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Drone Volt

Bloomberg   ALDRV FP
Aerosp. & Defence Equipt.  /  France  Web Site   |   Investors Relation
From distributor to service provider.
Upside 165%
Price (€) 0.01
Market Cap (€M) 12.8
Perf. 1W: 2.82%
Perf. 1M: -12.0%
Perf. 3M: -7.59%
Perf Ytd: -27.0%
10 day relative perf. to stoxx600: -8.51%
20 day relative perf. to stoxx600: -10.7%
Earnings/sales releases28/01/2022

Q4 21: best sales in its history

Drone Volt published its best yearly results in its history, with the delivery of 271 drones and three intelligent cameras. It could have been far better if the Aquiline Drone contract had been carried out as expected. Yet again, the contracts are still intact though postponed, and we expect a strong execution in FY22. Its recent capital increase has enabled Drone Volt to acquire SKYTOOLS, a promising opportunity to strengthen its business.


• Sales stood at €8,723k, a 49% increase yoy.

• Drone Volt Factory sales represented 42% of total sales and grew 67% yoy.

• Gross margin stood at 33%, 4 points above the FY20 levels.

• Acquisition of SKYTOOLS, a Dutch drone distribution and service company.

• The licence contract with Aquiline Drones generated €1.5m in FY21.

• FY22 is expected to be a milestone for the first hydrogen prototype drone and the first delivery of the LineDrone.


Lucrative Drone Volt Factory as main driver

Drone Volt Factory’s activities, namely the sales and services associated with its in-house designed and built drones, has generated a record 56% gross margin, higher than its pre-COVID-19 levels. This is an especially strong performance since the pandemic has slowed down its international expansion. It has been more difficult to communicate with its partners HydroQuebec in Canada and Aquiline Drones in the US, headwinds which we expect will decrease throughout the year.

The strong performance of this segment has offset the low gross margins generated by its distribution of drone activities. The margins of distribution have been impacted due to several discounts Drone Volt made to win large bids (i.e. the large drone contract for police forces in Northern Europe). It has resulted in large sales with lower margins. It is part of Drone Volt’s strategy to broaden its customer base, to later be able to propose its in-house drone portfolio with higher margins in the long term.

Acquisition of SkyTools

Drone Volt has just acquired SkyTools, a Dutch drone distribution and service company. The business is expected to generate over €1m of sales in FY22 and was bought with cash, thanks to the capital increase that Drone Volt performed in December. Financially, this acquisition will enable cost synergies and additional sales for the group. As Aerialtronics is close to SkyTools’ current location, the former will welcome the latter into its offices, which will reduce the cost structure of both entities.

Operationally, SkyTools and Drone Volt are complementary. Not only will this acquisition strengthen Drone Volt’s presence in the Netherlands, but it will also enable the company to broaden its customer base and develop its service portfolio. Skytools was only a reseller previously but had interesting services like maintenance and repairs to which Drone Volt was not exposed. In addition, SkyTools has an experienced salesforce and a broad range of customers (notably in the oil industry) which could facilitate the sale of Drone Volt’s legacy drones. We believe this will help diversify the customer base of Drone Volt, which is still very exposed to its main American customer/partner.

Lower demand than expected from Aquiline Drones

Though Drone Volt had record sales this year, it had the potential to perform even better. The 600 Hercules 2 contract with Aquiline Drones has only slightly improved in Q4, as Q3 associated drone deliveries amounted to 204 and the year ended with 211 deliveries. We were expecting over 400 deliveries by the end of FY21. This weaker than expected performance is due to Aquiline Drones investing heavily in structuring its drone eco-system, and having limited cash left to complete the contract in due time. Drone Volt has the components and some of the drones corresponding to this contract in its inventory. Though it is negative for its working capital, it suggests that it is ready to accelerate the deliveries rapidly once Aquiline Drones gives them the green light, with no potential supply-chain risks.

Nevertheless, Drone Volt has managed to generate strong sales without the Aquiline Drones contract (Q4 21 sales stood at €2.4m vs Q3 21 sales at €2.7m). It shows that the company has managed to decrease its exposure to its American partner by broadening its source of customers. A positive trend which we believe SkyTools will emphasise.

FY22: a new era for Drone Volt

We believe FY22 will be a year of both growth and innovation. We are expecting the first prototype of a hydrogen fuelled drone thanks to a partnership with Roth2, which would be used on larger drones and would give them more flight time without recharging. In addition, we are also expecting the delivery of the first LineDrone, which could be a trigger for both sales and profitability, as we believe the drone could cost over €300k.

The ongoing contracts are also expected to advance. We are not expecting deliveries of the 400H2 left for Aquiline Drones in the first half of the year but, when the latter has cash on board, the deliveries could be made rapidly. With this contract alone, Drone Volt would beat its yearly record of drone deliveries. The new Hungarian contract is on its way, with two deliveries in December and a high single-digit number of drones expected to be delivered in Q1 22. We doubt it will reach the 75 H20 milestone this year, but it will be a driver for sales. Lastly, we believe the mega-contract with Aquiline Drones which was composed of 500 H20 and 200 H10 is not likely to happen in the short term.

An interesting opportunity to bet on Drone Volt

Drone Volt has released a warrant that is currently trading on the markets for investors willing to have an exposure to Drone Volt cheaply. The warrant can convert into a share at a price of €0.11 any time in the next five years (the Drone Volt stock is currently trading at €0.06). As the dilutive instruments are on hold, we see limited risks of seeing the stock price decrease further. However, there are catalysts that could catapult the stock price above this strike, which could lead to consequent gains for investors willing to take the risk. In the event of Aquiline Drones having enough cash to complete its orders, Drone Volt’s sales could increase drastically, as the 400 H2 left alone could represent an additional €1.5m rapidly. (The warrant ISIN: FR0014007951 is currently trading at €0.02.)


Our estimates were too bullish for the number of units of H2 that Drone Volt would deliver in Q4. This difference is the reason why our sales estimates are above the recent quarter’s results. Due to the delay in the Aquiline Drones’ major contract, we will have to delay some of the revenue recognition in the future years, hence lowering our FCF and target price. Though we are confident that FY22 will be another record year, we will have to lower our estimates. The promise by the company to not use any dilutive instruments for the next 11 months should also stabilise the price and leave room for upside. The proposed subscription bond could be an interesting instrument for exposure to the company. We maintain our positive view on the stock.


26 Apr 22 Earnings/sales releases
Q1 22: integration of the acquisitions is progres...

24 Mar 22 Target Change
All eyes on Aquiline Drones

22 Mar 22 Earnings/sales releases
Q4 21: getting closer to break-even

28 Jan 22 Earnings/sales releases
Q4 21: best sales in its history

20 Oct 21 Earnings/sales releases
Q3 21: strong contract execution, as promised