Audinate Group Ltd. · ASX:AD8
Audinate — Investor Presentation (February 2021)
29 slides from Audinate's investor presentation, Feb 22, 2021
Slide 1: 1H21 Investor Presentation
22 February 2021 Aidan Williams – Chief Executive Officer Rob Goss – Chief Financial Officer Authorisation: This document was approved by the Board of Audinate Group Limited
Slide 2: Overview of Audinate today
Overview of Audinate today Products World-leading supplier of Growing network digital media networking effect of Dante- Dante comprises software and hardware that resides inside the audio for the Professional AV enabled products in and video products of Audinate’s Original Equipment Manufacturer ind
Slide 3: Audinate returns to pre-COVID levels in 1H21
Audinate returns to pre-COVID levels in 1H21 Financial Highlights • US$ revenue growth of 19% from 2H20 US$m 8.5 8.6 80% • US$ gross margin growth of 23% from 2H20 7.5 7.5 • 76.9% gross margin, up from 75.9% in 2H20 7.0 75% • A$1.8m EBITDA, consistent with pcp 6.2 • A$3.2m operating cash flow, consi
Slide 4: Delivering on medium-term priorities
Delivering on medium-term priorities In August 2019 when Aidan Williams commenced as CEO the following medium-term priorities were set and published for the business. Medium-term Priorities Achievements • Recruitment of Cambridge team put the business on track for 75% Investing to double Audinate’s
Slide 5: Audinate response to COVID-19
Audinate response to COVID-19 Recap on 2H20 Response 1H21 Strong Recovery • Additional contract manufacturing established • $40m capital raise completed in July & August in Malaysia just prior to outbreak • Revenue returns to pre-COVID levels • Q4 US$ revenue ↓25% • Hiring for growth restored • Qual
Slide 6: Leading global supplier of digital media networking
Leading global supplier of digital media networking Highlights Total audio products per protocol >A$1bn Total addressable market (1) 3,008 Dante has 17x 3000 the adoption versus closest competitor 2500 360 OEM brands shipping Dante enabled products 2000 3,008 Dante enabled products available on the
Slide 7: New Cambridge team to accelerate Dante video
New Cambridge team to accelerate Dante video Acceleration of existing video strategy • Video development team of 11 staff recruited in Cambridge, more to come • Team leaders were known to Audinate and have pre- existing relationships • Unique opportunity to put a senior team in place with > 165 year
Slide 8: Three OEM Dante Video products to be released
Three OEM Dante Video products to be released Dante AV Module “We are excited about all the new possibilities Audinate’s new Dante AV Module opens for developing the sort of products • “AV-over-IP” networking module, the pro-AV market craves,” Buddy Oliver, VP product OEM business model Management a
Slide 9: Financial Performance
FINANCIAL PERFORMANCE
Slide 10: Increased software sales drives growth in units shipped
Increased software sales drives growth in units shipped Revenue (US$M) Dante units shipped (‘000s) 347 Software units ↑61%(pcp) 11.1 11.1 269 276 10.3 246 254 10.0 158 9.3 8.4 2.3 213 1.6 3.4 88 98 1.6 186 74 91 6.8 1.9 6.2 1.2 148 78 4.9 5.0 1.1 127 72 0.8 3.8 100 48 0.6 0.7 8.5 8.6 47 8.0 7.6 76 1
Slide 11: Income statement
Income statement • Revenue flat in US$ – decline driven by currency (AU$’000s) 1H21 1H20 Change impacts Revenue 15,372 16,147 (5%) Gross margin 11,825 12,453 (5%) • Gross margin remained consistent at 77% Gross margin % 76.9% 77.1% • Employee expenses was consistent with prior year Employee expenses
Slide 12: Operating leverage supports increasing investment in R&D
Operating leverage supports increasing investment in R&D • Operating leverage in the cost base is once again evident as additional revenue drives EBITDA • Business growth and the recent capital raise allows continued investment • Ongoing focus on innovation and R&D to maximise future growth opportun
Slide 13: Cash-flow statement
Cash-flow statement • Operating cash receipts & payments are consistent with (AU$’000s) 1H21 1H20 Change the income statement and movement in working capital Receipts from customers 14,918 16,367 (9%) • Government grants relate to COVID, mainly JobKeeper Payments to suppliers & employees (12,473) (1
Slide 14: Balance sheet
Balance sheet • Cash and term deposits of $66.3m (AU$’000s) 31 Dec 20 30 Jun 20 Change ($) Cash 39,326 29,286 10,040 • Trade debtors up $0.8m consistent with the Term deposits 27,000 - 27,000 improved sales performance Trade and other receivables 2,692 1,849 843 Inventories 1,190 1,645 (455) • Inven
Slide 15: Outlook
OUTLOOK
Slide 16: Ongoing focus areas
Ongoing focus areas FY21 Objectives Actions • New products and subscription pricing model expected to drive more Drive designs wins during economic downturn design wins off the back of a record in 1H21 (#51) & prime the pump for economic recovery • Release of OEM Dante video products in 2H21 will al
Slide 17: Improved outlook for industry adoption
Improved outlook for industry adoption 50% increase in propensity to adopt AV over IP Readiness to embrace AVoiP? How do you expect your revenue to trend In 2021, do you expect to complete more, less, in 2021? or about the same amount of projects you did 4% Down More in 2020? 20% 12% Than 5% Down Le
Slide 18: Improved outlook as confidence returns
Improved outlook as confidence returns Audinate: • Confidence returning amongst OEMs, system integrators and end- Pioneering the users resulting in an improved overall industry outlook for CY21 future of AV • COVID related risks remain (including to global supply chains), abating with vaccine roll-o
Slide 19: Investment highlights
Investment highlights Attractive Financial Global Market Leader Profile Innovative Products • Dominant position as de- • Gross margins >75% facto standard in audio supported by strong IP • Broad intellectual property networking portfolio developed in • Consistent historical revenue Australia • 17x m
Slide 20: Questions
& Bey 48 & Ae i. > ) QUESTIONS Be 5 = S Say 2 .
Slide 21: Appendices
Appendices
Slide 22: Audinate is driving the transformation of the AV industry
Audinate is driving the transformation of the AV industry A$400m Audinate Total Addressable Market (‘TAM’)* • Networked digital connectivity is replacing traditional, point-to-point The TAM for digital audio networking is Audinate share of Audio Market analogue cabling in the AV industry A$400m annu
Slide 23: Accelerating OEM adoption: pipeline for growth
Accelerating OEM adoption: pipeline for growth OEM brands shipping Dante-enabled products 360 350 328 300 26% 270 292 250 CAGR growth in 228 218 221 200 OEMs 194 179 150 158 142 100 106 92 50 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 Note: per financial year Audinate has grown
Slide 24: Consistent growth in product ecosystem
Consistent growth in product ecosystem • Product ecosystem with over 3,000 Dante- enabled products and growing with over 518 3,008 OEMs • 43% CAGR in product ecosystem 2,804 • >17x number of products than the next digital audio networking technology 2,371 2,134 43% 1,751 1,639 1,292 CAGR in Dante 1,
Slide 25: Dante Audio and Adaptors
Dante Audio and Adaptors Dante Audio Brooklyn Broadway Ultimo Adaptors • Hardware based implementations for a range of product counts and price points • Transports uncompressed audio signals across standard computer networks Dante Adaptors • Connects legacy equipment to Dante (mostly analogue) • Add
Slide 26: Dante Controller
Dante Controller Dante Controller • Free system setup tool • Downloadable from Audinate homepage • Registration required • Makes virtual wires • > 250,000 downloads • Manages audio and video signals • Simple & easy to use • Standard industry matrix view • Training provided via Dante Certification •
Slide 27: Software Products
Software Products Dante Application Library (DAL) • Dante for PC/Mac applications • Simple way for software Ceiling Microphone developers to add Dante to their Software products enable: Dante IP Core (today) / products • Wider proliferation, thru lowered Dante Embedded Platform • Launched June 2019,
Slide 28: Dante Domain Manager
Dante Domain Manager Dante Domain Manager Complete Network Management System • Security • Usernames/passwords identify users • Roles control access to the system • Scalability • Create Dante systems spanning campus networks • Group Dante devices into logical managed systems • Visibility • Centralise
Slide 29: Important notice and disclaimer
Important notice and disclaimer Disclaimer Past performance The non-IFRS measures do not have any standard definition under IFRS and may be calculated differently To the maximum extent permitted by law, none of the Past performance information, including past share by other companies. Audinate Group
Audinate Group — Investor Presentation (February 2021) on 6ix