VIA optronics AG

Ladies and gentlemen, thank you for standing by. I'm Stuart, your Coors Call Operator. Welcome and thank you for joining the Via Optronics third quarter 2021 earnings call. Throughout today's recorded presentation, all participants will be in a listen-only mode. 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 touchtone telephone. Press the star key followed by zero for operator assistance. I would now like to turn the conference over to Lindsay Savarese. Please go ahead.

Lindsay Savarese Good morning and welcome to VIAptronics' third quarter 2021 financial results conference call. I'm Lindsay Savarese, Investor Relations for VIAptronics. Joining me on the call today will be Juergen Eichner, VIA's Chief Executive Officer, and Dr. Marcus Peters, VIA's Chief Financial Officer. Today's call is being webcast live and will be archived on the investor relations section of VIA's website at via-optronics.com, where the company's earnings press release is currently available. Certain matters we will be discussing today, including the business outlook and financial projections for the fourth 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 statement. These risks and uncertainties are discussed in the company's documents filed with the SEC, including Zia's annual report on Form 20-S, which was filed on April 29, 2021. Please note that any forward-looking statements that are made on this call are based on assumptions as of today, and the company undertakes no obligation to update these statements as a result of new information or future events. And with that, I'd like to turn the call over to Juergen.

Good morning, everyone, and thank you for joining us today. First, I will provide a brief overview of our search for the 2021 results. I will reflect on the accomplishments that we have made during our first year as a public company, provide an update on some key achievements and notable awards in the quarter, and will end with some commentary on our strategic initiatives looking forward. Our goal is to provide as much transparency to the investment community as possible. Markus will then review our third quarter financial performance in more detail and provide our outlook for the fourth quarter of 2021 and the full year. Turning to the third quarter, revenue of 49.4 million increased 13.3% year-over-year, driven by growth in our display solution segment. Our EBITDA in the third quarter of positive 1.1 million decreased from positive 3.5 million in the third quarter of 2020. Looking back on this past year, we have made significant progress on executing on our strategic plan that we laid out during the IPO process. Notably, we have now reported four quarters of double-digit year-over-year revenue growth since becoming a public company in September 2020. We continued to diversify our end-market revenue base and increase our sales in the automotive and industrial end markets. We completed the highly strategic acquisition of Germanius, a profitable automotive specialty company, earlier this year. This transaction expanded our engagement into the early concept phase of the car and has increased our value proposition to our customers as we now have the complete interactive display design competence, including the processing software part in-house. We have made a number of improvements to the organization to support our future growth plans. Notably, we have increased our R&D talent this year, both organically and inorganically, through a recent acquisition of German years. We staffed more than initially planned during the last month because of the necessity for existing projects. With these investments, we are now pushing interactive display and sensor systems offering ahead. Furthermore, earlier this year, we initiated a research and innovation team that is focused on developing our materials and process further and develop new technologies. This team now works together with the R&D team of SigmaSense, our most recent investment, to develop a variety of new functions and features for touch sensors and touch modules, some of which we will show during the CES show January 2022 in Las Vegas. As anticipated, we have expanded our production facilities, which I will touch on in a moment. We have also strengthened our sales organization to capitalize on the growth opportunities ahead of us. This has resulted in increased cooperation with our existing customer base with the full scope of our capabilities now. This paid already back with increased traction of existing and new customers, and we expect further traction after CES. We have already mentioned a strategic camera design win with the US EV maker, where we supply all cameras for the car and can generally report a strong increase in camera design in activities as well as we have started to ramp up new camera projects this year. Design wins have been stable. However, we are moving more towards larger projects with longer life cycles and higher value. As many of you know, this has been an exciting year for the EV market with many new companies becoming public in 2021. As EV companies build out their supply chain infrastructure, we are focused on increasing our share in this market. We are pleased with the traction that we have had with this front counting already. Three major US EV makers, one UK EV maker and Chinese EV makers as our customers. More recently, we have expanded our presence in the overall EV infrastructure market by providing display touch solutions for EV charging stations. Overall, I'm pleased with the positive momentum we are seeing and with our execution against our strategic initiatives. Turning to some of the dynamics in the third quarter, I'd like to address the global component shortage and specifically the impact on the app. We have been able to successfully manage the impacts of the global supply disruptions, maintaining a double-digit revenue growth and continue our growth path. Just during the last few days, we saw once more disruption, which have caused us to set our guidance for this year to a more conservative 15% revenue growth compared to 2020, whilst we are still working on increasing the number as we speak. We are however seeing an increase in some of our component and transportation costs driven by the shortages and we have impacts caused by power shutdowns in China. We are working with our customers on a case-by-case basis to minimize the potential impacts on margins. As announced on September 22nd, our new production facility in Germany successfully ramped up to this year's capacity. and we are shipping several of these volumes as plans to our U.S. EV customer. This will be followed by a production line extension around March coming year, where we integrate the equipment, which is currently used in China, into that line. From that point in time onwards, all production for the U.S. EV maker will be in Germany. On top of that, we are planning the new production line for our new European high-volume customer. We announced that design in late last year and expect production ramp-up in 2023. Further, we incorporated a new entity in the Philippines via Optronics Philippines Inc. to provide customized platform camera solutions from design and development to process and testing and quality control. The camera design and development team reported previously to VIA Optronics GmbH would be integrated into this new entity. Coming back to the business award we received from the British EV vehicle company, I like to say that this is the third EV customer where we provide most of the cameras in the vehicle. On top, we are providing display touch solutions for this customer as well. In this case, VIA's camera solution will be applied as front, and rear view and e-mirror cameras in different car models the start of mass production for over 2 million units is planned through 2020 through 2025 is planned to begin in 2022 next year looking ahead i'd like to spend a few moments talking about our key initiatives We are focused on further executing on our strategy of driving our sales in the auto and industrial end markets by leveraging on our LCD optical bonding sensor and camera capabilities across the board to deliver system solutions. The macroeconomic background remains uncertain and challenging. Therefore, we are undergoing production improvements to cost down in order to improve our margins whilst we are working with customers for price adjustments to drive profitability, even with the given uncertainties. We will continue to evaluate M&A opportunities focused on electronic system design. However, as we have all capabilities now in-house, the focus is on integrating the new team members and overcome capacity shortages by outsourcing capacities when needed. Last but not least, I'd like to mention that we continue to execute our strategy with the goal of moving towards the 500 million annual revenue target within five years under the assumption that the current market constraints will be resolved. We are pleased with the execution we have made so far and look forward to updating you on our progress next quarter With this, I will now turn the call over to Markus to present our third quarter financial results and fourth quarter and full year 2021 outlook in more detail. Markus?