Electro Optic Systems Holdings Limited · ASX:EOS
Electro Optic Systems — FY2019 Earnings Presentation
30 slides from Electro Optic Systems's earnings presentation, Feb 28, 2020
Slide 1: FY2019 Results Presentation
28 February 2020 ELECTRO OPTIC SYSTEMS HOLDINGS LIMITED FY2019 Results Presentation
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer CONTENT OF PRESENTATION FOR INFORMATION PURPOSES ONLY Forward-looking Statements This presentation may contain statements that are, or may be deemed to be, forward-looking statements. Such statements can generally be identified by the use of words such as ‘may’, ‘will
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Preparation of Information All financial information has been prepared and reviewed in accordance with Australian Accounting Standards. Certain financial data included in this presentation is ‘non IFRS financial information’. The Company believes that this non IFRS fi
Slide 4: Introduction
01. INTRODUCTION
Slide 5: EOS Business Snapshot and Key Sectors
EOS Business Snapshot 3 Key Sectors Defence Communications Space Revenue1: $166m 91% Backlog2: $620m 5 Locations ~400 EBIT1: $21.7m 194% Pipeline3: $3.1bn Australia, USA, Employees EBIT Margin1: 13.1% 4.6% Germany, Singapore & UAE 5 (1) Unaudited FY2019 results. EBIT excluding FX gains. Percentage m
Slide 6: Strategic Framework: EOS as a Technology Company
Strategic Framework: EOS as a Technology Company EOS is Australia’s largest aerospace entity, and the largest defence exporter in the Strategy southern hemisphere with established partnerships with major aerospace companies globally EOS’s strategy is to use advanced EOS has executed $800 million
Slide 7: EOS Business Sectors: Strong Ecosystem & Synergies
EOS Business Sectors: Strong Ecosystem & Synergies Weapon Aiming and Pointing Space Domain Awareness Directed Energy Systems Counterspace Operations Optical Sensors Mission Control Real Time Controls Adaptive Optics Adaptive Optics Shared Infrastructure Encrypted Communications Theatre ISR1 Wingman
Slide 8: Executive Management Team
Executive Management Team Dr Ben Greene Scott Lamond Group Chief Executive Officer Group Chief Financial Officer Dr Ben Greene established the original laser space tracking capabilities and infrastructure Mr Lamond joined the EOS team in 2006 and was appointed CFO in 2012. He brought to the acro
Slide 9: FY2019 Update & FY2020 Guidance
02. FY2019 UPDATE & FY2020 GUIDANCE
Slide 10: Key Operational Highlights of FY2019
Key Operational Highlights of FY2019 Beat FY2019 EBIT guidance of $20 million 01 Delivered EBIT of $21.7 million, excluding FX gains(1) Key EBIT drivers of production yield and order backlog, both tracking well Strategic acquisition of EM Solutions and Audacy Acquisitions give EOS a competitive edge
Slide 11: Financial Headlines (Unaudited)
Financial Headlines (Unaudited) A$m FY19 FY18 % movement Commentary Revenue 166.0 87.1 +91% • 91% revenue increase driven by customer demand • Achieved EBIT (excluding FX gains) of $21.7m in FY2019, well in EBITDA (excluding FX gains) 26.1 8.0 +225% excess of $20m forecast % of revenue 15.7% 9.2% •
Slide 12: Segment Performance (Unaudited)
Segment Performance (Unaudited) A$m FY19 FY18 % movement Commentary Revenue • Strong growth in Defence as production capacity increased to Defence 158.5 85.0 87% match contracted deliveries, as expected Communications 1.9 - nm Space 5.0 1.4 264% • Space satellite tracking services revenue milestone
Slide 13: FY2019 Net Cash Flow Movements (Unaudited)
FY2019 Net Cash Flow Movements (Unaudited) Commentary 108.0 (44.8) • Contract receivable asset increased due to early deliveries made against a fully executed and (33.8) funded (irrevocable letter of credit) contract as a means of smoothing output increase in support of higher (70%) growth target 81
Slide 14: Update on Pipeline and Backlog
Update on Pipeline and Backlog • Backlog reflects committed contracts that are not yet fulfilled • The backlog currently consists largely of Defence products Defence underpinned by a number of key contracts Backlog1 $620m Communications • Communications segment backlog is expected to grow strongly S
Slide 15: Use of Funds – November 2019 Capital Raise
Use of Funds – November 2019 Capital Raise These funds were raised to increase 2020 EBIT growth from 45% to 70% Inventory expansion – December 2019 to February 2020 $40.2m Supply Chain Expansion Inventory expansion – March to April 2020 (not yet spent) $11.8m (~$52m allocated) Total $52.0m USA plant
Slide 16: FY2020 Guidance and Growth Priorities
FY2020 Guidance and Growth Priorities FY2020 Guidance (Reaffirmed) Growth Plans Going Forward Defence 1 EBIT of $36-38m or ~70% growth Defence sector has strong growth beyond 2020 locked into its large contract backlog. The company will escalate production capacity towards $900m by 2024 in parallel
Slide 17: EOS Defence Sector
03. EOS DEFENCE SECTOR
Slide 18: Defence Sector Overview
Defence Sector Overview 1. Remote weapon systems (RWS) allow users to deploy existing weapons with the gunner located remotely from the weapon to avoid casualties from returned fire. 2. The RWS is far more accurate and effective in combat than a manned gun. These are not robots. A human must still f
Slide 19: Defence Sector Capacity
Defence Sector Capacity Production Plant – Australia • Hume (ACT) plant can now routinely run at capacity >40 units or $25 million revenue per month in output ($300 million annually) • This is its design capacity for single-shift operation and the output level required to meet FY2020 guidance withou
Slide 20: Counter Unmanned Aerial Systems (CUAS)
Counter Unmanned Aerial Systems (CUAS) There is surging market need and this product is expected to be a major contributor to EOS’s growth from 2021 1. In the past 3 years, UAS (“drones”) have become a major threat to both military personnel and civil or commercial infrastructure 2. Drones carrying
Slide 21: Counter Unmanned Aerial System (CUAS) Products
Counter Unmanned Aerial System (CUAS) Products EOS is unique in having a several different weapon systems which are proven killers for every category of UAS. Testing over 3 years with major customers gives EOS “first-to-market” advantages. EOS systems are proven to: 1. Detect UAS by radar or electro
Slide 22: EOS Communications Sector
04. EOS COMMUNICATIONS SECTOR
Slide 23: Communications Sector Overview
Communications Sector Overview • On earth communications traffic is carried in optical fibre using optical (laser) technology, which replaced microwave technology decades ago. • In space microwave technology is still used because optical links are degraded by the atmosphere and in some cases (cloud)
Slide 24: Communications Sector: Ground Segment
Communications Sector: Ground Segment • EOS acquired EM Solutions Pty Ltd (EMS) in FY2019. EMS is a leader in technology and products for the ground segment of microwave space communications. • EMS provides the antennae and associated equipment located on the ground (e.g. on vessels) for communicati
Slide 25: Communications Sector: Space Segment
Communications Sector: Space Segment • EOS has all the ground and space segment elements necessary to provide space communication customers with end-to-end and cost- effective communication solutions. An EOSLinkTM • Upon closing of the US acquisition, EOS intends to deploy a satellite spacecraft con
Slide 26: Communications Sector: Ground Support
Communications Sector: Ground Support • EOS has significant tracking and EOSLinkTM 7m Gateway Antenna communications facilities located in Canberra, ACT, and at Learmonth, WA • New facilities are planned in QLD and SA to support both Space Sector data sales and EOSLinkTM Learmonth, WA operations Bri
Slide 27: EOS Space Sector
05. EOS SPACE SECTOR
Slide 28: Space Sector Overview
Space Sector Overview Space Sector is EOS’s original technology centre and business incubator. It has spun off profitable EOS Defence and Communications sectors and also directly monetises its space technology through four markets: 1. Infrastructure: EOS provides space infrastructure to Australia an
Slide 29: Appendix
06. APPENDIX
Slide 30: FY2019 Financial Summary Waterfall (Unaudited)
FY2019 Financial Summary Waterfall (Unaudited) (A$m) 166.0 (90.1) (33.8) (20.4) 21.7 0.3 22.0 Revenue Direct Cost Employee Costs Expenses EBIT Before FX Interest / FX NPBT & Warranty 30
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