Filtronic Plc · LSE:FTC
Filtronic — FY2021 Earnings Presentation
30 slides from Filtronic's earnings presentation, August 2021
Slide 1: Full Year Results for Financial Year to 31 May 2021
Full Year Results for Financial Year to 31 May 2021 Richard Gibbs, CEO Michael Tyerman, CFO
Slide 2: Agenda
1. Executive Overview 2. Financial Review 3. Operational Review 4. Strategy & Growth 5. Summary
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
Slide 4: Executive Overview
Qfiltronic Innovation in RF technology Executive Overview filtronic.com
Slide 5: Overview
Overview Filtronic plc is a designer and manufacturer of advanced RF communications products serving five core markets: Telecommunications Aerospace & Critical Transport & Space / Infrastructure (X‐Haul) Defence Communications Private Networks *HAPS/LEO • HAPS: High Altitude Pseudo Satellites • LEO:
Slide 6: Full Year Highlights
Full Year Highlights • A third year of improved profitability from our core business operations • Healthy cash position which will be used to drive further organic growth in our served markets • Maintained 24/7 operation throughout the trading period and continued to deliver products and services in
Slide 7: Financial Summary
Financial Summary filtronic.com © filtroni Innovation in RF technol logy
Slide 8: Revenue: 20% Growth in H2 vs H1
Revenue: 20% Growth in H2 vs H1 Revenue in line with market forecast Key strategic objective: Develop customer base outside of top three customers Group revenue £15.6m (2020: £17.2m) • Programme delays in H1. • Lower demand for critical communication products due to diversion of public funds to heal
Slide 9: Second Consecutive year of Adjusted EBITDA growth
Second Consecutive year of Adjusted EBITDA growth Adjusted EBITDA finished ahead of market forecast • Stronger sales mix due to less sales to the telecoms market where margins are less attractive. COGS 32% lower on 9% revenue reduction. • Machine optimisation from substantial capex investment in pri
Slide 10: Balance Sheet Highlights
Balance Sheet Highlights Reduced capital expenditure needs Strong cash generation Healthy cash position • £0.4m capex represents a significant YoY • £2.5m cash generation from operations. • £1.9m net cash when excluding IFRS16 reduction. • Solid EBITDA coupled with an unwind of property leases. • Lo
Slide 11: Operational Summary
Operational Summary filtronic.com iltronic Ofiltr F technology
Slide 12: Operational Highlights
Operational Highlights • £1.3m contract to develop and supply battlefield radio communications equipment through a new channel to market • Our “best‐in‐class” Tower Top Amplifier supplied to the market leading Original Equipment Manufacturer in critical communications saw its first significant reven
Slide 13: Building Momentum
Building Momentum • UK Government interest in sovereign Telecom Infrastructure, the OneWeb satellite constellation and the UK Space industry, continues to build momentum and opportunity • US Critical Comms market reacting to McCain Bill requirement to remove Chinese vendors from Gov contracts • Filt
Slide 14: Strategy & Growth
Qfiltronic Innovation in RF technology Strategy & Growth filtronic.com
Slide 15: Market Dynamics
Market Dynamics Telecommunications Aerospace and Critical Private Telecom Space Telecoms Infrastructure (X‐Haul) Defence Communications Networks HAPS/LEO Primary Application E‐band mmWave backhaul RF / microwave hybrid TRM Subsystems for LMR secure Private Telecom links, Low Up‐link / Down‐link ‐ mm
Slide 16: Strategy & Growth – Markets / Applications
Strategy & Growth – Markets / Applications Vertical Market & Application Progress in 1st year Target mid term Target long term Aerospace • TRM + filter development • Tx Rx Module + filter • Qualification of prototypes for contracts for MKII upgrade. prototype for MKII upgrade. MKII radar upgrade. Ph
Slide 17: Strategy & Growth – Operations / Capability
Strategy & Growth – Operations / Capability Business Function Progress in 1st year Target near term Target long term Sales & • Complete the roster of sales • Expand UK defence sales and • Bring Channel Management reps in North America business development team skills into the company Marketing • Dev
Slide 18: Key Investments in FY2022
Key Investments in FY2022 Business Activity Key Investments Sales and marketing • Development of direct sales channels with senior hire • Expansion of rep network in the USA and Europe • Further development of the CRM system Engineering (R&D) • W‐band technology (exploring grant funding channels to
Slide 19: Summary
Summary filtronic.com © filtronic Innovation in RF technology
Slide 20: Summary
Summary • Filtronic is changing • Strategic plan focused on markets where we can differentiate, add value and command sustainable margins • Updating the brand based on a clear understanding of our values and customer’s expectations • Strengthening the sales function to widen the aperture on new busi
Slide 21: Appendices
Appendices © filtroni Innovation in RF technol logy filtronic.com
Slide 22: Income statement – continuing operations
Income statement – continuing operations 2021 2020 £000 £000 Revenue from goods and services 14,375 16,954 Revenue from non‐recurring engineering (NRE) 1,181 227 Revenue 15,556 17,181 Material costs of goods sold 5,462 8,079 Staff costs 6,318 6,536 Depreciation, amortisation and impairment 1,195 784
Slide 23: Balance sheet
Balance sheet May‐21 May‐20 £m £m Goodwill and intangible assets 1.7 1.9 Right of use assets 2.3 2.7 Property, plant and equipment 1.0 1.1 Deferred tax 1.2 1.9 Non‐current assets 6.2 7.6 Inventory 2.2 2.9 Trade and other receivables 3.3 4.9 Cash and cash equivalents 2.9 2.0 Current Assets 8.4 9.8 Tr
Slide 24: Cash flow statement
Cash flow statement May‐21 May‐20 £m £m Net cash generated from/(used in) operating activities 2.5 (2.6) Net cash (used in)/generated from investing activities (0.4) 2.4 Net cash used in financing activities (1.0) (0.4) Movement in cash and cash equivalents 1.1 (0.6) Currency exchange movement (0.2)
Slide 25: Telecommunication Infrastructure
Telecommunication Infrastructure • There will be unrelenting demand for 5G performance over the next 5 years and high frequency E‐band microwave backhaul will be a key enabler for network deployment • Significant parts of the world are expected to grant new E‐band licence in the next 3 years • Futur
Slide 26: Aerospace
Aerospace • The UK is an acknowledged provider of best‐in‐class ASEA radar technology with deployment in sovereign aircraft platforms and significant export sales • The UK government has increased defence spending budgets by £1.6b over four years in the November 2020 Defence Spending Review • The Mo
Slide 27: Critical Communications / Defence
Critical Communications / Defence • Twenty years serving the LMR P25 / TETRA Public Safety communication market with filter, combiners, amplifiers and subsystem solutions across a wide (VHF – 900MHz) frequency spectrum has established Filtronic as a trusted supplier of critical communications equipm
Slide 28: Space – HAPS / LEO
Space – HAPS / LEO • A number of technology companies and industry consortiums have shown interest in the opportunities associated with the convergence of satellite and terrestrial telecom networks and the deployment of LEO satellite constellations providing ubiquitous network coverage • The UK purc
Slide 29: Voice of Customer / Branding
Voice of Customer / Branding • Detailed VoC (Voice of Customer) exercise completed in November / December 2020. This has driven a comprehensive reshaping of the way we present the Filtronic brand • Recasting the company Vision, Mission and Purpose statements together with a more considered analysis
Slide 30: Filtronic offices and contact details
Q filtronic Innovation in RF technology UK Office NETPark Plexus 1, Thomas Wright Way, Sedgefield, County Durham, TS21 3FD T: +44 1740 618 800 E: [email protected] USA Office 700 Marvel Road, Salisbury, Maryland, 21801 USA T: +1 410 202 8811 E: [email protected] filtronic.com