Kempower

Welcome to this ChemPower's first result announcement after their successful IPO. My name is Anu Partanen and I will be moderating this event today. Today's event is for all of ChemPower's shareholders, analysts and the media. we will be hearing about ChemPower's financial results for full year 2021 as well as the fourth quarter. Our speakers today are ChemPower's CEO Tomi Ristimäki and CFO Jukka Kainulainen. But first a few words to the audience. We have reserved time for a Q&A session after the presentations. You can send in your questions by typing them in the chat window and you will find the chat box from the right hand side of the screen where at the bottom of the agenda there's a tiny little Q&A button. Click on that button and you can send in questions and I will see them here and I can bring them to our speakers after their presentation. Please state your name and company if viable. You can send in your questions in English or in Finnish, and our team will do our best to translate them as we go along as the language for the event today is English. But now to our speakers. Welcome, Kemper CEO Tomi Ristimäki and CFO Jukka Kainulainen.

Hello. and we can begin our part and welcome from the company side as well. We'll first go into the key highlights of our year in Kenpower and of course it's nice to see some also not so typical figures, so Kenpower solutions are delivering almost 80 megawatt hours of charging power to end customers every day. Today we are still continuing with two production sites in Lahti, Finland. 136 employees, so actually after third quarter end, quite strong growth also in the headcount. Subsidiaries, now a couple of new ones, Germany, Netherlands, UK, Norway, France and Spain. And we are in the middle of establishing companies also in Sweden and Italy. Looking at also the geographical spec where our chargers are already charging vehicles is more than 30 countries in the world and all the inhabited continents. And looking at the numbers and basically, of course, as a first, I want to mention the Nasdaq Helsinki listing with the first north growth market, Finland. That was, of course, for us a very historical day and a thing that has, like we also see today, is for us a big success. Growing existing and customer base in the Nordics and Europe was definitely the theme of 2021 and it's going to be continued. And also the decided capacity expansion already from the... We have now a project ongoing where the renovation is already being prepared to move in the first half of the year. We will move into new premises, the main part of the production. So 10,000 square meters about new space. Of course the theme of the year I think for all the electric companies was the component shortage, but I'm extremely happy on how well we actually managed the situation. So no lost customer deliveries in there and quite little amount of delivery delays as well. On the sustainability goals, so highlights, I think the reach goals is that we set the bar for 99% end-of-life recyclability rate for our products, which was achieved also based on the third-party study. And on the employee satisfaction, which is one of our key things in there as well, the employee net promoter score was reached in 83, which is an excellent result. Looking at the actual numbers, I can hardly believe actually that when we're looking at 2020 with our 3.3 million, which was already an achievement for a young company, that it has now reached the 27.4 euromillions. And actually 741% growth is, I think, a good achievement. But it is also showing very positive results when we are comparing the revenue to order intake. And the growth in the order intake, of course, is signaling where the company is going in the future. And the gross margin stayed in a healthy level of 46. And of course, the investment in the growth will continue with the funds gathered through the IPO. Looking at the go-to-market strategy, and also the map is showing where our main operations today are if we are looking at how we go to the market. And the interesting area when we are looking at the market and the key activities, I think the European presence for the next few years is the key in our growth plan. But we have also set up the goal that before the end of 2025, we will be in the US market with our own presence. And the focus will be on each customer segment that I will show in the next slide where we are focusing on these geographical segments. And we continue heavily on the recruiting professionals in each function within the company. Looking at actually, just a reminder, or if you haven't seen it before, that where we are focusing, so Kemppao is not in the consumer market, so we are fully business to business company. And basically starting from the left, we look at the charge point operators, retail chains. These are our two segments in the private vehicle sector. Then if we look at heavier vehicles, we are looking bus and truck operators. So those people who own the fleets is the key target in there. And especially today, the bus market is growing really fast in Europe in percentage, and we expect a lot from the electric truck market in the future. And also as a fourth direct sales segment, we count the OEMs. And how we define it in Kemppau is the parties who sell our charts as part of their solution. And they're also strong new customers achieved this year. Within the sales strategy, if the customer belongs to any other group, we are using our distributor and installer networks to serve those cases. And looking at a little bit about the references, very nice new ones also that we are able to show today. So if we are looking at the private card charging, there, of course, one of the big highlights in the Finnish market was the S Group announcement in the beginning of the year that they will build the charging network based on Kenpower chargers, a thousand sites in Finland, which is for a single country especially important, but of course, When we are looking at our international market recharge infrastructure, the biggest Nordic CPO is definitely an important customer for the period. And the new wins, if we are looking at, let's say, Vattenfall agreement, if we are looking at the powered up new business in the Southern Europe, these are key things for us when going to the next year. Boston Truck Operators continues. strong and we have new projects in the bus business this is a lot focusing now in the buses because the market situation is so that the buses are going going into the very popular in in in the cities especially the city buses And today we have a nice project in the truck side as well, but definitely the truck market is behind the buses in rollout. OEMs, very nice new customers. When we look at back of the year, especially we have the One of the leading companies in the mining segment, Epiroc, when looking at the fueling industry, market leader. And then, of course, strong commercial vehicle customers like Volvo and Scania there. And also, I like to point out, I think, good partners from the year that have also created part of our results by being, let's say, the face of Kenpower to smaller projects and wider audience. We look at those there as well. On the growing organization, driving the growth, I think there is quite significant increase when we're looking at almost adding 100 people into organization around 38. And this is also that it's spread out through the organization. But of course, we can see that in the future, I think the main focus areas on expanding is the international sales, but also the R&D, which is always in a main focus to tech company. and looking at the scalable business and looking at how fast a company can grow when you are in a manufacturing goods industry. Looking at the capacity expansion from 500 to 2,800 square meters, what we started in the February 21 and was already in a major part of creating the 27.4 million revenue this year. It took only four months. So it is kind of a way how we have set up the production to be scalable that we can increase the capacity fast. Today, the announced capacity expansion, what we did in the summer, is going to be in use in the first half of this year, adding 10,000 square meters to the plan. This actually shows also the asset-light business model that we are focusing on exactly to our core competence in the manufacturing, how to do it fast, but also how to make the variation to be flexible to the customers that we can have basically the mass customization model serving the customer base so that even we have low variations of components, we can create the high variation of end products. And looking at also, we mentioned when we were listing on ChargeEye, and this is the year actually that we are rolling out also our cloud solution to the customers. Already there is project that this is also widely used in a critical place, especially the bus sector, where ChargeEye in some side is controlling the whole power production, the whole fleet control of charging. And this is through cloud, self-developed cloud system. And coming as a lifecycle management, we are looking at remote operation, but also site maintenance, depending on the levels. This is a software as a service model we offer to our customers. And looking, of course, something what we launched last year. So the first deliveries of dynamic charging solutions were happening in January 21. Today, it already feels that it's a long, long, long time ago, but it's only one year from now. And this has been really successful and based on a market study, done by a third party to Kemppau. It's also that 70% of Kemppau's current customers is looking at this as a major purchasing reason. So this is really making a difference and we see that this is a unique feature in the DC charging market. And looking at the sustainability, this is really of course in the core if you're looking at electric vehicles reducing the carbon emissions by 86% on average for the whole industry. And we are in a position to enable this change to cleaner transportation. So in the left, I already highlighted, but I will highlight more that we already reached the end of the life recyclability rate, 99%. And of course, the employees are in a center in Kemppau. So also the ENPS, the employee net promoter score reaching to 83% is really something I'm also very proud of. We are looking at the three things in here on the sustainability about reducing the carbon footprints and through that we have committed to have fossil free electricity by the end of 2025 and zero percent landfill waste by 2025. And also the responsible products is in the core and focusing on to being the best workplace for future professionals. And now I pass this to Jukka.

Hello, let's go to our financials then. So 2021, also quarter four, we, of course, like we already showed, we grew really, really strongly. We could say that we grew exceptionally strongly when looking at the growth rate we reached. It relates to our revenue, it relates to our order intake, but on top of that, we successfully completed the IPO end of this year, which enables our growth strategy execution from now on. But a little bit highlights about these numbers. So revenue grew growing 741% in 2021, reaching 27.4 million euros. In Q4, we grew 328% compared to Q4 last year, so reaching €8.4 million in Q4 compared to €2.0 million in Q4 last year. Like I said, order intake also really strong performance, also indicating the growth for the coming months as well. And in Q4 part in order intake was 11.5 million euros. When looking at the profitability KPIs, full year EBIT 1.1 million euros positive, 4% of the revenue. When looking one year back, that's actually a positive surprise. We didn't focus on the profitability yet on this year. But then at the same time, in Q4 2021, we made the negative EBIT. So we really heavily, of course, invested on our people, able to grow the organization, able to become a bigger company, which is reflected in the EBIT number in Q4. In 2021, when looking at the P&L, the bottom row, we made the loss 4.5 million euros, which is of course connected also this IPO and related fees, 6.6 million euros, which was accounted for 2021. And of course, relating to the IPO, we have a really strong balance sheet. And when looking at our cash position at the end of the last year, 2021, we had more than 90 million euros on our balance sheet. Then when we look a little bit more in detail about our revenue, it's interesting to look, when looking at the company 2018, we had 20,000 euros revenue. Now we made 27.4 million revenue, so quite a growth in few years. When looking 2021, our revenue in Nordics was 23.1 million euros and rest of the Europe 4.1 million euros. Rest of the world was still a little bit more minor in 0.2 million euros. Interesting thing is when we look quarter four revenue growth numbers, which was growing 328%, but when we look it between different geographies, actually this rest of the Europe grew slightly quicker than the Nordics. And then when we go even more in details on the numbers, the growth in the rest of the Europe, it was not relating on single country or single customer, but it included several countries and several customers. Then a little bit more about the order intake and order backlog. Also, like we said, order intake, extremely exceptional growth, 427% growth year on year, reaching 37.4 million euros. And the quarter four part of the order intake was 11.5 million euros. At the end of the year 2021, we had 13.7 million euros order backlog. And it's good to remember about our order intake and order backlog, that we book only legally binding orders in our order intake and order backlog. So it's a real money what is in our order backlog and intake. So for example, if we have frame contract, which doesn't include minimum commitments, which is legally binding, it's not in the order backlog and order intake. Then another thing which we communicated last autumn is that we also have the seasonality impacting, for example, order backlog. Some of the bigger customers make their orders one or two times a year, so it doesn't develop equally between the quarters. Then a little bit about the profitability KPIs and our operating cash flow. Our gross profit for 2021, 46%, really healthy level. Like we communicated in this autumn, we had one exceptional delivery impacting the gross profit this year, but still we made 46%. I think it's a quite good performance. And then when thinking about our growth strategy and its execution, it's of course reflecting on operating cash flow. So we have working capital which is employing the capital and of course investment on our people, investment on our R&D, that is of course reflected in the operating cash flow. but still actually one highlight for quarter four we had a positive 2.9 million euros operating cash flow in quarter four thanks to good working capital management management we did then a little bit about this ipo ipo proceeds and how it impacted on our cash position on the balance sheet so we reached 101 100.1 million euros cross proceed from the ipo Then at the end of the year, we paid the loans back to our parent company, Kemppi Group Oy. but we also paid the IPO fees back to the advisors. And when deducting that from the gross proceeds, we had this more than 90 million euros on our balance sheet. Then at the same time, when we don't have any more debt on the balance sheet, our net debt at the moment is minus 90.4 million euros. So really positive also on that KPI. Then a little bit about our target markets. This is the Europe and USA, Europe on the left hand side, USA on the right hand side. When looking at 2020 numbers in Europe, half a billion euro market in DC charging, which will grow in 2030 to 2.5 billion euros. Then in the USA, which is a smaller market, when looking at 2020 numbers, 134 million euros growing to up to 1.4 billion euros in 2030. So these together creates this 4 billion euros market we as a company target. Then about our financial targets, our growth target in revenue is 200 million euros in medium term, so in four to six years. In profitability side, our target is to make 10% operating EBIT margin on the medium term, which is in four to six years, and at least 15% in the long term. Regarding the dividends, we are not going to pay dividend. We allocate the capital on company's growth.