WEBVTT 1 00:00:07.800 --> 00:00:10.100 Hello and welcome to this vidcast which is 2 00:00:10.100 --> 00:00:13.700 devoted to a prominent actor of a very important 3 00:00:13.700 --> 00:00:17.300 industry Mobility autonomous vehicle 4 00:00:16.300 --> 00:00:19.800 the name of the company's mobile. I 5 00:00:19.800 --> 00:00:23.000 and a title of the vidkasis from nice 6 00:00:22.200 --> 00:00:26.100 to NASDAQ. Why because I'm 7 00:00:25.100 --> 00:00:28.700 going to observe this company at two 8 00:00:28.700 --> 00:00:31.500 very important moments of IT industry 9 00:00:31.500 --> 00:00:34.400 and financial an economic life when the 10 00:00:34.400 --> 00:00:37.500 company is first listed on a New York Stock Exchange in 11 00:00:37.500 --> 00:00:40.200 2014. And when the company is back on 12 00:00:40.200 --> 00:00:43.500 the market NASDAQ in 2022. 13 00:00:45.900 --> 00:00:50.300 Mobile I was created in 1999 at 14 00:00:49.300 --> 00:00:53.100 the top of the internet bubble by 15 00:00:52.100 --> 00:00:55.500 a professor of the Hebrew University 16 00:00:55.500 --> 00:00:58.600 of Jerusalem professor. Amnon shashwah. 17 00:00:59.100 --> 00:01:03.000 He invented and developed a vision system a 18 00:01:02.200 --> 00:01:05.600 system is a combination of toastings. In fact, 19 00:01:05.600 --> 00:01:08.500 you have a camera and you have an algorithm. 20 00:01:08.500 --> 00:01:11.800 The camera is capturing the data 21 00:01:11.800 --> 00:01:14.100 on the algorithm is interpreting the 22 00:01:14.100 --> 00:01:14.300 data. 23 00:01:15.100 --> 00:01:18.700 The company is going to be incorporated in a Netherlands, even 24 00:01:18.700 --> 00:01:21.400 though R&D and business operations are 25 00:01:21.400 --> 00:01:22.800 located in Israel. 26 00:01:24.400 --> 00:01:27.900 The company's operating in an industry, which is named Adas which 27 00:01:27.900 --> 00:01:31.000 stands for Advance driving assistance 28 00:01:30.900 --> 00:01:33.700 systems against about Mobility. 29 00:01:33.700 --> 00:01:35.900 It's about the autonomous vehicle. 30 00:01:36.800 --> 00:01:39.500 A system means that you have a device which 31 00:01:39.500 --> 00:01:41.000 is combined with a software. 32 00:01:42.100 --> 00:01:46.400 The device is a camera is a leader Etc 33 00:01:46.400 --> 00:01:49.700 something which is capturing data a 34 00:01:49.700 --> 00:01:52.500 leader stands for a laser which calculates a 35 00:01:52.500 --> 00:01:54.300 distance of an object. 36 00:01:55.100 --> 00:01:56.800 static and dynamic 37 00:01:58.100 --> 00:02:02.300 once you got the data, it's absolutely fundamental. That's 38 00:02:01.300 --> 00:02:05.300 a software allows real-time analysis 39 00:02:04.300 --> 00:02:07.500 and interpretation of 40 00:02:07.500 --> 00:02:10.200 the data as quickly as possible to be 41 00:02:10.200 --> 00:02:13.700 able to take decisions in the car. It's about 42 00:02:13.700 --> 00:02:16.500 pattern recognitions about movements. You 43 00:02:16.500 --> 00:02:19.800 have to take decisions very quickly Based on data. 44 00:02:20.600 --> 00:02:23.500 There are plenty of actors in this business and they 45 00:02:23.500 --> 00:02:27.100 are very strong and credible actors common factories 46 00:02:26.100 --> 00:02:30.700 OEM South Korea Hyundai suppliers 47 00:02:29.700 --> 00:02:33.200 in Japan Denso linked 48 00:02:32.200 --> 00:02:36.200 to Toyota. I've seen Seiki Bosch 49 00:02:35.200 --> 00:02:38.300 on Continental in Germany value in France 50 00:02:38.800 --> 00:02:41.200 otolive in Sweden, but there are also 51 00:02:41.200 --> 00:02:44.500 some actors which are not directly linked with 52 00:02:44.500 --> 00:02:47.300 the car industry Panasonic, which is a Japanese 53 00:02:47.300 --> 00:02:50.600 conglomerate and producing air conditioning 54 00:02:50.600 --> 00:02:54.000 system and refrigerators and mobile. I 55 00:02:53.100 --> 00:02:56.800 the objective is the full 56 00:02:56.800 --> 00:02:57.500 autonomy. 57 00:02:58.500 --> 00:03:01.200 Five levels of autonomy have been 58 00:03:01.200 --> 00:03:04.200 defined as a six one, which is no autonomy at 59 00:03:04.200 --> 00:03:07.700 all. Of course, but five main levels the Holy 60 00:03:07.700 --> 00:03:10.700 Grail is there is absolutely no driver in 61 00:03:10.700 --> 00:03:12.200 the cars. This is level 5 62 00:03:13.300 --> 00:03:16.000 you just have people who are driven from one place to the other 63 00:03:16.500 --> 00:03:19.900 and the car is driving without drivers. There 64 00:03:19.900 --> 00:03:22.200 are plenty of debate all we will 65 00:03:22.200 --> 00:03:25.200 never be able to achieve this level or it will 66 00:03:25.200 --> 00:03:28.200 be tomorrow whatsoever. Forget about these debates. What is 67 00:03:28.200 --> 00:03:31.300 the reality today? The reality today is level 68 00:03:31.300 --> 00:03:34.300 three. So you are the driver you have 69 00:03:34.300 --> 00:03:37.500 to be in the car, but you can let go this cheering 70 00:03:37.500 --> 00:03:37.700 well. 71 00:03:38.800 --> 00:03:41.500 Still you have to be able to stay in control 72 00:03:41.500 --> 00:03:44.500 and take the control of the car. Is there something 73 00:03:44.500 --> 00:03:47.200 a little bit strange which is happening in front of you. 74 00:03:48.200 --> 00:03:51.500 You know what? This is perfect for traffic jams. The speed 75 00:03:51.500 --> 00:03:54.200 is quite slow. You don't change move from 76 00:03:54.200 --> 00:03:57.800 one lane to the other. The risk of collision is 77 00:03:57.800 --> 00:04:00.200 relatively limited and this is 78 00:04:00.200 --> 00:04:02.600 about level three, which is extremely useful. 79 00:04:03.600 --> 00:04:06.500 There are plenty of applications of others to 80 00:04:06.500 --> 00:04:09.300 autonomous mobility and many of them are already 81 00:04:09.300 --> 00:04:13.200 in your car speed control parking assistance 82 00:04:12.200 --> 00:04:15.300 the warning maybe 83 00:04:15.300 --> 00:04:18.300 you're not looking at the road and you are changing 84 00:04:18.300 --> 00:04:21.300 Lane and you have a warning system which tells 85 00:04:21.300 --> 00:04:24.800 you hey, are you sure it works emergency braking 86 00:04:24.800 --> 00:04:28.700 if something is happening, which was not expected a 87 00:04:27.700 --> 00:04:30.700 warning again for potential Collision. 88 00:04:31.500 --> 00:04:34.500 No, mobile eyes producing products and services. 89 00:04:35.200 --> 00:04:38.900 The products but IQ which is a single sensor 90 00:04:38.900 --> 00:04:41.800 camera which fits which each and 91 00:04:41.800 --> 00:04:44.300 every level of the autonomy. It's about 92 00:04:44.300 --> 00:04:45.400 other services. 93 00:04:46.300 --> 00:04:50.200 But there are other services for example if there 94 00:04:49.200 --> 00:04:52.600 is a mobile Eye camera 95 00:04:52.600 --> 00:04:55.100 in your car the camera is going 96 00:04:55.100 --> 00:04:58.400 to take some information about the road on which 97 00:04:58.400 --> 00:04:59.000 you're driving. 98 00:04:59.800 --> 00:05:02.400 And then the company's accumulating plenty of 99 00:05:02.400 --> 00:05:05.100 data in order to produce Maps. 100 00:05:05.600 --> 00:05:09.000 In 2021, they say we have information about 7.5 101 00:05:08.600 --> 00:05:12.000 billion kilometers of roads and 102 00:05:11.900 --> 00:05:14.400 highways and so on so forth on the planet. 103 00:05:15.300 --> 00:05:18.900 A third one, which is quite interesting. It's a model responsibility 104 00:05:18.900 --> 00:05:19.900 sensitive model. 105 00:05:21.100 --> 00:05:25.200 This is about setting unemploymenting rules of prudent 106 00:05:24.200 --> 00:05:25.500 driving. 107 00:05:26.300 --> 00:05:29.500 And this is very important because when the car 108 00:05:29.500 --> 00:05:32.600 is taking a decision because there's an 109 00:05:32.600 --> 00:05:35.400 unexpected event, which is happening in front of 110 00:05:35.400 --> 00:05:35.600 you. 111 00:05:36.200 --> 00:05:39.900 What will be the prioritization in the decision-making process, 112 00:05:39.900 --> 00:05:42.400 you know, if a decision is taken 113 00:05:42.400 --> 00:05:45.900 it might be at the expense of the driver or 114 00:05:45.900 --> 00:05:48.500 the people who are in the car. It might 115 00:05:48.500 --> 00:05:51.300 be at the expense of the people who are outside the 116 00:05:51.300 --> 00:05:54.500 car. How do you make the prioritization? This is 117 00:05:54.500 --> 00:05:57.400 very important. It's about responsibility sensitive model 118 00:05:57.400 --> 00:06:00.000 truly a fundamental issue. 119 00:06:01.300 --> 00:06:04.700 Some other products about true redundancy. It's Integrated Systems 120 00:06:04.700 --> 00:06:07.300 with all the cameras leaders Radars and 121 00:06:07.300 --> 00:06:10.500 so on so forth, etc, etc. So the company is very 122 00:06:10.500 --> 00:06:13.000 much a pure player in this industry and he's doing quite well. 123 00:06:14.100 --> 00:06:17.400 If you look at the evolution of the financing of the company and it's 124 00:06:17.400 --> 00:06:19.200 financing credibility. 125 00:06:19.900 --> 00:06:22.800 We got plenty of data from the traditional 126 00:06:22.800 --> 00:06:25.700 database crunch base Mobile ice 127 00:06:25.700 --> 00:06:29.000 created in 1999 at the 128 00:06:28.200 --> 00:06:32.000 very beginning. You need a little bit of money, which is a traditional family 129 00:06:31.600 --> 00:06:34.000 falls on Friends. Well the first 130 00:06:34.200 --> 00:06:36.500 step which is a little bit serious is in 2006. 131 00:06:37.200 --> 00:06:40.700 Now you start moving from software development 132 00:06:40.700 --> 00:06:43.600 to a little bit of manufacturing and so 133 00:06:43.600 --> 00:06:46.500 on. It's about 15 million dollars local financing. 134 00:06:47.400 --> 00:06:51.400 The year after the Monet spent 2007 100 135 00:06:50.400 --> 00:06:53.100 million dollars and it will 136 00:06:53.100 --> 00:06:57.100 come from Goldman's ax who's a premonite valuation of 500 million 137 00:06:56.100 --> 00:06:59.300 premoney means evaluation of 138 00:06:59.300 --> 00:07:03.400 the company before you inject cash postmoney's 500 139 00:07:02.400 --> 00:07:05.500 plus 10600. So golden 140 00:07:05.500 --> 00:07:08.300 Sachs has invested 100 out of 600 which 141 00:07:08.300 --> 00:07:11.300 is about 17% of the shares of the 142 00:07:11.300 --> 00:07:12.700 company, which is quite significant. 143 00:07:13.500 --> 00:07:16.900 The Monet spent and in 20-13, there's an 144 00:07:16.900 --> 00:07:19.500 additional need now of 400 million 145 00:07:19.500 --> 00:07:22.500 Goldman Sachs is going to contribute together with another 146 00:07:22.500 --> 00:07:25.600 Investment Bank Morgan Stanley and through 147 00:07:25.600 --> 00:07:28.300 one of its numerous agencies the 148 00:07:28.300 --> 00:07:32.200 Chinese state, but now the Primal evaluation is 1.5 billion 149 00:07:31.200 --> 00:07:34.800 compared with the postmoney 150 00:07:34.800 --> 00:07:36.400 of 600 million a few years before. 151 00:07:37.600 --> 00:07:40.400 2013-2014 now 152 00:07:40.400 --> 00:07:44.100 the IPO on the New York Stock Exchange premon evaluation 153 00:07:43.100 --> 00:07:46.400 4.4 billion three times as 154 00:07:46.400 --> 00:07:46.500 much. 155 00:07:47.400 --> 00:07:52.000 And the amount of cash which is going to be collected is 890 156 00:07:50.000 --> 00:07:52.200 million. 157 00:07:53.200 --> 00:07:56.100 The lead the leaders investment bankers who are going 158 00:07:56.100 --> 00:07:59.500 to lead the operations are obviously the investment Banks 159 00:07:59.500 --> 00:08:02.500 which are shareholders called and Zach and Morgan 160 00:08:02.500 --> 00:08:03.100 Stanley. 161 00:08:03.600 --> 00:08:06.600 If you look at the financial ID of mobile, I 162 00:08:06.600 --> 00:08:09.200 in 2013. This is the last full year 163 00:08:09.200 --> 00:08:13.200 before the IPO in 2014 revenues at 164 00:08:12.200 --> 00:08:15.500 the company is not a dream. It's selling good 165 00:08:15.500 --> 00:08:19.100 services and products about 80 81 166 00:08:18.100 --> 00:08:21.600 million dollars and the gross 167 00:08:21.600 --> 00:08:24.300 is fantastic. The company's doubling its revenues 168 00:08:24.300 --> 00:08:27.400 each and every year 100% per year from 20 to 169 00:08:27.400 --> 00:08:28.900 40 from 40 to 80. 170 00:08:29.600 --> 00:08:32.700 The company's profitable the operating income the 171 00:08:32.700 --> 00:08:35.900 income from operation. The ebit is 15 million, 172 00:08:35.900 --> 00:08:38.700 of course, it was zero in 2012, but 173 00:08:38.700 --> 00:08:41.600 now we have reached Beyond Break Even situation 174 00:08:41.600 --> 00:08:43.100 and we are making a profit. 175 00:08:43.900 --> 00:08:46.500 They'd be done which is a cash operating profit. 176 00:08:46.500 --> 00:08:49.200 It starts from eBay. Then you add the 177 00:08:49.200 --> 00:08:53.600 Precision amortization and you add again another non-cash 178 00:08:52.600 --> 00:08:55.700 item, which is stock based compensation 179 00:08:55.700 --> 00:08:58.300 stock options and so on so forth 180 00:08:58.300 --> 00:09:01.900 it be done adjusted is 30 million 181 00:09:01.900 --> 00:09:04.200 dollars now with the ebida you 182 00:09:04.200 --> 00:09:07.800 pay the capex capex less than three million. So you 183 00:09:07.800 --> 00:09:10.300 understand that the company's generating a free cash flow, 184 00:09:10.300 --> 00:09:13.800 which is absolutely huge Beyond Simple accounting 185 00:09:13.800 --> 00:09:16.400 profitability because the company's generating 186 00:09:16.400 --> 00:09:20.100 a profit which past ten times industrial investment. This 187 00:09:19.100 --> 00:09:23.400 is why the company is Cash Rich 224 million 188 00:09:23.400 --> 00:09:26.300 dollars of cash. We know that in the balance sheet. 189 00:09:27.300 --> 00:09:31.200 The metrics for the valuation are quite stratospheric 52 190 00:09:30.200 --> 00:09:34.500 years of revenues and 140 191 00:09:33.500 --> 00:09:36.600 years of Abida. Okay, that's 192 00:09:36.600 --> 00:09:39.200 quite high. But the gross potential 193 00:09:39.200 --> 00:09:42.400 of the company's huge and a company is not generating 194 00:09:42.400 --> 00:09:45.500 losses. The company is generating accounting profits and 195 00:09:45.500 --> 00:09:48.000 is generating plenty of positive free cash flow. 196 00:09:48.500 --> 00:09:50.800 It justifies more as a multiples. 197 00:09:51.600 --> 00:09:54.400 Now the company's going to be listed for its 198 00:09:54.400 --> 00:09:57.500 first listing during three years last full year 199 00:09:57.500 --> 00:10:00.800 2016 revenues not plus 200 00:10:00.800 --> 00:10:03.900 100% per year plus 50% period 201 00:10:03.900 --> 00:10:07.400 Which is less but still quite High revenues in 202 00:10:07.400 --> 00:10:10.500 three years are going to be multiplied by 4.5 which is 203 00:10:10.500 --> 00:10:13.300 now 3508 million dollars 204 00:10:13.300 --> 00:10:16.800 it be down skyrocketing not multiplied 205 00:10:16.800 --> 00:10:20.300 by 4.5 multiplied by 6.3 now 206 00:10:19.300 --> 00:10:22.700 190 million when Capital 207 00:10:22.700 --> 00:10:25.400 expenditures are about 11 million. So 208 00:10:25.400 --> 00:10:28.500 the free cash flow is great and the company is piling 209 00:10:28.500 --> 00:10:31.300 up cash. No that 600 and 30 210 00:10:31.300 --> 00:10:34.900 million dollars Intel is going to buy the mobile. I 211 00:10:34.900 --> 00:10:38.300 shares for 63 Point 54 dollars. 212 00:10:38.900 --> 00:10:41.500 We are in 2017 when the 213 00:10:41.500 --> 00:10:44.700 company was listed in 2014 the stock 214 00:10:44.700 --> 00:10:47.800 price. The issue price was $25. So 215 00:10:47.800 --> 00:10:49.600 good job for shareholders. 216 00:10:50.100 --> 00:10:53.400 What about the metrics of the multiples not 50 but 217 00:10:53.400 --> 00:10:56.900 41 years of revenues not 140, but 218 00:10:56.900 --> 00:11:00.000 still 78 years of a bit 219 00:10:59.100 --> 00:11:02.600 down. Now a few comments about R&D. We 220 00:11:02.600 --> 00:11:05.700 are in a high-tech firm in the 221 00:11:05.700 --> 00:11:08.100 high-tech from you invest a lot in 222 00:11:08.100 --> 00:11:11.700 research and development. What are the metrics in 2013 when 223 00:11:11.700 --> 00:11:14.300 the company is listed you remember 224 00:11:14.300 --> 00:11:17.600 revenues 81 million dollars, what about research and 225 00:11:17.600 --> 00:11:20.400 development expenses 22 million. So it's 226 00:11:20.400 --> 00:11:24.900 a bit more than one quarter of their revenues 27% 227 00:11:23.900 --> 00:11:28.700 in 2016 revenues 228 00:11:27.700 --> 00:11:30.700 are skyrocketing multiplied 229 00:11:30.700 --> 00:11:33.300 by 4.5 but are in these multiplied by 230 00:11:33.300 --> 00:11:36.500 three. What does it mean for the company? It 231 00:11:36.500 --> 00:11:39.300 means that it's not investing anymore 27% of its 232 00:11:39.300 --> 00:11:42.800 revenues. It is investing more in R&D, but 233 00:11:42.800 --> 00:11:45.800 less as a percentage to revenues 18% 234 00:11:46.900 --> 00:11:49.700 there are two possible interpretations of this 235 00:11:49.700 --> 00:11:52.200 reduction in the ratio. The first 236 00:11:52.200 --> 00:11:55.300 one is okay. We invest a lot in research 237 00:11:55.300 --> 00:11:58.900 and development but as sales and revenues are very 238 00:11:58.900 --> 00:12:01.700 much growing as a percentage to 239 00:12:01.700 --> 00:12:04.600 revenue. It's less. It does not mean that we don't invest 240 00:12:04.600 --> 00:12:07.400 we invest a lot but we generate even 241 00:12:07.400 --> 00:12:10.000 more sales. This is named economies of scale. 242 00:12:10.700 --> 00:12:14.000 There's another potential interpretation, which is under investment. 243 00:12:14.800 --> 00:12:17.700 When you are listed companies a financial analyst 244 00:12:17.700 --> 00:12:19.400 they are looking at your a bit dub. 245 00:12:20.200 --> 00:12:23.600 If you keep on investing a lot in research on development, but 246 00:12:23.600 --> 00:12:26.000 less as a percentage to revenue you're a bit that is 247 00:12:26.100 --> 00:12:29.500 going to be up as a percentage to revenue. This is mechanical stuff. 248 00:12:30.500 --> 00:12:33.800 And so it's a very big question is which interpretation is 249 00:12:33.800 --> 00:12:35.300 valid. I don't know. 250 00:12:36.300 --> 00:12:39.200 but what I know is how Intel is 251 00:12:39.200 --> 00:12:41.000 going to transform mobile I 252 00:12:41.800 --> 00:12:44.300 You remember in 2016 when the company is 253 00:12:44.300 --> 00:12:48.100 delisted revenue 358 R&D 65 254 00:12:47.100 --> 00:12:50.400 million in 2021 the 255 00:12:50.400 --> 00:12:53.300 last full year before the company is back to 256 00:12:53.300 --> 00:12:57.900 the market. NASDAQ revenues are almost 1.4 257 00:12:56.900 --> 00:12:58.500 billion. 258 00:12:59.500 --> 00:13:03.100 That's a dramatic increase compared to the revenues a 259 00:13:02.100 --> 00:13:05.700 five years before but now R&D is 260 00:13:05.700 --> 00:13:09.600 not 18% of Revenue. It's 39% 261 00:13:08.600 --> 00:13:13.600 of our news 540 4 262 00:13:12.600 --> 00:13:15.700 million dollars. It has nothing to 263 00:13:15.700 --> 00:13:17.400 be compared with 65 million. 264 00:13:18.800 --> 00:13:21.500 The consequence is what when you increase the 265 00:13:21.500 --> 00:13:24.500 R&D to sales figure from 18 to 266 00:13:24.500 --> 00:13:27.500 39 you increase an expense by 21 267 00:13:27.500 --> 00:13:30.300 percent then you reduce it be 268 00:13:30.300 --> 00:13:30.500 done. 269 00:13:30.800 --> 00:13:33.400 And the Ebates which was positive is now 270 00:13:33.400 --> 00:13:36.900 a little bit negative minus 57 they beat 271 00:13:36.900 --> 00:13:39.400 that which was absolutely stratospheric is just a 272 00:13:39.400 --> 00:13:42.200 little bit positive plus 57 the fact 273 00:13:42.200 --> 00:13:44.200 that it's the same figure is a pure coincidence. 274 00:13:45.100 --> 00:13:48.700 But then you understand that the company's investing more but is 275 00:13:48.700 --> 00:13:51.900 generating less as a profit. We have the figures 276 00:13:51.900 --> 00:13:55.900 for the first nine months of 2022 you 277 00:13:55.900 --> 00:13:58.900 remember in 2021 revenues 1.4 billion 278 00:13:58.900 --> 00:14:01.900 R&D 39% of revenues. What 279 00:14:01.900 --> 00:14:04.900 about the first three quarters of 2022 280 00:14:04.900 --> 00:14:07.300 revenues 1.3 billion? So 281 00:14:07.300 --> 00:14:11.500 about the same as 2020 1:39 282 00:14:10.500 --> 00:14:13.200 months you're on your 283 00:14:13.200 --> 00:14:15.400 represents an increase of 27% 284 00:14:16.200 --> 00:14:19.700 which is no more 100% no more 50% 285 00:14:19.700 --> 00:14:22.200 but it's still quite growing. 286 00:14:22.800 --> 00:14:25.500 And now R&D is not 287 00:14:25.500 --> 00:14:28.800 the 544 for 12 288 00:14:28.800 --> 00:14:31.700 months. It's 565 for 289 00:14:31.700 --> 00:14:35.200 nine months and it's no more 39% 290 00:14:34.200 --> 00:14:37.400 of revenues. It's 43% of 291 00:14:37.400 --> 00:14:40.300 revenues. It's for the last three quarters. If 292 00:14:40.300 --> 00:14:44.100 you take the last quarter Q3 2022, it's 293 00:14:43.100 --> 00:14:46.900 even 51% of revenues. 294 00:14:46.900 --> 00:14:49.600 So you understand that the company is not investing anymore 295 00:14:49.600 --> 00:14:52.600 1/5 of its revenues. It's investing 296 00:14:52.600 --> 00:14:56.000 one half of its revenues. It's dramatically changing. 297 00:14:55.300 --> 00:14:58.200 But what is the consequence a bit is 298 00:14:58.200 --> 00:15:01.900 a little bit negative he beta is a little bit positive and 299 00:15:01.900 --> 00:15:04.500 that's it. We are back to a kind of break even 300 00:15:04.500 --> 00:15:07.700 why because we are intensifying investments 301 00:15:07.700 --> 00:15:10.400 which are costs expenses in a 302 00:15:10.400 --> 00:15:10.700 p&l. 303 00:15:11.200 --> 00:15:14.400 And what about the free cash flow? You remember when I was telling you 304 00:15:14.400 --> 00:15:17.500 that they beat that was paying ten times the capacity. No, 305 00:15:17.500 --> 00:15:20.500 they'd be that does not pay any more the capex. It'd 306 00:15:20.500 --> 00:15:23.300 be done minus capex, which is a simplified version of 307 00:15:23.300 --> 00:15:26.800 the free cash flow is minus 11 million. Okay, it's 308 00:15:26.800 --> 00:15:29.500 close to zero and it's not really an issue. 309 00:15:29.500 --> 00:15:32.700 But you understand that the company's metrics. I've 310 00:15:32.700 --> 00:15:33.800 completely changed why. 311 00:15:34.900 --> 00:15:37.500 Because the market is growing the market is 312 00:15:37.500 --> 00:15:39.000 a huge potential. 313 00:15:39.800 --> 00:15:42.500 There are some expectations and four cars 314 00:15:42.500 --> 00:15:45.700 about the market which are more less credible. 315 00:15:45.700 --> 00:15:48.500 I would say today the market is 316 00:15:48.500 --> 00:15:51.600 about 20 billion dollar market some people considers that 317 00:15:51.600 --> 00:15:54.300 in 2030. It's going to be between 50 billion 318 00:15:54.300 --> 00:15:57.400 and 100 billion huge potential and even 319 00:15:57.400 --> 00:16:01.300 20 35 20 40, maybe 300 400 320 00:16:00.300 --> 00:16:03.400 billion dollars. So you understand that 321 00:16:03.400 --> 00:16:06.500 you have to invest to grasp your opportunity of 322 00:16:06.500 --> 00:16:09.300 his youth potential but the competition is 323 00:16:09.300 --> 00:16:12.500 extremely credible and you have to cope 324 00:16:12.500 --> 00:16:15.500 with that. This competition is creating an 325 00:16:15.500 --> 00:16:18.600 economic obligation. We are competing on 326 00:16:18.600 --> 00:16:21.200 technology and these are Big 327 00:16:21.200 --> 00:16:24.500 names with Deep Pockets. So it's 328 00:16:24.500 --> 00:16:28.100 companies have demonstrated their constant technological commitment 329 00:16:27.100 --> 00:16:30.900 and the ability to have an adopt 330 00:16:30.900 --> 00:16:33.300 a long term perspective a company 331 00:16:33.300 --> 00:16:37.100 like boss is not listed stock market. It's owned 332 00:16:36.100 --> 00:16:39.700 by a foundation. They don't publish figures. 333 00:16:39.800 --> 00:16:42.500 And they do what they want with the money of the company. 334 00:16:43.200 --> 00:16:46.500 Including investing for the long run and the technological 335 00:16:46.500 --> 00:16:47.100 leadership. 336 00:16:47.900 --> 00:16:50.600 In this context mobile I 337 00:16:50.600 --> 00:16:54.000 a few days ago early January 2023 made 338 00:16:53.300 --> 00:16:56.700 an announcement and they said because we've 339 00:16:56.700 --> 00:16:59.700 been very successful commercially and 340 00:16:59.700 --> 00:17:02.500 technologically we've been able to reach some design 341 00:17:02.500 --> 00:17:05.300 wins. And only the one we achieved in 342 00:17:05.300 --> 00:17:09.300 2022 are going to generate 17 billion 343 00:17:09.300 --> 00:17:13.300 dollars of revenues from 2023 to 2030 in 344 00:17:12.300 --> 00:17:15.500 eight years. It's represents more than two 345 00:17:15.500 --> 00:17:18.900 billion dollars per year. You remember in 2021 346 00:17:18.900 --> 00:17:21.300 revenues where 1.4 and 347 00:17:21.300 --> 00:17:24.500 we already have in the books to billion period 348 00:17:24.500 --> 00:17:28.000 during the next eight years. That's a great return on 349 00:17:27.300 --> 00:17:30.500 R&D investment and the market like 350 00:17:30.500 --> 00:17:30.800 that. 351 00:17:31.500 --> 00:17:34.600 If you look at the evolution of mobile, I and 352 00:17:34.600 --> 00:17:37.200 its correlation with NASDAQ. The company 353 00:17:37.200 --> 00:17:41.100 is back to the market at the end of October from and 354 00:17:40.100 --> 00:17:43.600 of October to beginning of December's as 355 00:17:43.600 --> 00:17:46.500 a perfect correlation between mobile I and NASDAQ 356 00:17:46.500 --> 00:17:49.300 and then as a consequence of the results of 357 00:17:49.300 --> 00:17:52.300 the first nine months mobile I is going to go up 358 00:17:52.300 --> 00:17:55.000 and as dark is not going to go up so much. 359 00:17:55.200 --> 00:17:59.100 There will be a decrease in the stock price in the early days 360 00:17:58.100 --> 00:18:01.700 of January 2023 because 361 00:18:01.700 --> 00:18:04.600 some people are taking their benefits as if 362 00:18:04.600 --> 00:18:07.500 it's a consequence of the announcement. I was just 363 00:18:07.500 --> 00:18:11.000 telling you is the stock price is a beginner who's 364 00:18:10.200 --> 00:18:13.900 a company who's on surprise value is now 28 billion 365 00:18:13.900 --> 00:18:17.700 dollars. So very significant company R&D 366 00:18:16.700 --> 00:18:20.200 went up from 20% to 367 00:18:19.200 --> 00:18:22.800 50% of revenues. And why 368 00:18:22.800 --> 00:18:25.800 do you have to do so because you want to become but you 369 00:18:25.800 --> 00:18:29.000 want to remain a technological leader in 370 00:18:28.400 --> 00:18:31.300 an extremely promising industry. 371 00:18:31.900 --> 00:18:34.400 But the consequence is in a short run is 372 00:18:34.400 --> 00:18:37.400 that you have to reinvest 100% of your profit 373 00:18:37.400 --> 00:18:41.000 in keeping remaining a technological 374 00:18:40.500 --> 00:18:43.500 leader. You have to invest in your leadership. What is 375 00:18:43.500 --> 00:18:46.600 a consequence on the free cash flow yesterday, you were 376 00:18:46.600 --> 00:18:49.500 generating plenty of positive free cash flow. Now you 377 00:18:49.500 --> 00:18:52.500 generate nothing you generate nothing in the short run. 378 00:18:52.500 --> 00:18:56.100 Why because you're creating the long term the one 379 00:18:55.100 --> 00:18:58.900 slide which I always present in my films 380 00:18:58.900 --> 00:19:02.000 in my lectures conferences. And 381 00:19:01.200 --> 00:19:05.100 in my teaching activity is the 382 00:19:04.100 --> 00:19:08.900 reprint of the letter to shareholders 1997 383 00:19:07.900 --> 00:19:10.900 Amazon some statements 384 00:19:10.900 --> 00:19:13.200 are absolutely phenomato. It's all about the 385 00:19:13.200 --> 00:19:16.700 long term. Why do we do we don't spend we invest 386 00:19:16.700 --> 00:19:19.900 we take continuously investment decisions. 387 00:19:19.900 --> 00:19:22.700 Why because we want to reach 388 00:19:22.700 --> 00:19:25.700 and we want to remain long-term Market 389 00:19:25.700 --> 00:19:29.200 leaders. That's absolutely phenomenal 390 00:19:28.200 --> 00:19:31.600 even though the short-term profit. 391 00:19:31.900 --> 00:19:34.300 Negatively affected by that we have 392 00:19:34.300 --> 00:19:37.500 to invest and invest and invest for long-term Market 393 00:19:37.500 --> 00:19:40.200 leadership considerations forget about the 394 00:19:40.200 --> 00:19:43.700 short-term profitability and forget about the short-term 395 00:19:43.700 --> 00:19:46.200 Wall Street reaction. In fact, if you 396 00:19:46.200 --> 00:19:49.700 look at mobile, I an Amazon yesterday, but 397 00:19:49.700 --> 00:19:52.000 mobile I the reaction of 398 00:19:52.700 --> 00:19:55.400 worst. It is quite positive Wall Street knows 399 00:19:55.400 --> 00:19:57.000 that R&D is an investment. 400 00:19:57.800 --> 00:20:00.400 Each and every investment has to generate a 401 00:20:00.400 --> 00:20:03.400 return on investment and you have to invest a lot 402 00:20:03.400 --> 00:20:06.400 why because competition is very 403 00:20:06.400 --> 00:20:09.700 powerful and is very active and is 404 00:20:09.700 --> 00:20:13.100 very credible and today the markets. I 405 00:20:12.100 --> 00:20:15.400 love your idea of investing in 406 00:20:15.400 --> 00:20:17.800 order to be a technological leader. 407 00:20:18.400 --> 00:20:22.000 But the consequence is a free cash flow is now today. 408 00:20:22.800 --> 00:20:25.500 Is it supposed to be near tomorrow? Well, there's 409 00:20:25.500 --> 00:20:28.200 a moment where the free cash flow will have 410 00:20:28.200 --> 00:20:31.500 to turn positive so that you can return cash 411 00:20:31.500 --> 00:20:34.600 to your shareholders who whatever BuyBacks or dividends 412 00:20:34.600 --> 00:20:35.400 and so on so forth. 413 00:20:36.100 --> 00:20:39.500 Today the markets are quite patient because they know that 414 00:20:39.500 --> 00:20:42.900 you're building something how long are capital 415 00:20:42.900 --> 00:20:46.400 markets going to stay patient. This 416 00:20:45.400 --> 00:20:49.200 is something which is absolutely no and 417 00:20:48.200 --> 00:20:51.000 very interesting to observe. 418 00:20:51.900 --> 00:20:52.600 Thank you very much.