For the six months ended 31 December 2018 28 FEBRUARY 2019 - PowerPoint PPT Presentation

For the six months ended 31 December 2018 28 FEBRUARY 2019

Disclaimer This presentation has been prepared by Adacel Technologies Limited (ACN 079 672 This presentation includes certain financial measures that are not recognised 281) ( Adacel or the Company ). The information contained in this presentation is under Australian Accounting Standards (AAS) or International Financial Reporting current at the date of this presentation. The information is a summary overview of Standards (IFRS). Such non-IFRS financial measures do not have a standardised the current activities of the Company and should be read in conjunction with the meaning prescribed by AAS or IFRS and may not be comparable to similarly titled Company’s disclosures lodged with the Australian Securities Exchange, including measures presented by other entities, and should not be construed as an the Company’s Appendix 4D lodged on 28 February 2019. alternative to other financial measures determined in accordance with AAS or IFRS. Recipients are cautioned not to place undue reliance on any non-IFRS This document contains certain “forward -looking statements” . Indications of, and financial measures included in this presentation. guidance on, future earnings and financial position and performance, including Adacel’s financial year 2019 outlook, are forward-looking statements, as are All references to dollars are to Australian currency unless otherwise stated. statements regarding Adacel’s plans and strategies. Such forward-looking statements are not guarantees of future performance and involve known and The release, publication or distribution of this presentation in jurisdictions outside unknown risks, uncertainties and other factors, many of which are beyond the Australia may be restricted by law. Any failure to comply with such restrictions may control of Adacel, which may cause actual results to differ materially from those constitute a violation of applicable securities laws. expressed or implied in such statements. Adacel cannot give any assurance or guarantee that the assumptions upon which management based its forward- looking statements will prove to be correct or exhaustive, or that Adacel’s business and operations will not be affected by other factors not currently foreseeable by management or beyond its control. Such forward-looking statements only speak as at the date of this document and Adacel assumes no obligation to update such information. 2

Adacel Overview Adacel operates in the Strong reputation within Global Aerospace the aviation industry, Systems market with a highly including the Air traffic experienced management and management and training sectors sales team The company also Adacel is a leading provides software developer of advanced maintenance, system simulation and control support, field services systems for aviation and on-site technical and defense services. 3

H1 2019 Highlights USAF 5-year contract $3.1m cash as at 31 renewal, valued at December 2018 up to $32M ATOP revenue increase of Services revenue makes 35% to $9.5M up 59.7% of total revenue Half-year dividend of Services gross margins 1 cent per share improved to 50.9% from (unfranked) 43.7% 4

Financial results meets guidance Financial Performance $23.75m H1 FY19 H1 FY18 Revenue decreased 6.4% pcp A$’000 Revenue 23,750 25,379 Gross margin 35.4% 39.8% $2.63m EBITDA decreased 47.9% EBITDA 2,633 5,053 Profit before tax 2,249 4,713 NPAT 1,454 3,390 $2.25m EPS (cents) 1.9 4.3 Profit before tax Dividend (cents) 1.0 2.0 5

1H FY19 key financial metrics REVENUE (A$m) NPAT (A$m) 3.75 25.38 3.39 23.75 19.93 1.45 H1 2017 H1 2018 H1 2019 H1 FY17 H1 FY18 H1 FY19 EBITDA (A$m) ORDERS A$m 35 31.3 5.05 4.67 29.00 30 25 20 2.63 15 10 5 0 H1 FY17 H1 FY18 H1 FY19 Jan-Dec 2017 Jan-Dec 2018 6

Increase Recurring Revenue Leveraging System Sales Develop a profitable, sustainable and growing recurring revenue base by leveraging existing large customer base Systems 40.3% Acquiring new customers through the combination of best in class technologies +27% and competitive pricing strategies. Services 59.7% New system sales lead to multiyear +14% services contracts. 7

Diversified business model Systems Adacel produces state-of-the- art simulation and training systems, as well as air traffic management solutions for military and commercial use Services Other Adacel provides ongoing Adacel is constantly pioneering new software maintenance, support aviation technology solutions, and technical services that including our Lexix speech provide a growing revenue recognition products and Voice stream for the company Activated Cockpit interfaces 8

Market Presence Target Markets Current Market Opportunities Speech Recognition Air Traffic Management Systems Integration Homeland Security Simulation Technology Visual Scene Generation Safety Critical Software Subject Matter Expertise Voice Activated Cockpit Airport Driver Training Pilot Training Controller Training 9

Air Traffic Control Simulation & Training: MaxSim ADACEL IS A PREMIER SUPPLIER OF AIR TRAFFIC CONTROLLER TRAINING SYSTEMS 90% Adacel has well over MaxSim provides a complete Improves content delivery by Training systems for use in 90% market share with air range of training solutions, spreading the teaching both civil and defense traffic controller training providing the right tool at workload to self-teach tools environments and for research, systems in the U.S. the right time enabling with sharable content and planning and modeling of air students to be engaged at all auto-feedback that engages traffic procedures. Adacel has • times throughout the today’s tech -savvy students won all major large scale Installed base of more training program and frees instructors to simulator system deployment than 350 air traffic better budget their time contracts in the USA training simulators • The only system widely • Adacel’s MaxSim is the deployed outside of the core of the ATC ATC schoolhouse simulation and training environment offering 10

Air Traffic Management: Aurora Adacel’s Aurora is a real-time, distributed, open architecture air traffic management automation system Overview Features • 4-D flight profile maintenance and flight time calculations: Automatic calculation of estimated • Unique upgrade path program provides flight and fix times for all flight operations, both on and off airways virtually unlimited expansion to meet • Advanced conflict determination ANSP’s ongoing requirements • Integration of Automatic Dependent Surveillance (“ADS”) and Controller Pilot Data Link • Integrated into powerful, low-cost, off- Communications (“CPDLC”) • Monitoring of conformity of an aircraft’s flight path to its cleared trajectory in terms of current the-shelf processors and high-resolution position, time, altitude and future intentions displays • Full integration with third-party radar data-processing systems and space based ADS-B • Built-in system flexibility easily handles • Automatic coordination between adjacent sectors and centers • the diverse mix of aircrafts using both Display of flight data and aircraft position data on high-resolution controller displays, including electronic flight strips conventional and NextGen • Minimum safe altitude warning communications • Recording and playback of all operations, resulting in benefits for training, operational analysis and investigation of incidents 11

Air Traffic Management Global Footprint Adacel has become one of the most recognized brands 6 in the specialized world of air 9 1 traffic management by focusing on the market niche of oceanic and non-radar- 6 based air traffic management, covering in excess of 41 Million Sq Miles of airspace 4 2 5 Additional 1. ISAvIA – Reykyavik systems are due 8 2. NaV Portugal – Santa Maria for installation in 3. Airways New Zealand – Auckland Martinique, 4. FAA ATOP / Ocean21 – New York 7 Guadeloupe and 5. FAA ATOP / Ocean 21 – Oakland an un-named 6. FAA ATOP / Ocean21 – Anchorage South American 7. Airports Fiji – NadI country 8. DSNA French Guiana – Rochambeau 3 9. Norway’s Vainer 12

Services: ATM and ATC Extended System Support Field Service Support Government Services Numerous extended support Provision of Adacel staff to Field training services programs offered to customers support non Adacel government • System maintenance • Software and hardware contracts including: • System operator • extended warranties Aviation subject matter • Operator and scenario • Annual maintenance experts creation training • services ATC Instructors • Air Traffic Instructors • • Remote system Systems operators Field service representatives • maintenance Systems maintenance • Support personnel are • • Telephone support Software engineering co- located at the customer’s • • Software upgrade services Project management site to provide support services on an ongoing basis Adacel’s increased focus on high -quality post- sales service and support has expanded the Company’s addressable market and transformed its revenue mix, while creating a strong base of high-margin, annuity-like revenue. 13