Filtronic Plc · LSE:FTC
Filtronic — FY2022 Earnings Presentation
33 slides from Filtronic's earnings presentation, May 31, 2022
Slide 1: Full Year Results for Financial Year to 31 May 2022
Full Year Results for Financial Year to 31 May 2022 Richard Gibbs, CEO Michael Tyerman, CFO
Slide 2: Agenda
1. Executive Overview 2. Financial Review 3. Operational Review 4. Strategy & Growth Update 5. 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
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 Private Networks / Space / Infrastructure (X‐Haul) Defence Communications Adjacent Markets *HAPS/LEO • HAPS: High Altitude Pseudo Satellites
Slide 6: Full Year Highlights
Full Year Highlights Revenue Revenue growth of 10% and adjusted EBITDA growth of 58% to £2.8m despite £17.1m (+10%) Margin improvement from a stronger sales mix. headwinds from the macro environment. Adjusted EBITDA* Series of recent contract wins totalling £1.9m from new customers £2.8m (+58%
Slide 7: Financial Summary
Financial Summary filtronic.com © filtroni Innovation in RF technol logy
Slide 8: Revenue: 10% Growth FY2022 vs FY2021
Revenue: 10% Growth FY2022 vs FY2021 Group revenue £17.1m (2021: £15.6m) Key strategic objective: Develop customer base outside of top three customers 10% revenue growth over FY2021 despite headwinds from global electronic component shortages, geopolitical issues and inflation. • Aerospace & defence
Slide 9: Third Consecutive year of Adjusted EBITDA growth
Third Consecutive year of Adjusted EBITDA growth • Improved revenue coupled with the stronger sales mix from higher margin business within aerospace & defence and critical communications markets drove higher gross profit. • Engineering developments customer funded in the year. Focus on technology ro
Slide 10: Balance Sheet Highlights
Balance Sheet Highlights Capital expenditure needs still low Working capital Strong net cash position • £0.6m capex to accelerate NPI developments • Net working capital is £7.0m • Healthy cash position gives a platform to invest and service the opportunity pipeline. • Inventory increased by £0.4m to
Slide 11: Operational Summary
Operational Summary filtronic.com iltronic Ofiltr F technology
Slide 12: Business Development Highlights
Business Development Highlights • Significant 12 month orderbook for Morpheus Xhaul transceivers as 5G network deployment gathers pace • £0.7m production order from test equipment market following successful development programme and prototype delivery • £1.3m Battlefield radio communications equipm
Slide 13: Building Momentum
Building Momentum • Healthy cash position will allow us to invest in technology roadmap to enable the next phase of growth • UK Government investment in sovereign Space and Telecommunications Infrastructure (including Skynet and OneWeb) continues to build opportunities for RF Gateway links • UK defe
Slide 14: Strategy & Growth
Qfiltronic Innovation in RF technology Strategy & Growth filtronic.com
Slide 15: Market Dynamics
Market Dynamics Telecommunications Aerospace & Critical Adjacent Markets / Space Telecoms Infrastructure (Xhaul) Defence Communications Private Networks HAPS / LEO Primary Application E‐band mmWave backhaul RF / microwave hybrid TRM Subsystems for LMR secure Private Telecom links, Low Up‐link / Down
Slide 16: Aerospace & Defence
Aerospace & Defence • Filtronic has a unique combination of filter design, MMIC design, hybrid assembly and RF sub‐system design and manufacturing • Filtronic has established security accreditations and manufacturing processes that allow us to work on classified defence programs • The UK defence ind
Slide 17: Telecoms Infrastructure
Telecoms Infrastructure • Filtronic has a long history in the design and manufacturing of Xhaul communications equipment at E‐band frequencies • Owning the core MMIC chip‐sets allows Filtronic to differentiate product offerings and offer enhanced product performance • Filtronic has a technology and
Slide 18: LEO Space
LEO Space • Filtronic has successfully developed and deployed two separate E‐band HAPS solutions for large USA West Coast technology companies • Commercial LEO programs expect commercial cost structurers and proven IP and place high value on fast time to market • LEO constellations require multiple
Slide 19: Adjacent Market Applications
Adjacent Market Applications • Filtronic investment in core technology and manufacturing capability for Aerospace and Defence, Telecom and Critical Comms enables access to adjacent markets • Adjacent markets help to diversify customer base, justify future investment and fill available manufacturing
Slide 20: Strategy & Growth – markets / applications update
Strategy & Growth – markets / applications update Vertical Market & Application Progress in 1st year Target mid term FY2022 Update Target long term Aerospace • TRM + filter development • Tx Rx Module + filter • 8 separate filter programmes • Qualification of prototypes for contracts for MKII upgrade
Slide 21: Strategy & Growth – operations / capability update
Strategy & Growth – operations / capability update Business Function Progress in 1st year Target near term Interim Update Target long term Sales & • Build the roster of sales reps • Expand UK defence sales and • Added to North America rep • Bring Channel Management in North America business developm
Slide 22: Key Investments in FY2023
Key Investments in FY2023 Business Activity Key Investments Sales and marketing • Development of direct sales channels for Aerospace, Defence and Space with recruitment of senior business development team • Increased budget for tradeshow and direct marketing activity • Expansion of rep and distribut
Slide 23: Summary
Summary filtronic.com © filtronic Innovation in RF technology
Slide 24: Summary
Summary • Filtronic continues to evolve: • Focused on four strategic pathways (Xhaul telecoms, aerospace, defence and space) that position us in markets where we can differentiate, add value and command sustainable margins: • Strengthening the sales and engineering functions to open the aperture on
Slide 25: Filtronic 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
Slide 26: Appendices
Appendices © filtroni Innovation in RF technol logy filtronic.com
Slide 27: Income statement
Income statement FY2022 FY2021 £000 £000 Revenue from goods and services 16,580 14,375 Revenue from non‐recurring engineering (NRE) 472 1,181 Revenue 17,052 15,556 Material costs of goods sold 5,645 5,462 Staff costs 6,416 6,318 Depreciation, amortisation and impairment 1,223 1,195 Other operating i
Slide 28: Balance sheet
Balance sheet May‐22 May‐21 £m £m Goodwill and intangible assets 1.5 1.7 Right of use assets 2.3 2.3 Property, plant and equipment 0.7 1.0 Deferred tax 0.8 1.2 Non‐current assets 5.3 6.2 Inventory 2.6 2.2 Trade and other receivables 4.5 3.3 Cash and cash equivalents 4.0 2.9 Current Assets 11.1 8.4 T
Slide 29: Cash flow statement
Cash flow statement May‐22 May‐21 £m £m Net cash generated from operating activities 2.3 2.5 Net cash used in investing activities (0.2) (0.4) Net cash used in financing activities (1.0) (1.0) Movement in cash and cash equivalents 1.1 1.1 Currency exchange movement 0.0 (0.2) Opening cash and cash eq
Slide 30: Markets / RF Frequency Band
Markets / RF Frequency Band 30
Slide 31: Applications by Market – 1MHz to 175GHz
Applications by Market – 1MHz to 175GHz 31
Slide 32: Technology Roadmap – Telecoms / Space
Technology Roadmap – Telecoms / Space Space and Telecoms Technology Roadmap Multiple frequency bands Ka to D‐Band will be used to facilitate the convergence of terrestrial and non‐terrestrial telecom infrastructure 32
Slide 33: 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 33