Core business growth drives strong Rakon half-year result

Results announcement







Results for announcement to the market
Name of issuer Rakon Limited (RAK)
Reporting Period 6 months to 30 September 2022
Previous Reporting Period 6 months to 30 September 2021
Currency NZD

Amount (000s) Percentage change
Revenue from continuing
operations
$87,164 +2%
Total Revenue $87,164 +2%
Net profit/(loss) from
continuing operations
$16,013 -15%
Total net profit/(loss) $16,013 -15%
Interim/Final Dividend
Amount per Quoted Equity
Security
No dividends are proposed to be paid.
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.58 $0.50
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the accompanying comments and the unaudited
interim financial statements released in conjunction with this
announcement
Authority for this announcement
Name of person

authorised
to make this announcement
Maureen Shaddick, Company Secretary
Contact person for this
announcement
Anand Rambhai, Chief Financial Officer
Contact phone number +64 9 571 9225
Contact email address anand.rambhai@rakon.com
Date of release through MAP

24/11/2022

Unaudited financial statements accompany this announcement.

---

Rakon Limited
T +64 9 573 5554
8 Sylvia Park Road, Mt Wellington, Auckland 1060, New Zealand
Private Bag 99943, Newmarket, Auckland 1149, New Zealand
Page 1 of 4 w w w . r a k o n . c o m


24 November 2022

UNAUDITED RESULTS FOR THE HALF YEAR TO 30 SEPTEMBER 2022

Core business growth drives strong Rakon half-year result
Highlights:
 Revenue $87.2m (1H22: $85.4m)
 Underlying EBITDA
1
up 6%
2
to $28.1m (1H22: $26.4m)
 Net profit after tax $16.0m (1H22: $18.9m)
 Positive earnings impact from foreign exchange gains
 Sustained core market growth, particularly 5G and positioning
 India expansion on track for completion early 2023
All amounts are in New Zealand Dollars

Rakon (NZX.RAK) today announced a strong result for the six months to 30 September 2022,
on the back of continued growth in global demand for its industry-leading frequency control
and timing solutions.
Solid core business revenue growth, combined with management of costs and margins and
foreign exchange gains have driven a 6% increase in Underlying EBITDA.
“We are pleased with this first-half performance. Our customers have remained our priority
and we are pleased to have achieved high levels of delivery despite challenging conditions
through the period,” said Chief Executive Dr Sinan Altug.
“Last year was a significant step up in revenue as we took advantage of short-term market
opportunities. With that business now tailing off, it is pleasing to see that the higher levels of
revenue and margins were maintained in the first half through growth in our core business.”
Financial and market performance
Total revenue rose 2% to $87.2 million (1H22: $85.4 million). Dr Altug said that core business
revenue growth has largely offset the decline in the one-off chip shortage business delivered
during the period.
In our core business, Telecommunications remains the biggest driver of growth, with revenue
up 14% to $47.5 million (1H22: $41.8 million) as 5G network infrastructure continues to be built

1
Refer to Note 5 of the FY2022 audited consolidated financial statements for an explanation of how ‘Non-GAAP Financial Information’ is used, including a
definition of ‘Underlying EBITDA’ and reconciliation to net profit after tax
2
All comparisons are against the prior corresponding period (1H22) unless otherwise stated

Page 2 of 4 w w w . r a k o n . c o m

around the globe. Space and defence revenue increased 19% to $12.3 million (1H22: $10.3
million), and Positioning was also up 16% to $16.4 million (1H22: $14.2 million). Dr Altug said
the company had experienced a post-Covid pick up in key space programmes and the
emergency locator beacon market, both segments where Rakon’s precision timing products
excel.
Gross profit remained steady at $43.5 million, with a gross margin percentage of 50% (1H22:
51%). After a long period of cost stability, operating expenses were $3.7 million higher at $28.4
million. While this increase was partly due to increased investment in people and resources to
support growth, cost inflation, including labour and energy prices, is also having an impact
across the business.
Underlying EBITDA increased 6% to $28.1 million (1H22: $26.4 million). Over the half year, the
significant reduction in the NZD/USD exchange rate had also favourably impacted Rakon’s
Underlying EBITDA.
Foreign exchange gains were made on USD sales where hedging was at less than 100%. Some
of these gains were realised and the rest unrealised. The unrealised gains mainly relate to the
revaluation of Rakon’s USD bank balances and debtors not hedged at 30 September.
Despite higher operating earnings, net profit after tax fell 15% to $16.0 million due to a higher
taxation expense after accumulated New Zealand tax losses were fully used in FY22.
Capital management
As signalled at the company’s annual meeting in August 2022, Rakon’s earnings growth has
enabled the company to self-fund key strategic growth projects. During the six-month period,
$6.8 million was invested in R&D including technology innovation, new product development
and manufacturing capability to meet anticipated demand. This investment, comprising both
capital and operating expenditure, was funded by a combination of operating cash and cash
reserves.
Inventory increased over the six-month period by $14.7 million, following a decision to further
build safety stocks of raw materials and finished products to mitigate supply chain risks and
ensure delivery continuity for key customers. Rakon India has also built buffer stocks to ensure
delivery continuity during the transfer of its manufacturing operation to the new facility,
starting in 2023.
“We believe these actions have been prudent given the current macro environment and the
Rakon India new facility project, but nonetheless expect inventory levels to start reducing in
the coming months”, Dr Altug said.
Rakon’s balance sheet remains robust, with net assets increasing by 3% to $140 million. Net
cash was $18.4 million, down $4.8 million since March as the company invested in additional
inventory and in the construction of the new building in India. During the period, Rakon repaid
an existing $10 million debt facility, which had been established in 2021.
Consistent with Rakon’s dividend policy the board has determined not to declare an interim
dividend.

Page 3 of 4 w w w . r a k o n . c o m

Operations
Dr Altug said that while supply chain conditions had improved during the period, operating cost
inflation and labour shortages remained a concern. These are being actively managed to ensure
delivery for customers and protection of margins.
Construction at Rakon India’s new manufacturing facility in Bengaluru is on track for completion
by the end of 2022. Once the building is complete, Rakon India’s manufacturing operations will
be transferred from the existing sites to the new facility on a phased basis. This will include the
commissioning of plant and equipment, product qualification by customers and commencement
of production.
“We will be working extremely hard to execute the transfer of our Rakon India operation to its
new facility effectively and with minimal disruption to customers or supply,” said Dr Altug. “Once
complete, we believe that the new operation, with its enhanced manufacturing capacity and
capability will be a vital long-term competitive advantage for Rakon.”
Growth plan
Rakon is making solid progress against its growth plan unveiled at the company’s annual
meeting in August.
The company is investing in people, products and capability to drive organic growth, as well as
exploring potential acquisition opportunities that may provide access to new markets or
technologies. Key growth projects are focused primarily on the development of new ASIC
3

semiconductor chips and their associated products, the new XMEMS® nanotechnology
production process, and a new suite of NewSpace products for Low Earth Orbit (LEO) satellites.
“We are on track to achieve the milestones identified in our three-year roadmap,” Dr Altug said.
“We have a significant new semiconductor chip due for release in the second half, and we
already have five products being manufactured using our new XMEMS® nanotechnology
production process. We are establishing our presence in the NewSpace ecosystem and are
excited to be aboard a planned In-orbit demonstration mission in early 2023.”
Outlook
Rakon’s board has updated guidance for Underlying EBITDA to be in the range of $38 million to
$44 million for the financial year to 31 March 2023.
“Although we expect the first-half challenges and uncertainties, including exchange rate
movements, to continue throughout the year, we remain well positioned to deliver a solid result
for FY23,” said Dr Altug.
“Our forward orders are strong. However, we are closely monitoring our markets and may see
some dampening of customer demand due to macroeconomic volatility and inventory
correction. We are also working hard to manage the ongoing impacts of supply chain
disruptions, labour shortages and cost inflation; as well as the business continuity risks around

3
ASIC stands for Application Specific Integrated Circuit, referring to a customised semiconductor chip

Page 4 of 4 w w w . r a k o n . c o m

the critical transfer of our Indian manufacturing operation to its new facility.”
“Nonetheless, we remain confident about Rakon’s future growth. The quality of our core markets
combined with our operating agility, technology innovation and strong customer relationships
provide a high level of resilience and provide a solid platform for long-term success.”
-Ends-
Contact:
Investors Media
Sinan Altug Richard Inder
Chief Executive Officer The Project
+64 21 371 567 +64 21 645 643

Anand Rambhai
Chief Financial Officer
+64 21 542 287
www.rakon.com

A b o u t Rakon
Rakon is a global high technology company and a world leader in its field. The company designs and
manufactures advanced frequency control and timing solutions. Its three core markets are
Telecommunications, Positioning and Space and Defence. Rakon’s products are found at the forefront of
communications where speed and reliability are paramount. Its products create extremely accurate electric
signals which are used to generate radio waves and synchronise time in the most demanding
communication applications.
Rakon has three manufacturing plants, six research and development centres, and sixteen customer support
offices worldwide. Founded in Auckland in 1967, Rakon is proud of its New Zealand heritage. It is a public
company listed on the New Zealand stock exchange, NZX, ticker code RAK.

---

Rakon Limited
Interim Report
2022

2

Table of Contents
Unaudited Consolidated Interim Statement of Comprehensive Income ..................................................... 3
Unaudited Consolidated Interim Statement of Changes in Equity .............................................................. 4
Unaudited Consolidated Interim Balance Sheet .......................................................................................... 5
Unaudited Consolidated Interim Statement of Cash Flows ......................................................................... 6
Notes to the Financial Statements ............................................................................................................... 8

3

Unaudited Consolidated Interim Statement of Comprehensive Income
For the period ended 30 September 2022


The accompanying notes form an integral part of these financial statements.


Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202220212022
Note $000s$000s$000s
Continuing operations
Revenue487,16485,416 171,967
Cost of sales(43,641) (41,931) (81,907)
Gross profit43,52343,48590,060
Other operating income2675881,634
Operating expenses
Selling and marketing(4,482) (3,900) (9,424)
Research and development(6,568) (6,454) (11,726)
General and administration(17,300) (14,274) (28,193)
Total operating expenses(28,350) (24,628) (49,343)
Other (losses)/gains – net57,434(367)(937)
Operating profit22,87419,07841,414
Finance income951639
Finance costs(547) (1,269) (1,945)
Share of net profits of associates(18)1,6272,382
Profit before income tax22,40419,45241,890
Income tax expense(6,391)(524) (8,779)
Net profit after tax for the period attributable to equity holders of the Company16,01318,92833,111
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Decrease in fair value cash flow hedges(19,664) (2,802)(697)
Cost of hedging (1,218)(43)(725)
Income tax relating to components of other comprehensive income5,847780398
Exchange differences on translation of foreign operations3,924(10)(517)
Long term incentive plan163-108
Items that will not be reclassified subsequently to profit or loss
Changes in fair value of equity investments – Thinxtra(628)(141)(440)
Other comprehensive income for the period, net of tax (11,576) (2,216) (1,873)
Total comprehensive income for the period attributable to equity holders of
the Company
4,43716,71231,238
Earnings per share attributable to the equity holders of the CompanyCentsCentsCents
Basic earnings per share7.1 8.3 14.6
Diluted earnings per share7.0 8.3 14.5

4

Unaudited Consolidated Interim Statement of Changes in Equity
For the period ended 30 September 2022

The accompanying notes form an integral part of these financial statements.





Share capital
Retained
earningsOther reservesTotal equity
$000s$000s$000s$000s
Balance at 31 March 2021
181,024 (56,237) (20,860) 103,927
Net profit after tax for the half year ended 30
September 2021
- 18,928-18,928
Currency translation differences
- -(10)(10)
Cash flow hedges, net of tax
- - (2,065) (2,065)
Changes in fair value of equity investments at fair
value through other comprehensive income – Thinxtra
- -(141)(141)
Total comprehensive income for the half year
-18,928 (2,216)16,712
Balance at 30 September 2021
181,024 (37,309) (23,076) 120,639
Net profit after tax for the half year ended 31 March
2022
-14,18314,183
Currency translation differences
--(507)(507)
Cash flow hedges, net of tax
--1,0411,041
Changes in fair value of equity investments at fair
value through other comprehensive income – Thinxtra
--(299)(299)
Contribution of equity net of transaction costs
Employee share schemes
Value of employee services--108108
Total comprehensive income for the half year
-14,18334314,526
Balance at 31 March 2022
181,024 (23,126) (22,733) 135,165
Net profit after tax for the half year ended 30
September 2022
-16,013-16,013
Currency translation differences
--3,9243,924
Cash flow hedges, net of tax
-- (15,035) (15,035)
Changes in fair value of equity investments at fair
value through other comprehensive income – Thinxtra--(628)(628)
Contribution of equity net of transaction costs
----
Employee share schemes
Value of employee services
--163163
Total comprehensive income for the half year
-16,013 (11,576)4,437
Balance at 30 September 2022
181,024 (7,113) (34,309) 139,602

5

Unaudited Consolidated Interim Balance Sheet
As at 30 September 2022
The accompanying notes form an integral part of these financial statements.
Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202220212022
Note$000s$000s$000s
Assets
Current assets
Cash and cash equivalents25,74419,93239,229
Trade and other receivables50,59551,15844,522
Inventories72,04343,56857,321
Derivative financial instruments 449421,345
Financial asset at fair value through profit or loss-539201
Current income tax asset266537213
Total current assets148,692 116,676 142,831
Non-current assets
Property, plant and equipment30,10320,57221,388
Intangible assets6,8836,7157,164
Right-of-use assets4,2225,9044,792
Interest in associates16,46014,08116,172
Trade and other receivables2,0703,2171,941
Financial asset at fair value through other comprehensive income –
Thinxtra
62,0532,9792,680
Derivative financial instruments2532521,095
Deferred tax asset7,6877,0511,806
Total non-current assets69,73160,77157,038
Total assets218,423 177,447 199,869
Liabilities
Current liabilities
Bank overdraft71,4174-
Borrowings71,3236151,297
Trade and other payables36,22229,22736,008
Current income tax liabilities3,289-2,457
Lease liabilities2,1392,0312,076
Provisions727142631
Derivative financial instruments16,305606854
Total current liabilities61,42232,62543,323
Non-current liabilities
Borrowings74,60415,71814,684
Provisions2,9403,3662,817
Lease liabilities2,7134,4463,404
Derivative financial instruments 7,142653385
Deferred tax liabilities--91
Total non-current liabilities17,39924,18321,381
Total liabilities78,82156,80864,704
Net assets139,602 120,639 135,165
Equity
Share capital181,024 181,024 181,024
Other reserves(34,309) (23,076) (22,733)
Accumulated losses(7,113) (37,309) (23,126)
Total equity139,602 120,639 135,165

6

Unaudited Consolidated Interim Statement of Cash Flows
For the period ended 30 September 2022

The accompanying notes form an integral part of these financial statements.

Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202220212022
$000s$000s$000s
Operating activities
Cash provided from
Receipts from customers85,49771,965 168,226
R&D grants received1,7591,1692,192
Other income received20774161
87,46373,208 170,579
Cash was applied to
Payment to suppliers and others(51,366) (38,588) (84,108)
Payment to employees(29,865) (28,376) (53,947)
Interest paid(735) (1,113) (1,811)
Income tax paid(5,480)(620)(475)
(87,446) (68,697) (140,341)
Net cash inflow from operating activities174,51130,238
Investing activities
Cash was applied to
Purchase of property, plant and equipment(9,420) (4,017) (8,461)
Purchase of intangibles(306)(785) (1,708)
(9,726) (4,802) (10,169)
Net cash outflow from investing activities(9,726) (4,802) (10,169)
Financing activities
Cash was provided from
Proceeds from borrowings-10,00010,000
-10,00010,000
Cash was applied to
Repayment of borrowings(10,000)--
Lease liabilities payments(1,491) (1,246) (2,625)
Cash was applied to financing activities(11,491) (1,246) (2,625)
Net cash inflow from financing activities(11,491)8,7547,375
Net increase in cash and cash equivalents(21,200)8,46327,444
Effects of exchange rate changes on cash and cash equivalents6,298(5)311
Cash and cash equivalents at the beginning of the year39,22911,47411,474
Cash and cash equivalents at the end of the period24,32719,93239,229
Composition of cash and cash equivalents
Cash and cash equivalents25,74419,93239,229
Bank Overdraft(1,417)(4)-
Total Cash and cash equivalents 24,32719,92839,229
Borrowings(5,927) (16,333) (15,981)
Net cash (excluding lease liabilities) at the end of the period18,4003,59523,248

7

Unaudited Consolidated Interim Statement of Cash Flows (continued)
For the period ended 30 September 2022

The accompanying notes form an integral part of these financial statements.


Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202220212022
$000s$000s$000s
Reconciliation of net profit to net cash flows from operating activities
Reported net profit after tax16,01318,92833,111
Adjustments for
Depreciation and amortisation expense3,8964,5868,938
Net increase in allowance for expected credit loss--291
Interest expenses-152-
Gain on dilution of investment in Timemaker--(634)
Provisions provided209-551
Movement in foreign exchange rates(673)(413)(851)
Share of net profits of associate18 (1,627) (2,382)
Deferred tax movement--5,041
Employee share based expense163-108
3,6132,69811,062
Change in operating assets and liabilities
Increase in trade and other receivables(6,202) (11,627) (3,714)
Increase in inventories(14,724) (5,869) (21,559)
Decrease/(Increase) in provisions21944(17)
Increase in trade and other payables21339610,357
Increase/(Decrease) in tax provisions and deferred tax885(59)998
Total impact of changes in working capital items(19,609) (17,115) (13,935)
Net cash flow from operating activities174,51130,238

8

Notes to the Financial Statements
General information ........................................................................................................................ 9
Statement of significant accounting policies ................................................................................... 9
Segment information ....................................................................................................................... 9
Revenue ......................................................................................................................................... 12
Other (losses)/gains – net .............................................................................................................. 13
Financial asset at fair value through other comprehensive income – Thinxtra ............................ 13
Borrowings ..................................................................................................................................... 15
Capital Commitments .................................................................................................................... 15
Contingencies ................................................................................................................................ 16
Subsequent events ........................................................................................................................ 16

Notes to the Financial Statements (continued)
9

General information
Rakon Limited (‘the Company’) and its subsidiaries (‘the Group’) are a global technology company that design and manufacture
advanced frequency control and timing solutions for a wide range of applications. Rakon’s core markets are Telecommunications,
Space & Defence, and Global Positioning. The Company is a limited liability company, incorporated and domiciled in New Zealand,
and listed on the New Zealand Stock Exchange (NZX code: RAK). The address of the registered office is 8 Sylvia Park Road, Mt
Wellington, Auckland.
The Company is registered under the Companies Act 1993 and is a FMC reporting entity under Part 7 of the Financial Markets
Conduct Act 2013. The financial statements of the Group have been prepared in accordance with the requirements of Part 7 of the
Financial Markets Conduct Act 2013 and the NZX (Main Board) Listing Rules.
The unaudited interim financial statements of the Group have been approved for issue by Rakon’s Board of Directors on 24
November 2022.
Statement of significant accounting policies
These unaudited interim financial statements of the Group for the half-year reporting period ended 30 September 2022 have been
prepared in accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP). They comply with New Zealand
equivalents to International Financial Reporting Standards (NZ IFRS), other New Zealand accounting standards and authoritative
notices that are applicable to entities that apply NZ IFRS, in particular NZ IAS 34 Interim Financial Reporting. The consolidated
financial statements also comply with International Financial Reporting Standards (IFRS). The Group is a profit-oriented entity for
the purposes of complying with NZ GAAP. These financial statements comprise Rakon and its subsidiaries, and have been prepared
on a going concern basis.
The unaudited interim financial statements of the Group have been presented in New Zealand dollars and have been rounded to
the nearest thousands unless otherwise indicated.
The preparation of financial statements in accordance with NZ IFRS requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
This unaudited interim financial report does not include all the notes of the type normally included in an annual financial report.
Accordingly, this report should be read in conjunction with the annual report for the year ended 31 March 2022 and any public
announcements made by the Company during the interim reporting period.
Segment information
The Chief Executive Officer is the chief operating decision maker (CODM) and is responsible for allocating resources and assessing
performance of the operating segments.
The operating segments are presented in a manner consistent with the internal reporting provided to the CODM. Significant
judgement has been applied in the determination of reportable operating segments. Ownership of products’ intellectual property
have been used as the key factor to identify reportable operating segment and aggregation criteria.
The CODM assess the performance of the operating segments based on ‘Underlying EBITDA’, a non-GAAP measure, defined as:
‘Earnings before interest, tax, depreciation, amortisation, impairment, employee share schemes, non-controlling interests,
adjustments for associate’s share of interest, tax, & depreciation, loss on disposal of assets and other cash and non-cash items’.
The CODM also receives information about the segments’ revenue on monthly basis.
Management had completed the internal reorganisation of operations during the prior period which has affected how the CODM
views segment information. Accordingly, to reflect these changes the comparative period 30 September 2021 has been restated.
Before the change, segment information was based on geography. Increased synergies between the businesses across the
geography has led to the formation of operating segments that is not limited by geography. The new segments are representative
of these changes and are described below.
In addition some customers have been reclassified between market segments impacting both comparative periods. The following
markets have been impacted: Telecommunications (31 March 2022: 86,246, restated: 86,381), Global Positioning (31 March 2022:
27,138, restated: 29,264) and Space & Defence (31 March 2022: 26,277, restated: 23,797).

Notes to the Financial Statements (continued)

10

Segment results
Information relating to each reportable segment is set out below.




NZ
France/
India
France
HiRelT'makerOther
1
Total
$000s $000s $000s $000s $000s $000s
Segment revenue by market
Telecommunications
30,634 19,255 298- (2,660) 47,527
Global Positioning
17,1989763- (974) 16,384
Space and Defence
5,209 1,061 6,366- (346) 12,290
Other
8,90647 2,636- (626) 10,963
Total segment revenue by market61,947 20,460 9,363- (4,606) 87,164
Underlying EBITDA32,149 2,998 (1,123) 1,050 (6,995) 28,079
Total assets
2
127,434 48,806 23,484 16,868 1,831 218,423
Additions of property, plant and equipment, and
intangibles
2,606 6,617 502-- 9,725
Total liabilities
3
49,390 18,888 8,935- 1,608 78,821
Unaudited six months ended 30 September 2022
NZ
France/
India
France
HiRelT'makerOther
1
Total
$000s $000s $000s $000s $000s $000s
Segment revenue by market
Telecommunications
27,181 13,255 242- 1,112 41,790
Global Positioning
13,5876 139- 433 14,165
Space and Defence
4,819 970 4,357- 171 10,317
Other
15,41976 3,047- 602 19,144
Total segment revenue by market61,006 14,307 7,785- 2,318 85,416
Underlying EBITDA23,262 1,548 (1,529) 2,627 471 26,379
Total assets
2
109,226 31,363 20,381 14,081 2,396 177,447
Additions of property, plant and equipment, and
intangibles
2,983 1,272 192-- 4,447
Total liabilities
3
33,219 13,313 9,115- 1,161 56,808
Restated unaudited six months ended 30 September 2021

Notes to the Financial Statements (continued)
11


1
Revenue is (losses)/gains on cash flow hedges apportioned to each segment based on hedged currency.
2
Segment assets are measured in the same way as in the financial statements. These assets are presented as it is regularly provided
to the CODM.
3
Segment liabilities are measured in the same way as in the financial statements. These liabilities are presented as it is regularly
provided to the CODM.
Segment description and principal activities
The New Zealand (NZ) operating segment designs and manufactures products for Telecommunications, Global Positioning and
Defence markets. The segment includes research and development (R&D) engineering teams located in NZ and UK which develop
new products and process innovations.
The France/India operating segment designs and manufactures products for the Telecommunication market. Design and support
services are in France and NZ, with manufacturing in India.
Rakon’s India facility in Bengaluru contract manufacture products exclusively for the Group. They also design and manufacture
products for the local Indian defence, aeronautics and space markets. Though there is potential for future growth in the domestic
market, this business currently is not large enough for the CODM to view separately, therefore is aggregated with France Telecom.
The France HiRel operating segment designs and manufactures products for the Space & Defence markets. Design, support services
and manufacturing are predominantly carried out in France.
The Timemaker Group (T’maker) produces crystal blanks and represents the Group’s 37.07% (2021: 40.00%) ownership interest.
All other segments (Other) includes Rakon Financial Services Limited, Rakon UK Holdings Limited, and Rakon Investment HK Limited.
These are not operating segments and are not separately included in reports provided to the CODM. Also included are the head
office, and group sales and marketing services segments. These are reported separately to the CODM.












NZ
France/
India
France
HiRelT'makerOther
1
Total
$000s $000s $000s $000s $000s $000s
Segment revenue by market
Telecommunications
57,464 27,150 367- 1,400 86,381
Global Positioning
28,47848 212- 526 29,264
Space and Defence
8,994 2,547 12,055- 201 23,797
Other
25,497 205 6,233- 590 32,525
Total segment revenue by market120,433 29,950 18,867- 2,717 171,967
Underlying EBITDA42,010 3,743 1,370 4,593 2,715 54,431
Total assets
2
121,953 37,925 22,210 16,172 1,609 199,869
Additions of property, plant and equipment, and
intangibles
6,420 1,977 1,714-- 10,111
Total liabilities
3
36,994 14,062 12,106- 1,542 64,704
Restated audited year ended 31 March 2022

Notes to the Financial Statements (continued)

12

Reconciliation of Underlying EBITDA to net profit after tax for the year

Revenue
The Group designs, manufactures and sells frequency control solutions for a wide range of applications. Revenue is derived from
the transfer of goods over time and at a point in time at an amount that reflects the consideration the Group expects to be entitled
to in exchange for products and services excluding any applicable taxes. Arrangements are agreed with the customers, set out in
the terms and conditions which cover the pricing, settlement of liabilities, return policies and any other negotiated performance
obligations.
Reportable segment revenue from contracts with customers



Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202220212022
Continuing operations$000s$000s$000s
Underlying EBITDA28,07926,37954,431
Depreciation and amortisation(3,877) (4,586) (8,938)
Adjustment for associate share of interest, tax and depreciation(1,066) (1,003) (2,222)
Finance costs – net(452) (1,254) (1,906)
Dilution gain on Timemaker investment--634
Other non-cash items(280)(84)(109)
Profit before income tax22,40419,45241,890
Income tax expense(6,391)(524) (8,779)
Net profit after tax for the year16,01318,92833,111
NZ
France/
India
France
HiRelOtherTotal
$000s $000s $000s $000s $000s
Products transferred at a point in time61,946 20,460 6,459 (4,605) 84,260
Products and services transferred over time-- 2,904- 2,904
Sales to external customers61,946 20,460 9,363 (4,605) 87,164
NZ
France/
India
France
HiRelOtherTotal
$000s $000s $000s $000s $000s
Products transferred at a point in time61,006 14,307 7,128 2,319 84,760
Products and services transferred over time-- 656- 656
Sales to external customers61,006 14,307 7,784 2,319 85,416
NZ
France/
India
France
HiRelOtherTotal
$000s $000s $000s $000s $000s
Products transferred at a point in time120,434 29,949 15,451 2,717 168,551
Products and services transferred over time-- 3,416- 3,416
Sales to external customers120,434 29,949 18,867 2,717 171,967
Unaudited six months ended 30 September 2022
Audited year ended 31 March 2022
Restated unaudited six months ended 30 September 2021

Notes to the Financial Statements (continued)
13


Revenue by geography
The Group’s trading revenue is derived in the following regions. Revenue is allocated based on the country in which the customer
is located.

Other (losses)/gains – net

1
Includes realised and unrealised (losses)/gains arising from bank balances, accounts receivable and accounts payable.
Financial asset at fair value through other comprehensive income – Thinxtra
Subsequent to losing significant influence in Thinxtra and ceasing equity accounting of the investment on 1 June 2018, the Group
elected to present changes in fair value of its investment in other comprehensive income (FVOCI).
The FVOCI are strategic investments which are not held for trading, and which the Group has irrevocably elected the classification
at initial recognition, considering this to be more relevant. For assets measured at FVOCI, gains and losses on revaluation are
recorded in OCI reserve. On disposal of these equity investments, any related balance within the OCI reserve is reclassified to
retained earnings.
Thinxtra
Thinxtra Pty Limited (Thinxtra) is an 'Internet of Things' (IoT) business that started in 2016. Thinxtra's focus is on establishing an IoT
network in Australia, New Zealand and Hong Kong and providing products, services and solutions enabling connectivity of devices
to the network. Thinxtra’s business model is based on subscription for access to the network, platform solutions and the sale of IoT
products. Further information is available at www.thinxtra.com.
Rakon was one of the founding members of Thinxtra in 2016, and has a 7.0% ownership interest at 30 September 2022 (March
2022: 7.0%). This is calculated on a fully diluted basis including the exercise of any existing options.
The Directors have reviewed the information and observations available and confirm a valuation of A$1.8m or A$2.29 per share as
at 30 September 2022 (31 March 2022: A$2.5m).
Valuation of the investment in Thinxtra at 30 September 2022
It is recognised that there is a high level of volatility and judgement required in valuing Thinxtra given its early stage of business;
the new and developing IoT market and ecosystem in which it operates; the volatility in prices achieved by historic capital raises, it
being a private company investment not actively traded; and the track record of the Company in achieving its forecast performance.
Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202220212022
$000s$000s$000s
Asia37,54248,624 114,695
North America35,30624,61429,274
Europe12,02810,99825,672
Others2,2881,1802,326
Total segment revenue by geography87,16485,416 171,967
Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202220212022
$000s$000s$000s
(Loss)/gain on disposal of property, plant and equipment, and intangible assets(7)(19)17
Foreign exchange (losses)/gains – net
Forward foreign exchange contracts
Financial asset at fair value through profit or loss(3,116)(670)327
Revaluation of foreign denominated monetary assets and liabilities
1
10,557322 (1,281)
Total foreign exchange gains/(losses) – net7,441(348)(954)
Total other gains/(losses) – net7,434(367)(937)

Notes to the Financial Statements (continued)

14

The Directors recognise there is a high risk of the valuation will change significantly over time and have chosen to adopt this
consistent overall methodology for the valuations reported since 31 March 2019.
In forming the Directors’ judgement, the Directors have taken into consideration whether there is an active market in Thinxtra as
indicated by the last capital raise in February 2020 for A$9m, which concluded in August 2020 with an additional subscription of
A$1m. The Directors concluded that there is not. If there is an active market, the fair value would be considered to be the recent
share issue price as the investment would be treated as a Level 1 investment under the fair value hierarchy (refer to scenarios
below).
Valuation methodology and key inputs
The Directors reviewed the available information to date including Thinxtra’s audited financial statements for the year ended 30
June 2021 and other shareholder communications. Due to the age of the cash flow forecasts and because they have not been
achieved, Directors concluded that the weighting assigned to the discounted cash flow valuation technique be reduced. This
resulted in a reduction in carrying value.
In undertaking the fair value assessment, given the range of potential outcomes, it was considered that one single valuation method
would not provide an appropriate result. Accordingly, the Directors have used a range of valuation techniques which provide
different scenario outcomes. These outcomes have then been assigned a weighting based on the available information and
Directors’ judgement. The methodology, key inputs and overall outcome is summarised as follows:

The valuation was based on Rakon having a 7.0% shareholding which assumed any existing share options were exercised and all
shares were issued under the capital raise offer that was open.
The resultant valuation of A$2.29 per share is adopted in the 30 September 2022 financial statements (31 March 2022: A$3.16).
To provide an indication about the reliability of the inputs used in determining fair value, the Directors classified the fair valuation
of Thinxtra investment as a level 3 investment. Instruments are classified as level 3 only if one or more of the significant inputs for
the valuation is not based on observable market data.

Notes to the Financial Statements (continued)
15

Borrowings
The Group is reliant on its bank facilities and equity as the principal sources of capital management.
Line of credits
The Group maintains following line of credits.

Tanarra
On 30 April 2021, a $20m New Zealand Dollars debt facility was agreed with Tanarra Credit Partners. An initial $10m was drawn
down immediately and used to repay the existing ASB Bank working capital facility which was reduced to nil.
During the period, the Tanarra loan was repaid in full.
State Bank of India
Rakon India has an existing facility with the State Bank of India including ₹150m (NZ$3.2m) which can be used for cash based
working capital requirements, unchanged from the prior year.
Crédit Agricole Provence Côte D’Azur
The bank borrowings include a €3.2m French government backed loan that was made available to Rakon France (2021: €3.5m). In
May 2021, the Company exercised its option to extend this loan for a further five years. Repayment of the loan is spread equally
over the final four years to June 2026. The effective interest rate is 1.24% for the remaining term of five years. This loan has certain
restrictions that limits it to be used for working capital/treasury support for the French business. There are no covenants on the
loan and no additional security is required.
ASB
On 31 August 2022 a $10.0m overdraft facility was agreed with ASB Bank Limited and security for the facility includes a cross
guarantee from Rakon Limited and its wholly owned subsidiaries, Rakon France SAS, Rakon UK Holdings Limited, Rakon UK Limited,
Rakon Financial Services Limited and Rakon International Limited and a general security deed given by each guarantor incorporated
in New Zealand.
The facility is subject to normal banking conditions. The financial covenants include Group coverage in relation to total tangible
assets and EBITDA and a tangible net worth ratio, interest cover ratio and net leverage ratio. A line fee in payable in relation to the
availability of the facility and interest on amounts drawn is payable at the New Zealand bank bill reference rate plus agreed margin.
Capital Commitments
The construction of a new purpose-built manufacturing facility in the Bengaluru Special Economic Zone, India is underway with
transfer of operations to the new site commencing in 2023.
Unaudited six Unaudited six Audited year
months ended months endedended
30 September 30 September 31 March
202220212022
$000s$000s$000s
Current
French Government loan1,2584911,179
Other borrowings66124118
Current borrowings1,3236151,297
Bank overdrafts1,4174-
Total current borrowings2,7406191,297
Non-current
Tanarra loan-10,00010,000
French Government loan4,3375,7184,412
Other borrowings267-272
Non-current borrowings4,60415,71814,684

Notes to the Financial Statements (continued)

16

Contingencies
There are no material changes to contingent liabilities or assets from 31 March 2022.
Subsequent events
The Directors are not aware of any material events subsequent to 30 September 2022.

---

0
Enabling the connected future
1H23 financial results & business update
Six months to 30 September 2022
24 November 2022© RakonLimited

1
This presentation contains not only a review of operations, but also some forward looking statements
about Rakon Limited and the environment in which the company operates. Because these statements are
forward looking, Rakon Limited's actual results could differ materially
Although management and directors may indicate and believe that the assumptions underlying the
forward looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect
and, therefore, there can be no assurance that the results contemplated in the forward looking
statements will be realised
Media releases, management commentary and investor presentations are all available on the company's
website and contain additional information about matters which could cause Rakon Limited's
performance to differ from any forward looking statements in this presentation. Please read this
presentation in the wider context of material previously published by Rakon Limited
Disclaimer

2
Key highlights and achievementsSinanAltug(CEO)
Operating performance & marketupdateSinanAltug
FinancialoverviewAnandRambhai(CFO)
Summary &outlookSinanAltug
Q&A
Sinan Altug
Anand Rambhai
2
Agenda

3
1H23 –key highlights & achievements
3
3

4
Strong core business growth offsets chip-shortage revenue impacts
Financial highlights
Notes:
All figures are presented in New Zealand dollars unless otherwise indicated
All comparisons are to the prior corresponding period (i.e. six months to 30 September 2021) unless otherwise noted
1
Refer to note 5 of the FY2022 audited consolidated financial statements for an explanation of how ‘Non-GAAP Financial Information’ is used, including a definition of ‘Underlying EBITDA’ and reconciliation to NPAT
4
v March 2022
Revenue
$87.2m
$1.7m +2%
Net profit after tax
$16.0m
$2.9m -15%
Operating cash flow
$0.0m
$4.5m -100%
Net cash/(debt)
$18.4m
Underlying EBITDA
1
$28.1m
$1.7m +6%
$4.8m -21%
$85m
$114m
$119m
$128m
$172m
$87m
FY19FY20FY21FY22HY23
Revenue
$26m
$11m
$15m
$23m
$54m
$28m
FY19FY20FY21FY22HY23
Underlying EBITDA
1

5
Strong margins despite
inflationary pressures
1H23 highlights
Key growth projects
on track
Solid revenue and
EBITDA performance
Corebusiness growth
across all key markets
Indiamanufacturing
facilitynearing
completion
Increased delivery
capacity of core
product portfolio

6
Operating performance and market update
6
6

7
Four-part growth strategy
GROW OUR
CORE BUSINESS
MAINTAIN PRODUCT
& TECHNOLOGY
LEADERSHIP
EXPAND INTO
NEW MARKETS
DELIVER
WORLD CLASS
MANUFACTURING
Strategic acquisitions supporting growth strategy

8
8
Core business –Telecommunications
Strong growth continues, driven by 5G and increased market share
8
Rakonin the Telecommunications market:
Our market-leading telecommunications products enable data to be
transmitted across networks at ever-increasing levels of speed and
reliability. Market growth is driven by the unrelenting advancement of
telecommunications, cloud computing equipment and infrastructure.
Aprimary supplier to 5 of the top 7 global telecommunications
infrastructure companies.
•Revenue up 14% driven by increased market share and 5G rollout
•Gross margin up $2.4m (14%) to $20.0m, GM% impacted by change in
product mix
•Growth well balanced across networking, base stations and radioheads
•Strong order book, closely monitoringdemand
•Synchronisation of edge servers & 5G roll out in India expected to drive
medium term growth
$42m
$54m
$65m
$77m
$86m
$48m
38%
40%
40%
45%
42%
FY19FY20FY21FY22FY23
Revenue & GM%
1H2HGM%
55%

9
Rakon in the Space & Defence markets:
Our products deliver the highest levels of performance in extreme
environments; in aviation, satellites, radar, communications and
positioning systems.Market growth is being led by the emerging low
earth orbit (LEO) satellite market.
Longstanding worldwide customer relationships with government
agencies and commercial programmes, with space generating 5% and
defence 8 8% of Rakon’s total 1H23 revenue.
9
9
Core business –Space & Defence
Increased revenue and strong stable margins in most demanding market
14%
•Revenue up 19%, driven mainly by demand for high-reliability space applications
•Gross margin up $1.8m (26%) to $8.5m with improved product mix
•Space
•Space programmes resuming
•LEO (NewSpace) momentum starting to build
•Defence -growing activity
$10m
$32m
$28m
$30m
$24m
$12m
69%
69%
68%
66%
69%
FY19FY20FY21FY22HY23
Revenue & GM%
1H2HGM%
13%

10
Rakon in the Positioning market:
Our products meet the most accurate positioning requirements in
key industries: aircraft/marine navigation, emergency beacons,
automotive, autonomous agriculture & mining. Market growth is
being led by autonomous industrial equipment and vehicles and
precision equipment.
In recent years we have pivoted away from consumer high-
volume/low value segments to focus on high-growth segments
where we have a product performance advantage.
10
10
21%
Core business –Positioning
Steady industrial growth supported by strong locator beacon resurgence
•Revenue up 16% driven by:
•Continued growth in industrial positioning (e.g. agriculture and construction
surveying)
•Returning global travel driving higher emergency locator beacon business
•Gross margin up $1.1m (14%) to $9.3m
•Industrial/precision equipment market outlook remains strong however we may
see an inventory correction in the short term
$14m
$20m
$19m
$14m
$29m
$16m
40%
36%
48%
58%
57%
FY19FY20FY21FY22FY23
Revenue & GM%
1H2HGM%

11
11
11
11%
Emerging & Other
Completion of large chip-shortage order during period
•Completion of major TCXO chip shortage order during the period
$19m
$8m
$7m
$7m
$33m
$11m
16%
-5%
15%
58%
52%
FY19FY20FY21FY22FY23
Revenue & GM%
1H2HGM%
13%

12
Key Investment Areas
12
New facility in India
Semiconductor chip
R&D
XMEMS
®
Quartz
nanotechnology
NewSpaceportfolio

13
FY23FY24FY25
•Construction completed
•Fitout / capacity
expansion
•Existing manufacturing
transfer
•Select NZ products
transferred
•Select NewSpace
products transferred
•Select French
NewSpacesubsystem
modules transferred
•Substantial increase in
R&D and chip design
capability inNZ & UK
•Release of Niku
TM
next
generation chip
•Release of Vulcan next
generationchip
•Chip based
productrevenue growing
to over 60%
•Chip based product
revenue growing
•Release of Caduceus &
Keplerchips
•Continued investment in
XMEMS
®
capability
•Release of initial XMEMS
®
based products
•Volume production of
XMEMS
®
based products
•Leadership in targeted
market segments
•Expansion into other
product categories
•R&D and supply chain
investment
•Strategic relationships
established
•Recognised player in the
ecosystem
•Significant orders secured
•Become a top 3 player
in subsystems
•Delivery of orders
3-year growth roadmap
On track to achieve FY23 milestones
New
manufacturing
facility in India
New Rakon
designed
semiconductor
chips
Commercialisation
ofXMEMS
®
nanotechnology
manufacturing
capability
NewSpacebusiness

14
New India facility on track
$12-14m project to increase capacity and extend product lifecycles
Progress update
•Construction on track for completion by the end ofFY23
•Phased transfer of manufacturing operations:
•Crystal manufacturing FY23
•Assembly and testing FY24
•Detailed transition plan to ensure business continuity and minimise customer
disruption, including:
•Product qualification schedule (developed with customers)
•Inventories built to ensure continuity of supply
Expected outcomes
•Expanded capacity to support growth opportunities
•Production transferred from NZ and France
•Extended product life cycles from low-cost manufacturing base
•Manufacturing efficiencies through consolidating two existing sites

15
Steady progress in other key investment areas
Rakon proprietary
semiconductor chips
XMEMS
®
nanotechnology
manufacturing
NewSpace-LEO satellites
•Rakon’s own chips deliver superior
product performance and 15%+
higher margins
•Niku
TM
TCXO chip on track for release
in FY23
•Continued investment in building
capability (NZ and UK R&D teams)
•Further single source design-in
approvals for Mercury+
TM
chip with
multiple Tier 1 customers
•Miniaturised products with levels of
performance not possible using
existing manufacturing methods
•Three new products released in 1H23
•Five products now generating
revenue at strong margins
•Investment in new equipment,
significantlyincreasing manufacturing
capacity
•Products which combine space-grade
performance with higher volume
manufacturing capability
•Dedicated internal team
•On board a planned in-orbit
demonstration mission (end FY23)
•Ongoing support fromspace
agencies
1
•Strategic partnershipsprogressed to
support key products
1
CNES (French National Centre for Space Studies)
& ESA (European Space Agency)

16
Financial overview
16

$11m
$15m
$23m
$54m
$28m
FY19FY20FY21FY22HY23
Underlying EBITDA
1
$3m
$4m
$10m
$33m
$16m
FY19FY20FY21FY22HY23
Net Profit
$114m
$119m
$128m
$172m
$87m
FY19FY20FY21FY22HY23
Revenue
Revenue and earnings trends
17
17
Notes
1
Referto Note5oftheFY22auditedconsolidatedfinancialstatementsforanexplanationofhow‘Non-
GAAPFinancial Information’isused,includinga definitionof‘Underlying EBITDA’and reconciliationto
netprofitaftertax
$26m
$19m
$85m
$52m
$52m
$59m
$90m
$44m
45%
44%
46%
52%
50%
FY19FY20FY21FY22HY23
Gross Margin
1H2HGM%
$44m

Increase innetprofitcompared to HY22
explained
Net profit & Underlying EBITDA explained
18
18
How the current period net
profit translates to EBITDA

How net profit translates to cash
19
19
How net profit translates to operating cash
How operating cash translatesto
movement in net cash

Notes
All comparisons are to the prior corresponding period (i.e. 6 months to 30 September 2021) unless otherwise noted
1
Referto Note5oftheFY22 auditedconsolidatedfinancialstatementsforanexplanationofhow‘Non-GAAPFinancialInformation’isused,
includinga definitionof‘Underlying EBITDA’and reconciliationtonetprofitaftertax
2
excluding NZ IFRS 16
Financial metrics & hedging
Hedging programme
•99% of revenue is in non-NZD currencies (mostly USD)
•Most significant currency exposure is NZD/USD
•Hedging covers up to 24 months exposures on a net basis
•NZD/USD hedging position
20
20
Calendar year
2023
2024
% of net exposures covered by hedging
95-100%
35-40%
average rate of cover
0.6511
0.6368

21
Summary & outlook
21

22
Recap -1H23 highlights
Key growth projects
on track
Solid revenue and
EBITDA performance
Corebusiness growth
across all key markets
Indiamanufacturing
facilitynearing
completion
Increased delivery
capacity of core
product portfolio
Strong margins despite
inflationary pressures

•Earnings guidance updated
FY23 Underlying EBITDA range $38m -$44m
•Order book strong, but being closely monitored
May see some dampening of demand due to macroeconomic
volatility and inventory correction
•Operating costs and risks being actively managed
Labour shortages, cost inflation and supply chain
•India facility completion and transition
Execution of detailed transition and business continuity plan
•Advancement of key growth projects
Investment in projects, ongoing assessment of acquisition
opportunities
•ESG and climate-related reporting
Continuing to progress programme and reporting framework
•Confidence in long-term growth story
Solid growth drivers, strong customer relationships, organisational
resilience
23
FY23 outlook and focus
Strong order book, active management of operating challenges
Notes
1
Referto Note5oftheFY22auditedconsolidatedfinancialstatementsforanexplanationofhow‘Non-
GAAPFinancial Information’isused,includinga definitionof‘Underlying EBITDA’and reconciliationtonet
profitaftertax
$44m
$38m
Guidance
range
4 Year CAGR 39% assuming midpoint of guidance range for FY23
$26m
$28m
$11m
$15m
$23m
$54m
FY19FY20FY21FY22FY23
Underlying EBITDA
1

24
Q&A
24

25
Outlook
Appendices
25

Cloud computing: Allows users to have on-demand availability of a remote
computer system’s resources for improved computing power or data
storage (usually located quite far from the user, such as in another country)
Datacentres: Usually a building that is used to hold a computer system and
other components to backup data
Design-in: An opportunity that allows Rakon’sproduct to be used as the
reference component for certain customer reference designs (a technical
blueprint of a system intended to be used by customers)
Edge computing: Allows users to have on-demand availability of a remote
computer system’s resources for improved computing power or data
storage (usually located close to the user, such as within the same city)
5G: 5th generation of the telecommunications standard, providing 10 to
1000 times better performance in many different applications
5G millimetre wave technology: The equipment that enables higher
frequency data transmission in 5G
NewSpace/ NewSpaceLEOs: Refers to space sector commercialisation,
that are mainly low earth orbit (LEO) satellites
Mercury™ / Mercury+™: Rakon’sproprietary integrated circuit used in
OCXOs to achieve clock variations to less than 1 billionth of a second, these
enable precision timing in 5G applications
OCXO: Oven Controlled Crystal Oscillator. A crystal oscillator that uses a
miniaturised oven to keep its internal temperature constant
O-RAN: Mobile networks that are more intelligent, open, virtualised and fully
interoperable
Pluto®: Rakon’s proprietary integrated circuit used in TCXOs to achieve clock
variations to less than 100 millionth of a second; these enable higher data rates
in 5G applications
System solutions:Refers to Rakon’s solutions that include high performance
products, equipment and consulting services for Space & Defence
TCXO: Temperature Compensated Crystal Oscillator. A crystal oscillator with
additional circuitry to remove frequency variations due to temperature change
Tier 1customers: recognised key players within their respective industries, that
make up a significant market share
VCXO: Voltage Controlled Crystal Oscillator (VCXO). A crystal oscillator with an
adjustable output frequency
XMEMS®: Crystal Micro-Electro-Mechanical System. Rakon’s advanced quartz-
based resonator technology. It is made with Rakon’s nano-technology
microfabrication process, delivering unprecedented resonator and oscillator
performances
26
26
Glossary

www.rakon.com

---

1
$26m
$11m
$15m
$23m
$54m
$28m
FY19FY20FY21FY22HY23
Underlying EBITDA
1
Shareholder update
1H23 financial results and business update
We are pleased to update our shareholders on a strong
six-month performance for Rakon.

This result was underpinned by continued growth in global demand for our industry-leading
frequency control and timing solutions. It was supported by a strong delivery performance,
and ongoing risk management around supply chain, cost inflation and labour shortages.
We acknowledge our thousand-strong Rakon team for their efforts and unrelenting customer
focus as we continue to expand and innovate. It is an exciting time to be at Rakon.
Financial performance
Total revenue rose 2% to $87.2 million (1H22:
$85.4 million), with core business growth
largely offsetting the decline in one-off chip
shortage business delivered during the period.
Gross profit remained steady at $43.5 million,
with a gross margin percentage of 50% (1H22:
51%), reflecting a strong product mix and
careful management of costs over the period.
After a long period of cost stability, operating
costs were $3.7 million higher at $28.4 million.
While this increase was partly due to increased
investment in people and resources to support
growth, cost inflation, including labour and
energy prices, is also having an impact across
the business.
Underlying EBITDA increased 6% to $28.1
million (1H22: $26.4 million). Over the half
year, the significant reduction in the NZD/USD
exchange rate had also favourably impacted
Rakon’s Underlying EBITDA
1
.
Foreign exchange gains were made on USD
sales where hedging was below 100%. Some
of these gains were realised during the period
and the rest are unrealised. The unrealised
gains mainly relate to the revaluation of USD
Revenue
Underlying EBITDA
1
Revenue
$ 87. 2m
▲ $1.7m+2 %
Underlying EBITDA
1

$28.1m
▲ $1.7m+6%
Net profit after tax
$16.0m
▼
$2.9m -15%

Net cash/(debt)

$18.4m
▼ $4.8m -21%
bank balances and debtors not hedged at 30
September.
Despite higher operating earnings, net profit
after tax fell 15% to $16.0 million due to a
higher taxation expense after accumulated
New Zealand tax losses were fully used in
FY22.
Capital management
As we signalled at the company’s annual
meeting in August 2022, Rakon’s earnings
growth has enabled the company to self-fund
key strategic growth projects. During the
six-month period, $6.8 million was invested
in R&D including technology innovation, new
product development and manufacturing
capability to meet anticipated demand.
This investment, comprising both capital
and operating expenditure, was funded by
a combination of operating cash and cash
reserves.
Inventory increased over the period by $14.7
million, following a decision to increase safety
stocks of raw materials and finished products
to mitigate supply chain risks and ensure
delivery continuity for key customers. Rakon
India has also built buffer stocks to ensure
delivery continuity during the transfer of its
manufacturing operation to the new facility,
starting in 2023.
This has been a prudent move given the
current macroenvironment. We consider
inventory levels to now be at peak, and to start
reducing in the coming months.
Rakon’s balance sheet remains robust, with
net assets increasing by 3% to $140 million.
Net cash was $18.4 million, down $4.8m since
March as the company invested in additional
inventory and in the construction of the new
building in India. During the period Rakon
repaid an existing $10 million debt facility
which had been established in 2021.
Consistent with the dividend policy, the board
has determined not to declare an interim
dividend.
$85m
$114m
$119m
$128m
$172m
$87m
FY19FY20FY21FY22HY23
Revenue
v March 2022
1
Refer to note 5 of the FY2022 audited consolidated financial
statements for an explanation of how ‘Non-GAAP Financial
Information’ is used, including a definition of ‘Underlying EBITDA’
and reconciliation to NPAT.

2
Reframing our strategy
Rakon’s growth strategy is set around four key objectives, which focus on: growing
our core business; maintaining our product and technology leadership; expanding
into new markets; and being a world-class manufacturer.
Under each objective we have identified key areas where we are focusing our
efforts to drive growth. This may be through organic growth initiatives or strategic
acquisitions which accelerate growth through access to markets or technologies.
As we invest in growth, our investments will align with these key areas.
An update on core business growth is provided on page 3.
At the Annual Meeting we highlighted to shareholders four current investment
projects that we believe will position us strongly for significant future growth.
A progress report on these projects is provided on page 4.

3
Telecommunications
Strong momentum continues
Growing our core business
Our market-leading telecommunications
products enable data to be transmitted
across networks at ever-increasing levels
of speed and reliability. Market growth is
led by the unrelenting advancement of
telecommunications and cloud computing
equipment and infrastructure.
Revenue grew 14% to $47.5 million, driven
by the ongoing rollout of 5G networks
and increased market share with major
customers. Revenue growth was well
balanced across networking, base station
and radio head products. Gross margin
rose $2.4m (14%) to $20.0m, with the GM%
down slightly due to a different product mix.
While 5G networks continue to dominate
market growth, emerging open radio
networks (O-RAN) and edge servers are also
expected to drive medium-term demand.
Rakon is developing a strong presence
in these segments, with our products
continuing to be ‘designed-in’ to reference
designs, making Rakon a preferred supplier
and ensuring long product lifecycles.
Revenue & GM%
Space & Defence
Space programmes return
Positioning
Steady industrial growth and locator
beacon resurgence
Rakon’s space and defence products deliver
the highest levels of performance in extreme
environments; in aviation, satellites, radar,
communications and positioning systems.
Market growth is being led by the emerging
low earth orbit (LEO) satellite market.
We work with government agencies and
commercial programmes around the world
to develop next generation solutions.
Revenue increased 19% to $12.3 million,
driven mainly by demand for high-reliability
applications as key space programmes
resumed post-Covid. Margins grew by 26%
to $8.5 million, or 69% of revenue, with these
strong margins reflecting the high value and
performance requirements for this market.
In the emerging NewSpace segment we are
continuing to establish a key position in the
ecosystem, with further detail on page 4.
While defence sector momentum has been
slower than expected given geopolitical
events, we are now seeing increased activity
and expect this to continue in the second
half.
Our products meet the most accurate
positioning requirements in key industries:
aircraft/marine navigation, emergency
beacons, automotive, autonomous agriculture
& mining. Market growth is being led by
autonomous industrial equipment and
vehicles as well as precision equipment.
In recent years we have strategically
repositioned away from consumer high-
volume/low value segments to focus on high-
value industrial segments where we have a
product performance advantage.
Half year revenue grew 16% to $16.4
million, driven by steady growth in industrial
positioning (e.g. agriculture and construction
surveying) as well as a resurgence in
emergency beacons as global travel returns.
Gross margin increased 14% to $9.3 million,
or 57% of revenue.
Revenue % GM%
Revenue & GM%
In 1H22, this segment contributed 22%
of Rakon’s revenue as opportunities
stemming from global chip shortages
were captured. These orders were
completed during the period under
review, with revenue 43% lower than
last year at $11.0 million. Margins
remained strong at 52% and the segment
contributed 13% of total revenue in 1H23.
Revenue & GM%
IoT, emerging and other
Worldwide TCXO chip shortage
opportunity captured
Revenue by Segment 1H23
Telecommunications
55%
Other
13%
Space &
Defence
13%
Global
Positioning
19%
$10m
$32m
$28m
$30m
$24m
$12m
69%
69%
68%
66%
69%
FY19FY20FY21FY22HY23
Revenue & GM%
1H2HGM%
$14m
$20m
$19m
$14m
$29m
$16m
40%
36%
48%
58%
57%
FY19FY20FY21FY22FY23
Revenue & GM%
1H2HGM%

4
Rakon proprietary semiconductor chips
With Rakon’s own chips enabling superior product performance,
we are investing to accelerate our semiconductor programme by
increasing our development and delivery capability and strength-
ening collaboration between Rakon’s R&D teams in the UK and
New Zealand.
During the period, trials for Niku
TM
(TCXO chip) progressed well,
with Niku
TM
products on track for release in the second half.
Our leading Mercury+
TM
chip continues to strengthen its market
position, with a further single-source design-in approval from a
major telecommunications networking customer.
XMEMS
®
nanotechnology manufacturing
XMEMS
®3
enables the production of miniaturised products
which perform at levels not possible using existing
manufacturing methods.
With three new products released in the half year, Rakon
now has five XMEMS
®
products generating revenue
at solid margins, and we are receiving strong, positive
feedback from customers on their performance.
Investment in new equipment during the period will
provide scalability and significantly expand manufacturing
capacity to cater for anticipated future demand.
Growth strategy – key project update
Rakon India facility
Construction is nearly complete at Rakon India’s new, world-class
manufacturing facility in the aerospace technology hub in Bengaluru,
Karnataka.
The new facility will be an integrated centre of manufacturing
excellence, future-proofing our Indian operations and replacing two
existing leased Bengaluru sites which the business has outgrown.
Once construction is finished, Rakon India’s manufacturing operations
will be transferred from the existing sites to the new facility. This critical
phase will commence in 2023 and will include the commissioning of
plant and equipment, product qualification by our customers and
commencement of production. A comprehensive plan is in place to
ensure continuity of supply to customers through the transition.
The new facility provides space for Rakon India to scale up its OCXO
2

production capacity by some 20%, and allows additional capacity for
the production of Mercury+
TM
OCXO products currently made in New
Zealand (anticipated to be late 2023). The new facility will be one of
the world’s largest and most sophisticated manufacturing sites for
frequency control products.
NewSpace – LEO satellites
Rakon continues to build a key position in the evolving
NewSpace ecosystem which requires mass-manufactured
products delivering space-grade performance. During the
period we established a dedicated internal team, progressed
important strategic partnerships and continued to work
closely with French and European space agencies to develop
new products.
A recent highlight was receiving confirmation that a new
GNSS product will be on board an In-orbit Demonstration
mission (anticipated launch early 2023), which is expected to
be the baseline for a large constellation, planned for 2024-25.

www.rakon.com
5
Enabling the connected future
Looking ahead
This first half performance, in particular the solid growth of our
core business, has again highlighted the competitive advantages
of Rakon’s operating agility, technology innovation and strong
customer relationships. While we fully expect the challenges
and uncertainties including exchange rate movements faced in
the first half to continue throughout the year, we remain well
positioned to deliver a strong result for FY23.
Rakon’s guidance for Underlying EBITDA has been updated to a
range of $38 million to $44 million.
Our forward orders remain strong. Nonetheless, we are closely
monitoring our markets and may see some dampening of
customer demand due to macreconomic volatility and inventory
correction. Regardless, we remain confident about the long-term
growth of our core markets and are confident in our resilience and
capability to respond to challenging market conditions. We will
continue to proactively manage the ongoing impacts of supply
chain disruptions, labour shortages and cost inflation.
Additionally, we will be working extremely hard to execute the
transfer of our Rakon India operation to its new facility effectively
and with minimal disruption to customers or supply. Once
complete, we believe that the new operation, with its enhanced
manufacturing capacity and capability, will be a vital competitive
advantage for Rakon.
We are continuing to build the foundations to capture future
market opportunities and are pleased with progress in our key
growth projects. In accordance with our growth plan, we are
investing in people, products and capability to drive organic
growth, as well as evaluating potential acquisition opportunities
that may provide access to new markets or technologies.
We remain committed to building a sustainable business and
strengthening our environmental, social and governance (ESG)
performance. Our ESG programme and reporting framework is
progressing well, and shareholders can expect to see more detail
and discussion in the next Annual Report.
We look forward to updating shareholders with further progress
at year end.
Notes:
1
Refer to note 5 of the FY2022 audited consolidated
financial statements for an explanation of how
‘Non-GAAP Financial Information’ is used, including
a definition of ‘Underlying EBITDA’ and reconciliation
to NPAT.
2
OCXO: Oven Controlled Crystal Oscillator
A crystal oscillator that uses a miniaturised oven to
keep its internal temperature constant.
3
XMEMS® is Rakon’s advanced crystal technology
using microfabrication technology enabling
innovative crystal design structures.