Aurrigo International plc (AURR) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Aurrigo International plc Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to David Keene, CEO. Good afternoon, sir.

Good afternoon, everyone, and thank you very much for attending our financial year '25 results presentation. Just a quick disclaimer, which hopefully you can read at your leisure. As introduced, my name is David Keene, and I'm the CEO and Co-Founder. And I also have Ian alongside me. Ian?

Ian Grubb. Hello, everybody. Thank you for joining. I'm CFO. I joined the company in 2022 and qualified with Touche Ross in 1993.

Thanks, Ian. Right. For those that are new to the company or those that already know us, I'd like to go through a few things quickly, which are just a little bit of background about the company and what we're involved in. We're a software, advanced engineering, and vehicles platform company with specialist areas in autonomous software, autonomous vehicles, vehicle control platform that runs all of those vehicles, which we'll come on to later. And the company that I started before we went to a plc 33 years ago was based as an automotive engineering company. And today, we still use all of that technology in automotive across into our autonomous vehicles. We have global blue-chip clients, which we'll see later on a few of those. And we have quite an extensive patented technology and know-how portfolio, which since we listed the company back in September of '22 has been accelerating quite quickly and not just in the U.K., but in markets around the world where we think we have a business case. We have growth. Our biggest growth area is obviously in the aviation area, where we are developing autonomous vehicles for baggage cargo and people movements. And we are working with some of the leading companies in the world, namely Changi Airport, Swissport, UPS, Cincinnati and Schiphol Airports to name a few. We have quite a large client list, but we just picked out some there to show you some of the blue-chip clients we're working with. And they are helping us develop new vehicles, new technology and the way that technology and those vehicles will interface into their operations. They don't actually own any of the IP. We still retain all of the IP, but these are the people who are on the ground every single day operating in airports around the world. And they know their business, and we know our business of technology, and those 2 come together in really good partnerships. As I said, we founded the company, or I founded the company as an advanced engineering company, primarily within automotive. And again, you can see some of our many customers in automotive, Jaguar Land Rover, Rolls-Royce, Aston Martin, et cetera. And that is a really important part of the business where we are transferring technology that we are developing in the automotive industry around electrification, lightweight engineering, use of new materials. And in doing that technical foundation, we're transferring that into our products, so that we become an exemplar in the aviation industry. As part of all this, we're not just doing this stand-alone with our customers in aviation. We're also, very importantly, working with the regulators and the alliances. And this ecosystem is really important, because technology companies like us tend to hare off and develop all this fantastic amazing technology, but sometimes lose focus on the fact that regulation in airports is really important. And if you can't work with the regulators, then you're not going to go anywhere. And I'm very proud to say that in the U.K., we have a great relationship with the CAA, with the FAA in America and with the Civil Aviation Authority in Singapore. And those authorities are working with us, and we are helping them to shape the future regulations. And of course, that's an advantage to us because if regulations are shaped around what you're doing, it's good. And hopefully, we'll give our competitors a little bit more difficulty in achieving the high levels that we've got. We're also working with industry bodies, IATA, in terms of their technical division, in terms of electrified ground support equipment and the new intelligent ground support equipment, and alliances such as the Baggage Innovation Working Group, where there's 150 airlines and airports and technology companies working together as to how do we improve baggage and cargo operations around the world. So let's just cover aviation to begin with. And although it's a strapline there, it's really important to know for people who don't know us that we do everything here from a blank sheet of paper all the way through to the technical development of the vehicle, the software, the electronics. We then build those vehicles ourselves. And then we, as a company, deploy those vehicles in our operations around the world. So we were a full end-to-end operation. The aviation industry is grappling with many difficult scenarios at the moment. Passenger volumes, although, of course, we have a war currently going on with Iran, and that is causing some issues around the world in terms of cargo and passenger movements, but nonetheless, passenger volumes are increasing rapidly and are due to double by 2040, and the same with cargo operations. And this is putting massive strain on airports, because they just can't get the people to match the scale at which the markets are increasing. So they're having to bring in new technology, and some of that is around how do you automate an airport, and a lot of money is being spent on automation in many areas in the airport. And we are just one of, as I say, many airport operations where this automation is being brought in. A lot of infrastructure investment, not just in existing airports, but in new airports. You may have seen that Dubai is building what will be the biggest airport in the world with some 240 million passengers going through it. And so to achieve the turnaround times for the aircraft and the movement of people through airports this size requires automation. And the industry is under great pressure. It has been seen for a long time as slightly dirty industry in terms of use of vehicles and aircraft with fuels that are not fit for purpose in the future. And that drive to net zero is also really important in ground handling, where predominantly it's still today the vehicles operate with diesel vehicles. So electrification of those vehicles and managing the electrification, because not every airport has got enough power to actually electrify all the ground support equipment that they need. So we've developed some products to help in that area. And just generally, commentators around the world, as you can see on the right-hand side, are predicting that below the wing, where we're operating, is going to be a massive market going forward. So we are positioned very well in this fast emerging market. We have a number of software solutions, and we have a number of hardware solutions. These are our 3 main software solutions. We have Auto-Sim, which is a complete digital modeling 3D visualization tool, which allows us to model an entire airport or a terminal, whether it's existing or whether it hasn't even been built yet, and determine, given flight schedules and how the airport or the airlines want to operate, we can actually in that software, simulate how that airport will operate and how would you bring electrified vehicles in and how would you bring autonomous electrified vehicles in? And what does that do to the efficiencies, turnaround times, number of people you need, and basically optimizing an operation for the future. And that is really important because it also has a module in there for how do you manage the whole electrification portfolio, i.e., do we have enough power, how much power do we need at peak performance, and how long do we need to charge vehicles and get the optimum number of vehicles for an operation. And pretty much every customer we have around the world, we're doing an Auto-Sim project for them. And it's widely known by those customers that this is probably the most advanced simulator that is available on the market, and we've built that from scratch. We then have Auto-Stack. Auto-Stack is our autonomous driving software stack. We've developed that ourselves. Nothing in this presentation has actually been done by anybody outside the company. I have an amazing technical team that can develop all this technology. And Auto-Stack is the same operational driving module in every vehicle that we have. There's no differences. So we're not customizing anything. Everything is absolutely the same with the same software and sensor suite across our fleet. And that has taken a very long time to develop. That driving software is now at a very advanced stage, and we'll talk a little bit more about what sets us apart in a moment. And then a very important part, not just having single vehicles running around, but having multiple fleets of vehicles in the future, they all need to be optimized, controlled, mission planned and also, more importantly, protected from cybersecurity threat. So having a resilient platform that can operate hundreds of vehicles, if necessary, has been an important part that we've been developing throughout late '24, the whole of '25, and indeed into '26. And that platform has just completed its third-party complete cybersecure and resilience penetration tests, and we'll be talking more about that in 2026, as we go forward. So having followed on from software, what's the main hardware platforms that we have? We have Auto-DollyTug, which is a vehicle that can carry a single ULD container. That container has around 35 to 40 of our bags in them that we normally have when we go on holiday or travel. It can carry one of those containers. In fact, it's the only vehicle that does carry a container. And it can tow, if necessary, another 4 trailers with containers behind it. It's a very unique vehicle and has been developed, as I said previously, alongside our partners. Our partners wanted a vehicle that could be super agile when it approached the aircraft. And the reason for that is because there's a lot of other ground support equipment doing a lot of other jobs such as refueling, waste, catering, et cetera. And so to move around on the airport and to have agility is really important. And one of those factors was can we make that vehicle go sideways? And can it rotate 360 tank turn. So that vehicle we developed and we have deployed and every single vehicle we have around the world is to that standard. And it means that airports and operations can continue like other things are happening. So traditionally, you wouldn't be loading baggage while you've got a catering wagon in position, because the distances and the operation is just too tight. Our vehicle can now slide in beside the catering wagon and can load and unload baggage automatically. It has robotic arms loaded onto the deck. It can identify its own container, pick its own container up, transport it to the aircraft and push it and unload it onto the aircraft. Our second vehicle is our Auto-Cargo, and we developed this through financial year '25. It's the largest vehicle we've built. It can actually carry 7.5 tonne container or 4 of those ULD containers and can also tow a trailer with another container on that with another 7.5 tonnes. And we've developed this vehicle in conjunction with UPS at East Midlands Airport. We've now delivered 2 of those vehicles to them, and they're in operation at the moment and going through their paces to see if they satisfy the requirements. And again, I believe we're the only company that's got a cargo moving vehicle at that size and that capability. That vehicle can also move sideways and almost tank turn. It can turn in a very small radius. And so it's super agile. And then finally, we have a passenger vehicle, which takes up to 10 people or can take loose containers like parcels, if necessary. So the interior is convertible from people to parcels. And our vehicle is now based on the Ford Transit-E platform. So we purchase Ford Transit vehicles. We convert them and put our sensor pack and our autonomous driving system onto them. And then that vehicle can be driven either manually or automated. And we've just completed a very nice on-road project. That vehicle travels autonomously up to 40 kilometers per hour. And we've just finished a program in Canada in very heavy snow running members of the public around a very large industrial park. So those are our software products and our hardware products. And we've also been developing a lot of technology that is equipped onto the vehicle, and this really sets us apart from the competition. The competition in the main is taking a traditional electric baggage tug and is converting it into an autonomous driving vehicle. That is just a towing vehicle. It cannot carry its own load. It's a towing A to B, B to A vehicle, and it also can't get up to the aircraft to load and unload its own containers, and it can't get into the baggage haul and load and unload its containers. So we are attempting to do a complete end-to-end, no person involved operation, whereas the competitors are still doing towing transportation. And we've got various bits of technology, dynamic alignment that we've developed that enables us to navigate on the stand. We detect every single piece of GSE equipment on the stand, where it's positioned and, in fact, even if it's moving or not moving, which enables us to navigate whether we're going forwards, backwards or sideways, or at an angle to actually go around those pieces of equipment to do our mission. We have aircraft precise location. So when an aircraft lands, it looks like it's in the same location, but it's not. And every time you go on to the stand, the aircraft is not positioned in the same precise location. So we have to scan the aircraft and accurately get a dimension to enable us to dock directly to the piece of equipment that is touching the aircraft. We're the only company in the world that has insurance to enable us to dock directly with a piece of aircraft equipment. And that has taken quite considerable time for us to get to that position, to convince authorities, insurance companies, and to build safety cases that people can ratify and understand. The third thing is we have spent a long time weather hardening our vehicle. And what that means is that traditionally, autonomous vehicles are not very good in heavy rain or heavy snow. And that's not very much used when you're in Singapore and you've got a big downpour, or you're in Canada or America and you're operating in snow. So we spent a lot of time, both mechanically, but more importantly, on software algorithms to enable us to drive in very hard conditions. And to date, we can operate fully in rain up to 50 millimeters per hour and snow up to 10 millimeters per hour. And if you were to see those levels, they are incredibly difficult to operate in. But we've managed to do this and prove to our customers that this is possible. And amongst all the many pieces of technical things that I could tell you, these are just a snapshot, but the final one is, we have now developed an automated way to cross a live taxiway. So normally, if a vehicle wants to cross a taxiway, they talk directly with the control tower. But of course, our vehicles autonomously, they don't have anybody on board, so how do you get a computer to do that and understand where it is, how it sees the aircraft, are the aircraft moving or not. And we've got some really good technology in the vehicles now and in our systems that enable us to do that. And those are subject to patents, and we've developed that and proved it out in operations at Cincinnati Airport. So all of these, what sets us apart technology is underpinned by all of the other technology that we've built up for many years now. And this is all coming together, including being able to have our Auto-Connect platform with a complete blockchain distributed identity per vehicle, which means it's very hard, almost impossible to crack our vehicles on our network. Progress on the ground. As I said previously, we've been working with Swissport and Schiphol and Changi and Cincinnati Airport for quite a while, amongst others. We now have -- in 2025, we won a contract to actually sell to Teesside a shuttle and an Auto-DollyTug. And we now have a digital test bed up there with a team, which enables us to engineer vehicles, develop them. And we're also working with the Teesside Freeport and the Airport people about how do you do digital trade. In other words, can you move a piece of cargo through borders digitally with no one on board and just using our sensors and cameras to check. So you get a digital trade certificate and you can take it straight on to the plane or straight off the plane and through borders. We also announced at the end of last year that we had raised GBP 14 million of additional investment to start to scale up our operations now that the technology was really getting mature. And for the first time, amongst some very, very good additional institutional investors, we brought on our first strategic investor, Next Gen Mobility, who invested GBP 9.75 million into the company. And I was very pleased that we were able to have a proper strategic relationship with those guys. And we won the Ultra Global contract, which for us is to design and develop their autonomous vehicle and manufacture the first 25 vehicles here in Coventry. And that's the largest autonomous contract we've generated to date. Some of that will be revenued in '26 and the balance should be in H1 of '27. So just diving into automotive for a very short time because automotive is super important, not just for what I said about technology transfer, but also about cash generation into the business to allow us to support the funding that we've received from shareholders. If you cast your mind back -- it's very difficult, sat in June '26, thinking about 2025, but if you cast your mind back, the automotive industry was hit by 2 very, very big things. The first from the Trump administration with tariffs, which wasn't very helpful at all and drove a lot of instability. And secondly, almost straight after that, our biggest client, Jaguar Land Rover, had a massive cyber-attack and was literally shut down for 3 or 4 months. And again, that rippled through the industry. We put out a notice roughly in the middle of last year to say that we were going to downgrade our numbers, particularly on automotive. But I was really pleased and I'm pleased to report that in the final part of the year, as JLR came back online and the tariff problem disappeared, that we had an excellent back end of H2 and almost recovered all of the revenue that we had lost. And that continues into FY '26, and we are making very, very good progress in '26 and are back to where we thought we would be. So those headwinds, let's hope they've gone. You never know with the Trump administration, of course, they could change something or something else could happen. But at the moment, those are behind us. And the automotive business unit is doing incredibly well. And again, I was pleased to report winning the GBP 4.5 million supercar framework contract, which will be revenued in '26, '27 and '28. And that just shows that our R&D team, our manufacturing team and the whole of the automotive division is working hard to get new contracts and new customers. And all of that cash that we generate, which Ian will tell you a little bit in a minute, all of that cash is diverted straight into the autonomous part of the business to supplement all of the cash that we've raised. So let me just take a breath, have a quick slug of water, and hand over to Ian for some results.

Thank you, David. So results for 2025, this is sales that we're looking at here and we have a number of graphs. So on the autonomous side, you can see where we've been focusing that, and we can see that the biggest growth opportunity for us. We've moved from mostly passenger autonomy into aviation autonomy. And 2024 saw a very large increase in that as we got a number of major contracts. Those contracts have moved into FY '25, and we've had a number of additional wins through 2025. Although that revenue has declined slightly, we've got some additional revenue that's come in through passenger again, which is related to the Ultra Global contracts that we've won. That was the first design development phase that allowed us to bid and win for the GBP 6.28 million that we referred to earlier. In terms of automotive sales, you can see that '23, '24 was fairly stable at around about GBP 6 million. That's what we would expect to be for a normal year. Given the turbulence that David was talking about in terms of tariffs and cyber-attacks, et cetera, that has come down slightly, but Q4 of 2025 really managed to bring back some of the dampened sales that we had, had through the course of the first quarter, second quarter, and into the third quarter of the year. So while revenues are down slightly from GBP 8.9 million to GBP 8 million, as we see on the next slide, that we feel is a very positive result for the year given the difficulties that have been through the industry, particularly in the automotive side. So next slide, please. So in terms of the actual results statements, revenue, as I say, was GBP 8 million compared to GBP 8.9 million in 2024. The gross profits, however, have remained at around about 41%, slight decline because of the mix in products within automotive and also the split between automotive and autonomy. EBITDA is a minus GBP 3 million compared to GBP 1.6 million in 2024. That is in line with our expectations given the fact that we have been increasing our spend on R&D manpower in order to develop and demonstrate increasingly complex and difficult scenarios that our customers are asking us to do and solve for them. So that's brought about a GBP 3.9 million net loss compared to GBP 2.4 million in 2024. So the other increases in costs that we have experienced are the legislative changes that came into force through '24 and '25, but also because of the increased complexity within the deployments that we are instigating at the request of our customers, those insurance costs are going up slightly. That's not unexpected, because it means that we're getting closer and closer to the planes and the infrastructure of the airports. And as David has said, we are the only company that we're aware of that has actually got that insurance, and we've got close ties with the insurers in order to discuss and establish that. From a balance sheet point of view, gross assets are nearly GBP 27 million compared to GBP 16 million in the prior year, increased and stabilized by the cash injection that we had through the year, initially in the beginning of the year, which was a remainder of the placement from 2024, but then a GBP 14.1 million gross placement towards the end of the year and end of Q3, which is why the cash position is currently very strong at GBP 11.5 million compared to GBP 3 million, and that's the highest cash position that we've had certainly since we have listed. We continue to spend money on R&D capitalization, and we capitalized GBP 1 million or so in the course of the year, primarily on the Auto-Cargo and Auto-Shuttle projects and products. And we've got a GBP 7 million net book value at period end for assets that we've capitalized. We have a related deferred revenue of around GBP 4 million, and we are putting around about GBP 0.5 million back into revenues, which is matching the amortization of that capitalized costs. I've mentioned the strengthening of the balance sheet. And if you examine the balance sheet and the accounts, you'll see that the IFRS 16 right-of-use property assets are reducing significantly as the leases in our old current site at the end of the year were due to expire, and that's allowed us to move into our new headquarters and manufacturing property. Thank you very much. That concludes the results section.

Very good. Thanks, Ian. So during 2025 and into 2026, we launched our hub strategy. And this is all about how we're going to scale the company. At the moment, we've been a company that has been developing technology vehicles and working with our customers to get something that's going to operate in their environments. And that has been done pretty much on a 1, 2, 3, 5 vehicle basis. Now if we are now going to enter the markets at scale, which we are going to, and our technology is maturing enough to get signed off, then we have to see how we're going to scale the company. And to do that, we're going to scale with partners, and this hub strategy was conceived, which we put out on an RNS. That hub model is around some very key locations around the world, namely, obviously, the U.K., where we've got our headquarters, potentially an operational hub in Europe, definitely one in North America, one in the Middle East, and one in the APAC region in Singapore or around that area. So that hub model means that we will not produce all of the vehicles in the U.K. Some will be produced here at our new facility, but others will be either manufactured under license or with partners or with invested partners in those locations. We will also not deploy all of those vehicles ourselves in those locations. We will look for partners who are already deploying these type of vehicles, although they're not autonomous vehicles, but this type of aviation ground support equipment. And so getting this hub model in these locations with really first-class partners where eventually, we become second-tier technical support to them. We become a company that is technically focused developing new vehicles, new technology, and licensing and transferring that technology to those hubs. That's how we're going to scale the company and look to see that those partners or where we're putting those hubs we can get that local investment into those hubs and not take it into the PLC and get any subsequent dilution. And to get routes to market, there are obviously ground handlers, there are GSE manufacturers, and there are also GSE lease and buy operators. So we will not be trying to sell product in a different way than other GSE is bought by operators, airlines or ground handlers that they do today. So we will look for traditional methods to go through those methods where a GSE leaser and operator will purchase from us and supply those into our customers. So that's scalable. It scales product sales through those routes. It's very capital light. We don't expect right this minute to be coming back for capital. We have a long runway and cash to support that runway and looking more to licensing and developing future technology. But for now, the company is doing everything. As I said, we're blank sheet of paper all the way through to deployment. To scale, you need to bring in partners to help you do that. And we want those partners to be invested into what we're doing. As part of our hub strategy, we needed a much larger, more sophisticated facilities, consolidating all of our 5 units that we have in the middle of Coventry into a unified site with much more expanded production capability, design office capability and prototyping. And I'm pleased to say only 6 or 7 weeks ago, we completed the lease of a building, which is not far from where we originally were 3 miles or so, which gives us 3x our footprint over 2 buildings and a 6.3 acre site, which also enables us to have our own testing facility and also customer demonstration. So for those of you who would like to visit and will visit or have visited already, you'll be able to be greeted by an autonomous vehicle that will take you around the site, and you'll be able to see us manufacturing those vehicles and developing those vehicles. The facility in the second building for manufacturing with very limited capital expenditure, very limited, can produce something like 500 vehicles per annum. And as I say, that on-site tech test track and demonstration will enable us to bring customers, blue-chip customers from around the world to see what we're doing. We now have facilities that match the technical ambition of the company. And I have to say, in 33 years, this is one of the most exciting moments that I have had, and I'd really like to share that with you when you're able to. So finally, on our investment case, we still have a growing large global market. More than 700 airports globally, we analyze, could take our equipment, facility, and technology, and get a very good commercial outcome from it. There are strong market tailwinds, lots of change, and we are right in the middle of that. We are an established partner now. We have spent many years getting to this point, proving to our customers that our tech is the best, it's reliable, and now we need to scale it. We've also got huge technical differentiation over our competitors. And we've talked about some of it, but we have a huge portfolio of advantages. And our customers are looking for complete end-to-end service. They're not looking for part of the solution. They want to get the maximum benefit from implementing autonomy going forward. We've launched the hub model, which will give us a scalable business model around the world. And we've been recruiting more people, including into the senior leadership team, and we've been bringing in more aviation experience into that team. So we really do have a team that can deliver this strategy. So this is all about now value creation rather than lots of improvements in the tech. We've got great tech and it works, and we're now proving that it works 24 hours a day, 365 days a year, and our customers can see that and implement it. So with that, we're in a very exciting position with the company and the outlook for '26 and into '27. So thank you very much for listening, and I'll just hand back.

That's great. Thank you very much for your presentation. [Operator Instructions] I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q&A can be accessed via investor dashboard. Guys, as you can see, we have received a number of questions throughout today's presentation. Could I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.