Connexion Mobility Ltd · ASX:CXZ
Connexion Mobility — Shareholder Meeting (November 2022)
34 slides from Connexion Mobility's shareholder meeting presentation, November 2022
Slide 1: Rental and Loaner Fleet Management Platform 2022 Annual General Meeting
Rental and Loaner Fleet Management Platform 2022 Annual General Meeting
Slide 2: Agenda
Agenda 1 Introduction GROUP AGM PRESENTATION NOVEM BER 2 022 2 Industry 3 Operating Model 4 FY22 Results 5 Outlook 6 Q&A 2
Slide 3: Introduction
Introduction 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 and data analytics too
Slide 4: What Do We Do?
What Do We Do? Our fleet & rental management software helps OEMs and Dealers to supply 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 recoup excess fuel & t
Slide 5: Connexion's Journey
Connexion’s Journey 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 Partnership Product #2
Slide 6: Connexion's Journey
Connexion’s Journey 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 balance sheet rehabil
Slide 7: Customer Landscape
Customer Landscape • 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 franchised dealerships OEM G
Slide 8: Competitor Landscape
Competitor Landscape • 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-coming competitor, wi
Slide 9: Mobility Technology Landscape
Mobility Technology Landscape Material provided courtesy of Automotive Ventures LLC 9
Slide 10: Navigating Industry Trends
Navigating Industry Trends 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 Connexion’s harnessing of
Slide 11: Industry Trends - EVs
Industry Trends - EVs Stakeholders frequently enquire about the impact of electric vehicle (“EV”) adoption on our business. 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 dominant DMS providers –
Slide 12: Operating Model
Operating Model Embed Integrate Generate via Functionality via API Data Insights 12
Slide 13: Operating Model
Operating Model 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 Outsourcing, Customer Ex
Slide 14: Operating Model: Embed via Functionality
Operating Model • 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 experience • Feature delivery
Slide 15: Operating Model: Integrate via API
Operating Model • 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 stickiness • Modest ini
Slide 16: Operating Model: Generate Data Insights
Operating Model • 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 • Modest initial investme
Slide 17: Sources of Value – Original Plan
Sources of Value – Original Plan 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 Lumpy revenue growth. O
Slide 18: Sources of Value – Original Plan
Sources of Value – Original Plan 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 19: FY22 Results
FY22 Results 19
Slide 20: Key Trends
Key Trends 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 of these, relating to
Slide 21: FY22 Highlights
FY22 Highlights $6,000,000 Revenue $3,500,000 Cash and Liquid Investments $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 early $- FY19 FY20 FY2
Slide 22: FY22 Vs FY21
FY22 Vs FY21 • 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 dealerships to supplemen
Slide 23: Gross Profit
Gross Profit 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 Profit (”GP”). Gross Profit
Slide 24: True SaaS
True SaaS 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 represents customer-dri
Slide 25: Investment Initiatives
Investment Initiatives 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 which they are incurred.
Slide 26: Capital Management
Capital Management • Long-term Shareholder value is a function of: 1. Operational performance 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. • Reliable “return on investme
Slide 27: Economic Drivers
Economic Drivers 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 28: Economic Drivers: Team Performance
Economic Drivers 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 model. Team Performance 3.
Slide 29: Economic Drivers: Subscriptions
Economic Drivers 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 by growth in subscript
Slide 30: Economic Drivers: FX
Economic Drivers 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 free cash (i.e. convertin
Slide 31: Outlook
Outlook 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 experience 2. Drive operati
Slide 32: Summary
Summary 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 throughout FY22 • High earning
Slide 33: Our Commitment
Our Commitment 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 Foster a rewarding and v
Slide 34: Shareholder Q&A
Rental and Loaner Fleet Management Platform Shareholder Q&A
Connexion Mobility — Shareholder Meeting (November 2022) on 6ix