Comrod Communication ASAQ2 Presentation
Stavanger, 27th. August 2007
Eirik S. Larsen, CEO
Kari Duestad, CFO
Ole Gunnar Fjelde, EVP and
MD Comrod AS
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Agenda
I. Key points
II. Company overview
III. Q2 Financials
IV. Summary
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Key points Q2
Continued growth in turnover
Important new contracts secured:
New contract on antennas to a major NATO country in May
New contract on masts to the US army in May
New contract with US based radio producer on antennas in June
New contract with US based radio producer on antennas in July
Good market development in all business units, high tendering activity
Preparing for higher production capacities in second half of 2007
Integration process run as planned, positive contribution from all entities
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Agenda
I. Key points
II. Company overview
III. Q2 Financials
IV. Summary
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A previous business division of Hexagon
Public listed company on Oslo Stock Exchange
Headquarter close to Stavanger
Offices and production facilities in Tau, Stavanger, Oslo and St Amand Les Eaux in France.
170 employees, whereof 86 in France
Comrod develops, manufactures and markets masts, antennas, industrial products and power supplies. Approximately 80% of sales is to the defense communication market
Comrod holds leading global market positions within antennas and masts for the defence market
Comrod Communicaton ASA – Company profile
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Masts
The Business Areas
Industrial products Power supply
Product illustration
Products
Revenues and EBITDA 2006
Type of clients
NOKm 27,2 / NOKm -1,1
OEM, defense organizations
Telescopic, sleeve, man-pack, manual and motorized versions
Key customers In defense market, key clients include Thales, DGA and US Army
NOKm 26,2 / NOKm 2,1
Utilities, industrial companies
Insulating products such as insulators, insulating poles and structural composites which are custom designed products
Defense (10% of sales) and utility and energy industry (90 % of sales). Key clients include Siemens and SCNF
NOKm 14,9 / NOKm 2,8
Defense organizations
Battery systems, technology rights acquired from Eltek ASA with exclusive rights in the defense market
In the defense market, key clients include Kongsberg Group and FMV Sweden
Manufacturing France / Norway France Outsourced to plants in Norway, Poland and China
Antennas
NOKm 129,3 / NOKm25,5
OEM, defense organizations, commercial vessels
HF, VHF, UHF, dual band, GPS, multi-band antennas and antenna systems
Defense (80 % of sales) and maritime industry (20 % of sales). Key clients include ITT, Harris, Thales and Rhode & Schwarz
Norway / France
Source: Comrod Communication
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Product range include HF, VHF, UHF, dual band, GPS, multi-band antennas and antenna systems
Products are manufactured at in-house manufacturing facilities
Key attractive features of products- Superior quality, proven record- Meets the toughest demands - Flexibility
Commercial vesselsNavy
Bowman Vehicle Collection
HF 1.6-30MHz, VHF 30-88MHz, UHF 225-450MHZ
Overview of products
Business Area – Antennas (58% of revenue)
Man-pack VHF 30-88MHz
Handheld VHF 30-88MHz
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Market : Antennas
Comrod has well established leading market positions in most main EU countries and now sells to more than 60 countries
The big new contracts for the US is an important step in becoming a major player also in the US market
Total market is increasing due to new and more advanced radio communication technologies being introduced and applied
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Overview of products
Business Area – Masts (13 % of revenue)
Masts include telescopic, sleeve, man-pack, manual and motorized versions
Products are manufactured at in-house manufacturing facilities
Key attractive features of products- Easy maintenance- Standard as well as tailor made versions- Advanced control for unmanned use
Surveillance
Omaha Beach LOS (land of sight) Advanced control
Unmanned use
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Market : Masts
New contract won in June for deliveries of 30m high tactical masts to the US Army.
Mast segment is increasing due to increasing use of high band width communication where LOS systems are applied
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Include battery chargers and power supplyManufacturing outsourced to companies in Norway, Poland and China
Key attractive features of products- Demanding applications- Tailor made solutions- Both Ni Cad and Li-Ion batteries
Double Man-pack charger
Standard power supply Combined charger and power supply
1 position vehicle charger
Overview of products
Product area – Power supply (16 % of revenue)
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Market: Power Supply
Market openings into the existing sales networks of Comrod and Lerc
High activity on new tenders
Comrod in unique technology position.
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Include insulating products such as insulators, insulating poles for railroad and utilities, offshore products and custom designed structural components.
Products are manufactured at in-house manufacturing facilities
Key attractive features of products- Tailor-made solutions- Niche markets - Extensively tested and quality assured
Offshore applications
Railroad applications Insulators
Foamed pipe
Overview of products
Product area – Industrial products (13 % of revenue)
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Market : Industrial Products
Growth within Offshore Application Products, good margins.
Stable market for Other Insulator Products.
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UMS Norway – Unmanned Systems
Development and sales of UAVs (Unmanned Aerial Vehicles)
First “scaled down” prototype successfully tested from March this year
Full scale prototype to be airborne within this year
5 m wing span
5m fuselage length
Speed: 300 km/h
Flying time: 7 -9 hours
Targeting the rapidly increasing demand for tactical UAVs in the defense and civil markets
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Agenda
I. Key points
II. Company overview
III. Q2 Financials
IV. Summary
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Financial performance Q2
Substantial growth in turnover
Growth in EBIT
EBIT margin down
Good development in the Power supply business area
Good development in the Mast business area
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Q2 financials
Q2 2007 Q2 2006 Q2 2006
ProformaTotal Sales 66 300 27 740 139,0 % 47 831EBITDA 7 580 4 218 79,7 % 6 889EBIT 4 574 3 030 51,0 % 4 090EBIT % 6,9% 10,9% 8,6%
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Segment Information : Turnover per Business Area
AntennasTurnover 31 627 30 964 EBIT 508 2 436 EBIT % 2 % 8 %
MastsTurnover 16 402 4 575 EBIT 2 441 12 EBIT % 15 % 0 %
Industrial Products Turnover 9 263 7 358 EBIT 89 837 EBIT % 1 % 11 %
Power SupplyTurnover 9 025 4 933 EBIT 2 450 805 EBIT % 27 % 16 %
Q2 2007 Q2 2006 - Proforma
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Turnover per segment
31627
16402
9263
9025 Antennas
Masts
Industrial Products
Power Supply
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Cash Flow Statement
(All f igures in 1000 NOK) 30.06.2007 31.12.2006
Profit before tax 4 941 11 732Depreciation and write-downs 6 001 5 686Change in net working capital -1 407 -9 059Net cash flow from operations 9 536 8 360Net cash flow from investment activities 26 889 -122 587Net cash flow from financing activities -20 923 116 733Net change in cash and cash equivalents 15 501 2 506Cash and cash equivalents at start of period 4 184 1 678Cash and cash equivalents at end of period 19 685 4 184
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Balance sheet
30.06.2007 31.12.2006
Total Capital 253 825 271 627
Equity 88 631 18 726
Net interest-bearing liabilities 93 339 183 581
Property, Plant and Equipment 54 996 57 878
Intangible assets 65 907 67 386
Available unused credit facility 10 000 5 000
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Capital structure
91 Mill NOK long term bank loan
10 mill NOK overdraft protection
Lerc: local financing of working capital factoring agreement
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Agenda
I. Key points
II. Company overview
III. Q2 Financials
IV. Summary
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Summary and outlook 2007
New contracts strengthening our position with the major radio producers.
Positive market outlook for all business areas
Integration process in good progress – positive and dedicated efforts from all organizational units
Continued growth expected in 2007 and beyond
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Q&A
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www.comrod.com
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