Slide 1: Investor Presentation HY 2017
INVESTOR PRESENTATION HY 2017
Slide 2: In This Presentation
IN THIS PRESENTATION ① WHO WE ARE slide 03 > 09 ① WHAT WE DO slide 10 > 26 [products & markets] ② KEY FINANCIALS slide 27 > 36 [HY 2017 earnings] ③ 2017 STRATEGY & OUTLOOK slide 37 > 40 [2]
Slide 3: Who We Are
PARROT | WHO WE ARE
Slide 4: Profile
PARROT > PROFILE - Founded in 1994 by Henri Seydoux, CEO with 36.1% of ownership - A fabless French tech company with a Silicon Valley business model - Leading in Automotive connectivity (OEM & Aftermarket) from 2000 to 2010 - Pioneering in, and shaping, the UAV industry since 2010 - 2016 revenues:
Slide 5: DNA & Evolution
PARROT > DNA & EVOLUTION INNOVATION - MOBILE – CONNECTED – DSP – GPU – CONSUMER – PROFESSIONAL From Automotive software to Flying software: creating and navigating disruption around the smartphone and wireless connectivity ecosystem BLUETOOTH AUTOMOTIVE CONNECTED CONSUMER DRONES CAR KITS INFOTAINMEN
Slide 6: Organization
PARROT > ORGANIZATION PARROT SA PARROT DRONE PARROT FAURECIA AUTOMOTIVE 100% 80% SENSEFLY P.A. ASIA PACIFIC 100% AMERICAS P.A. SHENZHEN PIX4D 95% AIRINOV EMEA 86% MICASENSE Commercial drone 56% APAC Distribution platforms ICONEM Parrot Faurecia Automotive 46% Distribution of retail BIOCARBON ENG. an
Slide 7: Drones/UAVs: Why, What, Who?
DRONES/UAVs: WHY, WHAT, WHO? FOR COMPANIES FOR CONSUMERS FOR PROFESSIONALS & INSTITUTIONS Play, Take pictures, Photography, Video, Film, Inspect, Map, Survey, WHY Make movies, Pilot Survey, Map Watch, Analyze Social media, Outdoor Events, Weddings, Sports, Movies/TV, Sites, Sports and Activities, Pr
Slide 8: Key Executives
PARROT > KEY EXECUTIVES Henri Seydoux Founder, Chairman & CEO R&D Elise Tchen 21 years at Parrot Executive VP, Production & 36.1% of ownership > Yvan Djelic Mathieu Babel Frederic Pirat Industry. Head of P. Asia Pacific Technology New products Portfolio 17 years at Parrot Jacques Bouchet - HR Jean C
Slide 9: Current Key Priorities
CURRENT KEY PRIORITIES ① DEVELOP ON THE DRONE MARKET MANAGING GROWTH AND CASH ② CREATE VALUE FOR OUR CUSTOMERS AND SHAREHOLDERS ③ CREATE HIGH QUALITY AND INNOVATIVE PRODUCTS, SOLUTIONS & SERVICES ④ ADAPT TO TIME TO MARKET AS NEW DRONE INDUSTRY PROGRESSIVELY MATURES ⑤ MAINTAIN A COMPETITIVE AND AGILE
Slide 10: What We Do
PARROT | WHAT WE DO
Slide 11: Consumer Drones
PARROT CONSUMER DRONES Parrot launched the first mass-market consumer drone A full range of affordable consumer drones -- from fun and in 2010 educative to fully immersive piloting (FPV) and HD filming 2017 DRONE RANGE Typical features - FPV / flypad / smartphone piloting - Full HD digital stabiliza
Slide 12: Consumer Drones Market & Opportunities
PARROT CONSUMER DRONES MARKET & OPPORTUNITIES 2016 market shares Original positioning to navigate high Amount of $400 to $1200 drones sold worldwide competition market NPD, GFK - Dec. 2016 • Mass-market: all in-one, affordable, easy to use and fun design • Tech: lightweight (<500g), long range (<2km
Slide 13: Consumer Drones New Products 2017
PARROT CONSUMER DRONES NEW PRODUCTS 2017 In 2017, Parrot has optimized its product portfolio to reinforce its competitiveness through differentiated products. Parrot’s key consumer drone assets are: light, all in one, fun, affordable and innovative drones Parrot Mambo FPV Parrot Bebop 2 Power High s
Slide 14: Commercial Drones: It's About Data
COMMERCIAL DRONES IT’S ABOUT DATA CAPTURE PROCESS ANALYZE USE With UAVs, sensors and software carrying a new level of high precision data which can be plugged in existing industry work-flow, Parrot Business Solutions is changing the way numerous industries work and helping improve ROI, efficiency an
Slide 15: Business Solutions Currently Addressed Markets
PARROT BUSINESS SOLUTIONS CURRENTLY ADDRESSED MARKETS INDUSTRIES WE ARE SERVING MINING MAPPING MINING FORENSIC CONSTRUCTION BUILDING INSPECTION EARTHWORK INSPECTION BIM AGRICULTURE ENERGY REAL ESTATE* INFRASTRUCTURE CROP HEALTH FERTILIZER WATER BIM PUBLIC SAFETY* * Through Parrot Professional range
Slide 16: Business Solutions: Parrot Entreprise
PARROT BUSINESS SOLUTIONS PARROT ENTREPRISE Within the Parrot Group, the eBee fixed-wing drone and the Pix4D Mapper software are leading products in the commercial drone industry Equipment, solutions and services giving access to a new level of high-precision data for companies, industries and gover
Slide 17: Business Solutions: Drone as a Service
PARROT BUSINESS SOLUTIONS DRONE AS A SERVICE While big corps are already integrating UAVS solutions internally, small and medium industries are seeking turnkey services. Today Parrot has developed efficient and timesaving process to serve farmers, builders and architects PARROT AIRINOV > SERVICES FO
Slide 18: Business Solutions: Parrot Professional Range
PARROT BUSINESS SOLUTIONS PARROT PROFESSIONAL RANGE By gathering its consumer and commercial technologies, Parrot is giving access to drone intelligence to small businesses and independents ALL IN ONE UAVS, SENSORS & SOFTWARE Pix4Dcapture Disco Pro AG €5,399 Sequoia €3,850 S.L.A.M.Dunk €950 Free App
Slide 19: Stimulating Various Route to Market
PARROT BUSINESS SOLUTIONS STIMULATING VARIOUS ROUTE TO MARKET To support the development of the drone market and maximize the exposition of its products range and dedicated analytics, Parrot is combining direct sales, 3rd party vendors and selective partnerships UAV Hardware Software / Analystics CO
Slide 20: Commercial Drones: Parrot Now Holds Leading Positions
COMMERCIAL DRONES PARROT NOW HOLDS LEADING POSITIONS senseFly is one of the few vendors to manufacture and sell both rotary and Pix4D produces photogrammetry software fixed-wing UAVs. It is selling complete solutions (UAV, software, analytics) and and solutions for the UAV industry, focusing individ
Slide 21: Commercial Drones Addressable & Targeted Markets
COMMERCIAL DRONES ADRESSABLE & TARGETED MARKETS Market for Commercial UAVs, By Vertical – Revenues ($m. - CAGR) 16000,0 72% % MARKET ADDRESSED BY PARROT 14000,0 Public Land Management ($572 M - 12%) 71% Delivery & Logistics ($1717 M - 238%) 12000,0 Media, Entertainment & Advertising ($9218 M - 16%)
Slide 22: Commercial Drones Differentiated Markets
COMMERCIAL DRONES DIFFERENTIATED MARKETS Parrot has a dual segment approach (prosumer/Professional & industrial/Enterprise), avoids the highly competitive Media & Entertainment segment - today representing most of the Rotary and Prosumer market - and holds a leading position in the fixed-wing UAV By
Slide 23: Commercial Drones Strong Growth on Targeted Markets
COMMERCIAL DRONES STRONG GROWTH ON TARGETED MARKETS Construction Service (CAGR 72%) Agriculture Service (CAGR: 34%) Revenues ($m.) Revenues ($m.) Software/Analytics (CAGR 66%) Software/Analytics (CAGR 81%) UAV equipment (CAGR 25%) UAV equipement (CAGR 45%) 1 600 500 400 1 200 300 800 200 400 100 0 0
Slide 24: UAV Regulation
UAV REGULATION VALIDATING THE BIRTH OF A NEW INDUSTRY Commercial flying: regulation is being deployed world wide, UAV registration, height, weight, location and BVLOS, operator’s insurance, training and certificate Recreational flying: widely permitted within height (<150 m), weight (250 gr to 2 kg)
Slide 25: Legacy Business: Other Consumer Products
LEGACY BUSINESS OTHER CONSUMER PRODUCTS Sales of legacy products are targeting margins (vs. growth) Resources are maintained at a minimum Revenues are expected to decrease until 2019 Sales of Other Consumer Products – Revenues (€m.) 14,5 15,4 Automotive aftermarket 12,5 Connected 53,9 52,8 objects 3
Slide 26: Legacy Business: Parrot Automotive
LEGACY BUSINESS PARROT AUTOMOTIVE In March 2017, Faurecia took a 20% stake in Parrot Automotive, through a €27m. capital increase The partnership established an entry value of €100m. for Parrot Automotive Parrot has issued a €41m. Bond convertible in Parrot Automotive shares (starting in 2019) repre
Slide 27: Key Financials
PARROT | KEY FINANCIALS
Slide 28: 2017 Financial Focus
2017 FINANCIAL FOCUS Growth margin level: mix and consumer drones contribution Commercial drones growth, resources and priorities Reorganization efficiency and cash allocation €64m. Capacity and pace of innovation €57m. 15 Preparing 2018 Revenue quick shot (% / €m.) 28 27 Other products 23% 34% 15 C
Slide 29: Revenues: Strong Growth on Priority Segment
REVENUES STRONG GROWTH ON PRIORITY SEGMENT Commercial drones: +53% yoy Change in Revenues by Products (€m.) > Pick up in hardware sales after low (other revenues not reported: NS ) H1 2016 pending new regulation > Continued growth in Softwares Commercial drones 68,5 > Services increase but is slower
Slide 30: Growth Margin
GROWTH MARGIN MANAGING COMPETITION & MIX Change in Consolidated Gross Margin (as % of sales) 42% > Better product mix within consumer range 21% > Commercial drone growth benefits global margins 7% > Product maturity lowers COGS H1 2016 H2 2016 H1 2017 [30]
Slide 31: EBIT & Operations: Adjusting the Cost Structure
EBIT & OPERATIONS ADJUSTING THE COST STRUCTURE Consolidated operating H1 2016 H1 2017 yoy change exp. (€m.) proforma > Reduced workforce by Sales & Marketing 38,9 25,6 -34% +250 worldwide % of revenues 68,9% 40,2% > Selective distribution R&D 27,1 19,7 -27% strategy = less marketing cost and % of re
Slide 32: Net Results Benefits from Parrot Faurecia
NET RESULTS BENEFITS FROM PARROT FAURECIA Consolidated expenses (€m.) H1 2017 EBIT -30,1 Non recurring expenses -12,2 > Restructuring costs Financial income / loss -1,8 > Foreign exchange Share of income in companies > Drone minority investments -1,2 accounted for by the equity method and Parrot Aut
Slide 33: Cash & Balance Sheet Key Data
CASH & BALANCE SHEET KEY DATA Dec. 31, June 30, Dec. 31, June 30, 2016 2017 2016 2017 Fixed assets 61 166 Shareholders’ equity 288 282 Working capital 54 39 Bond debt 0 41 Other assets 16 0 Acquisition debt 28 33 Net cash 185 174 Other liabilities 0 23 Source: Parrot summarized presentation, non IFR
Slide 34: Stock Information
STOCK INFORMATION Stock evolution Ownership structure (Jan. 2015 to Sept 29, 2017) (as of latest available public reporting) 2500000 40 Institutional Volume and Stock price 35 individual 2000000 30 investors, 44,0% 25 1500000 Treasury 20 shares; 2,6% 1000000 15 Bpifrance; 5,1% 10 500000 Moneta AM; H
Slide 35: 2017 Strategy & Outlook
PARROT | 2017 STRATEGY & OUTLOOK
Slide 36: Consumer Drones 2017: Reorganize & Redeploy
PARROT CONSUMER DRONES 2017 > REORGANIZE & REDEPLOY Reduce cost structure Monthly progress tracking • Reduce workforce by 1/3 (approx. 250 people) • Reorganize sales force on 3 main platforms (Europe, Asia, Americas) • Moderate all spending and reinforce control Focus strategy on best market opportu
Slide 37: Business Solutions 2017: Support & Accelerate Growth
PARROT BUSINESS SOLUTIONS 2017 > SUPPORT & ACCELERATE GROWTH Equipment (UAVs and sensors) • Accelerate fixed-wing penetration building on most recent technologies (eBee +, eBee RTK) at lower prices • Expand with payloads (photogrammetry, thermal, multispectral, etc.) • Develop distribution, territor
Slide 38: 2017 Outlook
2017 OUTLOOK Resume growth in consumer drones - Low basis for comparison in H1 Resume growth and - Enhanced product portfolio significantly reduce operating - Optimized sales and marketing efficiency losses to demonstrate Accelerate growth in commercial drones balanced operational - Best-in-class pr
Slide 39: Strategic Vision
STRATEGIC VISION Innovation in electronics commonly spreads through mass market before it can be customized to suit professional needs (ie. smarthphone, PC, etc.) Time to market is key, Parrot should adapt and progressively grow its opportunities Hardware is a mean to carry innovative, smart and pow
Slide 40: Appendix
APPENDIX [40]
Slide 41: Balance Sheet Details
BALANCE SHEET DETAILS June 30, Dec. 31, June 30, Dec. 31, Consolidated balance sheet in €’000 Consolidated balance sheet in €’000 2017 2017 2017 2017 Non current Assets 165,9 61,2 Shareholders Equity Goodwill 42,5 43,7 Share capital 4,6 4,6 Other intangible assets 2,9 3,9 Issue premium and transfers
Slide 42: Cash Statement
CASH STATEMENT June 30, 2017 Dec. 31, 2016 Earnings for the period, from continuing operation (2 271) (146 617) Share of profit from equity accounted investments 1 203 (62) Amortization and depreciation 7 161 27 522 Disposal gains and losses (45 020) (10 843) Income tax expense 720 8 144 Cost of sha
Slide 43: Organization
PARROT > ORGANIZATION PARROT SA PARROT DRONE PARROT GMBH 100% PARROT FAURECIA AUTOMOTIVE 100% 80% PARROT IBERIA 100% P.A. ASIA PACIFIC SENSEFLY 100% PARROT ITALIA 100% P.A. SHENZHEN PIX4D 95% PARROT UK 100% AIRINOV 86% PARROT ANZ 100% MICASENSE PARROT SHENZHEN 100% 56% PARROT JAPAN 100% ICONEM 46% P
Slide 44: Commercial Drone: Building an Ecosystem
PARROT COMMERCIAL DRONE BUILDING AN ECOSYSTEM Hardware Service Software P Partnership P P Software Specialist P 73.5% 23.2% 50.1% 13.6% 100% 49.1% 100% P 10% 20% 56% 56% 45% 2011 2012 2013 2014 2015 2016 Source: Droneii / Company [44]