COPENHAGEN I 29 NOVEMBER 2019 RTX FY 2018/19 PRESENTATION Presentation by CEO Peter Røpke CFO Morten Axel Petersen
DISCLAIMER This presentation contains statements regarding expectations for the future development of RTX A/S, in particular the direction of future product development, future sales, operating profits and business expansion. Such statements are subject to risks and uncertainties as various factors, many of which are outside the control of RTX, may cause the actual development and results to differ materially from the expectations expressed directly or indirectly in this presentation. Factors that might affect such expectations include, among others, rapid technological changes and evolving markets, overall economic and business conditions, fluctuations in currencies, demand for RTX’s services, competitive factors in the market and uncertainties concerning possible investments. 2 November 2019 I IR Presentation
STRENGTH PROFILE RTX has a: • Market-leading position in wireless solutions. • Proven ability to develop, innovate and manufacture customized solutions. • Track record of profitable growth , consistently sustained for many years. • Dedicated growth strategy – unleashing wireless wisdom through selected B2B target markets. • Solid business model with high degree of recurring revenue from loyal customers. • High profitability, that can be maintained with the right product mix. • Leverage opportunity within the current business setup. • Sustained focus on shareholder value - CFFO invested in value creation or paid back to the shareholders. 3 November 2019 I IR Presentation
AGENDA 1. RTX Business Model 2. Performance 2018/19 3. RTX Growth Strategy 4. Outlook and Long-Term Ambitions Peter Røp øpke Mor orten Axel l Petersen 5. Q&A Session President & CEO CFO 4
RTX BUSINESS MODEL 5 November 2019 I IR Presentation
RTX AT A GLANCE: SUSTAINED PROFITABLE GROWTH RTX is a global company with +25 years of extensive experience and knowledge KEY RTX FACTS in designing and manufacturing advanced wireless short-range radio systems and products. Our heritage has provided us with a unique combination of software 1993 and hardware capabilities which RTX leverages with globally recognized customers, from conceptualization to finished products and modules. Founded in 1993 and headquarter in Denmark +1,000 5-YEAR REVENUE GROWTH 5-YEAR EBITDA GROWTH 5-YEAR EBIT GROWTH DKK million DKK million DKK million Projects completed since 1993 CAGR CAGR CAGR 100 12.5% 14.2% 13.5% 87 560 83 77 75 289 72 475 70 66 434 396 59 52 350 FTEs at 30 September, 2019 +6.8m Units of products and modules delivered in 2018/19 14/1 4/15 15/1 5/16 16/1 6/17 17/1 7/18 18/1 8/19 14/1 4/15 15/1 5/16 16/1 6/17 17/1 7/18 18/1 8/19 14/1 4/15 15/1 5/16 16/1 6/17 17/1 7/18 18/1 8/19 6 6 6 November 2019 November 2019 I IR Presentation
WHAT WE DO Enterprise ProAudio With years of experience in ProAudio In the Enterprise segment, RTX designs, design, development and manufacturing, develops, and supplies wireless IP RTX has gained the expertise to deliver telephony solutions used in communication systems for professional use, e.g. in office incredible sound quality in high-density environments, call centers, retail or storage RF environments as well as in challenging radio environments with a high degree facilities etc. The wireless IP telephony of interference. Offering includes both solutions are supplied on both an ODM and an OEM basis. dedicated RTX modules and custom ODM/OEM products. Healthcare B2B Headsets In the Healthcare segment, RTX is primarily involved in the development, As an Enterprise adjacency expansion, the design and supply of wireless modules RTX ODM/OEM headset offering for call and products used for continuous patient centers, office environment, retail and monitoring in hospitals. Additionally, RTX storage facilities consist of several different is involved in the design of wireless models supporting customer demand for solutions for projects in assisted living high quality and deep integration across the such as hearing and accessories. Enterprise space. 7 November 2019 I IR Presentation
RTX BUSINESS MODEL FOR CONTINUED PROFITABLE GROWTH Leverage effect for profitable growth Deployment in attractive B2B target markets Core capabilities 8 November 2019 I IR Presentation
ODM MODEL OPERATED VIA FRAMEWORK AGREEMENTS WITH HIGH “STICKINESS” OF RECURRING REVENUE ILLUSTRATIVE RTX BUSINESS CASE BY PRODUCT LIFE CYCLE – FOR ONE COMBINATION OF PRODUCT AND CUSTOMER Effort and Revenue Revenue Engineering Effort ODM/OEM Revenue Start-up for replacement NRE Revenue product Years YEAR 1 YEAR 5 YEAR 2 YEAR 3 YEAR 4 YEAR 6 YEAR 7 YEAR 8 RAMP PHASE MAIN PHASE END OF REPLACEMENT DEVELOPMENT PHASE PRODUCT LIFE 9 November 2019 I IR Presentation
WHO WE WORK FOR 10 November 2019 I IR Presentation
PERFORMANCE 2018/19 11 November 2019 I IR Presentation
SATISFACTORY 2018/19 PERFORMANCE AS SOLID BASIS FOR FURTHER GROWTH ENTERPRISE • Framework agreement entered into in 17/18 now in ramp-up phase • New handset and base station range sold to existing customers • New major framework agreement entered into (during Q4 18/19) ENTERPRISE ADJACENCY, B2B HEADSET • Customer launch in December 2018 and thus framework agreement (from 17/18) in ramp-up phase PROAUDIO • Significant growth in recurring revenues from product sales and royalties • New framework agreement entered into (during Q4 18/19) HEALTHCARE • Agreement to increase product range with existing large customer as basis for future growth 12 November 2019 I IR Presentation 12
HIGHLIGHTS 2018/19 DISTRIBUTION TO SHAREHOLDERS REVENUE EBITDA CASH (CFFO) EPS DKK million DKK million DKK million 560 PAID DIVIDENDS 2018/19 108 8,4 100 475 96 17.1 DKKM 7 83 2.0 DKK per share SHARE BUY-BACK 2018/19 27.2 DKKM 17/18 18/19 17/18 18/19 17/18 18/19 17/18 18/19 with one programme continuing in 2019/20 +21% +19% +18% +13% PROPOSED DIVIDENDS JANUARY 2020 2.5 DKK/SHARE REVENUE SPLIT +25% compared to 2018/19 DKK million BUSINESS COMMUNICATIONS DESIGN SERVICES CONTINUED SHARE BUY-BACK 2019/20 387 174 32.8 DKKM 356 31 145 29 by continuing ongoing programme and through announced new programme 13 13 13 13 November 2019 I IR Presentation
GROUP P&L Q4 AND FULL YEAR 2018/19 • Revenue increased by 18% in 2018/19 to DKK 560 million. Both Business Re DK DKK mil million Q4 18/19 Q4 17/18 FY 18/19 FY 17/18 Communications (+19%) and Design Services (+15%) achieved revenue growth. Growth is driven by execution of strategy with a) the two major framework Revenue 157.0 153.5 560.3 475.3 agreements announced during 2017/18 (in Business Communications) and b) increased recurring revenues from product sales (in Design Services) Cost of sale -64.2 -73.8 -243.4 -210.5 contributing significantly to the growth. FX corrected revenue growth was 12% in 2018/19. Gross profit 87.9 79.7 316.9 264.8 • All business areas achieved revenue growth in 2018/19: Enterprise (+10%), Gross margin % 56.0% 51.9% 56.6% 55.7% Enterprise/B2B Headsets (+1840%), ProAudio (+ 17%) and Healthcare (+ 7%). Other external cost -14.9 -14.2 -61.1 -51.0 • Q4 revenue growth was 2.3% compared to Q4 2017/18 with strong comparable Staff cost -38.6 -34.8 -172.3 -147.0 (due to postponements of deliveries into Q4 in 2017/18 resulting from component allocation issues). FX corrected revenue growth was – 2.0%. Value of own work transferred to assets 2.5 1.8 16.8 16.3 • The Gross ss Margin in 2018/19 increased by 0.9 %-point due to the product mix EBI EBITDA 36.9 .9 32.5 .5 100.2 .2 83.1 .1 realized and a higher share of royalty revenue. In Q4, the gross margin increased considerably compared to last year also due to product mix and the absence of Depreciation and amortization -3.8 -2.9 -13.5 -8.3 supply chain issues affecting deliveries. Ope perating Profit (EBIT (EBIT) 33 33.1 .1 29.6 29 .6 86.7 86 .7 74.9 74 .9 • Capacity cost osts increased as planned with the strategy execution – both for ramping-up capacity in order to execute the two major framework agreements announced during 2017/18 and for continuing to build the organization and infrastructure necessary for further growth. The average number of FTEs increased to 277 in 2018/19 compared to 246 in 2017/18. • Oper perating per performance in both Q4 and FY 2018/19 improved with both EBI EBITDA and EBI BIT increasing. 14 November 2019 I IR Presentation
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