Transcript Inosat - Black Swan Conference 2014

INOSAT S.A.
Private Placement Offering
Jorge Carrilho
October 2011
BUSINESS COMPLEXITY IS RISING
 Globalization  Lower margins
 Mega-cities  Less mobility
 Oil price rising  More fuel costs
www.inosat.com
Business manager’s biggest challenge:
HOW TO INCREASE PROFITABILITY?
 How to reduce costs with operations?
 How to increase productivity of sales and field teams?
How to make more juice from the same oranges?
www.inosat.com
TELEMATIC FLEET MANAGEMENT SYSTEMS
Increase up to 25% business profitability
 18% driving time reduction
 15% lower fuel costs
 20% decrease in unauthorized stops
 19% increase in productivity
www.inosat.com
TELEMATIC FLEET MANAGEMENT SYSTEMS
Focus on increasing productivity and reducing costs
The term ‘Telematics Fleet Management Systems’
(‘TFMS’) encompasses a range of products and services
that help fleet managers optimize utilization of resources
through extensive use of
wireless communication
technology, such as GPS
(Global Positioning System)
and GSM (Global System
of Mobile Communications).
www.inosat.com
TFMS MARKET DATA
www.inosat.com
GLOBAL MARKET B2B – 290 million vehicles
Market Penetration of 5% | only 14 million vehicles equiped
equipped
T&T
4,6
MILLIONS
TFMS
2,3
MILLIONS
LBS
7,3
MILLIONS
LOCATION
&
SECURITY
www.inosat.com
TRACKING
&
CONTROL
TELEMATICS
FLEET
MANAGEMENT
HUGE
BUSINESS
OPPORTUNITY
PROFESSIONAL PRODUCTS
Track & Trace will remain dominant, Fleet Management Systems and
Remote Vehicle Diagnostics are gaining momentum
MARKET GROWTH - 27% CAGR
23 million new vehicles equipped by 2015
43% CAGR
40.0
35.0
32% CAGR
30.0
25.0
20.0
17% CAGR
15.0
10.0
TFMS
5.0
T&T
0.0
2011
2012
2013
2014
2015
LBS
The Telematics Fleet Management segment is growing at 43% per year
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INOSAT’S B2B PRODUCTS
INOFLEET – B2B PRODUCTS
Extensive range of solutions for every type of fleet
1st Generation product with focus on Security
Features: Location, Geofencing and Immobilization
2nd Generation product with focus on Control
Features: Route control, Schedules and Km analysis
3rd Generation product with focus on Productivity
Features: Task management, Driver’s style analysis,
Fuel monitoring and Route planning
www.inosat.com
UNIQUE FEATURES OF INOFLEET
Quick ROI through cost reduction and increase productivity
TASK MANAGEMENT & NAVIGATION
Increases productivity on average by 13%
VEHICLE ROUTE PLANNING & OPTIMIZATION
Reduces mileage by 11%
TELEMATICS AND DRIVER’S STYLE ANALYSIS
Cuts average fuel consumption by 15%
FUEL LEVEL MONITORING
Eliminates 100% of fuel theft
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HIGH QUALITY PRODUCT – ENGENEERED IN EUROPE
Inosat complies with the highest quality standards
RELIABILITY
European Quality Certification
Engineered in Europe
QUALITY CONTROL
Less than 1% units breakdown per year
Up to four years of warranty
CUSTOMER SATISFACTION
Customer satisfaction ratios above 95%
Fast and effective response to technical issues
www.inosat.com
COMPANY PROFILE
INOSAT IS PRESENT IN 17 COUNTRIES
Market leader in Telematic business solutions
Pioneers in telematics, profitable since 2002
2010’s turnover: € 6.5 M | 2010’s profits: € 868 K
100% in house development of hardware & software
Strong investment in R&D and Innovation
More than 40.000 location units sold
Extensive portfolio of location solutions B2B & B2C
www.inosat.com
INOSAT – International Partners
International Sales FY 2008 ~ YTD 2011
€1,100,000.00
€1,000,000.00
€900,000.00
€800,000.00
€700,000.00
€600,000.00
€500,000.00
€400,000.00
€300,000.00
€200,000.00
€100,000.00
€Brazil
Angola
Morocco
Chile
Greece
Mozambique
France
Spain
Argelia
Nigeria
Estonia
 TOP 4 countries represent 79% weight total sales:
Brazil 37%
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Angola 19%
Morocco 18%
Chile 4%
South Africa
(Rep. )
Czech
Republic
Colombia
BRAZIL B2B MARKET: 20 MILLION VEHICLES
With only 0.5% of penetration, TFMS it’s an huge opportunity
BRAZIL PROFESSIONAL VEHICLES MARKET
6.0%
2.0%
0.5%
91.5%
Vehicles not equiped
Vehicles with Location
Based Services
Vehicles with Track &
Trace Solutions
Vehicles with
Telematic Solutions
Resolution 245: Starting June 2012, all new vehicles sold in Brazil,
4 Million per year, will be forced to have a location based system.
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MORE THAN 2.500 B2B COSTUMERS
With 40.000 vehicle location units installed
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RECURRENT SALES BUSINESS MODEL
Each costumer pays a monthly fee per vehicle
Product
Type
Average
Monthly fee
Operating
Costs
Gross
Margin
INOFLEET START (VFC)
INOFLEET TRACE (BIZ)
INOFLEET PRO (NAV)
10 €
15 €
20 €
3€
3€
3€
70%
80%
85%
• Costumer pays an initial fee for hardware setup
• Contracts have a minimum duration of 24, 36 or 48 months
• Low operating costs: GSM + Maps + Support
• High margins, from 70% to 85%
www.inosat.com
INOSAT PORTUGAL FINANCIALS
2010
2011
2012
2013
2014
2015
2016
Sales 6,531,030 4,708,512 3,936,964 6,112,333 9,119,894 12,478,470 15,929,233
New Renting contracts 903,336 2,970,673 7,151,807 9,277,022 11,897,886 12,933,940 13,700,504
Total Productivity 7,434,366 7,679,185 11,088,772 15,389,355 21,017,780 25,412,410 29,629,736
P&L before taxes 1,197,713
674,659
Taxes
Dividends Brazil
Net Profits
329,371
185,531
868,342
489,128
Dividends
0
0
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131,766 1,685,744 3,792,784 6,272,616
8,898,862
36,236
463,580 1,043,016 1,724,969 2,447,187
338,689 2,099,505 4,062,315
95,530 1,222,164 3,088,458 6,647,151 10,513,990
0
916,623 2,316,343 4,985,363
7,885,492
Current Shareholders
Inosat share capital: € 1.000.000
• Jorge Carrilho ………………… 33,3%
• Tiago Borges ………………… 33,3%
• Innovation Capital SGPS ……. 33,4%
Innovation Capital SGPS is totally owned by Jorge Carrilho
& Tiago Borges
www.inosat.com
INOSAT’S INVESTMENT PROJECT
Highly profitable business model
LISTING IN THE DEUTSCHE BÖRSE
ENTRY STANDARD MARKET
EU - regulated market
Stock Exchange
regulated market
Prime Standard
Entry Standard
General Standard
First Quotation Board
(Open Market)
Regulation
Low
Level
O.M.
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High
Entry
Std.
General
Std.
Prime
Std.
ACTIVE M&A MARKET
SEVERAL OPERATIONS COMPLETED RECENTLY
Cybit and Masternaut Combine Forces, Creating Europe’s Leading
Telematics Provider
The Cybit-Masternaut agreement was overseen by technology-focused private
investment fund, Francisco Partners, which acquired Cybit Holdings plc in 2009.
The terms of the acquisition value the entire issued share capital of Cybit
Holdings plc at approximately £23 million.
www.inosat.com
Dividend Policy
• Distribute 50% of net income when these are > € 500 K
• Distribute 75% of net income when these are > € 1M
Dividend Forecast (2013-2016)
2013
2014
916.623 2.316.343
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2015
4.985.363
2016
7.885.492
Investor exit
• The need for dimension will force M&A
• Equity funds are looking for recurring revenue companies,
typically through SaaS (Software as a Service) business
models
• Sell the stocks on the Stock Markets
• Return on Investment through dividends
www.inosat.com
SWOT of the investment
Strengths
• Low overheads
• Low risk vs startups
• Present in 17 countries, 3 continents
• Emerging markets exposure (Brazil, Angola, Morocco)
• Current shareholders agree on a lockup period of 1 year
www.inosat.com
SWOT of the investment
Weaknesses
• Liquidity of the stock
• Company current dimension vs global competitors
www.inosat.com
SWOT of the investment
Opportunities
•
Technology is becoming cheaper (Hardware and GSM
cost decreased 50% over the last 2 years)
•
Revenue from traffic data will grow in future
•
Listing of the Brazilian company in Bovespa in 2014
•
M&A happening on this sector (Zatix, Cybit, C-Track)
•
Equity funds investing in SaaS companies.
www.inosat.com
SWOT of the investment
Threats
•
Market prices for the service are falling
•
Financial markets instability
www.inosat.com
Inosat Peer Group Valuation
Company
BSM Technologies
Numerex Inc
Market
TSX
NASDAQ
Trakm8
LSE
Transics NV
Frankfurt
Mix Telematics
JNB
C-Track / Digicore Holdings ltd
JNB
Pointer Telocation Ltd
Ituran
Values in thousands
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TLV
TLV
Mcap
Euro
9,841
84,737
2010 Sales MTP Net Income MTP
Euro
Euro
HQ
9,738 1.0
-2,266
Canada
43,172 2.0
-282
US
2,898
4,800
240.5
12 UK
48,110
41,000
2,520
19 Netherlands
82,616
62,950
79,105
63,498
6,421
4,370
13 South Africa
14 South Africa
15,292
196,199
16,168
31,430
238
2,408
64 Israel
81 Israel
CONCLUSIONS
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INVESTMENT PROJECT HIGHLIGHTS
Huge business opportunity for TFMS in Brazil
• Capital investment in INOSAT Portugal to boost our
operations in Brazil.
• An investment up to €2.25 million.
• Highly profitable business based on recurring revenue
model and low overheads.
• To be listed in the first semester of 2012.
• Attractive dividend policy.
www.inosat.com
Contacts
Thank you
Jorge Carrilho
[email protected]
www.inosat.com