Key Milestone Update and Notice of Results

Sondrel (Holdings) plc

15 May 2023

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation

15 May 2023

Sondrel (Holdings) plc

("Sondrel", the "Company" and together with its subsidiaries the "Group")

Key Milestone Update and Notice of Results

Update on material contract with Tier 1 automotive customer

Sondrel (AIM: SND), the fabless semiconductor business providing turnkey services in the design and delivery of 'application specific integrated circuits' ("ASICs") and 'system on chips' ("SoCs") for leading global technology brands, provides a further update on its Tier 1 automotive customer contract and notice of its final results for the year ended 31 December 2022 ("FY22").

Further to the announcement on 15 February 2023, significant progress and investment has continued in respect of the material turnkey ASIC engagement for a Tier 1 OEM Automotive customer and remains on schedule for the release to silicon manufacture later this year. Following mutual agreement of the reorganisation of certain project workstreams in order to prioritise and enable enhanced performance in the design, along with ensuring the optimal time to tapeout (and ultimately production), in line with industry practice, key milestones have been redefined and the payment receipt connected to the second project milestone, previously anticipated to occur in Q1 2023, is now expected to occur in the next few months.

As stated at the time of the Company's IPO, Sondrel expects typical production volumes for each contract to deliver revenue of £10m to £100m per annum and the contract with the Tier 1 OEM Automotive customer could deliver production revenue at the upper end of this range. 

The Group also continues to deliver other live ASIC projects in line with its expectations, as demonstrated by the January 2023 design tapeout for a leading provider of Edge AI Hardware Accelerator solutions and the March 2023 tapeout of an ASIC design for a leading provider of home network devices, both of which were fully funded by the customer.

Based on production volumes and lifetime currently projected by the customers, revenues for Sondrel associated with the production and supply of these two projects would be worth in excess of US$20 million to the Company over three years and US$25 million over five years, respectively.

Notice of Results

The Company will announce its full year results for the year ended 31 December 2022 ("FY22") on Wednesday, 24 May 2023 when, as announced by the Company on 15 February 2023, the Company expects to report FY22 revenues of £17.5 million, reflecting 116% year on year growth (FY21: £8.5 million). In addition, the Company announces that, excluding both the non-cash impact of a £1.1m write off of a capitalised asset and now confirmed treatment of FY22 amortisation charges, the Company expects to report Adjusted EBITDA* in line with market expectations** (FY22 Adjusted EBITDA loss of £1.1m including the effects of these two accounting provisions).

There will be an in-person presentation for analysts at 9:30 a.m. (BST) on the day of the announcement, hosted by Graham Curren (CEO) and Joe Lopez (CFO), at Buchanan's offices at 107, Cheapside, London EC2V 6DN. 

Please contact Buchanan for further details.

*Adjusted EBITDA is defined as earnings before interest, tax, depreciation, amortisation and IPO costs.

**Current market expectations of FY22 Adjusted EBITDA as at the date of this announcement of £1.0 million.

Graham Curren, Chief Executive Officer of Sondrel, commented:

"We continue to work closely with our Tier 1 automotive customer as we progress towards the next project milestone. This project, together with the other tapeouts we have announced in recent months, provides the Group with significant momentum and considerable traction in building a solid base of production revenues in the years ahead."

''Our focus on end markets that are aligned with strong and enduring global technology megatrends means that we have a good pipeline of design opportunities for 2023 and I look forward to updating the market on these as the year progresses.''

Sondrel (Holdings) plc	Via Buchanan
Graham Curren, CEO	Tel: [phone]
Joe Lopez, CFO
Cenkos Securities plc	Tel: [phone]
Ben Jeynes / Katy Birkin / George Lawson - Corporate Finance
Alex Pollen / Michael Johnson - Sales
Buchanan Communications	Tel: [phone]
Chris Lane Stephanie Whitmore	[e-mail]
Jack Devoy
Abby Gilchrist

About Sondrel

Sondrel is a UK-based fabless semiconductor company specialising in high end, complex digital Application Specific Integrated Circuits (ASICs) and System on Chips (SOCs). It provides a full turnkey service in the design, prototyping, testing, packaging and production of ASICs and SoCs.

The Company is one of only a few companies capable of designing and supplying the higher-spec chips built on the most advanced semiconductor technologies, selling into a range of hyper growth end markets such as high-performance computing, automotive, artificial intelligence, VR/AR, video analytics, image processing, mobile networking and data centres.  Sondrel designs have enabled products by leading technology brands including Apple (iPhone), Sony (PlayStation), Meta's (Oculus), Samsung, Google and Sony smartphones, JVC (prosumer camcorders), Tesla and Mercedes-Benz cars.

Sondrel is well-established, with a 20-year track record of successful delivery, supported by long standing ecosystem partnerships including Arm, TSMC and Samsung. Headquartered in the UK, Sondrel has a global presence with offices in UK, USA, China, India and Morocco.

For more information please visit: www.ir.sondrel.com.

 

END