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Drone Volt

CR
Bloomberg   ALDRV FP
Aerosp. & Defence Equipt.  /  France  Web Site   |   Investors Relation
From distributor to service provider.

Sustainability score
Company (Sector)
5.2 (4.6)

Sustainability is made of analytical items contributing to the E, the S and the G, that can be highlighted as sustainability precursors and can be combined in an intellectually acceptable way. This is the only scale made available

  Score Weight  
Governance   
Independent directors rate 8/10 25%More ...
Board geographic diversity 4/10 20%
Chairman vs. Executive split 5%
Environment   
CO² Emission 2/1025%More ...
Water withdrawal 3/1010%
Social   
Wage dispersion trend7/105%More ...
Job satisfaction3/105%
Internal communication10/105%


Sustainability score 5.2/10 100%  
Sustainability matters

Drone Volt has a sustainable model. As regulations on drones ease up and their technologies mature, we believe drones could replace current vehicles in some niche applications due to speed and energy efficiency. For inspection, it is safer and less energy intensive than a helicopter. For transporting vital medical material (or organs) from one neighbor hospital to another, drones are faster than cars which could be stuck in traffic jams. If their solutions are adopted by the market, the carbon impact would be positive.


Environmental score
Company (Sector)
2.7 (4.1)
Data sets evaluated as trends on rolling calendar, made sector relative
ParametersScoreSectorWeight
CO² Emission2/103/10 30%
Water withdrawal3/105/10 30%
Energy3/104/10 25%
Waste3/104/10 15%
Environmental score2.7  100%
Environment matters

Due to its small size, Drone Volt is not required to publish its Environmental metrics. Therefore, its poor environmental grade is irrelevant, as is any comparison with other peers of its Environmental score.

We believe that Drone Volt’s business model could remove many emissions. Its drone solutions are the alternative to often energy intensive methods. For example, its LineDrone would be used for high-voltage cable inspection where a helicopter would have been used previously. The drone is then capable of rolling on the lines (as it has the technological capacity to resist such high voltages), which is far less energy intensive then a helicopter flying still above the power line. In addition, as it can withstand high voltages, the power line does not need to be cut for it to operate (conversely to currently used methods). This improves the electrical grid efficiency.

Drone Volt is also investing heavily in hydrogen technology. It has already managed to produce a drone charging station through its partnership with Roth2 which would enable its largest drone, the Hercules 20, to fly longer with zero emissions. The charging station it has developed also enables the charging of other products, such as bikes.

Despite the lack of data on Drone Volt’s environmental metrics, we believe that its business model will have a positive impact on the global emissions of the niche industry it is addressing.

Environmental metrics


Energy (GJ) per €m in capital
employed

CO² tons per €m in capital
employed

Cubic meter water
withdrawal per €m in capital
employed

Tons waste generated per €m in
capital employed
Drone Volt Aerospace-Defence
Sector figures
Company CountryEnvironment
score
Energy
(total,
in GJ)
CO2
Emissions
(in tons)
CO2
Compensation
(in tons)
Water
Withdrawal
(in m3)
Waste
(total,
(in tons)
        
Airbus Group 6/1013,381,200857,000 3,672,21773,751
BAE Systems 6/103,181,241394,271 8,378,31347,485
Drone VoltCR 3/10     
Leonardo 5/105,435,015426,147 5,329,00030,001
MTU Aero Engines 5/101,104,12047,600 8,538,5007,950
Rheinmetall 3/103,562,621321,004 3,706,40254,039
Rolls-Royce 4/105,718,208409,925 8,277,83243,403
Safran 5/107,554,694441,719 2,780,00558,812
Thales 6/107,116,200148,000 1,529,00023,553

Social score
Company (Sector)
5.9 (6.5)
Social matters

It is difficult to judge on the Social aspect of Drone Volt given the limited data available. Due to the lack of cash, average salaries are logically below those of the major European Aerospace & Defense stocks. From 2018 until 2022, the workforce has steadily decreased due to the restructuring of the group. We believe that when the momentum of the LineDrone and other innovative solutions takes off, it will restore a healthy cash balance which would enable Drone Volt to recruit more employees and retain them with higher salaries.

Concerning the impact of its products on society, using its drone solutions has a key advantage: safety. Its built-in drone solutions are often the alternative to helicopters, which are flown by people. Some surveillance missions in unsafe environments can be dangerous (flying to an offshore wind turbine) and have caused deaths in the past. Flying an unmanned drone would fully remove safety issues.

Quantitative metrics (67%)
Set of staff related numerical metrics available in AlphaValue proprietary modelling aimed at ranking on social/HR matters
ParametersScoreWeight
Staffing Trend7/10 15%
Average wage trend10/10 30%
Share of added value taken up by staff cost1/10 20%
Share of added value taken up by taxes1/10 15%
Wage dispersion trend7/10 20%
Pension bonus (0 or 1)0
Quantitative score5.8/10 100%
Qualitative metrics (33%)
Set of listed qualitative criterias and for the analyst to tick

ParametersScoreWeight
Accidents at work4/10 25%
Human resources development7/10 35%
Pay7/10 20%
Job satisfaction3/10 10%
Internal communication10/10 10%
  
Qualitative score6.2/10 100%


Sector figures
CompanyCountrySocial Score Quantitative scoreQualitative scoreStaffing
      
Rheinmetall 7.47.96.527,393
Thales 7.26.97.881,306
Safran 7.06.97.293,824
Airbus Group 7.06.28.6153,809
BAE Systems 6.87.26.197,792
MTU Aero Engines 6.25.77.112,071
Rolls-Royce 5.96.54.739,314
Leonardo 4.75.14.055,709

Sustainability / ESG by AlphaValue:

Doubt driven, focused on dynamics


AlphaValue was set up in 2009 as an ESG native firm: since inception, no research could be published without filling up the ESG relevant items. ESG has always been there as a natural building block of the research effort.

Without much pretence, AlphaValue has accumulated 11 years of proprietary, practical data in a consistent way that has been made to “talk” with financial data. The efforts have been aimed at solving the main conundrum of ESG analytics: avoiding useless and noisy data. AlphaValue ESG data is intimately connected to the fundamental research work and its continuous updating process. In other words, AlphaValue ESG data can be made to resonate at will in terms of financial implications for those investors with the willingness to do so.

Over the last 3 years, this data, or rather the dynamic of this data, has been put at work so that it impacts directly and consistently on valuations across AlphaValue’s 450 + stocks universe. This is considerable progress vs. the dominant “consumption” of ESG raw data: ESG-type conclusions are sitting next to valuation fundamentals but hardly any investor is in a position to bridge effectively the two in a consistent and repeatable way. It takes more than a spreadsheet to get stable and auditable results that work 100% of the time.

AlphaValue reckons that it currently is the only equity research provider in Europe to have reached this stage: a perfectly smooth on-boarding of ESG data, on a continuing basis, impacting valuation fundamentals day and night.

This is available on every stock, every sector, every stock selection, every day.


Heretical ESG opinions?


ESG is a contradiction in terms. Without a good Governance, the Social and Environment items will never show progress. Social is for stakeholders and thus unlikely to please shareholders. The long-term view that good pay/working conditions are ultimately good for shareholders is, like any promise, better left to those who want to believe in it. It does not work for normal investment horizons

Environmental gains will not happen without good Governance but this is not enough as environmental progress will not happen without coercion from governments/supra-governments. There is no reason why a corporate will spend more for a possible collective gain tomorrow when it can have better returns now for its shareholders.

The environment is a cost of massive complexity and a universal one as data improves and allows for intricate tracking of what corporates are up to. There is no practical way a corporate can be valued through a web of changing definitions of environmental data. AlphaValue holds the view that all corporates are made to pay through lower GDP growth expectations resulting from friction costs. The only dimension that really matters from an investment perspective is whether a given corporate makes an extra effort vs. peers. A good ‘E’ rating shall not be driven by absolute levels but by the dynamic of emission controls relative to peers. Dumping cement stocks because they spit out carbon is a narrow view of what ESG implies.

Sustainability scores only

AlphaValue always refused to supply a pecking order of its coverage along some improbable ESG scale. It just does not make sense to mix opposing signals in a single ranking.

Sustainability is a different proposition where analytical items contributing to the E, the S and the G can be highlighted as sustainability precursors and combined in an intellectually acceptable way. This is the only scale made available by AlphaValue.

Sustainability impacts target prices

From 1-12-2020, AlphaValue substituted sustainability metrics for its Governance and Social ones when it comes to impacting valuations;

Indeed since 2019, all DCF (or DCF equivalents for Financials) have been impacted by Governance and Social metrics to connect directly ESG-type findings into share price targets and bring consistency across the board. The impact is driven by adjusting the small ‘g’ conventionally used to assess the growth to infinity. This is being tweaked to recognise, say, that good governance ultimately pays off.

The same procedure is now stemming from Sustainability metrics instead.

For the record, this has been made possible as AlphaValue has finalised its proprietary E scoring, now extended to 4 items (GHG, Waste, Water, Energy) on which a degree of data stability seems to emerge.