Cobra Automotive Technologies Presentation Milan, 11 November 2005 MOD. FMD1402 Cobra Automotive Technologies November 2005 1 Presenter Aldo Monteforte, board director, Cobra Automotive Technologies SpA Terra Nova Partners (Milan, San Francisco) Nomura International (London) Stanford Graduate School of Business (Stanford, California) MOD. FMD1402 Cobra Automotive Technologies November 2005 2 Cobra Automotive Technologies (“Cobra”) Our vision: Global Vehicle Security Designer Consolidated Revenues €m 17% CAGR in 01-05 80 80.5 Focus on mitigating risks associated with ownership and management of mobile assets 66.3 60 54.0 48.5 Revenues organically doubled 40 40.9 between 2001 and 2005 20 330 employees, with 80 engineers and software developers MOD. FMD1402 Cobra Automotive Technologies 0 2001 PF 2002 PF 2003 PF 2004 PF November 2005 2005 E 3 Cobra’s value proposition Risk class Main victims Theft Owner Insurer Low speed-accident Owner Third parties Antitheft Systems Location Based Services Parking Aid Systems Breakdown Owner User, Vehicle Maker Location Based Services Unauthorised use Owner Location Based Services Fraud Leasing co/insurer Location Based Services Hijack MOD. FMD1402 Cobra solution Cobra Automotive Technologies Owner / User Location Based Services November 2005 4 Cobra’s value proposition Location-based services MOD. FMD1402 Security electronics Stolen-vehicle recovery Antitheft systems & components Fleet management Parking aid systems Cobra Automotive Technologies November 2005 5 Location based services drill down information and control messages to and from vehicles via an integrated, on-board gps/gprs device Information and controls are managed through an always available, Internet based centralised server, that store, analyse and presents information in easy-to-use, mapping format to authorised subscribers Scaling leverage inherent in single platform, recurring revenue model offers opportunity to derive increasingly higher margins from growing subscriber base MOD. FMD1402 Cobra Automotive Technologies November 2005 6 Cobra Platform: telematics and electronics technologies integrated to deploy location based services News: 09/2005 Map Ser Porsche AG has nominate Cobra to serve after theft recovery service in 27 countries Control Room Call Center Help Desk MOD. FMD1402 Cobra Automotive Technologies November 2005 7 COBRA Location Based Services for Stolen Vehicle Recovery Private End User Service features ‘Always in touch’ “Proactive theft detection and tracking” THACHAM CAT 5 HOMOLOGATED Vocal menu with “vocal application option” Web Application ‘Alerts & recovery’ Vocal menu with “call center option” Vocal menu with “call center option” Voice, Fax or e-mail for alarms Voice, Fax or e-mail for alarms Value added services in case of theft Value added services in case of theft Control Room 24h*7d Control Room 24h*7d Control Room 24h*7d Vocal menu with only “theft option and Transport and Garage Mode setting” Vocal menu with only “theft option and Transport and Garage Mode setting” Vocal menu with only “theft option and Transport and Garage Mode setting” ‘Track the car’ “Tracking after customer theft declaration” Value added services in any case 15K€-25K€ 25K€-40K€ more than 40K€ European Customer Segmentation based on car value to be protected (to be personalised in every country) MOD. FMD1402 Cobra Automotive Technologies November 2005 8 The case of car theft in Europe Growth of vehicle stolen and not recovered (from 380.000 to 570.000 in one year) No other type of criminal activity is as lucrative for such minimal risk Estimated criminal revenues of €8,5 billion 1.400 # Car stolen (.000) 1.200 1.150 1.000 1.000 800 67% Recovered rate 43% Recovered rate 600 400 200 33% Not recovered rate 2002 57% Not recovered rate 2003 Sources: Europol 2004 MOD. FMD1402 Cobra Automotive Technologies November 2005 9 COBRA Location Based Services for Theft Risk Management BLU PROFILE supported only by ICD12 Daily use During theft Maintenance/Transport Theft management • customer sets the system accordingly (web or voice application) • Theft of the keys or car-jacking Arm/Disarm the system • Can be done through radio key, driver card or the vocal application Diagnostics and Comfort features • Battery level • ICD battery back up level • Speed alert • Vehicle tracking • Sabotage After theft Cobra Server Control Room: • Unauthorized movement Theft attempts detection • Attempt to start engine when system is set • Shock detection • Sabotage of GPS antenna contacts the customer tracks the stolen car each 30 sec can send commands such as immobilisation when the car is not running and dissuasion (blinker and horn) Authority intervention Recovered car Each country offers several differentiated services of car recovery Customer notification MOD. FMD1402 Cobra Automotive Technologies November 2005 10 COBRA Location Based Services for Fleet Management e-Fleet Application e-Fleet Application Fleet view Reports Settings Login: user1 Monitoring Fleet view Fleet Fleet My Fleet 1 Fleet Name: Vehicles Information : Vehicle Vehicle Reports Settings Login: user1 Monitoring Track Track Fleet Name: My Fleet 1 Vehicle identifier : Vehicle 2 John smith – Vehicle 2 John smith – Vehicle 2 10 min Location : A8 antibes-nice Mon - 10/09/2005 - Trip1 7h20 – Nice tier station 7h50 – Antibes motorway toll mike amer – Vehicle 1 20 min Location : Villeneuve 8h20 – Roquebrune motorway toll 8h50 – Aix en Provence motorway toll Total : Robert smith – Vehicle 9 10 min Location : Biot main street Wed - 12/09/2005 – Trip 1 Jeanna bar – Vehicle 5 15 min Map filter: MOD. FMD1402 Filters list + Cobra Automotive Technologies Duration - 25 km 45 km 49 km 25 min 45 min 49 min 119 km 1h 59 min Toll 2 25 15 29 69 euros Distance - Duration - 25 km 45 km 49 km 25 min 45 min 49 min Total : 119 km 1h 59 min 69 euros Total Report : 238 km 3h 58 min 138 euros 7h20 – Nice tier station 7h50 – Antibes motorway toll 8h20 – Roquebrune motorway toll 8h50 – Aix en Provence motorway toll Location : Cros cagnes Distance - Toll 2 25 15 29 - November 2005 11 Cobra Location Based Services for Insurance Risk Management Le compagnie assicurative, a livello europeo, introducono nuove soluzioni commerciali caratterizzate dalla attivazione di Location Based Services (LBS); le soluzioni sono segmentabili in quattro principali categorie: Tariffazione ridotta sull’assicurazione furto totale in caso di abbonamento a servizio di sorveglianza Incendio/furto Tariffazione collegata alla totale tracciabilità del comportamento di guida Tariffazione legata all’utilizzo effettivo del veicolo LBS RCA: Pay Per Use RCA: Pay As You Drive Polizza Premium Tariffazione unica comprensiva di servizi di localizzazione in caso di emergenza stradale e furto MOD. FMD1402 Cobra Automotive Technologies November 2005 12 Insurance Risk Management : “Pay Per Use” Cliente assicurato target: 1. 2. 3. Copre pochi chilometri all’anno Desidera soluzione tariffaria legata a reale utilizzo del veicolo Può chiedere a centrale di soccorso l’intervento delle forze di polizia in caso di furto (servizio opzionale) Il costo per veicolo è stimabile in 100 € all’anno ipotizzando un periodo di utilizzo tre anni inclusivo di installazione, manutenzione e 20% di disattivazione anticipata Principali dati di utilizzo veicolo • Targa del veicolo • Proprietario del veicolo • Modello del device • Chilometraggio per ogni viaggio reale (key on-off) • Velocità massima e media Procedure di diagnostica • Invio di allerta per eventuali malfunzionamenti • Procedure di ripristino con comunicazione al cliente ed all’assicurazione After theft tracking MOD. FMD1402 Cobra Automotive Technologies In caso di furto il cliente contatta la Centrale Operativa che localizza il veicolo ed attiva le procedure di recupero; in caso di spostamento non autorizzato del veicolo viene inviata una allerta automatica alla Centrale Operativa che contatta il cliente e, se necessario, localizza il veicolo ed attiva le procedure di recupero November 2005 13 Global presence and ambition Globally transferable solutions Export accounted for 90% of revenues in 2004 Exclusive Local Partners Argentina Australia Belgium Bosnia Bulgaria Croatia Czech Republic Denmark Finland France Germany Greece Hungary Iceland MOD. FMD1402 India Ireland Israel Italy Japan Latvia Lithuania Macedonia Malaysia Malta Morocco Mexico Netherlands Norway Poland Portugal Rumania Russia Slovenia Spain Sweden Switzerland Tunisia Turkey United Kingdom Uruguay Yugoslavia Cobra Automotive Technologies Cobra AT - Italy Cobra France Cobra Deutschland Cobra China (in formation) Cobra Japan Representative Office Nexo France Nexo Switzerland November 2005 14 Working with the leading vehicle makers and tier 1 players Business partners MOD. FMD1402 Cobra Automotive Technologies November 2005 15 Cobra Automotive Technologies Market Overview MOD. FMD1402 Cobra Automotive Technologies November 2005 16 Vehicle Electronics OE Market* Major drivers: (1) government-imposed environmental and safety standards, (2) consumers’ demand for affordable safety and convenience. € 29,5 bn Instrumentation Body/Chassis Electronics € 22,5 bn Powertrain Includes: security, climate control, body controllers, lighting, € 14,4 bn € 10,7 bn Safety/Convenience wiper systems, power operated systems, navigation,…. 2002 2007 * Source: Reed Electronics Research MOD. FMD1402 Cobra Automotive Technologies November 2005 17 Vehicle Electronics Market (cont.) Share of value add Electronics and software are expected to become the key technologies in a vehicle 100% 90% 80% 70% Mechanical Systems 60% Combined share in overall value of cars expected to rise from less than 30% today to over 50% in 2010*. 50% Electrical Systems 40% Electronics 30% Software 20% 10% 0% 1975 1985 1995 2005 2010 * Sources: German Automotive Association (VDA); MOD. FMD1402 Cobra Automotive Technologies November 2005 18 Location Based Services Market LBS expected to become a standard feature on vehicles and a competitive imperative for commercial fleets US LBS market estimated to grow from € 0.8bn in 2005 to over € 7bn in 2010*. Main drivers: 1. Hardware and software price/performance ratio continuous improvement 2. Global wireless carriers launch and support of advanced data services 3. Increased integration of location functions with vehicle components by OEMs. 4. Public funding and support of positioning infrastructures (NAVISTAR, GALILEO). * Sources: Canaccord Capital (2005) MOD. FMD1402 Cobra Automotive Technologies November 2005 19 Cobra Automotive Technologies Financial Overview MOD. FMD1402 Cobra Automotive Technologies November 2005 20 Revenues organically doubled in 4 years (01-05) First Half 2005 (€39.5m) above budget Business plan as at March 2005 17% CAGR in 01-05 €m 104,7 100.0 9.1 94,6 6.0 77,9 80.0 66,3 12.2 10.6 6.7 4.3 60.0 54,0 48,5 40,9 40.0 78.0 61.0 20.0 40.9 48.5 51.6 2002 PF 2003 PF 83.4 67.6 0.0 2001 PF Security Electronics MOD. FMD1402 Cobra Automotive Technologies 2004 PF 2005 E Location Based Electronics 2006 E 2007 E Location Based Services November 2005 21 Change in revenue mix Revenues growing and shifting in favour of scalable service revenues 2007 expected revenues: €105 million 2004 revenues: €66 million MOD. FMD1402 Cobra Automotive Technologies November 2005 22 LBS new subscribers New Subscribers 41.355 40,000 29.030 30,000 20,000 15.505 7.710 10,000 2.116 0 2003 Italy RoE 2004 RoW 2005 E 2006 E 2007 E Growth Rate MOD. FMD1402 Italy 234% 36% 27% 11% Rest of Europe 272% 551% 194% 63% Rest of World 698% 105% 30% 39% Total 264% 101% 87% 42% Cobra Automotive Technologies November 2005 23 LBS customer base Cumulative Subscribers 76.813 80,000 60,000 47.290 40,000 23.841 20,000 9.730 2.116 0 2003 Italy 2004 RoE 2005 E 2006 E 2007 E RoW Growth Rate Italy 330% 92% 43% 23% Rest of Europe 357% 507% 239% 104% Rest of World 798% 170% 68% 45% Total 360% 145% 98% 62% Note: Cumulative subscribers are net of cancellations. MOD. FMD1402 Cobra Automotive Technologies November 2005 24 In the last 6 months customer base grew by 60% and new additions grew by 45% European Subscribers 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1H 03 MOD. FMD1402 Cobra Automotive Technologies 2H 03 Net Cumulative Users 1H 04 2H 04 New Users 1H 05 November 2005 25 Investment thesis Telematics, electronic security and complementary markets are rapidly growing MOD. FMD1402 Cobra is a market leader in vehicle security and management Globally transferable solutions, under strong and visible brand Good economic and financial performance Scaling revenues from location based services Proven research and development capabilities State-of-the art, highly automated manufacturing facilities M&A opportunities to consolidate market leadership Cobra Automotive Technologies November 2005 26