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Interim results presentation April 2019 Enabling safer mobility Agenda Introduction James Routh Chief Executive Offjcer Our market drivers Matthew Hubbard Chief Technology Offjcer An evolved strategy James Routh Chief Executive Offjcer


  1. Interim results presentation – April 2019 Enabling safer mobility

  2. Agenda Introduction James Routh Chief Executive Offjcer Our market drivers Matthew Hubbard Chief Technology Offjcer An evolved strategy James Routh Chief Executive Offjcer HY19 fjnancials Robert Hart Chief Financial Offjcer Summary and outlook James Routh Chief Executive Offjcer AB Dynamics PLC | Interim results presentation – April 2019 2

  3. Introduction AB Dynamics PLC | Interim results presentation – April 2019 3

  4. 2019 HY Financial highlights Revenue Adjusted operating profjt Adjusted operating margin £25.8m £6.4m 24.7% +69% +95% +320bps 6.4 24.7 25.8 22.3 21.9 21.5 R R G G 20.3 A A C C % % 6 4 4 3 15.3 3.3 11.0 10.1 2.4 2.3 7.6 1.5 15 16 17 18 19 15 16 17 18 19 15 16 17 18 19 • Revenue growth driven by strong demand for • Strong, sustainable gross margins • Operating leverage providing signifjcant increase track testing products, particularly driving robots in H1 operating margins • Disciplined control of operating costs • Growth in H1 enhanced by reduction in delivery • Anticipated H2 operating margins to be in line • Largest proportion of anticipated 2019 increase lead time with full year 2018 in operating costs will be incurred in H2 • Solid order book provides confjdence for H2 AB Dynamics PLC | Interim results presentation – April 2019 4

  5. 2019 HY Operational highlights Reduction of customer lead Reached milestone of 1,000th LaunchPad ADAS target time through improved driving robot system platform continues to gain manufacturing effjciency market traction Second order for Advanced AB Dynamics Inc legal entity Order book remains strong and Driving Simulator (aVDS) for established in USA provides full visibility for 2019 Kempten University, Germany and beyond AB Dynamics PLC | Interim results presentation – April 2019 5

  6. Video AB Dynamics PLC | Interim results presentation – April 2019 6

  7. Business overview Track testing Laboratory testing Products and services for the testing and development of Advanced Products and services for simulation of ADAS, autonomous vehicles, Driver Assistance Systems (‘ADAS’), autonomous vehicle technology driving dynamics and Driver in the Loop (‘DIL ’). Quantitative testing 35+56+12+z 8:+12+z and vehicle dynamics. systems for vehicle suspension characterisation. Revenue contribution to the Group Revenue contribution to the Group ADAS test products: £8.8m +49% £23.0m £2.8m +64% +117% Driving robots: £14.2m +75% 89% of H1 revenue 11% of H1 revenue AB Dynamics PLC | Interim results presentation – April 2019 7

  8. H1 Revenue by geographical area £8.3m £4.3m +90% £4.2m +108% £2.0m 18 19 18 19 UK and Europe North America £12.8m H1 2018 Group revenue £8.8m £15.29m +46% H1 2019 Group revenue £25.81m +191% 18 19 £0.5m £0.2m Asia Pacifjc 19 18 RoW AB Dynamics PLC | Interim results presentation – April 2019 8

  9. Our market drivers AB Dynamics PLC | Interim results presentation – April 2019 9

  10. Market drivers Government & consumer Regulatory Market dynamics • 1.35m annual road traffjc • Trend towards greater regulation • Traditional OEMs face signifjcant fatalities globally 1 of ADAS and autonomous systems transformational market change • In Europe, ca.50% of fatalities are • Euro NCAP roadmap for Active Safety • Technology companies have signifjcant Vulnerable Road Users (VRUs) 2 funds to invest in mobility development • 40 countries including the EU have • US pedestrian fatalities highest mandated all new cars must have • Reducing cost and power consumption since 1990 3 minimum standards of ADAS by 2022 of embedded computing enabling ADAS and level 3 autonomy to be implemented 1 Source: www.thenational.ae • Likely to be increased regulation 2 Source: https://making-traffjc-safer.com of autonomous vehicle testing on • Realisation that ADAS are still far from 3 Source: www.statista.com public roads optimal and prone to false positives • Realisation that FULL autonomy is not easily achievable and will take many years to implement ~90% • Relatively low consumer demand for autonomy of accidents due to driver error AB Dynamics PLC | Interim results presentation – April 2019 10

  11. Growth drivers – Euro NCAP active safety 2018 2024+ Vehicle to Vehicle Vulnerable Road User Vehicle to Everything (“V2X”) (“V2V”) features (“VRU”) features features being tested: being tested: being tested: Scenario interactions with many other objects • Autonomous • Autonomous Emergency Braking Emergency Braking (‘AEB’) (pedestrians and cyclists) • Lane Support Systems AB Dynamics PLC | Interim results presentation – April 2019 11

  12. Growth opportunities ADAS Driving robots Simulation • Scenario testing will require more • Continued demand from all markets, • Push to reduce product development ADAS objects particularly from emerging markets costs through simulation prior to for additional driving robot equipment prototype builds • Future testing will require more realism in ADAS objects • Robots are currently primarily used • Simulation allows automotive systems for ADAS testing, but there are also to be quickly modifjed and tested in • Pipeline of products with increased opportunities for vehicle dynamics difgerent virtual environments speed, enhanced endurance and and durability testing higher load capacity • Largest potential market is in • Base technology is relatively mature, the area of driver interaction with but sofuware is still evolving quickly, semi and full autonomy. Other more and there are opportunities for defjned markets include motorsport new actuators and electronics AB Dynamics PLC | Interim results presentation – April 2019 12

  13. An evolved strategy AB Dynamics PLC | Interim results presentation – April 2019 13

  14. Strategy overview Our fjve strategic New product Capability priorities development & capacity International Service Acquisitive footprint & support growth AB Dynamics PLC | Interim results presentation – April 2019 14

  15. New product development New product development Capability & capacity International footprint Service & support Acquisitive growth • Continued innovation and product development to meet current and future market requirements • Comprehensive Product & Technology roadmap developed based on market trends, drivers and needs • Investment levels and resources/skills established to deliver the Product & Technology roadmap • Multiple new product launches across laboratory and track testing planned over the strategic review cycle AB Dynamics PLC | Interim results presentation – April 2019 15

  16. Capability & capacity New product development Capability & capacity International footprint Service & support Acquisitive growth • Facilities plan established with manufacturing and engineering space requirements defjned for next fjve years • New ‘North Site’ will be used as a simulator centre of excellence with demonstration facilities and full engineering R&D area • Organisation structure redesigned to ensure scalability • A rolling resource plan is in place which defjnes people requirements and skills • A review of our business systems has highlighted the need for a new business management system incorporating ERP, CRM, fjnance and operations AB Dynamics PLC | Interim results presentation – April 2019 16

  17. International footprint New product development Capability & capacity International footprint Service & support Acquisitive growth North America UK and Europe Asia Pacifjc UK USA West Coast USA Japan Germany China Key Current ABD locations Potential ABD locations AB Dynamics PLC | Interim results presentation – April 2019 17

  18. Service & support New product development Capability & capacity International footprint Service & support Acquisitive growth • Will become increasingly important as test requirements become more complex • Customers expect the highest levels of service and support • Need for local spares and support services and timely response to support calls (appropriate time zone) • Increased proportion of recurring revenue AB Dynamics PLC | Interim results presentation – April 2019 18

  19. Acquisitive growth New product development Capability & capacity International footprint Service & support Acquisitive growth • Acquire carefully selected, value-enhancing companies if appropriate • Potential to facilitate delivery of the strategy, e.g. international growth, service/support and technology development • Clearly defjned strategic, operational, fjnancial and cultural criteria established • Developing the organisational skills required to enable potential acquisition processes to be effjciently managed • Current pipeline of potential acquisition targets meeting above criteria AB Dynamics PLC | Interim results presentation – April 2019 19

  20. HY19 Financials AB Dynamics PLC | Interim results presentation – April 2019 20

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