Slide 1: Results for the Year Ended 30 April 2022
RESULTS FOR THE YEAR ENDED 30 APRIL 2022 Andrew Thomis & Simon Walther 28 July 2022
Slide 2: Highlights
Highlights Andrew Thomis, Chief Executive Cohort plc FY 21/22 Results Presentation 28 July 2022 2
Slide 3: Financial Highlights
Introduction FINANCIAL HIGHLIGHTS Adjusted Revenue Adjusted EPS Operating Profit Profit in line with revised guidance £137.8m £15.5m 31.08p -3.8% -16.7% -7.6% (2021: £143.3m) (2021: £18.6m) (2021: 33.63p) Order intake Order book Revenue cover Record long-term order book £186.4m £291.0m 78% (2021: £1
Slide 4: Operational Highlights
Introduction OPERATIONAL HIGHLIGHTS MASS main profit contributor with record high margins Cohort plc FY 21/22 Results Presentation 28 July 2022 4
Slide 5: Operational Highlights
Introduction OPERATIONAL HIGHLIGHTS MASS main profit contributor with record high margins MCL grew revenue and trading profit Cohort plc FY 21/22 Results Presentation 28 July 2022 5
Slide 6: Operational Highlights
Introduction OPERATIONAL HIGHLIGHTS MASS main profit contributor with record high margins MCL grew revenue and trading profit Strong first full year contribution from ELAC Sonar ahead of expectations Cohort plc FY 21/22 Results Presentation 28 July 2022 6
Slide 7: Operational Highlights
Introduction OPERATIONAL HIGHLIGHTS MASS main profit contributor with record high margins Stronger results at SEA with increase MCL grew in export revenue and deliveries trading profit Strong first full year contribution from ELAC Sonar ahead of expectations Cohort plc FY 21/22 Results Presentation
Slide 8: Operational Highlights
Introduction OPERATIONAL HIGHLIGHTS Disappointing performance from MASS main profit Chess. As expected, contributor with weaker performance record high margins at EID Stronger results at SEA with increase MCL grew in export revenue and deliveries trading profit Strong first full year contribution fr
Slide 9: Outlook
OUTLOOK Record order book Improved market dynamics Well positioned for growth opportunities Confident outlook Cohort plc FY 21/22 Results Presentation 28 July 2022 9
Slide 10: Financial Review
Financial Review Simon Walther, Finance Director Cohort plc FY 21/22 Results Presentation 28 July 2022 10
Slide 11: Income Statement
Financial Review INCOME STATEMENT Year ended 30 April 2022 2022 2021 Variance £m £m % Revenue 137.8 143.3 (3.8)% Gross profit (excludes FX and RDEC) 54.9 39.8% 52.7 36.8% Overhead (39.4) (34.1) Adjusted operating profit 15.5 18.6 (16.7)% • Gross margin % higher due to improved mix at MASS, SEA (expo
Slide 12: Chess Highlights
Divisional Highlights CHESS HIGHLIGHTS 2021/22 2020/21 Revenue (£m) 16.9 28.6 Operating profit (£m) 0.3 3.0 Operating margin 1.9% 10.5% • Revenue fell due to delays caused by technical issues and order slippage • Margin deterioration from issues on legacy projects • New management team making progre
Slide 13: EID Highlights
Divisional Highlights EID HIGHLIGHTS 2021/22 2020/21 Revenue (£m) 8.2 20.9 Operating profit (£m) 0.9 4.8 Operating margin 10.5% 23.1% • As expected, weaker performance due to non-repeat of large order in 2020/21 • Solid cash performance • Key order from Portuguese Navy expected in 2023 • Strong clos
Slide 14: ELAC Highlights
Divisional Highlights ELAC HIGHLIGHTS 2021/22 2020/21# 2020/21* Revenue (£m) 21.5 19.9 8.3 Operating profit (£m) 3.8 2.9 1.2 Operating margin 12.6% 14.1% 14.1% # 12 months proforma; *5 months only • Stronger than expected first full year contribution • Significant order secured for Italian Navy and
Slide 15: MASS Highlights
Divisional Highlights MASS HIGHLIGHTS 2021/22 2020/21 Revenue (£m) 38.5 39.5 Operating profit (£m) 9.1 8.7 Operating margin 23.7% 22.1% • Increased profits, despite fall in revenue • Remains strongest contributor in Group • Net margins increased due to improved mix and flat overheads • Continued str
Slide 16: MCL Highlights
Divisional Highlights MCL HIGHLIGHTS 2021/22 2020/21 Revenue (£m) 21.7 18.0 Operating profit (£m) 2.2 2.1 Operating margin 10.4% 11.5% • Revenue and adjusted operating profit increased in 2021/22 • Good cash conversion • Starts 2022/23 with record level of order cover and good prospects • High tempo
Slide 17: SEA Highlights
Divisional Highlights SEA HIGHLIGHTS 2021/22 2020/21 Revenue (£m) 31.0 28.0 Operating profit (£m) 3.4 2.4 Operating margin 10.9% 8.4% • Solid year with revenue growth over 10% and trading profit growth over 40% • Export revenue up significantly • Growth in naval research and rise in transport activi
Slide 18: Revenue & Profit Bridge
Financial Review REVENUE & PROFIT BRIDGE Revenue bridge +£3m -£12.7m +£3.7m +£13.2m MCL SEA -£11.7m EID -£1.0m 2020/21 ELAC Revenue Chess MASS 2021/22 £143.3m Revenue £137.8m Adjusted operating profit bridge +£1.0m -£3.9m +£0.1m +£0.4m +£2.6m MCL MASS SEA -£2.7m EID ELAC 2020/21 -£0.6m Adjusted oper
Slide 19: Net Funds Bridge
Financial Review NET FUNDS BRIDGE +£2.8m -£2.0m -£2.6m +£4.2m Capex Depreciation -£4.7m Net +£15.5m purchase of own Working shares -£4.7m capital Dividends +£11.0m Others 2021/22 Closing Net Funds +£2.5m 2020/21 Adjusted Opening Net operating Funds profit Cohort plc FY 21/22 Results Presentation 28
Slide 20: Banking Facility Renewed
Financial Review BANKING FACILITY RENEWED • Total facility now £50m, previously £40m • Facility available out to July 2025, with options to extend to July 2027 • Commerzbank joins the syndicate with NatWest and Lloyds Cohort plc FY 21/22 Results Presentation 28 July 2022 20
Slide 21: Selected Financial Guidance Items
Financial Review SELECTED FINANCIAL GUIDANCE ITEMS • Chess earn out and minority now £1.4m (2021: £2.8m), expect to pay by 31 October 2022 • Amortisation of other intangible expected to be £3.1m in 2022/23, £3.0m in 2023/24 and £1.0m in 2024/25 • Expect tax rate to be 18% for 2022/23 rising to 24% t
Slide 22: Outlook
Outlook Andrew Thomis, Chief Executive Cohort plc FY 21/22 Results Presentation 28 July 2022 22
Slide 23: Outlook for Growth
Outlook OUTLOOK FOR GROWTH • Russian invasion of Ukraine Big Picture • Continued Chinese defence spending expansion • 2021 UK Defence Review increased spending by £4bn per year Domestic • Increased activity levels at UK MOD following Ukraine conflict markets • Growing defence opportunities in German
Slide 24: Growth in Key Technology Areas
Outlook GROWTH IN KEY TECHNOLOGY AREAS • Secure communications and surveillance • Anti-submarine warfare • Artificial intelligence and autonomy • Cyber security and cyber defence Well positioned to meet current and evolving customer requirements Cohort plc FY 21/22 Results Presentation 28 July 2022
Slide 25: Record Order Book Out to 2030
Outlook RECORD ORDER BOOK OUT TO 2030 350 291.0 300 56.8 250 22.5 200 40.7 £m 150 75.1 13.5 100 15.1 68.4 23.1 68.8 9 10.9 0 58.9 58.6 1 8.9 8.3 11.5 7 1.1 8.6 50 72.8 36.3 14.8 7.2 12.3 3.1 27.7 16.5 10.8 5 3.9 7.8 5.5 5.8 18.2 14.7 0 14.1 2.9 12.7 13.1 At 30 April 2022 H1 2022/23 H2 2022/23 2023/2
Slide 26: Good Underpinning for Coming Year
Outlook GOOD UNDERPINNING FOR COMING YEAR 30 April To be delivered 30 April Last year's to be Order book 2022 2022/23 2021 delivered £m £m £m £m Chess 40.7 22.0 42.3 19.8 EID 23.1 11.3 20.0 8.2 ELAC 56.8 19.9 21.2 12.3 MASS 72.8 26.8 77.2 27.2 MCL 22.5 20.4 12.4 11.5 SEA 75.1 27.3 69.3 20.7 291.0 12
Slide 27: Investing for Organic Growth
INVESTING FOR ORGANIC GROWTH • 2022 R&D expenditure of £11.3m (2021 - £9.5m) • Focus on: • SEA – FILS weapon system development, autonomous platform communications architecture, RoadFlow • EID – Integrated soldier systems development, next generation ICCS • Chess – Novel sensor & control technology,
Slide 28: Outlook & Summary
OUTLOOK & SUMMARY Record order book and long pipeline of opportunities c.90% of 2022/23 consensus revenue underpinned by orders (July 2022) Well positioned to meet customer needs in growth markets 2022/23 overall performance expected to be ahead of 2021/22 Growth to accelerate 2023/24 based on curre
Slide 29: Exciting long-term future as a major independent UK defence technology group
Exciting long-term future as a major independent UK defence technology group offering world-class systems to domestic and export customers alike Cohort plc FY 21/22 Results Presentation 28 July 2022 29
Slide 30: Questions
Questions Cohort plc FY 21/22 Results Presentation 28 July 2022 30
Slide 31: Appendix
Appendix Cohort plc FY 21/22 Results Presentation 28 July 2022 31
Slide 32: Cohort Business Model
COHORT BUSINESS MODEL • Subsidiaries enjoy a significant degree of operational autonomy in order to develop their potential fully: – Enables streamlined decision-making and focus on solving customer’s immediate problems – Provides competitive advantage over larger rivals where the decision-making pr
Slide 33: Applying advanced technology to protect and secure
Applying advanced technology to protect and secure We create solutions to keep people safe. Acting with agility to find a better way, make smart decisions and meet customers’ needs. Where independent subsidiaries are free to grow and deepen relationships with the support of a steadying hand. Bringin
Slide 34: Acquisition Strategy
Acquisition Strategy ACQUISITION STRATEGY • Continue to see opportunities to accelerate growth by making targeted acquisitions in the UK and overseas • Stand-alone acquisitions – Likely to be operating in defence and security markets – Ready to join a larger public group – Growth potential and susta
Slide 35: Acquisition Track Record
Acquisition Strategy ACQUISITION TRACK RECORD • 2006: SCS acquisition helped create the Group at IPO (SCS now fully integrated within other divisions) • 2006: MASS acquired for £13m • 2007: SEA acquired for £25m • 2014: Disposal of Space Division for £6.5m • 2014: J+S acquired for £12m (now fully in
Slide 36: Chess Dynamics trading history
Chess Dynamics is an innovative, well-respected surveillance, tracking and gunfire control specialist for military and commercial customers. Incorporating Vision4ce Software for surveillance, tracking & fire control systems hardware Chess’s military customers include defence forces and prime contrac
Slide 37: EID trading history
EID is a Portuguese high-tech company with over 35 years’ experience and deep know-how in the increasingly critical fields of electronic tactical and naval communications, command and control (3C) equipment. The company’s focus is the design, manufacture, delivery and support of advanced high-perfor
Slide 38: ELAC Sonar trading history
ELAC SONAR is an innovative German company supplying global navies with advanced sonar systems and underwater communications, located in Kiel Germany It works with navies, system integrators and shipyards to supply mission critical hydro-acoustic naval sensors - from fully-fledged submarine combat s
Slide 39: MASS trading history
MASS is a global technology company, trusted by the most secure organisations to provide advanced, cyber hardened digital services centred around data, information and knowledge. MASS has built its reputation through decades in defence, providing training, electronic warfare and cyber security servi
Slide 40: MCL trading history
Marlborough Communications Limited (MCL is a leading supplier of advanced electronic communications, information systems and signals intelligence technology to the defence and security sectors. The company has over 40 years’ experience in supporting the UK’s ISTAR programmes including signals intell
Slide 41: SEA trading history
SEA delivers products and services into the defence and transport markets, alongside performing specialist research and providing services including training and product support. SEA’s engineering capabilities cover a wide range of maritime mission systems requirements including communications, ship
Slide 42: Net Cash Flow
Financial Review NET CASH FLOW Year ended 30 April 2022 2022 2021 £m £m Adjusted operating profit 15.5 18.6 Working capital 4.2 (0.1) Depreciation and share based payments 2.8 2.4 Net funds inflow from operations 22.5 20.9 Acquisition of ELAC - (1.3) Exceptional items (0.1) (1.3) Capital expenditure
Slide 43: Earnings Per Share
Financial Review EARNINGS PER SHARE • 7.6% decrease in adjusted earnings per share from 16.7% reduction in adjusted operating profit • Reconciled as follows: Adjusted Adjusted operating earnings per profit share £m Pence 2021 18.6 33.63 Chess (81.84% owned for the year) (2.7) (5.38) EID (80% owned)
Slide 44: Quarterly Profile of Group Revenue
QUARTERLY PROFILE OF GROUP REVENUE 2015/2016 2016/2017 2017/2018 2018/2019 2019/2020 2020/2021 2021/2022 Average % % 40.0 37.2 35.0 30.0 23.7 25.0 21.5 20.0 17.6 15.0 10.0 5.0 0.0 Q1 Q2 Q3 Q4 Cohort plc FY 21/22 Results Presentation 28 July 2022 44
Slide 45: Thank You
THANK YOU Cohort plc One Waterside Drive Arlington Business Park Theale Reading RG7 4SW www.cohortplc.com Cohort plc FY 21/22 Results Presentation 28 July 2022 45