Ava Risk Group Ltd. · ASX:AVA
Ava Risk — FY2021 Earnings Presentation
31 slides from Ava Risk's earnings presentation, Aug 30, 2021
Slide 1: FY2021 Results
Global leader in smart security and sensing technologies for the connected world FY2021 RESULTS 30 AUGUST 2021
Slide 2: Agenda
AGENDA 1 FY2021 Results Overview – Rob Broomfield, CEO 2 FY2021 Financials – Leigh Davis, CFO 3 Strategy & Outlook – Rob Broomfield, CEO FY2021 RESULTS 2
Slide 3: Market Leader in Risk Management Services & Technology
MARKET LEADER IN RISK MANAGEMENT SERVICES & TECHNOLOGY PROTECTING HIGH VALUE ASSETS AND CRITICAL INFRASTRUCTURE AROUND THE WORLD FY2021 REVENUE 28% $65M +100 countries 62% 10% +2,500 FY2021 EBITDA systems deployed 37% 48% $16M +3,500 sites protected 15% AVA Global Logistics Future Fibre Technologies
Slide 4: Two Divisions, Three Mission-Critical Businesses
TWO DIVISIONS, THREE MISSION-CRITICAL BUSINESSES TECHNOLOGY DIVISION SERVICES DIVISION Global leader in fibre optic Leader in high security access Global provider of secure intrusion detection systems control technology international logistics • Perimeter Intrusions • Access Control Readers • Risk C
Slide 5: Divestment of Services Division
DIVESTMENT OF SERVICES DIVISION • Entered into Sale and Purchase Agreement on 16th $40.3m August to divest Ava Global Logistics • Sale price of US$46.4m (~A$63.1m) with anticipated net cash proceeds1 of US$31.1m (~A$42.4m) • Expected completion by the end of October 2021 $25.1m • As at 30 June 2021,
Slide 6: FY2021 Financial Highlights
FY2021 FINANCIAL HIGHLIGHTS Group Revenue Technology Revenue Services Revenue $65.0m $24.7m $40.3m Up 41% on pcp 1 Up 17% on pcp Up 61% on pcp Group EBITDA Technology EBITDA Services EBITDA $16.0m $8.3m $7.7m Up 116% on pcp Up 64% on pcp Up 225% in pcp Strong financial position with cash of $17.3m a
Slide 7: Delivering Sustainable Profit Growth
DELIVERING SUSTAINABLE PROFIT GROWTH $65.0m • FFT merger with MaxSec (BQT & Ava Global) in December 2017 $46.1m • Since then, achieved strong revenue growth and positive $31.6m EBITDA $19.8m • Delivered FY2021 results $16.0m above original guidance $7.4m (revenue of $60-64m and EBITDA of $13-15m) -$
Slide 8: FY2021 Financials
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Slide 9: Group Financial Summary
GROUP FINANCIAL SUMMARY $Am FY2021 FY2020 Var % Group Revenue2 65.0 46.1 41% • Group Revenue of $65.0m in FY2021, up 41% higher on pcp1 COGS 33.4 24.1 39% • Gross margin of 49% for FY2021 Gross Profit 31.6 22.0 44% • Group EBITDA of $16.0m, up 116% on Operating Expenses 16.3 15.1 8% pcp Group EBITDA
Slide 10: Technology Division Financial Summary
TECHNOLOGY DIVISION FINANCIAL SUMMARY $Am FY2021 FY2020 Var % • FY2021 sales revenue of $24.7m up 17% Sales Revenue1 24.7 21.1 17% on pcp COGS 6.2 5.4 15% • FY2021 EBITDA of $8.3m up 64% on pcp Gross Profit 18.5 15.7 17% • Ongoing cost discipline and high margin Operating Expenses 10.8 11.2 -3% IMoD
Slide 11: Services Division Financial Summary
SERVICES DIVISION FINANCIAL SUMMARY $Am FY2021 FY2020 Var % • FY2021 Revenue of $40.3m, up 61% on Sales Revenue2 40.3 25.1 61% pcp1 COGS 27.2 18.7 45% • EBITDA up 225% to $7.7m Gross Profit 13.1 6.4 106% • Expanded customer base and greater Operating Expenses 5.5 4.0 38% share of existing client spe
Slide 12: Strong Growth in Customer Receipts Across Divisions
STRONG GROWTH IN CUSTOMER RECEIPTS ACROSS DIVISIONS (Unaudited financial information) • Receipts growth from different 20.0 products and services across the 18.0 (13%) three businesses 16.0 • In Q4 FY2021, Group receipts 14.0 increased by 13% on pcp and by 12.0 5% if the IMoD contract is excluded A$
Slide 13: Group Balance Sheet
GROUP BALANCE SHEET $A’000 30 June 2021 30 Jun 2020 Var % Cash and cash equivalents 17.3 7.7 124% • Strong cash generation from improved YoY trading performance with cash up 124% Receivables 9.3 6.0 55% YoY to $17.3m Inventories 3.1 3.9 -20% • Working capital needs for growth well Intangibles 11.2 1
Slide 14: Group Cash Flow Statement
GROUP CASH FLOW STATEMENT $A‘000 30 Jun 2021 30 June 2020 Variance Receipts from customers 62.7 42.3 20.4 • 195% improvement in YoY operating Payments to suppliers and employees (45.7) (36.8) (8.9) cash flows as a result of substantial trading improvements Other operating receipts and payments 0.6 0
Slide 15: Capital Management Update
CAPITAL MANAGEMENT UPDATE Capital Return to Shareholders of $39.2m (circa 16 cents per share); On-Market Buy Back of $1.0m CAPITAL MANAGEMENT FRAMEWORK MANDATORY DISCRETIONARY 1. Operational working 2. Growth capital capital 3. Dividends 4. Surplus cash flow - Product Development - Product Dev Susta
Slide 16: Strategy & Outlook
SECURITY RISK MANAGEMENT
Slide 17: Ava Risk Group Post Divestment
AVA RISK GROUP POST DIVESTMENT • ‘Pure play’ technology company Ava prior to Ava after Proforma numbers based on Transaction Transaction FY2021 results $(000) $(000) • Global Sales and Support Operations Consolidated total assets $43,253 $72,667 • Growth driven by increasing global security concerns
Slide 18: Strong Track Record and Global Opportunity
STRONG TRACK RECORD AND GLOBAL OPPORTUNITY • Technology division FY21 revenue of $24.7m, up 17% vs pcp despite COVID-19 challenges • High margins and ongoing cost discipline, strong cash generation, and surplus cash for investment and return TRACK RECORD OF to investors GROWTH AND RESULTS • Global f
Slide 19: Aura AI: New Application for Technology
AURA AI: NEW APPLICATION FOR TECHNOLOGY Buried Pipeline High security Perimeter access control intrusion intrusion readers and locking Conveyor belt • Using real-time data to enhance asset monitoring management, improve reliability and introduce new predictive capabilities to an expanding set of lar
Slide 20: Growth Initiatives
GROWTH INITIATIVES To be a global leader in actionable, intelligent data streams that protect and optimise critical assets LEVERAGE GROW RECURRING LEVERAGE PARTNERSHIPS REVENUE SCALABLE MODEL • Licence technology for low cost • Leverage BQT distribution • Convert Aura IQ conveyor health and high mar
Slide 21: Outlook
OUTLOOK Strong uplift in Q1 FY2022 orders, Expansion of sales capacity and continuing the momentum of Q4 FY2021 revenues in the US and building on the $4.3m FY2021 backlog Leverage strong base to grow and Grow FFT long term contracts and close the existing projects sales recurring revenue from techn
Slide 22: Questions
QUESTIONS
Slide 23: Appendix
APPENDIX
Slide 24: Proven Go-to-Market Strategies
PROVEN GO-TO-MARKET STRATEGIES OFF THE SHELF SERVICES PRODUCTS LICENCING SOLUTIONS PRODUCTS PRODUCTS SYSTEM SYSTEM DISTRIBUTORS MANUFACTURERS DISTRIBUTORS GLOBAL PARTNER SECURITY NETWORK INTEGRATORS INTEGRATORS OEM1 FOR INSTALLERS INSTALLERS MANUFACTURERS END USERS 1. Original Equipment Manufacturer
Slide 25: IMoD Contract for Licencing Technology
IMoD CONTRACT FOR LICENCING TECHNOLOGY $4.5m • Licencing FFT’s SecureLink technology to Indian Ministry $4.0m of Defence (IMoD) via local manufacturing partner $3.5m • Licencing model provides low working capital, low risk and high margin go-to-market approach $3.0m • US$11.9m including tax credits
Slide 26: Aura IQ Opportunity Pipeline
CONVEYOR HEALTH MONITORING SOLUTION • World-leading fibre optic technology with advanced signal processing algorithms, reporting and alerts • Developed in partnership with leading industry research organisation Mining3 Aura IQ • Access to sites for Proof of Value (POV) trials has been volatile as a
Slide 27: Fibre Optic Products for Intrusion Detection
FIBRE OPTIC PRODUCTS FOR INTRUSION DETECTION • Global leader in advanced fibre optic intrusion $18.5m detection systems $16.8m • Protect critical sites and infrastructure across transport, government, military and utility sectors $12.3m • COVID-19 restrictions led to delays in number of $11.5m major
Slide 28: High-Quality Customer Base
HIGH-QUALITY CUSTOMER BASE SYSTEM INTEGRATORS / DISTRIBUTORS END USERS FY2021 RESULTS 28
Slide 29: Leader in High Security Access Technology
LEADER IN HIGH SECURITY ACCESS TECHNOLOGY • Provider of high security card and biometric readers, electromechanical locks and related electronic security products $6.2m • Military, critical infrastructure, commercial, industrial and residential applications • Expanded distribution agreements with lo
Slide 30: Partner Relationships Expand Market Reach
PARTNER RELATIONSHIPS EXPAND MARKET REACH DISTRIBUTORS END USERS FY2021 RESULTS 30
Slide 31: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation is given on behalf of Ava Risk Group Limited (AVA) Information in this presentation is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in AVA. Certain statements in this