Melexis Nv Ieper

Hello and welcome to the MI6 Squad of 4 full year 2024 results. My name is Caroline and I'll be your coordinator for today's event. Please note this call is being recorded and for the duration of the call, your lancer will be on listen only mode. However, you will have an opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to register your questions. If you require assistance at any point, please press star 0 and you'll be connected to an operator. I will now hand over the call to your host, Mark Barron, the CEO, to begin today's conference. Thank you.

Thank you for the introduction. Dear audience, thank you for joining the Melexis fourth quarter and full year 2024 earnings call. Together with our CFO, Karen Van Grisven, I will look back on the past year and share how we see the coming year. I would like to take a step back and give a bit more perspective on 24. It has been an unusual year for Melexis, with significant contrast in our markets. We have started the year with most of our products still in allocation, and the order book has reflected good visibility. As the year progressed and the allocation period ended, we saw that we had avoided the bullwhip effect which is often experienced in our industry. This was, however, not the case, and we did not achieve our original sales target of around 1 billion euros, which is disappointing. Despite this, our 24 sales were broadly stable and significantly better than most of our peers. Of course, there are many highlights in 24. We had a record number of product launches, which is the starting point for future sales growth. The success of Malexis has always been built on enabling our customers to gain market share based on our innovations. I am happy to see that we continue to capture a strong level of design wins in automotive and beyond automotive applications. In automotive, design wins covered a wide range of electrification, comfort and safety applications. In powertrain, the design wins are well balanced across EV, hybrid and ICE, enabling us to capture growth irrespective of the type of engine. Geographically, we had a strong design win performance in China, confirming that we are taking the right steps to ensure our position in this important market. Looking ahead, in the short term, some customer inventory corrections are continuing in the first half of 2025. We continue to work very closely with our customers to manage their short-term outlook while push order requests are returning to normal level. We are closely monitoring many data points and are cautiously optimistic that customer demand will start to improve around summer. We have been through cycles before where customers needed to adjust their inventory levels and each time there followed years of sustained strong growth from Alexis. Many product launches are planned again this year as we continue to invest in innovation. The high number of design wins achieved over the past year are leading indicators of future sales. Content growth is here to stay and we are well positioned to capture it. I believe that the seeds for the next phase of Melexis growth are now being sown. Now, I will hand it over to our CFO, Karen Van Grisven, who will comment on our financial performance.

Thank you, Mark. Hello, everybody. The sales for the full year 2024 were €932.8 million, a decrease of 3% compared to the previous year. The euro-US dollar exchange rate evolution had no impact on sales compared to 2023, and the gross result was €401.4 million, or 43% of sales. a decrease of 9% compared to last year. R&D expenses were 11.8% of sales, G&E was at 5.5% of sales, and selling was at 2.1% of sales. The operating result was 219.9 million euro, or 23.6% of sales, a decrease of 16% compared to 261.3 million euro in 2023. The net result was €171.4 million or €4.25 per share, a decrease of 18% compared to €209.5 million or €5.18 per share in 2023. Sales for the fourth quarter of 2024 were €197.4 million, a decrease of 21% compared to the same quarter of the previous year, and a decrease of 20% compared to the previous quarter. The EURUSD exchange rate evolution had no impact on sales compared to the same quarter of last year and a positive impact of 1% on sales compared to the previous quarter. The gross result was 77.6 million euro or 39.3% of sales, a decrease of 31% compared to the same quarter of last year and a decrease of 28% compared to the previous quarter. R&D expenses were 15.3% of sales, G&E was at 7.2% of sales, and selling was at 2.8% of sales. The operating result was €27.6 million or 14% of sales, a decrease of 55% compared to the same quarter of last year, and a decrease of 57% compared to the previous quarter. The net result was €18.3 million or €0.45 per share, a decrease of 63% compared to €49.8 million or €1.23 per share in the fourth quarter of 2023, and a decrease of 64% compared to the previous year. The Board of Directors also approved on February 3, 2025, to propose to the Annual Shareholders' Meeting to pay out over the result of 2024, a total dividend of €3.7 gross per share. This amount contains an interim dividend of €1.3 per share, which was paid in October 2024, and a final dividend of €2.4 per share, which will be payable after approval of the annual shareholders' meeting. The Melexis shares will start trading ex-coupon on May 2025. And the record date is May 21, 2025. Now we also will say something about the outlook. So Menexis expects sales in the first quarter of 2025 to be in the range of 190 to 200 million euro. And for the first half year of 2025, Menexis expects sales to be around 400 million euro, with a gross profit margin around 40% and an operating margin around 16%. all taking into account a EURUSD exchange rate of 1.03. Sales in the second half of 2025 are expected to grow significantly compared to the first half of 2025, and this is based on forecasted global automotive production for the full year 2025 to remain at the same level as last year and increasing semiconductor content in automotive applications. And for the full year 2025, Menexis expects capex to be around 50 million euro. So this ends the introduction. So operator, you can now open the Q&A session, please.