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Drone Volt

CR
Bloomberg   ALDRV FP
Aerosp. & Defence Equipt.  /  France  Web Site   |   Investors Relation
From product to service
Target
Upside 78.9%
Price (€) 0.02
Market Cap (€M) 8.98
Perf. 1W: -2.86%
Perf. 1M: -27.9%
Perf. 3M: -54.6%
Perf Ytd: -67.5%
10 day relative perf. to stoxx600: -14.8%
20 day relative perf. to stoxx600: -33.9%
Target Change12/10/2022

H1-22 Model Update

Change in Target Price€ 0.04 vs 0.08-52.8%

Change in EPS2022 : € -0.01 vs 0.00ns
2023 : € -0.01 vs 0.00ns

Drone Volt saw a significant increase in expenses during the first semester, which was a drag on margins. The rise in marketing expenses (especially related to exhibition participations) amounted to €250k. In addition, through the acquisition of Viking Drones, Drone Volt recruited 3 top-notch engineers which have to be paid, leading to a 25% increase in the wage bill. This was combined with Aquiline Drone’s announcement stating that it would no longer pay the license contract. This will remove c.€650k of potential revenues in H2-22, which is pure profit for Drone Volt. Hence, we expect the gross margin for the coming semester to be below that of H1-22. We still expect growth in the H2-22 yoy and believe that the major one-off costs have already been accounted for in the H1-22 P&L statement.



Change in NAV€ 0.12 vs 0.15-23.2%

We have reduced the NAV to account for the slower growth than previously expected. Although we have increased the sales expected from Distribution thanks to the acquisition of SKYTOOLS (and its strong performance), we have adjusted downwards the Royalties revenues following the Aquiline Drone announcement and the Drone Volt Factory revenues given the slow execution of the promised contract from the Hungarian customer and Aquiline Drone.



Change in DCF€ 0.03 vs 0.10-69.1%

Due the decreased profitability, we have reviewed downwards Drone Volt’s cash generation. In addition, its inventory has slightly increased while we had been expecting a material decrease over the year. While the Hungarian and Aquiline Drone contracts have been postponed, Drone Volt has
managed to diversify its customer base and we believe its short-term growth is intact. The switch from products to services will also drive profitability. Hence, we have increased our DCF EBITDA long-term growth rate from 9.5% to 11% to account for this. The LineDrone as a service could be a major catalyst if the commercial traction is strong.



Updates

24 Oct 22 Earnings/sales releases
Q3-22: massive momentum in distribution

12 Oct 22 Target Change
H1-22 Model Update

27 Sep 22 Earnings/sales releases
From product manufacturer to service provider

26 Jul 22 Earnings/sales releases
H1 22: SKYTOOLS, another successful bet

18 May 22 Other news/comments
Could the French government be a new major ...

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

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