Q3 2018/19 PRESENTATION BY CEO PETER RØPKE & CFO MORTEN AXEL PETERSEN WIRELESS WISDOM WORKS IN ANY ENVIRONMENT
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COPENHAGEN | 30 AUGUST 2019
R T X P R E S E N TAT I O N
Q3 2018/19
PRESENTATION BY
CEO PETER RØPKE &
CFO MORTEN AXEL PETERSEN
WIRELESS WISDOM
WORKS IN ANY
ENVIRONMENT
DISCLAIMER
This presentation contains statements regarding expectations for the future development of RTX A/S, in particular the direction of
future product development, future sales, operating profits and business expansion.
Such statements are subject to risks and uncertainties as various factors, many of which are outside the control of RTX, may cause the
actual development and results to differ materially from the expectations expressed directly or indirectly in this presentation.
Factors that might affect such expectations include, among others, rapid technological changes and evolving markets, overall economic
and business conditions, fluctuations in currencies, demand for RTX’s services, competitive factors in the market and uncertainties
concerning possible investments.
RTX Presentation Q3 18/19 - 30 Aug 2019 2
AGENDA
1. RTX BUSINESS MODEL 9:00 – 9:15
2. FINANCIAL RESULTS Q3 AND 9M 2018/19 9:15 – 9:30
3. BUSINESS UPDATE Q3 2018/19 9:30 – 9:40
4. OUTLOOK 2018/19 9:40 – 9:45
5. Q&A SESSION 9:45 – 10:00
RTX Presentation Q3 18/19 - 30 Aug 2019 3
STRENGTH PROFILE
RTX has a:
• Market-leading position in wireless solutions.
• Proven ability to develop, innovate and manufacture customized solutions.
• Dedicated growth strategy - focus on 4 business areas: Enterprise, Headset, ProAudio and Healthcare.
• Solid business model with high degree of recurring revenue from loyal customers.
• High profitability, that can be maintained with the right product mix.
• Leverage opportunity within the current business setup.
• Sustained focus on shareholder value - CFFO invested in value creation or paid back to the shareholders.
RTX Presentation Q3 18/19 - 30 Aug 2019 4
RTX @ A GLANCE
RTX is a global company with 25 years of extensive experience and knowledge in design of advanced wireless short-range radio systems
and products. Our heritage has provided us with a unique combination of software and hardware capabilities through which RTX
manages projects for globally recognized customers, from conceptualization to finished products and modules.
Globally certified
1993 Founded in 1993 and
headquarter in Denmark +1,000 Projects
completed 264 FTE employees by 30
September 2018 ISO 9001 according to
ISO 9001:2015
REVENUE & GROWTH EBITDA & EBITDA-MARGIN EBIT & EBIT-MARGIN
DKKm % DKKm % DKKm %
500 25 100 20 100 20
400 20 80 15 80 15
300 15 60 60
10 10
200 10 40 40
100 5 20 5 5
20
0 0 0 0 0 0
2013/14 2014/15 2015/16 2016/17 2017/18 2013/14 2014/15 2015/16 2016/17 2017/18 2013/14 2014/15 2015/16 2016/17 2017/18
Revenue Growth % EBITDA EBITDA % EBIT EBIT-margin
RTX Presentation Q3 18/19 - 30 Aug 2019 5
W H AT W E D O
Enterprise ProAudio
In the Enterprise segment, RTX designs, develops, With years of experience in ProAudio
and supplies wireless IP telephony solutions used design, development and
in communication systems for professional use, manufacturing, RTX has gained the
e.g. in office environments, call centers, retail or expertise to deliver incredible sound
storage facilities etc. The wireless IP telephony quality in high-density RF
solutions are supplied on both an ODM and an environments as well as in challenging
OEM / white label basis. radio environments having high inter-
symbol interference.
Healthcare
In the Healthcare segment, RTX is involved
Headsets in the development, design and supply of
As an Enterprise adjacency, the RTX wireless modules and products used for
headset range for call centers & offices continuous patient monitoring in hospitals
consists of several different models as well as the design of wireless solutions
from high-end to low-end, supporting for projects in assisted living such as hearing
customer demand for high quality and aid accessories.
deep integration.
RTX Presentation Q3 18/19 - 30 Aug 2019 6H O W W E W O R K : M O V I N G F R O M D E S I G N TO P R O D U C T S
TO G E N E R AT E R E C U R R I N G R E V E N U E
Taking a customer-centric approach, understanding market trends and acting as a professional partner is an
integral part of how we do business at RTX. We believe that we provide a true value proposition and best
results when collaborating closely with our customers – either through projects or in ODM or OEM solutions.
SPECIFICATION AND DEVELOPMENT AND TESTING AND PRODUCTION AND SUPPLY
DESIGN INTEGRATION CERTIFICATION CHAIN MANAGEMENT
At RTX, we start by combining Following agile development Based on years of experience, Using a well-established
customers’ requirements and user practices, we develop prototypes our in-house pretest services network of ISO9001, SO14001,
needs with our wireless know-how into to evaluate system performance in- reduce your time to market and ISO13485, TS16949 and AS9100
a Product Requirement Specification. house. We integrate each design at lower approval and certification certified manufacturers,
Our engineering teams then design a system level so that every costs. If required, we can also we guarantee a production
solution that is based on the right component and sub-system works handle the full type approval through the entire product life-
combination of mechanics, hardware perfectly, evaluating performance service for our customers. cycle.
and software. Combined with our list of against test cases for the fully
patented solutions and in-house integrated system.
developed protocols, we promise our
customers a compelling result.
RTX Presentation Q3 18/19 - 30 Aug 2019 7RTX BUSINESS MODEL HAS INHERENT TIME -LAG FOR
RECURRING REVENUE
Illustrative RTX Business Case by Product Life Cycle
Effort & Revenue
Revenue
Engineering Effort
ODM/OEM Revenue
NRE Revenue
Years
Y1 Y2 Y3 Y4 Y5 Y6 Y7
End of
Development Ramp Phase Main Phase
Life
RTX Presentation Q3 18/19 - 30 Aug 2019 8W I T H S I M U LTA N EO U S D E V E LO P M E N T S , T H E E F F E C T O F
T I M E - L A G M AY B E C O M P O U N D E D
Customer X: Project Xxx
Customer C: Project Charlie
Customer B: Project Bravo
Customer A: Project Alpha
Effort & Revenue (Illustrative) Revenue
Engineering Effort
ODM/OEM Revenue
NRE Revenue
Years
Y1 Y2 Y3 Y4 Y5 Y6 Y7
RTX Presentation Q3 18/19 - 30 Aug 2019 9F O C U S E D G R O W T H S T R AT E G Y
RTX Focus Segments RTX Growth Strategy
Total = 475m
6% Healthcare Strengthen position in Healtchcare
Design
• Increase share-of-wallet
Services
26% ProAudio Utilize unique position in ProAudio
• Leverage unique technology into recurring revenues
• Lead the transition into digital wireless
Business 68% Enterprise Expand leadership and grow into adjacencies in Enterprise
Commu- (wireless IP & telephony and headsets) • Continue to gain share and consolidate market
nications
• Recurring revenue from long-term customer agreements
• Leverage position to establish a presence Headsets as an adjacency
• Utilize system integration as competitive advantage
Revenues
2017/18
RTX Presentation Q3 18/19 - 30 Aug 2019 10WHO WE WORK FOR
RTX Presentation Q3 18/19 - 30 Aug 2019 11AGENDA
1. RTX BUSINESS MODEL 9:00 – 9:15
2. FINANCIAL RESULTS Q3 AND 9M 2018/19 9:15 – 9:30
3. BUSINESS UPDATE Q3 2018/19 9:30 – 9:40
4. OUTLOOK 2018/19 9:40 – 9:45
5. Q&A SESSION 9:45 – 10:00
RTX Presentation Q3 18/19 - 30 Aug 2019 12GROUP HIGHLIGHTS FROM Q3 2018/19
REVENUE EBITDA EBIT EBITDA-MARGIN CFFO EQUITY RATIO
DKK 149m DKK 30m DKK 26m 20% DKK 34m 73%
REVENUE EBITDA EBIT
DKKm DKKm DKKm
160 35 35
140 30 30
120 25 25
100
20 20
80
15 15
60
40 10 10
20 5 5
0 0 0
Q3 14/15 Q3 15/16 Q3 16/17 Q3 17/18 Q3 18/19 Q3 14/15 Q3 15/16 Q3 16/17 Q3 17/18 Q3 18/19 Q3 14/15 Q3 15/16 Q3 16/17 Q3 17/18 Q3 18/19
RTX Presentation Q3 18/19 - 30 Aug 2019 13GROUP P&L Q3 AND 9M 2018/19
DKK million Q3 18/19 Q3 17/18 YTD 18/19 YTD 17/18 • Net revenue increased by 30.4% in Q3 to DKK 148.9 million. Both Business
Communications (+31.6%) and Design Services (+27.9%) achieved revenue
growth. Growth driven by execution of strategy with the two major framework
Revenue 148.9 114.2 403.2 321.8 agreements announced during 2017/18 (in Business Communications) and
increased recurring revenues from product sales (in Design Services)
Cost of sale -64.9 -50.9 -174.2 -136.8 contributing significantly to the growth. 9M growth was 25.3% compared to last
year (Business Communications +27.8% and Design Services +20.4%).
Gross profit 83.9 63.3 229.0 185.1
• The revenue growth in Q3 and 9M was positively affected by the USD exchange
Gross margin. % 56.4% 55.4% 56.8% 57.5%
rate with FX corrected revenue growth of 23.3% and of 19.2%. Conversely, the
implementation of IFRS15 had a negative impact on Q3 revenues compared to
Other external cost -14.4 -13.8 -46.2 -36.8 last year (positive impact for 9M compared to last year).
Staff cost -45.0 -38.5 -133.7 -112.1
• The Gross Margin in 9M was 0.7%-point below last year due to changes in the
Value of own work transferred to assets 5.1 4.8 14.3 14.5 revenue mix.
EBITDA 29.7 15.7 63.3 50.6 • Capacity costs increased as planned with the strategy execution – both for
ramping-up capacity in order to execute the two major framework agreements
Depreciation and amortization -3.4 -2.2 -9.7 -5.4 announced during 2017/18 and for continuing to build the organization and
infrastructure necessary for further growth. The average number of FTEs
Operating Profit (EBIT) 26.2 13.5 53.6 45.2 increased to 273 in 9M 2018/19 compared to 241 in 9M 2017/18.
• Operating performance in Q2 improved with EBITDA increasing by 89.2% and
EBIT increasing by 94.7%. In 9M, EBITDA increased by 25.2% and EBIT by 18.6%.
RTX Presentation Q3 18/19 - 30 Aug 2019 14GROUP BALANCE SHEET
DKK million 30 Jun 30 Jun Change
18/19 17/18 • Intangible assets increased due to the continued investments in own
financed development projects
Assets
Total intangible assets 52.3 39.8 +31.6% • Other long term assets decreased, utilizing the deferred tax asset.
Total tangible assets 14.6 14.7 -1.1% • Inventories increase with increased activity and decreased due to IFRS15
implementation.
Other long term assets 7.9 23.2 -65.9%
Inventories 21.1 20.2 +4.1% • Receivables increased as a consequence of the higher revenue, the timing of
sales and IFRS15 implementation.
Receivables 156.0 103.7 +50.4%
• Cash and cash equivalents increased to DKK 190 million due to the cash flow
Cash and cash equivalents 190.0 150.4 +26.3%
generated from operations. Further, the shareholder-related initiatives
Total assets 441.8 352.1 +25.5% (dividends in Q2 and share buy-back programme in Q2 and Q3) affect the
cash position.
Liabilities
324.1 285.2 +13.7% • Equity increased by DKK 38.9 million compared to last year driven by
Equity
earnings generated, while impacted by the shareholder-related initiatives.
Long term liabilities 4.3 0.3 +1561.6%
• Short term liabilities increased as a result of higher activity level.
Short term liabilities 113.4 66.6 +70.2%
441.8 352.1 +25.5% • Very solid equity ratio of 73.4%, with dividends and share buy-back affecting
Total equity and liabilities
equity ratio.
Equity ratio 73.4% 81.0% RTX Presentation Q3 18/19 - 30 Aug 2019 15G R O U P C A S H F LO W
• Increasing cash flow from operations with earnings increase.
DKK million YTD 18/19 YTD 17/18
Cash flow from operations (CFFO) 62.4 56.3 • Cash flow from investments primarily impacted by acquisition of current
securities in the trading portfolio, while the underlying investment level in
Cash flow from investments(1) -50.6 -22.0
tangible and intangible assets is similar to last year.
Cash flow from financing activities -37.2 -36.2
• Shareholder-related activities (dividends and share buy-back programme) for 9M
Change in cash -25.3 -1.9
is on par with last year, thus cash flows from financing is a the same level as last
year.
(1) Including acquisition of current securities in the trading portfolio – with impact 9M 2018/19 of DKK -32.6
million (9M 2017/18: DKK -1.2 million).
• When disregarding acquisition of current securities in the trading portfolio, cash
generation during 2018/19 has been slightly positive – i.e. most cash generated
in 2018/19 has been distributed to shareholders via dividends and share buy-
back.
RTX Presentation Q3 18/19 - 30 Aug 2019 16AGENDA
1. RTX BUSINESS MODEL 9:00 – 9:15
2. FINANCIAL RESULTS Q3 AND 9M 2018/19 9:15 – 9:30
3. BUSINESS UPDATE Q3 2018/19 9:30 – 9:40
4. OUTLOOK 2018/19 9:40 – 9:45
5. Q&A SESSION 9:45 – 10:00
RTX Presentation Q3 18/19 - 30 Aug 2019 17B U S I N E S S U P D AT E
• Strong Q3 and 9M results and solid order book for Q4 – full year guidance upgraded on 19 Aug 2019.
• Executing on growth strategy
• Growth from framework agreements announced during 2017/18
• Continued growth in recurring revenues from product sales within ProAudio.
• New handset and base station range sold to existing large Enterprise customers – ensuring prolonged revenue streams.
• Continue to build the organization and infrastructure necessary for further growth and targeting further growth avenues in both
Enterprise and ProAudio.
RTX Presentation Q3 18/19 - 30 Aug 2019 18
RTX Presentation Q2 18/19 - 3 May 2019G A M I N G P R O D U C T S W I T H R T X T E C H N O LO G Y
Currently in Market:
K57/Attila Wireless Keyboard
IRONCLAW RGB Wireless
Hi-End PS4 Gaming controller with
audio capabilities (confidential
customer) HARPOON Wireless
Follow-on Products (several customers):
Sept’19 Oct’19 Dec’19 1H2020 2H2020
Headset A Headset B Mouse A & B Keyboard A & B & mouse C Headset C & more
RTX Presentation Q3 18/19 - 30 Aug 2019 19ANNOUNCED SHARE BUY-BACK PROGRAMME CONTINUES
• RTX will buy back shares for an amount up to DKK
20 million from 1 August 2019 to 31 December
2019.
• As of 22 August, RTX has bought back shares for an
amount of DKK 2.4 million under the programme
(cf. company announcement 38/2019), which
continues as announced.
RTX Presentation Q3 18/19 - 30 Aug 2019 20AGENDA
1. RTX BUSINESS MODEL 9:00 – 9:15
2. FINANCIAL RESULTS Q3 AND 9M 2018/19 9:15 – 9:30
3. BUSINESS UPDATE Q3 2018/19 9:30 – 9:40
4. OUTLOOK 2018/19 9:40 – 9:45
5. Q&A SESSION 9:45 – 10:00
RTX Presentation Q3 18/19 - 30 Aug 2019 21O U T LO O K 2 0 1 8 / 1 9 U P G R A D E D O N 1 9 A U G – A N D C O N F I R M E D
DKK million Result 2015/16 Result 2016/17 Result 2017/18 Original Outlook Updated Outlook
2018/19 2018/19 (19 Aug)
Net Revenue 395.6 433.5 475.3 520-550 550-565
EBITDA 70.0 77.2 83.1 85-100 90-100
EBIT 65.8 72.3 74.9 65-80 77-87
• As described in our annual report in the section concerning risk management, RTX is relatively highly exposed to foreign currencies,
as a considerable part of the revenue is settled in US dollars.
• With the above major risk element in mind Executive Management expects a revenue in the range of DKK 550-565 million, EBITDA in
the range of DKK 90-100 million and EBIT in the range of DKK 77-87 million for the financial year 2018/19.
RTX Presentation Q3 18/19 - 30 Aug 2019 22AGENDA
1. RTX BUSINESS MODEL 9:00 – 9:15
2. FINANCIAL RESULTS Q3 AND 9M 2018/19 9:15 – 9:30
3. BUSINESS UPDATE Q3 2018/19 9:30 – 9:40
4. OUTLOOK 2018/19 9:40 – 9:45
5. Q&A SESSION 9:45 – 10:00
RTX Presentation Q3 18/19 - 30 Aug 2019 23Q&A SESSION
RTX Presentation Q3 18/19 - 30 Aug 2019 24T H A N K YO U F O R YO U R AT T E N T I O N
Further information please contact
CEO Peter Røpke at 91230000
RTX Presentation Q3 18/19 - 30 Aug 2019 25You can also read
