Velocity Composites Plc · LSE:VEL
Velocity Composites — FY2023 Earnings Presentation
26 slides from Velocity Composites's earnings presentation, January 2024
Slide 1: Investor Presentation Full Year Results
Investor Presentation Full Year Results For the year ended 31 October 2023
Slide 2: 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 3: Presentation Team
Presentation Team © Velocity Composites Plc - Jan 2024 Andy Beaden Jon Bridges Andrew Hebb Non-Executive Chairman CEO Interim Chief Financial Officer Andy has over 30 years experience in finance, Jon co-founded Velocity in October 2007. Andrew has been a professional interim CFO technology and manuf
Slide 4: FY23 Highlights
FY23 Highlights • Business has grown 37% from £12.0m in FY22 to • Margin impacted by US ramp up and inflation lag £16.4m in FY23, this includes $2.0m of maiden US • Successful fundraise in August 2023 delivered sales to secure existing programme delivery and new • Award of new contract for entry int
Slide 5: US Facility – Progress with launch customer
US Facility – Progress with launch customer • Regulated transfer process • FY24 pricing agreed and commencing in line with market implemented update (July 2023) • Production currently running two • Total of 1,047 kits to First Article shifts / five days with 3 machine Inspection (FAI) for entire pro
Slide 6: FY24 Focus
FY24 Focus • Implement new pricing agreement with existing customer by Q3/24 to mitigate inflation lag. All contracts will then allow for annual inflation review (100% already contain material price flow through agreement) • Complete FAI and production ramp up of remaining US launch customer program
Slide 7: Financial Summary
Financial Summary © Velocity Composites Plc - JAN 2024 FY 2023 FY 2022 £000 £000 • Sales increase of 37% compared to FY22 • Margin of 18.8% due to investment into US Revenue £16.4 £12.0m production facility (underlying excluding US costs is Gross margin 18.8% 23.0% 21.8%). • EBITDA loss (£1.6)m (FY2
Slide 8: Summary Income Statement
Summary Income Statement © Velocity Composites Plc - JAN 2024 FY 2023 FY 2022 • Sales increase of 37% with UK sales increase of £000 £000 20% and US contributing maiden sales of £2.0m. Revenue 16,411 11,959 Additional volume has generated a gross profit of Cost of sales (13,325) (9,213) £3.1m, £0.4m
Slide 9: Summary Statement of Financial Position
Summary Statement of Financial Position © Velocity Composites Plc - JAN 2024 FY 2023 FY 2022 • Increase in non-current assets of £1.6m £000 £000 driven by investment in technology and the Non-current assets 5,114 3,541 development of the US manufacturing facility. Inventories 2,743 1407 • Inventory
Slide 10: Summary Statement of Cash Flows
Summary Statement of Cash Flows © Velocity Composites Plc - JAN 2024 FY 2023 FY 2022 • Working capital movement of £(0.1m) (FY22 £0.3m) £000 £000 • £2.1m invested in US business development and Operating cash flows (1,730) (490) technology, of which £1.3m property, plant & Movements in working capit
Slide 11: Summary
Summary • 37% revenue growth in FY23, including £2.0m of Senior team strengthened in key roles of COO and maiden revenue in the US Interim CFO • New US facility at full rate production on 65% of • Contracted FY24 revenues expected to be in the FY24 programmes, remaining programmes will range of £27.
Slide 12: Appendices
© Velocity Composites Plc - 2024 12 Appendices
Slide 13: Experienced Board and Senior Management
Experienced Board and Senior Management © Velocity Composites Plc - 2024 Andy Beaden Jon Bridges Andrew Hebb Annette Rothwell David Bailey Non-Executive Chairman Chief Executive Officer Interim Finance Director Non-Executive Director Non-Executive Director Andy has over 30 Jon has 31 years’ Andrew w
Slide 14: Investment Case
Investment Case ©© Velocity Velocity • HUGE MARKET GROWTH Aerospace industry currently Composites spends $6.5bn per annum on composite materials. Composites Projected tenfold increase of composites within aircraft by 2041 to meet net zero. Plc Plc - 2024 • OUR SOLUTIONS ARE NECESSARY TO THE - 2023 A
Slide 15: Composite Materials
Composite Materials © Velocity Composites Plc - 2024 • A combination of a matrix and a reinforcement, which when combined gives properties superior to the COMPOSITE USE IN AIRCRAFT properties of the individual components • In the case of an aerospace composite, the reinforcement is the fibres and th
Slide 16: Composite Composition
Composite Content per Aircraft © Velocity Composites Plc - 2024 60% Wide Body Aircraft A350 50% B787 Composite Composition Narrow Body Aircraft C Series (Relative size determined 40% by maximum take off weight) MC-21 30% B777x A380 20% A320 B747 A330 B777 10% A300 A310 B767 MD-11 MD-80 B737-300 1970
Slide 17: Sustainability Driving Growth
Sustainability Driving Growth • Composites play an important role in • The aerospace sector has a clear • Velocity customers need to do light weighting all new aircraft platforms, strategy to achieve net zero by 2050 more-for-less to meet the production civil and defence and demand for composites wi
Slide 18: The Velocity Solution
The Velocity Solution Raw Material Customer Structural Product Vacuum Bag Product Finished Part (1m diameter) Aimed at providing at least 10% material cost saving and 20% time cost saving to customers 18
Slide 19: Velocity Technology
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 STOCK NEEDED Vs ACTUAL PRODUCTION M
Slide 20: 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 21: Market and Growth Opportunities
Market and Growth Opportunities Aerospace global market is $6.5bn pa Current Contracted Business Current 3 Facilities Support Potential Pipeline © Velocity Composites Plc - 2024 $36m - $43m $85m $250m Annually Annually Annually Near term growth supports 10% EBITDA and 25% return on capital Expected
Slide 22: European Site: Current & Potential Customers
European Site: Current & Potential Customers © Velocity Composites Plc - 2024 Potential Customers Current Customers Aerospace Composites Aerospace Composites 22
Slide 23: Velocity's North American Site and Current & Potential Customers
Velocity’s North American Site and Current & Potential Customers © Velocity Composites Plc - 2024 KS NC TN AR SC GA AL OK MS LA TX Potential Customers FL Current Customers FINAL ASSEMBLY LINE 23
Slide 24: Regulated Bid and Work Transfer Process
Regulated Bid and Work Transfer Process AUTHORITY TO FULL CONTRACT FIRST ARTICLE PROCEED AWARD AWARD OEM APPROVALS FULL REVENUE PROJECT 5 INSPECTION FIRST ARTICLE OEM APPROVALS FULL REVENUE PROJECT 4 INSPECTION FIRST ARTICLE OEM APPROVALS FULL REVENUE PROJECT 3 INSPECTION FIRST ARTICLE OEM APPROVALS
Slide 25: Why Invest Now?
Why Invest Now? • First to market • 10x market growth by 2041 • Profitability expected in H2 FY2024; Revenue increases 2.5x to 3.0x by 2024 • Funding for £70m capacity secured • 5 year revenue target of £100m with 10% EBITDA • Sticky, high-quality customers “ Velocity Composites has put into effect
Slide 26: Revolutionising composite manufacturing
plc revolutionising composite manufacturing © Velocity Composites Plc - JAN 2024