Rakon Annual Meeting 2024 Presentation

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2024 Annual meeting of shareholders
28 August 2024© Rakon Limited

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Chair’s address
Lorraine Witten
Lorraine Witten
CEO

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KEITH WATSON
Independent director
BRENT ROBINSON
Executive director
LORRAINE WITTEN
Chair and Independent director
KEITH OLIVER
Independent director
JUNG MENG (JM) TSENG
Director
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Our Board

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Chair’s address
Chief Executive’s review
Shareholders’ questions
Resolutions
General business
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Agenda

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Clear strategy to increase shareholder value
STRATEGIC ACQUISITIONS SUPPORTING GROWTH STRATEGY (PAUSED)
GROW OUR
CORE BUSINESS
MAINTAIN PRODUCT
AND TECHNOLOGY
LEADERSHIP
EXPAND INTO
NEW MARKETS
DELIVER WORLD
CLASS
MANUFACTURING
ORGANISATIONAL
TRANSFORMATION

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FY24business highlights
Highest ever Space and defence
revenue. Top 3 player for
Rakon’sSpace subsystem products
Launch ofAI computing hardware
product range for emerging core
market
Continuing focus on cost control and
driving efficiency

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FY24 key financials and capital management
NET PROFIT
AFTER TAX
REVENUE
$128.0m
$52.3m -29%
CAPEX
$17.0m
$1.7m -9%
OPERATING
EXPENSES
$4.5m
$18.7m -81%
$59.5m
$0.7m +1%
INVENTORY
$54.9m
$7.7m -12%
Dividend not
declared for FY24
2-3 year HSBC
Facility
Up to approx. $47m
CASH AND CASH
EQUIVALENTS
$17.8m
$3.9m -18%
OPERATING
CASHFLOW
$17.8m
$6.7m +60%

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Takeover process recap
Comprehensive process
•Receipt of confidential Proposal (7 Dec 2023)for an indicative price of $1.70 per share
•Established Independent Board Committee; appointedexpert legal and investment banking advisers
•Due diligence process undertaken over fivemonths, subject to strict confidentiality controls
•Strategy and value review: Board identified, risk-assessed and considered variousrelevant options under different
transaction alternatives,as well as status quo
•Process-end (19 June 2024)due to potential complexities encountered during due diligence for which the parties
were unable to reach a suitable resolution
•Thousands of hours of Board and management time was involved in the process. Total one-off costs associated
withthe proposal: $2.85 million
•Enabled in-depth review and confirmation of Rakon’s strategy, as well as business processes, documents, compliance
and governance

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Summary
•Continued strategic focus on growing multiple strong, balanced verticals –creating diversity and resilience
for the business, long term, and diversifying revenue to provide increased protection through the cycle
•Continuing to navigate through market uncertainty in Telecoms and Positioning
•AI hardware and Space segments are expected to continue growth
•Ongoing efficiency initiatives driving further cost savings
•Confident in the fundamental growth drivers supporting our core markets

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Chief Executive’s address
Sinan Altug

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Consistent market share gains and near
100% design win rate on targeted projects
FY24:Focused on efficiency + growth in Space and AI
New contract positions Rakon as a Top
3 player in SpaceSubsystems
Highest ever Space segment revenue.
Cyclical slowdown impacting
Telecommunications and Positioning
Continuing focus on cost control and
driving efficiency
Continued delivery of 3-year growthplan
Launch of MercuryXproduct range for
AI and cloud data centres

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FY24: Key market performance overview
Space and defencePositioning
$37m$67m$14m
FY24 REVENUEFY24 REVENUE
GROSS MARGINGROSS MARGINGROSS MARGIN
65%34%44%
UP 27%DOWN 34%DOWN 59%
FY24 REVENUE
Telecommunications

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FY24: financial performance snapshot
Revenue ($m)
Underlying EBITDA
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($m)
Revenue
$128.0m
$52.3m -29%
Operating cash flow
$17.8m
$6.7m +60%
Underlying EBITDA
1
$13.5m
$28.7m -68%
Gross Margin
$57.9m
$30.9m -35%
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Refer to note 4 of the FY2024 audited consolidatedfinancial statements for an explanation of how ‘Non-GAAP Financial Information’ is used, including a definition of ‘UnderlyingEBITDA’
$141m
$164m
$119m
$128m
$172m
$180m
$128m
FY20FY21FY22FY23FY24
Core businessTCXO chip shortage
$37m
$39m
$14m
$15m
$23m
$54m
$42m
$13m
FY20FY21FY22FY23FY24
Core businessTCXO chip shortageAssociate

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Delivering greater efficiency for global operations
•Ongoing focus on optimising our business and ensuring that Rakon is set up for the future,ensuring all key expenditures
across the boardcontribute to Rakon’s growth strategy
•Optimisationof manufacturing cost structures includes an accelerated schedule for Indian facility production of key
NZ / France product lines. Anticipate realisation of benefits from improved margins when volume ramped up in Q4
•Operating expenses (excluding acquisition proposal costs) fell $1.5m to $57.3m reflecting efficiency initiatives
•Global workforce numbersdown 13% year-on-year; ensuring workforce count is within optimal levelsfor cost
ofproduction while positioning the business to capture greater efficiency from its global operations
•Continued focus on optimising inventory led to -$7.7m overall decline (-12%) year-on-year, and will continue to drive
reductions

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Updated strategy to build long-term value
STRATEGIC ACQUISITIONS SUPPORTING GROWTH STRATEGY (PAUSED)
GROW OUR
CORE BUSINESS
MAINTAIN PRODUCT
AND TECHNOLOGY
LEADERSHIP
EXPAND INTO
NEW MARKETS
DELIVER WORLD
CLASS
MANUFACTURING
ORGANISATIONAL
TRANSFORMATION
Telco market leadership –
products using proprietary
technologies
Space and defence –
market access in
North America
Precision industry
Positioning applications
New technology design-in
Rakon semiconductor
chips –accelerate
time-to-market
XMEMS® –deliver next
generation products and
performance
Space –diversified
product range
includinghigher value
chain equipment and
subsystems
Space -LEO satellite
constellations
AI computing hardware /
AI Factories and
advanced data centres
Autonomous vehicles
Targeting key customer
partnerships in new
markets
Accelerated plan for
enabling global capability
and volume
manufacturing of key
products
Advanced supply chain
management
XMEMS® nanotechnology
volume manufacturing
Reconfigure global
operations to align with
strategic growth priorities
Optimise organisational
capabilities and capacity
to scale for growth
Drive efficiency initiatives
across global
organisational
structureand processes

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Growth roadmap
N E W
M A N U F A CT U R I N G
F A CI L I T Y I N I N D I A
R A K O N D E S I GN E D
S E M I CO N D U CT O R
C H I P S
X M E M S
®
N A N O T E CHN O L O GY
M A N U F A CT U R I N G
N E WS P A CE
B U S I N E S S
FY 2023
FY 2024
FY 2025
•Construction completed
•Fitout / capacity expansion
•Existing manufacturing
transfer
•Substantial increase in R&D
and chip design capability
•Release of Niku
TM
next
generation chip
•Continued investment in
XMEMS
®
capability
•Release of initial XMEMS
®
based products
•R&D and supply chain
investment
•Strategic relationships
established
•Transfer of select NZ products
•Transfer of select NewSpace
products
•Launch of enhancedMercuryX
TM
•AI computing products
generating revenue
•Chip based product revenue
growing to over 60%
•Volume production of
XMEMS®
•XMEMS® products qualified
into key 5G platforms
•Recognised player in the
NewSpaceecosystem
•Significant orders secured
•Transfer of select Space
subsystems
•Chip based product
revenue growing
•Release of Vulcan
TM
next generation chip
•Leadership in targeted
market segments
•Expansion into other
product categories
•Become a top 3 player
in subsystems
•Delivery of orders

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Addressable market projections –core markets
Please see disclaimer slide regarding forward looking statements. TAM and SAM diagrams are indicative only and not to exact scale.
Aerospace
(Space and defence)
Telecommunications
Positioning
AI Computing
infrastructure
CY24
TAM:
$983m
CY24 SAM:
$788m
CY24 TAM:
$928m
CY24 SAM:
$186m
CY24 TAM:
$270m
CY24 SAM:
$115m
CY24 TAM:
$466m
CY24 SAM:
$175m
Total Addressable Market (TAM)
Serviceable Addressable Market (SAM)
All figures in USD. TAM / SAM references: Euroconsult; Dedalus Consulting;Internal analysis.
"CAPTURE""COMMAND"

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•Awarded satellite subsystem contract with industry
leader in May2024, followed up by a second
subsystem contract win in June
•Contract wins make Rakon a Top-3 global supplier for
our space subsystems
•Released several new products in FY24, including new
GNSS (Global Navigation Satellite System) receivers,
MROs (Master Reference Oscillators),and ultra-stable
oscillators
•In August, we launched Mercury-R, anew
semiconductor chip designed for our space oscillator
products
Delivering on our strategy for Space
Industry estimates of new satellites launched by
2030 range between around 20,000 to50,000
Quilty Space, Dec 2023
US Government Accountability Office, Sep 2022
The market for commercial satellites is set to
triple, from $4 billion in 2023 to $12 billion
in 2035
World Economic Forum/McKinsey –Future of Space Economy
Paper, April 2024

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•Rakon’stechnology and products are ideally suited for
overcoming the synchronisation challenges that
datacentres face with AI workloads
•Working withleading players in AI hardware to enable
the next generation platforms for new ‘AI Factory’ data
centres
•Launched our next generation semiconductor chipNiku
in 2023, and enhancedMercuryXin 2024, creating
foundation for new AI computing hardware product lines
•These products are already generating revenue; expect
this to increase significantly over the next 5 years
Next core market: AI hardware / computing infrastructure
AI deployments will push the data center physical
infrastructure market over [USD]$50 billion by 2028
Dell’OroData Center Physical Infrastructure 5-Year Forecast Report, 2024

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FY25 Guidance and core market outlook
Guidance
•FY25 UnderlyingEBITDA
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is expected to be in the range of $5-15 million for the financial year to 31 March 2025
•Growth in Space and AI hardware segments, offset by a slow recovery in Telecommunications and Positioning
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Non-GAAP disclosures: Refer to note 4 of the FY2024 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 (NPAT)
Outlook by market
•Space and defence: strong order book for FY25; significant opportunity in satellite constellations
•AI computing hardware: rapidly growing, expected to rival telecom revenue within the next 5 years
•Telecommunications: market weakness continuing; potential stabilization expected in H2 FY25
•Positioning: Inventory correction ongoing; strong position in high-end precise positioning segment

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Summary
•Rakon is at an inflection point with Space and AI markets set to drive substantial new revenue streams.
•Short-term outlook remains suppressed, with the economic downturn for both telecommunications and positioning
•Space and defence is continuing to grow with a solid Space order book for FY25. Rakon in a strong position to
secure future wins from other targetedcontracts
•High design ratewin provides confidencein continued market share growth
•Continued focus on efficiency initiatives drivingannualisedcostsavings andimproving future resilience
andcompetitiveness
•Delivery of 3-year growth plan willimprove revenue and margins and, importantly, diversify revenue to provide
increased protection through the cycle
•We are well positioned tobenefit whenTelecom and Positioning markets recover and to continue momentum in
Space and AI hardware

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Shareholder questions

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Resolutions

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Resolution 1:
That the directors be authorisedto fix the fee and
expenses of Rakon’sauditor, for the following year.
Ordinary resolution

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General business & shareholder questions

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www.rakon.com
23 November 2023© Rakon Limited
28 August 2024
© Rakon Limited

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This presentation contains not only a review of operations, but also some forward looking statementsabout Rakon Limited and theenvironment in which
the company operates. Because these statements areforward looking, Rakon Limited's actual results could differ materially.
Although management and directors may indicate and believe that the assumptions underlying theforward looking statements are reasonable, any of the
assumptions could prove inaccurate or incorrectand, therefore, there can be no assurance that the results contemplated in the forward lookingstatements
will be realised.
Media releases, management commentary and investor presentations areavailable on the company'swebsite and contain additional information about
matters which could cause Rakon Limited'sperformance to differ from any forward looking statements in this presentation. Pleaseread thispresentation in
the wider context of material previously published by Rakon Limited.
All figures are presented in New Zealand dollars unless otherwise indicated. All comparisons are to the prior corresponding period (twelve months to
31 March 2023) unless otherwise noted.Refer to note 4 of the FY2024 audited consolidated financial statements for an explanation of how ‘Non-GAAP
Financial Information’ is used, including a definition of ‘Underlying EBITDA’ and reconciliation to netprofitaftertax (NPAT).
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Disclaimer

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Rakon Limited
T +64 9 573 5554, F +64 9 573 5559
8 Sylvia Park Road, Mt Wellington, Auckland 1060, New Zealand
Private Bag 99943, Newmarket, Auckland 1149, New Zealand
Page 1 of 1 w w w . r a k o n . c o m

28 August 2024

Rakon Annual Meeting Presentation

The Annual Meeting of Rakon Limited (NZX:RAK) will be held today 28 August 2024 at Great
Northern Room, Ellerslie Event Centre, 80 Ascot Avenue, Remuera, Auckland, New Zealand and
online via www.meetnow.global/nz at 10.30 am.

Attached is a copy of the presentation for the 2024 Annual Meeting.

This material will be presented at the meeting and will also be made available on Rakon’s website
www.rakon.com

ENDS
Investor and media relations
Nick Laurent
investors@rakon.com
+64 21 240 7541
About 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.
www.rakon.com