Ladies and gentlemen, welcome to the U-blox Q1 2024 Trading Update Conference Call and Live Webcast. I am George, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can raise different questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Rafael Duarte, Head of Investor Relations at u-blox. Hi, everybody. I'm Rafael Duarte, Head of IR at u-blox, here together with our CEO, Stephan Zizala, and our CFO, Roland Jud. I'm sure you have all seen our Q1 trading update, so the idea for this Q&A session is to give you the chance to address any potential questions on the results, so we'll have no slides. It was a brief announcement. It's really just the Q&A session. As always, in order to make a question, please follow the instructions in the webcast platform. And with that, operator, if you already have a question on the queue, we can get started. Operator? Our first question comes from Harry Blakelock with UBS. Please go ahead. Hi there. Good afternoon. Thanks for taking my question. The first is just on Q2. It's really, I think people will be surprised at how weak the guidance is for Q2 on top line, and seems to be kind of significantly weaker than most are expecting for some of your auto and industrial exposed peers. So I was just wondering whether you could give some color around what exactly it is that's driving that weakness. Is it just that the inventory digestion is taking longer than expected, or is there kind of anything else that you would call out? So thank you, Harry. Let me take this one. So first of all, the first quarter turned out as weak as we guided and also expected, and we also indicated that we expect a slight improvement for the second quarter. And this is how we guide it. If you now remember and compare this, we entered in this phase of corrections, inventory correction, very late. And this was due to the agreements we had with our customers and a significant overstocking, which happened in the second half of 2023, especially also in the fourth quarter. So this might be an explanation why the second quarter is, in terms of guidance, slightly higher than the first quarter, as expected, but not significantly higher. This effect we expect rather for the second half of the year. Got it. Thanks, Stephan. And then just one follow-up around what gives you confidence in that H2 recovery? Especially I think in the release, you mentioned that order levels are still relatively low. So yeah, it'd be great to get some color on what gives you confidence there. Well, on, there are several factors which go into this statement. So, we remain confident on the second half of the year, where we expect a more substantial increase of our revenues. And the reason for this is, first of all, we estimated a certain overstocking level at our customers, which will burn through. Second, don't forget, the underlying applications didn't disappear. So the basic auto market is there. Yes, it's a bit weak right now, but not to the extent what we see in revenue decline. We did not lose any sockets in this timeframe, so therefore, there's a structural reason why it will come back once the inventory is consumed. Third, also looking to our customers, when we talk to them, that's exactly the message we also get from them. So by and large, we are also in line with several other players in the market, which expect a more significant improvement in the second half of the year, which is complemented by our own view on the second half. Got it. Thank you. And then is that kind of does that stand true across all end markets? I mean, it sounds like maybe auto kind of maybe a little bit less of a bounce back than industrial. But yeah, does that statement for sharp H2 recovery stand true for all end markets? I would rather say it's customer specific. So I couldn't say it's auto or it's industrial, mainly because it was individual customer decisions, how much inventory and how much they really ordered and build up this level. Okay, makes sense. One last quick one, if I may. Have you seen any—I mean, yeah, you've spoken over the last few quarters, and peers seem to be talking about kind of a return to low to mid-single digit pricing decline. I was wondering whether you've seen any change to that. Is that kind of what you're expecting for this year and beyond? No change. So it will normalize in this level. Perfect. Thanks, Stephan. Our next question comes from Michael Nawrath with ZKB. Please go ahead. Thank you very much. Hi, everyone. I just have a question now in hindsight, Q4 last year, which was around CHF 140 million, CHF 141 million in revenues, compared to just CHF 100 million in Q3. What do you think how much was probably over ordered because of these agreements or contracts you had with your clients? I'm just trying to understand what would have been a normal revenue level in Q4, and what has been overcompensated in Q4 that you are not seeing now in orders in Q1 and Q2, sorry. So this would be interesting to understand also from your discussion with clients. And generally, just financial question, what, where would you see now your break-even level on quarterly revenue? And the third one, one of your peers, I mean, today, some of your peers have reported, but for example, Nordic Semiconductor has given a really strong revenue guidance for Q2, really V-shaped recovery. Is that a kind of recovery that you would also expect from, let's say, Q2 into Q3, that it's really V-shaped? Because if not, it will be tricky to reach what the consensus estimates, I would say. Those would be my questions. Thanks. So let's first start with your first question on the inventory. I cannot specifically now distinguish between the different quarters, but what I can say is that over the year 2023, we roughly estimate that we have around 25% overstocking in the market. If it exactly happened now in the Q4, or it if it was in a previous quarter, that's maybe even less relevant in this aspect, but overall, that's roughly the order of magnitude what we see. Mm-hmm. Then on your third question, the comparison with Nordic. So I, I cannot comment on, on their numbers. Of course. However, what I can say is we have a very low consumer exposure, and overall, if companies have a different exposure to end markets, that makes a difference. So it's not one-to-one comparable in this sense. Again, I can only repeat myself, we talk to customers a lot. We have no signals that we lost any projects which would affect our running business in the second half of the year. The end markets did not decline in a similar magnitude, and therefore, we remain confident on a more robust increase in the second half of the year. Okay. Okay, and back to your question, Roland, you speaking about the profitability level reached, so that we reach break even in a quarter. Yeah, that's difficult to say, but because it depends a lot on the mix of the top line and therefore the contribution. Mm-hmm. But overall, we could say if we are somewhere in revenues about between CHF 80 million and CHF 90 million, we are also, again, on EBIT then par or break even, so to say. Okay. Yeah, I understand, of course, the mix effects, but just to get a feeling. Yep. Thanks, Roland, and thanks, Stephan. Maybe just one add-on. I mean, I understand, Stephan, you cannot compare yourself to Nordic, and that, that was not my intention, of course. But just trying to understand, I mean, if you have a huge drop, you know, of 65% in revenues quarter-- year-over-year, and then again, 65% in Q2 year-over-year, I mean, is there a chance that you can also really quick-- Just from the characteristics of the business, is there even a possibility that you could say, I don't know, 50%, 60% up, you know, for example, from 60 to 90? Just as an example. I, I wouldn't obviously put it as a number, but just to understand, is that even a possibility? Well, I understand where you are coming from. And again, what we see is we look at the end markets, we look what our customers consume and what they currently buy from us. It's by far too less to even keep them flat on their end markets. So it's in a way what we expect is really a more substantial increase. However, what I cannot say if it will be exactly as V-shaped as, for example, Nordic, what you mentioned before. Yeah. But again, it's not that we need a growth in end market. The end markets are there, and they didn't change so much. It's just this overstocking effect, and therefore, to our best knowledge and to what we get as feedback from a customer, from customers, we see a more substantial upswing in the second half. Okay, perfect. Understand. Thank you all very much. Our last question comes from Jürgen Wagner, Stifel. Please go ahead. Yeah, good afternoon. Thank you. Question on cash flow, how was it in Q1? And, looking at Q2, what would it be if we take constant currency? Thank you. Yeah. On the cash flow side, Q1 was on free cash flow side, positive, at least. And in Q2, we expect it to be in this range as well, assuming constant currency, the currencies, but not the big impact. The bigger impact is the net working capital development, due to the overstocking, also due to the high stock levels we have at the moment, depending on the revenues then in Q2 and what happens there, and the mix of these revenues, how much this inventory goes down. We had again a positive free cash flow, or the free cash flow comes down or is even better than expected. So to predict this is rather difficult. The currency of course plays a role. If you have now a US dollar drop by 10%, then of course this has an impact. But, this is not expected at the moment. So, to say the constant currency is not the really trigger point. The trigger point is what net working capital loss. Yeah, I meant the Q2 guidance, what that would be on constant currency compared to Q1. If you take out the US dollar impact, I think it would be rather flat, right? Mm. It's a small growth. It's a small growth still. It's still a small growth if you take out of the guidance, dollar effect. Okay. Thank you. There is not a big dollar effect in put it in. Okay. Thank you. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Zizala for any closing remarks. Okay, so thank you very much for everybody for the questions. If there is anything else, you know how to find us. Happy to continue the dialogue. Thank you very much. Thank you.