VivoPower International — Strategic progress masked by COVID shutdowns

VivoPower International (NASDAQ: VVPR)

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Research: Industrials

VivoPower International — Strategic progress masked by COVID shutdowns

VivoPower International’s strategic plan to develop a sustainable energy solutions (SES) business (including EVs, infrastructure, solar and decarbonisation services) is progressing well. Australia’s COVID shutdowns have affected the Critical Power Services (CPS) division and financials, but should be temporary and not detract from the potential from the SES scale-up. Our forecasts are under review pending the release of full financials.

David Larkam

Written by

David Larkam

Analyst, Industrials


VivoPower International

Strategic progress masked by COVID shutdowns

FY21 results

General industrials

25 August 2021



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Net debt (US$m) at 30 June 2021


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Free float




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Business description

VivoPower International’s strategy is to provide sustainable energy solutions on an international scale. Key activities at present are electric vehicles, critical power and solar development. Its primary operations are in Australia, Europe and North America.


David Larkam

+44 (0)20 3077 5700

VivoPower International is a research client of Edison Investment Research Limited

VivoPower International’s strategic plan to develop a sustainable energy solutions (SES) business (including EVs, infrastructure, solar and decarbonisation services) is progressing well. Australia’s COVID shutdowns have affected the Critical Power Services (CPS) division and financials, but should be temporary and not detract from the potential from the SES scale-up. Our forecasts are under review pending the release of full financials.

Year end

Revenue ($m)




















Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

COVID-related shutdowns in Australia affected the CPS division, where sales fell by 20%, depressing profits despite gross margin improving from 14.6% to 15.3% as swift action was taken. The second main impact was a $4.6m increase in G&A investment including $1.9m for Tembo and $2.3m on infrastructure to accelerate SES growth. Consequently, the group reported underlying negative EBITDA of $1.4m against positive $3.9m in FY20. $2.9m in one-offs related to litigation with the previous CEO and Tembo acquisition costs. Net debt was $14.5m versus $23.1m at June 2020 due to the $32m fund-raising in the year.

Having taken 100% control of Tembo, the specialist EV business, the key developments were a letter of intent (LoI) with Toyota Australia to develop an electric Land Cruiser and expansion of the global distribution network with commitments for nearly 5,000 units, a figure that management is targeting to double in the current year. Vivo also assumed 100% control over its US solar venture. This is being renamed Caret along with a move towards innovative energy-intensive sectors such as cryptocurrency mining or hydrogen (Project2X) to accelerate value creation and realisation. The SES decarbonisation project awarded with UK premier league football club Tottenham is progressing to plan.

The 2022 financials will heavily depend on when the Australian economy returns to normal and CPS can execute its strong order book. Tembo is expected to start delivering its order book, which will be positive for the top line but lead to higher losses until break-even volumes are achieved. Strategic initiatives include growing Tembo’s distribution network, targeting to double order commitments and accelerated progress of the Toyota Australia partnership, integration of CPS and accelerating the leveraging of SES to benefit from increasing corporate commitments to decarbonisation. We note management’s reference to ‘hyperscaling’, which suggests an acceleration in the pace of development moving forward.

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