Calnex Solutions Plc · LSE:CLX
Calnex Solutions — H1 FY21 Earnings Presentation
28 slides from Calnex Solutions's earnings presentation, Nov 25, 2020
Slide 1: Calnex Solutions Interim Results
Calnex Solutions Test solutions for the world’s networks Interim Results six months to 30 September 2020 Tommy Cook, CEO Ashleigh Greenan, CFO
Slide 2: The Board
The Board Tommy Cook Ashleigh Greenan George Elliott Ann Budge Graeme Bissett CEO CFO Non-Exec Chairman Non-Exec Director Non-Exec Director Founded Calnex in 2006 Joined Calnex in 2020. Extensive board experience at Experienced Non-Executive Experienced corporate financier private and public technol
Slide 3: Calnex Solutions: test solutions for the world’s telecom networks
Calnex Solutions: test solutions for the world’s telecom networks Globally-established Designs, produces & markets test instrumentation to validate the Revenue and EBITDA growth provider of test solutions for performance of critical telecom network infrastructure 14,000 the Telecoms Industry Sco
Slide 4: Focus on high value niches of the testing market
Focus on high value niches of the testing market Design Design Conformance Manufacturing Network Maintenance Simulation Validation Test Test Deployment Test Calnex’s Strategic Focus R&D Design Validation and Conformance Testing Critical points in the development cycle, require high capability an
Slide 5: Strong performance in the period
Strong performance in the period Strong revenue performance in Significant Underlying EBITDA growth Positive cash flow first 6 months +36% +69% H1 FY21: £7.7m (H1 FY20: £5.7m) H1 FY21: £2.6m (H1 FY20: £1.5m) H1 FY21: £0.9 m (H1 FY20: -£0.4m) Continued innovation High levels of repeat revenue Favoura
Slide 6: Resilient through COVID-19
Resilient through COVID-19 Actions Impact Looking forward • Quickly adjusted to remote working, and • Customers successfully transitioned to • We are a resilient business with repeat changed customer engagement remote working enabling projects to revenues and a robust balance sheet. approaches conti
Slide 7: Business Model
— Calnex Business Model
Slide 8: Revenue model
Revenue model Revenue Streams 16,000 14,000 1,266 Core sales model is bundled Hardware & Software 12,000 Software options differ from customer to customer 847 10,000 692 Price per PO dependent on software options configuration £’000 8,000 Additional functionality can be added later by purcha
Slide 9: Repeat Customer Demand
Repeat Customer Demand Top 10 customers by revenue Top 10 customers Repeat customers Year of first 3 year average 3 year average sale FY18 FY19 FY20 Telecoms Customer 1 ‘09 834 1,525 1,264 Telecoms Customer 2 ’11 388 811 1,230 17% Telecoms Customer 3 ’10 711 1,384 1,081 Telecoms Customer 4 ’11 127 1
Slide 10: H1 FY21 Financials
H1 FY21 Financials 10
Slide 11: Income statement
Income statement H1 FY21 H1 FY20 FY20 £000 £000 £000 Revenue & EBITDA Revenue 7,721 5,655 13,739 10,000 Cost of sales (1,689) (1,138) (3,116) 548 8,000 Gross Profit 6,031 4,517 10,622 £’000 6,000 385 Other income 103 157 549 Administrative expenses (excl D&A) (2,710) (2,331) (5,384) 4,000 7,172 2,59
Slide 12: Cashflow
Cashflow H1 FY21 H1 FY20 FY20 Year ending 31 March £000 £000 £000 Cashflows from operating activities Robust cash flow performance due to EBITDA (continuing business) 3,424 2,402 6,288 strong trading in the period. Add back: Other income (103) (157) (549) Other non cash items 395 (34) 204 Net ca
Slide 13: Market & Strategy
—— Calnex Insight and Innovation Market & Strategy 13
Slide 14: 5G provides significant test equipment market
5G provides significant test equipment market Global 5G Testing Equipment and Solutions Market Forecast to 2024 (Frost and Sullivan report): “$1,058.2 million in revenue in 2018. 5G CAGR, 2018-2024 = 11.5% testing equipment used to validate the chipset, device, network and application Market siz
Slide 15: Growth strategy
Growth strategy Three pronged growth strategy to capitalise on structural market growth drivers Continued product innovation to Expand within the Cloud Computing Target select M&A opportunities to capitalise on growth of 5G sector and other market niches add to product portfolio Follow the trends
Slide 16: Outlook
Outlook Globally-established provider of test solutions for the Telecoms Industry Favourable market conditions continue into H2 FY21 Established industry position with reputation Anticipated that revenue and adjusted for winning products profit before tax in H2 FY21 will be broadly in line with H1 F
Slide 17: Q&A
Q&A 17
Slide 18: General information
General information Major shareholders • Share Price 69.5p (at 24.11.2020) % of Issued • Market AIM Shareholder Share Capital • Ticker CLX Thomas (Tommy) Cook (CEO) 21.0% • Market Cap. £62m BGF Investment Management Limited 15.0% • Ord. shares in issue 87.5m Scottish Enterprise 8.98% Otus Capital Ma
Slide 19: Calnex Test Solutions: Market firsts
Calnex Test Solutions: Market firsts High-value, high performance synchronisation products for both the lab and field Portfolio has been developed both organically and through acquisition Synchronisation testing in the lab Network emulation for real-world testing in the lab Portable field test u
Slide 20: A selection of Calnex Customers
A selection of Calnex Customers TELECOM EQUIPMENT VENDORS HYPERSCALE, ENTERPRISE NETWORK OPERATORS COMPONENT MANUFACTURERS 20
Slide 21: 5G driving market change
5G driving market change 5G Enhanced Mobile Broadband Massive Internet of Things Mission-critical Control Faster, more uniform user-experience Very high numbers of low-data rate Ultra-low latency and high reliability machine-to-machine connections Autonomous vehicles, object Demanding indoor/outdoor
Slide 22: Rapid evolution of wireless telecoms market
Rapid evolution of wireless telecoms market 4K 5G 1979 1991 1998 2008 2019 1G voice 2G 3G data 4G 5G Analog Text Mobile and Wireless Cloud, IP and Unlimited Telecommunications Messaging Internet Connection Mobile Broadband Data Capacity 35kbps 135kbps 2Mbps 100Mbps 10Gbps 22
Slide 23: Competitive Positioning & Barriers to entry
Competitive Positioning & Barriers to entry Longevity & depth of customer relationships demonstrate reputation in the industry and trusted partner status Close relationships with customers, regulatory Global network of Established bodies and leading market participants, means resellers & industr
Slide 24: Lean Business Operational Model
Lean Business Operational Model Lean business model, with global distribution channels in place and manufacturing outsourced to a high quality local partner Distribution channels Manufacturing capability Operational excellence Global reach through network of regional Manufacturing outsourced to
Slide 25: Snapshot of the complexity ahead: the evolving shape of mobile transport
Snapshot of the complexity ahead: the evolving shape of mobile transport 5G Functional Split Original Fronthaul Concept DU RRU RRU RRU Backhaul EPC BBU EPC CU Backhaul Middlehaul Fronthaul What has previously been a consistent EPC – Evolved Packet Core DU RRU topology with all the mobile basestati
Slide 26: Customer case study
Customer case study 1.60 14 Products Locations 1.40 12 2010 P-C USA, India, Belgium 1.20 2011 P-X USA, India, Italy 10 2012 P-X USA, India, Austria 1.00 8 2013 P-X USA, India £m 0.80 2014 P-X, A-X USA, India, China, UK 6 USA, India, UK, Czech 0.60 2015 P-X, A-X Rep. 4 USA, India, Austria, UK, 2016 P
Slide 27: Balance sheet
Balance sheet Summary Balance Sheet 30 Sep 20 31 Mar 20 £000 £000 Non-current assets Intangible assets 7,009 6,779 Tangible & right of use assets 621 681 Deferred tax asset 250 554 7,881 8,013 Current assets Inventories 1,226 958 Trade and other receivables 2,148 2,508 Cash and cash equivalents 4,51
Slide 28: Insight and Innovation
Insight and Innovation calnexsol.com Tommy Cook, CEO tommy.cook@calnexsol.com Ashleigh Greenan, CFO ashleigh.greenan@calnexsol.com