Slide 1: X2M digitising utilities in APAC: FY23 Results and Shareholder Update
For personal use only X2M digitising utilities in APAC FY23 RESULTS AND SHAREHOLDER UPDATE
Slide 2: Disclaimer
Disclaimer This Presentation (“Presentation”) has been prepared by X2M Connect Limited (Company). You must read and accept the conditions in this notice before considering the information set out in or referred to in this Presentation. If you do not agree, accept or understand the terms on which thi
Slide 3: Presentation Agenda
For personal use only PRESENTATION AGENDA 4 INTRODUCTION TO X2M 11 FY23 RESULTS SUMMARY 19 OUTLOOK 27 STRATEGY UPDATE 31 SUMMARY
Slide 4: Introducing X2M – what we do
For personal use only Introducing X2M – what we do
Slide 5: X2M is digitising utilities in APAC
X2M is digitising utilities in APAC For personal use only WHAT WE DO COMMON USE CASES ARTIFICIAL INTELLIGENCE ENABLEMENT Turn dumb meters, sensors Billing and other manual Bottled gas consumption and a broad range of devices process automation prediction and logistics into smart, communication manag
Slide 6: The X2M platform
The X2M platform Enabler of smart applications and data analytics For personal use only Machine Health Checks Billing AI & Big data Learning CRM Engines & Social Platforms Analytics & Asset Applications Management X2M Management Platform - “Vision” End Devices Any Device Any Meter Any Sensor OR X2M
Slide 7: X2M's IP delivers key differentiation
X2M’s IP delivers key differentiation - 54 patents 14 countries For personal use only One Platform Networks Control Dumb & Smart Flexibility Any device on Communication Two-way Ability to retro fit Cloud and edge- one platform over many communications legacy devices – based capability – means more c
Slide 8: X2M in the field – automation and simple AI coming together
X2M in the field – automation and simple AI coming together Bottled gas consumption analytics and logistics management delivering compelling use cases For personal use only Meter Sales and Platform Service Licensed Multiple Meter Gas Bottle X2M Service Manufacturer Bottled Gas Providers Supply SaaS
Slide 9: X2M in the field – data and event driven benefits
X2M in the field – data and event driven benefits 33 municipalities are receiving benefits from remote water monitoring and control in South Korea For personal use only Capturing new government municipalities and repeat orders from existing customers through provision of improved: • Billing and proc
Slide 10: X2M revenue model
X2M revenue model X2M secures revenue through two structures For personal use only FULL END TO END MANAGED SERVICE PLATFORM AND IP LICENCING • X2M contracts with enterprise customers – • “Intel Inside” type model - Japan China, Taiwan, South Korea and Australia • X2M contracts Licensee who in turn •
Slide 11: Summary FY23 Results
For personal use only Summary FY23 Results
Slide 12: FY23 KPIs set path to positive cashflows
FY23 KPI’s set path to positive cashflows Core business performance – FY231 For personal use only -$2.3m 62% improvement -$4.6m on pcp 25% improvement $16.2m $3.8m on pcp up 56% on pcp up 64% on pcp $9.1m up 2% on pcp Gross Opex Operating Adjusted Revenues margin up growth 2% cash burn EBITDA loss u
Slide 13: FY23 Operating cash burn comes down significantly
FY23 Operating cash burn comes down significantly FY23 operating activity cash burn of $2.3m is an improvement from $6.2m in FY22 For personal use only X2M reported positive cash flow from operating activities for 2Q23 and 4Q23 (Appendix 4C) QUARTERLY OPERATING CASHFLOW COMPARISON 388 105 -962 -1,13
Slide 14: Strategy driving revenue growth more than cost growth
Strategy driving revenue growth more than cost growth ($’m) FY23 FY22 Change For personal use only Revenue 16.2 10.4 56% Cost of Sales (12.4) (8.1) 53% “ Gross Profit 3.8 2.3 64% The company Other income 0.7 0.4 49% strategy is to secure Overheads1 (9.1) (8.9) 2% enterprise customers and extend into
Slide 15: June 2023 Balance Sheet
30 June 2023 Balance Sheet ($’m) FY23 FY22 Change For personal use only Current assets 9.4 4.2 120% Non-current assets 4.8 3.9 23% Total assets Current liabilities 14.2 (13.1) 8.2 (6.0) 73% 118% “ Balance sheet strengthened through August “ 2023 capital raise Non-current liabilities (0.7) (0.6) 11%
Slide 16: Performance since listing
Performance since listing Revenue ($M) Gross profit ($M) For personal use only FY23 revenue of $16.2m, FY23 gross profit of $3.8m, 3.8 up 56% on the pcp 16.2 up 64% on the pcp +64% 10.4 +56% 2.3 1.6 5.7 FY21 FY22 FY23 FY21 FY22 FY23 Annualised recurring revenue* (ARR, $ millions) Adjusted EBITDA Jun
Slide 17: Connected devices continue growth
Connected devices continue growth Repeat orders from customers and pipeline conversion drive future SaaS revenues 6 months to connect next ~100k For personal use only devices “ 6 months to connect 428,801 Annualised Recurring next ~100k devices 390,626 Revenue increased 361,345 from $0.7m in Dec 202
Slide 18: Key take outs from FY23
Key take outs from FY23 Another year of solid performance For personal use only Cash burn reducing and a clear path to positive operating cashflows A technology solution that is resonating “ Stage is now set to transition to a significant player in utility automation, Customer base represents a larg
Slide 19: Outlook
For personal use only Outlook
Slide 20: Our Vision
Our Vision For personal use only “ Our Vision is to communication enable millions of end devices onto the X2M platform through a B2B market play that gives us access to and monetises a significant enterprise market and in “ time, a very large consumer market
Slide 21: Outlook for X2M expected to be positive
Outlook for X2M expected to be positive IoT adoption by enterprises and government to be strong For personal use only Government incentives for utility digitisation in most markets expected to deliver tail winds Utility sector expected to accelerate adoption of smart devices and be resilient to econ
Slide 22: FY24 Targets
FY24 Targets > 20% Revenue growth For personal use only > 60% growth in annualised recurring revenues > 50% growth in gross profit Operating costs flat and cash burn halved >50% growth in connected devices FY23 RESULTS I X2M CONNECT 22
Slide 23: X2M's current markets represent a large catchment
X2M’s current markets represent a large catchment, and its existing customers have a large addressable market Australia For personal use only 26m people 9m households Total market size in current countries is 250 million people and Beijing, China 104m households 22m people 9m households Total addres
Slide 24: X2M's position in South Korea and Japan illustrates potential
X2M’s position in South Korea and Japan illustrates potential Total addressable market is huge and now being harvested. A validation of current strategy SOUTH KOREA MARKET JAPAN MARKET For personal use only Estimated TAM of TAM of all Cumulative TAM of all existing customers: households2: contracted
Slide 25: Land and expand strategy is working and will be driven harder
Land and expand strategy is working and will be driven harder Korea example - Total addressable market and share of TAM increasing as X2M gets embedded into customer eco systems generating follow-on orders SOUTH KOREA MARKET – SEP 2021 SOUTH KOREA MARKET – JUN 2023 For personal use only TAM of all C
Slide 26: Growth to be accompanied with a path to positive cashflow
Growth to be accompanied with a path to positive cashflow Cost reduction and cash conservation initiatives Hardware design simplified and production costs For personal use only reduced Intellectual Some engineering property functions reduced rationalised in Australia and centralised in South Korea P
Slide 27: Strategy Update
For personal use only Strategy Update
Slide 28: Our journey has been in three horizons
Our journey has been in three horizons X2M well positioned for Horizon 3 - Transformation For personal use only VALIDATE COMMERCIALISE TRANSFORM DONE DOING ENTERING • Build platform • Land and expand strategy • Deliver positive EBITDA • Trials and proof of working and Cashflow concepts • 5 countries
Slide 29: Top three mid-term priorities
Top three mid-term priorities ACHIEVE ACHIEVE POSITIVE OPERATING POSITIVE For personal use only CASHFLOW CASHFLOW • Margin expansion • Cost out programme • Cash preservation initiatives KEY FOCUS ACCELERATING AREAS BROADEN PRODUCT OFFERING SAAS BASE IN EXISTING MARKETS • Progressive conversion of BR
Slide 30: X2M and Artificial Intelligence
X2M and Artificial Intelligence What is it: At a simple level ‘it is a machine’s/ The X2M platform is an For personal use only device’s ability to perform enabler that makes AI a task normally carried out come to life by a humans” (ZDNET). At a more complex level McKinsey & Company X2M well position
Slide 31: Summary
For personal use only Summary 31
Slide 32: X2M a compelling investment proposition
X2M a compelling investment proposition Significant and growing addressable market For personal use only Existing customer base provides an immediate addressable market to harvest within utility digitisation and energy management in APAC. Attractive business model Comprising upfront fees and recurri
Slide 33: Summary
Summary X2M is digitising utilities with compelling business cases for process automation, public safety, artificial intelligence and machine learning. For personal use only X2M’s IP enables collection and aggregation of rich data and automated control of end devices and machines. The X2M patented p
Slide 34: Shareholder Enquiries
For personal use only Shareholder Enquiries Automic Pty Ltd hello@automic.com.au +61 (2) 9698 5414 Media and Investor Enquiries Mohan Jesudason, CEO and MD investor.relations@x2mconnect.com 1 800 926 926 (1 800 X2M X2M)