Wallbox N.V. Q3 FY2021 Earnings Call

Ladies and gentlemen, hello and welcome to the Wallbox Third Quarter Business Update Call. My name is Maxine and I'll be coordinating the call today. I will now hand over to your host Austin Wood, Director of Corporate Development to begin. Austin, please go ahead when you are ready.

Thank you, operator. Good morning and good afternoon to all that are listening in. And thank you for joining Wallbox's third quarter business update call. Earlier today we filed with the SEC and posted to our website at investors.wallbox.com a letter to shareholders. On this call, we will discuss some of the key points in that document. Before we begin, I'd like to remind everyone that certain matters discussed in today's conference call are forward-looking statements that are subject to risks and uncertainties relating to future events, and/or the future financial performance of the company. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in the company's most recent public filings with the U.S. Securities and Exchange Commission, including a registration statement on Form F-1 filed with the SEC on November 1, 2021, which can be found on our website at investors.wallbox.com and on the SEC's website at www.sec.gov. Speaking today will be Enric Asuncion, Co-Founder and CEO of Wallbox; and Jordi Lainz, CFO of Wallbox. We will not be hosting a live questions and answers session today. But if you have any questions throughout the course of this call or following, you can address them to investors@wallbox.com. Enric, I now turn the call over to you.

Thank you, Austin, and hello, everyone. We encourage you to review the letter to shareholders filed with the SEC and posted on our Investor Relations site for more details. I want to start by summarizing our business and reiterating what makes Wallbox differentiated. As this is our first priority call since completing our business combination with Kensington Capital Acquisition Corp. to our listing on the New York Stock Exchange in October. At Wallbox, our mission is to create smart charging and energy management solutions to advance electric vehicle adoption and sustainable energy use, with a focus on contracting solutions in particular. We are a global company and operate a vertically integrated business model, designing, engineering, and manufacturing our suite of products in-house. This translates into very fast development cycles, which we believe help us stay ahead of the competition and give us more control over our products, especially during times like these when there are severe global supply chain challenges. It has also translated to improved margins. We see our success to date as resulting from our focus on our design-centric, user-friendly hardware and software products that can help save our customers time and money and foster accelerated adoption of sustainable energy sources. Key to our value proposition, and truly unique to Wallbox, we believe is our focus on energy management systems technology. About 80% of Wallbox chargers sold are currently utilizing energy management through my Wallbox, our proprietary software, to yield significant benefits for our customers. For example, by managing home energy consumption, our products adapt the charging power on a real-time basis, ensuring that our users are always charging their cars at maximum power without worrying about capacity limits. By detecting when homes and solar panels generate excess energy, our products optimize that power for charging our customers' vehicles, enabling them to charge in a highly cost-effective and sustainable way while also accelerating the consumption of renewable energy sources. We have taken this smart technology one step further with Quasar, our compact, affordable, and easy-to-use bidirectional charging system. Quasar allows customers to turn their car into an energy source, discharging energy to power their home or selling the energy back to the grid where regulations allow. These products have allowed Wallbox to capitalize on an extremely strong historical market, and looking forward, we believe that the market dynamics for electric vehicles and charging remain very bright. In Q3, Bloomberg New Energy Finance raised the forecast of EV sales to 5.6 million in 2021, up from our previous estimate of 4.7 million in Q2. EV sales in Europe and the U.S. increased by 234% and 208% in Q2 2021, respectively. Based on Bloomberg New Energy Finance's forecasts, we will see another record-breaking year, driven by regulatory tailwinds and unprecedented demand. We believe that our performance so far in 2021 demonstrates the strength of the market and the value proposition we have believed in since the day we founded the company six years ago. Let me briefly touch on some operational, financial, and commercial highlights for the third quarter before turning it over to our CFO, Jordi Lainz, who will provide additional figures. We generated $65 million in revenue in 2021 for the nine months ended September 30. We believe we’ll meet our expected 2021 revenues of $79 million. Our revenues are, in fact, 16% ahead of our budget expectations. From January 1 through September 30 of this year, we sold 66,000 chargers in over 80 countries around the world. Some key markets that are driving our growth include Germany, the U.K., and France. Our success in these markets can be attributed to our incremental efforts around local certifications and marketing. We see a key advantage for our company with local expertise, ensuring that our products meet the evolving government-issued regulations at a lower cost to capitalize on not only in these three markets but also in other countries around the world. Additionally, we have been making a concerted effort to expand our footprint and grow market share through our marketing initiatives. In the U.S., a market we entered in February of this year, we continue to gain momentum. We made great strides during the third quarter that position us well for strong growth, including the introduction of our 48Amp Pulsar Plus and the announcement of our partnership with SunPower. The SunPower relationship is a strategic alliance whereby new customers can install our EV charger concurrently with their solar and/or storage system installation. SunPower, meanwhile, acts as a preferred solar and storage provider and EV charger installation provider for Wallbox customers. SunPower has already placed its first orders, and we believe this partnership will allow us to continue making installations easier and less expensive. Turning to our recent updates, in early September, we announced the site selection of our first U.S. EV charging systems manufacturing facility in Abilene, Texas. Given the demand from the U.S. market, we knew that in order to have an influential commercial presence in the country, we needed to establish an operational presence as well. This 3,000 square foot facility will be instrumental in accelerating the launch of new products to the market. In addition to producing the current version of Pulsar Plus, which is already available for the North American market, the facility will pave the way for a North American version of Quasar and Supernova. Production is expected to start in the second half of 2022, with a capacity of more than 500,000 units by 2030. We are excited to report that we are making quick progress on the new manufacturing facility that we announced earlier this year. As a reminder, this is a 100,000 square foot facility that is being built using state-of-the-art industry 4.0 technologies and greater sustainability certifications. The first assembly line has already been installed, and we are on track to begin production in this facility before the end of the year. Looking ahead, we see several notable bright spots. While Wallbox offers a robust product portfolio today, in the coming months, we will be introducing important new products to the market, which we believe will further diversify our offerings. We believe that the potential with our range of DC chargers is tremendous, as reflected in our results today. Historically, we have rolled out this product through strategic partnerships with international companies and OEMs. By early next year, we expect Quasar to be offered commercially, enabling any EV with compatible capabilities to recharge using our support or through our partnerships. Continuing with our DC power electronics, we are happy to announce that we remain on track to begin the first shipments of our Supernova DC public fast chargers by the end of this year. We are thrilled to be chasing first half injuries and can support endeavors to install over 150,000 charging stations throughout Spain in the next five years. Further, we continue to explore partnership announcements to enhance our brand recognition and expand our range. Recently, we announced a Bay Area Pilot Program with Uber, where Wallbox will offer ride-sharing drivers a discounted package for our Wallbox charger, installation, and financing options. Additionally, we have formed a partnership with a vehicle-to-grid software company in Dubai. By leveraging their software, we can enable vehicle-to-grid charging capabilities. We foresee partnerships such as these bringing tremendous growth potential as users come to appreciate the value proposition of our products. We look forward to entering into additional partnership arrangements across various product types as we continue to grow our company. I will now turn it over to Jordi, who will provide some additional information around the financials.

Thank you, Enric. As a newly public company, we have provided aggregated financial information this quarter. Going forward, we plan to report quarterly results and provide business updates, and we'll issue an annual report that includes full financials. With that said, let me recap solid financial and operational highlights and provide necessary clarifications where applicable. We reported revenue of $22 million in the third quarter, which is up nearly 250% year-over-year. As mentioned earlier, 2021 revenue through the third quarter was $55 million, up more than 280% versus the prior year. Our revenues are underpinned by charger sales of 26,000 units in the third quarter and 66,000 charger sales in the nine months ending September 30, as we pointed out. Our gross margin for the nine months ended September 30, 2021, was 39%. Although we faced challenges from the global supply chain shortage in the third quarter, our in-house engineering, manufacturing, and validation allowed us to continue producing without interruptions while maintaining an industry-leading gross margin. We continue to face logistical challenges involving supply chain issues, but our vertically integrated operations give us much more supply chain options compared to some of our competitors. Now, regarding our recent transaction, we generated gross proceeds from the merger of $252 million, exclusive of transaction costs of $40 million. The merger closed on October 1, after the end of the third quarter. On a pro forma basis, since the merger closed on September 30, our cash balance would have been $231 million. We believe that our existing resources will suffice to meet our capital requirements and fund our operations through 2024 and 2025 when we are expecting to achieve positive EBITDA and cash flow, respectively. Finally, our total shares issued and outstanding at the time of the merger closure were approximately 161 million. This excludes other outstanding shares and the impact of any stock options or employee stock purchase plans. Thank you for your time, and I will now turn it back to Enric to conclude the call.

Thank you, Jordi. Automatic rectification is at an inflection point today, and charging is essential to adoption. With the proceeds from this business combination, we are confident that we can capitalize on these megatrends and stay ahead of the competition as technology and customer demands evolve. We thank you for joining us today, and I look forward to speaking with you again after we report our first full year earnings results as a public company in early 2022. Have a good day.

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