2025 AGM - CEO Presentation
Released
Released
Announcement PDF
ASX RELEASE
2025 Annual General Meeting – CEO’s Presentation
Melbourne, 20 May 2025
Electro Optic Systems Holdings Limited (EOS or Company) (ASX: EOS) provides the
attached CEO Presentation to be delivered at today’s Annual General Meeting commencing
at 10.00am AEST at the offices of MinterEllison, Level 20, Collins Arch, 447 Collins Street,
Melbourne VIC 3000.
Authorised for release by the CEO and Managing Director of Electro Optic Systems
Holdings Limited.
Further information:
Investor Relations
ir@eos-aus.com
ABOUT ELECTRO OPTIC SYSTEMS (ASX:EOS)
EOS operates in two divisions: Defence Systems and Space Systems
Defence Systems specialises in technology for weapon systems optimisation and integration,
as well as ISR (Intelligence, Surveillance and Reconnaissance) and C4 systems for land
warfare. Its key products offered include next-generation remote weapon systems, vehicle
turrets, high-energy laser weapons (directed energy), as well as fully integrated and modular
counter-UAS and C4 systems.
Space Systems specialises in applying EOS-developed optical sensors and effectors to
detect, track and characterise objects in space. It includes capabilities in the domain of space
control.
Managing Director and
Chief Executive Officer’s
Presentation
Dr. Andreas Schwer
2024 Highlights - Financial
In 2024 EOS continued to execute on its turnaround program and set the foundation for future growth
Strong
Revenue
Growth
Improved
Gross
Margins
Strong
Balance
Sheet
Total Operations
Revenue
$258.7m
Gross Margin %
$39.4m (up 17%) vs. prior year
46%
2% vs. prior year
Underlying EBITDA1
$13.0m
$7.3m (up 128%) vs. prior year
NPAT
$(19.7)m
$14.4m (up 42%) vs. prior year
Continuing Operations
Discontinued Operations
Revenue
$176.6m
$14.6m (up 9%) vs. prior year
$82.1m
Gross Margin %
48%
3% vs. prior year
Underlying EBITDA1
$(12.9)m
$0.1m (up 1%) vs. prior year
$25.9m
NPAT
$(35.1)m
$9.3m (up 21%) vs. prior year
$15.4m
41%
At 31 January 2025, EOS had nil borrowings, ~$128m cash and ~$48m of cash security deposits
1. Underlying EBITDA is a non-IFRS measure and comprises net profit after tax, adjusted to exclude tax, finance costs, depreciation and amortisation and foreign exchange impacts. A reconciliation between the
net profit after tax and Underlying EBITDA is set out in an attached slide. The directors consider it useful as it enables readers to obtain an understanding of results from operations. Underlying EBITDA is
unaudited.
6
2024 Highlights - Strategic and Operational
Operational
Strategic
EOS has laid foundations for future growth, particularly Counter-Drone (RWS / High Energy Laser Weapons) and Space Control
Focused
Strategy
• Review of strategic growth opportunities
• Decision to focus on high growth opportunities – Counter-Drone and Space Control
Portfolio
Optimisation
• Announced agreement to divest non-core, naval satcom business, EM Solutions in Nov 24
• Proceeds received $158m on 31 Jan 2025
Strengthened
Balance Sheet
• Repaid remainder of borrowings in Jan 25
• Cash balance ~$128m plus ~$48m of cash security deposits at 31 Jan 2025
• Strong balance sheet to support future growth
Strong
Markets
• Ongoing conflicts and geo-political tensions
• Role of new technology and innovation - continuing megatrend
• New & existing customers continue to engage strongly in many markets
Product
Development
• New Slinger counter-drone systems delivered to Germany and deployed in Ukraine
• Next-generation technology R500 RWS developed in close collaboration with customer
• Government funding received for new space capabilities in Australia
Market
Development
• Successful demonstrations for Ukraine, Germany, potential new customers in Middle East
• High Energy Laser Weapon – negotiations for first commercial sale are progressing
• Space Control – several visitations and detailed discussions with international partners
Designed to
Drive
Order Book
Growth
in 2025
7
Market Conditions
Geopolitical uncertainty and rapidly evolving technology continues to create supportive market conditions
Geopolitical
uncertainty and
ongoing regional
tensions
Rapid technological
changes are
challenging defence
forces
8
EOS is focused on growing its order book
Growing the order book continues to be our key focus; several opportunities are developing positively
Markets
• Global military spending
remains strong
• Enduring thematic drivers:
• Geopolitical tensions
• Technological shifts
Products
Sales & Marketing
• Recent launch of the R500, the
next-gen successor to the
renowned R400
• Step-change in sales
capabilities installed during
2024
• Commenced sales of new
container-based RWS
• Strong focus on Europe
• Significant focus on improving
software and AI capability
across the product range
• Increased investment in
marketing with trade shows
and demonstrations
Order Book
• Contract backlog of $136m at
Dec 24, (excl. EM Solutions)
• EOS is working to grow the
order book over the forward
period
Traditional sales lead times are 1-3 years - several opportunities continue to develop positively
9
As Reported 25 Feb 2025
Market Development Update
Growing the order book continues to be our key focus; several opportunities are emerging
Opportunity Maturity
Advanced
Advanced
Evaluation
Preliminary
Emerging
Product
Estimated Opportunity Size
R400
$260-$300m
R800
$20-$30m
HELW
$100-$200m
R500
$500m+
R400
$60m
R150
$200-$300m
Slinger
$150m
R400
$200m
Slinger
$60-$100m
R800
Up to $100m
HELW
$100-200m+
Space Control
$10-$100m+
•
Significant investment in sales capability, marketing (trade shows
and demonstrations) is focused on pipeline development
•
Wide range of evolving opportunities:
• Product diversity
• Geography diversity
•
Extended sales cycle e.g. 1- 3 years
• Large, complex projects
• Often subject to government bureaucratic processes
• Acceleration and delays
•
Detailed list of notable opportunities appended
Maturity Definition
Advanced:
Contract under negotiation or negotiated and conditional
Evaluation:
Customer is performing assessments of product and/or detailed discussions are underway
Preliminary:
Bid being prepared or submitted
Emerging:
Initial discussions have occurred
Note:
The maturity of each opportunity should not be taken as an indicator of how long it may take to secure a potential contract.
There is no certainty that any particular outcome or transaction will result from these discussions and negotiations
10
Sales Strategy
EOS continues to invest in its sales capabilities and has developed tailored go-to-market strategies for each region
EUROPE
• Strong market growth
• New EOS market since 2023
• Conflict creating urgent operational
requirements
• Fragmented and diverse market
• Strong Netherlands relationship,
growing in other countries
• Partner with local champions to
shape local requirements - leverage
political and industrial market access
MIDDLE EAST
N. AMERICA
ASIA PACIFIC
• Longstanding, deep relationships
in certain countries
• Large and concentrated market
• Australian home base & existing
domestic relationships
• Tensions creating urgent
operational requirements
• New opportunities emerging
• Country-specific approach:
• Direct sales
• Partnering
• Well established competitors
• Local EOS facility – local board
and management relationships
• Approach includes
• Direct sales
• Partnering
• Close work with Northrop
Grumman
• Focus on demonstrations
• Asian emerging, fragmented and
diverse markets
• Longstanding Singapore
relationship
• Drone threat perceived as less
acute
• Significant future sales
development opportunity
• Consider localisation for large orders
Industry sales cycles are typically long; we will consistently execute our go-to-market plans
11
Product Development – Software and AI Opportunity
EOS is focused on advanced software solutions as part of our emphasis on counter-drone opportunities
Implications for EOS
•
•
•
•
•
EOS expects smaller, more distributed command and control systems
(C2) to continue emerging, providing more resilience and faster
decisions
AI-driven software and C2 will become a key differentiator
EOS’ products currently use market-leading software.
In order to maintain this leadership position, EOS will continue to invest
in software and AI capability
EOS is exploring multiple C2/software growth opportunities:
•
•
Organic - develop more in-house capability
Inorganic - acquire or partner with market leading expertise
AI will become a critical differentiator in counter-drone solutions
12
Product Development – R500
EOS is maintaining global product leadership by developing a next-generation AI-based RWS
Context
•
•
•
EOS products consistently demonstrate greater accuracy than competitors
We remain committed to being the global product leader
The R500 RWS was launched in Feb 2025 at IDEX in Abu Dhabi
Planned Features
•
•
•
•
•
•
•
Increased lethality
Dual-feed cannon and larger ammunition capacity
Dual-weapon capability
High elevation for CUAS applications
High resolution sensor unit with additional CUAS sensors
AI-based target identification and tracking
Mesh network capability
Customer Interest
•
We are in active discussions with a long-standing Middle Eastern customer
for a launch order for this system
13
Growth Strategy
EOS is positioned to grow sustainably in the short, medium and longer terms
1-3 Years
•
Significant organic growth opportunities:
• Remote Weapons Systems (RWS)
• Counter-Drone products (specialised RWS)
•
Two large strategic opportunities:
• High Energy Laser Weapons
• Space Control
•
DEFEND
& GROW
2-5 Years
NURTURE
3-10 Years
SEED
Space
Control
VALUE
High Energy
Laser
Weapon
Counter
Drone
Key focus areas:
• Commercialising our significant IP assets
• Maintaining capital discipline
RWS /
CUAS
TIME
14
Summary
EOS aims to become a global leader in Counter-Drone, High Energy Laser Weapons and Space Control
Summary
• Market conditions remain supportive
• Focused growth strategy - Counter-Drone and Space Control
• Divestment of non-core activity (EM Solutions)
• Strengthened balance sheet to support growth
• EOS will continue to be a disciplined allocator of capital
• EOS expects that 2025 revenue will be heavily biased to the second half of the year
RWS / Counter-Drone
High Energy Laser Weapons
Space Control
15
Appendix
31
As Reported 25 Feb 2025
Market Development Update
Growing the order book continues to be our key focus; several opportunities are developing
Emerging
Preliminary
Evaluation
Advanced
Notable Opportunities
Region
Australia
Product
R400
Size
Opportunity
$80-100m
•
•
•
•
Land 400-3 Project for ADF
Product specification / discussion ongoing with end-users
Contract development with Hanwha at advanced stage
Potential to sign in 2025 and benefit 2026 & 2027 revenue
Launch opportunity for EOS new heavy calibre R800 system
Customer is upgrading legacy Stryker/LAV vehicles for Ukraine donation
Customer finalising contract with national funding provider
Potential to sign & benefit 2025 and future years
North America
R800
$20-30m
•
•
•
•
Europe Ukraine
R400
~$181m
•
•
•
EOS has two conditional orders with Ukraine
Product demonstrations held & product listed as ‘approved’
Orders depend on Ukrainian budget allocation
International
HELW 100kW
$50-100m
•
•
Detailed discussions advanced during 2024 and early 2025
Potential to sign during 2025
International
HELW 100kW
$50-100m
•
•
•
Detailed discussions held during 2024
Customer has sought re-quote during 2025 following change in spec.
Potential to sign during 2025 or 2026
Note: there is no certainty that any particular outcome or transaction will result from these discussions and negotiations
Maturity Definition
• Emerging: Initial discussions have occurred
• Preliminary: Bid being prepared or submitted
• Evaluation: Customer is performing assessments of product and/or
detailed discussions are underway
• Advanced: Contract under negotiation or negotiated and conditional
32
As Reported 25 Feb 2025
Market Development Update
Growing the order book continues to be our key focus; several opportunities are developing
Emerging
Preliminary
Evaluation
Advanced
Notable Opportunities
Region
Product
Size
Opportunity
Middle East
R500
$500m+
•
•
Existing customer, follow-on order
Initial bid submitted, potential contract award in 2026
Middle East
R400 Spares
<$20m
•
•
Existing customer, sustainment contract
Bid submitted, under review
Europe
R400 Marine
Slinger
<$20m
•
•
Existing customer nation, new product configuration
Bid submitted, discussions done – Update: Order secured in May 2025 for A$53m
Australasia
R400 Marine
$15-25m
•
•
Existing end user
Bid submitted, discussions ongoing
Note: there is no certainty that any particular outcome or transaction will result from these discussions and negotiations
Maturity Definition
• Emerging: Initial discussions have occurred
• Preliminary: Bid being prepared or submitted
• Evaluation: Customer is performing assessments of product and/or
detailed discussions are underway
• Advanced: Contract under negotiation or negotiated and conditional
33
As Reported 25 Feb 2025
Market Development Update
Growing the order book continues to be our key focus; several opportunities are developing
Emerging
Preliminary
Evaluation
Advanced
Notable Opportunities
Region
Product
Size
Opportunity
Europe
R150
$100-$300m+
•
•
•
Opportunity to put RWS on large logistics vehicle fleet
Competitive process during 2025 and 2026 – new customer
Potential follow-on opportunities with other nations
Europe
R400 Slinger
<$50m
•
•
Follow on orders being pursued with donor nation
End user in Ukraine
North America
R400
<$50m
•
•
New customer, New end user
Bid submitted to large global prime to support vehicle program
Europe
R400
<$50m
•
•
New customer, New end user
Bid submitted to large global prime to support vehicle program
International
R400 Slinger
<$100m
•
•
•
Potential new customer
Sample products sold, demo held, discussions underway
Potential to accelerate due to operational requirements
Middle East
R400
<$100m
•
•
•
Potential new customer
Sample products sold, demo held, discussions underway
Potential to accelerate due to operational requirements
Note: there is no certainty that any particular outcome or transaction will result from these discussions and negotiations
Maturity Definition
• Emerging: Initial discussions have occurred
• Preliminary: Bid being prepared or submitted
• Evaluation: Customer is performing assessments of product and/or
detailed discussions are underway
• Advanced: Contract under negotiation or negotiated and conditional
34
As Reported 25 Feb 2025
Market Development Update
Growing the order book continues to be our key focus; several initial opportunities are emerging
Emerging
Preliminary
Evaluation
Advanced
Notable Opportunities
Region
Product
Size
Opportunity
Europe
R400 Slinger
$10-$50m
•
•
Potential new customer nation in western Europe
Early stage discussion with end customer & potential partners, including
established local providers
North America
R400 Slinger
<$50m
•
•
Sample products sold, co-developing advanced software for customer
Targeting initial orders in 2025 & 2026. Market size > 4,000 vehicles
Middle East
R800
Up to $100m
•
•
Previous end user / new customer
Vehicle upgrade opportunity – early stage discussions
Middle East
HELW
$100-200m or
more
•
•
New product for existing national customer
Next step – bid & deal structuring planned for 2025
International
Space Control
<$10 - $100m+
•
•
Initial discussions with several prospective customers
Opportunities range in size and could include initial ‘test’ programs, to pilot sites
and larger opportunities over 2-5 year period
Note: there is no certainty that any particular outcome or transaction will result from these discussions and negotiations
Maturity Definition
• Emerging: Initial discussions have occurred
• Preliminary: Bid being prepared or submitted
• Evaluation: Customer is performing assessments of product and/or
detailed discussions are underway
• Advanced: Contract under negotiation or negotiated and conditional
35
Reconciliation of Statutory Profit / (Loss) and non-IFRS measures
The results for EM Solutions (divested in January 2025) have been treated as discontinued operations
Total Operations (Continuing & Discontinued)
$m
2024
2023
Loss for the year
(19.7)
(34.1)
15.4
10.3
Net loss for the year attributable to continuing operations
(35.1)
(44.4)
Continuing Operations
$m
2024
2023
(Loss) for the year from continuing operations
(35.1)
(44.4)
Income tax (benefit)
(3.3)
(11.2)
(Loss) before tax
(38.4)
(55.6)
Finance costs
24.6
35.3
Foreign exchange (gain)
(11.6)
(0.9)
Underlying EBIT (loss) (before foreign exchange gains)
(25.4)
(21.2)
12.5
9.4
-
(1.2)
(12.9)
(13.0)
Profit after tax for the year from discontinued operations
Depreciation and amortization
Other one-off adjustments
Underlying EBITDA1 gain/(loss) (before foreign exchange gains)
1. Underlying EBITDA is a non-IFRS measure and comprises net profit after tax, adjusted to exclude significant items such as tax, finance costs, depreciation and amortization and foreign exchange impacts. The directors consider it useful as it enables readers
to obtain an understanding of results from operations. Underlying EBITDA is not audited by the Company's auditors.
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