- A clearer sales offer, allowing for the sale of cloud-connected drones as early as 2016
- A now-healthy financial situation and a solid balance-sheet structure
- Cash flow of over €6M as at 29 February 2016, covering 13 months of fixed expenses
- Established international bases (USA, South Africa, etc.)
- A clear horizon for achieving the Group’s strategic goals
Note: the accounts have been established in application of French accounting standards, in accordance with the rules and methods concerning consolidated accounts, approved by the order of 22 June 1999 confirming the Accounting Regulation Committee’s regulation no. 99-02.
|Sales revenue||939||1 216|
|Operating income||-7 325||-5 648|
|Net income||-12 248||-5 601|
|Equity & quasi-equity||4 397||9 587|
|Cash||4 052||4 399|
The Board of Directors met on 14 March 2016 in order to examine and approve the accounts for the 2015 financial year. Christian Viguié, Chairman and CEO of Delta Drone commented as follows:
“In order to properly take stock of the progress we have made, it is paramount to note that the balance-sheet structure was profoundly modified in 18 months, i.e., since the change in the Group’s governance. On the asset side, the R&D intangible fixed assets were written down to fair value and the cash position now represents 33% of the balance-sheet total, compared with only 6% at the end of June 2014. On the liabilities side, equity and quasi-equity represent 72% of the balance-sheet total and debts represent 28%, whereas the proportion was the exact opposite on 30 June 2014 (24% and 76% respectively).
Such a change was the absolute prerequisite in order to have a healthy base on which to build our future.
In parallel, during the 2015 financial year, the focus was on finalizing tools that would create a complete value chain marketable everywhere in the world. First and foremost is the Deltadrone Cloud Information System, the very cornerstone of a complete and secure offer in the sense that this system allows for the comprehensive management of all assignments, constant traceability of all drone uses and in fine full respect of the applicable laws and regulations, as well as strong assurance as regards the safety and security of people and property.
This necessary construction phase, which took place throughout 2015, opens up new prospects:
- the sales revenue of €1.2M, exclusively generated by providing services, shows the success of the solutions based on business expertise offered by Delta Drone. The fact that the second half of the year’s sales revenue is double that of the prior six months represents a very sharp increase in activity;
- having a complete value chain and a system for monitoring drone flights will allow the Group to launch, as of the second half of the financial year, the sale of its own aerial options to a clientele of professional operators throughout the world, including those who might with to carry out assignments delegated by Delta Drone pursuant to large contracts.
In this context, the financial year’s loss, which is already much less than that of the previous financial year, is the direct result of an insufficient amount of sales revenue. This situation is obviously temporary, especially as there is no reason to expect a significant increase in fixed expenses in the near future.
The Group has the means to finance this growth. Thanks to Yorkville Advisors’ exercise of three new blocks of OCABSA in February 2016, the cash situation was of €6.1M as at 29 February 2016. This amount represents 13 months of fixed expenses.”
Concerning the consolidated income statement
Change in operating income
|In €K||2014||S1 2015||S2 2015||2015|
|Sales revenue||939||400||816||1 216|
The sales revenue corresponds only to the providing of services and can be broken down into assignments (acquisitions and processing) (94%) and training (6%). Compared with the 2015 roadmap mentioned last year upon publication of the 2014 accounts (cf. press release dated 18 March 2015), the difference is due to low sales revenue from the EFD – Ecole Française du Drone.
It should nevertheless be pointed out that the sales revenue generated during the second half of the year is almost the same at that of the 12 months of the previous financial year, and double that of the first six months of the financial year.
The -€66K noted in the second half of 2015 corresponds to the scrapping of finished products.
Change in operating expenses
|In €K||2014||S1 2015||S2 2015||2015|
|Operating expenses||3 310||1 345||1 756||3 102|
|Personnel expenses||3 775||1 152||1 252||2 405|
|Amortization and depreciation||1 900||731||747||1 478|
While the operating expenses (fixed expenses) corresponded to an average of €590K/month in 2014, the average for 2015 was of €459K/month (€447K/month excluding non-recurring costs).
The increase in operating expenses in the second half of the year was the result of various expenses that were made necessary due to the internationalization of our activity.
Change in extraordinary income or loss and net income
|In €K||2014||S1 2015||S2 2015||2015|
|Operating income||-7 325||-2 643||-3 005||-5 648|
|Current income before taxes||-7 399||-2 691||-3 013||-5 704|
|Extraordinary income or loss||-3 872||-192||193||1|
|Net deferred taxes||855||-2||-280||-282|
|Net income||-12 126||-2 885||-2 536||-5 421|
|Consolidated net income||-12 248||-2 946||-2 655||-5 601|
The main change concerns the big decrease in consolidated loss, which dropped from -€12 248K in 2014 to -€5 601K for the 2015 financial year. This change was mostly due to the following:
- the increase in current income of €1 695K;
- the impact of the extraordinary loss of -€3 872K on the 2014 accounts.
Concerning the consolidated balance sheet
|In €K||2014||2015||In €K||2014||2015|
|Net fixed assets||3 139||6 635||Share capital||2 626||3 963|
|Goodwill||488||4 319||Subsidies and reserves||11 344||9 779|
|Intangible fixed assets||1 553||841||Net income||-12 248||-5 547|
|Tangible fixed assets||1 054||975||Other equity||2 675||1 392|
|Inventory||155||171||Shareholders’ equity||4 397||9 587|
|Operating receivables||1 353||1 238||Long-term debts||1 448||1 175|
|Liquidities||4 052||4 399||Trade payables & debt provisions||2 854||2 068|
|Total||8 699||13 263||Total||8 699||13 263|
The Group’s balance sheet improved in 2015:
- As at 31 December 2015, shareholders’ equity and quasi-equity represented 72.2% of the balance sheet’s total, compared with only 50.5% as at 31 December 2014. In absolute terms, they were of €9.6M, compared with €4.4M the previous year;
- The long-term debts decreased in 12 months by €273K and now represent 8.9% of the balance-sheet total, compared with 16.6% at the end of 2014;
- On 31 December 2015, the cash position amounted to €4 399K. It represented 33.2% of the balance-sheet total and was greater than all of the current liabilities recorded on the balance sheet.
Finally, we would like to point out the sharp increase in goodwill on the asset side of the balance sheet resulting from the acquisition of the Fly-n-Sense company on 30 November 2015.
In February 2016, in accordance with the OCABSA agreement, the US company Yorkville Advisors exercised three blocks of OCBSA, representing €3M, converting, a few days later, all of the convertible bonds into shares. This transaction resulted in an increase in equity and cash.
As at 29 February 2016, the Group’s cash situation was of €6 118K, which corresponds to approximately 13 months of fixed expenses.
As at 29 February 2016, the number of shares making up the share capital was of 19 900 561, compared with 10 506 519 as at 31 December 2014. Taking into account double-voting rights, the total number of voting rights amounted to 20 599 905 on 29 February 2016.
Currently, 8% of the capital is held by registered shareholders, with the rest corresponding to bearer shares.
Concerning the consolidated cash-flow statement
|Cash flow||-5 266||-4 147|
|Cash flow from operating activities||-6 661||-4 718|
|Cash flow used in investing activities||-63||-923|
|Cash flow used in financing activities||7 840||5 980|
|Including financial debt||-430||-1 923|
|Cash changes||1 116||339|
|Cash at the start of the financial year||2 934||4 050|
|Cash at the closing of the financial year||4 050||4 389|
In 2015, the company’s financing was still from the outside sources at the top of the balance sheet, while cash flow remained significantly negative, with a small improvement mainly due to the decrease in expenses.
The main issue for the 2016 financial year is therefore the improvement of our cash flow, primarily via an increase in sales revenue.
The recent increase in our cash position, which was at €6 118K on 29 February, allows it to be €0.5M above the total cash flow from operating activities and used in investing activities together (€5 641K), which improves our visibility for the 12 months ahead.
The Delta Drone Group’s development strategy is based on areas of business expertise, marketed via an offer of complete solutions from the preparation of flight assignments to the processing of the data gathered. Such areas of business expertise are focused on sectors having a worldwide scope, with leadership organized by geographic zones. In support of the operational part, the “support” subsidiaries guarantee compliance with the applicable laws and regulations, and the safety and security of people and property.
|Sector||Applications||Leadership||Group Expertise||Partner Expertise|
|Mining Topographic Survey & Imaging||Inventory, mapping, digital elevation models, maps, Lidar imaging, etc.||South Africa / Australia||MTSI|
Delta Drone Africa
|Agriculture, Forestry, Water||Nitrogen recommendations, phenotyping, forest management, measure flow and quality of water, etc.||Europe||Delta Drone SA|
|Industrial inspection||Telecom antennas, chimneys, etc.||USA||Delta Drone America|
Delta Drone Maroc
|Immersive tours||Multimedia solutions (industrial sites)||Europe||Delta Drone SA|
Delta Drone Maroc
|Support||Applications||Leadership||Group Expertise||Partner Expertise|
|Management of assignments||Authorizations & Safety||Europe||DSL|
|Pilot training||Basic curriculum & skills sessions,|
Master 1 project management
Insofar as the market is worldwide and the acquisition sites are many and distant, it is necessary to have a high capacity to act locally. This is the reason for the Delta Drone Network, which is made up of independent (and non-exclusive) operators. Of course, such operators must have the proper equipment to successfully complete the assignments, both technically and as regards compliance with laws and regulations in effect. Already, in 2016, Delta Drone will be able to meet their needs thanks to cloud-connected drones, i.e., drones managed and tracked via the deltadrone Cloud Information System.
The Delta Drone Group’s strategic marketing plan since the change in governance on 28 May 2014 can be summarized as follows:
- Phase 1: rebuilding (second half of 2014):
- Stop manufacturing drones requiring complex and costly processes, and having no credible commercial prospects
- Restore the financial structure
- Reorganize the company
- Phase 2: solid basis for development (2015 financial year):
- Obtain sufficient financial means (OCABSA)
- Create bases for international development (Delta Drone America, Delta Drone Africa)
- Develop areas of business expertise (agriculture with Farmstar, inspection of antennas with Orange, MTSI with Lidar under helicopters, etc.)
- Validate the local-operator model / centralized data processing (Delta Drone Network)
- New conception of cloud-connected drones to guarantee traceability and management of assignments (Fly-n-Sense)
- Finalize the deltadrone Cloud System to encapsulate the entire value chain
- Phase 3: deployment (2016 financial year)
- Accelerate the building of an order book with multi-year contracts (€1.2M as at 29 February 2016)
- Commercial contracts in the targeted zones / applicable sectors
- Launch a new trilingual website (deltadrone.com)
- First participation in AUVSI’s XPONENTIAL 2016 conference in New Orleans (Louisiana, USA) from 2 to 5 May 2016
- Sales launch of cloud-connected drones (drones + cloud system subscription)
- Create local assembly sites (USA, Morocco, South Africa, etc.)
- Reinforce IT services structure (data transfer)
The documentation for the SFAF meeting to be held in Paris on 15 March 2016 will be available in its entirety on the Delta Drone website (www.deltadrone.com) at the end of the day following the meeting.
About DELTA DRONE: The Delta Drone Group a renowned player in the field of civilian drone for professional use. It offers a complete service, from data acquisition to data processing through a specifically developed information system, including the supply of professional pilots. These pilots are trained and certified by the Ecole Française du Drone, a subsidiary of the Group.
Delta Drone stock is listed on the Alternext market of Euronext Paris. ISIN code: FR0011522168.
Contacts : Jérôme Gacoin