Hello, and welcome to X-FAB Quarter Three 2024 Results Conference Call. My name is Alicia, and I will be your coordinator for today's event. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to Rudi De Winter, CEO, and Alba Morganti, CFO. Thank you. Thank you for the introduction, Alicia. In the third quarter, we recorded revenues of $206 million, down 12% year- on- year and 1% up quarter on quarter. This compares to a guidance of $205 million-$250 million. Revenues in our core markets, automotive, industrial, and medical, accounted for $190 million, flat compared to previous quarter and down 8% year- on- year. The bookings were up 4% year- on- year, with a book-to-bill of 1.05 in the third quarter. The backlog came in at $481 million, compared to $517 million end of the previous quarter. The decrease in backlog is related to long-term orders worth $114 million, for which delivery dates are not yet confirmed and at the end of the quarter. These longer term orders for deliveries in the year 2025, 2026, will be added to the backlog in the next months. In the third quarter, our automotive business grew 8% year- on- year. While automotive bookings weakened due to year-end inventory adjustments and general destocking, the picture is mixed on the automotive side. Our China automotive business has grown with 55% year- on- year and 38% quarter- on- quarter, while EU and U.S. automotive bookings weakened. Our industrial and medical business decreased 41% and 29%, respectively, and the current market trends and uncertainties have led to destocking activities and delays across the entire supply chain. However, order intake in the industrial and medical end markets picked up strongly in the third quarter. The consumer communication and computer business bottomed out, and it grew 13% compared to previous quarter, with a strong booking of book-to-bill just above two. The CMOS business declined slightly year- on- year. Demand for X-FAB's popular 180 nm CMOS platform remained healthy. On the new 110 BCD SOI platform technology, several new prototypes were started for future high volume applications. The bookings for 350 nm CMOS technology dropped due to inventory corrections. The older 0.6-micron CMOS technologies on 150 mm revived after we announced a discontinuation for these technologies as per end of 2026. This decision was taken to support the ongoing transition to the microsystems business in our factory in Erfurt. Customers responded with high order volumes while initiating design activities to work on successor products. The upturn in 0.6-micron business is expected to contribute positively to the revenue from the fourth quarter onwards. The third quarter silicon carbide sales continued to decline in a weak market environment and decreased 60% year- on- year. The visibility remains low. However, the silicon carbide development activities have been encouraging, especially for the next generation technology that comes with improved design performance and a 30% increase in die per wafer. Combined with the recent reduction in silicon carbide substrate prices, this represents a potential of 40% cost improvement for the final silicon carbide devices, enabling new demand. As such, as soon as the silicon carbide market picks up, these new high performance designs will contribute to the future growth of the silicon carbide business. In the third quarter, the microsystems business recorded a decline of 11% year- on- year, reflecting current market weakness. Inventory adjustments in the automotive industry and delays in new model launches have particularly impacted the microsystems business in the third quarter. The medical end market, typically a strong driver of microsystems sales, has also been affected by destocking, but is expected to contribute positively in the future due to healthy bookings. Quarterly prototyping revenues totaled $23 million, down 14% year- on- year and up 12% against the previous quarter.... The fundamental drivers for X-FAB business remain intact. These include the growth of semiconductor content in cars and the electrification of everything, to drive the decarbonization of our world, and the digitalization of the medical sector to make healthcare more efficient. Our comprehensive set of technologies and expertise enable customers to develop world-leading solutions for most important challenges facing our world. Our business is expected to return to robust growth once the current destocking cycle is completed. Operations. Let's move now to the operations update. In the third quarter, we continued to our capacity expansion programs with a focus on our popular 180 nm and 110 nm CMOS technologies at the factories in France and Malaysia. The newly constructed clean room at our Malaysian site is ready, and the first equipment is moved in. The expansion of the CMOS capacity is also critical to support the microsystems business. Microsystems are based on CMOS wafers, to which specialized MEMS layers are added. With the planned discontinuation of the 0.6-micron CMOS business in Erfurt, the site is well on track to entirely focus on the manufacturing of complex microsystems in the future, as of 2027. The silicon carbide capacity expansions at our Texas fab, which has been slowed in line with current market demands, will be resumed as soon as the silicon market recovers and long-term customer commitments require additional capacity. In addition, we aim to further increase the portion of customers who source their own silicon carbide raw wafers and consign them to X-FAB, resulting in a lower total billing as this is less pass- through for substrates sourced by us. Due to both the lower installed capacity and the decision to optimize the portion of customer-consigned silicon carbide wafers, the overall silicon carbide revenue targeting for $300 million-$350 million in 2026 is no longer achievable. This will result in changes in the timing and the product mix of our X-FAB growth path going forward. Total capital expenditure in the third quarter came in at $150 million. Thereof, about two-thirds related to the expansion in our factory in Malaysia. We reiterate the CapEx projections for the full year of 2024, in the amount of about $550 million. Most of the Malaysian CapEx expansion will be delivered by end of first quarter 2025, and from there onwards, there will be a significant drop in the CapEx spending. An operational incident in our factory in Malaysia caused a three-day production slowdown in the third quarter. This has been fully resolved, and rework of the affected material is underway. It will, however, shift revenue also from the fourth quarter into the first quarter 2025, in the range of $ 15 million-$20 million. Let me now pass the word to Alba for the financials. Thank you, Rudi. Good evening, ladies and gentlemen. We will now move to the financial update. I would like to start this financial section by highlighting that the third quarter, we succeeded to increase quarter-on-quarter gross margin by 14% and EBITDA by 5%, EBIT by 9%, while the revenue increased by 1%, totalizing $206.4 million. These were, within the guided $205 million-$215 million. Our quarterly EBITDA was of $50.3 million, with an EBITDA margin of 24.4%. If we exclude the positive impact from revenues recognized over time, the EBITDA margin of the third quarter would have been 23.5%. As usual, our profitability was not affected by any exchange rate fluctuation, as our business is naturally hedged. At a constant US dollar-euro exchange rate of $1.09, as experienced in the previous year's quarter, the EBITDA margin would have been 0.1 percentage points lower. Cash and cash equivalent at the end of the third quarter remained very healthy and amounted to about $316 million. To conclude this financial section, I would like to share our guidance for the last quarter of 2024 and give you an update on full-year perspective. Fourth quarter revenue is expected to come in within a range of $195 million-$205 million with an EBITDA margin in the range of 22%-25%. The guidance is based on an average exchange rate of $1.1 to euro, and does not take into account the impact related to IFRS 15. As you can see, we have adjusted our full-year revenue guidance from $860 million-$880 million down to $822 million-$832 million. In the full year, EBITDA margin guidance has also been adjusted to 23.4%-24%. Now I would like to give the word back to Rudi. Thank you, Alba. On the short term, the automotive business is mixed. We see strong growth in China and a weaker market in the other regions due to inventory adjustments impacting portions of our business. The long-term outlook remains positive. I'm excited about our new silicon carbide technology modules with great advantages for our customers. I'm confident in the unique technologies we offer and the high growth end markets we're serving, putting us in the right position to address today's challenges and deliver sustainable growth. As soon as the market begins to recover, our pattern, order patterns will change rapidly. With the progress we are making with our capacity expansion programs, we will be able and we will be prepared for our customer needs, especially with the increased capacity on 180 nm technology, and we will return to solid growth. With this, I would like to conclude and open for questions, Alicia. Thank you. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. We'll start with the first question from Michael Roeg, from Degroof Petercam. Your line is open, thank you. Good evening. I have a couple of questions, and the first questions I have is on the operational incident in Malaysia. Can you elaborate a bit what happened there, and what kind of measures you will be implementing to prevent this mishap from occurring again in the future? Yeah, i t was related to an impurity in a chemical system, and so that was recovered after three days. However, it requires a review and rework of material that was in the fab, so yeah, of course, there are measures taken to avoid that in the going forward. Such an event has been very rare. We have been using that chemical for with the suppliers for 30 years, but this is so we're taking measures that doesn't happen again. Did you have to destroy the entire wafers, or could you grind a couple of layers and continued from where the mishap started? No. Actually, most of the products are good, but it requires kind of additional testing, and a rework or replacement for some of the others. Okay. So not a whole lot was destroyed and then costs that you could not recover. Okay. And then, this could also happen, of course, in other fabs that you operate. So that- Yeah, we... You've also adjusted procedures there? There are controls on those chemicals, and there are tests that are done. In a factory we use yeah hundreds of different chemicals with all extremely tight and ultra-pure chemicals. Y eah, so it's a lot of, you know, FMEAs and things are in place to avoid things that happen, but yeah, sometimes you can have an excursion. Okay, good. Then the next couple of questions I have is on price negotiations for 2025 That is typically something that would be happening, well, in this period of the year. Is it likely that we'll see a return to the usual price erosion of the past, in general? T hen considering that silicon carbide wafer prices have been sliding quite strongly, is it likely that there will be more price pressure in that part of the business than in your plain vanilla silicon business? Okay. T here is indeed, on the one hand, we have our three yearly, for quite some business, a three yearly LTA, where 2025 is still included. So the price evolution is moderate, but there is, in some cases, we have price negotiations and concessions, but they're very moderate. On the silicon carbide, that's a different topic. Yeah, as you know, the substrates are a very substantial cost of the end product, and X-FAB doesn't take any margin on those substrates. F or customers who consign the substrates, they have, of course, they see the savings themselves directly when they source them. For customers who buy through X-FAB, we pass through the savings that we can achieve on those substrates. So they are bigger. They are substantial. Okay. T hen, following up on that, Q4 is typically the quarter in which some customers do some inventory adjustments, and there's a bit more uncertainty than usual. Do you think that some of these customers are holding off on ordering, especially because they think that next year they can get lower prices than in Q4? No, I don't think that's the main reason. Well, for instance, in China, well, it's, as I explained, it is mixed in different regions, so some areas, like in China, we're doing very well. The rest of the world, automotive is weaker. What I think happened is that, throughout the supply chain, so as well as X-FAB, but our customers, but also the OEMs, they over the past years, they have been pushing LTAs and maybe this has resulted in higher inventories. What we see right now is that, yeah, because there is no shortage anymore of chips, that suddenly everyone went back to the old habits and try to optimize their inventories and so forth, and that's where we're going through. Because worldwide, the car sales is relatively stable and holding up well, is not such a big variation, but you do see a shift to China, where there is a lot of electric vehicles with a lot of electronics, and so we see also there strong growth, and well, as you know, in Europe or the rest of the world, electric vehicles growth is less than planned, and this has caused a disruption in the supply chains and corrections that are happening. On top of that, you have the typical end-of-year inventory optimization that comes on top. So I expect that in the early next year, things to resume there. Do you also see very different behavior from your Chinese customers in automotive who continue to order, whereas European and U.S. customers may be indeed holding off, or are they holding the same? I think the growth that we see in China is because the China electric vehicle market is going very strongly, and I think they have less inventories. They're in a growth mode, and that's what we're seeing in our bookings. Okay, then the final questions, and then I'll leave the floor for others, is about prepayments. Can you tell me, when will you start supplying wafers to your customers that will be charged against the prepayments? C an you sort of guide for a quarterly rate that will be the case next year? Actually, the system is a bit different. We received prepayments in advance, so at the beginning of the contract, for the full period of the three years, if it's a three years contract, in the range of 10%-15% of the total amount. And we have, depending on the contract, there is a general, a fixed amount which is repaid. I n most of the cases, it's quarterly, and the big amounts will start next year, and a big portion end of next year, in terms of repayment. Smaller amounts have been already started to be repaid in 2024, but the vast majority will start end of next year. So it's not linked to production actually. Okay. Oh, yeah. It is spread roughly over a period of three years. Three years. So three years starting end of next year, that's the big part? H ow would you define substantial on a quarterly basis? Is Is that $10 million or $20 million? You can assume that as of second half next year, that it is roughly the full amount spread over three years. Okay, good. Clear. Divided by 12 quarters then. Yeah. Okay, that's it from my side. Thank you. Thank you. We currently have no more questions coming through. As a final reminder, if you would like to ask a question, please press star one now. We'll go now one more question from Guy Sips from KBC Securities. Your line is open now. Yes, thank you. Can you elaborate a little bit more on the CapEx for next year? So in the first quarter, what amount do you expect to allocate on the first quarter, 2025 on CapEx? Thank you. Yeah. So roughly, I don't have that well prepared with me, but you can assume maybe something in the range of $ 150 million for the first quarter, and then the rest of the year, it will drop significantly, somewhere closer to $ 50 million or so per quarter. But that's. We're still working on those details, but that's the order of magnitudes in total. So that, then it would total closer to $300 million? Yeah, so but with a big chunk in the first quarter and then a significant reduction. Yeah, that's what we aim, yeah. O n the Malaysian incident, how much of this, yeah, sales do you expect to come in the first quarter? And is that on top of the normal, let's say, a normal business that you would generate in the first quarter, or is that, yeah? Yeah, so this is, as mentioned, it's about $15 million- $20 million. That is shifted, that would probably will not be able to finish this year, and that is shifted in the first quarter. So but maybe some business from the first quarter might now be shifted to the second quarter, but so the exact revenues for the first quarter, it's not that this business is gone, but it is a delayed delivery. Okay. Thank you. Thank you. We've got one more question from Robert Sanders from Deutsche Bank. The line is open now. Yeah. Hi, good evening. I just had a few sort of housekeeping questions on the balance sheet. I saw you raise some debt in the quarter. Are you drawing down on the facility? Are you just tapping the market? How are you going about raising debt a t present? Thank you. Yeah. Hi, Rob. Yeah, so we signed a new revolving credit facility on thirty-first of July this year, of another EUR 200 million, again, for five years, commitment fee, and so this is on top of the previous one, of also EUR 200 million that we raised on first December 2021. Bilaterally, we also had some sale- and- lease back and leasing contracts and a couple of other bilateral facilities that we signed in the recent few months. So this is the current structure. O f course t he majority is to finance the CapEx, definitely. H ow much of the two revolvers have you drawn down on? Okay. We only drawn down about, on the first one, we are in the range of, I think, around $190 million, $194 million maybe. We haven't started to draw under the second one yet. Because this is also mainly to finance the CapEx of Kuching, which we could reduce a bit, the needs, well, push out the needs, actually. So this is the good news. On the CapEx, what, why are you not slamming on the brakes? Every one of your peers is slamming on the brakes on CapEx, but you continue to have the same plan, which is very strange to me. So please help us understand. Because we have urgent needs for this capacity. So all our - it's in Erfurt, the capacity expansion is for 180-nanometer and 110 nm, but in particular for 180 nm and 180 nm BCD on SOI, for which we are still in allocation and see strong demand going forward. S o we're really pushing the throttle to get the machines in the fab up and running and producing, yeah. Right. Is there not a way you can reduce your CapEx costs by going into the secondary market? Because, you know, there is a lot of idle capacity out there. These machines, they were ordered a year ago, two years ago. We cannot cancel them. Okay. Sorry, actually, coming back to this, the strange comment you made about the backlog. So on the backlog, you said orders were higher than sales. Your backlog went up sequentially. Oh, no, sorry, it went down sequentially. But even though your backlog, your sale, your orders were higher than your sales, because you've taken out $114 million of orders, for which delivery date has not been confirmed, why have you got unconfirmed orders in your backlog in the first place? That is a technicality. So the way we manage or count our backlog is that the backlog is for orders that are scheduled and with a firm delivery date. And because of this last- time- buy, there are quite some orders, to be precise, $114 million, that as of today, we have not scheduled a precise delivery date. So that will be done in the next couple of months and quarters, and some of those will stretch up to end 2026. And that's so you could say that the actual backlog is the $481+ million the $114 million. But technically, because they have not yet a scheduled delivery date, they are not counted in backlog in our internal systems. So, they are unconfirmed orders as opposed to confirmed orders? Yes. Okay. And, and did they just get taken out of the backlog in the last quarter, or why did you not talk about it? No, no, no. These are orders that came in in the second and the third quarter that we have never, they have not been in the backlog yet. Okay, fair enough. And then just on the automotive backdrop, what have you actually seen from your customers since the sharp slowdown in the automotive industry in the last two months? W hat has been the impact on your business so far? We see slower bookings for some from our European and U.S. customers, automotive customers. Okay, thank you. Thank you. We currently have no more questions coming through. As a final reminder, if you would like to ask a question, please press star one. It seems we don't have further questions, so I will hand you back to Rudi to conclude today's conference. Thank you. Thank you, Alicia. With this, I would like then to close the call and hear you all back on the 6th of February for the full year results. Thank you, and have a good evening. Thank you. Good night. Thank you for joining today's call. You may now disconnect.