Full Year 2024 Carbon Revolution PLC Earnings Call
Operator: Greetings and welcome to the Carbon Revolution Full Year 2024 Earnings Call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.
Greetings and welcome to the carbon Revolution full year 'twenty 'twenty four earnings call. At this time all participants are in a listen only mode. If anyone should require operator assistance. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
Ashish Gupta: It is now my pleasure to introduce Ashish Gupta, Investor Relations. Please go ahead. Thank you, operator, and thank you everyone for joining us today.
It is now my pleasure to introduce Ashish Gupta Investor Relations. Please go ahead.
Ashish Gupta: Thank you operator, and thank you everyone for joining us today hosting the call today are covered Revolution, CEO, Donald Hampton Junior and CFO Jay Buckle.
Ashish Gupta: Hosting the call today are Carbon Revolution CEO Donald Hampton Jr. and CFO Jared Buckle.
Ashish Gupta: We'd like to remind everyone that this call contains forward looking statements, including, but not limited to Carbon Revolution's expectations or predictions of financial and business performance and conditions, competitive and industry outlook. Forward looking statements are inherently subject to risks and certainties and assumptions, and they are not guarantees of performance.
Speaker Change: To remind everyone that this call contains forward looking statements, including but not limited to carbon revolutions expectations or predictions of financial and business performance and conditions.
Speaker Change: Competitive and industry outlook forward looking statements are inherently subject to risks uncertainties and assumptions and they are not guarantees of performance.
Ashish Gupta: We encourage you to read the full annual report on Form 20-F filed with the SEC on May 14, 2025, and the accompanying presentation for discussion of the risks that can affect Carbon Revolution's business. Carbon Revolution is under no obligation and expressly disclaims any obligation to update, alter, or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Speaker Change: As you to read the full annual report on form 20-F filed with the SEC on May 14, 2025, and the accompanying presentation for a discussion of the risks that can affect carbon revolutions business.
Speaker Change: I've been revolution is under no obligation and expressly disclaims any obligation to update alter or otherwise revise any forward looking statements, whether as a result of new information future events or otherwise except as required by law. During the course of this call. We will refer to certain non <unk> financial measures that we believe are useful to investors evaluating the company's performance.
Ashish Gupta: During the course of this call, we will refer to certain non-IFRS financial measures that we believe are useful to investors evaluating the company's performance. Reconciliation of non-IFRS terms and adjustments is included in the presentation. All amounts in the presentation are stated in U.S. dollars unless otherwise indicated.
Speaker Change: A reconciliation of non ifr as terms and adjustments are included in the presentation.
Dani: All amounts in the presentation are stated in U S dollars unless otherwise indicated with that let me turn the call over to Dani.
Donald Hampton Jr.: With that, let me turn the call over to Donny. Thank you, Ashish, and thank you all for joining us today. I'd like to begin today's call by saying how excited I am to have the opportunity to speak to you today in my role as CEO of Carver Revolution. I'm very impressed by what the team has been able to accomplish so far, and I believe that as the world's leading carbon fiber wheel manufacturer and the developer of globally unique technology, the company is poised to take his next step in disrupting the automotive wheel industry.
Dani: Thank you Lucy and thank you all for joining us today.
Speaker Change: I'd like to begin today's call by saying how excited I am to have the opportunity to speak to you today in my role as CEO of covered Revolution.
Dani: I'm very impressed by what the team has been able to accomplish so far and I believe that as the world's leading carbon fiber will manufacture and the developer of globally unique technology. The company is poised to take this next step in disrupting the automotive wheel industry.
Donald Hampton Jr.: Next, I'd like to dive into today's agenda. I will start off by highlighting some of the accomplishments achieved during and since fiscal year 2024. Following this, for those that are unfamiliar with Carbon Revolution's story, I will provide a short overview of the company's strategy and value proposition, and then highlight the progress we've made in key areas.
Dani: Next I'd like to dive into today's agenda.
Dani: I will start off by highlighting some of the accomplishments achieved during fiscal.
Dani: Fiscal year 2024.
Dani: Following this.
Dani: Those that are unfamiliar with cover above elusive story I will provide a short overview of the company's strategy and value proposition and then highlight the progress we've made in key areas.
Donald Hampton Jr.: I'll then turn it over to Jared, who will provide financial and operational highlights. Firstly, I would like to cover a number of highlights and developments that the team has achieved over the past year. We have seen the launch of our customer's of some very exciting wheel programs. The reveal of the Corvette ZR1 is an exciting new halo program, growing our relationship with one of our key customers, General Motors. The reveal by Lamborghini of the Temerario represents a key milestone not just as an exciting product with a dynamic brand, but also as the first wheel program with a broader Volkswagen group.
Dani: I'll, then turn it over to Jerry who will provide financial and operational highlights.
Dani: Firstly.
Dani: I would like to cover a number of highlights and development that the team has achieved over the past year.
Dani: We have seen the launch of our customers.
Dani: So very exciting wheel program.
Dani: The reveal of the corvette ZR, one is an exciting new Halo program growing our relationship with one of our key customers General Motors.
Dani: The reveal by Lamborghini of the temporary O represents a key milestone.
Dani: Not just as an exciting project with a dynamic brand, but also as the first real program with a broader Volkswagen group.
Donald Hampton Jr.: The company also had the honor of being recognized with dual awards at the prestigious 2024 Pace Automotive Award. These recognize automotive suppliers for superior innovation and technological advancement. We received a 2024 Automotive News Pace Innovation Partnership Award for our outstanding collaboration with General Motors.
Dani: The company.
Dani: Also had the honor of being recognized with dual war at the prestigious 2020 for automotive awards.
Dani: These recognized automotive suppliers for superior innovation technological advancement.
Dani: We received a 2020 for automotive news pace Innovation partnership award for our outstanding collaboration with General Motors.
Donald Hampton Jr.: The company has also been strengthening its leadership and governance with the appointment of deep automotive expertise to both the board and the executive leadership team. As Jared will talk about in more detail, we have received strong support from our secure lenders and capital partners throughout this period, most recently securing a funding package of approximately $33 million in December 2024, comprising $27 million of new funds across five tranches, four of which have been released, plus PICC interest.
Dani: The company has also been strengthening his leadership and governance with the appointment of deep automotive expertise, both the board and the executive leadership teams.
Dani: As Gerrit will talk about in more detail. We have received strong support from our secured lenders and capital partners. Throughout this period. Most recently securing the funding package of approximately $33 million in December 2024.
Dani: Rising 27 million of new bonds across five tranches or wins have been released plus interest.
Donald Hampton Jr.: We have a clear strategy that drives everything we do. With a sole focus on our unique carbon fiber wheel technology, we will continue to invest in the right products. By focusing on product leadership and growth prospects. I've been meeting with existing and potential new customers and I've been struck by the enthusiasm for our technology. We have spent over a decade developing this technology. We are first and remain the only company to produce and sell carbon fiber wheels at scale to top global automotive OEMs in North America and Europe. We continue to focus on investing in the right customers, growing our portfolio, and diversifying our base.
Dani: We have a clear strategy that drives everything we do.
Dani: With the sole focus on our unique carbon fiber wheel technology, we will continue to invest in the right products.
Dani: By focusing on product leadership and growth prospects.
Dani: I've been meeting with existing and potential new customers.
Dani: I've been struck by the enthusiasm for our technology.
Dani: We have spent over a decade developing this technology.
Dani: We are first and remain the only company.
Dani: And so carbon fiber wheels at scale, the top global automotive Oems in North America and Europe.
Dani: We continue to focus on investing in the right customers.
Dani: Our portfolio and diversifying our base.
Donald Hampton Jr.: We have a strong focus on operational excellence with the aim of developing aggressive cost reduction. This is driven by productivity and process improvements and, with scale, are expected to enhance our market offering. You will see evidence of this operational improvement with the growth that the company has achieved in fiscal year 2024.
Dani: We have a strong focus on operational excellence with the aim of developing aggressive cost reduction.
Dani: This was driven by productivity and process improvements and with scale are expected to enhance our market offering.
Dani: You will see evidence of this outbreak small improvement with the growth that the company has achieved in fiscal year 2024.
Donald Hampton Jr.: In time, to embed strategic advantage, we expect to invest in lower cost geographies closer to our customer base. We have developed and manufactured a revolutionary product that is ready for industry disruption. Carbon Revolution is an established Tier 1 supplier disrupting the $38 billion automotive wheel market with our highly differentiated and unique lightweight carbon fiber composite wheel technology. Our carbon fiber wheels can deliver up to a 50% weight reduction compared to conventional aluminum wheels, providing significant benefits for all vehicle types. For an electric vehicle, this weight savings can result in a 5 to 10 percent extension of range.
Dani: In time.
Dani: <unk> strategic advantages, we expect to invest in lower cost geographies closer to our customer base.
Dani: We have developed and manufactured a revolutionary product that is ready for industry disruption carbon Revolution is an established tier one supplier is.
Dani: Roughly the $38 billion automotive wheel market with our highly differentiated and unique lightweight carbon fiber composite wheel technology.
Dani: Our carbon fiber wheels can deliver up to a 50% weight reduction compared to conventional aluminum wheels, providing significant benefits for all vehicle types.
Dani: Warner Electric vehicles.
Dani: This weight savings and result in a 5% to 10% extension of range.
Donald Hampton Jr.: if reinvested in battery mass and dependent on the level of integration into the overall vehicle design. Additionally, reducing mass from a vehicle's wheels reduces rotational unsprung mass and substantially improves the handling, acceleration, and braking of the vehicle.
Dani: If reinvested in battery mass and dependent on the level of integration into the overall vehicle design Adair.
Dani: Additionally, reducing mast boom of vehicles.
Dani: Wheels reduces rotational unstrung mass and substantially improves the handling acceleration and braking of the vehicle.
Donald Hampton Jr.: We believe that our technology is many years ahead of our closest aspiring competitors, and we have built and protected our competitive advantage in a number of important ways. First, after more than a decade of development, we have a strong IP portfolio of over 120 patents, with 94 granted and an additional 28 pending. Supporting our patent portfolio is valuable know-how, which has been gained via years of research and development and learning. Gain the hard way through the design and manufacturing process. Second, we have established relationships with major global automotive OEMs such as Ford, General Motors, Jaguar-Land Rover, Ferrari, Renault, and now Lamborghini, a premium brand of the major Volkswagen Group, most of whom have awarded us multiple programs. As discussed earlier, we have made substantial progress in key areas.
Dani: We believe that our technology is many years ahead of our closest.
Dani: Barring competitors and we have built and protect our competitive advantage in a number of important ways.
Dani: After more than a decade of development, we have strong IP portfolio of over 120 patents with 94 granted and an additional 28 pending.
Dani: Accordingly, our patent portfolio is valuable Knowhow, which has been gained via a years of research and development.
Speaker Change: The earnings.
Dani: Gain the hard way through the design and manufacturing process.
Dani: We have established relationships with major global automotive Oems such as Ford General Motors.
Dani: Land Rover.
Dani: Ari Renault and now Lamborghini, a premium brand of the major Volkswagen group, most of whom have awarded us multiple program.
Dani: As discussed earlier, we have made substantial progress in key areas during.
Donald Hampton Jr.: During the fiscal year, we have regenerated our board, bringing on six U.S.-based directors, four of whom collectively bring decades of automotive OEM and supplier experience. And two, from our valued capital partner, OIC. Chaired by Bob Lux, the expertise and experience of our board supports the company in strengthening its governance in our expanded international environment. Our leadership has continued to evolve with a focus on strengthening in-market experience and customer relationships.
Dani: During the fiscal year, we have regenerated our board, bringing on six U S based directors or.
Dani: Collectively bring decades of automotive OEM and supplier experience.
Speaker Change: Two from our valued capital partner, Oh I see.
Bob: Sure by Bob loves the expertise and experience of our board supports the company and strengthening its governance.
Bob: Our expanded international environment.
Speaker Change: Our leadership.
Speaker Change: Can you to evolve with a focus on strengthening end market experience and customer relationships to this <unk>.
Donald Hampton Jr.: To this end, Alia Comay Join the service of the company as chief revenue officer in June 2024, bringing over 25 years of extensive experience in the automotive sector. where she has held several pivotal leadership roles across product development, manufacturing, international business operations, program management, quality, and sales.
Bob: Oh my goodness.
Bob: So in the service of the company as Chief revenue Officer in June 2024.
Bob: Bringing over 25 years of extensive experience in the automotive sector.
Speaker Change: Well she has held several pivotal leadership roles across product development.
Speaker Change: That's right.
Speaker Change: International business operations program management quality and sales.
Donald Hampton Jr.: During the fiscal year, the company completed its NASDAQ listing and strengthened its relationship with its two key committed capital partners, OIC and the Pius lenders. An additional funding package of approximately $33 million was secured with OIC and Pius in December 2024, comprising $27 million of new funds, plus PIC interest. Drawn in $5.4 million increments, $21.6 million of this has been drawn to date, finally.
Speaker Change: During the fiscal year the company completed its NASDAQ listing and strengthen its relationship.
Speaker Change: With its two key committed capital partners, Oh, I see in the pie as lenders and additional funding package of approximately $33 million was secured with OSD empires in December 2024.
Speaker Change: Rising 27 million of new bonds plus interest.
Speaker Change: Drawn at $5 $4 million increments 21, 6 million of this has been drawn to date.
Speaker Change: Finally.
Donald Hampton Jr.: After a significant effort by the team with the enlargement of these financial results, we are now up to date with NASDAQ requirements for a fiscal 2024 result.
Speaker Change: After a significant effort by the team with a lot of these financial results were now up to date with NASDAQ requirements for our fiscal 2024 results.
Donald Hampton Jr.: As I discussed earlier, we have had key product launches, including the Corvette 01 and Lamborghini Temerario. Also, on a lunch front, these programs have entered production since July 2024. and a further four are expected to enter production in calendar year 2025.
Speaker Change: As I discussed earlier, we have had.
Speaker Change: Key product launches, including the corvette zero one.
Speaker Change: Lamborghini to Mario <unk>.
Speaker Change: Also on our lunch.
Speaker Change: These programs have entered production.
Speaker Change: July 2024.
Speaker Change: And a further four are expected to enter production in calendar year 2025.
Donald Hampton Jr.: Australian Plant Capacity Expansion Plan is now materially complete for expected volumes for existing awarded programs. Significant operational improvements have been achieved. We worked with our customers to negotiate price increases and working capital improvements. These are now substantially in place. The operational metrics made great strides in the year, including direct labor. costs and quality, both of which were key to increasing our revenue in the fiscal year.
Speaker Change: Australia and planned capacity expansion plan is now materially complete.
Speaker Change: Specter volumes for existing awarded programs.
Speaker Change: Significant operational improvements have been achieved.
We worked with or.
Speaker Change: With our customers to negotiate price increases and working capital improvements. These are now substantially in place E.
Speaker Change: Operational matrix made great strides in a year, including direct labor.
Speaker Change: Cost and quality, both of which were key to increasing our revenue in the fiscal year.
Donald Hampton Jr.: Major fixed cost reductions have also been implemented between November 24 and May 2025. This has been enabled by the maturing stages of our program development pipeline. and the substantial completion of our capacity expense program for existing awarded programs. We have had 18 programs awarded to date, and we are in discussion with both existing and potential new customers on the award of future programs. Of these 18 awarded programs, 7 programs are currently in production, and 7 programs are in after-sales. That is, they have completed the serial production stage, and we are now supplying after-sales or spare parts for vehicles currently in the market.
Speaker Change: Major fixed cost reductions have also been implemented between November 24, and May 2025.
Speaker Change: This has been enabled by the maturing stages of our program development pipeline.
Speaker Change: And the substantial completion of our capacity expansion program for existing awarded programs.
Speaker Change: We have had 18 programs awarded to date.
Speaker Change: We are in discussions with both existing and potential new customers on the award of future programs.
Speaker Change: These 18 awarded programs seven programs are currently in production and seven programs are in after sales that is they have completed the serial production stage and we are now supplying after sales were spare parts for vehicles currently in the market.
Donald Hampton Jr.: We now have four awarded programs that are in development, meaning they have been formally awarded but are not yet in serial production. Activities during this pre-production phase include virtual engineering, physical prototyping and testing, and then multiplying out. production capacity ahead of serial production. Typically, the customer will reveal or launch the vehicle to customers during this phase, at which point it typically becomes known that the vehicle will be fitted with our carbon fiber wheel.
Speaker Change: We now have for awarded programs that are in development, meaning they have been formally awarded but are not yet the serial production active.
Speaker Change: Activities. During this preproduction phase include virtual engineering, physical prototyping and testing and then most blind out.
Speaker Change: Production capacity ahead of serial production.
Speaker Change: Typically the customer will reveal or launch the vehicle.
Speaker Change: Customers during this phase at which point it typically these arms no. That's a vehicle will be fitted with our carbon fiber wheels.
Donald Hampton Jr.: By the end of the fiscal year, we have recorded cumulative sales of nearly 100,000 and we have since surpassed this important company milestone.
Speaker Change: By the end of this fiscal year, we have recorded cumulative sales of nearly 100000, but we have a sense surpassed this important company milestone.
Jared Buckle: Now I'll hand it over to Jared who will review our financial results. Thanks Tony. Turning to slide 9 where the highlight is the $22 million or 87% revenue growth achieved in fiscal year 2024 as compared to 2023. In fiscal year 2024, we experienced strong demand from JLR for the Range Rover program wheels and we had a full year of production for the Corvette Z06 e-rake program. As our wheels are currently an option on vehicle programs, our volumes are subject to variation year-on-year. The sale of our wheels depends on the consumer demand for the relevant vehicle, the success of the OEM's marketing of our wheels, and consumer preference for the carbon fibre wheel option.
Speaker Change: Now I'll hand, it over to Jared for a review our financial results.
Jared: Thanks, Tony turning to slide nine where the hardware is the 22 million or 87% revenue growth achieved in fiscal year 'twenty 'twenty four.
Speaker Change: Compared to 2020 right.
Speaker Change: In fiscal year 'twenty 'twenty four we experienced strong demand from jail, Oh, the Ryan drive a program wheels, and we had a full year of production for the corvette Z Rsa's E rate programs.
Speaker Change: As our wheels are currently an option on vehicle programs have volumes are subject to variation year on year the size of our wheels depends on the consumer demand for the relevant vehicle the success of the Oem's marketing of our wheels.
Speaker Change: And consumer preference for the Calvert Fava will option.
Jared Buckle: During the year, we also introduced the Ford Mustang Dark Horse program into production.
Speaker Change: During the year, we also introduced the Ford Mustang Dark roast program into production.
Jared Buckle: Unfortunately, this program has been concluded early and is now in after sales.
Speaker Change: Unfortunately this program has been concluded early and is now in after sales.
Jared Buckle: On slide 10, you will see our Statement of Finance for Performance. The key items in this slide are the revenue growth of 87%, which I've just covered on the previous slide.
Speaker Change: On slide 10, you'll see our statement of financial performance.
Speaker Change: All items in this slide are.
Speaker Change: The revenue growth of 87%, which I've just covered on the previous slot.
Jared Buckle: In accordance with International Accounting Standards 36, we have reviewed the carrying value of our assets and determined we needed to book an impairment of $80.5 million. Applying IAS 36, 68 million of this impairment relates to fixed assets and is recorded in a gross loss. 12.5 million of the impairment relates to intangible assets and is recorded in research and development expenses.
Speaker Change: In accordance with international accounting standards 36.
Speaker Change: We have reviewed the carrying value of our assets and determined that we needed to Vulcan impairment of $80 5 million.
Speaker Change: Applying ias.
Speaker Change: 36, <unk> million of this impairment relates to fixed assets that is recorded in gross loss.
Speaker Change: Well pause for a minute of the impairment relates to intangible assets and is recorded in research and development expenses.
Jared Buckle: The impairment was required for two key reasons. Firstly, a medium-term sales outlook has reduced due to the outlook of reduced adoption rates for awarded EV programs in the US. the early conclusion of the Mustang Dark Horse Wheel Program and recent slowing of demand for carbon fiber wheels for the Range Rover Sport SV. And secondly, our whack rate has also increased, due primarily to our revised assessment of the macroeconomic uncertainty driven by political and economic environments.
Speaker Change: The impairment was required for Teekay reasons, Firstly, a medium term sales outlook has reduced due to the air loop of reduced adoption rights for awarded a big programs in the U S.
Speaker Change: The early conclusion of the master and doctoral is wheel program.
Speaker Change: And recent slowing of demand for complex hot wheels for the range Rover sport.
Speaker Change: And secondly at what rate has also increased due primarily to a revised assessment of the macro economic uncertainty driven by political and economic environment.
Jared Buckle: With the impairment, our gross loss increased to $73.4 million. Excluding the impairment, the gross loss is $18 million for the 2024 fiscal year which is 38% of sales. This is a slight improvement on the 2023 fiscal year where the gross loss was 44% of sales.
Speaker Change: With the impairment gross loss increased to $73 4 million.
Speaker Change: Excluding the impairment gross loss is <unk> billion.
Speaker Change: Well the 'twenty 'twenty four fiscal year, which is 38% of sales. This is a slogging permit on the 'twenty 'twenty trade fiscal year, when our gross loss was 44% of styles.
Jared Buckle: In fiscal year 2024, we did also see a number of cost increases. They were SG&A increased 24% to $15.6 million due to training costs associated with onboarding of staff, higher D&O insurance costs, and the increased costs of being listed in the U.S. R&D costs increased to $23.9 million due to the impairment of intangible assets discussed earlier and an increase related to the large number of wheel programs in development and launch along with costs related to the capacity expansion program. The higher level of underlying SG&A and R&D costs were known and planned for fiscal 2024. This higher level of cost is expected to reduce during the second half of the 2025 fiscal year as we complete program launches, continue to implement fixed cost reductions and finish the capacity expansion program.
Speaker Change: In fiscal year 'twenty 'twenty four we.
Speaker Change: Would you also say a number of cost increases.
Speaker Change: SG&A increased 24% 15, 6 million future training costs associated with Onboarding and stuff.
Speaker Change: D&O insurance costs and the increased cost of being used in the U S.
Speaker Change: R&D costs increased to $23 9 million due to the impairment of intangible assets discussed earlier and an increase related to the large number of wheel programs in development and launch along with costs related to the capacity expansion program.
Speaker Change: The higher level of underlying SG&A and R&D costs were known and planned for fiscal 'twenty to 'twenty four.
Speaker Change: This high level of cost is expected to reduce during the second half of two of the 'twenty 'twenty four fiscal year as we complete program launches continue to implement fixed cost reductions and finish the capacity expansion program.
Jared Buckle: Transaction costs are $20.9 million. These costs are associated with the completion of the business combination, listing on NASDAQ and the cost of subsequent funding transactions. A large portion of these costs are one-off and this level of transaction costs is not expected to continue.
Speaker Change: Transaction costs of $20 9 million. These costs are associated with the completion of the business combination listing on NASDAQ and the cost of subsequent funding transactions.
Speaker Change: A large portion of these costs are one off and this level of transaction costs is not expected to continue.
Jared Buckle: Net financing costs of $13.9 million reflect the full year of borrowing costs related to the PIE's borrowing and the new costs related to the OIC borrowing.
Speaker Change: Net falling financing costs of 13, Partnoy minion reflect the full year of borrowing costs related to the Pos borrowing and the new cost related to the OSA borrowings.
Jared Buckle: The net loss for the year is $146.4 million and the adjusted EBITDA is a $35 million loss.
Speaker Change: The net loss for the year is $146 4 million and the adjusted EBITDA is $35 million loss.
Jared Buckle: Turning to slide 11, the key balance sheet and cash flow items are explained. On the balance sheet there are two large movements. The reduction in non-current assets from the prior period is due to the impairment that was required under IAS 36. and total liabilities increased by 77% to $166.8 million, which is primarily from the increase in borrowings necessary to fund the Capital Expansion Program and operations while a business is loss-making.
Speaker Change: Turning to slide 11, the K balance sheet and cash flow items are explained on their balance sheet, they're too large movements the reduction in noncore assets.
Speaker Change: Part prior period is due to the impairment that was required under Ias 36.
Speaker Change: And total liabilities increased by 77% to 100 and C. T $6 $8 million, which is primarily from the increase in borrowings necessary to fund the capital expansion program and operations, while our business is loss, making.
Jared Buckle: In the cash flow, net cash used in operating activities increased $16.1 million to $50.9 million. been movements, a reduction in government grant funds of $10 million. In 2023, the business was the recipient of funds from both state and federal grants which helped fund the required jobs growth and capital expansion program. These grant programs do not contribute significantly to the 2024 fiscal year. There is a $12.5 million net outflow between customer receipts and supplier payments, which is driven by the increased volume of sales and production during the year. and there is a net $4.1 million reduction in our flows for borrowing and finance costs.
Speaker Change: And the cash flow net cash used in operating activities increased $16 1 million to $59 million.
Speaker Change: Movements.
Speaker Change: A reduction in government grant funds of $10 million in 2023 business was the recipient of funds from both state and federal grants, which helped fund the required jobs growth and capital expansion program.
Speaker Change: These these credit programs did not contribute significantly to 2020 full fiscal year.
Speaker Change: There is a $12 5 million net outflow between customer sites and supply assignments, which is driven by increased volume of sales and production during the year.
Speaker Change: And there is a net $4 1 million reduction in air force for borrowing and finance costs.
Jared Buckle: Net cash used in investing activities reflects the investment during the year to deliver the capacity expansion program and the investment in real programs in development.
Speaker Change: Net cash used in investing activities reflects the investments during the year to deliver the capacity expansion program and the investment in new programs in development.
Jared Buckle: Net cash from financing activities increased by 28% to $56.4 million, which primarily reflects funding received from OIC during the year.
Speaker Change: Net cash from financing activities increased by 25% to 50, $56 4 million, which primarily reflects funding received from O I say during the year.
Jared Buckle: On slide 12, we have detailed liquidity actions that are planned and underway.
Speaker Change: On slide 12, we had we have detailed liquidity actions that our clients depend on to widen.
Jared Buckle: The key self-help actions the company has taken include in the 2025 fiscal year we have implemented a fixed cost reduction program. The program is underway with most actions now completed. Following the introduction of most of our new wheel programs and completion of the capacity expansion program for existing awarded programs, we have assessed our resource needs under a more steady state operations and we have downsized our indirect workforce to right size for the future. We have also reviewed all fixed cost items and taken actions to reduce cost wherever possible. The benefit of this cost down program takes effect from the second half of fiscal 2025.
Speaker Change: The case self help actions the company has taken include.
Speaker Change: In the 'twenty 'twenty four fiscal year, we have implemented a fixed cost reduction program.
Speaker Change: Program is underway with most actions near completion.
Speaker Change: Following the introduction of most of our new real programs and completion of the capacity expansion program for existing awarded programs. We have assessed their assessed our resource needs under a more steady state operations and we have downsized our indirect workforce too.
Speaker Change: <unk> for the future.
Speaker Change: We have also reviewed all fixed cost items and taken actions to reduce cost wherever possible.
Speaker Change: The benefit of these cost down program types effect from the second half of fiscal 2025.
Jared Buckle: Capital spend is reducing during 2025 as well. The capacity expansion program progressed very well during 2024 and the first half of 2025. This has allowed for a reduction in capital spend on plant and equipment in the second half of fiscal 2025.
Speaker Change: Capital spend is reducing during 2025 as well the capacity expansion program progressed very well.
Speaker Change: <unk> 2024, and the first half of 2025.
Speaker Change: He says a laugh for a reduction in capital spend on plant and equipment in the second half of fiscal 2025.
Jared Buckle: We have worked with and continue to work with customers and suppliers to improve our payment terms in order to improve our net working capital position of the company.
Speaker Change: We have worked with and can continue and continue to work with customers and suppliers to improve our payment terms in order to prevent net working capital position of the company.
Jared Buckle: The other key action is that we struck a new $33 million funding arrangement with OIC and Pius in December 2024. This funding agreement allows the company to access up to $27 million in new funding, of which $21.6 million has been drawn to date, and up to $6 million in peak interest. Along with the self-help outlined above, we expect this new arrangement with OIC and Pius to provide sufficient funds for the business for 2025. Of course, this requires the other areas of our forecast to remain on plan.
Speaker Change: The other key action is that we struck and used 33 million funding arrangement with OSA empires in December 2024.
Speaker Change: Funding agreement allows the company to access up to 27 million in new funding.
Speaker Change: Of which $21 6 million has been drawn to date.
Speaker Change: And up to 6 million in Pik interest.
Speaker Change: Along with the self help outlined above we expect this new arrangement with our St. Pius should provide sufficient funds for the business for 2025.
Speaker Change: Of course this requires the other areas of are forecast to remain on plan.
Donald Hampton Jr.: I will now hand back to Donny for the remaining slides.
Speaker Change: Oh, no I will now hand back to Tony for the remaining slots.
Donald Hampton Jr.: Thanks, Jared. Now turning to our business outlook, looking ahead, we will be delivering a number of new program launches. Three programs have recently entered production and a further four awarded programs are currently in the development or launch phase and we look forward to bringing these to market.
Tony: Thanks, Darren now turning to our business outlook looking ahead, we will be delivering a number of new program launches.
Tony: Three programs have recently entered production.
Tony: And a further four awarded programs are currently in the development or lot space and we look forward to bringing these to market.
Donald Hampton Jr.: As Jared mentioned earlier. As an optional fitment, our sales volumes are, in large part, driven not only by the success of our customers' experience with their vehicle sales, but also on the consumer uptake achieved for our wheel options. In addition to program-specific considerations, we also see some macroeconomic uncertainties and growth headwinds, which are also reflected in the impairment Jared described earlier. We have established a capability and cadence of program launches, which enables us to focus on our operational execution and cost reduction strategy. Our capacity expansion program required for expected volume from currently awarded programs is concluding and the plant is running well.
Jarrett: As Jarrett mentioned earlier.
Jarrett: As an optional fitment our sales volumes are in large part driven not only by the success of our customers experience with their vehicle sales.
Speaker Change: Also on the consumer uptake.
Jarrett: <unk> for our wheel options.
Jarrett: In addition to program specific considerations, we also seen some macroeconomic uncertainties and growth headwinds, which are also reflected in the impairment Jared described earlier.
Jarrett: We have established a capability and.
Jarrett: And cadence of program launches, which enables us to focus on our operational execution and cost reduction strategy.
Jarrett: Our capacity expansion program required for expected volume from currently awarded programs, including and the plant is running well.
Donald Hampton Jr.: From late 2025, there will be a significant reduction in investment in PP&E. We will continue to pursue improved gross margin with further efficiencies expected to come from new program launches combined with reducing material and direct labor costs. Overheads are expected to continue to be reduced and align to the company's next stage of a more stable production. As a result of these continuous initiatives, our cash burn is expected to reduce moving forward, enabling us to pursue our clear strategy of disrupting the automotive oil industry. Our business development focus is on winning new programs for the Australian facility and a potential new overseas plant.
Jarrett: From late 2025, there will be a significant reduction in investment in PP&E.
Jarrett: We will continue to pursue improved gross margin with further efficiencies expected to come from new program launches.
Jarrett: Buying with reducing material and direct labor costs.
Jarrett: Over his are expected to continue to be reduced and <unk>.
Jarrett: Lines of the company's next stage of a more stable production.
Jarrett: As a result of these continuous initiatives are.
Jarrett: Cash burn is expected to reduce moving forward, enabling us to pursue our clear strategy of disrupting the automotive wheel industry.
Jarrett: Our business development focus is on winning new programs for the Australia facility.
Jarrett: And a potential new overseas plant.
Donald Hampton Jr.: Given the current uncertain macro environment and EV demand, it is prudent to continue to focus on program wins for the Australian plan. Beyond Australia, the business development activities will also focus on securing program awards that would underpin investment in one or more lower cost territories closer to our customers.
Jarrett: Given the current uncertain macro environment.
Jarrett: And EV demand it is prudent to continue to focus on program wins for the Australian plant beyond Australia. The business development activities will also focus on securing program awards that would underpin investment in one or more.
Jarrett: Lower cost territories closer to our customers.
Donald Hampton Jr.: In summary, the operational progress made during a very challenging period adds to Carbon Revolution's position as a global leader in carbon fiber wheels and provides a strong foundation to pursue our growth strategy. This strategy is based on product and technology leadership combined with focusing on the right customers and operational execution. I truly believe we have developed a product which has the capability. to disrupt the enormous global wheel industry. We have a clear market leading position. We have a growing customer base. We have a team, and we have laid the foundations to take this breakthrough technology to the wider market.
Jarrett: In summary.
Jarrett: The operational progress made during a very challenging period as copper revolutions position as the global leader in carbon fiber wheels and provides a strong foundation to pursue our growth strategy. This.
This strategy is based on product and technology leadership, combined with focusing on the right customers and operational execution.
Jarrett: I truly believe we have developed a product which has the capability to.
Disrupt.
The enormous global wheel industry.
Jarrett: We have a clear market leading position we have a growing customer base, we have a team.
Jarrett: And we have laid the foundations to take this breakthrough technology to the wider market.
Donald Hampton Jr.: Thank you again for joining us today. We look forward to updating you on our progress.
Jarrett: Thank you again for joining US today, we look forward to updating you on our progress.
Operator: This concludes today's teleconference. Thank you for your participation. You may now disconnect your lines.
Jarrett: This concludes today's teleconference. Thank you for your participation you may now disconnect your lines.
Jarrett: Okay.
Jarrett:
Jarrett: [music].