Drone Volt

We have integrated the sales and gross margin figures for the FY24 that came in slightly under our expectations due to a sudden slump in sales from the distribution side, resulting in a €6.9m shortfall in sales to €28.3m in distribution, partially mitigated by higher sales on the Drone Volt Factory, Academy and services side (c.€200k to €4.4m). Although the global gross margin rate was above expectations at 12.3%, the slump in distribution sales resulted in c.€800k lower gross margin to €4m, which has had a knock-on effect on the EPS for this year.

We have also slashed our 2025 sales estimate to take into account the much more rapid strategic change reflected in the deceleration in distribution. We now expect a 75% decline yoy to €8.5m compared to a 3% growth rate to €36.2m, resulting in a €2m lower gross margin from this division to €850k due to the lower volume, despite an increase to our gross margin rate to 10% (from 6%). However, the positive surprise on the Factory, Academy and Services side has led us to increase our sales forecast for 2025 from c.€8.2m to €9.4m as the refocusing is benefitting the division, resulting in a €600k higher gross result at €5.8m. Combined with the €400k cost-cutting program, there has been a slightly positive effect on the bottom line which partially offsets the 50% increase in the number of shares to 38.4m coming from the €2.7m capital raising and the 50%-odd conversion of the €2m bonds.

Our NAV is similarly affected by the 50% increase in the number of shares as well as by the lower sales figures expected for 2025. The impact on the gross asset valuation is c.€2.4m, taking the figure to €40.3m.

Our DCF is mainly impacted by the 50% increase in the number of shares (to c.8.8m) induced by the €2.7m capital raising and the potential conversion of the €2m bonds into 4m shares (c.50% conversion rate as the bonds could just act as a bridge loan, we assign a 50% probability to this event). We thus assume 38.4m shares compared to 25m previously at end-25.