Drone Volt (EPA:ALDRV) Research Update

Highlights:

• Arrowhead is updating its coverage on Drone Volt with a fair value bracket of EUR 0.16 to EUR 0.20 (share price on February 14, 2023: EUR 0.01) based on the Discounted Cash Flow (DCF) method.
• The revenue for FY 2022 stood at EUR 13.4 mn in comparison with EUR 8.7 mn in FY 2021, a growth of 53.3% year-on-year (YoY). This growth was mainly attributable to Q4 revenue which was up by 126% YoY. The consolidated gross profit margin for FY 2022 stood at 20.6% in comparison with 35.0% in FY 2021. The gross profit margin of high-value-added activities stood at 62.3% in FY 2022, while the gross profit margin of third-party brands stood at 14.6% in FY 2022.
• The company recently has announced its decision to temporarily suspend the invoicing of production licenses to its American partner AQUILINE DRONE and will now devote all its commercial efforts to the distribution of the HERCULES 20 model.
• Drone Volt announced the sale of a Heliplane LRS, a Vertical Take-Off and Landing (VTOL) drone, to Groupe Gilbert who is a major player in transportation, logistics and civil and mining engineering in Canada, which the company believes might pave the way for future deployment of this type of solution in Canada and the United States (US).
• The company also announced the sale of solutions to GE Renewable Energy Offshore Wind, a subsidiary of GE Renewable Energy, including six HERCULES 2 drones, two HERCULES 20 drones and a training program for refuelling and control missions of an offshore wind farm.
• The company announced that LineDrone, a drone for inspection of power transmission lines, developed with Hydro Quebec, has satisfied all the technical requirements as per the latest tests carried out in the laboratory and outdoors on the high voltage lines. The company plans to start its demonstration campaigns from Q1 2023 onwards.
• With several studies and demonstrations of the company’s flagship products, such as the HERCULES 20 drones and the HELIPLANE, the company has won customers and prospects across Europe and North America.
• The company has a strong outlook for FY 2023, driven by strong customer base, reinforced geographic network, expanding range of products and services coupled with the commercial launch of the LINEDRONE and the development of the “Drone as a Service” offer.