Powering Planet Cool. We charge our planet for the better by powering the electric movement. We enable quick and scalable EV charging solutions for everyone and everywhere. We make it positive. We believe in the power of positive energy. We see opportunities where others see obstacles. As a team, we create success for us all and add value to people's lives. We make it quick. We like our charging experience fast and easy. We are quick to respond and quick to deliver. Our service is easy to sell and buy. We make it click. We make the most user-friendly EV chargers that become future standards. Our products just click. They are flexible to integrate and to scale. We make it happen. We empower the EV evolution and create a cleaner and more quiet environment for us all. We inspire our audiences to join the electric movement, plug in, and be the change. Hello, everybody, and welcome to the webcast where we present Kempower's Financial Results for the First Half of 2023. My name is Paula Savonen. I am the VP of Communications at Kempower, and also your host today. Today, we have two presenters. We have our CEO, Tomi Ristimäki, and our CFO, Jukka Kainulainen. Before I let Tomi and Jukka to the stage, I would like to remind you to ask questions during the presentations. You can type in your questions any time during the presentations in the chat box on your screen, and you can ask questions in Finnish or in English, and we take all the questions in the end of the presentations. Now, we go to today's agenda. We start with Tomi Ristimäki, who presents you the key highlights for the year. Thank you, Paula, and welcome from my side as well to this actually very great day. It's really pleasure to be here today. We are looking at from the highlights, a summary. The demand of the market is exceeding expectations. If we look at analysis, or we look at our own expectations or market studies. Increased production capacity is something that is a key for the also the results of the last quarter, record high quarter in many ways. Let's go to the topic. Record high revenue and record high order intake, showing also the growth of the business to the following quarters as well. We have never exceeded these numbers before, EUR 72.5 million revenue, and especially huge increase in the order intake is telling where the company is going. It's still growing in triple-digit, which is also, I would say. It's really nice to see. Doing it profitably. Operative EBIT for the second quarter was EUR 19.2. The strong demand of Kempower electric vehicle charging solutions is continuing, and the improved production capacity is making us able to answer this demand. How we see the market today and where we are? Like we stated in our Capital Markets Day, it's our goal is to be a top-five player in Europe and North America by 2030. How we are already doing it in Nordic, we are in the top position, and our market share is increasing in the rest of Europe. Jukka will tell you later about how much, but that's really happening. North America, that's a rapidly growing market, starting from smaller than Europe for the EV base. Today, moving with a higher percentage, Kempower's entry to that market is really happening this year when we open our factory by the end of the year, producing products for the U.S. market in the U.S. Rest of the world, we are looking at that more from the business development stage. We are screening the markets. What are the interesting areas? We have some interesting projects today in the Southeast Asia. We are active in the Australian market. We are in New Zealand, different countries in the area, but it's from us still today, more sales through our distribution partners. Looking at the outcome and, let's say, the market potential, one good. I want you to look at the headlines. 1 million new battery electric vehicles registered in Europe in the first half of 2023. It's 45% increase to the previous year. We are seeing this is the biggest driver, how it is when we are doing charging infrastructure, and I'm saying really the infrastructure to enabling people movement between places and being the core on supporting the EV business. The number of EVs is a big thing there. This is growing. How we see the market size for DC charging market, which is the main market of Kempower. By 2030, it is EUR 14 billion, dividing more or less equally to Europe and North America. Looking at Europe is today bigger, we expect a lot more growth in North America. It's been driven through the number of vehicles on the road by the users. Customer highlights of the Q1 and Q2. We received the second order and also the first order on the first half from the one of the largest retailers in the UK. building high power charging system network for UK-wide. Important part also to seeing the how the car sales companies, as Arnold Clark, one of Europe's largest car retailers, is now equipping their sites with Kempower chargers, providing their own network for their customers. As a highlight also, National Car Charging, one of the most significant reseller and installer of charging systems in U.S., was we made a cooperation agreement on the second quarter. Looking at the scale-up of production. This is key because we are a manufacturing company. Main part of our revenue comes from delivering products. We were able to answer the searching demand through continuous improvement. This is also how we communicated in the first quarter, that it's not only building new factories. Kempower's production method and the whole company is actually based on continuous improvement. We are all the time, developing how we do things, how we could use our existing resources more efficiently. Now we produced more than 9,000 charging points and delivered 475 MW of charger power to our customers in the first half. It's a significant improvement to the previous years. How it was done, we improved the production capacity in Lahti factory. Efficiency improvements, layout changes, all the time, trying to scale and basically speed up the process, have the throughput of the factory faster, being able to produce more units. Now we also communicated that during 2024 we will open the third production facility in Lahti, and opening it gradually, that we are moving part of the production there to make room in the existing facilities, and then also being able to finally double our production capacity in Europe through that investment. North America production is to start by the end of the year in 2023. Looking at North American entry, advancing as planned. Production preparations are really going on, and part of that is also the supply chain development in there. Looking at that, we are able to produce, we're able to answer the, let's say, the orders from the customers in the future. The customer pipeline development is progressing well as we see. We had a quite good increase in order intake in the US for the second quarter. I'm also very happy to welcome Tim Joyce to join us in the management team and running our US operations in the future. He will join us in August, and with the title of President of North America. Tim's responsibility is to run our US operations and get an efficient start and actually scale it up pretty fast. He's quite experienced person to do that. Really happy that he decided to join our company. Again, saying that the production will start by the end of 2023. Important milestones in R&D are RDI, so research, development, and innovation. We decided and announced also that we will have joint research center with LUT University in Lahti, to also focus really on the future research. If we're looking at power electronics, we are looking at energy efficiency, we are looking at data, we are looking at the charging network planning, all the topics what you have in the e-mobility and doing together with the academic research. A new R&D site we opened in Vaasa, and that now we are also telling that it's the main focus of the Vaasa site, is to focus also on future Megawatt Charging Systems and focus on the high power charging, what is higher than the current high power charging. Really looking at more than 500 kilowatt, up to several megawatts. We expanded the Tampere site as well in Finland. This is really also to have the possibility when we are looking at the resources in research and development, the engineering resources, you have to bring the company near to the knowledge pools of people in certain areas. We see Tampere and Vaasa in Finland, good sites for energy technology and power electronics. From new introductions, we introduced the Plug and Charge solution. This basically enabling in the future use of car as a payment and notification, let's say, car as a payment tool for the charging. This is not the same system as people see with Tesla. That's a closed network. This is more open for every car manufacturer, every charger, and actually following the GDPR rules, so making it a safe payment tool to use your car as identification when you do the charging. NACS, or like some people call it "NACS" charging standard, this is a charging standard developed by Tesla, we are going to include that in our offering in North America. This is quite now more significant than Tesla alone, because many car manufacturers are joining this standard and having those connectors that only Tesla used before in their cars in North America. Sustainability. Of course, in our industry, when we are looking at, this is really a competitive edge, people are choosing the suppliers also based on their values, on their sustainability goals and achievements. In the first half, we were awarded by Carnegie Sustainability Award. We achieved also, when we look at the social side, the employee net promoter score is extremely high, still 71. This is when the company grows, it is a measure we want to see that our employees are liking what they do, and we can create an atmosphere and culture where the, let's say, the people thrive. Our new planned production facility, as our all previous facilities as well, we are wanting to have them in existing buildings, existing facilities, not to build new things. It's also about biodiversity and circular economy, using the sites what are already there and not to, let's say, burden the nature by every time building new buildings. We have a clear roadmap on how we will achieve carbon neutrality in our own operations by 2035. Now I will give it to Jukka to tell you more about the figures from the Q2 and the first half. Thank you, Tomi. I'm Jukka Kainulainen, Kempower CFO, really nice to be here now in July 2023. Let's start with key figures, what Tomi already partly mentioned. We had really strong quarter. We could say even outstanding quarter. When looking our order intake, our revenue, operative EBIT, really record high level, all of those. Of course, how did we do it? Like Tomi mentioned, we were really successful in increasing our production capacity, but also, of course, the strong demand, driven especially in the regions of rest of Europe and Nordics as well, contributed on the strong result for the quarter. Also, it's good to also address, we already have the balance sheet, almost EUR 230 million at the end of the quarter. When looking the first half of the year, we actually improved our net debt situation by EUR 10 million. Really strong results in the quarter two, and of course, whole H1. A little bit details about our revenues. Our revenues continued to accelerate. Our revenue share in the rest of Europe continued to increase. It was already EUR 38.1 million in the quarter two, compared to Nordics, which was EUR 29.7 million. Also quite significant, even though rest of Europe becoming even the bigger regions already now. When looking how our revenue has been grown, how rest of Europe revenue was already 53% of the overall revenue, which was quite a significant milestone as well. It's good also to recognize that we haven't been growing only year-on-year, but we have actually grown also sequentially now 6 quarters in a row, which is quite a great achievement as well. Little bit about our sales performance. Really doing strong in that area as well. Like I mentioned, order intake, EUR 86.3 million, record number there. It was driven especially in the orders from the rest of Europe region. Really strong order backlog, EUR 138.5 million. Really strong outcome in the sales side as well. Little bit about our profitability and our cash flow. Our operative EBIT, like I mentioned, already reached 19%, 19.2%, in the Q2, reaching EUR 13.9 million on the quarter. That was driven, of course, like I mentioned, our strong revenue and demand, but of course, the increased production capacity as well. We also had a quite a healthy and profitable deliveries during the quarter. When looking the cash flow, it was really positive and strong cash flow as well, EUR 20.5 million operating cash flow for the quarter. Of course, driven also by our profitability at higher volumes, but also positive working capital management, what we did during the quarter. About our new outlook. We gave a profit warning one week back, which was a positive, and our new guidance for revenue is between EUR 280 million up to EUR 310 million, which means that we basically triple our revenue compared to last year. We also positively updated our profitability guidance. Our new operative EBIT margin guidance for this year is to reach over 10% operative EBIT margin for the year. It's good also to address that we, of course, continue growing profitable way, but in H2, we expect significantly higher fixed costs than in H1. We really want to accelerate our growth initiatives, which relates on our R&D programs. We continue scaling our capacity in Europe and in North America, and we continue, of course, doing the further recruitments, which enables our future growth as well. At the end, our financial targets, as a reminder, which we made public in April this year. Our revenue target is to make EUR 750 million in the medium term, so between years 2026-2028. In the same timeframe, to make operative EBIT margin between 10% to 15%, then in the long term, at least 15% operative EBIT margin. Our dividend policy in the short term is not to share dividends. Thank you. Thank you, Jukka. Thank you, Tomi. Now we go to the questions and answers, and we take all the questions that you have presented us from online. Thank you already now for the interesting questions that you have typed in. The first question is about customer expectations. Do you see any recent changes in customers' expectations in terms of what kind of product characteristics they are looking for? I think more or less, depends a little bit on the market, but in the long trend, we see at least, the increase of charging power, what people are requesting. People are wanting to have a higher and higher powers, and of course, it stops at certain point of view, but today, at least that's one. I think, in general, we see bigger and bigger charging sites when the electric vehicles are getting more popular in different countries, trying to avoid the charging queues and the delays in waiting for the charging points. Thank you, Tomi. This goes to Jukka. It's about gross margin. The gross margin has improved significantly compared to year-ago levels. What are the key factors behind this trend, and do you see the current level sustainable? What has been positive this year has been our product and whole customer mix, what we have had in our deliveries. We have been also maintained quite well our unit cost level, even reduced that. We have done really good work, whole company, regarding the gross margin. Of course, that is visible in our operative EBIT as well, more than 16% in the H1 and more than 19% in the quarter two. We don't guide the gross margin. Like I said, our financial targets in the long term is to make the more than 15%, and then in the mid-term, between 10% and 15%. That is the where we focus also. Thank you, Jukka. The next question is about the lead times. We mentioned in the report that we have a very competitive lead times at the moment. What is the average lead time for the new deliveries? Of what? Do we going single chargers, movable chargers, big systems, small systems? Average. I think average lead time, we are looking at three to four months, maybe, in a larger systems, but in a very simple level, a movable chargers, it's a few weeks. It varies, and of course, it could be also really fast if we are forecasting customers. It is something that average lead time in a company producing very many different kind of charging systems, it's not very clear question as well. Although it's competitive for us. It is today competitive, and being able to produce, and this is also why we make the new production assembly lines in the new facilities, to be able to better answer to the customer requests. Thank you, Tomi. The next question is about the production volumes. How do you see the room to increase production volumes? Do you still see room to increase production volumes from the current manufacturing facilities in Lahti? Mm The question is only about the current production facility. Simple answer is yes, but it's also simple answer is that there is not a single production facility which couldn't be improved. It's a matter of what is reasonable, and I think we have still reasonable efforts we can do and still make it more efficient. Thanks, Tomi. Jukka, the next question is about CapEx. What is the CapEx need for the new Lahti facility? That we haven't disclosed. Like you see, our investments in the first H1, first six months was around EUR 4 million. Of course, you know, you can assume what happens, you know, when you continue investing on the new facilities and all these growth initiatives like we mentioned in connection with our guidance. We don't disclose that, but, you know, you can draw some own conclusions, of course, from our previous comments. Thanks, Jukka. There is a question about the production volumes for the third quarter this year. Do we expect holiday season, especially maybe in Europe, to affect Kempower's production volumes on the third quarter? We haven't seen it in either or any of the years before. I think it's also that the Nordics is getting back to the work when the Central Europe gets to holiday. It's also a little bit stepped. I think that's not typical to be seen, that vacation periods are affecting that. Oh, yeah. The Nordic country, they take vacation-. Normally the. ... July the rest of Europe Central Europe. August. In August. It's normally been as good quarters in quarter three, because it's also there's no, let's say, frozen ground in the Nordics, and this kind of good installation time. This is I haven't seen any significant difference. Okay Quarter three on the vacation period. Thanks, Tomi. The next question is about the product mix, especially, we reporting now the number of charging points. The question is, this is from Paul de Froment from Bryan, Garnier & Co, and CEO: "Could you give us more information on the product mix, please? You indicated having produced 9,170 charging points over the first half of the year. What does this mean in terms of plugs? Yeah, this is difficult. does it mean it's mainly CCS, if it's the type of the plug today, maybe NACS in the future as well, but CHAdeMO is diminishing. If it's meaning, what does it mean? Mm. We calculate that charging points are plugs which can charge cars at the same time. We have products where you can use either CHAdeMO or CCS, that's for us one charging points. If you deliver a system which has four charging points and charge four cars, that's a four charging points. If that clears the things, it's. We are calculating how many vehicles you can charge at the same time and control it separately. That's what it means. I don't know if it helped anything, but mainly CCS, if it's about the type of the plug. Then. Yeah. Yeah. Thank you. About the sales development in Europe, could you give us some more color in Europe, where you see the most growth in regards to sales? I think it's, anyway, the countries where the EV numbers are growing fast, and is more or less related to that's how we have seen. I think the fast-growing countries, I would say UK, France, and Sweden, would be something that are really, I think, a high growth areas. Even Finland is now the high number of new cars as EVs. I Maybe those countries could be good. Yeah. It is typically that the high growth phase, what we have seen happens after the, let's say, the proportion of the new cars goes over 10% and steps from that, and that's would be expected then to grow faster after that. Thanks. I would continue, and it's nice in our rest of Europe, revenue growth, like I presented, that it's not any single country. There is several countries inside that numbers driving the growth for our business. That is positive from our company point of view. Thank you, Jukka. The next question goes to you. It's about the fixed cost on the second half of the year. What is driving the increased fixed cost that we expect for the second half of the year? Well, just looking our guidance, so our H1 revenue versus H2 revenue, so we guide between 20% to 40% higher revenue even in H2. That is naturally already increase the fixed cost. We have to, as we are growing as a company so rapidly, we need to, of course, focus quite a lot and invest on our technology R&D. That is really critical for our competitive edge, and we need all the time new people. We cannot grow without new people, and like we have communicated, the capacity increases now both in Finland and in North America as well. All these are really critical for our future growth as well. Now, even after the, let's say, profitable quarter, our main objective is the growth. Growth, you need to prepare before. We need to also be now building, let's say, resources to actually grow also in the future years, future quarters, also after 2023, and not optimize, let's say, cost what, let's say, the last half of the year. That's what it means. We are actually concentrating on creating the possibilities for the future growth. Yeah. Thanks, both of you. There are many questions related to our North American business and developing the business in North America. The first question regarding North America is the new North America factory going to show up in the revenue numbers this year in 2023? I would repeat what we have said also previously. We don't expect any material revenue from North America factory this year. This is really the year for production preparation, building the organization there as well. Thanks, Jukka. Then there is a question about North American charging standard. What does NACS mean for us in practice for you? Is that a kind of technology that is a prerequisite when we enter North American markets? We saw actually it's one of the standards used in charging. Like we have CCS2, CCS1, we have CHAdeMO, now we have NACS. It's a convenient name for Tesla on charging standard. Being also, let's say that several car manufacturers have claimed that they within 2024, 2025, that they will also start using or producing cars that can be compatible with the NACS plug. How we see it is one of the charging standards. I see it more complex maybe for the users who buy now cars in US with CCS1 and is there going to be adapters then? It's more or less similar situation as we had, like a CHAdeMO, CCS change in Europe five, six years ago, when there was only Nissan LEAF using CHAdeMO. Suddenly there was CCS, which took over the market. We see that NACS is now becoming common. We don't see it coming to Europe. It can only do AC charging in single phase. That will not work in Europe. That fits to the European market. As a convenience, if there will be only one standard in the long run in the U.S., it will make the market more simple. Okay. Let's see what the truck manufacturers do. Are the mining vehicles going to be NACS-compatible, and how the whole market works, it remains to be seen. Mm. Several cars will most likely move to that. Yes, there are also other electric vehicles than only personal cars. Yes. Yeah. There is also a question about the schedule for implementing the NACS. Could you share the implementation schedule? We haven't disclosed that fact yet. That's true. Yeah. Yeah. We will when we know and decide. Mm. When are you expecting to have a full-scale production in the United States? What does it mean? What's a full-scale production? I think when we are looking at our steps, the first step is to have basically these NEVI-funded chargers being able to make the end manufacturing in the U.S., having the metal parts from the U.S. that we can comply with the funded programs. Next phase is to have the factory producing, and our supply chain producing, so that we can fulfill the next phase of 55% of the American content. Is that the full scale? It's then demand-driven, how we develop the facility, and if we need to do new facilities, this is basically our everyday life, that we are expanding our operations. For us, the important steps is first to comply with the phase I of the NEVI funding, and then the phase II, where you need the further Buy America, let's say, requirements. Thank you, Tomi. There is a follow-up question regarding the European growth. How important Germany is as a market for Kempower? As a future market, this is the biggest, car market in Europe, which drives the, things from that point of view. It is quite driven that where you have cars, there you have charging market. Yeah. Germany has the biggest amount of cars, a lot of car industry, so definitely an important market for us in the future. There is a question about the innovation pipeline. How are you proceeding with the Megawatt Charging development? When can we expect Kempower to launch the Megawatt Charging solution? We haven't disclosed that fact, and we will tell when we are ready to tell more about that fact. Definitely, there is an interest from the market, and we are working on this, like we stated that, with the presentation as well. Yes. Thank you, Tomi. There is still one more question online. This is the last question for today. Can you, Jukka, comment on the expected 10% EBITDA level with expected EUR 750 million in revenue for 2026, 2028? Is it a bit conservative when you see the levels you achieved this year? Yeah, it was actually not EBITDA, but operative EBIT. Yeah, this, I guess, refers on our guidance this year, and it's good to remember, like I mentioned, this increased fixed cost for H2. What I can comment is that I think we are well on track regarding our financial targets, which are, of course, more long-term targets. Guidance is for this year. I mean, it's... I mean, we are quite confident, I mean, in our, on our way towards the long-term financial targets. Thank you, Jukka. Now it's time to conclude. Before you close the lines, we would like to show you a video from Norway, where our customer charges both electric cars and electric boats with a Kempower Satellite Charging System. On the video, you will get also some nice summer vibes from the Norwegian fjords. I hope you enjoyed the presentation, and I hope you also enjoy the video. Thank you, and bye-bye. Thank you. For Plug, it was important to choose a partner that could deliver systems and technology, and also support. We need to have suppliers that have good technical equipment, and also have good support lines. We have seen that there are not so many providers that have this satellite principle, where we have centralized the Power Unit, and where we can have the more adaptive power sharing between the Satellites. This is something unique that Kempower have, and this fits very well for marine use. Charging infrastructure is critical for adoption of electrical boats. Most of the charging will happen at your home dock, with slow charging overnight. To enable long-distance and high-speed traveling, we need a network of fast chargers to support that. Providers like, Plug and Kempower is working to make this a reality. We have some challenges with the different and harsh environment in Norway, especially in winter. We have this Kempower Satellites, which is close to waterproof, and we can install them very near where the charging is needed on a floating dock. The collaboration with Kempower overall, I think, have been very good. The equipment that we get delivered are going to be checked and installed correctly, and we will have this checked with the Kempower team before they are operational and publicly available. In a few cases where we couldn't resolve the issues, remotely, local service personnel was available very quick. The thing I like the most with the Kempower charging solutions is the ChargEye. This has enabled us to get detailed information about the charging process, when we wonder why things is not working, logging into ChargEye and looking at the state machine normally gives us the answer for what's wrong. We have also used the Kempower Movable Charger extensively, that has made it possible for us to bring the boat to various locations where charging is not well-prepared before we arrive. The Kempower charging is very flexible and user-friendly. I also like the fact that you can use the same app with your car as with your electric boat, that makes for a very coherent and good user experience. For us, it's very important that it's easy to use the charging station, easy to plug in, easy to plug out, easy to start and stop the charging, and overall, have a good experience. With the world struggling with climate change and increased focus on sustainability, I think this will drive the move to greener solutions also in the marine environment. For some years ago, someone was laughing about electric boats. Today, they say that this is the future. This is something we want. This is also a motivation for Plug, that we want to step up, and we want to build a charging network, public available in Norway, in Northern Europe, rest of the world.