Technoprobe Spa U/Adr

Good morning, everyone. We are just waiting for everyone to connect. Please allow us a few seconds. Good morning, everyone, and welcome to the full year 2023 results presentation of Technoprobe. Before I hand over to your host today, please be advised there will be an opportunity to ask questions at the end of the presentation. I now have pleasure handing over to Technoprobe's CEO, Stefano Felici. Please, the floor to you.

Good morning and thank you for joining us. Today with Stefano Beretta, our CFO, I will go through our 2023 results and I'll share our view for the first quarter of this year. Let's start with 2023. I'm very satisfied of the results we have achieved, notwithstanding the challenging market conditions. Technoprobe has been able to navigate the turmoil in the same space while at the same time achieving its strategic goals. The first half of the year, the parent company moved to Aeronext Milan just 15 months after the first IPO on Aeronext Growth Milan. In line with the objectives, of the listing process and increased its pre-float up to 25%. The translisting to the main market brought improvements in our processes and strengthening in our governance to comply with the regulatory framework. In the second half of the year, we finalized the acquisition of Harbor Electronics, one of the top players in the PCB manufacturing space. And we also announced the combined transaction with Teradyne, expected to be finalized within the first half of 2024. As discussed, the strategic rationale behind the two acquisitions is to complete the vertical integration of the manufacturing process and expand our presence also into the final testing space. Finally, we also acquired a majority stake in a startup named Microwave Plasma, focused in the engineering and manufacturing of microwave systems for chemical vapor deposition to realize materials in synthetic jets. As reported in this page, we closed the full year with revenues in the region of €409 million. 2023 was a very tough year. The semiconductor market experienced a prolonged demand stagnation in the major consumer electronics applications, such as smartphones and PCs. And the cutbacks on CapEx lasted longer than expected. Their bound in consumer application initially expected in the second part of the year, together with the correction of inventory levels, did not happen, leading to an almost flat-ish revenue trend on a quarterly basis. Automobile and industrial markets, a tailwind in the first part of 2023's started to show signs of weakness in the last quarters. This trend we expected to continue in 2024. Conversely, the artificial intelligence market grew at a constant pace during the whole year, confirming itself the biggest driver of the semis market in the mid-term. As discussed in our last call, we were able to successfully serve this market in 2023, thanks to our proprietary patents. Now, let me turn to Stefano Beretta, who will give you more color on our numbers.

Good morning, everyone, and thank you for joining us. So as you will have seen in our press release, revenues in the fourth quarter were 101.9 Euro million, slightly above our guidance, and registering a decrease of 16% compared to the same quarter of prior year, representing 8.2% sequential decrease compared to Q3. Consequently, gross profit and EBITDA decreased consistently compared to Q4 2022 to 42.6 million, and 22.2 million respectively representing 41.8 percent and 21.8 percent margin as guided during our private call if you move to the year-to-date figures total revenues were 409.3 million with an year-on-year decrease of 25.4 percent gross profit was 199.3 million equivalent to 40.1% lower compared to the same period of 2022, representing a margin close to 49%. EBITDA finally closed at 122.7 million, down 50% compared to the same period of fiscal year 2022, representing a margin of 30%. On this page, you can see a quick summary comparison between the financials at the end of fiscal year 2022 and 2023. So just to comment that further, you can see revenue year-on-year decrease of 25.4% was driven entirely by the market downturn, which started at the end of 2022 and significantly impacted the volume of orders and related deliveries. Just to give you an information, revenue expressed at constant currency, so using the same average FX rates of fiscal year 2022, would have been approximately 11.9 million higher than the reported revenue. In fact, the 12-month average US dollar-euro rate for fiscal year 2023 was approximately 1.08 compared to 1.05 for fiscal year 2022. On a gross profit level, the decrease in the margin from 60.6% to 48.7% was the result of our strategic decision to maintain our organizational structure at the level of the prior year. In particular, in terms of labor and capacity, despite the significant decrease in revenues, the consolidation of Arbor Electronics, starting from August the 8th of 2023, also contributed to the margin dilution. Finally, it's worth mentioning that during the year, a prudent inventory reserve of approximately 13 million was recorded to reflect both a slower inventory rotation, given the already mentioned reduction of revenues, together with a potential faster obsolescence of own ends and finished products. Again, the constant currency impact on gross profit would have been approximately 6.1 million higher by using the 12-month 22 average rate. Consistently, EBITDA reflected the same trend, so showing a decrease in the margin from 44.7% to 30%, including a negative Forex impact for approximately 4.8 million. We would highlight that EBITDA was also impacted by a significant amount of R&D cost, approximately 57 million, in line with the amount recorded in 2022, almost the same, 56 million, now representing approximately 14% of our revenues. higher compared to the 10% recorded last year, confirming once again the mindset and the commitment of our leadership to continuously develop new products and solutions. Finally, a picture of the net financial position that is down approximately 52.6 million in the full year, mainly due to 1.6 million generated through the operating activities, more than offset by 42 million cash out for acquisitions, as I mentioned already for Arbor and MW Plasma, together with 64 million absorbed by investment of the period, 45 million due to the payment of current tax, and 12 million used for the Treasury shares buyback. So now let me hand over to Stefano Felici again, who will summarize the overall market scenario for 2024.