Kempower

Powering planet cool. We charge our planet for the better by powering the electric movement. We enable quick and scalable EV charging solutions for everyone and everywhere. We make it positive. We believe in the power of positive energy. We see opportunities where others see obstacles. As a team, we create success for us all and add value to people's lives. We make it quick. We like our charging experience fast and easy We are quick to respond and quick to deliver Our service is easy to sell and buy We make it quick We make the most user-friendly EV chargers that become future standards. Our products just click. They are flexible to integrate and to scale. We make it happen. We empower the EV evolution and create a cleaner and more quiet environment for us all. We inspire our audiences to join the electric movement. Plug in and be the change.

Hi everyone and welcome to this webcast where we present Kempower's financial results for the third quarter 2024. My name is Paula Savonen. I am the VP of Communications at Kempower and also the host for today's webcast. Today we have two presenters. We start with our CEO, Tomi Ristimäki, and continue with our CFO, Jukka Kainulainen. And you can ask questions any time during the presentation by typing the questions in the Q&A box on the screen. And we really hope you ask the questions and actively join the discussion. And we take all the questions in the end of the presentation. But now we start, and over to Tomi.

Thanks, Paula. And welcome from my side as well. Going the quarter in brief, I think it's clear that the challenging market conditions are the same. So high customer inventory levels prevailed. And customers' low decision-making continued to impact the sales performance. How we have come to this high inventory situation in customers' installation stocks, we could remind on the topic on this high amount of purchasing in the fear of component shortage after the COVID. And then, of course, the market not being able to deliver the grid connections needed for this large quantity ordered. Basically, the message is that the grid installations haven't been getting slower. Actually, I can show figures how it's actually getting faster, but the high amount of orders, of course, made it so that this couldn't be done in the pace that our customers were hoping. Market situation. Year-to-date installation grew significantly in both Europe and North America. which tells that the charging market is actually growing. So looking at it from that point of view, that now the goods are coming to the warehouse, to the sites, but the actual charging networks are growing all the time. New customer acquisition. Of course, in the situation when current customers have this stock inventory, it's very important to focus on new customers. and we onboarded 12 new customers in Q3, totaling actually 44 new customers for the year. Strategic developments, which is a big milestone, that the ramp up of next generation product portfolio is now completed. This doesn't hinder revenues from customers ordering the new when we have the full capacity in use. North America revenue for January and September more than doubled. And as a big milestone for our U.S. market, we acquired the first customer under the NEVI funding program. And I could remind that was actually one of the main reasons to actually have the U.S. entry done two years ahead of the schedule. Profitability improvement. we are progressing well towards in targeted savings, which is actually to make a profitable Q4 this year. And could also remind on the strong financial position, we have one of the strongest liquidity positions in the DC charging industry. They're looking at a little bit more on the customer inventory levels, and they affect our own intake from the existing customers. And I could say that customers who were bringing the largest revenues, largest orders in 22, 23, And as we anticipated in June, in this similar session for our first half of the year, the decline in inventories is not significant. And we are now estimating the excess inventory on the market to be around 80 million and remain high until the first half of year 2025. positive new customer acquisition will still dilute the effect of high inventory levels. This is actually why we are concentrating a lot on actually onboarding new customers. Electrification megatrend continues. This is a lot of debate. We hear it from the media. that maybe the EV cars are not selling, there is something happening somewhere, green transition has put a question mark to it. But if we look at the data, the installations are growing 18% in Europe from year-to-date figures. So it means 18% installations per quarter compared to the last year, and 74% in North America. So charging networks are really growing at a quite rapid pace. And the share of electric vehicle registrations in January to September 2024 is at the same 15% level. So this is actually something that this means it's all the time we have more electric vehicles on the market. So 15% of all new vehicles. In North America, the percentage is lower, but this is a new market, but let's say the change rapidness has been faster. And we see actually the amount of electric vehicles in North American market that it's not that much behind Europe, even when we talk about the percentage, but the high amount of cars actually makes it that the amount of EVs on traffic is actually gaining Europe from the, let's say, quantity point of view. And what is also a very positive change when we look at the customer's funding, looking at investments in the charging network and charging network companies, that's recovering in 2024. This 2023 compared to 2024, when we look at the funding of our potential customer base, this is recovering and it's recovering actually quite significantly. And on the sales recovery, it's progressing step by step, onboarding new customers. I think also when the customers are not in a hurry, the qualification periods for pilot deliveries, pilot sites, takes more time. So the customers are testing the products more thoroughly. So when you gain the new customers, you have the first sites. I think compared to the last very rapid years, Before the big deployment starts, there's a long testing period because it's the carefulness of customers that they really have the right solution. And we could talk about four-month, six-month testing periods with the first deliveries and then decisions to actually start ordering in larger quantities. And the steady expansion of our customer base positions us well to regain momentum and return to our growth track. This removes a lot of risk when you're a wide customer base. This means that you are less affected with certain movements or single customer events. So I think it's a key thing for us to grow the customer base even more, to divide the risk over the large customer base. And ramp up of the next generation production portfolio is completed. And it's no longer limiting revenue growth in quarter level. And some examples, I think it's great to show like examples on having a first site inside New York and especially in Manhattan. So that's a Pier 36 in between Brooklyn and Manhattan on the Manhattan side. And these kind of sites are really good showcase for the market. And another one, new things happening in India. I think we have a couple of rollouts going on in India. This is a new market for EVs, but actually a very promising market. We are looking at this more in the business development sense, that is there a good market for Kenpower or not. But we are today, like the rest of the world segment, we operate through key partners, and actually all the time due to business development. The main focus of Kenpower is of course in strategical markets in Europe and North America, but we do look the other parts of the world to really see where the growth happens and be there on the right time. And also mentioning, I think what we have told before, and I think the sentiment is getting even stronger, that the biggest DC charging market by 2030 will be the truck charging. There's very clear messages also on the ambition level on truck manufacturers where they see that their sales to be how big percentage from their sales the battery electric trucks will be. And this is being more and more strong messages from there. There seems to be a lot of interest, and we see this not only in Europe, but maybe even stronger in the US side. And this side here is the first logistic hub with Kempo fast charging in France. And there is a steady progress in North America. The revenue on January to September 24 more than doubled. And there is a good sales pipeline. and there is room to grow in the market. We're also talking about the market where the DC charging installation grows 74% compared to last year. And the first customer acquired under the 5 billion NEVI funding program and significant new customers as description from these 12 new customers, there was a global truck OEM from US and also Fortune 500 energy company from US. And the ramp up of the next generation product portfolio completed. Very key thing for Kemppao this year. This is actually a very large project when you actually renew the whole basis, the platform behind your products, and you do it within the first five years of the company. And of course, first renewal of a platform is a big thing. And now we see actually that we are in a normal state in production and a good quality level. Production yields are very good. So we are ready to actually ramp up, let's say, ramp up the deliveries as well. The production is ready, product is ready. And it will provide top of the class performance to our customer. And we have also published white papers on the topic, but it has exceptional power factor efficiency. I think the key here is efficiency because this better performance to our direct customers who are selling the electricity. So this is direct OPEX improvement in our customer base. Technological development, this is going again, of course, as Kemppau's core is actually to be forerunner in the market. And we were the first company to bring MCS to the market with market launch. And the first true MCS delivery and also step increase in our standard CCS series that we go up to 700 amps, we will do in Q4 2024. These both are really targeted into heavy vehicle charging. If we are talking about trucks, we are talking ports, but the machines with big batteries and heavy weight. And another key thing with California, this is very similar. We have been discussing on this IHRED certification for Germany, which means accuracy of electricity measurement compared to the payment. So the CTEP certification is now stated, and it certifies Kenpower's equipment regulatory standards are protecting consumers of faulty or fraudulent devices. And as a side note, Kenpower was the first charger manufacturer who could actually comply CTEP requirements without additional electricity meters. And also looking at our para portfolio and what is the whole idea. When we look at our portfolio, the leading idea from our side from the beginning has been that there will be a lot of electric vehicles. There will not be single charging sessions for single vehicles in the market where the adoption gets higher. And this is the whole idea why we have the distributed charging solution. We call it the satellite solution, where you have a limitation on the grid power, but you use this limitation to the biggest amount frequency of charging more transactions based on grid connections, which means directly business benefit to our customers. That I would say is the key when you look at the public charging segment here. You do have on the market still the legacy chargers when we have these charging stations, a cabinet with two cables. But we see the movement that is, I think, led by Kemppau and Tesla going into this distributed charging systems and larger installations. And this is something that we see a key when we look at also the commercial vehicle charging. We look at logistic hub where you have several vehicles, size is limited. You have actually better movement in there. Could remind also the importance in the ChargeEye software. as a key in actually increasing the sales, but it's also its own revenue stream in our service in recurring revenue that we see now increasing and especially important interest is raising from the commercial vehicle segment. And then looking at what are the markets in the future. Our vision is to create the world's most desired EV charging solutions for everyone and everywhere. This is part of the story why we have these different animals in brand pictures as well. It's for everyone and everywhere. And I think we could tick the box also in this vehicle types, maybe not the agriculture yet, but we see that there's movement in every vehicle type. It makes it also in the market very interesting when you have a growth state segments popping up new and new. I would say the buses are more mature state. There is a high number of buses now converted to electric. It's going near to 50% of new vehicles being electric throughout the Europe. Personal cars are moving, but that's consumer driven market. And that's also something that relates to consumer car sales. But on the business segment, the trucks are showing high growth rates. Some might say, that it's easy to grow from a small percentage, but this is actually something which is backed up by plans with the truck manufacturers. It's also very much requested by the logistic companies because it affects directly to the total cost of ownership figure. Other segments I would say in Greece we see from port machinery, and of course the vans are going together with the trucks. But then it was really interesting now to be also charging airplanes. That's an interesting future segment or construction machinery going into electric. We commissioned that. There was a nice story on that. We made charging site in the US making electricity with electricity. Every machine was fully electric in that. So there are different stages of the market and there seems to be a growth segment in here. I think in the difficulty, I understand why agriculture is not really moving fast because that's hard to handle in that environment. But I would say that this is the vision that it's also that these target segments are not only personal cars, it's not only trucks. When you look at the further, it is the machinery market. It is different ways of traveling. It's on air or on water. And sustainability achievements. Step-up change in EcoVadis evaluation, going now for silver label, that's done. Also renewing our Nasdaq green equity designation. An important figure also, we see how the usage of our product is increasing. When you look at that, it has doubled from 23. So 1.1 gigawatt hours per day. And from sustainability view, this energy would have been produced by fossil fuels if it's not electric vehicle. So this is the difference we are making. It's the best measure for that. What is the impact to the world? And then I give the stage for Jukka on the financial side. Thank you, Tomi.