Carbon Revolution Public Limited Company · OTC:CREVF
Carbon Revolution Public — Carbon Revolution — H1 FY2020 Earnings Presentation
29 slides from Carbon Revolution Public's earnings presentation, Feb 20, 2020
Slide 1: Half Year Results 2020
Carbon Revolution Half Year Results 2020 20th February 2020 1
Slide 2: Disclaimer
Disclaimer This Presentation is provided by Carbon Revolution Limited (“Carbon Revolution” or the “Company”) as a summary of the Company and its operations and for general information purposes only. This presentation is not a disclosure document and should not be considered as investment advice or a
Slide 3: Results Presentation Agenda
31 Dec 2019 Results Presentation Agenda Summary Operational Highlights Financial Results 2020 Outlook 3
Slide 4: Summary
Summary 4
Slide 5: Strong customer and consumer demand drives growth
Strong customer and consumer demand drives growth Financial metrics on track: - Positive sales mix and strong demand for Carbon Revolution wheels - Cost per wheel trending down - Scale benefits starting to be realised Operations: - Industrialisation progressing well with the rate of wheel production
Slide 6: Operational Highlights
Operational Highlights 6
Slide 7: Revenue growth on track and second half volume step-up planned
Revenue growth on track and second half volume step-up planned Progress on industrialisation to meet customer volume demand is delivering the uplift in revenue for the forecast period 1st half revenue overview ▪ 30% of Prospectus forecast wheel sales revenue delivered in first half FY20 ▪ The key dr
Slide 8: Operations update – Second half focus
Operations update – Second half focus Cutting • New cutting machine due in March • New cutting tools in March Layup and preforming • Virtual conveyer has commenced driving efficiencies • Additional preforming capacity in April • Face and bucket cooling has commenced, improving tooling flow and outpu
Slide 9: The health and safety of the Carbon Revolution team is the top priority
The health and safety of the Carbon Revolution team is the top priority Carbon Revolution’s goal is to achieve zero harm to people and the environment Strong and proactive focus on maintaining a safe work environment, in this period of rapid growth LTIFR of 2.6, well below industry benchmark of 9.9
Slide 10: Financial Results
Financial Results 10
Slide 11: Scale clearly benefits the bottom line
Scale clearly benefits the bottom line ▪ Wheel sales volume increased by 171% to 6,761 wheels from the previous corresponding period ▪ Gross profit is improving and moving to positive in the second half driven by larger sales volume and industrialisation ▪ Other income stronger due to larger R&D tax
Slide 12: Balance Sheet
Balance Sheet Larger movement items are: ▪ Receivables and inventory growth in line with sales growth, noting receivables includes $3m growth in R&D tax incentive rebate ▪ PP&E growth due to investment in Industrialisation assets and program tooling ▪ Intangibles - capitalisation of the development
Slide 13: Building the business: investing in trade working capital, technology and assets
Building the business: investing in trade working capital, technology and assets Net cash used in operating activities • Sales growth has driven the growth in receipts from customers • R&D grant income of $5.9m is forecast to be received in the third quarter • Growth in wheels volume production is t
Slide 14: Outlook
Outlook 14
Slide 15: Outlook
Outlook Carbon Revolution’s growth journey is well underway. The Industrialisation phase is occurring and the path to profitability is clear. Key financial KPIs are tracking in the right direction Production growth continues to be driven by strong increases in demand on OEM programs Carbon Revolutio
Slide 16: Contact Details
Contact Details Investors Gerard Buckle Brett Dimon CFO Investor Relations gerard.buckle@carbonrev.com brett.dimon@carbonrev.com Media John Fergusson Daymark +613 407 826 952 16
Slide 17: Appendix
APPENDIX 17
Slide 18: Industry Overview
Industry Overview 18
Slide 19: The addressable market is very large
The addressable market is very large Estimated automotive new vehicle wheel market by material (2012–2034E; millions of wheels) ◼ In 2018, the automotive new vehicle wheel market is estimated by QUBE to have been approximately 429 million wheels ◼ Carbon Revolution believes its wheels are currently
Slide 20: Carbon fibre wheels make cars lighter, faster, quieter, and more fuel efficient
Carbon fibre wheels make cars lighter, faster, quieter, and more fuel efficient ✓ Increased vehicle efficiency ✓ Enhanced vehicle performance ✓ Increased range for electric vehicles ✓ Aesthetic improvement ✓ Improved noise, vibration and harshness performance ✓ Reduction in fuel consumption 20
Slide 21: Clear global market leadership
Clear global market leadership Carbon Revolution is the only company globally to have successfully developed and manufactured single piece carbon fibre wheels to OEM quality standards with commercial adoption across several major OEM models Overview of materials used in automotive wheel Current comp
Slide 22: Company Overview
Company Overview 22
Slide 23: Carbon Revolution's history
Carbon Revolution’s history Carbon Revolution has successfully delivered on product R&D and commercialisation and has already started industrialising its manufacturing operations 2019 Ford GT500 Launched at the Detroit Motor Show in January 2015 2017 2019 2010 2012 Ford Shelby 2018 High volume suppl
Slide 24: Demonstrated market acceptance from leading automotive OEMs
Demonstrated market acceptance of Carbon Revolution from leading automotive OEM’s Carbon Revolution has 9 existing contracts with 5 global OEMs with 6 programs currently publically announced Awarded Programs (Publically Announced) Note: 1 Popular Mechanics Sports Car of the Year for 2015; 2 As publi
Slide 25: Complex product engineering capability and proprietary, scalable manufacturing
Complex product engineering capability and proprietary, scalable manufacturing WHEEL DESIGN & ADVANCED & PROPRIETARY MATERIAL SCIENCE ENGINEERING MANUFACTURING Hub core ‘puck’ Bolted Joint design Thermal barrier Rim / Barrell coating “Pressure Vessel” Spoke to rim connection Hub Spoke architecture a
Slide 26: Significant capacity expansion in progress
Significant capacity expansion in progress ◼ Geelong facility expanded to approximately 10,000m2 in October 2018 ◼ Demonstrated annualised production rate of approximately 15,000 wheels in the December quarter ◼ Forecast monthly annualised production rate of almost 32,000 wheels per annum by June 20
Slide 27: Industrialisation program is well underway
Industrialisation program is well underway Carbon Revolution’s industrialisation program is expected to drive increased capacity and lower the cost of producing each wheel ◼ Key objectives in FY20 are: Initial Commercial ◼ 300% growth in wheel sales to 22,821 wheels (relative to FY19) Production and
Slide 28: Growth Strategy
Growth Strategy 28
Slide 29: Strategic Growth Opportunities
Strategic Growth Opportunities The Company’s investment in Research & Development has also positioned it to pursue other wheel sectors and adjacent markets Core business ▪ In the short to medium term, growth is expected to be driven by demand from the high-performance and luxury automotive new vehic