Drone Volt

Our EPS forecast for 2025 has been upgraded following the announcement of the latest €6m contract. We now forecast growth of 110% to €5.3m for the Drone Volt Factory division (100% previously) and a gross margin of 57% (from 55%) or €3mn. This has a positive effect on the bottom line in 2025 and 2026 as we have not changed our growth assumptions for 2026, in line with our confidence that the company can deliver more in 2026.

We have updated our NAV to take into account the strong rerating of Aerospace-Defence stocks by the market, thus increasing the multiple for the Drone Volt Factory from 3x to 5x as this business is poised to benefit from Defence orders, as witnessed by the announcement of the latest €6m contract. Our valuation has thus increased by €6m.

Our DCF has been updated to take into account the better prospects for Drone Volt for its Drone Volt factory division following the announcement of a large €6m contract, thus improving our growth prospects for 2027 from 15% to 45% to c.€14.5m, and predicting a lower slowdown for this year. We have also increased the operating margin from 62% to 70% as this is a relatively high operating leverage business. All things considered, the positive effect on our EBITDA forecast for 2027 is c.€3m to c.€10m for the year, boosting our DCF as we expect a lasting positive effect beyond 2027.