Slide 1: Welcome to 2021 Annual and Special Shareholder Meeting
For personal use only Title of the presentation 1 • Tena koutou, tena koutou, tena koutou katoa. • Good afternoon ladies and gentlemen and thank you for joining us for EROAD’s 2021 Annual Shareholder Meeting and Special Shareholder Meeting to approve the Coretex Acquisition and its funding which we
Slide 2: For personal use only
For personal use only Title of the presentation 2 2
Slide 3: Chairman's welcome and meeting opening
For personal use only Title of the presentation 3 • My name is Graham Stuart and I am Chairman of EROAD. On behalf of your directors, Steven Newman, our CEO and all of the EROAD team, a very warm welcome to you in the room with us here today and those joining the meeting virtually. • Like many other
Slide 4: Directors, management and advisors present
For personal use only Title of the presentation 4 • Up front with me or joining us virtually today I have: • Barry Einsig who is joining us virtually from Pennsylvania • Tony Gibson • Susan Paterson • Board member and Chief Executive Steven Newman; • Chief Financial Officer, Alex Ball and • General
Slide 5: Auditor and solicitor attendance
who are available to support you with the formal aspects of the meeting. Also here today are KPMG, our company’s auditor and Chapman Tripp our company’s solicitor. For personal use only 4
Slide 6: Meeting format
For personal use only Title of the presentation 5 • The format of the formal part of today’s proceedings will comprise of presentations from myself, then Steven, followed by Alex Ball who will run through the numbers. Steven will then make some comments on the Coretex acquisition and the exciting fu
Slide 7: FY21 highlights
For personal use only Title of the presentation 6 • As you are all well aware, FY21 brought with it some challenging macro-economic conditions across all our markets. North America has been the most challenging of our markets during COVID-19 due to the impacts of lengthy lockdowns, wild fires, civil
Slide 8: Investment and acceleration after ASX listing
opportunities when conditions improved. • For EROAD this meant increasing and accelerating its investment in its platform and productivity. The ASX listing and simultaneous $53m capital raise in September 2020 ensured we had the upfront funding to be able to begin this acceleration. We were ensuring
Slide 9: Coretex alignment with EROAD purpose
For personal use only Title of the presentation 7 • As well as the significant growth that Coretex brings with it – Coretex is a perfect complement with EROAD as we are aligned with our purposes. Both EROAD and Coretex aspire to create a safer, more sustainable and more productive society. • We have
Slide 10: Strategic rationale for Coretex acquisition
For personal use only Title of the presentation 8 • We have always stated that an acquisition would be part of our growth strategy to reach our medium and long-term goals. We have been clear we would seek complementary and proven technology to augment our product range. To accelerate growth, any acq
Slide 11: Path to 250,000 units
• We have always been clear with shareholders that EROAD chooses to grow in this rapidly growing global telematics industry and this moves us closer to the next major milestone of 250,000 units and positions us to become a bigger player in the global telematics market. • We are very excited about th
Slide 12: CEO welcome
For personal use only Title of the presentation 9 • Welcome everyone. Its great to be able to spend time with our shareholders, updating you on the significant progress we have made since the last ASM against our strategy. • Welcome to all our shareholders joining us virtually as well – we have a nu
Slide 13: Contracted unit growth by market
For personal use only Title of the presentation 10 • This is a slide that we’ve shown every year, which demonstrates our growth in each market. As Graham mentioned, despite difficult macro-economic conditions EROAD continued to see grow. While not the growth rate we have seen in previous years, nor
Slide 14: Additional services and products
For personal use only Title of the presentation 11 • EROAD also looks to grow by selling more to our customers. During FY21 we made significant improvement in the services we offer our customers to help them manage safety and productivity of their fleets. • The dashcam is really important to North A
Slide 15: New Zealand market
For personal use only Title of the presentation 12 • Our home market of New Zealand remains an important one for us. • Financial year 21 we continued to grow with 9% growth in contracted units, up to 87,892 units at the end of the year. That represented the growth of 7,526 units and that’s really qu
Slide 16: US market
For personal use only Title of the presentation 13 • We turn to the US market. The US market was the most challenging of the markets that we operate in from a macroeconomic conditions point of view. • The pandemic and the lockdowns that resulted from that, as well as civil unrest and the political b
Slide 17: Australia market
For personal use only Title of the presentation 14 • We turn to our third market now. Australia. • Our business continues to build in Australia and during the year we added another 745 units in our small and medium sized customer segment, and we signed our largest enterprise customer over there, bei
Slide 18: Financial results
For personal use only Title of the presentation 15 • Thank you Steven, and good afternoon everyone 15
Slide 19: FY21 financial results
For personal use only Title of the presentation 16 • Group Revenue increased 13% from $81.2m to $91.6m reflecting growth in New Zealand and North America. • New Zealand Revenue increased by 12% reflecting an additional 7,526 contracted units through both expansion into existing customer fleets and n
Slide 20: Recurring revenue, ARPU and retention
For personal use only • One of the main focusses for us in FY21 was to weather the storm and not only come out of the year far more competitive but to retain all the underlying metrics that we had historically enjoyed, which was strong monthly recurring revenue per subscriber and high retention rate
Slide 21: Q1 operating update
For personal use only Title of the presentation 18 • At the same time we announced the Acquisition of Coretex, EROAD also released its Q1 Operating Update for the three months ended 30 June 2021. • EROAD grew by 4,152 contracted units during Q1 reflecting good growth in New Zealand and Australia. •
Slide 22: FY22 EBITDA margin outlook
• Given expected one-off integration costs from the acquisition of Coretex, FY22 standalone EBITDA margin now is expected to be between 28- 31%. Excluding these, EBITDA margin will be consistent with that of FY21. • Thank you and I will hand you back to Steven. For personal use only 18
Slide 23: Coretex acquisition
For personal use only Title of the presentation 19 Thank you Alex. 19
Slide 24: Pro forma financial performance
For personal use only Title of the presentation 20 • I’m hugely exited about the acquisition of Coretex – it is truly transformational for EROAD • On the next four slides you see what our FY21 would have looked like if Coretex has already been acquired. Adding our financial and operating performance
Slide 25: Pro forma operating metrics
For personal use only Title of the presentation 21 Moving on to our operating metrics you see: • We get a big jump in unit numbers to 190,380 getting us closer to the next milestone of 250,000 units • Our average revenue per unit is broadly flat – although down slightly reflecting the large % of tra
Slide 26: North America and enterprise scale
For personal use only Title of the presentation 22 EROAD’s strategic priorities have been to increase our scale in North America and Australia, focus on winning Enterprise customers and entry into a number of new key strategic verticals. The acquisition of Coretex does all this nicely. • We see Nort
Slide 27: New verticals
For personal use only Title of the presentation 23 • And given the significant headway Coretex has made developing and selling their specialist products we see EROAD entering into the new areas of Refrigerated Transport, Construction and Waste & Recycling. 23
Slide 28: About Coretex
For personal use only Title of the presentation 24 • What makes this transaction so appealing is that on the face of things EROAD and Coretex look quite similar but if you look closely they are quite different. By introducing Coretex’s products and services we significantly improve our product marke
Slide 29: Construction end-to-end solution
For personal use only Title of the presentation 25 • As we have mentioned the acquisition gives EROAD solutions in the Refrigerated Transport, Construction and Waste and Recycling. We have provided case studies for all of these in the investor presentation released to the market on 14 July, however
Slide 30: Acquisition accelerates strategic priorities
For personal use only Title of the presentation 26 The acquisition of Coretex accelerates EROAD’s strategic priorities: • Immediate scale and significantly improved position in refrigerated transport and construction • Extended product offering and telematics solutions for refrigerated transport, co
Slide 31: Acquisition accelerates strategic priorities (continued)
For personal use only Title of the presentation 27 The Acquisition of Coretex accelerates EROAD’s strategic priorities: • Immediately gain significant greater scale with addition of 7,876 units improving our market position • Significantly accelerate unit growth targeting key verticals with more com
Slide 32: Global telematics industry
For personal use only • This transaction better positions us a bigger player in the global telematics market and capture a bigger piece of the pie. • The Global telematics industry is estimated, in research produced by Imarc, to reach a value of US$109 billion by 2026 growing at a compound annual gr
Slide 33: General questions
For personal use only Title of the presentation 29 • Now, is there any general questions on EROAD or the acquisition you would like to ask, you will have an opportunity to ask questions on each resolution as we go through them individually. 29
Slide 34: Formal part of meeting
For personal use only Title of the presentation 30 • Thank you, ladies and gentlemen. There being no more questions I now move to the formal part of the meeting, the resolutions. If you do not have a pen or a voting paper and would like one, please raise your hand and Computershare will help you. 30
Slide 35: Financial statements and auditor questions
For personal use only Title of the presentation 31 • At this time, can I ask if there are any questions regarding the financial statements and Auditors report. • For the first resolution, I will hand over to Tony to Chair the meeting. 31
Slide 36: Resolution 1: Election of director
For personal use only Title of the presentation 32 • Good Afternoon Shareholders. • Resolution 1. That Graham Stuart, who is eligible for election, be elected as a director of the company. The Board recommends Graham to you as a director of EROAD Limited and unanimously supports his reelection. I no
Slide 37: Resolution 2: Director remuneration pool
For personal use only Title of the presentation 33 • Thank you. Moving onto Resolution 2. An increase in the Non-executive Director Remuneration Pool. • It is proposed that the total amount of the fee pool be increased from $500,000 to $850,000, which represents an increase of $350,000. This is to a
Slide 38: Resolution 3: Auditors and remuneration
For personal use only Title of the presentation 34 • Thank you. Moving onto Resolution 3 of the annual general meeting. Appointment of Auditors and Auditor Remuneration. • Is there any discussion on this resolution? • There appears to be no further discussion. I now put to the vote the ordinary reso
Slide 39: Special Meeting: Coretex acquisition approval
For personal use only Title of the presentation 35 • Moving on to the resolutions relating to the Special Shareholders Meeting. • In respect of the first resolution, shareholders are asked to ratify, confirm and approve for all purposes the acquisition by EROAD Financial Services Limited, a wholly o
Slide 40: Special Meeting: Share issue to Coretex shareholders
For personal use only Title of the presentation 36 • The second resolution for the Special Shareholder Meeting relates to the approving of the issue of EROAD shares to Coretex shareholders. • Under this resolution, shareholders are asked to approve, for the purposes of Rule 4.1.1 of the NZX Listing
Slide 41: Special Meeting: Capital raise approval
For personal use only Title of the presentation 37 • The final resolution relates to the capital raise. Under this resolution, shareholders are being asked to approve both the shares to be issued to investors in the placement and to retail investors through the share purchase plan. • Under this reso
Slide 42: Meeting close
For personal use only Title of the presentation 38 • With that I bring EROAD’s Annual and Special Meeting to an end. • Thank you everyone. As always I appreciate meeting our shareholders in person, hearing you questions and feedback directly. For those of you in the room, please join us for some lig