ASX BRIEFS

VEEM LIMITED (VEE) - Marine Innovation Unleashed as a Global Leader in Marine Propulsion and Stabilizing Systems

• Andrew Musgrave

Share episode

Send us a text

Mark Miocevich, Managing Director of Veem Limited, takes us behind the scenes of what he calls "a rare beast in Australia" – a high-technology marine products manufacturer dominating global markets through innovation and precision engineering.

Veem specializes in three critical marine technologies: advanced propulsion systems, revolutionary gyrostabilizers, and specialized defence applications. Despite the cyclical nature of defence contracts, the company recently posted $33.6 million in first-half revenue for FY25 and is on track for continued growth following last year's record $80+ million performance.

The conversation reveals Veem's remarkable global expansion, securing contracts with major Italian super yacht builders while simultaneously entering Asian markets where demand for high-performance marine technology is surging. Most exciting is their exclusive 17-year partnership with Sharrow to manufacture what Mark describes as "the biggest step forward in probably a hundred years in propellers" – innovative toroidal-based designs that significantly increase efficiency.


Andrew Musgrave Host

Welcome back to another episode of ASX Briefs, where we bring you insights from the leaders of Australia's most innovative companies. Today, we're speaking with Mark Miocevich, the Managing Director of Veem Limited, a global leader in marine propulsion and stabilisation systems. Veem has been making waves in the industry, particularly with its high-performance propellers and gyrostabilizers used in luxury motor yachts, commercial vessels and defence applications. Mark, thanks for joining me today and welcome to the ASX Briefs podcast. 

Mark Miocevich Guest

Thank you, Andrew, nice to be here. 

Andrew Musgrave Host

Okay, Mark, for listeners that may be unfamiliar with Veeam, can you just provide a brief overview of the company? 

Mark Miocevich Guest

Sure, Andrew, we're a very, very rare beast in Australia that we're a high technology marine products manufacturer. So, we only deal in the high technology. Most of our work is exported and we focus on three major areas, which is propulsion, so propellers and shaft lines, gyro stabilizers a brand-new technology to the world for bigger boats. And also defence, marine related, so submarine work, propeller work, and they're the big three for us. 

Andrew Musgrave Host

Okay, and just touching on the financials, veem recently reported a $33.6 million revenue for first half FY25, and that's at the upper end of your guidance. So, can you walk us through the key drivers behind this performance? 

Mark Miocevich Guest

Sure, what we've seen. We've just come off a record year. Last year we returned over $80 million for the year and this year is our. It was expected to be a little slower because we're in between refits of submarines, which we usually have a cyclical turnover every two years, every two to three. So, we're in our little bit slower year this year, but we were pleased to say that we anticipated this. It all went well. It was a little slow the first half of the year, very big in the back half of the year, and so we'll come in a little bit below last year's. But then we're launching to be a much greater turnover the following financial year. So cyclical but going very, very well. 

Andrew Musgrave Host

Okay, and with a $1 million defence grant secured for propeller manufacturing, how does this support the company's long-term growth in the defence sector? 

Mark Miocevich Guest

Well, the defence sector, as you know, has taken a huge tick upwards and none of us want to see it, but we all have to be realistic that this is occurring globally. Now we do very, very advanced propeller technology for the world and for defence departments, and this grant is to enable us to set up a specialist facility for manufacturing what we call internally secret propellers. So, as you can imagine, there's a lot of development going on and I think Ukraine, Russia that conflict has really caused an acceleration of technology in this space. So, this grant enables us to install the necessary machinery to do all this for the Australian Department of Defence do all this for the Australian Department of Defence. 

Andrew Musgrave Host

Okay, and the company assigned propeller supply contracts for three major super yacht builders in Italy and entered the Korean yacht market. So, what does this mean for the global marketing position? 

Mark Miocevich Guest

Yeah, that's fantastic. We were doing ad hoc work for these big three and what they wanted to do and were able to coordinate is to have a contract which extended what we supply to them. So, we've got a much broader range, but also incorporated a more efficient freight method into Europe. So that really was the catalyst of all this, which means that, though, once they've signed up for this, the volumes have gone up and we become the incumbent on many of the lines. So that's really significant. 

And we haven't really entered into the Asian market until recently, and what we've seen is in Taiwan there's a lot of boat building going on, a lot of demand for the high technology I guess, the high speed and high demand propellers that we manufacture. So, it's worth adding that we lead the world in this field, so it's not unexpected. So, on top of that, we have our regular work with Volvo, which is being expanded as well for Volvo penta. So we've had a really significant uh uptick in the orders that we're expected to meet uh coming going forward, and that's resulted in expansion of our factories and more machinery arriving. So, it's a terrific time and that should all be installed and running around Christmas time. 

Andrew Musgrave Host

And the Sharrow by Veem collaboration is gaining momentum, with a focus on high-performance inboard propellers. So, what makes this technology so disruptive and what's next for this partnership? 

Mark Miocevich Guest

Yeah, Sharrows are just a stunner. It's been now well proven in the outboard market to significantly increase efficiencies of motors in the outboard area, and what Sharrows are doing is translating that across to inboard so bigger boats, which is much more complex. So, we're the only company in the world that has the technology to be able to manufacture these, and they're a toroidal based propeller, so they look like a big, curved ribbon and we're in the very early stages of that development. So, we've uh, sharrow are providing all the designs for this program going forward, and Veem has an exclusive and global license to manufacture them for the next 17 years plus. So, if the patents run longer, we'll do them for longer. So that's really exciting for us. 

What we're at the moment doing is Sharrow are now working with what they call a super users group, which are the first people that are really keen to get Sharrow on their boats, and they're working intimately with these people to develop their designs and from each of these designs they springboard to better designs and it it's an accelerated development process, which we're all very keen to do, and once we've got past that stage it'll revert back to Veem selling all these propellers and working with the general community. But the Sharrow advancement is the biggest step forward in probably a hundred years in propellers. So extremely exciting technology, but we have to give them the time to develop the designs. It's a very complex process. 

Andrew Musgrave Host

And your production capacity is increasing, with plans to boost annual propeller output from 4,500 to 5,500 units. So how is Veeam scaling up to meet this demand? 

Mark Miocevich Guest

Yeah, as I mentioned before, we've got an extension coming in and more machinery arriving, so we have the capacity on this site to probably go well beyond that, probably up around 8,000 units a year, and nearly all of these are exported all over the world. 

Andrew Musgrave Host

And the company is investing heavily in engineering and automation. So how will new multi-access machines and scanning technology improve production efficiency? 

Mark Miocevich Guest

We've got an extremely advanced process that heavily utilises robots and the CNC machinery, these multi-access machines they're talking about. They run around the clock, so it's really that's more of the same thing, and they're fed by a laser guided forklift day and night lights off. So, it's extremely advanced. But robotics is where we're bringing more and more technology into the process. We have to be as advanced as possible to compete with low-cost countries that are producing substandard products but are satisfying a particular financial market. 

Andrew Musgrave Host

And with the expansion of gyrostabiliser applications, how do you see this product segment evolving, particularly in the commercial and defence sectors? 

Mark Miocevich Guest

Gyros is for people in the marine sector. You would have already seen there is now something like 12 different manufacturers of small gyros. Our product is for bigger boats, from about 20 metres up to about 100 metres, so for big boats, and that's when the technology works really well, and we've developed that and there's no competitors in our space. But there's a $1.4 billion a year market. So, this is the technology of the future for stabilisation, because it works at all speeds and a gyro is just a big spinning flywheel inside a vessel that produces a resistive torque when the boat tries to roll and it's the laws of physics that we're harnessing and it puts a resistive torque through the gyro and stops the boat from rolling. It is absolutely a technology of the future and the market for us is massive. 

Andrew Musgrave Host

And with the global push towards autonomous vessels and advanced naval technology, how is the company positioning itself in the next generation of marine engineering? 

Mark Miocevich Guest

Well, we're already there. So obviously our gyros work completely automatically. But even with propellers, we've already seen the first requests for short life propellers, which had our engineers scratching their heads first until we had to explain that, look, they're going one way, they're not coming back. So, the demands are completely different. So, we're already into designing those and producing some of the early work. So, we're very excited to be involved. But we're very well placed to deal with it because we are so advanced with our technology already. 

Andrew Musgrave Host

Given the cyclical nature of defence and commercial marine orders, what are the biggest challenges in securing long-term defence contracts and how does the company plan to navigate them? 

Mark Miocevich Guest

Defence is particularly interesting and we're heavily involved in the Collins Class program and have been since 1988. And yes, that particular work does fluctuate, and we obviously work with ASC to try and minimise that. But there's the Type 26 frigate program which is coming on board, which is only a part of it. There is an international program for Type 26 boats. We call them Hunter, but there's another 35, 36 vessels globally of the same type. So, we're working very hard to integrate ourselves into the global supply chain for those, which is really important. 

And I think there's a very limited amount of people in fact there's only two people in the world and we're one of them that can manufacture this accuracy of propeller. So, we believe that's a very strong position for us. And also, there's a lot of work coming to Australia that is pre-AUKUS, which is designed to support the US submarine program, where they're having the same difficulties as the rest of the Western world in finding advanced manufacturers such as us to meet their needs. So, we're really going global now on our defence work, which will reduce that cyclical impact to our business. 

Andrew Musgrave Host

Okay, Mark. Now just to close things up, what are some of the key catalysts that investors can look out for over the next 12 to 18 months? 

Mark Miocevich Guest

We'll certainly see defence greater defence contracting contracts awarded. We will also see more sharp line work, which is the pieces that we attach to the propeller in a boat. We'll see significant rises in that space. We'll see the continuing rise of gyrostabilisers. But the beauty of Veem is that we're just steadily growing and expanding around the world. So, we're a long-term growth company and we have a very good fallback position with Defence. So, I think it's a very exciting company to be involved with. 

Andrew Musgrave Host

Well, thanks for your time today, Mark. It's been great to chat, get an update on the company and we look forward to further updates from Veeam in the upcoming months. 

Mark Miocevich Guest

Thanks, Andrew, lovely to talk to you. 

Andrew Musgrave Host

That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.