Hi, everybody, and welcome to this webcast where we present Kempower's financial results for the first quarter, 2024. My name is Paula Savonen. I am the VP of Communications and also your host today. Today, we have two presenters. We have our CEO, Tomi Ristimäki, and our Chief Financial Officer, Jukka Kainulainen. You can ask questions any time during the presentations by typing the questions in the Q&A box on your screen, and we take all the questions in the end of the presentations. I hope you enjoy the presentations. Now, I give the floor to Tomi. Thank you, Paula. We go to the subject of the day. Of course, the first financial performance. Key finances on a weak level due to customers' high inventory levels, delayed grid connection availability, which is actually tied to the previous one, and basically, political strikes in Finland affected also the revenues in Q1. What we don't see in the figures is actually that what we see positive sales pipeline development and also the new customer acquisition in the key markets among the Commercial Vehicles and Public Charging segments was very good in Q1. We expect to get back on the growth back track during the second half of this year. On North America, which is of course a strategic project for us, we look at the sales pipeline expansion and also the NEVI compliance process proceeding well. Revenue from North America was already 9% of the total revenue. Technological side, we go look at the launch of Megawatt Charging System with peak power of 1.2 MW, which means 1,200 KW. North American Charging Standard, NACS, we look at this charging standard that was first called Tesla charging standard and now expanding to different car makers in the U.S. and, by 2025, and we are now able to deliver. Ramp-up of the second generation charging product portfolio is progressing very well. We are ahead of the schedule and looking at very good feedback from the customers. Sales highlights. We see the growing interest towards Kempower's charging technology as we have won several new partnerships in Commercial Vehicles and Public Charging segments during the Q1, onboarding 15 new customer accounts. We look at first orders from large fuel retailers in Europe, global car manufacturer, and then several bus and truck depots in several countries. As a milestone, in a very key market where we were able to enter in the late last year is the first public charging hub delivered in Germany, and sales pipeline is developing positively. We are expecting actually to receive the orders from the pipeline later this year. We look at North America and NACS. This is increased sales efforts in North America where we see the partner channel, typical for the U.S. industrial product sales, that we have especially increased focus on that. Focus production ramp-up has progressed well. Operations are in good hands with our current leadership while we search for the new North America leader. Very important NEVI funding compliance progressing as planned. As mentioned before, we are compliant with our manufacturing with today's regulation, but we see, and there is news that this regulation will tighten later this year by requiring 55% local content, made in the U.S. This is actually something that we have a clear pipeline how to achieve that and how to reach our goals. After the review period, we announced as the first European DC charging company to include NACS charging standard for the company's whole offering in North America. Strengthening our competitive edge with our new product portfolio is very much a theme of today also, impacting our finances for the Q1. Ramping up production of our second generation product portfolio has progressed better than planned. We are looking at actually being ahead of timeline when we look at the deliveries and the readiness of production. Customers have been satisfied with the high performance and efficiency of the new technology, and seeing this as a comparison towards the whole market will strengthen our position as technological forerunner in DC charging market. Another very major launch, first true MCS offering. What I mean by true MCS is that it is actually not just doing pilot charging with a CCS protocol. We are actually having product available which has true MCS communication protocol as well as first one in the market. I mean, look at the Capital Markets Day, this was one of the key projects that we are going for. Truck charging, what we see is developing to be the biggest DC charging market by 2030, and this is a very major part of that, because this high power, for especially long-haul trucks is extremely important. Some references from the quarter. First, bus depot with Kempower charging in Italy and Bologna commissioned during Q1. We look at the first public charging systems in Germany. Look at the very nice truck references, where HEINEKEN is delivering, refreshments to people with the joining with Einride and of course, charging the electric trucks with Kempower chargers. Looking another truck segment, also major logistics operator DFDS, having the charging hub in the Netherlands. Some big things because we have been now in the Nasdaq First North Growth Market for over two years, and it's definitely time to take the next step. Transfer to the official list of Nasdaq Helsinki will happen at earliest during the second quarter of 2024. This transfer will bring more visibility to Kempower and actually have us accessing larger investor pool. Of course it has an impact, positive impact on the liquidity part. Sustainability, very key topic for many companies now. I think the CSRD reporting will be a topic for every company as it will become mandatory next year, and this is progressing very well. We are prepared for this change. Actions taken to strengthen our waste management, and we are looking at actually our impact to the world. The power delivered to electric vehicles rose 61%, so to a very high figure, 900 MWh/day, and this is 61% more than 2023. This means emission-free kilometers driven on the roads of the world. Now for Jukka to look at the financials. Thank you, Tomi. Hello, everyone. Key figures for the quarter. As we communicated earlier this year, quarter one was impacted by the high inventory of our customers' side, delayed grid connection availability, and also the transportation strikes which we had here in Finland, where we have the major part of the production. Order intake for the quarter, EUR 45 million. In revenue, we reached almost EUR 43 million. Gross profit margin, strong and healthy level, around 50%. Operative EBIT, EUR 10.8 million for the quarter. The financials for the quarter were weak, but as we expected and communicated earlier this year. Let's move on to order intake and order backlog. On the order intake side also was impacted by the same factors as the overall financials, around EUR 45 million orders reached during the quarter. Of course, really positive for the quarter was the order intake in the regions of Nordics and North America, which actually grew from the previous year quarter one. At the same time, like Tomi mentioned, we onboarded 15 new customer accounts, which we expect to create growth for Kempower business in the future. Regarding order backlog, we had around EUR 112 million order backlog at the end of the quarter 2024. On revenue development, our revenue decreased year-on-year 24%. Actually, revenue in North America grew positively 139% compared to quarter one last year. Of course, same time, revenue in other regions went down during the quarter. When looking at the transportation strikes and other delays with some of the customers, around EUR 10 million of revenue was shifted from quarter one to quarter two of this year. About the profitability and cash flow for the quarter. Of course, operating EBIT was impacted by low revenue for the quarter. Our fixed cost also has increased close to EUR 11 million compared to quarter one last year. As a growth company, we focus on growth and invest on growth and continue to do that also now and in the future. On top of that, we accounted around half a million EUR costs regarding change in our North America leadership. When moving to operating cash flow, that was of course impacted by negative result, but also at the same time increased inventories regarding the increased finished products, but also our aim to secure the materials and components for our second-generation charging portfolio. At the same time, we are taking actions to improve our short-term profitability, which means that we limit the new recruitments and also the external spending. At the same time, as a growth company, we continue investing on growth, which means we are selective in recruitments, but we continue increasing salespeople especially, and also our services people in the organization for creating the growth on the short-, mid-, and long- term. About our outlook for 2024, we remain committed to strive for rapid and profitable growth, and we continue investing in Europe on our key markets and capacity expansion as well, and also the North America strategy execution. Also for 2024, we expect the success with the new customer opportunities in Commercial Vehicles and Public Charging segments, but also the successful launch of our new product portfolio. At the same time, we expect a reduction in customers' inventory levels. For this year, we expect revenue to be between EUR 360 million- EUR 410 million, and operative EBIT margin to be between 5% - 10%. Financial targets, which we set up one year ago, so we target revenue EUR 750 million between 2026 and 2028, and operative EBIT margin between 10% and 15% in the same timeframe, and on the long term, at least 15% operative EBIT margin to be reached. Dividend policy, we are not going to share dividends on the short term. Thank you. Thank you, Tomi. Thank you, Jukka. Now we go to questions and answers, and you can still type in your questions in the Q&A box. We have quite a few questions received, but you have still time to ask. We start here, but keep on going. Okay, we go to North America first. North American revenue has declined quarter-over-quarter. What are the main drivers behind this? Well, actually, year-on-year it grew, so 139%, which was actually a really positive development. Our kind of sales pipeline also in North America is developing quite positively, and we brought also really good accounts in the first quarter of this year regarding to North America. Thanks, Jukka. We have a question from Pauli Lohi. How much your projected growth in the second half is based on external factors such as market demand and customer inventories, and how much on your internal factors such as higher capacity, new products, and new customers? Yeah. I can comment. Regarding the external factors, we expect the inventory levels to come down, which we commented also in the guidance for the full year. The most of the remaining is up to us, so just to make it happen. We have really good sales pipeline development like we communicated. We brought 15 new accounts in quarter one, which we expect to actually bring orders during quarter two. It is basically how we plan the year is through the customer cases directly. We are looking at that capacity and everything together, so that's- Mm. That is a combination. Thanks, Tomi, Jukka. This question comes from Steven Benhamou. I hope I pronounce it right. What do you expect in terms of order intake trend in the second quarter and beyond? Do we comment that? Well, we don't guide the order intake, but I think you can make conclusions when you look our revenue guidance for the year and the quarterly development so far. I think you can draw the conclusions from there. Well said. I was going to say the same. Yeah. Thank you. We continue with Steven. Given the weak order intake trend in the first quarter, are you still comfortable with the higher range of the 2024 guidance? I think that we keep the guidance as a message as its own, so that is something that we stick with. A third question from Steven. What is the usual timeline between order intake and conversion in revenues? I think it's a very difficult question when we look at the total order intake. I think we have commented before that order intake converts in now in one or two quarters, and we're looking. Mm-hmm at the shorter pipeline. It could be even one quarter, or less. I think the market is becoming faster after this component shortage year. Yeah. That's right. We go to questions from Paul de Froment. Could you give us more details related to your new product line, power capacity, modular or not, timing of the release? I think the new product family has been released, and it's basically an improvement in the power electronics. We go to the new power semiconductor family called silicon carbide. This is basically the same, and it's backward compatible with the old product, so this is something that we did an upgrade. It's the same way as Kempower product range is modular, so is our product launches that we can actually combine things. This matches also to the MCS launch that we are using the same power structures to support the MCS and using the same system to charge everything. This is very much in the Kempower product idea. Thanks, Tomi. Where were we going? We take one from Finland. What's your estimated market share in fast charging, and do you think it is growing or falling? We know our market share numbers from last year, and it was actually quite high in Europe, but we don't wanna disclose it publicly the numbers, but we are among the top players in Europe. Thanks, Jukka. We go back to Paul de Froment. What's your view on grid connection lead times in Europe? Yeah, I think it varies in different countries. I've heard as short as, like, three weeks in some places, but then in some way it's 12 months, 18 months in the worst areas. It's not even country by country. It could be by electrical company. This is a very complicated question to answer completely. What we've seen actually in grid connection availability that what we have talked with, like, transformer manufacturers, that the lead times transformers is getting better. That actually points that the delivery of the hardware needed for the grid connection is getting improving. This indicates actually the improvement in this availability time. Thanks, Tomi. Paul is interested about the CPOs. When do you expect CPOs to connect their stations more efficiently? I don't exactly understand what this- It's related to the grid connections. ... more efficiently. More fast or? Yeah, yeah. Maybe faster. I think it's not up to the CPOs. In a way, we are looking at more, the same topic as I already commented on the- Yeah Grid connection availability. If you're looking for new technology in this area, these are more future trends that they could be more efficient than transformer connections, but I think we are talking about the future then and. Yeah Not today. Yeah. Hey, then we mentioned 15 new customers. Could you give us more details on the 15 new customers? Are they CPOs, corporates? Where are they based? I think it was comments on. Because as we have the customer confidentialities, we commented that there was several fuel retailers. We are talking about European-wide. We are looking at logistics players, and we look at truck and e-bus depots. Bus depots mainly in Europe. We look at truck depots in both North America and Europe. There was also important thing on this global car manufacturer cooperation happening, which could be compared to the kind of public charging as well. More on that if we have the possibility to publish those as. Yeah as reference. Stay tuned. The next question is from Mika. Regarding the recruitments, have they previously been mostly to production? Where are the selective recruitments going to be targeted? Yeah. I'd comment on that. Like I mentioned, so we continue focusing especially on the sales and marketing side. You know, we continue focusing and investing on growth and of course great customer experience overall. Those are the kind of key areas there. Of course operations and our production is also scaled up according to customer demand always. Mm. Thanks, Jukka. Actually Mika continues, do you have sufficient production staff to cater for larger production volumes going forward, or will there be bottlenecks there if you think about the production employees? I don't think we have it. It's basically also not that people-heavy when we look at our production, the final assembly, and I think there is plans that we are planning all the time and looking at the capacity needs and our new investments that are coming. Basically the U.S. production running more efficiently now all the time, and then our new factory in Lahti will actually help us with the capacity, definitely. Good. Thanks. The next question is from Tom Skogman. What is needed for you to reach the lower and upper end of your 2024 sales guidance target range? Is it enough if orders improve significantly or no earlier than the third quarter? What order level do you expect in the second quarter? Two questions, actually. Actually that's a link to our guidance and what I commented that the, of course, the success in the Commercial Vehicles and Public Charging segments, so sales on these areas, and also the we continue the successful launch of the second generation charging portfolio. Then also the inventory levels to be go down on our customer side. Thanks, Jukka. Pia asks, "Can you comment on pricing and the decline in gross margin in the first quarter? That was a very slight decrease, and it has varied from quarter to quarter. I think there is no conclusion on that, at least in this short trend. When pricing things, you need to look at longer than one quarter because it's also affected by our which customers we are selling which products, which mix of products. I think the short term and these small variations do not show the trends. This is more or less we don't see high changes in those. Thanks, Tomi. Next question comes from Emiliana. The EV sales car market has been soft. How does this affect demand in DC chargers? We are looking at, actually, the amount of battery electric vehicles in Europe is growing all the time. Of course, if certain car manufacturers are reporting low figures than the other car manufacturers, like for example Chinese car manufacturers actually boosting their production, importing more cars. I think it's just generally at the moment the car sales is low due to the economic situation. For it to affect actually the DC charging market demand, it would need to be low for a very long time, because I think in most countries the DC charging network and the public charging networks is behind the market needs. There is investment debt in the market and basically very long downturn in the car sales could affect that, but not short-term one-year, two-year shifts, because I think the infrastructure is behind on the needs. Thanks, Tomi. Next question comes from John. This is a longer one now. For reaching 2024 lower sales range estimate of EUR 360 million annually, you would need approximately EUR 105 million of quarterly sales for the remaining 2024. Where do you see such sales growth coming from, for example, quarterly sales more than doubling quarter-over-quarter compared to EUR 43 million in the first quarter of 2024? Yeah. Well, I can take it. Like we commented in the presentation, we had really positive development on the sales pipeline side and also regarding this new onboarded customer accounts, 515 altogether. Those are the ones where we also bring the growth in the coming quarters. The stability of the quarter- to- quarter is known when we are in the market where we have certainly valuable products and some of the orders can be bigger than, and some of them can be smaller. It's the variation between the quarters is never even, and than drawing these direct lines that it will be EUR 100 million per each quarter is not very reasonable in our market. It is something that, of course, you can calculate from the figures what we expect for the total of the end of the year, but it is not something that we are in a stable industry. We are in a new industry and the growth figures from the car sales and the demand side are seen when we look to the future. Thanks. We have a question from Juha-Pekka. How should we interpret the back on growth track during the second half of the year and sales pipeline turning into orders later this year statements? Should we expect the slowness in market to affect the second quarter orders as well? Yeah. Good question. When looking at our year and our existing guidance between EUR 360 million and EUR 410 million, that's the way you should model our sales development, meaning the order intake for quarter two, quarter three, and quarter four as well. Like we communicated, we expect the growth to happen, the revenue growth to happen in H2 this year. That's also information you should use when you are doing your models. Thanks, Jukka. We have a question from Janice, and this is about competitor. What is the impact/gain from Australian competitor with Tritium? I think there is, of course, at least in certain markets, an empty space where you had a competitor which is gone there, so of course it's interesting for the other players. That's probably the best comment on that. Thanks, Tomi. We go back to Finland. The question is from Finland, from Nikko. You guide the sales in 2024 between EUR 360 million and EUR 410 million. How much does this include sales from North America? Are you more confident on your sales estimate in 2024 in Europe or North America? North America is, of course, really important strategic market. That's why we made our entry last year, and we continue investing in North America, continue increasing the people and also the capacity in our NEVI compliance program as well. We haven't split our guidance on different markets, but it's a really important market for Kempower overall. Very interesting growth market, but when we have a more mature market in Europe too actually when we have large volumes in demand as well, so that could be a hint on where we expect that as a majority of the volume in the value come from. Thanks. We have a question from Pauli Lohi. How is your competitive landscape evolving? A wide question. We have certain competitors maybe having less success on the market. Some are actually coming. We see some new players maybe entering as a beginning. We have different companies. For us, it's also an eye-opener, and you have a little bit different competitors in the U.S. than in Europe. Mainly the same, but you have more, for example, more Korean players active in the U.S. market. I think there will be entrants with the new players, but we do have also. If you have customers who have had to, for example, like negative gross margins, those companies aren't doing very well, so that is more than expected when you're in a manufacturing industry. Thanks, Tomi. Now the next question is from mergers and acquisitions, and it comes from Ville. Does Kempower has any thoughts to buy competitor, competing companies or any companies that could enlarge the product portfolio, for example, to batteries, for example? Do you follow competition in this from this point of view actively? Yeah. Regarding M&A, what has been our focus is the companies with complementing technology for Kempower, so making Kempower offering stronger than it is at the moment. It's even stronger than it is at the moment. That's the focus we have had in M&A. Of course not excluding anything, but that's the strategy and focus in M&A side. Yeah. Thanks, Jukka. We have a question of Megawatt Charging System. What is the status of MCS project and what is the go-to-market strategy on MCS? What are the potential revenues from MCS throughout, when we go to 2030? The status of the project, go-to-market strategy and potential revenues. I think this is such a quiet question we will probably have a Capital Markets Day only for this answer. I think it's something that if we look at the go-to-market strategy for this year it's more the proof of concept deliveries. We are having certain networks. There is a let's say lack of cars available for the Megawatt Charging System. It's important here that we are early in this market to create the opportunities in the to be first in the market gives you an edge. In the future where we see the Megawatt Charging System, and when you talk about trucks, the most important and most significant market for trucks will be this en route charging. We'll have a look at CPOs who are focused in truck charging. We are looking at, like, few retailers, people who offer energy during the transportation to be main. Then when we look at the end-to-end and in the logistics center, that would be, at least our view today, it will be CCS, high power CCS charging and overnight with reasonable power CCS charging. Megawatt Charging Systems will include we think about 20% of the 20%-30% of the truck charging market value, but it's a key to actually enter this en route charging. Our approach is actually with our dynamics, with our flexibility that we can have a same power unit offering CCS and MCS combining the systems that with the same investment you can cater the overnight charging, we can cater the en route charging. Having advantage with that over the other players in the market is actually pretty strong, we believe. Yeah, we believe that. Yeah. A couple of questions on North America about the revenue. Is your North American revenue in the first quarter representative of the United States manufacturing capacity currently? No, no it's not. It's a total of everything when we look at the customer demand delivery and maybe some delayed goods delivery from Finland because of the strikes in the end of the quarter as well. I think it's a combination. Thanks, Tomi. We stay in North America. Actually, that's something that we have already asked, so I skip that one. About the fixed cost, Nikko asks: how much do you expect your fixed costs growing this year compared to the level on the first quarter? Yeah, it's good question. Relatively less than in first quarter, but especially when you look our guidance for revenue EUR 360 million - EUR 410 million, and between 5% and 10% operative EBIT. Of course we scale up the fixed cost according that, but relatively less in coming quarter than the growth in quarter one. When we look at the profitability in Kempower, it's also that we are looking at the growth of the company still. Not growing the EBIT by target, it's actually growing the company and the opportunities. The investment typically in Kempower are operating expenses investment. When we see the market going, then we start actually investing to the market and that will actually increase the fixed cost if it's about people or adding resources in different ways. This is something that we are planning and we are looking and it's also seen in our guidance how we see the years of Kempower is actually having efforts for the growth as a main target. Yes. About the order backlog, could you walk us through the composition of your order backlog currently? What portion of the orders are scheduled for delivery later than Q2? Do we comment on that? We can comment that we have also orders already, you know, for after quarter two. Yeah. Like we always have had, so it's not only. For the second half. The following quarter, so it will be for the several quarters. Of course there's some weight that the short term weight is always the higher when looking at the backlog and how it's recognized as revenue. Thanks, Jukka. You mentioned this. Also, we continue actually with the order intake. You mentioned that you got several new clients. Has the order intake trend already started to improve? I think it's very positive to get the new orders. Normally when you start with the new customers in our segment, especially now that we are not in the component shortage era, you have the pilot deliveries, you have smaller system deliveries in the beginning. From the commitment point of view, they are significant, but they are significant not compared to company size or delivery size in total. This is something that the first deliveries tend to be smaller than, let's say, when you have volume deliveries and people are testing the systems and it's actually growing up like any normal system deliveries in the industrial products. There is also a question of the seasonality. What kind of seasonality and order intake do you expect for 2024, if any? It's normally when you look at the seasonality, if we look at the seasons as such, winter and spring and things, normally we see the effect more in Northern Europe, where you have a freeze in the ground that the installation amounts in the Nordics is normally lower, and it's higher in Q2 and Q3 when you have actually the optimal circumstances. When we look at it globally, there is not that trend to be seen. I think we are looking at more the market situation, and I think a focus on what is the stock situation with the potential customers, not only with Kempower chargers, with other people's chargers as well, especially in the European market. Thanks, Tomi. Maybe this goes to Jukka. This is about the profitability. Are you planning to take actions to improve your profitability and does it worry you? Yeah. Doesn't worry me. Yes, we have taken actions already, like we communicated, so we limit the new recruitments and we also limit the external spending overall in the company. Those are the actions we take. At the same time, as a growth company, we need to continue investing in growth. That is the key number one when look at the short, mid, and long term as well. Thanks, Jukka. Next question is about pricing. This comes from John: How competitive are the discussions with clients pricing-wise, and are any of the competitors aggressively pushing their products with large discounts? I think those players always exist, and then you have the other players who sell value. I think it is more Kempower is in this kind of added value sales. You will have in every market your price competitors and you have the value sales. I think there is not any big changes in this world. But of course, when the amount of customers who make large purchases is getting smaller, that's natural that there is more competition in different customer discussions. I think it was again a politician's answer, yes and no in the same phrase, but. Yeah. John also asks: Which companies do you consider your strongest competitors, and who is the cost leader per charging unit globally? I think I could not answer that wide question, who is the cost leader in charging units. That's very hard to say. Today I think in Europe wide, I think we consider Alpitronic, ABB quite important, let's say, competitors in there who have been doing well. Maybe some others are now popping up as well, but that's at least the two names. Thanks, Tomi. Tom Skogman asked a question about the pricing too. What is your price versus one and two years ago for a similar product? Can you comment around that? Yeah. Customer pricing, we don't comment publicly, basically. Yeah. Thanks, Tom. I think we go to the last question. Thank you, by the way, for all the questions, and now we take the last question and this is about the DC charging market in Europe. How do you see the DC charging market in Europe, and how do you see the development of the sales of the electric cars in Europe in the next couple of years? I think we see actually the increase in the battery electric vehicle sales, which has been actually going on all the time. It's also confusing messages sometimes on the media, what we see in the studies, the amount of electric vehicles is increasing continuously, especially when we look at longer trends than certain quarters, certain months. This is something. The DC charging market is already, if we look at the infrastructure in Europe, it's behind on the existing car amounts, which actually tells you. We made an internal study when we look at how many electric vehicles per charging point you have in each country, and it's actually, as an electric vehicle driver, if I would be living somewhere else than Finland, I would be very worried at where do I charge my car. We have some of the Nordics are maybe a little bit better situation in the numbers, but many markets, the amount of electric vehicles has grown too fast for the infrastructure to keep up, and that's actually telling you that the demand is there. Then we have, if there is certain short-term obstacles actually having the hiccups on the market, having let's say, longer delivery time or longer delivery times of the grid connections, and we are looking at then the last year's maybe overstating to say panic on the component shortage that created a big amount of orders and big amount of deliveries, and then piling up the storage. Then people of course want to get rid of the storages before the large volumes are implemented. I think when we look at the demand and the need and already invested, that these stocks will be going out onto the field. Because like I said, they are not normally sales warehouses, they are actually made for installation. These are goods that the customer already bought for making money with that. That there is a high interest to actually get that. It's not a sales warehouse, it's basically waiting for installation is the majority of this. Yeah. Thanks, Jukka. Thanks, Tomi. Thank you all for the questions and for your interest towards Kempower today. Before you go, we wanna show you again a customer case, and today we go to Netherlands. In Netherlands, there is a charging hub which was commissioned last year, called WattHub, and this charging hub is actually for electric machines and electric trucks, especially also cars, but especially for trucks and electric machines. Please take a look. Thank you so much for your time today, and I wish you a great spring.