Drone Volt has signed major contracts in H1, one firm contract concerning 600 Hercules 2 drones of an estimated real value of €2.4m and one flexible contract concerning 500 Hercules 20 drones and 200 Hercules 10 drones of a catalogue value of €15m (we estimate a real price of €9.5m). Drone Volt is currently ramping-up its production of Hercules 2 drones to honour its firm contract before the second. Its production rate is currently 40 drones a week and it is expected to rise to 60 drones by the end of the year. As its priority is the Hercules 2 contract, we were clearly too optimistic on the fulfilment of the mega contracts involving the Hercules 20 and 10. We are estimating this second contract to represent €1m in FY21 vs €1.9m previously. While this has not changed our fundamental view as the drones that are not delivered this year would be delivered later on, we have added a degree of caution on the calendar which impacts the DCF.
