Rovsing — Investor Presentation 2017

Dec 7, 2017

Rovsing A/S - Strategy 2021 – Restore trust and profitability

Rovsing

ROVING

1. Rovsing Mission:

• To support customers in the aerospace industry to operate flawless systems by supplying systems and products for ground simulation & testing.

2. Vision – Rovsing 2021 Strategic Program

• Rovsing will develop into a strong high tech SME, recognized as a key player in aerospace with key expertise in the Aeronautics, Space & Defence Industry.

3. Management & Leadership

• CEO with prime space industry expertise, new CFO & lean management team;
• New members of Board of Directors with financial and industrial expertise, and competences in strategy, turnaround, and profitable growth;
• New shareholders with strong support to Rovsing’s strategic development.

4. Rovsing’s core skills

Rovsing’s critical skills and competences:
- Digital electronics & firmware, IoT;
- Embedded & system software;
- Project management – LEAN & Agile;
- Process competence – ISO 9001 & CNQ;
- Product quality and reliability;
- Responsiveness to Product Life Cycle, i.e. digitalization challenges in Aeronautics, Space & Defence.

5. Product Range / Portfolio

Current product range (2016/17):
- Test systems & Products (65%)
- Software Verification (ISVV) (15%)
- On-site engineering Services (20%)

GROW TOP LINE

6. Market expansion focus

• Make products known worldwide;
• In the established institutional segment:
• Strengthen preferred supplier status with ESA & EU national agencies
• Pursue opportunities with NASA and other major non-EU space agencies;
• In the competitive private commercial segment:
• Focus on Communication, Weather, and Earth Observation satellites;
• Support professional small satellite programmes & constellations;
• In the growing Military/Security segment
• Leverage DK/Nordic environment;
• Leverage competences and product portfolio with various European defense research project budgets.

7. Product development focus

• Focus R&D on standard products, reduce complexity;
• Focus on profitable implementation and configurable S/W for customized systems

8. Geographical sales focus

• Focus on Europe through direct sales and leverage existing customer relationships;
• Expand in the US through local partners (RT Logic is current US partner);
• Establish foothold in APAC through local partners (Keliang is partner in PR China);

9. Market sizes and Rovsing share [%]

Global market of Electrical Ground Support
Equipment: USD 100m p.a.
ESA ESGE market: EUR 20m p.a.
ESA Rovsing market share: <3%
Est. Europe market growth: 3.5% p.a.
Est. USA market growth: 7.5% p.a.

IMPROVE MARGINS

10. Cost efficient production/sourcing

• Comprehensive cost savings program initiated;
• Make-or-buy decisions are revisited;
• Focus on improved profitability in product manufacturing;
• Full supplier review/renegotiation programme to be completed in Q1 2018.

11. Organisation & Employees:

• Increase use of salary models with performance based incentives;
• Implement Value based team KPIs to ensure focus on profitability, roll out LEAN & 6% tools to minimize waste;
• Improve accountability and focus on financial performance in project planning and resource allocation throughout the organisation;
• Strengthening of reporting and management systems.

Turnover, 6 years + guidance, DKKm

FOCUS ON VALUE CREATION

12. Capital structure – key to drive turnaround

• The capital structure has been strengthened;
• Strong short-term focus on liquidity/improve cash management;
• Review contractual terms;
• Continued use of EKF project funding;
• Capture relevant grant programs from EU et al. to facilitate development of segments.

13. Value based incentives – investors with long-term perspective

• All Board members and CEO are shareholders;
• 3-year warrant programme in place for Board, management & senior managers.

14. Reporting and Investor Relations – investor story for success from Denmark

• Upgrade IR activities;
• Modernize corporate web-site;
• Improve on-time, on quality reporting;

15. Financials

Actual performance 2016/2017:
- Revenue: DKK 39 mio.
- EBITDA: DKK 1.3 mio.
- EBITDA margin: 3.3%

Financial guidance 2017/2018:
- Revenue: DKK 32-36 mio.
- EBITDA: DKK 0-2 mio.

Financial medium-term targets
- Revenue above DKK 64 mio. in 2021/22
- EBITDA-margin % of +10% in 2021/22.