Autostore Hldgs Reg S

Good morning, and welcome to AutoStore's first quarter 2024 presentation. My name is Joe-Christian Lund-Steigedahl, and I'll moderate this webcast. As usual, I'm joined by the two members of our executive team, Mats Hovland-Vikse, our CEO, and Paul Harrison, our chief financial officer. Quick reminder on the disclaimer with regards to forward-looking statements. It can be read here at your convenience. Moving on to our agenda, Mats and Paul will present the quarter's operational and financial development. As usual, all financials are stated in US dollars, and we will host a Q&A session right after the prepared presentation. As always, you will be able to post written questions in the webcast player starting already now, if you like. This time, we are also providing you with the opportunity to log on to the webcast via a Teams link and ask verbal questions directly to the management team by using the raise hand feature in Teams. The link to the Teams meeting is available on our IR website and in the invitation distributed as a stock exchange release a week ago. After the Q&A, Mats will round off with some final remarks. And with that, Mats, the word is yours.

Thank you, Christian. So I'm pleased to report that we continue to perform well in the market in the first quarter, with order intake of 183 million, 11% ahead of the first quarter of 2023. Our market leading and highly standardized solution enables us to compete very effectively across a broad range of warehouse automation use cases. These include high throughput projects, which was a strong driver of orders in the first quarter. And this is a continuation of a trend that we observed and talked about in the fourth quarter. As you may remember, high throughput applications are a focus area for us and a segment where we see great potential. Our Q1 revenue was 138 million, which is a reduction of 7% compared to last year. The decline was due to a lower volume of shipments of high throughput projects in the quarter. And this was an expected development and is driven by the project schedules of our customers. So we just see it as a timing issue. To some extent, the development was countered by growth and shipment in the standard segment, where each installation is smaller. But to be clear, we expect revenue to pick up in the quarters to come. And looking at the backlog, there are several exciting high throughput projects to be delivered in the second half of the year. The Q1 gross margin was almost 73%, a strong number driven by several factors. There are product mix advantages in the quarter, but we are clearly seeing the results of initiatives we have taken to streamline and optimize our production and procurement processes. Our EBITDA margin was stable year over year at the 46% level, which I think is a solid evidence of our attractive and scalable business model. As mentioned previously, we introduced a new price increase of net 3% in December. The price increase has been well absorbed and in Q1 we see a mix of price and volume growth in terms of order intake. The revenue effect of last year's price increase will come through gradually throughout the year. We continue also to strengthen our successful BDM and global accounts initiatives. Supplementing and working closely together with our partners, this has yielded strong results. Also, the expansion of our production capacity is on track, and in Q2, we expect our new facility in Thailand to become fully operational. So moving on, this well-known slide very efficiently summarizes Autostore's strong position and why the business is so attractive. We've now delivered 1,450 systems with 67,500 robots in 54 countries. We have about 1,050 unique customers compared to 850 customers one year ago. Within the cubic storage space, we are the only player with such a significant install base, providing us with great advantages. And not only is it real proof of the strength of our solutions, it also represents a big base of satisfied customers to expand our relationship with. Around half of our queue on order intake was from existing customers. Additionally, on a daily basis, we are downloading operational data from our installations, helping us to focus relentlessly on increasing efficiency of our system and further developing our product. And finally, this install base helps us to gradually increase recurring and reoccurring revenue. And let me also reiterate that our research shows that only around 20% of the market for warehouse automation is currently penetrated. And that's a tremendous opportunity. 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 the end customers. Our go-to market model is highly efficient with a strong network of 23 integration partners around the world, which again are complemented by our business development and global accounts teams. And let me elaborate a bit on this point. Over the last couple of years, we've built our team of business development managers and more recently, global account managers. They work alongside the 2,800 certified sales reps of our partners, building awareness about AutoStore's unique advantages and discussing opportunities with potential end clients. And once the prospect is sufficiently matured, it is handed over to a partner who, as always, facilitates the detailed planning, integration, implementation, education, and maintenance. And with around 30% of orders initiated through our own business development managers, this is clearly a win-win proposition for all. Our global account managers work with larger international companies, building deeper and more strategic relationships, resulting in roadmaps of auto stores, together with our partners. And it is this efficient go-to-market model, together with our highly standardized and scalable solution, which is the foundation for the attractive and stable financial profile you see in these slides. At the same time, we focus relentlessly on our customer-led product roadmap with around 300 colleagues in R&D, driving continuous performance improvement. So we have included a small selection of our 1,050 customers here on this page. And as you can see, we are very well diversified across a wide range of end markets. In Q1, more than half of our revenue came from existing customers, a very strong reflection of customer satisfaction, particularly when you consider that we've added around 500 new customers over the last two years. But nothing beats a real customer story, and you know we love to share them. This time, we want to highlight an electronic components distributor in the US. TTI, a Berkshire Hathaway company, distributes electronic components all over the world. They're adding new customers constantly, and we're in need of a flexible, expandable robotic solution. And the facility in Texas that we're now going to visit was installed on a brownfield location, massively improving efficiency for TTI. So before Paul takes us through the financials of the quarter, please have a look at this.

We're an electronic components distributor based out of Fort Worth, Texas. We ship all over the world in all industries, all markets. If you think about why customers use distribution, it's because we're holding the inventory for them when they need it. It's not project oriented in that let's start today and we'll ship to that guy in 90 days. We're delivering daily to some of the largest industrial companies in the world. Every single day, the majority of what we ship every day comes down same day, ships same day. So we want to be able to ship to that customer in Los Angeles just as efficiently as we do the one in New York. So those orders can come down really late at night and we need to be able to process those out. So speed matters, especially these days with the supply chains being what they are, speed matters. Our systems can't go down. And so it's incredibly important that we have a reliable system that our customers, our sales team can enter orders and know that they're going to get shipped that day. We have to maintain our customer experience, and we have to do it while we're growing at a tremendous pace, and that requires automation. AutoStore is a game changer in terms of how you operate. The amount of product that we can stock per square foot, the AutoStore is by far the best in the industry.