AAC Clyde Space — Strong order backlog underpins growth prospects

AAC Clyde Space (OMX: AAC)

Last close As at 24/04/2024

SEK47.60

−0.75 (−1.55%)

Market capitalisation

SEK272m

More on this equity

Research: Industrials

AAC Clyde Space — Strong order backlog underpins growth prospects

In FY23, AAC was largely affected by continuing supplier delays, which compromised the anticipated delivery of subsystems and delayed projects, with subsequent key revenue deferred. Nevertheless, Q423 saw tremendous order inflow worth more than SEK200m, leaving a year-end record backlog of SEK630m, which should bolster the acceleration of revenues towards the SEK430–500m targeted by management in FY24. This should accompany improving profitability and positive operating cash flow and move AAC towards a self-sustaining funding status. Our capped DCF valuation of SEK301/share implies substantial upside potential.

Natalya Davies

Written by

Natalya Davies

Analyst

Industrials

AAC Clyde Space

Strong order backlog underpins growth prospects

FY23 results

Aerospace and defence

4 March 2024

Price

SEK47.40

Market cap

SEK270m

SEK10.34/$, SEK13.10/£

Adjusted net cash (SEKm) at 31 December 2023 (excluding leases of SEK15.7m)

34.3

Shares in issue

5.7m

Free float

88.0%

Code

AAC

Primary exchange

Nasdaq First North Premier Growth Market

Secondary exchange

OTCQX

Share price performance

%

1m

3m

12m

Abs

(14.6)

32.0

(38.7)

Rel (local)

(18.3)

18.9

(44.5)

52-week high/low

SEK79.86

SEK27.50

Business description

Headquartered in Sweden, AAC Clyde Space is a world leader in nanosatellite end-to-end solutions, subsystems, platforms, services and components, including supply to third parties. It has production and development operations in Sweden, Scotland, the Netherlands, the United States and Africa.

Next events

FY23 annual report

25 April 2024

Q124 results

May 2024

Analysts

Natalya Davies

+44 (0)20 3077 5700

Andrew Keen

+44 (0)20 3077 5700

AAC Clyde Space is a research client of Edison Investment Research Limited

In FY23, AAC was largely affected by continuing supplier delays, which compromised the anticipated delivery of subsystems and delayed projects, with subsequent key revenue deferred. Nevertheless, Q423 saw tremendous order inflow worth more than SEK200m, leaving a year-end record backlog of SEK630m, which should bolster the acceleration of revenues towards the SEK430–500m targeted by management in FY24. This should accompany improving profitability and positive operating cash flow and move AAC towards a self-sustaining funding status. Our capped DCF valuation of SEK301/share implies substantial upside potential.

Year end

Revenue (SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/22

196.7

(23.2)

(5.58)

0.0

N/A

N/A

12/23

276.6

(18.4)

(4.15)

0.0

N/A

N/A

12/24e

465.4

12.4

2.08

0.0

22.8

N/A

12/25e

647.6

52.7

8.72

0.0

5.4

N/A

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

FY23 constrained by supply chain delays

Although the FY23 results were largely affected by continuing supply chain constraints, revenue increased 41% y-o-y to SEK276.6m and, for the first time, AAC reported positive EBITDA of SEK1.0m. However, we note that this was largely aided by a surge in royalty income (c SEK30.6m at the EBITDA level), which is variable in nature and which we do not expect to be a key driver of income in the future. Q423 was weaker than anticipated, affected by currency exchange losses of SEK4.8m, with an EBITDA loss of SEK9.7m (Q422: loss of SEK20.1m). Q423 basic EPS suffered an increased loss year-on-year of SEK4.91 (Q422: loss of SEK4.34), partially attributable to a SEK6.5m impairment charge from the loss of the Kelpie-2 satellite.

Record order backlog supports future growth

In Q423, AAC experienced a significant increase in order inflow, surpassing SEK200m, and resulting in a year-end record backlog of SEK630m. This should bolster revenue acceleration towards management’s FY24 target of SEK430–500m, with pipeline momentum continuing into 2024. High-margin SDaaS order intake has been broadly static since Q221 at the c SEK160m level, albeit we expect significant data orders after the initial SDaaS satellites start to provide data for evaluation by potential customers. With the first xSPANCION and additional AIS/VDES satellites expected to be deployed, AAC expects to have c 13 of its own satellites in orbit by the beginning of next year, which should augment SDaaS earnings sharply, largely coming through in our 2025 forecasts.

Valuation: Substantial upside potential

We introduce our FY25 estimates, which incorporate our expectation of increased higher-margin SDaaS sales, which should bolster profitability, with a 5.4x P/E in 2025 appearing undemanding. We have rolled forward our capped DCF to an FY24 basis, which now returns a value of SEK301/share (versus SEK287/share previously), as start-up cash outflow is replaced by stronger future cash generation.

FY23 results affected by continuing project delays

For AAC, FY23 marked a consecutive year of persistent supply chain issues that continued to delay projects and defer revenue recognition into the current year. Despite this, the company reported record revenue of SEK276.6m, up 41% y-o-y, largely driven by exceptional growth from the AAC (up 134% y-o-y) and Hyperion (up 180% y-o-y) divisions, which yielded EBITDA margins of 18% and 31%, respectively. For the first time, AAC reported full-year positive EBITDA of SEK1.0m, albeit largely driven by royalty income (SEK30.6m at the revenue level), which has de minimis associated costs and which we do not expect to be a critical driver of future revenues. Q423 was negatively affected by unfavourable currency exchange fluctuations (SEK4.8m loss), driving down the EBITDA loss to SEK9.7m (FY22: loss of SEK20.1m), and a SEK6.5m impairment charge from the loss of the Kelpie-2 satellite, contributing to the weaker EPS loss of SEK4.91 (Q422: loss of SEK4.34).

Space data as a service (SDaaS) revenues continue to grow, rising 42% y-o-y, albeit at a slower pace than anticipated at the start of the year as a result of delays to in-orbit commissioning of satellites deployed during the year, which we note showed signs of recovery for Clyde in Q4. Nevertheless, with the anticipated launch of four additional satellites in FY24 for AAC’s own constellations, alongside additional revenue recognition from the satellites deployed in H123, we expect higher-margin SDaaS to increasingly bolster cash generation in the next couple of years and beyond.

Exhibit 1: AAC Clyde Space FY23 results summary

SEKm

FY20

FY21

FY22

FY23

% change FY23 vs FY22

By business

AAC

28.0

41.4

34.8

81.5

134.2%

Clyde

68.0

61.5

59.2

57.9

(2.1%)

Hyperion

2.4

13.9

15.5

43.4

179.5%

SpaceQuest

0.0

19.2

31.4

34.0

8.2%

Omnisys

43.8

52.2

58.3

11.6%

AAC Space Africa

3.6

1.5

(58.0%)

Total group net sales

98.4

180.0

196.7

276.6

40.6%

By activity

SDaaS

3.1

12.8

16.9

24.0

41.6%

Space Missions

51.6

57.5

36.2

28.3

(28.7%)

Space Products

43.7

108.2

139.8

193.8

42.1%

License & royalties income

0.0

1.4

3.8

30.6

712.8%

Total group net sales

98.4

180.0

196.7

276.6

40.6%

Other operating income

12.7

17.2

25.2

19.5

(22.8%)

Own work capitalised

8.3

13.6

21.8

29.3

34.7%

Total group income

119.5

210.8

243.7

325.5

33.5%

Raw materials & subcontractors

(50.3)

(83.2)

(82.8)

(105.0)

(26.8%)

Personnel costs

(59.4)

(106.0)

(140.8)

(163.5)

(16.1%)

Other external expenses

(19.5)

(28.8)

(43.4)

(44.5)

(2.6%)

Other operating expenses

(7.8)

(5.2)

(15.4)

(11.5)

25.2%

EBITDA (company adjusted)*

(17.5)

(12.4)

(30.0)

1.0

N/A

EBIT (underlying)**

(25.5)

(22.8)

(41.1)

(14.2)

65.5%

Underlying PBT

(26.7)

(27.0)

(23.2)

(18.4)

20.7%

EPS – underlying (SEK)

(12.9)

(7.2)

(5.6)

(4.2)

25.4%

Adjusted net cash

62.2

95.5

52.1

34.3

(34.1%)

Source: AAC Clyde Space reports. Note: *Before exceptional items. **Before exceptionals and PPA intangible amortisation.

The key highlights of FY23 were:

Group net sales rose 41% to SEK276.6m (FY22: SEK196.7m). SDaaS sales were up 42% to SEK24.0m, largely driven by a surge in Clyde revenue recognition in Q423 that had been deferred from H123 due to satellite commissioning delays. Space Products revenue increased 42% to SEK193.8m, reflecting tremendous growth at Hyperion (up 180%), alongside AAC Clyde Space in Sweden (up 134%) and Omnisys (up 11.6%). Space Missions’ performance continued to be the main casualty of project delays, with sales falling 29% to SEK28.3m. We note that revenue excluding licence income of SEK30.6m (the majority of which, SEK26.2m, came through in Q323) increased by 25%.

The group generated positive EBITDA of SEK1.0m (FY22: SEK30.0m loss) despite additional investment in personnel costs and infrastructure, although this was largely driven by royalties, which are extremely high margin with few associated costs. The EBITDA loss excluding licence income stood at SEK29.6m, which we note is roughly in line with last year’s SEK30.0m loss (excluding aborted acquisition costs of SEK8.6m). Positive EBITDA contributions came from AAC Clyde, Hyperion, SpaceQuest and Omnisys, which, including royalty income, more than offset an increased loss at Clyde Space and start-up losses from AAC Space Africa. Hyperion was exceptionally strong, with EBITDA of SEK13.4m (FY22: SEK0.7m) as it moved from a development phase into customer supply.

The underlying loss before tax of SEK18.4m was 21% lower than in FY22 despite a SEK22.1m reduction in net financial items to a loss of SEK4.2m (FY22: SEK17.9m), largely attributable to higher interest expense from increased debt.

The group continued to invest in future growth opportunities, with SEK47.8m invested in fixed assets during the year, of which SEK29.3m was intangible assets, primarily development costs. We expect the level of investment to continue to rise as the number of AAC-owned and operated satellites grows for an increasing number of constellations (eg for the xSPANCION satellite project).

Operating cash inflow declined year-on-year to SEK3.4m (FY22: SEK6.4m), reflecting a SEK33.9m decline in working capital increases to SEK10.4m.

Adjusted net cash (excluding lease liabilities of SEK15.7m) stood at SEK34.3m (FY22: SEK52.1m) due to the use of a SEK25.2m of a bank overdraft facility.

Exhibit 2: Net sales by activity Q120–Q423

Source: AAC Clyde Space reports

Record order backlog supports future growth

While FY23 proved to be more challenging than expected, with continued delays to component supply and projects exacerbated by summer shutdowns, alongside the loss of the Kelpie-2 3U SDaaS satellite, the company continues to build its pipeline, with a record year-end order backlog of SEK630m. More than SEK200m of this was secured in Q423, with a large proportion of this being a SEK137m Omnisys contract to supply radio astronomy receivers for the SKA Observatory and preparatory work set to commence in the current year. SDaaS orders have remained fairly static since Q221 at the c SEK160m level, albeit we expect significant data orders after the initial SDaaS satellites start to provide data for evaluation by potential customers.

Exhibit 3: Order backlog development by activity (SEKm)

Source: AAC Clyde Space reports

Pipeline momentum has continued into FY24, with the following events reported since our last note:

22 January 2024: AAC Clyde Space won an order worth c SEK9.9m for its Sirius range of onboard computers and services, designed for low Earth orbit (LEO) satellite constellation missions, with delivery planned for Q424.

24 January 2024: AAC Clyde Space (Hyperion), partnered with TNO, successfully demonstrated that the laser satellite communications terminal (SmallCAT) transfers data onboard a spacecraft in LEO to Earth, with AAC responsible for contributing electronics and firmware components. A commercial version for use in nanosatellites, CubeCAT (1.3kg, 10cm3), is currently being developed. This presents a promising revenue opportunity for AAC with the accelerating use of laser communication technologies (infrared wavelength) to send satellite data directly to Earth, as an alternative to traditional radio frequency communication.

15 February 2024: Intuitive Machines’ Nova-C spacecraft (Odysseus) was successfully launched on a SpaceX Falcon 9 rocket incorporating AAC’s proprietary Starbuck power system, as part of NASA’s Commercial Lunar Payload Services initiative. This is focused on the investigation of space weather and lunar surface interactions, in addition to radio astronomy. Odysseus successfully soft landed on the moon eight days later.

28 February 2024: AAC Space Africa has successfully secured its first satellite order, valued at c SEK2.3m and scheduled for delivery in June 2024. This marks a pivotal achievement in the company’s expansion in the African market.

4 March 2024: AAC Clyde Space has secured a c SEK56.2m order for 11 satellite kits from LusoSpace to be delivered in Q424. These will be used to build VDES-equipped EPIC 8U satellites as a maritime communication system, set to be launched in late 2025.

AAC currently has 10 satellites in space, four of which are delivering data under SDaaS contracts, with another five undergoing commissioning, including Ymir-1, which, subject to demonstration of its VHF Data Exchange System (VDES) capabilities, will start delivering automatic identification system (AIS) data to ORBCOMM. FY24 should see the deployment of four self-owned and operated LEO data acquisition nanosatellites, which should help transform the group’s financial dynamics, with a burgeoning quantity of data available to sell via subscription contracts. This includes the two additional VDES satellites expected to be launched in Q3 and Q4, which should stimulate high-margin data sales to third parties within six months of deployment.

In addition, the first four (of 10) xSPANCION satellites went through a preliminary design review at the end of 2023, with manufacturing of the first two satellites expected to commence in H124 in preparation for the launch of the first satellite in either H224 or H125. These will be the first 16U satellites built by AAC Clyde Space and will introduce a new generation of EPIC VIEW satellites. Once deployed and commissioned, they should bolster accelerated growth in the high-margin data revenue streams.

Outlook: Introducing 2025 earnings forecasts

FY23 revenue of SEK276.6m was broadly in line with our estimate of SEK277.5m, albeit an unfavourable mix of lower operating income, negative currency fluctuations and the SEK6.5m impairment charge for the loss of Kelpie-2 in Q4 meant that the bottom line suffered a larger loss than expected, with an underlying EPS loss of SEK4.2 (Edison estimate: loss of SEK1.3).

With an element of catch-up from deferred FY23 projects and systems deliveries, we continue to expect the backlog to support our FY24 growth expectations for the group. We expect to see additional healthy order intake in the current year, with the newly deployed satellites providing verification of the SDaaS offering. Our FY24 revenue expectation is broadly unchanged at SEK465.4m, with high-margin SDaaS revenues expected to grow sharply at 66.8% y-o-y, largely attributable to Clyde orders. We expect the company to continue to leverage higher sales over a largely fixed cost base.

Our 2024 EBITDA forecast is positive at SEK32.9m and incorporates only SEK10m from royalties. This forecast is 37% lower than previously anticipated due to lower expected capitalised R&D, with fewer satellites expected to be deployed this year. This in turn provides a positive underlying EPS estimate of SEK2.1 (previously SEK3.9). We expect operating cash inflow to increase to SEK35.9m, albeit investment to support growth (forecast at SEK59.7m) is likely to lead to an FY24 reduction in net cash to SEK11.5m (pre IFRS 16).

Exhibit 4: AAC Clyde earnings revisions

Year to 31 December (SEKm)

2023

2024e

2025e

Estimate

Actual

% change

Prior

New

% change

New

By business

 

 

 

 

 

 

 

AAC

72.6

81.5

12.3%

82.3

91.9

11.6%

117.5

Clyde

51.0

57.9

13.7%

177.6

183.2

3.2%

291.7

Hyperion

51.2

43.4

(15.3%)

56.3

52.1

(7.6%)

57.3

SpaceQuest

36.1

34.0

(5.9%)

51.0

48.0

(5.9%)

72.1

Omnisys

62.7

58.3

(7.0%)

94.0

87.5

(7.0%)

105.0

AAC Space Africa

3.9

1.5

(61.8%)

6.9

2.8

(59.6%)

4.2

Total group net sales

277.5

276.6

(0.3%)

468.2

465.4

(0.6%)

647.6

By activity

 

 

 

 

 

 

 

SDaaS

19.0

24.0

26.2%

40.0

40.0

0.0%

81.0

Space Missions

32.5

28.3

(13.1%)

113.6

103.7

(8.7%)

179.4

Space Products

193.7

193.8

0.0%

304.6

311.7

2.3%

377.2

Licence & royalties income

32.2

30.6

(5.1%)

10.0

10.0

0.0%

10.0

Total group net sales

277.5

276.6

(0.3%)

468.2

465.4

(0.6%)

647.6

Other operating income

26.3

19.5

 

3.0

3.0

 

3.0

Own work capitalised

30.3

29.3

 

52.3

39.6

 

43.7

Total group income

334.1

325.5

(2.6%)

523.5

508.0

(3.0%)

694.2

Raw materials & subcontractors

(106.7)

(105.0)

(1.6%)

(204.9)

(203.6)

(0.7%)

(277.8)

Personnel costs

(165.4)

(163.5)

(1.2%)

(190.3)

(196.2)

3.1%

(241.1)

Other external expenses

(41.7)

(44.5)

6.8%

(68.7)

(68.3)

(0.6%)

(89.3)

Other operating expenses

(9.7)

(11.5)

18.3%

(7.0)

(7.0)

(0.6%)

(6.5)

EBITDA (company adjusted)

10.6

1.0

(90.8%)

52.5

32.9

(37.3%)

79.6

EBIT (adjusted)

(5.6)

(14.2)

154.1%

22.8

13.1

(42.6%)

56.1

Underlying PBT

(3.9)

(18.4)

371.7%

23.3

12.4

(46.7%)

52.7

EPS – underlying, diluted (SEK)

(1.28)

(4.16)

225.5%

3.88

2.09

(46.2%)

8.75

DPS (SEK)

0.0

0.0

 

0.0

0.0

 

0.0

Adjusted net cash/(debt)

36.5

34.3

(5.9%)

61.5

11.5

(81.4%)

31.5

Source: AAC Clyde Space accounts, Edison Investment Research estimates

We also introduce FY25 forecasts, which incorporate our anticipation of a rapidly burgeoning number of annual subscription SDaaS contract wins, associated with high-margin earnings. We forecast a SDaaS revenue increase of 103% to SEK81m y-o-y, largely contributing to our anticipated group revenue and EBITDA growth of 39% and 142% to SEK647.6m and SEK79.6m, respectively, yielding a margin of 12.3% (2024e: 7.1%). This anticipated increase in EBITDA is also attributable to AAC’s ability to leverage higher sales over a largely fixed cost base. We forecast 2025 underlying EPS of SEK8.8/share, which incorporates our assumptions of a surge in SDaaS revenue recognition with increased nanosatellite deployment, expected to stand at 10–12 annually in the medium term (including replenishment). We expect 2025 to be the first year of positive free cash flow of SEK19m despite the anticipated continued increase in capex.

Valuation: SEK301/share implies substantial upside

In terms of valuation, our capped DCF has been rolled forward to FY24. As we would expect given the nature of the company and its model, the increasing cash flows lead to a significant increment in value as weaker historical cash flow is replaced by stronger future generation. As a reminder, our capped model captures six years of forecasts and then assumes zero growth in the terminal value. We consider this to be conservative as we do not capture continued growth in the company beyond the forecast period, with AAC clearly outlining a burgeoning growth path.

The sensitivity of the value to terminal growth rates and weighted average cost of capital (WACC) assumptions is shown in Exhibit 5 below, with the WACC calculated at 11.4%. The returned value is SEK301/share (SEK287/share previously), reflecting stronger growth in out-year cash flows.

Exhibit 5: AAC DCF sensitivity to WACC and terminal growth rate (SEK/share)

WACC

Terminal growth rate

7.0%

8.0%

9.0%

10.0%

11.0%

11.4%

12.0%

13.0%

14.0%

0%

563

477

410

358

315

301

280

251

226

1%

649

539

456

393

343

326

302

269

241

2%

771

622

516

437

377

356

329

290

258

3%

952

737

595

494

419

394

361

316

279

Source: Edison Investment Research estimates

We also note that the more traditional earnings-based metrics are becoming more meaningful, with a single-digit 2025e P/E of 5.4x, at an early stage of the growth trajectory.

Exhibit 6: Financial summary

SEKm

2021

2022

2023

2024e

2025e

Year end December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

 

Net sales

 

 

180.0

196.7

276.6

465.4

647.6

Own work capitalised and other operating income

30.9

47.0

48.8

42.6

46.7

Group income

210.8

243.7

325.5

508.0

694.2

EBITDA

 

 

(12.4)

(30.0)

1.0

32.9

79.6

Operating Profit (before amort. and except).

 

(21.9)

(40.3)

(11.6)

16.5

60.3

Intangible Amortisation

(0.9)

(0.7)

(2.6)

(3.4)

(4.2)

Exceptionals

(15.8)

(26.0)

(22.7)

(16.2)

(15.5)

Other

0.0

0.0

0.0

0.0

0.0

Operating Profit

(38.6)

(67.0)

(36.8)

(3.1)

40.6

Net Interest

(4.2)

17.9

(4.2)

(0.7)

(3.4)

Profit Before Tax (norm)

 

 

(27.0)

(23.2)

(18.4)

12.4

52.7

Profit Before Tax (FRS 3)

 

 

(42.8)

(49.1)

(41.1)

(3.7)

37.1

Tax

3.3

2.6

(0.5)

0.2

(1.9)

Profit After Tax (norm)

(24.9)

(22.0)

(20.032)

11.8

50.0

Profit After Tax (FRS 3)

(39.5)

(46.5)

(41.6)

(3.5)

35.3

Average Number of Shares Outstanding (m)

3.5

3.9

4.8

5.7

5.7

EPS - fully diluted (SEK)

 

 

(7.17)

(5.58)

(4.16)

2.09

8.75

EPS - normalised (SEK)

 

 

(7.17)

(5.58)

(4.15)

2.08

8.72

EPS - (IFRS) (SEK)

 

 

(11.36)

(11.82)

(8.69)

(0.60)

6.16

Dividend per share (SEK)

0.0

0.0

0.0

0.0

0.0

EBITDA Margin (%)

-6.9

-15.2

0.4

7.1

12.3

Operating Margin (before GW and except.) (%)

-12.2

-20.5

-4.2

3.5

9.3

BALANCE SHEET

Fixed Assets

 

 

681.0

728.6

746.2

773.9

807.8

Intangible Assets

639.5

665.5

672.6

677.6

686.6

Tangible Assets

26.4

46.4

56.7

80.5

106.4

Right of use asset

15.1

16.8

16.8

15.8

14.8

Investments

0.0

0.0

0.0

0.0

0.0

Current Assets

 

 

193.4

152.8

192.2

145.0

214.7

Stocks

13.2

20.2

22.1

35.3

46.7

Debtors

23.0

24.5

23.5

37.6

49.7

Cash

96.1

52.1

59.5

39.5

79.5

Other

61.1

56.0

87.1

32.6

38.9

Current Liabilities

 

 

(129.2)

(170.2)

(243.9)

(200.3)

(248.7)

Creditors

(128.5)

(170.2)

(218.7)

(200.3)

(248.7)

Short term borrowings

(0.6)

0.0

(25.2)

0.0

0.0

Long Term Liabilities

 

 

(16.6)

(17.8)

(16.7)

(44.9)

(64.8)

Long term borrowings

0.0

0.0

0.0

(28.1)

(48.0)

Lease liabilities

(15.1)

(16.5)

(15.7)

(15.7)

(15.7)

Other long term liabilities

(1.5)

(1.2)

(1.1)

(1.1)

(1.1)

Net Assets

 

 

728.6

693.5

677.7

673.8

709.1

CASH FLOW

Operating Cash Flow

 

 

(37.3)

(13.1)

5.1

36.1

93.1

Net Interest

(0.2)

18.3

(0.1)

0.3

(2.4)

Tax

2.1

1.2

(1.6)

(0.6)

(2.6)

Capex

(29.2)

(40.9)

(47.7)

(59.7)

(68.9)

Acquisitions/disposals

2.6

(43.7)

4.1

1.0

1.0

Financing

94.1

33.4

35.9

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

Net Cash Flow

32.0

(44.7)

(4.3)

(22.9)

20.1

Opening net debt/(cash) excluding lease liabilites

(62.2)

(95.5)

(52.1)

(34.3)

(11.5)

HP finance leases initiated

0.0

0.0

0.0

0.0

1.0

Other

1.3

1.3

(13.5)

0.0

(0.0)

Closing net debt/(cash) excluding lease liabilities

(95.5)

(52.1)

(34.3)

(11.5)

(31.5)

Net financial liabilities including lease liabilities

(80.4)

(35.6)

(18.7)

4.2

(16.9)

Source: Edison Investment Research

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Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

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Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by AAC Clyde Space and prepared and issued by Edison, in consideration of a fee payable by AAC Clyde Space. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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