Filtronic Plc · LSE:FTC
Filtronic — FY2024 Earnings Presentation
34 slides from Filtronic's earnings presentation, September 2024
Slide 1: Results for Financial Year to 31 May 2024
Results for Financial Year to 31 May 2024 Nat Edington, CEO Michael Tyerman, CFO
Slide 2: 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
Slide 3: Agenda
Agenda • Company Overview • Financial Summary • Focus Markets & Growth Strategy • Summary 3
Slide 4: Enabling the future of RF Microwave and mmWave communications
Enabling the future of RF Microwave and mmWave communications • High bandwidth, high speed, secure and low latency data transmission 4
Slide 5: Experienced Board
Experienced Board CEO CFO Non‐Exec Chairman Non‐Exec Director Non‐Exec Director Nat Edington Michael Tyerman Jonathan Neale Pete Magowan John Behrendt Nat Edington was appointed Michael Tyerman was Jonathan Neale was Peter (Pete) Magowan has John Behrendt was Chief Executive Officer in appointed Chi
Slide 6: Filtronic
Filtronic • > 40 years rich history • New Filtronic is a high growth, communications technology leader in fast growing markets • World class agile engineering and manufacturing capabilities in the UK and USA • Technology roadmap that ensures we remain at the very leading edge of RF communications fo
Slide 7: FY2024 Summary
FY2024 Summary Revenue Operational Highlights £25.4m (56%) • Signed a 5‐year Strategic Partnership with SpaceX, for the supply of Cerus 32 solid state power amplifier (“SSPA”) products at multiple frequency bands. • Contract award of £3.2m from the European Space Agency to develop a series of mmWave
Slide 8: RF solutions across the spectrum
RF solutions across the spectrum Confidential & Proprietary ‐ Filtronic plc‐ © Filtronic plc 2021.
Slide 9: Where we lead
Where we lead Comprehensive RF design and manufacturing, mastering even the most complex E/W and D‐band frequencies. Across these markets Space Communications Telecommunications Infrastructure Aerospace & Defence Critical Communications 9
Slide 10: Growth markets
Growth markets Connecting a converged network RF, Electronic Warfare & AESA Radar • Low Earth Orbit (LEO) and High Altitude Pseudo Satellites (HAPS) • Unmanned & counter unmanned systems applications • Electronic countermeasures • Commercial and Military solutions • Space communications solutions •
Slide 11: Global presence
Global presence Manchester, UK Sedgefield, UK Leeds, UK SatCom design centre mmWave design, RF design and assembly for • 2,300 ft2 Total size manufacture and test Aerospace & Defence and • 1,200 ft2 Engineering • 17,000 ft2 Total size Critical Communications • 1,100 ft2 of ESD safe • 2,000 ft2 Clean
Slide 12: Strategic Partnership - SpaceX
Strategic Partnership ‐ SpaceX • Strategic Partnership announced 24 April 2024 • Chosen due to world leading performance in mmWave RF solutions • Initial supply of E‐band Solid State Power Amplifiers (SSPA) for ground stations • Development work started, and in discussions on other bands • $29M orde
Slide 13: Financial Summary
QO filtronic Innovation in RF technology Financial Summary filtronic.com
Slide 14: Revenue: Increase of 56% vs FY2024
Revenue: Increase of 56% vs FY2024 Group revenue £25.4m (2023: £16.3m) • Space market saw a strong uplift with contract wins from SpaceX supported by Strategic Partnership. • Aerospace & defence projects impacted by a project hiatus which is a mere timing issue, but new contract wins give high confi
Slide 15: Investing for Growth
Investing for Growth Investment in engineering and business development to deliver growth • Increased trading driving profit growth with contribution margin flat year‐on‐year ‐ COGS 56% higher on revenue increase of 56%. • Investment in sales channels and engineering continued which increased the ov
Slide 16: Balance sheet
Balance sheet May‐24 May‐23 Capitalised development costs £m £m • Execution of the strategic plan and technology roadmap have Goodwill and intangible assets 2.3 1.8 led to capitalisation of development costs in line with IAS38. Right of use assets 3.7 2.9 • W‐band chipset development Property, plant
Slide 17: Cash
Cash May‐24 May‐23 £m £m Net cash generated from operating activities 6.3 1.0 Net cash used in investing activities (1.5) (1.5) Net cash used in financing activities (0.2) (0.9) Movement in cash and cash equivalents 4.6 (1.4) Currency exchange movement 0.0 0.0 Opening cash and cash equivalents 2.6 4
Slide 18: Quality of earnings
Key Financial Themes Investment • Aerospace and defence EBITDA margin EBITDA margin can be driven to the 20%‐25% range in the near‐ • Space term by continuing to leverage the operating cost base. • Critical Engineering investment Target to maintain investment at 13% of revenue. FY2024 comms – capaci
Slide 19: Revenue and EBITDA - outlook
Revenue and EBITDA – outlook • LEO space market momentum building: • Contract wins of ~£23m secured with SpaceX since signing our Strategic Partnership. • Key players and well‐funded disruptors generating a healthy pipeline of opportunity. • Recent contract win with the European Space Agency for £3.
Slide 20: Focus Markets & Growth Strategy
Focus Markets & Growth Strategy 20
Slide 21: 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 22: Space Market
Space Market TAM: $3B the RF communications element of 60,000 LEO satellites • LEO constellations are converging with 5G terrestrial telecom launched in next 5 years networks to provide low latency and global broadband connectivity • Core IP Reuse ‐ the fast‐growing LEO market represents a significa
Slide 23: Primary LEO Space Constellations
Primary LEO Space Constellations Target Commercial in confidence Programme Target Segments Constellation HQ Launch Partners Satellite OEM Bands Comments Size Consumer and Enterprise Ka, E, Service live across, US, EU and SE Asia inc Australia and StarLink 30,000 Redmond, USA SpaceX SpaceX Internet /
Slide 24: LEO Space - Satellite Payload Opportunity
LEO Space ‐ Satellite Payload Opportunity • Solving the cost of launch and deployment has been the key to unlocking the economic potential of LEO satellite constellations • The speed of network deployment depends on launch capacity and the size and weight of satellite payload – SpaceX Starship is Co
Slide 25: LEO Space - Ground Station Opportunity
LEO Space ‐ Ground Station Opportunity • Ground stations or Gateway Links provide high speed, low latency links to and from the LEO satellite as it passes overhead • Uplinks require high performance amplification at mmWave frequencies – currently ~400 (5%) antenna are E‐band enabled • The current St
Slide 26: 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 UK Typhoon fleet radar system • £10b committed to Tempest a next generation fast jet platform • SkyNet 5/6 investment
Slide 27: Re-energised Growth Strategy
Re‐energised Growth Strategy • Growth Markets focus – Space and Aerospace & Defence, while continuing to support other markets Market Focus • Moving up the value chain – expanding core technology into the digital RF domain, and subsystems offering Accelerated • Enhancing our UK manufacturing capabil
Slide 28: Summary
QO filtronic Innovation in RF technology Summary filtronic.com
Slide 29: Investment Proposition
Investment Proposition • On a significant growth trajectory • Focused strategy designed for major revenue growth and shareholder value • Significant and growing orderbook and opportunity pipeline for FY2025 and beyond • Controlled investment in leadership, business development, engineering • Global
Slide 30: Appendices
Ofiltronic Appendices filtronic.com VAVAVAVAN ee 30
Slide 31: A track record of innovation
A track record of innovation Relocate to NETPark in Sedgefield, County Durham 2023 Launched Taurus, Hades X2 and Morpheus X2 31
Slide 32: Filtronic Timeline
Filtronic Timeline <<< 13 Years >>> <<< 24 Years >>> <<< 9 Years AIM listed >>> 20 years LSE listed
Slide 33: The EM Spectrum - RF Frequencies
The EM Spectrum – RF Frequencies Confidential & Proprietary ‐ Filtronic plc‐ © Filtronic plc 2021. • Frequency / spectrum allocation is coordinated by a United Nations body the International Telecommunication Union (ITU) and local regulating agencies (ie: FCC and OFCOM) • Terrestrial telecommunicati
Slide 34: 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.