Napatech

Good morning, I'm Heiner Torsgaard, CFO of Navatech. I'm pleased to welcome you all to Navatech's Q4 presentation. Our Q4 interim management statement was released earlier this morning on the OSE and is available on the Navatech website. For your information, a recording of this webcast will be available later today. As usual, we will answer questions at the end of this presentation. You may submit your questions via text on the webcast page, or we can take your questions on the phone. If you'd like to ask a question, please follow the instructions on this slide. Please note that this presentation contains forward-looking statements that are subject to risks and uncertainties. Our actual results may differ from those discussed in forward-looking statements. Our agenda today will cover our results for 2022, updates on our strategic efforts with key partnerships, a view of our market and opportunities, and finally, a review of our financials and our outlook for 2023. Now, I will hand over the presentation to our chairman, Lars Bøylesen.

Thank you, Heine. My name is Lars Bøylesen, chairman of NABATECH. I have also in the last year been working as an executive chairman in NABATECH. 2022 was a disappointing year as we didn't meet our financial goals. Heine will, in his financial sector later in the presentation, go into details on why we missed revenue and EBIT and other targets in 2022. However, 2022 was also a transformational year. After a very dedicated, approximately 18 months of R&D product development, we late in 2022 signed contracts with market makers like Intel, F5 and others. And 2022 ended up being a breakthrough year on our new products and probably the best year in the history of Navitek, creating the foundation for mega growth and a very strong future. for the company. I have to give credit to Jared, who has led all our efforts to these new accounts, and also to Flemming, head of IND and his engineering team, who has delivered and developed these new products. This has simply been world-class performance by Flemming and Jared. In 2022, we also took cost measures. This was done in order to increase IND investments to meet the strong pipeline backlog future business of requirement from our new partners. This trend of further investing into R&D will continue into 2003, giving the high backlog and demand we see from the market. The strategic review was concluded. We engaged a banker back in October. We received interest from many partners. The board decided to go for a strategic investment from a Tier 1 partner. This partnership will include joint product development, and Napotex technology will be included in many of this Tier 1 partner's products. Again, meaning a new building block for further growth for Navitek in the coming years. Combined with contracts with Intel and others, this strategic investment creates more value for shareholders than a sale of the company today. Just as a simple example, a single order from one of these tier one new clients can potentially double Navitek's annual production, just a single order. Jared will, in his presentation, talk more about the potential of these new deals and new partnership. The key person in convincing this new strategic partner to invest into NapperTech was our new CEO, Henrik. Henrik did a fantastic job in working together with this partner and finally also convinced them to invest into NapperTech. Therefore, I'm also very pleased that Henrik has accepted to take over as our new CEO. And I will now give the word to Henrik.

Thank you very much, Lars, for giving me this opportunity. I've been with Navitek for quite some years and I always felt privileged to work at Navitek with all our incredible colleagues. I'm very passionate about the company, employees and our relationships with customers and partners that all together form Navitek. As we're going to focus on today, Navitek has an immense range of opportunities ahead. And although there have been both ups and downs since Navitek was founded back in 2003, I'm really excited about the position we are in today. We have now not only established a very strong technology and product position, but very importantly, some great partnerships that we are going to talk more about today. Having said that, we also recognize that 2022 financial performance was far from what we expected. When we initially set out our ambitions for 2022, we did not imagine the scale of impact that NABATEC would endure from the global economic slowdown and supply chain disruptions in the form of order reductions and delays. And that is unfortunately clear reflected in our numbers. Let me make it very clear, we are not at all satisfied with our financial performance during 22. In Q4 22, we continue to feel the impact of the worldwide recession on the tech industry for many of our customers and Navitek leading to a harsh end of 22. So as most of you have probably read, The numbers are not exciting. So let me tear off the band aid and review the key figures for 22. 22 full year revenue ended at 158.6 million Danish kroner, which is decline of 19% year over year, resulting in EBITDA margin at minus 13%. The fourth quarter revenue was 33.9 million Danish kroner. That is a 38% decline compared to fourth quarter of 21. and with gross margin at 59% affected by product mix with higher than expected hardware sale and the global supply chain situation driving higher than expected cost. The fourth quarter EBITDA was negative 4.2 million Danish kroner and the EBITDA margin was minus 12%. The fourth quarter cash and cash equivalent were 12 million Danish kroner affected by high inventory buildup due to lower than expected sales in 22. However, the inventory will be reduced significantly throughout 2023 and thereby improve the cash position. We are not satisfied with our financial performance in 2022, but we strongly believe that our investment in new technology during 2022 will ensure that Nabatech stays competitive and very well positioned for the opportunities of the coming years. Let me talk about why we continue to be so enthusiastic about Nabatech and our future. by sharing some key updates about important progress in our strategy that is setting us up for a compelling 2023 and beyond. 18 months ago, NABATECH and the board of directors began the execution of a new strategy based on two important objectives, which will secure NABATECH's future position in the market. The first part was to make significant investment in our product technology to create a strong foundation and competitive position for our business in market areas like 5G network and cloud that will deliver growth in the coming years. The second part was to ensure strong partnerships with market-making industry partners that will have exceptional knowledge of technology, products, markets, and customers, as we believe this will position Nabatech in the best possible way to leverage our leadership position in the fast-growing SmartNIC domain. And to tell you more about that, I'll now hand over the presentation to our CMO, Jarrett Siget.