FLASH 7 June 2023

KALRAY
BUY
Electronics
KAL
RAY

EPS 12/23e Unchanged • EPS 12/24e Unchanged

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BUY
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Pres
s
rele
ase
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Con Press releas e +
tact Conta ct

PRICE* TP POTENTIAL
€ 26.00
*closing 06/06/23
€ 36.0 +38.5% Coolidge 2 on schedule
In line with its roadmap, Kalray has announced the tape-out of its new
Coolidge 2 DPU processor. The first samples will be available this
Press release + Contact
summer.

Bloomberg ALKAL FP
Market cap. €m 211
New generation of DPU in 2023
Free Float €m 172
Kalray's new generation of DPU (Data Processing Unit), Coolidge 2, will be launched onto
Volume (3M) €m 0.28/day the market in the second-half of 2023. The group is making a leap in performance
compared with the previous generation of processors (x10), while offering reduced energy
consumption. Its processors are particularly well suited to processing algorithms and data-
Price CAC M&S EPS (GD)
40.0 0.00 intensive storage, features that are currently very much in the spotlight with the success
35.0 -0.50 of ChatGPT, a tool that requires these two types of data processing.
-1.00
30.0
-1.50
The first contract linked to the Coolidge 2 DPU is the jumbo contract, announced at the
25.0
20.0
-2.00 end of 2022. The group is currently in discussions for other contracts of this type.
-2.50
15.0 -3.00
10.0
Jun-21 Dec-21 Jun-22 Dec-22
-3.50
Jun-23 Reminder of the details
In line with its roadmap, Kalray has announced the tape-out of Coolidge 2 (dispatching of
PERFORMANCE 1M 6M 12M the photomask of the circuits to the manufacturing plant), thereby enabling it to have the
Absolute +48.4% +53.5% +12.6% first samples of the processor this summer. This stage represents an investment of €4m,
Rel. / CAC M&S +51.6% +48.7% +19.9% and production of these processors will be performed by the Taiwanese firm TSMC.

AGENDA
Buoyant environment
11/07/23 after the close : H1 sales
Kalray is currently operating in a buoyant environment. In addition to the start to
production of its products and all the news about artificial intelligence and the associated
FINANCIAL ANALYST(S)
need for processors to handle it, the sector is undergoing a strong period of consolidation
Yann de Peyrelongue (acquisition of Fungibles by Microsoft at the beginning of the year).
+33 (0) 1 40 22 41 13
yann.de-peyrelongue@socgen.com Rating and TP confirmed
Document completed on 07/06/2023 - 08:28 We confirm our rating and TP at a time when the group is benefiting from a healthy
Document published on 07/06/2023 - 08:29 momentum, both in its market (strong growth, consolidation) and internally (jumbo
contracts, new hardware and software products). The group has expressed its confidence
in its ability to double sales to €40m this year, thereby enabling it to significantly reduce
its losses. Our forecasts are in line with this guidance.

STOCK RATIOS 12/22 12/23e 12/24e 12/25e FINANCIAL DATA 12/22 12/23e 12/24e 12/25e
P/E ns ns 14.8x 6.8x Sales (€m) 16.4 40.0 80.0 112.0
PEG ns ns ns 0.1x C. EBIT (€m) -19.6 -9.7 9.1 27.2
P/CF 50.9x 18.2x 6.8x 4.4x C. EBIT/Sales -119.6% -24.3% 11.4% 24.3%
EV/Sales 9.9x 5.5x 2.6x 1.7x EBIT (€m) -19.6 -9.7 9.1 27.2
EV/EBITDA ns 30.0x 8.1x 4.2x Net attributable profit (€m) -15.5 -5.2 14.5 31.3
EV/C. EBIT ns ns 23.1x 6.9x Adjusted EPS (€) -1.93 -0.64 1.76 3.80
EV/EBIT ns ns 23.1x 6.9x Chg. ns ns ns 116.1%
EV/Capital employed 5.6x 4.6x 3.9x 3.1x FCF (€m) -16.4 -23.7 7.7 24.5
P/BV 2.9x 5.0x 3.8x 2.4x Net fin. debt (€m) -19.3 4.4 -3.3 -27.8
FCF yield -9.0% -11.1% 3.6% 11.4% Gearing -40.4% 10.4% -5.9% -31.5%
Yield 0.0% 0.0% 0.0% 0.0% ROCE -51.8% -15.5% 12.8% 33.8%

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 7 June 2023

KALRAY BUY Yann de Peyrelongue +33 (0) 1 40 22 41 13

PRICE* TP POTENTIAL PROFIT LOSS STATEMENT (€m) 12/20 12/21 12/22 12/23e 12/24e 12/25e
Sales 1.0 1.5 16.4 40.0 80.0 112.0
€ 26.00 € 36.0 +38.5% Chg. -18.3% 40.8% 1028.9% 143.7% 100.0% 40.0%
*closing 06/06/23 Chg. lfl -18.3% 40.8% 203.6% 78.5% 100.0% 40.0%
EBITDA -5.9 -5.8 -2.7 7.3 26.1 44.2
C. EBIT -14.7 -18.6 -19.6 -9.7 9.1 27.2
EBIT -14.7 -18.6 -19.6 -9.7 9.1 27.2
Net interest income -0.1 -0.1 0.2 -0.3 -0.3 -0.3
Tax 3.0 3.6 8.1 4.7 5.6 4.4
Income from associates 0.0 0.0 0.0 0.0 0.0 0.0
Activity Net earnings from discontinued operations 0.0 0.0 0.0 0.0 0.0 0.0
Kalray is a many-core processor conceptor Minority interests 0.0 0.0 0.0 0.0 0.0 0.0
Net attributable profit -11.8 -15.1 -15.5 -5.2 14.5 31.3
addressing datacenter and autonomous Adjusted net attr. profit -11.8 -15.1 -15.5 -5.2 14.5 31.3
vehicle industries
CASH FLOW STATEMENT (€m) 12/20 12/21 12/22 12/23e 12/24e 12/25e
Cash Flow -5.1 -4.8 2.7 11.8 31.5 48.3
- Chg. in WCR 0.5 2.3 4.5 19.5 7.7 5.8
- Capex 10.5 13.6 14.7 16.0 16.0 18.0
= Free Cash Flow -16.2 -20.7 -16.4 -23.7 7.7 24.5
- Net financial investment 0.0 0.0 0.9 0.0 0.0 0.0
- Dividends 0.0 0.0 0.0 0.0 0.0 0.0
Market data + Capital increase/Share buybacks 13.6 11.1 36.7 0.0 0.0 0.0
12M Low/High € 14.08/€ 26.65 + Others 2.3 1.9 1.6 0.0 0.0 0.0
Volume (3M) 15,634 shares/day = Chg. net financial debt -0.2 -7.7 18.8 -23.7 7.7 24.5
Number of shares 8,071,798
BALANCE SHEET (€m) 12/20 12/21 12/22 12/23e 12/24e 12/25e
Market cap. €m 211
Goodwill 0.0 0.0 13.8 13.8 13.8 13.8
Free Float €m 172 Other intangible assets 19.1 19.5 24.4 21.4 18.4 17.4
Market Euronext Growth Tangible assets 4.3 4.8 3.1 5.1 7.1 9.1
Sector Electronics Financial assets 0.6 0.7 0.4 0.4 0.4 0.4
Bloomberg ALKAL FP WCR -1.1 2.2 -12.7 6.7 14.5 20.3
Shareholders' equity (group share) 28.4 25.6 47.7 42.5 57.0 88.2
Isin FR0010722819 Minorities 0.0 0.0 0.0 0.0 0.0 0.0
Index EN Growth Allshare Equity + minorities 28.4 25.6 47.7 42.5 57.0 88.2
Shareholders on 02/12/22 Cash and equivalent 20.2 12.2 32.2 8.5 16.3 40.7
Net financial debt -8.4 -0.6 -19.3 4.4 -3.3 -27.8
Free float 81.4% Capital employed 22.9 27.1 28.9 47.4 54.1 60.9
NXP 6.3%
Pengpai France 4.4% PER SHARE DATA (€) 12/20 12/21 12/22 12/23e 12/24e 12/25e
Safran Corporate Ventures 4.0% Number of shares (000) 5,348 5,830 8,072 8,237 8,237 8,237
CEA Investissement 3.9% Number of diluted shares (000) 5,858 6,436 9,269 9,137 9,137 9,137
Adjusted EPS -2.39 -2.70 -1.93 -0.64 1.76 3.80
Employees on 31/12/22 188 Reported EPS -2.39 -2.70 -1.93 -0.64 1.76 3.80
CF per share -0.95 -0.82 0.34 1.43 3.82 5.86
2022 sales by region Book value per share 5.32 4.40 5.91 5.16 6.91 10.71
Europe 55% Dividend 0.00 0.00 0.00 0.00 0.00 0.00
Others 43% Payout 0% 0% 0% 0% 0% 0%
France 2% RATIOS 12/20 12/21 12/22 12/23e 12/24e 12/25e
2022 sales by activity Gross margin/Sales 70.3% 64.1% 56.0% 55.0% 60.0% 60.0%
EBITDA/Sales -567% -397% -16.7% 18.2% 32.7% 39.5%
C. EBIT/Sales ns ns -120% -24.3% 11.4% 24.3%
EBIT/Sales ns ns -120% -24.3% 11.4% 24.3%
Corp. tax rate 0.0% 0.0% -20.8% 0.0% -2.9% -8.9%
0%
Adjusted NR/Sales ns ns -94.7% -13.1% 18.1% 27.9%
Capex/Sales ns 937% 89.3% 40.0% 20.0% 16.1%
Capex/D&A ns ns ns ns ns ns
38% FCF/Sales ns ns -99.8% -59.2% 9.7% 21.9%
FCF/EBITDA ns ns ns ns 29.7% 55.4%
Goodwill/Equity + minorities 0.0% 0.0% 28.8% 32.4% 24.2% 15.6%
WCR/Sales -108% 150% -77.5% 16.8% 18.1% 18.1%
62% Gearing -29.4% -2.3% -40.4% 10.4% -5.9% -31.5%
Net financial debt/EBITDA 1.4x 0.1x 7.0x 0.6x -0.1x -0.6x
EBITDA/Financial charges ns ns ns 28.2x ns ns
ROCE -54.9% -55.8% -51.8% -15.5% 12.8% 33.8%
ROE -41.6% -59.0% -32.6% -12.3% 25.4% 35.5%

STOCK MARKET DATA 12/20 12/21 12/22 12/23e 12/24e 12/25e

Equipment sales Services Share price performance 40.2% 5.7% -45.3% 49.9% - -
Share price performance vs. CAC M&S 42.0% -9.3% -36.5% 44.7% - -
Share price High (€) 30.00 49.10 35.00 26.65 - -
Sales and C. EBIT Margin Share price Low (€) 13.55 28.50 14.08 15.60 - -
Enterprise value (€m) 96.1 211.5 163.2 218.7 210.9 186.4
Sales (€m) C. EBIT Margin = Market cap. 105.0 212.6 182.5 214.2 214.2 214.2
+ Net financial debt -8.4 -0.6 -19.3 4.4 -3.3 -27.8
20 0% + Minorities 0.0 0.0 0.0 0.0 0.0 0.0
+ Provisions & others 0.1 0.1 0.4 0.5 0.5 0.5
- Financial assets 0.6 0.7 0.4 0.4 0.4 0.4

0 -2000% VALUATION 12/20 12/21 12/22 12/23e 12/24e 12/25e

12/17 12/18 12/19 12/20 12/21 12/22
P/E ns ns ns ns 14.8x 6.8x
PEG ns ns ns ns ns 0.1x
P/CF ns ns 50.9x 18.2x 6.8x 4.4x
EV/Sales ns ns 9.9x 5.5x 2.6x 1.7x
EV/EBITDA ns ns ns 30.0x 8.1x 4.2x
EV/C. EBIT ns ns ns ns 23.1x 6.9x
EV/EBIT ns ns ns ns 23.1x 6.9x
EV/Capital employed 4.2x 7.8x 5.6x 4.6x 3.9x 3.1x
P/BV 5.6x 7.2x 2.9x 5.0x 3.8x 2.4x
FCF yield -15.4% -9.7% -9.0% -11.1% 3.6% 11.4%
Yield 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Find our research at www.gilbertdupont.fr I please read the DISCLAIMER at the end of this document carefully
P2 Downloaded on www.gilbertdupont.fr by Mubashir Mohammad - 07/06/2023 09:17:12