Wallbox N.V.

Hello everyone and welcome to the WowBox's second quarter 2022 earnings conference call and webcast. My name is Victoria and I will be your operator for today's call. At this time, all participants' lines have been placed in listen-only mode to prevent any background noise. After a speaker's remarks, there will be a question and answer session. Analysts who wish to ask a question can place themselves into the queue by pressing star 1. I would now like to turn the call over to Matt Trachtenberg, Wallbox's Vice President of Investor Relations. Matt, please go ahead.

Thank you, Victoria, and good morning and good afternoon to everyone listening in. Thank you for joining today's webcast to discuss Wallbox's second quarter 2022 results. This event is being broadcasted over the web and can be accessed from the investor section of our website at investors.wallbox.com. I'm joined today by Enrique Asuncion, Wallbox's CEO, Geordie Lyons, our CFO, as well as Douglas Alfaro, General Manager of Wallbox North America. Earlier today, we issued our press release announcing results from the second quarter 2022, period ending June 30th, 2022, which can also be found on our website. Before we begin, I'd like to remind everyone that certain statements made on today's call are forward-looking. that may be subject to risks and uncertainties relating to future events and or the future financial performance of the company. Actual results could differ materially from those anticipated. The risk factors that may affect results are detailed in the company's most recent public filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20F for the year ended December 31, 2021. which can be found on our website at investors.wallbox.com and on the SEC website at www.sdc.gov. We will be presenting unaudited financial statements in IFRS format that reflect management's best assessment of actual results. Also, please note that we will use certain non-IFRS financial measures on this call, and reconciliations of these measures are included in the presentation posted on the investor section of our website. Also, a copy of these prepared remarks can be obtained from the Industrial Relations website under the Quarterly Results section, so you can more easily follow along with us today. So, with that out of the way, I'll turn it over to Enrique.

Thank you, Matt, and thanks, everyone, for joining us today. In addition to reviewing highlights from the second quarter of 2022, I will also share some updates on a new partnership two acquisitions we just recently completed, and provide you with a view of the market. Douglas is joining us today to offer some insight into our North American business, the new manufacturing facility, the NEVI program, and the recently announced Inflation Reduction Act, or IRA, and what it all means for us. We will then turn the call over to Jordi, who will provide a more detailed review of our financial results. Before I return to communicate our guidance for the third quarter of 2022, we will end by taking questions from our covering research analysts. The second quarter played out as we expected, with strength across regions and technologies. Despite that complicated geopolitical backdrop and continued global supply chain disruptions, Wallbox continues to perform exceptionally well and again exceeded expectations in the second quarter of 2022. I'm proud to share our record results, which highlight our continued commitment to executing our business plan. I want to thank our team for their hard work in helping to deliver on our commitments to investors, partners, and customers. It was a very busy quarter for us, producing solid results. Revenue growth was 124% on a year-over-year basis, and we are pleased with our growth margin of 41.1%. We forged new exciting partnerships, including one in the U.S. with Nissan. For this, Wolf will offer a complete solution to buyers of the new Nissan EV area. A beautiful new SUV hitting the market soon. We see this as a proof of the trust and confidence we deal with global leading brands like Nissan, and we look forward to a successful launch. We also acquired two very effective but very different companies, Coil and Ares Electronics. They are great examples of opportunities we see that can expand our offering, addressable market, and capabilities, and which can ultimately deliver value for shareholders and customers. Turning to the financial results, first quarter revenue of €39.5 million was up 124% year over year. That standing performance was fueled by growth strength across much of Europe, with notable growth in Spain, the Netherlands, and Belgium, all at approximately 400%, and Sweden and France both exceeding 200% on a year-over-year basis. North America, which now includes sales in Canada and Mexico, grew by almost 500% over the prior year period. We are making great progress in Asia-Pacific, with Australia and New Zealand growing year-over-year by 300% and 600%, respectively. LATAM, while early in its transition, continues to show promise, and we expect it to be an effective source of growth for World Ops in the coming years. Consolidated growth margin in the quarter was 41.1%, driven by continued cost control on key components, even in the face of global shortages. We continue to navigate the supply shortage of critical items better than most, and we continue to re-engineer products and establish strategic purchasing agreements for critical components. And finally, we sold almost 64,000 chargers in the quarter, with 77% in Europe, 16% in the U.S., 5% in APAC, and 2% in Latin. Notable share gains continue to occur in Southern Europe, Sweden, and the U.S., with new markets like Australia and New Zealand ramping up nicely. Today, we are experiencing a unique market dynamic. The demand for EVs is stronger than most imagined. At the same time, EV manufacturers are struggling to keep up. Capacity constraints and company shortages are resulting in longer lead times and lower EV delivery volumes than industry services expected. Often, buyers are quoted six to 12-month delivery dates. And while I'm encouraged by the amount of investment made in expanding that capacity in 2023 and beyond, there is little that can be done in the short term. However, even in the face of this imbalance, we've been able to achieve our sales and growth margin targets. We see these market share gains as a result of our agile manufacturing model, brand reputation, and strong focus on meeting customer needs. For example, in the first quarter of 2022, European EV deliveries grew by 24% year over year. In the same period, we sold 155% more units compared to Q1 of 2021. Similarly, in the most recent quarter, even though European e-deliveries declined by 2%, we sold 70% more units than Q2 of 2021. Our business model and brand reputation are helping drive our ability to make shares, and these share gains enable us to meet our commitments to investors. Build, buy, partner. Three methods of growing your business. Wallbox builds exceptional products. That is something that you likely know. We also consider ourselves adept at identifying and acquiring attractive companies. I'll talk more about this in a minute, but partnering, that's probably where most companies fall short. It's hard to do well, but we work very hard at establishing the right ones and being a good partner. When we first enter a market, the fastest path to the customer is direct, retail. But it's done through sites like Amazon.com, Walmart.com, Best Buy, Lowe's, Walmart, and Napa Auto Parts. You can see the success we had here. While delivering products to the first channel, we are investing in developing the second channel, which consists of distributors, contractors, and installers. This channel is something we spoke to you last quarter about our strategy here and how valuable this is for Walvox. The agreement with City Electric is one great example, and ZVEA Solar, the solar solution provider for IKEA, is another. ZVEA now includes Walvox chargers in their solution seen on the IKEA showroom floor. That is part of their holistic approach to energy management, and it's a passion we strongly share. Those types of relationships take time to cultivate and formalize. So it's our second path to the customer. And while you are servicing those channels and investing in their success, you are speaking with large, often global OEMs and utilities. Partnerships are often the decent method here. And a great example is what we announced with Nissan in June. Nissan has been a leader in the AV space from the beginning. The Nissan Leaf is one of the best-selling EVs on the market, and they've assembled an impressive list of new and exciting vehicles to come. Their new SUV, named Aria, is expected to be in high demand, and we are proud to be included in the launch. Buyers are directed to a program that website that allows them to select a charger and schedule an installation, all at a reduced price. We chose WarWalks because of our commitment to high-quality hardware and innovative software features, as well as outstanding customer support. And what's more is that the installation services are facilitated by COI. Our recent partnership with EVF is another great example. They are one of the world's largest utilities with more than 5.5 million customers and have recently launched a new platform servicing homes and small businesses that include sales and installation of EV charging infrastructure called EV. Through the platform, EVF customers can choose a Volvo charger and schedule installation all from EVF's new website. These are only a few of many partnerships we put in place, and there's more to come. We have ongoing conversations with most household names around the world. I look forward to sharing more with you as we make our way through the year. As we look out over the need to long-term, we expect Wallbox to continue its evolution into a holistic provider of energy management, hardware, and software. Some of that will be done organically. Quasar, for example, is designed to enable consumers to more efficiently manage their energy consumption and put energy stored in their EVs back into the grid when needed. However, some of this journey can be accelerated through the application of innovative technology or talented people. We expect there will be consolidation in the charging market, and we intend to closely watch for opportunities that align with our strategic plan while allowing us to create shareholder value. The two transactions, basically closed, align very closely with our strategy and bring clear commercial and operating synergies to Wallbox. The consideration for both transactions was made largely in Wallbox stock, which highlights their trust in the long-term vision of the company. Financial impact in the short term is relatively benign. Coil is a fast-growing provider of installation services within the energy management space. and they expand our addressable market into a large and growing segment. They've been a key part to market for Wallbox, and now they are part of the family. Installation and solution sales are an important element to the comprehensive solution, especially within semi-public and public settings. Installers are often the face of the brand, and the expertise and relationships Coil brings to Wallbox will help strengthen our competitive offering. In return, The investment and scale we can offer COIL is expected to open new opportunities and business models that will benefit everyone. The commercial synergies here are compelling, and we believe the purchase price allows for significant value creation over the mid and long term. Remember that the total purchase price of a charger and installation is often multiples of the hardware price alone. And when you account for an addressable market that is of equal size to that of hardware, the value of this business combination is extremely compelling. We will share more details on how we expect to benefit as we look into 2023. RF Electronics designs and assembles innovative printed circuit boards, or PCBs, for technology companies, including Wallbox. We've been their largest customer, and we are excited to bring these capabilities in-house. We are excited about this for two reasons. First, it will put us in a good position to help ensure a consistent supply of high-quality components that are critical to winning orders in today's market. And second, it allows us to be closer to the point of innovation, further differentiating our product by designing unique components and innovative features. We will not anticipate a material revenue impact from this transaction. but we do expect cost synergies that will be realized given the expected scale of our business in the coming years. This transaction is a great example of ways to improve or accelerate our path to profitability. Ares has both attracted broad margins and generated positive EBITDA. We have a payback period of less than two years. I'm looking forward to seeing the impact they will have. The last topic is one that Douglas is going to speak on. and that's the current state of the North American market, our position there, and the subsidy programs currently being discussed. Barlas, I'll hand it to you.