[Foreign Language]. Thank you for standing by and welcome to the 5N Plus Inc. First Quarter 2023 Results Conference Call. At this time, only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, please press keypad. If you require immediate assistance for the operator, please press star zero. I would like to turn the conference over to your speaker today, Richard Perron, Chief Financial Officer. Please go ahead, sir. Good morning, everyone. Thank you for joining us for our Q1 2023 financial results conference call and webcast, followed by a question period with financial analysts. Joining me this morning, we issued our financial results yesterday and posted a short presentation on the investors section of our website to slide two of this presentation. Information in this presentation and remarks made by the speakers today will contain statements about expected future events and financial results that are subject to risk and uncertainties. A detailed description of the risk factors that may affect future results is contained in our management's discussion and analysis, dated February 21, 2023, available on our website in our public filings. In the analysis of our quarterly results and discuss certain non-IFRS measures which definitions may differ from those used by other companies. For further information, please refer to our management now turn the conference over to Gervais. Merci Richard. Welcome, everyone, and good morning. Yesterday, we released solid Q1 results for Q1 2023. In what remains a complex global environment, rich in opportunities in we operate. Adjusted EBITDA was up 56% because of our booming and an improved product mix in Performance Materials, reflecting our exit from the low-margin sector. These same factors also had a positive impact on our Adjusted gross margin, which was up to nearly 30% for Q1. As per our previously provided guidance, we are seeing strong demand for terrestrial renewable energy, we remain the partner of choice for these high-growth, value-added sector end. Our backlog was 365 days for Specialty Semiconductors, only because the estimated number of days-based revenues cannot exceed 365 per our definition. The effective backlog, in fact, surpasses the next 12 month long-term contracts. Last week, I was at the Space Power Conference in Los Angeles, players of the industry, and confirmed the progress of AZUR on different satellite programs. The solid rapidly increasing adoption of our space solar cell technology in North America, positioned in Europe. As a preferred partner, we have been able to secure favorable terms, and we noted some example of these key contracts in recent announcement, namely our role in the European Space Agency's mission to Jupiter and NASA's intention to employ in its future mission to Jupiter. These previously announced Sierra Space contract renewal highlight our ability to meet unique needs and specifications and reinforce our leadership position in more balanced geographical global presence. To meet this extensive pipeline of contracted work in the Specialty Semiconductors segment, we continue in line with the ramp-up of our commercial agreements across our manufacturing. At AZUR, we just announced a program to increase production capacity by 30% in 2024. To achieve this growth, we are making productivity improvements, installing new equipment. In our Performance Materials segment, we are of our improved product mix. We remain confident in the outlook for the health and pharmaceutical sectors that contribute to the demand. Our strategic focus for fiscal 2023 remains embedded in our commercial excellence program. Is to prioritize innovative partnerships that further solidify our role as the premier viable suppliers in growing sectors. The second focus of our commercial excellence program is the continued value optimization across our product offering, which allows us to manage pricing for the benefit of our growth while providing cost-effective. Our strategy looks to promote co-investment initiatives that expand for our specialty products and optimize our capital deployment. We remain highly optimal for the future with a clear strategy, a strong pipeline, and a continuous focus on cover. We are confident in our ability to meet our previously disclosed financial guidance for fiscal year 2023 and fiscal year 2024, and in the second half. Of fiscal 2023 as we hold firm in our value-added role as a critical link materials. I will now pass the call over to Richard to discuss our financial results in more detail before we take questions from analysts. Richard. Gervais just voiced, the 1st quarter of 2023 completed, we continue to be very optimistic and excited about the near-term outlook. Optimism supported by the conviction that the company has an important role to play in the critical technology advancements. Disclosed last night, the company ended the 1st quarter delivering solid financial results, supported by the rise under Specialty Semiconductors, both in terms of Adjusted EBITDA on the Performance Materials, favored by an improved product mix following the divestment of Tilly at the end of last year. Consolidated Adjusted EBITDA to increase by more than 56% compared to the same quarter of last year. Despite the global, we continue to experience robust demand, market demand on the renewable energy and space power, as well as a real momentum in terms of To our clients, remaining at the forefront of our commercial excellence program, launched last year to mitigate the negative impact of inflation on product markets. Sequentially improved consolidated Adjusted gross margins from 21.9% in Q1 of last year to more than 29.8%. This, we believe, 5N Plus is a stronger company today than at any point in its history. Turning now to revenue, gross margin, and Adjusted EBITDA for Q1. Q1 of this year reached $55.3 million compared to $64.4 million for the same period last year. Is attributable to the company's exit from the manufacturing of low-margin extractive and catalytic products in the second half of 2022 and related divestiture of its Tilly, Belgium operations during Q4. Impacted by strong demand for products under Specialty Semiconductors. Turning the Adjusted gross margin, Q1 was favorably impacted by the consolidated product mix, reaching CAD 16.5 million or 29.8%, compared to CAD 14.1 million or 21.9%. This allowed the company to realize an Adjusted EBITDA of more than CAD 3.2 million compared to CAD 5.6 million in Q1 of last year. The Adjusted EBITDA 27% on their Specialty Semiconductors, supported by our demand, and on the Performance Materials increasing by CAD 1.8 million by more favorable product mix. Looking at the analyzed backlog. The backlog on market in six days of analyzed revenue, an increase of 53 days or 21% over the backlog of December 2022. It represented 260 days of analyzed revenue at similar level over the backlog of December when expressed in days. I will refrain twice to this this morning. The estimated number of days based on analyzed revenues cannot exceed 265 days per hour to note that the effective backlog under Specialty Semiconductors surpasses the 12-month period due to confirmed long-term contracts in renew- As for the backlog of Performance Materials, it represented 153 days of analyzed revenue, an increase of 29 days. The increase on the Performance Materials expressed the number of days is Following the company's exit from the manufacturing of extractive and catalytic products last year. The key contract present an improved product mix that continued to be mainly renewed in the fourth and the first quarters of the year. Turning to expenses, depreciation and amortization expenses compared to CAD 4.8 for the same period of 2022. The decrease mainly associated with the company's divestiture of its Tilly Belgium operations. SG&A expenses in CAD 2.5 for the same period of 2022, also positively impacted by the divestiture of Tilly. There were no impairment charges from impairment on non-current assets of CAD 5.4 million in Q1 of last year under Specialty Semiconductors to reflect the assessment of the carrying value of intangibles due to the impact of the Russian-Ukrainian conflict. On the CAD 2.3 million compared to CAD 1.6 million, the negative impact mainly due to the increase in interest rates. Any reported earnings before income taxes of CAD 2.5 million in Q1 of this year. This quarter, we're about CAD 1 million compared to an income tax recovery of CAD 0.5 million in the same period of last year. Quickly covering liquidity, this quarter, cash used in operating activities, among last year. The decrease comes from the net difference between higher contribution from operating activities, minus a less favorable change. Q1, cash generated from investing activities amounted to CAD 2.9 million, compared to cash used in investing activities of CAD 4.1 million in Q1 of last year. The increase of $7 million is mainly explained by the proceeds on settlement of an index-linked deposit contract, which was amended during Q1 of this year, resulting in a receipt. In Q1, cash used in financing activities amounted to $0.6 million compared to $0.8 million. At total debt stood at $121 million, with net debt, after considering cash and cash equivalents, ended at $79.6 million. In conclusion, in recent years, we have refocused our operational footprint to advise divestments and the AZUR SPACE acquisition, investing strategically in sectors and products that offer high growth potential. Business guidance, supported by innovative partnerships and transform businesses, management maintains its projected Adjusted EBITDA range for this year, with higher contribution in the second half of the year and between $45 million and $50 million for the full year of 2024. I will now, the call go back to the operator for analyst, questions. Thank you, sir. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. You will then hear a three-tone are your request. If you would like to withdraw from the question queue, please press star followed by two. If using your speakerphone, we do ask that you please lift the handset before pressing any keys. Now, if you have any questions. Your first question will be from David Ocampo at Cormark Securities. Please go ahead. Thank you. I guess my first question here is just on your largest customer, First Solar. We've seen some pretty good commentary where they're now selling capacity into 2029. They're looking for more visibility on their supply chain, and they're even considering you. With that context in mind or those comments in mind, how should we be thinking about growth with First Solar beyond 2024? And what's your expectation on the, in the near future? Expectations are fairly easy. Essentially, we're gonna be adjusting capacity in order to support them over the course of the coming years. Right. Yeah. Just adding that we're meeting frequently with them, and, you know, we're looking at the future, what needs to happen, and, you know, booming. I think you've seen the growth. They have a large backlog. This growth is happening largely now in North America, and some of it will be India. you know, we're interrogated to try to optimize our business with them. I think we're working with them to find delivering this project pipeline. The relation between the two parties is one of the partnerships. Yeah. We contribute to the success of our clients and, yep. Yeah. You talked a little bit there about capacity facility enough to meet the demand beyond 2024. I'm just curious how you guys are handling the feedstock to meet that. The, the current changes or additions that we're making is gonna bring us beyond 2024. I have to just refer is very important, so we're gonna have to make additional adjustments in time. Got it. Just housekeeping question here, the expansion plans that you guys a week ago now, is that 30% lift captured in your 2024 guidance? Or is that growth that we can expect beyond 2024? Part of it is captured in our 2024. For example, the additional capital investments on our own and those that are based on co-investments. Part of the co-investments are part of our guidance. The sum of all three, let's say, items here will contribute for the most part in 25 and beyond. Okay. Thank you. Next question will be from Lee. Go ahead. Hey, good morning. When you bought AZUR SPACE, the EBITDA margin% range. Just wondering if you can comment on where margins were and how we should think about AZUR SPACE margins trending through the rest of this year and into 2024? Yes. As we've mentioned in previous calls, the AZUR business is very different than the rest of our businesses, okay? In the sense that you sell projects. The year 2022 and a good portion of the year 2023, those were contracts that were earned by the previous owners, okay? Previous shoulders. Us, margins are improving 'cause we're obviously putting in place different initiatives from an operational perspective, but you'll see the benefit of better contracts in late this year, but most of them will have an impact in 2024 and beyond. Okay? These days, we're tracking a slightly better margin than when we acquired AZUR. Again, the real benefit from our commercial excellence programs and different other initiatives that we have in place at the operational level, will contribute later in 2024. Okay. Is there any way, like you indicate to us what First Solar was, but can you talk about revenue growth at AZUR SPACE, like where revenue came in at for the quarter? Revenues with revenue growth, man, it comes from. Well, we had the balance again, as we've mentioning, the balance of our clients between North America and Europe has changed. There's definitely a higher balance of North American clients in this quarter than in Q1 of last year, okay. It's a more balanced, let's say, client mix going forward than historically for AZUR, okay. Q1 is reflects that as well. Okay. Then just circling back to First Solar, like if you listen to their Q1 conference call, one of the talking points on their side was they're waiting for some clarity with respect to domestic content requirements for the manufacture of the solar cells. I'm just wondering if this is something that could perhaps temper some of the ramp in production in the near term or if it's something you're in discussion with them on. No, Well, that's a very good question, Michael. We made sure that the North American production was part of the local requirement. you know, at this point in time, the production that is coming from the Montreal site will be accounted as local requirement for them. today, most of most of the semiconductor products that we're supplying them are coming from Europe. We're gonna be adding a different allocation in the coming quarters where their North American needs will be supplied from Montreal, Canada, and complying with their North American content. Yep. Requirements. Okay. Maybe just one more for me on the inventory side. What was the inventory build in the quarter, and what's the schedule to unwind that or take it lower? There's a small inventory built in Q1. For us, the way we look at it is it's essentialy normal in the first half of each year. We always have a little bit more inventory. That inventory build is across all of our, all of our product lines. Mm-hmm. Okay, thank you for taking the questions. Pleasure. Next question is from Rupert Merer at National Bank. Please go ahead. Hi. Good morning. A great quarter. Good morning. So- Morning. Morning. It sounds like your activity levels are pretty high here. You're running flat out, at least in some of your operations. How much excess capacity do you have across the company, across all of your product lines? If we look at your guidance out to next year, if the business opportunities remain strong, are you capacity limited or do you think you could beat the high end of your guidance if things go well? We have the capacity, obviously, to reach the high end of our guidance, otherwise, we would not have provided such range. Yes, of course. We have also given ourselves a little room for improvement. Don't worry. We have capacity to go to the upper range of that guidance. You are effectively capacity limited today, and you are expanding the operations as a result. Is there an opportunity to expand faster? The reality is the following. Under Performance Materials, plenty of capacity because we've made important investments in the last few years to improve processes, okay? That's for Performance Materials. Under Specialty Semiconductors, we do have extra capacity, but it's a bit more of a stretch, and we're making different investments this year to make sure that 2024 goes easy. Okay? In 2023, we have a little bit of extra capacity because of different things that we've been doing last year and we're doing now. Okay. Beyond 2024, Specialty Semiconductors, everything that we're doing now needs to come in line, obviously, to bring us additional business. I think we're playing with the different levers we have in ends. You know, we're doing continuous improvement initiatives on many different sites, looking at the way we've been doing things, how can we do it differently through Kaizen and other type of continuous improvement initiative. We're also looking at organization. You know, what we've done in AZUR, moving from five days to seven days, moving to the 24 hours full coverage, we can also do it in Montreal and other sites because we're not 24/7 everywhere. That's another lever that we have in end. We're also looking at the bottleneck and see what we can do to adjust the bottlenecks on part of our process. Okay, great. That's helpful. Thank you. Just back to the inventory follow-up on Michael's question. With the closure of Tilly, we anticipated we might see some drop in inventory. Am I looking at that right or are there opportunities to improve working capital efficiency following the closure of Tilly? What we expect is the following: year-over-year, okay, leave aside that in the first half of the year, we always have a little bit of additional working cap. Year-over-year, you're likely to see a small decrease. Remember, we're positioning ourself for 2024, where demand is much higher than 2023, okay, based on earned contracts. All right. Very good. I'll leave it there. Thank you. Thank you, Rupert. Thank you. Once again, ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touchtone phone. Your next question will be from Frederic Tremblay at Desjardins. Thanks. Good morning. Morning. Good morning. Wanted to touch first on the Performance Materials segment, margins there, 19.8% Adjusted EBITDA margin, really strong. I'm just wondering, does that capture the entire effect of exiting extractive and catalytic materials or is there potential for further improvement on the margin side in coming quarters? No. At the EBITDA level, the exit represents a small portion of the additional benefit under that segment. If you go, if you go in the notes of the MD&A, you'll see that on an annual basis, Tilly was losing about EUR 2 million. So divide this by four, and you get a pretty good estimate of the impact. F or Q1 of this year. The balance are through additional benefits from an improved mix and a better cost structure with the Tilly out of the picture. Okay, maybe switching to the balance sheet, debt levels were pretty much flat sequentially. Richard, do you have any thoughts on expectations for leverage, as we move through 2023? What you're gonna see is an improvement in terms of ratios this year, so a lower leverage by year-end. Okay. Does that, technically that would provide you ammunition for potentially, you know, acquisitions? Is that part of the strategy or are you focused mainly on, you know, increasing capacity in sort of internal growth initiatives? It's obviously always there. At the same time, we're not gonna compromise 2024. In terms of resources allocation, we're making sure that we're ready to succeed in 2024, which may mean a decent level of inventory and making sure we accelerate the capital investments where needed. Great. maybe one last question from me on the co-investments. Just wanna maybe better understand if there's a, you know, a margin or pricing impact to those co-investments, meaning, you know, our clients that are agreeing to co-invest in some equipment with you guys, are they expecting, you know, some benefits on the pricing side? Sort of what's the dynamic there? That would be helpful. Thanks. Well, thanks for the question. I think the strategy is pretty clear. Co-investment strategy will enable the customer to get their product faster. It's a go-to-market strategy. You know, we are at full capacity in some places. If they want to jump the queue and go faster, then they can co-invest and buy equipment. We will not compromise on margin. Great. Thank you. Thank you. Next question is a follow-up from Michael Glen at Raymond James. Oh, hey, thanks for getting me in again. In the Specialty Semiconductors segment, like, if we're looking at the portion of business outside of First Solar and AZUR, can you give some general comments? I think there's a bit of a hodgepodge of different things in that revenue bucket that will be left over. Like, can you give an indication of how that's tracking? Yeah. You have, I'm gonna use the term three key sectors as part of that segment. Renewable space, and we have another one that we refer to as Sensing and Imaging, and it touches medical imaging, for example. Quarter-over-quarter, it's at similar level. As we've mentioned on other calls, that segment, there'll be growth, it's part of our growing segment, but most likely it's gonna be more of a midterm growth. It probably needs a couple of years more to be materially better. You'll see over the year from one quarter to another quarter, some improvements, again, on a full year basis, we think it's gonna take a couple of more years to be materially better than historical performance. Okay. Then, Richard, are you able to give a, like, a gross CapEx figure that we should think about for the year? Yeah, the same rule of thumb. I mean, we should have CapEx in the range of our depreciation charge on PP&E, on property, plant, and equipment, which should flirt with figure between 10 and 12. CAD 10 million-CAD 12 million. That's on a net cash out basis before co-investments. Okay. What would be the? Can you say what the gross number would be, though? With the co-investments? on the co-investments, there's a bit more, I'm gonna use the term volatility, because it's divided into phases with milestones and else. It can easily move from 1 fiscal year to another. You use a figure between three and six for the co-investments. Okay. Okay. Thank you. Thank you. Next is a follow-up from Rupert Merer at National Bank. Please go ahead. Hi. Hi. Yeah, just a standard, quarterly update question here. Can you give us an update on your medical imaging market and, high power semiconductor market opportunities? Thanks, Rupert. Well, the medical imaging market, you know, as previously said last quarter, it's moving slowly. I think they're still doing their testing. We're still working with it. We're providing the high purity material to produce the samples, but the volume is not significantly higher than the previous quarter. I think they are doing qualification. We still have, you know, our partner, Samsung, they still have few equipment in operation over the world trying to qualify their product and get also more data to commercialize them at mass scale. They're also partnering with other to accelerate this market penetration. We're still seeing that happening not this year or probably not next year in terms of being a significant higher volume. It's probably more 2025. The industry is still pursuing their technology change. They're moving away from scintillator-based detectors to PCD detectors. That is happening. That continues, but it's taking longer, as Gervais just mentioned. Okay. Very good. Thank you very much. Thank you. At this time, gentlemen, we have no further questions. Please proceed. Okay. Well, we would like to thank you all for joining us this morning. Have a nice day. Thank you very much. Thank you. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines.