Vantiva S.A. (TNM2.MU) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. Welcome to Vantiva's Third Quarter Revenue Conference Call, chaired by Luis Martinez-Amago, our CEO; and Lars Ihlen, our CFO. [Operator Instructions]. Just to remind you all, this conference is being recorded. We would like to inform you that this event is also available live on Vantiva's website with synchronized slide show. During this conference call, statements could be made that constitute forward-looking statements based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the future results expressed, forecasted or implied by such forward-looking statements. For a more complete list and description of such risks and uncertainties, refer to Vantiva's filing with the French Autorité des marchés financiers. I would now like to hand over the call to Luis. Please go ahead.

Thanks, Thierry, and good evening, everyone, and thank you for being in the call. As I'm sharing with all of you in this call since end of last year. And as you maybe are also hearing from other players in the industry and especially for the 2 or 3 big network equipment providers, 2023 is a low demand year due to the macroeconomic situation in the world. In addition, 2022 was an exceptional high demand year due to the shortage that we were suffering, which created some excess of inventory in our customers that they are consuming gradually during the year, and this contrast between the extraordinary high demand in 2022 and the extraordinary low demand in 2023 makes the basis of comparison a bit abnormal. None of this is coming as a surprise to us. We prepare the year with the right market assumptions. And the year is developing within the min/max revenue scenarios and is slightly lower than expected in quarter 3, as you will see in a minute. But the good news is that we are maintaining our EBITDA and EBITDA guidance, our profitability guidance, which proves that the actions [ launch ] -- that we launched for this year are delivering the expected results, which, as you know, not many companies in our industry can say this. We are adjusting our free cash flow guidance, mostly due to some revenue timing within quarter 4, which is impacting the time of the cash collections. Concerning a longer view, we don't yet see signs of demand recovery. Visibility is still limited into next year, but we are preparing our plans for a difficult 2024 still with a weak demand. But the top priority for all of us is to executing the project that we already communicated to all of you a few weeks ago. It is an acquisition of CommScope Home units and integrate them into Vantiva. The priority will be to execute our plans on this aspect. As shared with you a few weeks ago, that this is a transformational projects for the industry at large and for Vantiva in particular, is a consolidation that the industry was needed, and it's a very important project for Vantiva. The feedback that we are getting from customers and partners are very positive and encouraging. We are convinced that with the amount of synergies that we are planning, this is a significant value creation project for all our stakeholders, our customers, our partners, investors and employees. 2024 will be a transformational year for Vantiva, the market will recover at some point, and we are sure that we will have a very efficient and performing company to make our customers successful with our products and services. In the following 2 slides, you have a breakdown of revenues for quarter 3 and year-to-date, splitting them by the business divisions. I think they are self-explanatory, and if you have any questions, we are ready to answer. My only comment, and I would like to repeat is the abnormal comparison basis between the 2 years, again being 2022 a higher demand than normal, and 2023 a lower demand than normal. And with this, and in the final slide on the guidance, you will see our confirmation of the profitability as I indicated, and the adjustment that we are making in terms of free cash flow expectations. And with this, I would propose to move to the questions and answers.

Thank you, Luis. Operator please go ahead.

[Operator Instructions]. We have no questions at this time. I will now hand back to you for closing remarks.

Okay. Thank you, again, for being here. I'm happy to share with you in the next occasion the closing of the year and the future evolution of our projects. Thank you, and talk to you later.

And if you have further questions this evening, tomorrow, feel free to call me whenever you want. Have a good evening. Bye now.

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