Velocity Composites Plc · LSE:VEL
Velocity Composites — H1 2020 Earnings Presentation
29 slides from Velocity Composites's earnings presentation, June 2020
Slide 1: Investor Presentation Half Year Results
JUNE 2020 Investor Presentation Half Year Results For the six months ended 30 April 2020 © Velocity Composites Plc - JUNE 2020
Slide 2: Introduction
Introduction © Velocity Composites Plc - JUNE 2020 • Highlights • COVID-19 – impact, actions and current status • Aerospace industry today • Business Development • Summary and outlook 2
Slide 3: Highlights
Highlights © Velocity Composites Plc - JUNE 2020 Boeing Approval Resilient business model, No contracts lost - reduced New Customer and swift management action revenue from existing Programmes Director NADCAP Merit achieved to mitigate impact of business appointed COVID-19 Robust liquidity position
Slide 4: COVID-19 impact, actions and current status
COVID-19 © Velocity Composites Plc - JUNE 2020 IMPACT ACTIONS TAKEN CURRENT STATUS • Immediate impact on airline • 60% of staff furloughed • Re-alignment of business to industry, following global • Cash conservation measures match customer demand, lockdown restrictions implemented whilst maintaining
Slide 5: Aerospace Industry Today
Aerospace Industry Today © Velocity Composites Plc - JUNE 2020 Velocity has a strong proposition in a growing market for composites (market share <1%), with an increased need for cost reductions • Significant contraction in production of new aircraft • Government financial support of the industry an
Slide 6: Business Development
Business Development © Velocity Composites Plc - JUNE 2020 • Proprietary technology, reducing customer manufacturing • Flexible Manufacturing Domes, delivering on-site or near- costs and enabling cheaper, lighter aircraft which to aid site supply solutions, with lower deployment costs transition to
Slide 7: Proprietary Technology Driving Growth
Proprietary Technology Driving Growth 3-AXIS DIGITAL 3D-2D-3D MATERIAL CUTTING DIGITAL DESIGN • Velocity’s powerful proprietary technology is at the core of its unique ADVANCED CLOUD proposition BASED MATERIAL NEST POLYMER VACUUM OPTIMISATION BAG FILM WELDING • Proprietary nesting system, which opti
Slide 8: The US Opportunity
The US Opportunity © Velocity Composites Plc - JUNE 2020 • Addressable market estimated to be £450m-£475m, with c.20 potential customers • Partnership approach key to unlocking larger opportunities - first strategic partnership with Incora (Wesco) progressing well • Atlanta region identified for fir
Slide 9: The European Opportunity
The European Opportunity © Velocity Composites Plc - JUNE 2020 • Addressable market estimated to be £120m-£130m, with c.25 potential customers • Continuing to work with Airbus and its supply chain partners • New experienced Customer Programmes Director (known to Airbus), focused on driving new busin
Slide 10: Financial Summary
Financial Summary © Velocity Composites Plc - JUNE 2020 • Revenue of £9.5m (H1 FY19: £12.2m) • Gross margin of 20.5% (H1 FY19: 20.9%) • Operating loss of £0.7m (H1 FY19: loss £0.4m after exceptional administrative expenses of £0.4m) • Adjusted EBITDA1 loss of £0.3m (H1 FY19: profit of £0.2m) • Cash
Slide 11: Summary
Summary • Resilient model and robust financial liquidity position, with sufficient resources to withstand likely recovery scenarios • Strong pipeline of opportunities – c.£30m • Strengthened business development team, and refined customer “pitch”, showcasing the business case for Velocity’s cost-sav
Slide 12: Outlook
Outlook “The trajectory of our planned growth has, inevitably, been impacted by COVID-19, but our opportunities are undiminished. Velocity’s customer proposition is more relevant than ever in the new trading environment and the expected growth period afterwards.” © Velocity Composites Plc - JUNE 202
Slide 13: Appendices
Appendices © Velocity Composites Plc - JUNE 2020 13
Slide 14: The Board
The Board © Velocity Composites Plc - JUNE 2020 • Radically strengthened Board since July 2019 • Quoted company experience and highly relevant skills Andy Beaden Jon Bridges Chairman CEO • Strengths in finance, aerospace, manufacturing technology, global procurement, supply chain management Rob Soen
Slide 15: Management Team
Management Team © Velocity Composites Plc - JUNE 2020 • Strengthened team, appointment of Customer Programmes Director • New CFO planned to start in August • Deep focus on aerospace composites Jon Bridges Darren Ingram • Bottom-up integrated business plan to deliver CEO Operations Director growth •
Slide 16: What do we do
What do we do © Velocity Composites Plc - JUNE 2020 Our mission is 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. • Velocit
Slide 17: 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 2020 17
Slide 18: Traditional vs Velocity's Manufacturing Process
Traditional vs Velocity’s Manufacturing Process The Traditional Supply Chain For Manufacturers NON-CORE BUSINESS TO MANUFACTURER Supply Material Clean Room Material Material Material Material Procurement Storage Cutting and Delivery Manufacturing Curing Machining NDT Assembly Collation MULTIPLE SUPP
Slide 19: How Velocity Adds Value
How Velocity Adds Value © Velocity Composites Plc - JUNE 2020 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 20: Customer Engagement Lifecycle
Customer Engagement Lifecycle Customer Engagement Lifecycle * © Velocity Composites Plc - JUNE 2020 © 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 21: Revenue by Customer
© Velocity Composites Plc - JUNE 2020 21 Revenue by Customer
Slide 22: Revenue by Aircraft Type
© Velocity Composites Plc - JUNE 2020 22 Revenue by Aircraft Type
Slide 23: Income Statement
Income Statement © Velocity Composites Plc - JUNE 2020 HY 2020 HY 2019 FY 2019 £000 £000 £000 Revenue 9,502 12,243 24,316 Cost of sales (7,558) (9,679) (19,047) • Revenue decline due to impact of COVID-19 and delay in 737 Max return to Gross profit 1,944 2,564 5,269 production Admin Costs (2,589) (2
Slide 24: Balance Sheet
Balance Sheet © Velocity Composites Plc - JUNE 2020 HY 2020 HY 2019 FY 2019 • Maintaining strong focus on cash collection overdue debtors £000 £000 £000 remain low Non current assets 3,394 1,480 1,379 • Stock increased temporarily to £3.4m (H1 FY19: £3.0m), as a Current assets result of immediate CO
Slide 25: Cash Flow
Cash Flow HY 2020 HY 2019 FY 2019 © Velocity Composites Plc - JUNE 2020 £000 £000 £000 Operating loss (618) (430) (636) Depreciation & Amortisation 326 219 449 Other Operating Cash flows 32 107 90 Decrease/(Increase) in receivables 1,225 1,088 1,579 • Inventories higher as a result Covid-19 impact D
Slide 26: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position As at 30 April 2020 © Velocity Composites Plc - JUNE 2020 HY 2020 HY 2019 FY 2019 £000 £000 £000 Non-current assets - Intangible assets 281 350 318 - Property, plant and equipment 3,113 1,130 1,061 Current assets - Inventories 3,361 3,048 3,177 - Trade &
Slide 27: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position As at 30 April 2020 © Velocity Composites Plc - JUNE 2020 HY 2020 HY 2019 FY 2019 £000 £000 £000 Non current liabilities - Net obligations under finance leases 1,252 224 169 Net assets 8,133 8,894 8,691 Equity attributable to equity holders - Share capita
Slide 28: 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 29: Revolutionising composite manufacturing
plc revolutionising composite manufacturing © Velocity Composites Plc - JAN 2020