Electro Optic Systems Holdings Limited · ASX:EOS
Electro Optic Systems — Investor Presentation (November 2019)
34 slides from Electro Optic Systems's investor presentation, Nov 21, 2019
Slide 1: Upgraded FY2020 guidance and equity raising
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only ELECTRO OPTIC SYSTEMS HOLDINGS LIMITED Upgraded FY2020 guidance and equity raising 21 November 2019
Slide 2: Disclaimer
Disclaimer For personal use only NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES The material in this presentation has been prepared by Electro Optic Systems Holdings Limited (ACN 092 708 364) (EOS or the Company) and includes information about a fully underwritten institutional private placeme
Slide 3: Disclaimer
Disclaimer For personal use only NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES This presentation is based on information available to the Company as at the date of this presentation (unless otherwise stated). The information in this presentation is subject to change without notice and the Com
Slide 4: Disclaimer
Disclaimer For personal use only NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES The basis of preparation of the earnings guidance included in this presentation is, to the extent applicable, consistent with that of the Historical Financial Information. The guidance is based on an assessment of
Slide 5: Agenda
Agenda For personal use only 1 Executive summary Page 7 2 Company overview Page 12 3 EOS Defence segment Page 14 4 EOS Communications segment Page 20 5 EOS Space segment Page 24 6 Key risks and foreign selling restrictions Page 28 5
Slide 6: Executive summary
For personal use only 1 Executive summary
Slide 7: Backlog, pipeline and outlook update
Company update and equity raising For personal use only 1. Backlog and pipeline: Backlog of confirmed orders and contracts are expected to grow to ~$630 million by 31 December 2019, despite increased conversion of backlog to revenue throughout 2019 Pipeline of tenders and contracts under negotia
Slide 8: Management of growth: Demand vs. Capacity
Management of growth: Demand vs. Capacity DEMAND For personal use only EOS defence products are now penetrating Remote Weapon Systems (RWS), turret and counter drone systems markets. In addition, EOS is leveraging its technology and expertise to sell more complex and more highly aggregated systems a
Slide 9: Equity raising details
Equity raising details For personal use only • EOS is undertaking a fully underwritten institutional placement to professional and sophisticated investors to raise A$68 million (“Placement”) Placement • 10.1 million new fully paid ordinary shares (“New Shares”) to be issued, representing 10.1% of cu
Slide 10: Equity raising timetable
Equity raising timetable For personal use only Event Date¹ SPP Record Date 7:00pm, Wednesday, 20 November 2019 Trading halt and announcement of Placement and SPP Thursday, 21 November 2019 Placement opens Thursday, 21 November 2019 Announcement of results of Placement and trading halt lifted Friday,
Slide 11: Company overview
For personal use only 2 Company overview
Slide 12: Company overview
Company overview EOS is an Australian technology company with leading positions in the application of advanced electro-optic For personal use only technologies for the global defence and aerospace markets. Founded in 1983 from the privatisation of Commonwealth of Australia space activity Listed
Slide 13: EOS Defence Segment
For personal use only 3 EOS Defence Segment
Slide 14: Defence Segment background
Defence Segment background For personal use only 1. Remote weapon systems [RWS] allow users to deploy existing weapons with the gunner located remotely from the weapon to avoid casualties from returned fire. 2. The RWS is far more accurate and effective in combat than a manned gun. These are not rob
Slide 15: Defence Segment fundamentals
Defence Segment fundamentals For personal use only Strong fundamentals support long term growth and profitability: 1. Demand for RWS and CUAS products exceeds $24 billion and EOS is securely lodged in this market with currently dominant technologies and dominant market share in the initial 4% [$1 bi
Slide 16: Counter Drone [CUAS]
P Counter Drone [CUAS] P Applications p For personal use only EOS in US Army CUAS trials 2017-19 EOS systems are proven drone killers: 1. Drones are detected by radar 2. The RWS slews to radar cue and acquires the drone with a thermal tracker 3. The fired round detonates near the drone and destroys
Slide 17: Production plant: Australia
For personal use only Production plant: Australia • Hume [ACT] plant can now routinely run at >40 units or $25 million revenue per month in output [$300 million annually] • This is its design capacity for single-shift operation and the output level required to meet FY2020 guidance • This plant is a
Slide 18: Production capacity expansion
For personal use only Production capacity expansion • New EOS plants in UAE [above], USA [right] and Singapore expected to lift total capacity to $900 million annual revenue by 2022 • Technology transfer to other EOS plants is under way and training for foreign production staff has commenced in Aust
Slide 19: EOS Communications Segment
For personal use only 4 EOS Communications Segment
Slide 20: Space Communications
Space Communications Market For personal use only • Space communications employs over $1,000 billion of existing infrastructure investment and generates $500 billion in annual revenue across the sector • A large proportion of all global communications passes from one point on earth to another throug
Slide 21: EOS Optical Communications Technology
EOS Optical Communications Technology For personal use only • Optical communication transmitters used on earth for fibre optic communications cannot presently provide enough power to move data to and from space through the turbulent atmosphere which distorts the beam causing huge signal loss. • EOS
Slide 22: Communications Sector: Microwave Technology
Communications Sector: Microwave Technology For personal use only • EOS has acquired EM Solutions Pty Ltd (EMS) to enter the space communication market. EMS is one of the world leaders in the technology and products for microwave communications. • EOS has optical space communication technology which
Slide 23: EOS Space Segment
For personal use only 5 EOS Space Segment
Slide 24: Space Segment
Space Segment Space Sector is EOS’ research centre and technology incubator. It has spun off EOS Defence and Communications. For personal use only Space Sector is also directly monetising its technology through 4 space markets: 1. Infrastructure Deployment. EOS provides space tracking infrastructure
Slide 25: Space Infrastructure Deployment
For personal use only Space Infrastructure Deployment EOS is one of the world’s leading optical space tracking companies, with over $600 million of space and missile tracking sensors 25 deployed. EOS continues to provide advanced space surveillance equipment to Australia’s allies and coalition partn
Slide 26: SDA and Counterspace
SDA and Counterspace • EOS owns a significant number of space sensors used for SDA operations • EOS sensors are used to detect, analyse and even negate space threats For personal use only • EOS has lasers capable of moving space debris from the path of a satellite 26
Slide 27: Key risks and foreign selling restrictions
For personal use only 6 Key risks and foreign selling restrictions
Slide 28: Key risks
Key risks 1. Manufacturing facilities For personal use only The EOS business plan relies on establishment of significant high technology manufacturing capacity. Notwithstanding the use of a large-scale pilot plant, there is risk associated with developing and maintaining the manufacturing facilities
Slide 29: Key risks
Key risks 6. Government contracts For personal use only A portion of EOS' revenues may depend on its ability to do business with the U.S. as well as foreign governments and their various agencies, whether directly or indirectly. Such customers may: a) award or terminate contracts at their convenienc
Slide 30: Key risks
Key risks 11. Competition For personal use only EOS operates in markets which are significant on industry terms, and which attract strong competition. Accordingly, there is no certainty that EOS' current market share will be maintained or that its expected market share will be achieved in the near f
Slide 31: Foreign selling restrictions
Foreign selling restrictions For personal use only NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Hong Kong WARNING: This presentation has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor h
Slide 32: Foreign selling restrictions
Foreign selling restrictions For personal use only NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES New Zealand This presentation has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the FMC Act). The New Shares are
Slide 33: Foreign selling restrictions
Foreign selling restrictions For personal use only NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Singapore This presentation and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Sing
Slide 34: Foreign selling restrictions
Foreign selling restrictions For personal use only NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES United Kingdom Neither this presentation nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (wi
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