HY2019 Results & Business Update Presentation

Rakon Limited
T +64 9 573 5554, F +64 9 573 5559
8 Sylvia Park Road, Mt Wellington, Auckland 1060, New Zealand
Private Bag 99943, Newmarket, Auckland 1149, New Zealand
Page 1 of 1 w w w . r a k o n . c o m


25 October 2018


Rakon HY2019 Result Announcement Date & Teleconference Details

Rakon Limited (RAK) will release its preliminary result announcement for the half year ended 30
September 2018 to the market at around 9.00am on Thursday 15 November 2018. This will be
followed by a presentation by management at 11.00am by teleconference. A direct link to
presentation material which will be referred to by management, will be available on Rakon’s website
(www.rakon.com) prior to the teleconference.

Attendees: To ensure you are placed into the conference in time for the start, we recommend you dial
in 5 minutes prior to the start time of the conference. Dial one of the following access numbers listed
below and enter the PIN code followed by the # key:


Participant Pin Code: 65688680#

Country: Toll Free Access Toll Access
New Zealand: 0800 452 257 +64 9 307 1606
Australia: 1800 093 431
China: 800 803 6107 +86 400 669 0013
France: 0800 913 497 +33 170 489 682
United Kingdom: 0800 026 1552 +44 203 194 0564
United States: 1 877 788 9032





Contact:
Anand Rambhai
Chief Financial Officer
(09) 571 9225

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©2015 Rakon Limited
HY2019 Financial Results
& Business Update
© RakonLimited 15 November 2018
Enabling the
Connected Future

1
Agenda HY2019
AgendaItemPresenter
HY2019 Financial Key PointsAnand Rambhai (CFO)
HY2019 Key AchievementsBrent Robinson (CEO, Managing Director)
MarketUpdateBrent Robinson
Q&A Session
Closing Comments and OutlookBrent Robinson
Brent
Robinson
Anand
Rambhai

2
HY2019 Financial Key Points

3
HY2019Key Points
NZ$-13.6m
NZ$4.0m
▼55%
Revenue of $53.3m vs. $48.3m in HY2018
RakonIndia contribution of $2.0m
Like for like revenue up 6% on a NZ$ basis, with
growth coming from Telecommunications (up $2.9m)
and Space & Defence (up $1.6m), offset by a decline
in Global Positioning (down $1.7m)
Strong earnings result
Net Profit After Tax (NPAT) of $9.2m vs.$0.9m in
HY2018
Underlying EBITDA
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of $5.9m vs. $3.8m in HY2018
NZ$9.2m
+55%
NZ$5.9m
Notes:
Rakon India is 100% consolidated from May 2018
Share of Thinxtralosses ceases from 1 June 2018
The release of HY2019 results is based on unaudited financial statements
All figures are presented in New Zealand dollars unless otherwise indicated
1
Refer to Note B1 of the HY2019 Unaudited Consolidated Interim Financial Statements for an explanation of how ‘Non-GAAP Financial Information’ is used, including a
definition of ‘Underlying EBITDA’ and reconciliation to NPAT
Revenue
Net profit
Underlying
EBITDA
1
Up $5.0m
Up $8.3m
Up $2.1m

4
$0.9
$9.2
($0.7)
($4.0)
$7.2
$4.5
$1.1
$0.2
HY18 net
profit
Thinxtra
remeasured
Gross
margin
Associate
and JV
profit
OtherHY18
Siward
licence
Operating
expenses
HY19 net
profit
$8.3m Net Profit Movement
HY2019 Key Points
Several contributing factors to the net profit
movement
Thinxtrainvestment re-measured to fair value
resulting in a one-off $7.2m gain
Gross margin improves
Mix drives higher GM% (46% vs. 42% in HY2018)
Flow through of growth in core business
Operating expenses grew reflecting higher
cost base with inclusion of Indian operations,
one off integration costs and FX impact of
higher EUR & GBP

5
▼>100%
NZ$-13.6mNZ$4.0m
▼55%
Depreciation higher with India
now included
Operating cash flow & net
debt are impacted by growth
in inventory and higher capital
expenditure predominantly to:
Support higher demand from
Telecommunications market
Enable the launch of key new
Telecommunications products
Purchase components to
mitigate supply risks due to
industry shortages
Implement core infrastructure
in Rakon India
HY2019 Key Points
NZ$MillionsHY2019HY2018Variance
Revenue53.348.3+5.0
Gross profit24.620.1+4.5
Operating expenses23.519.5+4.0
Underlying EBITDA
1
5.93.8+2.1
Depreciation & amortisation2.82.3+0.5
Net profit/(loss) after tax9.20.9+8.3
Earnings (cents per share)4.10.4+3.7
Operating cash flow(3.4)4.9-8.4
Capital expenditure2.11.1+1.0
Net debt3.90.3+3.5
Shares on issue at balance date
(millions)
229.1229.1-
Notes
The release of HY2019 results is based on unaudited financial statements
1
Refer to Note B1 of the HY2019 Unaudited Consolidated Interim Financial Statements for an explanation of how ‘Non-GAAP
Financial Information’ is used, including a definition of ‘Underlying EBITDA’ and reconciliation to NPAT

6
HY2019 Key Achievements

7
HY2019 Key Achievements
Growth in core business
Space & Defence up 11% on a US$ basis
Telecommunications up 10%
Leadership & Governance
Strong and refreshed board with new Director & Chair
in place
New executive positions provide enhanced capability
(Global Head of Engineering, Company Secretary)

8
HY2019 Key Achievements
Rakon India
Controlled by Rakon since May
Strong first half net profit compared to HY2018’s
net loss
Significant demand
Volumes up over 40% year on year
Increased headcount, investment in
equipment, inventory & expanded premises
Integration on track
Core functions now in place and senior team
including MD appointed
SAP implementation underway with planned
‘Go Live’ April 2019

9
Market Update

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Telecommunications
4G and 4.5G mobile base station demand has been growing, but component supply is tight
and delivery doesn’t reflect actual demand
Data centre demand contributed to an overall upside in HY2019
Global Positioning
Growth continued in the higher margin industrial markets
PND market contracted further
Space
Billings slightly down on previous period
Geostationary market trending down
Defence
The US market delivering the growth in HY2019
HY2019growth is mainly from products made in NZ
IoT
Many new applications and volumes in HY2019 have almost doubled vs. HY2018
Market Update –HY2019

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Telecommunications
The forecast demand for the remainder of FY2019 is up and strong for 4G and 4.5G base
stations and network equipment
Supply into the early 5G deployments in the US and Asia are ramping from Q3
Pressure remains from tight component supply and capacity
Global Positioning
Although quantity is forecast to be down, this is from the high volume low margin business,
while industrial applications continue to grow
Space
Second half billings forecast to improve similar to previous years’ phasing
Increasing enquiries for Low Earth Orbit (New Space) satellite requirements
Defence
Delivery of open orders from France will deliver the growth in the second half
US demand expected to drive further growth
IoT
New applications driving a lot of activity; higher volumes from Sigfoxmodules are happening
in HY2019 (production out of Siward)
Applicationsinclude pet tracking, leak detection, smoke alarms, shopping trolleys
Market Update –Outlook

12
Q&A

13
Closing Comments and Outlook

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14
Closing Comments and Outlook
HY2019
Good performance in core business
RakonIndia acquisition completed
and integration is on track
Strong profit performance by Rakon
India in HY2019
4.5/5G demand is growing
Closing Comments
5G is deploying earlier than expected
Enabled with further 4G
deployment
Key focus is on capacity and delivery
Production ramping up for multiple
new products used in new generation
networks

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