Etherstack Results presentation

Etherstack plc (ASX:ESK) 17 February 2023

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Disclaimer

This presentation has been prepared by Etherstack plc (ARBN 156 640 532) (“Etherstack” or “the Company”). The information in this presentation is for information purposes only and is not investment, financial product, legal or tax advice.

This presentation contains summary information about the activities of Etherstack and subsidiaries. The information in this presentation does not purport to be complete nor does it purport to contain all the information that a prospective investor may require in evaluating a possible investment in Etherstack. This presentation should be read in conjunction with Etherstack’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at www.asx.com.au or at www.etherstack.com

Statements in this presentation are made only as of the date of this presentation unless otherwise stated and the information in this presentation remains subject to change without notice. Etherstack is not responsible for providing updated information to any prospective investors.

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Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. The historical information in this presentation is, or is based upon, information that has been released to the market. For further information, please see past announcements released to ASX.

‐ This presentation may contain forward looking statements with respect to the financial condition, results of operations, business of Etherstack and certain plans and objectives of management. Actual outcomes may differ materially from forward-looking statements. Forward-looking statements, opinions and estimates provided in this presentation are likely to involve uncertainties, assumptions, contingencies and other factors. As a result, unknown risks may arise, many of which are outside the control of Etherstack. Forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Etherstack disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise.

Should you have any specific queries in respect of this disclaimer please contact Etherstack directly.

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2022 Financial & Business highlights

Etherstack

Etherstack is a wireless technology provider that supplies our own mission critical wireless networks to the public safety, utilities and resource sector. The company also licenses key technology to over 20 other wireless equipment manufacturers globally

Snapshot

3 Core Businesses (diversified revenue mix)

• Etherstack plc (UK) is a majority Australian owned business listed on the Australian Securities Exchange (ASX:ESK)

• Digital radio networks for first responders, essential services, resource sector and security/defense organizations – high margin system sales and support revenues

• Market Cap ~A$70m

• R&D offices in Sydney, Yokohama, Reading (UK) and New York

• 48 employees globally

• Technology licensing of R&D keeps our own products fresh and generates additional royalties revenue

• New high growth cellular network technology to bridge 4G/5G networks with existing government digital radio networks – licensing deals with Samsung & Nokia

• Highly profitable, debt free, growing

• All three businesses performing well

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2022 Financial highlights

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14%

Revenue growth to US $9.68 m

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Strategic Business

Samsung, Nokia and Rio Tinto

33% EBITDA growth to US $3.4 m

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Two new Recurring revenue growth
products
launched
+
US $2.55 million
invested in IP
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51%
NPAT growth to
US $2.2 m
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US$2.16m FY22 operating cash flow Fifth consecutive year of positive operating cash

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Business highlights

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Strong revenue growth supported by key contract wins

Etherstack Revenue (USD ‘000)

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9,681
8,504
guidance
4,792 4,699
2019 2020 2021 2022
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Multiple growth drivers have delivered strong revenue growth in FY22

• Step change in revenue 2021 has been maintained with additional 14% growth in 2022

• Multiple growth drivers

• Strong project revenues

• Continued increase in recurring support revenues

• Increase in addressable market for MCPTX

• Follow on “land and expand” revenues from Australian government and Rio Tinto mine activities

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Recurring revenue remains a core focus for Etherstack

Etherstack Recurring Support Revenue (USD ‘000)

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guidance
1,876
1,777
1,588
1,490
2019 2020 2021 2022
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Recurring Support Revenues continue to grow

• 6% increase on FY2021 to $1,876

• Increase driven by:

• New network deployments

• Incremental growth to existing networks

• High customer retention rates

• Ninth consecutive year of support revenue growth

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Income Statement

Revenue increases driving EBITDA growth

• Revenue of US$9.681 m representing 14% growth

• EBITDA increased 33% over FY2021 to US$3.468 m

• NPAT of US$2.193 m vs FY2021 of US$1.455 m – a 51% increase

• Gross Margin of 65% note 1

• EBITDA margin 35%

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Note 1: Etherstack gross profit margins vary depending on the mix of Etherstack product (relatively high margin) vs third party product (relatively low margin) and is driven by the nature of projects in the year.

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Balance Sheet & Cash Flow Statement

Balance Sheet

Strong balance sheet position, providing a foundation to invest in growth

Tight management of cashflow and investment to deliver continued growth and profitability

Operating cash flows consistently positive even throughout Covid-19 pandemic

Continued R&D investment into intellectual property builds on Etherstack’s competitive advantage

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Strong outlook driven by focus on key strategic initiatives

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•
•
•
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Expansion of Commencement License and supply existing Australian of upgrades to of defence & International virtualised communications public safety switching solutions solution to other networks across installed nations base Cellular Satellite Networks LMR Networks Defence Upgrades network “Land and Procure initial Telco carrier pursuits expand” contracts with currently underway New Australian satellite network with: terminal providers to Defence projects commenced in 2023 incorporate • Samsung and other Etherstack technology into their network • Nokia opportunities present solutions • Others & Direct

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Questions

London

+44 207 734 0200 [email protected]

New York

+1 917 661 4110 [email protected]

64 Rose Street, Chippendale NSW 2008

Phone +61 2 8399 7500

Sydney

+61 2 8399 7500 [email protected]

Yokohama

+81 45 342 9050 [email protected]

David Deacon, CEO [email protected]

David Carter, CFO [email protected]

Martin Duff , Corporate & Legal [email protected]

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