Electro Optic Systems Holdings Limited · ASX:EOS
Electro Optic Systems — FY2022 Earnings Presentation
21 slides from Electro Optic Systems's earnings presentation, Feb 28, 2023
Slide 1: Full Year Results Investor Presentation
Full Year Results Investor Presentation 28 February 2023 1
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer CONTENT OF PRESENTATION FOR INFORMATION PURPOSES ONLY Forward-looking Statements This presentation may contain statements that are, or may be deemed to be, forward-looking statements. Such statements can generally be identified by the use of words such as ‘may’, ‘will
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Preparation of 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’ noting that the financial information relating to FY2022
Slide 4: Agenda
Agenda 1. Introduction of New Leadership Team 2. Unaudited 2022 Financial Results 3. Funding Update 4. Strategic Review – Implementation Status 5. Market Update 6. Defence Business Update 7. Space Business Update 8. Outlook 9. Q&A Appendices 4
Slide 5: New Leadership Team
New Leadership Team The new Chair, CEO and CFO were recruited externally to bring new leadership Garry Hounsell, Chair Commenced • Extensive experience in corporate finance, business leadership & management, with 24 November 2022 expertise in accounting & audit in Australia and overseas • Longstandi
Slide 6: Financial Results
Financial Results The new team are managing several challenges. SpaceLink was exited to improve cashflow. Financial Results Unaudited A$m 2021 2022 Revenue (1) 212.3 137.9 Underlying EBITDA(2): Continuing Operations 22.8 (42.9) Loss For the Year(3) : Continuing Operations 6.7 (53.6) SpaceLink Discon
Slide 7: Underlying Performance Drivers
Underlying Performance Drivers Results in 2022 were impacted by lower/delayed revenue, and higher costs Revenue • Customer Delays • Delayed customer contract awards and announcements Market Outlook • Delayed COVID impact Growing Strongly • Defence Strategic Review in Australia • Supply Chain Challen
Slide 8: 2022 Segment Performance
2022 Segment Performance Overall results impacted by lower Defence revenue and higher overall costs in 2022 Defence Systems Continuing Operations Unaudited • Revenue down due to delays in: A$m 2021 2022 Var • New contract awards Revenue • Customer milestones due to supply chain challenges • EBITDA i
Slide 9: Cashflow
Cashflow SpaceLink cash outflows ended in Q4 2022, and steps were taken to reduce cash costs 2021 Unaudited 2022 Cashflow Continuing Discontinued A$m Operations SpaceLink Total Operating 0.2 (36.3) (15.2) (51.5) Investing (37.7) (16.9) (11.4) (28.3) Sub total (37.5) (53.2) (26.6) (79.8) Financing 30
Slide 10: Funding Update
Funding Update Key steps have been taken to improve cashflow, and more are underway A$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
Slide 11: Strategic Review and Implementation
Strategic Review and Implementation We have cut costs, ended SpaceLink and started rebuilding RESTRUCTURING PROGRAM Cost savings 01 • Implemented H2 2022 • Over 100 roles made redundant $25m pa COMPLETED SPACELINK Improve 2023 02 • Ceased investment • EOS exited SpaceLink in Q4 2022 cashflow CASHFLO
Slide 12: Market Development & Outlook
Market Development & Outlook Global spending on National Security is accelerating Mid Term Growth Opportunities • Conflict in Ukraine and increased geopolitical tensions Growth in National • Increased focus on national security Stronger market growth Security spending • Increases in defence spending
Slide 13: Defence Systems Update
Defence Systems Update The Priority is to maximise customer receipts 1. Cash Collection Priority • Net Contract Asset and liabilities, Unbilled A$142.2m at 31 December 2022 • Key Contract Amendment secured in February 2023 2. Revenue Growth • Australia - Defence Strategic Review outcome pending • In
Slide 14: Space Systems Update
Space Systems Update EM Solutions delivers another strong growth year EM Solutions • Revenue growth of 22% - consistent delivery of strong growth • Marine SATCOM on-the-move • Continued delivery Australian & European naval fleets • New sustainment contract for Royal Australian Navy A$26m • Targeting
Slide 15: Conclusion and Actions
Conclusion and Actions The initial steps have been completed and there is a clear focus for 2023 Conclusions • EOS has new leadership • Key initial steps completed: • Refinancing • SpaceLink ended • Cost reduction • Strategic Partnerships are an opportunity • Global market outlook improving Key Acti
Slide 16: Questions
ions =qa_— ~ Quest
Slide 17: Appendices
Ss ice Append ‘Eos
Slide 18: Appendix
Appendix Reconciliation of Statutory Profit / (Loss) and Non-GAAP measures for Continuing Operations Continuing Operations Year ended 31 December $m 2021 2022 Profit (Loss) for the period 6.7 (53.6) Income tax expense (benefit) 9.2 (9.3) Profit (Loss) before tax 15.9 (62.9) Finance costs 6.6 14.3 Im
Slide 19: Detailed Debt and Covenant Information
Detailed Debt and Covenant Information Full details of the debt refinancing were included in an announcement to New Additional Existing the ASX on 13 October 2022. Term Loan Working Capital Working Capital Facility1 Facility Facility Facility Total The WHSP Financing Facilities include financial and
Slide 20: Detailed Debt and Covenant Information
Detailed Debt and Covenant Information Covenant Calculation Ratio Asset Coverage Defined, in general terms, as the ratio of: Must be more than 1.6 : 1 Ratio (a) net tangible assets excluding borrowings, relative to (b) the borrowings of EOS plus the face value of bonds issued, less cash backing prov
Slide 21: a Q | , Wy
a Q | , Wy
Electro Optic Systems Holdings — FY2022 Earnings Presentation on 6ix