Nano Dimension Ltd.

Good day, ladies and gentlemen. Welcome to today's conference call to discuss Nano Dimension's fourth quarter 2020 financial results. My name is Grant, and I'm your operator for today's call. On the call with us today are Yoav Sir, President and CEO, and Yael Sander, CFO. Before we begin, may I remind our listeners that certain information provided on this call may contain forward-looking statements, and the Safe Harbor Statement outline in today's earnings press release also pertains to this call. If you have not received a copy of the press release, please view it in the investor relations section of the company's website. Yoav will begin the call with a business update, followed by a question and answer session, at which time Yale will answer questions regarding the fourth quarter 2020 financial results.

I would now like to turn the conference over to Nano Dimensions President and CEO, Yoav Stern. Yoav, please go ahead.

Thank you very much and good day and good morning to everybody. I will talk today a little bit about the 2020 performance, which I've written a letter to the shareholders before. I'll speak about the money we've raised, a bit about M&A, our plans moving forward, what's happening in the industry, and about the elephant in the room. So our performance in 2020, you have to divide it to revenue and to expenses. The expenses are somewhat Deceiving because a lot of high expenses are non-cash expenses resulting from all kind of gap rules regarding stocks and ease up and non-cash compensation as part of restructuring the company. And if you want to know more details about it, you can speak with Yael and ask questions. As much as the top line, as I mentioned before, I was surprised. Estimation in the middle of the year was that the revenue will be much lower, resulting in the corona. We sold very few machines, but the revenue ended up being about $3.4 million, which is about half of our revenue the year before, 50%, which was structured from a lot of the present customers upgrading their machines, buying the razor blades, buying the consumables. of course service contracts on the annual basis that we're having and some revenue from our new nano services where we actually do services for the people who don't have a corona budget is limited and don't have the capital expense to buy machines meanwhile they are paying us for doing with our machines and our fabs what they will do eventually hopefully when they buy the machines so I was presently surprised Entering 2021, we're not seeing a major change, especially not in Europe and in the States. The East is starting to wake up and we are hoping for a new trend of buying machines. But by now, adding the revenue from the non-machines, which has shown a very, very nice performance last year. Obviously, the company has changed dramatically. We've raised money over the year. I would like to emphasize some semantics of accretion and dilution. We've raised the money always with a higher price than the transaction before and there was thinking behind it. We did not raise money at dilutive prices comparing to transactions before and shares obviously continue to raise and We basically mounted our armor in order to prepare for what we perceive is what's going to happen in the near future. And that perception relates both to the industry and it relates to the, I would say, financial markets. I'm not a prophet and I'm not going to comment about where the financial markets will go, but the aggressive and actually very exciting business plan that we have has an allocation of exact years of proceeds for the money we have raised, which is by now $1.5 billion. And we want to be with this money, and we will be, we shall be with this money when the market behaves up or down and our competitors, or I shouldn't say direct competitors, but any acquisition targets or pseudo-comparators, will be in a different situation or at least part of them. We expect our position now to strengthen because of that. We expect prices in the market to go down once this excitement of Robinhood and other trading houses and a lot of participants winning out and the market going back to Thank you very much. The person who tells you this, be sure he will pay too much money in M&A and we don't intend to do it. We have a very intensive M&A activity. We have few, much more than one, letter of intent already signed. We're in the process of due diligence on few M&As at once. The gates were opened a little bit in certain countries without mentioning specifics. So in three days, I'm traveling the first time to be able to perform due diligence on location. We performed already two due diligence process in other locations that were open before. So yes, M&A is happening. But what I've said to the people I've raised money from, which are institutional investors, Many of maybe shareholders of us today didn't hear because they never spoke with me. So I will say it again. Do not expect me to perform or to announce something unless it's happening and unless we did it cautiously, thoughtfully, in the right time, just because the share is up or down. And just because there is short players or non-short players, our business is to use The Money According to Our Business Plan, and we are doing it. And investors that I met, which was probably a few dozens, if not more than hundreds, institutional investors, when we raised the money, heard me saying very, very clearly, if you are not patient and are waiting to see something in a quarter or two, don't invest in nanodimensions. Nanodimensions are going to change an industry that's 70 years old Non-environmental friendly, very, very non-efficient in the West, and everything of it moved to the East, creating serious issues of supply chain. It's called the PCB industry, or the high end of it, which is about $30 billion in size, including the PCB assembly. And this industry did not change into digital industry, and we are going to do it. And the signs are there. The reason certain investors invested in us and certain investors that people follow invested in us is because they are convinced that this industry is going to go that direction. We have machines and materials that are structured in a way that are environmentally friendly, digitized, and that The response we get from both our customers that are existing array of customers and the new ones that started to buy in the end of the fourth quarter 2020 into the first quarter are reinforcing this concept. So whoever are valuable investors, and they are, and we have hundreds of thousands of investors today. These are numbers that we're getting from our customers. Transfer Agent, but never heard me face to face when we raised the money. I'm saying it again. This company is leading a very careful plan toward an inflection point when there will be a very, very fast change, but it is not something that it's going to, and it is going through stages. It is not something that is going to Gradually, from quarter to quarter, by increasing sales and increasing the amount of machines, we're doing it anyhow. But mostly what we're doing is we search the industry. We're in the process of combining forces with other companies because we're the strong, by now, we're the strong player with, I don't want to say 800 pounds gorilla because there are other connotations, but we are a strong player with technology and with an ability to scoop up and we're in the process of doing it and you'll start to see a set of inflection points as things are happening. They're not going to happen just because the elephant in the room is their share price is going down so I will accelerate those. I will not accelerate anything. I will do it cautiously at the right time at the right price and I will do the R&D in the right way and whoever is going to be with us is going to see that the valuation of changing a 70 billion industry on the low side and 250 billion industry of PCB including mounting the components on it is going to be leading a company with the proper valuations accordingly. So hopefully people will be with us. We are very, very confident and very encouraged by what we see on the acquisition trail. I mentioned to you before, I've spoken with 85 companies. I have scanned them down to 40 more interesting, and then from there down to what I'm ready and spend money on meeting and discussing. and yes, the SPAC tsunami created a situation that companies are completely in la-la land as much as what they believe their value is. Moreover, some people think that because we have the money we have and we are under pressure to quickly do an acquisition, they are asking us to pay more and we say no. Whoever is there and behaving this way, we're going to leave them behind and move forward. Don't expect it, neither the companies nor the investors. When it will happen, it will be done cautiously and accretively. By now, I want to stop. I don't want to take too much time describing to you more of our vision. Some of you have heard it before. If you are interested to hear more, I'll be happy to do it while you're asking questions.