ADS-TEC Energy PLC Q2 FY2024 earnings call

Key Points

• Revenue grew over 107% YoY. Adjusted EBITDA was positive in H1 2024.
• More than 2,500 high-power charging points produced and delivered.
• Market trends involve e-mobility, renewables, and a volatile energy system, emphasizing the need for flexibility platforms.
• Strategy focuses on intelligent platform solutions, multi-revenue business model, and battery-buffered systems.
• Dresden factory has capacity to produce 5,000 systems/10,000 dispensers annually. Business models expanded to include taxi platforms, police EV infrastructure, etc.

Revenue for the first half of 2024 increased by over 107% compared to the same period in 2023, from €38.3 million to €79.3 million. The majority of revenues were generated by charging products like ChargeBox and ChargePost. Geographically, most revenue originated from Europe. The customer base broadened significantly with more blue-chip clients joining the business.

Forward-Looking

• Anticipates continued positive momentum in H2 2024 with increased sales revenues vs H1.
• Aims to be adjusted EBITDA positive for full year 2024.
• Expects substantial growth driven by strong customer dynamics and market trends, with at least doubling revenues.

Risks

• Volatile EV market in Germany and others impacting business.
• Grid expansion costs and associated power price increases.
• Dependence on regulatory changes and innovator/investor dilemma in e-mobility adoption.

Q: What will be the biggest challenge for ADS-TEC in the next 1-2 years?

A: Politics, regulations, and the hesitating period in the energy transition.

Q: What percentage of revenue in the first half of the year came from Germany, and how will that change in the second half?

A: Majority of revenue in H1 from Germany, but details on H2 change not specified.

Q: Could you describe your capacity to fulfill demand growth in the next 2-3 years?

A: Dresden factory has spare capacity (5,000 systems/10,000 dispensers annually), prepared for North America logistics.

Q: How do you intend to finance growth?

A: Use capital markets, existing shareholder support, work on bank rating for future leverage.

Q: Can we get an update on your business development efforts in the U.S. market?

A: Started in U.S., working on projects with OEMs, preparing Made in America structure.

Q: How do you intend to mitigate against an increasingly volatile EV market?

A: Diversify revenue streams (trading, peak shaving, solar integration) to reduce reliance on charging utilization.

Q: Could you expand on the decrease in SG&A year-over-year and your expectations for that going forward?

A: SG&A relatively decreased but will increase with expansion, at a lower rate than revenue growth.

Q: How about your cash needs in the next two years? Will you need further investments/capital?

A: Need further financing for U.S. expansion, supported by existing shareholders, may seek additional funding in future.