Energy Technologies Limited · ASX:EGY
Energy Technologies — Investor Presentation (May 2020)
29 slides from Energy Technologies's investor presentation, May 27, 2020
Slide 1: ASX announcement: Investor Presentation
ENERGY TECHNOLOGIES LIMITED A.B.N. 38 002 679 469 102 Old Pittwater Road Brookvale NSW 2100 Tel: +61 2 9938 5622 Fax: +61 2 9939 9812 www.energytechnologies.com.au Australian Stock Exchange Company announcements platform 27 May 2020 ABN 38 002 679 469 Investor Presentation Please see attached an inv
Slide 2: Energy Technologies Limited (ASX:EGY) Investor Presentation May 2020
Energy Technologies Limited (ASX:EGY) A specialised cable & wires manufacturer Investor Presentation supplying the high value infrastructure sector May 2020 1
Slide 3: Important Notice & Disclaimer
Important Notice & Disclaimer This presentation has been prepared by Energy Technologies Limited (EGY or the Although the Company believes that the expectations reflected in the forward looking Company). It should not be considered as an offer or invitation to subscribe for, or statements included i
Slide 4: Executive Summary
Executive Summary Company Energy Technologies Limited (ASX:EGY) is 100% owner of Bambach Wires and Cables (Bambach), a major supplier of Australian manufactured low voltage copper cable products targeting specialised uses Industry Focus The Australian cables industry is a growing >$3.3bn opportunity
Slide 5: Executive Summary
Executive Summary Specialised branded cables targeting ~38% gross margin (not commoditised) Considerable ‘know how’ & IP for new and custom product development Australian designed & manufactured (fast turnaround, high standards) using locally sourced input materials Transitioned to $7m factory in Ro
Slide 6: Company Record & Capability
Company Record & Capability 5
Slide 7: Bambach Wire and Cables
Bambach Wire and Cables Bambach Wire and Cables manufactures low voltage industrial and specialised copper cables Founded in 1936 and is the oldest existing Australian cable manufacturer and 100% owned by Energy Technologies since 2012 New factory in Rosedale, VIC capable of processing up to 250 ton
Slide 8: High Value Industry Focus
High Value Industry Focus Provision of specialised and customised cables and wires for large scale projects >$1bn in annual demand from target sectors plus $60m from Mining Defence Road and Traffic bespoke cable projects $600m in cables pa $60m in cables pa $60m in cables pa Captures upfront value f
Slide 9: Top Tier Client List
Top Tier Client List Supplying some of the world’s largest companies. Many relationships established in last two years with opportunity to grow revenue. Rail Rail Road & Traffic Other Defence 8
Slide 10: Revenue Mix and Uplift Potential
Revenue Mix and Uplift Potential Revenue mix by industry 18 Month Target Other 6.8% Revenue Market (Low Rail Current Goal Voltage) Size 18.5% Rail $2.7m $5.7m $60m-$80m Made to Order 27.4% Mining $3.5m $4m $600m ~$14.6m Road $1.3m $4.1m $60m Average revenue Defence $200k $2.7m $60m last 2 years Mini
Slide 11: Specialised Product Mix
Specialised Product Mix Branded Cables (with est. annual revenue opportunity*) Wide scope: ~1,300 different cable products for industry uses – NEW NautX: Marine cables (~$2-3m) sales targeting 38% gross margin (vs <10% for commoditised cable products) NEW FlareX: Fire-safe cables (~$2m) Branded: Cus
Slide 12: Manufacturing: Rosedale
Manufacturing: Rosedale Larger & faster machines can 10x increased capacity with room to 122 acres of available process 200-250 tonnes of expand, plus Government support land for expansion with copper per month for regional development & ample skilled workers employment in region 11
Slide 13: Primed for New Growth
Primed for New Growth Historic: New facility: Brookvale, NSW Rosedale, VIC Factory • Small facility with low throughput • $7 million investment to large factory with high throughput (10x larger footprint) Capacity • Limited production of 25 tonnes of copper wire • Expansion to ~250 tonnes of copper
Slide 14: National Distribution
National Distribution 6 State distribution branches located in main Australian cities and a manufacturing facility in Rosedale, VIC • Each ~600 sq ft branch staffed by: • 1x storeman • 2x sales / business development staff • Branches provide: • Warehousing & storage, particularly for Brisbane brande
Slide 15: Strategic Advantage
Strategic Advantage Specialised Cables Asian-sourced Cables Eu-sourced Cables High value & margin industries Approved for specific projects Turnaround times for custom product ~4 weeks ~8-12 weeks >12 weeks Custom manufacturing capability Knowledge & process advantage Sales channels developed Suitab
Slide 16: Client Lifecycle
Client Lifecycle Approval & Quote & Order & Repeat Product creation Standards Proposal Delivery Orders • R&D and custom • ISO AS/NZS • Significant • Receive order • Repeat sales to production of 9001:2015 inbound enquiry • Fulfil from organisations that new product lines standards • Dedicated sales
Slide 17: Profit & Loss: Historical
Profit & Loss: Historical Energy Technologies - Profit & Loss (FY18 – 1H FY20) • Received orders of >$2m since March 2020 (A$'000, unless indicated) FY18 FY19 1H FY20 • Sales in 2H effected by COVID shutdowns, but effect on earnings offset by Sales revenue 15,271 12,592 5,222 Jobkeeper Government pa
Slide 18: Balance Sheet: Historical
Balance Sheet: Historical Energy Technologies – Balance Sheet (FY18 – 1H FY20) • Average working capital cycle of 16-18 weeks (from materials purchase to product delivery) (A$'000, unless indicated) FY18 FY19 1H FY20 Assets Cash 189 30 17 • 30 days EOM or 60 days EOM, with average 60 days payment fr
Slide 19: Market Opportunity
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Slide 20: Significant Market Opportunity
Significant Market Opportunity Fulfil existing Market Size (2020) demand from heavy industries Generate new Imported demand from $3.3B cable and Domestic production adjacent markets wires $1.5B $1.8B and export 55% Revenue 45% (2019) Of the $3.3bn cables industry, sub-industries Develop new in- are
Slide 21: Market Tailwinds
Market Tailwinds Significant infrastructure Increased focus on Push to procure products spend over mid term defence and rail domestically post COVID-19 • Major Federal and State Govt • ~$200 billion in defence spend • Require high Australian standards spend planned (~$500 billion) over planned • Fed
Slide 22: Case Study: Rail Demand for Cables
Case Study: Rail Demand for Cables City and Southwest: $11B Melbourne Metro: $11B ~$5-6 million Requirement for low Melbourne Airport Link: $10B voltage cable for track and signalling for each major Sydney Metro – Northwest: $10B project ($5-10 billion) Inland Rail: $10B Sydney Airport Link: $5B $90
Slide 23: Australian Made Advantages
Australian Made Advantages Made in Quicker Weaker AUD Satisfies local Australian Leverage post- Australia with turnaround for makes pricing procurement and Standards and COVID environment ~92% production comparable to Australian Industry Type for insourced composition of (4 weeks vs ~8-12 imported G
Slide 24: The Future: Industry 4.0
The Future: Industry 4.0 EGY will replicate the Bambach experience in other sectors of the electricity supply market via two means: 1. Acquisition of Australian manufacturing businesses 2. Establishment of greenfield manufacturing of industries • Target acquisitions in the electricity supply space f
Slide 25: The Next 12 Months: News Flow
The Next 12 Months: News Flow Replace/refinance working capital facility “What we have been able to establish in Rosedale is a vehicle which, if Service foregone $0.5-1.0m revenue / month from Rosedale sufficiently funded, is capable of Completion / commissioning of Rosedale & closure of Brookvale p
Slide 26: Appendices
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Slide 27: EGY Corporate Overview
EGY Corporate Overview Key Metrics Share Price ($) Board of Directors Shares on issue (m) 85.7 12 month high 0.315 Alfred J. Chown B.Econ 25 years’ industry experience having co-founded Dulhunty Yangzhou Line Fittings Co Last traded price ($) 0.20 12 month low 0.19 Chairman / Managing Ltd, a manufac
Slide 28: Appendix: Key Risks
Appendix: Key Risks Risk Risk Management Demand Risk • Bambach has experienced 50% growth in RFP and quotes in the past 12 months. With increased capacity, inventory and balance sheet to access raw materials, the Company is able to fulfil this demand • Current and future investment into rail, constr
Slide 29: Bambach
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