DTI GROUP LTD DTI GROUP LTD Interim Results Presentation 26 February Interim Results Presentation [_] February 2017

Transcription

1 DTI GROUP LTD 2019 Interim Results Presentation 26 February 2019 DTI GROUP LTD 2017 Interim Results Presentation [_] February 2017 PETER TAZEWELL Chief Executive Officer 1

2 Overview H1 FY19 Financial Operating Outlook Revenue of $13.8 million, 68 per cent increase on FY18 Positive EBITDA of $0.3 million reflects improved product margins, benefit of cost reductions and positive R&D claim adjustment $3.0 million negative cash flow from Operations due to increased working capital supporting higher revenue New contracts awarded from Metro Trains Melbourne and Broward County (USA) Ongoing strong interest in DTI PIS systems Schedules deliveries for DART (Dallas), Sydney Metro and SFMTA (San Francisco) Contracted order book 1 of $37.7 million at 31 Dec 2018 Opportunity Pipeline stable at $374.7 million with potential for ~$38 million to be awarded within six months Strong public transport investment profile in all key markets 2 1 Includes LoI/LoA and near term awards

3 Highlights Record revenue performance and positive EBITDA Maintained strong Contracted Order Book 1 to support revenue Maintained scheduled deliveries to critical projects (Sydney Metro, DART [Dallas], SFMTA [San Francisco]) Secured new maintenance contract for Broward County (Florida, USA) IRIS and ISO accreditation achieved Granted US Patent for pantograph analytics Continued strong support for DTI product suite Tendering pipeline with rail OEMs - $213 million 3 1 Includes LoI/LoA and near term awards

4 H1 FY19 FINANCIAL RESULTS 4

5 Key Financial Metrics H1 FY19 H1 FY18 Revenue $m EBITDA $m 0.3 (6.0) Underlying EBITDA $m 0.05 (3.3) Net profit/(loss) after tax $m (0.23) (5.3) Earnings per share (0.001) (4.28) Dividends per share Nil Nil Gross debt $m Net cash/(debt) $m Net working capital $m Significant revenue increase from pcp Positive EBITDA Improved Gross Margin Nil term debt Net trade working capital increased to support increased revenue Headcount stable Operating cash flow $m (3.0) (0.9) Employees FTE Contracted Order Book $m

6 Balance sheet $m H1 FY19 FY18 Cash Trade receivables Other receivables Inventory Property, plant & equip Intangible assets Other assets Total Assets Trade payables Financial liabilities Provisions Deferred Tax Total Liabilities Total Equity Net cash/(debt) Net trade working capital Increased working capital requirement driven by rail projects and increased revenue Negligible bank debt 6 6

7 Revenue $m Revenue Split $m Revenue Growth FY16 FY17 FY18 FY19 H1 H2 0 Maintenance Recurring Project H1 FY18 H1 FY19 Strong revenue increase from pcp Weighting to H2 will be less pronounced Continued increase in Maintenance and Project revenues Decline in Recurring revenue attributed to completion of US bus programme Project revenue continues to drive overall growth 7

8 Gross Margin $m Revenue and Gross Margin H1 FY17 H2 FY17 H1 FY18 H2 FY18 H1 FY % 42.0% 32.0% 22.0% 12.0% 2.0% -8.0% Revenue Gross Margin Gross margin steadily improving over past three reporting periods Attributed to increased focus on product margin, reduced overhead costs and increased maintenance revenue 8

9 Technology and R&D Spend DTI has invested in R&D to create industry-leading product solutions for the global mass transit market R&D cycle peaked in FY17 with the development of new products to meet the standards of the rail sector R&D normalised at ~$2 million per annum R&D Marketing Prospects Contracts Recurring Revenue Year 0 1 Year 0 1 Years 0 2 Years 1 3 Years 5+ DTI is focused on building recurring revenue from contracted work and on-ground positioning with clients 9

10 Cash flow from Operations $'000s (2,975) (3,971) (2,000) (4,000) 10

11 11 BUSINESS OVERVIEW

12 What we do... DTI designs, develops and installs world-leading surveillance, video analytics, and passenger information systems technology and services to the global mass transit industry Utilising proprietary software with leading edge hardware (hybrid-recorders, commuter communications systems and back office management solutions), DTI provides data solutions to transit operators DTI seeks to leverage its engineering capabilities to provide transit operators with increased functionality, products and services 12

13 Share Price Volume (000s) Company Snapshot Share Price $0.25 $0.20 $0.15 $0.10 $0.05 $ Corporate Details ASX Code DTI Closing Share Price (20 February 2019) $0.04 Market Capitalisation $8.6 million Issued Shares 215,341,850 Major Shareholders Chris Morris (& Associates) 32.6% UIL Limited (& Associates) 25.3% Board & Management 6.6% Other Institutional/HNW 20.6% Board and Management Greg Purdy Peter Tazewell Steve Gallagher Neil Goodey Andrew Lewis Chairperson Managing Director Non-Executive Director Non-Executive Director Non-Executive Director 13

14 DTI s Business Model Opportunity for exponential growth driven by on-ground contracted positioning and recurring revenue Solution Development (R&D) Business Development & Marketing Prospects Contracts Recurring Revenue Maintain marketleading position by continued investment in product development and product expansion, eg passenger communication solutions, pantograph with leading software solutions Product development supported by committed investment in business development and marketing Grow prospects by investing in business development and marketing Prospects converted to contracts by offering customised advanced surveillance solutions Ongoing orders from customers for new vehicle procurements; maintenance agreements; DTI solutions specified in long-term procurements; framework agreements with major suppliers 14

15 Key Drivers R&D Investment Ongoing R&D investment critical to development of new products and application of new technologies Relationship with OEMs Strengthen relationships with OEMs to allow DTI to participate in the design and implementation phase of project tenders Public Safety Increased awareness of public safety by all stakeholders as terrorism remains a critical global threat Operator Efficiencies Mass transit operators seeking efficiencies from operations to drive bottom line profitability and improvements in passenger experience Maintenance & Support Build on ground strategic relationships with global integrators to allow DTI to develop and service maintenance and recurring revenue streams Growing Global Demand Expand revenue streams from existing customers by leveraging DTI s technology and support from existing contracted transit locations

16 Operational Update Americas EMEA Australasia Sales of $6.2 million, up 126% from $2.8 million in prior period Key transit operators, including SFMTA, SamTrans, Long Beach Transit and Broward County New Maintenance relationship for Broward County Pipeline of $74 million, weighted 95% to rail Successful completion of Loan Agreement (Trial) for major US transit operator 16 Sales of $1.5 million, up 54.1% from $1.0 million in prior period Strong interest in DTI solutions from UK rail Continued revenue growth from bus and tram market in Poland and France Awarded $19 million supply contract of PIS systems to Alstom Ubunye (PRASA) Pipeline of $214 million identified, weighted 74% to rail Deploying pantograph analytics solution for major UK rail operator Sales of $6.1 million, up 36% from $4.5 million in prior period Strong ongoing investment in new and refurbished rail rollingstock in NSW, Victoria, Qld and WA Completion of deliveries to Sydney Metro project Awarded $5.85 million contract for CCTV/PIS retrofit for MTM Pipeline of $81 million identified, weighted 95% to rail Opportunities in new markets identified in Australia and India

17 Key Customers OEMs Municipal Authorities Transit Operators Integrators 17

18 ORDER BOOK AND PIPELINE 18

19 Order Book $m Order Book support FY19 revenue. Future revenue supported by multi year contracts Strong growth in rail sector with strong interest in DTI PIS systems Expected $38 million in new orders expected to be awarded over next six months 19 Bus Rail Preferred

20 Opportunity Pipeline 19.8% 22.8% 57.3% Australasia EMEA Americas 2.5% 13.5% 83.1% Bus Rail Taxi Law Enforcement Significant identified long term pipeline in excess of $370 million Geographic segmentation remains similar with EMEA presenting strongest opportunities Market continues to be dominated by rail which generally has higher specifications, engineering effort and capital intensity Growth drivers include legislation/evidence standards, public infrastructure spending and potential to reduce insurance and maintenance costs 20

21 Addressable Market 21 DTI s addressable market comprises: Mobile surveillance systems, consisting of recorders, cameras and ancillary equipment; and Passenger Information Systems, consisting of displays, audio communications and entertainment systems Mobile Surveillance market is forecast at US$1.6 billion by Passenger Information Systems forecast to exceed US$21.4 billion by IHS Research 24 Feb Market Research Future July 2017

22 STRATEGY AND OUTLOOK 22

23 Strategies Short-term Grow Revenue Base Production Cost Efficiencies Cost Down Strategy Overhead Reduction Strong increase in revenue compared to FY18 Ongoing conversion of opportunity pipeline R&D cycle complete providing new leading edge product solutions Product design finished leading to stable production runs Migrate production to lower cost manufacturer Review supply chain to reduce component costs Implement design efficiencies Target margin improvements via competitive product sourcing Tight control of costs and working capital Improved inventory management processes established Focus on project execution and margin management 1 Includes LoI/LoA and contracts under advanced negotiations 23

24 Strategies Medium and Long-term Medium-term Demonstrate profitability Ongoing monetisation of past R&D investment Target continued increased in maintenance and recurring revenue to underpin revenue growth Multi-year contract support future revenue growth Product suite developed drives leading turnkey solutions Long-term Continue to leverage R&D investment in new market-leading technology platform Develop DTI hardware as platform for multiple technology applications Expand strong OEM relationships to create stronger maintenance and recurring revenue and position DTI as preferred technology provider Build contracted footprint globally to position DTI in all major markets 24 24

25 Outlook Strong contracted order book 1 of $37.7 million - $4.4 million added since 30 June 2018 Identified Opportunity Pipeline of $375 million with $38 million to be awarded within six months Near term completion of major projects DART, Northern Line. Commencing significant multi-year contracts for MTM (Melbourne) and PRASA Global demand for mobile surveillance and passenger information system equipment continues to be strong DTI has developed a strong technical reputation for developing leading edge products and solutions Operating cost base stabilised Focus on project execution and margin management 1 Includes LoI/LoA and advanced contract negotiations 25

26 Disclaimer Reliance on third party information The information and views expressed in this presentation were prepared by DTI Group Ltd (the Company) and may contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. No responsibility or liability is accepted by the Company, its officers, employees, agents or contractors for any errors, misstatements in or omissions from this presentation. Presentation is a summary only This presentation is information in a summary form only and does not purport to be complete. It should be read in conjunction with the Company s 2019 Interim Report. Any information or opinions expressed in this presentation are subject to change without notice and the Company is not under any obligation to update or keep current the information contained within this presentation. Not investment advice This presentation is not intended and should not be considered to be the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. The information provided in this presentation has been prepared without taking into account the recipient s investment objectives, financial circumstances or particular needs. Each party to whom this presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. No offer of securities Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell Company securities in any jurisdiction. Forward looking statements This presentation may include forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, these statements are not guarantees or predictions of future performance, and involve both known and unknown risks, uncertainties and other factors, many of which are beyond the Company s control. As a result, actual results or developments may differ materially from those expressed in the statements contained in this presentation. Investors are cautioned that statements contained in the presentation are not guarantees or projections of future performance and actual results or developments may differ materially from those projected in forward-looking statements. No liability To the maximum extent permitted by law, neither the Company nor its related bodies corporate, directors, employees or agents, nor any other person, accepts any liability, including without limitation any liability arising from fault or negligence, for any direct, indirect or consequential loss arising from the use of this presentation or its contents or otherwise arising in connection with it. 26

27 Contact Details PETER TAZEWELL Chief Executive Officer T: , 113 E: peter.tazewell@dti.com.au 27