain

I think there’s quite a good momentum in the U.S. And in China, I believe – so, yes, U.S. and China.

Soumya Chandramouli

And some other parts of Asia also.

Olivier Legrain

Yes. Let’s say, the U.S. and Asia. Yes, we are in a good moment.

Soumya Chandramouli

David has a question online. Go ahead, David.

David Vagman

Yes. Thank you. One more question on the gross margin and inflation. Can you break down, let’s say, on the drop of the gross margin in H1 versus last year? So, we had, of course, the, I think, the €7 million related to PPI and then you’re don’t playing, let’s say, so to speak, the inflation that of [indiscernible] and I don’t know, maybe staff as well the technical staff and you rather referring to the let’s say, the scale impact of having less revenues than anticipated. So, can you, let’s say, break down a bit between, let’s say, 1/3 of the drop-in margin is inflation, 2/3 is just scale volume. Can you — should we think about it this way?

Soumya Chandramouli

Well, I think a major portion, more than 50% is really down to a non-absorption of overheads. And because if you read through the press release, you may have seen the actual cost of our projects have really not increased a lot on the overall cost basis, which is basically hundreds of millions of euros because €700 million revenue backlog, you can make a rough estimate of what that means in terms of costs.

We’ve only seen around 1.2% cost increase. So that’s on a lot. But what you do have is that when you have a cost increase that hits your P&L directly because you also have to readjust your past margin to the new margin if — I’m sorry, that’s technical, but basically, it hits directly in the period, even though over the duration of the project, it’s a small cost decrease.

As well as that has a double effect on the margin for the period. Now if I look at the overall gross margin, I think more than 50% is indeed related to the non-absorption of overheads. There is some level of product mix. We do have some projects which been sold at lower margins, and we had some level of delivery of production, I would say, to those projects rather than to one of the higher margins that are coming in the future. So, I think what we expect is that, indeed, while it won’t — there won’t be a crazy improvement on the gross margin, I think there will be some level of improvement in gross margin indeed as we start to absorb more.

David Vagman

Okay. Not crazy, you mean improvement in H2. That’s what you mean?

Soumya Chandramouli

Yes.

David Vagman

Okay. And maybe to finish on the — on inflation and gross margin. When should we see really like an improvement or, let’s say, you not being impacted anymore by inflation at the gross margin level, i.e., What I mean is when in your orders, you would have, let’s say, correctly priced the raw material inflation and I don’t know, technician inflation, et cetera, or protect it yourself maybe also contractually. Is that more something for 2024 or 2025, when you would have processed, let’s say, enough of your historic backlog?

Soumya Chandramouli

I think to some extent, we’ve already mentioned is that after — and during the COVID crisis, we started to adapt our contracts to make sure that we are able to pass on a portion of the cost increases to our customers, and that certainly happened in all the contracts that have been sciences then. We continue to have some contracts that were signed before that period and indeed in some of those, it’s more of a negotiation with our customers.

We’ve been able to transfer cost to them in many cases, in some cases, not. But indeed, I do expect that, that will — that effect will be smoothed out over the coming months as we have more and more of the projects where we do not have those costs those extra costs attributable to IBM.

David Vagman

Okay. So, let’s say that the historic covering is more something to be solved in the next months rather than, let’s say, in the next 18 months.

Soumya Chandramouli

Yes. Well, I mean, our backlog, as you know, for most projects convert over three years to four years, some projects, it can be longer because you have some projects which get stuck out there on which it takes much longer to convert. But any it’s probably something which is a question of, I don’t know the next couple of semesters, I would say.

David Vagman

Okay. I have a small question on the number of proton therapy systems, which are generating the survey was a bit of a drop in there from 41 to 37, if I’m not mistaken. Just trying to understand why nevertheless, your services revenues are up.

Soumya Chandramouli

So that’s related to Rutherford. So, we have removed the other Rutherford contracts from our services because those stopped. But then we’ve been renegotiating new contracts in the meantime. And of course, we had a new product track cutting into service also during the period. And so, one compensates the other basically.

David Vagman

Okay. Then on the cash flow going forward. You have, of course, the working — the investments in the inventory to ramp things up. I think is that for everything in the second half or also a part related to everything that needs to come with the — yes, with the project in Spain, how we should see if it’s for the Spain project. I don’t expect it to see it normalize like in the second half. So, how should I look at it for the second half? And when should we see like a full normalization?

Soumya Chandramouli

So indeed, the inventory buildup that we have here right now is not only for Proton, by the way, it’s also for the industrial and even for the Radiopharma business because last year, that Radiopharma business also had a very high level of order intake. Of course, the rotation cycles for Radiopharma and industrial are smaller. So, for regional shops, it’s a little bit, I would say, on average six months or so for industrial, still between 12 months and 18 months, but so much shorter.

So, we are already procuring also, for beyond 2023 H2. I would say that we will probably see some level of drop of the inventory over H2 but it will come back to what it was end of 2022 because we continue to procure for 2023. And just as you said, indeed, the 10 deals in Spain are also going to deliver some level of revenue in H2. Of course, they will not be shipped, but there will be some level of recognition as we have a buildup of uses.

David Vagman

So, I explain it if I understand this correctly for the proton therapy delays. So, what you mentioned in the press release was that there were five systems planned for the second half. These remain — and originally, there were three planned for the first half, and these three got postponed. That’s correct.

Olivier Legrain

Yes.

David Vagman

And of in terms of capacity, there will not be — that should not be.

Soumya Chandramouli

No, because we have dedicated teams who make sure that the inventory is shipped out and of course, the installation is irrigated.

We have a question from Simon. Go ahead, Simon.

Thank you so on mute.

Simon Vlaminck

Yes, I was sorry about that. A very quick 1 still on proton therapy. So, in the first half, there was not a single installation payment coming in. Second half, let’s assume that we’ll have eight. Every installation shipment or whatever brings about €3 million on average or even more as revenue for you. So, is it fair to say eight times three that’s going to be the difference first is the first half contribution for proton therapy?

Soumya Chandramouli

That’s an assumption.

Simon Vlaminck

I mean it’s just based on everything that you’re seeing. So, that basically means that your results should be €24 million in the second half for PT indeed?

Soumya Chandramouli

Are you speaking on revenue, Simon?

Simon Vlaminck

No. Just the delta because you get the money in, which is different from what happened in the first half.

Soumya Chandramouli

So, also, it’s not related to cash. As you remember, our cash is completely dissociated from our revenue recognition because cash is based on milestones, and revenue recognition is based on cost recognition. But if you look at it from another angle, basically, indeed, I think you will — we will see a very big ramp-up in revenue in H2 because every shipment, as I mentioned, has indeed a big chunk of revenue associated with it, which has not got any relationship with the cash, at least not direct. But indeed, it does lead to a big level of revenue recognition as that cost is registered on that project.

On the number itself, I’m not going to say anything, but the eight projects are a mix of Proteus plus and Proteus one and you need to remember that the Proteus contract, of course, is worth much more than a Proteus one, and so there could be a much bigger level of revenue recognition on those Proteus plus contracts.

Simon Vlaminck

Okay. Thank you. And then on the other accelerators, can you give a bit of an example on investment future proof because there’s been already a segment that’s been doing very well for the last two years, I would say. And can you quantify how much that investment was because we you have — I think we run a little bit with the understanding that the margins in the other accelerators are significantly higher than in proton therapy.

Olivier Legrain

It’s a fair assumption. I can give you an example like we are currently installing a number of machines in the U.S. for industrial — and historically, in the U.S., we have no field service engineers to maintain the machine in the U.S., and we’re building a team to actually be in a position to maintain the machine as soon as they will be operational.

And this has impacted our profitability in the first half because when we hire someone, we have what we call an applied time, which is billable, let’s say, the number of hours of a person, which is very low in the beginning and is increasing as they are trained and fully operational.

And we speak a certain number of people that we have onboarded, not only in the U.S. but in Asia as well. And train, and that will continue to be trained in 2023 to be in a position to maintain the machine when they will be up and running. So, that’s an example of investments we’ve made to build up the capacity. And if and when we sell more machines in the U.S., then we can count on them. So, there as well, there’s a potential operational leverage and something that has been an investment a pure investment in the first half.

Simon Vlaminck

Okay. But — and you can — but you cannot quantify that.

Olivier Legrain

No. I can, but I will not.

Simon Vlaminck

Okay.

Olivier Legrain

But once again, I think we had a question earlier on why don’t we see the operational leverage on the accelerator. Well, this is a big part of the answer on why we don’t see operational leverage on the other accelerators. So, you can actually do the calculation. Do we have more questions online?

Soumya Chandramouli

No, not for now.

Olivier Legrain

Okay. In this case, I will now close the call and thank you all for joining. And I think we look forward as you look forward, to updating you on our future progress in the future. Thank you very much for joining, and speak to you soon. Thank you.

Soumya Chandramouli

Bye, everyone.