Droneshield Limited · ASX:DRO
Droneshield — Investor Day (December 2021)
46 slides from Droneshield's investor day presentation, Dec 6, 2021
Slide 1: Investor Day Presentation ASX Release
6 December 2021 ASX RELEASE Investor Day Presentation For personal use only DroneShield Limited (ASX:DRO) (“DroneShield" or the “Company”) is pleased to share the attached presentation for the upcoming Investor Day to be held tomorrow, 7 December 2021, in its Sydney office. This announcement has bee
Slide 2: AI-Enabled Platforms for Protection against Advanced Threats
For personal use only AI-Enabled Platforms for Protection against Advanced Threats ASX:DRO December 2021 www.droneshield.com
Slide 3: Investment Highlights
Investment Highlights For personal use only World leading Large international addressable Leveraged to global proprietary AI platforms markets in counterdrone, growth trends – rising AI for protection against electronic warfare and tracking applications and defence advanced threats systems expenditu
Slide 4: AI-Enabled Platforms for Protection against Advanced Threats
AI-Enabled Platforms for Protection against Advanced Threats Multiple platforms in adjacent technologies and customers with a common theme of AI-based threat For personal use only protection Counterdrone Artificial Intelligence in Artificial Intelligence in Command-and-Control (C2) Electronic Warfar
Slide 5: Drones - A Critical and Growing Threat Vector
Drones - A Critical and Growing Threat Vector For personal use only 4 www.droneshield.com
Slide 6: Why is the Malicious Use of Drones a Threat?
Why is the Malicious Use of Drones a Threat? The widespread adoption of drone technology has increased the risk and prevalence of disruptive use For personal use only Payload delivery • Attacks: Dropping harmful / explosive payloads (including chemical or biological substances) or creating damage vi
Slide 7: Counterdrone: Multi-Billion Dollar Market by 2024
Counterdrone: Multi-Billion Dollar Market by 2024 Rapidly improving and easily available drone technology is driving demand for counterdrone solutions For personal use only Sources: MarchWatch: https://www.marketwatch.com/press-release/counter-uas-market-size-share-growth-business-scenario-insights-
Slide 8: How does a counterdrone system work?
How does a counterdrone system work? For personal use only Step 1 Step 2 Step 3 Detect Assess Respond 7 www.droneshield.com
Slide 9: Counterdrone detection solutions
Counterdrone detection solutions DroneShield uses all of the drone detection methods, with multi-sensor approach giving better results For personal use only Radio frequency Radar* Cameras* Acoustic* Imagery • Electro-Optical (EO), • Foundational layer • Motion tracker - emits • Compares noise of dro
Slide 10: Counterdrone defeat solutions
Counterdrone defeat solutions DroneShield uses smart jamming which has advantages over other technologies, particularly, in its use For personal use only across civil and military applications, and does not compete against large Defence Primes Exotic tech, Large Defence Primes limited reliability do
Slide 11: Artificial Intelligence in Military: US$6bn in 2020, projected to grow to US$12bn in 2025
Artificial Intelligence in Military: US$6bn in 2020, projected to grow to US$12bn in 2025 2021 has seen a major step forward for DroneShield, despite the COVID pandemic challenges For personal use only ü A new high-tech area, substantially open to disruption by smaller companies like DroneShield Sov
Slide 12: 2021 Scorecard
2021 Scorecard 2021 has been a major step forward for DroneShield, despite the COVID pandemic challenges For personal use only On track for another order of magnitude all-time record year for revenues ü and cash receipts Expanded past counterdrone into two AI-powered adjacent areas of ü Electronic W
Slide 13: 2021 Industry Recognition
2021 Industry Recognition DroneShield is well regarded across defence industry, winning multiple awards and media focus in 2021 For personal use only 12 www.droneshield.com
Slide 14: 2022 Key Priorities
2022 Key Priorities For personal use only Multiple large ($5m+) contracts across multiple countries and customers Another order of magnitude year of increase in customer cash receipts Winning contracts adjacent to current core capability, within Artificial Intelligence domains – such as Command-and-
Slide 15: Accelerating Cash Receipts
Accelerating Cash Receipts Since 2016, DroneShield’s total revenue has grown materially each year, with 2021 shaping as the pivotal year For personal use only Customer and Grant Cash Receipts since 2016 (A$m – December year end) 4x cash receipt growth over 12.2 Q1-Q3 2020 5.4 3.7 1.8 3.0 Consistent
Slide 16: Financials Summary and 2021 Estimates
Financials Summary and 2021 Estimates (A$m, Dec YE) Rapidly improving financials, as the business stands at an inflection point into 2022 For personal use only Rapid Revenue Growth Rapid Customer and Grant Cash Receipt Growth 14.7 10.3 90% growth 5.3 3.7 170% growth 5.4 9.4 6.6 5.4 3.3 3.0 3.7 2.8 1
Slide 17: Proven Progression and Pathway to North Star
Proven Progression and Pathway to North Star Cutting edge proprietary products, powered by AI engine and carrying SaaS pricing, in a rapidly growing market, For personal use only via multiple proven go-to-market strategies, substantial existing deal pipeline and a world class team “North Star” 5-Yea
Slide 18: Trading Update and Outlook
Trading Update and Outlook For personal use only Expected 2021 Cash Receipts from Sales and Grants of $14- ü 15m $200m+ sales pipeline, focus on the US and Australian ü Government customers Major US milestones reached, including integration with ü the US Air Force MEDUSA system, and working towards
Slide 19: Strong Cash Receipts Pipeline of $200m+ to Dec 2022
Strong Cash Receipts Pipeline of $200m+ to Dec 2022 A significant and geographically diversified pipeline, approx. 85 projects at different maturity stages to Dec 2022 For personal use only Pipeline: $60m / 5 projects Pipeline: $23m / 12 projects • Awarded preferred bidder status for two • Various d
Slide 20: Diversified and Mature Pipeline
Diversified and Mature Pipeline Multiple projects at each development stage improve predictability of cashflows For personal use only 6-18 months from lead to sale, but can be much shorter for repeat orders Credible Lead Confirmed Scope Firm Bid Submitted DroneShield Shortlisted Purchase Conditional
Slide 21: Defence engagement in Australia
Defence engagement in Australia There are lots of access points into Defence with different needs and different approach methods For personal use only ü Australian Army / Navy / Air Force ü CASG - Capability Acquisition and Sustainment Group ü Defence Primes ü Defence Science and Technology Group –
Slide 22: Strategy | Continue Leadership in Counterdrone, Grow Adjacent Capabilities and SaaS
Strategy | Continue Leadership in Counterdrone, Grow Adjacent Capabilities and SaaS For personal use only Three-part Strategy Continue Leadership in the Counterdrone/Unmanned Threat Sector • The counterdrone market is growing rapidly, especially in the US • DroneShield is well positioned as the indu
Slide 23: Contact details
Contact details For personal use only Email: info@droneshield.com Sydney, NSW (Headquarters) Level 5, 126 Phillip St Sydney, NSW 2000 Australia Phone: +61 2 9995 7280 Warrenton, Virginia 7140-B Farm Station Rd, Warrenton, VA 20187 USA Phone: +1 (540) 215-8383 22 www.droneshield.com
Slide 24: Appendices
For personal use only Appendices www.droneshield.com
Slide 25: Rapidly Growing Electronic Warfare Contracts in Hand
Rapidly Growing Electronic Warfare Contracts in Hand For personal use only Electronic Warfare (EW) / Signals Intelligence (SIGINT) area has a number of technology overlaps ü with counter-drone, as drones utilise radiofrequency spectrum in an increasingly complex and encrypted manner EW/SIGINT is gen
Slide 26: DroneShield Capability Overview
DroneShield Capability Overview Rapidly evolving capabilities in response to customer requirements For personal use only Hardware with Embedded Software and Associated Services Subscription and R&D Based Software Dismounted & Body-Worn Counterdrone Solutions Electronic Warfare and Signals Intelligen
Slide 27: DroneShield's competitive counterdrone advantage?
DroneShield’s competitive counterdrone advantage? C-UAS market pioneer, with a culture of systematic innovation For personal use only Market leading, differentiated technology… …across multiple platforms… ü Multi-sensor detection, ID and tracking ü Body-worn Best-in-breed detection range Vehicle/Shi
Slide 28: Australian Government is committed to building home-grown defence sector
Australian Government is committed to building home- grown defence sector The Australian Government’s defence spending commitment presents a large opportunity for the sector For personal use only Overview Capability investment funding profile (A$bn) $270bn in total • Australia has 12th largest defen
Slide 29: Global defence spending continues to rise
Global defence spending continues to rise For personal use only Overview Global defence spend (US$bn)1 Dip attributable to end of large scale combat • Global military spending in 2019 operations in Afghanistan represented 2.2% of GDP 1,849 1,914 1,753 1,789 1,794 1,778 1,748 1,743 1,766 1,779 1,800
Slide 30: Benefits and applications of safe, layered, counterdrone systems over kinetic systems
Benefits and applications of safe, layered, counterdrone systems over kinetic systems Safe counterdrone systems have many advantages over kinetic counter-drone systems, which are only For personal use only practical for deployment in war-like scenarios Avoidance of Evidence for legal Intelligence Mu
Slide 31: Increasing Predictability of Cash Receipts via Balancing Geographies
Increasing Predictability of Cash Receipts via Balancing Geographies Increasing focus towards the more business-transparent Australian and the US customer base, with deep For personal use only track record of successfully conducting business (and being paid) in the Middle East Cash Receipts in 2017
Slide 32: Increasing Predictability of Cash Receipts via Growing Repeat Business
Increasing Predictability of Cash Receipts via Growing Repeat Business Defence and Government Agencies often have a long acquisition cycle to first purchase, but are loyal and For personal use only collaborative customers, once on board. DroneShield has been increasing its repeat customer business R
Slide 33: Continuous Significant Momentum
Continuous Significant Momentum For personal use only www.droneshield.com
Slide 34: Seasoned senior sales and engineering teams
Seasoned senior sales and engineering teams DroneShield’s experienced team carries a solid track record of delivering growth For personal use only Peter Oleg Jethro Carla Red Katherine James Vornik Marks Balanco McClintock Stapels Independent CEO and Independent CFO and Sales Non- Managing Non- Dire
Slide 35: Capital Structure
Capital Structure For personal use only Enterprise Value (A$) DRO Shares 17c / share1 $71.1m2 Cash As at 30 November 2021 $10.0m Debt As at 30 November 2021 nil Enterprise Value $61.1m 1 Shareprice as at 3 December 2021. 418,226,152 ordinary shares outstanding at the date 2 Excluding unlisted option
Slide 36: Growing and Cohesive Team with Deep Capability
Growing and Cohesive Team with Deep Capability Continued growth of the global team since inception in 2015, across sales, engineering and support roles For personal use only 35 www.droneshield.com
Slide 37: Investor FAQs
Investor FAQs What does DroneShield do? For personal use only DroneShield makes hardware and software solutions that detect and safely neutralise small drones (unmanned aerial vehicles or “UAS”) used for nefarious purposes, such as terrorism, contraband delivery, and airport disruptions. We also pro
Slide 38: Investor FAQs (continued)
Investor FAQs (continued) Who are your customers? For personal use only We operate in over 100 countries. Most revenues are from military customers in the US, Australia and the Middle East. Large defence prime contractors such as Thales are also our customers. We have expanded our addressable market
Slide 39: Investor FAQs (continued)
Investor FAQs (continued) What are your competitive strengths? Why do customers choose For personal use only DroneShield? DroneShield is the original pioneer in the counterdrone space, and has the best recognised brand globally in the sector. We have the largest engineering team, and have been in ma
Slide 40: Investor FAQs (continued)
Investor FAQs (continued) What is the company’s strategy for growth? For personal use only We have the Over 75% of the revenues today comes from defence. Intelligence community is second largest vertical at approximately 15% of revenues. This will continue being the key focus for us. Success of mass
Slide 41: Investor FAQs (continued)
Investor FAQs (continued) Do acquisitions play a part in the growth strategy? For personal use only The Board regularly evaluates acquisition opportunities as a way of accelerating organic growth. Given our competitive lead over competitors we are not looking to consolidate other providers. However,
Slide 42: Investor FAQs (continued)
Investor FAQs (continued) When do you expect to turn profitable? For personal use only Given our competitive strengths and large addressable market opportunities, DroneShield is revenue growth focussed. To help investors understand the underlying profitability of our financial model, we would like t
Slide 43: Investor FAQs (continued)
Investor FAQs (continued) What do you see as key re-rating triggers for the For personal use only stock in the near term? 1. US Government agency and defence market - we are going through formal evaluation towards setting up a Program of Record with a major US Government agency, starting mid 2022 -
Slide 44: Investor FAQs (continued)
Investor FAQs (continued) For personal use only Can you give an update on the large Middle Eastern deal? We continue to regularly engage with the customer, and the contract with them (US$50m) is in a fully negotiated stage, with the final signature as the next step. The customer has made a A$2.5m pa
Slide 45: Disclaimer
Disclaimer For personal use only These presentation materials (the Presentation Materials) are confidential and have been prepared by DroneShield Limited (Company). By receiving the Presentation Materials, you acknowledge and represent to the Company that you have read, understood and accepted the t
Slide 46: Disclaimer
Disclaimer For personal use only FORWARD LOOKING STATEMENTS Certain statements contained in the Presentation Materials, including information as to the future financial or operating performance of the Company and its projects, are forward looking statements. Such forward looking statements: a) are n