Creating subscription based revenues from delivery of essential data to government and commercial entities around the globe
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Creating subscription based revenues from delivery of essential data to government and commercial entities around the globe 1
DISCLAIMER This document is not a product disclosure statement for the purposes of a disclosure document under the Corporations Act 2001 (Australia). This presentation has been prepared solely for information purposes and does not purport to contain all the information that a potential investor may require. It is distributed on the understanding that no representation or warranty is made by Kleos Space S.A. with respect to the completeness, accuracy or reliability of the information contained. This presentation is not a financial product or investment advice or a recommendation to acquire Kleos Space S.A. securities, nor is it legal, accounting or tax advice. This presentation has been prepared without taking into account any person’s individual investment objectives, financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions on such matters and for making your own independent assessment of the information in this presentation. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial and tax situation and seek independent professional advice. Past performance and historical information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of the Kleos Space future financial performance or condition. Actual outcomes may vary from forecasts. A number of important factors and risks may cause actual performance to differ materially. This presentation must not be disclosed to any other party and does not carry any right of publication. This presentation is without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Kleos Space S.A.. Neither this presentation nor any of its contents may be reproduced or used for any other purpose without the prior written consent of Kleos Space S.A.. This presentation has been prepared in accordance with the laws of the Grand Duchy of Luxembourg. K L E O S . S PA C E A S X : K S S 2
INTRODUCTION Radio Frequency (RF) Kleos is the first company to fly The data is collected and spectrum usage is a resource clusters of four satellites to downlinked from the satellites that can be mined for highly accurately detect and locate the then processed through our valuable data usage of the RF spectrum by proprietary algorithms legitimate and illegitimate actors Once ‘packaged’ into data products and transferred to our licenced subscribers ‘as-a- service’, the same data is able to be sold unlimited times creating annuity type revenues. Kleos is targeting areas that are of greatest interest to our customers i.e. Strait of Hormuz, South China Sea, East/West Africa, Southern Sea of Japan, northern Australian coast K L E O S . S PA C E A S X : K S S 4
EXECUTIVE SUMMARY Proprietary technology and own Complementary to other Revenue generating post imminent satellites creating a highly commercial and government launch of first satellites that are valuable, independent data set assets and data waiting at the launch site High growth: Subscription based data sales are Stable OPEX, profits increase over more satellites = more data = more revenue scalable, recurring annuity type time with growth in subscribers and unrestricted in scale Exceptional management team Defensible market position experienced across Space, technology, defence and intelligence sectors K L E O S . S PA C E A S X : K S S 5
INVESTMENT HIGHLIGHTS Subscription revenue model providing Global engagement made in high value defence and recurring, annuity type, profitable security markets: cash-flow. Qualified pipeline of 25 deals Further initial pipeline of over 90 opportunities Upsell opportunities; requests for high margin, bespoke data Annual Licensing Fees for 1st Cluster between Large addressable Maritime A$128k – A$971k per licence Information market expected to be up to US$1.41BN (Technavio) Technology driven: Leveraging proprietary IP Owned assets High barrier to entry for competition: Development time Level of expertise required Capex intensive K L E O S . S PA C E A S X : K S S 6
MILESTONES ACHIEVED Four Scouting Mission Multiple early contracts signed e.g. satellites at the launch site US Air Force Micro-Satellite Military Utility programme contract awarded Launch programmes L3Harris (NYSE:LHX US$43Bn delayed due to COVID- market cap) – Integrator and 19 lockdowns, now placement on US Government GSA beginning to re-open platform Multiple Nation state collaborations Satellite operating Brazilian Government pre-orders licences in place awarded Data products Next cluster of four satellites in prepared progress Revenues to commence post satellite test phase K L E O S . S PA C E A S X : K S S 7
UPCOMING MILESTONES First satellite cluster to be launched; Scouting Mission Commencement of subscription revenues Team expansion to facilitate scalable growth Further contracts to be signed Launch further clusters, collecting more data Subscriptions and revenue growth K L E O S . S PA C E A S X : K S S 8
MANAGEMENT & BOARD Peter Round Andy Bowyer Miles Ashcroft David Christie Chairman/Exec Director CEO/Co-Founder CTO/Co-Founder Non-Exec Director RAF Air Commodore, expert in 15 years’ heritage delivering complex Extensive 20+ years technical 20 years experience as a Solicitor and EU Defence Issues, military Space projects, including on missions to experience delivering technically Executive in Australia, United Kingdom affairs and has led multiple multi- Mars and Mercury as co-founder of ground breaking and high value and the US. Specifically focused in million pound contracts within the Space Engineering company; Magna Space engineering hardware to corporate/commercial, governance Defence industry. Internationally Parva. Experienced technology sales, multiple international space agencies, and M&A. Currently a co-founder of an renowned strategic executive with marketing, contracting, commercial and multiple patent holder. Co founder of Artificial Intelligence company and experience in the US,EU and business development executive across Magna Parva. Digital Marketing company. NATO. Space and Defence sectors. Australia based. K L E O S . S PA C E A S X : K S S 9
MANAGEMENT Iain Hackston Karyn Hayes-Ryan CFO USA Director Extensive CFO experience and is Former intelligence community a finance professional with wide- and Department of Defense senior ranging international experience and a executive with an extensive history proven track record. Previous roles in defence, aerospace and IT. include O3b (satellite), LeoSat Has held senior executive roles in Enterprises, Inc. (satellite) – USA the National Geospatial Intelligence / Luxembourg and at SES Satellite Agency and National Leasing (satellite (SES S.A): Euronext: Reconnaissance Office. SESG). Sean McKay USA/Saudi BD Retired Colonel and with over 22 years’ experience in programme management for various Department of Defense, Foreign Military Sales, and Intelligence Community activities in command and control, intelligence, surveillance, reconnaissance, space. K L E O S . S PA C E A S X : K S S 10
THE GLOBAL CHALLENGE Defence Illegal and Security fishing Increasingly complex global threats and emergencies are driving the Maritime Drugs/arms/ need for more specific data from the security people trafficking world around us. From launch of our first satellites Current solutions are often we are targeting: expensive, technically limited by range, limited by geography & Border weather security Illegal oil bunkering Ghost Illegal shipping trans-shipping K L E O S . S PA C E A S X : K S S 11
THE GLOBAL CHALLENGE – COVID 19 EFFECT Kleos data shines a light on the new paradigm Control of a Pandemic The need for data will Commercial, private sector multiply, Governments need Space enables to: People movement Identify new patterns of life Wide area surveillance within borders as Know where threats are Affordable data important as across and the scale of the threat borders Criminals will exploit Know what is happening emerging black markets within and outside their and restrictions borders K L E O S . S PA C E A S X : K S S 12
INITIAL TARGET MARKET - SOLUTION Kleos Data Product Applications Markets Locations of VHF transmitters Surveillance of ‘areas-of-interest’ Defence & Security e.g. walkie talkies used to Maritime situational awareness Commercial GEOINT providers coordinate activity on board a Border security Search & Rescue ship, or from ship-to-ship or from Maritime operations, logistics, port Fishing Monitoring (regulatory) a ship-to-shore and terminal management Insurance and Shipping Maritime trade Companies Risk management, commercial shipping and port stakeholders Fleet capacity analysis and forecasts Reporting on illegal activities K L E O S . S PA C E A S X : K S S 13
TARGET MARKET APPROACH Kleos initial addressable market of Global Kleos is accessing diverse, B2G & B2B Maritime Information Market expected to multi-market, direct, channel partner & be up to US$1.41BN (Source:Technavio) reseller agreement revenue streams Defence/Security Market – Government/Enterprise Licence Customers Defence Intelligence Tier 1 ISR Intelligence Border/Homeland Ministries Agencies Supply Chain Aggregators security Agencies Maritime Market – Team Licence Customers Coast guards Maritime Security Insurance Companies Intelligence Shipping Companies Companies Aggregators Other Markets – Team/Single User Licence Customers Search and Rescue Communications Earth Observation Regulatory Bodies Agencies Providers App Developers K L E O S . S PA C E A S X : K S S 14
BUSINESS MODEL • Subscription based Data-as-a-Service licencing to access data • Repeatable model, data ‘rented’ to an unrestricted number of customers • Data accessed via industry standard APIs • Standardised pricing based on number of users and use of the data • Highly cost effective when compared with operating own assets • Initial target subscriber base is in excess of 130 users • Go-to-market strategy includes direct sales and via integrator, channel partner and reseller Example annual revenues per subscription based on number of Clusters Number of 1 2 3 Clusters Single User $128,571 $200,000 $400,000 Small team $485,714 $728,571 $1,457,143 Large team $971,429 $1,457,143 $2,914,286 K L E O S . S PA C E A S X : K S S 15
L E A D I N G T H E WAY TO E A R LY R E V E N U E Global engagement (the numbers encompass a wide range of levels from early Highlights include: discussions to signed contracts) across USA, Europe, Asia Pacific, South America, Middle East and Canada has already been achieved across a wide L3Harris contracted as data range of customer, reseller and integrator types: integrator and to place Kleos products on to the GSA Schedule a widely used US Government Route to market for a particular region, each partner is able to sell many Portal which provides a shorter, Reseller, 26 Channel Partner licences to their customer base at ‘single user, team or enterprise’ level simplified sales process. A specialised entity that is aggregating or integrating multiple data Contract awarded for Kleos data Integrator 66 sets together to deliver a derived product to their customers from Utah State University Space Government Defence and Security single users, agencies, departments Dynamics Laboratory (SDL) under 29 delivering a capability, solution for end users Defence multi-national Government Government Civil Regulatory or other civil single users, agencies or departments 10 initiative in collaboration with US delivering a capability, solution for end users Air Force Research Laboratory. The Brazilian Government agency Agência Nacional do Petróleo, Gás Natural e Biocombustíveis – ANP (www.anp.gov.br) pre-Order Kleos data. K L E O S . S PA C E A S X : K S S 16
FINANCIAL INPUTS/OUTPUTS Cluster 1 at launch site, multi- Revenues to grow consistently year revenue generating life. over time with the company’s Revenues will commence post subscription business model launch satellite and data testing and as additional services are phase added Through incremental increase The revenue growth can be of satellite numbers, Opex achieved with an inflation- remains stable creating high adjusted fixed 5-year Capex EBITDA renewal cycle and stable annual Opex Forward orders in place, and Delivering growing Free Cash strong pipeline to build on Flows over each successive Capex cycle. K L E O S . S PA C E A S X : K S S 17
COMPETITIVE LANDSCAPE No direct competitor with 1st mover outside of US for The market and customer equivalent technology or similar offering. base welcomes multiple business plan or area of Hawkeye360 closest data sets to fill gaps and interest cover equivalent, US based, reduce risks. recently closed a US$70m At 9th June 2020; Kleos capital raise at a pre-money market cap = A$28M valuation of US$200m (Edison Group Report) K L E O S . S PA C E A S X : K S S 18
CONCLUSION Leveraging Space SPACE RAPID Kleos now stands at a technology to deliver a TECHNOLOGY GROWTH critical inflection point, high value commercial, poised to commence rapid scalable, responsive, high and significant growth quality and trusted data set to industry and Government customers OPPORTUNITY Space capability delivered by the private sector offers a responsive, cost effective enhancement of Government and other asset derived data sets to deliver solutions for maritime security challenges K L E O S . S PA C E A S X : K S S 19
Contact: Europe: Australia: Andrew Bowyer - CEO MMR Corporate Services andy.bowyer@kleosglobal.com kleos@mmrcorporate.com kleos.space/investors/ 20
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