ADS-TEC Energy PLC Q2 FY2024 earnings call

• Review of H1 2024: Revenue grew by 107% y-o-y, adjusted EBITDA was positive, and over 2,500 high power charging points were produced and delivered.
• Market Trends: Focus on e-mobility, renewables, and the volatile energy system; flexibility platforms are crucial to address generation-consumption differences.
• Strategy and USPs: Intelligent platform solutions, multi-revenue business model, control over hardware and software, and services like availability and data-driven services.
• Customer Base: Significant broadening of customer base, with over 50 customers onboarded in the last three years, and a sales cycle of 9-12 months for blue-chip corporations.
• Business Models: Examples include garbage trucks using charging solutions, police EV deployments, and taxi platforms with integrated charging infrastructure.

In the first half of 2024, ADS-TEC Energy reported revenue of €79.3 million, which is a 107% increase compared to the same period in 2023 (€38.3 million). The majority of revenues were generated by charging products such as ChargeBox and ChargePost. Geographically, most revenue originated from Europe. Charging products accounted for the majority of total revenues, with commercial and industrial products, services, and others also contributing.

• Full-year 2024: Anticipate continued positive momentum in the second half, with revenues expected to be the highest in company history. The company is on track to be adjusted EBITDA positive for the full year, and expects at least doubling of revenues driven by strong customer dynamics and market trends.

• Political/Regulatory: Uncertainties in politics and regulations affecting e-mobility adoption.
• Revenue Dependence: Risk of over-reliance on single revenue streams from EV charging without additional revenue sources.

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

A: Politics and regulations playing a big role in the transformation to a decentralized energy system.

Q: What percentage of revenue in H1 came from Germany?

A: The majority, approximately three quarters of revenue in H1 came from Germany.

Q: How does ADS-TEC plan to fulfill demand growth in the next 2-3 years?

A: Dresden factory can produce 5,000 systems/year with spare capacity for the next 1-2 years, and is prepared for North American logistics within 1-1.5 years.

Q: How will ADS-TEC finance growth?

A: Supported by existing shareholders, and may use capital markets; working on improving bank rating for future financing.

Q: Update on U.S. market efforts?

A: Working on projects with OEMs like Ford, preparing Made in America structure, and taking a step-by-step approach.

Q: Expand on SG&A decrease and outlook?

A: SG&A increased but at a rate lower than revenue growth; expect further increase with expansion but under revenue growth trajectory.

Q: Energy storage business and residential segment?

A: Focus on C&I business, not residential; working on new battery technology for C&I to avoid naked component business.

Q: Cash needs in next 2 years?

A: Need further financing for expansion, may seek additional funding through equity or credits, with support from existing shareholders.