Vection Technologies Limited (VR1) Earnings Call Transcript & Summary

Hello, and welcome to the Deutsche Bank Deposit Receipts Virtual Investor Conference, DBVIC. I'm pleased to announce that our next presentation will be from Vection Technologies from Australia. Before I introduce our speakers, a few points to note. [Operator Instructions] On a final note, all of today's presentations are recorded and can be accessed via the Deutsche Bank website, adr.db.com. At this point, I'm very pleased to welcome Gianmarco Biagi CEO; and Gianmarco Orgnoni, who is CFO and CMO of Vection Technologies, which trades on the ASX and the symbol VR1 and in the U.S. on the OT market under the symbol VCTNY. Over to you.

Okay. Good morning to all, and thank you for attending this presentation. My name is Gianmarco Biagi, I'm the CEO of Vection Technologies Limited. Joining me today from Perth in Australia is Gianmarco Orgnoni, the company's CFO and CMO. I'm engineer, I have 20 years of experience in a building medium and large multinational industrial group, and I'm based in Europe, in Italy, in particular, okay? First of all, okay, it's -- please note the disclaimer, which is available to review in our ASX announcement available online and through our website. At the beginning, I would like to explain to you that -- the global situation due to the pandemic, there were and the energy crisis inflection and other causes mean that the world of business in the public administration must radically and quickly change its foundation. For this reason, many governments are allocating many billions of dollars to the companies and public institution for the digitalization and process and their consequent efficiency. Company, all companies and all over the world must now compete internationally and globally in order to reduce the local risk and increase their business value, but do so they must find the new organizational and development model in order to overcome the barrier given the recent work rises. For this reason, immersive technologies that inspection is a producer of this, such as vital reality, augmented reality, mix of reality, assume and growing and a dominant importance in this moment in the world, allowing the technologies allowing all people who works in the business to communicate and work tremically and to have awards tools and information I never had before. In fact, these technologies starting from the information system present in all companies allow to process the local and remotely a huge amount of information and a significant reduction in industrial cost and a relevant increase of sales with Zeemixion and Cobie, for instance. XATechnologies allow to optimize the industrial process and integrating internal and external process. These technologies allow every company to have the opportunity to scale this business internationally with very low cost. This is why in Vection, we have developed that a property integrated are workflow solution, therefore, a software and Arbor solution and integrated infrastructure system that allow the real use of technologies in the B2B world where Vection technology is working. I would like to show OI perfectly slides. But what is the a component of integrated technologies. Exact standard for extended reality is the term for Vercoreality VR, augmented reality, AR, and mixed reality MR. I would like to explain you something about this. The AR is a simply overlay of the digital information in the user's fields of view via your device camera. The mixed reality or MR is a seeded via wearable device, such as Microsoft tolerance to, for instance, and allow the user to interact with the digital layer with their own hands in a natural way. Finally, we have the virtual reality or VR in a common section. Virtual reality immerses the user in a completely digital environment through the view to the point where the digital world become the perceived the real world of the users. Now that these concepts are clear, let's see what's the market Vection unique and what is integrated XR is. Integrated Exar is in our mind and in our project and a revolutionary suite of the solution aimed at facilitating an adoption of XATechnologies for enterprises or in the B2B world. from VR, AR and AMR and the metaverse and from ICT infrastructure to another are like kiosk and 3D system, Vection technologies cover an organization and tire the value chain in the manufacturer and industrial companies and assisting in the digital transformation process to area technologies and the metaverse to come. In order to -- in order to develop its business, Vection has created an important set of platform that allow Vection to become a strategic and essential partner of the clients of the company. In fact, thanks to the veto reality for scans, you can get the integration of the VR with the cat allow you to view the prototype, for instance, of a process in a real time without cost. Yet, we are in a training allow immersive experience in the reduced train and reduce the delayering cost and time, yet in the sales and marketing allow the customer an immersive e-commerce experience with the possibility of presenting the product and the whole range in realistic and engaging way to very low cost and exceed to exit for another kind of application. This is the VR. Thanks to the momentum, the mixed reality, important results are obtained in relation to, for instance, the reduction of the logistic cost, production cost, manutnance cost thanks to the fact the hands-free operator see the digital works instruction and tolls to remote assistant, the record has works and avoid errors. Thanks to the kiosk, all these technologies can be easily used in the business and the retail. Thanks to the integrated XR vection platform, companies have the possibility to reduce the process cost and increase the sales in integrated way. Thanks to our experience in the industrial and the technology world, Vection has created a evolutionary process, efficient and system by integrated with AR, VR, MR and IT system technologies and information system, thanks to the important investments in and many important customers like, for instance, LamboGuinea, Volvo, Volkwagen Armani, Gucci, an important designer, multi, defense and government and other Tier 1 clients who are adopting our solution with important results in manufacturing, automotive, fashion, furniture, real estate, health care, educational and in other, for instance, in the world of tourists and in the museum world -- what I tell you, what do I mean? I mean that thank you this strategy, Vection Technologies has recorded a strong revenue growth over the past 4 fiscal years with CR1 -- and the revenue growth has accelerated in the last 12 months with revenues lifting by 440% compared to last -- the previous year and the audited fiscal year 2021 and by 87% compared to the auditor revenue, including the effect for the acquisition. This is the point of view the general point of view at the beginning. Now please, Gianmarco, will join to me in the next part of the presentation.

Thank you, Gianmarco. I'm happy to be here. Thank you for attending today. So let's first look at the industry where VectionTechnologies is operating. So obviously, Gianmarco retouch on the key concepts of Integral and the Merries and all these cool kind of technologies that can come together to create these digital worlds and blend the physical and ideal to get to reboost what companies and enterprises globally can do in this tinage. But the reality is that actually is so much more than just the Malibus just the trend of the Merivis concept. We're operating already at the enterprise level, integrating and blending virtual reality, augmented reality, Internet of Things, artificial intelligence, all the way to ICT infrastructure more. So we're really building the foundations of what the mervs is today and what it can become for enterprises globally in the future. Next slide. Perfect. So let's talk about the actual technology. So Gianmarco has already mentioned the -- how integrated XR comes together and what entails what kind of technologies, what kind of solutions integrated XR is formed by. But the reality is that integrate is a huge opportunity for business today that are looking to join the future of Merivis technology. So we are just at the start of what Integrated Care can become for businesses moving forward and how we can actually integrate within the existing workflows. And we are different from our competitors in the sense that while a lot of our competitors are focusing on niche applications or the developing customer-specific solutions. We're looking at the whole meeting of the whole XR extended reality train in a whole wholly different light, and we're really building the front foundations up from ICT infrastructure and building all delays above to get to the technologies and the motives of the future. So what are technologies? So we've built over the last 4 years, our robust suite of XR solutions of extra solutions that are really looking at solving specific challenges from our customers. So we go from the design review or the engineering process to manufacturing and maintenance to product presentations and marketing, all the way to the exact that transforming the in-store customer experience. Mindesk, for instance, that's the name of our first platform is a platform that enables designers to perform this and reducing virtual reality. And in real time, all the way to the unreal engine so connected to the unreal engine but also it connects to all the most common computer-aided design software such as Rio 3D, but also into the we've ventured into the BIM industry, so the built-in information modeling industry with a EBIT out of the civit- that integration. Then we've got EnWorks, which is one of our latest platforms, which really looks at digitalizing the knowledge base of a company. So we're looking at how you can leverage your existing 3D models and create innovative manuals that boost productivity, the post-training and it also post the maintenance part of our company's workflow. We've got 3D Frame, which is a no-code enterprise level mertverse app that really is boosting the industry forward in how products are presented in this dine. And it's the first actual virtual reality meta solution that is integrated with WebEx by Cisco. We've got the Configurator, which enable companies to create unlimited product configurations with augmented reality embedded into it for your website. And then we've got the ERKiosk, which is really blending how the in-store customer experience can in connect with 3D and augmented reality. Yes. Perfect. The next slide really talks about the services. So we've created a whole -- a whole range of services to support the integration of integrated XR. So on 3D more rendering 2 metaverse cost, exactustomizations and labels and ICT infrastructure. And this connects to a vision, so the integrated sapele, from the exco, we're integrating with technology such as artificial intelligence, Internet of Things and asset infrastructure to enable vertical-specific applications. And over the last 4 years, we've grown globally from Australia to India, to UA, to Italy into America. Today, we are really a global company that is just at the verge of its next phase of growth. And we've done this, thanks to partnerships with some of the biggest names in enterprise technologies such as Accenture, NTT Data and also, as I was mentioning earlier, WebEx by Cisco. And our growth path as our growth path has been exponential, as Gianmarco was mentioning from the beginning of our journey, but way to next. So the next step for us is really growing in vertical areas, acquisitions, so M&A and from the really bolster our global presence. Today, we are a company with over EUR 80 million in revenue, EUR 28 million in assets, 4 million casual banks, so the company is cashed up, and we've got a market cap of just $60 million. So to cater everything off and really recap wide Vection technologies over to you Gianmarco for the final slide. Thank you.

Thank you, Gianmarco Okay. This is my -- my conclusion is that today, the market of the company of all sites, especially medium and large, is investing in these new technologies, especially in the post-pandemic period in order to increase their profit and to reduce the cost with the limited investments, believe me. It's a real technological revolution. Today, we leave this. For this reason, the market of new technologies of the business where is growing strong and Vection is ready to take this trend since we are already -- because we are already a multinational company, we have the mature and patient property platform with international presence, big international partners and with an adequate international management structure that we are making growth with M&A to action in the last 3 years of life years in which, despite the international problem, COVID, war, energy crisis, et cetera, we have bid a lot. Vection has a precise industrial growth plan based on the many pillars, but the main pillars are at the beginning, first, development of our XR platform for industrial work for the B2B world, health care, real estate, automotive, fashion and suppliers and which we distribute through our direct sales force and direct sales force with a network of more 30 dealers in Europe, U.S. and Australia. We have invested a lot today, and we have a 4 platform, what Gianmarco told you. 3D frame, VR reality is patent, Mindesk in VR patent and EnWorks and mixed reality, ERKiosk and integration system, first, big investment. With our platform, we are among the few companies that we can provide a technological for the B2B work to cover the entire value chain and thus become a strategic supplier for our clients. Yet we are investing in international managerial structure and the Board advisory. Vection technologies operate in the fast growth metaverse strength and industry with a market opportunity estimated in over $1 trillion in the yearly revenues. Second pillar is an international and commercial alliance. For instance, Gianmarco told you, Cisco Webex, Accent in Europe, NTT Data is a Japanese giant for the manufacturing, DXC, especially in the world of health care and at technologies. That important companies will allow us to have an international reputation and their market customers with a strong acceleration of our growth. During the last year, the company has expanded its operational presence in Australia, Asia Pacific and Middle East and U.S. The third pillar is the M&A. After the 4 acquisition at the moment, we are negotiating a new targets in order to acquire a package of clients, management, national and international territory, local sales force and very important things for the growth of action. -- is activity, I personally, I have many years of experience in this one. The last pillar for us is the vertical companies. For instance, Vection health, Vection real estate, Vection automotive and other company that using our platform are specialized in the relevant market through sector experts. At the end of my speech, I tell you that the company today has 40 million total liquidity assets and customer shareholders included, for instance, Italian government and ATC Live American company. We invested a lot over the past before years and to expand our technology portfolio to have our global growth and strategy. As the company continue in its growth trend, it's expected to improve a lot its EBITDA margin increase profitability in the next fiscal year. It's all -- thank you for your time.

Yes, yes. So we have a couple of questions from Q&A. So I'll just start from the top. So the first question is, could you please explain how you incorporate 3D data in to extend the reality interfaces. This actually not a single answer to this specific question. There's a number of examples. I can give you a very specific example of something we tested not so long ago, which was a very cool application that enabled 3D data coming from one of the most popular maps interfaces online, and then over essentially putting on top overlaying the 3D MAP data with 3D models coming from Autodesk credit and enabling the visualization of a building to be into an existing location on the map. And that was done through virtual reality, but also we've done it in enteral as well and mixed reality as well, to be honest. The second question is, who is your target market and what are the drivers of your recent revenue growth. So our target market really is obviously the enterprise world. We're really looking more at the bigger kind of end of town. So the bigger kind of customers, more than the small ones at this stage. So we're doing with bigger customers, governments, et cetera. We work in a number of different verticals stemming from health care, manufacturing, automotive, fashion and furniture and so on and so forth. So really, there's not one specific target market that we're focusing on. What we're doing instead is we're trying to build we've been successfully doing, building different kind of expertise and managing expertise across different verticals to really enable us to verticalize our technology and use cases within each single vertical or market that we're targeting. Other question is who is your take market and business revenue model? So the first part of the question, I believe already answered. The second part of the question, the business revenue model today is twofold. You've always got an implementation component where we're looking at really creating an integration and really embedding our technology within company's existing systems and operations. And then on top of that, we create a recurring revenue kind of model where you've got the all license or the maintenance fee. Today, obviously, we're still at a build-up stage of growth of the company. So we still got a lot more implementations and customizations compared to the return revenue, but our plan is to really build double the recurring revenue component. Another question that came in with many big U.S. tech firms developing web reprenour and metaverse application services, how does spectrum win unbuild market share. Again, it's a twofold answer. We do it directly through our sales force. So we've been investing significantly in the development of our own expertise in how to sell and introduce the integrated concept within organizations. And on the other hand, we also are heavily reliant on partners. So Gianmarco already mentioned a number of these partners. So we've got a very strong distribution network and a network across Europe, Australia, and we're now also building the same across the U.S. and the Americas in general. Last question that I can see here. Do you have an IP portfolio in protection? The answer is yes. And so we already have launched a number of patents, both in Europe and the U.S., and we're now working with our legal team in identifying specific strategies of implementing the correct protection around our patents, considering the significant investment that has gone into our technology in the last 4 years specifically. So maybe I'll just wait maybe an extra minute. Perfect. What are your key milestones for 2023? That's another question. For 2023, really for us is a very strong year in the sense that we've got a revenue guidance of EUR 24 million, EUR 26 million, which is up from the EUR 80 million plus performed in fiscal 2022. So that's item number one is really revenue growth. Item #2 is to start creating the correct metrics around EBITDA. So our plan is to become EBITDA neutral or positive during this current fiscal year. So we'll be putting -- providing more information around this to the market in the coming weeks as well. And then we've got the -- always from a corporate standpoint, we've called the M&A component of that. So we're looking outperforming a number of acquisitions during this fiscal year to really fast forward and fast track the growth of the company as well. From an operational standpoint, we've got some very specific challenges and objectives around the growth of our own technology across Tier 1 clients. And also, we're working on significant opportunities within the defense sector to really essentially establish ourselves as a key player in the space as well. That's just to name a few. There's obviously a lot more that is happening as a company as well. Just wait another minute to see if any other question comes in. Otherwise, we can terminate this presentation for today. Okay. It looks like there's no other question coming in. So I'll just thank everybody for joining today. It was a pleasure being here and presenting to you. And Gianmarco, if you'd like to say something as well.

Thank you very much. So for the time, it was our pleasure. Thank you very much.