Thank you for standing by. Welcome to the Matrix Composites & Engineering Limited 1H FY 2025 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 hand the conference over to Mr. Aaron Begley, Chief Executive Officer. Please go ahead. Thank you very much, good morning, everyone. I'm here with Brendan Cocks, our CFO. We're presenting from Perth today on our 2025 half-year results presentation. I'm gonna be talking to the presentation that's been put up on the ASX platform. I'll turn directly to slide three, which is titled Our Business. Just to bring those that are not that familiar with our business up to speed. Our core businesses include the delivery of subsea buoyancy and SURF energy product solutions to the global market. We support growth in the renewable energy sector across a variety of different opportunities and sectors, and we protect key infrastructure with corrosion-resistant coatings and systems. We also deliver advanced materials and technologies into oil and gas resources, infrastructure, Defence, and the renewable sector. On that slide is an image of our plant in Lake Haven, Henderson, south of Perth in the Australian Marine Complex, and that is the world's largest capacity plant in terms of manufacturing syntactic foam. Turning to the next slide, which is slide four. We saw positive momentum, which continued in the first half. Compared to the prior half, there was a significant revenue growth and also EBITDA growth. Revenue was up 47% on the first half of FY 2024 to just under AUD 40 million. That was really driven by strong subsea product demand. We've been very successful in penetrating a share of the global subsea CapEx market, and that's really been reflected in our results. Our new SURF awards and with secured revenue for FY 2025 is now at around AUD 60 million, and that'll be a record year for that product line. That's considering this product line didn't feature significantly only a few years ago. Our advanced materials are on track for continued growth in FY 2025, which is very important for a diversification sector. We're seeing sustainable OpEx and maintenance revenue from our corrosion technologies division, and really deepening that breadth and reach into the energy and resources space. We saw increased profit. Our underlying EBITDA sat at AUD 3.2 million, resulting in an NPAT of AUD 1 million. Our second half revenue for FY 2025 is pretty similar to the first half, as we have seen some delayed customer awards tip some revenue into next year. The medium- and long-term outlook remains very positive. It is very strong. We finished the half in a robust financial position. It's actually since improved, so our cash on hand at the end of the half was just under AUD 16 million. Currently it sits at around just over AUD 19 million, and our net cash at AUD 8.3 million. You can see on the graph on the right that our split was, in terms of revenue contribution, was dominated by subsea buoyancy. As I mentioned earlier, it was predominantly drawn from the subsea or SURF market, which we've seen very strong growth and we expect to see strong growth over the next several years. I'm gonna pass on to Brendan now, who will take you through the first half FY 2025 financial results. If you turn directly to slide six. Over to you, Brendan. Thanks, Aaron, and good morning, everyone. As Aaron mentioned, we received a revenue of AUD 39.4 for the half. That reflects a 47% increase from the prior corresponding period last year, which resulted in an underlying EBITDA for the period of AUD 3.2 million, and an NPAT of AUD 1 million. With that half, and if we look at our last two halves over the last preceding 12 months, it reflects a business revenue of just under AUD 100 million and an EBITDA of AUD 13.5 million. It probably just reflects the operating leverage of our business. We've got a couple of comments on the cash there, but I might cover them in the next few slides. If you just turn to page seven. With our balance sheet, there's cash of AUD 15.7 million there within the balance sheet and a net cash of AUD 8.3 million when you take off a debt attributable to a convertible note. Of note, the AUD 15.7 million increased to AUD 19.2 million as at the time of reporting, which just reflects the working capital cycles we experience within the business. I might just turn to the next slide, which is the cash flow, and That cash flow better, we are heavily influenced by project movements. Of note and on the prior balance sheet, our working capital and our cash was pretty consistent for a term that period at a total of AUD 38 million. Although we see big swings in our bank and our debtors and creditors and inventory and customer deposits, we still maintain that total of AUD 38 million across all those lines. Being able to keep the working capital within the business that helps us support our existing projects but also win new projects. The drive for the improvement in the cash in the last few months was driven by some significant receivables, which were invoiced on one of our key projects in December as we came up to three large production milestones and then were received subsequently in early February. At this point, Aaron, I might hand back to you to take run through some of the operations. Thanks, Brendan. We'll go straight to slide 10 under the Matrix Outlook and Growth. As we've mentioned in previous presentations, the business has three core business pillars: subsea, corrosion technology, and advanced materials. Subsea encompasses all of our products that go into the subsea market, and they include SURF which is where we supply subsea products for production applications, mainly in deep water, deep water drilling, so mobile drilling rigs, well construction, energy transition, including fixed and floating wind, and other types of subsea equipment, excluding defense. That's really been a key driver of our revenue recently. One of our other focuses is to build diversity of revenue and market base and sustainability in revenue across those other sectors, which include resources, defense, infrastructure, and renewables. That's really wrapped up in corrosion technologies and advanced materials. Corrosion technologies is a business we've been in for the last four years, that supplies anti-corrosion coatings, equipment, and services, primarily to the LNG and port infrastructure and mining sector in Australia. That business provides a good sort of month-to-month revenue base from that sector. Advanced materials is a mooe broad, I guess, selection of markets and applications, which include renewables like hydrogen production, defense, and the resources sector. That's an area where we do expect some significant growth over the next few years, in particular, in the resources space. Go to the next slide 11. We put this slide in to just demonstrate the growing share of deepwater investment in the global energy production space. Deepwater is definitely a sweet spot for us. Our technology is a leader in the market in terms of the way the products perform for deepwater oil and gas applications in particular. We've seen a large amount of our products used in places like Brazil, other parts of South America, and also the Gulf of Mexico. We're also targeting West Africa, where there's a lot of deepwater projects that are slated to be kicked off over the next few years. I think the key driver to this market is the growing share of global oil production makeup that deepwater investment will make between now and 2030. The image on the right-hand side, which shows the share of deepwater from 2023 to 2030, really does tell a story about where oil and gas will come from over the next five years. That is one of our key target markets. There are some very strong fundamentals that have been exhibited there. Our strategy here is to grow our market share as far as the percentage of that deepwater CapEx spend, grow out a product range. We don't just manufacture buoyancy, we manufacture other products like VIV suppression for pipelines and risers, other pipeline products, protection systems, and a whole variety of polymer-based technologies for this sector. We're really seeking to capture more of that spend. Going to the next slide. In slide number 12, you can see that FY 2023 was a real turning point for our entrance into this market. We took our facility in Henderson that was quite underutilized, and our technology, and pivoted towards servicing the SURF market, which took many years in the making. Over the last 2 and a half years, we've secured over AUD 120 million across four projects in this specific market. You can see from the growth curve. We've grown from a negligible amount in FY 2021, and even prior years were similar, to where we sit today in FY 2025. We've also deployed our equipment successfully. It's one thing to manufacture and market products into this market, but ultimately, the proof is in the successful deployment of equipment. I'm happy to say that we successfully deployed well over 1,000 modules, probably closer to 1,300-1,400 modules in ultra-deepwater applications that we've manufactured over the last couple of years. They're in the water, they've been successfully installed, and this helps build our track record with that product, and also we can piggyback other products onto that success as well. We'll continue to add to our growing list of qualifications with deepwater operators and EPCI contractors globally. We're building out our client base and we're also building out our product lines to increase our share of that CapEx. We've got about AUD 300 million of competitive quotations that are yet to be awarded. We haven't had any subsequent material project losses. I think we announced a AUD 22 million award in November 2024. We are seeing some delays in award from our international client base. That's not because their projects have been delayed. It's just simply the engineering delays from the EPCI contractors that have occurred. It just meant that those projects have been pushed to the right three to six months. We've seen some revenue that we did expect in this half tip into the next half, hence the comment around first and second half being similar to each other from revenue terms. The outlook for us is very good. The global subsea project equipment forecast spend graph there shows just very solid and sustained demand in this sector from now to the end of the decade. The two areas that we specifically look at are SURF and pipeline spend. That's what drives our demand. We don't really have a lot of involvement in supplying products for what's called SPS or subsea production systems. We do bits and pieces for it, but the main driver is SURF and pipelines. That actually peaks in 2027, but there's probably a one to two-year tail in terms of project awards to us after that. A very strong outlook for us in that target segment. Moving on to slide 13. Look, the business really started from supplying equipment into the drilling market. We supplied over AUD 1 billion of products into this market over the last 15 years. There's about 200 rigs and drill ships with about AUD 2 billion worth of buoyancy on or all around the world. There is a market for upgrades primarily and replacements. This has been a lot softer than we expected, frankly. I think one of the challenges that we have is there is a bit of a dip in rig utilization this year, with demand being pushed into 2026 and 2027. Discretionary spending on replacements in this sector has been pretty limited. The orders that we are seeing are really for products like LGS, which is quite a differentiated technology that we sell into this market for drag suppression. We do expect to see orders for that product this year, and also upgrades and extensions. That's really what drives demand in this market. We've been very busy with opportunities in this sector. I think over the last year, we've bid over AUD 140 million of quotations into the drilling sector globally. There has been a lot of activity. It just hasn't transformed into the sort of orders we would have expected at this point. I think that graph tells a bit of a story about any form of discretionary expenditure. If they do need the equipment to drill a well, they come to us. We're ready to pounce on those opportunities when they come. Slide 14. This is a graph which I find quite interesting. It shows the floating offshore wind forecast in terms of installed capacity from now to 2033, and shows it right across the globe. What's interesting to us is that floating wind, as opposed to fixed wind, presents a lot of opportunities for our business that has the capacity to mass produce very large quantities of subsea buoyancy. Floating wind uses buoyancy for mooring systems to support cables and also potentially for the structures themselves. This is a very large and growing market. This year, we'll see the first FID of a commercial scale floating wind project in North Asia. Actually, the first commercial size project anywhere in the world. There's a lot of buoyancy required for, as I mentioned, mooring lines, cable protection support, and so on. We think we're very well positioned to take advantage of that, especially in this region, which will see the will be early adopters of this technology. We're positioning ourselves to supply into that market. Turning to the next slide, which is slide 15. Look, I'll touch just briefly on Corrosion Technologies. Look, this has been a great business for us, in terms of diversification and market exposure. It's with an adjacent technology. We're supplying to customers like Woodside and INPEX and Rio Tinto and others. We have seen some project wind downs in W.A. and the Northern Territory as certain work fronts have been completed or have been delayed. We're now selling to a much broader customer base across Australia, New Zealand, and PNG. We're selling the systems into customers like Exxon, to Shell, and to a variety of other diverse marine asset owners. This is going to continue to grow, probably not as quickly as we would've liked. The diversification of customer base, I think will really see some good growth over the next few years. Advanced materials is slide 16. I guess, some comments on this are really around defense. Look, Matrix is a member of DISP, the Defence Industry Security Program. We're quite active in the defense sector. We're also part of the Australian Marine Complex, which will see Australia's largest naval facility developed over the next few years, basically on our doorstep. We're looking at where we can be involved, and leverage our manufacturing and advanced materials experience into that sector. We're already supplying solutions, and products into crewed and uncrewed systems, in Australia. Also products into the U.S. market. That planned investment into the Australian shipbuilding sustainment sector is expected to be up to AUD 160 billion from 2025 to 2044. They're very big numbers and we're chasing the slice of the pie. In terms of energy resources and civil, look, probably our two key targets here are in our well construction products, centralizers in particular. This is an oil and gas consumable product line that we've been involved in for a long time. We relaunched that product in North America last year. It's been very successful. We've supplied tens of thousands of products, from about June last year to now into the U.S. and we're expanding into Canada, and also into parts of South America. We have a very strong distributor relationship across there, and that's growing. It's a great business. They're high-value consumables, or high value-add consumables, effectively a catalog sale. We keep the product on the shelf and distribute it through distributors in the U.S. and also in other parts of the world, including Saudi and Saudi Aramco, where we're now fully qualified. We would expect to see significant volumes out of that market over the coming years. We're also focusing on the local mining market. There's a lot of consumables that are polymer-based and some that are not. We're displacing those with polymers in the Australian mining sector. We've co-developed a product with Rio Tinto, which uses a 3D-printed technology to replace steel in materials conveying. We expect that product to be deployed in the field, well, probably by the middle of this year. We've actually added extra capacity in terms of injection molding to service this increase in demand. Turning to the conclusion, which is slide 17. We experienced strong revenue expansion in the first half compared to the previous first half. We're on a solid growth trajectory. The second half is likely to be similar to the first half given some of those award delays tipping over into the next financial year. The pipeline remains very, very strong. In subsea in particular. We're leveraging our installed capacity, so we're not having to spend any money of significance to increase our output. We've got a lot of capacity in that Henderson plant. We can produce at least a couple of hundred million AUD of syntactic foam a year with our current install base. We're seeing recurrent accretive revenue from Corrosion Technologies, advanced materials across oil and gas. Sorry, excuse me. Renewables, resources, and defense. We expect that part of our business to grow significantly in the coming years. That concludes the formal part of the presentation. Before I end, I'd just like to make a comment on another announcement that was put out to the ASX this morning, with some board changes. The first one is Steven Cole's retirement after 11 years from the Matrix board. I'd just like to take this opportunity to thank Steven for his very valuable contributions across that period, navigating some stormy seas and also seeing our return to profitability and growth in recent years. Steven provided some great oversight in terms of governance and strategy and we'll certainly miss his counsel there. Also I'd like to welcome Stephan Kirsch onto the board. Stephan is a very interesting addition to our board. He has extensive senior mining sector experience at a very senior level, and has been in the Australian mining sector for over 25 years. Has great contacts and technical knowledge and commercial knowledge across the mining market, which is going to be a key focus for our advanced materials business unit. I'd like to welcome Stephan and say goodbye to and thank you to Steven Cole. That concludes the formal presentation. I'll hand back to the moderator to facilitate any questions that might be out there. 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 from Bell Potter Securities. Please go ahead. Brendan, thanks for taking my questions and good morning. Firstly, sorry to be pedantic on some of the language in the outlook. You say group revenue for the second half is likely to be similar to the first half. I'm just wondering if there's open to any interpretation on the word likely, if there's downside risk to that outlook? I'm sorry, can you repeat the question? I didn't quite hear you, Joseph. Sorry. You've emphasized in your outlook statement that the second half group revenue is likely to be similar to the first half. I'm just wondering if there's any interpretation on the word likely, if there's any downside risk implied in that comment? I think there's both upside and downside risk, Joseph, because there is still a bit of short-term work that we need to win. At the same token, yeah, we could certainly see an increase. There's enough work out there to do that. It really comes down to project timing. I can't really be more specific than that. No, that's okay. Understood. My second question, just on the outstanding quotations for the SURF and drilling market? It seems that these quotations that you've released today versus some of the quotations you spoke about at the FY 2024 result, they're about the same in terms of value. I'm just wondering if within those numbers, if there's been any new contract or new quotation additions or removals or maybe quotation losses between the two reporting periods. There's been very few quotation losses. There's been some additions. Obviously, we won some work as well across that period. What we've seen is that the size of some of these projects are so large that a small engineering delay up front, for example, if a client needs to reconfigure a field or something like that, just results in our inquiry being pushed down the road a bit. The challenge that we've got is that they expect the same delivery time. What we see is compression of delivery. The delivery time might be the same in terms of delivery date, but the order placement's delayed. It does put a bit of pressure on us to put it out, but it also plays to our capacity as well. It's also a bit of an advantage for us. If the orders were placed earlier, we sometimes have the option of making it earlier, which is obviously advantageous because we can smooth production. It's one of those things where we have very little control over when those orders are going to be placed. The other comment I would make is, that's probably what we're seeing in SURF, in the drilling market, there has been some projects come out where we've just downgraded the chances of them going ahead. We haven't actually lost any to a competitor. Likewise, we've done fresh quotes during the period as well, in relation to the drilling sector. Some of them probably indicate the CapEx that the drillers want to spend on their rigs, but it's not necessarily pushing through as strong. Great. That's great color. Thank you. Then just lastly, you mentioned in your report that you're still targeting around AUD 10 million per annum in recurring revenue from corrosion technologies and advanced materials. I'm not sure if that's applied to FY 2025, but if it is, it's probably suggesting a stronger second half. Are you able to provide any commentary on what gives you confidence in delivering that for FY 2025? It's a modest increase in the second half. I think we've probably done more like four and a half. Yeah. nearly in the first half. Probably some of it we would expect would come out of our well construction products, where we're adding an additional capacity right at the moment, sort of purchased an additional injection molding machine, which will help us service growing interest in the U.S. market and also cover what we'd like to see happen in the Middle East. Yeah. Specifically the demand's there from the U.S. That's been really good. It's been strong and consistent. That's driving those sales. We've also got a backlog of work in defense that we have to deliver this half. We've got some infrastructure products that we can just continue to pump out the door and the forecast for MCE is probably a little bit modest. We do have a quite steady historical demand for that product. It is one of those products which is relatively sustainable in terms of its revenue. It's also growing. I think that forecast is based on existing backlog plus also just run rate and what we see as growth. Yeah, we've got reasonable expectations that that'll be met. I think next year we'll continue to grow quite rapidly, especially with some of the work we're doing in North America. Great. Okay. Thanks for taking my questions. I'll move on. Thanks. Thanks, Joseph. Thank you. Your next question comes from Oliver Porter from Euroz Hartleys. Please go ahead. Hey, Aaron and Brendan. Thanks for taking my questions. Just wanted to touch on that AUD 300 million pipeline where you said your customers are expecting delivery within the same timeline. Can you just give a bit of color around the composition of that, like maybe between FY 2026, FY 2027, 2028, and beyond of that AUD 300? Well, I would say that even from a risk-weighted perspective, we'd expect probably two-thirds of that to be delivered across that period. Yeah. That's what it looks like. There is a lot of work out there. Yeah. Where demand's coming from is primarily from Brazil, with projects from Petrobras, Shell, in West Africa, Total, Gulf of Mexico, customers like Woodside, for some of their projects there. Namibia, Nigeria, Brazil, Guyana, and there's also some projects in Indonesia and Malaysia that are all deep water. It's a really interesting dynamic for us. We're involved in bidding on all of those. There's also a recent announcement with Subsea 7 and Saipem are merging, so they're currently the world's largest subsea installation contractor. Both of those companies are major clients of ours. That we see as a good thing for us. Yeah, there's a significant backlog of work that's coming. I think just one more point, Oliver, was of some of those large projects, there is definitely some meaty ones that are due for delivery in FY 2026. Yeah That will be FY 2027 projects. Definitely a bit of both. Yeah. The annoying thing for us is, especially being a public company and having to report on a financial year basis, is sometimes the project deliveries don't fall in neatly into their charts. It's still a bit lumpy. Yeah. No, understood. Thanks for that. Last one from me. That AUD 60 million quote, I think, for offshore wind. Do you have a sense of when you'd expect, I know it's fraught with danger talking about- Probably, look, the earliest- Yeah. Will be towards the back end of this year. The calendar year? Calendar year. Yeah. Yeah. Okay. So. All right. All right. Cool. Thanks, guys. Cool. Thank you. Your next question comes from Nicholas Rollinson from Jefferies. Please go ahead. Hi, Aaron and Brendan. Thanks for taking my questions. No problem. As you mentioned before, Subsea 7 and Saipem are merging. they might have their hands a bit full. Does that have the potential to cause any delays to awards for you guys? will they still be on the hook to get going Asia for projects like BCS nine, for example? Basically, they still have to deliver to their customers. Their customers are really not that concerned with their merging from that perspective. They want oil out of the ground as quickly as possible or according to their schedule. They'll still be beholden to customer schedule. I don't think the merger is actually going to be completed until back end of 2026, beginning of 2027. At the moment it's at an MOU stage. I don't think it'll affect any of the short-term work. They still have to deliver into their projects. Okay. That's helpful. You've mentioned that the medium-term and long-term outlook is strong. I know you have AUD 300 million of submitted SURF tenders out in the market. Could you give us an indication of if any of those awards are due to land in the next three to four months, like before the end of FY 2025? It's unlikely. Some of them might. There'll be a few small ones that might land into that period, but I think they'll be around the middle of the year. Whether they fall this side or the other side of the financial year, it's just, that's not clear. Okay. I think your previous aspirations, were to double advanced materials year on year. It looks like it's down a touch from last year. What's changed in that division? Has it just been delays to awards as well or is there some Yeah. There's been a delay with some of the. Again, it falls over into the next financial year. With some of the Defence contracts, they're still coming. Defence gets delayed, just like it did way a while with that program. We probably have not seen the ramp up in well construction as quickly as we expected out of the Middle East. It's coming. We're building some momentum there, but again, it's just not been quite as quick. Corrosion technology's been down a little bit. It's really a short-term issue for us. The trajectory's going the right way. Okay. That's it from me. Thanks, guys. No problem. Thanks, Nick. Thank you. Once again, if you do 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 Joshua Gross from EXEL Network. Please go ahead. Yeah. Hi. I was just wondering, with larger contracts on the horizon, is management strategically managing cash flow or the working capital to ensure financial flexibility as the project milestones fluctuate? Or are there any mechanisms in place to smooth out that variability and sustain positive cash flow, as the business scales? Yeah, we're certainly managing the cash flow. There was a capital raising we did two years ago now that was quite large, but it was very purposeful in helping us support through some of these large projects as we emerge through. We continue to manage our working capital very closely. Also we would like to, this year, start bringing more debt options into that working capital, which helps smooth it out. Also the reality is we're dealing with rather large projects. They don't run on six-month cycles, so we don't expect to see half-on-half cash flow positivity. There will be large swings based on just where a project may fall at the close of any period. We're certainly managing those projects very closely through the whole project life cycle, which as a projects company, is our biggest focus. Okay, great. Then the other question I had, which I think has sort of been mentioned anyway, but it was just relating to the tenders in place. Obviously, there's quite a bit there, and you mentioned it might fall either side of the financial year. I assume a large chunk of these then are in the advanced stages. Are you guys confident of winning any of these? Sure. I mean, look, they're with our current customer base. We've got a track record with them and, yeah, look, a lot of them are in advanced stages, but we get involved very early in the project, right. We get involved with the customers at the bidding stage, and then try and offer solutions which help them win the project and install it efficiently. There are projects in the pipeline that we bid up to, in some cases, 18 months ago. Yeah, there's a lot of work that have gone into all of those proposals. Yep. Awesome. Thanks for answering my question, guys. I appreciate it. Great. No problem. Thanks, Joshua. Thank you. There are no further questions at this time. I'll now hand back to Mr. Begley for closing remarks. Well, thank you again for listening. Brendan and I will sign off there, and we look forward to talking to you next time. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.