Matrix Composites & Engineering Ltd · ASX:MCE
Matrix Composites & Engineering — Investor Presentation (March 2023)
42 slides from Matrix Composites & Engineering's investor presentation, Mar 1, 2023
Slide 1: 2023 Half Year Results & Equity Raising Presentation
2023 HALF YEAR RESULTS & EQUITY RAISING PRESENTATION 1 March 2023 Not for release to US wire services or distribution in the United States WWW.MATRIXENGINEERED.COM
Slide 2: Disclaimer
DISCLAIMER Important information: The following notice and disclaimer applies to this investor presentation issued by Matrix Composites & Engineering Ltd (the Company). You are advised to read these disclaimers carefully before reading or making any other use of this presentation or information cont
Slide 3: Disclaimer
DISCLAIMER Forward looking statements: This presentation may include forward-looking statements. The words 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'could', 'may', 'target', 'plan' and other similar expressions are intended to identify forwa
Slide 4: Disclaimer
DISCLAIMER To the maximum extent permitted by law the Relevant Parties exclude and disclaim all liability, including without limitation for negligence or for any expenses, losses, damages or costs incurred by you as a result of your participation in an investment in the Company and the information i
Slide 5: Executive Summary
EXECUTIVE SUMMARY MATRIX IS WELL-POSITIONED TO LEVERAGE MATERIALS & ADVANCED MANUFACTURING CAPABILITIES TO BUILD REVENUE ACROSS OUR TRADITIONAL AND EXPANDING ENERGY, RESOURCES AND DEFENCE SECTORS • Revenue $11.8m (1H FY22: $13.7m). • Significant contract awards during 1H from rebounding oil & gas ma
Slide 6: Our Business
THE POWER OF ADVANCED MATERIALS OUR BUSINESS Matrix Composites & Engineering designs, engineers and manufactures BOARD & MANAGEMENT composite and advanced materials to: • Deliver subsea buoyancy solutions to the world PETER HOOD Non-Executive Chairman • Support growth of the renewable energy sector
Slide 7: World's Largest Syntactic Foam Production Capacity
THE POWER OF ADVANCED MATERIALS WORLD’S LARGEST, SYNTACTIC FOAM PRODUCTION CAPACITY MARKET LEADING MATERIALS TECHNOLOGY AND ENGINEERED PRODUCTS INTO AN EXPANDED RANGE OF MARKETS • Subsea Production and SURF applications • Deepwater Drilling • Offshore Floating Wind • Defence • Marine and Deepwater M
Slide 8: Positioned For Strong Growth
POSITIONED FOR STRONG GROWTH FINANCIAL OPERATING OUTLOOK At least Revenue $45m • Revenue $11.8m (1H FY22: $13.7m). • Drilling riser buoyancy, SURF and well secured construction orders 60% of 1H FY23 40.0 • Significant contract awards during 1H revenue. 30.0 $m 20.0 from rebounding oil & gas market,
Slide 9: 1H FY23 Financial Results
1H FY23 FINANCIAL RESULTS 9 1/03/2023 Matrix Composites & Engineering
Slide 10: Key Financial Metrics
KEY FINANCIAL METRICS 1H FY23 1H FY22 • Increased activity in traditional oil & gas markets, with secured contracts timing to drive revenue step change in 2H over 1H FY23. Revenue $m 11.8 13.7 At least $45m secured Underlying EBITDA1 $m (2.3) (1.3) Revenue 1H 2H 40.0 EBITDA $m 12.4 (1.0) 30.0 $m 20.
Slide 11: Balance Sheet
BALANCE SHEET $m 31 Dec 22 30 Jun 22 • Increased cash balance supporting ramp-up in pipeline and Cash1 10.5 7.6 new markets initiatives to penetrate emerging energy, Trade and other receivables 7.0 3.5 resources and defence sectors. Inventory 8.9 6.5 • Expansion in trade receivables, inventories fro
Slide 12: Cash Flow From Operations
CASH FLOW FROM OPERATIONS $m 1H FY23 1H FY22 • Operating cash outflow ($1.5m) stemming from EBITDA loss and increased working capital to Underlying EBITDA /(Loss) (2.3) (1.3) support increased order book for FY23-FY24. Receivables (3.5) (1.6) • Higher deposits received in advance on recent contracts
Slide 13: Matrix Growth Outlook
MATRIX GROWTH OUTLOOK 1/03/2023 13
Slide 14: Three Business Pillars
THREE BUSINESS PILLARS CORE TRADITIONAL EMERGING SUBSEA CORROSION ADVANCED TECHNOLOGIES MATERIALS SURF, deep water drilling and Growing anti-corrosion Advanced composite well construction. Energy coating, application material solutions for transition opportunity with equipment and technical Renewabl
Slide 15: Subsea
APPLICATIONS ACROSS OIL & GAS AND RENEWABLES SUBSEA FOCUS – MOMENTUM BUILDING OUR GROWING QUOTATION PIPELINE • Buoyancy (syntactic foam) for: • Deepwater drilling • Subsea umbilicals, risers and flowlines (SURF) • Offshore floating wind turbines and infrastructure • Matrix LGS VIV and drag reduction
Slide 16: Subsea: Global Subsea Spend
APPLICATIONS ACROSS OIL & GAS AND RENEWABLES SUBSEA GLOBAL SUBSEA SPEND • Global activity in SURF reflected in recent significant award win, with growing pipeline of opportunities and outstanding quotes. • Matrix has improved its industry qualification status. • Now on approved vendor list as large
Slide 17: Floating Offshore Wind
SYNTACTIC FOAM: THE FUTURE FLOATING OFFSHORE WIND SUPPORTING ENERGY TRANSITION • 28.7 GW of new floating wind capacity will be added between 2022 and 2031* • Predicted to grow to > 264 GW in 2050** • Growth in regional markets – Japan, Korea and Australia POWER CABLE BUOYANCY MOORING BUOYANCY LARGE
Slide 18: Corrosion Technologies
STRONGER ● LIGHTER ● SMARTER CORROSION TECHNOLOGIES LOCAL RESOURCES SECTOR • LNG • Brownfield developments • Operational maintenance KEY CLIENTS TECHNOLOGY SOLUTIONS • Humidur® coatings • Composite repairs • Equipment • Rotolining: Thermoplastic lining 18
Slide 19: Advanced Materials
STRONGER ● LIGHTER ● SMARTER ADVANCED MATERIALS LOCAL RESOURCES SECTOR • Iron ore, LNG, Gold • Hydrogen, Renewables KEY CLIENTS • Active discussions with other major Matrix Composites & Engineering resource companies TECHNOLOGY SOLUTIONS • Steel replacement and advanced composite applications for •
Slide 20: Strong Growth Outlook
STRONG GROWTH OUTLOOK • FY23 advancing with challenging COVID-19-induced period in rear view, and larger, more diversified pipeline of work lies ahead due to increased oil & gas activity • Increasing activity in subsea markets, ~$76m in recent drilling riser buoyancy, SURF contracts • Floating wind
Slide 21: Equity Raising Overview
EQUITY RAISING OVERVIEW FULLY UNDERWRITTEN $20.2m EQUITY RAISING Matrix Composites & Engineering 1/03/2023 21
Slide 22: Equity Raising Overview
EQUITY RAISING OVERVIEW FULLY UNDERWRITTEN EQUITY RAISING OF APPROXIMATELY $20.2M • With significant revenue growth locked in for FY23, Sources Amount (A$m) Matrix is confident that following the increased activity in the oil and gas market, investment into new Institutional Placement $6.3m Entitlem
Slide 23: Equity Raising Overview
EQUITY RAISING OVERVIEW FULLY UNDERWRITTEN EQUITY RAISING OF APPROXIMATELY A$20.2M Fully underwritten Equity Raising of approximately A$20.2 million comprising: o A$6.3 million institutional placement (“Institutional Placement”); and Equity Raising Size & Structure o A$13.9 million 1-for-2.95 pro
Slide 24: Pro Forma Capital Structure
EQUITY RAISING OVERVIEW PRO FORMA CAPITAL STRUCTURE Post-equity raising pro forma Pro forma Post-equity raising capital structure Pre-raise ordinary shares 146.1m Ordinary shares 218.2m Pre-raise market capitalisation1 $48.9m Performance rights 9.3m Approx. new shares issued (Institutional Placement
Slide 25: Equity Raising Timetable
EQUITY RAISING TIMETABLE Summary of Key Dates Date/Time Trading halt and announcement of the Equity Raising Wednesday, 1 March 2023 Institutional Offer opens Wednesday, 1 March 2023 Institutional Offer closes 2:00pm AWST, Wednesday, 1 March 2023 Trading halt lifted – Securities recommence trading on
Slide 26: Convertible Note Overview
CONVERTIBLE NOTE OVERVIEW Face Value $7,485,000 Maturity 36 months from the issue date. Convertible in full or part at the election of Collins Street any time prior to Maturity at 35 cents per share (subject to dilutionary adjustment if Conversion Matrix raises equity at less than 45 cents per
Slide 27: Key Risks
KEY RISKS • There are a number of risks that are both specific to Matrix and of a general nature, which may affect the future operating and financial performance of the Company and the outcome of any investment in the Company. • This section describes some, but not all, of the material business risk
Slide 28: Key Risks
KEY RISKS COMPANY-SPECIFIC • Key Contract Risk - The majority of the Company’s revenue is derived from a number of substantial contracts with clients. There is a risk that any one or more of those contracts may be terminated, delayed or incur unforeseen costs which may not be recoverable. The cost a
Slide 29: Key Risks
KEY RISKS COMPANY-SPECIFIC (CONT.) • Counterparty Risk - The delay or failure of the Company’s clients or other parties to agreements to which the Company is a party to pay any debts or other obligations they have to the Company when due and payable, whether as a result of insolvency or for other re
Slide 30: Key Risks
KEY RISKS COMPANY-SPECIFIC (CONT.) • Competition - The Company operates in competitive markets in which a number of companies compete. Competition in these markets is expected to continue and may increase, challenging the Company’s ability to maintain growth rates and acceptable margins. If the Comp
Slide 31: Key Risks
KEY RISKS COMPANY-SPECIFIC (CONT.) • Additional Requirements for Capital - The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the Offer
Slide 32: Key Risks
KEY RISKS COMPANY-SPECIFIC (CONT.) • Insurance Risks - The Company’s business involves hazards and risks that could result in it incurring losses or liabilities that could arise from its operations. If the Company incurs losses or liabilities which are not covered by its insurance policies, the fund
Slide 33: Key Risks
KEY RISKS COMPANY-SPECIFIC (CONT.) • Professional Negligence and Insurance - Claims of professional negligence may be made against the Company. The Company maintains significant professional indemnity insurance to cover liabilities in the event of a claim of negligence. In the event of a successful
Slide 34: Key Risks
KEY RISKS GENERAL RISKS • General Economic Conditions - Changes in the general economic climate in which Company operates may adversely affect the financial performance of Company. Factors that may contribute to that general economic climate include the level of direct and indirect competition again
Slide 35: Key Risks
KEY RISKS GENERAL RISKS • Share Market Conditions - Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as: (a) general economic outlook; (b) the introduction of t
Slide 36: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any
Slide 37: Summary Of Underwriting Agreement
SUMMARY OF UNDERWRITING AGREEMENT Matrix has entered into a conditional Underwriting Agreement with Bell Potter (the “Underwriter”) dated 1 March 2023 (“Underwriting Agreement”) under which the Underwriter has agreed to fully underwrite the Equity Raising, subject to the terms and conditions of the
Slide 38: Summary Of Underwriting Agreement
SUMMARY OF UNDERWRITING AGREEMENT • (unable to proceed) Matrix is or will be prevented from conducting or completing the Equity Raising (including granting the entitlements or issuing Equity Raising securities) by or in accordance with the ASX Listing Rules, Australian Securities and Investments Com
Slide 39: Summary Of Underwriting Agreement
SUMMARY OF UNDERWRITING AGREEMENT • (applications) o an application is made by ASIC for an order under Part 9.5 of the Corporations Act in relation to the Equity Raising Materials or the Equity Raising or ASIC commences, or gives notice of an intention to hold, any investigation or hearing under Par
Slide 40: Summary Of Underwriting Agreement
SUMMARY OF UNDERWRITING AGREEMENT • * (political or economic conditions) the occurrence of any adverse change or disruption to financial, political or economic conditions, currency exchange rates or controls or financial markets in Australia, New Zealand, any member state of the European Union, the
Slide 41: Summary Of Underwriting Agreement
SUMMARY OF UNDERWRITING AGREEMENT • (change in directors or management) a change to the chief financial officer or the board of directors of Matrix occurs, or any such changes are announced; • (prosecution) any of the following occurs: o a director or senior member of management of Matrix engages in
Slide 42: Contact
CONTACT Aaron Begley Chief Executive Officer T +61 8 9412 1200 E: aaron.begley@matrixengineered.com Brendan Cocks Chief Financial Officer T +61 8 9412 1200 E: brendan.cocks@matrixengineered.com WWW.MATRIXENGINEERED.COM
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