VEEM LTD — Investor Presentation 2024

Jun 18, 2024

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VEEM LTD

DISCLAIMER

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR ADVERTISEMENT

This document, including the information contained in this disclaimer, is not a prospectus, product disclosure statement or other disclosure document and does not constitute, or form any part of, an offer to sell, or a solicitation of an offer to buy, the Shares. This document does not constitute an invitation, offer or recommendation to apply for or purchase the Shares and does not contain any application form for the Shares. This document does not constitute an advertisement for an offer or proposed offer of the Shares. Neither this document nor anything contained in it shall form the basis of any contract or commitment and it is not intended to induce or solicit any person to engage in, or refrain from engaging in, any transacti on. No person is authorised to give information or make any representation in connection with any Public Offer which is not contained in this document. Any information or representation not so contained may not be relied on as being authorised by the Company, the Lead Manager or any person assoc iated with them. This document does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. The Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (Securities Act) or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold, directly or indirectly, in the United States absent registration under the Securities Act or in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and any other applicable U.S. state securities laws.

DISTRIBUTION

Distribution of this document outside Australia may be restricted by law. Persons who come into possession of this document who are not in Australia should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

NO LIABILITY

The Company has prepared this document based on information available to it at the time of preparation, from sources believed to be reliable and subject to the qualifications in this document. To the maximum extent permitted by law, Limited Parties accept no responsibility or liability for the contents of his document and make no recommendation or warranties concerning any Public Offer. No representation or warranty, express or implied, is made as to the fairness, accuracy, adequacy, validity, correctness or completeness of the information, opinions and conclusions contained in this document. To the maximum extent permitted by law, none of the Limited Parties accepts any responsibility or liability including, without l imitation, any liability arising from fault or negligence on the part of any person, for any loss whatsoever arising from the use of this document or its contents or otherwise arising in connection with it.

FORWARD-LOOKING STATEMENTS

Certain statements, beliefs and opinions contained in this document, particularly those regarding the possible or assumed future financial or other performance of the Company, industry growth or other trend projections are or may be forward looking state ments. Forward-looking statements can be identified by the use of 'forward-looking' terminology, including, without limitation, the terms 'believes', 'estimates', 'anticipates', 'expects', 'predicts', 'intends', 'plans', 'propose', 'goals', 'targets', 'aims', 'outlook', 'guidance', 'forecasts' , 'may', 'will', 'would', 'could' or 'should' or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future, assumptions which may or may not prove correct, and may be beyond the Company's ability to control or predict which may cause the actual results or performance of the Company to be materially different from the results or performance expressed or implied by such forward-looking statements. Forward-looking statements are based on assumptions and contingencies and are not guarantees or predictions of future performance. No representation is made that any of these statements or forecasts will come to pass or that any forecast result will be achieved. Similarly, no representation is given that the assumptions upon which forward looking statements may be based are reasonable. Neither the Company, nor any other Limited Party, makes any representation or warranty as to the accuracy of any forward looking statements contained in this document. Forward-looking statements speak only as at the date of this document and the Limited Parties disclaim any obligations or undertakings to release any update of, or revisions to, any forward-looking statements in this document. All dollar values contained in this document are in Australian dollars (A$) unless otherwisestated.

NOT FINANCIAL PRODUCTADVICE

No attempt has been made to independently verify the information contained in this document. You should make your own assessment in considering an investment in the Company and should not rely on this document. In all cases, you should conduct your own investigations and analysis of the financial condition, assets and liabilities, financial position and performance, profits and losses, prospects and business affairs of the Company and its business, and the contents of this document. This document is not, and should not be construed as, a recommendation by the Company, related bodies corporate (as that term is defined in the Corporations Act), or any of their respective officers, employees, directors, shareholders, partners, representatives, agents, consultants or advisers or any other party referred to in this document (each a Limited Party and, together, the Limited Parties ) to invest in the Company. The information in this document is of a general nature and does not constitute financial product advice, investment advice or any recommendation. Nothing in this document constitutes legal, financial, tax or other advice. The information in this document does not take into account the particular investment objectives, financial situation or needs of any person. You should seek legal, financial, tax and other advice appropriate to your jurisdiction.

PAST PERFORMANCE

Past performance information in this document is given for illustration purposes only and should not be relied upon as (and is not) an indication of future performance. Actual results could differ materially from those referred to in this document.

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Who is VEEM?

• Designer and manufacturer of its own disruptive, high-technology marine propulsion and stabilization products for the global luxury motor yacht, fast ferry, commercial workboat and defense industries.

• Commenced in 1968. Listed on ASX 2016. Profits and dividends every year since listing.

• 1HFY24 Turnover $38m, EBITDA $7m and NPAT $3.5m. We expect to deliver a similar revenue and profit outcome for the second half.

• Located in Perth, Western Australia, with a 14,700 sqm purpose-built manufacturing facility, including Australia’s largest non-ferrous foundry.

• Approximately 200 staff in Australia, including R&D, graduates and apprentices.

• Accredited to ISO 9001, 14001, 45001, Defence (DISP) security accreditation and recently ISO 27001 Information Security.

• Revenue generated from the following markets:

• Propellers

• Gyrostabilisers

• Defence

• Mining and Industrial products and services

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Propulsion

VEEM Propellers

• Most advance monobloc propeller manufacturing facility in the world.

• 24/7 lights off operation, 5,000 propellers per annum and is the only company fully CNC machining every propeller over every mm[2] .

• VEEM exports most of its propellers to the larger premium boat brands in the US and European markets.

• Sizes from 0.5m dia to 4.6m dia. Current turn over circa $30M PA. New build market $350M(USD) existing market $2.3B(USD)*.

Sharrow by VEEM Propellers

• In October 2023 VEEM signed an exclusive worldwide agreement with Sharrow Engineering, LLC for the manufacture and sale of Sharrow propellers for inboard vessels with propeller sizes 0.5m to 5.0m diameter. The agreement runs for 17 years (or longer).

• Sharrow propellers have had a spectacular impact on the outboard motor market with outstanding improvements in fuel efficiency, noise, vibration and handling.

• In April 2024 VEEM formally accepted the test results of the Sharrow designs. Rollout to pre-order customers has commenced.

• The progression of the contract also enables expanded defence opportunities in Australia and the US, particularly in relation to the noise and vibration benefits.

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VEEM Gyrostabilisers

• A VEEM gyrostabiliser is a ship stabilising technology that uses a powerful gyrostabiliser with patented control technology for vessels over 24m in length.

• VEEM holds the dominant position as the only major supplier in the large marine gyrostabiliser market, which is estimated at US$1.1bn per annum for new builds and US$13.5bn for retrofits (current fleet)*.

• Production facilities capable of $100m (AUD) per annum and utilizes a global supply chain to ensure VEEM is at world best technology, quality and pricing and allows for low-capital cost capacity growth. Currently producing around $13M (AUD) PA.

• Sales and orders from Strategic Marine and others highlight that the commercial market for gyrostabilisers is now understanding the value a VEEM gyro can deliver in terms of operational, HSE and commercial benefits - ie smaller boats doing a better job.

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VEEM Defence

• VEEM has supplied critical cast components (valves, mufflers, strainers)to ASC for the Collins Class submarines since 1988.

• Overall VEEM has supplied over $280m to defence customers since 1988.

• VEEM has supported Austal ships for 30 years in defence ride control and propulsion.

• VEEM will deliver the Hunter demonstrator program in Q1FY25, VEEM is one of only two suppliers globally to be able to produce this level of precision manufacturing. Looking at leveraging this to supply more of the global T26 programs, some 24 vessels in total

• VEEM is active in the Defence space and is well positioned to take advantage of further defence work opportunities that are now emerging from Hunter, Austal, AUKUS, Autonomous vessel and other weapons defence programs, especially since VEEM now has an enhanced security rating.

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Mining and Industrial Products

Forever Pipe

• The only supply of custom centrifugally cast hollow bar in Australia - $6.6M PA.

• Unique ‘duo’ bar manufacturing process of a bar within a bar allowing for a high wear bar inner with a pressure vessel outer.

• Idea for temp, chemical, wear and abrasive applications in the processing industries. Aluminium, manganese, nickel and other processing industries.

Mining and Industrial Engineering:

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• Demand for the traditional engineering products and services for mining and industrials expected to continue in Western Australia.

• Work load is driven by VEEM’s specialist offerings in Foundry, Dynamic balancing, NDT and Electroless Nickel.

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Outlook

• VEEM to develop and grow its propeller business through the rollout of the new SHARROW by VEEM range. Initial engagement with the pre-order customers has commenced and will see development of the design portfolio. First deliveries and revenue expected in Q1 FY25.

• VEEM is also seeking opportunities to develop its traditional propulsion business.

• Gyro sales expected to continue to be strong, particularly in the workboat/commercial market. Brand building and product development expected to continue to drive product sales.

• VEEM is active in the Defence space and is well positioned to take advantage of further defence work opportunities that are now emerging from Hunter, Austal, AUKUS, Autonomous vessel and other weapons defence programs, especially since VEEM now has an enhanced security rating. Hunter demonstrator project expected to be completed Q1FY25.

• Engineering products and services business expected to remain strong with domestic demand for foundry-led products.

• 2HFY24 results expected to be similar to 1HY24 - Turnover $38m, EBITDA $7m and NPAT $3.5m.

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Contact

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VEEM LTD

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PRINCESS YACHTS
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