Nano Dimension Ltd.

Ladies and gentlemen, thank you for standing by. All participants are at present in listen-only mode. Welcome to today's conference call to discuss Nano Dimensions 2022 second quarter results. On the call with us today are Yoav Stern, CEO, and Yael Sandler, 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 outlined 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 Investors 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 Yael will answer questions regarding the second quarter 2022 financial results. As a reminder, this conference is being recorded September 1st,

2022. i would now like to hand over the call to mr yoav stern mr stern would you like to begin thank you very much yoni and good day to everybody uh just to add we have with us today also julian letterman which is our head of corporate development and our financial marketing department which is only lately established in order to reinforce and improve the connection with all you guys, the shareholders. So welcome, Julian, as well. You'll be talking to him. So we had a very good quarter in spite of the situation in the market, specifically in Europe, with the issues of the war in Ukraine, which affected especially Central Europe purchasing rates where Germany and countries around it kind of initially froze a little bit. But in spite of that, all our acquisitions and our internal growth and organic growth proved to be going well. The go-to-market systems that we established. And I'm not going to read, of course, as traditionally we don't, the whole report. And I'm assuming you have read it and If you did, then you'll have questions for me. But the highlight is the $11.1 million revenue is 12 times the revenue of the same quarter last year. And we expect that as the crisis with the supply chain of components is hopefully easing up, will ease up, we will even grow faster organically. The second thing we are quite happy about is while we're trying to accelerate the R&D, which the indication thereof is spending more money, we managed to be much lower in a cash burn rate than we originally planned. So we are maintaining the around $40 million per half a year of cash burn rate, double than that or a bit more for a year. And in a funny way, we are hoping actually to accelerate because the burn rate in cash is mostly to accelerate the R&D and bring the new products into market. So that's good news. The gross margins, as we spoke last time, is a combination 36 of high gross margins of 65% in new machines in the manufacturing electronics and additive manufacturing metal and ceramics, and lower gross margins in additive surface mount technology, which is traditionally 35% gross margins, 32% gross margins. So the mixture and the average gross margin is a combination of both. We don't have service business like other people, which is reducing gross margins even more. So that's basically giving you the outline of our source of revenue and then source of cash going down below the gross margin. We have spent this quarter $12.9 million in R&D, which of course by a gap in IFRS is an expense, we also consider it an investment. The results of the R&D are showing amazing results in advancement toward the new product, which will go into beta toward the end of this year, and then next year will be released. And I'm kind of hoping, you know, it's not great to hope that the market will stay as erratic and as low as it is, the public market, but assuming it is, What we see beyond the operations of the company is the fact that multiples and values are lower and the activity in M&A is accelerating, which is very exciting because companies I held back on for two years now and we have looked at 330 companies. I'm now back and now they're talking to me and now the multiples are right or at least right there or better. and reasonable, so we expect to show some results there. So our growth as projected or as expected, I should say, is by now more practically available to us because I'm not going to have to overpay, which I refused to do in the past. Of course, we did an acquisition as well this quarter. I think we closed it a month and a little bit more ago. a very exciting acquisition in Europe, Holland, one of the most leading technology in metal and ceramic printing, a small company that was kind of hidden from the visual sight of both analysts and the competition because it was a subsidiary of a very large American company which was in trouble for many years. And through our search we found them and we believe There will be a call for very fast growth of our additive manufacturing business. So bottom line as we proceed and as we expand, you can look at us today where traditionally we started from additive manufacturing electronics. Our growth strategy both organically in the development and R&D and requisition is we expand from electronics from additive manufacturing electronics into electronics and on the left side call it and from additive manufacturing electronics into other additive manufacturing on the right side so you're going to own a company that is expensive as much as his ability to manufacture machines in in additive manufacturing in general it's already happening and in other digital machines for electronics that add value as they are being part of the network of machines that we're building, led by the artificial intelligence and deep learning and machine learning software that we have. On that area of machine learning and software and deep learning, from dozens of interviews and due diligence that we did, I can tell you, ladies and gentlemen, we are ahead of everybody. And it's just a matter of time until this robotic brain, as I pointed, is going to be in most of our machines, plus in the networking between the machines. So it becomes, call it if you wish, manufacturing, cloud manufacturing, if you wish. That is kind of wrapping up both where we are this quarter and connecting it to where we have been coming from and where we're going. I will be more than happy, of course, now to hear your questions and refer much more to issues that are of interest to you today in this call, please.

Thank you. Ladies and gentlemen, at this time we will begin the question and answer session. If you have a question, please press star 1. If you wish to cancel your request, please press star 2. If you are using speaker equipment, kindly lift a handset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. I repeat, if you have a question, please press star one. The first question is from Yoram Perlman. Please go ahead.