Velocity Composites Plc · LSE:VEL
Velocity Composites — H1 2024 Earnings Presentation
23 slides from Velocity Composites's earnings presentation, Aug 1, 2024
Slide 1: Half Year Results
Half Year Results For the 6 months ended 30.04.24
Slide 2: An Experienced Board
An Experienced Board Andy Beaden Jon Bridges Rob Smith Annette Rothwell David Bailey Non-Executive Chairman Chief Executive Officer Chief Finance Director Non-Executive Director Non-Executive Director Andy has over 30 Jon has 31 years Rob is a chartered Annette has extensive David has contributed to
Slide 3: H1 24 Financial and Operational Highlights
H1 24 Financial and Operational Highlights • Revenues have grown 53.9% from £7.0m in H1 23 to £10.7m in H1 24, as we continue the customer on-boarding process in the US • Gross margins increased with H1 24 at 22.5% (H1 23: 21.8%), with further improvement activities ongoing • H1 24 EBITDA improved t
Slide 4: H1 24 Financial Summary
H1 24 Financial Summary H1 24 H1 23 £000 £000 • 53.9% increase in sales in H1 24 compared to H1 23 Revenue £10.7m £7.0m • H1 24 gross margin improvement to 22.5% Gross margin 22.5% 21.8% (H1 23: 21.8%) resulting from improvements in US facility utilisation Adjusted EBITDA* £(0.2)m £(0.9)m • EBITDA l
Slide 5: H1 24 Summary Income Statement
H1 24 Summary Income Statement H1 24 H1 23 FY 23 • Sales increase of 53.9% with UK sales increase of £000 £000 £000 4% and US contributing maiden sales of £3.6m. Revenue 10,745 6,980 16,411 • The additional volume has generated a gross profit of Cost of sales (8,331) (5,459) (13,325) £2.4m, £0.9m ah
Slide 6: H1 24 Summary Statement of Financial Position
H1 24 Summary Statement of Financial Position H1 24 H1 23 FY 23 • Increase at H1 24 versus H1 23 in non-current £000 £000 £000 assets of £0.2m resulting from investment in Non-current assets 4,721 4,537 5,114 technology and the development of the US manufacturing facility. Inventories 2,096 1,633 2,
Slide 7: H1 24 Summary Statement of Cash Flows
H1 24 Summary Statement of Cash Flows H1 24 H1 23 FY 23 £000 £000 £000 • Overall working capital movement decrease of £1.7m from H1 23. Year to date decrease £0.3m Operating cash flows (207) (862) (1,730) Movements in working capital (268) 1,410 (102) • £1.0m utilised to repay CBILs and finance leas
Slide 8: FY24 Focus
FY24 Focus • Trading in H1 24 has continued to be strong, and the Group guidance for FY24 remains unchanged • H1 24 revenue of £10.7m (H1 23: £7.0m) • EBITDA loss of £0.2m (H1 23: loss of £0.9m) • Cash at bank as at 30 April 2024 was £1.8m (H1 23: £1.2m) • Net cash of £0.6m (H1 23: net debt of £1.7m
Slide 9: Conclusion
Conclusion • Contracted revenue for FY24 of £27m (FY23: £16.4m), increasing to £33m in FY25 (excluding any new business wins) • Key new business opportunities in UK and US with a highly qualified pipeline of £200m • Profitability and cash generation anticipated in H2 24 • Velocity has completed FAIs
Slide 10: Appendices
Appendices 10
Slide 11: Introduction | Velocity’s Opportunity
Introduction | Velocity’s Opportunity • Increase of composite components within modern aircraft – projected 10x growth over next decade COMPOSITE USE IN AIRCRAFT • Customer savings of >10% material costs and up to 20% time costs • Greater quality consistency • Industry focus on outsourcing • Contrac
Slide 12: The Velocity Solution and Key Partners
The Velocity Solution and Key Partners Velocity’s bespoke clean room production facilities allow the supply of the following processes, services and products Precision Cutting and Structural Product Targeting at least 10% Material Optimisation material cost saving and 20% time cost saving to custome
Slide 13: Where Velocity sits in the Global Composites Industry
Where Velocity sits in the Global Composites Industry VELOCITY TOTAL KIT PROVISION • Inventory Finance • Inventory Management • Demand Aggregation Global Material Suppliers / Distributors • Goods In • Quality Inspection • Kit Manufacturing • Warehousing • Goods Out / Transportation • Subcon Integrat
Slide 14: Velocity’s Resource Planning system
Velocity’s Resource Planning system MATERIAL SUPPLIER EXPECTED STOCK ACTUAL STOCK D IBP FREEZER D CUSTOMER MONTHLY MATERIAL D RAW MATERIAL VC DEMAND 12 to 34 MANAGEMENT ERP ORDER BOOK DEMAND PLANNING Weeks (KIT/Part level) DEMAND (WITH RFID) REVIEW RAW MATERIAL STOCK 2 to 12 Weeks P.O. COVER PLANNED
Slide 15: Sustainability Driving Growth
Sustainability Driving Growth Demand for composites is set to grow rapidly as the aerospace sector delivers on its strategy to achieve net zero by 2050, replacing older models with the next generation of aircraft By 2041, new generation 10x growth in new The new generation of aircraft will 95% passe
Slide 16: New Customer Onboarding Process
New Customer Onboarding Process AUTHORITY TO FULL CONTRACT FIRST ARTICLE OEM APPROVALS FULL REVENUE PROJECT 5 PROCEED AWARD AWARD INSPECTION FIRST ARTICLE OEM APPROVALS FULL REVENUE PROJECT 4 INSPECTION FIRST ARTICLE OEM APPROVALS FULL REVENUE PROJECT 3 INSPECTION FIRST ARTICLE OEM APPROVALS INSPECT
Slide 17: Case Study – Tier 1 Aerospace Manufacturer
Case Study – Tier 1 Aerospace Manufacturer Background... • Velocity signed a five-year contract with expected revenue of £79 million ($100 million) in December 2022 Progress... with US manufacturer • Selected to improve efficiency and increase production Total of 1047 kits to complete First Article
Slide 18: Pipeline Underpinned by Contracted Revenue
Pipeline Underpinned by Contracted Revenue Current Contracted Business 3 Current Facilities Support Potential Pipeline £27m - £33m £67m £200m ($34m - $42m) ($85m) ($250m) Annually Annually Annually Near term growth supports 10% EBITDA and 25% return on capital 18
Slide 19: European Sites: Current & Potential Customers
European Sites: Current & Potential Customers Potential Customers Current Customers Velocity has identified the following long term opportunities that are not included in current market forecasts: Customer Estimated Annual Opportunity Safran (Additional) Circa $25m GKN (Additional) Circa $25m Aerosp
Slide 20: Velocity’s North American Site and Current & Potential Customers
Velocity’s North American Site and Current & Potential Customers KS NC TN AR SC Potential Customers GA AL Current Customers OK MS LA TX FL Velocity has identified the following long term opportunities that are not included in current market forecasts: FINAL ASSEMBLY LINE Customer Estimated Annual Op
Slide 21: Timeline of Velocity Composites
Timeline of Velocity Composites SA FAC ILITY 2023: UY OPENED IN T FACILI A AND M ALABA ELIVERE D D IPO &D CENTRE 1st KITS LET ED 2020: R OMP ON 2017: CIM OF THE LONIDSING R&D C ENTRE ED IN BURNL EY ONTO A GE RA LISH EX CHAN CAP ESTAB T STOCK H A MARKET MARKE ROVAL IT 2007 IN ED GAP MERS TH E : APP £
Slide 22: Velocity Disclaimer
Velocity Disclaimer IMPORTANT NOTICE prospectus, contract or commitment. is being made available to the recipients Group’s present and future business strategies and the environment in which thereof for the purpose of providing information and is not intended to form the the Company and/or the Group
Slide 23: revolutionising composite manufacturing
plc revolutionising composite manufacturing