Caesarstone Ltd (CSTE) 2023 Q4 法說會逐字稿

Greetings. And welcome to the Caesarstone fourth quarter 2023 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brad Cray of ICR. Thank you. You may begin.

問候。歡迎參加凱撒金石 2023 年第四季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，ICR 的 Brad Cray。謝謝。你可以開始了。

Thank you, operator, and good morning to everyone on the line. I am joined by Yos Shiran, Caesarstone's Chief Executive Officer; and Nahum Trost, Caesarstone's Chief Financial Officer.

謝謝您，接線員，祝線路上的每個人早安。Caesarstone 執行長 Yos Shiran 也加入了我的行列；以及 Caesarstone 財務長 Nahum Trost。

Certain statements in today's conference call and responses to various questions may constitute forward-looking statements. We caution you that such statements reflect only the company's current expectations that actual events or results may differ materially. For more information, please refer to the risk factors contained in the company's most recent annual report on Form 20-F and subsequent filings with the SEC.

今天電話會議中的某些陳述以及對各種問題的答覆可能構成前瞻性陳述。我們提醒您，此類陳述僅反映公司目前的預期，實際事件或結果可能存在重大差異。欲了解更多信息，請參閱公司最新 20-F 表格年度報告以及隨後向 SEC 提交的文件中包含的風險因素。

In addition, on this call, the company will make reference to certain non-GAAP financial measures, including adjusted net loss income, adjusted net loss income per share, adjusted gross profit, adjusted EBITDA, and constant currency. The reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in the company's fourth quarter 2023 earnings release, which is posted on the company's Investor Relations website.

此外，在這次電話會議上，該公司將參考某些非公認會計準則財務指標，包括調整後淨虧損收入、調整後每股淨虧損收入、調整後毛利、調整後 EBITDA 和固定匯率。非 GAAP 衡量標準與最直接可比較的 GAAP 衡量標準的調整可以在公司投資者關係網站上發布的公司 2023 年第四季財報中找到。

On today's call, Yos will discuss our business activity and Nahum will then cover additional details regarding financial results before we open the call for questions. Thank you. And I would now like to turn the call over to Yos. Please go ahead.

在今天的電話會議上，Yos 將討論我們的業務活動，然後 Nahum 將在我們開始提問之前介紹有關財務表現的其他詳細資訊。謝謝。我現在想把電話轉給 Yos。請繼續。

Thank you, Brad. Good day, and thank you, everyone, for joining us to discuss our fourth-quarter and full-year results. In 2023, we were able to navigate through a challenging macroeconomic, regional, geopolitical, and regulatory dynamics occurring in our key markets. We have implemented a new strategic plan and initiated significant restructuring actions, which allowed us to accomplish our primary financial objective of generating positive cash flow from operations.

謝謝你，布拉德。美好的一天，感謝大家加入我們討論我們的第四季和全年業績。2023 年，我們能夠應對關鍵市場中充滿挑戰的宏觀經濟、區域、地緣政治和監管動態。我們實施了新的策略計劃並啟動了重大重組行動，這使我們能夠實現從營運中產生正現金流的主要財務目標。

We more than delivered on this front as our working capital management and meaningful savings stemming from our global restructuring actions generated positive operating cash flow in four consecutive quarters totaling $66.5 million. This left us with a solid net cash position of $83.5 million. Overall, we are executing in accordance with our strategic plan.

我們在這方面的表現超出了預期，因為我們的營運資金管理和全球重組行動帶來的有意義的節省在連續四個季度產生了總計 6650 萬美元的正營運現金流。這給我們留下了 8,350 萬美元的堅實淨現金頭寸。總體而言，我們正在按照我們的策略計劃執行。

We believe actions taken during 2023 have set the foundation for an optimized production footprint, better utilization of resources, and improved cost structure and realign workforce, allowing us to capture greater efficiencies and opportunities. We believe that these factors will allow us to enhance our brand, better compete, grow market share, and get back to profitability.

我們相信 2023 年採取的行動為優化生產足跡、更好地利用資源、改善成本結構和重新調整勞動力奠定了基礎，使我們能夠獲得更高的效率和機會。我們相信，這些因素將使我們能夠提升品牌、更好地競爭、擴大市場份額並恢復獲利。

In regard to driving production cost efficiencies, we are quickly transitioning production to our global network of production business partners. In the second quarter of 2023, we made the decision to close our Sdot Yam manufacturing facility. And in December, we announced the closing of our Richmond Hill facility. Following the strategic changes to our operations, we are now sourcing over 40% of our products from production business partners.

為了提高生產成本效率，我們正在迅速將生產轉移到我們的全球生產業務合作夥伴網路。2023 年第二季度，我們決定關閉 Sdot Yam 製造工廠。12 月，我們宣布關閉列治文山工廠。隨著我們的營運策略發生變化，我們現在 40% 以上的產品都是從生產業務合作夥伴採購的。

We expect that percentage to trend up further as we move through 2024. As another result of the closure of these two facilities, we have reduced our spend on CapEx, and we're able to reduce our workforce by approximately 14% across the organization. In turn, we expect to realize annual cost savings of approximately $20 million in 2024 and $30 million in 2025 on top of the savings that were already realized during 2023.

我們預計，隨著 2024 年的到來，這一比例將進一步上升。關閉這兩個設施的另一個結果是，我們減少了資本支出，並且能夠將整個組織的員工人數減少約 14%。反過來，我們預計在 2023 年已實現的成本節省基礎上，到 2024 年每年可節省約 2,000 萬美元，2025 年可節省 3,000 萬美元。

We also maintain our view that we have potential for additional cash inflows as subleases are executed on the non-cancellable, long-term lease agreements associated with Sdot Yam facility and upon the potential realization of our Richmond Hill property.

我們還堅持認為，由於與 Sdot Yam 設施相關的不可撤銷的長期租賃協議以及我們列治文山房產的潛在變現，轉租被執行，因此我們有可能獲得額外的現金流入。

With all these in mind, we believe that we have a clear strategy in place to reduce our manufacturing cost base and invest a portion of our savings into our brand, sales, marketing, R&D, and an expansion of our premium porcelain products to reignite profitable growth across the business.

考慮到所有這些，我們相信我們已經制定了明確的策略來降低我們的製造成本基礎，並將部分節省的資金投入到我們的品牌、銷售、行銷、研發以及我們優質瓷器產品的擴張中，以重新實現獲利。整個業務的成長。

Now I would like to provide an update on our Australian market. As we previously announced, in December 2023, the Australian federal state and territory governments announced a joint decision to ban the use, supply, and manufacture of engineered stone slabs containing crystalline silicon in Australia, including Caesarstone's quartz-based products.

現在我想介紹一下我們澳洲市場的最新情況。正如我們之前宣布的，2023 年 12 月，澳洲聯邦州和領地政府宣布了一項聯合決定，禁止在澳洲使用、供應和製造含有晶體矽的工程石板，包括 Caesarstone 的石英基產品。

The ban is expected to go into effect on July 1, 2024, in most Australian states and territories. The Caesarstone brand is well known in Australia and our products have earned tremendous success in the region over the years.

該禁令預計將於 2024 年 7 月 1 日在澳洲大多數州和地區生效。凱撒石品牌在澳洲享有盛譽，多年來我們的產品在該地區取得了巨大的成功。

We have been proactive in our approach to supply Australian market with alternative materials that will comply with the new regulations. By the end of the second quarter of 2024, we will have a full collection of alternative products, which we believe will allow us to retain our position in the Australian market.

我們一直積極主動地向澳洲市場供應符合新法規的替代材料。到 2024 年第二季末，我們將擁有完整的替代產品系列，我們相信這將使我們能夠保持在澳洲市場的地位。

In conclusion, during 2023, we took significant actions to restructure and stabilize the business. We diverted resources to areas that we believe will allow us to capture profitable growth, all while achieving our goal to further improve our net cash position.

總之，2023年，我們採取了重大行動來重組和穩定業務。我們將資源轉移到我們認為能夠實現獲利成長的領域，同時實現進一步改善淨現金狀況的目標。

While we are pleased with our progress as measured against our initial plan, there is more work to be done. With our restructuring and other cost-saving actions, we are prepared to prudently allocate capital back into the business, primarily into our branding and R&D to drive top-line growth, margin expansion, and profitability. We believe we have the right global strategy in place to improve our results and drive value to all our stakeholders.

雖然我們對與最初計劃相比所取得的進展感到滿意，但還有更多工作要做。透過重組和其他節省成本的行動，我們準備謹慎地將資本重新分配給業務，主要是我們的品牌和研發，以推動營收成長、利潤率擴張和獲利能力。我們相信，我們擁有正確的全球策略來改善我們的績效並為所有利害關係人創造價值。

Thank you, and I will now turn the call over to Nahum to walk through the details of our financial performance.

謝謝，我現在將把電話轉給內厄姆，詳細介紹我們的財務表現。

Thank you, Yos, and good morning, everyone. Looking at our fourth quarter results, global revenue in the fourth quarter was $128.5 million compared to $159.4 million in the fourth quarter of last year. On a constant currency basis, sales were down 19.6%. The decrease was primarily driven by softer global market conditions particularly in North America and renovation and remodel channels, mainly as a result of higher interest rates, which has impacted residential spending.

謝謝你，Yos，大家早安。從我們第四季的業績來看，第四季的全球營收為 1.285 億美元，而去年第四季的全球營收為 1.594 億美元。以固定匯率計算，銷售額下降 19.6%。這一下降主要是由於全球市場狀況疲軟（尤其是北美市場）以及翻新和改建管道所致，這主要是由於利率上升影響了住宅支出。

In addition, our sales were impacted by the competitive landscape for our product. In the US, sales were down 21.1%, mainly tied to softer residential end markets, particularly through third third-party distributors. This was partly offset by higher year-over-year sales with big bulk customers and improved performance in our commercial business.

此外，我們的銷售受到產品競爭格局的影響。在美國，銷售額下降 21.1%，主要與住宅終端市場疲軟有關，尤其是透過第三方經銷商。這在一定程度上被大宗客戶銷售額的同比增長以及我們商業業務業績的改善所抵消。

Canada sales were lower by 13.8% on a constant currency basis, experiencing similar market dynamics as the US, but to a lesser extent. Australia sales were off by approximately 8.1% on a constant currency basis, reflecting slower market conditions. Australian government's decision to ban quartz slabs did not have an impact on our fourth-quarter sales, given the plant meet 2024 implementation of the tolling. New Zealand sales were challenged in the fourth quarter, mainly as a result of the war and terror, which has significantly reduced activity in the region.

以固定匯率計算，加拿大銷售額下降了 13.8%，市場動態與美國類似，但幅度較小。以固定匯率計算，澳洲銷售額下降約 8.1%，反映出市場狀況放緩。考慮到該工廠將於 2024 年實施收費，澳洲政府禁止石英板的決定並未對我們第四季的銷售產生影響。紐西蘭第四季的銷售受到挑戰，主要是由於戰爭和恐怖活動，導致該地區的活動大幅減少。

Looking at our fourth-quarter P&L performance, our gross margin was 18.1% for the quarter. Adjusted gross margin was 18.9% compared to 19.7% in the prior year quarter. The year-over-year decrease in margin mainly reflected the impact of lower revenues, unfavorable product mix, higher slow-moving inventory provisions, and increased manufacturing unit cost driven by lower fixed cost absorption due to the lower capacity utilization.

從我們第四季的損益表來看，該季度的毛利率為 18.1%。調整後毛利率為 18.9%，去年同期為 19.7%。利潤率年減主要反映了收入下降、產品結構不利、滯銷庫存準備金增加以及產能利用率較低導致固定成本吸收減少導致製造單位成本增加的影響。

These factors were partially offset by lower (inaudible) expenses and the benefits of our improved production footprint as we transition production through our global network of third-party manufacturing partners.

這些因素被較低（聽不清楚）的費用以及我們透過第三方製造合作夥伴的全球網路轉移生產而改善生產足蹟的好處所部分抵消。

Operating expenses in the fourth quarter were $56.5 million compared to $106.1 million in the prior-year quarter, mainly related to a higher onetime non-cash charge in the prior year. Excluding legal settlements, loss contingencies, and restructuring and impairment expenses, operating expenses were 24.3% of revenue compared to 22.2% in the prior-year quarter. The higher percentage mainly resulted from the lower revenues.

第四季營運費用為 5,650 萬美元，去年同期為 1.061 億美元，主要與上一年一次性非現金費用增加有關。不包括法律和解、損失或有費用以及重組和減損費用，營運費用佔收入的 24.3%，去年同期為 22.2%。較高的百分比主要是由於收入較低。

Adjusted EBITDA in the fourth quarter was $1.4 million compared to $5.7 million in the prior-year quarter. The decrease primarily reflects the operating loss and lower gross margin.

第四季調整後 EBITDA 為 140 萬美元，去年同期為 570 萬美元。這一下降主要反映了經營虧損和毛利率下降。

Now looking at our full year financial performance highlights. Sales for the full year were down 18.2%. On a constant currency basis, sales were down 17%, mainly due to lower volume driven by challenging market conditions across our global footprint.

現在來看看我們全年的財務業績亮點。全年銷售額下降18.2%。以固定匯率計算，銷售額下降了 17%，這主要是由於我們全球業務中充滿挑戰的市場條件導致銷量下降。

Gross margin for the year was 16.3% compared to 23.6% last year. Adjusted gross margin was 17% compared to 23.8%. The difference in adjusted gross margin mainly reflects lower revenues and increased manufacturing unit costs due to lower fixed cost absorption. This was mainly related to lower capacity utilization as we undertook significant restructuring actions within the business during 2023.

本年度毛利率為 16.3%，去年為 23.6%。調整後毛利率為 17%，去年同期為 23.8%。調整後毛利率的差異主要反映了由於固定成本吸收減少而導致的收入減少和製造單位成本增加。這主要與產能利用率較低有關，因為我們在 2023 年進行了重大的業務重組行動。

The unfavorable impact of the underutilized capacity at our plants was partially offset by the benefits of higher ASP, lower shipping cost, and improved production footprint as we transitioned a significant portion of production to our network of third-party manufacturing partners throughout the year.

由於我們全年將大部分生產轉移到第三方製造合作夥伴網絡，因此較高的平均售價、較低的運輸成本和改善的生產足跡所帶來的好處部分抵消了我們工廠產能未充分利用的不利影響。

Excluding legal settlements, loss contingencies, restructuring, and non-cash impairment expenses we incurred during the year, operating expenses for the full year were 24.2% of revenue compared to 21.7% in the prior year. Our full year 2023 adjusted EBITDA was a loss of $9.4 million compared to a gain of $51.9 million last year, with the year-over-year change, primarily reflecting the lower gross margin and operating growth.

不包括年內發生的法律和解、或有損失、重組和非現金減損費用，全年營運費用佔收入的 24.2%，而前一年為 21.7%。2023 年全年調整後 EBITDA 虧損 940 萬美元，而去年則獲利 5,190 萬美元，年比變動主要反映了毛利率和營運成長的下降。

Turning to our balance sheet. Caesarstone balance sheet remains solid. As of December 31, 2023, cash, cash equivalents, and short-term bank deposits total to $91.1 million with a total debt to financial institutions of $7.6 million.

轉向我們的資產負債表。凱撒金石的資產負債表依然穩健。截至 2023 年 12 月 31 日，現金、現金等價物及短期銀行存款總計 9,110 萬美元，金融機構債務總額為 760 萬美元。

During the fourth quarter, we generated another quarter of positive cash flow from operations of $13.2 million. For the year cash flow from operations totaled to $66.5 million, mainly driven by inventory reductions in the quarter and the full year. Our net cash position as of December 31, 2023, was $83.5 million compared to $28.2 million as of December 31, 2022.

第四季度，我們又從營運中產生了 1,320 萬美元的正現金流。全年營運現金流總計為 6,650 萬美元，主要受到本季和全年庫存減少的推動。截至 2023 年 12 月 31 日，我們的淨現金部位為 8,350 萬美元，而截至 2022 年 12 月 31 日，我們的淨現金部位為 2,820 萬美元。

In regards to the Sdot Yam plant closure, which occurred during the second quarter of 2023 and Richmond Hill plant closure, which occurred during January 2024, we now expect to realize savings of [$20 million] in 2024 compared to a full year of 2023 results. We expect additional $10 million [after] 2024 for a total of $30 million of savings compared to full-year 2023 results.

關於 2023 年第二季發生的 Sdot Yam 工廠關閉和 2024 年 1 月發生的 Richmond Hill 工廠關閉，我們現在預計與 2023 年全年業績相比，2024 年將實現節省 [2000 萬美元] 。我們預計 2024 年後將額外增加 1,000 萬美元，與 2023 年全年業績相比總共節省 3,000 萬美元。

We are still in the process of accepting bids to sublet portions of the non-cancellable lease agreement associated with the Sdot Yam manufacturing facility, which will allow us to recognize additional cash inflows on top of the plant cost savings. At our Richmond Hill site, we are looking for the best alternative to monetize that asset.

我們仍在接受與 Sdot Yam 製造工廠相關的不可撤銷租賃協議的部分轉租投標，這將使我們能夠在工廠成本節省的基礎上確認額外的現金流入。在我們的列治文山網站，我們正在尋找將該資產貨幣化的最佳替代方案。

In regards to our outlook, based on our significant restructuring initiatives underway, our leaner operations and our focus on profitability, we have entered 2024 on a much stronger footing as compared to a year ago. We are seeing signs of stabilization in what has been a turbulent demand environment.

就我們的前景而言，基於我們正在進行的重大重組舉措、我們更精簡的運營以及我們對盈利能力的關注，我們進入 2024 年的基礎比一年前更加牢固。我們看到動盪的需求環境出現穩定跡象。

Against this backdrop, I will provide color on our outlook for full year 2024. Revenues in the first quarter of 2024 are trending in line with the fourth quarter. So we expect both periods to be roughly similar. We expect the first quarter to be our lowest revenue quarter for the year and for revenues to be stronger in the following quarters based on our historical seasonality trend. This outlook considers several assumptions. In the North America, we expect to begin seeing more favorable year-over-year comparisons as we move into the second quarter of the year.

在此背景下，我將闡述我們對 2024 年全年的展望。2024 年第一季的營收趨勢與第四季一致。因此我們預期這兩個時期大致相似。我們預計第一季將是今年收入最低的季度，根據我們的歷史季節性趨勢，接下來幾季的收入將會更強。這項展望考慮了幾個假設。在北美，隨著進入今年第二季度，我們預計將開始看到更有利的同比比較。

In Australia, we expect to perform roughly in line with the market for our products. We anticipate the regulatory decision to cause a temporary air pocket in sales as we introduce alternative materials that comply with the regulations during the first half of 2024.

在澳大利亞，我們預期我們產品的表現大致與市場一致。我們預計，隨著我們在 2024 年上半年推出符合法規的替代材料，監管決定將導致銷售暫時出現空檔。

In Israel, revenues are likely to remain depressed due to the war on terror, but we expect those pressures to ease as we move through 2024. Based on our revenue outlook and restructuring actions, we believe full-year adjusted EBITDA will be positive.

在以色列，由於反恐戰爭，收入可能會持續低迷，但我們預計這些壓力將隨著 2024 年的到來而緩解。根據我們的收入前景和重組行動，我們相信全年調整後的 EBITDA 將為正值。

As mentioned, the closure of the two plants are poised to bring us realized P&L savings of approximately $20 million in 2024 compared to 2023. We expect adjusted EBITDA for the first quarter to be negative to breakeven, given the expected timing of spend on sales, marketing and related expenses, and as the savings that are coming from Richmond Hill plant will become more significant in the second half of the year.

如前所述，與 2023 年相比，關閉兩家工廠將使我們在 2024 年實現損益節省約 2,000 萬美元。考慮到銷售、行銷和相關費用的預期支出時間，以及列治文山工廠的節省將在今年下半年變得更加顯著，我們預計第一季度調整後的 EBITDA 將為負數，達到盈虧平衡。 。

We will remain focused on improving our bottom line as we move through the year and believe the significant actions we have taken to restructure and stabilize the business has set the foundation to do so. In turn, we are prudently allocating resources to areas that we believe will allow us to capture profitable growth.

在這一年裡，我們將繼續專注於提高我們的利潤，並相信我們為重組和穩定業務所採取的重大行動已經為此奠定了基礎。反過來，我們正在謹慎地將資源分配到我們認為將使我們能夠實現獲利成長的領域。

Finally, based on all the improvements and actions that we are taking, we expect 2024 to be another full year of positive cash flow from operations. We will continue to invest for growth while taking disciplined approach to capital allocation as we move through the year. With that, we are now ready to open the call for questions.

最後，基於我們正在採取的所有改進和行動，我們預計 2024 年將是另一個全年營運現金流為正的一年。我們將繼續投資促進成長，同時在這一年中採取嚴格的資本配置方法。至此，我們現在準備開始提問。

(Operator Instructions) Reuben Garner, The Benchmark Company.

（操作員說明）Reuben Garner，Benchmark 公司。

Yeah, good afternoon, Yos and Nahum. Thanks for taking my questions this morning. Maybe to start, you referenced a stabilization or signs of stabilization, I think in North America in particular, can you talk about what exactly you're seeing there, maybe as things change dramatically on a year-to-date basis versus what you're seeing in the fourth quarter or is that just an assumption that the easing rate environment throughout the year will result in better results?

是的，下午好，約斯和內厄姆。感謝您今天早上回答我的問題。也許首先，你提到了穩定或穩定的跡象，我認為特別是在北美，你能談談你在那裡到底看到了什麼，也許是因為今年迄今為止的情況與你所看到的相比發生了巨大變化。是在第四季度看到的，還是只是假設全年的寬鬆利率環境會帶來更好的結果？

Hi, Reuben. It's Nahum. So basically, as we mentioned, we see first signs of stabilization, meaning Q1 is trending in line -- is in line with Q4. And based on the things that we analyze and read, we expect to see a gradual improvement also in the macroeconomics as we progress during the year. But in terms of Q1, we see the same dynamics as in Q4, no deteriorating, let's say for them.

嗨，魯本。這是內厄姆。因此，基本上，正如我們所提到的，我們看到了穩定的初步跡象，這意味著第一季的趨勢與第四季度一致。根據我們分析和閱讀的內容，我們預期隨著今年的進展，宏觀經濟也會逐步改善。但就第一季而言，我們看到了與第四季相同的動態，沒有惡化，我們可以這麼說。

Okay. And then how about from a pricing versus a volume standpoint, can you help us with what you saw in the fourth quarter and how to think about 2024, whether that's in North America or the whole business altogether?

好的。然後，從定價與銷售的角度來看，您能否幫助我們了解您在第四季度看到的情況以及如何思考 2024 年，無論是在北美還是整個業務？

So yes, so in North America, we saw down volume, mainly on the back of the macroeconomic, the soft macroeconomic, the higher inflation rate, and it impacted mainly the residential channel. We saw some positive signs in the commercial channel and also in the big box. This is basically the same dynamic globally in certain regions we see it to a higher extent. In other regions like Australia and Canada, we saw the same dynamic, but to a lesser extent.

所以，是的，在北美，我們看到成交量下降，主要是因為宏觀經濟疲軟、通貨膨脹率較高，這主要影響了住宅通路。我們在商業管道和大盒子中看到了一些積極的跡象。在全球某些地區，這基本上是相同的動態，我們在更大程度上看到了這一點。在澳洲和加拿大等其他地區，我們也看到了相同的動態，但程度較小。

And again, based on the things that we analyze, we expect to see certain relief throughout 2024. The pricing that we mentioned that impacted negatively gross margin was not a decline in the average selling price, but rather the mix of channels and the mix of products that we sold during the quarter.

同樣，根據我們分析的情況，我們預計 2024 年會出現一定程度的緩解。我們提到的對毛利率產生負面影響的定價並不是平均售價的下降，而是我們在本季銷售的通路組合和產品組合。

Okay. And then a question on your restructuring actions. What -- so it's $30 million total over the next two years. What portion of the expense, why is some of that out in 2025, the facility closures have already taken place, can you help to help us understand what portion of the savings gets pushed out into next year?

好的。然後是關於您的重組行動的問題。那麼未來兩年的總金額為 3000 萬美元。哪一部分費用，為什麼其中一部分要在 2025 年支出，設施已經關閉，您能幫助我們了解哪一部分節省的費用會推遲到明年嗎？

Yeah. So the Richmond Hill was only closed in the beginning of January, and we are still holding inventory that was produced in that plant and still reflects the higher prices, the higher cost. This cost will be digested during 2024.

是的。因此，列治文山工廠在一月初才關閉，我們仍然持有該工廠生產的庫存，並且仍然反映出更高的價格和更高的成本。該成本將在 2024 年消化。

So the positive you know that the savings coming from Richmond Hill will be reflected in full only in 2025. In 2024, we will digest and eat the more expensive inventory that came from Richmond Hill, especially in the first half of 2024.

因此，您知道列治文山節省的正面因素要到 2025 年才能全部體現出來。2024年，我們將消化並吃掉來自列治文山的更昂貴的庫存，尤其是2024年上半年。

Okay. And I'm going to sneak one more in and then I'm done. The cash flow from operations goal of being positive in 2023 you've got a big benefit from working capital, obviously, reducing inventory. Do you have more room to go there in '24? Or how do we think about how you get to cash flow positive? Is it going to look differently this year than it did last?

好的。我會再偷偷地放進去，然後我就完成了。2023 年營運現金流目標為正，您可以從營運資本中獲得巨大收益，顯然，減少庫存。24年你還有更多空間去那裡嗎？或者我們如何考慮如何實現正現金流？今年的情況會與去年有所不同嗎？

The positive cash flow this year definitely will be to a lesser extent on the back of improvement in inventory, although we still have room for improvement in inventory days. Just as a reminder, we reduced inventory days from the beginning of the year that it was around 170 days to 120 days at the end of 2023.

儘管我們的庫存天數仍有改善的空間，但今年的正現金流肯定會在較小程度上得益於庫存的改善。提醒一下，我們將庫存天數從年初的 170 天左右減少到 2023 年底的 120 天。

And as I said, we still have some room for improvement during 2024 also on the back of closing the Richmond Hill manufacturing activity. In addition to that, we believe that during the year, as our profitability will increase and be more significant, we will also benefit from debt and not only from the improvements in working capital.

正如我所說，在關閉列治文山製造活動的背景下，我們在 2024 年仍然有一些改進的空間。除此之外，我們相信年內，隨著我們的獲利能力將提高且更加顯著，我們還將受益於債務而不僅僅是營運資金的改善。

Okay. Thank you and good luck, guys.

好的。謝謝你們，祝你們好運。

Stanley Elliott, Stifel.

史丹利·艾利奧特，史蒂菲爾。

Yos, Nahum, thank you, guys for the question. When we talk about the outlook, can you give us some of the building blocks you're looking at for sequential improvement on the revenue build? And I say that in context, after July 1, 20% of your business is going to be under severe pressure. But under this contract, just sequential improvement, we're actually looking at growth into the December quarter. And I'm just curious how we get to that build up.

是的，Nahum，謝謝你們提出的問題。當我們談論前景時，您能給我們一些您正在尋找的收入成長連續改善的建置模組嗎？我說的是，從上下文來看，7月1日之後，你們20%的業務將面臨巨大的壓力。但根據這份合同，只是連續改善，我們實際上正在考慮到 12 月季度的成長。我只是好奇我們是如何實現這一目標的。

Stanley, so first of all, as we mentioned, Q1 is we expect Q1 to be our lowest quarter in terms of revenues. And then we believe that the seasonality that we used to see in our results in previous years, I mean before the impact of COVID and other external impacts to be evident in 2024. So we expect Q2 and Q3 to be higher in terms of revenues compared to Q1 and also Q4 compared to Q1. So basically, we expect to see a gradual improvement in the coming quarters. While Q1, as we mentioned in the outlook section, it's trending in line with Q4. So this is one reason.

史丹利，首先，正如我們所提到的，我們預計第一季將是我們收入最低的季度。然後我們相信，我們在前幾年的結果中看到的季節性，我的意思是在新冠疫情和其他外部影響在 2024 年變得明顯之前。因此，我們預計第二季和第三季的營收將高於第一季度，第四季的營收也將高於第一季。所以基本上，我們預計未來幾季會逐步改善。正如我們在展望部分所提到的，第一季的趨勢與第四季一致。所以這是原因之一。

And with regard to Australia, we took a proactive approach to the to the new regulations that came that were published during December. And we are -- and as we said, we are preparing a collection that will meet the regulations and it will be ready by the end of Q2, by the by middle of the year, and expect to maintain our leading position in that market.

對於澳大利亞，我們對 12 月發布的新法規採取了積極主動的態度。正如我們所說，我們正在準備一個符合法規的系列，並將在第二季末、今年年中之前準備好，並期望保持我們在該市場的領先地位。

Any guess what the Australia business is going to look like after July 1? I mean, is it going to be like a [$50 million run rate business, is it $80 million]? Just trying to get a sense for the magnitude of change that we should expect there?

你猜7月1日之後澳洲的商業會是什麼樣子？我的意思是，它會像[5000萬美元運轉率業務，是8000萬美元嗎]？只是想了解我們該期待的改變幅度嗎？

So Stanley, hi. So far, the business in Australia continues quite well. And you know where business is usual in terms of selling the products, and this is expected to continue until July. From July, we don't know now exactly what will be the reaction in the market? What we are seeing is very positive sign for the products that we introduced and we will have to wait and see. There are still things that needs to be cleared by the Australian government.

史丹利，嗨。到目前為止，澳洲的業務進展順利。您知道產品銷售方面的情況通常會怎樣，預計這種情況將持續到七月。從7月開始，我們現在還不知道市場具體會有什麼反應？我們所看到的對於我們推出的產品來說是非常積極的信號，我們將不得不拭目以待。還有一些事情需要澳洲政府澄清。

So the signs are very good, but we don't have something which is carved in stone as of yet. But overall, it seems that the product that we have introduced -- by the way, also some of our competitors are introducing a similar, not similar, but let's say localized products and the reaction from the government is positive. And also, we believe it's in accordance with the Australian new regulations.

所以跡象非常好，但我們還沒有什麼是刻在石頭上的東西。但總的來說，我們推出的產品——順便說一句，我們的一些競爭對手也在推出類似的、不類似的、但我們可以說是本地化的產品，政府的反應是積極的。而且，我們相信這符合澳洲的新法規。

So as I said, we definitely got some positive response in the last few weeks. And we are advancing with the products and with the production and we will have to wait and see what will be the exact revenue. We also have our lines of porcelain, which are relevant to the Australian market under the new regulations. So all in all, we believe that we will continue to maintain our leading position in the market. How much exactly will it be, we don't know at this stage.

正如我所說，過去幾週我們確實得到了一些正面的回應。我們正在推進產品和生產，我們將不得不等待，看看確切的收入是多少。我們也有自己的瓷器系列，根據新法規，它們與澳洲市場相關。總而言之，我們相信我們將繼續保持在市場上的領先地位。具體是多少，我們現階段還不知道。

Yeah, that's fair. And I guess one last, just kind of a point of clarification. So maybe help us with the inventory days, how you see this model running now that you're going to be more on the import side. And then lastly, point of clarification, you mentioned positive operating cash, are you also expecting positive free cash flow in 2024?

是的，這很公平。我想最後一點只是需要澄清一下。因此，也許可以幫助我們了解庫存天數，以及您如何看待這個模型的運行，因為您將更專注於進口方面。最後，需要澄清的是，您提到了正的營運現金，您是否也預計 2024 年會出現正的自由現金流？

So in terms of the inventory days, as Nahum said, we went down from 170 days to 120 by the end of Q4. We are aiming to be lower than 100. So there is still room for improvement there. And in terms of free cash flow, we are reducing our CapEx. So we will still have CapEx for our porcelain plant in India and also for our plant in Israel mainly.

因此，就庫存天數而言，正如 Nahum 所說，到第四季末，我們從 170 天減少到 120 天。我們的目標是低於 100。所以這方面還有進步的空間。就自由現金流而言，我們正在減少資本支出。因此，我們在印度的瓷器工廠和以色列的工廠仍會有資本支出。

But it will be less than what we used to have when we had all the additional factory in Sdot Yam and Richmond Hill, of course. So all in all, we believe that we will still generate positive cash flow, of course, and we will, of course, have a free cash flow after that.

但當然，這將比我們以前在 Sdot Yam 和列治文山擁有所有額外工廠時所擁有的要少。總而言之，我們相信我們仍然會產生正現金流，當然，之後我們當然還會有自由現金流。

Perfect, guys. Thanks so much and best of luck.

完美，夥計們。非常感謝，祝你好運。

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to your host, Yos Shiran, Caesarstone's Chief Executive Officer, for any closing remarks.

謝謝。我們的問答環節到此結束。我想將會議轉回給你們的東道主 Caesarstone 首席執行官 Yos Shiran 致閉幕詞。

Thank you for your attention this morning, and we look forward to updating you on our progress next quarter. Thank you very much. Bye.

感謝您今天早上的關注，我們期待向您通報下季度的最新進展。非常感謝。再見。

Thanks.

謝謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。