Connexion Mobility Ltd · ASX:CXZ
Connexion Mobility — Connexion Telematics — Shareholder Meeting (November 2022)
35 slides from Connexion Mobility's shareholder meeting presentation, Nov 17, 2022
Slide 1: 2022 Annual General Meeting Presentation
ASX Announcement 17 November 2022 For personal use only 2022 Annual General Meeting Presentation Melbourne, Australia: Connexion Telematics Ltd (“CXZ”, “Connexion” or “the Company”) provides the attached presentation to be delivered to shareholders at the Company’s 2022 Annual General Meeting presen
Slide 2: Rental and Loaner Fleet Management Platform – 2022 AGM
For personal use only Rental and Loaner Fleet Management Platform 2022 Annual General Meeting
Slide 3: Agenda
Agenda For personal use only 1 Introduction GROUP AGM PRESENTATION NOVEM BER 2 022 2 Industry 3 Operating Model 4 FY22 Results 5 Outlook 6 Q&A 2
Slide 4: Introduction
Introduction For personal use only Connexion Telematics is a publicly-listed, enterprise- grade software company servicing the US automotive industry, with a focus on courtesy transportation. Our proprietary OnTRAC and Connexion platforms incorporate telemetry, fleet management, contract management
Slide 5: What Do We Do?
What Do We Do? Our fleet & rental management software helps OEMs and Dealers to supply For personal use only courtesy transportation to their service customers. Our customers benefit from: • Quick reservations and DMS integration, reducing time to rent out a vehicle • Telemetry, allowing Dealers to
Slide 6: Connexion's Journey
Connexion’s Journey For personal use only ASX Listing MiRoamer Flex Major Feature Release GM Commercial Link Phase 1 Major Feature Release 2014 2015 2016 2017 Board & Mgmt Renewal OnTRAC Premium Major Feature Release Major Feature Release OnTRAC Platform Phase 2 2018 2019 2020 Board & Mgmt Renewal P
Slide 7: Connexion's Journey
Connexion’s Journey For personal use only Roadmap Balance of Control Favoured Pricing Approach Concentration Risk Trend Balance Sheet Tactics Phase 1 External One-off Increasing (small number of OEMs) Aggressive investment, heavy cash burn Phase 2 Investment minimisation, Increasing External One-off
Slide 8: Customer Landscape
Customer Landscape For personal use only • Fleet Owners mostly operate a variety of commercial fleets • Connexion focuses on a specific type of fleet owner, being the Franchised Automotive Dealership (as franchisee), along with the Manufacturer (as franchisor) • The US is home to circa 17,000 franch
Slide 9: Competitor Landscape
Competitor Landscape For personal use only • TSD (tsdweb.com) is the oldest, and most dominant, with ~8,000 dealerships and ~2,500 traditional rental car companies. Family-owned and established in 1983, TSD services all the largest OEM brands outside of GM. • Dealerware (dealerware.com) is an up-and
Slide 10: Mobility Technology Landscape
Mobility Technology Landscape For personal use only Material provided courtesy of Automotive Ventures LLC 9
Slide 11: Navigating Industry Trends
Navigating Industry Trends For personal use only The Connexion to the Future Connexion partners with OEMs and Dealerships to maximise the utilisation of their assets, the profitability of their business units, and to elevate the end-customer experience. This combination is only possible through Conn
Slide 12: Industry Trends - EVs
Industry Trends - EVs Stakeholders frequently enquire about the impact of electric vehicle (“EV”) adoption on our business. For personal use only From the perspective of a large automotive software company with both large market share and a large share of dealers’ software spend (such as the two dom
Slide 13: Operating Model
Operating Model For personal use only Embed Integrate Generate via Functionality via API Data Insights 12
Slide 14: Operating Model
Operating Model For personal use only Embed via Functionality Operating as a feedback loop, each step not only adds to profitability, but strengthens our moat. Generate Integrate In turn, this executes our product strategy of Data Insights via API operating at the intersection of Business Process Ou
Slide 15: Operating Model: Embed via Functionality
Operating Model For personal use only • Executing Customer-Focused Product Roadmap Embed • Notably strong track record of delivery since 2017 via Functionality • Customer-driven approach enables low marketing cost & high satisfaction • Feature enhancements improve both User and end-customer experien
Slide 16: Operating Model: Integrate via API
Operating Model For personal use only • Ecosystem integration improves functionality and reduces double-entry Integrate • Execution underway in 2022, with multiple integrations commenced via API • Integrations improve both User and end-customer experience • Integration enhancements improve product s
Slide 17: Operating Model: Generate Data Insights
Operating Model For personal use only • Data Analytics holds potentially significant untapped value Generate • Execution underway in 2022, with nominal initial revenues Data Insights • Access to Data Insights improves the User experience • Application of Data Insights improves product stickiness • M
Slide 18: Sources of Value – Original Plan
Sources of Value – Original Plan For personal use only Generating Economic Value Building Strategic Value 2017 Onwards. OEM Sales – existing product. 2020 Onwards. Commercialising Strategic Value A small number of potentially large- ticket revenue prospects. Building the value inherent in both our L
Slide 19: Sources of Value – Original Plan
Sources of Value – Original Plan For personal use only OEM Sale #1 OEM Sale #2 and beyond 2017 Onwards Dealership Sales 2021 Onwards Ecosystem & Data Sales 2021 Onwards Channel Partner Sales 2022 Onwards 2022 Onwards 18
Slide 20: FY22 Results
19 For personal use only FY22 Results
Slide 21: Key Trends
Key Trends For personal use only Four key trends influenced our FY22 results: 1. Revenue deterioration from lower new vehicle inventory 2. Revenue growth from Connexion subscriptions 3. Revenue growth from feature delivery 4. Expenditure growth from reinvestment into our Team and Products The first
Slide 22: FY22 Highlights
FY22 Highlights $6,000,000 Revenue $3,500,000 Cash and Liquid Investments For personal use only $3,000,000 $5,000,000 $2,500,000 $4,000,000 $2,000,000 $3,000,000 $1,500,000 $2,000,000 $1,000,000 $1,000,000 $500,000 Our P&L exhibits a high degree of operating leverage typical of a SaaS company at an
Slide 23: FY22 Vs FY21
FY22 Vs FY21 For personal use only • FY22 total revenue fell by $610k, driven by a very large fall in OnTRAC revenue (due to new vehicle inventory shortages), partly offset by a reduction in COGS (OnStar fees tied directly to OnTRAC revenue) and an increase in Connexion platform revenue (enabling de
Slide 24: Gross Profit
Gross Profit For personal use only Gross Profit $3,000,000 $2,500,000 Connexion’s increasing investment into R&D and Sales & Marketing will weigh on Net Profit for the $2,000,000 foreseeable future. The single best metric representing the return on $1,500,000 such investment over time is Gross Profi
Slide 25: True SaaS
True SaaS For personal use only Connexion’s prime focus is growing its “true”, scalable, SaaS business. This focus is reflected in the high percentage of revenue that we derive from “SaaS”. SaaS Revenue derives from our core software platform, and is generally recurring in nature. Services Revenue r
Slide 26: Investment Initiatives
Investment Initiatives For personal use only Connexion is consistently increasing its investment into both R&D and Sales & Marketing, whilst closely monitoring the return on such spend. We refer to these investments as Growth Expense, and these are fully expensed (“written off”) in the period in whi
Slide 27: Capital Management
Capital Management • Long-term Shareholder value is a function of: 1. Operational performance For personal use only 2. Capital allocation • Capital can be allocated to product-based and/or share-based investment initiatives. • A strong balance sheet can enable meaningful allocation to both. • Reliab
Slide 28: Economic Drivers
Economic Drivers For personal use only Team Performance At last year’s AGM, we advised of the three Economic Drivers affecting Connexion’s financial Subscriptions performance, in order of influence. Throughout FY22, the order did not change. FX 27
Slide 29: Economic Drivers: Team Performance
Economic Drivers For personal use only Team performance remains strong: 1. Rapid onboarding of Connexion platform subscribers, mitigating margin loss from reduced new vehicle inventory. 2. Further $692k in organic revenue growth in FY22, reflecting the “Embed” component of Connexion’s operating mode
Slide 30: Economic Drivers: Subscriptions
Economic Drivers For personal use only Subscription gross margin increased materially: 1. Vehicle inventory continued to be impacted by supply-side constraints of the global semiconductor chip shortage. Reduced new vehicle inventory directly impacts OnTRAC revenue. 2. The above was more than offset
Slide 31: Economic Drivers: FX
Economic Drivers For personal use only Movement from FX sensitivity was relatively low through FY22: 1. Continued application of Connexion’s FX Policy performed to expectation. 2. The policy includes a natural hedge of currency-matching assets and operating expenditure to the extent of available fre
Slide 32: Outlook
Outlook For personal use only The Company’s progress remains consistent with the multi-year plan presented at the 2020 AGM. We believe Connexion’s outlook to be positive for the following reasons: From our observations, dealerships are increasingly adopting software to: 1. Improve the customer exper
Slide 33: Summary
Summary For personal use only 2 0 22 AG M AGM PRESENTATION • Fifth consecutive profitable year, with record net cash and investments on balance sheet NOVEM BER 2 022 • All-time high gross profitability reached in the final quarter • External impact from the semiconductor shortage dissipated througho
Slide 34: Our Commitment
Our Commitment For personal use only To Create technologies that To Consolidate and deepen To Extend and commercialise maximise asset utilisation our existing commercial new relationships across the relationships global Automotive Industry To Increase Shareholder To Manage our growth, ensuring To Fo
Slide 35: Shareholder Q&A
For personal use only Rental and Loaner Fleet Management Platform Shareholder Q&A
Connexion Telematics — Shareholder Meeting (November 2022) on 6ix