Autostore Hldgs Reg S

Good morning and welcome to Autostore's fourth quarter 2023 presentation. My name is Joe-Christian Lund-Steigerall and I'm glad to be here serving as an investor relations officer at Autostore while Hiva Flåkjær is on maternity leave. As usual, I'm joined by the two members of our executive team, Mats Hovland-Vikse, the CEO, and Paul Harrison, the CFO. As usual, we would like to remind you of our disclaimer with regards to forward-looking statements. It can be read here at your convenience. Moving on to our agenda, Mats and Paul will provide you with an update on the business and discuss the fourth quarter results. As a quick reminder, all the financials in the presentation are stated in US dollars. The presentation will be followed by Q&A session with participants joining via the earnings call and the webcast. And for those of you who are participating on the webcast and ask questions there, you can submit your questions through the webcast player at any time. We will conclude the session today with some final remarks by the CEO. And with that, Mats, the word is yours.

Thank you, Christian. And as you can see on this page, our performance was strong in fourth quarter. This is especially true when you consider that the broader market backdrop remains challenging. For 2023 as a whole, we grew our revenue by 11%, whereas the warehouse automation market in total declined. In the fourth quarter of 23, we achieved revenue of 176 million, an accelerated growth of around 20% compared to the same period in 2022. This was slightly better than our guidance in November when we estimated full year revenue of around 640 million, implying 171 million for Q4. While accelerating revenue growth, we continue to deliver high gross margins with 69% in Q4, up 8 percentage points compared to Q4 of 22. This means that the full year gross margin was 67.8%, which is a high and we believe sustainable level. And Paul will return to this shortly. Similarly, we have an efficient and scalable business model leading to strong EBITDA margin of 48%. Order intake has continued to develop positively and was in Q4 164 million, up 8% sequentially and up 7% since Q4 of last year. This brought our backlog to 447 million and around two thirds of the order intake in Q4 was from new customers. However, existing customers still make up 45% of our total backlog, which is in line with the historical mix. While standard solutions remains our most significant source of revenue, I am particularly pleased to see strong growth in high throughput solutions, where we continue the positive trend in Q4. Moving to the operational highlights, and as I mentioned in the Q3 presentation, we introduced a new price increase of net 3% in December. This was the result of us removing the grid surcharge completely and replacing it with a fixed general price increase. This price increase has been well absorbed. And at the same time, we did not see it generate any significant pull forward effect. I would also like to highlight the fact that our Poland team has successfully ramped up production capacity. At the same time, our new facility in Thailand will be fully operational in Q2 of this year. And all in all, this means that we will have production capacity that can support significant growth for many years to come without having to do any material additional investments. So moving on, this slide here summarizes our strong position and why the business is so attractive. We have now delivered 1400 systems with almost 65,000 robots in 54 countries. And the observant viewer will notice that we've entered two new countries since last quarter, New Zealand and the Dominican Republic. And these are significant numbers, but remember that still only 20% of the market for warehouse automation is currently penetrated. And that is a tremendous opportunity. And we are positioned for strong growth in the future. We have a solution for virtually all end markets and all system types with very attractive economics for our end customers. Additionally, we have developed a strong network of 23 integration partners around the world, which are complemented by our business development and global account teams. And all in all, this is the foundation for the attractive financial profile that you see. We ended 2023 with revenues of 646 million. We are back to historical high margin levels with profitability readily converting to cash. In 2023, free cash flow conversion was strong 83%. And this attractive financial profile is sustainable, given our standardized solutions and highly scalable business model. At the same time, we focus relentlessly on our customer-led product roadmap, with some 300 colleagues in R&D driving continuous performance improvement. So we believe passionately in the strength of our position in this market. But don't just take my word for it. I think you will be interested to see that we commissioned a Forrester study where Forrester has characterized a typical auto store customer as a composite of five different real customers who they interviewed. And this study can be downloaded on our website. It describes all the different inputs and cost drivers and draws a clear conclusion, which is that a typical auto store system with an investment of around $5 million provide a 79% ROI. So let's now reflect on our customer portfolio. We today count roughly 1,000 unique customers globally. We have included a small selection of them here on this page. And the key message looking at this picture is that we are very well diversified across a wide range of end markets. We support e-commerce and omni-channel fulfillment across different end markets. And in addition, we serve markets like industrial, automotive and healthcare. And there are a few warehouse automation projects that would not be well served by the addition of an autosource system. And as usual, we would love to show you an example of a successful implementation of AutoStore. And this time, we highlight the industrial equipment distributor, SMC, who was reaching their capacity ceiling using legacy storage solutions, but was able to double their throughput in their new facility with an AutoStore solution provided by our partner, Bastia. And on a higher level, I think this is a good example as to how we can serve a very broad range, if not all and markets. Automation of warehouses in the industrial space is also a segment that has proven more resilient throughout the recent quarters when we've seen that some e-commerce players has eased off their investments. So before Paul takes us through the financials of the quarters, please have a look at the SMC facility in Indiana, USA.

SMC Corporation was founded in 1959 in Japan, and our vision is to become the de facto standard, the standard for sustainable automation around the world.