CTEK Ab

Thank you operator and good morning everyone and welcome to the presentation of CTEK Q1 interim report and the presenter today will be myself Henrik Wagenius and CFO Tom Mathisson. So let's start before we dig into the figures spend some time with our history. CTEK was founded 25 years ago by the inventor Bengt Wahlqvist. He invented the world's first smart battery charger. And ever since, development has been core for CTEK. All design and development are done in Sweden. We are producing by our production partners in Asia and China. And we have our own personnel in place in China for more than 20 years to secure quality and production. CTEK is then consisting of two main technologies. The EVSC, which is a charger for electric vehicles. There we have three different areas. One is destination charging. One is mobile charging, and the last one is client brand charging. Then we have our low voltage segment, that is 12 to 24 volts chargers. And we have four different areas, consumer, professional, which is the workshops, client brand, where we have had among Porsche as a customer since 2003. And we have other numerous high end car manufacturers, and then we have integrated solutions. So that is the four areas for our low voltage business. We are going to market with two different divisions. One is the professional division that is selling it to big parking operators, our destination charging, and also selling our client brand low voltage to the OEMs. in the consumer uh division we're selling mainly our low voltage but also our mobile evsc and there we're selling for different channels like retail and e-tail and crew importers in some countries but let's dig into the numbers for q1 it was a solid quarter the net revenue net sales ended up 201 million gross margin ended up 54% almost 10% higher than comparing quarter adjusted EBITDA 19 million which is a 9.7 percentage also up 6.7 percentage points since the comparing quarter good stable cash flow of 45 million The share of EVSE fell to 17%, and our net debt ratio fell to 2.2 times. The key takeaways from the quarter is, of course, continuously good cash flow and increased profitability. We can see that our activities are working. We have a stable cost base. We are improving both gross margin and adjusted EBITDA margin. We have a stable cash flow and we're working to reduce the net working capital. We have also had a very strong low voltage sales. This is the third consecutive quarter where we see a growth in that division. This quarter we grow with 11 percentage points. And we see positive trends in Sweden and DASH region. What is reducing our net sales is significantly lower EVSE volumes, especially in North America for our customer there. It was a remarkable lower sales. We had also quite a strong comparing quarter to compare with. But we see a positive trend in the overall EVSE sales in the Nordic. And as we mentioned last time, we are now also introducing our new ChargeStorm Connected Free, which will open up more markets for us by the end of the year. So I would say that we have buttoned out the EVSE and see a growing trend in that segment as well. For some more details, I leave the word to you, Tom.

Yes, so dig a little bit more into the financials. This first quite crowded slide highlights just a few items there. As Henrik mentioned, the decrease in the overall net sales is only related, I would say, to the EVSE and particularly the customer we have in North America. I'll come back to that a little bit later. have a strong increase in the gross margin and that is a mixed effect from the higher low voltage sales so we are 10 percentage points above last year same quarter on the adjusted EBITDA Again, the increase there is related both to the higher sales of high-module products on the LV side, but also to the impact of the lower OPEX of our cost reduction programs from end of 2022 and beginning of 2023. With that, I go to the divisions and the consumer division. continue to increase quarter on quarter the sales. So around 10% higher net sales compared to last quarter same time. Stable margins on good levels. And we also can see that quarter over quarter, it's a good positive trend both on margins and volumes. This division is, as you can see from the upper right-hand corner, two-thirds of our company. As you see, it's predominantly low-voltage sales. Almost the full sales are from low-voltage. Coming then to the professional division, if you start in the same end, this is then one-third of our company. and it's around 50-50 between EVSE and low voltage products. Here we can see the decrease quarter over quarter with almost 45% and that is again related to this North American EVSE customer. On the positive note, you can see from the graph on the lower side of the slide that it's a sharp improvement from quarter four 2023 and still we are not happy with the margins we will continue now foremost looking for higher volumes to come up to profitable levels in the professional division finally on the financial highlights cash flow and capex says that this really important for us to continue the good cash flow development. We have now operating cash flow positive of 45 million and after investments, it's still positive with 26 million, which is 50 million more than, 70 million, sorry, more than the same quarter last year. This good cash generation has made it possible for us to now also amortize on our loan with 100 million in this quarter. which also will improve our cash flow going forward. And most importantly, this continues to take down our net debt ratio from 2.7 at the end of 2023 down to 2.2. And from the graph on the lower side of the slide, you can see that we have now stabilized our CapEx development on the lower levels, and we had 22 at the beginning of 2023 as well. If it should be 9% or 8% or 10%, you can always debate. We will always have quite high capex investing in new products and improved products, but it should be on the levels as we are right now. With that, I hand over to Henrik again.

Thank you, Tom. Looking then a little bit into the future, as we presented last quarter, We have divided our future journey into three phases where the first phrase is stability. We can now conclude that we have a cost base that is sound and we are having a positive cash flow. So we are leaving phase one and entering into phase two where the focus will be on profitability and also profitability through organical growth. So we're putting more efforts into growth, into organical growth, and then we have a phase three that is more accelerated growth with both new geographical areas and also to investigate the M&A possibilities. So what are the summary then of Q1? Solid quarter, continuously strong cash flow and increased profitability. We are continuing to reducing our net debt rate. We see a continued growth for the third quarter now in low voltage sales. We see a significantly lower EVSE volumes for our North American customer. But we see positive trends for other EVSE segments in Nordic, and we will also open up new countries. I know there have been a lot of discussion about lower sales of EV vehicles, but there is also a growth in plug-in hybrids. And for CETEC as a company, it doesn't really matter if it's a sales of an EV car or if it's a plug-in hybrid. Both need the charging infrastructure. And we are leaving phase one and entering in phase two in our journey towards profitable growth. With that, we open up for questions. Please, operator.