RTX PRESENTATION Q3 2018/19 PRESENTATION BY CEO PETER RPKE & - - PowerPoint PPT Presentation

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RTX PRESENTATION Q3 2018/19 PRESENTATION BY CEO PETER RPKE & - - PowerPoint PPT Presentation

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COPENHAGEN | 30 AUGUST 2019 RTX PRESENTATION Q3 2018/19 PRESENTATION BY CEO PETER RPKE & CFO MORTEN AXEL PETERSEN WIRELESS WISDOM WORKS IN ANY ENVIRONMENT DISCLAIMER This presentation contains statements regarding expectations for

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SLIDE 1

WIRELESS WISDOM WORKS IN ANY ENVIRONMENT

RTX PRESENTATION Q3 2018/19

COPENHAGEN | 30 AUGUST 2019

PRESENTATION BY CEO PETER RØPKE & CFO MORTEN AXEL PETERSEN

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SLIDE 2

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.

RTX Presentation Q3 18/19 - 30 Aug 2019

2

DISCLAIMER

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SLIDE 3

AGENDA

1. 1. RTX BUS BUSINESS S MODEL 9:00 :00 – 9:15 :15 2. FINANCIAL RESULTS Q3 AND 9M 2018/19 9:15 – 9:30 3. BUSINESS UPDATE Q3 2018/19 9:30 – 9:40 4. OUTLOOK 2018/19 9:40 – 9:45 5. Q&A SESSION 9:45 – 10:00

3

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 4

4

STRENGTH PROFILE

RTX has has a: a:

  • Sus

Sustained foc

  • cus on
  • n sha

shareholder valu lue - CFFO invested in value creation or paid back to the shareholders.

  • Le

Leverage opp

  • pportunity within the current business setup.
  • Proven abil

ability to develop, innovate and manufacture customized solutions.

  • Mark

arket-leading pos positio ion in wireless solutions.

  • Hig

High pr profitabilit ity, that can be maintained with the right product mix.

  • Soli

Solid bu business ss mod

  • del with high degree of recurring revenue from loyal customers.
  • Ded

Dedicated gr growth strategy - focus on 4 business areas: Enterprise, Headset, ProAudio and Healthcare.

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 5

RTX is a global company with 25 years of extensive experience and knowledge in design of advanced wireless short-range radio systems and products. Our heritage has provided us with a unique combination of software and hardware capabilities through which RTX manages projects for globally recognized customers, from conceptualization to finished products and modules.

5

RTX @ A GLANCE

100 200 300 400 500 201 013/1 3/14 201 014/1 4/15 201 015/1 5/16 201 016/1 6/17 201 017/1 7/18 5 10 15 20 25 Revenue Growth %

REVENUE & & GRO ROWTH

5 DKKm %

20 40 60 80 100 201 013/1 3/14 201 014/1 4/15 201 015/1 5/16 201 016/1 6/17 201 017/1 7/18 5 10 15 20 EBITDA EBITDA %

EB EBITDA & & EB EBITDA-MARGIN

DKKm %

5 10 15 20 201 013/1 3/14 201 014/1 4/15 201 015/1 5/16 201 016/1 6/17 201 017/1 7/18 20 40 60 80 100 EBIT EBIT-margin

EB EBIT & & EB EBIT-MARGIN

DKKm

1993 +1,000 264

ISO 9001

Founded in 1993 and headquarter in Denmark Projects completed FTE employees by 30 September 2018 Globally certified according to ISO 9001:2015

%

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 6

6

WHAT WE DO

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 / white label basis.

Headsets

As an Enterprise adjacency, the RTX headset range for call centers & offices consists of several different models from high-end to low-end, supporting customer demand for high quality and deep integration.

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 having high inter- symbol interference.

Healthcare

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

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 7

HOW WE WORK: MOVING FROM DESIGN TO PRODUCTS TO GENERATE RECURRING REVENUE

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.

7

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

At RTX, we start by combining customers’ requirements and user needs with our wireless know-how into a Product Requirement Specification. Our engineering teams then design a solution that is based on the right combination of mechanics, hardware and software. Combined with our list of patented solutions and in-house developed protocols, we promise our customers a compelling result. Following agile development practices, we develop prototypes to evaluate system performance in-

  • house. We 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 your time to market and lower approval and certification

  • costs. If required, we can also

handle the full type approval service for our customers. Using a well-established network of ISO9001, SO14001, ISO13485, TS16949 and AS9100 certified manufacturers, we guarantee a production through the entire product life- cycle. RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 8

RTX BUSINESS MODEL HAS INHERENT TIME-LAG FOR RECURRING REVENUE

8

Illustrative RTX Business Case by Product Life Cycle

Y4 Y1

Yea ears

Y5

Effort & Revenue

Y2 Y6 Y3 Y7 Revenue Engineering Effort Development Ramp Phase Main Phase End of Life NRE Revenue ODM/OEM Revenue

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 9

WITH SIMULTANEOUS DEVELOPMENTS, THE EFFECT OF TIME-LAG MAY BE COMPOUNDED

9

Customer X: Project Xxx Customer C: Project Charlie Customer B: Project Bravo Customer A: Project Alpha

(Illustrative) NRE Revenue ODM/OEM Revenue Y5 Years Y4 Ef Effort & Re Revenue Y2 Y1 Y6 Y3 Y7

Revenue Engineering Effort

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 10

FOCUSED GROWTH STRATEGY

68% 68% 26% 26% 6% 6%

Revenues 2017/18

10

Hea ealthcare ProA

  • Audio

En Enterpri rise

(wireless IP & telephony and headsets)

Total = 475m

Strengthen position in Hea ealtchcare

  • Increase share-of-wallet

Utilize unique position in ProAudio

  • Leverage unique technology into recurring revenues
  • Lead the transition into digital wireless

Expand leadership and grow into adjacencies in En Enterp rprise

  • Continue to gain share and consolidate market
  • Recurring revenue from long-term customer agreements
  • Leverage position to establish a presence Hea

eadsets as an adjacency

  • Utilize system integration as competitive advantage

RTX Presentation Q3 18/19 - 30 Aug 2019

RTX Foc

  • cus Seg

egments RTX Growth Str trateg egy

Design Services Business Commu- nications

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SLIDE 11

11

WHO WE WORK FOR

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 12

AGENDA

1. RTX BUSINESS MODEL 9:00 – 9:15 2. 2. FI FINANCIAL RE RESU SULTS Q3 Q3 AN AND 9M 9M 20 2018 18/19 19 9:1 9:15 5 – 9:3 9:30 3. BUSINESS UPDATE Q3 2018/19 9:30 – 9:40 4. OUTLOOK 2018/19 9:40 – 9:45 5. Q&A SESSION 9:45 – 10:00

12

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 13

13

GROUP HIGHLIGHTS FROM Q3 2018/19

REVENUE

13 DKKm

EB EBITDA

DKKm

Q3 3 14 14/1 /15 Q3 3 15 15/1 /16 Q3 3 16 16/1 /17 Q3 3 17 17/1 /18 Q3 3 18 18/1 /19 5 10 15 20 25 30 35

EB EBIT

DKKm

DKK 149m

REVENUE

DKK 30m

EBITDA EBIT

73%

EQUITY RATIO

20%

EBITDA-MARGIN

DKK 26m

Q3 3 14 14/1 /15 Q3 3 15 15/1 /16 Q3 3 16 16/1 /17 Q3 3 17 17/1 /18 Q3 3 18 18/1 /19 20 40 60 80 100 120 140 160 Q3 3 14 14/1 /15 Q3 3 15 15/1 /16 Q3 3 16 16/1 /17 Q3 3 17 17/1 /18 Q3 3 18 18/1 /19 5 10 15 20 25 30 35 RTX Presentation Q3 18/19 - 30 Aug 2019

DKK 34m

CFFO

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SLIDE 14

GROUP P&L Q3 AND 9M 2018/19

14

DK DKK mil million Q3 18/19 Q3 17/18 YTD 18/19 YTD 17/18

Revenue 148.9 114.2 403.2 321.8 Cost of sale

  • 64.9
  • 50.9
  • 174.2
  • 136.8

Gross profit 83.9 63.3 229.0 185.1

Gross margin. % 56.4% 55.4% 56.8% 57.5%

Other external cost

  • 14.4
  • 13.8
  • 46.2
  • 36.8

Staff cost

  • 45.0
  • 38.5
  • 133.7
  • 112.1

Value of own work transferred to assets 5.1 4.8 14.3 14.5 EBI EBITDA 29.7 .7 15.7 .7 63.3 .3 50.6 .6 Depreciation and amortization

  • 3.4
  • 2.2
  • 9.7
  • 5.4

Ope perating Profit (EBIT (EBIT) 26 26.2 .2 13 13.5 .5 53 53.6 .6 45 45.2 .2

  • Net

t revenue increased by 30.4% in Q3 to DKK 148.9 million. Both Business Communications (+31.6%) and Design Services (+27.9%) achieved revenue

  • growth. Growth driven by execution of strategy with the two major framework

agreements announced during 2017/18 (in Business Communications) and increased recurring revenues from product sales (in Design Services) contributing significantly to the growth. 9M growth was 25.3% compared to last year (Business Communications +27.8% and Design Services +20.4%).

  • The revenue growth in Q3 and 9M was positively affected by the USD exchange

rate with FX corrected revenue growth of 23.3% and of 19.2%. Conversely, the implementation of IFRS15 had a negative impact on Q3 revenues compared to last year (positive impact for 9M compared to last year).

  • The

he Gross s Margin in 9M was 0.7%-point below last year due to changes in the revenue mix.

  • Capacity cost
  • sts 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 273 in 9M 2018/19 compared to 241 in 9M 2017/18.

  • Oper

perating per performance in Q2 improved with EBI BITDA increasing by 89.2% and EBI EBIT increasing by 94.7%. In 9M, EBITDA increased by 25.2% and EBIT by 18.6%.

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 15

GROUP BALANCE SHEET

  • Intangible assets increased due to the continued investments in own

financed development projects

  • Other long term assets decreased, utilizing the deferred tax asset.
  • Inventories increase with increased activity and decreased due to IFRS15

implementation.

  • Receivables increased as a consequence of the higher revenue, the timing of

sales and IFRS15 implementation.

  • Cash and cash equivalents increased to DKK 190 million due to the cash flow

generated from operations. Further, the shareholder-related initiatives (dividends in Q2 and share buy-back programme in Q2 and Q3) affect the cash position.

  • Equity increased by DKK 38.9 million compared to last year driven by

earnings generated, while impacted by the shareholder-related initiatives.

  • Short term liabilities increased as a result of higher activity level.
  • Very solid equity ratio of 73.4%, with dividends and share buy-back affecting

equity ratio.

15

DK DKK mil million 30 Ju Jun n 18/19 30 Ju Jun n 17/18 Change

Assets Total intangible assets 52.3 39.8 +31.6% Total tangible assets 14.6 14.7

  • 1.1%

Other long term assets 7.9 23.2

  • 65.9%

Inventories 21.1 20.2 +4.1% Receivables 156.0 103.7 +50.4% Cash and cash equivalents 190.0 150.4 +26.3% Tot

  • tal assets

44 441.8 35 352.1 +2 +25.5 5.5% Liab Liabili ilitie ies Equity 324.1 285.2 +13.7% Long term liabilities 4.3 0.3 +1561.6% Short term liabilities 113.4 66.6 +70.2% Tot

  • tal equity

quity and nd liab abilit litie ies 44 441.8 35 352.1 +2 +25.5 5.5%

Equity ratio

73.4% 81.0%

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 16

GROUP CASH FLOW

16

DK DKK mil million YTD 18/19 YTD 17/18

Cash flow from operations (CFFO) 62.4 56.3 Cash flow from investments(1)

  • 50.6
  • 22.0

Cash flow from financing activities

  • 37.2
  • 36.2

Cha hange in in cas ash

  • 25

25.3 .3

  • 1.9

1.9

  • Increasing cash flow from operations with earnings increase.
  • Cash flow from investments primarily impacted by acquisition of current

securities in the trading portfolio, while the underlying investment level in tangible and intangible assets is similar to last year.

  • Shareholder-related activities (dividends and share buy-back programme) for 9M

is on par with last year, thus cash flows from financing is a the same level as last year.

  • When disregarding acquisition of current securities in the trading portfolio, cash

generation during 2018/19 has been slightly positive – i.e. most cash generated in 2018/19 has been distributed to shareholders via dividends and share buy- back.

(1) Including acquisition of current securities in the trading portfolio – with impact 9M 2018/19 of DKK -32.6 million (9M 2017/18: DKK -1.2 million).

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 17

AGENDA

1. RTX BUSINESS MODEL 9:00 – 9:15 2. FINANCIAL RESULTS Q3 AND 9M 2018/19 9:15 – 9:30 3. 3. BUS BUSINESS UPDATE Q3 Q3 2018/19 9:30 :30 – 9:40 :40 4. OUTLOOK 2018/19 9:40 – 9:45 5. Q&A SESSION 9:45 – 10:00

17

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 18

BUSINESS UPDATE

18

  • Strong Q3 and 9M results and solid order book for Q4 – full year guidance upgraded on 19 Aug 2019.
  • Executing on growth strategy
  • Growth from framework agreements announced during 2017/18
  • Continued growth in recurring revenues from product sales within ProAudio.
  • New handset and base station range sold to existing large Enterprise customers – ensuring prolonged revenue streams.
  • Continue to build the organization and infrastructure necessary for further growth and targeting further growth avenues in both

Enterprise and ProAudio.

RTX Presentation Q2 18/19 - 3 May 2019 RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 19

IRONCLAW RGB B Wir ireless HARP ARPOON Wir ireless K5 K57/Attila a Wir ireless Keyboard

Curr urrently ly in n Mark arket: Fol

  • llo

low-on Produ

  • ducts (se

(several cu customers):

Hea eadset A Hea eadset B Mou

  • use A

A & B Keyboard A A & B & mou

  • use C

Sept’19 Oct’19 Dec’19 1H2 1H2020 2H2 2H2020

Hea eadset C & mor

  • re

19

Hi Hi-End PS4 S4 Gam aming con

  • ntroller with

ith aud audio capa apabilities (c (confi fidential cu customer)

GAMING PRODUCTS WITH RTX TECHNOLOGY

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 20

ANNOUNCED SHARE BUY-BACK PROGRAMME CONTINUES

20

  • RTX will buy back shares for an amount up to DKK

20 million from 1 August 2019 to 31 December 2019.

  • As of 22 August, RTX has bought back shares for an

amount of DKK 2.4 million under the programme (cf. company announcement 38/2019), which continues as announced.

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 21

AGENDA

1. RTX BUSINESS MODEL 9:00 – 9:15 2. FINANCIAL RESULTS Q3 AND 9M 2018/19 9:15 – 9:30 3. BUSINESS UPDATE Q3 2018/19 9:30 – 9:40 4. 4. OUTLOOK 20 2018 18/19 19 9:4 9:40 0 – 9:4 9:45 5. Q&A SESSION 9:45 – 10:00

21

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 22
  • 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.

  • With the above major risk element in mind Executive Management expects a revenue in the range of DKK 550-565 million, EBITDA in

the range of DKK 90-100 million and EBIT in the range of DKK 77-87 million for the financial year 2018/19.

22

OUTLOOK 2018/19 UPGRADED ON 19 AUG – AND CONFIRMED

DK DKK mill illion Resu esult 20 2015 15/16 Resu esult 20 2016 16/17 Resu esult 20 2017 17/18 Orig iginal Outl utlook 20 2018 18/19 Upd pdated Outl utlook 20 2018 18/19 9 (19 (19 Aug Aug)

Net Revenue 395.6 433.5 475.3 520-550 550-565 EBITDA 70.0 77.2 83.1 85-100 90-100 EBIT 65.8 72.3 74.9 65-80 77-87

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 23

AGENDA

1. RTX BUSINESS MODEL 9:00 – 9:15 2. FINANCIAL RESULTS Q3 AND 9M 2018/19 9:15 – 9:30 3. BUSINESS UPDATE Q3 2018/19 9:30 – 9:40 4. OUTLOOK 2018/19 9:40 – 9:45 5. 5. Q&A Q&A SE SESS SSION 9:4 9:45 5 – 10 10:00 :00

23

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 24

24

Q&A SESSION

RTX Presentation Q3 18/19 - 30 Aug 2019

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SLIDE 25

RTX Presentation Q3 18/19 - 30 Aug 2019

25

THANK YOU FOR YOUR ATTENTION

Further information please contact CEO Peter Røpke at 91230000