Full Year 2024 ADS-TEC Energy PLC Earnings Call
Thanks for watching!
[inaudible]
From a D S TEG and at least get the first units.
From a D S tick.
We are focusing on a long term resilient business model and we explained several times, we are not a trucking company we are.
Sure.
Convinced that flexibility, especially digital managed flexibility will play a big role in the future and that is what we are driving forward and charging is one of the things we are doing and so we mentioned that multi revenue streams based on proven technology as <unk>.
And that turned out and there's more and more turning out to be true here, we see some pictures from the U S with the truck box, which is well known but also here you see that big storage systems are playing a role and I will come to that later and also the.
Sure.
The awards, we've got which shows that we are.
On the right way also from the technology and from the strategy side.
Important for US is to strengthen the partnership with our first of all existing but also new clients.
That is key for us and we do everything to help and support our customers and partners because based on our ecosystem based on our technology. They can operate their own business. We always said that we have a platform and our customers our clients our partners can run their own business models on our <unk>.
<unk> systems, and we are serving.
Services, which are physically or digitally.
But we have been now instead by end of the year. We will also accelerate the business by recurring revenues and that is what we want to explain again here.
Based on 'twenty 'twenty four we all know that the market has been volatile everybody knows the news about charging then Evs went down we had the election in the U S and it was unclear what to come but Nevertheless, we said, okay. It's a long a long term focus.
We have to concentrate also on the margin improvement and that is what led us to the results.
As shown at the beginning so profitable growth what's important for us in the last year.
And also.
That we want to focus on continuing with the partnerships.
With the current customers, but also with new ones and the new business model.
Realizing new opportunities.
As mentioned.
We do that with existing but also new customers.
And we will act now as a foodservice provider.
Realized.
Fleet infrastructure projects, so besides our partners and customers, who are running and operating the system themself.
Customers came and said we can provide you with sites and are pleased operate and.
Oh.
And do it for us and that is what we have started by end of last year and.
Communicated already.
One thing, which is also coming back.
If you know a D S bank from the beginning so C&I commercial industrial and also utility scale battery projects have been a very important for us and that's the beginning so we are getting back on track here, we mentioned that already over the last years.
First with a big project for US is Porsche and the battery based Super Chargers.
We concentrated on bad but now we are getting back also on the big storage project in 2025, we will develop a large scale best projects.
We also have improved momentum in North America. For example, that's also public already won new customers such that the corporation.
Our big customers not only in Canada, but also in potentially in the U S.
The strategy.
Still we believe that the ability to act as key only if you can control the whole inspect the full stack then you play a role and you can adjust your business model or the business model to the latest regulations and to the specified markets. This is based on the 10 plus years of experience.
We had and also continuous focus on innovation, which is still a key in <unk> Tec.
We see that here the 360 degrees we call. It on the left side that is what is what.
Now also we want to control and we control the hardware the software and also the service, including all the digital services and now on the right side.
We started a project based at the owned and operated businesses. So we will finance this.
Sites, we do the operation the installation commissioning and then get the whole revenue stream into the company, which is then the multi unit revenue case, which means charging energy trading and of course advertisement.
He has some screens some examples where we can see the charge caused the charge posted the first unit, where we can combine ultrafast charging without expanding the grid. So we safety extension fees.
We avoid demand charges and high power rates.
But in.
Additionally, we get revenues from energy trading and also from advertisement.
I just mentioned there a renewed focus on C&I assessing <unk> for commercial industrial but here also utility scale large scale systems are more and more are getting popular weekend or you can see that also in the news that's our international thing and we.
We have developed a pipeline.
One is one of the largest best projects in Europe.
Currently B plant and we have applied for the grid access.
Youll see that number it's.
It's more than 500 megawatts and one gigawatt hours.
So the request or the required land has already been secured exclusively for us for <unk> energy and we have already.
Applied for the grid connection to the tiers.
So we expect that the project can start already during 2025.
And also further best projects coming in and are under development right now with our teams.
<unk>.
With that short survey I want to hand, it over to Stephane.
Stephane: We'll give you more insights into the financials. Thanks, Matt.
Speaker Change: Thank you Thomas.
Speaker Change: Taking a closer look to the financial 'twenty 'twenty four.
Speaker Change: The company achieved a revenue of $110 million for the full year 2024, compared to $107 $4 million in 2023 at.
Speaker Change: It misses market uncertainties.
Speaker Change: And then she was able to.
Speaker Change: See that its previous year revenue.
Speaker Change: Roughly two 5% while growing the customer base more than 200% to 55 customer across Europe, USA and Canada in late 2024, the company effectively mitigate and resolve risk from a major customer business difficulties viagra.
Speaker Change: Wiring nearly all of the affected end customers directly which was a significant success for the company.
Speaker Change: Whereas for the convention Thomas already mentioned that we were able to.
Speaker Change: Almost tripled our service revenue from $2 million in 2023 to $5 6 million and 24 due to the growing base of installed fast charging solutions units.
Speaker Change: Yeah.
Speaker Change: As already.
Speaker Change: Already mentioned by Thomas It's the first time ever that the company can report a positive gross profit and positive adjusted EBITDA for the <unk>.
Speaker Change: Full year 2024.
Speaker Change: This was mainly possible because we were able to reduce the cost of sales by 80% so to minus $96 million.
Speaker Change: This resides.
Speaker Change: As already mentioned in the first time positive full year gross margin of $94 million, which is 77% for the full year.
Speaker Change: This is a significant improvement to minus $9 2 million or two 7% in 2023.
Bruce gross margin could be mainly realized due to the.
Speaker Change: Our reduced material costs and also to a higher margin.
Speaker Change: Our focus in 2024 for <unk> was really on the cost production base.
This also then operate.
Speaker Change: And an operating result of minus $8 6 million, which was a significant improvement by $35 9 million compared to minus $44 5 million so the previous year.
Speaker Change: Similar attested.
Speaker Change: Adjusted EBITDA could also significant.
Speaker Change: In Greece.
Speaker Change: From minus $38 $1 million to positive $2 2 million, it's really important to mention here that the adjusted EBIT are only includes share based payment and not as in the previous year reported.
Speaker Change: Share based payment plus write down on inventory. So inventory write downs are not included anymore into adjusted EBITDA.
Speaker Change: The cash and cash equivalents ended by $22 9 million.
Speaker Change: End of December.
The operating cash flow was significant improved.
Speaker Change: Minus $27 million to $16 3 million this year business, an improvement of $4 4 million.
Taking into account that in 2023.
Speaker Change: It was not included in the operating cash flow the capitalized R&D of $7 6 million, which was shown under investment due to our fresh goods than a year to year comparison would be an improvement of $12 million on the operating cash flow.
Speaker Change: To sum this up.
Speaker Change: We have an improvement.
Speaker Change: Highly recognized technology, we won several awards in 2024.
Speaker Change: Starting with determined Innovation award Decretum products, Our Board Chairman Environmental Award and the Red Dot Award.
Speaker Change: Charge box in charge pulse has been broom by real operation Dot data from clients.
Exceeding customer experience due to the very high utilization rates, which is a result of the broom and performing technology.
Speaker Change: This technology was developed for more than one decade.
Speaker Change: As a.
Speaker Change: Basically super proud of the strong financial basis of the company first of all as already mentioned, we achieved our first ever positive gross profit.
Speaker Change: Adjusted EBIT.
For the full year. In addition, the company was able to secure.
Speaker Change: The convertible notes in the aggregate principal amount of $50 million in the beginning of may be exact on the first night.
Speaker Change: In addition, we extended our existing shareholder loans for one for the year until August surface.
Speaker Change: <unk> for us.
Speaker Change: And we can use this as a credit line, which gives us additional $25 six.
Speaker Change: I'm sorry.
Speaker Change: Total company than has enough financial resources and ability to extend the business and invest in the operating units and <unk>.
Speaker Change: <unk> or extending the business.
Speaker Change: So this operation.
Speaker Change: The further growth strategy as Thomas already mentioned, we will strengthen our partnership with existing and new customers, we want to invest and accelerate and recurring revenues.
Speaker Change: Our customer base for more than 200% to 55 customer across Europe, USA and Canada.
Speaker Change: We will remain focusing on resilient business model backed by long term.
Speaker Change: Revenue and proven technology.
Speaker Change: And also.
Speaker Change: <unk> mentioned, we were able to triple our service business.
Speaker Change: And driven.
Speaker Change: Driven by the growing installed base and disciplined non stop in 2024 with the increased installed base. The service revenue is expected to further growth.
Speaker Change: At close and go to the Q&A session.
Speaker Change: Thank you very much Thomas Thank you very much stephane.
Speaker Change: Not only gain from my side, you will have the possibility to send US your questions via this Q4 platform.
Let's start with the first question I think Thats one for you Thomas.
Speaker Change: Some challenges and opportunities for companies like <unk>.
Yes. Thank you for the question. So the opportunities I think they are still the same so we see the transformation is ongoing and we will not stop we see that worldwide. Even if we are concentrating now on Europe North America.
Speaker Change: So the opportunities are the same and even what we see now is that Evs are coming back now we saw that last year. It was a little bit going down now we see that he'd come back. So we don't have any.
Speaker Change: Is that true.
Speaker Change: So maybe she can be stopped that's a very important thing and so flexibility will be key.
Speaker Change: Not only the renewables.
Speaker Change: Hi.
Speaker Change: Also wind and others, but also on the consumer side on the demand side, we see more and more.
Speaker Change: Need for flexibility and that is why also large scale.
Speaker Change: Our battery storage comes in more and more we see that flexibility gets prices.
Speaker Change: Highly regulated market, so and that is maybe something about the challenges. So now we are facing a very.
Speaker Change: Diverse situations, so it's not even Europe.
Speaker Change: June one.
Reaching it split up in maintenance.
And many different regulated zones and now <unk> comes into place.
Speaker Change: <unk> to act I'm mentioning all the all the time that is why it's so important because we can adjust the system the operations and software to the local needs and it's not just having one component in it.
Speaker Change: Dana is shipping from wherever to Germany or to a year ago to the U S. It's about the whole scope and it's an end to end business and it's not for three years, it's for 10 years or even more and so the opportunities are still the same and the challenges I would say they are opportune.
Speaker Change: <unk> for us because we can manage the challenges by following the demand and by having the ability to act.
Speaker Change: Nevertheless, we saw also some difficulties and depressing the news so charging in some.
Speaker Change: Im segment was under pressure, we see that as well and we see that.
Speaker Change: Having played an installation that.
Speaker Change: The market is.
Speaker Change: Paul a little bit in some in some regions, but the overall.
Bill: All right Bye Bill this thing.
Bill: Thank you very much theres another question.
Speaker Change: Lots of same buttons could see one.
Bill: Listen to that.
Speaker Change: Do we see the competition with regard to the large corporations as the same business.
Bill: Well.
Bill: Yeah.
Bill: What are the large corporations in the same business.
Bill: We are not a utility we never want to be a utility.
Bill: We are serving utilities and the big companies. So we see ourselves rather in the second row by being a very strong partner and now with the expansion of our business.
Bill: Owning and operating the units and taking care about the very complex operation model that is our business and we are not trying to beat the Google further next year.
Bill: And our system, because we believe that it's more decentralized it's more.
On a case by case I always said, it's like a fingerprint. So we are not seeing corporation.
Bill: Where we could see the winner takes it all but rather see.
Bill: Who can enable others to participate in the business and therefore, you need the technology, that's where we do it could take a little bit longer because that's very complex.
Bill: Please.
Bill: I realize that all of the regulation and politics are playing a big role we see that in our last year, we lost our government in Germany before the rigs you can elect to time and then we have venue.
Bill: U S.
Bill: These changes you always do.
Bill: Impact on regulation. This is also an opportunity for us.
Bill: So.
Bill: Integrations and to answer the question, we don't see that there is one big player rather.
Bill: The big ones are looking for companies like US who are able to help them interest support them on the long run.
Bill: Great. Thanks, a lot.
Speaker Change: He is another trust Jill regarding the large scale best Pro effect can you provide some view on the financials for the large 500 megabit approach shakes, who has this been signed with us.
Bill: It is not signed.
Bill: That is under development. So what we did now and that is how you do the business. So we want to.
Bill: We do not want to sell batteries to somebody who is.
Bill: Taking the role as an EPC and operating the.
Bill: The units in this case, we are developing the project itself and the first step of doing that is that you have to secure the sites and there is no project without sites and the sites have to be close to grid.
Bill: Grid excess which is strong enough and so that took some months now.
To get that done in this first step we have we have close now so we have access to the sites and.
Bill: Next steps will be that.
Bill: The application for the grid access.
Bill: It can be fulfilled.
Bill: If you're in this business and then you know that can take some months. So we expect that during 2025, we would get the second very important step.
Bill: Being closed and then the next step will be and then talking about the financials and of course, we will then.
Bill: Communicate the details also with potential investors because as you can imagine these kinds of projects have.
Bill: High demand for Capex and they are running for.
Bill: More than 10 years now and so that's a long term business and so we believe that it's very important for <unk> to be in that market. We have been there remember <unk> 15, we have been the first.
Bill: Commercial.
Bill: We get the first commercial frequency regulation power plant as an EPC atheistic provide debt to start Kraft, which is a Norwegian utility a huge one and thats up and running until today.
Bill: <unk>.
Bill: We have 700 megawatt hours installed base in different applications and we want to continue also in this business, which is also flexibility and flexibility is not just charging flexibilities everything also in the big scale.
Bill: Okay.
Bill: Great then.
Bill: There's another question coming in.
Bill: Maybe for you Stephane could you expand on how the 50 million.
Bill: Main financing.
Bill: Only result in the number of new shares it would seem that conversation.
Bill: <unk> price is a lot higher than the current share price.
Bill: So.
Bill: Not not.
Bill: Going too much into the detail, but roughly it's a convertible note, which then will be.
Bill: Let's call it exchanged against share so.
Bill: Price will be determined in the next month so Darius.
Bill: A portion of that $15 million and then the following portion about $35 million, which is b redeemed over 36 months.
Bill: And I think that's the most important highlights, but its especially important that.
Bill: Secured a $50 million for the company, where we want to invest.
Bill: Extended business to operate the units one, which then gives us long term recurring revenue over multiple years 10 years or even longer cost in some cases, we have a right to extend the contract to a further five years and that's the most important about the financing.
Bill: Then there's another question regarding the.
Bill: The change in the strategy or the additional strategy was extension of the business.
Bill: Could you give us some guidance and given the change in strategy will impact the numbers short term. So should we expect weaker short term financials.
Bill: First of all for me for US, it's very important it's not a change.
Bill: So we still.
Bill: Stay with our business and we are equal platform provider and we support the platform for our customers to embed is why I mentioned it is so important for us too.
Bill: Continue in the partnership for our existing and also new customers and yes. They.
Bill: They are using the platform running their own application they have.
Bill: Our own software business model and they use us like I always say like an iPhone and you write your own software you buy from Apple phone and the operating system and the services and the data protection.
Bill: The over the air updates, but you're right to your own App and this business will continue and it's really a very important business for Adi is take what we're doing now is that.
Bill: The business because embedded.
Bill: The market has developed in the direction that our site owners are now coming it's also due to regulation. Because now you are forced you are motivated to have charters on your site and not everybody can do that by themselves.
Speaker Change: Us instead.
Speaker Change: The platform company and can you also do the operation and we allow you to do.
Speaker Change: Not just the charging where we're interested in but we allow you to take benefit of the advertisement.
Speaker Change: Trading and we take very much cat that we are not.
Speaker Change: That is all on arm's length also compared to our other partners and customers. So atheistic will not sell the system. So the service is cheaper into the owned projects compared to how we support our partners that is very important for us because we don't want to lose.
Speaker Change: Our partners that's still for a very very long time, but it's different.
Speaker Change: If you look at for example, bigger utility it takes a long time to get them into the business and to adapt their software and their infrastructure. Their process is on our platform. This will stay over the years.
Speaker Change: They don't care, whether we in other cases probes.
Speaker Change: Provide the foodservice to let's say, a small company or a network of companies.
Which one to use the chartwell and the premise is that is not a conflict and so it's not a new business. It's not a change in that is very very important for us.
Speaker Change: It leads to changes in the market because in terms of revenue development.
Speaker Change: <unk>.
Speaker Change: We are investing our setup and it's a question of production capacity. We do have a question how fast we get access to the sites and how fast can we build the systems.
Speaker Change: Basically where the.
Speaker Change: Restriction comes from in our own business.
Speaker Change: May be one one.
Speaker Change: Benefit we have also we can adjust the business model without asking.
Speaker Change: We're discussing that with a partner because that's under our own control. So we are getting faster here and the other thing.
Speaker Change: The complete market, where we are also depending on the rollout and on the operations from our partners. They are of course, we see and that is what I mentioned.
Speaker Change: The overall market.
Speaker Change: Charging has come down with the developmental <unk>.
Speaker Change: Beck.
Speaker Change: Here we are.
Speaker Change: Going with the Colgate market with all the charter market.
Speaker Change: This is different but again, please do not think that we are changing the business model. We have just been the decision and so we're not changing now to Eni, we always did C&I, but we have not been able to do everything at the same time and now I think that's the positive news we can come back in.
Speaker Change: Also extend the business in these areas.
Speaker Change: Okay.
Speaker Change: I would say last question regarding the time were interesting.
Speaker Change: It's a question regarding the extension of the business and business model.
Could you share how many operational charters you acquire in the deal where you acquire customers and related to that could you say something about how many charters of sites to be run by yourselves lending to develop in 2025.
Speaker Change: Yes.
Speaker Change: Yes, we cannot.
Speaker Change: About.
Speaker Change: The details of which are under NDA with our customers and partners, who gave us the details about their sites but.
Speaker Change: So the first sites, we would get it.
Speaker Change: The three digit numbers, so it's above 100 and below 500.
Speaker Change: As for now and then the installation will go as fast as we can do it and thanks to the investment and two the funding we got.
Speaker Change: We are not limited here and we also see that if this really.
Speaker Change: We get into the market. Then there is also a lot of potential to scale that up and because if we can show and that is also a big opportunity for us that multiyear revenue really has.
Speaker Change: And impact on the whole business model now so far we only.
Speaker Change: So the ecosystem and the services and the services came in as we just saw but.
Speaker Change: There is not.
Speaker Change: <unk>.
Speaker Change: Establish right now in the market with our partners and also the advertisement business.
Speaker Change: Beginning so we are really.
Speaker Change: Looking forward to make improve with the overall business model, what we say multi revenue and we are supporting our existing partners here as well. So it's not that we keep that trust for us. So we are offering. This service is also to our existing partners. If they want to they can participate as well so in total we want to add.
Speaker Change: The biggest impact for all of us for the existing partners and customers as well as for the owned and operated sites by us.
Speaker Change: Okay, and then I would propose one last question because thats targeting the multi revenue streams.
Speaker Change: In a year or two how much of the revenues to us coming from Paolo <unk> trading.
Speaker Change: Yes.
Speaker Change: And that's a very smart and good question and I would say today, we can say and you can look at because it's probably go to the bvs website, which is our storage Association you can see what can be achieved to date with energy trading for example.
Speaker Change: I would say these numbers for today, but what we also see the market is really changing and developing and.
Speaker Change: Region by region.
Speaker Change: Different we started our first pad directional charter has been installed in Austria by end of last year. So we get the certification and now we are.
Speaker Change: Collecting data in the first.
Speaker Change: Test and the first results are coming in now we do the next step here in Germany. So this is a step by step approach, but to answer the question, where do we see flexibility in the future.
Speaker Change: It's hard to predict I don't see that it comes down significantly because as we have seen it with frequency regulation at the beginning it came from 3000 Euro a week.
Speaker Change: And of course, it went down after a lot of storage system come into the market, but now it's back on.
Speaker Change: Higher level, why because we have more and more demand.
Speaker Change: In the market and there will be no energy transformation that is exactly why we are here without flexibilities of flexibility is and Thats. Our snow is the twin brother of renewables and of the new way, how we do heatings and heating systems and also the mobility sector. So I don't see that flex.
Speaker Change: The ability would go down to zero, it's rather the other way that we see a bigger and bigger market for flexibility and of course, there will be also a price for flexibility and that is again, where we can adapt our business model to where you can make the most money out of whether it's frequency regulation or weather.
Speaker Change: It's trading whether its peak shaving or maybe also other grid services.
Stephane: Thank you very much. Thank you told us I guess stephane. Thanks to all of you for your time and attention.
Stephane: I would say we close the session. Thank you very much for your time.
Stephane: And for your support.
Stephane: Yeah.
Stephane: Yeah.
Stephane: Yeah.