Technoprobe Spa U/Adr

Good evening and thank you for joining us. Together with Stefano Beretta, our CFO, I will go through 2024 nine-month results and guidance for the last quarter of this year. As usual, Q&A session will follow at the end of the presentation. Results achieved in the third quarter are in line with guidance shared in August confirming trends rose in our reference markets. Exposure to artificial intelligence has been the main driver of our revenue, partially offset by weakness in the automotive and industrial market. Looking at different segments, we have automotive industrial remains sluggish. Suffering of the ongoing inventory correction started in last quarter 2023, which is expected to last at least until the first half of next year. More consumer-exposed markets and related inventories are completing the process of normalization as expected in 2024. Moving to artificial intelligence, as said, it has been the biggest driver of this year and will remain the same in the short to mid-term, in the same space overall. It was powered by Edge AI and inference applications that boosted data centers. Looking at artificial intelligence devices, you see chips being split into chiplets, new architectures, and some other factors feeding device complexity. It means that we expect an overall growth in the test intensity, driven by the need of a customer to prove and test each component of chiplet during the assembly process. Also, the average selling price are higher on these complex devices. So customers are increasingly willing to perform more tests in order to avoid the cost of failure. From a technical standpoint, these are challenges that we did not have to face a couple of years ago or even last year. Now we have this new wave of complexity driving test content and test time. In addition to test time, another key contributor to test demand is the effort to bolster quality assurance and reliability. Said that, it is difficult to forecast the testing market growth given our limited visibility. It is especially difficult to predict changes in test time and test content for AI devices. That being said, if you look at the architecture of next-generation SoC devices, the complexity is only increasing. So there is no reason for us to believe that the test content is going to do anything but continue to increase. Now let me turn to Stefano Beretta, who will give you more colors on our numbers.

Thank you, Stefano, and good afternoon to everyone. As you will have seen in our press release, revenues in the third quarter were 145.8 million. At the lower end of our guidance, registering an increase of approximately 31.2% compared to the same quarter of prior year, with a sequential increase of 4.7% compared to the second quarter of 2024. It's worth to remind you that on a sequential quarterly basis, The lower increase registered in the Q3 compared to the previous quarter is related to an important campaign that came in the second quarter of 2024. Gross profit increased 8% compared to the same period of 2023, up to 59.4 million, representing a 40.7% at the midpoint of our guidance. As per gross profit, also the EBITDA was at the midpoint of the guidance. It decreased approximately 3.4% compared to the third quarter of 2023, down to 34.6 million, representing a 23.7% margin. If we move to the year-to-date figures, total revenues were 386.9 million, with an year-on-year increase close to 26%. Gross profit was 160.1 million, 2.2% up compared to the same period of 2023 and representing a margin of 41.4%. The EBITDA closed at 95.3 million, down 5.2% compared to the same period of 2023 and representing a margin of 24.6%. All the completeness of information And comparison purposes, it's worth to remind that all the above figures include a new perimeter of consolidation, inclusive of the contribution of Arbor Electronics, nine months in 2024, compared to little less than two months in 2023. And DIS tech business, four months in 2024, compared to nil in 2023. If we move to the next page, so now you can see a summary comparison between the financials at the end of the nine-month period, 2023 and 2024. Just to comment that further, revenue year-on-year increase of 25.9% was driven by the gradual recovery of the consumer segment and by volumes related to artificial intelligence. together with the other half by the contribution of Arbor and DIS Tech, all of them partially mitigated by the weakness in automotive and industrial, as already reminded by Stefano Felici. If we want to give just a note on the effects impact revenue expressed at the cost and currency So using the same average FX rates on the nine months of 2023 would have been approximately 3.2 million higher than reported revenue, meaning only 1% unfavorable impact. On a gross profit level, the decrease in the margin from 51 to 41.4% was the result of the expected dilution from the mentioned acquisition together with a relevant increase of depreciation following the high investment in fixed assets made in the last 12 months. And also due to the growing complexity of our products and the related and temporary lower performance registered in the second and third quarters of the year. Consistently, the bid reflected the same trend, more or less showing a decrease in the margin from 32.7% to 24.6%. including a negative Forex impact for approximately 1 million. We would highlight also that EBITDA was impacted by a significant amount of R&D costs, approximately 45 million, 3 million more compared to the amount recorded in the same period of 2023 and representing approximately 12% of our revenues. confirming once again the mindset and the commitment of our leadership to continuously develop new products and solutions. Finally, just a few comments on the net financial position that is up for almost 280 million in the nine months period, mainly due to 64 million generated through the operating activities. together with 385 million generated through the capital increase following the Terraden acquisition of 10% stake. Both of them partially offset by 55 million absorbed by the investment of the period, 80 million absorbed by the acquisition of DIS Tech, and approximately 23 million absorbed by the share buyback program. This amount at the end of September. So now finally, we project our guidance for 2024, where we see an overall stabilization in our reference market for the last part of the year, with a slight sequential increase in revenue together with a progressive recovery of the profitability. That said, the last quarter of the year is expected to show the following, so revenues to be about 150 million plus minus 3%. Gross margin in the range of 42% plus minus 2%. EBITDA margin in the range of 25% plus minus 2%. This is all I have, so thanks everyone for your attention. Now we can move to the Q&A session.

Thank you to the management team. Our first question today comes from Mr. Gianmarco Bonaccina. Please, the floor to you.