SCHMID Group (NASDAQ:SHMD) said it expects stronger order activity through the remainder of 2026 as demand tied to artificial intelligence infrastructure, optical modules and advanced packaging supports its equipment business.
On the company’s first formal investor call, Chief Financial Officer Arthur Schütz described 2025 as “a year of transitioning and repositioning” for SCHMID, with operations recovering significantly in the second half after a challenging start to the year. Schütz said first-half results were affected by tariff uncertainty that delayed orders, while activity began rebounding around May.
The company also reported first-quarter 2026 revenue of EUR 18.2 million, order intake of EUR 13.6 million and quarter-end backlog of EUR 49 million. Schütz said the first quarter has historically been SCHMID’s weakest period and that the company expects “a significant uptick” in order intake in the second quarter compared with the first quarter.
Based on current visibility, SCHMID reaffirmed its 2026 outlook for revenue above EUR 100 million, adjusted EBITDA margin significantly above 12% and order intake of approximately EUR 114 million.
AI and Advanced Packaging Drive Order Mix
Chief Sales Officer Roland Rettenmeier said SCHMID is benefiting from a shift in the electronics industry from wafer-level packaging toward panel-level packaging, driven by high-performance computing and AI. He said larger compute packages, including sizes such as 120 millimeters by 120 millimeters, are increasingly being manufactured on rectangular substrates on panels rather than wafers to reduce wasted production area and material.
Rettenmeier said customers and their supply chains are establishing several panel sizes, including 310 by 310 millimeters, 510 by 515 millimeters and 600 by 600 millimeters. He said SCHMID expects the panel-level packaging market to grow three- to fourfold by 2030.
In response to an analyst question, Rettenmeier said about 60% of SCHMID’s order intake over the past 12 months was related to AI infrastructure or optical modules. He said the company expects that mix to move toward about 70% by the end of 2026.
Rettenmeier pointed to SCHMID’s newer product families, including the InfinityLine C-Plus, L-Plus and P-Plus, as drivers of above-market growth. He said the L-Plus is a full panel-sized chemical mechanical polishing system and described it as key equipment for panel-level packaging with glass core substrates.
Balance Sheet Restructuring and Financing
Schütz said SCHMID has taken steps to simplify and strengthen its capital structure. The company announced a $30 million convertible financing in January, of which $18 million remains outstanding, and recently announced a $30 million standby equity purchase agreement with an institutional investor.
Schütz said the standby equity line gives SCHMID flexible access to capital “entirely at our discretion” and provides a financial backstop while minimizing immediate dilution. Shares may be placed at a 3% discount to average trading levels if funding is needed, he said.
The company also reduced debt through debt-to-equity measures. Schütz said SCHMID converted a liability to the private equity investor in its Chinese operation into equity, while core shareholders waived EUR 5 million of debt. He said the company is further reducing debt through the conversion of shareholder loans into equity, which is expected to cut debt by around EUR 31 million in the coming weeks.
After those actions, Schütz said SCHMID’s debt profile would primarily consist of about EUR 10 million of lower-interest property leases and the remaining convertible instrument. If that instrument is converted, pro forma debt would be around EUR 23 million, which he described as a sustainable leverage level.
Cost Savings Program Targets EUR 4 Million
SCHMID has also launched an operational efficiency program aimed at reducing overhead costs and improving margins. Schütz said the company’s German manufacturing footprint remains “right-sized” and unchanged, but German overhead costs increased faster than revenue over the past two years, particularly in general and administrative expenses and research and development.
The program, called FRIP, was initiated in January and targets at least EUR 4 million in sustainable annual savings. Schütz said the savings are expected mostly through short labor programs and voluntary headcount reductions, with one-time reduction costs of approximately EUR 500,000.
The company is also working to reduce listing-related costs, including audit, legal and directors and officers insurance expenses, some of which Schütz said were particularly high following SCHMID’s de-SPAC process. He said some benefits should appear in 2026, with more impact in 2027.
Customer Activity Expected to Be Back-End Loaded
During the question-and-answer session, executives said SCHMID’s 2026 orders are expected to be weighted toward the second half of the year. Schütz said equipment orders can be “lumpy” because the timing of larger orders is uncertain. Rettenmeier said orders received by July or August can still be converted into revenue during the fiscal year because the company typically receives a 30% down payment, produces the equipment and recognizes revenue when it ships.
Rettenmeier said SCHMID is in negotiations to deliver larger batches of equipment to key customers expanding capacity for optical modules and AI server boards. He also said the company expects to enter 2027 with roughly EUR 60 million to EUR 70 million of order backlog.
Asked about production capacity, Rettenmeier said constraints in China are being addressed through additional rented and built production floor space. He said SCHMID’s manufacturing capacity is sufficient to meet expected demand for 2026 and 2027.
Executives said they do not see an impact on the business from the Iran conflict. Schütz also said SCHMID’s production is not highly capital intensive, noting that historical capital expenditures have generally been around EUR 1 million or less because much of the work involves assembly.
Schütz said the company intends to engage more regularly and transparently with the market and plans to provide quarterly trading updates on revenue and order intake.
About SCHMID Group (NASDAQ:SHMD)
Schmid Group AG is a global engineering and manufacturing company specializing in flexible packaging and barrier coating technologies for a range of industries. The company’s core offerings include turnkey coating, metallization and extrusion lamination lines designed to enhance the functional performance of films and substrates used in food, pharmaceutical and medical packaging applications. Schmid Group’s expertise also encompasses process engineering, product development and on-site support services, enabling clients to optimize production efficiency and sustainability in high-volume manufacturing environments.
In addition to its barrier technologies, Schmid Group provides modular solutions for thin-film coating, printing, slitting and winding, as well as machinery for flat glass finishing such as washing, sanding and patterning.
