Velocity Composites Plc · LSE:VEL
Velocity Composites — H1 FY2021 Earnings Presentation
20 slides from Velocity Composites's earnings presentation, Jun 17, 2021
Slide 1: Investor Presentation Half Year Results
Investor Presentation Half Year Results For the six months ended 30th April 2021 © Velocity Composites Plc - JUNE 2021
Slide 2: Contents
Contents © Velocity Composites Plc - JUNE 2021 • Key highlights • Appendices: • Market outlook • What we do • Business development update • H1 FY21 Revenue by Aircraft type • Financial summary • Financial statements • Summary 2
Slide 3: Key Highlights
Key Highlights • Existing sales – Successful renewal of 3 largest customers • Diversification – F35 approval and sales with ongoing discussions with large OEM • Technology focussed flexible operating model progressing • Margin improvements – Internal efficiency and operational performance • Strong p
Slide 4: Market Outlook
Market Outlook • Acting with cautious optimism - market uncertainty until air travel resumes • Airbus has started to increase production rates from 2022 • Expect recoveries to differ by platform, but 2-5 years to recover to long term trends • Velocity is well placed: Further reduced break even posit
Slide 5: Market Outlook (cont'd)
Market Outlook (cont’d) INDUSTRY TRENDS & EXPECTATION VC OPPORTUNITIES • Structural & Consumable kits and processing aids for engine & • Early signs of recovery by 2023 wing structures • Anticipating ~33% total aerospace market share by 2030 • Revenues live on A320, A220 & C919 platforms Civil • Dom
Slide 6: Business Model Development
Business Model Development • Model has been developed to allow customers to obtain the benefits of Velocity’s technology without having the single option of full outsource • High demand for the benefits of the technology package (lean, efficient, high quality, data driven continuous improvement) • T
Slide 7: Financial Summary
Financial Summary © Velocity Composites Plc - JUNE 2021 HY 2021 HY 2020 • Revenue of £4.4m (H1 FY20: £9.5m) as the £000 £000 suppressed Covid-19 build rates impact Revenue 4,439 9,502 • Gross margin of 25.1% (H1 FY20: 20.5%) Cost of sales (3,323) (7,558) driven by successful technology improvements
Slide 8: Summary
Summary © Velocity Composites Plc - JUNE 2021 • Underlying business re-contracted for at least the next 3 years • Technology developments and operational changes have significantly improved the breakeven point to below £12m • Strong operational gearing ready for industry recovery • Liquidity remains
Slide 9: Appendices
Appendices © Velocity Composites Plc - JUNE 2021 9
Slide 10: Velocity - What Do We Do?
Velocity - What Do We Do? © Velocity Composites Plc - JUNE 2021 • Mission: To revolutionise aerospace and high value composites manufacturing by enabling our customers to reduce waste/costs whilst meeting increased global demand by creating a lean and scalable supply chain in a more-for-less era • V
Slide 11: Velocity Process
Velocity Process Raw Material Structural Product Vacuum Bag Product Finished Part (1m diameter) Saving > 10% material and > 20% time © Velocity Composites Plc - JUNE 2021 11
Slide 12: The Composites Manufacturing Process
The Composites Manufacturing Process The Traditional Supply Chain For Manufacturers NON-CORE BUSINESS TO MANUFACTURER Supply Material Material Material Material Clean Room Material Procurement Storage Cutting and Delivery Manufacturing Curing Machining NDT Assembly Collation MULTIPLE SUPPLIERS MANUF
Slide 13: How Velocity Adds Value
How Velocity Adds Value © Velocity Composites Plc - JUNE 2021 Savings made by customers using Velocity • Material spend reduced by 10 - 53% due to smarter nesting • Material increase in productivity due to reduced production times • Increase in productive cleanroom floorspace by removing associated
Slide 14: Customer Engagement Lifecycle
Customer Engagement Lifecycle Customer Engagement Lifecycle * © Velocity Composites Plc - JUNE 2021 © Velocity Composites Plc - JUNE 2019 INITIAL CUSTOMER BID RESPONSE ENGAGEMENT plc GATE 1 GATE 2 GATE 3 • Visits Preliminary Bid Bid / No Bid Solution Submission • Presentations Development • Obtain R
Slide 15: Velocity FY20 Revenue by Aircraft Type
Velocity FY20 Revenue by Aircraft Type © Velocity Composites Plc - JUNE 2021 15
Slide 16: Financial Highlights
Financial Highlights © Velocity Composites Plc - JUNE 2021 HY 2021 HY 2020 FY 2020 £000 £000 £000 Revenue 4,439 9,502 13,561 Cost of sales (3,323) (7,558) (11,237) • Revenue decline due to impact of COVID-19 on underlying production rates Gross profit 1,116 1,944 2,324 • Gross margin has increased b
Slide 17: Full Balance Sheet
Full Balance Sheet © Velocity Composites Plc - JUNE 2021 HY 2021 HY 2020 FY 2020 • Reduction in Non-current assets reflecting £000 £000 £000 temporary capex freeze over period. Prior Non-current assets 2,683 3,394 3,017 year spend of £0.7m in relation to the new Burnley site and R&D centre completio
Slide 18: Cashflow Statement
Cashflow Statement HY 2021 HY 2020 FY 2020 © Velocity Composites Plc - JUNE 2021 £000 £000 £000 Operating loss (1,059) (618) (3,130) Depreciation & amortisation 375 326 691 Other operating cash flows 114 32 173 (Increase)/decrease in receivables (13) 1,225 1,685 Decrease/(increase) in inventories 1,
Slide 19: Velocity Disclaimer
Velocity Disclaimer IMPORTANT NOTICE This presentation and any verbal information given (together, the “Presentation”), has been prepared by the Nothing in the Presentation is, or should be relied on as, a promise or representation as to the future. The directors of Velocity Composites plc (the “Com
Slide 20: Revolutionising composite manufacturing
plc revolutionising composite manufacturing © Velocity Composites Plc - JUNE 2021
Velocity Composites — H1 FY2021 Earnings Presentation on 6ix