Rakon half-year results for FY2025

Results announcement



Results for announcement to the market
Name of issuer Rakon Limited (NZX:RAK)
Reporting Period 6 months to 30 September 2024
Previous Reporting Period 6 months to 30 September 2023
Currency New Zealand Dollar

Amount (000s) Percentage change
Revenue from continuing
operations
$41,657 -32%
Total Revenue $41,657 -32%
Net profit/(loss) from
continuing operations
-$10,367 -2,176%
Total net profit/(loss) -$10,367 -2,176%
Interim/Final Dividend
Amount per Quoted Equity
Security
No dividend proposed to be paid
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not applicable
Dividend Payment Date Not applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.48

$0.64

A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the Commentary and the unaudited interim
financial statements released in conjunction with this
announcement.
Authority for this announcement
Name of person

authorised
to make this announcement
Maureen Shaddick
Contact person for this
announcement
Nick Laurent, Investor and Media Relations
Contact phone number +64 21 240 7541
Contact email address nick.laurent@rakon.com
Date of release through MAP

27/11/2024
Unaudited financial statements accompany this announcement. Dividend Policy on www.rakon.com

---

Rakon Limited
Interim Report
2025

2

Table of Contents
Unaudited Consolidated Interim Statement of Comprehensive Income ..................................................... 3
Unaudited Consolidated Interim Statement of Changes in Equity .............................................................. 4
Unaudited Consolidated Interim Balance Sheet .......................................................................................... 5
Unaudited Consolidated Interim Statement of Cash Flows ......................................................................... 6
Notes to the Unaudited Financial Statements ............................................................................................. 8

3

Unaudited Consolidated Interim Statement of Comprehensive Income
For the period ended 30 September 2024


The accompanying notes form an integral part of these financial statements.


Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202420232024
Note $000s$000s$000s
Continuing operations
Revenue441,65761,254 128,010
Cost of sales(25,913) (35,133) (70,151)
Gross profit15,74426,12157,859
Other operating income2192350
Operating expenses
Selling and marketing(5,989)(5,827) (11,139)
Research and development(7,864)(8,856) (17,684)
General and administration(16,195) (14,135) (30,666)
Total operating expenses(30,048) (28,818) (59,489)
Other gains/(losses) – net5(1,490)3,3744,092
Operating (loss)/profit(15,773)7692,812
Finance income246280529
Finance costs(455)(265)(662)
Share of net profit/(losses) of associate922(625)(2,332)
(Loss)/profit before income tax(15,060)159347
Income tax credit4,6933404,168
Net (loss)/profit after tax for the period attributable to equity holders of the Company(10,367)4994,515
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Increase/(Decrease) in fair value cash flow hedges2,430(1,613)1,256
Cost of hedging (19)(310)(190)
Income tax relating to components of other comprehensive income(675)538(298)
Exchange differences on translation of foreign operations(2,444)9681,184
Items that will not be reclassified subsequently to profit or loss
Changes in fair value of equity investments – Thinxtra(30)10(1,529)
Other comprehensive (losses)/income for the period, net of tax (738)(231)423
Total comprehensive (losses)/income for the period attributable to equity
holders of the Company
(11,105)2684,938
Earnings per share attributable to the equity holders of the CompanyCentsCentsCents
Basic earnings per share(4.6) 0.2 2.0
Diluted earnings per share(4.5) 0.2 2.0

4

Unaudited Consolidated Interim Statement of Changes in Equity
For the period ended 30 September 2024

The accompanying notes form an integral part of these financial statements.




Share capital
Retained
earningsOther reservesTotal equity
$000s$000s$000s$000s
Balance at 31 March 2023
181,02493 (24,253) 156,864
Net profit after tax for the half year ended 30
September 2023
-499-499
Currency translation differences
--968968
Cash flow hedges, net of tax
-- (1,385) (1,385)
Changes in fair value of equity investments at fair
value through other comprehensive income – Thinxtra
--1010
Total comprehensive income for the half year-499(407)92
Contribution and distribution of equity net of
transaction costs
Issue of shares
568--568
Dividends-(3,482)-(3,482)
Employee share schemes
Value of employee services
--176176
Balance at 30 September 2023 (Unaudited)
181,592 (2,890) (24,484) 154,218
Net profit after tax for the half year ended 31 March
2024
-4,016-4,016
Currency translation differences
--216216
Cash flow hedges, net of tax--2,1532,153
Changes in fair value of equity investments at fair
value through other comprehensive income – Thinxtra
-- (1,539) (1,539)
Total comprehensive income for the half year-4,0168304,846
Employee share schemes
Value of employee services
--222222
Balance at 31 March 2024
181,5921,126 (23,432) 159,286
Net profit after tax for the half year ended 30
September 2024
- (10,367)- (10,367)
Currency translation differences
-- (2,444) (2,444)
Cash flow hedges, net of tax
--1,7361,736
Changes in fair value of equity investments at fair
value through other comprehensive income – Thinxtra--(30)(30)
Total comprehensive income for the half year
- (10,367)(738) (11,105)
Employee share schemes
Value of employee services
--162162
Balance at 30 September 2024 (Unaudited)
181,592 (9,241) (24,008) 148,343

5

Unaudited Consolidated Interim Balance Sheet
As at 30 September 2024

The accompanying notes form an integral part of these financial statements.
Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202420232024
Note$000s$000s$000s
Assets
Current assets
Cash and cash equivalents15,80717,87917,831
Trade and other receivables35,61345,84851,936
Inventories651,49059,95954,906
Derivative financial instruments 92529292
Financial asset at fair value through profit or loss21357
Current income tax asset2,4483671,001
Total current assets106,496 124,350 125,773
Non-current assets
Property, plant and equipment40,79438,56340,143
Intangible assets11,1778,59410,824
Right-of-use assets8,3903,9746,166
Interest in associates12,59513,52511,953
Trade and other receivables2,1392,1512,719
Financial asset at fair value through other comprehensive income – Thinxtra3681,936399
Derivative financial instruments11535834
Deferred tax asset11,8194,0659,085
Total non-current assets87,39773,16681,323
Total assets193,893 197,516 207,096
Liabilities
Current liabilities
Borrowings71,3501,3741,439
Trade and other payables25,71524,84325,565
Current income tax liabilities99(825)852
Lease liabilities1,7831,5771,817
Provisions1,1871,1531,030
Derivative financial instruments1994,7923,003
Total current liabilities30,33332,91433,706
Non-current liabilities
Borrowings74,2633,1125,158
Provisions3,7033,0963,781
Lease liabilities7,2512,9034,956
Derivative financial instruments -1,273138
Deferred tax liabilities--71
Total non-current liabilities15,21710,38414,104
Total liabilities45,55043,29847,810
Net assets148,343 154,218 159,286
Equity
Share capital181,592 181,592 181,592
Other reserves(24,008) (24,484) (23,432)
(Accumulated losses)/retained earnings(9,241)(2,890)1,126
Total equity148,343 154,218 159,286

6

Unaudited Consolidated Interim Statement of Cash Flows
For the period ended 30 September 2024

The accompanying notes form an integral part of these financial statements.






$000s$000s$000s
Operating activities
Cash provided from
Receipts from customers56,24775,679136,611
R&D grants received1,5968822,138
Covid-19 government assistance-10-
Interest received246280-
Other income received19388594
58,10876,900139,343
Cash was applied to
Payment to suppliers and others(20,996)(35,346)(57,846)
Payment to employees(27,961)(31,593)(59,770)
Interest paid(459)(282)(662)
Income tax paid(359)(2,369)(3,234)
(49,775)(69,590)(121,512)
Net cash inflow from operating activities8,3337,31017,831
Investing activities
Cash was applied to
Purchase of property, plant and equipment(5,477)(6,015)(12,715)
Purchase of intangibles(1,436)(46)(4,314)
Net cash outflow from investing activities(6,913)(6,061)(17,029)
Financing activities
Cash was provided from
Proceeds from borrowings--875
--875
Cash was applied to
Repayment of borrowings(783)(1,317)
Lease liabilities payments(937)(2,915)(1,739)
Dividends paid--(2,914)
Finance lease payments-(1,733)-
Cash was applied to financing activities(1,720)(4,648)(5,970)
Net cash (outflow)/inflow from financing activities(1,720)(4,648)(5,095)
Net (decrease)/increase in cash and cash equivalents(300)(3,399)(4,293)
Effects of exchange rate changes on cash and cash equivalents(1,724)(439)407
Cash and cash equivalents at the beginning of the year17,83121,71717,879
Cash and cash equivalents at the end of the period15,80717,87913,993
Composition of cash and cash equivalents
Cash and cash equivalents15,80717,87917,831
Total cash and cash equivalents 15,80717,87917,831
Unaudited six
months ended 30
September 2024
Unaudited six
months ended 30
September 2023
Audited year ended
31 March 2024

7

Unaudited Consolidated Interim Statement of Cash Flows (continued)
For the period ended 30 September 2024

The accompanying notes form an integral part of these financial statements.


$000s$000s
Reconciliation of net profit to net cash flows from operating activities
Reported net profit after tax(10,367)4994,515
Adjustments for
Depreciation and amortisation expense4,2773,5038,132
Net (decrease)/increase in allowance for expected credit loss-14(497)
Provisions provided463-585
Movement in foreign exchange rates7732,2093,834
Share of net profits of associate(915)6252,332
Income tax and deferred tax movement(5,538)-(5,785)
Employee share based expense114175446
Gain from termination of lease--(126)
Loss on disposal of inventory1,289--
Gain on disposal of property, plant and equipment-(88)-
4636,4388,921
Change in operating assets and liabilities
Decrease in trade and other receivables15,8965,7082,816
Decrease in inventories2,1902,6547,708
Increase/(decrease) in provisions-17(7)
Increase/(decrease) in trade and other payables151(5,228)(4,505)
Decrease in tax provisions-(2,778)(1,617)
Total impact of changes in working capital items18,2373734,395
Net cash flow from operating activities8,3337,31017,831
Unaudited six
months ended 30
September 2023
Unaudited six
months ended 30
September 2024
Audited year ended
31 March 2024

8

Notes to the Unaudited Financial Statements
General information ........................................................................................................................ 9
Statement of significant accounting policies ................................................................................... 9
Segment information ....................................................................................................................... 9
Revenue ......................................................................................................................................... 11
Other gains/(losses) – net .............................................................................................................. 12
Inventories ..................................................................................................................................... 12
Borrowings ..................................................................................................................................... 13
Contingencies ................................................................................................................................ 13
Subsequent events ........................................................................................................................ 13

9

General information
Rakon Limited (‘the Company’) and its subsidiaries (‘the Group’) are a global technology company that design and manufacture
advanced frequency control and timing solutions for a wide range of applications. Rakon’s core markets are Telecommunications,
Aerospace & Defence, and Global Positioning. The Company is a limited liability company, incorporated and domiciled in New
Zealand, and listed on the New Zealand Stock Exchange (NZX code: RAK). The address of the registered office is 8 Sylvia Park Road,
Mt Wellington, Auckland.
The Company is registered under the Companies Act 1993 and is a FMC reporting entity under Part 7 of the Financial Markets
Conduct Act 2013. The financial statements of the Group have been prepared in accordance with the requirements of Part 7 of the
Financial Markets Conduct Act 2013 and the NZX (Main Board) Listing Rules.
The unaudited interim financial statements of the Group have been approved for issue by Rakon’s Board of Directors on 27
November 2024.
Statement of significant accounting policies
These unaudited interim financial statements of the Group for the half-year reporting period ended 30 September 2024 have been
prepared in accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP). They comply with New Zealand
equivalents to International Financial Reporting Standards (NZ IFRS), other New Zealand accounting standards and authoritative
notices that are applicable to entities that apply NZ IFRS, in particular NZ IAS 34 Interim Financial Reporting. The consolidated
financial statements also comply with International Financial Reporting Standards (IFRS). The Group is a profit-oriented entity for
the purposes of complying with NZ GAAP. These financial statements comprise Rakon and its subsidiaries, and have been prepared
on a going concern basis.
The unaudited interim financial statements of the Group have been presented in New Zealand dollars and have been rounded to
the nearest thousands unless otherwise indicated.
The preparation of financial statements in accordance with NZ IFRS requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
This unaudited interim financial report does not include all the notes of the type normally included in an annual financial report.
Accordingly, this report should be read in conjunction with the annual report for the year ended 31 March 2024 and any public
announcements made by the Company during the interim reporting period.
Segment information
The chief operating decision maker (CODM), is responsible for allocating resources and assessing performance of the operating
segments. CODM for the Group is the Chief Executive Officer.
The operating segments are presented in a manner consistent with the internal reporting provided to the CODM. Significant
judgement has been applied in the determination of reportable operating segments. Ownership of products’ intellectual property
have been used as the key factor to identify reportable operating segment and aggregation criteria, based on synergies between
the businesses not limited by geography.
The CODM assess the performance of the operating segments based on ‘Underlying EBITDA’, a non-GAAP measure, defined as:
‘Earnings before interest, tax, depreciation, amortisation, impairment, employee share schemes, non-controlling interests,
adjustments for associate’s share of interest, tax & depreciation, loss on disposal of assets and other cash and non-cash items’. The
CODM also receives information about the segments’ revenue on monthly basis.

10

Segment results
Information relating to each reportable segment is set out below.


NZ
France/
India
France
HiRel T'maker Other
1
Total
$000s $000s $000s $000s $000s $000s
Segment revenue by market
Telecommunications
11,965 5,148 203- (518) 16,798
Aerospace & defence
4
6,942 1,236 8,838- (214) 16,802
Global Positioning
5,46240 175- (147) 5,530
Other
1,00959 1,521- (62) 2,527
Total segment revenue by market25,378 6,483 10,737- (941) 41,657
Underlying EBITDA(6,630) (4,570) (15) 1,928 2,023 (7,264)
Total assets
2
94,249 49,135 36,201 12,963 1,345 193,893
Additions of property, plant and equipment, and intangibles3,725 2,230 958-- 6,913
Total liabilities
3
23,546 13,622 7,782- 600 45,550
NZ
France/
India
France
HiRel T'maker Other
1
Total
$000s $000s $000s $000s $000s $000s
Segment revenue by market
Telecommunications
23,393 13,323 152- (2,703) 34,165
Aerospace & defence
4
6,245 756 8,864- (582) 15,283
Global Positioning
7,53131 234- (618) 7,178
Other
2,34787 2,468- (274) 4,628
Total segment revenue by market39,516 14,197 11,718- (4,177) 61,254
Underlying EBITDA6,821 (1,503) 880 566 (1,509) 5,255
Total assets
2
102,388 51,209 28,700 13,914 1,305 197,516
Additions of property, plant and equipment, and intangibles3,583 2,135 1,611-- 7,329
Total liabilities
3
21,932 14,345 5,968- 1,053 43,298
NZ
France/
India
France
HiRel T'maker Other
1
Total
$000s $000s $000s $000s $000s $000s
Segment revenue by market
Telecommunications
38,810 32,296 256- (4,505) 66,857
Aerospace & defence
4
15,736 2,551 19,779- (1,257) 36,809
Global Positioning
14,089 426 360- (1,016) 13,859
Other
4,328 140 6,516- (499) 10,485
Total segment revenue by market72,963 35,413 26,911- (7,277) 128,010
Underlying EBITDA9,316 1,718 4,501 (697) (1,382) 13,456
Total assets
2
101,969 55,472 35,791 11,953 1,911 207,096
Additions of property, plant and equipment, and intangibles6,930 5,484 4,615-- 17,029
Total liabilities
3
23,436 13,766 9,531- 1,077 47,810
Unaudited six months ended 30 September 2024
Audited year ended 31 March 2024
Unaudited six months ended 30 September 2023

11

1
Revenue is (losses)/gains on cash flow hedges apportioned to each segment based on hedged currency.
2
Segment assets are measured in the same way as in the financial statements. These assets are presented as it is regularly provided
to the CODM.
3
Segment liabilities are measured in the same way as in the financial statements. These liabilities are presented as it is regularly
provided to the CODM.
4
Space and defence segment was renamed to Aerospace & defence. The new description aligns with the industry and better
describes the scope of this segment.

Reconciliation of Underlying EBITDA to net profit after tax for the year
Underlying EBITDA is a non-GAAP measure that has not been presented in accordance with GAAP. The Directors present Underlying
EBITDA as a useful non-GAAP measure to investors, in order to understand the underlying operating performance of the Group and
each operating segment, before the adjustment of specific cash and non-cash items and before cash impacts relating to the capital
structure and tax position. Underlying EBITDA is considered by the Directors to be the closest measure of how each operating
segment within the Group is performing. Management uses the non-GAAP measure of Underlying EBITDA internally, to assess the
underlying operating performance of the Group and each operating segment.

1
During the period, the Group has incurred $1,708,000 in legal and consulting costs relating to acquisition proposal and related
costs. These are recorded in general administration cost under operating expenses.
Revenue
The Group designs, manufactures and sells frequency control solutions for a wide range of applications. Revenue is derived from
the transfer of goods over time and at a point in time at an amount that reflects the consideration the Group expects to be entitled
to in exchange for products and services excluding any applicable taxes. Arrangements are agreed with the customers, set out in
the terms and conditions which cover the pricing, settlement of liabilities, return policies and any other negotiated performance
obligations.
Reportable segment revenue from contracts with customers

Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202420232024
Continuing operations$000s$000s$000s
Underlying EBITDA(7,264)5,25613,456
Depreciation and amortisation(4,277)(3,503)(8,132)
Adjustment for associate share of interest, tax and depreciation(1,016)(1,191)(1,642)
Finance costs – net(209)15(133)
Redundancy cost(396)--
Long term incentive scheme(164)(270)(643)
One-off costs relating to acquisition proposal
1
(1,708)-(2,206)
Other non-cash items(26)(148)(353)
(Loss)/profit before income tax(15,060)159347
Income tax credit4,6933404,168
Net (loss)/profit after tax for the year(10,367)4994,515
NZ
France/
India
France
HiRelOtherTotal
$000s $000s $000s $000s $000s
Products transferred at a point in time25,378 6,483 4,945 (940) 35,866
Products and services transferred over time-- 5,791- 5,791
Sales to external customers25,378 6,483 10,736 (940) 41,657
Unaudited six months ended 30 September 2024

12



Revenue by geography
The Group’s trading revenue is derived in the following regions. Revenue is allocated based on the country in which the customer
is located.

Other gains/(losses) – net

1
Includes realised and unrealised gains arising from bank balances, accounts receivable and accounts payable.
Inventories
An additional $1.7 million provision was charged to the Statement of Comprehensive Income. At 30 September 2024, the inventory
provision was $8.1m (March 2024: $6.9m).

NZ
France/
India
France
HiRelOtherTotal
$000s $000s $000s $000s $000s
Products transferred at a point in time39,516 14,197 8,875 (4,177) 58,411
Products and services transferred over time-- 2,843- 2,843
Sales to external customers39,516 14,197 11,718 (4,177) 61,254
Unaudited six months ended 30 September 2023
NZ
France/
India
France
HiRelOtherTotal
$000s $000s $000s $000s $000s
Products transferred at a point in time72,963 35,413 22,010 (7,277) 123,109
Products and services transferred over time-- 4,901- 4,901
Sales to external customers72,963 35,413 26,911 (7,277) 128,010
Audited year ended 31 March 2024
Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202420232024
$000s$000s$000s
Asia13,80424,89752,707
North America17,55722,59347,773
Europe8,95312,88125,516
Others1,3438832,014
Total segment revenue by geography41,65761,254 128,010
Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202420232024
$000s$000s$000s
(Loss)/gain on disposal of property, plant and equipment, intangible, and right-of-use assets(1)968
Foreign exchange gains/(losses) – net
Forward foreign exchange contracts
Financial asset at fair value through profit or loss1,093(745)(1,345)
Revaluation of foreign denominated monetary assets and liabilities
1
(2,582)4,0235,429
Total foreign exchange (losses)/gains – net(1,489)3,2784,084
Total other (losses)/gains – net(1,490)3,3744,092

13

Borrowings
In April 2024, the Company entered into an agreement with Hong Kong Banking Group that provides Group access to equivalent
NZ$47m borrowing facility for the purposes of capital investment and working capital requirements. The facility is guaranteed by
the Group assets and has regular financial undertakings. At 30 September 2024, the borrowing facility remained undrawn.
The Company has terminated its facility with ASB. The Group is in transition to move all banking with HSBC.
Other line of credits
The Group maintains following line of credits:


Crédit Agricole Provence Côte D’Azur
The bank borrowings include a €1.5m French government backed loan that was made available to Rakon France (March 2024:
€2.0m). In May 2021, the Company exercised its option to extend this loan for a further five years. Repayment of the loan is spread
equally over the final four years to June 2026. The effective interest rate is 1.24% for the remaining term of five years. There are
no covenants on the loan and no additional security is required.
HDFC Bank
In June 2022, Rakon India secured a credit facility with HDFC bank including ₹200m (NZ$4,000,000) that can be used for funding
working capital requirements. The facility is secured by inventories and debtors. The facility is unused to date and will be replaced
with HSBC facility.
Contingencies
There are no material changes to contingent liabilities or assets from 31 March 2024.
Subsequent events
The Directors are not aware of any material events subsequent to 30 September 2024.
Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202420232024
$000s$000s$000s
Current
French Government loan1,2991,3071,331
Other borrowings5167108
Current borrowings1,3501,3741,439
Non-current
French Government loan1,4132,9682,237
Other borrowings2,8501442,921
Non-current borrowings4,2633,1125,158

---

Rakon Limited
T +64 9 573 5554
8 Sylvia Park Road, Mt Wellington, Auckland 1060, New Zealand
Private Bag 99943, Newmarket, Auckland 1149, New Zealand




Market Release
Rakon half-year results for FY2025
All numbers are stated in New Zealand dollars (NZ$) and relate to the six months ended 30
September 2024 (HY25), with comparisons to the six months ended 30 September 2023 (HY24)
unless stated otherwise.

HY25 results reflected the anticipated pressures in Telecommunications and
Positioning markets, driven by challenging conditions and temporary impacts on
gross margins.
Despite these headwinds, Rakon made solid progress in advancing its operational
transformation and cost efficiency initiatives, leaving the company well-positioned for
growth. Strategic investments in diversifying revenue streams, alongside robust
demand in Space and AI & Cloud Infrastructure, are expected to underpin sustained
expansion.
27 November 2024 – Rakon Limited (NZX: RAK), a world leading manufacturer of frequency
control and timing solutions, has today released its financial results for the six months ended
30 September 2024 (HY25).
Key takeaways:
 Strong performance in Aerospace and defence segment, delivering revenue growth
for the fourth consecutive financial half-year, was offset by some of the toughest
market conditions Rakon has seen in Telecommunications and Positioning.
 The first half was impacted by significantly lower demand in Telecommunications and
Positioning, which led to lower order volumes and constrained economies of scale,
impacting gross margins.
 Telecommunications showed signs of improvement in late HY25: inventory
normalisation levelling off and selective global 5G network investment.
 Cost reduction programme is advancing effectively, balanced by R&D investments to
extend technology leadership, safeguard growth pathways, and scale production to
meet robust demand in high-growth Space business and AI & Cloud Infrastructure
segment.
 Rising demand for Rakon’s AI & Cloud Infrastructure products from leading industry
players in HY25. Segment is on track to deliver significant revenue in 1H26.
 On track with accelerated schedule for the transfer of key product lines to Rakon’s
manufacturing centre of excellence in India; improved margins expected as
production ramps up in the last quarter of the fiscal year.
 Achieved highest revenue month for HY25 in September 2024; company anticipates
this momentum will persist in 2H25, supported by improving Telecommunications
orders and substantial demand for Space products.

Page 2 of 5 w w w . r a k o n . c o m

 Rakon expects to track in the lower half of its FY25 Underlying EBITDA
1
guidance of
$5m to $15m.
Rakon CEO, Sinan Altug says the challenges of the last six months were exceptionally tough
in the Telecommunications and Positioning segments, driving total revenue and margins
lower, despite year-on-year growth in Aerospace and defence.

“As we anticipated, the first half of FY25 presented significant challenges, particularly in
Telecommunications and Positioning markets. These markets continued to be affected by
macroeconomic conditions that slowed investments in 5G mobile networks globally, and
extended timeframes for customer inventory normalisation across both markets,” says
Altug.

"Despite these pressures, we have stayed focused on diligent execution of our cost
reduction programme, balanced by investments in the company’s growth strategy. This has
allowed us to emerge from this incredibly tough period streamlined and strengthened to
capture more opportunities, particularly in our high growth Space business and AI & Cloud
Infrastructure segment.

“Importantly, our growth drivers in these areas have strengthened over this period, with our
Aerospace and defence segment performing well, and delivering record revenue for the past
two years. Our AI & Cloud Infrastructure products are getting designed in and securing
orders from leading industry players, and we are on track to start delivering significant
revenue in this new segment in the first half of FY26.”

Altug says the Telecommunications segment also showed signs of improvement in late
HY25 with inventory normalisation levelling off and indications of selective global 5G network
investment, and the company expects this to continue into 2H25.

“We achieved our highest revenue month for HY25 in September 2024, fuelled primarily by a
modest increase in Telecommunications orders. We anticipate this momentum will persist in
the second half of the financial year, alongside high seasonal Space demand in Q4.”

HY25 financial results
Total HY25 revenue of $41.7m (HY24: $61.3m) was lower year-on-year, with strong revenue
growth in Aerospace and defence unable to offset lower demand in Telecommunications and
Positioning.

Telecommunications revenue was down 51% to $16.8m, and Positioning was down 23% to
$5.5 million. Aerospace and defence delivered its highest ever revenue result, up 10% to
$16.8m, and continues to validate Rakon’s strategy to invest in new high-growth market
opportunities. AI & Cloud Infrastructure revenue is currently milestone-focused, with revenue
expected to grow significantly from FY26.

Lower gross profit of $15.7m (HY24: $26.1m) and margin percentage of 37.8% (HY23:
42.6%) was primarily driven by lower order volumes in Telecommunications and Positioning
and the impact on economies of scale.

Underlying EBITDA
1
was $(7.3)m (HY24: $5.3m), with a net loss after tax of $(10.4)m
(HY24: $0.5m).

“The first half reflected the challenging market conditions, particularly in Telecommunications
and Positioning,” Altug says. “Gross margins were impacted by reduced sales volumes,

Page 3 of 5 w w w . r a k o n . c o m

$1.5m of increased inventory provisions, and one-off adjustments. Opex was impacted by
$1.7m in unfavourable FX movements, and restructuring and acquisition proposal related
costs.”

Rakon’s programme to reduce costs and carefully manage its working capital continues to
advance effectively. Global workforce numbers are down by 22% year-on-year, keeping
production utilisation at optimal levels while retaining necessary ramp-up capability. Effective
efforts to drive inventory optimisation have carried over from FY24 and reduced inventory by
a further 14% in HY25 to $51.5m (HY24: $60m).

HY25 Capex dropped by 6% to $6.9m with operating expenses relatively flat at $30m,
reflecting the impact of Rakon’s cost reduction and efficiency initiatives in offsetting the
company’s continued growth strategy investments.

Growth investments include Research & Development (HY25 $10.7m (HY24: $8.9m)), to
extend Rakon’s technology leadership for securing future design wins and market share. It
also includes expansion of facilities to ramp up production to meet current and future AI &
Cloud Infrastructure, and Space orders – including orders from contract wins announced in
2024 to supply subsystems for two new LEO satellite constellations.

Rakon retains a strong balance sheet, with net assets of $148.3m. The company had $15.8
million in net cash at balance date, $2.1 million lower than a year ago.

In April 2024, Rakon entered into a 2-3 year debt facility with global banking and financial
services group, HSBC, which remains undrawn at HY25.

Strategic Progress
Rakon is successfully delivering on its strategic growth plan, with the diversification of its
products and revenue solidifying the company’s medium to long-term growth pathway. This
gives the company added protection against traditional market cycles and leverages its
technology leadership and reputation to gain market share and design wins in key high-
growth areas.

Rakon’s Space business and AI & Cloud Infrastructure segment represent the core revenue
growth drivers for the company in the medium to long-term, and it anticipates they will
account for close to 50% of total revenue by the end of the decade. LEO satellite subsystem
contract wins and the recently announced selection of Rakon’s MRO subsystem for an
International Space Station mission, have continued to grow the company’s stature in the
Global Space Industry, as a top-3 supplier for its subsystems. In the AI & Cloud
Infrastructure segment, Rakon is achieving design wins and securing orders from all of the
key industry players.

Positively, the Telecommunications market showed indications of improvement in late HY25,
with signs that customer inventory normalisation is almost complete, and reports of a gradual
rise in 5G network investment.

Altug says: “We expected the Telecommunications market would remain subdued in the first
half of FY25, consistent with what we shared at our FY24 results. We anticipate stabilisation
on a year-on-year basis during the second half of the fiscal year, with inventory stockpiles
normalising.”

“Our largest customers are seeing some positive signs and sales growth in the North
American market as mobile network traffic continues to grow at a ‘healthy rate’ – a

Page 4 of 5 w w w . r a k o n . c o m

combination of underlying traffic growth and also growth of Fixed Wireless Access demand,
that is, using mobile networks to deliver high-speed home internet. On top of this we have
seen indications of selective mobile network investment in Europe and also in India, where
three of the four largest network operators have recently announced billion dollar
investments in their network infrastructure, starting in 2025.”

Rakon made good progress in HY25 with its ‘Innovate, Capture, Capitalise’ initiative to
optimise research, product development and manufacturing across its global operations.
This includes an accelerated schedule for transferring key product lines to Rakon’s
manufacturing centre of excellence in India. The company expects to achieve improved
margins on the transferred products as production ramps at the start of calendar year
2025.

These product transfers are the first step of a comprehensive organisational transformation
programme to reconfigure the company in line with its growth strategy. The organisational
transformation programme is expected to deliver substantial overhead efficiencies and
margin enhancements across Rakon’s global operations within the next two years.

Outlook
Rakon is forecasting an improved second half, with its Aerospace and defence
segment leading the way and continuing its growth trajectory. Rakon’s Space business has a
strong order book for FY25 and beyond, and annual seasonality means Space order
volumes are weighted towards Q4.

The company’s Telecommunications and Positioning segments are expected to remain
subdued but improving in the second half. Rakon has retained its share of both markets and
anticipates that Telecommunications demand will build in 2H25, as the market stabilises.

AI & Cloud Infrastructure product orders from leading industry players will deliver significant
revenue in 1H26.

Rakon is tracking in the lower half of its FY25 Underlying EBITDA
1
guidance of $5m to
$15m.


About Rakon
Rakon’s products help people to connect, explore and innovate. They are the ‘heartbeat’ for
electronic systems, delivering fast, precise and stable connectivity in everything from mobile
networks and autonomous vehicles to satellite constellations and AI data centres.

Whether connecting to a 5G tower or to a rover exploring Mars, our technology is relied on to
deliver the highest performance in even the most extreme conditions. Thanks to our constant
drive to innovate, we continue to empower our customers to create the next-generation of
life-transforming technologies, on Earth and beyond. For more information, visit rakon.com.


1
Non-GAAP disclosures. Refer to note 4 of the FY2024 consolidated financial statements for
an explanation of how ‘Non-GAAP Financial Information’ is used, including a definition of
Underlying EBITDA’ and reconciliation to net profit after tax (NPAT).

ENDS

Authorised for release to the NZX by Rakon’s Board of Directors.

Page 5 of 5 w w w . r a k o n . c o m



Contact: Investor and media
Nick Laurent
Investor and Corporate Communications Manager
investors@rakon.com
+64 21 240 7541
www.rakon.com

Financial Results and Business Update details
Rakon’s Half Year financial results presentation FY2025, is scheduled to start at 11.00am
NZDT on Wednesday 27 November 2024. To view the live presentation webcast please pre-
register using this registration link.

---

0
27 November 2024© Rakon Limited
For the six months to 30 September2024
Half year financial results presentation FY2025

1
Disclaimer
This presentation contains not only a review of operations, but also some forward looking statementsabout Rakon Limited and the
environment in which the company operates. Because these statements areforward looking, Rakon Limited's actual results could
differ materially.
Although management and directors may indicate and believe that the assumptions underlying theforward looking statements are
reasonable, any of the assumptions could prove inaccurate or incorrectand, therefore, there can be no assurance that the results
contemplated in the forward lookingstatements will be realised.
Media releases, management commentary and investor presentations areavailable on the company'swebsite and contain additional
information about matters which could cause Rakon Limited'sperformance to differ from any forward looking statements in this
presentation. Please read thispresentation in the wider context of material previously published by Rakon Limited.
Non-GAAP measures
All figures are presented in New Zealand dollars unless otherwise indicated. All comparisons are to the prior corresponding period
(six months to 30 September 2023) unless otherwise noted.
Refer to note 4 of the FY2024 audited consolidated financial statements for an explanation of how ‘Non-GAAP Financial Information’
is used, including a definition of ‘Underlying EBITDA’ and reconciliation to netprofitaftertax (NPAT).
Important Notice
2

2
Agenda
4-5Key takeaways
6Business highlights
7Key financial results
8-10Core market performance
11Working capital management
12-14Strategy
15Outlook
16Summary
Sinan Altug
Chief Executive Officer
Mark Dunwoodie
Interim Chief Financial Officer
3

3
Key takeaways –Half Year FY2025
»Strong performance in Aerospace and defence segment delivering revenue growth for the fourth consecutive financial
half-year but offset by very tough market conditions in Telecommunications and Positioning segments.
»HY25 revenue down year-on-year, impacted by significantly lower demand in Telecommunications and Positioning,
leading to lower order volumes and constrained economies of scale, impacting gross margins.
»Cost reduction programme is advancing effectivelybut balanced by R&D investments to extend technology leadership,
safeguard growth, and scale production to meet robust demandfor Space and AI & Cloud Infrastructure products.
»Telecommunications showed signs of improvement in HY25:inventory normalisation levelling off and selective network
investment globally.
4

4
Key takeaways –continued
»Rising demand for AI& Cloud Infrastructure products from leading industry players in HY25; will produce significant
revenue in 1H26 and projected market size growth supports this segment becoming a core market within five years.
»On track with accelerated schedule for the transfer of key product linesto Rakon’s manufacturing centreof excellence
in India; improved margins expected as production ramps up in Q4 of FY25.
»Achieved highest revenue month for HY25 in September 2024,we anticipate this momentum will continue in 2H25,
supported by improvingTelecommunications orders and substantial demand for Space products.
»Rakon expects to track inthe lower half of its FY25Underlying EBITDA
1
guidance of $5m to $15m. Strong order
pipeline in Space and AI & Cloud Infrastructure isdriving growth projectionsin the medium to long-term outlook.
1
Non-GAAP disclosures: Refer to note 4 of the FY2024 consolidated financial statements for an explanation of how ‘Non-GAAP Financial Information’ is used, including a definition of Underlying EBITDA’ and reconciliation to net profit after tax (NPAT)
5

5
Increased production capacity for Space subsystems and
AI products to support customer order growth and pipeline
Business highlights –Half Year FY2025
Signed $17m contract with MDA Space to supply MRO
subsystems for TelesatLightspeed satellite constellation
Announced a second space subsystem contract in June
for a new Low-Earth orbit (LEO) satellite constellation
Indian facility transfers; equipment transfer completed and
validated; customer qualification phase underway
Launched Rakon’s ground-breaking semiconductor chip
for space, MercuryR™
AI & Cloud Infrastructure products have secured orders
from key industry players; significant revenue in 1H26
Organisational transformation programme underway;
Chief Transformation and Operations Officer NZ appointed
Rakon’s next semiconductor chip, Vulcan™, on track for
release and customer testing in FY25
6

6
Performance for six months to 30 September 2025
NZ$m
HY25HY24YoY
change
% change
Revenue41.761.3-19.6-32%
Gross profit15.726.1-10.4-40%
Gross margin %37.8%42.6%-4.8%
Operating expenses30.028.8+1.2+4%
Net profit after tax(10.4)0.5-10.9
n/a
Underlying EBITDA
1
(7.3)5.3-12.6
n/a
Capital expenditure6.97.3-0.4-5%
Operating cash flow8.37.3+1.0+14%
Financial PositionSep-24Sep-23Variance% change
Cash and cash equivalents15.817.9-2.1-12%
Debt
2
-5.6-4.5-1.1-24%
Inventory51.560.0-8.5-14%
Key financial results –Half Year FY2025
1
Refertonote4oftheFY2024auditedconsolidatedfinancialstatementsforanexplanationofhow‘Non-GAAPFinancialInformation’is
used,includingadefinitionof‘UnderlyingEBITDA’
2
ExcludingNZIFRS16
Revenue
Underlying EBITDA
1
$60m
$85m
$87m
$61m
$42m
HY21HY22HY23HY24HY25
$11m
$26m
$28m
$5m
($7m)
HY21HY22HY23HY24HY25
7

7
7
7
Aerospace and defence
•Continued growth (up 10% YoY) in Aerospace and
defence, driven by strong order book for Space business
and steady order levels in defence
•High demand for Space subsystem products is a key
growth driver, including orders from the two announced
contracts to supply subsystems for LEO satellite
constellations
•Gross margin up YoY for past four years due to
expansion of our Space product portfolio into higher
margin products

8
8
8
Telecommunications
•Continued weakness globally in Telecommunications
segment (down -51% YoY)leading to low order volumes
and reduced revenue
•Lower gross margin driven byinefficiencies of lower
production levels
•Maintained market share and design win rate for latest
products, ensuring a high share of next-generation
application orders

9
9
9
Positioning
•Positioning market revenue (down 23% YoY) affected
by lower demand and customer inventory normalisation
•Lower gross margin driven byinefficiencies of lower
production levels
•Share in the Precise Positioning business remains
strong. Continued heavy competition in
Consumerbusiness ensures that near-term focus
remains on maximising Precise Positioning orders and
market share

10
Careful working capital management and investing for growth
»Continued focus on working capital managementincluding an $8.5m reduction in total Inventory balances.
»Capex and Opex reductions balanced with protecting growth path, including investments forR&D and product transfers to India,
and ramping up production capacity to meet demand for Space and AI & Cloud Infrastructure products
»Optimisationof manufacturing cost structures to capture greater efficiency
•Accelerated schedule for Indian facility production of key products is on track
•Anticipate realisation of greater Cost of Sales efficiencies from Indian facility as production ramps at the start of CY2025
»Production utilisation levels–workforce countwas reducedby 22%, year on year,in response to thelowerrevenue
environment, optimising cost ofproduction while still retaining necessary capabilitiesfor growth plan
»Good net cash position and strong balance sheet; HSBC debt facilities undrawn at HY25
11

11
Short to medium-term growth aspirations
Aerospace and defence
Telecommunications
Positioning
Other
AI &Cloud Infrastructure
One-off‘chip-shortage’
revenue
Exposed to traditional rollout cyclesDiversified; protected against cycles
2020
2029
Note:ThisslideillustratesRakon’sshorttomedium-
termgrowthaspirations,basedontargetedkey
marketgrowthfactoringinexecutionrisk.Itisnota
graphandshouldnotbeinterpretedasan
indicationoffuturerevenuelevelsorprofitability.
2025

12
Innovate, Capture, Capitalise: Extending the product lifecycle
13

13
FY25 growth milestones
M A N U F A CT U R I N G
F A CI L I T Y I N I N D I A
R A K O N D E S I GN E D
S E M I CO N D U CT O R
CHI P S
X M E M S
®
N A N O T E CHN O L O GY
M A N U F A CT U R I N G
N E WS P A CE
B U S I N E S S
FY2025 milestones
•Transfer of select NZ
telecommunications and France
space subsystem products
•Chip based product revenue
growing to over 60%
•Release of Vulcan
TM
next
generation chip
•Leadership in targeted market
segments
•Expansion into other product
categories
•Become a top 3 player in
subsystems[Achieved in FY24]
•Delivery of orders
FY2026-2028
I CC A N D
O R GA N I S A T I O N A L
T R A N S F O R M A T I O N
T E CHN O L O GY
L E A D E R S HI P A N D
P R O D U CT P I P E L I N E
A E R O S P A CE
P R O D U CT S A N D
S U B S Y S T E M S
A I A N D CL O U D
I N F R A S T R U CT U R E
14

14
Core markets outlook
Aerospace and defence
•2H25 revenue to benefit from seasonal delivery orders; strong Space order book extending beyond FY25
•Continued high customer interest in space subsystem products; targeting additional contract
wins/design-ins for large LEO satellite constellations
CY24 TAM: $1.7b
CY24 SAM: $1.4b
CY24 TAM: $806m
CY24 SAM: $303m
CY24 TAM: $1.6b
CY24 SAM: $322m
CY24 TAM: $467m
CY24 SAM: $199m
Telecommunications
•Based on feedback from largest customers, product orders are expected to stabiliseYoY during 2H25,
driven by selective network infrastructure investmentfrom global network operators
•Network investment activity: North American market improving; selective investment by European
operators; 3 of 4 largest operators in India have recently announced billion dollar network investments
Positioning
•Expect revenue to remain flat; increased competition is driving down price but overall volumes steady
•Rakon has a good position in the high-endPrecise Positioning business and is maintaining market share
AI &Cloud Infrastructure
•Product orders secured from key industry players; expect significant revenuein 1H26
•Segment on track to become a new core market within five years
Total Addressable Market (TAM)
Serviceable Addressable Market (SAM)
All figures in NZD. Please see disclaimer slide regarding forward looking statements. TAM and SAM diagrams are indicative only and not to exact scale.TAM / SAM references: Euroconsult; Dedalus Consulting;Internal analysis.
15

15
Summary
1
Non-GAAP disclosures: Refer to note 4 of the FY2024 consolidated financial statements for an explanation of how ‘Non-GAAP Financial Information’ is used, including a definition of Underlying EBITDA’ and reconciliation to net profit after tax (NPAT)
»Strong performance and continued year on yeargrowth in Aerospace and defence offsetby some of the
toughest market conditionsRakon has seen in Telecommunications and Positioning segments.
»Rising demand for AI& Cloud Infrastructure products from leading industry players in HY25; supports this
segment becoming a new core market within five years
»Cost reduction programme is advancing effectivelybut balanced by R&D investments to extend technology
leadership and safeguard growth trajectories in Space business and AI & Cloud Infrastructure segment.
»Telecommunications showed signs of improvement in HY25:inventory normalisation levelling off and selective
network investment globally; anticipate this will continue in 2H25
»Expect to be inthe lower half of FY25Underlying EBITDA
1
guidance of $5m to $15m.
»2026 to 2029 aspirational core business CAGR targetof 25%,driven by Space and AI & Cloud Infrastructure
growth, and return of Telecommunications orders.
16

16
Shareholder questions

www.rakon.com
End of presentation. Thank you for attending.

18
Appendix

19
19
Net profit and underlying EBITDA explained
20
Decrease in net profit compared to HY24 explained
How the current period net profit
translates to EBITDA
1. Include movement in finance cost, balance of operating expenses, other operating income, foreign exchange gains & net financecost
2. Adjustment for Timemaker share of interest, tax and depreciation

20
How net profit translates to
operating cash
How operating cash translatesto
movement in net cash
•Decrease in receivables reflects reduction
in Telecommunications revenue
Other
1
–non-cash items including unrealised foreign exchange, share of net profits of associate (Timemaker), employee share-based expense, and
movements in other provisions
Cash balance
$15.8m
How net profit translates to net cash movement
Inventory management and investment for growth impacting cash position
21

21
Strategy to build long-term value
STRATEGIC ACQUISITIONS SUPPORTING GROWTH STRATEGY
GROW OUR
CORE BUSINESS
MAINTAIN PRODUCT
AND TECHNOLOGY
LEADERSHIP
EXPAND INTO
NEW MARKETS
DELIVER WORLD
CLASS
MANUFACTURING
ORGANISATIONAL
TRANSFORMATION
Telco market leadership –
products using proprietary
technologies
Space and defence –
market access in
North America
Precision industry
Positioning applications
New technology design-in
Rakon semiconductor
chips –accelerate
time-to-market
XMEMS® –deliver next
generation products and
performance
Space –diversified
product range
includinghigher value
chain equipment and
subsystems
Space -LEO satellite
constellations
AI computing hardware /
AI Factories and
advanced data centres
Autonomous vehicles
Targeting key customer
partnerships in new
markets
Accelerated plan for
enabling global capability
and volume
manufacturing of key
products
Advanced supply chain
management
XMEMS® nanotechnology
volume manufacturing
Reconfigure global
operations to align with
strategic growth priorities
Optimise organisational
capabilities and capacity
to scale for growth
Drive efficiency initiatives
across global
organisational
structureand processes
22

22
FY23-FY25 Growth roadmap
N E W
M A N U F A CT U R I N G
F A CI L I T Y I N I N D I A
R A K O N D E S I GN E D
S E M I CO N D U CT O R
CHI P S
X M E M S
®
N A N O T E CHN O L O GY
M A N U F A CT U R I N G
N E WS P A CE
B U S I N E S S
FY 2023
FY 2024
FY 2025
•Construction completed
•Fitout / capacity expansion
•Existing manufacturing
transfer
•Substantial increase in R&D
and chip design capability
•Release of Niku
TM
next
generation chip
•Continued investment in
XMEMS
®
capability
•Release of initial XMEMS
®
based products
•R&D and supply chain
investment
•Strategic relationships
established
•Transfer of select NZ products
•Transfer of select NewSpace
products
•Launch of enhancedMercuryX
TM
•AI computing products
generating revenue
•Chip based product revenue
growing to over 60%
•Volume production of
XMEMS®
•XMEMS® products qualified
into key 5G platforms
•Recognised player in the
NewSpaceecosystem
•Significant orders secured
•Transfer of select Space
subsystems
•Chip based product
revenue growing
•Release of Vulcan
TM
next generation chip
•Leadership in targeted
market segments
•Expansion into other
product categories
•Become a top 3 player
in subsystems
•Delivery of orders
23