RTX PRESENTATION Presentation by CEO Peter Rpke I IR - - PowerPoint PPT Presentation

▶
rtx presentation
SMART_READER_LITE
LIVE PREVIEW

RTX PRESENTATION Presentation by CEO Peter Rpke I IR - - PowerPoint PPT Presentation

Dec 04, 2022 134 likes •410 views

COPENHAGEN I 4 DECEMBER 2019 RTX PRESENTATION Presentation by CEO Peter Rpke I IR Presentation DISCLAIMER This presentation contains statements regarding expectations for the future development of RTX A/S, in particular the direction

slide-1
SLIDE 1

RTX PRESENTATION

COPENHAGEN I 4 DECEMBER 2019

Presentation by CEO Peter Røpke

I IR Presentation

slide-2
SLIDE 2

DISCLAIMER

2 I IR Presentation

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,

  • verall economic and business conditions, fluctuations in currencies, demand for RTX’s services, competitive factors in

the market and uncertainties concerning possible investments.

November 2019

slide-3
SLIDE 3

59 70 77 83 100 14/1 4/15 15/1 5/16 16/1 6/17 17/1 7/18 18/1 8/19

RTX is a global company with +25 years of extensive experience and knowledge in designing and manufacturing advanced wireless short-range radio systems and

  • products. Our heritage has provided us with a unique combination of software

and hardware capabilities which RTX leverages with globally recognized customers, from conceptualization to finished products and modules.

RTX AT A GLANCE: SUSTAINED PROFITABLE GROWTH

3 I IR Presentation November 2019 3 November 2019 3

1993 +1,000 289

Founded in 1993 and headquarter in Denmark Projects completed since 1993 FTEs at 30 September, 2019 Units of products and modules delivered in 2018/19

+6.8m

KEY RTX FACTS

350 396 434 475 560 14/1 4/15 15/1 5/16 16/1 6/17 17/1 7/18 18/1 8/19

5-YEAR REVENUE GROWTH

DKK million

5-YEAR EBITDA GROWTH 5-YEAR EBIT GROWTH

DKK million DKK million

52 66 72 75 87 14/1 4/15 15/1 5/16 16/1 6/17 17/1 7/18 18/1 8/19

CAGR 12.5% CAGR 14.2% CAGR 13.5%

slide-4
SLIDE 4

RTX BUSINESS MODEL FOR CONTINUED PROFITABLE GROWTH

4 I IR Presentation November 2019

Core capabilities Deployment in attractive B2B target markets Leverage effect for profitable growth

slide-5
SLIDE 5

DEVELOPMENT PHASE RAMP PHASE MAIN PHASE END OF LIFE REPLACEMENT PRODUCT

NRE Revenue ODM/OEM Revenue

YEAR 1 YEAR 2 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8

Revenue Engineering Effort

ODM MODEL OPERATED VIA FRAMEWORK AGREEMENTS WITH HIGH “STICKINESS” OF RECURRING REVENUE

5 I IR Presentation November 2019

ILLUSTRATIVE RTX BUSINESS CASE BY PRODUCT LIFE CYCLE – FOR ONE COMBINATION OF PRODUCT AND CUSTOMER

Effort and Revenue Start-up for replacement product Years

YEAR 3

slide-6
SLIDE 6

WHO WE WORK FOR

6 I IR Presentation November 2019

slide-7
SLIDE 7

STRENGTHEN POSITION IN HEALTHCARE

  • Increase share-of-wallet

UTILIZE UNIQUE POSITION IN PROAUDIO

  • Leverage unique technology into recurring revenue via ODM/OEM

model

  • Lead the transition to digital wireless in pro audio markets

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

pure play ODM/OEM model

  • Utilize system integration as competitive advantage
  • Leverage Enterprise leadership position and sector expertise to

establish a presence in adjacencies, such as B2B Headsets

RTX GROWTH STRATEGY IN TARGET MARKETS

7 I IR Presentation November 2019

RTX TODAY: REVENUE BY TARGET MARKETS 2018/19 RTX GROWTH STRATEGY UNTIL 2021/22

560 DKKm

TOTAL REVENUE

DESIGN SERVICES BUSINESS COMMUNICATION HEALTHCARE PROAUDIO ENTERPRISE Wireless/IP telephony and headsets

69% 26% 5%

1 3-year revenue CAGR (2016-19).

CAGR1 ~11.0% RTX CAGR1 ~12.5% CAGR1 ~11.0% CAGR1 ~13.0%

slide-8
SLIDE 8

Further execution of growth strategy expected to lead to profitable growth

LONG-TERM FINANCIAL AMBITIONS

8 I IR Presentation November 2019

Based on our strategy of deploying our wireless wisdom in selected B2B target markets for growth via recurring revnues, and based on execution of existing and new framework agreements, it is the ambition of RTX to grow revenues

  • rganically by an average of 13-16% p.a. in the period from

end 2018/19 up to and including the fiscal year 2021/22.

ORGANIC REVENUE GROWTH EBITDA MARGIN ASSUMPTIONS ORGANIC REVENUE GROWTH EARNINGS (EBITDA MARGIN)

AVERAGE OF 13-16% P.A. UNTIL 2021/22 18-20% BY 2021/22

With our long-term revenue growth ambitions, and with the leverage effect on the scalability of our resources from increased recurring revenues, it is the ambition of RTX to achieve an EBITDA margin of 18-20% by the completion of the fiscal year 2021/22. This ambition reflects inclusion of the effect of the implementation of IFRS 16 regarding leasing. The long-term revenue and earnings ambitions are based on constant currencies with the ambitions especially being sensitive to the USD/DKK exchange

  • rate. They are also based on the current

macroeconomic and political environment, where major developments may also impact the

  • ambitions. The ambitions are also based on stable

raw material prices and supply chain performance and availability. Also, note that the long-term financial ambitions are until/by the fiscal year 2021/22 and in the interim years growth rates and margins realized may vary from year to year.

slide-9
SLIDE 9

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

OUTLOOK 2019/20

9 I IR Presentation November 2019

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.

slide-10
SLIDE 10

10 I IR Presentation

Q&A SESSION

November 2019

slide-11
SLIDE 11

APPENDIX

11 I IR Presentation

  • 1. RTX Introduction and Investment Case
  • 2. RTX Growth Strategy
  • 3. 2018/19 Highlights

November 2019

slide-12
SLIDE 12

12

I IR Presentation

RTX INTRODUCTION AND INVESTMENT CASE

November 2019

slide-13
SLIDE 13

WHY INVEST

13 I IR Presentation November 2019

RTX has a:

  • Sustained focus on shareholder value - CFFO invested in value creation or paid back to the shareholders.
  • Leverage opportunity within the current business setup.
  • Proven ability to develop, innovate and manufacture customized solutions.
  • Market-leading position in wireless solutions.
  • High profitability, that can be maintained with the right product mix.
  • Solid business model with high degree of recurring revenue from loyal customers.
  • Dedicated growth strategy – unleashing wireless wisdom through selected B2B target markets.
  • Track record of profitable growth, consistently sustained for many years.
slide-14
SLIDE 14

WHAT WE DO

14 I IR Presentation

Enterprise

In the Enterprise segment, RTX designs, develops, and supplies wireless IP telephony solutions used in communication systems for professional use, e.g. in office environments, call centers, retail or storage facilities etc. The wireless IP telephony solutions are supplied on both an ODM and an OEM basis.

B2B Headsets

As an Enterprise adjacency expansion, the RTX ODM/OEM headset offering for call centers, office environment, retail and storage facilities consist of several different models supporting customer demand for high quality and deep integration across the Enterprise space.

ProAudio

With years of experience in ProAudio design, development and manufacturing, RTX has gained the expertise to deliver incredible sound quality in high-density RF environments as well as in challenging radio environments with a high degree

  • f interference. Offering includes both

dedicated RTX modules and custom ODM/OEM products.

Healthcare

In the Healthcare segment, RTX is primarily involved in the development, design and supply of wireless modules and products used for continuous patient monitoring in hospitals. Additionally, RTX is involved in the design of wireless solutions for projects in assisted living such as hearing and accessories.

November 2019

slide-15
SLIDE 15

Taking a customer-centric approach, understanding market trends and acting as a professional partner is an integral part of how we do business at RTX. We believe that we provide a true value proposition and best results when collaborating closely with our customers – either through projects or in ODM or OEM solutions.

HOW WE WORK: FROM DESIGN TO PRODUCTS AND PRODUCTION

15 I IR Presentation November 2019

SPECIFICATION AND DESIGN DEVELOPMENT AND INTEGRATION TESTING AND CERTIFICATION PRODUCTION AND SUPPLY CHAIN MANAGEMENT

At RTX, we start by truly understanding customer requirements and user needs. This is accomplished by focusing on the ‘why’ and not only the ‘what’. We combine this insight with our wireless know-how into a Product Requirement

  • Specification. Our engineering teams

then design the optimal solution based

  • n a combination of software, hardware

and mechanics. Combined with our list

  • f patented solutions and in-house

developed protocols, we ensure our customers a compelling result. In close collaboration with our customers, following agile development practices, we develop prototypes to evaluate system performance in-house. We build on

  • ur extensive wireless and audio

capabilities and integrate each design at system level so that every component and sub-system works perfectly, evaluating performance against test cases for the fully integrated system. Based on years of experience,

  • ur in-house pretest services

reduce time to market and decrease approval and certification costs for our

  • customers. If required, we can

also handle the full type approval service for our customers. Using a well-established network

  • f ISO9001, ISO14001, ISO13485,

TS16949 and AS9100 certified manufacturers, we guarantee production through the entire product life-cycle.

slide-16
SLIDE 16

16 I IR Presentation

RTX GROWTH STRATEGY

November 2019

slide-17
SLIDE 17

STRENGTHEN POSITION IN HEALTHCARE

  • Increase share-of-wallet

UTILIZE UNIQUE POSITION IN PROAUDIO

  • Leverage unique technology into recurring revenue via ODM/OEM

model

  • Lead the transition to digital wireless in pro audio markets

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

pure play ODM/OEM model

  • Utilize system integration as competitive advantage
  • Leverage Enterprise leadership position and sector expertise to

establish a presence in adjacencies, such as B2B Headsets

RTX GROWTH STRATEGY IN TARGET MARKETS

17 I IR Presentation November 2019

RTX TODAY: REVENUE BY TARGET MARKETS 2018/19 RTX GROWTH STRATEGY UNTIL 2021/22

560 DKKm

TOTAL REVENUE

DESIGN SERVICES BUSINESS COMMUNICATION HEALTHCARE PROAUDIO ENTERPRISE Wireless/IP telephony and headsets

69% 26% 5%

1 3-year revenue CAGR (2016-19).

CAGR1 ~11.0% RTX CAGR1 ~12.5% CAGR1 ~11.0% CAGR1 ~13.0%

slide-18
SLIDE 18

EXPAND LEADERSHIP AND GROW INTO ADJACENCIES

18

ENTERPRISE: RTX GROWTH STRATEGY

I IR Presentation November 2019

Drive recurring revenue from long-term customer agreements via pure play ODM/OEM model Utilize system integration as competitive advantage Leverage enterprise leadership position and sector expertise to establish a presence in adjacencies1

1 E.g. B2B headsets, conference phones and/or beacons.

CONTI TINUE TO O GAIN GAIN MAR MARKET T SH SHAR ARE AN AND DR DRIVE MAR MARKET CONSOLIDATION

Grow with DECT technology while ensuring long-term technology agility

slide-19
SLIDE 19

0,6 0,6 0,7 0,7 0,8 0,8 0,6 0,7 0,9 1,0 1,1 1,3

19 21 24 27 31 34

5 10 15 20 25 30 35 0,0 0,5 1,0 1,5 2,0 2,5 3,0

LEVERAGE ENTERPRISE POSITION IN ADJACENCIES EXAMPLE: B2B HEADSETS

19

ENTERPRISE ADJACENCY, B2B HEADSETS: MARKET TRENDS & RTX GROWTH STRATEGY

I IR Presentation November 2019

HIGH-GROWTH MARKET DRIVEN PRIMARILY BY THE DEMAND FOR WIRELESS CONNECTIVITY

GLOBAL PROFESSIONAL HEADSET MARKET

1.2 1.4 1.5 1.7 1.9 2.1

Corded Revenue in USDbn Units in million

LEVERAGE ENTERPRISE LEADERSHIP POSITION AND SECTOR EXPERTISE TO ESTABLISH PRESENCE IN B2B HEADSETS Utilize system integration as competitive advantage Provide ODM/OEM headset offering as additional revenue opportunity for Enterprise partners

Source: Frost & Sullivan

1 2018-2022 wireless revenue CAGR.

Wireless Revenue in USDbn 2017 2019F 2018 2020F 2022F 2021F

CAGR1 ~14.0%

Revenue & Units

slide-20
SLIDE 20

PRO AUDIO MARKET TRANSITION CREATES RTX GROWTH OPPORTUNITIES

20

PROAUDIO: MARKET TRENDS

I IR Presentation November 2019

RTX PROAUDIO CONSISTS OF THREE SEGMENTS, WITH MICS & STAGE AS OUR PRIMARY TARGET AREA FOR GROWTH MICS & STAGE IS ATTRACTIVE DUE TO ONGOING TRANSISTION FROM WIRED ANALOG TO DIGITAL WIRELESS 2 MILLION PRO WIRELESS MICS, PLUS NON- MICS UPSIDE, CONSTITUTE SIGNIFICANT RTX GROWTH OPPORTUNITY

Source: Arizton.

1 At the benefit of e.g. mobile phones, internet broadband etc. 2 2017 to 2023 CAGR. 3 Pro audio devices such as power amplifiers, speaker enclosures, and mixers. DJ products such as digital controllers, mixers, and headphones. Instruments such as e.g. guitars.

PRO WIRELESS MICROPHONE MARKET

1.8 1.8 1.9 2.0 2.1 2.2 2.3

Million Units Per Year

Significant additional market potential, beyond micro- phones, in instruments, DJ products, and other pro audio devices, where wireless transmission is relevant3.

2017 2018 2021F 2020F 2019F 2022F 2023F

  • Spectrum repack
  • Microphone frequencies are being reallocated to

video- and broadband services1

  • The regulatory changes are occuring in both US and

Europe

  • Increased need
  • The music industry is becoming increasingly more

dependent on live performances; due to disruptions in music publishing industry

  • Live performances are growing significantly in

complexity and needed channel count/number of microphones

  • New requirements
  • New requirements to robustness, and security

requires a digital transmission technology

PROAUDIO

MICS & STAGE INTERCOM GAMING

slide-21
SLIDE 21

Deploy and refine our existing technology base… …into a flexible technology platform with dedicated RTX modules and custom ODM/OEM

UTILIZE UNIQUE POSITION IN PROAUDIO

21

PROAUDIO: RTX GROWTH STRATEGY

I IR Presentation November 2019

We move from engineering hours… …to recurring revenue Short time-to-market Attractive cost of entry

LEAD THE TRANSITION TO DIGITAL WIRELESS IN PRO AUDIO MARKETS LEVERAGE UNIQUE TECHNOLOGY INTO RECURRING REVENUE VIA ODM/OEM MODEL

Attractive value propositions for RTX customers Scalability for RTX

slide-22
SLIDE 22

STRENGTHEN POSITION IN HEALTHCARE

22

HEALTHCARE: MARKET TRENDS & RTX GROWTH STRATEGY

I IR Presentation November 2019

Pressure to reduce costs and prove value remains intense3 and drives need for new technology4. Medtech1 sales are estimated at 425 USD billion globally with expected CAGR of 5% towards 20222 Expand share of value chain (e.g. production of subassemblies) Extend portfolio

  • f ODM offerings

EXPAND EXISTING CONTINUOUS PATIENT MONITORING BUSINESS BY INCREASING SHARE-OF-WALLET WITH OURONG-TERM BLUE CHIP HEALTHCARE CUSTOMER HEALTHCARE MARKET DEPENDS ON NEW TECHNOLOGIES, DIGITAL AND WIRELESS, TO INCREASE EFFICIENCY AND KEEP UP WITH DEMAND

Source: Economic Intelligence Unit, OECD, Deloitte

1 E.g. in vitro diagnostics, cardiology, diagnostic imaging etc. 2 Healthcare growth in general, is driven by ageing and growing populations, emerging market expansion, increase in chronic diseases (e.g. cancer, heart disease, and diabetes), and advances in treatments 3 Resulting in focus on efficient use of resources, shift in focus from procedures towards outcomes (also referred to as value-based healthcare), and increasing focus on virtual healthcare – all to help drive cost efficiency 4 E.g. networked medical devices (mobile, wearing external, implantable), remote care system, identification systems etc.

slide-23
SLIDE 23

23 I IR Presentation

2018/19 HIGHLIGHTS

November 2019

slide-24
SLIDE 24

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

SATISFACTORY 2018/19 PERFORMANCE AS SOLID BASIS FOR FURTHER GROWTH

24 I IR Presentation November 2019 24

slide-25
SLIDE 25

475 560

17/18 18/19

HIGHLIGHTS 2018/19

25 I IR Presentation November 2019 83 100

17/18 18/19

96 108

17/18 18/19

7 8,4

17/18 18/19

REVENUE EBITDA CASH (CFFO) EPS

+18% +21% +13% +19%

DKK million DKK million DKK million 25 25 25

17.1 DKKM

2.0 DKK per share

DISTRIBUTION TO SHAREHOLDERS

PAID DIVIDENDS 2018/19

27.2 DKKM

with one programme continuing in 2019/20 SHARE BUY-BACK 2018/19

2.5 DKK/SHARE

+25% compared to 2018/19 PROPOSED DIVIDENDS JANUARY 2020

32.8 DKKM

by continuing ongoing programme and through announced new programme CONTINUED SHARE BUY-BACK 2019/20

REVENUE SPLIT

DKK million

BUSINESS COMMUNICATIONS DESIGN SERVICES

356 387 31 174 145 29

slide-26
SLIDE 26

Further information, please contact President and CEO Peter Røpke at +45 9632 2300

THANK YOU FOR YOUR ATTENTION

26 I IR Presentation November 2019