Nordic Unmanned ASA

Earnings Release • Feb 23, 2023

Nordic Unmanned reports growth in Q4 and outlines profitability outlook for 2023

Nordic Unmanned reports growth in Q4 and outlines profitability outlook for 2023

23.2.2023 08:01:41 CET | Nordic Unmanned | Half yearly financial reports and

audit reports / limited reviews

Nordic Unmanned today announced continued strong growth in the fourth quarter of

2022

Revenues in the fourth quarter amounted to EUR 3.7 million compared to EUR 2.5

million, an increase of 48 percent from the same quarter last year. Full year

revenue ended at EUR 16.5 million, up 79% from EUR 9.2 million in 2021. EBITDA

was negative EUR 2.4 million, adjusted for impairment and write downs, compared

to negative EUR 2.8 million in the fourth quarter of last year. For the full

year, EBITDA ended at negative EUR 8.6 million.

"We finished the fourth quarter with new flagship agreements with EMSA and

Lockheed Martin UK that will catalyst growth in the coming years. Revenues in

the quarter added to the strong, continued growth trajectory, with rolling 12

months revenues at a record high. In 2023, our overriding priority is to convert

high-value customer agreements to cash flow, scale our manufacturing activities

and streamline operations through cost control and pooling of resources", says

Knut Roar Wiig, CEO of Nordic Unmanned.

At the end of the fourth quarter, the total contract backlog was approximately

EUR 89 million. The commercial pipeline is currently at EUR 1.3 billion, with

EUR 67 million worth of opportunities expected to reach a decision in the next

six months. The biggest opportunities in the pipeline are drone-in-a-box

solutions in the US and Europe, and drone-as-a-service opportunities for

governmental customers to deliver maritime surveillance.

The commercial highlight of the quarter was Nordic Unmanned UK Ltd.'s award from

Lockheed Martin UK for the production and supply of Heimdal sensors, maintenance

and modifications related to the sensor, and other related work on the Lockheed

Martin Indago 4 drone.

The board has decided to simplify the financial and organisational structure by

consolidating business unit NUMar into Nordun and business unit NUGlobal into

NUTech. The purpose is to create a clear distinction between flight services and

technology/OEM activities, enabling two profitable business models with separate

customers, suppliers and partners. In conjunction with this process that will be

implemented in Q1, alternatives will be explored for certain non-core assets.

In Q4, the company closed the Staaker development office in Oslo as part of the

earlier announced cost saving plan, and with the increasing focus on the

existing product lines in AirRobot and DroneMatrix. For prudential reasons, the

board has decided to make an aggregate EUR 2.3 million write down of its

long-term assets related to its Staaker product line. In addition, the board has

decided to derecognize a deferred tax asset in the balance sheet related to

Norwegian taxes of EUR 5.0 million. The deferred tax will be carried forward off

balance sheet until the company is in a tax position.

In December, the company raised gross proceeds of NOK 70 million through a

private placement, with a subsequent offering of NOK 9.6 million completed

February 2023, for investments in contracts, working capital needs and reduction

of short-term debt.

Busiest year in Nordic Unmanned history

The number of flight hours in the quarter was 437, an increase of 43 percent

compared to the same quarter last year. Full year flight hours were 2922. During

the quarter, substantial support has been provided to our customers, with air

pollution measured on 124 vessels. In 2022, Nordic Unmanned participated in

search and rescue activities involving more than 3000 people in Europe.

Outlook

In 2023, the focus will be on drone services (Nordun) and products (NUTech). The

contracts awarded in the last half of 2022 provide a strong backlog for both

segments' continuing strong and profitable growth in 2023.

The current contract backlog, in addition to projected new contracts, is

expected to contribute revenues of more than EUR 30 million in 2023. The

visibility of the current backlog stands at 87%.

Based on the current outlook, Nordic Unmanned targets to exceed revenues of EUR

30 million, whilst targeting an EBITDA margin of approx. 10% for the full year,

accumulated breakeven EBITDA from Q2. The Company is targeting to cash positive

from operations for the full year 2023, with accumulated cash break even in Q2.

Profitability will come through improved efficiency, utilization of crew and

assets, reduction of operational costs and the next generation of contracts

carrying a rate increase.

The planned H1 2023 uplisting will be postponed until the company has

demonstrated the targeted financial performances in each of its business units

in line with revenue and profitability expectations as communicated to the

market, and the capital structure supports the planned continued ambitious

growth.

The fourth quarter report and presentation are enclosed. There will be a

livestreamed presentation as well as a Q&A session at 10:00 CET. Register here

to view it: https://attendee.gotowebinar.com/register/4050934416950921818

DISCLOSURE REGULATION

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

CONTACTS

* Knut Roar Wiig, CEO, +47 92 66 66 59, krw@nordicunmanned.com

ABOUT NORDIC UNMANNED

Nordic Unmanned is a leading provider of high-end drone and data capture

products and flight services. Its NUTech business unit is an Original Equipment

Manufacturer (OEM) for the drone and sensor product lines AirRobot, DroneMatrix,

and Staaker, serving primarily defense, security, and productivity improvement

markets. The Nordun business unit holds industry-leading expertise as an

operator of rotary and fixed-wing drone systems, providing pollution monitoring,

fishery control, surveillance, and logistics services. Clients include coast

guards, intelligence services, and government agencies.

Nordic Unmanned has one of the world's most comprehensive permits to fly beyond

visual line of sight (BVLOS), through its EASA-approved Light UAS operator

Certificate (LUC). The company is ISO 9001-2015 and AS9100 certified for

operating, maintaining, selling, developing, developing, and producing unmanned

systems and sensor technology.

Founded in Norway in 2014, Nordic Unmanned has offices in Sandnes (NO), Molde

(NO), Odense (DK), Cranfield (UK), Hasselt (BE), Arnsberg (GER) and Baltimore

(US).

For more information visit - https://nordicunmanned.com/

ATTACHMENTS

Download announcement as PDF.pdf -

https://kommunikasjon.ntb.no/ir-files/17847587/2127/2861/Download%20announcement

%20as%20PDF.pdf

Nordic Unmanned Q4 2022 Presentation.pdf -

https://kommunikasjon.ntb.no/ir-files/17847587/2127/2859/Nordic%20Unmanned%20Q4%

202022%20Presentation.pdf

Nordic Unmanned Q4 2022 Report.pdf -

https://kommunikasjon.ntb.no/ir-files/17847587/2127/2860/Nordic%20Unmanned%20Q4%

202022%20Report.pdf