Earnings Call FY2024 2 12.05.2025 ADS-TEC Energy © Disclaimer Cautionary Language Regarding Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified using words such as "may," "might," "will," "would," "could," "should," "forecast," "intend," "seek," "target," "anticipate," "believe," "expect," "estimate," "plan," "outlook" an ...

Financial Data and Key Metrics Changes - The company achieved a revenue of EUR 110 million for the full year 2024, compared to EUR 107.4 million in 2023, representing a growth of approximately 2.5% [18][19] - Positive gross profit and positive adjusted EBITDA were reported for the first time, with a gross margin of EUR 90.4 million (70.7%) compared to a loss of EUR 9.2 million (-2.7%) in 2023 [20][23] - Operating cash flow improved significantly from EUR -20.7 million to EUR 16.3 million, marking an improvement of EUR 12 million when accounting for capitalized R&D [21][22] Business Line Data and Key Metrics Changes - Service revenues nearly tripled from EUR 2 million in 2023 to EUR 5.6 million in 2024, driven by a growing base of installed fast charging solutions [19][20] - The customer base increased by over 200%, reaching 55 customers across Europe, the USA, and Canada [19][25] Market Data and Key Metrics Changes - The company noted improved momentum in North America, winning new customers and expanding its market presence [12] - The market for electric vehicles (EVs) is showing signs of recovery after a downturn, indicating potential growth opportunities [29] Company Strategy and Development Direction - The company aims to strengthen partnerships with existing and new customers while focusing on recurring revenue streams [4][25] - A shift towards a full-service provider model is being implemented, allowing the company to operate and own infrastructure projects [10][14] - The strategy includes a focus on large-scale battery storage projects, with plans for a significant project exceeding 500 megawatts [16][41] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of flexibility in operations and the ability to adapt to local market regulations [30][32] - The overall market remains volatile, but the company is optimistic about long-term growth opportunities despite short-term challenges [9][34] Other Important Information - The company secured a convertible note of EUR 50 million and extended existing shareholder loans, providing additional financial resources for growth [24][25] - Several awards were received in 2024, highlighting the company's recognized technology and innovation [22][23] Q&A Session Summary Question: What are some challenges and opportunities for companies like ADS Tech? - Management highlighted ongoing transformation in the market and the return of EV demand as key opportunities, while also noting regulatory challenges [28][29][30] Question: How do you see the competition with large corporations in the same business? - Management clarified that the company does not aim to be a utility but rather a strong partner for utilities, focusing on decentralized solutions [35][36][38] Question: Can you provide some view on the financials for the large 500 megawatt project? - Management stated that the project is under development, with site access secured and grid connection applications expected to be fulfilled in 2025 [39][41] Question: Could you expand on how the EUR 50 million financing will impact new shares? - Management explained that the convertible note will be exchanged for shares, with the price determined in the coming months [44][45] Question: Will the change in strategy impact short-term financials? - Management emphasized that the strategy is not a change but an expansion of existing operations, with a focus on maintaining partnerships [47][49] Question: How many operational charges are planned for 2025? - Management indicated plans to acquire between 100 and 500 operational sites, with installation timelines dependent on funding and site access [55][56]

Financial Data and Key Metrics Changes - The company achieved a revenue of EUR 110 million for the full year 2024, an increase of approximately 2.5% compared to EUR 107.4 million in 2023 [18] - Positive gross profit and positive adjusted EBITDA were reported for the first time, with a gross margin of EUR 90.4 million (70.7%) compared to a loss of EUR 9.2 million (-2.7%) in 2023 [20] - Adjusted EBITDA improved from a loss of EUR 38.1 million to a positive EUR 2.2 million [21] - Operating cash flow significantly improved from a loss of EUR 20.7 million to a positive EUR 16.3 million [21] Business Line Data and Key Metrics Changes - Service revenues nearly tripled from EUR 2 million in 2023 to EUR 5.6 million in 2024, driven by a growing base of installed fast charging solutions [19] - The customer base increased by over 200%, reaching 55 customers across Europe, the USA, and Canada [19][25] Market Data and Key Metrics Changes - The company noted improved momentum in North America, winning new customers and expanding its market presence [12] - The market for electric vehicles (EVs) is showing signs of recovery after a downturn, indicating potential growth opportunities [28] Company Strategy and Development Direction - The company aims to strengthen partnerships with existing and new customers, focusing on a resilient business model with multiple revenue streams [6][25] - Plans to develop large-scale battery storage projects are underway, with a significant project of over 500 megawatts in Europe expected to start in 2025 [16][41] - The company is transitioning to a full-service provider model, managing complete infrastructure projects for clients [10] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of flexibility in operations and the ability to adapt to local market regulations [30] - The overall market for charging and energy trading is expected to grow, with flexibility becoming increasingly valuable [62][63] Other Important Information - The company secured a convertible note of EUR 50 million to support its growth strategy and operational investments [24] - Several awards were received in 2024, including the German Innovation Award and the Green Product Award, highlighting the company's recognized technology [22] Q&A Session Summary Question: What are some challenges and opportunities for companies like ADS-TEC? - Management highlighted ongoing transformation in the market and the return of EV demand as opportunities, while also noting regulatory challenges and market volatility [28][30] Question: How do you see competition with large corporations in the same business? - The company positions itself as a strong partner rather than a utility, focusing on enabling others to participate in the market [34][36] Question: Can you provide financial details on the large-scale battery project? - The project is under development, with site access secured, and further steps will involve applying for grid access [39][41] Question: How will the EUR 50 million financing impact new shares? - The financing will be through a convertible note, with details on share conversion to be determined in the coming months [45] Question: Will the change in strategy impact short-term financials? - Management clarified that the strategy is an expansion rather than a change, maintaining focus on the existing business model while exploring new opportunities [47][51] Question: How many operational chargers are planned for development in 2025? - The company anticipates acquiring between 100 to 500 operational sites, with installation progressing as quickly as possible [56]

Company Classification and Growth - The company is classified as an "emerging growth company" and will remain so until total annual gross revenue reaches $1.235 billion or other specified conditions are met[117]. Geopolitical Risks - The ongoing military conflict in Ukraine may adversely affect the company's operations and expansion plans in the European Union, leading to market disruptions and increased commodity price volatility[120]. - The conflict between Israel and Hamas has negatively impacted the global economy, which could affect the company's financial performance despite limited direct exposure to the Middle East[122]. - The company faces risks from the conflict between China and Taiwan, particularly regarding semiconductor supply chain disruptions that could increase costs and delay product deliveries[124]. Economic and Market Conditions - Inflationary pressures and market fluctuations, including tariffs, could increase operational costs and affect the company's ability to pass these costs onto customers[126][127]. - Economic instability and fluctuations in currency exchange rates may adversely affect consumer demand and operational costs, impacting the company's financial performance[130]. - Market opportunity estimates for the EV and battery storage market are subject to significant uncertainty, which could impact the company's growth forecasts[134]. Demand and Adoption of Electric Vehicles - The demand for electric vehicles (EVs) is influenced by various factors, including fuel economy standards and consumer acceptance, which could affect the company's product demand[135]. - The company’s future growth is dependent on the rapid adoption of EVs, which is influenced by changing technologies, government regulations, and consumer behavior[138]. - Future growth is dependent on the rapid adoption of decentralized renewable energy, with market demand for battery energy storage systems being uncertain[148]. - The EV and battery energy storage market relies on government incentives, and any reduction or elimination of these benefits could adversely affect demand[150]. Product Development and Innovation - The company must continuously innovate and develop new products to keep pace with rapid technological changes in the market[151]. - The company incurred research and development costs of EUR 1.7 million, EUR 2.8 million, and EUR 9.0 million for the fiscal years ended December 31, 2022, 2023, and 2024 respectively, indicating a significant increase in investment for future product development[172]. Operational Risks - The company faces risks related to lithium-ion battery safety, including potential fires and adverse publicity that could impact business prospects[142]. - Expansion into battery energy storage systems introduces asset, operational, and financing risks that may affect revenue and earnings[143]. - Changes in energy storage standards or the success of alternative technologies could negatively impact demand for the company's products and services[144]. - The company faces risks related to defects in its High-Power-Charger and battery storage systems, which could lead to product liability claims and adversely affect its business and reputation[168]. - The complexity of the company's software platform, developed over a decade, may lead to undetected defects or errors that could impact market adoption and customer satisfaction[169]. Customer Relationships and Sales Strategy - The company is substantially dependent on its direct sales force for customer acquisition and plans to expand this force, but faces challenges in recruiting and training sufficient personnel[176]. - The company anticipates fluctuations in financial results due to concentrated customer relationships, which could lead to significant risks if major customers reduce or cancel orders[183]. - In 2024, the company aims to diversify its customer base, with a goal of having four customers each accounting for about 10% of total revenue, as opposed to previous concentrations where two major customers accounted for approximately 55% of revenue[178]. Financial Reporting and Internal Controls - The company has identified material weaknesses in its internal control over financial reporting, which could impair compliance with financial reporting requirements for publicly traded companies[190]. - Management is responsible for maintaining adequate internal control over financial reporting, with several material weaknesses identified in disclosure and internal controls[192]. - A remediation plan is in place to improve internal control over financial reporting, including hiring additional staff and engaging external accounting experts[193]. - Even after remediation, management does not expect internal controls to prevent all errors and fraud, providing only reasonable assurance[196]. - Failure to comply with Section 404(a) of the Sarbanes-Oxley Act could harm the company's ability to produce timely and accurate financial statements[197]. - EUSG restated its previously issued financial statements due to improper valuation of Public Shares, indicating a material weakness in internal control[200]. Legal and Compliance Risks - The company faces potential litigation or disputes arising from restatements and material weaknesses in internal control over financial reporting[203]. - Being subject to U.S. reporting requirements incurs significant legal and accounting expenses, impacting operating results[211]. Shareholder and Equity Considerations - The concentration of ownership by two shareholders, who own approximately 59.8% of the outstanding Ordinary Shares, may influence corporate governance and strategic decisions[218]. - The Company may issue additional Ordinary Shares or equity securities without shareholder approval, potentially diluting existing ownership interests[223]. - The market price of the Ordinary Shares may decline if a significant number of shares are sold following the exercise of registration rights by certain shareholders[214]. - The Company does not intend to pay dividends on Ordinary Shares in the foreseeable future, and if dividends are declared, they may be subject to a 25% Irish dividend withholding tax[244]. Financing and Capital Structure - The Company issued a total of 1,716,667 May 2023 Financing Warrants, 1,500,000 August 2023 Financing Warrants, and 4,633,335 August 2024 Financing Warrants, with 143,333 of these warrants exercised as of the report date[214]. - The Company agreed to issue senior secured convertible notes totaling $53,763,441 and warrants to purchase up to 1,116,072 Ordinary Shares as part of the May 2025 Offering[215]. - The issuance of Ordinary Shares for the conversion of 2025 Convert Notes may lead to significant dilution for existing shareholders[265]. - The company received $15 million from the May 2025 Offering, with an additional $35 million contingent on achieving specific milestones[263]. Tax and Regulatory Risks - Future changes in U.S. and foreign tax laws could adversely affect the Company's financial performance and operations[230]. - The Company is subject to the Irish Takeover Rules, which regulate takeovers and ensure fairness among bidders[256]. Miscellaneous Risks - The company has granted a first priority security interest in substantially all of its assets, which could adversely affect its ability to operate[268]. - If the company fails to generate sufficient cash flow, it may need to seek alternative financing, potentially leading to bankruptcy or liquidation[269].

Core Viewpoint - ADS-TEC Energy PLC (ADSE) is identified as a promising momentum stock with a Momentum Style Score of A and a Zacks Rank of 2 (Buy), indicating strong potential for outperformance in the near term [2][6]. Company Performance - Over the past week, ADSE shares have increased by 19.96%, significantly outperforming the Zacks Technology Services industry, which rose by only 0.45% during the same period [3]. - In a longer time frame, ADSE's monthly price change is 6.2%, compared to the industry's mere 0.1% [3]. - For the past quarter, ADSE shares have risen by 6.29%, and over the last year, they have surged by 94.83%, while the S&P 500 has only increased by 3.97% and 34.89%, respectively [4]. Trading Volume - The average 20-day trading volume for ADSE is 123,509 shares, which serves as a bullish indicator when combined with rising stock prices [4]. Earnings Outlook - In the last two months, one earnings estimate for ADSE has been revised upward, while none have been revised downward, leading to an increase in the consensus estimate from -$0.17 to -$0.07 [5]. - For the next fiscal year, one estimate has also moved upwards with no downward revisions noted [5].

Group 1 - ADS-TEC Energy PLC (ADSE) is a notable stock in the Business Services sector, currently holding a Zacks Rank of 2 (Buy) [2] - The Zacks Consensus Estimate for ADSE's full-year earnings has increased by 64.3% over the past three months, indicating a positive shift in analyst sentiment [2] - Year-to-date, ADS-TEC Energy PLC has achieved a return of approximately 52.7%, outperforming the average gain of 17% in the Business Services group [2] Group 2 - CRA International (CRAI) has also shown strong performance in the Business Services sector, with a year-to-date return of 69% [3] - The consensus EPS estimate for CRA International has risen by 12% over the past three months, and it currently holds a Zacks Rank of 1 (Strong Buy) [3] - ADS-TEC Energy PLC is part of the Technology Services industry, which has seen an average gain of 28.8% this year, further highlighting its strong performance [3] Group 3 - Investors are encouraged to monitor both ADS-TEC Energy PLC and CRA International for their potential to maintain solid performance in the Business Services sector [4]

Stock Performance and Technical Analysis - ADS-TEC Energy PLC (ADSE) has experienced a significant decline of 17.3% over the past four weeks, indicating strong selling pressure [1] - The stock is currently in oversold territory with an RSI reading of 26.13, suggesting a potential trend reversal as the selling pressure may be exhausting itself [3] - The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements, with a reading below 30 typically indicating an oversold condition [2] Fundamental Analysis and Earnings Estimates - Sell-side analysts covering ADSE have raised earnings estimates for the current year, leading to a 61.5% increase in the consensus EPS estimate over the last 30 days [4] - The upward trend in earnings estimate revisions often translates into price appreciation in the near term [4] - ADSE currently holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 stocks ranked based on earnings estimate revisions and EPS surprises, indicating a potential turnaround [4] Market Sentiment and Investment Opportunity - Wall Street analysts strongly agree that ADSE will report better earnings than previously predicted, supporting the case for a potential rebound [1] - The combination of technical indicators (oversold RSI) and fundamental improvements (earnings estimate revisions) suggests a favorable entry point for investors looking to benefit from a potential price rebound [2][3][4]

Group 1 - The profile is managed by Manika Premsingh, who leads the investing group Green Growth Giants and has over 20 years of experience in investment management, stock broking, and investment banking [1] - The article does not provide specific investment recommendations or advice, emphasizing that past performance is not indicative of future results [2] - The analysts contributing to the article may include both professional and individual investors, who may not be licensed or certified [2]

Revenue and Profitability - Revenue for the six months ended June 30, 2024, increased to €79,263k from €38,276k in 2023, representing a growth of 107%[1] - Gross profit improved to €15,672k compared to a loss of €531k in the same period last year[1] - Operating result showed a loss of €4,960k, significantly better than the loss of €19,992k in 2023[1] - The company reported a diluted loss per share of €0.84, compared to €0.59 in the previous year[1] - Total comprehensive income for the period was -€45,226k, worsening from -€28,742k in 2023[1] Financial Position - Total assets increased to €129,189k from €124,408k as of December 31, 2023[2] - Cash and cash equivalents decreased to €23,691k from €29,162k at the end of 2023[2] - Total liabilities rose to €131,061k from €90,489k, indicating a significant increase in financial obligations[4] - Retained earnings declined to -€191,216k from -€136,117k, reflecting ongoing losses[4] Financial Performance - Net finance result worsened to a loss of €39,413k from a loss of €10,800k in the previous year[1]

Financial Data and Key Metrics Changes - The company reported a revenue increase of 107% year-over-year, reaching €79.3 million for the first half of 2024, with Q2 revenue at €42.4 million [4][35][36] - Adjusted EBITDA for H1 2024 was positive at €3.6 million, a significant improvement from a negative €14.3 million in the previous year [40][42] - Gross profit for H1 2024 was €15.7 million, with a gross margin of 19.8%, compared to breakeven in H1 2023 [38] Business Line Data and Key Metrics Changes - The majority of revenue was generated from charging products, specifically ChargeBox and ChargePost, which accounted for most of the total revenues [36][37] - The company has produced and delivered over 2,500 high power charging points, indicating strong operational performance [4][42] Market Data and Key Metrics Changes - Most revenue originated from Europe, highlighting the region's lead in EV adoption compared to the U.S. [37] - The company noted a significant broadening of its customer base, with increasing investments from financial institutions in the charging business [37] Company Strategy and Development Direction - The company is focused on providing intelligent, decentralized flexibility platforms for energy management, rather than just charging solutions [5][6][17] - The strategy includes expanding into new markets and enhancing service offerings, with a strong emphasis on customer partnerships and long-term relationships [18][19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing growth of the EV market and the importance of flexibility in energy systems [45][59] - The company anticipates continued positive momentum in the second half of 2024, with expectations for increased sales revenues and positive EBITDA for the full year [41][42] Other Important Information - The company is preparing for expansion in North America, with plans to establish local production to comply with "Buy America, Build America" regulations [54][67] - The management highlighted the importance of diversifying revenue streams beyond just charging to mitigate risks associated with market volatility [59] Q&A Session Summary Question: What will be the biggest challenge for ADS-TEC and the competition in the next one or two years? - Management indicated that the transformation to decentralized energy systems and the clarity of political support will be crucial for future growth [45] Question: What percentage of revenue in the first half of the year came from Germany, and how will that change in the second half? - Approximately three-quarters of revenue in the first half came from Germany, with expectations for changes in the second half [47] Question: Could you describe your capacity to fulfill demand growth in the next two to three years? - The company has a production capacity of 5,000 to 10,000 systems per year, indicating sufficient spare capacity for the next one to two years [48] Question: How does ADS-TEC expect to finance growth? - The company plans to utilize capital markets and existing shareholder support for financing, with a focus on becoming bankable for future growth [50][51] Question: Can we get an update on your business development efforts in the U.S. market? - Management confirmed ongoing projects in the U.S. and a cautious approach to expanding operations, emphasizing the need for market readiness [52][54] Question: How do you intend to mitigate against an increasingly volatile EV market? - The company aims to integrate multiple revenue streams beyond charging to reduce dependency on EV utilization [59] Question: Can you expand on the decrease in SG&A year-over-year? - SG&A has relatively decreased, with expectations for increases in line with revenue growth, but at a lower rate than revenue growth [60][61] Question: What are the updates on the expansion towards the residential segment? - The company has decided not to enter the residential market, focusing instead on commercial and industrial (C&I) business [63][64] Question: Will you need further investments/capital in the next two years? - Expansion in the U.S. will require additional financing, while ongoing operations are approaching breakeven cash flow [66][67]