Eurotech S.p.a. · MIL:ETH
Eurotech — Q1 2024 Earnings Presentation
18 slides from Eurotech's earnings presentation, May 1, 2024
Slide 1: 2024 first quarter results
2024 first quarter results INVESTORS LIVE STREAMING PRESEN TA TI ON
Slide 2: Disclaimer
disclaimer This presentation has been prepared by Eurotech S.p.A. (or “Eurotech”) and has to be read in conjunction with its oral presentation. The information contained in this presentation does nor purport to be comprehensive. Neither Eurotech nor any of its officers, employees, advisers or agents
Slide 3: Q1 2024 financial highlights
Q1 2024 financial highlights Revenues @11.9M€ largely affected by phase-out of main customer on legacy embedded business in U.S. and destocking in Japan -50% YoY at constant exchange rates Gross Profit Margin @ 48.7% improving 180bps YoY and better than 47.4% in FY23 Opex down 0.3M€ i.e. 3% YoY net
Slide 4: Business update
@®eurotech business update
Slide 5: 2024 still a year of transition, full steam on tasks we can control
2024 still a year of transition full steam on tasks we can control As our peers, suffering the global destocking phenomena still ongoing, especially in Industrial coping with longer ramp-up time of design-wins in Europe but facing mainly the phase-out of main customer on legacy embedded business in
Slide 6: Company strategic pivoting is happening: Edge AIoT surpassing Legacy Embedded in 2024
company strategic pivoting is happening Edge AIoT surpassing Legacy Embedded in 2024 embedded boards & systems edge AIoT hw & sw 68.1 55.1 CAGR 49.7 70% 38.6 26.2 13.4 2021 2022 2023 2024 2021 2022 2023 2024 #6
Slide 7: Our HW&SW value proposition again confirmed to be state-of-art
our HW&SW value proposition again confirmed to be state-of-art #7
Slide 8: Global PRs announcing new products enabling go-to-market channels
global PRs announcing 3 new products enabling go-to-market channels First Cybersecure Edge AI game-changers Ignition-ready IPC @Automate Show ReliaCOR 40-13 ReliaCOR 31-11 & ReliaCOR 33-11 powered by NVIDIA Jetson Orin #8
Slide 9: Going forward…
going forward… Low visibility beyond the short term: customers still releasing orders "last-minute“, but… … early signs of a more promising second half of the year Overall we expect growth in Edge AIoT revenues this year Net reduction in total operating costs, with a year- on-year benefit at the EBI
Slide 10: Finding the right balance: Opex Reduction Plan
finding the right balance Opex Reduction Plan Goal: lowering the run-rate of total opex by ca. 3M€ incremental to the net saving of 1M€ already coming to fruition FY2025 opex down ca. 4M€ or 10% vs FY2023 opex Timing: during next 9 months in sequential steps How: 2 main initiatives #1. Doubling down
Slide 11: Boosting US with a "tuck on" M&A
boosting US with a “tuck on” M&A Time for an acquisition has come Building on the positive experience of InoNet Focusing on finding a "tuck on" target in the U.S. i.e. a “InoNet like” company Boosting the business transformation to Edge AIoT in a short timeframe like InoNet allowed in Europe. to fin
Slide 12: Financial update Q1 2024
financial update Q1 - 2024 #12 #12
Slide 13: 3 months drop driven by legacy business; Edge AIoT accounts for 63% of revenues
3 months drop driven by legacy business All values in € million edge AIoT accounts for 63% of total revenues 24.9 #90% of revenues decrease -0.9 -0.5 linked to phase out of US legacy embedded customer, not yet replaced by Edge AIoT growth 11.9 -11.6 #Edge AIoT slightly down due to different distribu
Slide 14: Europe is the first area, breakdown by end-customer location
Europe is the first area breakdown by end-customer location other other #US suffering from mismatch between 5 2 phase-out of main customer on % % embedded and phase-in of new Edge EU JP AIoT business 33 28 JP 26 % % Q1 % Q1 2024 #Europe facing postponements of 2023 5 ramp-up of design wins in IoT, e
Slide 15: EBITDA margin negative due to volume decrease
EBITDA margin negative due to volume decrease rising first margin and falling operating costs only partly compensated Ebitda decline 1.465 1.603 -138 320 260 240 -3.370 -5.656 All values in € million EBITDA Fx rate EBITDA Lower Better Opex Other EBITDA Q1 23 effect Q1 23 @ 2024 Volumes GM Rev. Q1 24
Slide 16: Balance sheet normalizing after component shortage effects
balance sheet normalizing after component shortage effects All values in € million NFP improving 1.4M€ vs year end 2023 NWC down 5.9M€ vs year end 2023 by virtue of thanks to NWC reduction the normalization of material purchases 23.9 18.0 3.2 0.3 3.0 -0.9 -0.4 -19.2 -9.4 -20.6 -0.3 FY FX Cashflow Ca
Slide 17: Key takeaways Q1 2024
@®eurotech key takeaways Q1 - 2024 UNLEASHING THE POWER OF THE EDG!
Slide 18: Key takeaways
key takeaways Weak start of the year, yet Lower visibility than the past on historically first quarter not how the year will progress, but H2 representative of FY results more optimistic GPM improving 180bps YoY, Actively searching a tuck-on, InoNet- Opex down 3% YoY and on track like acquisition in