Transcripts
ADS-TEC Energy PLC (ADSE) Q4 2022 Earnings Call Transcript
Operator
Thank you. We will now begin the question-and-answer session. [Operator Instructions]. The first question comes from Pavel Molchanov with Raymond James. Please go ahead.
Pavel Molchanov
Thank you for taking the questions and appreciate all the details in your comments earlier. Let me first ask about the outlook for 2023. Of the €100 million of revenue that you are expecting, how much was originally supposed to have come in 22?
Wolfgang Breme
Yes. Hi, Pavel. How are you? Nice talking to you. So it’s, of course, hard to assess in infrastructure business how much is shifting from one year to the other and I’ll give it over to Thomas just from some strategic aspects to that.
Thomas Speidel
Yes, Pavel. So this is — we took out from last year, because I mentioned that we had problems by end of the year with the units we have produced, but so far have not gone out to the customers. So we have been very conservative on that. So last year, if we take that on top, it has been more okay, let’s say me that one. It has been more so we have been conservative in this case.
Pavel Molchanov
Okay. And can you share how much, because we’re now in May, can you share how much revenue approximately you had in the March quarter?
Wolfgang Breme
Yes. Hi, Pavel. We are currently not sharing any quarter information, because we just finished the fiscal year audit. And we are now focusing on the numbers of the first and second quarter. And as you know, like last year, we will come out with half year numbers as soon as they’re ready.
Pavel Molchanov
Please, go ahead.
Thomas Speidel
No, I just wanted to say that in the press release we made today, that we also have stated that other new customers came in and the volume we have also disclosed. So if you look at that and take all the information you get, you might get a picture, but we are not able as there to communicate it now.
Pavel Molchanov
Okay. What is the geographic mix that you anticipate in 2023 revenue between Germany, other Europe and U.S.?
Thomas Speidel
Yes. The expectation is that in the U.S. We will be — in percentage, it will be 10% to 15%. Because why? We started in Europe many years earlier than in the U.S. And it is important to understand that. And I tried to mention that at the beginning of the call. Infrastructure business is not an off the shelf business. You have to get into detailed communication and testing phases in all the approvals. Now even if the system is certified, that doesn’t matter. It takes time. And we see in the U.S. that we have a strong pipeline, but we started with initial installations and testing and approval sites. And that is the reason why I think and that is the plan that the U.S. will have a delay in the growth, but it will be a huge market. And that is the reason why we have and that has been the right decision to start in Alabama. We have made the right decision to have our own service station in the U.S. Because systems are out and running in the U.S. and not less.
And if you ask me about 2023. So my expectation would be it’s between 10% and 15% in the U.S. But that’s not the end, it’s just the beginning. That’s difficult to understand, because if you start a new business in a new area with a new market, with not many EVs now out in the market, then it takes time. And we saw exactly the same in Europe and in Germany.
And to finally answer your question about Europe, we see it will be a distribution between Germany and also the other European countries, including Switzerland and Austria. And we also see that Great Britain is a big opportunity. The detailed share which of the country will take what, I cannot even say, because when we are, and that is our business model delivering to our customers, then normally it’s that they have the sites, and we don’t even know exactly today where they are installing the units.
So, just an example for you. If we get an order of 100 units from Amperio, which is the case, then we do not know today where the installation will be. So I just cannot tell it now. We might tell it later when the installation has been done.
Pavel Molchanov
My last question is, can we get an update please, on the residential energy product that you have been working on?
Thomas Speidel
Yes. So, as I already communicated, we have not stopped working on it on a lower level of priority, because we need all our resources for 2022, as I mentioned, first of all for the replacements on to rescue the material issue and also to get the ChargePost out as planned. So that has just been a resource issue. And the second is we are now observing that the home market is booming. Myself, I’m the President of the German Energy Battery Storage Association and we see that now more and more off the shelf products also from Asia are kicking in, and we are a little bit in an observation role, because and now we are coming back to the business model.
For ADS-TEC in our view, it makes only sense if we can get into business partnerships where we are not only asked for the hardware and the basic software, but for the complete scope, including services and long-term business cases. If it’s only going into the business in the direction of bulk ware, where price is the main focus, then I think we should reconsider and mainly concentrate on the business where we see that the company strategy can fully play out.
So have we stopped it? No. Are we pushing it right now? No as well. And are we a little bit — or are we observing what the market is doing? Yes. And if we look at the new companies are out there, you might have seen that you now can order over the internet and installers are picking up the systems. And we have seen now that they get China deliveries directly on their premises or on their side. So there’s nothing in between anymore. And that’s the reason probably why we are here a little bit in a careful or not bullish role for the company, we want to go into business, which is called for ADS-TEC.
Pavel Molchanov
Okay. Thank you very much.
Wolfgang Breme
Thanks, Pavel.
Operator
The next question comes from Matt Summerville with D.A. Davidson. Please go ahead.
Canyon Hayes
Hi. This is Canyon Hayes on for Matt Somerville. Thanks for taking my questions.
Wolfgang Breme
You’re welcome. Hi.
Canyon Hayes
Just in your pathway to sustained free cash flow positivity, how much incremental capital do you foresee needing?
Wolfgang Breme
Could you repeat it? Because I couldn’t kept really hear you.
Canyon Hayes
Sorry about that. In your pathway you sustained free cash flow positivity, how much incremental capital do you foresee needing to make that happen?
Wolfgang Breme
As we said, we do not anticipate any increase in equity in the foreseeable future. So if we achieve our goals and targets, which we have communicated in that call, we are not envisaging to raise additional equity.
Canyon Hayes
Thank you. Could I get a little bit more color on potentially why customers were not picking up orders from Alabama?
Wolfgang Breme
Yes, you can. I mean, as Thomas pointed out, some of the customers in the United States have not picked up some of the products. And as we pointed out, we are an infrastructure business. Of course, we have to be careful, because we cannot name our customers and we should not give any hints to who they are. But in infrastructure, we see cases in which customers were not successful acquiring sites, were not successful acquiring both public and private funding, and therefore they could not take the systems at that point. Let’s say in a nutshell, Thomas, what it is, isn’t it?
Thomas Speidel
Yes.
Canyon Hayes
Great. Thank you for that color.
Wolfgang Breme
Please go ahead, operator.
Operator
Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Wolfgang Breme for any closing remarks.
Wolfgang Breme
Okay. Thank you, operator. Ladies and gentlemen, this ends our ADS-TEC Energy’s 2022 earnings call. Thank you very much for joining and for your continued interest in our business. Stay tuned and have a good day wherever you are. Bye-bye.
Operator
The conference has now included. Thank you for attending today’s presentation. You may now disconnect.