Thank you for standing by, and welcome to the Matrix Composites & Engineering Limited 2023 financial year results conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to turn the conference over to Mr Aaron Begley, Chief Executive Officer. Please go ahead. Thank you very much. Welcome everyone to Matrix's 2023 full year results presentation. I'm Aaron Begley, the CEO of Matrix, and I'm here with Brendan Cox, our CFO. For those following the presentation, I'll turn straight to the slide, which is entitled, "Matrix's Growth Proposition." We put this slide in to really highlight where we are, where we're going. We have the world's largest syntactic foam plant that's operating in Henderson, West Australia, and is really the centerpiece of our production capability. We're leveraging that plant's production capability into very strong growth that we're seeing in the subsea production space, a resurgence in drilling activity internationally, and growing markets in defense and what we see coming from offshore floating wind. We see strong revenue expansion, which has been highlighted by our results this year and our outlook. Importantly, we're also seeing the growth of our recurrent and sustainable revenues from our Corrosion Protection division and growth opportunities coming from renewables from our Advanced Materials division. We'll just turn to the next slide. In review, last year saw a significant increase in revenue up to just under AUD 50 million, which was a 65% increase on the previous year. Most of this growth occurred in the second half, which was three times our first half revenue, which is the busiest our plant and production facility has been since 2016. The second half produced about AUD 2.5 million in EBITDA, which resulted in an overall positive EBITDA result for the full year. Our headline NPAT was AUD 8.7 million. This was driven primarily by that positive EBITDA and also a reversal of prior asset impairment, given the positive and sustained market outlook. Our cash position at the end of the financial year was AUD 20 million. That's actually grown since then. We've just reported there as a subsequent item. Our 30th of August cash was AUD 23.5 million. From an operational perspective, the offshore oil and gas market is very active at the moment. During FY 2023, we were awarded over AUD 80 million in new orders, which included drilling riser buoyancy to SURF, orders for Advanced Materials, and our Corrosion Protection division. Our Corrosion Protection division is creating some recurring income for us, which is important for the business. It really does stabilize our revenue base and our Advanced Materials product lines are really starting to gain momentum across a variety of different industries. We expect the growth trajectory to continue in FY 2024. We currently secured AUD 55 million in SURF contracts for delivery this financial year. We do expect to continue to secure more for delivery this financial year. We're also continuing our run rate, with Corrosion Protection and our Advanced Materials business division is also gaining real momentum. We think that the outlook for the subsea market will continue to build. We've got a very active quotation pipeline. We think this will add significantly to our revenue base, both in FY 2024 and also into FY 2025. Corrosion Protection and Advanced Materials is a very important and exciting opportunity for the business, as it's creating both strong growth opportunities, but also the promise of sustained revenue that's coming from the resources sector, the local energy sector, and of course, renewables. In the long term, we're looking forward to penetrating the new offshore floating wind opportunities that we see emerging all around the world, including in Australia. I'm going to pass over to Brendan, who will take you through our financial results, and then I'll come back for the strategy and outlook section. Over to you, Brendan. Thanks, Aaron, and good morning, everyone. Turn to slide six, which is our key financial metrics. It's a summary page, the financials. A couple of comments on that slide. Our revenue was delivered within guidance, reflecting 65% increase on last year's revenue. Encouragingly, we were EBITDA positive for the second half, and also profitability in the second half was sufficient enough to offset the loss in the first, meaning that we had a small EBITDA profit at the end of the year. This is encouraging because it just shows that with the increased volume and throughput, that it does drop to our bottom line, showing our strong operational leverage within the business. Our facility operating cash flow reflects our current working capital cycle and project life cycles, where at the end of the year, we had projects that were substantially complete. We'd paid for a majority of the raw materials, but then we still had substantial milestones to collect, which we've invoiced and we'll collect, which we have been collecting between July and until the end of October. Just in time for when we'll be ramping up on some of the other big projects for this year. Our gross cash was at AUD 20 million, as Aaron mentioned, it had grown to AUD 23.5 million in some of these milestones are collected as well. We expect that to keep increasing before we go into our next working capital cycle with the F07 project. On slide seven, we've got strong revenue growth. We have been experienced recovering and growing revenue as the energy market recovers and grows. We do expect continuing growth into FY 2024, and that's based on our current order book, but also a conversion of near-term opportunities, which we're working hard on. Aside from that subsea order book, we're also working hard on getting growth across all our three divisions in the business in FY 2024. On page eight, we have our balance sheet. We did strengthen our balance sheet through the year, with quite the convertible note that we took out in December, and then also a subsequent capital raise in March. We've experienced higher working capital requirements with the increased workload, and as I mentioned before, the year-end effectively reflects the bottom of the cycle of one of our main projects we were producing for the year. Our Mero 3 SURF project, which we'd all but produced all the modules for that project at year-end. We'd paid for all the raw materials, but we still probably had over half the size of that contract that would be paid subsequent to year-end in the production milestone payments, which we're now collecting. The other thing that strengthened our balance sheet is there was an impairment reversal, which we took within the half year, which reflects the stronger market we now operate in, reversing prior impairments or partially reversing them. We also had the capital raise and the stabilization of earnings reflects a net asset position at the end of the year of AUD 26.8, which is a lot stronger position than what was a net liability position at the end of June 2022, putting us in a good position to execute work and keep securing more work. On page nine, cash flow from operations really dominated from the workload that we've got on at the moment. You'll see just the movement in our increase in our receivables reflects what I was talking about before, where we were pretty heavy in the working capital cycle and had a number of receivables that will come through early in the new financial year. We also had a large deposit that we'd invoiced in June that has been subsequently paid to year-end. That's almost an offset, that AUD 8 million increase with the increase in receivables. Had modest capital expenditure, which is some sustaining CapEx, but also reflects investment in our production tooling as we win new projects and make bespoke tooling for those projects. At the end of the year, as we mentioned, we closed with cash of AUD 20 million. On that, hand back to you, Aaron. Thanks, Brendan. If we can just go directly to slide 11, I'll report out on the three pillars of the business. Our core traditional pillar, which is subsea, which encompasses all the products we manufacture as a subsea market, regardless of industry. This includes subsea exploration, production, and opportunities in offshore floating wind. Our emerging markets in corrosion technologies and Advanced Materials. It's important to point out again that both corrosion technologies and Advanced Materials offer fantastic growth opportunities for the company, and also the opportunity for a broader sustained revenue base. If you turn to slide 12, we're looking at our subsea quotation pipeline, which you'll note for those who've been following the business, has grown from last time. Look, I think one of the questions we get is where are the conversions from bid to contract to orders? I think our response to that is a lot of the quotations that we have that are live here and have been live for some time, are for projects which have quite a long decision-making timeframe. In many cases, the end date, the delivery date doesn't change. Because of the complexity of the projects, it does take quite some time for our clients and their clients to make final decisions on exactly the way they're going to execute their projects, the design of the equipment that they need and that sort of thing. Within that bid to contract opportunity pipeline includes a substantial amount of orders that is converted will be delivered into this financial year. Some of them spill over to the following financial year. It's important to point out that we really have had no material losses in terms of our bid to contract pipeline. The few small orders that we have lost to competition have really been because of legacy relationships, not because of price or technical capability. We're quite confident that we'll continue to convert a significant amount of that bid to contract pipeline in the near term. Bid to bid continues to grow. Bid to bid is where we bid to contracts that our clients are bidding on. There is a lot of work coming in the subsea space, as you'll see from the next slide. Our key clients include major EPCI contractors, as detailed in the slide there, and also ultimately, we're approved by companies such as ExxonMobil internationally, Petrobras, recently Aramco, formerly Saudi Aramco, and a number of other operators. Turning to slide 13, to give you some flavor for the outlook. We expect this market, that is the subsea oil and gas space, to be busy for the rest of the decade. That's in line with what our clients are saying. I think in that graph, the part to look at that drives our business is really the green part, which is the demand for SURF. That's likely to remain at levels of around AUD 4 billion plus over the next five years, which will underpin demand for the products and services that we supply. The pipeline market also is a lead indicator of some of the activity in our sector, but primarily SURF is the key driver. Being on the approved vendor list with large EPCI contractors such as Subsea7, recently TechnipFMC and Subsea7, will continue to generate work through the foreseeable future. Turning to slide 14. This looks forward a few more years. As we lose visibility in the subsea oil and gas market, so we start gaining some visibility of what's going to be happening in the floating offshore wind market. This market's very interesting to us because of its sheer size. The size of these developments is absolutely enormous. To put it in perspective, just from a mooring cable perspective, a large FPSO development in the oil and gas industry might have 12 mooring lines. A large or even medium-sized floating offshore wind system will have hundreds of mooring lines, and that's just per installation. Those mooring lines require buoyancy, as do the power cables. We also have products for power cable protection and other products that can be utilized in offshore floating wind. It's a very bullish long-term outlook. Key target geographies for us include, obviously, Australia. There are some very large installations that are proposed offshore Newcastle in New South Wales. Regionally in Taiwan, South Korea and Japan, there are a number of opportunities there. We're working with the same EPCI contractors that are involved in the oil and gas space, that are utilizing their skills to penetrate the floating offshore wind space. We've increased our participation in this market. We're participating in trade shows. We're engaging with clients. It is a longer-term prospect for the business, but a very important one and one that we need to be center of mind or front of mind for, with the EPCI contractors who really gain some momentum in what will be a much larger market than the SURF market currently is. Turning to slide 15. Corrosion technology. A couple of key milestones we achieved last year included the ongoing supply of coating systems to companies like Woodside and Inpex and other resources companies. We also signed a licensing agreement with the manufacturers of Humidur out of Belgium. We expect to be manufacturing the paint under license here towards the end of this calendar year. We've also started to build some of our own IP around composite repairs of structures which utilize materials like carbon fiber in lieu of doing traditional weld repairs, and some other lining technologies. Our target market here is the LNG sector, the iron ore sector, ports, brownfield developments, and it's a share of a very large spend that we're chasing. To put it in perspective, the industrial paint market in Australia, this is just the value of the paint market alone, is about AUD 800 million. We're seeking a share of that market. We have a very strong value proposition and a lot of interest from major operators that are looking to save a lot of money on their operating and maintenance expenses, and this is something that our product can enable. The great thing about this is it's very different from our buoyancy business, which is a CapEx-based product. This is an operational-based expense, we literally get orders for this product every day. That builds some real sustainability into the business, and we think it can grow quite significantly. Turning to slide 16. Advanced Materials is a real growth opportunity for the company. Key markets here include defense, resources, and energy transition opportunities, in particular, hydrogen. In the defense sector, the growth opportunity we see is with the unmanned underwater vehicle market, that is drones for underwater. We do have our first orders from this space that we're manufacturing at the moment for local defense contractors. Not something we've announced at this stage. Until it becomes a bit larger, we probably won't have much more commentary on it. It's a very large potential market because of the global opportunity where Australia might be looking at acquiring state manned submarines over the next 20 - 30 years. They will potentially use literally hundreds of unmanned underwater vehicles, as will Australia's partners in the AUKUS alliance. We have relationships with companies in the U.K. and also the U.S. We believe that this is going to be quite significant for us, especially considering our scale to manufacture large quantities of both composite and syntactic structures in our existing plant in this existing configuration. It's a bit of a sleeper, but a big opportunity for us. The other point to talk to on this is really around the work that we're doing for companies like FFI. We're manufacturing componentry for their electrolyzer plant in Gladstone, we're actually starting to produce components for production for them. That's been a great milestone, and we'll hopefully continue to drive demand there. In Advanced Materials, we now also include our well construction products because it's not a subsea product, even though it is for the oil and gas industry. You may have noticed that we recently announced an order from Aramco. Relatively small, it was only about AUD 1 million, this is for a product that we've been qualifying with Aramco. It's taken nearly eight years to get that approval, the size of the prize ultimately is quite significant for the business. This is our first order for a relatively small part of their demand, actually a very small part of their demand. As we build traction in that market, so that should lead to some pretty significant sustainable revenue, because we'll be supplying this product into a large proportion of their wells that have been drilled through Saudi, and they are the world's largest oil company. Over to the final slide, which is just a wrap-up. I think last year we secured AUD 80 billion of new orders, which included AUD 55 million of orders that will be delivered into this financial year. We have a growing pipeline with some immediacy in it in terms of conversion that we expect to be able to add to our backlog for this financial year and also for next financial year. The outlook for SURF remains very strong over the next, well, really until the end of the decade. We continue to run in that market. We appear to be very competitive. We've got a big plant that we can gain lots of operational leverage from. There's a proven profitable track record with that facility. We're utilizing effectively the same production technologies that we've used historically for drilling riser buoyancy in the SURF market and really gaining quite a lot of traction in terms of market share. Corrosion Protection and Advanced Materials are expected to grow significantly over the next few years. Ultimately, we want the business to be profitable just on the basis that that's a sustainable technology, and I want to say sustainable in terms of revenue production. That's really one of the underlying themes of our strategy. Is to make sure that the business is profitable, sustainably profitable and growing, on the basis of revenues that come from those two pillars, whilst being able to capitalize on the upswing in the CapEx cycle in the oil and gas industry, and then ultimately offshore floating wind when it comes along. It's a good place to be. I think that's probably where I'll wrap up. I think we delivered on what we said we were going to deliver on last year. We've got a good backlog going into this year. We've got great momentum coming from Advanced Materials and Corrosion Protection and a continued sustained, improving outlook for the subsea market that we've historically participated in and continue to grow in. A strong growth trajectory. Thanks for listening. I think we'll hand back to the moderator, see if there's any questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Joseph House with Bell Potter Securities. Please go ahead. Hi, Aaron and Brendan. Thanks for your presentation and thanks for taking my questions. I've got three. Firstly, I'm keen to get some commentary on the replacement riser buoyancy market. Is this a market segment that could support new orders for you in the near term? Look, absolutely. One of the challenges with the replacement market for riser buoyancy really comes around a lack of visibility. We've had quite an active period of closing. What we're finding is that there's probably two key drivers to demand for that product. Number one, generally, the drilling contractors are not going to spend money unless it's underpinned by an order from their customer. Where an upgrade and a riser is required to mobilize a rig and the customer pays for it, then they'll proceed. We, a few months ago, announced an order for Transocean, and that was very much the case. They picked up an order actually in Australia, needed to buy some new buoyancy and refurbish their riser. That was all funded as part of the mobilization charge by the customer, and therefore we got the order. The other thing that we are seeing is we would have expected a bit more sooner, for the fact that the lead times on new risers are now going out to 12-18 months. The buoyancy goes around the riser. Where we know customers have actually upgraded their riser system, they don't need to place the buoyancy orders right now. They will have to actually place that order sometime in the next 6-12 months to meet the riser delivery. That's delaying, in some cases, their order placement. Look, the other thing that we're seeing is we've got some specialized products like LGS, which is a drag reduction product that we sell into the market. That's effectively been specified by Petrobras, it will take a year or two for that really to flow through to orders for us. We do expect an uptick in order take from that market. It's just a bit unpredictable for when that happens. Does that answer your question? Yes, it does. That's really helpful. Thank you. Yep. I guess next I wanted to focus on corrosion technologies. Just keen to hear your thoughts on the growth opportunities here. How should we think about sales growth beyond your traditional customers? Oh, well- In your presentation, you make mention of customers like Rio and Alcoa. Yep. Look, generally these customers, it takes a while to demonstrate the product, do testing work, and then ultimately get it specified into projects or their engineering manuals. Look, we've seen our first sales now into Rio, into ExxonMobil, and others. That really should build over time into quite significant recurring revenue. We have been quite reliant on a couple of key customers, but we're now seeing some very big players like Rio and like Exxon start using the product. I would expect that's just going to add to that recurring growth over the coming few years. The fact that we can now manufacture the product here also removes a brake on growth, which was really around being able to react quickly to market demand, because quite often our customers don't want to wait 16 weeks or whatever it might take for a custom order to be made. We need to respond a lot quicker, being able to manufacture that product here should really drive additional growth. It's a great business because, as I mentioned, it's sustainable, it's predictable, and it's a very large market. The paint market in Australia is arguably much bigger than the buoyancy market globally. It's also pretty crowded, and you've got to find a place in that market, but we're really getting some traction there. Lastly, I just had one more question, sorry. Have you had any additional interest in your subsea products for use in floating offshore turbine projects? Maybe an extension to that question, what geographies do you see being key markets for Matrix going forward? Sure. Well, look, as I mentioned in the presentation, we're interacting with our current customer base, companies like Subsea7 and Saipem and others who have the facilities and the experience to install this type of equipment. The key markets are really, for us, are probably South Korea, Australia, potentially Japan and Taiwan. Really, we think the first cabs off the rank will probably be in South Korea in terms of a local geography. Certainly offshore Norway and the U.K. Are also growth markets, but I think the big ones for us are going to be South Korea and Australia. Okay. Thank you. That's all for me. Thanks, Joseph. Good talking. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Michael Byrne with Canaccord Genuity. Please go ahead. Good morning. My question relates to gross margin. This is something that confuses me a lot. I know in 2010, 2011, 2012, and I know it's a different time with probably a different company, but gross margin got up to 30% back then. I'm struggling. I've seen the last result we exited the half with a gross margin of about 15%. I know it's a different company, different product suite, different industry conditions to a large degree. Can you give me some idea of what internal expectations are for gross margin going forward or across the cycle? Thanks for the question, Michael. In the statutory reporting, there'll be a gross margin, we'll include a number of fixed costs that relate to our production facility, and we'll also have the depreciation amortization relating to the production facility. I suppose there is a big volume element to what is reported in the statutory reporting. I suppose from a business, we look at it slightly differently where we understand pretty accurately what our fixed cost base is, and we've had to wear that fixed cost base over the downturn over the last five years in maintaining our facility, maintaining our quality accreditations, maintaining our industry accreditations so that as the market returns, we're in the best position to win the project work. What I'd expect we'll find is that, again, this is part of this operational leverage, that gross margin will just keep increasing because there's a substantial amount of fixed facility costs sitting within that reported margin. I suppose the other way we look at it as a business is we've got, if we're not doing anything, we've probably still got AUD 15 million worth of company costs that are largely a fixed cost base. As these projects ramp up quickly, we're not changing that revenue base dramatically. We're winning work at strong margins, which then will overtake the fixed costs and grow our gross margin back to that 30% that you talk about, so that we're winning work in excess of that kind of contribution at the moment. It does. It's just that it's not, and I understand the way the business is configured, that there are fixed costs embedded in the manufacturing process, which is not a pure variable sort of cost model. Yeah, correct. If you get up to AUD 50 million, AUD 60 million, AUD 70 million of revenue, do I think of, and you're probably gonna decline to answer because it amounts a bit of spoon-feeding, for every AUD 10 million of revenue that rises, does the gross margin ratchet up by 200 or 300 basis points? Is there a rule of thumb that can be applied? Probably, yeah. Far off. Yeah. We probably don't look at it that way, but yeah, we're looking at a largely fixed cost base and then everything that we add in over and above, we're adding in at that kind of the historic, at least the historic margin you were talking about. It should move up pretty quickly. Any feedback, any guidance in the future, with disclosure obligations notwithstanding, be helpful. As an owner of the business, it's very difficult given we've come through a period of severe pain. We had some great times, and there has been some severe pain, and now we're emerging out of this. It's very difficult. It's like nailing jelly to the ceiling a bit to find out how the business is going to be performing once it is at some kind of a scale from a demand point of view. Yeah. Well, it's a pretty simple economic model. We've got a fixed cost base, and then once that fixed cost base is covered, then your marginal profit basically equals your gross profit or your gross margin on those projects. Yeah, that's the simplest way of putting it. All right. Thank you. Thanks. Thanks, Michael. Thanks, Michael. Thank you. There are no further questions at this time. I'll now hand back to Mr. Begley for closing remarks. Well, thanks very much for listening. We've been quite pleased to present this result. Brendan and I are available if there are any questions following this presentation. I think we'll sign off. Thank you very much. That does conclude our conference for today. Thank you for participating. You may now disconnect.