Melexis Nv Ieper

Hello and welcome to the Melexis Q2 2024 results call. My name is Saskia and I will be your coordinator for today's event. Today's call is being recorded and for the duration, your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to Marek Biron, CEO, to begin today's conference. Please go ahead.

Thank you for the introduction. Dear audience, thank you for joining the Melexis second quarter 2024 earnings call. We will review our performance over the past quarter and over the first half of this year. In Q2, our sales reached 245.7 million euros, which is close to the higher hand of our guidance. It represents a 4% increase year over year. Compared to the market, we stand tall. Our automotive growth was mainly driven by applications outside the port train. we experience new premium applications that rapidly ripple down into smaller vehicles. For example, comfort features like ambient lighting or advanced climate control, in which we are a successful player, are becoming more and more widespread in the different car segments. We are also hearing from our customer about a renewed focus to develop the next platform of combustion and hybrid engine cars. Melexis is well prepared for this shift since our product portfolio covers all type of powertrain. The diversity in our portfolio make us resilient against recent fluctuation in global car demand. In the second quarter of 24, Melexis has introduced several innovations. We launched a new magnetic position sensor for applications requiring high functional safety level. We have expanded our linear GB family and we have provided a code-free fan driver mainly used in data server. These successes highlight our growth ambition in e-steering technology, ambient lighting solutions, and market beyond the automotive sector. The growth of our pipe of opportunities confirmed the effectiveness of our product strategy. Here is some insight of our five major design wins in Q2. One design win is a driver to actuate valves in the thermal management system of an EV in China. Another design win is also a driver, but it is used in water pumps in Europe. We have booked new business with current sensor for inverter application in the US, and also with magnetic sensor to sense the position in a combustion engine in Korea. We have also one additional ambient lighting application in Europe. Those five examples show that we are succeeding globally, whether it is in EV or in combustion engine, in powertrain, and also in non-powertrain applications. Now, I will hand it over to our CFO, Karen Van Grisven, who will share some financial insights.

Thank you, Marc. So, hello, everybody. I will go a bit deeper into the financial results for the second quarter. So, Marc already mentioned we had 245.7 million euro sales in the second quarter, which is 4% more versus the same quarter a year ago, and 2% more than the previous quarter. and the Euro-US dollar had no effect, neither versus a year ago or versus the previous quarter. The gross result was 108.8 million euro, or 44.3% of sales, which is a decrease of 2% compared to the same quarter of last year, and an increase of 2% compared to the previous quarter. R&D expenses were 10.8% of sales, G&A was at 5.3% of sales, and selling was at 2% of sales. The operating result was 64.4 million euro, or 26.2% of sales, a decrease of 5% compared to the same quarter of last year, and an increase of 1% compared to the previous quarter. The net result was 49.1 million euro, or 1.4%. €21 per share, a decrease of 5% compared to the €51.9 million or €1.28 per share in the second quarter of 2023, and a decrease of 7% compared to the previous quarter. Our Board of Directors also decided on an interim dividend of €1.3, which will be payable after 17 October. And related to our outlook, Melexis expects sales in the third quarter of 2024 to be in the range of €247 to €252 million. And for the full year, Melexis expects sales to be around €1 billion, with a gross profit margin above 44% and an operating margin above 25%. all taking into account a Euro-US dollar exchange rate of 1.08 for the remainder of the year. For the full year 24, Melexis expects capex to be around 50 million euro, which at 60 million euro, so previously we mentioned here 70 million euro, so a reduction of 10 million euro. So operator, I would now like to open the Q&A session. So please go ahead.