Autostore Hldgs Reg S

Good morning and welcome to Autostore's first quarter 2025 presentation. My name is Siva Florskjær and I'm the Investor Relations Officer at Autostore. I'll be moderating today's presentation. Today, I'm joined by three members of our executive team. Mats Havlund Vikse, our CEO, Paul Harrison, our CFO, and Parth Yoshi, our Chief Product Officer. Now, before we start, I'd like to remind you of our disclaimer with regards to forward-looking statements. It can be read here at your own convenience. Moving on to our agenda, we'll begin with Math who will present this quarter's operational developments, followed by Parth who will discuss our recent product innovation and how they support our growth strategy. Paul will then provide a detailed overview of our financial results. And as always, all financials are stated in U.S. dollars. After the prepared remarks, we'll open the floor for Q&A. You can submit written questions through the webcast player starting already now. Additionally, similar to previous quarters, you're invited to join the webcast via Microsoft Teams to ask verbal questions directly to the management team. Good morning and welcome to Autostore's first quarter 2025 presentation. My name is Siva Florskjær and I'm the Investor Relations Officer at Autostore. I'll be moderating today's presentation. Today, I'm joined by three members of our executive team. Mats Hovland-Vikse, our CEO, Paul Harrison, our CFO, and Parth Yoshi, our Chief Product Officer. Now, before we start, I'd like to remind you of our disclaimer with regards to forward-looking statements. It can be read here at your own convenience. Moving on to our agenda, we'll begin with Math who will present this quarter's operational developments, followed by Parth who will discuss our recent product innovation and how they support our growth strategy. Paul will then provide a detailed overview of our financial results. And as always, all financials are stated in US dollars. After the prepared remarks, we'll open the floor for Q&A. You can submit written questions through the webcast player starting already now. Additionally, similar to previous quarters, you're invited to join the webcast via Microsoft Teams to ask verbal questions directly to the management team. Please use the raise hand feature in Teams to participate. The link can be found on the Investor Relations website and is also included in the invitation that was distributed as a stock exchange release one week ago. After the Q&A, Mats will round off with some final remarks to conclude this presentation. With that, I'll hand over the word to Mats.

Thanks, Eva, and good morning. With all we have going on in the world right now and the unprecedented levels of uncertainty businesses are facing, there is a lot to discuss today. Our numbers tell you that we're not immune to this uncertainty. At the same time, I want to leave you today with a clear understanding of the actions that we're taking to ensure that AutoStore emerges from this period stronger than ever. By which I mean with the best solution in our industry, with an optimized go-to-market model and with the strongest financial profile. It is with this in mind that I invited Parth, our CPO, to join us. Now coming up to a year with the business, Parth is driving a transformation of our product organization, and I want you to hear more about that. But first, let's take a closer look at the numbers. We closed the quarter with 86 million in revenue, 141 million in order intake. Gross margin was 74%, and our adjusted EBITDA margin came in at 25%. As highlighted during our Q4 update in February, we expected a softer start to the year, reflecting the shift towards autoservice-as-a-service projects and given the broader macro uncertainty impacting global commerce. If we included autoservice-as-a-service products we shipped in the quarter, secured revenue was 113 million. And I will come back to the importance of service revenue shortly. I think it's also fair to reiterate my words back at the Capital Markets Day. We're not satisfied with these numbers. And yes, we can talk to a challenging market at present, but even so, we're aiming for much better and we know shareholders expect that too. The encouraging part is that I'm starting to see clear signs that our strategy is taking hold. It's the same strategy we outlined at the Capital Markets Day, one that we believe will drive a return to highly profitable growth. And I'll speak more about that in just a few minutes. Moving on to our business developments. And let's start with tariffs. You don't need me to tell you that the situation is still evolving. The timing, scope and details are all uncertain. What I can tell you is that about 25% of our revenue comes from the US. And it's our partners, not AutoStore, who import our products into that market. However, we're realistic. We know that will likely bear some of the impact. But based on what we know today, we still expect to deliver strong, best-in-class gross margins. The more significant impact of tariffs is the uncertainty they create. We're also seeing market analysts now suggesting that 2025 will be another year of market contraction. An uncertain outlook leads to hesitation. Our customers understand the strong ROI associated with an autostore solution, but it is understandable that many are holding off on their commitments until there is more clarity on this matter. As I said, our response to these challenges is to double down on delivering on our strategy. We know it's one that will restore growth with a better backdrop, and it will see us emerge in an even stronger position. And this is a multifaceted strategy. Parth will speak shortly about our product direction, and I'll cover progress on the go-to-market strategy on the next slide. And Paul will later outline our plans to streamline support function and deliver a meaningful reduction in our operating expenses. But while we can't control the external environment, what we remain focused on is what we can control, which is executing on our strategic priorities and positioning Autosource for a return to higher levels of profitable growth. We are responding to the current conditions by transforming our commercial function with new leadership, accelerating growth through Autostraße service and implementing cost efficiency measures expected to reduce our annualised operating expenses by approximately 10 million. These actions are aimed at maintaining high profitability, strengthening our competitive position and support long-term growth and resilience. Moving on, we're happy to share that we successfully completed several Autosource as a Service projects this quarter. Autosource as a Service is our flexible subscription-based model that removes the need for a big upfront investment. It gives us predictable and recurring revenue. And for our customers, it means faster time to value, predictable costs, and more flexibility in how they run and scale their operations. So this model is a win-win. And while still early days, AutoStory as a service is already proving to be a strong driver of growth and deeper customer relationships, especially in today's market. So now let's take a step back. This slide highlights our superior value proposition to customers, our long-term competitive strength and superior financial profile. It summarizes the strength of our platform and why we're uniquely positioned to lead. We have now delivered 1,700 systems with 78,500 robots in 58 countries. We have over 1,150 unique customers, and we added over 100 in just one year. Within the cubic storage space, we are the only player with such a significant install base, providing us with the great advantages. And not only does this speak to the strength of our solutions, it also represents a big base for our land and expand strategy. And while our financials on this page reflect the impact of a softer Q1, we've consistently demonstrated industry-leading margins and profitable growth, which is a testament to the strength and scalability of our business model. And this is also a slide that you're familiar with. And here you can see a small selection of our over 1,150 customers. And as you can see, we have a broad customer portfolio across a diverse set of end markets. Around half of our revenue comes from existing customers, and this growing customer base represents a massive opportunity. It is also worth noting that Europe remains our largest region, representing over 65% of our business. To further expand on our reach in these key end markets, we continue to innovate and strengthen our value proposition. So I'm going to pass to Parth, who will walk you through some of the product innovations from our spring announcement and how they're designed to drive our growth and continue our leadership position.

Hi, everyone. I'm Parth Joshi, Chief Product Officer at AutoStore, responsible for all things product and technology. As Mats mentioned earlier, I joined the company in the summer of 2024, and I'm currently in the midst of driving a transformation of our product organization. It's been an exciting time to come on board as we work to shape the future of warehouse automation and strengthen our leadership in this space. During my time at AutoStore, I focused on three key areas as I've done in previous industries. Driving scale and growth through product innovation, building high quality recurring revenue streams, and combining best-in-class hardware with truly disruptive software. As Mats mentioned, we have over 1,700 systems in operation and more than 78,500 robots deployed in the industry, leading customers across a broad range of end markets. But for us, it's not just about scale. It's about being trusted partners for our customers. leveraging our product and technology to deliver sustainable growth across varying CapEx cycles and business models. We remain focused on solving increasingly complex challenges for our customers. That's how we continue to create value and unlock new growth opportunities for us and for them. Today, I want to show how far we've come and why it matters. Innovation has always been core to AutoStore. We focus on solving complex customer problems with reliability, scalability, and standardization at the center. As our customers grow, we grow with them. Just look at the shift from a few hundred robots to over 70,500 now. from 50 robots per site to up to 2,000 with a 99.7% uptime. This kind of progress drives real impact for us and our customers. We're doubling down on four strategic priorities that keeps us future ready. First, optimize the cube. We're increasing speed, density, and efficiency, reducing total cost of ownership and time to deploy. We still see massive opportunities to continue to optimize our cube with data from a majority of our 70,000 robots, keeping us as an industry leader. Second, expand our core capabilities. we are continuing to build on the platform we've developed with seamless integration between software and hardware as a key differentiator. Doing so enables us to solve new applications. As an example, increasing our throughput capabilities has helped us to expand into the high throughput segment, which alone represents over a third of the total light ASRS market, making it a significant opportunity for us. In addition, we have opened chilled and frozen applications through our multi-temperature solution and addressed small-scale fulfillment through our PO turnkey offering. Third, add on new capabilities. We are also going beyond the cube to add new capabilities. By expanding into adjacent use cases, we're growing our serviceable addressable market and increasing share of wallet. Solutions like our Carousel AI, something I'll speak about more shortly, demonstrate how we can extend the value of our platform in new powerful ways. And fourth, AutoStore software platform. Software drives efficiency of the hardware. It's the barrier to entry and what truly sets AutoStore apart. This system-led approach with software as a brain is what enables long-term customer value, high-quality recurring revenues, and sustainable growth. We're building a unified ecosystem that enhances interoperability, accelerates innovation, and unlocks new opportunities in AI and analytics. As outlined in our Capital Markets Day last fall, our biannual product announcements are designed to deliver value throughout the system lifecycle. And that strategy remains unchanged. This spring, we launched five new products aimed at boosting productivity, lowering operational costs, and enabling faster and more scalable expansion. Each product is built to drive continuous value and strengthen our profitable recurring revenue model. A standout in this launch is Carousel AI, our first AI-powered robotic piece picking solution, and a clear step beyond the cube. It addresses a key industry bottleneck, which is manual picking outside the system, and automates the next logical step in the process. This directly addresses key challenges that customers are facing, such as rising labor costs and warehouse staffing challenges. Carousel AI is a proof point of our strategy to expand beyond the cube, creating value through having a fully integrated, standardized offering. Early traction has been strong and is already a key topic in our customer conversations. More to come on AI-related impacts to our products in future updates. We're also launching the Essentials software package, a powerful all-in-one solution designed to enhance performance across the customer journey. It delivers industry-leading robot routing, real-time system analytics, and intelligent reporting tools for ongoing optimization, which will help drive growth in ARR. By aligning with evolving customer needs, the Essentials package strengthens our value proposition while also laying the foundation for what's next in our software journey. Finally, we're expanding PO, our plug-and-play standardized solution that brings cube storage to smaller businesses and compact spaces. Built on the same high-performance robots as our larger systems, PO is intuitive, fast to deploy, live in as little as four days, and available via subscription through our partner network. With our Spring 2025 release, PIO is now available to numerous partners worldwide in a range of sizes, making it easier than ever to offer automation in new markets. We also see a strong pull from partners on smaller use cases within the enterprise segment. It's a true turnkey solution that generates recurring monthly revenue. As Matt said earlier today, my objective is to leave you with a clear understanding that even in these challenging markets, we are innovating at pace. Our reinvigorated products team will continue to deliver solutions that will position AutoStore more strongly than ever to win in this market. Thank you. Paul will now take us through the financials of this quarter.