Vection Technologies Limited (VR1) Earnings Call Transcript & Summary

Hello, ladies and gentlemen, my name is Damian Banks. Well after our [indiscernible] starting for today, we are just waiting for the ASX to put up the presentations for today before we start the formal business [indiscernible]. I'll start that when we get confirmation. But I firstly would like to thank you everyone for joining today. We've got quite a lot of people on Board, and I would like to apologize on behalf of team for our delay getting started. But I will introduce you to some of the people who are present in the meeting. We have now our Chief Executive -- Gianmarco Biagi, who is our Chief Executive and Executive Director. We have Lorenzo Biagi, who is Executive Director; and we have Gianmarco Orgnoni, who is an Executive Director with us in the room today. And we have our Non-Executive Director, Umberto Mondello, with me today. So I think all of you [indiscernible] us. Some of the team in Italy today and some of the team in [indiscernible]. And I'll move to the formal presentation that gives us the [indiscernible] as soon as we get confirmation of ASX having put [indiscernible] up on the platform. It's been up there for a little while we get queued up going. And so [indiscernible]. We now would like to open [indiscernible]. Firstly, what I'm going to do is give Chairman's address, and then we'll give our Chief Executive's address, and then [indiscernible] formal business of the meeting. And for those in the room today, you're [indiscernible] ask questions if you'd like. I will take those in [indiscernible] order. That's [indiscernible] process. So what I'll do is just start with the Chairman's address to the meeting. Vection has a vision to help businesses transition from 2D to 3D, by creating experiences that seamlessly integrate the digital and physical worlds. Our primary objective is to deliver time and cost savings, mitigate risks and empower our clients with actionable data. We operate in a challenging and -- technology and cyber environment, and our first focus is to understand and then respond to our clients' needs to bring their visions to reality. FY23 was an exciting year for our company. Total organic revenue growth was 39% and took our total revenue $26.3 million. There has been a significant decrease in the value of non Big 7 tech companies worldwide, and Vection is no exception. Your Board is aware of this impact on shareholder [ revenue ]. As a company, we have a responsibility to deliver exceptional performance for our clients, our shareholders, our employees and our community. To achieve our vision, we need to have a well-planned and executable strategy. The decrease in asset values has created an opportunity where potential merger partners are now priced reasonably, giving us a wider choice than ever before. However, we have our commitment that we will be selective in our approach. Our primary focus is on organic growth, and we aim to demonstrate our ability to grow the business and the acquired companies that come to our portfolio. Whilst we acknowledge the challenges of the markets, we are open to exploring all possibilities available to us. Against the backdrop of dynamic market conditions and prudent decision-making, the Board and Management implemented cost optimisation program to the enhance profitability of the company, whilst preserving robust growth prospects. We still have more [indiscernible] in this area. Our company is currently focusing on maximizing the return on investment by strategically making operational and technological decisions. We aim to address the challenging needs of our customers, who demand intelligent and integrated solutions and fully utilize virtual environments that benefit. We are well-equipped to deliver on this vision with people, expertise and technology. Our operational framework has been structured into 9 groups, each dedicated to serving a specific industry vertical with specialized expertise. These groups cover a diverse range of sectors, includes fashion, retail and service agencies and food; public sector, education and banking; real estate and furniture; healthcare, pharma and energy; defence, space, military and law enforcement; transportation, automotive and naval; industrial, machinery and industrial food; and finally sports, betting, media and telco. We have [indiscernible] those sectors because we have businesses and opportunities in each of those sectors. This specialized focus ensures that our technological offerings are tailored to each industry's unique needs. our comprehensive suite of products, from devices to integrated software solutions, has gained significant traction amongst our customers and reinforces our strategy. We are confident that our industry-specific approach will be the result of incremental growth and solidify our market position. In relation to governance, the company has considered shareholders' feedback and is implementing changes to improve its governance. As the newly-appointed Chair of the Board, I am increasing the non-executive presence [indiscernible]. Throughout the year, we will work to strengthen governance further in line with our growth, gradually moving towards an ideal structure and implementing best-practice processes and the ASX's best-practice [indiscernible]. I've joined the company, and I continue, I am very excited about the growth prospects that are available to us in FY '24 and beyond. I would like to thank the Directors and Management for their hard work in the past few years, but particularly in FY '23. I'll now invite our CEO, Gianmarco Biagi, to provide a business update and address the meeting.

Okay. Thank you very much, Damian. Thank you very much for your presentation, and good morning, and thank you for your joining at our 2023 Annual General Meeting. I am speaking to you from Bologna, Italy, the Center of our European operations. Today, we will discuss Vection Technologies' progress and delve into the details of our annual results. Our detailed pack has been [ logged in ] with ASX for those following along. On slide 7, you can see that Vection Technologies is facilitating the evolution of businesses from 2D to 3D, creating experience in integrating the digital and physical worlds. Our goal is to deliver time and cost savings, mitigate risk and empower our clients with actionable data. The integration of extended reality, XR, and other technologies is revolutionizing the realm of business into business interaction. As various industries embrace this integration, they unlock unprecedented value of efficiency. XR comprises the virtual reality, VR, augmented reality, AR, and mixed reality, MR, which offer immersive experiences that redefine collaboration, training and product development. When combined with AI's productive analytics and adaptive learning capability, XR environments become interactive and intelligent ecosystems that automate complex tasks, anticipate needs and enhance decision-making with data-driven insights. This synergy propels business into a new era, where remote workplace are interactive and are physical counterparts. In the future, the benefits of blending XR with AI go beyond providing a high-tech solution and touch the core of operational excellence. With AI's ability to analyze the vast and most of data, customer can expect personalized and optimized interaction within XR experience and space. Imagine a virtual meeting room, for instance, that adjusts its setting to suit the preference of each participant or our training simulation that evolve in the real time based on the user performance. By leveraging AI's machine learning and natural language processing, our XR solution become more than just tools. They become partners that understood the context, adapt to challenge and provide actionable insight. This could be a game-changer for our clients, and it matters exchange productivity, innovation and competitive edge in a rapidly evolving digital marketplace. We are looking for to being a leading participant in this emerging space. To fully leverage the benefit of our solution, customers must have access to hardware and network systems capable of supporting these advanced technologies. Devices such as VR headsets, AR glasses and MR interface are necessary to gateway touch, where the virtual dimensions become accessible. Without this physical touch point, the bridge to this new reality remains conceptual rather than experiential. Moreover, the device must be backed by robust ICT framework, including high-speed connectivity, ample data storage and powerful processing capability to handle XR environment data intensive latency-sensitive nature. We believe we will see a surge in adoption of this device, both in enterprise and customer, from fiscal year '24 onwards, lead by large tech participants already announcing a significant product development in these areas. In this context, traditional ICT play a fundamental role in the democratization access in this innovative technologies. Not all customers have a readiness or resource to jump directly in the sophisticated XR application. By offering a spectrum of device and ICT solution, we meet customer, where they are on their digital transformation journey. Whether it's through providing the necessary hardware, ensuring interoperability with existing systems or offering cloud-based services that scale with the business needs, our comprehensive approach ensure not customer is left behind. We aim to build an ecosystem that support seamless integration, ease of use and maximal accessibility. In doing so, we lie down the digital infrastructure that empower customers to thrive in the environment enriched by XR. Therefore, we ensure that the transition to those advanced technologies is as smooth and beneficial as possible. Moving to Slide 8, please. We're highlighting our revenue milestone from the past year. Vection engaged with around 200 customers, and our total revenue surged by 39% to $26.3 million. This growth is a testament of the successful integration of sales synergies across our acquisitions, resulting in organic expansion across the company. Our cost reduction program will persist into the fiscal year '24. In the Slide 9, we unpacked the company performance and strategic direction. Our fiscal year '23, the results showcase positive notes of organic growth. It's very important to us. The company leveraged the global of move to 2D and 3D driven by enterprise across various industries. Vection is targeting 9 high-value industries, likely to demonstrate fast adoption. The company has successfully integrated acquisition performance in fiscal year '21 into the business as usual activities. On Slide 10, we review our key financial metrics. The company reported an EBITDA loss $9.2 million. Our cash reserves stand at $8.1 million at 30 September '23. We expected our market presence by entering new territory and engage it with diverse sector. This has allowed us -- our portfolio and strengthen our market position. We have refined our management structure to optimize the organization performance and responsive to market dynamics. Our global marketing initiative has been amplified, extending our rich and reinforcing Vection Technologies' position as the trailblazer in our field. Let's move on to Slide 11, where we focus on the future. The first 4 months in the fiscal year '24 have been promising, with organic revenues increased by 76% to $6.5 million compared to the fiscal year '23. The revenues included acquisition by increase -- has increased by 88% to $6.9 million. Our focus to report -- the rest of the fiscal year '24 will be to achieve organic revenue growth in each of 9 selected industrial verticals. We aim to improve our operating results across the business, while prioritizing our customers' needs to deliver time and cost saving, mitigate the risk and empower them with actionable data. Additionally, we will implement a cost reduction program to optimize our operation. I express my deeper gratitude for your continued trust in us, and we navigate these exciting opportunities. Thank you very much.

Thank you, Gianmarco. What I'd like to do now is move to the formal business of the meeting. I would like to welcome our auditors, Matthew Beevers from RSM and [indiscernible] will be about to bring questions fro shareholders [indiscernible]. We have a quorum present in the meeting, and so will all move forward to the official business. The notice has been already dispatched to all shareholders, and if there's no objection on proposal of that -- notice of meeting [indiscernible]. We have received proxy votes from a number of shareholders. To streamline with meeting details and resolution of proxy votes received, each resolution will be detailed on the screen as I call for [indiscernible]. If a proxy has appointed the chair as a proxy and over [indiscernible] the chair intends to [indiscernible] each of those proxies in favor of each of the business. The first item of business been tabled in the financial reports and the directors and auditors reports. Reports tabled are not subject to resolution. I'll now ask shareholders if there any questions or comments regarding the financial statements [indiscernible], including any questions about auditors [indiscernible] There'd be no questions, I'll move on. There are resolutions for [indiscernible]. The first one is the remuneration report. That is [indiscernible] corporation's active product services, the remuneration report [indiscernible] by shareholders on the [indiscernible]. The proxy votes are shown on the screen. Are there any questions or comments from shareholders on this resolution? If there's no questions from the shareholders on this resolution, we'll now move to Resolution number 3. That [indiscernible] 6.3 of the constitution and ASX listing rule of [indiscernible] and all of the purposes that Mr. Gianmarco, our Director, was appointed on [indiscernible] 2017 and reelected on 4 December 2020 [indiscernible] and being eligible for reelection, to be elected as a [indiscernible]. The proxy votes are shown on screen. Does any shareholder have any questions on resolution? If there are no questions Resolution 2, I'll move to Resolution 3. The short term and [indiscernible] shareholders approved [indiscernible] described in listing rule [indiscernible] and on terms and conditions [indiscernible]. The proxy votes are shown on the screen. Does any shareholders have any questions in relation to Resolution 3? If there's no questions, I'll move now to Resolution 4, ratification of prior issue. That is the purpose of ASX listing rule 7.4 [indiscernible] purposes. Shareholders can ratify [indiscernible] performance rights on the terms that we set out [indiscernible]. The proxy votes are provided on the screen. Do any shareholders have any questions in relation to the resolution number 4? If there are no questions on the resolutions, I now ask are there any other questions [indiscernible] maybe from the shareholders. So there being no questions, we will now conduct the poll on the resolution. If you are eligible [indiscernible]. In my [indiscernible], I direct all proxies [indiscernible] provided by shareholders and [indiscernible] resolutions. I now display our [indiscernible]. Ladies and gentlemen, thank you very much for your attendance today in detail of what we [indiscernible] ASX platform for your [indiscernible] consideration. And I'll now close the formal business of the Annual General Meeting and the [indiscernible]. Thank you for your attendance.

Thank you very much. Thank you, -- thank you very much.