Technoprobe Spa U/Adr

Good evening and thank you for joining us. I'm with Stefano Beretta, our CFO, presenting the full year 2024 results and the guidance for the first quarter of this year. As usual, a Q&A session will follow at the end of the presentation. 2024 confirmed Technoprobe as leader in the testing of logic chips for artificial intelligence. Investment we made in the last couple of years together with the solid know-how of Technoprobe in the MEMS technology have been the drivers to achieve this leadership. Looking at revenues split, 35% of revenues refers to artificial intelligence, approximately plus 15% compared to 2023. A better than expected result driven by a surge in volumes of chips for data centers, feasible thanks to the increase in manufacturing capacity compared to 2023. Artificial intelligence will remain the main growth driver also for 2025. Demand is seen as both realistic and extremely strong. Also bear in mind that artificial intelligence, as well as the most technological advanced chips, requires high performance, low power consumptions, and quick data processing features supported by advanced packaging architectures. These architectures, which use sophisticated technology and aggregate components to create a single electronic device, require advanced testing solutions based on MEMS technologies. That said, we're assuming a progressive and steady increase in demand for advanced logic testing solutions. Let's move to consumer segment, which for us refers mainly to PC and mobile. It is stable at approximately 50% of our revenues. 2024 has been a year of stabilization and the segment is expected to post a slight growth in 2025. In fact, we think that they will still suffer from a slower adoption of AI at the edge, which is confirmed to be the real catalyst. The exposure of automotive industrial decreased in 2024 for 20% to 15%. The industrial segment is expected to remain sluggish in 2025 due to the stocking expected to continue at least in the first half of this year. The automotive segment will show same areas of weakness as well as OEM inventory containment measures and slow electrical vehicle sales, even if the long-term trend of electrification has not changed. In this scenario, our expectations for the current year are positive. We are working to secure the leading position of Technoprobe in artificial intelligence to consolidate our distinct knowledge in the advanced testing space, both at front end and back end, and continue to work hard on the ambitious project to enter in the high bandwidth memory market segment. As you know, we will dig more into our competitive positioning in the testing space focusing on the growth trajectories of our company in a couple of weeks during the capital market day that will be held on April 14. Now I turn over to Stefano Barretta who will give you more color on our 2024 results.

Thank you Stefano, good afternoon everyone. As you have seen in our press release just published, Star Revenues in the fourth quarter were euro 156.3 million beating the guidance and registering an increase of 53.3 percent compared to the same quarter of prior year with a sequential increase of 7.2 percent compared to q3 2024. gross profit increased 48.7 compared to the same period of 2023 up to 63.3 million representing 40.5 percent margin at the lower end of our guidance, inclusive of approximately $6 million of fixed-asset impairment and $1.5 million of severance and other provisions related to the US reorganization announced during the quarter. Excluding these, the gross profit would have been equal to 45.3%, beating the guidance consistently with the revenue. Also, the EBITDA closed at the higher point of the guidance, It increased 85.8% compared to the fourth quarter of 2023, with a margin of 26.4%. Without the U.S., reorganization provisions would have been equal to 27.3%. Moving to the year-to-date figures, total revenue were $543.2 million, with a year-on-year increase close to 33%. Gross profit was 223.4 million, 12.1% up compared to the same period of 2023, and representing a margin of 41.1%, or 42.5% without the reorganization provisions. The EBITDA for the year closed at 136.5 million, up 11.2% compared to the same period of 2023, and representing a margin of 25.1%, 25.4% without the reorganization provision. For the completeness of information and competition purposes, it's worth remembering that all the above figures include a new perimeter of consolidation, inclusive of the contribution of Arbor Electronics, 12 months in 2024 compared to a little less than five months in 2023, and DIS tech seven months in 2024 compared to zero in 2023. If you can move the next page, so thank you. So you can see the simple annual trend by quarter of our main KPIs. So revenue, gross profit, margin and EBITDA. So the slow but steady growth in all our KPIs was really consistent with our prudent view of the market and confirms the solidity of our plan. So despite the uncertainties that characterized 2024, particularly in the consumer automotive segments, like Stefano Felici said a few minutes ago. So the organic revenue, just for your information, in 2024 compared to 2023, was, as expected, mid-double digit at 14%. On this page, you can see the usual summary comparison between the financials at the end of 2023 and 2024. So just to comment it further, so revenue year-on-year increase of 32.7% was driven by a gradual recovery of the consumer segment. and by volumes related to the artificial intelligence. And for the other half of the contribution, for Arbor and the ISTEC, all of them partially mitigated by the weakness in automotive and industrial. Revenues expressed in cost and currency, so using the same average effects rate of 2023, would have been approximately 3.2 million higher than reported revenues, meaning less than 1% unfavorable impact. In fact, in the 12 months average, the Euro rate for fiscal year 24 was pretty aligned with prior year, so 1.082 compared to 1.081 of 2023. On a gross profit level, the decrease in the margin from 48.7 to 41.1 was the result of the expected dilution from the mentioned acquisition. together with a relevant increase of depreciation following the investments in fixed assets made in the last 12 months and also due to the growing complexity of our products and to the related and temporary lower performance registered in the second and third quarters of the year now resolved. Moreover, as mentioned during Q4, a significant reorganization process has affected the U.S. structure, so bringing into the accounts provisions for approximately 13.5 million, of which 7.5 impacting the gross profit, six of them related to fixed asset, and 1.5 related to severance, inventory, and other minor provisions. Finally, it's worth remembering 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 potentially faster obsolescence of own-end semi-finished products. Gross profit at constant currency has been approximately 1.5 million higher by using the 12 months 2023 average rate. Consistently, the EBITDA reflect the same trend, showing a decrease in the margin from 30% to 25%, including a negative Forex impact for approximately 1.4 million. We would like again that EBITDA was also impacted by a significant amount of R&D costs, approximately 63 million, 6 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 developing new products and solutions. Finally, a few words for the net financial position that is up for almost 395 million in the 12-month period, mainly due to 124 generated through the operating activities, together with 385 generated through the capital increase following the Terradon acquisition of 10% stake. Both of them partially offset by 94 million absorbed by the investment of the period, 82 million absorbed by the acquisition of the IS Tech, and 35 million absorbed by the Shared Payback Program. We wanted to include also this page in a very synthetic focus on investments, which have grown to the threshold of Euro 100 million compared to 73 in the previous year. representing now a portion equal to 80% of the revenues. As just mentioned in the previous comments, most of the investments were dedicated to the completion of the second MLO and MLC factory in Taiwan, which will be operating starting from the second quarter of 2025, as well as to the increase in production capacity and automation in manufacturing processes of Technoprobe Italy. Now I hand over to Stefano Felici for the next comment.

Yes, as you know, we signed partnerships with Teradyne and Advantest, the two main tester and manufacturer. Our aim is to build an open ecosystem to share knowledge on the entire testing process to facilitate the technology evolution. Now I will hand back again to Stefano Beretta for the first quarter of 2025.