Slide 1: Strategic Investment & Capital Raise
October 2022 Strategic Investment & Capital Raise Chris Tait Chair Trevor Elbourne Chief Executive Officer James Cody Chief Financial Officer
Slide 2: Important notices and disclaimer
Important notices and disclaimer The information contained in this document (“Document”) has been prepared by Atomos Limited ACN 139 730 500 Neither the receipt of this Document by any person nor any information contained in it or supplied with it or (referred to as “Atomos” or “Company”). This Docu
Slide 3: Executive Summary
Executive Summary ATOMOS IS SEEKING TO UNDERTAKE AN EQUITY CAPITAL RAISE FOR $17.9M FY22 was a challenging year • A shift away from historically successful product and customer Use of funds focused marketing led to: • a slowdown in sales Strategic investment ($1.7m + $1.7m1) • a build in inventory (
Slide 4: Overview: We are a global video technology leader
Overview: We are a global video technology leader…
Slide 5: ATOMOS: a global leader in video tech
ATOMOS: a global leader in video tech SOLVING CUSTOMER PROBLEMS FOR OVER 12 YEARS • Founded in 2010 with vision to democratise high quality GLOBAL LEADER IN PROVIDING MUST-HAVE TOOLS video content creation FOR CONTENT CREATORS. STARTED BY INVENTING THE • Unique ability to partner with dominant indus
Slide 6: Our products improve content creation at all levels
Our products improve content creation at all levels CONTINUING OUR HERITAGE OF SIMPLIFYING THE WAY CREATORS WORK Workflows from capture to delivery We have a proven history at the forefront of developing innovative products and technologies that improve & simplify the way content creators work: • Wo
Slide 7: Market Size
Market Size MARKET FOR MONITOR RECORDERS IS $610M, GROWING AT 12%PA, BUT TOTAL MARKET IS MUCH BIGGER Studio & broadcasting SIGNIFICANT GROWTH OPPORTUNITY AMS 25 Atomos is entering new markets for streaming, remote collaboration and Monitor recorder market 125 cloud-based production which will signif
Slide 8: FY22 Review: Challenging but significant positives moving forward
FY22 Review: Challenging but significant positives moving forward
Slide 9: FY22 in Review
FY22 in Review SEVERAL CHALLENGES OVERSHADOWED GROUNDBREAKING NEW PRODUCT RELEASES Challenges Solid Base now in place Exceptional New Product Portfolio • Departure from proven success in active • Cost base corrections to right momentum building into FY23 product-led marketing which focused on size b
Slide 10: Material slowdown in 3Q22 sales had flow on effects
Material slowdown in 3Q22 sales had flow on effects PERFECT STORM OF UNEXPECTED SALES SLOWDOWN & LONG INVENTORY LEAD TIMES IMPACTED CASH FLOWS FY22 $m • Planned build in inventory through 1H22 to mitigate supply chain challenges EBITDA (5.1) • Unplanned slowdown in 3Q22 sales impacted profitability
Slide 11: Solid base now in place
Solid base now in place COMBINING BACK TO BASICS WITH IMPROVED MARKETING TO DELIVER FUTURE GROWTH People • Experienced and cohesive leadership team now in place • Experienced marketing director appointed for better alignment of sales and marketing • The business is part way through a reorganisation
Slide 12: We continued to deliver ground-breaking products
We continued to deliver ground-breaking products SERIES 2 CONNECTED PRODUCTS AND ATOMOS CLOUD STUDIO Yet again, Atomos leads the way with democratising content creation Atomos Connect for Ninja New ground-breaking Video Sharing products invented in FY22 with more to come in 2H23 All share many commo
Slide 13: FY23: Returning to, and further building upon, what makes us a global leader
FY23: Returning to, and further building upon, what makes us a global leader 13
Slide 14: Momentum to accelerate in the new year
Momentum to accelerate in the new year NEW PRODUCT ACCELERATION + WORKING CAPITAL REDUCTION FROM 2Q23 ONWARDS 1H23 to be broadly flat on prior year - Channel Stronger outlook for 2H23 – FY23 results feedback of softer sales in Q1 reflected in AMS results expected to deliver stronger sales, earnings
Slide 15: Improved Marketing Strategy
Improved Marketing Strategy ENSURING OUR CUSTOMERS UNDERSTAND HOW WE CAN HELP BRING THEIR CREATIVE VISION TO LIFE Return to product-focused messaging that we know works Highlight which problems our products solve for our customers Demonstrate the value that our products bring to our customers Clearl
Slide 16: Improved delivery of marketing
Improved delivery of marketing BETTER MARKETING CHANNELS TO CUSTOMERS – BUILD ON PROVEN FUNDAMENTALS Focus on digital No more expensive New website Hero ad campaigns and social tradeshows With the launch of eCommerce, iPhone-style hero ad Heavy use of digital platforms No more big and expensive full
Slide 17: Direct to customer
Direct to customer ROLLOUT OF ATOMOS ECOMMERCE ON TRACK Website partner for eCommerce solution engaged and progress underway Payment platform partner selected Innovative buy-now-pay-later partner selected Third partner logistics partners engaged On schedule to launch eCommerce on redesigned Atomos w
Slide 18: New Era for Atomos Products
New Era for Atomos Products POWERING NEW GENERATION OF VIDEO COLLABORATION Ninja More to come! Camera-to-Cloud Shogun Social Atomos Cloud Studio Streaming + Video Sources Zato Series 2 Devices CLOUD STUDIO Powering the ability to collaborate in real-time with anyone, anywhere, anytime will revolutio
Slide 19: New Era for Atomos Products
New Era for Atomos Products PARTNERS LIKE ADOBE HELPING DRIVE DEMAND FOR ATOMOS PRODUCTS AND SERVICES Atomos Cloud Studio + 25+ million Adobe Create Cloud subscribers now have a reason to consider an Atomos product Hundreds of new cameras now part of the Frame.IO ecosystem via an Atomos product Larg
Slide 20: New products & services driving FY23
New products & services driving FY23 AND RIGHT-SIZING THE BUSINESS TO REDUCE BREAK EVEN SALES POINT FY23 Revenue (A$m) Fixed Cost Base (A$m) New Products yet to be launched: 81 - 89 14 • DTC targeting 10% of sales • Gradual build in contribution from subscription services • Two new Series 2 connecte
Slide 21: Atomos Group Strategy
Atomos Group Strategy NEW PRODUCTS AND CLOUD SERVICES TO DRIVE VALUE 12 months 2-3 years 3-5 years Expand Consolidate Accelerate • Launch new channels to customers - • Launch next generation of hardware • Acceleration of strategy which emphasizes Introduction of device sales via platforms ‘Series 3’
Slide 22: Strategic Investments
Strategic Investments: 22
Slide 23: MAVIS technology + Atomos
MAVIS technology + Atomos MASS APPEAL OF ATOMOS LIVE PRODUCTION Atomos Cloud Studio GAME CHANGER Enormous simplicity enables mass-appeal opportunities With nothing more than two iPhones, an iPad and an Atomos Cloud subscription, anyone can do a live production. Anywhere. Anytime. Social events Corpo
Slide 24: MAVIS technology
MAVIS technology ATOMOS CLOUD STUDIO WILL REVOLUTIONISE LIVE PRODUCTION Outside Broadcast Vans – Atomos Cloud Studio – Legacy Live Production Live Production SIMPLIFY Easier Cheaper Much Wider Appeal Traditional Live Production Atomos Live Production • Not scalable Eliminate • Scalable (cloud based)
Slide 25: Mavis Strategic Investment
Mavis Strategic Investment RATIONALE – THIS TECHNOLOGY POWERS FUTURE GROWTH £2m for 20% strategic stake: Exclusive access to game-changing MAVIS technology: built-for-purpose video streaming protocol and disruptive live production in the cloud solution Provides pre-emptive rights on additional inves
Slide 26: World class 8K video sensor
World class 8K video sensor EXPLORING COMMERCIALISATION • Atomos has developed an 8K and high-speed 4K world-class video sensor which captures video images suitable for use in a mainstream DSLR camera • Outside of big camera makers like Sony & Canon, having 8K sensor technology is extremely rare & v
Slide 27: Capital Raising
Capital Raising 27
Slide 28: Capital Raise: Overview
Capital Raise OVERVIEW Offer size and structure Capital raising of approximately $18 million via a: • A fully underwritten Placement of approximately 52.4 million shares (representing approximately 23.6% of issued capital) to institutional and sophisticated investors to raise approximately $5.2 mill
Slide 29: Capital Raise: Use of Funds
Capital Raise USE OF FUNDS Uses A$m Sources A$m Initial investment in MAVIS 1.71 Placement 5.2 Second investment in MAVIS 1.71 Accelerated non-renounceable entitlement 12.7 Marketing of new revenue streams 2.0 offer Sensor Commercialisation 1.0 Debt reduction 5.0 Balance sheet flexibility 5.5 Capita
Slide 30: Post Offer Pro Forma Balance Sheet
Capital Raise POST OFFER PRO FORMA BALANCE SHEET Debt Offer 2Strategic Offer Pro A$m 130 Jun’22 Repaym • Increase in cash of $17.9m from the Proceeds Investment Costs Forma ent Offer proceeds Cash and cash equivalent 5.0 17.9 (1.7) (5.0) (1.0) 15.2 • Investment of GBP 1 million2 for Trade & other re
Slide 31: Capital Structure
Capital Raise CAPITAL STRUCTURE Substantial Holders Pre-Offer Ellerston Capital1 28,550,164 12.84% Regal Funds Management1 16,407,514 7.38% Capital Structure Pre-Offer Post Offer Ordinary shares on issue 222,351,585 100.00% 401,821,079 Share options2 7,194,582 7,194,582 Performance rights 1,089,018
Slide 32: Timetable
Capital Raise TIMETABLE Event Date Announcement of Placement and Entitlement Offer 18 October Entitlement Offer Record Date 20 October Institutional Placement and Entitlement Offer Institutional Placement and Entitlement Offer opens 18 October Institutional Placement and Entitlement Offer closes 19
Slide 33: Highlights
Highlights Atomos is building products and services that are at the forefront of new collaboration workflows. These new products and services will fuel growth for the next 5+ years. • Leverage proven Atomos fundamentals: Deep tech expertise, great product design, brand equity, partnerships with indu
Slide 34: Risks
Risks 34
Slide 35: Risks associated with investment
Risks RISKS ASSOCIATED WITH INVESTMENT Conditions to investment The Mavis Broadcast investment is reliant on Atomos raising funds under the Placement to fund the subscription for shares. The Mavis Broadcast investment is reliant on Atomos raising funds under the Placement to fund the subscription fo
Slide 36: Risks associated with Atomos
Risks RISKS ASSOCIATED WITH ATOMOS Competition risk Atomos competes against other video technology companies. Atomos faces the risk that (amongst other things) existing competitors could increase their market share through aggressive sales and marketing campaigns, product research and development or
Slide 37: Risks associated with Atomos
Risks RISKS ASSOCIATED WITH ATOMOS Failure to manage growth Atomos will need to continue to invest in sales and marketing and other systems and processes to support the development of its business if Atomos gains significant market share over and above its current short-term expectations. If this is
Slide 38: Risks associated with Atomos
Risks RISKS ASSOCIATED WITH ATOMOS Risk of shareholder dilution Atomos may in the future elect to issue new shares or engage in capital raising to fund ongoing working capital requirements of Atomos or acquisitions that Atomos may decide to make. While Atomos will be subject to the constraints of th
Slide 39: Selling Restrictions
Selling Restrictions New Zealand Singapore This document has not been registered, filed with or approved by any This document and any other materials relating to the Shares have not New Zealand regulatory authority under the Financial Markets Conduct been, and will not be, lodged or registered as a
Slide 40: Selling Restrictions
Selling Restrictions Hong Kong United Kingdom WARNING: This document has not been, and will not be, registered as a Neither this document nor any other document relating to the offer has been prospectus under the Companies (Winding Up and Miscellaneous delivered for approval to the Financial Conduct
Slide 41: Appendix
Appendix
Slide 42: FY22 Revenue vs Inventory
FY22 Revenue vs Inventory SALES DECLINE & INVENTORY BUILD DRIVEN BY CHANGE IN MARKETING APPROACH +5% 32 +31% 28 29 28 29 27 24 24 +81% 21 22 +13% 19 13 13 11 4 4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY21 FY22 Revenue Inventory • Departure from proven success in active product-led marketing which focused on custo
Slide 43: Debt Facility
Debt Facility TERMS OF THE FACILITY FOLLOWING COMPLETION OF THE OFFER • Existing debt facility of $12m with Arrowpoint will be reduced by A$4m via an early prepayment • Second tranche of facility (for additional $4m) cancelled - new limit $8m • An additional $1m prepayment from raise proceeds will b
Slide 44: Strategic Investment: Key Terms and Conditions
Strategic Investment KEY TERMS AND CONDITIONS Structure • Atomos has agreed to subscribe for 20% of the issued share capital of MAVIS on a fully-diluted basis by mid-April 2023. • The investment will consist of two tranches: a subscription in October 2022 for 3,556 new B Class shares and further sub
Slide 45: Market Size
Market Size OUR CLOUD BASED PRODUCTS WILL REVOLUTIONIZE THE CREATIVE WORKFLOW ACROSS SEGMENTS • The table summarises the Atomos market for video monitor recorders segmented by customer type • This market is growing at 12% pa and Atomos has around 12% market share but with minimal penetration in cert
Slide 46: Market Size: Institutions and Venues
Market Size CUSTOMER SEGMENT – INSTITUTIONS AND VENUES CAGR 2021 2031 SEGMENT BREAKDOWN HOW THEY USE VIDEO OUR TARGETING APPROACH 21-31 ($m) ($m) (%) Large venues and Streaming live events such as concerts, religious 1 Targeted B2B relationship marketing 118 359 11.8% Events services, conferences et
Slide 47: Appendix Q: Sell In Analysis
Appendix Q SELL IN ANALYSIS soon eo FY20 FY21 FY22 cOVID Revenue Dec - Mar $18.1m Revenue Dec - Mar $25.0m 125M Revenue Dec - Mar $17.4m 4% down on COVID year FY20 30% down on FY21 Abnormally low revenue 1M oM 31/12/2079 2 31/12/2020 28/02/2021 31/03/2021 31/12/202! 31/01/2022 31/03/2022 47
Slide 48: Sell In Analysis
Appendix SELL IN ANALYSIS Facts regarding AtomxX CAST sales June 2021: + AtomxX CAST fundamentally does not have any software installed as all the necessary software runs on the Ninja V or Ninja V+ + FY21 bonuses not dependent on sales— only on EBITDA + Total ATOMOS Jun ‘21 sales of $15m + CAST sale
Slide 49: Sell In Analysis
Appendix SELL IN ANALYSIS 20M 10M oszm osim osim osm oom Sumo Sales Dec ‘20 - Dec ‘21 40m Stock-out 04am 039M Facts regarding December 2021 Sumo sales: * Dec ‘20 - Apr '20 monthly sales run-rate was $618K/month + Minimal Stock available for 5 months: May ‘21 to Oct ‘21 + Backlog at end Nov ‘21 was 1
Slide 50: Underwriting Agreement
Appendix UNDERWRITING AGREEMENT Atomos Limited ACN 139 730 500 (Atomos) has entered into an underwriting agreement with Morgans Corporate Limited ACN 010 539 607 and Shaw and Partners Limited ACN 003 221 583 (Joint Lead Managers), (Agreement) under which the Joint Lead Managers have agreed to manage
Slide 51: Underwriting Agreement
Appendix UNDERWRITING AGREEMENT Regulatory action Certain regulatory actions are commenced in relation to the Offer or Offer Materials including an application made by ASIC for an order under Part 9.5 of the Corporations Act, ASIC gives notice of an intention to hold, any investigation or hearing in
Slide 52: Underwriting Agreement
Appendix UNDERWRITING AGREEMENT Breach of warranty A representation and warranty contained in the Agreement on the part of Atomos is untrue or incorrect when given or taken to be given or becomes untrue or incorrect Regulatory action There is a contravention by Atomos, any Atomos group member, Mavis
Slide 53: HARDWARE. SOFTWARE. CLOUD. Q&A
HARDWARE. SOFTWARE. CLOUD. Q&A