Good day, and welcome to today's Melexis full year 2023 results conference call. This meeting is being recorded. At this time, I'd like to hand the call over to Mr. Marc Biron, CEO. Please go ahead, sir.
Thank you. Dear audience, thank you for joining the Melexis fourth quarter and full year 2023 earnings call. Together with Karen Van Griensven, our CFO, I will go back, I will look back on the past year, and I will give some light on the year to come. In the fourth quarter of 2023, sales came out at EUR 250.5 million, up 12% compared with the fourth quarter of 2022. For the full year, sales grew by 15% compared with 2022. The outperforming product line were current sensor for powertrain application, but also embedded motor driver and pressure sensor, which are agnostic to the powertrain. Product, product launches in 2023 address both the automotive and the non-automotive industry.
Automotive product launch included a current sensor for power sensing application for the EV vehicle, and an inductive sensor used in automotive pedal and automotive steering applications. Here in automotive, we launched a magnetic switch suitable for IoT, industrial, and white goods application. We have also launched a Triaxis magnetometer, which is mainly intended for joystick and other similar human machine interface applications. Looking at 2024, we expect sales to land at around EUR 1 billion. Uncertainties in the market and some inventory correction impact our short-term results. However, many of our customers expect an increased business in the second half of 2024. Moreover, design win intake has been very strong since a few years now, and our innovation team is delivering many promising and unique products. I can give some example as the tactile sensor. We are working on this tactile sensor.
We are also working on the new generation of our temperature sensor. We are also deploying an impressive roadmap for our lighting product, as well as for our drivers that are used in actuators. At our Capital Market Day in November of 2023, we presented our strategy and target for the next seven years. In the automotive business, we aim to grow at 10% CAGR, thanks to innovative solution for powertrain, thermal management, battery, e-braking, e-steering, and lighting applications. Beyond automotive, we will expand our presence with four emerging product lines: sustainable world, alternative mobility, robotic, and digital health. We aim for 15 or higher annual sales growth on those areas. To execute this strategy, we are working on a cultural transformation, stimulating more autonomy, more entrepreneurial mindset, and a faster decision-making. I now give the floor to our CFO, Karen Van Griensven, for some more financial information.
Thank you, Marc. Hello, everybody. So, the sales of the full year 2023 were around EUR 964.3 million, an increase of 15% compared to the previous year, and the Euro-US dollar exchange rate evolution had a negative impact of 1% on sales compared to 2022. The operating result was EUR 261.3 million or 27.1% of sales, an increase of 15% compared to EUR 226.5 million in 2022. The net result was EUR 209.5 million or EUR 5.18 per share, an increase of 6% compared to EUR 197.2 million or EUR 4.88 per share in 2022.
For the fourth quarter of 2023, we were at EUR 250.5 million, an increase of 12% compared to the same quarter of the previous year, and an increase of 1% compared to the previous quarter. The Euro-US dollar exchange rate evolution had a negative impact of 2% on sales, compared to the same quarter of last year, and a negative impact of 1% on sales compared to the previous quarter. The gross result was EUR 111.7 million or 44.6% of sales, an increase of 12% compared to the same quarter of last year, and a decrease of 2% compared to the previous quarter.
R&D expenses were 11.9% of sales, G&A was at 5.7% of sales, and selling was at 2.4% of sales. The operating result was EUR 61.5 million or 24.6% of sales, an increase of 6% compared to the same quarter of last year, and a decrease of 13% compared to the previous quarter.
The net result was EUR 49.8 million or EUR 1.23 per share, a decrease of 4% compared to EUR 52.2 million or EUR 1.29 per share in the fourth quarter of 2022, and a decrease of 12% compared to the previous quarter. The board of directors also approved on February 5, 2024, to propose to the annual shareholders meeting to pay out over the result of 2023, a total dividend of EUR 3.7 gross per share. This amount contains an interim dividend of EUR 1.30 per share, which was paid in October 2023, and a final dividend of EUR 2.4 per share, which will be payable after approval of the annual shareholders meeting. The Melexis shares will start trading ex-coupon on May 15, 2024.
A bit more on the outlook. So Marc already mentioned it, for the full year, we expect to have sales around EUR 1 billion. Now, for the first quarter of 2024, we expect sales in the range of EUR 240 million-EUR 245 million. For the full year, we expect a gross profit margin of around 44% and an operating margin above 25%, all taking into account a EUR-USD exchange rate of 1.08. For the full year, we also expect CapEx to be around EUR 70 million. With this, I would like to end this part, and open the Q&A session. So operator, please go ahead.
Thank you, Madam. Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star one on your telephone keypad. If you find that your question has already been answered, you may remove yourself from the queue by pressing star two. Again, it is star one to ask a question. Now, the first question comes from François-Xavier Bouvignies from UBS. Please go ahead.
Thank you very much. I have a couple, if I may. The first one is basically the question we ask to all auto semis and, you know, auto exposed names. You are talking about, you know, short-term inventory correction impacting your business, but yet you are still, you know, guiding for 5% growth next quarter. If you look at the full year, so you are still growing low single-digit %, which many would argue it doesn't imply a significant, you know, inventory correction as such, especially after the base. You know, the inventory buildup that we saw in the last year at least, it should bring, you know, like a significant base effect, and therefore, the correction could be even more.
Now, if you look at the history, you know, in 2019 you had an inventory correction, you had double-digit percentage decline, and now you are just, you know, guiding a very, very mild inventory correction as such. So what makes you confident? I mean, do you think it's conservative enough to have such a mild down cycle? Or, or what the risk do you see, you know, basically that you could see a, a further, you know, correction than what you are seeing? Do you see what I mean?
Yeah, I think we understand very well what you mean indeed. But there are, let's say, two main factors that go in the direction of, as you say, a mild correction. Yeah, first of all, we have discussed with, or we have make a survey, let's say, with our main customer, okay, the 24 biggest customer, and the majority of those customer believe that H2 will be better than H1. And on the other hand, when we look at the inventory of our distributor, we see that the inventory is going down quite a while. It means we believe that at one point in time, at least the distributor will need to order again.
We see that the inventory is going down and the Point of Sale is going up. Those are, I would say, the two main reasons why we are rather optimistic.
Okay, thank you very much, Marc. On the margin side, I mean, the full year guide implies that the gross margin is lower despite a growth that you expect. Can you explain, you know, what the drivers of lower margins for 2024 versus 2023?
Well, we keep investing in capacity, in people. So we will have overall a cost increase in 2024 versus 2023, while we have some sales growth, but it's insufficient to compensate the cost increase, because we believe in the long-term growth of Melexis, and so we keep investing.
Understood. Thank you, Karen.
Longer term, of course-
Yeah.
We aim for 45% plus, but we see 2024 as a transitional year there. We are working on cost improvements, like cost of yield is an important one. We have ramp up of quite some products, so cost of yield can further improve. Cost of test we are working on. We are also working with suppliers on a cost improvement roadmap. So, but in 2024, yeah, we invest in the future.
Understood. And you mentioned in the note, I mean, in your report, that you have initiated an organizational update to foster innovation, optimization. I mean, and that it impacted Q4. Can you elaborate on this project? I mean, what, because if you mention it, it means that it must be material. I mean, so what is going on exactly here?
Yeah. Yeah, it's part of the increase we saw in operational expenses in Q4 versus Q3. Through this update, we will reduce our operational costs again in Q4. But as I'm in Q1 2024, we see a drop in operational expenses. But as I mentioned, we keep also investing in skills, in people skills, in new skills, and also in equipment. So throughout the year, we'll see operational costs move up again gradually. So overall, we still expect an operational cost increase for 2024 versus 2023.
What the strategic-
But in Q1, there will be a drop.
Yeah, and what the strategic project specifically, I mean, any specific product or specific, or just across the board?
It's an update. There are nuances in our strategy that are changing. It's good to once in a while, indeed, review your full organization and adapt it to the new reality.
Yeah, perhaps to complement what Karen mentioned, if I can make reference to the capital market base, where we have indeed announced that we are creating what we called for emerging product line, mainly addressing adjacent application. And then we mentioned robotic, digital health, sustainable world, and alternative mobility. And indeed, in the budget of 2024, we are planning or we are recruiting people in order to work on those four emerging product line. In order to first listen to the market, define the requirement for the new product, and then develop the new product to address those applications. It is one of example of strategic project that we have launched.
Understood. Thank you very much. We will now take our next question from Ruben Devos, from Kepler Cheuvreux. Please go ahead.
Yeah. Yes, good morning. Just two questions. The first one, related to design wins. Could you maybe talk about the rate of design wins in 2023 and how that compared to 2022? I believe the aim used to be for 15-20 new products annually. So how fast could you execute on these design wins typically? Is that a material contributor two years down the road? And maybe, how reliant are you on supplier responsiveness to execute on these design wins? That's the first question.
Mm-hmm. And the Design Wins in 2023 are almost, and when I say almost, it's 2%-3% below the Design Win of 2022. And the Design Win of 2022 was extremely high. It was extremely high in 2022, probably, let's say, driven by all the allocation problem that have pushed the customer to make Design Win, to show the importance of themselves. Then 2022 was really a very, very high Design Win year. And in 2023, which was a more normal year, we have almost repeated the same record, which is, I think, a very, very impressive and very important success.
As you know, to transform, let's say, those Design Win in revenue, we need, let's say, one year, 18 months extra because there is all the ramp-up of the volume. But in term of Design Win, yeah, 2023 was extremely good. And this is the situation. You have to also ask a question about the supplier, then I assume it was more about the capacity of the supplier. Yeah, those we have X plus five plan with our supplier, and those Design Win are integrated in the X plus five plan.
Okay, thank you. And then, a question for you related to your other supplier, the wafer supplier in 180 nanometer. Is that still very well on track, that capacity that should come on stream in 2024, such that you could meet some of the demand that you said you were facing some constraints on before? And then, you know, given the more muted outlook, is it reasonable to say the deliveries can be somewhat delayed? Or just curious, also, whether you could update us on your search for a second source for wafers. Thank you.
Yeah, and for the point 18, as you mentioned, we are indeed in ramp-up with different products. It's why I think Karen has hinted the yield effect on those ramp-up, which are normal, but okay, we need some time, let's say, to optimize the ramp-up. The ramp-up is, I would say, according to the plan, the capacity of the supplier outlook is according to the LTA that we have signed. And I would say this is within plan. For the second supplier that you mentioned, yes, we are also on track, and we will start the first wafer production from this second supplier after summer.
The design is finalized, and we are now in the qualification phase. The goal is to have the start of the volume production after summer 2024.
... All right, very helpful. Thank you.
Guy Sips, KBC Securities, please go ahead.
Yes, thank you. Also question on what you mentioned on the OpEx related to the strategic projects. Can you quantify that a little bit? And as you were mentioning, there will be no spillover in the first quarter. Is that true? And a second question on the geographical spread of the sales. Is it fair to assume that the sales year-over-year in Asia or in APAC was a little bit below par, while it was in EMEA a little bit above par? Is that, and how do you see the trends going forward on a granular geographical breakdown? Thank you.
So I will go first. First question on the operational expenses. So we took some actions in Q4 that also pushed up the cost a bit. In Q1, as I mentioned, we'll see a drop of operational expenses. Well, it will be in the range of around EUR 4 million, the drop versus Q4. Then again, to gradually increase because we keep investing, as I explained earlier. Is that sufficient explanation for you?
Yes. EUR 4 million impact of this OpEx.
Q1-
Yeah.
Versus Q4.
Okay.
Yeah, and for the geographic split, I would say in Asia in 2023 versus 2022, it was more or less stable. No big change. You are correct to say that Europe was a bit stronger, but it was in balance with the US. I mean, the US was a bit less strong, Europe a bit more strong, and Asia stable. But those variation, not big variation, it's quite limited variation, if you look in the time perspective. But it's correct that Europe is still very strong.
How do you see that evolve going, going forward? Meaning, what's the view on, on China?
I would. If you look since 2, 3 years, China is quite stable. We don't really see a big growth in China. Guy, if you read some reports, people say that it will stay as is, let's say. On the other hand, it's clear that the electrification of the car moving up, and the move from the center of gravity from Europe to China, this is a trend that we cannot deny. Then from this perspective, you could say that indeed Asia will increase, but we don't really see it in the figures for the time being.
Well, it, as a percentage of sales, it is stable.
Yeah.
In design wins, it's also stable.
Yeah, the design wins are also very strong in Europe, as an example.
Thank you.
The next question comes from Sandeep Deshpande from JP Morgan. Please go ahead.
Hi.
Sandeep.
Thanks for taking me on. My question is going back to the guidance. When you guide to EUR 1 billion in sales for the year, how much of that growth that you're guiding for the year comes from new orders from customers? And how much are you expecting of that from market growth this year, less potentially, whatever inventory correction that is happening in the market at this point?
Yeah, difficult to make the split indeed, in between the general market evolution and the new customer. It's even more difficult because we see that the electrification is increasing lower than what we have expect. And many of the new application or new customer are coming from this electrification. And I think it's difficult to answer the question in an accurate way. I would say we see this 10% growth that we have announced as realistic and difficult to judge, but there is no reason to believe that 2024 will be very different of that.
Are you saying that you are expecting underlying 10% growth less the inventory correction, which is what is resulting in this EUR 1 billion number for the year?
No, no, no. That's the long-term 10% growth. It's-
So how should we quantify the impact?
Extremely difficult.
How should we quantify the impact of how much inventory correction is negatively impacting your growth in the year?
It's across the board, inventory correction is not particularly in one area. Well, the drivers are still very strong in general, but also there, we see here and there some corrections. So we cannot quantify how much is now inventory correction and how much is new product launches. It's just not possible.
Yeah, but we still have some product or some product family that are still under constraint, let's say. And what Karen mentioned, the embedded driver, and the ambient lighting product are clearly still under constraint. Then those product, let's say, do not suffer from the inventory correction. On the other hand, as we mentioned in the previous call, the less modern product in 0.35, there is for sure some inventory of those products. I think it's a bit a mix of the product used in modern application that are still in constraint, and the products that are used in more the historical application that are less in constraint. It's why it's really difficult to answer your question.
Okay, thank you. A follow-up question would be on your own inventory. Why has your own inventory risen so significantly in the fourth quarter?
Yeah, we are... Well, we see, I think, that there is a drop in sales in Q1, and that is temporarily also pushing up our inventory. Moreover, at year-end, we didn't ship a lot over the Christmas period, while material was still coming in. So yeah, throughout the year, we expect inventory still to increase a little bit, but not at the same speed that we saw in Q4, though. And because, yeah, we expect growth to continue. We expect a stronger second half of the year versus the first half of the year. But in order to make sure we can deliver, we still have quite some products where capacity is still, I mean, still limited. So for that reason, yeah, we want to also invest in our inventory.
Just maybe to also say that most of what we have today in inventory is WIP, so work in progress. The final goods are not increased, well, there is maybe a slight increase, but it's not major. It's nearly all work in progress.
Understood. Thank you.
Maybe also to add, the risk on obsolescence is very low. That's also important.
Thank you.
Mark Hesselink, ING, please go ahead.
Yes, thank you. Firstly, on what you just mentioned on the supply still being constrained in some products, is this something that with the extra supplier getting over the course of this year, that this should be solved over the course of 2024?
Yeah, I think the increase of capacity and the market situation will indeed help this. And as I said, I think in the past, I really do believe that at the end of 2024, this inventory, or this allocation problem will be solved. And yeah, perhaps it will be solved some one quarter earlier because of the situation. But in general, we do believe that at the end of 2024, we don't have constraint anymore, mainly because the capacity is increasing, and also because this new supplier will start to send wafers after summer.
Okay. Okay. And then, what are you currently seeing on the pricing side? I think we hear there are some different stories from some... Also, your one of your bigger indirect clients yesterday said that they see some pressure in the industry to push down prices. What are you seeing, and what kind of discussions do you have?
For 2024, we have, let's say, a very low single-digit price decrease, meaning really not, not a lot. Of course, there are some discussion, but I think for 2024, the discussion are over, let's say. I do believe that for 2025, we will come back probably in what we call the regular price negotiation that we knew, let's say, before the chip shortage crisis.
That's also a low single-digit decline?
Yeah. It is, yeah.
Yeah.
What we know historically.
Yeah. Okay, okay. Very clear. Thank you.
Javier Correonero, Morningstar, please go ahead.
Good morning. Thanks for taking my question. Some of your peers have recently reported results, and one of them, the mix of growth during the year was very skewed towards price increases versus volume increases. So could you give a sense of the volume versus pricing dynamics that we have seen in these last quarters, and also how the pricing versus volume looks for 2024?
Is your question related to our customer or to our supplier?
No, no, sorry. The question is related to you. Basically, how is the pricing versus volume outlook, how has it looked for the last quarters, and how is it looking for 2024?
I would say if I-
For your sales, yeah.
Yes, for our sales in total. I would say, yeah, you know that we have LTA for, yeah, hopefully half of the, half of the business. And I must say that, in those LTA discussion, we don't, we don't discuss the price. We, we sometimes discuss the volume and, and we try to find a solution that is positive, let's say, for Melexis and for the customer. Because usually the customer, they need a bit less than this product and a bit more than another product, because the, let's say, the product split is not exactly what was written in the LTA.
Then we have this kind of discussion with the customer, not really on the price, I would say, but not at all on the price, but more on the volume and on the volume split.
But there is a-
Okay.
A very low single digit, price pressure into 2024. But LTAs there we still have more or less stable pricing.
Okay, thank you. Just one short follow-up. Have you guys maybe been under shipping a bit in recent quarters to help customers offset the pressure on their inventories, or have you been shipping at full capacity?
Well, in Q4 we have shipped according to the plan, I would say. And indeed, in Q1, as we have mentioned, there is a bit of weak situation. I think it's linked to uncertainties in the business and also inventory. And indeed, then in Q1, we will ship a bit less than expected, let's say, than expected initially.
Okay, thank you.
Robert Sanders, Deutsche Bank, please go ahead.
Yeah. Hi, good morning. Thanks for taking my question. I just have two. The first one is just one of your competitors was saying on their conference call that Tier One inventory levels have dropped from 8-10 weeks to 4-6 weeks, which is pre-pandemic levels. I was just wondering if you, if you would agree with that, that, that the inventory levels at your Tier One customers have normalized to pre-pandemic levels? And I have a follow-up. Thanks.
Yeah, we have a clear view on our distributor. And our distributor, I can confirm what you mentioned or what our competitor has mentioned. On the Tier One, we have a view which is a bit less clear, but we see also that it's not going up, it's more going down, on the Tier One.
Got it. And then another one of your competitors, they acquired Crocus for TMR. I just wondered if there was a dynamic within your business where the whole sensor business will undergrow while the other businesses, like driver IC, will outgrow your 10% CAGR growth, maybe because of TMR, or maybe just because all sensors have more of an exposure to ICE. I was just interested to sort of think about the mix going forward. Thanks.
Yeah, I would say we did not, we did not see any impact linked to this TMR, but I think honestly, we need to give, to give a bit of time probably to this competitor to, to leverage, to leverage it. But for the time being, it's, it's—the effect is invisible to us, and related in general to the, to the magnetic business. Yeah, if you compare the magnetic business with, as you mentioned, as example, the embedded driver, in percentage, the, the growth is, is smaller, but in absolute volume, absolute, absolute volume, it's still the biggest. In absolute volume, the growth of the magnetic is still, is still the biggest, but indeed a bit lower than the, the embedded driver, as an example.
Got it. Thanks.
But it's still a very good, very important business, and we still have, yeah, in our product line strategy, a different generation of products and even more product. I mentioned that we have launched one of the magnetic sensor for joystick application and for human machine interface. Yeah, we are also working on what we call the tri-axis, which gives the sense of touch to a robot, which is also based on the magnetic sensor. We still have a lot of magnetic sensor in our development portfolio.
Got it. Thanks a lot.
Nigel van Putten from Morgan Stanley, please go ahead.
Hi, good morning. Most questions are answered, but I have one on the variable remuneration for key management. So correct me if I'm wrong, but I believe the threshold for any compensation is at least 10% growth for both EBIT and revenue. And it seems from your guidance, you won't be able to go near that level, even though, you know, you could argue it outperforms some of your peers. So first off, is this correct? And then second, has there been any, are you looking to change this going forward, is it or is it, you know, as is?
It's correct, and it is as is.
Okay.
It's the principle we've used now for many years, for more than 10 years, indeed.
All right. That's clear. Thanks.
Don't change the rules in the middle of the game.
Thank you. We'll now take our next question from Nikos Kolokotronis, from Van Lanschot Kempen. Please go ahead.
... Hi, good morning. Thanks for taking my question. So my first question is on China, actually. There is a lot of capacity being built there, so and at the same time, we know that China is an important market for the EV business. So what actions are you taking in order to remain competitive in the region and maintain or even increase your business there? And how well the discussions with Chinese customers go at this stage?
Yeah, indeed, for China, what we call the localization is important. It's an important parameter, let's say, for the customer in China. Then we have what we call a strategic team, which is linked to China. And part of this strategic team is to have pilot working in China in order to assemble the product and to test the product in China, it's what we call OSAT. Then we have two pilot, one for latch and switch products, one for ambient lighting, where we will assemble and test this product in an assembly house in China. And this is part, let's say, of the localization roadmap of Melexis.
Okay, thanks. And then my follow-up would be on the free cash flow for 2024. I mean, you mentioned that you expect inventories to gradually increase, but if you could also guide a bit on the other lines of the working capital, would be helpful. Thanks.
We don't see major changes in percentage of sales of the working capital. Maybe slightly up because inventories might still increase a bit, but not substantial. Yeah, the CapEx will be lower than in 2023. So we ended up at around EUR 95 million for 2023, where we expect EUR 70 million in 2024.
Okay, thanks, Christine.
Is that okay for as an answer?
Yeah. Thank you.
Michael Roeg, Petercam, please go ahead.
Yes, good morning. Well, only two smaller questions left because most of it has been answered. The first one is on your suppliers. You said there are still some capacity shortages here and there, but some of your competitors have noticed that especially the industry segment is going down rapidly. So I was wondering if that is not freeing up capacity at your suppliers, that you could use to get more wafers for automotive.
Yeah, then, you know that our wafer supplier is very much focused on automotive. It means that, yeah, there is big part of this automotive business is still constrained, let's say. But it's correct that, let's say since some months, we received some extra wafer that we can start, and we benefit a bit indeed from this trend that you mentioned. Yeah, it has helped in Q3 and Q4 2023, those additional wafers.
Okay, so there.
But, I mean, it's on the margin, let's say. There is not—in terms of volume, it was not gigantic.
Okay, so this is not something that will be able to, you know, push the shortages, pull it forward to Q2 or something?
No, I would say that the supplier follow the LTA volume.
Mm.
From time to time, we have, we have some good surprise.
Okay, good. Then my second question, I see in your presentation that you sold more than 1.8 billion chips last year. And a quick calculation shows that's then EUR 0.52 per chip, which is organically 23% higher year-on-year. Could you perhaps break that down into price increases and mix effect?
I think the price increase we have mentioned in the past, that it was a low double-digit price increase. And the rest is indeed the product mix.
Okay. Would you say that that product mix of 2023 is extremely rich compared to all the years of the past? And is that sustainable, or do you expect that mix to change, reverse, or whatever?
Are you sure your conclusion is correct about the EUR 0.52 and then the 33% more?
23%, 23%. Yeah, 'cause if I take, one point eight billion chips in the slides, so I do 1.84, your sales, EUR 964 million, get to EUR 0.52 per chip, and that is an increase of 22%. One percent negative on the FX, according to the press release, gives you 23% organically.
Yeah, let's take it, let's take it offline and indeed compare offline, 2023 and the previous years.
Okay, good.
Because the price increase is what I have told you, indeed.
Yeah.
The product mix did not change so much. I mean, there is, there is something that we need to take offline indeed, to understand.
Okay, good. Thank you. That's it from my side.
As a reminder to ask a question, please signal by pressing star one. Our next question comes from Ben Seruri from D. Tate. Please go ahead.
... Hi, good morning, everyone. It's been mentioned on this conference call, but I'd like to circle back to the organizational changes, if I may. I was just wondering if you could give some background, some insight on why you felt these changes were necessary. Thank you.
Yeah, I would say the world is changing around us in our business, linked to the electrification of the car, links to the move of the center of gravity from Europe to China. The world is also changing outside of our business, like climate change creates some opportunity. I would say that the aging population is also a fact that could create some opportunity, and I think we need—we want to be the actor of those change, and we want to take opportunity from those change. It's why it was important and to strengthen our innovation strength in automotive. And it was important to create those emerging product line in non-automotive, in order to develop the product that would answer the climate change, the aging population, the alternative mobility.
And it's why also we want to create this entrepreneurial mindset in the company to serve the innovation. I think it's why also we want to modify the organization to be able to take quicker decision, because clearly our customers in China expect a much more, let's say, dynamic and quick decision. And it's why those changes have been launched.
Mm-hmm. And can you give some more insight on what you exactly changed?
Yes. First, we have created those emerging product line. And also, we are busy needed to have in one entity, the development people and the business people. Today, we have two business units, Sensen Live, Sensen Five, and a development team. But the development team is, let's say, outside the two business units. The idea is to create four business units and to include the development team in the business units, in such a way that the development team will be more in contact with the business, with the customer, and also to, let's say, reduce the number of alignment between the business people and the development people, and to be able to take quicker decision. In short-
Okay, very clear.
That is what we are doing.
Thank you very much.
Thank you all. As there are no further questions in the queue, I'd like to hand the call back over to Mr. Marc Biron, CEO, for any additional or closing remarks. Over to you, sir.
Thank you. I thank all of you for the question. As I said, it's always good and challenging and refreshing to have this external view on the situation. And thank you for that, and I'm looking forward to have the next call in April for the Q1 result. Thank you, and have a good day.
Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.