VIA optronics AG

Ladies and gentlemen, thank you for standing by. I am Emma, your course call operator. Welcome and thank you for joining the Via Optronics fourth quarter and full year 2020 financial results conference call. Throughout today's recorded presentation, all participants will be in a listen only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touch tone telephone. Press the star key followed by zero for operator assistance. I would now like to turn the conference over to Monica Gould, Investor Relations for vOptronics. Please go ahead.

Thank you. Good afternoon. Welcome to vOptronics' fourth quarter and full year 2020 Financial Results Conference call. I'm Monica Gould, Investor Relations for vOptronics. Joining me on the call today will be Juergen Eichner, VIA's Chief Executive Officer, and Daniel Juergens, VIA's Chief Financial Officer. Today's call is being webcast live and will be archived on the investor relations section of our website at via-optronics.com, where our earnings press release is currently available. Certain matters we will be discussing today, including the business outlook and financial projections for the first quarter and full year 2021, are forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties are discussed in our documents filed with the SEC, including our registration statement and prospectus. And with that, I'd like to turn the call over to Juergen.

Juergen Ortega- Yeah, thank you, Monica. Good morning, everyone, and thank you for joining us today. First, I will provide a brief overview of our fourth quarter and full year 2020 results. I will then discuss our key achievements and notable awards in the quarter before I turn the call over to Daniel Nergens, our CFO, who will review fourth quarter 2020 financial performance and our outlook for the first quarter of 2021 and the full year. Turning first to a brief summary of our financial results. driven by continued growth in our display solution segment and increased 4% eventually of a strong Q3. EBITDA was flat with the prior year period at a loss of €1.1 million. For the full year 2020, we delivered top-line growth of 11% and expanded our cost margins by 800 base points. Notably, during the fourth quarter, we continued to diversify our revenue and increase our sales in the automotive and industrial end markets. We see a large opportunity in both sectors as the total number of displays with features that we are providing, cameras and the use of glass as a design element in vehicles as well as agricultural and construction equipment steadily increases. The technology behind these elements is becoming increasingly more complex. and our expertise is well suited to meet these challenges. As a start, we address this with a great new technology development for rocketized laptops. Consumer customers have typically been early adopters of our products and technology. However, more recently, electric VAT manufacturers are becoming nearly as aggressive in implementing new features, which position us very well competitively. As a result, within our display solution segment in the four and accounted for 27% of the total revenue. Revenue from our industrial customers rose 23% year-over-year and accounted for 44% of revenue, leaving consumer revenue at a total of 29%. Within the automotive segment, we are working with a wide range of customers, including many of the world's largest OEMs and especially EV companies. Our product design wins and shipments cover our complete portfolio. The strongest drive for our portfolio comes from electrical vehicles. This includes luxury vehicles, trucks, and vans, mainly for cluster and center displays, as well as all sorts of camera applications like surround fuel, etc. As our mix of revenue from auto and industrial end markets increases, we expect a positive impact to our gross margin, as margins in these sectors are higher than our corporate average. With this shift, we also gain greater revenue visibility, as some product life cycles are as long as five to seven years. This shift also has positive impact on our backlog, providing visibility beyond 2024. To capitalize on the strong growth, further increase our spending in R&D and SG&A. We pulled in investments already in Q4. We expect that our operating expenses as a percentage of total revenue will remain elevated as we will continue to pull in investments in 2021 to take advantage of the opportunity to engage in new projects with new customers at a faster rate than previously expected. Given the length of design production cycles in the industries, we do not expect our investments to impact our near-term revenue, but rather need to increase revenue over the next three to five years. Now I'd like to turn to some of the progress and key achievements that we made during the fourth quarter. We are now working with several of the world's leading electrical vehicle manufacturers, and we continue to expand upon our strong position in this space. We are in production with two Chinese EV car manufacturers and will be shipping prototypes on several different projects to them this year. With respect to progress that we have made with a leading US-based EV company that we discussed on our Q3 call, we have already shipped hundreds of prototypes. These prototypes have been very well accepted and we, along with our customer, are driving our R&D teams to finalize qualification for mass production. The production ramp-up is anticipated mid-2021. The construction of the new manufacturing facility that we are building in support of this project is virtually complete and we are working on finishing the interior before ramp-up production. As we have discussed previously, the facility will have a capacity of 10,000 units per month once complete. During Q4, we finalized the automated production lines in our existing German facility, therefore increasing our production capacity another 50,000 pieces per month to a total of 60,000 units per month. This upgrade will not only lower our production costs, it is also an important step on our path to produce parts in China and Germany with the same processes and equipment, thus being able to share production capacity if needed. Having a geographical diverse manufacturing strategy will also help us overcome tariffs and sourcing issues and provide additional flexibility. During the fourth quarter, we initiated a research innovation team within VIA that is exclusively focused on developing new technologies and securing our technology leadership. This team is completely decoupled from any project to concentrate on technologies to expand VIA's market position with new technology developments. This includes advanced proprietary bonding and support materials, as well as free-form glass designs to enable displays, with touchscreen technology to be constructed in complex shapes, as well as complete interactive display systems. With respect to our strategic collaboration with Corning, we are expanding our cooperation by investing in joint development projects for new glass display and touch functionalities, hoping to be able to do joint physical road shows this year. During the fourth quarter, we received a number of new awards demonstrating our success. I would like to highlight a few in more detail. Starting in the automotive sector, we received a new award from a very well-known German sports car manufacturer to develop a first prototype for a future interior camera. With this win, we believe that we are very well positioned to receive the final award for mass production. We have also received several more awards in namely in the US, UK and EU. We look forward to updating you on these projects as we begin to ramp up production. In the industrial sector, we received a new project from a large existing US-based customer. This is particularly important as it includes new touch technology that we are currently developing together with a partner for ruggedized laptops. In summary, it has been an exciting year and I'm pleased with the progress to the hard work of our team and the strengths of our proprietary technology. I would also like to thank our partners and our customers for their support this year. Looking ahead, we will continue to execute on our strategy of increasing our sales in the auto and industrial end markets, leveraging our sensor and camera capabilities to deliver system solutions, while expanding the number and size of our projects within our existing customer base. We will also continue opportunities that would complement our current technology portfolio or add capacity. We are excited seeing more and more opportunities ahead of us and believe that our expanding pipeline and greater visibility positions us well for continued growth in 2021 and beyond. With that, I will now turn the call over to Daniel to discuss our financial results and outlook in more detail. Daniel?