Hello, everyone, and welcome to Wallbox' First Quarter 2023 Earnings Conference Call and Webcast. My name is Charlie, and I'll be coordinating the call today. [Operator Instructions] I would now like to turn the call over to Matt Tractenberg, Wallbox' Vice President of Investor Relations. Matt, please go ahead.

Thank you, and good morning, and good afternoon to everyone listening in. Thank you for joining today's webcast to discuss Wallbox' first quarter 2023 results. This event is being broadcasted over the web and can be accessed from the Investors section of our website at investors.wallbox.com. I'm joined today by Enric Asuncion, Wallbox' CEO; Jordi Lainz, our CFO; and Douglas Alfaro, our new Chief Business Officer. Earlier today, we issued our press release announcing results from the first quarter ended March 31, 2023, which can also be found on our website. Before we begin, I'd like to remind everyone that certain statements made on today's call are forward-looking, that may be 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. 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 the Post-Effective Amendment No. 3, to our Registration Statement on Form 20-F filed on March 31, 2023, which can be found on our website at investors.wallbox.com. and on the SEC website at www.sec.gov. We will be presenting unaudited financial statements in IFRS format that reflect management's best assessment of actual results. Also, please note that we use certain non-IFRS financial measures on this call, and reconciliations of these measures are included in the presentation posted on the Investors section of our website. Also, a copy of these prepared remarks can be obtained from the Investor Relations website under the Quarterly Results section, so you can more easily follow along with us today. So with that out of the way, I'll turn it over to Enric.

Thank you, Matt, and thanks, everyone, for joining us today. In addition to reviewing highlights from the first quarter 2023, we will spend some time discussing our rapidly evolving product portfolio and road map. I will provide an update on our path to profitability, and Douglas will join us to discuss the key competitive advantage he's going to leverage in his new role. Jordi will then step in and offer additional detail on our quarterly performance and offer some insight on our balance sheet as well as some guidance on expenses and CapEx. And finally, I will return to the current market outlook and how it impacts our guidance for the second quarter and full year 2023. We will end by taking questions from our covering research analysts. So let's get started. The first quarter finished within our expected range at €35.1 million, representing growth of 24% on a year-over-year basis. A few comments on Q1 results. The quarter played out as we anticipated and ended within the expected range. Today, our focus is on cutting costs, strengthening our balance sheet, forging new partnerships and bringing new products to market. The markets in which we participate remain strong on a consolidated basis, yet somewhat variable when looking at individual countries. That is not unusual given where each is on the adoption curve. We are encouraged by the resiliency in Europe this quarter and will continue to watch for some more signs of strength and consistency. EV deliveries increased by 55% in the U.S. and 18% in Europe, both on a year-over-year basis. Our sales increased by 126% and 18% in those regions, respectively, enabling us to expand market share in the U.S. and maintain our position of strength in Europe. Q1 revenue of €31.5 million grew by 24% on a…

Thanks, Enric. Good morning, and good afternoon, everyone. Wallbox has done exceptionally well executing its existing go-to-market strategy. We've accomplished something few companies have, which is to achieve a dominant position in highly competitive and fast-growing markets, like our progress in Europe, where we're the largest player by unit volume in the residential segment. And because of this, we want to be careful to leave untouched what's working well. But at the same time, we're in a great position to implement strategies to grow, evolve and improve. And so we identify those small nuanced changes that can often make a meaningful difference, especially at the point we're at. That point is an inflection, not just because EV adoption is finally happening at scale or because of massive public investment that's coming, but because of the strengths we've built and can control. The strengths we'll leverage include our leading market presence, access to new verticals and offerings through the new products we're introducing, our comprehensive portfolio and our global footprint. Wallbox is one of the top players in each of the markets we operate in. In many countries, we hold a leadership position that allows us to establish partnerships with brands that have become household names, names like Uber, Nissan, Walmart, Best Buy, Sam's Club, Rexel, SunPower and Iberdrola. The customer list we have is world-class and also varied, and that opens doors to discussions that don't exist if you're the sixth or eighth largest player. The competitive landscape is often crowded, but single segment products that lack brand presence, intelligence and reliability will not win in the marketplace. We've built a reputation for a high-quality and innovative product portfolio, and that presence is something very valuable that we work to leverage even further with both our expansive list of existing…

Thank you, Douglas. Good morning, and good afternoon to everyone. Our first quarter results came in as expected, and we are aggressively pushing ahead on several strategic initiatives previously shared with you. I will provide more detail on those results, discuss some financing activities we've announced and share some thoughts on the remainder of the year. For the first quarter 2023, revenue was €35.1 million, a 24% increase from the year ago period, driven by geographic mix, new products and M&A, slightly offset by channel inventory management and the timing of several large deals at the end of the quarter. The seasonal pattern played out as anticipated. However, we are encouraged by better delivery rates by the European OEMs. And while one point does not make a trend, it's positive and one we'll continue to watch for relief within the supply chain. Depending on the geography, we grew with or well in excess of the market growth within the regions we participate in and achieved our objectives. Now let me share with you some key highlights that drove our results. First, our regional mix continues to improve upon the benefit of geographic diversification. North America accounts for 16%, up from 9% in the prior year period, and Europe represents 80% of our revenue mix, down from 85% last year. Asia Pacific is currently 2%. Latin America is 1%. The latter two are subject to large swings given their smaller bases, but will continue to grow over time. We expect the shift to North America to continue, especially as subsidies begin to flow in 2024. An exciting data point for the quarter was our entry into the Japanese market. It's a challenging market to break into given the unique requirements, but we've been working hard to develop the right product and…

Thanks, Jordi. The long-term fundamentals of the markets we operate continue to be overwhelmingly positive. EV adoption is finally becoming a reality. And as production ramps up and the infrastructure is able to support it, ICE vehicles will become a thing of the past. It's a once-in-a-lifetime market disruption, and we have a front-row seat. Wallbox is a leading global brand with an exceptional portfolio. Balancing the short-term needs of the business, while ensuring the long-term potential remains, is our main objective today. Market uncertainties will always exist, but we believe we are doing the right things and navigating them well by defending and capturing market share, expanding margins, reducing inventories and optimizing our cost structure. As we said last quarter, 2023 is about getting in shape to be able to catch the massive wave we see ahead. It's an exciting time for us, and we are focused on what we control and influence. With that said, for the second quarter of 2023, we anticipate revenue within the range of €40 million to €50 million. We also continue to expect full year 2023 revenue to be between €240 million and €290 million, representing growth between 60% and 100%. Given the volatility we see in the market today, we will anticipate tightening this range on our next earnings call. Linearity of first half versus second half 2023 will equate to roughly 1/3 versus 2/3. It is not uncommon to see a 40/60 split. So while this pattern is slightly more back half-loaded than normal, there are a number of factors that give us increased confidence. First, our partners are installing more chargers than ever see, which is quickly bringing channel inventory to the right level. Second, all the new products coming to market this year. Third, the multiple new revenue streams opened by those new products. Fourth, the competitive landscape is rapidly changing, creating opportunities that we are aggressively capturing. And finally, the new partnerships which we are already benefiting from. Regarding gross margin, we expect Q2 to be approximately flat on a sequential basis and continue to model approximately 38% for the full year. With that, we are ready to take questions from our analysts.

[Operator Instructions] Charlie, I think you have some instructions for everybody before we start.

[Operator Instructions] Our first question comes from Marianne Bulot of Bank of America. Marianne, your line is open. Please go ahead.

Thank you very much. Good afternoon all of you. Thank you for taking the question. I was wondering if you could just remind us the difference in terms of gross margin between the different Supernova chargers, Generation 1, 2 and 180, and kind of the path towards the increasing in gross margin for the different products.

Okay. Thanks, Marianne. So basically, all products we launched follow a gross margin profile based on the maturity of the product. So in general, when we launch a new product, as we ramp up production, we improved the designs. The gross margin is below 20%, and sometimes for the case of Gen1 is around the 10%, okay?Gen2, we decided to radically improve gross margins. We decided to do a second generation of Supernova with all the things we learned in the production line and to make it more automatized. So Gen2 goes right away to gross margins above 30%. And we expect, as we end the year, getting them close to the 40s. So we get similar margins like we will have on AC products. So - because we had to do a big jump in terms of gross margin for the DC line, fast charging line, we decided to go to these next generation of products. When it comes to Supernova 180, actually, Supernova 180 uses the same hardware, exactly the same hardware than Supernova 150. Because Supernova 150 has the capability to achieve 180. However, it requires further certification and some changes that - to achieve the 180. So the main difference between Supernova 150 and 180, apart from some country-specific stuff that requires - that's been required in the U.S., it's exactly the same hardware. It's only a certification issue to carry that 180. So Supernova 180 is going to benefit directly from the gross margins we are seeing today in Supernova Gen2, 150.

Okay. That's super clear. And just a quick follow-up, if I may. Could you confirm if you expect to reach positive EBITDA for the full year 2023 or just by the end of the year, meaning Q4 only?

So we said last quarter that our goal is to achieve Q4 only adjusted EBITDA breakeven, and we expect for the 2024 on a full year basis to be profitable. So these are the two commitment we have.

Okay, thank you. I'll go back into queue.

Thank you. Our next question comes from George Gianarikas of Cannacord Genuity. George, your line is open. Please go ahead.

Thank you for taking my questions. I'd like to first focus on the second half versus first half guidance and whether or not you can just sort of illuminate us a little bit more on the inventory situation that you mentioned is you're quickly bringing to the right levels. What kind of data can you share a little bit more granular as to how that's working itself out in the channel between this quarter and next quarter?

Yes. Thank you, George. Basically, when we talk about channel inventory, this is the inventory that have our distributors in their warehouses, okay? During the second half of last year, our partners increased their inventory levels, forecasting a stronger second half for 2022. And we knew that EV deliveries didn't achieve what we expected last year. At the end, this forecast in terms of deliveries they expected did not materialize, okay? So we started 2023 with a higher channel inventory than we will have liked. We have access to the data in myWallbox in our platform of every charger that is installed. So every time a charger is installed and it's powered up, we get the data to our platform. So we know how many chargers our partners and our installers are installing every day, every hour. We have all this data. The data we have today is that we are selling in Q1 - we sold in Q1 more chargers than ever in the company. So actually, our partners sold more chargers than ever. I'm going to clarify that. Our partners installed and sold more chargers than ever. However, they have been going through their own inventory. We expect in Q2 at the end of this quarter that all partners will have - or almost all of them will have healthy levels of inventory. That depends obviously on the country. There are some countries - for example, Australia has higher levels because it takes more time to write products. Countries that we have our warehouse, inventory levels that are healthier, lower. So we have different levels depending on the geographic location. But we expect by the end of this quarter to achieve this healthy level. So when we look into the second half, we are very encouraged by this.…

As a follow-up, you mentioned the competitive landscape both in those comments and in the press release. I was wondering if you had any color on what's happening in Northern Europe. One of your competitors, Easee, had a difficult time with its product safety. And to the extent you could share any comments on - and any color on how that's creating an opportunity for you in those countries, that would be appreciated. Thank you.

Yes. So what we are seeing is that countries are starting to be more focused on the safety of the products we manufacture. In that case, the Swedish authorities review deliver EV chargers in the Swedish market. And obviously, we were part of these four companies that they were reviewing. And all of us at the end, we passed this test, and we were considered safe than this. But apparently, there's a dispute with Easee, and the authority is saying that the product cannot be sold in the Swedish market. Obviously, first of all, that put us as a leader in Europe in terms of sales. We are the number one today company selling home chargers in Europe. And obviously, that's very good news. But secondly, give us additional opportunity. If one competitor like Easee, which was having considerable numbers in terms of sales, now cannot sell in one of their biggest market. And this is market where we are well positioned is giving us obviously a huge opportunity for us. So there's news coming. There's new partnership we made in Sweden due to this change on the competitive landscape. So we are planning to announce news about partnerships we made that will allow us to sell huge volumes of these products in the Swedish market. And we believe that this is going to continue at the end. More countries are looking into safety and looking into the products, and that's why we focus on certification, we focus on quality and we focus on improving our products constantly and launching new products.

Thank you. Our next question comes from Ben Kallo of Baird. Ben, your line is open. Please go ahead.

Hi, good day, and thanks for taking my question. Just maybe more on the competitive landscape. Could you just discuss maybe bidirectional charging and how it's developing across regions, and how you look at what different OEMs and their acceptance to the technology? And then I know you've had success in Europe with utilities. But how is North America going in terms of bidirectional charges with utilities and their acceptance of the 2?

Okay. Thank you, Ben. Actually, we haven't spoke about bidirectional charging in this call because we had so many products to talk about that I think there was too much. But it's - we - I think I explained this a couple of calls ago, but I will repeat it to clarify everyone listening. We have one product that's called Quasar, Quasar 1. That is a bidirectional charger that works with CHAdeMO cars. CHAdeMO cars - there are a few CHAdeMO cars today that use this standard, the CHAdeMO protocol, which are Nissans and Mitsubishis. This is a product we've been selling in Europe, very successful. But today, remote cars that are coming into the U.S. and in the European market come with what's called the CCS standard. That's the connector we have for charging any car that's been sold in Europe and the U.S. today. This protocol doesn't allow straight away bidirectional charger - bidirectional charging you require today to partner with an OEM to make sure you can discharge the car. And we signed during this first quarter, [5/1/2023], a partnership with an OEM where we can discharge multiple of their brands. So today, Quasar 2, which is the product we are launching for bidirectional CCS charging, can discharge these manufacturer different brands. These are very big European - one of - obviously, leader in European car manufacturer. And there's other partnerships we are working with Korean companies. You will have news by the end of the year once we announce the launch of this product with this car manufacturer. So our goal, because this is very tight to a car manufacturer because the standard still is not available for all the car manufacturers, we are going to launch the product together with the car manufacturer and pay it together. So you sell - they sell the car, and they will offer a Quasar as a possibility to use the battery of the car to power the home, okay? So we have the contract signed, and we are working to make sure we can launch it at the end or at the beginning of next year. Very exciting times. And then when we go to the U.S., same thing we are doing. Right now, we are working with car manufacturers, showing the technology. We had last quarter a couple of days where we invited almost any American OEM car manufacturer to show the technology of Quasar 2. We used some vehicles to - as a demo. The feedback we had was that - it was the first time that they saw a CCS car being discharged. They never show it. That's the OEM, basically. And we expect this to happen in the U.S. as we move into 2024, launching this product, because, again, it requires a synchronized launch with the car manufacturer.

Yes, Ben. We spoke, I think, on the last call about a pilot program in California with homebuilders and utility companies. And I think we have so much to get through on this call that we just didn't have time for it. But we'll try and provide you and others an update on our next call or during the quarter at a public event, okay?

Great. Thank you. And my follow-up is just - is on channels and if - in the industry overall, how exclusivity works, if it does. And so as you talked about the OEM that you're working with - a deal with, for example, or a utility or other channels on power, is exclusivity a part of how you guys do deals in the industry? Or is it not? And maybe you could talk about different channels.

It's not. We don't have in Europe or in North America any agreement of exclusivity with the company, any company. We do have for a short-term period or maybe one year and two years on new markets. So maybe if we go to Latin America, a new market where we are just launching or a new Asian market that's small and we are launching, often, we do an exclusivity partnership because we help the partner develop, and we go hand by hand because this is a market that needs development. But in North America or Europe, we don't have an exclusivity agreement.

That's by design.

By design.

Thank you. Our next question comes from Brian Dobson of Chardan Capital. Brian, your line is open. Please go ahead.

Hi, thanks very much for taking the question. So in the past, you've spoken about exiting higher-cost sales channels and moving to better margin channels. Could you maybe give us a little bit more color on how that's progressing and what you see for the future for your direct-to-consumer lines and advertising?

Yes. So I think - I'm paraphrasing here, Brian, but I think the question is just optimizing our go-to-market and where we sell those products through, making sure that we're getting appropriate margins and pricing, right?

Yes, that's right.

Perfect. Thank you, Brian. So right now, our focus is on AC chargers, where we have more inventories that we will like, is on reducing those inventories. So we are not really selective on the channels. It's actually on reducing inventories. But we are able to keep these levels of 38%, which is what we are looking for. But when we go to fast charging, it's what we have been doing. For example, Supernova Gen1, we did two things. While we talked in the call where we improved margins by launching Gen2, but also because Supernova Gen1 has a lower gross margin, we are going to channels with Supernova Gen1 now that can give us higher margins, but lower volumes. So we are paying with that. But what's important, first of all, is that the margin went up sequentially versus Q4, okay? So we are increasing our gross margin. And two, for fast charging, what pulled our margin down, we have a new product, and we have been more selective on those margins.

And Brian, I think one interesting data point - yes. Just one interesting data point that I think is - that we're watching closely is that we're beginning to see interest from our distribution partners for our DC portfolio, too. That requires a certain level of expertise, and in some cases, installation as well. But offering that comprehensive portfolio through our distribution partners is increasingly attractive to them. And so we're looking for ways to expand those relationships and get those products into market faster and more broadly, okay?

Our next question comes from Maheep Mandloi of Credit Suisse. Maheep, your line is open. Please go ahead.

Hi. Maheep here from Credit Suisse. Thanks for squeezing me in here. Just one question from my end in terms of the annual guidance implies strong ramp in the second half here. Just curious on the cadence between Q3 and Q4, if you could provide some color there. And then also, like what drives that comfort for you at this stage? Any indications from the channels or OEM launches or just - or any on the U.S. NEVI deployments. But just curious on the comfort on the guidance here.

Okay. Maheep, so regarding the third and fourth quarter, we are not providing specific guidance yet. I think it depends a lot on these new partnerships. We were talking on when some of these big orders will materialize. Obviously, we expect for it to be weaker than Q3 only because the fact that, for example, Supernova 180 is coming at the last quarter, and Hoco, it's coming in the last quarter of the year. So there's new products coming in the last quarter, but we are not providing guidance for this. And for the second question, Doug, I don't know if you will comment about the NEVI program and the IRA.

Doug, can you comment on where we are with NEVI?

Yes, absolutely. So as it turns out with the timing of the NEVI program, we're still in the stages where we're waiting for the vast majority of states to release the RFPs, for which we're well positioned to enter, especially by bringing forward a higher-volume, high-power charging system like Supernova 180, which meets the requirements of the program to be able to enter into RFP and partnerships to be able to play a part in the rollout of the NEVI program. What we're seeing is activities to be - very likely to be installed-based activities for 2024 more than 2023, and the second half of 2023 to be very likely the first announcements for, let's call it, the larger share of the states that would be proposing forward the RFPs as it relates to the NEVI program. One thing that was mentioned, however, is by being able to bring forward a product like Supernova 180, which is a higher volume, lower cost and more broadly applicable type product, it allows us to move an order book forward with customers outside of the scope of NEVI, which is a more time-bound program, into the framework of, for example, the IRA, which is not time bound and has projects that can deploy much quicker. So to the extent that products are available and delivered either to previous commitment customers, which we have, or even projects that arise between now and end of year, there are certainly opportunities on the DC fast charge side participating in North America.

Got it. And then just to clarify, are you assuming any NEVI - so you're not assuming any NEVI shipments this year, right? And do you see any IRA deliveries getting delayed as those customers want to wait for NEVI?

It's correct, Maheep. We don't have any subsidy revenue baked into our forecast this year. Thanks. Okay, Charlie, I think we have one last question.

We have a follow-up from Marianne Bulot of Bank of America. Marianne, your line is open. Please go ahead.

Yes, thank you for letting me ask the follow-up. I just wanted to know if you could share the market growth that you've seen in Europe and North America. I remember that in Q4, you said you were expecting roughly 30%, 33% growth for the full year 2023 for the market. So I was just wondering if you could provide the Q1 data and what you're expecting for the full year 2023.

Yes. Thank you, Marianne. So actually, it's very encouraging. The data we've seen, we've seen that the Europe and North America growing as expected and maybe even a little bit more. The EV deliveries in the U.S. grew by 55% on a year-over-year basis. And in Europe, they grew by 18%. These were the two matters you asked for.

Yes. And the full year forecast, the industry forecast, Marianne, have not been adjusted yet.

Okay. Thank you very much.

So I think that, that's going to be our last question, Charlie. And we want to thank everybody for joining us today, and we hope you found today's call a good use of your time. Also, please note that we're going to be very active at investor events in May and June, and so watch our website for details. If you're interested in meeting with us, you're certainly welcome to let us know, if we can help you any way - in any way. So have a great day, everyone.

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