Electro Optic Systems Holdings Limited · ASX:EOS
Electro Optic Systems — H1 2024 Earnings Presentation
32 slides from Electro Optic Systems's earnings presentation, Aug 27, 2024
Slide 1: 1H 2024 Results Presentation
For personal use only 1H 2024 Results Presentation Andreas Schwer, Managing Director & Chief Executive Officer Clive Cuthell, Chief Financial Officer & Chief Operating Officer 27 August 2024 Approved for release by the Board of Directors
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer CONTENT OF PRESENTATION FOR INFORMATION PURPOSES ONLY This presentation has been prepared as at 27 August 2024. For personal use only Electro Optic Systems Holdings Limited (EOS) published the 30 June 2024 half year financial statements on 27 August 2024 and this pres
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Presentation of Information All financial information has been prepared in accordance with Australian Accounting Standards. Certain financial data included in this presentation is ‘non IFRS financial information’. The Company believes that For personal use only this n
Slide 4: 1H Highlights and Business Update
For personal use only 1H Highlights and Business Update Andreas Schwer, Managing Director & Chief Executive Officer
Slide 5: Summary
Summary EOS grew revenue by 92% in 1H 2024 and delivered $11.5m Underlying EBITDA1. Securing new orders is the key focus for 2H 2024 Turnaround Key financial outcomes in 1H 2024 include: Continues • Revenue $142.6m up 92% or $68.3m on prior corresponding period For personal use only • Gross Margin2
Slide 6: 1H 2024 Highlights
1H 2024 Highlights In 1H 2024 we grew revenue, developed growth capacity and reduced debt For personal use only Key Developments in 2024 YTD Jan 24 New Slinger counter-drone contract ($15m) with Diehl Defence in Germany Completed placement and announced SPP (together net $35m) to invest in long lead
Slide 7: Market Conditions – Geopolitical Backdrop
Market Conditions – Geopolitical Backdrop Geopolitical uncertainty continues to create very supportive market conditions Global defence spending increased by 9% to a record US$2.4tn in 2023 For personal use only Entrenched conflict in Ukraine and broadening conflict Middle East Source: SIPRI Militar
Slide 8: Market Conditions - Technological
Market Conditions - Technological Wide-ranging technological shifts in the defence industry are expected to continue THEME For personal use only DESCRIPTION RECENT MEDIA Low-cost, mass-produced drones Mass manufactured • • Readily available and easy to operate drones • Difficult to detect and defeat
Slide 9: Recent Product Developments and Growth Opportunities
Recent Product Developments and Growth Opportunities EOS has recently launched several products to capitalise on key macro drivers and enable future growth Forecast Indicative Macro Drivers Product Recent activity revenue timing * For personal use only C-UAS • Formal production launch in 2023 R150 L
Slide 10: Drones & Counter-Drone Warfare
Drones & Counter-Drone Warfare Global demand for drones and counter-drone solutions is growing rapidly • The rise of drones in modern warfare in recent years is well For personal use only documented – media attention is expected to continue • Low Cost - Drones provide both state and non-state actors
Slide 11: Effective counter-drone strategies require a layered response
Effective counter-drone strategies require a layered response EOS is developing products that form part of comprehensive, layered, counter-drone systems 0.5km 1km 2km 3km 4km 5km 6km 7km 8km 9km 10km Electronic Warfare For personal use only (EW) EOS CURRENT FOCUS Remote Weapon System Directed Energy
Slide 12: EOS is focused on organic growth opportunities
EOS is focused on organic growth opportunities Growing the order book continues to be our key focus; several opportunities are developing positively; European growth is targeted For personal use only Markets Products Sales Capability Order Book • Global military spending grew • Commercialising exist
Slide 13: Market Development Update
Market Development Update Growing the order book continues to be our key focus; several opportunities are developing positively; European growth is targeted Potential Potential Geography Maturity Remote Weapon Systems Geography Maturity High Energy Laser Weapon Size (A$m) Size (A$m) For personal use
Slide 14: Contract Backlog
Contract Backlog We aim to continue work to diversify the customer base. The key focus is on converting opportunities into contracted orders Secured Contact Backlog – 30 June 2024 For personal use only Contract Backlog, $m 700 622 Description $m Business 567 600 RWS 158 Defence Systems 181 500 181 R
Slide 15: 1H 2024 Financial Results
For personal use only 1H 2024 Financial Results Clive Cuthell, Chief Financial Officer & Chief Operating Officer
Slide 16: 1H 2024 Financial Performance
1H 2024 Financial Performance EOS increased Revenue by 92% or $68.3m on 1H 2023 and achieved Underlying EBITDA1 of $11.5m Revenue, $m $m 1H 2024 1H 2023 Var For personal use only Revenue 142.6 74.3 68.3 Gross Margin % 2 44% 35% 9% 114.5 145.0 104.7 H2 Underlying EBITDA1 11.5 (14.8) 26.3 84.1 H1 EBIT
Slide 17: 1H 2024 Segment Performance
1H 2024 Segment Performance Both business segments contributed strong growth to the positive financial performance in 2024 For personal use only $m 1H 2024 1H 2023 Var 71% of Revenue 101.4 50.7 50.6 revenue 1 Defence Underlying EBITDA 5.2 (12.9) 18.1 Systems • Revenue increased by 100% on prior corr
Slide 18: 1H 2024 Cashflow
1H 2024 Cashflow 1H 2024 Cash Flow included interest payments and debt repayment. Operating Cashflows remain lumpy while we diversify $m 1H 2024 1H 2023 Var • 1H 2024 Operating cash flow includes : For personal use only Receipts from customers 120.3 123.3 (3.0) • Receipts from customers of $120.3m –
Slide 19: Debt Position
Debt Position During 1H 2024 Cash Flows were used to reduce debt levels For personal use only $m Principal Term Maturity Total Rate Repayment1 Status Working Capital Facility 20.0 12m Sep 23 19% 26.9 REPAID Working Capital Facility 15.0 18m Apr 24 19% 20.5 REPAID PLANNED TO BE REPAID Term Loan Facil
Slide 20: Conclusion
For personal use only Conclusion
Slide 21: Growth Strategy
Growth Strategy EOS is positioned to grow sustainably in the short, medium and longer terms 1-3 Years 2-5 Years 3-10 Years For personal use only DEFEND NURTURE SEED • Significant organic growth opportunities: & GROW • Remote Weapons Systems (RWS) • Counter-Drone Products (specialised RWS) • Naval Sa
Slide 22: Future Strategic Growth Opportunities
Future Strategic Growth Opportunities EOS is developing world-leading innovations with large addressable markets and is currently seeking strategic partners High Energy Laser Weapon (HELW) Recent Activity For personal use only • There is an urgent market need for laser-based • Negotiations with pote
Slide 23: Summary and Outlook
Summary and Outlook Summary For personal use only • Market conditions are very supportive • Product range widened and now in-market • Significant counter-drone opportunity • Discipline will continue – Strategy, Capex, Costs • Focus on commercialising strategic IP • High Energy Laser Weapons and Spac
Slide 24: Appendices
For personal use only Appendices
Slide 25: Reconciliation of Statutory Profit / (Loss) and Non-GAAP measures
Reconciliation of Statutory Profit / (Loss) and Non-GAAP measures $m 1H 2024 1H 2023 For personal use only (Loss) for the period (3.5) (32.4) Income tax (benefit) (0.0) (3.0) (Loss) before tax (3.5) (35.4) Finance costs 12.5 16.0 Foreign exchange (gain) (5.1) (2.4) Underlying EBIT (loss) (before imp
Slide 26: 1H 2024 Segment Performance
1H 2024 Segment Performance $m 1H 2024 1H 2023 Var Revenue For personal use only Defence 101.4 50.7 50.6 Space (incl. EM Solutions) 41.3 23.6 17.7 Total 142.6 74.3 68.3 Underlying EBITDA Profit/(Loss) Defence 5.2 (12.9) 18.1 Space (incl. EM Solutions) 10.1 1.5 8.6 Unallocated (3.8) (3.5) (0.3) Total
Slide 27: Remote Weapon Systems Product Range
Remote Weapon Systems Product Range EOS is developing a wider range of RWS products to meet evolving needs For personal use only Sensor Unit Ultralight RWS Light RWS Medium RWS Heavy RWS Light Turret Multi-Mission R150 R400 R600 R800 T1600 Sensors Common Range of Platforms and Applications Common Co
Slide 28: R800 Heavy Calibre System
R800 Heavy Calibre System EOS recently launched a heavy calibre R800 system, with an integrated counter-drone laser dazzler Product For personal use only • Turret-level, heavy-calibre hitting lethality • Lightweight system • Operated remotely Wide range of weapons, including: • 1 x Javelin or 2 x Sp
Slide 29: R150 Remote Weapon System
R150 Remote Weapon System Lightest system on the market capable of deploying 12.7mm/14.5mm heavy machine guns Product For personal use only • Ultra lightweight system • Under 150kg with 12.7mm machine gun and full ammunition load • Can be operated remotely • Non-ITAR Wide Range of Weapons, including
Slide 30: Slinger Counter-Drone System
Slinger Counter-Drone System The Ukraine conflict demonstrates the drone threat and the need for counter-drone solutions. EOS is pursuing a range of opportunities. Context • Continuing Ukraine drone attacks For personal use only • Limited defence options: • technical requirements • economic sustaina
Slide 31: Glossary
Glossary Term Description Term Description ADF Australian Defence Force ISR Intelligence, surveillance and reconnaissance For personal use only Technique of precisely deforming a mirror in order to Adaptive Optics kW Kilo Watts compensate for (atmospheric) light distortion APKWS Advanced Precision K
Slide 32: For personal use only
For personal use only
Electro Optic Systems Holdings — H1 2024 Earnings Presentation on 6ix