u-blox Holding AG

Ladies and gentlemen, welcome to the uBlocks Half Year 2024 Update Conference Call and Live Webcast. I am Maria, the course call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Rafael Duarte, Head of Investor Relations at Ublox. Please go ahead, sir.

Hi, everyone. I'm Rafael Duarte, Head of IR at Ublox. Here together with our CEO, Stefan Cisala, and our recently joined CFO, Camila Japur. Happy to have you on board, Camila. Thank you. Our agenda for today, we will present the main aspects of the results, provide you an outlook to the business, and close it with a Q&A session. As always, in order to make a question, please follow the instructions in the webcast platform. Stefan, I hand over to you.

Welcome, everybody. And thank you, Raphael. Welcome from our headquarters at Lake Zurich in Switzerland. Let's move directly to page 5 for the highlights of the period. We reported half-year results, which came in at the higher end of our guidance. It turns out that we were right in our predictions last year during the capital market day in November. we reached the lowest point of the cycle in the first quarter and saw a slight improvement in the second quarter. EBIT was quite negative as a consequence of lower revenue. Our cost optimization program started at the beginning of the year and already generated 5 million Swiss francs in savings. Despite the negative EBIT, we managed to maintain a resilient, positive free cash flow, mainly from our efforts in reducing working capital. At this stage, if you follow other semiconductor companies, you will not be surprised to hear that we now expect a more gradual improvement in the third quarter. And because of that, we take action and expand the scope of our cost optimization plan. This new, broader plan targets savings of over 20 million Swiss francs. After this summary, I would like to go through some of the business achievements of the first half. Slide six. First on the robotic lawnmower market. We have one businesses that will sum up to over 100 million Swiss francs in revenue from 2024 onwards. I must be honest on this one. When the team came with this number, my first thought was, is this market that big? How many lawnmowers are we talking about here? Then I learned. that over 2.5 million lawnmowers are expected to be sold just this year with an estimated growth of close to 20% per year. High precision technology is expected to be more and more present in those lawnmowers. To me, This is a good example of applications that will emerge in the next year using precise, reliable, and affordable positioning technology provided by uBlocks. Precision agriculture, automated construction machines, autonomous cars, and many more applications one did not even consider as possible a few years ago need to know their exact positions. And this is exactly what makes us, and foremost me, so excited about the future of uBlocks and especially positioning. The future holds innumerous applications for our technologies, which will continue to evolve and shape our lives. On slide number seven, I want to speak about a very important partnership with NVIDIA. NVIDIA is the leader in artificial intelligence technologies, providing solutions that power a wide array of industries. Their AI platforms are crucial for advancing innovations, particularly in areas requiring real-time processing and decision-making. Artificial intelligence relies heavily on accurate and timely data inputs, including GNSS. Our high precision GNSS solutions ensure that AI systems receive the reliable and precise position information they need to operate effectively in diverse environments. This collaboration will help to make it simpler for engineers to develop autonomous vehicles and mobile robots based on uBlocks positioning solutions. On one hand, uBlocks has joined the NVIDIA Jetson partner ecosystem, which delivers the power of modern AI for industrial autonomous machines and other edge AI applications across all industrial markets. On the other hand, uBlocks is listed as a reference for positioning sensors in NVIDIA's developer's kit for autonomous cars. engineers in the ecosystem can quickly develop and deploy leading edge AI powered devices for a wide variety of use cases. Now back to our results on slide number eight, where we look into our revenue for the first half, which dropped to 121 million Swiss francs at the higher end of our guidance. The negative performance is mainly associated with the inventories held by our customers. In Q2, revenue grew by 16% versus the previous quarter, which confirms our prediction of bottoming out in Q1. On the next slide, you will see the breakdown of this revenue development. Slide number nine. A few important messages here as we look into those details. First, the performance was weak across the board. There are some differences here and there, but the general picture is similar, mainly due to the common effect of overstocking. Second, the only difference I would point out here is the better performance in positioning compared to connectivity. Third, a common question from investor and in my opinion, a very important one is about market share. I can confirm that we win in our target applications. If I take automotive, for example, we have achieved more design wins in this half year than one year ago, a double digit increase. Now I would like to welcome Camilla Chapour, our new CFO. She will guide you through the financials. Camilla.