REG - Seeing Machines Ltd - FY2022 trading update

Seeing MachinesAnnouncement

15/08/2022 07:00

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RNS Number : 8835V  Seeing Machines Limited  15 August 2022

 

This announcement contains inside information

 

Seeing Machines Limited ("Seeing Machines" or the "Company")

 

 

15 August 2022

 

FY2022 trading update

 

Trading in line with expectations, positive underlying growth

 

Seeing Machines Limited (AIM: SEE, "Seeing Machines" or the "Company"), the
advanced computer vision technology company that designs AI-powered operator
monitoring systems to improve transport safety, provides a trading update for
the year ended 30 June 2022 ("FY2022").

 

Key highlights:

 

-     Revenue in line with, and cash position ahead of market expectations

-     High margin Automotive royalty revenues up 139% on prior year

-     Start of production vehicles on road now at 447,000, up 246% on
prior year

-     Non-Recurring Engineering (NRE) revenue up 61% on prior year, a lead
indicator for future Automotive royalty revenue

-     Cumulative Automotive order book of A$395m, up 97.5% on prior year,
based on expected initial lifetime volumes

-     Guardian now connected to 39,832 vehicles, up 25% on prior year,
with increasing demand from customers, and has travelled more than 10 billion
kms globally

-     Deal signed to deploy the world's first pilot fatigue detection
system in the cockpit for Air Ambulance Victoria

 

Seeing Machines' growth momentum accelerated as additional Automotive programs
successfully start production and there are more than 447,000 cars on the
road, spanning 24 vehicle models across 5 individual OEMs, with the Company's
driver monitoring system (DMS) technology installed. This represents a 246%
increase year-on-year, a trend that is expected to continue as more programs
start production, permanently changing the Automotive revenue mix from
non-recurring engineering (NRE) to high-margin royalty revenue. The cumulative
Automotive order book now stands at A$395m with the majority expected to be
recognised over the period to 2028. The Company also delivered a significant
underlying increase in NRE revenue, 61%, year-on-year, as new programs begin,
with additional, bespoke features, a strong lead indicator for future royalty
revenue.

 

The Aftermarket business continued to grow as Guardian, now connected to
39,832 vehicles (compared to 31,771 in the previous period), is attracting
commercial fleet operators, including large multi-national enterprises. In
addition, Guardian is being sought by truck and bus manufacturers for 'after
manufacture' fitment as Europe's deadline for General Safety Regulation (GSR)
compliance fast approaches.

 

The global supply chain pressures have affected Guardian hardware costs and
the Company's ability to secure adequate supply of hardware to meet demand.
This has resulted in all available stock being sold in FY2022 and over 2,000
Guardian units ordered and not yet supplied, representing around A$3.5m in
forward orders to be recognised in FY2023. Supply chain issues have been
resolved with the Company's manufacturer, resulting in their guarantee to
deliver satisfactory levels of stock by the end of H1 2023 to meet the growing
demand for Guardian hardware.

 

The Aviation business is maturing across its three focus areas and, during
FY2022, the Company signed a deal to deploy the world's first pilot fatigue
detection system in the cockpit for Air Ambulance Victoria to detect pilot
fatigue, in real time. This is ground-breaking and marks the beginning of
significant commercial opportunities for this developing market, a market
which Seeing Machines is clearly leading. Simulator and console-operator
opportunities continue to advance as the Company works with leading avionics
brands globally.

 

Financial highlights for FY2022

 

-     Reported Revenue for FY2022 is expected to be A$54.2m, representing
a 15% increase on the previous period and in line with market consensus 1 
(#_ftn1)

 

-     Underlying operational growth, on a like-for-like basis, excluding
one-off license revenue in FY2021, of 22% when using constant currency 2 
(#_ftn2)

 

-     Annualised Recurring Revenues increased by 20% year on year to
A$20.7m

 

-     Cash at 30 June 2022 is expected to be A$59.3m, 29% above market
consensus 3  (#_ftn3)

 

Paul McGlone, CEO of Seeing Machines commented:

 

"The increasing release of cars on road is very pleasing and will continue to
drive positive margin mix across Automotive as more of our ongoing programs
progress into production. The Aftermarket business has also grown despite
market dynamics beyond our control impacting our supply chain. Guardian sales
increased across all market segments including new opportunities in 'after
manufacture'.

 

"Our success in new business across all of our transport sectors, and notably
in Automotive driven by our unique systems approach, is expected to continue
as we work closely with our ecosystem to deliver our industry leading driver
and occupant monitoring technology into the market."

 

 

The Company expects to publish its audited year end results in late October.

 

The financial information in this announcement is based on the unaudited
management accounts for the year to 30 June 2022.

 

Enquiries:

 

 Seeing Machines Limited                     +61 2 6103 4700
 Paul McGlone - CEO

 Sophie Nicoll - Corporate Communications

 Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)                +44 20 7710 7600
 Alex Price

 Nick Adams

 Ben Burnett

 Lionsgate Communications (Media Enquiries)  +44 7791 892509

 Jonathan Charles

 

The person responsible for this announcement is Paul McGlone.

 

 

 

About Seeing Machines (AIM: SEE), a global company founded in 2000 and
headquartered in Australia, is an industry leader in vision-based monitoring
technology that enable machines to see, understand and assist people. Seeing
Machines' technology portfolio of AI algorithms, embedded processing and
optics, power products that need to deliver reliable real-time understanding
of vehicle operators. The technology spans the critical measurement of where a
driver is looking, through to classification of their cognitive state as it
applies to accident risk. Reliable "driver state" measurement is the end-goal
of Driver Monitoring Systems (DMS) technology. Seeing Machines develops DMS
technology to drive safety for Automotive, Commercial Fleet, Off-road and
Aviation. The company has offices in Australia, USA, Europe and Asia, and
supplies technology solutions and services to industry leaders in each market
vertical.

 

www.seeingmachines.com (http://www.seeingmachines.com)

 

 1  (#_ftnref1) Market expectations for FY2022 are for revenue of A$55.6m and
EBITDA of A$(32.7m)

 2  (#_ftnref2) This refers to underlying growth rates at constant currency or
adjusting for currency so business results can be viewed without the impact of
fluctuations in foreign currency exchange rates, thereby facilitating
period-to-period comparisons of Seeing Machines business performance. To
present this information, current period results and comparative period
results are converted into Australian dollars at the 30 June 2022 exchange
rate.

 3  (#_ftnref3) Market expectations for FY2022 for cash are A$46.1m

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