Wallbox N.V. Price & Performance (WBX)

We will be presenting on other financial statements in IFRS format that reflect management's best assessment of actual results. Also, please note that we use certain non IFRS financial measures on this call. And reconciliations of these measures are included in the presentation posted on the Investors section [indiscernible] Also, copy of these prepared remarks can be obtained from the Investor Relations website under the Quarterly Results section. So you can more easily follow along with us today. So with that out of the way, I will turn it over to Henrik. Thank you, Michael, and thanks everyone for joining us today. I would like to start today's call reflecting on 2024. Which included exciting achievements and solid progress on the challenges we are facing. Start, 2024 has been a challenging year due to the slowdown in daily market.

Which also impacted our results. If we look at the EV market in the main divisions we operate in, Europe, North America. And rest of world which are all countries excluding China, baby markets only grew 6% year over year. This market growth continues to be subdued compared to initial market expectations. However, at Walvox, we believe that we are managing this down cycle in the EBIT transition as one of the best in the industry. Revenue for the full year total €163,900,000 reflecting a 14% growth compared to last year. The main growth drivers were the full year contribution of ABL and solid growth in the North American market.

Up more than 40% year over year. We delivered more than 162,000 AC units, and close to 1,000 DC units during the year.

Allowing us to surpass 1,000,000 charger sold in the history of workers.

We have achieved good results with a more efficient organizational setup. As we continue to drive down labor and operating expenditures. Down 11% compared to last year. As a result of this growth and cost optimization, we improved adjusted EBITDA by 21% year over year. From negative EUR74.2 million to negative €58,800,000 We remain confident that last year's strategic initiative will continue to improve our adjusted EBITDA with the positive impact of these efforts becoming more visible in the coming quarters. New business unit structure introduced last quarter is allowing us to more efficiently service each target segment. Home and business, fast charging and software supported by manufacturing. With new versions of our chargers and software solutions, We believe we remain a technology leader in the space and find opportunities improve our margins. Examples include achieving the UL certification for our bidirectional charger, the Quasar two as the first one in the industry. And the launch of the new Supernova and pulsar versions. Such as the Supernova UL, Supernova two twenty the fastest wall mounted charger today. [indiscernible] is showing strong traction in the Commercial segment. We have strengthened our commercial relationship with parties such as ENGIE, Generac, Free2Move Portia Power Light, Elanovo and Iberdrol Light, in 2024, raised an additional $45,000,000 from strategic investors.

Excluding $10,000,000 private placement that took place in February 2025, and announced earlier this week. While these are notable achievements, considering the challenging market backdrop, are not satisfied.

It is important that we continue to focus on our strategic plan. Continue to right size the organization and further secure the fundamental to be successful in the long term. We believe we have an unparalleled platform for further growth. With a complete product portfolio and global footprint. Coupled with strong commercial partnerships and the invaluable trust of our strategic investors. In our opinion, the transition to this is going to take place. It is only a matter of when Not if. Based on different indicators such as declining battery prices, introduction of affordable EV models and continued investments, we believe we are close to the inflection point and we are well positioned to benefit from the massive growth that lies ahead. [indiscernible] will go into the highlights of the fourth quarter and share our perspective on the market. Afterwards, Luis will offer a closer look at our financial results and our key financial metrics. Finally, I will return to close the conversation and provide Q1 twenty twenty five guidance. Q4 revenue was €37,400,000 down 14% year over year and missing the item range we provided in our last earnings call. But it improved with 8% compared to last quarter.

Main reason was lower DC fast charger sales. Which was down 34% quarter over quarter as certain customers pushed out expected orders. As commented on our previous earnings call, our CPO cost customers have been building up inventory as their focus has shifted from highly accelerated rollout towards profitability. This trend was more significant than expected and is impacting the whole industry. We are working closely with our CPO partners to understand the raw plants including product requirements to improve our visibility and pipeline. In parallel, we have continued to sync up new commercial partners with the more recent example, Beef.

DCPO operating in The United Kingdom is expected to roll out different versions of our Supernova product to further expand their charging network. Growth in AC of 14% quarter over quarter partly offset the slowdown in DC fast chargers. But not sufficiently to cover the gap to our guidance range. As previously mentioned, North America kept seeing significant growth as well as an uptick in other markets such as Belgium, France and The UK. In total, during the fourth quarter, we delivered more than 38,000 AC units, and more than 100 PC units. Gross margin was 34.6% in the fourth quarter, which is lower than our target range of 38% to 40%. And guidance provided last quarter. The main items impacting the result were product mix, due to the lower top line contribution of DC fast chargers and ABL. We are actively looking to unlock several gross margin expansion opportunities to reach and potentially exceed the 38%, 40% prior target range, which Luis will discuss shortly. On the cost side, one of the levers we have made significant progress and continue to do so. When we look at our cash cost, which is defined as labor cost and OpEx excluding R and D activation, non cash items and one off expenses, We achieved a year over year reduction of 19%.

We expect further improvements in the coming quarters as we continue to find ways to optimize organization with the further implementation of the new business unit structure. For the fourth quarter, adjusted EBITDA was closer to the improvement trend we had seen earlier this year. A negative EUR12.3 million and improved with 43% compared to last quarter. The main drivers were the bond fracking gross margin, and a 10% quarter over quarter reduction in labor and OpEx costs.

The cost improvement positions the company for the future. Was not sufficient to cover the gap to the adjusted EBITDA guidance of 7% to 10%. Million euros We monitor closely our seller metrics and can see that the inventory in the channel is healthy and that our sell out performance generally outpaces or is in line with EV sales in our key market. [indiscernible] [indiscernible] a privileged position to capitalize on our anticipated massive growth [indiscernible] Nevertheless, As the volatility in the market continues and top line visibility remains challenged, continue to push for rightsizing the organizational structure and becoming profitable at Curranu top line levels. For the fourth quarter twenty twenty four, Europe contributed €25,700,000 of consolidated revenue. Or 69% of total revenue. And remains the largest region. Considering the softness in the European market, based on the Celaud data, we have been able to hold our market position we believe this will result in in an uptick in selling in the near future. North America remained the strongest growth market in 2024 for wallbox and in the fourth quarter contributed €10,500,000 or 28% of the total revenue. Represents a 64% year over year growth compared to the fourth quarter of twenty twenty three.

While the market in the region grew 12%. In the past, we mentioned the importance of North America market, and we're excited to see the progress we are making It was great to see one of our pulsar being featured in the recent Super Bowl ad of Jeep. 2025, we see an opportunity to grow In the region, despite a change in the EV sentiment, which I will comment on shortly. APAC contributed €900,000 or 2% at LATAM was approximately €400,000 or 1%.

SE sales of €26,900,000 including ABL represented approximately 72% of our global consolidated revenue. Compared to the previous quarter, the AC sales grew 14%, mainly due continued momentum in North America and increasing demand in Europe for the Pulsar family. Especially with the introduction of new Purcell versions such as the Purcell Pro and the Purcell Max in the residential segment, there has been good traction. [indiscernible] see improvements in the upgraded versions of our products, which are designed to be easier to install and offer new features. Also, our software remains a key differentiator nailing customers to efficiently manage their chargers. The Wallbox app enhances our home EV charger. Providing features like real time monitoring, scheduling and remote operation via Wi Fi or good [indiscernible] Our app is recognized as one of the best in the space which give us a clear competitive advantage. With due to a four pronged duration, our charges can contribute to grid stability and enable users to participate in energy markets. Further reinforcing our leadership in smart charging solution. The attractive business of our smart selling solutions allow us to continue to support existing partners and signing up new partnership. Through our partnerships with the likes of Free2Move and Evendrola, we continue to sell thousands of chargers to companies such as Chip, Alfa Romeo, Mercedes, Volvo, Maserati and Hyundai.

PC sales were €2,900,000 representing 8% of sales in the fourth quarter. And might be slightly than expected. As mentioned before, there is inventory buildup with our CPO customers and orders have been pushed to twenty twenty five. As they slow down the rollout of their networks as the EV fleet is not growing fast as expected. In The U. S, we launched Supernova at the beginning of twenty twenty four. Which was a great milestone as we expanded our product offering in the region with fast charging. We have made a very successful launch and are still ramping up our commercial efforts and order book. Q4, we received the I-five certification to sell our Supernova in Germany. And are in the process of receiving the C test certification to be compliant with the regulations in Cal Both of these certifications will expand our addressable market significantly. As we continue to see NAP customers that look for the product specification, reliability, and high power to food pre radio that Supernova can offer. Software services and others contributed €7,700,000 for the fourth quarter. Representing 20% of our total revenue 18% growth compared to last quarter. We are excited by the segment's rapid growth which is already fueling a scalable competitive edge in our markets.

As mentioned, the start of the call, 2024 has been a challenging year for EV6. EV market growth was volatile and clearly below expectations. Especially Europe has been soft, which was down 2% compared to the full year 2023. North America and rest of world show more promising growth. With respectively 1028% year over year growth rates. However, these markets are smaller, especially for wall boards and are still catching up. Reported by Roll Motion in our addressable markets, combined 6,100,000 EVs have been sold representing a 6% year over year growth.

Looking forward, while near term market visibility remains slow, Long term prospects point to massive growth. [indiscernible] expect DB market to continue to grow with high double digits including North America and Europe with 2321% respectively. In Europe, stricter emission regulations come into effect we see already strong initial sales numbers picking up in the last quarter of twenty twenty four. In the first month of the New Year. North America, there is a change in sentiment now that the new administration has taken office. Certain subsea such as Navy and will impact fuel economy standards. Limiting the legislative pressure to increase EV sales. Other subsidy schemes such as the IRA which includes the AVE tax credit are currently being reviewed. Meanwhile, automakers keep betting on EVs long term and are allowing to keep certain incentives in place and push for gradual phase out as more affordable EV models become available. Also, several states continue with their own regulations and incentive programs. In the end, we believe the new IMOI station is not a poor TV, but that the industry must be commercially viable without government support. There are many proof points that we are getting close to this inflection point.

With decreasing battery prices, more affordable car models and continuous investment. Leaving any missions, I am an environmental conservation site I'm a strong believer that EVs will eventually dominate the auto landscape. They are more efficient better performers cheaper to maintain, becoming cheaper to wide, and safer. If we look at what this means for Wallbox, we recognize the proof points and are optimistic about the market. Nevertheless, we are very intentional about reaching profitability and cash generation independent of market growth. That's why we've realigned the organization around the key levers we can control. Gross margin, OpEx and working capital. To drive sustainable growth and ensure our long term success. [indiscernible] I'll turn it over to you to comment further our financial details. Thank you, Enrique.

Good morning and good afternoon to everyone.

Our fourth quarter results are softer than expected and missing the guidance provided in our last earnings call. The revenue was €37,400,000 down 14% year over year but showed an improvement compared to the previous quarter. AC sales showed a strong recovery with 14% growth quarter over quarter.

The North American market continues to grow fast and the European business is recovering.

However, PC sales were much lower than expected mainly due to inventory buildup with customers and purchase orders being dragged to 2025. With 34.6% the gross margin is lower than expected and outside the target range we The main reason is weaker sales of DC fast charging and ABL impacting the product mix as these are higher than the group's target margins. Looking forward, we continue to see opportunities to expand gross margin to improve bit of material cost increased economies of scale and introduction of newer version of our products with higher quality and expanded features. Q4 labor cost and OpEx landed at €28,800,000 which was flat compared to the same quarter last year. But does not clearly reflect the cost reduction achievements in the past year due to ABL entering the perimeter on November 1, 2023, an inclusion of one off items. On a full year basis, labor costs and OpEx decreased If we look at our cash cost instead, which is defined as labor costs and OpEx excluding R and D capitalization, non cash items and one off expenses we achieved a year over year reduction of 19% in Q4.

We cost control remains one of our highest priorities on our path to profitability. Among others, the activities we're undertaking are rightsizing the organization, removing unnecessary spend and renegotiating necessary spend. As part of the efficiency efforts, we have reduced headcount by 35% Consolidated adjusted EBITDA loss for the quarter was 12,300,000.0 softer top line and lower than expected gross margin have been the main reasons why we did not land in our guided [indiscernible] And yet, the results show a lean organization that provides an improved adjusted EBITDA margin on lower level of revenues. This will show incremental improvement on We ended the quarter with approximately €46,000,000 of cash cash equivalents and financial instruments. This is excluding the approximately US10 million dollars private placement announced earlier this week from our trusted strategic shareholders. Loans and borrowings were approximately €198,000,000 at the end of the quarter, with approximately €91,000,000 in long term debt and approximately hundred and €7,000,000 in short term debt. [indiscernible] In order to strengthen our balance sheet, we successfully negotiated with our main lenders. Santander and BBVA, for an interest only period of eighteen months starting in November 2024. We are now actively expanding that interest only period to another pool of loans to minimize loan repayments in 2025. 2024 loan repayments amounted to almost €20,000,000 CapEx was again light.

But slightly higher than the last quarter at €3,900,000 €1,500,000 was invested on property, plant and equipment. Full year PP and E and intangible CapEx excluding R and D capitalization was €9,900,000 below €10,000,000 as expected. This represents a 39% decrease in CapEx spend compared to the full year 2023. Echoing earlier comments, we continue to expect limited CapEx because of significant investments made in the past to achieve our existing unique product and global positioning with excess manufacturing capacity Right.

For future growth.

One of the other items we continue to book success with is the reduction of our inventory which now lands at a total €71,100,000 That is a 23% reduction compared to the same period last year. We expect this optimization to continue as our business unit led organization manages the excess inventory down. Which should in turn result in operating cash And Lake turn it back to you to provide some closing commentary.

Thank you, Luis. I would like to end with what I started. Which is to recognize 2024 a challenging year for the industry. However, Challenging times are part of every industry. And what is most important is managing these down cycles. Especially in a young industry that has experienced significant volatility. Being agile is crucial and Woolworths has taken the opportunity to become a leaner more efficient company that maintains a unique fit and strong propositions for the massive growth that lies ahead. 2025, will be another year of growth for the industry. We recognize that volatility in EV sales could persist as a transition of these magnitudes However, at Woolbox, we are excited about what 02/2025 will be.

We have made great progress in the past year and are starting to reap the benefits of these efforts. Incremental improvements expected for the coming quarters. The goal of GoldBox is to generate profitable growth and we are getting closer and closer to IZOCE. [indiscernible] believe that the platform we developed generate shareholder value has all the elements in place, including a diversified [indiscernible] large geographical presence key strategic partners capacity in place and a great team. [indiscernible] have high ambitions in building out our leading position in the transition to sustainable mobility and we appreciate the continued trust of our shareholders. We also aim to provide the market and our shareholders better insights in what lies ahead. Therefore, we want to provide guidance on what we expect for the first quarter. Revenue in the €34,000,000 to €37,000,000 range. Gross margin between 3739%. And expecting a negative adjusted EBITDA between €8,000,000 and €11,000,000 negative. With that, we are ready to take questions from our analysts.

Welcome back, everyone. To our analysts, we ask that you post one question with a follow-up if needed. Then reenter the queue if there's more.

This will allow each of you to ask your questions upfront and we get to as many additional questions as time allows. Charlie, could you please share instructions to our analyst and take the first question?

Our first question comes from Stephen Jengara of Stifel Stephen, your line is open. So I think two things. I think the first Just at a high level, when we think about your mix going forward, and I know you mentioned in the commentary some of the sort of regulatory changes or at least potential changes in The U. S. Market. How should we think about the mix of product. You think it evolves much because of maybe the lack of some of the NEVI funding? How do we think about how your mix might evolve, particularly in The U. S. Market? Hi, Stephen. Good morning. This is Henrik.

So In The U. S, we are seeing The mix should be improving towards fast charging. [indiscernible] We have been launching the Supernova UL at the middle of last year. And we have also included the certifications of the NTEP and CTEEP, which will be announced and launched soon. So at the end, this increase our addressable market for fast charging in The U. S, which [indiscernible] it's a vector of growth for fast charging for us. Also, the fact that we launched the product in the middle of last year nor in Q2 last year, most of the deals and most of the accounts that that we have take time to mature. And in average, we are seeing that a deal for fast charging takes around two hundred days to start seeing [indiscernible] At the beginning, the CPO makes a small order, there's the product, And then after that, after two hundred days, you start seeing volume of orders. So these two together should make the mix increases. And our goal in The U. S. As we look at is eventually to be 50% fast, 50% home and business.

We are seeing also positive note in terms of growth for home charging in North America is this quarter. Sellout is growing nicely. And as well Celine, So it doesn't look like it's very impacted by new policies or new sentiments, or maybe this is accelerating the orders of some electric cars because people is worried that some incentives might disappear. So in the short term, we are seeing a growth for home charging, but also we expect a growth for fast given the fact that we launched new products, increase our addressable market and the opportunities are maturing.

Okay.

You. And then any other question, I know this is a a hard one to pinpoint with all the moving pieces. But when we think about kind of where you might be in twelve months or eighteen months and and just sort of the I'm thinking about the path to being kind of EBITDA and then ultimately free cash flow positive like where do you think you are kind of in that evolution? And maybe do you think the backdrop or even the top line would need to look like to get you there?

So basically, What we've done so far, the last year, even it was a challenging year for the market, is being able to exceed in most markets or maintain our sales compared to the EV market, EV vehicle sales. So we've been maintaining our market share or increasing it in many countries. A clear example of that is North America. The EV market grew around 20% and we've grown 40% in this market. So that means increasing market share, having new customers, and we can see this with all these new brands we are launching. So when we look at our performance, that's what we are committing for the following twelve months, being able to our market share and we see less competition We see new partnerships coming. And at the end, will depend a lot on how the EV market performs.

We are seeing positive things. For example, Europe If the missions continue the missions of relations continue, no, and it looks like it's going to be like that, There's a 20% growth potential. In North America, industry sources say 20%. So we are going to be very dependent on EV sales and that's what's going to impact our performance. When you look about the revenues, now what revenue makes us we have to be given all the efforts we are doing, we changed from a functional organization to to business unit organization and we've been doing strong efforts introducing OpEx. And CapEx and you can see this, but we are not still seeing the full impact of all these improvements, and we will start seeing it now in this quarter. With revenues of around €40,000,000 to €45,000,000 The company should be able to be at breakeven. Once we reach the size we are targeting. And this target size, we are targeting to be at least at the end of Q2, which will be in the target size, which it will be fully reflected in Q3. So that's these are the numbers. So this upside potential with daily sales. If there's more AV sales, we will sell more.

Because we are able to capture this market. I think there's opportunities to capture it even more because the platform we have have the products, we have the global [indiscernible] And at the end, we are not very dependent on specific regions. If Europe now grows and U. S. Maybe doesn't grow as fast, we are able capture this growth. And we're reabsorbing the cost to the to be able to add these revenue levels be profitable and generate with the positive.

Great. Now thank you for all the detail.

Our next question comes from William Griffin of UBS. William, your line is open. Please proceed.

Great.

Thank you very much.

My first question, just wanted to touch on tariffs here. Your folks appear pretty well positioned just given your manufacturing footprint, but could you talk about maybe some possible areas of import tariff exposure and how you're positioning the company as the import tariff environment in The U. S. Is evolving here. Thank you, William. Good morning. This is Henrik.

So as you are saying, I think there's two hedges or two protections we have as a company. One is obviously a big part of our revenue comes from Europe, and we manufacture in Europe. So here, we are less exposed to North America market, but obviously, we're growing a lot in the North America. Market. Now we've seen a 40% growth. But in North American market, we have a factory, assembly facility in Arlington where we manufacture the chargers. We the home chargers and commercial chargers we sell in all North America and also some parts of South America. When I think about risk, I don't see a reason in terms of supply chain for this factory because we can manage and most of our supply chain is localized. The bigger reason I will say is in the fast charging space where we still a big part of this fast charging is being manufactured in our Barcelona factory.

And a big part of it, we ship it from Barcelona to Arlington. We are working on a plan in place in case that there will be a specific tariff coming from Barcelona to The U. S. Trespass more of these of these manufacturing or more of these supply chain. To North America. So we can do it. We have the space. We have the CapEx invested The fact that we are doing most of this right now in Barcelona is from an operational efficiency. [indiscernible] there's not enough volume to justify these two separate assembly lines, but our factory in Algonquin could do it. So if we see that's necessary, [indiscernible] and at the end, it makes financial sense. We can pass more parts of this manufacturing in Arlington. And also maybe if you think about China, and importing goods from there, We've been working with our suppliers that to make sure we source from alternative suppliers or alternative factories they have around the world. So also, this has been has been an ongoing effort since I would say one year ago at least, and we are well set. We're almost of all of the materials come have multiple sources.

I will pass it to Luis, one moment. Yes. I was only going to add to that, William, that going back to Enrique's prior point, Fast charge is relatively non material part of the business in The U. S. Where we see upside and also linking to other comments that we've been sharing with you that business unit has a good margin. So when you put all those things together, we see this as incremental that we need to address, but we can manage accordingly.

Very helpful. And my follow-up here is just on the $10,000,000 capital raise you announced a couple of days ago.

You just elaborate on sort of how much funding runway or visibility that gives you? And do you need or see the need potentially for additional capital to reach more of a self funding level here.

Thank you, William. Richard, again, and maybe I will pass it after that to Luis also to comment. Well, first of all, we are are very Very proud that we can access capital markets and we have the support from our strategic and long standing shareholders. Which many of them are not only investors, they are also key customers like Iberdrol. I know Iberdrol is one of the biggest utilities in the world. And also one of our biggest customers worldwide and having them keep supporting the company and investing I think is a proof point of the products. The technology and all the things, all the value we create to our customers. There's many things [indiscernible] with many levers we have in terms of cash, we released the current cash at hand and the fundraising we've done. And at the end, we are doing is make the company that operationally can as soon as possible be cash flow positive. How we are doing that? We have the inventory release So we still have a lot of inventory, euros 70,000,000. We've been able last year to reduce it significantly. Which at the end has released a lot of cash available every month and every quarter.

So this is an important part of how we are managing cash, also working capital, have been optimizing we'll continue to invest in our working capital and working with customers to have early payments and with suppliers to manage all of this. So all in all, what we are trying is to make sure we don't need more capital or at least the minimum capital and minimize dilution. If needed, and at the end, that depends a lot on the top line. The core reduction efforts are being made. The We are working on the gross margin. I think we're doing an excellent job on the working capital as well. And you can see that when you do that. And also, we've another thing that we haven't seen a big impact last year, but we're seeing now renegotiation with banks where we are not paying the principal, we are paying all the interest all in all for eighteen months, which again is what makes sense in a company that's still is not generating cash, and we hope to do that soon. So with all these actions, we are working and we're taking we don't need to raise additional cash. And it will be very dependent on the top line.

And if needed, I think the company has proven that it has access to capital markets but we are trying to manage it with the current cash.

Alright. Thanks for the time. Talk to you guys soon.

Okay. That's our next question. Thank you all for joining us today. We hope you found today's call a good use of your time. Let me let us know if we can help you in any way.

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.