Etherstack Plc · ASX:ESK
Etherstack — Investor Presentation (December 2020)
31 slides from Etherstack's investor presentation, Dec 18, 2020
Slide 1: Investor Presentation: Capital Raise to Accelerate Growth
For personal use only Investor Presentation Capital Raise to Accelerate Growth Etherstack plc (ASX:ESK) December 2020 Authorised for release by the Board of Directors
Slide 2: Disclaimer and important notices
2 Disclaimer and important notices For personal use only Disclaimer Notice The f ollowing notice and disclaimer applies to this inv estor presentation (Presentation) and y ou are theref ore adv ised to read this caref ully bef ore reading or making any other use of this Presentation or any inf ormat
Slide 3: Disclaimer and important notices: Forward looking statements
3 Disclaimer and important notices For personal use only Forward looking statements This document contains certain f orward looking statements and comments about f uture ev ents. Forward looking statements inv olv e known and unknown risks, signif icant uncertainties, assumptions, contingencies, and
Slide 4: Not for release or distribution in the United States
4 Disclaimer and important notices For personal use only Not for release or distribution in the United States of America This Presentation may not be distributed or released in the United States. This Presentation does not constitute an of f er to sell, or the solicitation of an of f er to buy , any
Slide 5: Placement to accelerate growth
5 Placement to accelerate growth For personal use only • Etherstack today announces an institutional Placement comprising the issue of approximately 8.6 million CHESS depositary interests over fully paid ordinary shares (New CDIs) to raise A$5 million (‘Placement’) • New shares will be issued at an
Slide 6: Etherstack Snapshot
6 Etherstack Snapshot For personal use only Who we are • Etherstack is an established wireless technology company serving public safety, electric utility, resource and defence sectors across the globe • We develop and license wireless technologies to other equipment vendors as well as design, manufa
Slide 7: Business Overview
7 Business Overview For personal use only Terrestrial Digital (VHF, UHF, 700MHZ) Cellular Networks (4G & 5G) Satellite PTT Networks (GS, LEOS, MEOS) Traditional Digital Mission Critical Push to Talk Push to Talk (PTT) Over Satellite LMR Products (MCPTT) Solutions Advances in satellite communications
Slide 8: December 2020 - Australian Department of Defence Contract Win
8 December 2020 - Australian Department of Defence Contract Win For personal use only Etherstack’s Defence Technology Expertise • Small form factor tactical communications products, providing secure communications on the move. Supplied to US federal agencies for some years • Cryptographic modules an
Slide 9: June 2020 - Samsung Global Teaming Agreement
9 June 2020 - Samsung Global Teaming Agreement For personal use only Partnership to Deliver Next Generation MCPTT • Emerging cellular standard to provide public safety solutions within 4G and 5G cellular networks • Builds on Etherstack’s digital land mobile radio technologies embedded within Samsung
Slide 10: Etherstack Market Opportunity
10 Etherstack Market Opportunity For personal use only Global Telcos Global Push to Talk National carriers expected to provide guaranteed capacity to public Market Size safety agencies in each country (e.g. bushfires, ambulance, policing) Initial focus is on 37 OECD countries – approximately 100 -12
Slide 11: Etherstack Market Trends
11 Etherstack Market Trends For personal use only Etherstack is leveraged to government and infrastructure spend ✓ Etherstack is influenced by government and industry infrastructure spending which flows to areas such as public safety, utilities, defence and resource projects ✓ Unprecedented global s
Slide 12: Etherstack Traditional Business
12 Etherstack Traditional Business For personal use only Digital Land Mobile Radio Networks • Used by police, fire, ambulance services, utilities, resources etc. • Typical lifespan 10-15 years (= long term govt. backed support contracts) • Electric utilities: in recent years, Etherstack has deployed
Slide 13: Recurring Revenue: Network Deployments drive Support Revenues
13 Etherstack Traditional Business For personal use only Recurring Revenue: Network Deployments drive Support Revenues • As we deploy more networks, our long-term support revenues continue to grow • Support revenues have increased by over 350% since 2014 (an CAGR of 36.7% over the past 5 years) • Ne
Slide 14: Etherstack Licensing and OEM business
14 Etherstack Licensing and OEM business For personal use only Technology licensing & OEM supply • Etherstack licenses core wireless technologies, such as ”air interface protocol stacks” to wireless equipment manufacturers for embedding in chipsets within their products • The company also supplies a
Slide 15: Underlying Tech Trends – 5G
15 Etherstack Underlying Tech Trends – 5G For personal use only Etherstack Key Technology Trends: 1. Evolution to MCPTT (Mission Critical Push To Talk a.k.a. MCPTX) • Ubiquitous availability of broadband wireless technologies (wifi, 4G & 5G) in urban areas is transforming emergency services and publ
Slide 16: Underlying Tech Trends – Satellite
16 Etherstack Underlying Tech Trends – Satellite For personal use only Etherstack Key Technology Trends: 2. PTT over Satellite Solutions • Advances in satellite communications technologies and launch vehicle platforms have seen an unprecedented number of satellites launched in the past 12-24 months
Slide 17: Etherstack Evolving Business
17 Etherstack Evolving Business For personal use only MCPTT Networks Focus • Developments in MCPTT will require the development of hybrid cellular and traditional narrowband public safety networks to serve public safety and security services over the next two decades • The initial focus from our lar
Slide 18: Etherstack Revenue Mix
18 Etherstack Revenue Mix For personal use only How we derive revenues • Etherstack supplies wireless products and technologies to the essential communications industry globally in the form of finished products, digital radio network systems and technology licensed to other manufacturers for inclusi
Slide 19: 2021 Vision: New Products & Partnerships
19 2021 Vision: New Products & Partnerships For personal use only Innovation and Investment in R&D Etherstack has invested in excess of US$20 million into our suite of intellectual property assets and has developed a substantial intellectual property portfolio that generates revenue streams from div
Slide 20: Building on Success
20 Building on Success For personal use only Key accomplishments 2019 – 2020 YTD Key short and medium term milestones April New radio network contract for public safety and 2019 emergency services personnel in the State of Idaho • Release of new MCPTX products Public Safety • Announcement of first t
Slide 21: December 2020 Business update
21 December 2020 Business update For personal use only Selected business achievements in 2020 include: • Global Samsung Partnership: Ongoing development and integration activities with Samsung, in parallel with Samsung pursuit of initial orders; • Royal Canadian Mounted Police: First contract order
Slide 22: Growing high margin, recurring revenue base
22 Growing high margin, recurring revenue base For personal use only Recurring Revenue Number of support contracts US 1.8m Estimated lifetime 13 US 1.7m of current networks US 1.5m are typically 11 11 10 – 15 years 9 US 1.1m 7 6 US 0.6m 2015 2016 2017 2018 2019 Up to 2015 2016 2017 2018 2019 2020 •
Slide 23: Income Statement
23 Income Statement For personal use only US$'000 2017 2018 2019 1H 2020 • Recurring Support revenues driven by multiple contract wins including: ─ Ergon Energy ─ First Energy – Allegheny Energy Revenue from Contract w ith customers 4,239 5,366 4,792 2,405 ─ First Energy – Jersey Central Power & Lig
Slide 24: Balance Sheet & Cash Flow Statement
24 Balance Sheet & Cash Flow Statement For personal use only US$'000 Pro-Forma 1-July-20 1 US$'000 FY17 FY18 FY19 1H FY20 Cash and bank balances 1,480 Net cash generated from operating activ ities (599) 1,528 1,364 1,354 Net cash flow (used in) inv esting activ ities (819) (1,267) (1,223) (502) Trad
Slide 25: Details of the Offer
25 Details of the Offer For personal use only Institutional Placement comprising the issue of approximately 8.6 million CHESS depositary interests over fully paid ordinary shares (New CDIs) to raise A$5 million (‘Placement’) Offer structure and size Issue of approximately 8.6 million New CDIs (equiv
Slide 26: Offer timetable
26 Offer timetable For personal use only Event Date 1 Trading halt, announcement of Placement Thursday, 17 December 2020 Announce outcome of Placement and re-commence trading (pre-open) Friday, 18 December Placement settlement via DvP with the Shares subject to a holding lock Wednesday, 23 December
Slide 27: Cleansing Prospectus Disclosure
27 Cleansing Prospectus Disclosure For personal use only Cleansing Prospectus Disclosure • On 3 July 2020, ESK received an aw are query letter from ASX, w hich ESK responded to on 6 July 2020. This correspondence w as announced on ESK’s ASX platform on 7 July 2020. • On 4 September 2020, ESK receive
Slide 28: Jurisdiction Offer Restrictions
28 Jurisdiction Offer Restrictions For personal use only International Offer Restrictions This document does not constitute an offer of New Shares in any j urisdiction in w hich it w ould be unlaw ful. In particular, th is document may not be distributed to any person, and the New Shares may not be
Slide 29: Jurisdiction Offer Restrictions
29 Jurisdiction Offer Restrictions For personal use only Singapore This document and any other materials relating to the New Shares hav e not been, and will not be, lodged or registered as a pr ospectus in Singapore with the Monetary Authority of Singapore. Accordingly , this document and any other
Slide 30: Contacts
30 Contacts For personal use only Etherstack plc 93A Shephard Street, Chippendale NSW 2008 Phone +61 2 8399 7500 David Deacon, CEO, david.deacon@etherstack.com David Carter, CFO, david.carter@etherstack.com ©©Etherstack © Etherstack Etherstack 20202018 2015, under NDA
Slide 31: For personal use only
For personal use only London New York +44 207 734 0200 +1 917 661 4110 info.eu@etherstack.com info.na@etherstack.com Sydney Yokohama +61 2 8399 7500 +81 45 342 9050 info.au@etherstack.com info.jp@etherstack.com