Slide 1: AI-Enabled Platforms for Protection against Advanced Threats
AI-Enabled Platforms for Protection against Advanced Threats 2021 Full Year Results (ASX:DRO) February 2022 www.droneshield.com Image: DroneShield product testing at anechoic chamber
Slide 2: 2021 Full Year Summary
2021 Full Year Summary (A$m, Dec YE) Rapidly improving financials, as the business stands at an inflection point into 2022 Strong Revenue Growth Rapid Cash Receipt Growth 14.8 10.5 94% growth 174% growth 5.4 5.4 3.3 3.7 1.0 1.8 2018 2019 2020 2021 2018 2019 2020 2021 FY FY Improving EBITDA Improving
Slide 3: Investment Highlights
Investment Highlights World leading Large international addressable Leveraged to global proprietary AI platforms markets in counterdrone, growth trends – rising AI for protection against electronic warfare and tracking applications and defence advanced threats systems expenditure Best in class custo
Slide 4: Counterdrone: Multi-Billion Dollar Market by 2024
Counterdrone: Multi-Billion Dollar Market by 2024 Rapidly improving and easily available drone technology is driving demand for counterdrone solutions Sources: MarchWatch: https://www.marketwatch.com/press-release/counter-uas-market-size-share-growth-business-scenario-insights-industry-analysis-and-
Slide 5: US$10bn Total Addressable Market
US$10bn Total Addressable Market Sources: https://www.droneshield.com/counterdrone-market 5 www.droneshield.com
Slide 6: AI Generally: US$58bn in 2021, US$310bn in 2026
AI Generally: US$58bn in 2021, US$310bn in 2026 AI in Military: US$6bn in 2020, US$12bn in 2025 2021 has seen a major step forward for DroneShield, despite the COVID pandemic challenges ü A new high-tech area, substantially open to disruption by smaller companies like DroneShield Sovereign capabilit
Slide 7: Drones - A Critical and Growing Threat Vector
Drones - A Critical and Growing Threat Vector 7 www.droneshield.com
Slide 8: Why is the Malicious Use of Drones a Threat?
Why is the Malicious Use of Drones a Threat? The widespread adoption of drone technology has increased the risk and prevalence of disruptive use Payload delivery • Attacks: Dropping harmful / explosive payloads (including chemical or biological substances) or creating damage via collision • Smugglin
Slide 9: AI-Enabled Platforms for Protection against Advanced Threats
AI-Enabled Platforms for Protection against Advanced Threats Multiple platforms in adjacent technologies and customers with a common theme of AI-based threat protection Counterdrone Artificial Intelligence in Artificial Intelligence in Command-and-Control (C2) Electronic Warfare computer vision and
Slide 10: How does a counterdrone system work?
How does a counterdrone system work? Step 1 Step 2 Step 3 Detect Assess Respond 10 www.droneshield.com
Slide 11: Counterdrone detection solutions
Counterdrone detection solutions DroneShield uses multi-sensor drone detection for optimal results Radio frequency Radar* Cameras* Acoustic* Imagery • Electro-Optical (EO), • Foundational layer • Motion tracker - emits • Compares noise of drone Infrared (IR) and Thermal • Detects drone comms signals
Slide 12: Counterdrone defeat solutions
Counterdrone defeat solutions DroneShield uses smart jamming which has advantages over other technologies, particularly, in its use across civil and military applications, and does not compete against large Defence Primes Exotic tech, Large Defence Primes limited reliability dominance area Safe – “s
Slide 13: DroneShield Capability Overview
DroneShield Capability Overview Rapidly evolving capabilities in response to customer requirements Hardware with Embedded Software and Associated Services Subscription and R&D Based Software Dismounted & Body-Worn Counterdrone Solutions Electronic Warfare and Signals Intelligence DroneGun DroneGun R
Slide 14: 2021 Scorecard
2021 Scorecard 2021 has been a major step forward for DroneShield, despite the COVID pandemic challenges On track for another order of magnitude all-time record year for revenues ü and cash receipts Expanded past counterdrone into two AI-powered adjacent areas of ü Electronic Warfare and Computer vi
Slide 15: 2022 Key Priorities
2022 Key Priorities Multiple large ($5m+) contracts across multiple countries and customers Another order of magnitude year of increase in customer cash receipts Winning contracts adjacent to current core capability, within Artificial Intelligence domains – such as Command-and-Control and Tracking S
Slide 16: 2022 Pipeline of $160m, with a further $130m of projects tracked for 2023+
2022 Pipeline of $160m, with a further $130m of projects tracked for 2023+ A significant and geographically diversified pipeline, approx. 80 projects at different maturity stages to Dec 2022 2022 Pipeline: $59m / 5 projects 2022 Pipeline: $10m / 6 projects • Awarded preferred bidder status for two •
Slide 17: Diversified and Mature Pipeline
Diversified and Mature Pipeline (Cash Receipts to Dec 2022 only) Multiple projects at each development stage improve predictability of cashflows 6-18 months from lead to sale, but can be much shorter for repeat orders Credible Lead Confirmed Scope Firm Bid Submitted DroneShield Shortlisted Purchase
Slide 18: Strategy | Continue Leadership in Counterdrone, Grow Adjacent Capabilities and SaaS
Strategy | Continue Leadership in Counterdrone, Grow Adjacent Capabilities and SaaS Three-part Strategy Continue Leadership in the Counterdrone/Unmanned Threat Sector • The counterdrone market is growing rapidly, especially in the US • DroneShield is well positioned as the industry pioneer, with on-
Slide 19: Contact details
Contact details Email: info@droneshield.com Sydney, NSW (Headquarters) Level 5, 126 Phillip St Sydney, NSW 2000 Australia Phone: +61 2 9995 7280 Warrenton, Virginia 7140-B Farm Station Rd, Warrenton, VA 20187 USA Phone: +1 (540) 215-8383 19 www.droneshield.com
Slide 20: Appendices
Appendices www.droneshield.com
Slide 21: Proven Progression and Pathway to North Star
Proven Progression and Pathway to North Star Cutting edge proprietary products, powered by AI engine and carrying SaaS pricing, in a rapidly growing market, via multiple proven go-to-market strategies, substantial existing deal pipeline and a world class team “North Star” 5-Year Goals ü $100-300m an
Slide 22: Growing Electronic Warfare Business Segment
Growing Electronic Warfare Business Segment Electronic Warfare (EW) / Signals Intelligence (SIGINT) area has a number of technology overlaps ü with counter-drone, as drones utilise radiofrequency spectrum in an increasingly complex and encrypted manner EW/SIGINT is generally the domain of Defence Pr
Slide 23: DroneShield's competitive counterdrone advantage?
DroneShield’s competitive counterdrone advantage? C-UAS market pioneer, with a culture of systematic innovation Market leading, differentiated technology… …across multiple platforms… ü Multi-sensor detection, ID and tracking ü Body-worn Best-in-breed detection range Vehicle/Ship mounted ü ü Best-in-
Slide 24: Australian Government is committed to building home-grown defence sector
Australian Government is committed to building home- grown defence sector The Australian Government’s defence spending commitment presents a large opportunity for the sector Overview Capability investment funding profile (A$bn) $270bn in total • Australia has 12th largest defence budget spend global
Slide 25: Defence engagement in Australia
Defence engagement in Australia There are lots of access points into Defence with different needs and different approach methods ü Australian Army / Navy / Air Force ü CASG - Capability Acquisition and Sustainment Group ü Defence Primes ü Defence Science and Technology Group – DSTG ü Defence Innovat
Slide 26: Global defence spending continues to rise
Global defence spending continues to rise Overview Global defence spend (US$bn)1 Dip attributable to end of large scale combat • Global military spending in 2019 operations in Afghanistan represented 2.2% of GDP 1,849 1,914 1,753 1,789 1,794 1,778 1,748 1,743 1,766 1,779 1,800 • Total military spend
Slide 27: Benefits and applications of safe, layered, counterdrone systems over kinetic systems
Benefits and applications of safe, layered, counterdrone systems over kinetic systems Safe counterdrone systems have many advantages over kinetic counter-drone systems, which are only practical for deployment in war-like scenarios Avoidance of Evidence for legal Intelligence Multi-platform with coll
Slide 28: Increasing Predictability of Cash Receipts via Balancing Geographies
Increasing Predictability of Cash Receipts via Balancing Geographies Increasing focus towards the more business-transparent Australian and the US customer base, with deep track record of successfully conducting business (and being paid) in the Middle East Cash Receipts in 2017 Cash Receipts in 2018
Slide 29: Increasing Predictability of Cash Receipts via Growing Repeat Business
Increasing Predictability of Cash Receipts via Growing Repeat Business Defence and Government Agencies often have a long acquisition cycle to first purchase, but are loyal and collaborative customers, once on board. DroneShield has been increasing its repeat customer business Repeat vs First Time Cu
Slide 30: Seasoned senior sales and engineering teams
Seasoned senior sales and engineering teams DroneShield’s experienced team carries a solid track record of delivering growth Peter Oleg Jethro Carla Red Katherine James Vornik Marks Balanco McClintock Stapels Independent CEO and Independent CFO and Sales Non- Managing Non- Director General Company E
Slide 31: Industry Recognition
Industry Recognition DroneShield is well regarded across defence industry, winning multiple awards and media focus in 2021 31 www.droneshield.com
Slide 32: Capital Structure
Capital Structure Enterprise Value (A$) DRO Shares 16c / share1 $66.9m2 Cash As at 31 December 2021 $9.5m Debt As at 31 December 2021 nil Enterprise Value $57.4m 1 Shareprice as at 21 February 2022. 418,226,152 ordinary shares outstanding at the date 2 Excluding unlisted options. 39,465,834 unlisted
Slide 33: Growing and Cohesive Team with Deep Capability
Growing and Cohesive Team with Deep Capability Continued growth of the global team since inception in 2015, across sales, engineering and support roles 33 www.droneshield.com
Slide 34: Investor FAQs
Investor FAQs What does DroneShield do? DroneShield makes hardware and software solutions that detect and safely neutralise small drones (unmanned aerial vehicles or “UAS”) used for nefarious purposes, such as terrorism, contraband delivery, and airport disruptions. We also provide Electronic Warfar
Slide 35: Investor FAQs (continued)
Investor FAQs (continued) Who are your customers? We operate in over 100 countries. Most revenues are from military customers in the US, Australia and the Middle East. Large defence prime contractors such as Thales are also our customers. We have expanded our addressable markets to include Intellige
Slide 36: Investor FAQs (continued)
Investor FAQs (continued) What are your competitive strengths? Why do customers choose DroneShield? DroneShield is the original pioneer in the counterdrone space, and has the best recognised brand globally in the sector. We have the largest engineering team, and have been in market for the longest,
Slide 37: Investor FAQs (continued)
Investor FAQs (continued) What is the company’s strategy for growth? We have the Over 75% of the revenues today comes from defence. Intelligence community is second largest vertical at approximately 15% of revenues. This will continue being the key focus for us. Success of mass deployment is a combi
Slide 38: Investor FAQs (continued)
Investor FAQs (continued) Do acquisitions play a part in the growth strategy? The Board regularly evaluates acquisition opportunities as a way of accelerating organic growth. Given our competitive lead over competitors we are not looking to consolidate other providers. However, we may acquire strate
Slide 39: Investor FAQs (continued)
Investor FAQs (continued) What do you see as key re-rating triggers for the stock in the near term? 1. US Government agency and defence market - we are going through formal evaluation towards setting up a Program of Record with a major US Government agency, in second half of 2022 - initial order alo
Slide 40: Investor FAQs (continued)
Investor FAQs (continued) Can you give an update on the large Middle Eastern deal? We continue to regularly engage with the customer, and the contract with them (US$50m) is in a fully negotiated stage, with the final signature as the next step. The customer has made a A$2.5m payment to us in 2Q21, t
Slide 41: Disclaimer
Disclaimer These presentation materials (the Presentation Materials) are confidential and have been prepared by DroneShield Limited (Company). By receiving the Presentation Materials, you acknowledge and represent to the Company that you have read, understood and accepted the terms of this disclaime
Slide 42: Disclaimer
Disclaimer FORWARD LOOKING STATEMENTS Certain statements contained in the Presentation Materials, including information as to the future financial or operating performance of the Company and its projects, are forward looking statements. Such forward looking statements: a) are necessarily based upon