Electro Optic Systems Holdings Limited · ASX:EOS
Electro Optic Systems — H1 2023 Earnings Presentation
31 slides from Electro Optic Systems's earnings presentation, Aug 28, 2023
Slide 1: 1H 2023 Unaudited Results
1H 2023 UNAUDITED RESULTS 28 August 2023
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Unaudited & Unreviewed CONTENT OF PRESENTATION FOR INFORMATION PURPOSES ONLY This presentation has been prepared as at 28 August 2023 Forward-looking Statements This presentation may contain statements that are, or may be deemed to be, forward-looking statements. Such
Slide 3: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Unaudited & Unreviewed Preparation of Financial Information All financial information has been prepared in accordance with Australian Accounting Standards. Certain financial data included in this presentation is ‘non IFRS financial information’. The Company believes t
Slide 4: Speakers
SPEAKERS Unaudited & Unreviewed Andreas Schwer, CEO • Over 30 years in global Defence, Manufacturing and Space industries Commenced • Aeronautical engineer, PhD August 2022 • German citizen • Airbus 14 years, Rheinmetall International 5 years Clive Cuthell, CFO • Over 15 years as CFO in global indus
Slide 5: Contents
CONTENTS Unaudited & Unreviewed 1. Introduction • Status of Half Year Report • Global Market Update • Business Overview • 1H 2023 Performance Overview 2. Financial Results 3. Growth & Outlook Appendices 5
Slide 6: Status of Half Year Report
STATUS OF HALF YEAR REPORT Unaudited & Unreviewed Status of Half Year Report • EOS has not yet finalised its Appendix 4D and Financial Statements for the Half Year ended 30 June 2023. • This is as a result of a matter that has recently been raised by a Middle East customer concerning EOS’s complianc
Slide 7: Market Update
Unaudited & Unreviewed MARKET Market Situation UPDATE The Ukraine war and geopolitical tensions Significant increases in global Defence activity and planned spending Ukraine conflict and increased geo-political Technology is key differentiator tensions are resulting in EOS Strengths higher Defence s
Slide 8: Business Overview
BUSINESS OVERVIEW Unaudited & Unreviewed Strategic Positioning Our Strengths Key Product Areas >75% export Accuracy and revenue tracking RWS and Turrets High Energy Technology and Laser Weapons Global Non-ITAR market (non-US) Innovation Growing Established market size >2,500 RWS Space EM Solutions i
Slide 9: 1H 2023 Performance Overview
Unaudited & Unreviewed 1H 2023 PERFORMANCE New products launched: Slinger Counter-Drone OVERVIEW R150 lightweight formal launch New Products Signed new contracts >$400m incl. conditional Ukraine $181m New Orders Improved cash flow, Focus on contract management Net realisation A$50m contract asset si
Slide 10: Contents
CONTENTS Unaudited & Unreviewed 1. Introduction 2. Financial Results • 1H 2023 Financial Results Overview • 1H 2023 Cash Flow • Segment Update – Defence & Space 3. Growth & Outlook Appendices 10
Slide 11: 1H 2023 Financial Results
Unaudited & Unreviewed 1H 2023 Unaudited & Unreviewed 1H 1H FINANCIAL Key Results 2023 2022 RESULTS $m $m $m Revenue 74.3 53.8 20.5 Underlying EBITDA (14.8) (24.2) 9.4 Significant improvement Finance cost (16.0) (6.1) (9.9) in Revenue, Cashflow and Net loss before tax (35.4) (33.0) (2.4) Order Backl
Slide 12: Cash Flow Improvements
Unaudited & Unreviewed CASH FLOW Unaudited & Unreviewed 1H 1H IMPROVEMENTS Key Cash Flows 2023 2022 $m $m $m Customer receipts 123.3 74.5 48.8 Net operating CF 30.7 (17.1) 47.8 EOS delivered cash flow Net investing CF (6.1) (23.6) 17.5 improvement Cash balance 30 Jun 42.0 13.8 28.2 Cash balance 28 A
Slide 13: Defence
Unaudited & Unreviewed DEFENCE Unaudited & Unreviewed Divisional Results 1H 2023 1H 2022 $m $m % Revenue 50.7 38.2 33% Solid revenue growth Loss before tax (17.5) (25.7) 32% Customer receipts 109.3 52.7 107% with positive market outlook Customer receipts 200 Millions 150 100 68% 50 - 2020 2021 2022
Slide 14: Space
Unaudited & Unreviewed SPACE Unaudited & Unreviewed 1H 1H Divisional Results 2023 2022 $m $m % Revenue 23.6 15.6 51% High growth EM Solutions Loss before tax (0.4) (3.4) 88% naval satcom activity, and Customer receipts 13.9 21.8 -36% Space data services Revenue 45 Millions 40 35 30 32% 25 20 15 10 5
Slide 15: Contents
CONTENTS Unaudited & Unreviewed 1. Introduction 2. Financial Results 3. Growth & Outlook • New Order Intake & Backlog • New Product Growth Opportunities • Our promises • Our approach Appendices 15
Slide 16: New Order Intake & Backlog
Unaudited & Unreviewed NEW ORDER Unaudited & Unreviewed INTAKE Order Backlog 700 645 & BACKLOG Millions 600 181 500 400 300 464 200 Record order backlog 100 - provides a strong base Jun21 Dec21 Jun22 Dec22 Jun23 Secured Conditional for future growth Significant New Orders Secured • A$51m Western Eur
Slide 17: New Product Growth Opportunities
Unaudited & Unreviewed NEW PRODUCT Revenue timing * GROWTH R150 Formal launch in 2023 2023-25 Lightweight Suitable for light vehicles OPPORTUNITIES System Future UGV opportunity Counter Launched “Slinger” in 1H 2023 2024-25 EOS has unique Drone Proven, world-leading accuracy Kinetic Initial evaluati
Slide 18: New Product Growth Opportunities
Unaudited & Unreviewed Aim * NEW PRODUCT High 36kW prototype laser weapon Product GROWTH Energy Laser Counter-Drone app’n (Class 1/2) Scalable to 54kW & 100kW Develop’t Funding* OPPORTUNITIES Weapon Marketing and demo in 2023 2023-25 Low power opportunities (More details in appendix) We focus on sec
Slide 19: Our Promises
Unaudited & Unreviewed OUR We said… We delivered… Formulated new Focus on core businesses & strengths of point & track PROMISES strategy Exit SpaceLink in 2022 Exit Australian Satellite Manufacturing proposal (2023) 2023 Capex focused on core business Seeking third party product development funding
Slide 20: Our Approach
Unaudited & Unreviewed 1. Manage Cash Flow OUR • Realise working capital APPROACH • Repay debt on schedule in 2023, 2024 and 2025 2. Diversify Product Base We will maintain focus • Maintain leadership in accurate pointing • Commercialise technology 3. Diversify Customer Base • Go to market in Europe
Slide 21: Conclusion, Questions, Thank You
CONCLUSION Unaudited & Unreviewed 1. QUESTIONS 2. THANK YOU 21
Slide 22: Appendices
APPENDICES Unaudited & Unreviewed • Glossary • Net loss to EBITDA reconciliation • Segment results detail • Historical revenue and cash receipts • Order intake summary • Debt summary • EOS Segments 22
Slide 23: Glossary
GLOSSARY Unaudited & Unreviewed Term Description Term Description International Traffic in Arms 1H First Half of the financial year ITAR Regulation (a USA regulatory regime) 2H Second Half of the financial year MOD Ministry of Defence ADF Australian Defence Force Q4 4th quarter of the financial year
Slide 24: Net Loss to EBITDA Reconciliation
Unaudited & Unreviewed NET LOSS TO Period Period EBITDA Unaudited & Unreviewed ended 30 ended 30 June 2023 June 2022 RECONCIL’N Continuing operations $m $m (Loss) for the period (32.4) (26.4) Income tax (benefit) (3.0) (6.6) (Loss) before tax – see next page (35.4) (33.0) Impairment of assets - 3.8
Slide 25: Segment Results Detail
Unaudited & Unreviewed SEGMENT RESULTS Unaudited & Unreviewed Un-allocated DETAIL June 2023 Defence Space (incl. finance costs) Total $m $m $m Revenue 50.7 23.6 74.3 Loss before tax (17.5) (0.4) (17.6) (35.4) June 2022 Revenue 38.2 15.6 53.8 Loss before tax (25.7) (3.4) (3.9) (33.0) Amounts may not
Slide 26: Orders Intake Summary
Unaudited & Unreviewed Unaudited & Unreviewed Segment Amount Customer Product/Services Delivery ORDERS INTAKE $m location period 120 Ukraine RWS 2023-2024 SUMMARY 61 Ukraine RWS 2023-2024 51 Western RWS 2023-2024 Defence Europe 15 Southeast RWS R600 2023 From Sep 22 to date Asia <10 USA RWS R150 202
Slide 27: Debt Summary
Unaudited & Unreviewed Unaudited & Unreviewed DEBT SUMMARY A$m Principal Term Maturity Total Rate Repayment Working Capital Facility 20.0 12m 6 Sep 23 19% 26.9 Working Capital Facility 15.0 18m 11 Apr 24 19% 20.5 Term Loan Facility 35.0 36m 11 Oct 25 26% 52.1 Total 70.0 99.5 Key steps have been New
Slide 28: High Energy Laser Weapon
Unaudited & Unreviewed EOS Prototype HIGH ENERGY • Currently available 36-54kW class (36kW in trial LASER WEAPON operation) • Two test ranges – indoor and outdoor • Class 1 and 2 drone capability and demonstration • Fully owned IP EOS has developed a 36- Fixed/Portable Product Development 54kW laser
Slide 29: Space & Space Warfare
Unaudited & Unreviewed SPACE & Market Evolution SPACE • Space Warfare is a significant growth market – growing need for capability to disrupt enemy space operations WARFARE • National governments are seeking help to develop this capability - recent government tender for US$80m development project EO
Slide 30: EOS Segments
Unaudited & Unreviewed Defence EOS SEGMENTS Defence Systems specialises in technology for weapon systems optimisation and integration, as well as ISR (Intelligence, Surveillance and Reconnaissance) and C4 systems for land warfare. Its key products are next-generation remote weapon systems, vehicle t
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