Alfen Nv

Hello and welcome to the Elfin 2024 full year results. My name is Laura and I will be a coordinator for today's event. Please note this call is being recorded and for the duration of the call, your lines will be on listen and remote. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. Today, we have Marco Roulevel, CEO, Owner Crop, CFO, and Michel Lesch, CCO, as our presenters. I will now hand you over to your host, Marco Roulevel, to begin today's conference. Thank you.

Thank you, Laura. Good morning and welcome to this Alphen webcast. We appreciate the fact that you've taken the effort to participate And these webcasts and the questions that may come forward are handled by the Management Board of Alphen, as indicated by the moderator being Michel S. CCO, Onno Krupp, CFO, and myself, Marco Roelveld, CEO. In this webcast, we will start with the highlights of 2024 followed by a short review of the business line. Next, we will go in more detail regarding our financials of 2024. And lastly, a significant part of this presentation will handle the strategy update our outlook for 2025 in the context of our medium-term ambition. We continue with slide four with the highlights of 2024. In line with the updated guidance during the three results, the revenue for the full year of 2024 ended up at the lower end of our revenue bandwidth and amounted up to €87.6 million. The adjusted EBITDA of 5.8% was in line with the updated guidance. Our results in 2024 were impacted by headwinds across all three of our business lines. Lower EV subsidies resulted in a low demand for charging stations, and a significant price decline of batteries resulted in a wrong decision cycle and low revenues. And the moisture issue of smart grid solutions caused a big financial impact. The free cash flow in 2024 was 21.4 million per cent compared to a negative cash flow 2023 of 27.2 million euros. This positive cash flow exceeded our updated guidance, primarily driven by a reduction in inventory and timing of NEC storage projects. We've updated our strategy in the second half of 2024 and have decided to enhance our focus on our core markets and to further optimize our product market approach. With the restructuring in the fourth quarter, we adjusted our cost base, adapting it to the new market conditions. And for 2025, a 13.1 million euro net cost base improvement was realized compared to 2024. Driven by strategic repositioning in which we sharpen our market focus and the current limited market visibility, we concluded for the year 2025 a revenue outlook of 445 to 505 million euros. and a single-digit adjusted EBITDA margin combined with a CAPEX below 4% of revenue. Due to the current market volatility and macroeconomic uncertainty, our updated medium-term admission for 26 to 27 is a revenue growth of 5 to 10%, a year-on-year improvement of adjusted EBITDA margin towards low double digits and a CAPEX below 4% of revenue. On the next slide, we will continue with our progress on our sustainability program. With regard to our sustainability program, we would like to highlight three aspects. First, that 99.5% of our revenue in 2024 has been aligned with the EU taxonomy. Secondly, that the SBTI has validated our science-based greenhouse gas emission reduction targets. With these targets, we comply with the SBTI corporate net zero standard. And thirdly, in the sustainability section of our 2024 annual report, we have closed more than 30 pages of qualitative and quantitative information on our ESG activities. In our sustainability approach, we've defined 15 material topics and we've reported on. It's been a tough job to bring all data points together and create a comprehensive storyline We are convinced that the overall result is well balanced. Please look at our annual report on our website for further information. Michelle will now continue this webcast with a segmental review.

Thanks, Marco. Now we'll talk through each of our business lines, starting with Smart Grid Solutions. In Smart Grid Solutions, we achieved $210.6 million of revenue for full year 2024, which is a year-on-year increase of 11.8%. This is primarily driven by our grid operator segment, which contributed to 66% of our revenue. And while grid congestion drives our grid operator demand, we do see it hamper our private domain segment. Gross margin was 15.5%, driven by a $15.4 million warranty provision for the moisture issue, but our adjusted gross margin was 22.8%. Commercially, we continue to win projects in our greenhouse segment and provided a new innovative approach to the transport distribution stations for our customer nexus. Alphen's innovative approach to the station and as the end-to-end contractor significantly reduces their time to install, connecting more capacity in a shorter amount of time, which further eases grid congestion in the Netherlands. On the next slide, we'll talk through EV charging. In full year 2024, we saw revenues of 153.3 million which is flat to 2023, and slightly above our guidance from the Q3 trading update, which was up to a negative 5% growth year-on-year. Due to a one-off inventory adjustment, gross margin was 31.5% versus 38.3 in 2023, driven by a general warranty provision of $4 million, and on an adjusted basis was $36.1 million. We continue to win and innovate this space with multiple wins in the public segments, for example, in the city of Groningen, and launching the first eight-year compliant Twin 5 Plus station with dynamic QR codes. On the next slide, we provide some additional context on Alphen's revenue relative to other players in the marketplace. Here, we can see Alphen's revenue development is in line with our peers based on the information currently available. And while we all have slightly different end segments that we serve, overall, we see that 2024 was a challenging year. Even with these challenges, we still see elephant well-positioned. Overall, we had stable revenue. And as we looked at our market share position in each country, across our key markets, Netherlands, Belgium, Germany, and France, in aggregate, we gained share. And if we look across all of those other countries outside of our top four markets, we slightly lost share. This reinforces our direction of increased strategic focus on our core markets, as we will discuss later in the webcast. Overall and across Europe, In aggregate, our market share has remained flat. We do expect EV registrations to come back in 2025, as previously shared. However, we still don't expect that uptick in Q1 and expect any market growth that might materialize to contribute in the second half of 2025. Now, as we move to energy storage, on the next slide, we see revenue of $123.7 million down 24% year on year. As previously communicated, we had longer deal cycles, which impacted our 2024 revenue. Our gross margin was 27.6% compared to 22.4% in 2023, driven by an impairment of older batteries. Our adjusted gross margin was 29.1%. In Q4, we were able to finalize key deals and are excited about Flavobest, 126-megawatt-hour system, the largest for Alphen and one of the largest for the Netherlands. This project is expected to contribute to our 2025 revenue. We also continue to deliver innovation to the market, utilizing the latest containerized solution for our customers, which ensures our competitiveness in this space. As we move to the next page, we can see our backlog development, which includes other key deals from Q4. We've seen steady backlog growth from 72 million in June of 2024 to 100 million in December of 2024. with 86.5 million of that currently contributing to our 2025 revenue outlook. As you compare our backlog to our outlook, we have approximately 78% coverage of our midpoint and expect our current first half pipeline of deals and total year mobile system opportunities to support the remainder of the gap and contribute to backlog in 2025. And now I'll hand it to Ono to walk through the financials.