Wallbox N.V.

Hello everyone and welcome to Warbox's fourth quarter and full year 2024 earnings conference call and webcast. My name is Charlie and I'll 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 the 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 followed by one. Now let's turn the call over to Michael Wilhelm from Warbox to begin. Michael, please go ahead.

Thank you, Charlie, and good morning and good afternoon to everyone listening in. Thank you for joining today's webcast to discuss Wallbox's fourth quarter and full year 2024 results. This event is being broadcast over the web and can be accessed from the investor section of our website at investors.wallbox.com. I am joined today by Enrique Asuncion, Wallbox CEO and and Luis Boada, Wolbox CFO. Earlier today, we issued our press release announcing results from the fourth quarter and year ended December 31st, 2024, which can also be found on our website. Before we begin, I would like to remind everyone that certain statements made on today's call are forward-looking that may be subjected to risks and uncertainties related 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 SEC, including the annual report on Form 20F for the fiscal year ended December 31st, 2023, filed on March 21st, 2024. We will be presenting unallotted financial statements in IFRS format that reflect management's best assessment of actual results. Also, please note that we 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 investor 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 will turn it over to Enric.

Thank you, Michael, and thanks everyone for joining us today. I would like to start today's call reflecting on 2024, which included exciting achievements and solid progress on the challenges we are facing. To start, 2024 has been a challenging year due to the slowdown in the EV market, which also impacted our results. If we look at the EV market in the main regions we operate in, Europe, North America, and rest of the world, which are all countries excluding China, the EV market only grew 6% year over year. This market growth continues to be subdued compared to initial market expectations. However, at Wallbox, we believe that we are managing this down cycle in the EV transition as one of the best in the industry. Revenue for the full year totaled 163.9 million euros, reflecting a 14% growth compared to last year. The main growth drivers were the full-year contribution of AVL and solid growth in the North American market, up more than 40% year-over-year. We delivered more than 162,000 AC units and close to 1,000 DC units during the year. allowing us to surpass 1 million chargers fold in the history of Walcox. We have achieved these results with a more efficient organizational setup as we continue to drive down labor and operating expenditures, down 11% compared to last year. As a result of this growth and cost optimization, we improved the adjusted EBITDA by 21% year over year, from negative 74.2 million euros negative 58.8 million euros we remain confident that last year's strategy initiative will continue to improve our adjusted data with the positive impact of these efforts becoming more visible in the upcoming quarters the new business unit structure introduced last quarter is allowing us to more efficiently service each target segment home and business fast charging and software supported by manufacturing In parallel, our product portfolio continues to evolve with new versions of our chargers and software solutions, as we believe we remain a technology leader in the space and find opportunities to improve our margins. Examples include achieving the UL certification for our bidirectional charger, the Quasar 2, as the first one in the industry, and the launch of the new Supernova and Pulsar versions, such as the Supernova UL, Supernova 220, the fastest Wallbox DC charger to date, and the Pulsar ProSocket, which is showing strong traction in the commercial segment. We have strengthened our commercial relationship with parties such as Engie, Generac, Free2Move, Florida Power & Light, and in 2024, raised an additional $45 million from strategic investors, excluding the $10 million private placement that took place in February 2025 and announced earlier this week. While these are notable achievements, considering the challenging market backdrop, we are not satisfied. It is important that we continue to focus on our strategic plan, continue to right-size the organization, and further secure the fundamentals to be successful in the long term. We believe we have an unparalleled platform for further growth, with a complete product portfolio and global footprint, coupled with strong commercial partnerships and the invaluable trust of our strategic investors. In our opinion, the transition to EVs is going to take place. It is only a matter of when, not if. Based on different indicators, such as declining battery prices, introduction of affordable EV models, and continued investments, we believe we are close to the inflection point and we are well positioned to benefit from the massive growth that lies ahead. Now, we will go into the highlights of the fourth quarter and share our perspective on the market. Afterwards, Luis will offer a closer look at our financial results and our key financial metrics. And finally, I will return to close the conversation and provide Q1 2025 guidance. Q4 revenue was 37.4 million euros, down 14% year over year and missing the item range we provided in our last earnings call, but did improve with 8% compared to last quarter. The main reason was lower DC fast-charger sales, which was down 34% quarter-over-quarter as certain customers pushed out expected orders. As commented on our previous earnings call, our CPO customers have been building up inventory as their focus has shifted from highly accelerated rollout towards profitability. This trend was more significant than expected and is impacting the whole industry. We are working closely with our CPO partners to understand the rollout plans including product requirements to improve our visibility and pipeline. In parallel, we have continued to sign up new commercial partners with the more recent example, Believe. The CPO operating in the United Kingdom is expected to allow different versions of our Supernova product to further expand their charging network. Growth in AC of 14% quarter over quarter partly offset the slowdown in DC fast chargers. but not sufficiently to cover the gap to our guidance range. As previously mentioned, North America kept seeing significant growth, as well as an uptick in other markets such as Belgium, France, and the UK. In total, during the fourth quarter, we delivered more than 38,000 AC units and more than 100 DC units. Gross margin was 34.6% in the fourth quarter, which is lower than our target range of 38 to 40%. and guidance provided last quarter. The main items impacting the result were product mix due to the lower top-line contribution of DC fast chargers and ABL. We are actively looking to unlock several gross margin expansion opportunities to reach and potentially exceed the 38-40% prior target range, which Luis will discuss shortly. On the cost side, one of the levers where we have greater control, we have made significant progress and continue to do so. When we look at our cash costs, which is defined as labor costs and OPEX excluding early activation, non-cash items, and one-off expenses, we achieve a year-over-year reduction of 19%. We expect further improvements in the coming quarters as we continue to find ways to optimize organization with the further implementation of the new business unit structures. For the fourth quarter, adjusted EBITDA was closer to the improvement trend we had seen earlier this year at a negative 20.3 million euros and improved with 43% compared to last quarter. The main drivers were the bonds backing gross margin and a 10% quarter over quarter reduction in labor and OPEX costs. The cost improvement positions the company for the future, but wasn't sufficient to cover the gap to the adjusted EBITDA guidance of seven to 10 negative million euros. We monitor closely our sell-out metrics and can see that the inventory in the channel is healthy and that our sell-out performance generally outpaces or is in line with EV sales in our key markets. We therefore stand in a privileged position to capitalize on our anticipated massive growth of EV sales. Nevertheless, as the volatility in the market continues and top-line visibility remains challenged, we continue to push for right-sizing the organizational structure and becoming profitable at current top-line levels. For the fourth quarter of 2024, Europe contributed 25.7 million euros of consolidated revenue, or 69% of total revenue, and remains the largest region. Considering the softness in the European market based on the sell-out data, we have been able to hold our market position and we believe this will result in an uptick in selling in the near future. North America remained the strongest growth market in 2024 for Wallbox, and in the fourth quarter contributed 10.5 million euros, or 28% of the total revenue. This represents a 64% year-over-year growth compared to the fourth quarter of 2023, while the EV market in the region grew 12%. In the past, we mentioned the importance of North America market and we're excited to see the progress we are making with our strategic partners, such as Generac and Free2Move. It was great to see one of our culture being featured in the recent Super Bowl ad of JEEP. For 2025, we see an opportunity to grow in this region, despite a change in the EV sentiment, which I will comment on shortly. APAC contributed 900,000 euros, or 2%, and LATAM was approximately 400,000 euros or 1%. AC sales of 26.9 million euros, including ABL, represented approximately 72% of our global consolidated revenue. Compared to the previous quarter, the AC sales grew 14%, mainly due to continued momentum in North America and increasing demand in Europe for the Pulsar family. Especially with the introduction of new Pulsar versions such as the Pulsar Pro and the Pulsar Max in the residential segment, there has been good traction. We see improvements in the upgraded versions of our products, which are designed to be easier to install and offer new features. Also, our software remains a key differentiator, enabling customers to efficiently manage their chargers. The Wallbox app enhances our home EV chargers, providing features like real-time monitoring, scheduling, and remote operation via Wi-Fi or Bluetooth. Our app is recognized as one of the best in the space, which gives us a clear competitive advantage. With virtual power plant integration, our chargers can contribute to greater stability and enable users to participate in energy markets, further reinforcing our leadership in smart charging solutions. The attractiveness of our smart charging solutions allow us to continue to support existing partners and signing up new partnerships. For our partnerships with the likes of Free2Move and Iberdrola, we continue to sell thousands of chargers to companies such as Jeep, Alfa Romeo, Mercedes, Volvo, Maserati, and Hyundai. DC sales were 2.9 million euros, representing 8% of sales in the fourth quarter, and much lighter than expected. As mentioned before, this inventory buildup with our CPO customers and orders have been pushed to 2025. as they slow down the rollout of their networks as the EV fleet is not growing as fast as expected. In the U.S., we launched Supernova at the beginning of 2024, which was a great milestone as we expanded our product offering in this region with fast charging. We have made a very successful launch and are still ramping up our commercial efforts and order book. In Q4, we received the i-Ride certification to sell our Supernova in Germany. and are in the process of receiving the CTEP certification to be compliant with regulations in California. Both of these certifications will expand our addressable market significantly as we continue to sign up customers that look for the product specification, reliability, and high power to footprint ratio that Supernova can offer. Software, services, and others contributed 7.7 million euros for the fourth quarter, representing 20% of our total revenue and 18% growth compared to last quarter. We're excited by this segment rapid growth, which is already feeling a scalable competitive edge in our market. As mentioned at the start of the call, 2024 has been a challenging year for EV sales. EV market growth was volatile and clearly below expectations. Especially Europe has been soft, which was down 2% compared to the full year 2023. North America and the rest of the world show more promising growth, with respectively 10% and 28% year-over-year growth rates. However, these markets are smaller, especially for Walgreens, and are still catching up. As reported by Road Motion, in our addressable markets, combined, 6.1 million EVs have been sold, representing a 6% year-over-year growth. Looking forward, while the near-term market visibility remains low, long-term prospects point to massive growth. For 2025, leading research firms, such as RoMotion, expect the EV market to continue to grow with high double digits, including North America and Europe, with 23% and 21% respectively. In Europe, stricter emission regulations come into effect, and we see already strong initial sales numbers picking up in the last quarter of 2024 and in the first month of the new year. In North America, there is a change in sentiment now that the new administration has taken office. This has impacted certain subsidies such as NEVI and will impact fuel economy standards, limiting the legislative pressure to increase EV sales. Other subsidy schemes such as the IRA, which includes the EV tax credit, are currently being reviewed. Meanwhile, automakers keep betting on EVs long term and are lobbying to keep certain EV incentives in place and push for gradual phase-out as more affordable EV models become available. Also, several states continue with their own regulations and incentive programs. In the end, we believe the new administration is not opposed to EVs, but that the industry must be commercially viable without government support. There are many proof points that we are getting close to this inflection point, with decreasing battery prices, more affordable car models, and continuous investment. Leaving any emissions and environmental concerns aside, I am a strong believer that EVs will eventually dominate the auto landscape. They are more efficient, better performers, cheaper to maintain, becoming cheaper to buy, and safer. If we look at what this means for Wallbox, we recognize the proof points and are optimistic about the market. Nevertheless, we are very intentional about reaching profitability and cash generation independent of market growth. That's why we've realigned the organization around the key levers we can control, gross margin, OPEX, and working capital, to drive sustainable growth and ensure our long-term success. Luis, I'll turn it over to you to comment further on our financial details.