Electro Optic Systems Holdings Limited · ASX:EOS
Electro Optic Systems — Shareholder Meeting (May 2022)
30 slides from Electro Optic Systems's shareholder meeting presentation, May 27, 2022
Slide 1: Electro Optic Systems Holdings Limited Annual General Meeting
Electro Optic Systems Holdings Limited Annual General Meeting – 27 May 2022 1
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer CONTENT OF PRESENTATION FOR INFORMATION PURPOSES ONLY Forward-looking Statements This presentation may contain statements that are, or may be deemed to be, forward-looking statements. Such statements can generally be identified by the use of words such as ‘may’, ‘will
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Preparation of Information All financial information has been prepared in accordance with Australian Accounting Standards. Certain financial data included in this presentation is ‘non IFRS financial information’ noting that the financial information relating to FY2021
Slide 4: Proxy Votes Received
2, RE-ELECTION OF DR GREENE For 22,631,010 86.54 15.00 Proxy Votes Against 1,529,586 5.85 1.01 Open-Usable 1,990,091 7.61 1.32 Received Board| 594192] 2.27 0.39 Non-Board| 1,395,899 5.34) 0.92 Open-Cond 0 0.00 0.00 Open Unusable 0 NIA 0.00 Abstain 10,194,974 NA| 6.76 Excluded 4,860,196 NA\ 3.22 3, R
Slide 5: Strategic Review - Purpose
Strategic Review - Purpose The Board initiated a Strategic Review in March 2022. Greenhill & Co were engaged to undertake an independent assessment of the business to consider options to maximise shareholder value. The scope of the review was to: 1. Provide an assessment of the underlying value pote
Slide 6: Strategic Review - Status
Strategic Review - Status • A number of pathways have been explored to ensure EOS has an appropriate capital structure to continue to diversify and grow our core businesses • Broad range of stakeholders have been engaged including strategic and financial counterparties (both domestically and globall
Slide 7: Landscape - Global
Landscape - Global Geopolitical tensions • China’s assertiveness in the Indo-Pacific region • Russia’s invasion of Ukraine • Contestability of space an increasing security concern Responses • US pressures allies to shoulder more defence burden through ANZUS, AUKUS, NATO • EOS customers, including NA
Slide 8: Landscape - Domestic
Landscape - Domestic New federal government to enhance sovereign capabilities in defence and manufacturing Defence capabilities of increasing importance • Provide relevant defence technology, products and sustainment to US under AUKUS • Detect, track and destroy long-range threats from space • Commu
Slide 9: Results
Results 9
Slide 10: 2021 Milestones
2021 Milestones EOS’ investment of $77m to drive near-term opportunities impacted 2021 cash and EBIT. 1. Record Revenue $212m. After three years of strong revenue growth, in 2021 revenue grew a further 18%. 2. Record production. In 2021, EOS manufactured 271 Remote Weapons Systems (RWS) up from 209
Slide 11: 2021 Profitability
2021 Profitability Directors acknowledge that a net loss of $13.8m is a disappointing outcome. 1. SpaceLink. $37m was invested in SpaceLink in 2021, of which $20.6m was expensed through the P&L. A total of $49m has been invested in the past two years. 2. R&D. In 2021, $27m was spent on Research & De
Slide 12: Financial Performance Breakdown
Financial Performance Breakdown EOS’ underlying defence business is profitable and has strong momentum A$million 2021 2020 Revenue1 Defence Systems Defence Systems 184.5 156.4 • Revenue increased 18% Space Systems (excl. SpaceLink) 27.8 23.8 • Underlying EBIT improved strongly even after adjusting f
Slide 13: Underlying Segment EBIT to Statutory NPAT Reconciliation
Underlying Segment EBIT to Statutory NPAT Reconciliation A$million 2021 2020 Underlying EBIT (excl. FX gains/losses) (11.5) (12.8) FX gains/(losses) 9.8 (15.7) EBIT (1.7) (28.5) Interest (2.9) (1.4) Profit/(loss) before tax (4.6) (29.9) Income tax (expense)/benefit (9.2) 4.7 Net profit/(loss) after
Slide 14: EOS at a Glance
EOS at a Glance Defence Systems Space Systems1 SpaceLink • Develops, manufactures and markets advanced • Comprises EM Solutions and Space Technologies • Opportunity to leverage EOS’ existing capabilities technologies for weapon systems optimisation to build and operate a constellation of medium and
Slide 15: Business Update Defence
Business Update Defence 15
Slide 16: Defence Systems
Defence Systems Improved revenue and profitability • Strong EBIT outcome given COVID-19 and supply chain challenges • New customers added to the EOS RWS user community Production level stabilised with additional capacity introduced • Record 271 RWS produced • Huntsville, AL facility approaching full
Slide 17: RWS - Superior performance
RWS - Superior performance Range and accuracy advantage • R400 demonstrates accuracy to 2.2 km on the move, a 40%+ range advantage over competitors • Marine offering exceeding customer expectations Product range expanded for minimal investment • Missile and rocket integration provides wider options
Slide 18: Directed Energy
Directed Energy Market and products rapidly evolve GS to review Product development • 35 kW directed energy system for drones and missiles • Successful customer-funded demonstrations • Group 1 drones permanently disabled at distances beyond 1 km and at a rate of 20 drones per minute • Qualification
Slide 19: Unmanned Ground Vehicles
Unmanned Ground Vehicles Reliability and accuracy critical Major growth segment • Unmanned vehicles with a range of lethality capabilities are very attractive to allied forces • EOS’ accuracy and reliability are essential in this domain • EOS’ capabilities in C2-C4, communications and CUAS strengthe
Slide 20: CUAS – Unique integrated solution
CUAS – Unique integrated solution Ukraine highlights drones’ lethality • Increased prevalence of weaponised drones and loitering munition technologies • Customers undertaking threat assessment and evaluating potential solutions, accelerated by events in Ukraine • Threats may require complex solution
Slide 21: C4 EDGE - ADF engagement
C4 EDGE - ADF engagement C4 Evolutionary Digital Ground Environment Communications • $34.4m project successfully delivered by EOS as Prime Contractor • All-Australian consortium demonstrated a Battlegroup and Below Battlefield Command System designed to address the Army’s future tactical requirement
Slide 22: Business Update Space
Business Update Space 22
Slide 23: Space Domain Awareness
Space Domain Awareness Space Protection Space Domain Awareness (SDA) • SDA service adoption accelerating due to geopolitical tensions • EOS provides highest accuracy data, unmatched by other ground-based sensor technologies, such as RADAR • EOS delivers actionable space intelligence to customers • N
Slide 24: Space – EM Solutions
Space – EM Solutions • World leading technology deployed across six navies globally ̶ Closed-loop monopulse tracking gives higher speeds and greater uptime ̶ Terminal covers multiple frequency bands at once providing link redundancy NATO Type M • Record delivery of satellite terminals and robust pip
Slide 25: SpaceLink
SpaceLink 1. The global and domestic landscape is driving up the priority of SpaceLink, as highlighted by current needs for responsive space data relay in active war zones. 2. Aligning our technology roadmap with the US SDA has reduced risk, allowed the initial capital requirement prior to revenue g
Slide 26: Company Outlook
Ae eae “Company Outlook
Slide 27: Landscape – Global and Domestic
Landscape – Global and Domestic Powerful Drivers • China’s assertiveness in the Indo-Pacific, Russia’s invasion of Ukraine, contest in space • US pressures allies to shoulder more defence burden: ANZUS, AUKUS, NATO • EOS customers, including NATO, Asia, Australia all significantly increasing defense
Slide 28: Significant Growth Opportunities Across the Portfolio
Significant Growth Opportunities Across the Portfolio Total Addressable Product Comments Market / Revenue Opportunity • Strong market position and pipeline of potential awards in 2022/23. Focus on market-leading RWS US$8bn / 10 years accuracy, weight and lethality to accentuate technology lead CUAS
Slide 29: 2022 Outlook
2022 Outlook Tailwinds • Global and domestic fundamentals are compelling, and momentum is lifting • Unfolding events strongly support EOS investments, product mix and technologies • EOS technology, products, capacity, quality, yield and margins all on plan • Stronger inbound enquiries than ever befo
Slide 30: Questions
Questions 30
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