COPENHAGEN I 4 DECEMBER 2019 RTX PRESENTATION Presentation by CEO Peter Røpke I IR Presentation
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
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 3 3 3 November 2019 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 4 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 5 November 2019 I IR Presentation
WHO WE WORK FOR 6 November 2019 I IR Presentation
RTX GROWTH STRATEGY IN TARGET MARKETS RTX TODAY: REVENUE BY TARGET MARKETS 2018/19 RTX GROWTH STRATEGY UNTIL 2021/22 TOTAL REVENUE STRENGTHEN POSITION IN HEALTHCARE RTX CAGR 1 560 DKKm ~12.5% • Increase share-of-wallet CAGR 1 5% ~11.0% UTILIZE UNIQUE POSITION IN PROAUDIO • Leverage unique technology into recurring revenue via ODM/OEM SERVICES 26% HEALTHCARE DESIGN model • Lead the transition to digital wireless in pro audio markets CAGR 1 ~11.0% PROAUDIO EXPAND LEADERSHIP AND GROW INTO ADJACENCIES IN EN ENTERPRISE • Continue to gain market share and drive market consolidation • Drive recurring revenue from long-term customer agreements via COMMUNICATION 69% CAGR 1 pure play ODM/OEM model ~13.0% • Utilize system integration as competitive advantage BUSINESS • Leverage Enterprise leadership position and sector expertise to ENTERPRISE Wireless/IP telephony establish a presence in adjacencies, such as B2B Headsets and headsets 1 3-year revenue CAGR (2016-19). 7 November 2019 I IR Presentation
LONG-TERM FINANCIAL AMBITIONS Further execution of growth strategy expected to lead to profitable growth ORGANIC REVENUE GROWTH EBITDA MARGIN ASSUMPTIONS The long-term revenue and earnings ambitions are 18-20% AVERAGE OF based on constant currencies with the ambitions especially being sensitive to the USD/DKK exchange BY 2021/22 rate. They are also based on the current 13-16% P.A. macroeconomic and political environment, where major developments may also impact the UNTIL 2021/22 ambitions. The ambitions are also based on stable raw material prices and supply chain performance and availability. Also, note that the long-term ORGANIC REVENUE GROWTH EARNINGS (EBITDA MARGIN) financial ambitions are until/by the fiscal year Based on our strategy of deploying our wireless wisdom in With our long-term revenue growth ambitions, and with the 2021/22 and in the interim years growth rates and selected B2B target markets for growth via recurring revnues, leverage effect on the scalability of our resources from margins realized may vary from year to year. and based on execution of existing and new framework increased recurring revenues, it is the ambition of RTX to agreements, it is the ambition of RTX to grow revenues achieve an EBITDA margin of 18-20% by the completion of organically by an average of 13-16% p.a. in the period from the fiscal year 2021/22. This ambition reflects inclusion of the end 2018/19 up to and including the fiscal year 2021/22. effect of the implementation of IFRS 16 regarding leasing. 8 November 2019 I IR Presentation
OUTLOOK 2019/20 DK DKK mill illion Resu esult 20 2016 16/17 Resu esult 20 2017 17/18 Resu esult 20 2018 18/19 Outl utlook 20 2019 19/20 Revenue 433.5 475.3 560.3 620 - 650 EBITDA 77.2 83.1 100.2 105 - 120 EBIT 72.3 74.9 86.7 75 - 90 As described in our annual report in the section concerning risk management, RTX is relatively highly exposed to foreign currencies, as a considerable part of the revenue is settled in US dollars. Given the nature of the expected growth from framework agreements under ramp-up as well as from new framework agreements being started up, it is expected that the revenue and earnings distribution over 2019/20 will be relatively backloaded towards the end of the year – as also described in our annual report. 9 November 2019 I IR Presentation
Q&A SESSION 10 November 2019 I IR Presentation
APPENDIX 1. RTX Introduction and Investment Case 2. RTX Growth Strategy 3. 2018/19 Highlights 11 November 2019 I IR Presentation
RTX INTRODUCTION AND INVESTMENT CASE 12 November 2019 I IR Presentation
WHY INVEST 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. 13 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. 14 November 2019 I IR Presentation
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