Welcome to u-blox 2023 results. Warm welcome for the ones here in the room with us, so it's always good to see you in person. For the ones in the webcast, also welcome. Quick note for those: when it comes to the Q&A session, we're going to go, as usual, with the questions from the audience, and then we go for the webcast. So the format here is very simple, as usual, so we'll have the presentation of the results by our CEO, Stephan Zizala, and CFO Roland Jud, and then we go for the Q&A. So, Stephan, now for the highlights 2023. Good afternoon, everybody. So welcome to our results press conference for our fiscal year 2023. So I need to— Do I do it? Okay, now it's the right slide. So when we entered 2023, we came out of a very strong year 2022. It was our record year. It was the year with the most severe shortage of semiconductors. And the first half of 2023 was very strong for us. But when we entered the second half, we saw already a decline in our revenues. So the year itself was different. If we look overall, and if we look at constant currencies, we saw a revenue down by 2.7%. And if you compare this to the global semiconductor market, which was down by 9.4%, we performed better in this environment versus the global semiconductor market. With this result, we achieved a profitability margin of adjusted 12% EBIT and, over the year, a cash flow of 10%. If you look at what else has been done in this year, we reworked our strategy. This was important for us because we set up the company for its future growth. The board of directors, the executive team, and the whole team of u-blox embraced this strategy. I'm really proud of this, that it's not just a top-down thingy, but it's something that we see now active in the company. We embrace it, and I will come to this a bit later to recap some parts of our Focus, Innovate, and Execute strategy before we come then to the numbers again. There are two highlights of the strategy, which is important in two key areas: one innovation area in the area of combined satellite and cellular communication, but also in autonomous driving. We already see success in this strategy in a very early stage, which confirms that we are on the right track. Let's see if now it works. On this chart, you see the quarterly revenue development. And here, 2023 was special because, coming out of this semiconductor supply crisis, our customers wanted to have firm orders for 2023, which we agreed on. And, of course, this also put a certain obligation for our customers to consume those parts. And this effect you see mainly in the second quarter and the fourth quarter, where our customers took more than they actually needed. Now, there's one part I'm proud of because it shows the strong customer relationships u-blox has. So we have an agreement with our customers, and our customers executed on those agreements to a very large extent. And this is exceptional nowadays, that both parties—we, as u-blox, but also our customers—really live the sense of such a partner, the meaning of such a partnership. Now, obviously, if they took more than they actually needed, this means they have now a higher inventory, and this we will see in the quarter one and two of this year. Now, let me come to operative highlights. So the first one I would like to pull out is a new product innovation. We combined cellular and satellite communication in a single module. This is very relevant for applications like asset tracking. Think of a container. A container which is on a ship most of the time has no cellular reception because only 10% of the Earth's surface is covered with cellular. So you need satellite communication. However, equipment for satellite communication is very expensive. And the innovation we brought together with our partner ORBCOMM is to have satellite communication about the much cheaper hardware of a cellular module. And this will enable a complete new application range. Now, of course, we are proud of this technical innovation, but we are even more proud that already now we have orders for this product, and we will see first revenue even in 2024, which is very fast for an innovation topic in the industrial domain. Typically, it rather takes two years until you see first revenues. Another topic is even more important for our future growth story. Automated driving is one of the four application fields from which we expect more than 40% of our growth in the next years. Automated driving is for sure, even on the long term, an even more important topic. Last year, we achieved a record design win of CHF 100 million. This means we acquired projects from our customers of a value of CHF 100 million over lifetime, which will start in 2026. Now, if we look one step deeper even, we were successful at very established auto players, but also at the fast-moving newcomers which we have on the world. We were successful in a way that we see that our customers trust in us in this innovation field. This market for automated driving is just at the start. You see the numbers, the penetration rates 2023- 2 030 triple. So that's a very important point for us to be there very early, be the market leader, be the trustworthy partner of our customers for this innovation. Now, having said those highlights of the year, I would hand over to Roland to give us some more details on the numbers. Thanks a lot, Stephan. And a warm welcome also from my side. After we heard the highlights of the year, as Stephan said, take a deep look into the financial results. On the top line, we reached CHF 577 million. It's a decline of 8% compared to the all-time record year 2022. It's not new that the exchange rates have an important impact on our revenues. u-blox is maybe one of the most exposed to U.S. dollar companies in the entire Swiss Stock Exchange, as we do 85% of our revenues in U.S. dollars, and the other part is done in euros. So if you measure the revenue performance by using the 2022 exchange rates, that shows a minus of 3% compared to the previous year. And if you measure that guidance rate, the guidance we issued in August, it's a minus of 6%. It's exactly at the lower end of the guidance. On this slide, we show you a little bit how negative foreign currency can impact our business. To give you a better feeling of what it means to u-blox, the table on the right-hand side shows you the impact of a 10% change on U.S. dollars or on euros, sensitivity in the U.S. dollars. That means that on revenue +9%, but on EBITDA it will be up by 14%, and the EBIT will be up by 19%. As the U.S. dollar exchange rate declined by -5.2% and also the euro declined by 3.2%, we had a minus on top line of 4.8%. Now, let's move to gross profit. Adjusted gross profit reached CHF 254 million in 2022. Although we saw a positive impact of our long-term agreements with customers, not only volume growth, but also in quite stable prices, the corresponding gross profit margin declined from 49.2% in 2022 to 44.1% in the current year. This decline in gross profit margin is mostly due to changes of the product mix towards cellular products who performed better in 2023 than the other products. On the OpEx side, R&D expenses in 2023 reached CHF 117 million and grew by 10.5%. As a percentage of revenue, we expensed 20.4% for R&D. In prior year figure, it was 17%. I will talk a little bit more about R&D here on the next slides. Let's move on in the middle to the SG&A expenses, which declined by 3% and reached CHF 67 million in 2023. Due to the lower basis, SG&A expenses in percentage revenue increased only by 40 basis points. With the lower sales bonus and a good cost discipline, we were able to at least partially mitigate the margin increase due to the lower revenue base. As a result of these items, as I described before, adjusted EBIT reached CHF 70 million in 2023 versus CHF 131 million in 2022, while adjusted EBIT margin declined to 12.1%. Now, as proposed, I'd like to give you some more color into R&D expense. Let's first start with the chart on the left-hand side. Here, we show a reconciliation from adjusted R&D expense to cash R&D. The adjustments we make are for IFRS 2. Impairment charges are deducted, and amortization charges for acquired technology. With that, you reach the CHF 117 million R&D expenses adjusted. Now, to get a more cash view, a more reasonable view to R&D, you have to add now the capitalized development cost of CHF 41 million, but also deduct from the expenses CHF 29 million amortization for these capitalized development costs. With that, you end up with this orange column, cash R&D expenses of CHF 129 million. On the right-hand side, you now see the development chart of these cash R&D expenses, historically starting in 2019, ending up with 2023. And you can see here, again, the CHF 129 million. You see here also, again, an increase of 20%-22.4% of revenue of these cash R&D expenses. Also here, the increase, of course, is mainly impacted through the lower basis as revenues are lower than in 2022. With this, I stop at the P&L review. You will see in the slide set, in the appendix, there is then a complete P&L. If you have any questions on the lines below EBIT, I'm happy to answer and take these in the Q&A session. On cash flow in 2023, u-blox was able to generate a positive free cash flow of around CHF 11 million. I may recall that in the first half of 2023, our free cash flow was negative for minus CHF 30 million. Means in the second half, we managed to generate CHF 24 million free cash flow. This turnaround is mostly driven to good working capital management. And what the working capital looks like, you see on the next slide here. Net working capital in December 2023 reached CHF 150 million, 26% of revenues. In the comparison of various net working capital components year-on-year, 2023 versus 2022, you see that on one hand, we did a good job on inventories by reducing them. On the other hand, we saw an increase in the receivables due to the very high sales in December 2023 and a decrease in payables, which together consumes close to CHF 50 million cash. At the end, this results in a net working capital increase of CHF 27 million compared to 2022. But now, if you look at the comparison between June 2023 and December 2023, you see how good progress we made on working capital management in the second half. Inventories were reduced by CHF 29 million, receivables by CHF 7 million, while also payables declined by CHF 14 million. All in all, working capital was reduced by CHF 22 million over this period. Sorry. This ends up in a solid net cash position. Net cash means cash at hand minus debt of CHF 86 million in 2023. CHF 8 million higher than last year. Despite having paid a dividend of CHF 14 million, we paid back our bond with a net impact of CHF 20 million. And we paid out the high bonus due to the very good result in 2022 to our employees also in 2023. To ensure our financial stability for the next years, early this year, 2024, we signed a new CHF 140 million revolving credit line over three years, plus two. This credit line was led by ZKB. And due to this good financial situation, the board also decided to pay a dividend in form of a par value reduction of CHF 1 per share so that this dividend, again, can be paid tax-free for the investors. Now, last but not least, some review. I'd like to give you an update with the final numbers for the impairment, which we announced at our Capital Markets Day last year. The impairment booked, really, in December 2023, was in the amount of CHF 65.4 million. As this impairment is mostly due to cellular technology, the distribution of the capitalized R&D expenditure, as you can see on this slide, moved towards positioning. So post-impairment, 70% of our capitalized R&D in the balance sheet are now related to our rock solid positioning business. As we also change the project structure in R&D, this will reduce the capitalization rate in the future. And with that, we make sure that this position in the balance sheet does not just grow again in the same pace as it did last year. And with that, I conclude my part of the presentation and hand back to Stephan for further business information. Thank you, Roland. So now, let's have a look at how we prepared u-blox for the future. I would like to recap some key points of our strategy and, on certain topics, also provide a bit more color. u-blox has the privilege to enable and also benefit megatrends of our society. So if you take our positioning products, they will be essential to enable the autonomous car of the future. And with the autonomous car, there will be less traffic jams. And with less traffic jams, there will be less waste of energy. So we are contributing to the megatrend of being more conscious of what we do with our resources. If you think of our cellular products, they are used, for example, in home healthcare equipment. They connect literally the patient with the doctor in remote locations. With an aging society, this will become more and more important to have a longer self-determined life. Also, if you think of the example I mentioned before, the innovation example, the global asset tracking, this will allow us to optimize freight routes, save money, save energy. If you think of our short-range products, they are standing in the way. They are used, for example, to make charging of cars more convenient, easier. They are also used very heavily in the factory floors. They connect the sensors, the mobile equipment in the digital factories to the factory cloud. So they enable the digitalization of the factory. And if you look on our customers, many of them struggle with this more and more multipolar world. u-blox, as a trustworthy Swiss supplier of positioning and connectivity solutions, plays an important role to make their life easier and to have the innovation available. Now, observing megatrends, obviously, is also a benefit for our revenue development. And it always was. This is one of the reasons why, over decades, u-blox was able to outperform the typical semiconductor cycle in growth. We have the clear aim to continue on this path. To do so, we reworked our strategy, and we gave ourselves a new target financial model. Over the cycle, we aim for more than 10% growth, roughly 14% EBIT margin, and 8% free cash flow margin. Therefore, we adapted our strategy. We increased the focus on our positioning business. We will turn around our loss-making connectivity business, and we will improve the operational excellence overall over the company. Now, again, let me give you a few more details on this one. In positioning, we are already leading the market with 28% market share. But there are still applications out there and customers out there which will allow us to grow further. For this, we need innovation. For this innovation, we need the power of our people bringing this to the market. We have a track record doing so. Therefore, we shifted R&D teams to our positioning business. This will be also the area where our digital services will play a major role to have a more differentiated offering in the future for positioning. On the cellular side or connectivity side overall, we have clear tasks to become bigger. We need a larger size, first of all, to cover our R&D costs, but also to have more power when we buy R&D services or material. Here, we get tailwind currently because the U.S. authority, FCC, has strong concerns about the usage of Chinese vendors in applications like automated cars, digital factories, or healthcare. Obviously, this is tailwind for us, and we have the clear target to benefit from this one. But we also need to do things internally. We already did one major step. We stopped the development of own chips for cellular, also to reduce the cost in this area. We continue chip development for positioning because this is highly differentiated, but we don't do it for cellular anymore. Of course, we go more in a way where we really look for a design-to-cost approach in this area. There's another good example, what I mentioned in the beginning, having applications where we can bring our knowledge together, like in this hybrid cellular satellite and positioning module. This is very nice because there we have then a differentiated product exactly in this area. Now, in terms of operational excellence, we are convinced that we can do what we do better. We grew from a startup to a pretty sizable company. And here is also the point. I also was hired. My background is from a larger company, as most of you know. So of course, I try to contribute here and also lead the company, being more systematic while keeping our agility, which made us successful in the past. So the activities here fall into two buckets. We want to improve the effectiveness of what we are doing, so being faster to the market with agile product developments, basing our decisions on accurate, timely available data. Therefore, we invest in an ERP harmonization project. We also have a cultural aspect in there. So the topic of profitability is something we really discuss with our teams to make them aware that the value creation out of this is essential. In terms of efficiency, we started with a transformation project for our procurement activities. We also, as mentioned before, especially for cellular, we need a design-to-cost approach, much more elaborated as we had so far. We optimize network and capital management. As Roland just mentioned, you already can see progress, what we are making there. For sure, in terms of staffing, we will utilize our global footprint to hire at locations where it's cost-efficient. Now, I would like to give you one more step of detail on two selected topics. The first one, we call integrated business planning. We are not happy with the way we plan and forecast our business. And therefore, we set up an activity to make sure that we have owners defined, and we have the processes defined in a way that we get to consistent data quickly when it comes to our forecasting and planning activity. And for sure, this is something which is very relevant. As you can see, our net working capital, for sure, is higher than we wished it to be. So we are not satisfied with this one. And this process will help. And also, the way we give guidance and also the fact that we missed guidance several times needs improvement. And this topic will contribute to make this more systematic and better in the future. The second topic is our procurement organization. We buy material, mainly material and production services of around CHF 300 million in 2023. We come from a structure where many decisions were taken decentrally. With such a purchasing volume, it made sense to harmonize it, to have global responsibilities for commodities and also have the right processes in place. So we did a major restructuring in the way we purchase our product. And we hired a very experienced purchasing professional to head this organization for u-blox. With those key points of our strategy, what I mentioned here, we want to make sure that we meet our ambitious new target financial model. Now, having said this, we come a bit closer to the near term. And I want to speak about the near-term outlook, especially the guidance for this quarter. Let's pick up where we left it, at least for many of you, at the Capital Markets Day. There we said we observe a significant overstocking. And especially for the first half and the first quarter, a reduction of this overstocking at our customers and a weak revenue for us. This is happening. So we see a very weak quarter one. We see already a slight improvement in the second quarter. Before, in the second half of the year, we expect a more significant improvement in the recovery of the business. Now, you might ask, "Hey, Stephan, didn't you just tell us that you want to improve the way you forecast? Can we believe this?" And honestly speaking, it's a good question. And let me give you three points where I think, where we are convinced that this is the way we describe right now. The first point is we started with this improved forecasting project several months ago. So we already see good progress. We are not yet perfect. We are not yet there where we want to be. We see the progress, what we wanted to see. Second, when talking to our customers and also here, remember, in the Capital Market Day, we said 250 customers we want to take very close and talk to them directly versus the long tail is handled via distributors. So when talking to those customers, we get the same message. It's not something we invented in our offices or thought out in our offices. Third, if you look around in the industry, there are many seeing the same market and therefore giving the same picture. Therefore, we expect the scenario as described. Now, looking into the first quarter, here, we see the most heaviest impact of this stock correction. We expect a revenue between CHF 50 million and CHF 60 million. Due to this fact that we have a significantly lower revenue, we lose operating leverage in this quarter. Therefore, the EBIT is also so low that we expect -30% to -40% EBIT margin. This is due to the lower top line, what we have, and no other effect in this area. Now, for me personally, it's not the first time that I experience such a downturn in the semiconductor market. I have been around during the dot-com bubble burst in 2001. I also have been around in the financial crisis in 2008 and 2009. So I personally have managed through several of such semiconductor downturns. My clear ambition and my clear target is to be stronger after such a transition year than we ever have been before. Of course, we take measures when we see those numbers. So of course, we gave ourselves cost reduction measures to mitigate part of the effect of what you see here. Just for example, we almost froze hiring. We also do cost-saving in every aspect in our operative business, starting from simple things like saving on travel costs, but also all other topics which are not essential to go after our strategy. We reduced the bonus floor for our employees to zero. This has the mindset that in good years, we all should benefit from good results. But in years where we don't meet the target, there should not be a bonus. And this we did. What we did not do, however, we did not take any short-term measures which endanger our long-term strategy. We are convinced that the strategic direction we took is the right one, and we will execute on this one. Of course, we will monitor this execution very tightly. We will take actions in case of deviations quickly. In this case, we see deviations. We will act and for sure not wait for years to come to better knowledge. With this, I'm absolutely convinced that we are on the right track. We go after the right markets. Sorry, I need to advance my slide. We go after the right markets. We have structural growth markets in here. Just again, to name the four of them: automated driving, asset tracking, industrial digitalization, or home healthcare. Those are megatrends in our society. They will come. They will need technologies as we have. u-blox has this. If you look on our positioning, we are the undisputed market leader with unique IP. This is a very strong base for us. I'm convinced that there's a lot of value creation potential for us in the future. With this, I thank you for your attention. Rafael, I think we open up for questions, right? Exactly. Thank you, Stephan and Roland, for the presentation. We start now with the Q&A, as I said. We open in the room here in Zurich. Anyone who wants to raise their hand right in the front row? Easier for the people in the webcast, you say the name and institution, just so. Yeah. Marc Possa, VVAG. A question about the last point you just mentioned, Stephan. The undisputed market leader in positioning based on unique IP. Can you show us how unique the IP really is and how long the uniqueness will last in terms of kind of patents and other potential infringements that might always happen out of China or other regions? Thank you for asking these questions. I smile a bit because we had a slide prepared for these questions, and we took it out. But it's a very valid question. And the answer is not simple that I say we have patents and this is it because, of course, we have patents, and we defend our patents. But that's only one part of the story. The much more important part is that, first of all, what we do is not easy. I know everybody with some education in mathematics thinks, "What can be special about satellite positionings?" You need four satellites, and you measure the distance, and then you have it. And the second thing is, "Hey, it has been around since the '80s. Must be solved, this problem." And this is not true. It's highly complex. Things are moving. You have buildings which create bad reception. And you have new applications like automated driving. So again, think of it. If you have a GPS system in your navigation in your car, it doesn't matter if the system takes 10 seconds or 15 seconds to find the position. If you sit in an automated car and leave a tunnel, this can be essential. So there come new requirements. So it's not the same positioning anymore, what we had before. We also have requirements for safety exactly in this area. So the system must prove the chip needs to prove that it is right. So the requirements are right. And we like this because we get to know them first working with our customers. This is where we put in the innovation. And this innovation quite often is even implemented in our chip to have the right performance. You can't do it with software on a general-purpose processor. Now, having said this, even if somebody takes our latest chip just brought to the market today, takes it, analyzes it, tries to copy it, it will take easily three years until somebody like this is on the market. And they will not be perfect. And until they are on the market, we are already on the next one. So that's a long answer to a short question. But this innovation power, what we have there, being in the forefront, being faster, getting the requirements earlier, having the solution earlier, this is the essence why we were successful in the past and why we are absolutely confident that we will extend this to the future. Hi. Mark Diethelm from Vontobel. Is there a contingency plan in place in case that the geopolitical environment in the U.S. doesn't create the necessary tailwind that you would hope or expect? Well, first of all, I even said upfront, we are monitoring this very closely. So it's not like that we define the strategy, then wait for five years, and then check if it worked out. No. This runs in a very much shorter cycle. We will also see this earlier. In the sense of what you do in a certain business situation, of course, every well-managed company works in scenarios. But none of this is relevant for today. We believe in our strategy. We execute our strategy. This is where we put our effort on. Great. Thank you. Do you already have some tangible how should I frame that? Tangible outputs? Or do you see already some tailwind from the situation happening, some tangible leads in the U.S. where it gives you confidence for? Absolutely, yes. We cannot declare victory. But we see very clearly there are tangible opportunities. And we are working on this. But it's not yet the point in time to say assumptions true or not. Yeah. Anyone else? Michael Schulz, JMS Invest. What is the addressable market for or how big is this an opportunity for you, this hybrid positioning module? I guess you're in the market with the positioning, for example, containers and so on. But there will be some replacement, I guess. Or is that some additional revenues and some replaced, I guess? So you see here an indication what this could be. And again, that's a new topic. So the market is starting in a certain way. So currently, there are roughly 10 million such IoT satellite subscriptions. And that's not our assumption. But the market researcher assumed until 2027, it will grow by a factor of five. What do you assume is your market share there in 2027 or so? And now it's zero, right? I mean. Now it's zero because we just brought out the product. What you see here are again, as many innovations, it can be solved. You just buy an expensive satellite receiver, and you buy an additional cellular module, and you put it in a big box, and it's solved. It's just economically preventing that this market goes in this direction. So indeed, there's a certain replacement possibility. So the market share, again, is currently exactly in this combination is zero because we bring out this product. Market share prediction, in this specific case, we don't do. What we see now from the first opportunities and orders, it's a highly interesting business for us. This is where we stand currently. If you would quantify the 50 million devices, what would that be in Swiss francs as a market, basically? What's the average value of such a market? No. The average value in this area is in the mid-double-digit dollar range, what we can sell in such an application. Okay. And if I may, I have two other questions. You said the capitalization of development costs is going to change going forward because projects will be adapted. What does this mean exactly? And how is it going to change? And from when on? Yeah. This may be more a question. It's more a technical question about the counting than about the technology itself. It means that how we develop products, we develop them in project. Let's say, in the past, you started developing, developed three years. And after three years, you bring out the product but not the product, a whole product family. And that is what capitalized the whole three years. Now, the process of development itself changed that you do it more agile, more incremental. With that, you end up with, let's say, products faster. This means that capitalization of these costs according to the rules are no more valid as it is they are. And with this change in the development process, you bring down the capitalization range and expense the rest. So the effort you do for a product does not change. It changed what you put on the balance sheet and what you expense. Because of the turnover of products or smaller product releases, which has then also not a lifetime of 10 years because you have an X release and an X release, this means, from a capitalization point of view, that you do not have a longer period of harvesting of this development. With that, you have to expense. You are not allowed to capitalize that. The ratio goes, let's say, today, it's 35%-40%. It's expected that over years, it's not something which happens bang now. It's something which comes gradually over time. It goes back to maybe 20%, 15%, somewhere there. Another question, if I may. The normalization of inventory and net working capital, is there, do you have a target for a, say, inventory-to-sales level or something like that? Or what would be a normalized inventory level or net working capital level? If now you have a couple of difficult quarters ahead, but then you're back to normal, maybe. So what is your kind of targeted level where you think that is what we need? Yeah. The inventory level is not related to directly. It's related to sales, but it's not defined on sales because most of the inventory are components. So part of products which go into certain products at the end. But the normalized level is roughly 40% lower than it is today. But if then you grow again, so you grow? [crosstalk] If you grow, of course, you need a little bit higher inventory level. Yes. But it's more the inventory, as we call it, today's inventory outstanding. So the inventory turnover should come down again. But as I said, from today's business level, it's roughly 40% less than we have. Thank you. Thank you. It's Michael from ZKB. Just two questions on your ability to actually guide us through the years. You're guiding now for a very weak Q1 and the recovery going forward. But based on what? Is it actually because all the presentations I've recently attended, I hear the same? But I don't really see any hard evidence that it's really going to turn in H2. So is it based on just very low inventory at your clients they need to build up? Is it based on you expect better demand on the end products? So maybe you can give us an indication on that and what exactly means a recovery. I mean, from CHF 50 million to CHF 60 million, pretty quickly, it's a recovery. So just to get maybe the altitude, what we can expect. Yeah. Yeah. First of all, you're right. And in a certain way, the question you ask is very valid. But what are the assumptions? If you look on the decline what we saw, and this is visible across all market segments, the decline is larger than the end market, which are maybe also a bit weaker but not to this order of magnitude. And that's a clear indication of the stock corrections. It's not like that there are 70% less cars sold nowadays. This calculation is not correct. But you know what I mean? So there is a very clear indication that this is a stock correction. And this is also what our customers tell us. I mean, of course, we are paranoid and ask, "Did we lose the project? Yeah. Did we lose to a competitor?" And the answer is clearly, no. The answer is overstocking. The stock must go through. Then you do some math what this could be. Then you end up in this order of magnitude that in the second half, it must come back. That's the first question. Nevertheless, this whole year will be a transition year, as you can sense. For good reasons, currently, in such a situation where the transparency is so low, we don't provide guidance for the complete year. On the long term, our target financial model is still what we believe in. There, we want and think we will come back. Thanks. And maybe just two more, but I can ask them together. One actually is, in the past, there has been a business model also somewhat based around software, services, security, correction data, all these kind of things. And I know, obviously, it's connected also to the communication side of things. But what is still possible in a positioning business software-wise? And maybe just a second, probably it's a short one, on your design wins in automated driving. I know you've put out a number, what you expect. But can you give a little more detail, maybe? Are these different design wins? Is it one customer? What exactly is it? Just to get a bit better understanding. Yeah. I'll start with the second one. Several customers in several regions. We are not allowed to name them. But several customers, several regions, and also different types of customers, very established players. So you would call them the big names but also the challengers, the newcomers in those automated electric cars. And this makes us so confident that the technology we have and the approach we have works so well. Yeah. Your first question. Software business model. Yeah, e xactly, s oftware s orry. The software business model. I mentioned perhaps a bit too briefly. When we look in positioning, already today, there are correction services used for getting more accurate positions. And there, of course, we have a potential looking in the future because we can, in an optimum way, we have the chip. We have the module. We have the software. And we have the digital services. So we can optimize wherever the solution can be done best and most efficient. So in our current view, in our view, how this technology will establish, it will be a major part for the positioning area. Thank you. Sorry. Stephan Sola, from Sola Capital. Actually, Stephan also a bit worried about your Q1 guidance and looking at the next three quarters. The last eight quarters, on average, you had a CHF 170 million top line. Now, if you guide for the CHF 50 million-CHF 60 million, you need those for the remaining three quarters just to end up flat. Now, top line is one thing. But then, obviously, you have a heavy hit on the margins. Is there any way how you could somehow soften the impact on the EBIT margin? I think that 30-40 minus is hefty, which I understand with CHF 50 million. But it's hefty. Absolutely agree. Those 30%-40% sorry. Those 30%-40% is something which is very low. And what I said before is, we take cost-saving measures. But as you could easily imagine, if we would take cost-saving measures which would compensate this, then we would need to announce a change of strategy. This would not fit together very well. We absolutely believe that the applications we go after and the technology we have will be successful. And therefore, we are doing what we are doing. So, of course, we will save costs. And we have, of course, also push programs to make sure we get revenue in as well as possible. But this burndown of inventory, which we go through now, this is inevitable. And we will manage through it. That was fun. Johannes Bürkle, Santorini Invest. I have a question with respect to this continuation of the cellular development, trying to understand what will happen. Do you just replace what you develop by your own then by buying in these cellular modules? Sorry, chips or products. Or do you lose business by not developing your own cellular chip? That's the first question. The answer is, we will buy those chips from third parties. Actually, we are doing this already right now. The majority of our cellular module revenue comes from modules with third-party chips in there. So we always had the strategy that we only do own chips when there's nothing in the market or if there's a margin upside possible. And we came last year, when we reworked the strategy, to the conclusion that investing in our own cellular chipset, which is technically highly appreciated in the market but commercially does not provide the benefit what we expected for. And therefore, we use third-party chips. You could even turn this around because even if you deduct the chip developers, which don't work for cellular anymore, there are software developers developing the software for our own chips. And those can use now their time to develop software based on other chips. We even could increase what we can have as an output, as new products. Okay. There's no cellular sales going away? For the chipset topics, no. Okay. And then this implicitly means that you had quite a pressure on the margin due to higher cellular sales. I suppose this margin profile will improve going forward? Or what should we expect? Well. Similar sales split. So is that margin upside potential just due to the fact that you can buy in, let's say, commercially better products, if I may say? What happened last year was that the cellular business developed very well. We also mentioned in the annual report, we were performing quite well at a healthcare customer where we provided our solutions. Now, having said this, also, our margin profile in cellular or gross margin profile in cellular improved, however, on a lower level than we have in our positioning business. Therefore, despite the fact that there was improvement in the gross margin in cellular, you still have this mixed effect that we have a higher share of cellular business in the 2023 P&L. Will that change now going forward? Forward-looking, in 2024, cellular is more affected of the destocking. So there will be a change in this mix. And the other topic, of course, is also true. We continue to work on the cost and improve the margin profile of our cellular business. Quick. Hello. Reto Huber from Research Partners AG. In the U.S., are you already winning business due to this potential regulatory threat for the Chinese players? So we have a significant number of opportunities, very concrete, we go after. Winning business is not so easy that you go in and say, "Here is our new product. Read the specification and sign the contract." Typically, it requires several months of evaluation and development efforts of our customers. So it's literally too early to say, "We have win there." But we make progress there exactly out of this rationale. Customers are approaching us and asking us for proposals to replace a Chinese module in exactly this area. Anyone else? If that's not the case, we can open now for questions via the phone. So I think we have one question for an analyst from UBS. Operator, can you open the line? Yes. Okay. The first question from the phone comes from the line of Harry Blaiklock with UBS. Please go ahead. Hi there. Thanks for taking my question. I was wondering if you could give a bit of color around the contractual orders in Q4. And then it would just be useful to know what the underlying growth rate was in Q4 or kind of underlying revenue level. Yeah. That's my first question. So just to make sure that the answer is the right question, you ask how much of the business was due to those long-term contracts and how much was underlying growth. Correct? Yes. Yes. Exactly. In Q4. Okay. Understood. 2023 was a highly distorted year. So we already had this effect in Q2 and probably, without knowing it, also in Q1, probably without even our customers knowing it already in Q1. And therefore, Q3 was so weak because that was the first opportunity where they could reduce what they bought before they had to come back to their commitments, what they had before in Q4. So it's really very difficult on a quarterly basis to say how much was really due to which effect. If you look on the overall effect and what we have and what we indicated and also that we just said, "We expect this stock correction to go through the first half year with revenues which will slightly improve in the Q2 but not be back to normal," we are in order of magnitude of one quarter, which needs to be corrected. I cannot give you an exact number because it's not possible to define it so precisely. But that's the order of magnitude we are talking. Okay. Perfect. And I was wondering whether we could revisit something that an earlier person asked, which was just around what are the indicators that you're looking at that give you confidence in the improvement in revenue in the second half, kind of, yeah, beyond the inventory correction? Yeah. We are absolutely confident on our long-term growth driver. Nothing changed, yeah, also compared to what we told you during the Capital Market Day. I mentioned before, we ask our customers, "Did we lose business to competition?" The answer is no. Therefore, what we see here, of course, we do some modeling. We talk to our customers. We watch industry calls. Therefore, we are confident that the growth trajectory will be back in the second half. Got it. So I mean, is it conversations with customers, orders that you have coming through from customers, anything that you can point to in terms of that? Sorry. Now I got your question probably right. So here, the situation changed. Lead times are down to roughly 12 weeks, plus minus, on the products. So there is currently no need for a customer to place an order for the third quarter. And this situation is different compared to one year ago. Okay. Got it. That's very useful. And then just one last question on free cash flow. I know you haven't provided kind of explicit qualitative guidance. But I was wondering whether you could give kind of a rough indication. Are you expecting it to be positive in 2024? Yes. It's rather difficult, as you know, to predict free cash flow. The major point is then if we can reliably predict what the inventory level and how the orders will come over the year, not everything at the end or at the beginning, then you have a big impact on free cash flow, so to say, just to say, "Okay. It will be positive or negative." We have done in 2023 CHF 11 million free cash flow. So that's not close to zero. 11 million is quite a number. But a change at an inventory level of CHF 100 million, if you just think of, "I increased the inventory by 10%," that is, cash flow is gone. So therefore, to predict today for 2024, to make a free cash flow prediction, I cannot tell you at the moment. Okay. Got it. Thank you very much. I think there are no further questions from the phone. In the room, I think we're also good. So if that's the case, we close here. Or one more? Thorsten Sauter from Cheuvreux. What does change for your daily work when the big godfather is not anymore elected for the board? Is there a change for you? You feel more free to can go your own way or to develop more intensely your strategy? Well, first of all, I always feel free. Thomas was with the company for 22 years. He brought significant value to the company. He took it over as a startup and look at the size of the company it is right now. For sure, he knows a lot about this company. In the board, we have a lot of competence available. We have good discussions in the board. This is what I appreciate. I'm looking forward to continue my good discussions with the board. If it comes to domain knowledge, look at our leadership team. They are quite experienced. Two of the founders are even on this call because we have all the EC members on this call in case I get questions which I cannot answer. So far, it was good. In the leadership team, we also have a good competence. Of course, somebody experienced going, there's always a loss. We have a strong team to go ahead. Maybe I can add something. I'm André Müller. I'm the Chairman of u-blox. Yes, Thomas is leaving. Thomas has been working with me for about 10 years. He has been with the company for more than 22 years. Since 2007, he was a member of the board. This is always a loss for a company to have a brain leaving. But I fully agree with what Stephan just said. We have the competencies in the board. We have the competencies in the company. We are sure that we will. On the personal side, this is a loss because I've had a very good relationship with Thomas over the last 10 years, almost 10 years. That's always dommage in French. Okay. Thank you. Great. So if no other questions, we thank you very much for all the dynamic Q&A, for the ones who are here today with us in Zurich and the ones connected on the phone. Thank you. Thank you. Bye.