EGY Investor Update December 2023
Released
Released
Announcement PDF
Energy Technologies Limited (ASX:EGY)
A specialised cable & wires manufacturer
supplying the high value infrastructure sector
Investor Update Presentation
December 2023
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Important Notice & Disclaimer
This presentation has been prepared by Energy Technologies Limited (EGY or the
Company). It should not be considered as an offer or invitation to subscribe for, or
purchase any shares in EGY, or as an inducement to purchase any shares in EGY. No
agreement to subscribe for securities in EGY will be entered into on the basis of this
presentation or any information, opinions or conclusions expressed in the course of this
presentation.
Although the Company believes that the expectations reflected in the forward looking
statements included in this presentation are reasonable, none of the Company, its
Directors or officers can give, or gives, any assurance that the results, performance or
achievements expressed or implied by the forward-looking statements contained in this
document will actually occur or that the assumptions on which those statements are
based are exhaustive or will prove to be correct beyond the date of its making.
This presentation is not a prospectus, product disclosure document, or other offering
document under Australian law or under the law of any other jurisdiction. It has been
prepared for information purposes only. This presentation contains general summary
information and does not take into account the investment objectives, financial situation
and particular needs of an individual investor. It is not a financial product advice and the
Company is not licensed to, and does not provide, financial advice.
Readers are cautioned not to place undue reliance on these forward-looking statements.
Except to the extent required by law, the Company has no intention to update or revise
forward-looking statements, or to publish prospective financial information in the future,
regardless of whether new information, future events or any other factors affect the
information contained in this presentation.
This presentation may contain forward-looking statements which are identified by words
such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other
similar words that involve risks and uncertainties. These statements are based on an
assessment of past and present economic and operating conditions, and on a number of
assumptions regarding future events and actions that, as at the date of this presentation,
are expected to take place. Such forward-looking statements do not guarantee of future
performance and involve known and unknown risks, uncertainties, assumptions and
other important factors many of which are beyond the control of the Company, its
Directors and management.
Readers should make their own independent assessment of the information and take
their own independent professional advice in relation to the information and any
proposed action to be taken on the basis of the information. To the maximum extent
permitted by law, the Company and its professional advisors and their related bodies
corporate, affiliates and each of their respective directors, officers, management,
employees, advisers and agents and any other person involved in the preparation of this
presentation disclaim all liability and responsibility (including without limitation and
liability arising from fault or negligence) for any direct or indirect loss or damage which
may arise or be suffered through use of or reliance on anything contained in, or omitted
from, this presentation. Neither the Company nor its advisors have any responsibility or
obligation to update this presentation or inform the reader of any matter arising or
coming to their notice after the date of this presentation document which may affect
any matter referred to in the presentation.
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Bambach Wire and Cables
•
Bambach Wire and Cables manufactures low
voltage industrial and specialised copper cables
•
Founded in 1936, it is the oldest existing
Australian cable manufacturer and 100% owned
by Energy Technologies since 2012
•
Factory in Rosedale, VIC with sales offices in
New South Wales, West Australia and
Victoria
•
Blue Chip customer base across Rail and
Road, Mining, Construction, Defence and
Power and Energy
Rosedale, VIC
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Strategy Pivot
Maintain manufacturing at Rosedale for low voltage industrial and
specialised copper cables
Existing operations new
focus
Preference to high margin, value add products from manufacturing division
Deliver high quality cables with short lead times specific to the customer
New Division
New division delivering imported cables (Purchased Sales) to existing and
new clients
Expanding our reach in existing and adding complementary sectors
Competitive pricing across a larger landscape
New Offering
Delivering a broader suite of products into customers on a project basis and
blanket sales offering will increase sales capacity
New division is higher volume, lower margin and more reliable, efficient
working cap cycle across Low Voltage and Solar markets
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Purchased Sales
Market
There are ~90 participants with an
estimated $2bn in Revenue. Low
voltage and solar markets make up ~50%
of the market with Solar growing
aggressively*
Inhibitors
Sales staff must be experienced
Logistics need time to be organised
and tested
Suppliers must be consistent and of
quality
*ANZSIC , IBIS WORLD Aug ust 2023
Sales
Logistics
Suppliers
• Sales team are in place and
established
• Sales team have strong
relationships across a bluechip customer base
• Manufacturing capabilities
often allows the sales team
to see projects before they
are awarded
• Broader suite of purchased
sales at competitive prices
allows sales to offer a total
solution for customers at
the contract level resulting
in the potential for larger
contract wins
• Warehousing in place and with
capacity due to the finalisation of
the second factory at Rosedale
• Logistics in place at all Distribution
Centres
• Deliveries already depart weekly to
existing customers
• Potential to ramp up capacity by 5
times in a short time period
• Sharing deliveries between
manufacturing and purchased sales
divisions will provide margin
efficiencies
• Bambach have been using overseas
suppliers for the last 20 years
• Suppliers used have predominantly
been used for raw product finished
at the factory
• Long track record of quality
assurance across many suppliers
• All cables to be produced under an
OEM arrangement subject to our
QMS qualification process
• A mix of suppliers will be used to
de-risk supply and cost issues
• Bambach have long established
processes in place around risk
mitigation of the supply chain
• Terms and margins will improve as
volume grows
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5
Staged approach
Actioned
Sales
Product
Market
Suppliers
Logistics
Sales Team
0
2
4
6
Engaged
Actioned
8
10
12
14
Completed
6
Timeline
Sales Team
Logistics
Suppliers
Market
Product
Sales
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
In Place
Soft Launch
Identified but not actioned
Not finalised
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Operational Update
• Market remains strong with sales and order book on track given operational conditions
• Operational conditions remained challenging with constraints on working cap and operational staff
• Factory more efficient after rationalisation but utilisation remains low due to the above
• New strategy will ease working cap constraints and utilise sales capacity more efficiently
• New sales division will contribute first sales in June quarter 2024
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Appendices
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Appendix: Key Risks
Risk
Risk Management
Demand Risk
• The target industries are varied and demand can be affected in numerous ways, not the least Covid related, Government and
Defence spending, Construction industry, Private infrastructure and lack of confidence in delivery and pricing.
Capacity Risk
• Access to raw materials has been restricted due to limited capital. Capacity issues are a risk to Sales as Sales are booked once the
product has been processed and delivered. Issues with machinery would also affect the capacity of production depending on
timing and the relevant machine
Product Risk
• Each product is manufactured to ISO AS/NZS 9001:2015 and other Federal and State Government standards and by quality
assured by industry in the majority of its uses
Delivery Risk
• The company had previously lacked inventory, working capital and manufacturing capacity to be able to meet delivery timeframes
in a timely manner. Delivery times are extremely important in the industry
Competition
• Bambach’s main competition in specialised cables and wires is from offshore suppliers. The Company’s offering is competitive in a
weaker AUD rate environment and delivery time
COVID-19
• The Company has experienced a decline in orders in relation to COVID-19 through the first half of FY21.
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