Calnex Solutions Plc · LSE:CLX
Calnex Solutions — H1 FY2024 Earnings Presentation
22 slides from Calnex Solutions's earnings presentation, Nov 23, 2023
Slide 1: Interim Results HY24
Calnex Insight and Innovation Interim Results HY24 Tommy Cook, CEO MW We ES Ashleigh Greenan, CFO
Slide 2: Altice, Portugal Telecom Network Operator
Altice, Portugal Telecom Network Operator.
Slide 3: Why we are needed
Why we are needed Design Design Conformance Manufacturing Network Monitoring and Simulation Validation Test Test Deployment Maintaining networks New product development . @° J L lifecycle ee” id % A R&D Design Validation and Conformance Testing Maintenance Testing post deployment Monitoring networks
Slide 4: Telecoms budgets impacted from the top down
Telecoms budgets impacted from the top down * Telecoms spend generally led by the large . . Ongoing infrastructure projects of the major telecoms data centre operators, which then filter down through the RES eoTeiAs A Increasing wider ecosystem use of cloud computing & Al * High interest rate enviro
Slide 5: HY24 Overview
HY24 Overview H1 performance impacted by the wider economic environment and resulting cautious telecoms market * £7.8m Revenue (HY23: £12.7m) + £(0.6)m Profit before tax (HY23: £3.1m) + £13.5m Closing cash (HY23 £14.4m) + 0.31p Interim dividend (HY23 0.31p) Calnex November 2023 Order inflow remained
Slide 6: Customer successes in H1
Customer successes in H1 ecoms Tier 1 European Network Operator (existing customer) Purchase of multiple Paragon-Neos across multiple divisions to test high- speed interfaces recently added. Tier 1 US Network Operator (existing customer) First sale of SNE-X 100G Key feature: traffic capture function
Slide 7: Financial review
———— Calnex Insight and Innovation Financial review
Slide 8: Income statement, period ending 30 September
Period ending 30 September H1 FY24 H1 FY23 • £000 £000 Revenue 7,847 12,728 • Cost of sales (2,011) (3,111) Gross Profit 5,836 9,617 • Other income 111 150 Administrative expenses (excl D&A) (4,542) (4,691) EBITDA 1,405 5,076 • Amortisation of development costs (1,816) (1,610) Underlying EBITDA (411
Slide 9: Revenue analysis
Revenue analysis H1 FY24 Region * ROW: Least affected by slow-down, with resilient performance in EMEA as business derived from a wide range of sectors * North Asia: China still remains challenging due to impact of US restrictions. Focusing on growing business in Taiwan and Japan * Americas: Most im
Slide 10: Cash flow, period ending 30 September
Period ending 30 September H1 FY24 H1 FY23 £000 £000 Cashflows from operating activities • EBITDA 1,405 5,076 Add back non cash items 339 49 Movements in net working capital (3,284) (1,275) • Tax paid/credits received (885) 393 Net cash from operating activities (2,425) 4,243 • Development costs cap
Slide 11: Financial resilience
Financial resilience * New products performing well. * Gross margins have remained robust. * Costs under control, while investing in the areas which will generate future growth. ¢ Increased inventory will bring benefit once orders return. ° Well-funded and expect breakeven H2 cash performance. Calne
Slide 12: Strategy and market opportunity
———— Calnex Insight and Innovation Strategy and market opportunity
Slide 13: Continued product innovation to capitalise on growth
Continued product innovation to capitalise on growth of 5G Expand within the Cloud Computing sector and other Ethernet market niches Target select M&A opportunities to add to product portfolio
Slide 14: Synchronisation testing and network emulation portfolio
Synchronisation Testing synchronisation Network emulation for testing in the lab performance of networks real-world testing in the lab LAB SYNC NETWORK SYNC CLOUD & IT Telecom Telecom Data Centre Infrastructure Applications Prove compliance and interoperability of 5G O-RAN fronthaul devices Sentry S
Slide 15: Product innovation to stimulate growth
Product innovation to stimulate growth pgs : Non-Telecoms, * Dual approach - new capability in the Automotive Telecom market to stimulate growth, plus entry into Non-telecoms markets. * In this way, previous R&D investment is repurposed for new growth channels e.g. Sentinel into data centres as Sent
Slide 16: Navigating a challenging period
Navigating a challenging period Underlying market drivers remain unchanged New product programme will drive growth - widening the Calnex offering and serving unmet needs We have a dedicated team, experienced at managing tough market conditions Strong customer and partner relationships across all ter
Slide 17: Appendix
———— Calnex Insight and Innovation Appendix
Slide 18: Balance sheet
Sep-23 Sep-22 Mar-23 £000 £000 £000 Non-current assets Intangible assets 11,168 10,181 10,565 Goodwill 2,000 1,646 2,000 Tangible & right of use assets 843 957 937 Deferred tax asset 691 304 272 14,702 13,088 13,774 Current assets Inventories 3,837 1,532 2,748 Trade and other receivables 4,718 6,035
Slide 19: Revenue model
Revenue model 10% 90% 59% 24% G @ Hardware & Software revenue 7% BH Americas O Warranty support © a North Asia G Rest of Revenue (£,000) Geographic Split World (3yr order average) 53% 47% 26% 74% Average length of relationship of top ten customers is 10 years Total customers orders over 3yrs @ Repea
Slide 20: Financial structure
Financial structure Revenue Gross profit Admin costs Tax Cash Two revenue streams: * Historical full year average of 90% bundled hardware & software recognised on delivery * Historical full year average of 10% warranty and software support recognised over life of product Gross margin: approx. 75% ne
Slide 21: Board of directors
Tommy Cook Ashleigh Greenan Stephen Davidson Graeme Bissett Margaret Rice-Jones Helen Kelisky
Slide 22: Shareholders, % of issued share capital
% of Issued Shareholder ▪ Share Capital ▪ ▪ ▪ ▪