Filtronic Plc · LSE:FTC
Filtronic — H1 FY2024 Earnings Presentation
28 slides from Filtronic's earnings presentation, February 2024
Slide 1: Interim Results for Financial Year to 30 November 2023
Interim Results for Financial Year to 30 November 2023 Richard Gibbs, CEO Michael Tyerman, CFO
Slide 2: Agenda
Agenda • Executive Overview • Financial Report • Markets Strategy & Growth • LEO Space Opportunity • Summary 2
Slide 3: Enabling the future of RF Microwave and mmWave communications
Enabling the future of RF Microwave and mmWave communications Creating value for our stakeholders through technology leadership 3
Slide 4: Executive Overview
QO filtronic Innovation in RF technology Executive Overview filtronic.com
Slide 5: Business Overview
Business Overview Filtronic plc is a designer and manufacturer of advanced RF communications products serving four strategic markets: Aerospace & Defence Telecommunications & Space RF sub‐system design and manufacturing Radar and Battlefield Terrestrial Telecoms LEO Gateway Electronic Warfare Commun
Slide 6: Recent Business Highlights
Recent Business Highlights • Strong order inflow and good engagement with the technology leaders in our chosen markets • Agile engineering for rapid design, prototype and product development in LEO space market • Rapid scaling of in‐house manufacturing capacity to meet urgent LEO space market demand
Slide 7: Half Year Summary
Half Year Summary Revenue Operational Highlights £8.5m (1%) Revenue and profit expected to be ahead of market expectations for FY2024 and FY2025 Contract award of £3.4m in the period from the market leader in the high‐growth, low earth orbit (“LEO”) satellite communications equipment using Filtr
Slide 8: Financial Summary
QO filtronic Innovation in RF technology Financial Summary filtronic.com
Slide 9: Revenue: Increase of 1% vs FY2023
Revenue: Increase of 1% vs FY2023 Revenue from recent key contract wins not reflected in these results Key strategic objective: Group revenue £8.5m (2023: £8.4m) Continue to develop customer base outside of top three customers • Space market expected to see very strong uplift in H2 with recent contr
Slide 10: Investing for Growth
Investing for Growth Investment in business development and engineering to deliver growth • Sales mix weaker due to a higher concentration of 5G backhaul product ‐ COGS 8% higher on a revenue increase of 1%. • Investment in sales channels and engineering continued which increased the overhead cost b
Slide 11: Balance sheet
Balance sheet Nov‐23 May‐23 Nov‐22 Capital expenditure and Right of use assets £m £m £m • Reclassification of right of use assets following successful Goodwill and intangible assets 2.0 1.8 1.6 asset financing of £700k of capex investment from FY2023 Right of use assets 3.6 2.9 2.6 Property, plant a
Slide 12: Cash
Cash Nov‐23 May‐23 Nov‐22 £m £m £m Net cash generated from operating activities 1.8 1.1 (0.2) Net cash used in investing activities (0.5) (1.2) (0.4) Net cash used in financing activities 0.1 (0.4) (0.4) Movement in cash and cash equivalents 1.5 (0.4) (1.0) Currency exchange movement 0.0 0.0 0.0 Ope
Slide 13: Progress on Investment Initiatives
Progress on Investment Initiatives Business Activity Investments and Progress Against Objectives Sales and marketing • Additional BD hires planned in FY2024 targeting aerospace & defence and space market opportunities • Expanding the trade exhibition coverage. • Further investment in the CRM tool.
Slide 14: Key Financial Themes
Key Financial Themes Future investment • Aerospace and defence Engineering resource Target to maintain investment at 13% of revenue • Space Sales and marketing Incremental development of direct channels to market • Critical and building of indirect channels to market with a comms variable cost model
Slide 15: Revenue and EBITDA – outlook
Revenue and EBITDA – outlook • Number of aerospace & defence opportunities at key strategic targets. • Large contract wins at BAE and QinetiQ • Good engagement with further defence primes as the UK government encourages SME involvement. • A third contract win with DSTL for £400k. • Number of other s
Slide 16: Markets, Strategy & Growth
Markets, Strategy & Growth 16
Slide 17: Market Dynamics
Market Dynamics Telecommunications Space Telecoms Critical Telecommunications LEO Space Aerospace Defence Defence Critical Communications Infrastructure (X‐haul) HAPS/LEO (Radar / EW / ECM) Communications Infrastructure (X‐haul) (Gateway / Payload Links) (Comms / EW / ECM) (LMR / P25 Networks) Prima
Slide 18: Market Size and Opportunity
Market Size and Opportunity Telecommunications Space Telecoms Critical Confidential & Proprietary ‐ Filtronic plc‐ © Filtronic plc 2021. Telecommunications LEO Space Aerospace Defence Defence Critical Communications Infrastructure (X‐haul) HAPS/LEO (Radar / EW / ECM) Communications Infrastructure (X
Slide 19: LEO Space Market Summary
LEO Space Market Summary • LEO constellations are converging with 5G terrestrial telecom networks to provide low latency and global broadband connectivity • The Starlink Network supported by SpaceX is the current market leader in LEO Space infrastructure with 300 launches, 5,000 LEO satellites deplo
Slide 20: Primary LEO Space Constellations
Primary LEO Space Constellations Target Commercial in confidence Program Target Segments Constellation HQ Launch Partners Satellite OEM Bands Comments Size Consumer and Enterprise Ka, E, V/Q, Service live across, US, EU and SE Asia inc Australia and Star Link 30,000 Redmond, USA SpaceX SpaceX Intern
Slide 21: LEO Space - Satellite Payload Opportunity
LEO Space ‐ Satellite Payload Opportunity • Solving the cost of launch and deployment will be the key to unlocking the economic potential of LEO satellite constellations • The rate of network deployment will depend on launch capacity and the size and weight of satellite payload – SpaceX Starship and
Slide 22: LEO Space - Ground Station Opportunity
LEO Space ‐ Ground Station Opportunity • Ground stations provide high speed, low latency links to and from the LEO satellite as it passes overhead • Antenna servicing high user throughput require high performance solid state or TWTA amplifiers operating at mmWave frequencies • The current Starlink n
Slide 23: Aerospace & Defence Market
Aerospace & Defence Market TAM: £3.2b UK Defence Budget / approx. 2.3% GDP • £750m Electronic Warfare (EW) annual spend ‐ growing to £1.0b by 2027 • £2.4b funding to upgrade current aerospace radar system • £10b committed to next generation fast jet platform • SkyNet 5/6 investment – secure MoD GEO
Slide 24: Telecoms Infrastructure Market
Telecoms Infrastructure Market Unrelenting demand for 5G performance over the next 5 years with high frequency mmWave backhaul a key enabler for true 5G network deployment IP Ownership ‐ Owning the core mmIC semiconductor chip‐sets allows us to differentiate product offerings and offer enhanced prod
Slide 25: Summary
QO filtronic Innovation in RF technology Summary filtronic.com
Slide 26: Summary - Investment Proposition
Summary ‐ Investment Proposition • Filtronic ‐ build momentum and positioned for growth • Focused on four strategic verticals ‐ LEO space, aerospace, defence and terrestrial telecommunications • serving the market leader in each of our target markets ‐ adding value and commanding sustainable margins
Slide 27: Enabling the future of RF Microwave and mmWave communications
Enabling the future of RF Microwave and mmWave communications 27
Slide 28: Filtronic Disclaimer
Filtronic Disclaimer IMPORTANT NOTICE This presentation and any verbal information given (together, the “Presentation”), has been prepared by No representations or warranties of any kind are made by any person as to the accuracy of such the directors of Filtronic plc (the “Company”). The information