Announcement PDF Atomos Ltd (ASX:AMS) Atomos FY24 Results Presentation Hardware. Software. Cloudware. Important Notice and Disclaimer The information contained in this document (“Document”) has been prepared by Atomos Limited ACN 139 730 500 (referred to as “Atomos” or “Company”). The information contained in this Document is current as at the date of this Document and should be read in conjunction with other Atomos periodic and continuous disclosure announcements filed with the Australian Securities Exchange (ASX), available at www.asx.com.au. The information in this Document is not intended to form the basis of any investment decision in relation to the Company or its assets and should not be considered as a recommendation to the Recipient to acquire securities in the Company. 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Non-IFRS information descriptors: • EBITDA (before R&D expenditure) is earnings before research and development expenditure, interest, taxation, depreciation, amortisation and impairment charges; • EBITDA is earnings before interest, taxation, depreciation, amortisation and impairment charges; • EBIT is earnings before interest, taxation and impairment charges; • Working capital is defined by the Company as trade and other receivables, inventory and other current assets less trade and other payables and other current liabilities; • Net cash flows from operations: the operating cash flows generated by the Company calculated as EBITDA excluding non-cash items and allowing for changes in working capital; and • Net cash flows before financing activities: being net cash flows from operations less capital expenditure and other investing expenditure. 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Neither the receipt of this Document by any person nor any information contained in it or supplied with it or subsequently communicated to 2 Atomos is known for world class product innovation and design… Over 100,000+ active users 500,000 units sold lifetime Automated production is the future 3 Our flagship products are used all across the content creator universe… Ninja Phone Shinobi II Ninja Sun Dragon Turns your smartphone into a high-end recorder, monitor and streamer Lightweight and high brightness monitor; perfect for vloggers and photographers Flagship monitor recorder that connects to almost every camera in the world World’s first sun spectrum, waterproof, lightweight flexible production and cinema strip light 4 Atomos - Returning to our core strengths … The Vision Focus on the Art Empower the democratisation of content creation in the Social, User-friendly designs that make video production simple intuitive and Pro Video & Entertainment Markets creative. Enabling creatives to focus on their art. Weddings, Events, Music Partnering with the Best Industry Standard Brand Align, integrate and partner with global technology leaders Strong brand equity and customer loyalty built over 12 years of innovation, care for the customer and teaming up with the best of the best to drive technology forward 5 FY24 – Executive Summary Renewed focus on leveraging our core strengths to rebuild into a growth business Stabilised Operations & Balance Sheet Refreshed Product Roadmap Refreshed Board & Management • H2’24 sales of $18.3m, up 5.1% on H1 with underlying gross margin improving to 39% in Q4’24 (40% in June 2024) • Right-sized fixed operating costs – reduced headcount from ~150 (during FY22) to 90 (Dec-23) and now 70 (Jun-24) • Debt free as of 30 June - $8.3m being repaid as part of capital raise in April 2024 and relisting to ASX on 21 May 2024 • Inventory balance reduced to reflect current sales (thorough review resulted in write-down for stock obsolesce in FY24) • Full realisation of cost restructuring initiatives expected in Q1 FY25; targeted EBITDA breakeven of ~$45m in sales • $2.9m cash as at 30 June, with further access to capital via exercise of options • Bottom-up review of business has facilitated the development of a clear product and growth strategy roadmap • Ninja Phone: new video-coprocessor for the latest iPhone; shipped in June-24 • SunDragon: unique ‘sun-spectrum’ range of LED lights; shipping in September-24 • Shinobi II: upgrade to existing core product line; shipped in July-24 • Expect to build upon new product momentum over H1’25 to generate uplift in sales • In Jan-24, return of co-founder Jeromy Young as CEO and MD, to drive new momentum to product and operations • In Feb-24, appointed Peter Barber as Exec Director and COO; co-founder of Blackmagic Design • In Jan-24, appointed Ben McAlister as financial advisor to the Board; assuming CFO duties to stabilise operations • Appointment of new auditors (Moore Australia) 6 Capital Structure Atomos Ltd (ASX:AMS) Stock Chart AS AT 30 August 2024* 1,213,662,308 Share Price $0.043 Market Capitalisation ($) $52.2M Options on Issue (listed, ex Nov-25, $0.03) 551,115,526 Share Rights Options (Various ex dates and prices) $0.060 Share Price ($) Shares on Issue Shares (m) 12m $0.050 $0.045 $0.040 170,378 $0.035 1,637,312 $0.030 % Held Share Price $0.055 $0.025 Top 5 Shareholders* 14m Volume Volume Corporate Structure 10m 8m 6m 4m $0.020 2m $0.015 Domazet FT3 P/L 210.5 17.4% Jeromy Young (CEO) 100.0 8.2% Peter Barber (COO) 100.0 8.2% Regal Funds Mgmt 87.1 7.2% Ellerston 83.1 6.9% Top 5 Shareholders 580.7 47.8% $0.010 0 (*) As disclosed based on public filings, unless otherwise stated 7 FY24 Financials 8 A$m FY24 – Revenue & Gross Profit margins 12.0 50% • – 10.1 10.0 8.0 8.8 40% 8.7 8.2 37% $18.3m in H2 FY24, up 5.1% on H1 FY24 39% 30% 33% 6.0 25% • Higher gross margins in FY24 attributed to the cessation of product discounting • Underlying gross margin improved to 34% in FY24 (20% FY23) 20% – 4.0 • 10% 2.0 - Driven in part by new management reinvigorating sales & marketing of existing products and launching new innovative products creating demand across other product categories H2’24 Underlying gross profit margin of 36% vs 31% in H1’24 Q4 FY24 gross margins consistently just under 40%; June reaching 40% – Taken longer than expected to unwind previous management’s strategies 0% 1Q FY24 2Q FY24 Revenue 3Q FY24 4Q FY24 Underlying Gross Margin 9 Underlying Proforma Profit & Loss A$m 30 June Year End FY23 (Proforma)1 FY24 (Proforma)1 •1 FY24 sales of 35.7m, down 16% pcp •2 Underlying (proforma) gross profit margin of 34%, up from 20% pcp Revenue 42.8 COGS (34.1) Gross Profit 8.7 Gross Profit Margin % 20% Variable operating costs (4.0) 3 (3.2) Fixed operating costs (27.2) 4 (21.3) Other Income / Forex 0.6 0.7 EBITDA (22.0)2 (11.8) Depreciation & amortisation (3.0) (1.6) – Reduced from 90 people at Dec-23 to 70 people at Jun-24 Finance costs (2.1) (1.2) – All R&D / product development costs expensed in FY24 Profit (Loss) before tax (27.1) (14.7) – Refer Appendix and FY24 4E accounts for breakdown of one-offs 1 35.7 (23.7) 2 1. Refer Appendix for bridge between statutory P&L and proforma P&L 2. Underlying FY23 EBITDA of ($19.5m) plus FY23 capitalised R&D costs of ($2.5m) equals FY23 Underlying Proforma EBITDA of ($22.0m) Reported gross profit margin of 31% (vs 11% in FY23) •3 Variable operating costs remain consistent at ~9% sales, subject to product mix •4 New management initially targeted to reduce fixed operating cost base to a run-rate of $16m pa by Jun-24; unforeseen challenges have resulted in longer than expected implementation of restructuring initiatives. 12.0 34% 5 – – • •5 Full run-rate benefit of restructuring initiatives will be seen from beginning of Q3 FY25 Proforma fixed operating costs reduced by $5.9m (22%) in FY24 vs. FY23 Financed costs to reduce materially with all now debt repaid post raise 10 Balance Sheet FY23 Audited FY24 Proforma Cash 2.9 2.9 Trade and other receivables 5.2 Inventories 15.4 Other current assets 5.3 3.3 Other current assets 28.7 19.9 PPE 1.4 0.9 Right of use assets 5.3 4.2 Financial assets 1.8 Total assets 37.2 Trade and other payables 13.0 4 11.3 Borrowings 3.4 5 0.1 Provisions 2.5 6 4.6 Lease liabilities 1.0 0.9 Income taxes payable 0.9 1.5 Current liabilities 20.8 18.4 Provisions 0.1 0.1 Lease liabilities 5.2 4.1 Income taxes payable 1.3 - Total liabilities 27.4 22.6 Net assets 9.8 2.4 A$m - 30 June Year End 1 •1 – 5.0 2 3 8.7 25.0 $2.9m cash as at 30 June Potential additional cash inflow of $16.5m if all listed options (exercise price of $0.03) were exercised •2 Excessive inventory balance in FY23 progressively turned into cash with thorough review in FY24 resulting in modest write-down of $0.8m for stock obsolesce •3 Impairment of Mavis investment •4 Trade payables being progressively reduced with various payment plans due to be paid off over next 6 months •5 No debt, outside of corporate credit cards, following completion of capital raise in May 2024 •6 Includes various provisions, such as onerous contracts provision (for legacy purchase orders) and Ex-CEO separation claim 11 Outlook Summary – Next chapter in the Atomos journey ... Grow from Strength New Adjacent Markets • Atomos core monitor-recorder market stable • Enter adjacent LED On-Set & Studio Lighting - NEW unique tech • Maintain revenue $40m+ at 40%+ gross profit margins • Products announced and shipping in September 2024 • Global respected brand • Large TAM opportunity – US$1.5bn, CAGR 13%1 • Right-sized - restructured to match core revenues and margins • Same customers through the same sales channels Return to Innovation Financial Stabilisation and Growth • New products that are ready to announce • • Next generation Ninja, Shogun and Sumo lines Restructure expected to be complete by Q1 FY25 with targeted EBITDA breakeven around $45m of sales • Market Cloud Services as essential value-add to devices • Targeting increasing sales momentum in Q1 FY25 • Launch of new products including Shinobi II, Sun Dragon and Ninja Phone with significant roadmap of products in development 1. Report by 360iresearch: LED Light for Camera Market by Product (Panel Light, Ring Light, Rope Light), Model (OffCamera, On-Camera), Device Type, Application, Sales Channel, End-User - Global Forecast 2023-2030. 13 Appendix P&L - Statutory to Proforma Bridge A$m 30 June Year End FY23 (Statutory) One-offs Capitalised R&D costs FY23 (Proforma) FY24 (Statutory) One-offs FY24 (Proforma) 42.8 35.7 - 35.7 Revenue 42.8 COGS1 (38.1) 3.9 (34.1) (24.5) 0.8 (23.7) Gross Profit 4.7 3.9 8.7 11.2 0.8 12.0 Gross Profit Margin % 11% 20% 31% Variable operating costs (4.0) (4.0) (3.2) - (3.2) Fixed operating costs (26.8) (27.2) (26.0) 4.7 (21.3) Other Income / Forex 0.6 0.6 0.7 - 0.7 EBITDA (25.5) (22.0) (17.3) 5.5 (11.8) Depreciation & amortisation (3.0) (3.0) (1.6) - (1.6) Finance costs (2.1) (2.1) (1.2) - (1.2) Impairments (30.7) 30.7 - (1.8) 1.8 - Profit (Loss) before tax (61.3) 36.7 (27.1) (22.0) 7.3 (14.7) 1. 2. 2.1 6.0 (2.5) (2.5) (2.5) 34% One-offs shown within COGS relate to inventory obsolescence write-downs Refer Page 12 of FY24 Appendix 4E report for breakdown of one-offs items 15 Ninja Phone – Now phones can be Ninjas too Expanding upon existing market opportunity • Video co-processor for the latest iPhones that lets you record from professional cameras onto the iPhone’s storage • Unique HDMI to USB-C, professional adaptor that securely attaches to the back of an iPhone 15 Pro or iPhone 15 Pro Max to create the world’s first Apple ProRes driven high resolution monitor-recorder. • Enable connection to any professional camera (Nikon, Panasonic, Canon, Fuji, Sony, etc) with an uncompressed HDMI output to Apple’s magnificent OLED screen. 16 The 'Light Bulb/LED Moment’ – introducing Ninja Dragon New Adjacent Markets Expand into LED On-Set & Studio Lights • Unique sun spectrum, Ninja controllable camera LED lights • Waterproof, flexible strip light design • Place anywhere, bend, shape and mount technology • Achievable adjacent market penetration • Able to leverage existing sales infrastructure and customer relationships • Large addressable market opportunity ~US$1.5bn1 3m light strip ships in a case that facilitates rolling up into a Light Panel with included diffuser - Replacing Light Panels 1. Report by 360iresearch: LED Light for Camera Market by Product (Panel Light, Ring Light, Rope Light), Model (OffCamera, On-Camera), Device Type, Application, Sales Channel, End-User - Global Forecast 2023-2030. 17 New Products and Markets: LED On-Set & Studio Lighting Portfolio of new products and market – complementary to Atomos' existing flagship products Atomos brings innovation and creative flexibility to simple LED lighting Ninja Dragon can be LED panel, striplight or focused beam light Various competitor designs can be heavy, with a dated design Competition can be up to ~350% more expensive with minimal flexibility or adjustable features 18 Control lights, cameras and monitors from your Ninja! A suite of intuitive cloud-based production services to allow creators to focus on their art, not on the tech Simpler, Faster and Higher Quality production workflows Atomos Technology makes this possible 19 Hardware. Software. Cloudware.