Transcript 3Q 2001 Investor Update Oliver Vellacott – CEO Alan Bennie – CFO

IndigoVision Group plc
Presentation of 2002
1st Half Results
Oliver Vellacott – CEO
Alan Bennie – CFO
First half progress
• Turnover up 50% on 1H01 to £1.1m
• 1 new licensee and 3 repeat licensees
• Gross profit up from 57% to 67%
• Monthly cash burn reduced from £800k to £700k
• Cash balances of £27.8m
• Broadened channel reach outside CCTV
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IV 1H02 results - rev 1.4 – 14 March, 2002
H1 operational highlights
• New licensee: Spawar
• 3 repeat licensees: Baxall, Cirrus and Ultrak
• Licensee unit shipments overtook our own in Q2
• Strategic alliance with StorageTek
• 3 major product launches
• Additional airport implementation: Schipol
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IV 1H02 results - rev 1.4 – 14 March, 2002
Consolidated Profit & Loss Account
£000
6 months to
31 January
2002
Turnover
6 months to
31 January
2001
Year to 31
July 2001
1,063
692
1,809
Cost of sales
352
340
779
Gross profit
711
352
1,030
1,561
4,079
892
3,042
2,007
6,804
(4,929)
(3,582)
(7,781)
630
(6)
1,044
(7)
1,922
(14)
(4,305)
(2,545)
(5,873)
(6.29p)
(3.71p)
(8.57p)
Research & development
Other overhead
Operating loss
Interest receivable
Interest payable
Loss before taxation
Loss per share
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IV 1H02 results - rev 1.4 – 14 March, 2002
Revenue
(£000)
800
700
600
500
In Q2 02:
• Revenue doubled on Q1
400
300
200
100
• Strong contribution across all
business areas
0
Q101 Q201 Q301 Q401 Q102 Q202
- £0.25m in license revenues
- Highest platform revenues
- Highest royalty revenues
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IV 1H02 results - rev 1.4 – 14 March, 2002
Revenue
(£000)
1200
In the half year:
1000
1063
800
600
• Record half year revenue
692
• 54% increase over 1H 01
400
200
0
1H 01
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1H 02
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IV 1H02 results - rev 1.4 – 14 March, 2002
Revenue by geography
(£000)
83
• North America revenue increased
by 127% over 1H 01
- strong growth in Q2
• Tokyo office staffed from Q1 02
- Asia revenue now includes
significant platform sales
230
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IV 1H02 results - rev 1.4 – 14 March, 2002
Revenue by source
£000
1200
• 1H 02 Licence and related revenues = £0.6M
+ 100% on 1H 01
1000
800
600
• 1H 02 Licence/platform revenue split = 60/40
(1H 01 = 46/54)
400
200
0
1H 2001
1H 2002
Platform
Dev Consultancy
Maintenance
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Development Systems
License
Royalty
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IV 1H02 results - rev 1.4 – 14 March, 2002
Platform shipments + licensed product
1400
1200
1000
• Baxall and Ultrak now
generating royalties
800
600
• Panasonic royalties in
2nd half 2002
400
200
0
Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02
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IV 1H02 results - rev 1.4 – 14 March, 2002
Consolidated Profit & Loss Account
£000
6 months to
31 January
2002
Turnover
6 months to
31 January
2001
Year to 31
July 2001
1,063
692
1,809
Cost of sales
352
340
779
Gross profit
711
352
1,030
1,561
4,079
892
3,042
2,007
6,804
(4,929)
(3,582)
(7,781)
630
(6)
1,044
(7)
1,922
(14)
(4,305)
(2,545)
(5,873)
(6.29p)
(3.71p)
(8.57p)
Research & development
Other overhead
Operating loss
Interest receivable
Interest payable
Loss before taxation
Loss per share
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IV 1H02 results - rev 1.4 – 14 March, 2002
Gross profit
 Gross profit percentage up a further 10 points to 67%
 Improvement generated from:
- further cost reduction in product designs
- proportionate growth in licence and related revenue
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IV 1H02 results - rev 1.4 – 14 March, 2002
Consolidated Profit & Loss Account
£000
6 months to
31 January
2002
Turnover
6 months to
31 January
2001
Year to 31
July 2001
1,063
692
1,809
Cost of sales
352
340
779
Gross profit
711
352
1,030
1,561
4,079
892
3,042
2,007
6,804
(4,929)
(3,582)
(7,781)
630
(6)
1,044
(7)
1,922
(14)
(4,305)
(2,545)
(5,873)
(6.29p)
(3.71p)
(8.57p)
Research & development
Other overhead
Operating loss
Interest receivable
Interest payable
Loss before taxation
Loss per share
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IV 1H02 results - rev 1.4 – 14 March, 2002
Research & development
 R&D spend £1.6M, up 75% on 1H 01
 Headcount now 61
 Further additions subject to roadmap justification
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IV 1H02 results - rev 1.4 – 14 March, 2002
Consolidated Profit & Loss Account
£000
6 months to
31 January
2002
Turnover
6 months to
31 January
2001
Year to 31
July 2001
1,063
692
1,809
Cost of sales
352
340
779
Gross profit
711
352
1,030
1,561
4,079
892
3,042
2,007
6,804
(4,929)
(3,582)
(7,781)
630
(6)
1,044
(7)
1,922
(14)
(4,305)
(2,545)
(5,873)
(6.29p)
(3.71p)
(8.57p)
Research & development
Other overhead
Operating loss
Interest receivable
Interest payable
Loss before taxation
Loss per share
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IV 1H02 results - rev 1.4 – 14 March, 2002
Other overhead
 Spend £4.1M, up 37% on 1H 01
 Sales & marketing & field engineers headcount now 36
- additions in US and EU
- Tokyo additions planned in Q3
 Investment in CRM system
- essential to manage partner programme
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IV 1H02 results - rev 1.4 – 14 March, 2002
Employees
120
UK- based
Overseas - based
Contractors
100
• Headcount up from 98 to 114
80
• Contract engineering staff
reduced
60
40
20
0
Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02
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IV 1H02 results - rev 1.4 – 14 March, 2002
Consolidated Balance Sheet
As at 31 January
2002
£000
£000
Fixed assets
Tangible fixed assets
Investments
As at 31 January
2001
£000
£000
289
163
30
193
289
Current assets:
Stock
Debtors
Cash
565
1,331
27,833
29,729
(1,650)
Creditors: amounts falling due within one year
267
788
35,734
36,789
(1,405)
Net current assets
28,079
35,384
Total assets less current liabilities
28,368
35,577
Creditors: amounts falling due after more than one year
(83)
(128)
Deferred income
Provisions for liabilities and charges
(72)
(78)
(12)
(46)
28,135
35,391
6,849
28,849
8,563
(16,126)
6,849
28,849
8,563
(8,870)
28,135
35,391
Net assets
Capital and reserves
Called up share capital
Share premium account
Other reserve
Profit & loss account
Shareholders' funds
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IV 1H02 results - rev 1.4 – 14 March, 2002
Current assets
 Stocks up to £0.6M
=> 3.3 months’ forward demand
 Debtors up to £1.3M
=> Trade debtors 88 days
 Cash £27.8M
Cash burn reduced to £0.7M per month
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IV 1H02 results - rev 1.4 – 14 March, 2002
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IP NETWORK
STORAGE
IV 1H02 results - rev 1.4 – 14 March, 2002
APPLICATION
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IP NETWORK
CAMERA
Live Networked Video (LNV) solutions
Our marketing strategy
PUSH
TECHNOLOGY
CHANNEL
PULL
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IV 1H02 results - rev 1.4 – 14 March, 2002
Push design licenses at OEMs
MAINSTREAM
IP CAMERA
PUSH
NVR-SDK
Strategy is to win CCTV OEMs first
Use Mainstream to win camera OEMs
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IV 1H02 results - rev 1.4 – 14 March, 2002
VBDK
Push enabling products at channel
IP CAMERA
VB6000
PUSH
NVR
CONTROL
CENTRE
Strategy is to win channel adoption
Will move to pure OEM licensing ultimately
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IV 1H02 results - rev 1.4 – 14 March, 2002
Releases: Digital IP camera
available as product & design license
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IV 1H02 results - rev 1.4 – 14 March, 2002
Releases: Web server
Live Networked Video on web pages
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IV 1H02 results - rev 1.4 – 14 March, 2002
Releases: Control Centre
available as product & design license
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IV 1H02 results - rev 1.4 – 14 March, 2002
Enable channel pull
Partner Programme provides
training, consultancy, major-bid support,
connection to OEM licensees, technical support
CCTV CHANNEL
NETWORK
CHANNEL
STORAGE
CHANNEL
PULL
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IV 1H02 results - rev 1.4 – 14 March, 2002
IT APPLICATION
CHANNEL
We need to work across whole market
to establish it as a standard
CHIP
CAMERA
CCTV CHANNEL
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RECORDER
NETWORK
CHANNEL
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APPLICATION
STORAGE
CHANNEL
IV 1H02 results - rev 1.4 – 14 March, 2002
IT APPLICATION
CHANNEL
Hence…key deals this half
CIRRUS
SPAWAR
CCTV CHANNEL
x11
PARTNERS
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MILESTONE
NETWORK
CHANNEL
STORAGE
CHANNEL
STORAGETEK
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IV 1H02 results - rev 1.4 – 14 March, 2002
IT APPLICATION
CHANNEL
CIRRUS
MILESTONE
SPAWAR
Key deals: Spawar
CCTV
CHANNEL
NETWORK
CHANNEL
STORAGE
CHANNEL
IT
APPLICATION
CHANNEL
• US Space & Warfare Systems Command agency
• IndigoVision video in Spawar robots at Ground Zero
• License to manufacture IndigoVision-powered cameras
• Spawar will mandate relicense into defence applications
• Key supplier to US DoD
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IV 1H02 results - rev 1.4 – 14 March, 2002
CIRRUS
SPAWAR
Key deals: Cirrus Logic
CCTV
CHANNEL
NETWORK
CHANNEL
MILESTONE
STORAGE
CHANNEL
• Agreement to design ASIC based on Mainstream
– Further license fee
– Royalty per chip
– July 2002 tape-out
• Targeting networked video market, US & Asia
• Other consumer video applications
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IV 1H02 results - rev 1.4 – 14 March, 2002
IT
APPLICATION
CHANNEL
CIRRUS
SPAWAR
Key deals: Milestone
CCTV
CHANNEL
NETWORK
CHANNEL
MILESTONE
STORAGE
CHANNEL
IT
APPLICATION
CHANNEL
• Danish-based developer of Windows apps
• World market leader in security & access control apps
• Milestone channel for IndigoVision-enabled products
• Milestone adds support for IndigoVision to its apps
• IndigoVision channel gets Milestone apps
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IV 1H02 results - rev 1.4 – 14 March, 2002
11 CCTV joiners to
partner programme
CCTV NETWORK
CHANNEL
CHANNEL
Channel partners
Geography
Sensormatic (Pty) Limited
Richardson Electronics Limited
SmartTelecom Comunicacion SL
KM Group, Inc
Revenga Ingenieros SA
Intruder International plc
System Automation and Controls srl
Computer Network Ltd
e-Vision Technologies Inc
Milestone a/s
C-Ways Limited
South Africa
EU
Spain
Canada
Spain
UK
Italy
UK
US
Scandinavia
UK
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IV 1H02 results - rev 1.4 – 14 March, 2002
STORAGE
CHANNEL
IT
APPLICATION
CHANNEL
StorageTek
strategic alliance
CCTV
CHANNEL
IT
STORAGE APPLICATION
CHANNEL CHANNEL
NETWORK
CHANNEL
Worldwide, but in North America alone:
 4 StorageTek VARs promoting IndigoVision products
 15/20 sales offices per VAR across North America
 160 sales personnel
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IV 1H02 results - rev 1.4 – 14 March, 2002
Addressable market
CCTV
Applications
All
apps
Analog
today
Digital
today
Cameras p.a.
5m
50k
50m
500m
Revenue per
camera
n/a
$100
$25
$12.5
Addressable
market
n/a
$5m
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IV 1H02 results - rev 1.4 – 14 March, 2002
Digital Digital
future future
$1.25b $6.25b
Outlook
• License funnel strong
– Get CCTV OEMs first
– Get camera OEMs using Mainstream
• Channel pull increasing
– Control Centre complete application for security
– Channel can deploy without waiting for 3rd party apps
– Access non-CCTV channels thru alliances
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IV 1H02 results - rev 1.4 – 14 March, 2002
Summary
• New & repeat licensing improving
• Significant gross margin improvement
• Technology lead extended by Mainstream
• Channel reach extending beyond security
• Strong balance sheet
• Careful cost management
• Positive outlook
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