Wallbox N.V. (WBX) Earnings Call Transcript & Summary

Hello everyone and welcome to our ESG webcast. My name is Michael Wilhelm, and I'm part of the Investor Relations and Corporate Development team. Today, we will discuss Wallbox ESG activities and the overall electric vehicles play in our sustainable future. We will be joined by our subject matter expert and Head of ESG at Wallbox, Laura Roca. During this webcast, we will discuss Wallbox' ESG commitment and all our efforts on all environmental, social and governance matters, which are impacting both internal as well as external stakeholders. Before jumping into Wallbox' ESG activities, we would like to highlight the company's role in creating a greener and cleaner world through our technology. Contributing 15% of the total global CO2 emissions, conventional road transport is one of the largest contributors to global warming. On the contrary, electric cars produced 66% less CO2 emissions over their lifetime. As concerns about climate change continued to grow electric vehicles, or EVs, have emerged as a promising solution to reduce greenhouse gas emissions, combat air pollution and support the climate agenda to limit global warming to 1.5 degrees. EVs are not only a more efficient and cleaner way to get from point A to point B. But together with smart EV charging infrastructure, EVs are a large battery that are supporting the transition towards more renewable energy generation. Due to the nature of renewable energy generation, there's often additional volatility and increased constraints on energy grid. EVs can provide energy flexibility that helps recreating a more efficient energy grid, which allows us to deploy renewable energy generation on a larger scale faster. Imagine an EV driver that can store self-generated electricity through their solar panels for a later moment or on an industrial scale, utilities that use vehicle-to-grid technology to balance the supply and demand of electricity. At Wallbox, we are dedicated to changing the way the world uses energy. We create advanced electric vehicle charging to accelerate the adoption of electric vehicles and energy management system that redefine users relationship to the grid. Next to creating products and solutions that contribute to a cleaner and healthier environment, we recognize the importance of incorporating ESG practices across departments. As a global public company listed on the New York Stock Exchange with offices in many countries, we understand our ESG responsibility related to both internal and external activities and stakeholders. Wallbox commitment to ESG is strongly ingrained in our corporate strategy and managed by the office of the CEO. Nevertheless, practical implementation of ESG and Wallbox is still relatively new. Therefore, during this webcast, we would like to introduce you to our initial ESG practices and how we explore ways to put them in place the best class policies. Laura, thank you for joining and it's great to spend time on the ESG topic ahead of moving into the different aspects of ESG. Could you explain where we stand as a company regarding ESG and how we compare with benchmarks and our peers.

Thank you for having me, Michael. As already briefly mentioned, we are still relatively a young company that not that long ago became on the New York Stock Exchange. But we became public. That said, we are fortunate because the very nature of Wallbox mission is ESG-centric. At Wallbox, we aim to accelerate the transition to e-mobility, which means our entire company was built around the idea of creating a more sustainable world. Our focus on the environment or the E is built into everything we do. Following the IPO 2 years ago, we knew that we needed to consolidate all of the ESG-related activities across the company into one single department. This has allowed us to concentrate our efforts on affecting change in the areas of the company that make the largest difference of the -- for the company. For the sector, and our society, whether that's implementing intelligent energy management systems, at our headquarters, for example, creating new internal policies or tracking our carbon footprint and performing life cycle assessments on our products. Our department has been able to accomplish a lot in the past 2 years. So while we may be young, we are still very committed and confidentially, since our IPO, it feels like the topic of ESG has exploded. There is exponentially more interest from investors now versus 2 years ago. But with that interest also comes increased scrutiny. It's more important than ever to be as transparent as possible about our activities and stay up to date on the changing regulations. We're constantly performing peer analysis and industry benchmarking exercises to ensure that we are complying with regulations around the globe and that we are pushing to the company not only to be a leader in our sector, but also a leader in our ESG practices. As we examine best-in-class policies, protocols and processes from industry-leading companies, we know that we still have some way to go. But we're very confident we will get there eventually. We're very proud of our accomplishments over the past 8 years as a company and 2 years as the ESG department. And I'm excited to talk more about some of our achievements and how we think about strategy so that our audience gets a sense of our thought processes.

Thank you, Laura. I'm excited too. So let's start off our ESG discussion on the environmental aspect. Could you elaborate on how Wallbox is supporting the transition to electric transport and smarter use of energy?

Yes, of course. Wallbox plays a crucial role in supporting the transition to electric transport through our innovative charging and energy solutions. It is important to note that at Wallbox, we're not making just any type of chargers, but focused on creating smart chargers that provide value to the end customer and the environment. We provide cutting-edge charging infrastructure for different use cases that offer efficient and convenient charging options for electric vehicles. Charging products for residential, commercial and public AC include, among others, the Pulsar family, the Commander Copper and Orion. For public DC fast charging Wallbox offering, the Supernova and Hypernova. These products are all developed to enable the widespread adoption of sustainable transportation. The company believes that e-mobility is the key to intelligent energy management. Because of that, we are developing solutions way beyond just charging such as optimizing the use of the car battery and integrating the charger with solar panels and stationary batteries. Our EcoSmart solution allows customers to maximize the potential of their solar panels by diverting any excess energy to charging their car. This ensures our customers with solar panels have the greenest charge possible. We have also developed the world's first DC by directional charger for the home. It's called the Quasar. Quasar allows EV drivers to not only charge their car, but also discharge the energy from their car back into the home or back into the grid. This essentially turns your car into a backup generator, gives users more flexibility to use energy when it's cheaper or greener. And also in the future can be used to make grids around the world more resilient. The backbone of all our chargers is our energy management system called Sirius. Sirius allows users to easily manage the energy from their car, your home or building. We will talk more about products and softwares in just a bit. But it's these types of solutions that allowed for a higher renewable energy consumption and more energy usage.

So Laura, it's great that Wallbox can make such a positive impact on the environment with our products. But could you elaborate on the company's climate agenda and our internal initiatives to limit our own impact.

Yes. Great question, Michael. We're lucky that the core strategy and charging solutions of our company is so intrinsically linked to reducing carbon emissions and accelerating the consumption of renewable energy. By leveraging this strategy and the solutions for internal purposes, Wallbox was able to make an important commitment to achieve net zero emissions by 2030. We recognize the urgency of addressing climate change, and we have set a clear target to net out our carbon footprint within the next decade. This commitment is part of the climate pledge but is more ambitious than their standard guidelines of being net zero by 2040. As a first step, we have been focusing on impact measurement by reviewing our Scope 1, 2 and 3 emissions and completing a life cycle assessment of our main residential and public charging products, including the Pulsar, Supernova, Hypernova and Quasar. This impact measurement initiatives will help us to establish a baseline and assess how we can work towards reducing our carbon footprint. In the meantime though, we're working hard on reducing our internal emissions. In fact, we have been installing a significant amount of solar panels in our headquarters as well as in our new factory in Barcelona. At our headquarters, we have installed around 1,200 panels. Additionally, we have installed about another 2,000 solar panels in our factory called D26. The solar panels at our factory are also linked to a power purchase agreement with the energy company, Iberdrola and can produce around 1,200 megawatt hours of energy a year. We also developed our internal energy -- our internal building energy management solutions called Sirius, which we talked briefly about earlier. [ Sirius ] ties together our 1,200 solar panels, a 500-kilowatt battery, 5 AC chargers, 23 bidirectional chargers and a 150-kilowatt fast charger. This intelligent software has allowed us to achieve these where we were completely independent from the grid and operating 100% on renewable energy. This is not only a great way to reduce our internal emissions, but it is also a solution we will soon begin to integrate into all of our chargers around the world to help our clients reduce their emissions as well.

Those are great initiatives on emission reduction. Apart from the decarbonization efforts, do you have circularity practices that promote sustainable growth?

Absolutely, Wallbox is committed to embracing circularity initiatives. They mainly focus on the 3R model of reducing, reusing or recycling. We strive to minimize waste generation, reduce materials wherever possible and recycle with another component at the end of their life cycle. Practical cases include digitalization of the instruction guides, Cradle to Cradle certification in our factory and headquarters, reutilization of main panels for Wallbox event booths and reduction of excess food in our canteens. By implementing these initiatives, Wallbox aims to maximize resource efficiency and minimize our ecological footprint.

And Laura, as green activities are at the core of Wallbox, how does the company align with the EU taxonomy?

Yes. Wallbox is probably aligned with the EU taxonomy. We set standards for environmentally sustainable economic activities and is an important benchmark for investors. Wallbox activities are considered 100% green eligible by the EU taxonomy standards. This not only reinforces that we are on the right track, it gives us tamp of confidence to the investor community. As long as an investors look to fund sustainable projects, they are more frequently turning to the EU taxonomy as a reference for what projects and companies are truly green and which are not. Because Wallbox is 100% aligned with the EU taxonomy, we have actually already received fundings from banks like Santander, and [ Citi ] for more than EUR 70 million. As money managers and banks dedicate larger positions towards sustainable projects, Wallbox alignment with the EU taxonomy is definitely a competitive advantage.

Thank you. It's great that we are able to make progress on reducing our environmental impact and focus on circularity, both internally and externally. Could you share more examples and data?

Yes, of course. Let me start with the external impacts Wallbox has created by providing charging solutions for the green transportation. Our chargers are connected to our software back end myWallbox which allows us to track the amount of energy charged. And based on the energy mix, we estimate the impact we have with our products. Based on that data, Wallbox customers have driven more than 4.9 billion electric kilometers, resulting in 643,000 tonnes of CO2 avoided through cars charge by Wallbox charges by the end of Q3 2023. On the internal emission reductions, Sirius allows us 100% optimization of on-site renewable production. 60% self-sufficiency agreed independent in the first half of 2023 and 40% reduction of monthly energy costs. By controlling both the solar panels and other distributed energy resources with our energy management software, we can efficiently manage both energy costs and our emissions in real time. Regarding circularity, we have different examples of how our applied Model 3R of reduce, reuse and recycle. First, we saved about 788 trees by digitalizing our product guides. Second, we have saved 2,280 kilos of waste with our award-winning reusable goods instead of using single-use booths for each fare. Third, we have implemented our Tupper Away program to avoid food waste. Lastly, on the Cradle to Cradle certification, all materials used in the factory and in our headquarters can be recycled to the molecular part and then reuse the materials for other purposes.

Great. Those are very clear examples of the progress the company is making. Now I would like to move to a new topic and discuss how Wallbox runs social initiatives. To start off with an important stakeholder, how does Wallbox prioritize quality employment within their organization?

Wallbox places a great importance on providing quality employment opportunities. We foster a positive and inclusive work environment, emphasizing employee well-being and professional growth. The company recognizes that people are the cornerstone creating the growth and success of the Wallbox journey. To define our culture, we have developed a concept there drive different to give employees a framework on how to contribute to our shared success. With Wallbox voice an internal survey that we sent out to employees quarterly to get engagement, motivation and connectedness, we emphasize the importance of communication with the employees and demonstrate our commitment to high employee engagement. Finally, by offering competitive compensation, benefits and career development opportunities, Wallbox attracts and retains talented individuals. We are restricted stock units and employee stock purchase plan programs in place to have employees benefit from the future growth of the company. Through our commitment to quality employment, Wallbox aims to create a fulfilling and rewarding workplace.

And what measures does Wallbox take to promote diversity and inclusion?

Wallbox recognizes that diversity and inclusion are essential for innovation and success. We actively promote diversity across our organization fostering an inclusive culture where individuals from diverse backgrounds can thrive. Currently, around 1/4 of our employees are women, and we are working to improve this number. However, we have a wide range of young and also experienced employees and more than 50 different nationalities. Through initiatives and dedicated programs, Wallbox aims to ensure that every employee feels valued and included as a Wallboxer. To improve diversity and inclusion, Wallbox developed a 3 goal plan, which is focused on achieving a better gender balance, ensuring a respectful culture and environment and empowering female talent. Examples include increasing the percentage of female applications and She drives and She connects events where people come together to improve engagement and general equality.

And referring to your earlier point related to quality employment, how does Wallbox prioritize the training and development of their employees?

Wallbox places a strong emphasis on the training and development of their employees. We invest in ongoing learning opportunities to enhance skills and knowledge, whether it's through internal training programs, workshops or professional development resources. Wallbox supports their employees' growth and career advancement. By empowering our workforce through continuous learning Wallbox improves our organization capabilities and fosters a culture of excellence.