VusionGroup

Good day and thank you for standing by. Welcome to the Vision Group Full Year Results 2024 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star 1 or 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference has been recorded. I'd now like to hand the conference over to your first speaker today, Olivier Guernon, Investor Relations Officer. Please go ahead.

Thank you very much. Good afternoon, ladies and gentlemen, and welcome to our full year 2024 results presentation. With me today are Thierry Gadou, our Chairman and Chief Executive Officer, as well as Thierry Lemaitre, our Deputy CEO, Finance and Corporate. Thierry Gadou will start with some remarks on the group's business performance. Thierry Lemaître will then make some comments on our financial performance, and Thierry Gadot will make some comments on our full-year outlook. After these remarks, we will be happy to take your questions. As a reminder, some of the information to be disclosed on our call today is forward-looking and subject to important risks and uncertainties that could cause actual results to differ materially. For these, I refer you to the Safe Harbor statement included in our press release and on slide three of this presentation. This evening's release was issued a short while ago and is available in French and in English on Vision Group's website, vision.com. The slides of this presentation can also be found on our website in the regulated information section. A replay and a transcript will also be made available on our website after this call. And with that, it's my pleasure to hand you over to Thierry Gadou for his opening remarks.

Thank you, Olivier. Good afternoon, everyone. Thanks for joining our conference call. I'm very happy to present our performance for the last quarter and the full year of 24. In a nutshell, first, so Vision Group achieved the record Q4 and passed the 1 billion mark in annual adjusted revenues, up 25% year on year. Order entries in 24 grew by 71% at 1.6 billion euro. EBITDA reached slightly over 160 million, up 51% year-on-year, and EBITDA margin improved by 270 basis points at 15.9% of sales. Free cash flow generation reached 391 million. Looking ahead, the momentum of the company is excellent. And for the full year of 2025, we see adjusted revenues growing at an accelerated pace at around 40% with a target of €1.4 billion in adjusted revenue for the year. We expect VAS to grow twice as fast as the top line, so that's around 80% growth. And our profitability should continue to grow. That's for the headlines. Before handing over the floor to Thierry Lemaitre, who is next to me, to review our financial figures, let me just maybe summarize the key achievements of last year. So I said Vision Group achieved a record Q4 with adjusted sales of over €350 million. That's a growth of 47%. and a record H2 as well at €580 million, up 36% year-on-year. Both are our best quarter and semester ever. North America saw very strong growth and has become our first geographic market in 2024. Vision Group is the leader in the region, and this position is a major asset for the years to come, given the very strong dynamics in this market. In Europe, Despite the finalization of a very large multi-year rollout contract, which explains a temporary revenue decline, which was anticipated and announced, the region is gradually compensating the gap, achieving an excellent fourth quarter, close to the record sales of Q4 23, and that's thanks to strong growth in France, Southern Europe, and the United Kingdom. Overall, revenue for the full year in Europe is near half a billion euro, And despite the decline year on year, our average growth over the past four years since 2020 is at 24% per annum. And that's well above our long-term growth guidance for the region. We should be resuming growth in 25% in Europe. And of course, globally, we passed the announced 1 billion mark in adjusted annual revenue with a growth of 25%. 25%, which is roughly in line with our average growth over the past decade. As I said, order entry reached 1.6 billion euro, a growth of 71%. And of course, that's thanks in particular to a very large contract signed by Walmart US. Although, please note that this record number does not yet include the last tranche of that contract, which was announced at the very end of the year. This excellent performance was also due to many other wins in both Europe and North America, some of which were publicly disclosed, and you see the logos on the slide that is presented. Others were signed, too, towards the year end and have not yet been disclosed, but should be disclosed in the coming weeks. And those wins cover all kinds of retail verticals, not only grocery, but DIY, pharma, health and beauty, consumer electronics, home and garden, automotive, etc. Regarding the Walmart U.S. contract for the rollout of H10s, I just remind the different steps of that very historic achievement. You remember that the first pilot with H10 started four years ago. Then in March 22, we announced that pilot was successful and we were going to extend the pilot to more stores and enter into a strategic relationship with Walmart. And 50 stores were subsequently equipped with a new version of the solution. And then that phase was very successful too. And in 23, we signed a framework agreement for the complete U.S. rollout and the first firm PO for a first tranche of 500 stores. That phase was successful too, and in 2024, we signed two major contract extensions of 1,800 stores in April and 2,300 stores in December, completing the framework contract that had been signed in 2023. And again, note that the December last range order entry of around €1 billion will be accounted for over the following quarters in 2025. Now, this exceptional success with the best, the world's best performing retailer, and by the way, the world's largest company, is essentially based on two fundamental and disruptive innovations that are a game changer for retail. And I want to say a few words on the EdgeSense revolution because many people think EdgeSense is just a new ESL system. In fact, since the invention of ESL 30 years ago by our company, EdgeSense is the biggest retail IoT innovation, which will enable a shift from single-purpose ESL-only technology to multi-purpose unified digital shelf systems. And that will effectively datafy and digitalize the physical store and enable multiple use cases for retailers, shoppers, and suppliers. So just to take a minute here, what is EdgeSense exactly? and what is Fusion OX. The EdgeSense is a digital shelf system consisting of a smart shelf edge rail and IoT devices or IoT nodes such as shelf labels, cameras, and sensors. ESL are only one of the many applications of EdgeSense. The EdgeSense connected smart rail that you see again following, I hope, the slide because otherwise it might be a bit difficult to follow, but I'll just be very short, the Edgechains Connected Smart RAID is the solution's cornerstone asset, as it provides power and data connectivity to all IoT nodes or IoT devices that are clicked on the RAID. It neutralizes connectivity and data and power. And the Smart RAID is operated by a completely new software operating system called Fusion OX. which is based on the BLE standard, the Bluetooth Low Energy Standard, but with many proprietary features which optimize power, security, scalability, speed, and other performance features. Here, a quick note, standard Bluetooth exists and is a standard, so it's widely available. But it has never been an acceptable protocol for retail IoT. And the new retail IoT protocol that we developed with Vision OX and with the associated new semiconductor has been developed in close cooperation with Qualcomm. The EdgeSense infrastructure and Vision OX effectively turns the store into a smart grid where products, associates, and shoppers are located, connected, and synchronized. The EdgeSense rail also unlocks the power limitation by mutualizing power for all clicked in IoT devices and by achieving unrivaled power efficiency. Moreover, That smart rail will soon be powered by light harvesting technology, which will solve the power management problem of retail IoT in general. The HN smart rail will also soon include rail-embedded AI-powered miniature shelf cameras for full real-time shelf vision and shelf data. That's why the HN's infrastructure is a unified, multipurpose shelf digital system, And that future proves the store, and it provides not only optimized DSL applications, but also product fencing, precise indoor location and navigation for associates and shoppers, real-time shelf monitoring, and many other applications. Exchange is also a so-called infra-less solution because it leverages third-party existing Wi-Fi access points from Cisco, Meraki, NIST, and many others, saving huge CapEx and OPEX for retailers. So I think 24 will stay in our history, not only because of the 1 billion euro achievement, but even more as the year of the accelerated launch of Edge Sense and Fusion UX with on top the world's largest retailer. And of course, Fusion UX has been, as well as Fusion Cloud, a great driver of our VaaS development. So regarding VaaS now, Our revenue from software services and non-ESL solutions reached $106 million in 2024. That's slightly down by minus 3% compared to 2023. Within vast revenues, recurring services, which represented 54% of vast revenues, or $57.4 million, grew by 35%, while non-recurring services fell by minus 28%. In a difficult context, economic context, where distributors slow down certain projects or internalize certain services. But in the fourth quarter, VAS sales grew strongly, both non-recurring, 32% growth, and recurring VAS, which grew by 48% and reached an annualized run rate of 65 million in Q4. We see that strong growth continuing in 2025. Now, one of the main drivers of vast growth, I was saying, is the Fusion Cloud. And Fusion Cloud's installed base grew rapidly to now 25,000 stores and 165 million cloud-managed IoT devices. As a reminder, at the end of December 23, the cloud installed base was 17,000 stores and 82 million ESLs. So you see the momentum is very strong, and the strong dynamic will continue in 2025. Interestingly about our vast strategy, one of the last new wins of the year was the Fresh Market, a US grocer. And what's interesting about this deal and was well appreciated, I believe, was they decided to roll out upfront a large part of our solutions portfolio from ESL to data and AI solutions. as opposed to gradually onboard new products over time. This Fusion 360 approach, that's how we call it, is really a very good showcase of our strategy in enabling the digital transformation of retailers. I talked about Hsense and Fusion OX, of course, but many other innovative developments came out of our nine R&D centers in the world. I remind that 30% of our staff is in R&D. and which were presented at NRF in New York. So on this quick video that you see, you can have a feel of what has been this fantastic event. NRF, you know, is the main annual event of our retail tech industry. And this year, I think you can be proud that Fusion Group was truly the highlight of the show, the busiest booth, and the place to be. Thousands of visitors were on our booth, nearly half of the top 100 retailers, came to the booth, including an unprecedented number of retail C-suite executives. In addition, our solutions were also presented by no less than 10 partners on their own booth, including some of the technology blue chips, Google, Microsoft, Qualcomm, SAP, Cisco, Instacart, and others. So we were in many, many places in NRF that year, The room was also packed for the highly anticipated conference that was given by our U.S. CEO, Philippe Bottin, and Walmart's head of U.S. operations. And obviously, nowadays, everybody's watching Walmart because they are the best performing retailer in the world in many respects. We presented many innovations at NRF across our broad solutions portfolio, including the prototype of Fusion Live, our new store AI assistant developed by memory, a new mobile version of Captana AI, our new solution Fresh Connect, an end-to-end farm-to-store supply chain traceability solution for fresh products, and various other specialty retail solutions in eyewear, in fashion, in automotive retailing. That's it for me as a conclusion before handing over to Thierry for the financials. I would say 2024 was truly a wonderful year, full of excitement and passion for what we are building to serve retail and consumers. And Thierry will now explain how we convert passion to cash.