Member Info for Brockwl

Lost 48mSEK last quarter.

Have 110mSEK left.

3 to 4 quarters away from supposed breakeven.

Have another 80m credit facilities.

So it all depends on whether you can believe the expected revenue stream.

I don't.

What was interesting is they have finally acknowledged that the BMW contact is in wind down, without giving exact details.

The analyst is guessing that at the beginning of the year, they were still in 11 models, and now only in 4.

He expects this to be 0 by end of year.

This tends to support the CBs view that we could be doing 500k cars a quarter from BMW alone by the end of year.

S2020,

Sometimes you just go a ramp too far.

1).License deal with CAT

- CAT will have done extensive DD again before signing up for another 5 years, so they must be happy with the developments that are planned .

Firstly its NOT a licence renewal. They already have a perpetual licence in mining for the SEE product.

They have paid a grossly discounted payment to cover all the royalties they would have been due to pay over the next 5 years. up front.

SEE were clearly likely to run out of money before they reached break even, and this "DEAL" has helped tide them over until they reach that point. They didn't do this discounted deal because they had plenty of money and break even was a shoe in.

I don't have a problem with the deal if they needed money, as it's better than being diluted, buts lets not try and frame it as a positive event.

CAT had little choice but to stay with us.

1. They already own the licence, and wouldn't want to pay someone else again.

2. They have a large amount of trucks with our hardware already installed, which would be very expensive to replace, so could only be possible with any new sales.

Soulboy,

It's almost certainly the reason for the delay. As he stated they didn't know how to treat it, and it might take a while to determine.

People keep referring to it as licence money, as that's what was said in the RNS.

However I'm the interview he made it clear it's not a licence fee, it's 5 years up front royalties.

Caterpillar appear to pay a royalty for every truck using the software per year.

They have agreed an up front figure for the next 5 years.

They have never disclosed how many caterpillar trucks exist or what we get for each one.

However the yearly total is in the account.

Clearly they want to put as much of this into 2024 and 2025's revenue, to bring break even foward, but would need auditor sign off for that.

That's my take. I don't have too big a problem with it other than it is holding up the TU release.

It's certainly true, as I remember him saying this at least once, possibly twice.

The context was in explaining the distinction between 2024 and 2026 Euro regs, and how some OEMs were still box ticking re 2024, but wouldn't be able to do that with 2026, so would need to start incorporating proper DMS soon to be ready.

Numpty,

Trouble is it doesn't say WAS, and now selling G3 to everyone.

It says initially to Euro OEMs, and then to everyone else. Which means others need to wait.

Market seems to like it, which is good.

Next KPIs are key because these should show decent jump in Auto and Fleet, given what we are being told.

I'm not being obtuse and negative, just trying to read between the lines and get proper expectations, rather than the usual PM ramp.

Numpty,

So given G2 stock is gone, and G3 is for Euro OEMs initially, what are they doing for other customers? Telling them they have to wait? Not ideal is it.

Given yelyah comment below I now suspect they don't know when they are going to issue the trading statement.

They stated previously they had issues in how and when to recognize the caterpillar revenue.

I'm guessing that still hasn't been sorted.

Unfortunately I did see it as a slight negative.

Either they are constrained by lack of G3 stock, so are saving what they have for OEMs, or they don't want to roll out a new product too quickly. (The over the air updates path with G3 presents certain risks which didn't exist with G2.)

If anything goes wrong with this they are stuck with a huge cost in having to fix problems.

Either way sales may be constrained during the early period.

Interesting that the company has issued KPIs separately from trading statement, which is different to normal.

I doubt they would do this unless they thought the KPIs were good.

Auto was a little below my lower expectations, but probably will meet the markets expectations.

Fleet monitored was below normal, but sold was good, so again should meet market expectations.

Only now selling G3. Saying initially concentrating on Euro OEMs could suggest, they are deliberately holding back sales elsewhere for some reason which is my main worry from RNS. Might just be badly worded, and I've misunderstood.

S2020,

Apologies, yes you are right I keep making this mistake, that he's actually talking about cumulative cars on road.

It's a completely meaningless stat, but currently allows him to quote the 100% figure which seems impressive. As the cumulative numbers grow over the next 6 months to a year, you'll see this claim dropped very quickly as it becomes impossible to achieve.

So he's basically saying we will hit 342K, which is a very low ball number given all the ramp up that is supposed to be occurring, and last Q was 313K.

I'll be very disappointed with that number, and so will the market.

Mike,

“but what exactly is going to shake the SEE share price from its continuing malaise?”

Well unfortunately due to the continual over promise and under delivery, the market will need to see something of significance. Then it will need to see that repeated again and again, before it buys in to the story.

I suspect 2 quarters of very decent Auto KPI numbers could generate the start of significant interest.

Especially if they announce a few contracts along the way. The market wants to be sure that profitability is a given, and decent Auto KPIs are what can do that in the short term.

Latest set of KPIs should be published next week. Will they live up to the promise that PM keeps giving? I don’t know, I don’t even know what he means when he says Auto will continue to deliver 100% increase.

You see a 100% increase could mean 100% more than was done last year ie 0.638m, so 1.270m.

For that to happen they would need to deliver another 530k this quarter.

Or it could mean 100% more than last years 4th Quarter figures which were rather soft at 211k. So that would require 422K this quarter. So quite a big difference between those 2 figures.

Or it could mean 100% increase in Auto revenue.

He really needs to be a bit more specific, when he makes these promises. But suspect he is deliberately vague.

I’m hoping that based on what has been predicted, he means the year on year at 530k this quarter. However, 422k this quarter would be the bottom line for me, and suspect this is the figure he is suggesting. Anything below this is another under delivery on previous promises, and anything above is a bonus, and should be well received. The 530k would be extremely good.

Providing they can show good growth with KPIs, the push back on profitability by a quarter or 2 should be forgiven. Less than 422k would see further disappointment and another share price retrace.

Chut,

Thats because the text is wrong and should say "up front royalties, and not "up front License"

See received 3 types of revenue from Caterpillar.

1 Licence Fee (which was a one off and never to be repeated bit of business, many years ago)

2 Royalties - a yearly software fee for each truck .

3 Hardware fee for each installation of G2

No one is saying the hardware fee won't continue. What is being said is that the $3.5m ish revenue for the royalty a year is being paid upfront at $16.5m to cover the next 5 years. We will receive no royalty income during this time.

Clearly that would have increased over time as more caterpillar trunks come on board.

So in return for the upfront payment, we have lost any price increase we may have applied and any growth based on more trucks.

It may turn out to be the right thing to have done, but at least understand that this isn't ideal, and there is and never was any license payment involved in this.

Chut,

You really need to listen to the interview again.

There is no up front licence fee. He makes it VERY clear that the 16.5m includes all royalties for the next 5 years.

My guess is that the original deal was was a perpetual licence, ie for ever.

Everything I've said is correct, sorry you don't like the facts but there it is.

Sure I've guessed future royalties, which you can take or leave.

However last half royalties were 1.7m, previous half they were 1.07m, so they are growing fairly decently.

I expect we may get gains from New fields of use, but that will take time. Quite a bit of time given experience of company.

My response is as factual as it can be, unlike your completely made up view of licence situation.

As glandore says it's clear the caterpillar deal wasn't a license deal at all, but was purely about receiving royalties up front, because they are short of cash.

Clearly that will come at a cost.

H1 2024 showed this revenue at 1.7m and growing. Over 5 years this could easily have grown to 3m per half year.

Hence an average would be about 2.35m, which over 5 years = 23.5m.

So taking the money up front and getting some areas back, will likely cost 23.5 - 16.5m = 7m in lost revenue.

Quite costly in the short term.

Only time will tell if it was the right thing to do.

Looks like they have sold another 1m since. Announced today they are down to 3m.

Quite a few I is announcing they have 3m+ shares. No idea what is going to happen here but price dropped slightly yesterday so market thinks it less likely to get through.

Maps,

You have no idea how the market works, and talk an absolute load of tripe.

Your comments 're takeover show clearly that you have zero investing experience,

and are the comments i'd expect be hear from someone barely out of school.

If I was you i'd give up investing tomorrow, because if you don't lose it all on this, it's just a matter of time before the next one gets you.

It worries me excessively that I am invested if anything that ypu

Clearly the caterpillar licence is very good news indeed. Helps explain why they have been so confident about breakeven, and others (Me included), were more pessimistic 6 months ago. They had this in their back pocket all the time and we were completely unaware of the possibility.

As for the trading update, I'm struggling to understand how we can meet market expectations 're revenue and cash, but be worse with ebitda. Makes no sense. Initial reaction is costs have stayed high, but if that was the case then cash would have been adversely affected, but they are saying not. So I'm confused by these statements.

Lots of indirect supporting news coming out this morning, suggesting next Auto DMS KPIs should very strong. With GM and Ford pushing on strongly, and BMW continuing the roll out, 400k seems almost guaranteed which would be above expected growth levels. However there is every chance they could approach 500k, which would definitely get the markets attention.

I have been here before with these hopes only to be disappointed. However I suspect mr market has got quite low expectations, and this is a real chance for the company to finally exceed expectations for the first time.

Nathon,

I seem to remember during one of the company presentations that they indicated the aviation market opportunity to be worth 30m a year. No idea what that came to per plane.

I didn't take a lot of notice, as I was expecting auto to be doing 300m a year by the time we reached that

Point. So saw it as nice to have but small in overall scheme of things.

Terry,

Fleet revenue tends to increase just over $2m a year. So I've assumed increases of $3m a year for the next 4 years.

That includes the Cat licence revenue as they bundle it all together in results.

However given Gen 3 and aftermarket that should be very conservative.

But Fleet has been pretty predictable recently with about 10,000 added per year, and Gen3 and aftermarket is a complete unknown.

It might take off, or might be poor, as box tickers just go for the cheaper and poorer alternatives.