ADS-TEC Energy PLC Q2 FY2022 earnings call

Key Sections - Transformation: The transformation to an intelligent and decentralized energy supply is ongoing, and ADS-TEC's battery-buffered technology positions it to capitalize. - Product Portfolio: Develops and produces decentralized smart storage-based platforms like ChargeBox, ChargePost, and ChargeTrailer, enabling fast charging even in power-limited areas. - Market Segments: Targets segments such as retail, telecom, transportation, utilities, and oil and gas companies, all in need of fast charging on power-limited grids. - Sales Pipeline: Sales team led by John Neville is building a robust pipeline with new customers in various sectors. - European Growth: European business continues to grow with strategic partnerships like JOLT, and expansion into new European countries. - US Business: Launched US business in late 2021, accounting for 27% of H1 2022 revenue, with plans for a US manufacturing site opening in Q4 2022. - Supply Chain: Redesigned supply chain to address material shortages and cost increases, though gross margin impact was seen in H1 2022. - Manufacturing: Build-up of manufacturing facilities led to increased payroll-related costs in cost of sales.

For the segment performance: H1 2022 revenue was EUR9.431 million, down from EUR20.9 million in H1 2021. The charging segment saw a decrease, with the service segment contributing EUR636,000 (a ~39% YOY decrease). The commercial and industrial business had EUR2 million in revenue, a ~65% YOY increase. Geographically, H1 2022 revenue was 54% from outside Germany, including 27% from the US due to the launch of US business.

Guidance - Full year revenue guidance remains in the range of EUR80 million to EUR100 million, backloaded to the second half of 2022. - Current order backlog is EUR176.7 million, providing visibility into growth opportunities. - Charging unit sales guidance remains in the range of 400 to 500 units for 2022. - Expect gross margin to improve by the end of 2022. - Current cash on hand is expected to support the next quarter, with monitoring of capital structure and growth opportunities ongoing.

Risks - Supply chain issues, including material shortages and increased costs, impacted gross margin in H1 2022. - Continued COVID-19 pandemic and geopolitical challenges could affect actual results. - Potential for material shortages to persist, impacting production and gross margin.

Q: What is the level of visibility into 2023 deliveries from the current backlog?

A: Orders on the backlog are planned and scheduled for delivery until the end of 2023.

Q: What is the timeline for the U.S. facility ramp-up?

A: Started searching for the site in January, plan to have the facility operational with warehouse, battery assembly, and service team starting this year, ramping up production in subsequent years.

Q: Can you give a range for gross margin in 2022?

A: Gross margin is expected to turn positive in the second half but exact range is uncertain due to supply chain uncertainties.

Q: Is there any difference between chargers for fast charging passenger cars and electric trucks?

A: Chargers can handle up to 300kW for light trucks, buses, and vans; for larger trucks needing over 1MW, technology is available but waiting on standardization.

Q: What is the revenue mix in terms of segments?

A: Services contributed EUR0.6 million, commercial and industrial application (EV charging) contributed EUR2 million in H1 2022.

Q: What is the geographical mix of charging unit sales expected?

A: It is almost half and half between Europe and the US.