Parrot Sa · EURONEXT:PARRO
Parrot Sa — ODD BHF Forum (Q3 2017)
44 slides from Parrot Sa's conference presentation, November 2017
Slide 1: Investor Presentation - ODD BHF Forum (Q3 2017)
INVESTOR PRESENTATION ODD BHF FORUM (Q3 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 > 34 [Q3 2017 earnings] ③ 2017 STRATEGY & OUTLOOK slide 35 > 40 [2]
Slide 3: Who We Are
PARROT | WHO WE ARE
Slide 4: Parrot > 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: Parrot > 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: Parrot > 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 45% 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: Parrot > 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: 2017 Consumer Drones
PARROT 2017 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 st
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 Hardware & Software
PARROT BUSINESS SOLUTIONS HARDWARE & SOFTWARE 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 gov
Slide 17: Business Solutions Data Analytics & Services
PARROT BUSINESS SOLUTIONS DATA ANALYTICS & SERVICES 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 > SERV
Slide 18: Business Solutions Growing New Professional Range
PARROT BUSINESS SOLUTIONS GROWING NEW PROFESSIONAL RANGE By gathering its consumer and commercial technologies, Parrot is giving access to drone intelligence to small businesses and independents through a rapidly growing range ALL IN ONE UAVS, SENSORS & SOFTWARE Disco Pro AG €5,399 Bebop-Pro Parrot
Slide 19: 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 20: 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 ($9218 M - 16%)
Slide 21: Commercial Drones Differentiated Markets
COMMERCIAL DRONES DIFFERENTIATED MARKETS Parrot has a dual segment approach (prosumer/Professional & industrial/Enterprise), avoids the highly competitive Media & Entertainment segment - today representing most of the Rotary and Prosumer market - and holds a leading position in the fixed-wing UAV By
Slide 22: Commercial Drones Strong Growth on Targeted Markets
COMMERCIAL DRONES STRONG GROWTH ON TARGETED MARKETS Construction Service (CAGR 72%) Agriculture Service (CAGR: 34%) Revenues ($m.) Software/Analytics (CAGR 81%) Revenues ($m.) Software/Analytics (CAGR 66%) UAV equipment (CAGR 25%) UAV equipement (CAGR 45%) 1 600 500 400 1 200 300 800 200 400 100 0 0
Slide 23: UAV Regulation: Validating the Birth of a New Industry
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 24: Other Consumer Products 2017 > Gradual Phase Out
OTHER CONSUMER PRODUCTS 2017 > GRADUAL PHASE OUT 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
Slide 25: 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 26: Key Financials
PARROT | KEY FINANCIALS
Slide 27: 2017 Financial Focus (9 m. update)
2017 FINANCIAL FOCUS (9 m. update) Growth margin level: mix and consumer drones contribution Commercial drones growth, resources and priorities Reorganization efficiency and cash allocation €103m. Capacity and pace of innovation €98m. Preparing 2018 22 Revenue quick shot (% / €m.) 35 Other products
Slide 28: Revenues: Strong Growth on Priority Segment
REVENUES STRONG GROWTH ON PRIORITY SEGMENT Commercial drones: +30% yoy Change in Revenues by Products (€m.) (other revenues not reported: NS ) > Strong hardware sales > Continued growth in Softwares Commercial drones 50,0 > Services increase but is slower to Consumer drones Other retail products mat
Slide 29: Growth Margin: Managing Competition & Mix
GROWTH MARGIN MANAGING COMPETITION & MIX Change in Consolidated Gross Margin (as % of sales) > Better product mix within consumer range due to 42,6% improved pricing policy and 39,5% product maturity 29,5% 25,3% > Commercial drone growth benefits global margins but has lower H2 seasonality > Parrot
Slide 30: EBIT & Operations: Adjusting the Cost Structure
EBIT & OPERATIONS ADJUSTING THE COST STRUCTURE Consolidated operating 9 m. 2016 9 m. 2017 Change exp. (€m.) proforma > Reduced workforce by Sales & Marketing 45,3 32.0 -29% +250 worldwide % of revenues 46% 31% > Selective distribution R&D 39,4 27,3 -31% strategy = less marketing cost and % of revenu
Slide 31: Net Results Benefits from Parrot Faurecia
NET RESULTS BENEFITS FROM PARROT FAURECIA Consolidated expenses (€m.) 9 m. 2017 EBIT -41,3 Non recurring expenses -13,6 > Restructuring costs Financial income / loss -2,8 > Foreign exchange Share of income in companies > Drone minority investments -2,5 accounted for by the equity method and Parrot A
Slide 32: 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 33: 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 34: Strategy & Outlook
PARROT | STRATEGY & OUTLOOK
Slide 35: 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 36: 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 37: Business Solutions 2017 > Key Achievements
PARROT BUSINESS SOLUTIONS 2017 > KEY ACHIEVMENTS GROW PIX4D GROW SENSEFLY • Grow key accounts customers (e.g. KKC Japan / • Increase sales of eBee+ range (Q3 2016 launch) Pix4D in nov. 2017) • Introduce new set of complete vertical solution • Establish international organization (Berlin and (Survey
Slide 38: 2018 > First Take
2018 > FIRST TAKE CONSUMER DRONES COMMERCIAL DRONES Fully benefit from 2017 product portfolio Develop high value commercial drone and organization optimization solutions for small and large businesses Maintain manageable cost structure Maintain and enhance worldwide Achieve next level innovation lea
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 has the mean and the will to become a large key player in the still emerging drone industry Hardware is a m
Slide 40: Appendix
APPENDIX [40]
Slide 41: Balance Sheet Details at June 30
BALANCE SHEET DETAILS at June 30 June 30, Dec. 31, June 30, Dec. 31, Consolidated balance sheet in €’000 Consolidated balance sheet in €’000 2017 2016 2017 2016 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 an
Slide 42: Cash Statement at June 30
CASH STATEMENT at June 30 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
Slide 43: Business Solutions: 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 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]