Member Info for Brockwl

Soul,
I took a look at this the other day. I'm sure that next page it shows a table 're current status of these.
It shows that 2020 he was awarded 2.5m of the 5m.
2021 he got all the 5m.
I assume that as they show as vested rather than cancelled.
The 2022 ones failed the performance criteria, but they will be retested 2023 and 2024 due to covid.
So not true to say he didn't receive any first 2 years. I don't think.

The previous trading update has already provided the financial information 're upcoming results. So don't expect any storming results, they are well known.
See have consistently matched trading updates with future results, so there will be no surprises with the financials.
Whether they have other news remains to be seen, but only expecting new news to be any quarterly updates 're auto and fleet.
That may or may not be released with results.

This weeks mileage suggests we may be over 42k installs now.

Nathan,
At no point did I get the impression that Magna will be paying extra because of help, we have given 're mirror design etc.
However conversely Paul stated that doing the exclusivity deal wouldn't result in their units being discounted either.
I'd guess what help we gave was rewarded with the money from the recent deal.
Going forward they will pay the standard volume price.

I guess the other point about the bonds which hasn't been mentioned yet, is that they offer senior debt security to the holder (Magna in this case)
Basically, what that means is that they get paid first, in the event of any financial problems, or going into administration situations.
They rank higher than shareholders, when it comes to paying back money.
If anything went wrong and the company went tits up, and didn't have enough money to pay back the loan,
Magna would take ownership of the company and all its IP, and products.
Shareholders would get nothing.
Now whilst that is extremely unlikely to occur here, it gives Magna another level of comfort.

BTW after reading the RNS and replying to Phil I suggested that Magna would have no choice but to convert.
Thats how I read the RNS first thing. However, Paul said during the presentation that they don't have to convert, which is more normal for convertible Bonds.
Clearly if they decide not to convert, we will need to pay back the loan.
Usually in those type of situations all sorts of options are considered, and the one which suits both is chosen.
ie pay it back, roll over the bonds for longer, take another loan to pay this one back etc etc.

Agree with all that Terry.

The price point was the only negative thing I heard yesterday. That winds me up a bit as I think it's worth much more than that. However once you deal with less tier 1s and bigger volumes, discounts become expected.
He said to me that 7 dollars was the basic rate for the 2026 RFQs that they were currently going through. But they then charge extra for each feature required.
So that adds a few dollars.

One final thing about the Mirror.

Yesterday Paul stated that it was currently suited to about 50% of models.
He then went on to say that it should take 50% of the market. He then realized what he had said and corrected that to 40%. He is very wary of over promising following the imminent debarcle.
However basically what he was saying is that every OEM who can choose the mirror will chose the mirror.
Why is that?
Well he explained that the first decision they need to make is where to site the camera. If they don't go with the mirror, they will need to put it in their console/****pit. That will require a complete redesign of the console, and all that goes with that. Manufacturing changes etc. It's very expensive.
Why do that when you can just buy a slightly dearer mirror.
So where it's possible to use the mirror it is a no brainer for them.
Magna also know this and why they have invested in us.

Previously Paul has been hopeful of winning 40% market share, 50% market revenue. Well seems to me this gives us 50% market share in one hit.

I'd also bet there is a team working on solving the technical issues for the other 50% right now.

The mirror is looking more and more like the killer app ????

Cheers

Ok as we are answering questions, here's want I don't fully understand, hopefully someone can answer.
Lets say GM go down the Qualcomm route and because they have supercruise they need DMS.
Lets say they also choose to use the Magna mirror.
Do they need the DMS module supplied with Qualcomm, or can they get away with just using the software in the mirror?
My gut feel is that they don't need our Qualcomm DMS functions, however this description of the mirror as just sending DMS signals slightly confuses the issue a little.

Dan,
As I understand it there is no conflict with Qualcom. I believe Paul stated that yesterday.
I still have one or two things I don't fully understand 're all The technical solutions. But this is what I think.
The mirror holds the camera and Sees chip, and becomes the piece of kit which provides the signals to all things which need them.
As I said before we offer 50 features, so at least 50 signals.
They played a video yesterday which showed a car with 4 passengers and it displayed the signals being monitored and potentially sent.
So things from, distraction, mobile phone use, seat belt use, to whether the person was smoking.
All these signals can be used by other ADAS functions.
Qualcomm provide snapdragon, which is in effect a central processing unit which can house all these ADAS functions and the infotainment features.
It can also support Sees DMS software.
Qualcomm don't care if someone uses the mirror or the See solution on snapdragon. All they want is too sell their unit into OEMs, which they appear to be doing great with.
So if I learnt one thing yesterday, it was that the Magna mirror is much more important to us than Qualcomm.
Also any significant Qualcomm revenue is further out than Magna.

Hope that helps. Please correct any inaccuracies, we are all learning here.
Cheers

Some other stuff either from meeting or conversation with Paul after.

Costs
Over 100 engineers taken on recently. Done in a cost-effective way (ie 17 in Vietnam, where labour rates are $35 against $135 in Aus). All bedded in and working well.
They saw what was coming and took decision to scale up to meet expected demand.
He said competitors have plans/would need to do a similar thing, but you can’t do these things overnight, and just click a switch. They will also have the issues re the cost of this, it’s unlikely they can do it as cost efficiently. Plus, they will likely need a fund-raise to enable this, and there is no certainty of that.
They are actively reducing the number of Tier 1’s they work with. This is another cost saving measure and has little effect on sales. When they started and had no industry reputation, and they had no choice but to go for all the tier 1’s. Now they can be much more selective about who they deal with

NDA’s
He confirmed to me that they were still not able to name many models, due to NDA’s.
They are not trying to go under the radar, as some have suggested, and would love to name them.
When I said we had been led to believe that once model was on the road, they could be announced, he said that isn’t always the case. Some have X quarters after hitting road in the NDA.
The obvious one is definitely in that category.

Auto DMS market (my thoughts after talking to Paul)
Will be about 80 million units a year by 2029. If we assume $10 a pop, and we have 50%, that’s $400m revenue. At 90% margin that’s $370m profit.
Using a PER of 10 to 15, gives a market cap of? (I’ll leave you to do the maths)
But it is multiples of current price.

They now offer 50 additional features over the basic offering and charge extra per feature.
Features will increase year on year.

Very confident and assured.
I put that down to 2 things.

1. He's just getting better at doing theses sort of things.
2. The story gets better by the day and is easy for him to sell.

My Magna take away from the town hall
Magna
Great deal
Exclusivity – This was the only exclusive deal they would consider in Auto due to following.
Its location based, and only ties them down from going with other mirror manufacturers, of which there is only one other. They were unlikely to have done business with them anyway.
So presents no restrictions.
It’s only for 3 years.
Magna had no real NEED to do this deal, as they would likely have been the dominate supplier anyway using See’s software.
Not sure we will know why they felt the need, but from what he said, my best guess is that the solution is worth very big money to them.
The Mirror itself will be at least 7 times more revenue to them than to us. Yet the only thing that differentiates this from other mirrors, is the fact that our software can be deployed in this small space. So we are key to their Mirror.
So, whilst this seems a lot of money to us, it’s small beer to them, and guarantees a massive revenue stream. There is also a deep relationship between the 2 companies.
I’d guess if the 2 had fallen out and SEE stopped providing the software, a great revenue stream would have been lost to Magna. Unlikely, but this deal protects all that for them.

So, it seems to me that SEE have given away virtually nothing commercially, I’d see this as almost free money, and a better deal than it seemed yesterday.

Would have been Impossible to raise money in market at these rates if at all.
Bond conversion at 11p is quite remarkable in current market.
Paul stated that he felt the Mirror solution would be the dominate solution to host the camera.
Because it was the simplest and cheapest by far.
Expects possibly 50% of all near future deployments to use this method. Thats fantastic for us.
Currently some car models are such that their shape/build means the Mirror is not a good solution. Hence only 50%. However, they think that technical issue, will get solved over time.
Which would mean 50% is no longer the limit.

Hope this is useful. Please correct anything above if I've got it wrong.

Excellent presentation by Paul, easily the best he has done to date.
The event was filmed, so it should be available to view at some point.
Currently traveling so I'm unable to say much more.

Esc,
Wasn't talking about the loan. Was making the point that we only get 10m
If the 17m exclusivity deal this year. So S2020 saying we would be profitable this year is wrong.

Only 10m US is payable this year.

Phil,
I don't think Magna have a choice, they have to convert. The only part that is not is the interest, which see decide whether to pay or convert.
I accept your point about giving away the mirror.
But the more I look at it, I think it's a very good deal.
Biggest downside is,as you say, that others will need to find a way of getting a mirror to work, and that produces competition.
However I suspect there isn't time for that and Magna know that and have got a cracking dea.

I'll reserve judgement until tomorrow.
Clearly the exclusivity deal is excellent.
However given they were already funded and getting another 17m from that deal, why did they Need more and incur further dilution, and significant interest payments.
Seems the key question tomorrow for me.

Not sure when you found it to be like that, but is definitely variable now.
Gets updated twice a day, and I try to collate all the evening updates.
By taking the highest km daily value around the time they announce latest installs and dividing the 2, you get a km per install figure.
Use that against any future daily km reading to get rough number of installs.
Need to only use the same days of the week you obtained the original figure from.
Wednesday and Thursday are the busy and most consistent days, as they also tend to avoid bank holidays.

Should have said it currently indicates about 41300.

I beg to differ, but I think you'll find you can.
If you plot the daily mileage totals, and divide by the last calculated average daily mileage per truck.
Not perfect, but provides a reasonable indicator of current Fleet installs.