Slide 1: Results for the Year Ended 30 April 2021
RESULTS FOR THE YEAR ENDED 30 APRIL 2021 Andrew Thomis & Simon Walther 27 July 2021
Slide 2: Some Context
SOME CONTEXT…. • Journey to a serious mid-sized defence company • 14% CAGR in adjusted operating profit • No equity fund raising • Distributed >£25m dividends 2
Slide 3: Operational and Divisional Highlights
Operational and Divisional Highlights Andrew Thomis, Chief Executive Cohort plc FY 20/21 Results Presentation 27 July 2021 3
Slide 4: Financial Highlights
Introduction FINANCIAL HIGHLIGHTS Adjusted Revenue Adjusted EPS Operating Profit Achieved record adjusted operating profit £143.3m £18.6m 33.6p +9.3% +2.2% -9.4% (2020: £131.1m) (2020: £18.2m) (2020: 37.1p) Order intake Order book Revenue cover Good order cover for coming year £180.3m £242.4m 64% (2
Slide 5: Operational Highlights
Introduction OPERATIONAL HIGHLIGHTS Initial Good contribution performance from from ELAC MASS, slightly better than behind 2020 record expected high Acquisition of Stronger year Wärtsilä ELAC from EID and Nautik GmbH better completed performance from MCL Weaker performance at CHESS and SEA Cohort pl
Slide 6: Board and Senior Leadership
Introduction BOARD AND SENIOR LEADERSHIP Beatrice Nicholas Non-executive Director Bernd Szukay Ole Schneider Joint Managing Joint Managing Director, ELAC Director, ELAC Richard Flitton Frederico Lemos Managing Director, SEA Managing Director, EID David Tuddenham Managing Director, Chess Cohort plc F
Slide 7: Financial Review
Financial Review Simon Walther, Finance Director Cohort plc FY 20/21 Results Presentation 27 July 2021 7
Slide 8: Chess Highlights
Divisional Highlights CHESS HIGHLIGHTS 2020/21 2019/20 Revenue (£m) 28.6 25.2 Operating profit (£m) 3.0 3.9 Operating margin 10.5% 15.6% • Revenue grew, but reduced margins led to fall in adjusted operating profit • Revenue dominated by export customers • Strengthened management team to address grow
Slide 9: EID Highlights
Divisional Highlights EID HIGHLIGHTS 2020/21 2019/20 Revenue (£m) 20.9 18.0 Operating profit (£m) 4.8 3.1 Operating margin 23.1% 17.2% • Grew on good performance, historically high net return • Improved cash performance • Decline in revenue from Portuguese armed forces • Improved intercom deliveries
Slide 10: ELAC Highlights
Divisional Highlights ELAC HIGHLIGHTS 2020/21* 2019/20 Revenue (£m) 8.3 - Operating profit (£m) 1.2 - Operating margin 14.1% - *5 months only • Initial contribution in line with expectations • Only minor impact from COVID • Significant order secured for Italian Navy • Order coverage >90% for 21/22 C
Slide 11: MASS Highlights
Divisional Highlights MASS HIGHLIGHTS 2020/21 2019/20 Revenue (£m) 39.5 41.1 Operating profit (£m) 8.7 8.9 Operating margin 22.1% 21.7% • Slightly weaker after record year last year, but ahead of expectations • Still strongest contributor in Group • Net margins increased due to improved mix and flat
Slide 12: MCL Highlights
Divisional Highlights MCL HIGHLIGHTS 2020/21 2019/20 Revenue (£m) 18.0 15.1 Operating profit (£m) 2.1 1.7 Operating margin 11.5% 11.0% • Bounced back with revenue and operating profit exceeding expectations • Strong cash performance • Starts 2021/22 with improved visibility and good prospects for co
Slide 13: SEA Highlights
Divisional Highlights SEA HIGHLIGHTS 2020/21 2019/20 Revenue (£m) 28.0 31.7 Operating profit (£m) 2.4 3.5 Operating margin 8.4% 11.1% • Restructure exercise completed in July 2020 to shape cost base to activity • Disappointing trading performance in 2020/21 due to delays in export orders • Weaker re
Slide 14: Income Statement
Financial Review INCOME STATEMENT Year ended 30 April 2021 2021 2020 Variance £m £m % Revenue 143.3 131.1 9.3% Gross profit 52.7 36.8% 50.4 38.4% Overhead (34.1) (32.2) Adjusted operating profit 18.6 18.2 2.2% Exceptional items (1.3) (0.8) 1 Adjusted profit before interest and tax 17.3 17.4 (0.6)% N
Slide 15: 2019/20 to 2020/21 Revenue & Profit Bridge
Financial Review 2019/20 TO 2020/21 REVENUE & PROFIT BRIDGE Revenue bridge +£3.4m +£2.9m -£3.7m +£2.9m -£1.6m +£8.3m Chess EID MCL SEA 2020/21 MASS Revenue £143.3m ELAC 2019/20 (5 months) Revenue £131.1m Adjusted operating profit bridge +£1.7m -£0.9m -£0.2m -£1.1m +£0.4m Chess +£1.2m MASS -£0.7m EID
Slide 16: Earnings Per Share
Financial Review EARNINGS PER SHARE • 9.4% decrease in adjusted earnings per share from 2% growth in adjusted operating profit • Reconciled as follows: Adjusted Adjusted operating earnings per profit share £m Pence 2020 18.2 37.10 Chess (81.84% owned for the year) (0.9) (1.56) EID (80% owned) 1.7 3.
Slide 17: Balance Sheet
Financial Review BALANCE SHEET • Chess earn out and minority now £2.8m (2020: £4.0m), expect to pay by 31 October 2021 • Amortisation of other intangible expected to be £6.8m in 2021/22, £3.1m in 2022/23 and £2.9m in 2023/24 • Defined benefit scheme acquired with ELAC. Net liability at 30 April 2021
Slide 18: Net Cash Flow
Financial Review NET CASH FLOW Year ended 30 April 2021 2021 2020 £m £m Adjusted operating profit 18.6 18.2 Working capital (0.1) (7.2) Depreciation and share based payments 2.4 1.9 Net funds inflow from operations 20.9 12.9 Acquisition of ELAC (1.3) - Exceptional items (1.3) (0.9) Capital expenditu
Slide 19: Expected Cash Projection 2021/22
Financial Review EXPECTED CASH PROJECTION 2021/22 £m Opening net funds 2.5 Operating cash flow 9.8 Chess earnout/minority purchase (2.8) Tax/capex/dividends (9.5) Closing net funds/(debt) at 30 April 2022 - Cohort plc FY 20/21 Results Presentation 27 July 2021 19
Slide 20: Banking
Financial Review BANKING • Total facility now £40m of which £10m available plus £32m cash • Facility available out to November 2022 • Expect to use £2.8m re Chess minority purchase • Discussions to begin with banks in late Summer to extend facility – German bank to be added Cohort plc FY 20/21 Resul
Slide 21: Outlook
Outlook Andrew Thomis, Chief Executive Cohort plc FY 20/21 Results Presentation 27 July 2021 21
Slide 22: Outlook for Growth
Outlook OUTLOOK FOR GROWTH • Defence review in UK offers opportunities already being seen by MCL Home • New opportunities in Portugal markets • Growing defence opportunities in Germany • Underlying demand drivers remain – increasing geopolitical polarisation Export • Strong maritime systems offering
Slide 23: Order Book – Underpinning 2021/22 and Beyond
Outlook ORDER BOOK – UNDERPINNING 2021/22 AND BEYOND 300 242.4 250 21.2 12.4 200 42.3 £m 150 69.3 100 2.9 20 4.6 63.9 0.1 57.6 7.8 0.8 42.1 4.6 52.0 9 7.9 11.9 1.3 50 77.2 3.6 0 26.8 30.6 11.5 8.3 11.8 1.6 10.9 9.7 4.1 0.8 6.3 3.4 18.8 20.5 4.8 6.9 0 16.1 11.1 At 30 April 2021 H1 2021/22 H2 2021/22
Slide 24: Order Book – Good Underpinning for Coming Year
Outlook ORDER BOOK – GOOD UNDERPINNING FOR COMING YEAR 30 April To be delivered 30 April Last year's to be 2021 2021/22 2020 delivered 2020/21 £m £m £m £m Chess 42.3 19.8 13.4 10.8 EID 20.0 8.2 36.5 20.2 ELAC 21.2 12.3 - - MASS 77.2 27.2 91.2 27.6 MCL 12.4 11.5 8.6 7.5 SEA 69.3 20.7 33.6 18.4 242.4
Slide 25: Orders and Prospects
ORDERS AND PROSPECTS • Over £50m of orders since 1 May 2021 • £43m sonar systems for two Italian submarines at ELAC • £10m of smaller orders • Good pipeline of prospects • £10m+ contract extension, major new contract opportunities at MASS • Domestic and export prospects at EID • Multiple £10m+ syste
Slide 26: Investing for Organic Growth
INVESTING FOR ORGANIC GROWTH • Planned self-funded R&D expenditure of £3.6m (2021 - £2.0m) • Focus on: • SEA – Krait V2, KDS software, transport • EID – Handheld radio, soldier system, new features for ICCS and ICC • MASS – DF evidence management, machine learning for missile defence • Chess - Artif
Slide 27: Outlook & Summary
OUTLOOK & SUMMARY Strong order book and pipeline 70% of 2020/21 consensus revenue underpinned by orders (July 2020) Well positioned to meet customer needs in growth markets 2021/22 overall performance expected to be slightly ahead of 2020/21 Expect rate of growth to accelerate from 2022/23 Cohort pl
Slide 28: Exciting long-term future as a major independent UK defence technology group
Exciting long-term future as a major independent UK defence technology group offering world-class systems to domestic and export customers alike Cohort plc FY 20/21 Results Presentation 27 July 2021 28
Slide 29: Questions
Questions Cohort plc FY 20/21 Results Presentation 27 July 2021 29
Slide 30: Appendix
Appendix Cohort plc FY 20/21 Results Presentation 27 July 2021 30
Slide 31: Cohort Business Model
COHORT BUSINESS MODEL • Subsidiaries enjoy a significant degree of operational autonomy in order to develop their potential fully: – Enables streamlined decision-making and focus on solving customer’s immediate problems – Provides competitive advantage over larger rivals where the decision-making pr
Slide 32: Applying advanced technology to protect and secure
Applying advanced technology to protect and secure We create solutions to keep people safe. Acting with agility to find a better way, make smart decisions and meet customers’ needs. Where independent subsidiaries are free to grow and deepen relationships with the support of a steadying hand. Bringin
Slide 33: Acquisition Strategy
Acquisition Strategy ACQUISITION STRATEGY • Continue to see opportunities to accelerate growth by making targeted acquisitions in the UK and overseas • Stand-alone acquisitions – Likely to be operating in defence and security markets – Ready to join a larger public group – Growth potential and susta
Slide 34: Acquisition Track Record
Acquisition Strategy ACQUISITION TRACK RECORD • 2006: SCS acquisition helped create the Group at IPO (SCS now fully integrated within other divisions) • 2006: MASS acquired for £13m • 2007: SEA acquired for £25m • 2014: Disposal of Space Division for £6.5m • 2014: J+S acquired for £12m (now fully in
Slide 35: Chess Dynamics
Chess Dynamics is an innovative, well-respected surveillance, tracking and gunfire control specialist for military and commercial customers. Chess’s military customers include defence forces and prime contractors in the UK and overseas for the naval and land sectors. Platforms: 68% Fire control, sur
Slide 36: EID
EID is a Portuguese high-tech company with 35 years’ experience and know-how in the increasingly critical fields of electronic tactical and naval communications, command and control (3C) equipment. The company’s focus is the design, manufacture, delivery and support of advanced high-performance 3C e
Slide 37: ELAC SONAR
ELAC SONAR is an innovative German company supplying global navies with advanced sonar systems and underwater communications, located in Kiel Germany It works with navies, system integrators and shipyards to supply mission critical hydro-acoustic naval sensors - from fully-fledged submarine combat s
Slide 38: MASS
MASS is a data technology company with over 35 years’ heritage serving the defence and security markets. Providing electronic warfare operational support, digital services and training support to military operations in the UK and to international customers. MASS’s core skill is enabling its customer
Slide 39: Marlborough Communications Limited
Marlborough Communications Limited is a leading supplier of advanced electronic communications, information systems and signals intelligence technology to the defence and security sectors. The company has over 40 years’ experience in supporting the UK’s ISTAR programmes including signals intelligenc
Slide 40: SEA
SEA delivers products and services into the defence and transport markets, alongside performing specialist research and providing services including training and product support. SEA’s engineering capabilities cover a wide range of maritime mission systems requirements including communications, torp
Slide 41: Quarterly Profile of Group Revenue
QUARTERLY PROFILE OF GROUP REVENUE 2015/2016 2016/2017 2017/2018 2018/2019 2019/2020 % 2020/2021 50 Average % 45 40 35 30 25 20 15 10 5 0 Q1 Q2 Q3 Q4 Cohort plc FY 20/21 Results Presentation 27 July 2021 41
Slide 42: Thank You
THANK YOU Cohort plc One Waterside Drive Arlington Business Park Theale Reading RG7 4SW www.cohortplc.com Cohort plc FY 20/21 Results Presentation 27 July 2021 42