Nexteq Plc · LSE:NXQ
Nexteq — FY2024 Earnings Presentation
34 slides from Nexteq's earnings presentation, March 2025
Slide 1: Nexteq plc 2024 results
Nexteq plc 2024 results Duncan Faithfull – CEO Matt Staight - CFO March 2025
Slide 2: Introductions
Introductions Duncan Faithfull Matt Staight Chief Executive Officer Chief Financial Officer • Appointed September 2024. • Appointed October 2024. • Previously the Chief Commercial Officer in Quixant • Previously the Group Finance Controller in Nexteq. (Gaming industry). • Been with Nexteq for 3 year
Slide 3: Agenda
Agenda • Introductions. Looking • Who is Nexteq. backwards • 2024 performance in summary. • 2024 Market and performance background. • Financial results. • Product and brand. • 3-year plan and our KPIs to measure success. • Summary & Outlook Moving • Q&A. Forward 3 © Nexteq plc 2024 Full year results
Slide 4: Who is Nexteq
Who is Nexteq What we are and what we stand for
Slide 5: © Nexteq plc 2024 Full year results
5 © Nexteq plc 2024 Full year results
Slide 6: Empowering technology
Empowering technology Our Vision To be recognised as the leading experts in delivering innovative technology that empowers our partners’ missions and enables their success. Our Mission Identify, analyse and understand multiple market sectors and, through engineering excellence and partnerships, crea
Slide 7: A new way of thinking about our group
A new way of thinking about our group 7 © Nexteq plc 2024 Full year results
Slide 8: A new way of thinking about our group
A new way of thinking about our group New structure Old structure Product development Product development Nexteq North America Nexteq EMEA & RoW and R&D and R&D Operations and Field Operations and Field Technical Support Technical Support Product development and R&D Manufacturing and Manufacturing a
Slide 9: Nexteq overview
Nexteq overview Who we are Business split Financial profile 2024 revenue by region ($m) 2024 revenue by sector ($m) Historic group revenue ($m) • Operations in US, Europe and Asia with infrastructure to scale Gaming, 54.7 2024 55 32 North America, 2023 69 45 • Profitable cash generative core busines
Slide 10: Our brands: Quixant
Our brands Key Metrics 20 Years of gaming expertise Design and deliver high-performance gaming computing platforms and software solutions that enhance the player experience. 63% Why Quixant? Current group revenue % 95 Customers $54.7m 2024 revenue Exclusive Market-leading Global Specialist Global in
Slide 11: Our brands: Densitron
Our brands Key Metrics 50 Years of HMI expertise Leaders in HMI (Human-Machine Interface) and control system solutions for industries such as medical and broadcast. 37% Current group revenue % About Densitron 469 Customers $32m 2024 revenue Traditionally an Global display Access to many Recurring in
Slide 12: 2024 – Review of a tough year
2024 — Review of a tough year NEXTEQ
Slide 13: 2024 – summary 'at a glance'
2024 – summary ‘at a glance’ Revenue Gross Adjusted Profit Margin Before Tax $86.7m 35.9% $4.8m -24% -40bps -67% Adjusted Operating Cashflow Net Cash Diluted EPS Conversion 5.08c 324% $29.1m -72% 2023: 142% +4% 13 © Nexteq plc 2024 Full year results
Slide 14: 2024 trading background
2024 trading background Revenues were disappointing. • Destocking across our customer base continued through 2024 as predicted. • RoW regions saw the largest % decline vs 2023 (-43%), with the biggest decline across the markets our Densitron business serves. • USA was more resilient, declining 10% v
Slide 15: 2024 review
2024 review What went well What was challenging • New Senior Leadership Team in place. • Macro-economic environment. • Efficiencies in overhead delivered in Q4. • Significant internal change. • One Nexteq structure delivered – The best of Nexteq. • Destocking, with false 2022 and 2023 peak volumes.
Slide 16: Detailed financial performance
Detailed financial performance Matt Staight - CFO
Slide 17: Income statement
Income statement 31-Dec-24 31-Dec-23 Change • Year-over-year revenue decline of 24%, with revenue from top $m $m % 10 customers at 60%, up from 51% in 2023. Revenue 86.7 114.3 -24% Cost of sales (55.6) (72.8) -24% • Gross margin remaining around historical highs, at 35.9%, Gross profit 31.1 41.5 -25
Slide 18: Quixant revenues
Quixant revenues Revenues Gaming Platform sales (quantity) by 80 74.1 product family 69.2 60,000 54,513 52,044 60 56.2 50,000 43,569 47.3 42.7 34.9 39,439 40,070 40,000 US$m 23.9 40 32.6 30.3 30,000 28.9 21,976 20,000 20 18.4 31.4 34.3 30.9 23.6 10,000 18.4 11.9 0 - 2019 2020 2021 2022 2023 2024 201
Slide 19: Densitron revenues
Densitron revenues Revenues 50 45.8 45.1 • First revenue from the newly launched ProDeck. 40 39.8 • Stand alone desktop control solution. 36.2 33.5 • The current market leader requires a PC to be linked to 23.9 23.1 control broadcast tech….. 30 21.7 • ………Our new ProDeck has a PC integrated into US$m
Slide 20: Gross margin
Gross margin Gross Margin remains close to historic high levels 38.0% 36.3% 35.9% • Gross margins remaining close to historic high at 35.9%, 36.0% 34.7% down 40bps YoY. 34.0% 32.2% • The gross margin recovery reflects: 32.0% 31.5% - Focus on higher margin business in Densitron 29.7% 30.0% Display Co
Slide 21: Positive operating cashflow leading to improved net cash
Positive operating cashflow leading to improved net cash • Net cash of $29.1m at 31 December 50.0 45.0 9.5 2024, up $27.9m on 31 December 2023. 40.0 (2.5) • Improved cash from operations and 35.0 6.0 (2.9) (2.8) working capital inflows as we consume 30.0 27.9 0.8 29.1 US$'m (6.9) strategic stock. 25
Slide 22: Looking forward – Our products and three-year plan
Looking forward – Our products and three-year plan Duncan Faithfull - CEO 22
Slide 23: Product Innovation driving growth
Product Innovation driving growth • Unique IP rotary encoder. • Stand alone desktop control solution. • Complete gaming hardware range. • On screen technology. • Includes PC. • Includes new products for LatAm and Amusement sector in NA and Spain. • Ability to deliver rotary dials and touch • Others
Slide 24: Unique technology transforming Quixant opportunity
Unique technology transforming Quixant opportunity • Unique IP software platform being launched • Exclusive graphics solution integrated onto our • Unique partnership model to deliver excellent at G2E 2025 in Las Vegas. gaming hardware platforms. ‘turnkey’ solutions. • Adds recurring software revenu
Slide 25: Three-year plan - Four areas of execution
Three-year plan - Four areas of execution • Invest in R&D. • Retain & Grow 2 largest customers • Deliver 15% growth in gaming • Launch gaming software solution outside of the big 2 (AGT & at G2E 2025. • Utilise Italy and Taiwan centres • Manage largest customer Everi). of excellence across the acqui
Slide 26: Three-year plan financials
Three-year plan financials Significant growth by 2027
Slide 27: Where are we now
Where are we now Varied market conditions in previous years: Nexteq Revenue trend • Covid impact 2019-2021. 140 USDm • Post covid boost 2022/2023. 120 • De-stocking cycle through 2024. 100 80 • Average revenue <$94m. 60 40 1% Consistently 65% 5% 20 of revenue from 9% 0 Top 20 customers FY19 FY20 FY2
Slide 28: Organic growth – 2027 financial ambition
Organic growth – 2027 financial ambition $108m-$120m $108m-$120m revenue • Medical • Brazil • Software • Tactila & haptics 35%-38% gross margin $86.7m • IQ Connect • Sales process • Partnerships • Engineering in market EBITDA% of 10-15%1 2024 Organic Innovation Markets 2027 1 Adjusted EBITDA 28 © Ne
Slide 29: Driving operational leverage
Driving operational leverage Revenue Targeting 10-15% EBITDA1 margin. Cost of sales Operating costs EBITDA Gross margin Supply chain efficiency Increased sales Higher % of revenue from Engineering expertise in reducing BOM costs. incorporating Nexteq IP. software solutions. market advising customers
Slide 30: Organic growth – Signposts to success
Organic growth – Signposts to success #1 - Pipeline growth #2 - Nexteq new IP revenue #3 - $1m customers Goal Goal Goal • Increase revenue from products with • Grow number of customers • Deliver significant growth in the multi- new Nexteq IP. delivering $1m annual revenue. year sales pipeline across
Slide 31: One Nexteq platform for growth beyond 2027
One Nexteq platform for growth beyond 2027 . . . $86.7m $108m $120m Continued innovation 150 revenue growth. 125 Software Increases in key 100 Industrial 1% market verticals. Medical 75 22% Broadcast 9% 50 5% Operating cash flow driving investment. Gaming 25 64% 0 Customer wins with 2024 2025 2026 2
Slide 32: Summary and Outlook
Summary and Outlook NEXTEQ
Slide 33: 2025 will be a transformational year
2025 will be a transformational year • 2024 was difficult – but we ended the year with a new structure and a re-energised and re-focussed business. • One Nexteq gives the chance to utilise the core Nexteq skills across the focus areas. • Innovation and investment in R&D will be at the heart of all w
Slide 34: Thank you
Thank you The Galleria, Station Road, Crawley, RH10 1WW, UK T +44 (0)20 3597 6800 info@nexteqplc.com Nexteqplc.com 2024 Full year results 3 4