THEON Business Model

THEON’s business model leverages our technological and engineering expertise with fully integrated processes, ranging from design and production to business development. This vertical integration allows us to firmly oversee engineering and production, resulting in high-quality, cost-efficient solutions.
THEON generates revenue by selling products primarily to government procurement agencies, armed forces worldwide, defense primes, and law enforcement agencies.

Key Competitive Advantages

  • Customization: Our ability to customize products is a key competitive advantage. We have a fast-track design and prototyping procedure, enabling us to promptly respond to modification requests. Our focus on customisation has led to long-standing relationships globally, some spanning over 10 years.
  • Customer Engagement: We engage continuously in educating our clients; tendering, and executing contracts, and improving our products based on our clients’ input and respective needs.
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Strengths of Our Model

  • Large Scale: Leading in the man-portable night vision segment, with over 50% market share in Europe. Our large purchasing power allows form better negotiation terms than competitors.
  • Advanced Product Offering: Continually developing and improving mission-critical products to stay ahead of the competition.
  • International Presence: Utilizing a global supply chain and establishing co-production facilities in strategic regions.
  • Established Client Base: Long-standing relationships with a diversified global customer base in multiple attractive markets, leading to repeat business.
  • Attractive Operating Model: Disruptive and vertically integrated, with an agile corporate structure and competitive cost base due to Greek-based operations.
  • Strong Financial Profile: Fast-growing with clear growth visibility, lean cost structure, high-profitability, strong cash conversion, and low leverage.
  • Technology: Deep technological know-how and engineering expertise at the core of our operations.
  • People & Culture: Highly skilled workforce, recognized as one of the top companies to work for in Greece by the Great Place To Work Certification™.
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Strategy for growth

Strong underlying market growth

Global defence spending is projected to increase by 5.2% annually from 2022 to 2027, due to the volatile geopolitical environment. Theon operates in the rapidly growing defence electronics subsegment, which is expected to expand at approximately 10% per year over the next five years. This growth is partly driven by a renewed focus on dismounted capabilities, which are anticipated to grow over 16% annually. Additionally, platform applications are expected to grow around 10% per year, largely due to increased investments in combat vehicles.

Growth in our addressable markets is further supported by major military spending programmes, particularly in Europe, US and Middle East.

Organic growth

Adjacent products:

We are currently designing more sophisticated products on top of our existing product set. This way, we intend to enter new markets and customers, and sell additional products to our existing clientele. New products developed by our own in-house R&D teams will also be supplemented by strategic acquisitions (see Inorganic growth below).

Product innovation:

Theon recently launched new products within the ARMED ecosystem that integrate with battle management systems and provide enhanced situational awareness for soldiers. These products include heads-up displays, thermal clip-ons, and fused goggles with interconnection capabilities, all poised to play a key role in modern warfare. Fused goggles and heads-up displays are expected to become standard equipment over time.

On top of man-portable products, we also focus on cutting-edge multisensory platform-based products, which are anticipated to be a larger contributor to future growth.

Geographic expansion:

Theon has a strong global footprint, but there are significant opportunities to expand worldwide, both within Night Vision and within adjacent products, particularly in markets like the USA, the Middle East and the Far East.

Inorganic growth

The €94 million in net cash raised from our IPO will accelerate our growth through M&A activities in the near to medium term. Our intention is to acquire companies in both our core and adjacent markets to gain complementary products, innovative technologies, extended capabilities, and broader geographical reach.

In our core man-portable markets, we plan to pursue vertical integration of key components and critical parts. Additionally, we seek to expand our product portfolio with new offerings such as day sights, laser targeting systems, and fire-control systems.

For platforms, we intend to acquire key capabilities that, combined with our internal R&D and outsourced design resources, will expedite new product development and market entry.