Good day. Welcome to Half Year Results 2023 Call. My name is Priscilla, and I'll 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'll be connected to an operator. I will now hand you over to your host, Peter Bijvelds, the CEO, to begin today's conference. Please go ahead, sir. Thank you. Thank you, operator, and good morning, everybody, and welcome to the Ebusco Half Year Results 2023 Webcast. My name is Peter Bijvelds, and I'm the founder and CEO of Ebusco. With me here in the room today are Bob Fleuren, our COO, and Björn Krook, our CFO at Interim, who will each take you through part of the presentation. I would also like to take the opportunity to introduce our proposed CFO, Jurjen Jongma, who's already present as a listener during today's call. Starting as usual with the disclaimer on page 3, which you should all be familiar with. The agenda is reflected on page number four. I will take you through the operational highlights and briefly through some high-level financials, after which I will give over to Bob for an update on the production capacity. After that, Björn will discuss the financials in detail, and I will conclude what the strategic priorities and outlook for the remainder of the year and medium term. Let's start with elephant in the room before we dive right in. In the first half of 2023, we delivered fewer buses than expected, resulting in a negative result. While we are very proud that we delivered the first Ebusco 3.0 bus from series production, we can't deny there is still a lot of work to be done. We are fully aware of this, but we are also confident that we are on the right track with our adjusted manufacturing strategy. With the help of our three experienced assembly partners in Europe and Asia, we can quickly scale up production capacity. Moreover, by decoupling composite parts production and customer assembly, we also aim to ramp up customer production in conjunction with our trusted partners. I'm fully convinced by doing so, we are taking the right measures to improve our performance in the second half of 2023. Before elaborating on this, I would first like to take a look at the operational highlights at slide number six. Although we delivered fewer buses than planned, a huge milestone for the company was the delivery of the first Ebusco 3.0 bus from series production. Feedback from our customer Transdev is positive, and we are observing strong vehicle performance, which forms the confidence that the design of our buses is sound. Consequently, the commercial momentum persists with orders from Qbuzz, SWEG in Germany, and Keolis, among others. Moreover, the first orders are coming in through public procurement agency, UGAP. While tender activities are in full swing, we traditionally expect more orders in the second half of the year. Of course, this implies we'll have to increase our production capacity substantially. Luckily, we expect to make significant steps in the area in the second half of the year. The first step, buses, have been successfully built, and we expect to start production in the coming months. Although the results for the first half of 2023 were below our expectations, we therefore look forward to the second half of the year with renewed confidence. First, let me elaborate on a bit on the financials on the next slide. We ended H1 2023 with a revenue of EUR 41.7 million, an increase of 12.4% compared to H1 2022. Nevertheless, as a result of late deliveries, EBITDA arrived at negative EUR 43.5 million. Björn will address this in more detail later on. Cash and equivalents amount to EUR 42.1 million. In order to finance short-term liquidities, we secured a two-year financial facility of EUR 41.5 million, in addition to the already existing bank guarantee credit facility, EUR 50 million. This allows us to continue our ramp-up and look ahead. After all, with we all loaded order book of 1,794 buses and a European market share of now 4.7%, there is still a bright road ahead. Zooming in on the order book on slide eight, we see a healthy mix of the both Ebusco 2.2 and 3.0 buses. Overall, the order book grew from 320 buses net in the first half of the year. Besides the growth in the number of bus orders, we also see our Ebusco energy business increasingly gaining a foothold. Here we deploy our knowledge in the field of batteries for implication in other industries within the mobility sector, such as inland shipping. Example of this are the 20 mobile energy containers with a capacity of 660 MWh we recently sold, as well as the batteries for the MS Antonie, the first newly built hydrogen ship. We expect this to have a positive impact on the results in the coming 6 months, while simultaneously ramping up our bus production. Let me hand over to Bob now for more detailed update on this. Thank you, Pieter. As you can see on slide number nine, it's fair to say that the ramp-up of our production in Deurne is going slower than expected. The after effects of last year's supply chain disruptions are causing significant disruption in the production flow. Two out of the three assembly lines are still in use to complete unfinished business instead of new builds. On top of this, the inflow of the required amount of skilled labor became more difficult in the second quarter. This is broadly visible in the entire making industry as such. ... Furthermore, despite all the efforts of the company and our manufacturing colleagues themselves, getting all staff to the required competence level is quite an endeavor. However, to mitigate the challenges just mentioned, Ebusco has a recruitment agency permanently on site and has decided to work during the company closing to make up for lost time. Despite the setbacks, currently, the fourth series order is on the assembly line. In parallel, Ebusco has decided to further increase the production capacity by cooperating with well-respected bus assembly partners in Europe and Asia. These partners will support Ebusco in having the right capacity at the right time on top of our own capacity here in Deurne. These assembly partners have an experienced workforce already, and furthermore, we do see that the Asian supply chain recovered way faster than Europe. Ebusco has secured European safety stock and has strong relationship with European tier one suppliers for the main components, but can flexibly make use of this alternative supply chain for less complex and smaller parts. At this moment in time, the first Ebusco 3.0 buses have been successfully manufactured by our partners. The first launching projects have been awarded and set into motion. All these actions will lead to an improvement in our delivery reliability and growth margin in the short term and facilitate further growth of the order book. Let's move to the next slide. To be able to assemble Ebusco 3.0 buses, we obviously also need sufficient casco capacity. Also impacted by parts and staff shortages, the ramp-up of the casco production is progressing. The Deurne casco facility is expected to go into a 2-shift operation this quarter. Furthermore, our activities in Rouen are still on schedule, and the first lightweight cascos will leave the production line of Rouen still this year. On top of our activities in Deurne and Rouen, from a capacity and risk mitigation point of view, Ebusco has decided to cooperate with our existing supplier to further increase casco capacity. By decoupling composite parts production and casco assembly, Ebusco can significantly increase its casco capacity while securing its proprietary technology. Having said that, I would like to hand over to Björn for the financials. Thank you, Bob. As Bob said, I'm going to elaborate on the results of the first half of 2023 by taking you through the details of the P&L, our margin development, balance sheet, and cash flow statement. Reiterating what Bob and Peter already said, it's obvious that the results are disappointing for the first half of 2023. Although working capital, in general, was relatively stable in the first half, our lower than expected sales should have led to a lower and more balanced inventory level. The build-up of continuing operating losses due to the inability to deliver sufficient buses and increased inventories have had an impact on our cash position. It's therefore that we have secured two-year financing, allowing us to continue to meet our obligations. In addition, the manufacturing restructuring that Bob alluded to and the continued availability of the bank guarantee for credit facilities allow us to better utilize working capital with an outlook to a much improved second half of 2023. On slide 12, you can find the P&L. As we said previously, there are three important parts to our P&L: the revenue, the gross profit, and the operating expenses, resulting in the EBITDA. Tackling the revenue first, even though our revenue increased by 12.4%, this was substantially lower than anticipated due to the two key reasons that Bob already discussed. First, the instability of our supply chain leads to a scattered availability of components, which forces us to temporarily remove buses out of the production lines, thereby causing inefficiencies and incidental cost overruns, but it also takes a lot of time. Secondly, the tight labor market leads to a shortage of skilled labor, which is required to deliver and complete the buses that our customers demand. These two factors resulted in fewer buses contributing to revenue than expected, as we have communicated previously. Moving on to the gross margin, let me be very brief here because I have a slide with more details later on. Summarizing, also margins, gross margins fell short of our normalized margin level that we would normally expect. This is largely due to provisions for delivery penalties, warranties, maintenance costs, and project one-offs. We'll not dwell on this much further because I will go into detail on the next slide. Moving to the operating expenditures, OpEx doubled in comparison with the first half of 2022 on the back of additional hires in internal personnel and temporary labor. In addition, both internal personnel and temporary labor saw an increase in average wage. Clearly, the increase in cost is largely attributed to the increase in temporary workers. On top of additional costs related to both fixed and temporary employees, we also saw an increase in the cost due to the production ramp-up. A very specific example here is the additional space we rented in Venray to conduct our pre-delivery inspections. What I just said on gross margin and operating expenditures resulted in EBITDA that was negative by EUR 43.5 million. Let me, on the next slide, dive into the gross margin in a little bit more detail. What we did on this slide, the gross margin reconciliation first half 2023, is reconstructing the gross margin, excluding incidentals. We see the impact here from the low revenue as well, which means that even small numbers have a large percentage impact. As you can see on the right-hand side, and our normalized margin would have been around 23%, 22.9%, to be exact. Obviously we reported -6.4%. Now, if we look at how we got there, first, some 9.3 percentage points were related to provision for late delivery penalties that customers might claim to, against us in the future when buses are delivered, agreed, on a time agreed later. Next to do an imbalanced supply chain, we experience a higher than normal addition to the provision for obsolete materials and other inventory adjustments. There's also a relatively large impact of 6.4 percentage points. We also made an addition to our warranty provisions, which saw higher than expected maintenance costs, which added 3% and 5.2% respectively. Finally, the supply chain disturbances led to additional costs on projects where delivery was delayed or less smooth than we had expected. Overall, the impact here was 5.5 percentage points. What is not reflected in this number is the production mix. Due to the slower than expected production of the Ebusco 3.0, the mix effect was unfavorable, as the Ebusco 3.0 has a higher gross margin. Also note that we have identified cost savings for materials, which are yet to contribute to gross margin. I will speed up a little bit in the remainder of the financial statements. On the next slide, you see the cash flow statement. Clearly our cash out has been largely driven by the EBITDA loss of EUR 43.5 million. The cash flow from working capital was negative EUR 2 million. If you dig into a little bit deeper, you see that the inventory was moving up quite significantly. Driving down inventories is a critical action going forward. The liquidity cushion with the two-year financing facility of EUR 41.5 million, is allows us to meet the short-term working capital movements, as well as our commitments to suppliers. Second, we believe that the right instruments is in place to help out improve our operational performance in the second half of 2023. This I touched on the main items in the cash flow statement already, very brief on the balance sheet. Fixed assets, you see that they increase mainly due to the deferred tax asset increase. On the working capital side, you see that it, it seems a little bit stable, but the inventories that are, are way too high. Inventories increased from EUR 47 million to EUR 85 million, is clearly not in line with our lower than expected activity level. Finally, there's one more point worthwhile mentioning, is related to the other current liabilities which increased from EUR 9 million-EUR 28 million, due to goods received, for which we need to still receive an invoice. Hopefully, this gives you a clearer picture of our financial performance over the first half, and I can imagine you have some questions on this, which I'm happy to take during the Q&A. With that, back to you, Peter. Thank you, Björn. We will now take a look at the medium-term objectives on slide number 17. I am confident of our adjusted manufacturing strategy. I can be short on this. We repeat our objective to produce over 3,000 zero emission buses per year with an EBITDA margin of 20%-25% within the next five years. At the same time, I'm very realistic. There are still a lot of work to be done, but I'm fully convinced we are taking the right measures to improve our performance in the second half of 2023. In the next slide, I will focus a bit more on our key priorities to get here. For 2023, we expect to record a significantly improvement in operating results for the second half of 2023, compared to the first half of this year. Next to this, we expect a significant increase in sales over the full year 2023 to the full year 2022. In 2024, we expect to be EBITDA positive again. We will focus on three key priorities to achieve this. One, ramp-up of the bus production and delivery via Ebusco's assembly partners. Two, increase customer production by decoupling composite parts production and customer assembly, while securing our proprietary technology. Three, improvement of the overall operation result, including right-sizing working capital. All in all, we have an existing time ahead of us, but we are making great strides forward. Now, operator, you can open the floor for the Q&A. Thank you, sir. Ladies and gentlemen, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. We'll pause just for a moment to allow everyone an opportunity to signal for questions. Once again, ladies and gentlemen, please press star one on your telephone keypad to ask for a question. We'll take our first question from Tijs Hollestelle from ING. Please go ahead. Your line is open. Thanks, operator. Morning, gentlemen. My first question is on other elephant in the room, and that is for me, the ability, let's say, for Ebusco to provide a viable outlook, because I appreciate the provided one-offs and the growth margin. If I go back to the presentation at the beginning of the year, there are also, let's say, a whole string of one-offs, which provided an adjusted growth margin of almost 25%. On that slide, in that slide deck, there is a forecasted growth margin on the current order book, substantially above the normalized 2022 growth margin. Now we're looking at a negative growth margin. How much leeway do you take into account for unexpected events? We all know that in the next reporting period, there will probably also all kinds of one-offs that will be impacting your profitability levels. A comment on that will be appreciated. Thanks, Tijs. I'll be answering your question. It's Bjorn here. What you should really consider here is the size of the gross margin here. The percentage impact is really quite big. The impact, if you compare it to what we said at the end of 2022, and the normalized gross margin was including the mix effect of the 3.0s. I think really that is the item that we're missing. That is what doesn't really add up for us in the last half year. If you would add that back into the mix, yeah, then that would be a good improvement of the margin as we had earlier thought. Going forward, working with external assembly partners, we look at the gross margins that that will bring and the reliability of the numbers, and reliability of the output. That should help us in forecasting the gross margins and the profitability in a much better way. Again, the reason that we make this step is because the predictability of the supply chain, specifically in Asia, is much higher. Yeah, but I'm, I'm still not really convinced, because if I read, let's say, the comments on the, on the gross margin in, in the, in today's press release, yeah, it sounds to me like two years ago, when most companies were basically surprised by the supply chain issue. Why is it that in previous outlook statements, yeah, this has not been more accurately translated in, in, yeah, let's say, an outlook, because we all know that financial markets need an outlook. I mean, for me, I don't care whether a bus co makes, let's say, 10 buses in, in a six-month period or 150, as long as it is basically based on a kind of a reliable range of expectations. Still, I'm looking at all kinds of forward-looking statements, significantly improved. Yeah, I have to make forecasts, yeah. My, my boss demands me to make forecasts on the, on the stocks that I'm covering, and I have no clue. What, what should we do? I mean, how much buses will the revenue be based on in the second half? What, what are your assumptions, and what is the range? How many 2.2, how much revenue recognition on the 2.2, on the 3.0? There must be kind of a minimum and maximum amount of, of buses in order to form these results. Otherwise, basically, you also have no, no idea on the profitability outcome in a reporting, in a reporting period. Look, Tijs, what we've been confronted with is a lower and lower number of missing parts, but still a significant number of missing parts that we're that we're missing. That impacts our predictability as well, right? It doesn't matter if, so much if you miss 100 or 150 parts, but if you miss 1 or 2 parts, that still doesn't allow you to push the bus forward, and the client needs a complete bus. We have seen that situation improving, but, yeah, it is still recovering slower than we had expected. I think that is, you know, where we call it, maybe have been too optimistic. We, we clearly recognize that, and that's also why, you know, now we're careful in, in predicting the number of buses that we're, we're forecasting. We see an underlying improvement of the results in the second half as we, as we communicate in our outlook. Bob? Yeah, maybe to add to that, is that, two factors have determined the uncertainties of, let's say, predicting or forecasting. One is, let's say, turmoil, which is created by material shortage, and the other one is, is a staff shortage. As you see in the Netherlands, but in the entire of Europe, it's really difficult to attract skilled labor. While we are re-strategizing with this new, let's say, production strategy, with working with those third-party assembly partners, they already have existing employees, and they already have an existing supply chain for smaller parts. The uncertainties that we have encountered in the first half of this year with parts availability and staff, we hope and think to take that out of the equation while working with those third-party assembly partners. We fully understand, Tijs, that we, we need to be more consistent in our forecasting, and that's for sure true. It's only still difficult, as Björn already mentioned, one year ago, when the bus went from the last station, we had 75% of the components installed on the bus only, and now we look at a rate of 95%, 96%. We have seen a lot of improvement, but the problem is, what we have seen also, for example, with one of our big customers in Germany, where we delivered 90 buses, if it's not 100% finished, we cannot deliver the bus. We cannot take revenues, we cannot do a final acceptance by the customer because we are delayed six, seven months to certain parts. That's why the forecast is still, is for sure not up to the grade that you would normally expect from us. We fully understand your question. Outside that, we, we occupy a lot of extra time if these buses come from the last production station, that if they are 95% or 96% finished, maybe in six weeks or five weeks when the parts arrive, they need to go on rework lines. This has also a heavy impact on our gross margin and cost because this is a lot of inefficiency and also the predictability of this. ... getting the parts in is difficult. That's why we have also seen with our business model of 2.2, that supply chain in Asia is much, much stronger. This is the reason that we shift more back to that, where we have delivery time to Europe on certain, let's say, smaller items like wiring looms or connectors from four-six months, we see there a lead time from four-six weeks. Okay, yeah. Still, I mean, I have no clue what to put in my model for the second half of this year based on these, on these textual statements. All right, let, let's have that discussion outside of the call, guys. Okay, yep. Thank you. Thank you. We'll now move on with David Kerstens from Jefferies. Please go ahead. Your line is open. Thank you. Good morning, gentlemen. Maybe a question first on the order book. You said the order book increased by 320 buses. I think your announced order intake was 303 buses. Were there some orders that you did not announce, or what, what explains the difference? I think it's a decrease from 927 buses in the first half of last year, but obviously, that included that Deutsche Bahn order. How do you see that order intake? Is that in line with expectations, below expectations, or is it low because your production capacity was not fully up and running? Also, I noticed that it was mainly for Ebusco 3.0. Does nobody want the Ebusco 2.2 anymore? Is that phasing out much quicker than expected? Maybe the second question. I, I agree with Thijs, you, you, you are guiding for 3,000 buses within five years, but can you tell us how many you did in the first half of the year, and how many you are expecting to do in 2023? 550-600 buses was the previous guidance. As you now no longer mention that, does it mean you've dropped that guidance? Where do you expect to end up now for this year? Can you maybe tell a little bit more about who your assembly partners are? Is it your existing partner in China? What are the commercial agreements, and how will it impact your profitability? Maybe a final question on your CapEx. I think previously you guided for CapEx of EUR 5 million-EUR 10 million for this year. You did EUR 9.5 million in the first half. I saw there was also some M&A included in there. What was that for? Is that EUR 5 million-EUR 10 million still relevant for this year? Thank you very much. Okay, I will start already with answering some questions. I wrote some down, if I forget things, please let me know. It's for sure true that the operational performance from the 3.0 is even better than we expected in real life, and this is getting sounded through the market, and these on a 12 meters, 4,000 kilos, that it's lighter, has a big impact, for example, on energy consumption, and this has also a positive impact on our sales in one way: that more customers want to move towards the 3.0, because TCO-wise, it's a lot more interesting. Yes, we having more orders than we expected on the 3.0 and a little bit lower on the 2.2. On the other hand, we keep consistent orders also on the 2.2, as you, for example, deliver to BVG, it's, it's operated very, very positive. We also keep delivering a lot of 2.2 orders. If you then go further, how, how will this continue? We, we, we see that we still get a, a positive result on the, on the 2.2s because of a very stable performance. Again, on TCO-wise, 3.0, of course, it's, it's, is stronger. Mm-hmm. Does it mean you will start manufacturing the 3.0 in China? What is the view of customers on that with regards to locally produced buses? Yes, we will, we will work with our existing assembly partners, yes. Because, yeah, we have already experience with that. The main reason is that we see that supply chain is much better, as we mentioned before, but of course, this will also impact on our margin. It will, it will get significantly better. Yeah. And- I think in the IPO, you highlighted that the insourcing of the production to Deurne would lead to a step up in the profitability, right? From 27% to 35%, I think, was your previous target. Locally produced buses- Right. Would be more profitable than buses manufactured in China. Why would this improve the margin now? Very simple, because here the supply chain is still for sure not under control. You must imagine, like I just said before, with Mr. Hollestelle, is that now you must see that because a bus cannot finish completely, it needs to go a rework line. The hours, and time and effort we need to put into a bus to get it completely finished is here much higher. In a perfect world, we still agree that in Europe, yes, if supply chain is in order, if everything runs smoothly, you can produce your buses to a higher margin in Europe than, for example, in Asia. At this moment, because you have much longer lead times and availability of parts is still a big problem, this is not the case. David, any comments on the volume numbers? David, can you hear me? Yeah. Yeah, so on the assembly partners, because that was also one of your questions. The assembly partners are very familiar partners to us. There's partners that we've worked with on the 2.2 and on the 1.0 beforehand, and we've disclosed the name of [UMFI as well, as our European assembly partner. Those are all familiar people to us. They are familiar with the Ebusco drivetrain. That's one of the reasons also that we have good confidence that we can scale up assembly with those assembly partners as well. I'm, I'm going down my list. I'm looking at a CapEx number in the original guidance of EUR 10 million-15 million. I, I think you said 5-10, the original guidance was 10-15. I think what we spent on the half year was around seven. I think you can assume that we will end up at the high end of that of that range. And for the number of buses, that we, number of buses that we announced in terms of the order book, there have been a few orders that we haven't announced. One of them was the, the Rouen UGAP order, because it came very close to this to this release. And there's a few more smaller ones. I think also what you've seen is the conversion from the Deutsche Bahn call off contract. That that one set. In terms of the volume numbers, we're, we're in the middle of setting up this, this movement, this, this change in assembly strategy. So with the trading update in October, we will be able to give a lot better guidance on how that will develop. For now, y- you have the order book and, and you know what we're working through. We know- you know that we've been a little bit behind. I think that, for the seoncd half of the year, we're catching up here in Deurne, and we'll have the added capacity of our assembly partners in Europe and Asia. The order book is the order book today, not at the end of June? No, no, it's the end of June. End of June. Okay. All right. Thank you very much. The team, for instance, that we've done the SWM, 80 meter, the, the 28 that we announced recently. Those should come, should come on top. Thank you. Thank you. Dear gentlemen, if you have any follow-up questions, you may press star one again. All right. It appears there is no further... Okay, we have a follow-up question from David Kerstens again, from Jefferies. Please go ahead. Your line is open. Thank you. Yeah, I had one more written down, maybe on the contribution of the, of the energy business in, in the second half. Is there a rule of thumb we can apply to the kilowatt hour of energy storage that you provide in turn to get to a revenue number for that business? What is the potential there, exactly? Yes. I think in total, off top of my head, the total is not kilowatt hours, but megawatt hours. It's 72,200 kWh and 72 MWh. If you compare that, let's say, to, to make it even more, it's approximately batteries for 190 buses. On a 12 meter, just for your. Does that help, does that help in answering your question, David, or? Batteries for 190 buses. Approximately. Equivalent. Yeah, so a total- Yeah, equivalent, yeah, from a 12-meter bus. It's 72,200 kWh, divided by 383. That's an average of a 12-meter bus battery pack on an Ebusco 3.0. It's to be 100% exactly, it's 187.9 buses, but just to give you an idea. Okay, thank you very much. Thank you. It appears there is no further question at this time. I'd like to turn the conference back to the host for any additional or closing remarks. Thank you first of all, all for your, for your time, and for all your questions. We also understand that this is not the results we wanted to show, but I can promise you that we are very much working hard on this to turn this around, and we have also a lot of confidence that we will do that, especially with our assembly partners and a much better supply chain. Thank you very much. We will stay in close contact. If you have any further questions later, like Björn already said to Mr. Hollestelle, we are very happy to give you more insights. Thank you very much for now, and I will give it back to the operator. Thank you, everyone, for joining today's call. You may now disconnect. Have a nice day, everyone.