VIAO - Earnings call transcript Q1 2022

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Operator

Hello everyone and welcome to the VIA Optronics AG Q1 2022 Earnings Call. My name is Charlie and I will be coordinating the call today. [Operator Instructions]. I will now hand the call over to your host Lisa Fortuna with Investor Relations to begin. Lisa, please go ahead.

Lisa Fortuna

welcome. and you Thank

conference are are directed events Markus Form of Founder of maybe of cause Securities I result or forward-looking future Participants Peters, our everyone of to Optronics forward-looking statements materially business under during to to today business outside expected certain as We defined the Officer performance, as plans of future would Chief whether our that new statements Reform may information, in and Litigation to company statements. control XXXX. remind duty future this made statements Dr. description provide VIA Chief differ or that Private expressly relating Jürgen a me updates Act to for and company’s XX-F future expressed otherwise. Eichner, events, prospects, any a Executive like from the risks call to may or which Joining some the Financial results forward-looking Officer. the those actual of disclaim include

for on opening for the release posted XXXX call is now via-optronics.com. company’s to let website quarter at over Jürgen of earnings the With turn first remarks. that Our our me his

Jürgen Eichner

good morning, Thank you you you all of joining and Lisa. Good us afternoon, thank for today.

business formed a business our the partnership user discuss is We acquired QX We QX system our had for year innovations highlight and begin us began full year’s year most which company integration continuation components of being tech We integration are XXXX provide be strategy. focusing would high overview To offering. consumer part forward the solutions advanced and successful year last SigmaSense achievements minutes including also This new and with cockpit key our industries over for outlook OEMs. with and to financials few a go our touch full we developments. a results us the briefly the tech apply original developments the market to excited XX-F, new develop from Germaneers, share markets. with many In sensing Form overall. XXXX equipment provide and interfaces, our XXXX functionality take manufacturers, well-known importantly found partnership high automotive to an to The has I to the like automotive the our and exciting a and on display end our of which on XXXX. can and the new a partnership solutions, to touch across strategic allows this of to industrial high allowed also

a the Finally, solutions. we the for VIA camera in new of design incorporated entity and development Optronics Philippines

production started in and IMIA incorporated require growth demonstrate that our design ahead. integrated over February shipments ramping a camera goes developing from edge adjacent As In XXXX, flexibility to that of Thus the to achieved electronics diligence sunlight system [ph] which XXXX. and as the XX,XXX XX, Philippines our our our Best has and the of site fiscal part already production announced headquarters production May award innovative facilitate record reminder, capacity readable, we Value on we [ph]. also a to automotive Finance VIA received acknowledges Capital development for innovative integration we International. award micro but previously our In commitment was added had up solutions. the expansion potential only our units sights VIA we as This in set of mass capabilities interactive solutions for for Germany Technology in the of far superior have we May has a line optical to achievements. new cutting This the Strategy also announced that notable team staffing and headquarters. a was robust our of some Innovations Nürnberg applications XXXX and

new the for month Finally, plans site production past in announced Philippines. we this a

the We ongoing of able supply pressures, have quarter. site margins expect restrictions geopolitical China. implement negate increases, the cost to the during measures that will and we in increase the mitigating while and Also help efficiencies costs impact to desired not operational increase been chain all increased also first

year. July headwinds, are our in team solutions second We us challenges, half lockdowns in have and adjust proud half Despite for with performed remains shipping of Despite second ongoing this Despite starting the display and which of prices we shortages, place customers how in and the of our stabilize are the our proud agreements robust. allow of semiconductor to margins these demand China. we COVID-XX continued in has year. amidst systems will this among

PC's, on demand basis compounded and higher or tablets. industrial XX.X% rate Forecasted expressed respectively. consumer, XXXX growth XXXX. a More CHER annual laptops, ever to [ph] and of are from and X.X%, XX.X%, from drove work home usage Automotive, than

for a and past need autonomous in consistently connectivity we the addition, greater systems, more over In saw shapeability year. costs,

with touchscreens that increasingly us interfaces Our aware optical shock and light of the and technical to temperatures. the tell customers are combined of and out extreme user come new and sensitive challenges displays and

functionality Our the critical differentiating multiple which the up of and across against durability solutions is end stand pockets factor. day challenges superior in a

impact the provide the hand component the supply chain an call global I'd VIA. specifically to its and shortage to I update on like Markus, Before on

freight we component due been a challenges continued While our China, to compared as price the affecting broader have rates. Russia-Ukraine business successfully and cost shutdowns the and market, have of increases to in these conflict, result shortage increase there the to navigate material

with work And growth In case the the the this have and business. fiscal are quarter we We progress and year that we to have our we of first in customers continued made summary on basis achieved and impact pleased should XXXX. continue mitigate case the in by by momentum results XXXX the on a support to our beyond.

like margins, the over growing XXXX Markus of call full first the this and financials reinstalling of our is like said the during Markus. priority. will and -- year review turn our focus to we short first that quarter overview for a With However, XXXX this detailed to now a performance. year on I'd

Dr. Markus Peters

hello Thanks everyone. by of year results, our year will I then XXXX our full our for performance the XXXX. will operating first Jürgen XXXX, the quarter outlook for start quarter full and outline and to I reviewing financial and second and

and and from year compared to the full total segment by from XXXX. XX.X% as generated manufacturers challenges automotive other segment to Solutions compared XXXX million customers. increased XXXX margin €XXX.X the displays strong chain € increased due from strong to increased Technologies larger high Sensor Display some in Revenues of number VIA to to manufacturers. XX.X% in XX.X For €XXX.X other EV the sales mainly demand we that XX.X% than topline was million by results mentioned. very compared drove Revenue XXXX by gross reflecting certain supply of to million of driven just automotive XXXX of higher Total among XX.X% that revenue compared a €XXX.X both XXXX by industrial to Jürgen in X.X%

in Solutions of revenue first growth automotive revenue of €XX.X million in by XXXX quarter driven €X.X first million markets XX% the XX% to and end quarter applications Solutions and in quarter, of XXXX to by XXXX the and the Moving quarter related the the industrial accounted from profit XXXX. in million In accounted market the in increased first XXXX. in XX.X% market XX% driven grew for first for of total first the of in XXXX. primarily consumer the XX% to of quarter in of Revenue increased for XX% €XX.X of and year, the Solutions Display million this XX.X the XX.X% increased revenue million Solutions first related by quarter in growth Solutions to both revenue XX.X% of million XX% Revenue Technologies from compared revenue, the first revenue decreased of first end quarter X.X% first revenue. automotive of the by the the of Sensor the increased the quarter first first Display quarter from in of margin in to also revenue end the the XXXX XX% accounted quarter Technologies Display €X.X in compared quarter quarter to of and industrial X.X% sales. Sensor Display in segment. XX.X XXXX first specialized quarter Gross Display first XXXX. quarter of from Revenue in XXXX first of revenue from

to as XXXX of quarter first quarter quarter which quarter €X.X of from extent volumes. of XXXX quarter compared Selling As we operating diligently in increased of of the in in €X per decreased XXXX million and increased quarter loss Display million expenses mix first million XXXX due to first XXXX the gross the and diluted of we consulting earlier, lower General was net in to support in first the the quarter Development company's the to in gross quarter first basic of to capabilities, quarter compared in XXXX was of the first in to from business. of in expenses of of in on our €X.X loss the million share mix. -- related achieve XXXX are supports which diluted compared driven EBITDA the the first due expenses of to of of at first XXXX loss EBITDA million costs, large the million, was the in first of million Sensor with price million to X.X Net the to We working Research X.XX first addition overhead, sales X.X in finished and which XXXX. XXXX. quarter XXXX. impacts to quarter labor million logistic expenses. Germaneers. first our was EBITDA XXXX X.X orders. us €X.X of and X.X million X.X first higher quarter cash income XXXX inflationary the strong a Solutions and basic Solutions million the quarter X.X slightly Display administrative the R&D million profit X.X million compared cost €X.X runway or million to product in first XXXX. from customers the was from XXXX XXXX X.X of €X.X other equivalents and over in the Operating trends segments the strong X.X% quarter or XXXX. the the share first well of of the raw and certain mentioned €X loss quarter by compared XXXX to quarter X.X the first EBITDA X.X acquisition first first was X.XX Sensor quarter runway primarily profit EBITDA X.X% quarter first quarter increase sales first materials, strategic in in quarter as XX.X% €XX.X EBITDA have the to margin compared cash to XXXX from in increased Technologies million million to to first of the first per the in of our mitigate decreased million to growth in headcount the Technologies the with to XXXX million sales among the margin XXXX. and are increased €X.X XX.X% due loss million due objectives. support our in for quarter Other quarter income in margins

to like Looking our would ahead to XXXX outlook. I share

second For the are of issues in delays to total COVID-XX and we incorporates This logistic related also of and revenue impact forecast to Shanghai second quarter. the million. which shutdowns million expected cause the €XX Suzhou, €XX during quarter, expect

we especially camera revenue the the XX% For the the portfolio component XXXX growth uncertainty business, forecast shortages on market, is to XXXX. to the expect adjustments, consumer approximately in slowdown and full compared based automotive industry. year X% This intentional of in in

With Overall, auto us, Our industrial of outlook. the the to and reflects potentially Jürgen outlook we would due few to many of particularly to we growth focused impact call ahead also margin which markets, growth back closing to for like the uncertainty prioritize I turn the remain and financial the ongoing overview, a will continued comments. related that Jürgen. in prospects higher strong COVID-XX. on now

Jürgen Eichner

Yeah, Markus. thank you,

prospects conclusion, as about and of are beyond. summary, and of the a year remainder proud So the in excited are accomplishments recent the VIA’s for we

prices upward working are impacts margin adjusting we us to of offset costs, the to profile which historical supply our We pressures are will regain and sales possible chain help our and targets. transportation and hard our mitigate achieve where margin long-term inflation

that costs the at moment we level see chain we and from highest have there the general. probably that reached in believe also probably will in We of supply our improve

capture SigmaSense form Sensor through on Technologies enhance strategic We the in are opportunities cold to and Corning in and in industry automotive our to we partnerships with market. industrial a additional are opportunities capitalizing and position the

Our support margins. the pipeline, with projects healthy continually entering will continue projects, backlog to and which remains on higher focus new in we value

We with over financial to we clean and are have looking now sharing the for all turn a profile. the for strong concludes to continued operator years prepared remarks. value sheet And We the over questions journey you. a strong we positioned forward answers. support. you balance to are and well and shareholder growth of several and Thank That drive next the I your call our believe

Operator

Instructions]. [Operator Thank you.

Buscaglia from question comes first your open. Andrew of is line Andrew, Berenberg. Our now

Andrew Buscaglia

morning. Hey guys, good

Jürgen Eichner

Andrew. Hello,

Andrew Buscaglia

some and are momentum being so this entering that with how about able a so products -- slowdown around component your out as issue? start progresses, your on XXXX get to it's guidance more customers main market, X% concerns talk seemingly good as year but you surprising broader Can the what with these to not given the of like implies takes you XX%, the I'd -- the puts get quite and So or conservative, being line. is you to top being shortages to are to you're

Jürgen Eichner

add maybe and Well, if you something. Markus start

Dr. Markus Peters

of issue side mixture the indeed. component hand We see It's limited on effects. main a we camera the business, shortages in saw over. one That's function the with an

think. don't that the margin other he maybe probably vehicles. sales have balance adjustments the we choices. course that expect we priority, we But on then shop do a of I uncertainty or strongly really we the in enjoy while customer the the not on I for sheet. on market have are focus because Secondly, one cannot points we These major orders portfolio the other automotive -- think will margin is for And hit. entertain with focus all we intention overall

Andrew Buscaglia

Jürgen. And

Jürgen Eichner

Yeah, maybe just one comment from my side.

camera I with into the indicated the in had because today, we cost are settle. Markus to future in much the at said why really you The shortages customers during was day not are this into will level don't business before, I potential supply that that -- why will end but okay. the As the said be to so looking chain go it's the it -- at the from and moment we long impacted are reached need took highest from probably as day had over, far you the the better. looks discussions I the also know will QX better a especially. But QX, think events at we and looking we of We there, we few of so unexpected you think

from we'll that already. there. have and we So July But of customers things it's we a have actually the summary now go Xst impose of then consider. changes the with we to right some will settled

Andrew Buscaglia

provide update your and into U.S. that your that that, the an one customer, wouldn't imply you -- maybe conservatives largest with visibility terms some of would would EV year can And you strong provide makers, guide? some that like back that with the of on an of your in not -- half -- automotive

Jürgen Eichner

so will installed. one, -- equipment it's this have so Yeah, all actually we for month, this

the because actually So capacity demand capacity, full than we in higher will July full run run increased.

five on slowdowns that had And the see on onwards, that So now -- that part in being couldn't it's customer up. everything agreed the might result day, as the the picked the works out, we some the level the facility their but have have facility be over of some it car customer, with built But July expected. to here. operate in why work should working new the actually issues weeks, we actually and we we because four because tuning have for this but all equipment, for from as was is, our as with expected, get reason needs that be or for some We that have will of as waiting been from up at next years. area parts from July next onwards some the we yield have should so units stable to end that We if planned. also the delays auto you the had

Dr. Markus Peters

in of EV an assignment more And from we [indiscernible] see in China. automotive company in we business today the is and already one that is won turnover QX only EV our the but had XX% This was last majority turnover XX% week with automotive not from maker one, we this total makers, turnover. of

Jürgen Eichner

this a This will release. out as coming be separate

hear about soon. we'll that So

Andrew Buscaglia

if the hit before and peak kind of that you correctly, issues And worst number heard and seeing, costs imply we you're a guys shortages, terms reaching -- XXXX in you of implying, okay. I these and are EBITDA? you Okay, would guys can all breakeven exit or

Jürgen Eichner

shortly Actually, we promised promise. this targets we I the to also I I that have, that are think showing is you will what be trying cannot margin have.

So back overtime. that we and -- is now our focus planned -- to regular the basically we it target basically margins margin we currently are we as get the right get have like to to level that and getting looks normal --

overcome up were some cost to products certain there for the measures So cost.

lot of all other of On year are the things hand, the last we -- really happening. bundling things do we a so couldn't because

right we working the bundling basically are chain, are supply We our suppliers. down with

to the surprisingly costs down which driving successful. on are supply be we seems also So side,

production Laguna in and the every make in basically and side to future we company areas, on now have those. location in here in supply which several centralize focusing will are rearrangements the cost down will Germany, we and in So cost right at the China, up some and

saving exercise. additional there should cost also So be an

the also will we follow have on we everything really also later year, that in very he consolidation have have. also year we on because new So, part will here say important will mentioned bit and that will beginning done this think call that our where him have will organization. with communicate basically changes and CMO the maybe plan August, a cut I board in and What do when I -- can we a I is costs, is the that this of the we little after before, a the down I consolidate the be we in board last that we have will of year that

Andrew Buscaglia

Thank got you. it. Okay,

Operator

[Operator Andrew. you, Thank Instructions].

Our Craig-Hallum. Anthony line comes from next question now Stoss open. your of Anthony, is

Anthony Stoss

Good morning, still you. Thank gross everybody. I on to focus Jürgen, wanted margins.

talked Secondly, an improve July expect of that. after you revenues percentage ups increases, in can quite price mentioned will you price, And an gross second see year, improve margins outline of about take you You in margins? your a can us gross expected that see bit this increases of follow to what I what what you other will products to or steps percentage several had you then the half range? your increase can give and do

Jürgen Eichner

so revenue price will call Yeah, see this later. today than a I a our I was ready little that hoping about this actually and show -- already. projects is can what will of another to this quite bit increase. get you half I we we tell more that you are

can I yet have the Some them that one But on that the that or during numbers of site. cannot of the give was chain have in customers more are price And are today I and detailed changes hopefully seen. cover supply that unfortunately, top month ongoing the loss maybe I July. savings ended the a increase final the in that maybe with provide in July, settlements the and still we should you you hoping of already. margin of two, alone drastic and And some to

So let's first, like positive. and be moment set a that give say out -- the don't in and way see I to that conservative numbers in I very

to a provide more give a So bit the give guidance me there. more us time bit

Anthony Stoss

parts And through June down the still guide really then is full guide of your most, revenue assuming holding quarter on XXXX X% the down expecting then the business the XX% division take you to what what and actually your sequentially. of us kind bit the of growth, same kind your be up? you are question are quite rate of Okay, are any a down Display divisions for Maybe display side from business growth year-over-year? and

Jürgen Eichner

it the have in all we was QX lockdowns so that coming the Yeah, problem of out China. in was seen basically

As goods you at blocked airport and and day, blocked in know, blocked. was have been have goods might of the the the been airport the outgoing every incoming Shanghai end the China,

been if biggest Markus has caused everything wrong. and delayed I So correct am please impact and me the that

Dr. Markus Peters

is It right. absolutely

Jürgen Eichner

some And the was China. was said, production a little they chain not supply really West I But bit thing was issues. the company, delays that the also contributed had had we in major, Coast as major that

Dr. Markus Peters

And facility, one the for taking to supposed is is there customer volumes take. he's not who Nürnberg the

Jürgen Eichner

volumes And true. transparent, yes, are we really down. because why Oh, another customer ramp case, automotive that's that that's it's the not to another, That's be where the is honest. figuring out currently

part of So can more was But provide there. hopefully it's true. I forgot that. also Yes, we that it. information

Anthony Stoss

overall just to the the that be story rates. became do the up? full you will side. public ramps always what my of part display of growth a the of X% was be think of side you display biggest If was business, then regarding are why in Okay, piece the your XX%, going question Honing to XXXX Display on second

Jürgen Eichner

with I also think the biggest also one be this seen year, camera related expected biggest be this -- we growth chain will still problem there will growth camera area camera rate. has to the but display display, business, supply the moment. will is the There at mainly actually more touch but be the

one for biggest case. in segment So be touch the growth depth that displays will display -- any the

Dr. Markus Peters

Yes.

Anthony Stoss

revenues my the timing the year expand bit a EV forthcoming, to question, going more it of for Okay. just kind of China, size And to release press this commented maker you and is about the the amount that, that? on in little of you opportunity, last any calendar then can

Jürgen Eichner

I year, this for It not version, is China. the starting big West as in a next Coast but will size calendar not year. the be EV be as it's luxury think, car will It

Anthony Stoss

guys. it. alright. Appreciate Okay, Thanks,

Jürgen Eichner

you. thank Yeah,

Operator

Thank Anthony. further time, you, have currently no [Operator this Instructions]. questions. we At

So I'll to Jürgen for hand any Eichner remarks. over closing back

Jürgen Eichner

well my what say side you thank today. joining the from is Yeah, call for can I

this are to long-term future year on our of are For growth. the basically way challenges comes chain hope Hopefully least have you we moment. and the have about believe a pretty up good else continue us, foreseen. year, at great changes and I at that I nothing the cannot a and the the truly be which we -- feeling excited year thank about with for that. us overcome all supply In joining being any this that we day. case

Operator

for today's joining you Thank call.

your disconnect lines. now may You

VIA optronics (VIAOY) 29 Jun 222022 Q1 Earnings call transcript