Electro Optic Systems Holdings Limited Annual General Meeting 27 - PowerPoint PPT Presentation

Electro Optic Systems Holdings Limited Annual General Meeting 27 May 2010

1. Company Overview 2. Review of 2009 operating result 3. Remote Weapon Systems Business 4. Space Business

Com ompa pany ny Overvi erview ew  Profitable with substantial cash and inventory  Acquisition of ROI completed  Teaming with NGC for $4 billion CROWS 3  Addressable market now exceeds $7 billion  Space surveillance re-positioned for tighter budgets  Australian space policy providing growth options Strong progress towards strategic objectives. A platform for growth has been established.

Rev eview iew of of 20 2009 09 Pe Perfo formance rmance Annual Revenue 44 42 $A Mill i ons 40 38 36 34 2007 2008 2009 Strategic positioning is in hand and revenue growth can now be addressed with a stronger product line and partners.

Rev eview iew of of 20 2009 09 Pe Perfo formance rmance Profit/Loss 5 0 2007 2008 2009 2006 2007 (5) $A Millions (10) (15) (20) (25) Profit achieved on $40m revenue while expensing all technology development and product line expansion costs.

Remote Weapon Systems Developments:  Acquisition of ROI Inc.  Expansion of product line  CROWS teaming  New market development

ROI I Acqu quis isition ition Recon Optical Inc. [ROI] was EOS’ partner for CROWS from 1999 - 2007. RWS business of ROI acquired in 2 stages: – Stage1 December 2008: Physical assets acquired – Stage 2 November 2009: RWS technology acquired The acquisition brings to EOS all the technology incorporated in the CROWS R-400 and R-200 products that was not already owned by EOS. EOS now owns all the technology for its entire product line of remote weapon systems. This is unique to EOS.

EOS Rem emot ote e Wea eapo pon Sy n Syste stems ms  R-600 Dual [300 kg]  R-400 [CROWS 1] [200 kg]  R-200 [100 kg] EOS now has the most comprehensive product range in the industry

EOS Li Ligh ghtw twei eigh ght t RWS R-200 • Lightweight • Low cost • Fielded and qualified

R-40 400 0 o or U US Army my CROWS WS US Army CROWS [Common Remotely Operated Weapon System] • High performance • Long range • High powered weapons • In production • Excellent performance record

R-40 400 0 in in ser ervic ice e wit ith h th the e Au Austra tralian lian Ar Army my

R-60 600: 0: D Dua ual l Wea eapo pon Sy n System tem  Dual weapons  Video tracker  Video-Audio record  Air burst 40mm  Built-in Test [BIT]  BMS port In production and fielding R- 600 is the world’s most advanced remote weapon system

CROWS OWS 3 The US Army will procure up to 10,000 CROWS 3 weapon systems from 2011. This procurement will be valued at up to US$4 billion over 10 years. EOS has proven products for this requirement .

CROWS OWS 3 T 3 Tea eami ming ng EOS has teamed with Northrop Grumman for CROWS 3. EOS will provide technology and products and about 50% of deliverables. Northrop Grumman will provide the production and parts management technology, global product support, program leadership including tender preparation and about 50% of deliverables under license to EOS. EOS is now placed in an extremely strong CROWS team which can meet all Army requirements for technology, quality, production and global support.

Def efen ence ce Whi hite te Pap aper er: Rem emote ote Wea eapo pon Sy n Systems tems • Australia will acquire 1,100 deployable protected vehicles & 7,000 support vehicles. Many will require weapon systems • “Remote weapon stations on combat vehicles” is a priority industry capability for Australia EOS is the only Australian provider of remote weapon stations, and has proven technology and products Australian remote weapon system requirements provide growth potential over the next 5 years

Spa pace e Bus usin ines ess • Telescopes : – Skymapper, Lick, MRO projects delivered – GMT effort escalating with ANU • Space Operations : – GoA space tracking contract extended to 2013 • Space Surveillance – Australian requirements approaching acquisition – EOS capabilities adapting for new requirements

Ma Magd gdal alen ena a Rid idge ge Obs bservatory ervatory 2. 2.4m 4m Tel eles esco cope pe • Installed 2008 • Delivering excellent results for 2 years • Completion Q3 2010

ANU Rel elat atio ions nship hip • EOS corporate offices & EOS space development moved to new premises at Mt Stromlo, leased from ANU. • EOS and ANU are executing teaming arrangements to pool resources to develop advanced Adaptive Optics (AO). • AO is a universal requirement for future large telescopes such as GMT and in space surveillance.

Gia iant nt Ma Mage gell llan an Tel eles esco cope pe [G [GMT MT] • 26m diameter telescope (world’s largest). • A$1bn international project with A$88m Australian participation through ANU • Success depends on “Adaptive Optics” technology • EOS and ANU have strong AO technology and will jointly bid for GMT requirements.

Aus ustrali tralian an Spa pace e Res esea earch rch Prog ogram am • ASRP is a $40M fund for space technology • EOS funded in first round for improving satellite orbit prediction • Candidates for further funding through EOS in 2010:  enhancements to EOS space surveillance capability to full operational readiness; and  Space flight hardware for NASA Grace satellite follow-up mission

Sp Space Su Surveilla llanc nce: e: Current t Conflic ict Need for new space surveillance data is becoming more acute: – Space debris grown 50% since Chinese ASAT test and Iridium/Cosmos crash – Runaway pollution of entire orbital belts now possible – Multi-year studies in USA and Europe underscore increased risk and inadequacy of current capabilities Funding constraints are also becoming more acute: – Euro sovereign debt crisis will have implications on public spending in the euro zone for several years – US defence spending facing cuts – NASA budget under increased pressure A new approach is required to allow these conflicting pressures to be reconciled and current operational problems to be addressed.

Sp Space Su Surveilla llanc nce: e: EO EOS S Re Respons nse EOS response to unmet requirements and funding issues : – Mt Stromlo capability to be upgraded for 400% productivity increase by 2012 – Adapt technology to fit both needs and funding, and allow progressive deployment with strong risk reduction – Performance improvements and cost reduction allows Australia itself to contribute to global space surveillance efforts Planned data yield improvements will allow more affordable access to customers for risk reduction.

Spa pace e Activ tivities ities in in Au Austr tralia alia The Defence White Paper [2009] indicated requirements for the following capabilities. • Space Surveillance and Space Situation Awareness • Theatre Defence • Surveillance from Space using satellites EOS has commenced the adaptation of its technology and products to meet these needs as they are acquired by Australia from 2011.

Com ompa pany ny Overvi erview ew  Profitable with substantial cash and inventory  Acquisition of ROI completed  Teaming with NGC for $4 billion CROWS 3  Addressable market now exceeds $7 billion  Space surveillance re-positioned for tighter budgets  Australian space policy providing growth options Strong progress towards strategic objectives. A platform for growth has been established.