Filtronic Plc · LSE:FTC
Filtronic — FY2023 Earnings Presentation
31 slides from Filtronic's earnings presentation, May 31, 2023
Slide 1: Full Year Results for Financial Year to 31st May 2023
Full Year Results for Financial Year to 31st May 2023 Richard Gibbs, CEO Michael Tyerman, CFO
Slide 2: 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 2
Slide 3: Agenda
1. Executive Overview 2. Financial Review 3. Operational Review 4. Strategy & Growth Update 5. Summary 3
Slide 4: Executive Overview
QO filtronic 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 four strategic markets: Aerospace & Defence Telecommunications & Space RF sub‐system design and manufacturing Radar and Battlefield Terrestrial Telecoms LEO Gateway Electronic Warfare Communications
Slide 6: Full Year Highlights
Full Year Highlights Revenue £16.3m (‐5%) Revenue impacted by global semiconductor component shortages. Strong order intake from our lead telecommunications infrastructure customer to Adjusted EBITDA* ramp up supply ready for India deployment. £1.3m (‐55%) First contract win with market leading
Slide 7: Financial Summary
QO filtronic novation in RF technology Financial Summary filtronic.com
Slide 8: Revenue: Reduction of 5% against FY2022
Revenue: Reduction of 5% against FY2022 Added maiden Low Earth Orbit client which reduces customer concentration Key strategic objective: Group revenue £16.3m (2022: £17.1m) Continue to develop customer base outside of top three customers • 5G rollouts generating strong demand despite component shor
Slide 9: Continued Profitability and EBITDA Generation
Continued Profitability and EBITDA Generation Profitability also impacted by supply chain issues • Weaker sales mix with a higher concentration of 5G backhaul product ‐ COGS 6% higher despite revenue decrease of 5%. • Investment in sales channels and engineering ‘bench strength’ increased the overhe
Slide 10: Balance sheet
Balance sheet May‐23 May‐22 Capital expenditure £m £m • Large capex spend in Q4 FY2023 for plastic encapsulation Goodwill and intangible assets 1.8 1.5 equipment and key engineering test equipment to support Right of use assets 2.9 2.3 aerospace and defence work and space applications. Property, pla
Slide 11: Cash
Cash May‐23 May‐22 £m £m Net cash generated from operating activities 1.0 2.3 Net cash used in investing activities (1.5) (0.2) Net cash used in financing activities (0.9) (1.0) Movement in cash and cash equivalents (1.4) 1.1 Currency exchange movement 0.0 0.0 Opening cash and cash equivalents 4.0 2
Slide 12: Revenue and EBITDA – outlook
Revenue and EBITDA – outlook • Number of aerospace & defence opportunities at key strategic targets. • Looking to grow opportunities outside of our lead customer. • Number of smaller contract wins in period. • LEO space market momentum building: • Key players and well‐funded disruptors generating a
Slide 13: Operational Summary
QO filtronic Innovation in RF technology Operational Summary filtronic.com
Slide 14: Recent Business Highlights
Recent Business Highlights • Delivered (£2.3m) Tarsus E‐band SSPA modules to a global provider of low earth orbit (“LEO”) satellites for E‐band right‐of‐use trials • ESA ARTES contract (€3.7m) for the development of multifrequency transceiver technology for satellite payload feeder links • DTEP (Def
Slide 15: Building Momentum – Aerospace & Defence
Building Momentum – Aerospace & Defence The Aerospace & Defence landscape has a wide variety of RF sensor and RF communication applications and a need for sovereign capability UK Aerospace primes making strategic decisions regarding technology and manufacturing partners • Visibility of repeat export
Slide 16: Building Momentum – Telecom & Space
Building Momentum – Telecom & Space 5G terrestrial telecom infrastructure build and commercial LEO space investment build opportunity for Filtronic technology: Global 5G deployment continues – but slowed by economic headwinds • Consumer demand drives a migration to higher frequency bands in telecom
Slide 17: Strategy & Growth
QO filtronic novation in RF technology Strategy & Growth filtronic.com
Slide 18: Market Dynamics
Market Dynamics Telecommunications Space Telecoms Critical Telecommunications LEO Space Aerospace Defence Defence Critical Communications Infrastructure (X‐haul) HAPS/LEO (Radar and EW) Communications Infrastructure (X‐haul) (Gateway Links) (EW Cyber and ECM) (LMR Networks) Primary • E‐band backhaul
Slide 19: Key Investments in FY2024
Key Investments in FY2024 Business Activity Investments and Progress Against Objectives Sales and marketing • Additional BD hire planned in H1 FY2024 targeting aerospace & defence and space market opportunities. • Expanding the trade exhibition coverage. • Further investment in the CRM tool. • New r
Slide 20: Summary
QO filtronic Innovation in RF technology Summary filtronic.com 20
Slide 21: Summary
Summary • Filtronic continues to build momentum • Focused on four strategic verticals ‐ terrestrial telecoms, aerospace & defence and LEO space • Well positioned in markets where we can differentiate, add value and command sustainable margins • Strengthening sales and engineering to open the apertur
Slide 22: 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 22
Slide 23: Appendices
Ofiltronic Appendices filtronic.com VAVAVAVAN ee 23
Slide 24: Income statement
Income statement FY2023 FY2022 £000 £000 Revenue from goods and services 15,362 16,580 Revenue from non‐recurring engineering (NRE) 906 472 Revenue 16,268 17,052 Material costs of goods sold 5,992 5,645 Staff costs 6,859 6,416 Depreciation, amortisation and impairment 1,033 1,223 Other operating inc
Slide 25: Telecoms Infrastructure
Telecoms Infrastructure • Strong demand for 5G performance over the next 5 years and high frequency E‐band backhaul will be a key enabler for true 5G network deployment • Filtronic has a long history in the design and manufacturing of Xhaul communications equipment at Q/V and E‐band frequencies • Ow
Slide 26: Aerospace & Defence
Aerospace & Defence • UK Gov defence spending 2.5% of GDP £32b p/a (EW operational spend = £629m p/a) • The MoD has announced £2.4b funding to develop the next generation ECRS radar system for upgrade of the current UK Typhoon fleet • The UK fully committed to Tempest a next generation fast jet plat
Slide 27: HAPS and LEO Space
HAPS and LEO Space • Tech billionaires driving the rapid convergence of satellite and terrestrial telecom networks to provide global ubiquitous network coverage • The global race to build infrastructure and secure capacity is accelerating UK and EU investment strategy in LEO communications • Filtron
Slide 28: Adjacent Market Applications
Adjacent Market Applications • Filtronic investment in core semiconductor technology coupled with a hybrid manufacturing capability for Aerospace and Defence, Telecom and Critical Communications enables access to adjacent high reliability markets • Selectively pursuing adjacent markets helps to dive
Slide 29: Strategy & Growth – markets / applications update
Strategy & Growth – markets / applications update Vertical Market & Application Progress in 1st year Target mid term Current Update Next Steps Aerospace • TRM + filter development • Tx Rx Module + filter • Investments made in QFN • Qualification of prototypes for contracts for MKII upgrade. prototyp
Slide 30: Strategy & Growth – operations / capability update
Strategy & Growth – operations / capability update Business Function Progress in 1st year Target near term Current Update Target long term Sales & • Build the roster of sales reps • Expand UK defence sales and • Full BD team driving strong • Complete representative in North America business developm
Slide 31: Contact
QM filtronic Innovation in RF technology VW UK Office USA Office NETPark Plexus 1, Thomas Wright Way, 700 Marvel Road, Salisbury, Sedgefield, County Durham, TS21 3FD Maryland, 21801 USA T: +44 1740 618 800 T: +1 410 202 8811 E: [email protected] E: [email protected] filtronic.com