Titomic Limited (T04.F) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to Titomic's Full Year '22 Investor Webinar. Before I introduce our speakers today, I just wanted to remind you how to ask questions. [Operator Instructions] So without further ado, let me introduce our lead speaker, Herbert Koeck, who's the CEO of Titomic. So Herbert, over to you.

Thank you, Adrian, and hello, everyone, and thank you for joining us today to discuss Titomic's fiscal year 2022 financial results. I'm Herbert Koeck, Managing Director of Titomic and with me today is Jon Nield, our CFO. As always, it's my pleasure to have this opportunity to speak with you and share progress on our efforts to commercialize and grow Titomic's business. There is much to be optimistic about and we have utmost dedication to position Titomic as the global player in the cold spray technology. Now, it's somehow clear to me that the current trends in the economy supports the adoption of additive manufacturing solutions across almost every industries and every country. But even compared to 6 months ago, the world today looks totally different. A simple shipping of product around the globe has become cumbersome and costs have increased significantly for many companies. The lengthening and the cost of the supply chain, so is forcing companies to rethink their approach to servicing and repair solutions. These factors actually are all tailwinds for many areas of our business. We have growing confidence that the solutions offered by Titomic will lead to great business results following from the successes over the last year. Adrian, please go to the next slide. Before I begin, I would like to refer to our Safe harbor disclaimer on Slide #2 of the presentation. Some of the comments we make today will include forward-looking statements. And as you know, actual results may vary based on several risks and uncertainties. Can we go to Slide #4, forward. Now let me run through some of the highlights from last year with a summary of the achievements and I'm actually very proud of what we have achieved this last year, leading to good results and major breakthroughs. Importantly, we stayed focused on the execution of our strategy outlined earlier in the year. In terms of the numbers, we actually saw a 7x increase of our customer revenue compared to the year before to AUD 3.4 million. And currently, we saw growing revenues consistently from month-to-month, enjoying a record quarter in June with AUD 2.3 million revenue in 1 quarter. I'm very pleased with these results, as there are evidence that our strategy is working. Driving a balanced mix of machine and material sales, a push for joint ventures to establish real manufacturing businesses, a rollout of our workflow solutions in the glass manufacturing industry and combine all that with part production in our [ Hawthorn ] innovation center really works. It allows us to generate short-term revenues while building at the same time the platforms for recurring revenue streams in the future. Now let me provide a little bit more color on the status of our distinct revenue streams. If we can go to the next slide, please. Our Machine and Materials sales have been outstanding. On one side, we have built, equipped and installed our first large-scale TKF 1000 system for our customers, TWI in the U.K., a customer actually I'm visiting tomorrow. There were some challenges, but despite all odds, the job got done and we could recognize revenues in the fourth quarter of fiscal year 2022. The installation of this machine has created a true template for the delivery of the TKF 1000 in the future. At the same time, we strongly believe that our mobile low-pressure D523 product offering has a unique value proposition and is very competitive. As the system allows service partners and customers to do in situ repair of components, it opens tons of opportunities, especially in mining, oil and gas fields. We have partners like Brauntell have seen the opportunity early on and now work with us offering these services and machines across New South Wales and Queensland with more partners and territories to come. We also sold our first machine to a partner in Singapore, again, using our technology and product to repair service metal parts and products in a very efficient and cost effective way. In the Australian market, I can see the need for at least 250 to 300 of these machines. For many years, welding has been the traditional way to repair corrosion and still works great today. But using our D523 cold-spray solution provides a significant productivity increase, as for example, fuel tanks don't need to be emptied before the repair can happen as cold spray doesn't transfer heat to the inside of the tank and as such, significant -- it doesn't inflame any fuel left inside the tank. Holding shafts, for example, to increase wear resistance is another great use case and can be easily done with our solutions. Repairs costing normally tens of thousands of dollars can be done in a few hours and at a significantly reduced cost for the customer. Let me share the outstanding process we made when it comes to joint ventures. Joint ventures allow us, as I shared with you earlier, to integrate our technology in existing or new manufacturing processes, complementing what's there already. And by doing so, creating opportunities for products which couldn't be built without us. On top of it, the joint ventures allow us to enter industries with partners who are already experts in these businesses. They allow us to enter faster and at a lower cost than if we would try to do this on our own. During fiscal year '22, we really moved from design to implementation. Moved from having Heads of Agreement to solid well sought through and legally binding contracts. Specifically, you know that we signed 2 joint venture agreements, one with Neos in the U.K. on the manufacturing of tools and for the aerospace industry and another one was Repkon on the manufacturing of barrels in Turkey. In both cases, we started to form a physical presence with corresponding companies. We currently discuss the specific functionalities and options for the machines involved, which will lead to firm machine orders in the weeks ahead. And in consequence will allow us to become operational in the future. You will hear from me whenever we have more information that is material. We will then disclose as we move forward. Our service bureau in Melbourne is fully operational and actually has become an innovation sector. This is the kitchen, as I call it, to my employees and within our team, where we delegate applications for and with customers and where we produce demonstrate parts on one side for partners and customers, but also our engineering team, I can tell you, has stepped up significantly during the year, delivering customer reports, which are based on facts and on data, details, which are very necessary for future businesses. Some of these revenues are definitely one-off, no doubt about, but many times, they create a foundation for future big production orders and laying the foundation for future joint ventures. We have worked with external experts for example, like ANSTO in Sydney to validate radiation shield solutions. The data we gathered earlier this year then enabled us to reach out to companies like Fleet Space who gave us an order earlier to create a radiation shield. So, this is something what we have in place. Can we go to the next slide, please. Again on our execution strategy, we continue to make strong progress also with all our strategic pillars. Fevisa is just an example of the many projects we have been executing throughout the year and we continue to work diligently to meet stringent requirements with the aerospace and with the defense industry. At the same time, we have made tremendous progress over the past year with both additive manufacturing and repair and coatings. We installed the TKF 1000 installation in the U.K., adoption of multiple resellers and continuous progress with materials testing and validation for barrels, ballistic protection and radiation shielding. We now have a sharp focus on a few applications and have a clear pathway to recognizing significant value in these areas in the future. Finally, we continue to build out our geographical presence for our go-to-market. Please go to the next slide. Our team in the U.S. has been complemented with the hiring of Bruce Colter as General Manager for Titomic United States, whose experience in the additive manufacturing market is helping us to grow the business there. On top, we enjoyed the support of Neil Matthews since the beginning of May, whose experience and expertise in cold-spray repairs is a great upgrade to our existing skills and capabilities. At the same time, from the very beginning, actually, I was clear that in certain geographies, we want to build a setup where authorized partners of Titomic carry out our products and services to customers. In this area, we continue to work with Shree Rapid, for example, in India and just recently announced that our joint venture partner, Repkon will also act as a reseller for the Middle East, Saudi Arabia and Turkey. All these additions and expansion has happened during fiscal year 2022. And already today, we are seeing a fast-growing sales funnel, leading to even more revenue opportunities across the globe. At this point in time, I'd like to hand over now to Jon to share more details about our financial results during the fiscal year and give you more perspective on how we grow revenue and what the actual numbers are. Jon?

Great. Thanks, Herbert and hello, everyone. As, you've heard Herbert explain, we have had a very positive year in FY '22. We're clearly heading in the right direction as we can see in the financial results. Our total reported revenue for the year increased from AUD 2 million last year to AUD 5.3 million in FY '22, and that's an increase of 168%. The most important element of that is that our revenue generated from customer sales was 7x that of last year, just as Herbert mentioned earlier. And consistent with our journey towards full commercialization, we reported a net loss of AUD 17 million in the year, which was actually AUD 0.2 million better than prior year and during a year that has seen costs for 2 acquisitions and related other global expansion activities and increased sales and marketing activity following the removal of COVID restrictions, we have slightly reduced the total reported loss. This indicates that our expenses are under control and have redirected expenses and costs strategically towards future business growth and other revenue-generating activities. The underlying result included -- sorry, excluding nonoperating activities, improved from a loss of AUD 11.1 million in FY '21 to a loss of AUD 10.5 million in FY '22, again, an improvement there. The margin we generated from customer sales was offset primarily by the increased employment costs relating to our larger global footprint and those increased sales and marketing activities. We're able to get out and visit customers and attend strategic marketing events again. The nonoperating costs were primarily related to revised Director share-based payments and, of course, business acquisition costs. Turning to the next slide. Talking about cash flows and balance sheet here. The company has adequate funding to continue with its current growth activity with AUD 7.1 million in the bank, cash reserves and that's after raising AUD 9.9 million net through a successful share placement plan in about October last year and also a AUD 2.5 million strategic investment from Repkon, one of our major customers and partners. Key items on the cash flow include AUD 3 million of receipts from customers, along with AUD 2.9 million of grant in income. The net outflow from operating activities was AUD 10.2 million and that includes machine build costs related to sales and payments related to the Tri-D acquisition in the U.S. Then in the investing cash flows category, there's another AUD 1.9 million in there related to payments for acquisitions, both in Europe and the U.S. And then in the financing cash flows section, the main item there is the increase in lease payments under the Australian Accounting Standard 16 for leasing. So, the overall Titomic has got a pretty good-looking balance sheet with no debt and adequate funding for future activities, of which we have got plenty planned coming up. So, back to you, Herbert.

Thank you very much, Jon. But the story, which I'd like to summarize once again, which the takeaway I would like all of you to get from the financial numbers overall is, so what we saw is significant increase in customer revenue. That's just a proof point that customers are trusting in the solutions we have and they see a benefit for them, getting our products and services within into their premises. That's one thing. At the same time, when you look on the cash flow and on the operating loss and you go to the details, you see a major transition of the spending from what we had in the past to spending which positions us going forward for better revenue with an increase in sales and marketing activities with an increase and a strong reduction on the administrative side. So, everything is focused on creating revenue and this was possible because of our focus. If we go and once again into the strategy and the outlook, Adrian, if we can go to the next slide. This is a story, where I would say, which has been with us for the entire year. And I remember me being in front of you and having said that, we had 167 use cases and we chased -- even tried to develop these solutions out there which is kind of a mission possible. And we applied a very thorough and diligent process together with the engineering team, where we've zoomed in and focused [ painstakingly ] on first 2 high-level groups, one of them, everything around additive manufacturing and another group everything around coating and repairs. And within these 2 groups, we try to aggregate and check out and figure out where is the sweet spot of the solution. Where is the sweet spot of cold spray technology and what we have in terms of our machinery, okay, what you see here is the summary. That's at the end of the day, the focus areas and you could say we can further reduce and yes, we will. But at the same time, we have to keep the right balance between the short-term solutions, which will generate revenue now and develop the solutions, which will generate even more revenue tomorrow. And there is a cost aspect to it and there is a resource aspect to it. Okay. Actually, we need to stretch ourselves along the capital, which we have available along the cash we have. We are very cautious and very focused to spend the money where we see the biggest return in the shortest period of time. Let's go to the next slide, please. In our update to our investors in the midst of this year, we also laid out the areas we are going to think about in the following way. The first thing is we need to create a value proposition simply to show where are we better. What are the things that Titomic is different today than from some of the other competitors. And there is a long list, which I can share with you, starting with that we have many, many years of experience with cold spray and we have a global footprint. We are in Australia, we are in Europe, we are in the U.S. We have a very complete product portfolio. We have mobile machines, which can carry and like a trolley behind you, and we have very large -- actually the largest machine of cold spray globally. And at the same time, also, we know how to handle all of the metals, not only the soft ones like copper and aluminum, but those are the very hard ones where we are talking about Inconel, Invar or Titanium. So, all these together at the end day is a very strong value proposition for Titomic. And we are different and better and have a better value proposition already today. Now the next question then is, where are we going to? Where are we heading to? Where will our journey bring us? And we have gone through a thorough process where we selected some specific mountains ahead of us and these are the lists which you find on that chart. Okay. It's around barrels. It's around tooling faceplates. It's around armaments like ballistics. It's around titanium structures. And for each of these targets, we have identified revenues, target market sizes, but also what is our opportunity in these markets. And now we have laid out basically a plan, a pathway, how do we get from where we are today, how can we reach these mountains one after the other. And as soon as we have reached these mountains, obviously, there will be other mountains showing up, but that's another play and another time, okay. We have identified these targeted revenues and these are what we are chasing going forward. And this is the cumulative revenues we think we can achieve and we will achieve in these next 5 years. Can we go to the next slide? I talked about the product portfolio and here it is. Okay. As you can see here from the left side, starting with our TKF 9000 system, which is the largest cold-spray system globally. To the very far right, where you see the mobile unit, which actually just yesterday, I saw a repair happening on a metal -- on a steel shaft actually here in the U.K. And this is a portfolio, which at this point in time is very unique and there is no competitor globally who can compete with us on this portfolio we have in place. Can we go to the next one? This is something which I'm extremely proud of, okay? At the same time, it humbles me because there is a responsibility we inherited now to serve these customers as well. And just let me highlight 2 of these customers specifically because they are very close to our success going forward. Repkon and Neos on the upper left side, together with Boeing, where we did a lot of projects already and there's more to come. Repkon and Neos where we are starting and have an agreement in place for a joint venture. This is very important. This differentiates us from being just another supplier of machinery, which will be placed with the customers and where you leave it to the customers to make a business out of it. We want to identify use cases and we work to be in manufacturing without -- the effort to duplicate and what competition has done already, we want to team up with leading players in certain selected industries. Repkon and Neos are 2 of them. The other one is almost in the center, the logo which you see around IPGR, the International Partner Group for Glass Research. That's an association, which is focused on the developing in the glass industry of literally dozens of glass manufacturing sites. We have installed the first machine in one of the leading glass manufacturing bottlers in the world, Vetropack, actually in Austria. I have an opportunity to see their CEO next week and we are discussing the solution itself but also on how we can roll out that solution to all the other sites. Huge opportunity going forward. At the same time, we need to prove first that the solution works, which is happening right now. And in further consequence, this will drive good business back to Titomic in a recurring way for the years ahead. Other, many of these logos, you can see that the one, small one, I would like to highlight is Fleet, because, as I said before, we have done the work with ANSTO in Sydney, where we investigated if our theory that we can produce a radiation shield is really working and it does. We created a data set. With that data set, we became attractive to a company, a customer like Fleet, and they provided us with the first order. And so very soon we're going to see a coating and radiation shield of Titomic being up in space. Next one, please. Now, let me summarize before then handing back to Adrian for question and answers. I just, I continue to be extremely confident on what we are doing today. Okay. Yes, the economy hasn't become easier. Yes, there's a lot of challenges out there in the world, supply chains are getting worser. At the same time, as I said before, this is actually technically creates tailwind for us, which we enjoy at this point in time. The market itself is not changing. And there is even more push to additive manufacturing than ever before and the market continues to grow, as you can see out there. Now from our side, we really are shooting high. We have identified specific markets. We have developed the path together on these mountains and we are executing. Okay. It's very important, and my team knows that execution is the difference. We don't need to talk about it. We just need to get 1 proof point after the other. And I think when you look at the long, long list of events, which we have this year and the many announcements, I think we are on the right trajectory going forward. At the same time, for the fiscal year '23, which, by the way, has started very strong, as we also have reported to you in the aftermath of the fiscal year reporting, we started very strong. We're going to continue to fill the pipeline on the sales side. We are confident that we can convert the existing backlog, which we have at the moment on the machine build for the D523 that we can create and build these machines and ship to customers, which then automatically will turn into revenue going forward as we have had our conversations with our suppliers already, and we are confident that we can work the backlog down in the months ahead. And at the same time, we are sitting on a solid cash reserve overall. If you think about it, we started off after Q3 at AUD 9 million. We still have AUD 7.1 million after the Q4 results, and I look forward to work with my team within the existing cash envelope and driving the business forward. With that, thank you for your attention, and I look forward to the question and answers. Adrian?

Thanks, Herbert. Thanks for that run through. So just a reminder for those that are on the webinar, to ask question, just in your Q&A section on your screen just enter them. Herbert, we've got a bunch of questions. So hopefully, you've got time to work through all these. The first question, a very specific question, with the welding solution, will this reduce the number of welders required? I understand that they are forecasting a shortage of 5,000 welders in Australia by 2025 and 70,000 in the U.S.

So, the answer is yes and no. And for that, I'm not that [ optimistic ] I'm giving you a straight answer on that topic. In many times, if you look at the partners like Brauntell, it's basically welders who are performing the job with our D523 machines. Okay. It's very important to understand that they are not hiring different people to perform the job. It's the welders which in the past have gone up, for example, to repair a fuel tank that they had to empty the tank first and they did the batching on the tank, then they refilled the tank, and then they move on. Okay. It's now these welders who have another tool in the toolbox. As I always said, this is what we want to provide to existing companies. We want to provide another tool in the toolbox. And with that machine in the back instead of welding and there are still -- the majority of the places is still that it needs to be welded, let's not be confused. This is a process over time and certain repairs cannot be done with cold spray, but many can and more and more can be done by that one as we are improving also on our machinery. Okay. This is serious. So, on the short run, there's no reduction on shortage of welders. On the long run, yes, it will ease the situation because to operate, for example, a D523, you don't need to be an educated welder. At the same time, it's very helpful because then you really understand what's happening when you do and operate this machine and welders are well positioned to be the best users of our machines here.

Thanks, Herbert. Very comprehensive answer. So next question, when will we see revenue coming from the joint ventures?

So, the revenue from the joint ventures, there is multiple revenues coming from the joint ventures, okay, or financial contribution as such. Basically, if you think about it, the whole model is that we are creating a joint venture, creating a company, that company then gets established. It gets listed, it gets registered. It creates a management team. It creates operating personnel. And one of the first actions is that together with the joint venture partner on the other side, in that case Neos or Repkon, we are defining the exact specifications of the machine first. We do have a TKF 9000. We have installed a TKF 1000 for TWI. But for example, on Neos, they may need based on their requirements for the tools a TKF 2000-something. Well, the 2000, the number is at the end of the day, an indication of the size of the part, which can be produced in that machine. After that configuration is defined, the joint venture orders them from Titomic that machine. We're going to build it. We're going to install it, we're going to invoice it and we get revenue. That's the first step. At that point in time, the joint venture is operational and start basically working. From that onwards, they are producing then these tools, which are used in the aerospace and in defense for the building of carbon fiber components, for example, and for every tool, which [indiscernible] the machine in the joint venture, we also get a financial contribution in return. Okay. But it takes us approximately 10 to 12 months between the configuration done, the order received and built. We are working hard with our supply chain and our colleagues to get the reduction of this time. This is very key and you will see a tremendous progress over the fiscal year '23 to shorten that time frame. But for a machine of that size and for an investment of that size, a horizon usually from 8 to 12 months is very common in the industry out there. Totally different though, obviously, if you're talking about the small machines, the D523, where there is approximately 6 to 8 weeks between the time we get the order to the point where we can build.

Thanks, Herbert. Sort of have a feeling we had this question a few times on previous result calls, but it's a bit of a perennial one. So, what is the status of the deal with Composite Technologies?

Unchanged, as I would describe it in one word. At Titomic, we continue to work with Composite Technologies on developing a commercial relationship. Both parties are working to come to a mutually acceptable and beneficial approach to complete this process. And that's what we are doing right now, and that's all I can comment on that part.

Thanks, Herbert. Next question. Are you still working with BAE Systems to make Howitzer barrels?

BAE is a very interesting and potential partner for us. I cannot comment on specific projects in the defense world.

Thank you. So our next question, why didn't we see the payment for TWI in the fiscal year?

On the cash inflow, I guess it relates to that one. Yes, you see me here with a little bit of a smile and a challenge. Obviously, we had a plan from the very beginning of the fiscal year that we complete, for example, the installation of the TWI machine at the end of May, early June and basically, knowing that TWI has certain terms and conditions on when they have to pay. It was all planned. At the end of the day, it was tight from the very beginning. I have to say it was planned and it all works out in situ. Now, a couple of things happen in-between, which actually caught us by surprise, like almost the rest of the world. We figured out that supply chains and supply chain lengths have increased. So, at the end of the day, we couldn't ship in time from our Australian operation into the U.K. We changed. We went to Plan B and to Plan C. At the end of the day, we completed the installation of the machine in the mid end of June, which we also reported. But given the payment terms, which were given to TWI, the payment of them moved over to the next month. I can safely say now that this money is already received.

Thanks, Herbert. Next question, what progress, if any, Titomic is making in the repairs and coatings to the [indiscernible] implements in the Australian and the world agricultural industries?

In the agricultural industries, at this point in time, I'm not aware that we are chasing a specific project in the agricultural world. I know my team has a long list of projects they want to pursue in these areas and we are investigating and evaluating which ones we want to go to first, okay? Reality is I don't want to fall back basically into a behavior where we are taking on one project after the other without facing and risking the progress on the projects we have set in the past, which are our priority. Okay? The fact is that agriculture at this point in time is not on the focus areas, but that's not 100% right when I say this, because in agriculture, for example, you have a lot of metal equipment, you have shafts on tractors. You have [indiscernible] and other stuff, which is needed in agriculture. And these are specific projects, which are technically the same projects we are chasing for example, in the mining field. Okay? So, there is actually an overlap, but it's not so that I can say that we have a focus on agriculture on one side, but we have a focus on repair of metal shafts, for example, and equip these with coating, which is extremely wear resistance which, of course, is also helping on machinery in agriculture.

Thanks, Herbert. Next question, what are the acquisitions of Tri-D and Dycomet contributed?

A lot. I really can say so, have contributed a lot. In both cases, obviously, with these acquisitions, we inherited very skillful people and we inherited a foot-hold in the geography, which we wanted to go to. That applies to the U.S. with the US and the Tri-D folks, but also in Europe with the guys in the Netherlands. Okay. And on top of it, what we are also seeing specifically now for the Dycomet acquisition in Holland, that these guys, first of all, have an install base on customers, which have been ordering already in the past and continue to order not only on machines but also in materials. What you have seen actually in our fiscal year numbers is technically only half of what is from Dycomet because we only could close the acquisition in December. And from that day onwards, we are reporting our revenues and the profits from there. But at the same time, also what Dycomet brought us is our low-cost -- it is low-cost actually. It is our repair and service machine, our mobile machine, which we are using in the mining fields. This is a product which was complementing the product portfolio we had already and technology in Australia. And with that one, now we have a very complete product portfolio. On top of it, I can tell you with the know-how of these people, what we are finding right now is tons of solutions to which they have been chasing in the past, but they never had the resources to pursue further and specifically, on Dycomet once again, the glass solution for repairing and protecting the most in the glass bottling industry is the development which we inherited straight from Dycomet in the Netherlands, and we are rolling this out now. So, a lot of contributions from both acquisitions.

Thanks, Herbert. Next one, quite a simple question. When will you be profitable?

At this point in time, we are not disclosing the details of our 5-year plan out there. You may have heard me say one in time that we have to be profitable in any kind of a turnaround for a company within a 3-year period. I mean now for 1 year. But at the end of the day, we will report back when we get to and when we reach profitability.

Thanks, Herbert. So, what other joint ventures can we expect?

What other joint ventures? Once again, first of all, a few more, that's important to start with, even so it's a lengthy process, but we -- it's not something which we have started yesterday, but we are already changing for the full year. At the same time, think about it, it's the same thing we are trying to implement again and again. We have large expertise with a joint venture in tooling and with barrels. Obviously, to minimize the surprises and diversify from that one, obviously, we're going to continue to try to go for joint ventures, for example, with tooling and at this point in time, there are a couple of candidates we are actually discussing. One of them is also in the United States of America. One of them is in Asia, that we can create a joint venture on tooling. The same on the barrels. So, that we can use the template like the template we have now for the TKF 1000, also on the joint venture and to roll out and accelerate. At the same time, I want to caution you because the point is we also need to look at a stretch from a cash perspective, what the joint venture needs, because at the very beginning, when you build out the joint venture, it's actually cash flow negative. So, it costs you money to get to the point where you then can enjoy the profits and the financial returns at a later stage. So, we need to be cautious, but we are going into this conversation with open eyes taking into consideration the amount of cash we have available. And yes, we are working on a few more at this stage.

Thanks, Herbert. The next one, it looks like certain progress update on the internal bracket for an aircraft, which is being tested for Boeing for their production after FAA approval.

Nothing I can comment on. That's a level of details which I can simply not share because of confidentiality reasons with customers.

Perfectly understand, Herbert. I thought that would be your answer. Next one, why isn't the joint venture with Repkon implemented in Australia as previously announced?

That's a very good question. If you think about it, what the joint venture with Repkon, on the barrel of manufacturing in using actually our 2 technologies. Okay. There is the flow forming technology, which is owned by Repkon, which also is a kind of a AUD 10 million to AUD 15 million investment just to get started from Repkon, which they have sitting around and which they have built in Turkey for a while. And then there is the investment, which would relate to the TKF systems, okay. It's depending on the configuration we're going to go to, but we're talking here about AUD 3 million or AUD 4 million on the TKF system. Now if we wanted to happen, that was the original plan, if we wanted to have that one in Australia, that would assume that Repkon would need to make that investment in Australia and would need to build it up that would take them approximately 1.5, 2 years to get this going and it will cost them AUD 50 million, which we both didn't have. Okay. And we said, what is the choice point. We can go for the Repkon joint venture and start the new technology approach with cold-spray systems and go forward and move now because they have already an existing flow forming machinery in Turkey, and we just get operational within a short period of time or we wait until we have the funding together and then build up the flow forming system and the TKF system, which would have delayed the implementation of the joint venture significantly. And I made the call to say, hey, no, we want to start quickly. Can we go to a setup of the same system of the same constellation in the future in Australia, certainly, we can. Actually, we are discussing this already. But at this point in time, we are implementing the first step in Turkey, simply because of lower cost and faster return on investment.

Thanks, Herbert. Turning to glass solutions. So, when will we see the next glass solution installed and related? Why Vetropack in Austria?

Yes, good question, why Vetro -- and I refuse accountability that it's in Austria because I'm Austrian, by the way, it was pure coincidence that it happened. What you need to understand these kind of solutions are not built basically from one day to the next. Okay. These solutions specifically has been refined over a period of several years, by the Dycomet team in Holland. We had the prototype sitting around at Fevisa, which is a bottler, a glass bottling company in Mexico. We had a test site and a prototype with Gallo in the U.S., in California, and these guys have helped us to develop that solution. On top of it, you need to understand that Vetropack in Austria is one of the largest and most successful glass bottle manufacturers globally, and interesting enough, the CEO of Vetropack is at the same time, the President of the IPGR Association with whom we developed that solution with, okay. And he was confident that the solution is delivering the results and he made sure that the first installation of the operational machine of the final design of the machine is at his site in Austria.

Thanks, Herbert. There's just 2 final questions. So -- and not surprised to see this next one. There have been significant changes in the Board and executive leadership team this year. Has that created any issues or instability in the business?

Whenever there are organizational changes, there can be some issues around. Okay. It's a kind of somebody going out and somebody else is coming in, that's by nature, is a kind of a change. At the same time, what we have seen specifically with as relates to some comments on the Board, that Andreas Schwer has gone out as the Chairman of the Board was related to the fact that he had a couple of other assignments. And at a later stage, we knew where he's going to. As you may know that he just was announced recently as becoming the CEO of EOS, which is home based yesterday where he's going to move to Canberra, that's one thing, okay. So, that was kind of a natural drive. At the same time, also what we see, there is a need and it gave us some challenges from an communication standpoint, if the Chairman basically of the Board is overseas, even if you have the best communication and the best processes in place and the best alignment, simply it's time difference is a challenge. And on top of it, it was very clear, and I'm very happy that I have now Humphrey Nolan, as the Chairman of the Board at Titomic because, a, Humphrey is incredibly successful businessman. Humphrey is in Australia. He is available to me on the minute basically without any time difference in-between. And with his pragmatic leadership, we have changed already a lot of the engagement, including having a strategic session, which we have outlined and worked with the Board that we had for the first time in the history of the company, also a face-to-face meeting so that the Board members all could see the machinery and got together. So, these changes have been very positive all over the place. At the same time, also, it's something when it comes to the organization itself, getting new people in like Neil Matthews, which was coming from one of our competitors or Bruce Colter in the U.S. also coming from a competitor. It's just the proof points and a confirmation also that suddenly Titomic at the end of the day is becoming attractive for the greatest talent and I take it as a compliment that we got these employees now onboard, and they are putting all their skills, all their experience behind the solutions of Titomic.

Thanks, Herbert, and as part of one of -- it looks like to kind of catchall this one. Given the instability around the world today, what if your plans don't work?

As usual, if plan A doesn't work, you go to plan B, you go to plan C. At the end of the day, we have -- how should I say, we have a clear strategy in place. Okay? It started with focusing on these very few use cases. We have a path on what we have to do. We know the margin we're going to climb on. We know we have a plan on the track, which brings us up there. And yes, if an avalanche comes down and I'm Austrian, I've done a lot of tracking in winter time and -- next morning when you go out there, you find that the track which you have planned for, suddenly doesn't exist anymore or is simply not able that you can pass on. You work left or right or you climb over it. Okay? So, I think we don't spend too much time on investigating and analyzing on why this happened because at the end of the day, that's kind of a useless exercise. We just say, hey, this is the mountain we are going to go up. And here the choice point we have. Let's rise or over. And I think that's, we are doing on a daily basis. And the team is extremely responsive on that one. The team really has changed gears and we are all basically together as a strong team. And not only what I'm seeing weekend over weekend, also on the [ footer ] teams here in Australia. Everybody knows which position they have to play and everybody is giving his best.

We've exhausted the crowd, so well done. So just back to you for any final remarks for the audience.

I think a lot of things have been set. Okay? Starting point for me is I'm very happy and I'm humbled on the achievements we could go through. And it only was possible because, as I said before, it really worked out as a great team, starting with the Board, starting with each and every employee and the leadership team at this point in time, we have a gameplay and we are executing. At the same time, the world isn't always providing what we would like to get. But then we have multiple options. Okay? Again, and the options is like of the deck, which we shared before, you go left, right or you climb over it. But at the end of the day, we will deliver on the numbers for colds pray and for Titomic as a business. And as I can say, I'm still passionate about cold spray, okay? The more I'm getting into it, it's great to see also the progress and there is tons of opportunities. Okay? And all these opportunities, we just need, we are funneling these. We are trying to get the lowest hanging fruit first and we are moving and marching forward. And there is other opportunities which are showing up left and right. We're going to investigate, if we exchange an existing one with the new one, but this is a thorough process and we continue to march ahead along the lines, which have given ourselves along with strategy we have aligned with the Board, and we are executing because that's the task for me as a CEO and that's the task for all the employees at Titomic. Execution, proof, what we can do, get in front of customers, do what the customer is asking for and after you have done, make sure you get paid, and you move onto the next order.

Thanks, Herbert. That ends the webinar. Thank you all for joining us, and enjoy the rest of the day.

Thank you very much.

Good-bye.