Firan Technology Group Corporation · TSX:FTG
Firan Technology — FTG — Shareholder Meeting (April 2024)
33 slides from Firan Technology's shareholder meeting presentation, April 2024
Slide 1: FTG Corporation
FTG CORPORATION Aerospace & Defence Electronic Products & Subsystems FTG: TSX April 2024
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward-looking statements. These forward-looking statements are related to, but not limited to, FTG’s operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains words such as “anticip
Slide 3: FTG Today: Pioneering Aerospace & Defence Solutions
FTG Today: Pioneering Aerospace & Defence Solutions A Global Force, Crafting Cutting-Edge Electronic Products and Subsystems that Propel the Industry Forward Markets Products Cockpit Products Printed Circuit Boards Aerospace & Defence FTG Aerospace FTG Circuits TSX: FTG 3
Slide 4: FTG at a Glance
FTG at a Glance Financial And Operational Snapshot TSX: FTG 50% Growth in Sales (2022-2023) Driven by Acquisitions & Organic Growth: $90M Sales in 2022 $135M Sales in 2023 9 Sites Globally: 5 in USA 2 in Canada 2 in China 23.9M Common Shares, approximately: 4.8M owned by Oakwest
Slide 5: FTG Strategic Initiatives
FTG Strategic Initiatives Operating Performance Deliver Value to Customers Growth Reduce Costs, improve Increase Efficiencies Operating Leverage Expand Pursue Market Technology, High Positioning Geography, Margin Capacity Business Advanced Acquisitions Technology TSX: FTG 5
Slide 6: FTG Operating System
FTG Operating System Solidifying Leadership Team – Laying The Groundwork To Scale Effectively, Without Compromising Performance Build/Strengthen the team Standardize FTG operating system across the company: Leverage best practices from inside and outside FTG Ensure consistent performance acr
Slide 7: FTG - Strong Leadership Team
FTG - Strong Leadership Team Operational Excellence – Proven Success in Scaling and Optimizing Manufacturing and Assembly Procurement Processes Brad Bourne CEO SALES CIRCUITS AEROSPACE (15 STAFF) (475 STAFF) (200 STAFF) CORPORATE LEADERS OPERATIONS LEADERS Jamie Crichton Leo LaCroix Shawn Thompson P
Slide 8: FTG Strategic Initiatives
FTG Strategic Initiatives Operating Growth Performance Deliver Value Increase to Customers Reduce Costs, Operating Improve Leverage Efficiencies Expand Pursue Market Technology, High Positioning Geography, Margin Capacity Business Advanced Acquisitions Technology TSX: FTG 8
Slide 9: FTG Scalable Economics
FTG Scalable Economics Top Line Drives Bottom Line CAD/USD Exchange Rate 100 $1.70 90 Direct Labour Variable Cost $1.60 80 ~70% $1.50 70 $1.40 60 Material $1.30 Percent 50 $1.20 40 Fixed Cost $1.10 30 Indirect Labour ~30% $1.00 20 $0.90 10 Infrastructure 0 Contribution Margin of ~30% on incremental
Slide 10: Commercial Aircraft Deliveries
Commercial Aircraft Deliveries AIRCRAFT DELIVERIES 1200 Airbus Airbus total backlog Ramping from 50 to 75 8,014 1000 A320s per month by 2026 800 Ramping A350 from 5 to 10 AIRCRAFT per month by 2026 # Aircraft 600 Ramping from 5 to 14 A220 per month by 2026 400 Boeing total backlog Boeing 200 5
Slide 11: Business Jet Forecast - Global
Business Jet Forecast - Global # Aircraft Business Jet deliveries are ramping in 2023 to 2026 to above pre-pandemic levels TSX: FTG 11
Slide 12: US Defence Spending
US Defence Spending 850 US DEFENCE SPENDING 800 750 700 $B 650 600 550 500 2018 2019 2020 2021 2022 2023 2024 Defence spending is increasing as geopolitical tensions increase around the globe TSX: FTG 12
Slide 13: FTG's Multiple Levers For Continued Growth
FTG’s Multiple Levers For Continued Growth 4. New Technology Increase product offerings to grow content per aircraft 2. New Programs Win content on new programs in development 3. Operational Excellence Quality, delivery, customer service 6. Acquisitions In support of increased 1. Market/ Industry ca
Slide 14: Capacity and Plant Utilization
Capacity and Plant Utilization Circuits Aerospace Can add staff on afternoon/night/ Toronto weekend shifts Toronto Running day shift, and 70-80% Can offload lower tech work to free up capacity for higher value product 60-70% small afternoon shift Chatsworth Currently running day shift, with
Slide 15: FTG Strategic Initiatives
FTG Strategic Initiatives Operating Performance Growth Deliver Value to Customers Reduce Costs, Increase Improve Operating Efficiencies Leverage Expand Technology, Pursue High Geography, Market Margin Capacity Business Positioning Acquisitions Advanced Technology TSX: FTG 15
Slide 16: Barriers to Entry
Barriers to Entry Technology/Capabilities Government certifications Customer certifications and approvals Customer Relationships Operational Performance Financial Strength Global Footprint TSX: FTG 16
Slide 17: FTG's Market Segmentation Dynamics
FTG’s Market Segmentation Dynamics Analysis For Optimal Capital Deployment Benchmarking data used to assess financial attractiveness of various market segments Aftermarket Defence Aerospace Simulation Spares, Repairs, Production Production and Support Short cash cycles Good margins POSITIVES H
Slide 18: Market Positioning
Market Positioning Benchmarking Process Used To Assess Financial Attractiveness Of Various Market Segments After market Simulators Margins Aerospace Defence Cash Cycle Future investment decisions will drive FTG towards higher margin business TSX: FTG 18
Slide 19: Aerospace Technology Growth
Aerospace Technology Growth Technology Growth Drives Higher Content Per Electronic Assembly Aircraft And Accelerates Revenue Growth Power Supply Panel Switch Panel 40% of 2023 sales Electro-mech are assemblies Assembly Keyboard TSX: FTG 19
Slide 20: Circuits – Technology Growth
Circuits – Technology Growth HDI Hybrid Materials Semi / Fully Micro Vias Rigid Flex High Frequency Thermal Additive Process Sequential RF Circuitry (Averatek) Assembly RF Circuitry Management Lamination Digital Circuitry UHDI Filled Vias Over 50% of sales are high technology or specialty products T
Slide 21: FTG Strategic Initiatives
FTG Strategic Initiatives Operating Performance Growth Deliver Value to Customers Reduce Costs, Increase Improve Operating Efficiencies Leverage Pursue Market Expand High Technology, Margin Positioning Geography, Business Capacity Advanced Technology Acquisitions TSX: FTG 21
Slide 22: Corporate Development Milestones
Corporate Development Milestones Company Founded Acquires Filtran Acquires Helix Circuits Micro Circuits Photo Etch Company renamed Incorporates FTG Acquires Teledyne PCT Circuit World Aerospace Tianjin Acquires Colonial FTG completes FTG Aerospace Chatsworth Circuits reverse takeover Grand Opening
Slide 23: FTG Site Positioning
FTG Site Positioning Circuits Aerospace Rigid Flex Flex, Rigid Flex, Assemblies Specialty FTG Circuits FTG Technology Circuits Chatsworth Haverhill Flight Assemblies FTG Simulator Aerospace FTG Rigid HDI and Assemblies Advanced Mat’l FTG Circuits FTG Circuits Toronto Aerospace Toronto Minnetonka Cha
Slide 24: FTG Circuits Minnetonka
FTG Circuits Minnetonka OVERVIEW Focused on high tech circuit boards Leverage FTG’s 8 person Focused on aerospace/defence sales team 110,000 sq ft facility FTG’s USA tax losses to Operate as is, where is shield future earnings INTEGRATION ACTION STATUS Add Ramp ERP Material Price Expand
Slide 25: FTG Circuits Haverhill
FTG Circuits Haverhill OVERVIEW Focused on RF circuit boards Leverage FTG’s 8 person Focused on defence market sales team 30,000 sq ft facility FTG’s USA tax losses to Operate as is, where is shield future earnings INTEGRATION ACTION STATUS Add Select ERP Material Expand Equipment to Imp
Slide 26: Future M&A Considerations
Future M&A Considerations Future Acquisitions Key criteria for future acquisitions include: Aligned with FTG market and product focus Expand technology offering Expand geographic coverage Europe for commercial airspace Europe, India, other top ten countries outside of US for defence Acce
Slide 27: Capital Allocation
Capital Allocation Capital allocation plans include: 1. Invest organically to ramp throughput and drive technology 2. Pursue corporate development opportunities 3. We have an NCIB to buy back up to 5% of outstanding shareholder stock 616,400 shares repurchased since 2022 Deploy cash available to i
Slide 28: Financial Highlights – By Quarter
Financial Highlights – By Quarter $7,000 $45,000 $6,000 $40,000 $35,000 $5,000 $30,000 $4,000 $25,000 ADJ EBITDA Revenue $3,000 $20,000 $K $K $2,000 $15,000 $1,000 $10,000 $0 $5,000 -$1,000 $0 Q1 21 Q1 22 Q1 23 Revenue Adj EBITDA Revenue has doubled since pandemic lows TSX: FTG 28
Slide 29: Balance Sheet Highlights
Balance Sheet Highlights $40 Working $35 Capital $30 $25 $20 $15 $M $10 $5 Net $0 Cash/Debt -$5 -$10 -$15 Working Capital | Working capital remains strong after the acquisitions Net Cash | FTG has minimal debt after completing two acquisitions in 2023 TSX: FTG 29
Slide 30: Cash Flow Highlights
Cash Flow Highlights Cash Flow/ Cash Conversion(1) 45,000 1200% 40,000 1000% 35,000 30,000 800% 25,000 600% 20,000 15,000 400% 10,000 200% 5,000 0 0% 2018 2019 2020 2021 2022 2023 Total Cashflow Net Income Cash Conversion Cash conversion above 100% every year except 2023. 2023 cash conversion impact
Slide 31: FTG's Stock Performance
FTG’s Stock Performance 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Stock is up 200% since announcing the two acquisitions and strong organic growth in 2023. Stock is up 1,000% in the last decade. FTG TTM EV/EBITDA is 6-7X TSX: FTG 31
Slide 32: ESG at FTG
ESG at FTG Focus On Environmental, Social & Governance Factors Across All Operations Environment: Reduction of impact on the environment in areas such as water recycling, higher efficiency equipment, and committed further investments, with the support of the Canadian and Ontario Governments. Social:
Slide 33: FTG Corporation
FTG CORPORATION www.ftgcorp.com | FTG: TSX FTG: TSX