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Q1-FY2026 Investor Presentation July 11, 2025
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Disclaimer The following presentation provides an analysis of the consolidated operating results and financial position of Velan Inc. (“the Company”) for the quarter ended May 31, 2025. This presentation should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal years ended February 28, 2025, and February 29, 2024. The Company’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). The significant accounting policies upon which these consolidated financial statements have been prepared are detailed in Note 2 of the Company’s audited consolidated financial statements. All foreign currency transactions, balances and overseas operations have been converted to U.S. dollars, the Company’s reporting currency. This presentation was reviewed by the Board of Directors of the Company on July 10, 2025. Additional information relating to the Company, including the Annual Information Form and Proxy Information Circular, can be found on SEDAR+ at www.sedarplus.ca. NON-IFRS AND SUPPLEMENTARY FINANCIAL MEASURES In this presentation, the Company has presented measures of performance or financial condition which are not defined under IFRS (“non-IFRS measures”) and are, therefore, unlikely to be comparable to similar measures presented by other companies. These measures are used by management in assessing the operating results and financial condition of the Company and are reconciled with the performance measures defined under IFRS. Reconciliations of these amounts can be found at the end of this presentation. The Company has also presented supplementary financial measures which are defined at the end of this presentation. FORWARD-LOOKING INFORMATION This presentation may include forward-looking statements, which generally contain words like “should”, “believe”, “anticipate”, “plan”, “may”, “will”, “expect”, “intend”, “continue” or “estimate” or the negatives of these terms or variations of them or similar expressions, all of which are subject to risks and uncertainties. These risks and uncertainties are disclosed in the Company’s filings with the appropriate securities commissions. While these statements are based on management’s assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that it believes are reasonable and appropriate in the circumstances, no forward-looking statement can be guaranteed and actual future results may differ materially from those expressed herein. The Company disclaims any intention or obligation to update or revise any forward-looking statements contained herein whether as a result of new information, future events or otherwise, except as required by the applicable securities laws. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. 2
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James A. Mannebach 3 Chairman of the Board and Chief Executive Officer
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General Overview of the First Quarter A solid performance • 18.6% sales growth • 100 bps gain in gross profit margin Cash position in excess of $59M • Highest level in five years Strong financial cushion will enable us to review our strategic options • Establish a balance between supporting long-term growth objectives and maximizing returns to shareholders Board of Directors approved a change in our dividend policy • Significant increase in quarterly dividend to CA$0.10 per share • Reflects growing backlog and confidence in future financial performance and ability to sustain strong cash flow 4
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Backlog1 and Bookings1 Backlog of $286.1M as at May 31, 2025 • $241.3M deliverable within next 12 months • Increasing number of long-term contracts for the nuclear and defense sectors Bookings of $78.2M in Q1-26, versus $83.0M in Q1-25 • Lower year-over-year bookings in Germany and North America • Large orders received last year • Higher bookings in China and Portugal • Higher maintenance, repair and overhaul (MRO) bookings 5 $270 $306 $286 $226 $277 $241 $0 $50 $100 $150 $200 $250 $300 $350 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Q4-25 Q1-26 Backlog (in millions) Backlog < 12 months 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 $0 $50 $100 $150 $200 $250 $300 $350 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Q4-25 Q1-26Bookings and Sales (trailing 12 months, in millions) Bookings Sales Book-to-Bill (right axis) 1 Non-IFRS measure – see Non-IFRS and Supplementary Financial Measures in the Appendix of this presentation.
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Growth Opportunities Heightened traction in China • Traditional power consumption is booming • Positive effect on our business • Most of our output in China is sold domestically • Not meaningfully exposed to U.S. tariffs Middle East is poised for solid growth • Largest market for oilfield valves • JV in Saudi Arabia to strengthen our presence • Achieved important qualification standards and awarded first significant production order 6
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Growth Opportunities (continued) Leveraging MRO opportunities • Vast installed base across several industrial markets • Steady flow of orders quickly converted into sales • 90% penetration rate at oil refineries in North America • Significant repeat business reflected in our bookings We remain bullish about the nuclear market • Work diligently with key players both for standard and small modular reactors (SMRs) • Revenue recognition cycle is longer term • Expect announcements about expanded agreements in near future • Nuclear is increasingly relied upon as a viable alternative to fossil fuels 7
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Rishi Sharma 8 Chief Financial and Administrative Officer
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First-Quarter Results 9 Sales $72.2M 14.1% vs. prior year • Higher shipments from Italian, Chinese, Indian and German operations • Partially offset by lower sales in other international markets • Stable sales from North American operations • Lower shipments to the defense industry offset by strong MRO activity $60.9 $72.2 Q1-FY25 Q1-FY26 Sales ($ US millions) 49.1% 3.7% 40.5% 5.0% 1.7% Q1-FY26 North America Europe Asia Pacific Africa & Middle East South & Central America $72.2M Sales 61.8% 11.4% 12.1% 13.1% 1.7% Q1-FY25 $60.9M Sales
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First-Quarter Results 10 Gross Profit $20.6M 28.6% of sales $3.8M vs. prior year 100 bps vs. prior year • Higher business volume • More favourable product mix • Lower material costs • Lower provisions for aging inventory Adjusted EBITDA1 $4.0M $1.2M vs. prior year $23.8 $15.1 Q1-FY26Q1-FY25 Gross Profit ($ US millions) 28.6%27.6% • Higher gross profit, partially offset by higher administration costs • Excludes $5.7M in restructuring costs $2.8 $4.0 $0.2 $0.1 Q1-FY25 Q1-FY26 Adj. EBITDA1 and Adj. Net Income1 ($ US millions) Adjusted EBITDA Adjusted Net Income 1 Non-IFRS measure – see Non-IFRS and Supplementary Financial Measures in the Appendix of this presentation.
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11 Financial Position • Cash and cash equivalents of $59.1M at May 31, 2025 • Long-term debt, including current portion of $16.4M • New credit facilities of $35M over three years • Well positioned to further invest in operations and to consider strategic acquisitions First-Quarter Results $59.1 $16.4 $3.3 Financial Position as at May 31, 2025 ($ US millions) Cash and cash equivalents Long-term debt Bank indebtedness Cash Flow from Operating Activities • Used $15.5M before net changes in provisions • Includes transaction-related costs of $6.1M • Negative changes in non-cash working capital this year versus last • Lower short-term customer deposits this year • Important inflow last year from collection of receivables $12.0 ($15.5) Q1-FY25 Q1-FY26 Cash Flow from Operating Activities1 ($ US millions) 1 Before net changes in provision.
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Thank you for attending our Q1-FY2026 Financial Results Investor Call. We are happy to answer any questions. 12 velan.com facebook.com/velan @VelanInc linkedin.com/VelanInc
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Appendix Additional Information
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Non-IFRS and Supplementary Financial Measures 14 Non-IFRS measures The term “Adjusted net income (loss)” is defined as net income or loss attributable to Subordinate and Multiple Voting Shares plus adjustment, net of income taxes, for costs related to restructuring and to the proposed transaction. The terms “Adjusted net income (loss) per share” is obtained by dividing Adjusted net income (loss) by the total amount of subordinate and multiple voting shares. The forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement. The term “EBITDA” is defined as adjusted net income plus depreciation of property, plant & equipment, plus amortization of intangible assets, plus net finance costs, plus income tax provision. The term “Adjusted EBITDA” is defined as EBITDA plus adjustment for costs related to restructuring and to the proposed transaction. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. Supplementary financial measures The term “Net new orders” or “bookings” is defined as firm orders, net of cancellations, recorded by the Company during a period. Bookings are impacted by the fluctuation of foreign exchange rates for a given period. The measure provides an indication of the Company’s sales operation performance for a given period, as well as well as an expectation of future sales and cash flows to be achieved on these orders. The term “backlog” is defined as the buildup of all outstanding bookings to be delivered by the Company. The Company’s backlog is impacted by the fluctuation of foreign exchange rates for a given period. The measure provides an indication of the future operational challenges of the Company as well as an expectation of future sales and cash flows to be achieved on these orders. The term “book-to-bill ratio” is obtained by dividing bookings by sales. The measure provides an indication of the Company’s performance and outlook for a given period.
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