Thank you. Welcome everyone to the conference call fourth quarter and full year results 2023.

We have in the meeting room also Alba Morganti, CFO. Let me walk over the most important items in the past quarter and the full year.

Let's start with the quarter. In the fourth quarter, X-FAB recorded revenues of 237 million, up 29% year-on-year and 2% quarter on quarter, which is in line with the guidance.

Excluding the negative impact of revenue recognition over time amounting to minus 2 million The fourth quarter invoiced revenue came in at 240 million. This is an increase of 7% quarter-on-quarter, including the IFRS and year-on-year, this is an increase of 31%.

And this is a great result looking at the overall semiconductor industry. CMOS revenues in our core markets, automotive, industrial, medical amounted 222 million, up 38% year-on-year, representing now a share of 93% of revenues.

Now, let's look at the full year '23. We achieved the revenues of 970 million, up 23% year-on-year, including 17 million in revenues recognized over time.

Annual turnover in X-FAB key end markets totaled 812 million, up 31% year-on-year and this accounts to 91% of total revenue, compared to 84% in the previous year, reflecting a successful transformation of X-FAB activities towards high growth and long lifecycle business in automotive, industrial and medical markets. X-FAB Semiconductor Technologies enabled sustainability and energy efficiency solutions to address today's megatrends such as electrification of everything to mitigate the climate change or the digitalization of health care in the context of growing and aging societies.

This is also reflected in strong demand for the broad range of specialty technologies that X-FAB is offering, including high voltage CMOS, MEMS, microsystems and silicon carbide. Bookings in the fourth quarter came in at $225 million up 17% year-on-year, and the full year order intake was $818 million up 9% compared to 2022.

At year end, the backlog amounted to $475 million. X-FAB Automotive Business continued to be very strong, and in the fourth quarter, revenues of $152 million up 45% year-on-year.

Full year automotive revenues came in at $539 million up 38% year-on-year. This increase is mainly related to the ramp up of the automotive business in our factory in France.

The French side continued the conversion of capacities into X-FAB 180 nanometer automotive technologies, plus replacing capacity that has been used to produce CCC legacy business. In the fourth quarter, 93% of X-FAB revenues in France was based on X-FAB Technologies against 84% in the same quarter last year.

From this point on, we continue to grow the capacity in our French side to about double from where we were in the last quarter. Let's now look at Industrial.

Industrial revenue in the fourth quarter came in at $54 million up 28% year-on-year. In the full year of '23, X-FAB recorded industrial revenues of $206 million up 19% year-on-year.

Contribution from silicon carbide was a key growth driver for the industrial business. With applications such as power inverters for wind, solar systems, industrial inverters or uninterrupted power supply systems.

Fourth quarter silicon carbide revenues amounted $23 million up 93% compared to previous year. For the full year '23, X-FAB's Silicon Carbide Business increased 33% to $73 million.

The total number of silicon carbide wafers produced in '23 shows a significant higher increase of 58% year-over-year. The silicon carbide revenue growth was partially diluted by the fact that a large portion of consumers produce procure the raw wafers themselves and consign them to X-FAB.

This applied to approximately 51% of the Silicon Carbide customers in the fourth quarter and resulted in a lower billing, whereas the pass through of the substrates is not in there anymore. In the fourth quarter, X-FAB recorded medical revenues of $16 million up 13% year-on-year.

And for the full year '23, it came in at 67 million, up 21% year-on-year. Semiconductor Technology is key for digital transformation and efficiency improvements in the healthcare sector.

And X-FAB's medical business is benefiting from the increasing use of wearable medical devices as well as growing demand for testing and point of care. Among the growth drivers for '23 were infrared temperature sensors as well as DNA sequencing applications.

X-FAB capabilities to combine CMOS and MEMS technology as well as altogether in system integration expertise is a great value driver for Innovative Medical Solutions, as well as a major growth driver for MEMS Medical Business. Revenue of MEMS Microsystems MEMS business was in the fourth quarter amounted to 28 million, up 43% year-on-year, while the whole 2023, it came in at 95 million an increase of 26% from the previous year.

In addition, various medical applications and next two various medical application also the MEMS started volume production for an automotive headlamp application that positively contributed this past quarter. The X-FAB CCC business reached a sustainable level, recording now 17 million in the last quarter, which is down 21% year-over-year and flat sequentially.

Prototyping revenues in the fourth quarter came in at 27 million, up 16% year-on-year. In 2023, they amounted 109 million, up 19% year-on-year.

The prototyping revenues represent new business adding up to the pipeline of new projects and supporting X-FAB's future growth. The lower revenue guidance for the first quarter in 2024 reflects the faster than expected decline in demand for older 150 millimeter CMOS technologies due to inventory adjustments, primarily in the industrial end segment.

And in the medium term, this will be overcompensated by transition to growing micro systems and silicon carbide business in these respective factories. From an operations update, I would like to add that the fourth quarter utilization rate varied by technology and site.

In X-FAB 200-millimeter CMOS and silicon carbide and MEMS systems, capacity continued to be fully loaded, while the aforementioned decline in demand for the older 150-millimeter technologies resulted in lower capacity utilization in our factory in Texas and as well as our factory in Erfurt in Germany. X-FAB ongoing capacity expansion programs progressing well and they are on schedule.

In 2023, X-FAB Texas produced 58% more silicon carbide wafers than the previous year. And in our factory in Malaysia, the building construction to increase the site capacity to by 10,000 wafer starts per month is expected to be completed at after this summer, and it is planned to start moving in equipment in the fourth quarter of this year.

Now I'd like to pass the word to Alba for the financials.

Thank you, Rudi. Good evening, ladies and gentlemen.

And now let's talk about the financial update. I would like to start this section by highlighting that the fourth quarter was another very good quarter.

As Rudi already mentioned, we had all time high sales level with $237.7 million revenue, which represents an increase of 29% year-on-year and 2% quarter-on-quarter. Our EBITDA was of almost $60 million with an EBITDA margin of 25.1%, which was within the guided 25% to 29%.

Excluding the effect of revenue recognized over time in accordance with IFRS 15 rules, the EBITDA margin of the fourth quarter would have been slightly higher and would have totalized 25.4%, representing a decline of 1.4 percentage points quarter-on-quarter, which is attributable to the various factors such as higher cost of fixed assets, increased general and administrative expenses related to the business process optimization activities, but also to the planned introduction of a new ERP system, and finally also due to higher staff cost. The full year EBITDA came in at the upper end of the guided 23%, 27% and amounted to $245.6 million with an EBITDA margin of 27.1%, which represents a very good increase if we compare it to the EBITDA margin of 18.2% that we recorded in 2022.

If we exclude the revenue recognized over time, the EBITDA margin in 2023 would have been 26.7%. X-FAB business continued to be naturally hedged in terms of currency exposure.

As a result, the profitability is not affected by exchange rate fluctuations and at a constant U.S. dollar/euro exchange rate of 1.02 as experienced in the previous year's quarter, the EBITDA margin would have been 0.1 percentage points lower.

Cash and cash equivalents at the end of fourth quarter remained strong as they amounted to $405.7 million which represents an increase of 4% compared to the end of the previous quarter. And to conclude this financial section, I would like to share our guidance for the next quarter full year.

For the first quarter of 2024, we forecast our revenue to be in the range of $215 million to $225 million with an EBITDA margin in the range of 24% to 27%. This means at the midpoint a year-on-year increase of 6%.

The full year 2024 revenue is expected to come in at the range of 900 million to 970 million with an EBITDA margin in the range of 25% to 29%. This means at the midpoint a year-on-year increase of 5%.

The aforementioned guidances are based on an average exchange rate of US$1 to euro. And now, I would like to give the word back to Rudi.

Thank you, Alba. We finished the year very successfully with above market growth rates in our core automotive, industrial and medical markets.

This shows that X-FAB with its specialty technologies is perfectly positioned to continue its growth path in the future. I'm pleased with the progress we have made in expanding our capacity to better serve our customers' demand, and 2024 will be a very important year for our capacity expansion programs, which runs through into 2025.

The consistently strong development of our prototyping revenues reflecting new business wins gives us confidence in X-FAB's future. With this operator, I terminate the introduction and we can open for questions.

I guess the first question would be around CapEx. I think you're the only auto industrial player that I know about that is spending much more capital in the current year than it did last year.

So maybe you could just walk through what gives you the confidence that there is a need for such, capacity expansion in light of the inventory correction that's going on at the moment? And I have a follow-up.

The fact of the expansions that we're doing are based on our long-term agreements that we have with our customers. And so the forecasts going forward in 2024, '25, '26, they still require these CapEx, so there is no fundamental change.

So the weakness, so we still are fully utilized and demand is still higher than what we're able to produce. And the expansion, why this year is much higher than previous year, and it will be also higher than 2025.

It's the fact at factory in Malaysia. The building will be ready for equipment move in, so just after the summer.

So in the fourth quarter, we will have a peak in equipment that is then all moved in. It will continue a bit in the first quarter in 2025.

And then it's all about ramping up these equipments and ramping up the capacity.

And on the industrial slowdown, when do you think the worst of the correction will be over? Do you still think it's the second quarter?

Do you have any visibility into which parts of the industrial market are really suffering at the moment? That would be interesting as well.

Thanks.

In the industrial market, it's very fragmented, and what we do see, it is across the board in all these customers, a lot of our industrial business is also very long life cycles, and therefore, still a lot of it is in the 150 millimeter in the 6 inches factories, where we saw this really dropping demand or this signal from the market in the second quarter last year, but with the large backlog that was still there, we continued our shipments. And so I expect, so then the bookings came down.

We see this effect now, and I expect that maybe ordering will start again somewhere in the second quarter, but that means then also with revenues rather in the second half of this year to pick up again.

Just a quick follow-up. On your largest customer, they were talking about qualifying new foundries.

I mean, on their conference call. I just wanted to understand, given that the specialty foundries out there are very under loaded when you look at the Chinese and UMC.

They're all significantly under loaded. Is there not a risk of some opportunistic qualifications from your customers of these foundries who may be offering lower pricing than you have agreed on the LTA?

First of all, it's very important to note that the automotive, the industrial, the business we're in is based on specific technologies and for our customers to switch is a very big burden. So typically, this is then done on new projects, but if you look the life cycle of the projects and mostly if you look at, for instance, X-FAB, in our business portfolio, the majority of products are actually is revenue generated with products that were designed that launched production a year or more ago.

So actually, in one year, there is very small business, so the capability of maneuvering is very limited. So it typically is done on brand new products.

And yes, typically, while there's not a big change possible in a couple in a year or 2 or 3 years. But for sure in the longer term, it's something that, yes, we need to take into account.

And that is part of the planning and so yes, we know about that.

Two questions from my side. First, you were highlighting that you were implementing a new ERP system.

Is that finalized or is there some spillover in the first quarter of this year? And second question is on the CapEx in Malaysia.

So the book will be done in the fourth quarter, but then you will have a period of testing. How long do you expect this period to be and when will be the first full-fledged production will be ready as from what date on?

So first with respect to the ERP, unfortunately, this is not something that is done in a couple of months, is a project of couple of years. Also just like the previous implementation of the ERP, this is activated, the cost related to the implementation and then are written off once the ERP it becomes live.

Now, we believe we expect it to be live in 2025 beginning '26. So there is still no work to be done on that.

So but there are some costs that are associated to the implementation that we are calling our audits cannot be activated and so therefore they are taking as cost and another portion of those costs are activated. And then you had a question with respect to the ramp up in the factory in Malaysia.

So that is a period of the majority of the equipment will be moved in the fourth quarter and beginning of the first quarter of '25. Then there is a period of qualification and some equipments, it takes longer than others, so it is not a sudden ramp up of the capacity.

It's more gradual and we will be seeing an increase of the output and revenue generation of these capacities, gradually increasing starting the Q2 '25, up to the Q1 '26. There will be more or less a linear increase of the outputs over that period.

Thank you very much everyone for joining the call today. I'm looking forward to speak to you again on the 25th April to explain the first quarter results.

Thank you very much, and have a nice evening.