Specialist
Former executive at Vehco AB
Agenda
- Competitive landscape, focusing on AddSecure's positioning across categories
- AddSecure's business model vs peers
- Building security, fleet management and healthcare growth drivers
- Roll-up economics and inorganic growth runway
Questions
1.
What does AddSecure do? Which parts of the security value chain does the company perform and how does it fit more broadly into the landscape?
2.
Could you outline the types of application that AddSecure performs and develops?
3.
How does revenue split across AddSecure’s different business units – the building security business, the telematics or the trucking or transportation business, the healthcare business and Smart Grids? What drives revenue?
4.
Which business units are driving AddSecure’s growth and what are the major drivers in each of the units?
5.
You highlighted a lower growth rate for the building security business – are we talking GDP 2-4%? Do you expect any regulatory changes given that regulation is the major driver here?
6.
What might happen if Honeywell was to make its own M2M [machine-to-machine] solution? Would AddSecure be excluded entirely or would the company have a slightly different role?
7.
What do you think is stopping Honeywell from entering the M2M security solutions space?
8.
How quickly is the telematics market growing? Presumably AddSecure’s 16% growth in its telematics business is a combination of inorganic and market growth.
9.
To what extent has technology driven telematics’ growth rates? I imagine the 10-15% is far higher than the growth rate of the truck base in Europe or worldwide. In what way has technology driven that growth rate above the install growth rate of trucks?
10.
How quickly is AddSecure growing compared to the market’s 10-15% growth?
11.
What is the likelihood of OEMs, Daimler, Scania, Traton or any of the big trucking companies developing their own integrated telematics? How might that impact AddSecure?
12.
Do you think the bigger risk would be Honeywell in building security or Volvo or Scania in telematics?
13.
We’ve addressed the possibility of OEMs entering the segment, but what about network operators or players such as Orange, Vodafone and Verizon? What’s the potential for these players to enter?
14.
How complicated are the applications? Could you elaborate on AddSecure’s application development and whether the company owns and develops the IP around the software application? Are third parties involved?
15.
How challenging is it to develop all the necessary applications to be competitive? Do you think there’s a long roadmap for further application developments that will enable AddSecure to consistently stay ahead?
16.
Does AddSecure have any unique applications or are the applications relatively common across competitors?
17.
Who actually owns the data? Can AddSecure leverage its data across customers and significantly benefit from its scale compared to smaller players?
18.
Do you think there are significant advantages to scale? Does scale enable AddSecure to be at an advantage in certain units compared to smaller local peers?
19.
How do margins compare for AddSecure and its competitors? How strong are margins across business units?
20.
What’s your outlook for margins? Do you expect margins to expand alongside consolidation or until the large OEMs enter and intensify the competition? What general trends can you highlight?
21.
What are the major drivers of margin pressure? Is there anything beyond new players?
22.
Could you elaborate on the revenue model and the move to SaaS from the hardware model? How does the recurring fee work? What are the commission considerations for technology suppliers? Are the models different across divisions?
23.
Can you outline the value of the install base? Castik’s website indicates over 100,000 connected security units and over 100,000 connected trucks that AddSecure operates, along with 50,000 customers. Is all of the business value in the install base?
24.
What’s the typical churn and CAC [customer acquisition cost]? You touched on the average revenue per unit but could you outline the three major variables of install base valuation?
25.
Do you think there’s potential for AddSecure to expand into other regions, given that it is largely a European business?
26.
What’s your take on potential M&A? What might be the strategy for identifying, acquiring and integrating targets? New board members have been announced to help drive acquisitions. What are your thoughts on AddSecure’s personnel and their ability to drive the M&A machine?
27.
Can you outline the types of businesses that AddSecure acquires and why? Are acquisitions purely to gain install base? Application could be another possible area given what you’ve discussed and the development plan. What might be the rationale there?
28.
Roughly what multiples does AddSecure pay for business acquisitions? Would it be a multiple of EBITDA or a multiple on the install base?
29.
How easy is post-acquisition growth? Do you think AddSecure is very good at running the acquired businesses?
