Slide 1: Half Year Results Presentation
For personal use only Half Year Results Presentation Presenters Executive Chair and Group CFO 29 February 2024
Slide 2: Disclaimer
DISCLAIMER This presentation is given on behalf of HighCom Limited (HighCom) For personal use only Information in this presentation is for general information purposes only, and is not an offer or invitation for subscriptions, purchase of recommendation of securities in HighCom. Certain statements i
Slide 3: Agenda
Agenda • Results and overview For personal use only • 1H FY24 financial performance • Review of HighCom Armor • Review of HighCom Technology • Strategic Priorities (short to medium term) • Conclusion • Q&A HIGHCOM LTD | INVESTOR PRESENTATION 3
Slide 4: Key Snapshot for 1H FY24
Key Snapshot for 1H FY24 • On 12 February the Company announced revised guidance for a half year loss of between $13m and $15m. For personal use only • Final result for the half year is $14.9m of revenue and an NPAT loss of $13.5m. EBITDA loss of $12.1m (includes non-cash impairment of $6.2m). • Res
Slide 5: State of Play
State of Play Issue Strategy Need for greater visibility • Flattened out structure and streamline management reporting to board For personal use only Cash management • Great control over discretionary spend from non-revenue generating activities Inventory reduction • Push for continued implementatio
Slide 6: H1 FY24 Results – Key Highlights
H1 FY24 Results – Key Highlights Revenue (A$m) Divisional Revenue Attribution (A$m) $50.0 $45.2 For personal use only H1FY24 $14.9 $40.0 H1FY23 $48.5 $30.0 H1FY22 $11.5 $20.0 $13.2 $8.5 $7.5 $10.0 H1FY21 $12.4 $3.8 $4.0 $3.3 $1.8 - H1FY20 $16.0 H1FY21 H1FY22 H1FY23 H1FY24 Technology Armor Gross Marg
Slide 7: H1 FY24 Results – Key Highlights
H1 FY24 Results – Key Highlights For personal use only HIGHCOM LTD | INVESTOR PRESENTATION 7
Slide 8: Group Overview
GROUP OVERVIEW Highcom Group is comprised of two distinct businesses – HighCom Armor & HighCom Technology. For personal use only HighCom Armor HighCom Technology Designs, manufactures, and supplies global Supplies Australian Defence and Security Agencies military, law enforcement, and first responde
Slide 9: HighCom Armor – Overview
HighCom Armor – Overview • Designs, manufactures, and supplies world-class, advanced Body Armor, Ballistic Helmets, Shields and Armor Panels & Platform Structures. For personal use only • Key Customers: Global militaries, US law enforcement, national security and first responders. Locations: • Globa
Slide 10: HighCom Armor – Update
HighCom Armor – Update • During the reporting period, delivered and received orders for customers located in the US and around the world. For personal use only • The monthly domestic US run rate sales in line with expectations for H1. Current order book backlog approximately $9m, all of which it exp
Slide 11: HighCom Armor Activity – H1 Revenue Reconciliation and Forward Order Book
HighCom Armor Activity – H1 Revenue Reconciliation and Forward Order Book For personal use only Summary of Deals • Run rate sales tracking in line with expectations Order FY24 Total H1 H2 FY25+ • $7m+ of new Ballistic Armor orders secured during H1 for Run rate sales (1) $10.0m $10.0m delivery in H2
Slide 12: HighCom Armor – Inventory Management
HighCom Armor – Inventory Management Inventory (Dec-23) (A$m) • Limited progress made during H1 2024 in reducing inventory levels Note: Inventory value reduced by $4.4m due to impairment since flagging issue end of FY23. For personal use only • New inventory policy implemented by Board during FY23 –
Slide 13: Technology Relocation to USA
Technology Relocation to USA • XTClave & R&D capabilities relocated to facility in Columbus and are now on site in Columbus. For personal use only • Adelaide Manufacturing & R&D to closed effective end of period. Make good being finalised for release of the facility. • Move maximises potential for u
Slide 14: HighCom Technology – Overview
HighCom Technology – Overview • Co-located with Corporate Headquarters in Canberra, ACT, Australia. Focused on manufacturing and supplying Australian Dept. of Defence and Security Agencies with world-leading For personal use only • Australian-made and globally sourced: • Systems - UAV solutions and
Slide 15: HighCom Technology – Update
HighCom Technology – Update • HighCom Technology continued to focus on delivering the Tactical Persistent Uncrewed Aerial Systems (TPUAS) capability through Land 1508. For personal use only • Of the total $26.9m contract, majority of the revenue was recognised in FY23. Final system acceptance and th
Slide 16: HighCom Technology – H1 Revenue Reconciliation and Forward Order Book
HighCom Technology – H1 Revenue Reconciliation and Forward Order Book $3.4m SUAS Spare Parts Order booked for delivery H2 FY24. For personal use only • Summary of Deals • $4.1m TPUAS Spare Parts Order booked for delivery H2 FY24 as Order FY24 Total H1 H2 FY25+ part of 10-year / $110m Support Contrac
Slide 17: Maintain our Strategy however new focus on sales and cost base
Maintain our Strategy however new focus on sales and cost base only Maintain Strategy REINFORCE SUCCESS SEEK ADJACENCIES CREATE OUR FUTURE use Invest in the areas of our business Find new business opportunities that Invest in organic and inorganic that have been successful and have extend our reach
Slide 18: Conclusion
Conclusion • H1 FY24 financial result disappointing. For personal use only • Board has implemented a number of strategic initiatives to improve cost base and operational focus. • Inventory management still a key priority, aim to reduce to $8m - $10m range. Initiatives underway. • Operational objecti
Slide 19: Question & Answers
Question & Answers • Q&A submitted For personal use only • Contacts: Mark Stevens – Executive Chairman Jacqui Myers – Group CFO • Email: investors@highcom.group HIGHCOM LTD | INVESTOR PRESENTATION 19
Slide 20: HighCom Limited Corporate Snapshot
HighCom Limited Corporate Snapshot Capital Structure (28 February 24) Shares Outstanding 102,682,672 $0.80 4.00 For personal use only 1 2 Month Share Price Range A$0.14 – A$0.765 $0.70 3.50 Cash Balance & Borrowings (31 December 23) $0.60 3.00 Cash Balance A$1.6m Borrowings A$1.5m Traded Volume (mil
Slide 21: Summary Income Statement
Summary Income Statement For personal use only Summary Income Statement H1FY23 H1FY24 Change Revenue A$m 48.5 14.9 (69%) Cost of Sales A$m (23.9) (11.7) (51%) Gross Profit A$m 24.6 3.2 (87%) Gross Margin % 51% 22% (29pp) Other Income A$m 0.1 0.3 297% Operating Costs A$m (13.7) (15.6) 0.0 EBITDA A$m
Slide 22: Summary Financial Position
Summary Financial Position Summary Financial Position FY23 H1FY24 Change Cash A$m 6.9 1.6 (5.3) For personal use only Receivables A$m 24.7 0.8 (23.9) Inventories A$m 25.7 19.3 (6.4) Other Current Assets A$m 4.5 3.7 (0.7) Total Current Assets A$m 61.8 25.4 (36.4) PP&E A$m 9.8 7.9 (1.9) Other Non-curr
Slide 23: For personal use only
For personal use only 16 HIGHCOM LTD | INVESTOR PRESENTATION