Axios - The President`s Club Conference
Transcription
Axios - The President`s Club Conference
Axios Mobile Assets-Advanced Pallet Technology Solution Investment Overview – Richard MacDonald - CEO Sustainability Through Intelligent Invention Overview ! Axios is disrupting a basic, essential market with superior technology and service ! The largest retailer in the world has selected Axios to be an essential part of their supply chain for staple perishable foods, Axios has a backlog of demand to meet ! Axios pallet pooling rental business, enjoys high gross margins, recurring revenue, and a massive addressable market ! Axios is winning with superior technology and service, underpinned by a superior cost and service model, the Axios platform is 3X more efficient than its wooden counterparts ! Axios pallets excel in strength-to-weight ratio, durability, multiple trips and environmental footprint The Axios Building Blocks : The first fully integrated and holistic supply chain solution since the invention of the wood pallet, built on 3 value add pillars Device& Pillar 1 : Best in Class Engineered, tested and validated pallet platform – Best in Class design & function, production scalability Pillar 2: Technology , Software Client Dashboards – KPI’s, Sensors, Readers, RFID, Integrated platform, M2M, IoT, Networked Pillar 3 : Integrated Logistics, freight and pallet retrieval, high customer service levels, elimination of lost/ damaged pallets Behind raw material and labour costs, the next major cost to Vendors and Manufacturers and Retailers is the “logistics barrier” or getting product to market and on the shelf, it can be as much as 30% of the Retail price Vertical Integration Synergistic approach towards: ! Platform Management; ! Logistical Support; and ! Business Intelligence Accomplished through consistent quality while realizing: ! Cost Savings; ! Operational Efficiencies; and ! Corporate Social Responsibility initiatives. Our goal is to provide value at multiple organizational levels: ! Operations; ! Support Services; and ! Administration. Services are designed to maximize program flexibility while providing cost savings and/or operational efficiencies for additional offerings. Axios Solution : Breaking Through The Logistics Barrier Mobile'Assets' Retail / Consumer Manufacturing / Vendor Natural & Renewable Pallet Track & Trace Impact Management Full Pallet Pooling Management Solution Data Intelligence Axios’ logistics denominator enables an electronic conversation between all parties (including M2M) in the Supply Chain including the Retailer to improve the speed, cost, quality, integrity and reduce the carbon footprint of delivery to the consumer. Payback to users is in the form of Operational savings, higher service levels, carbon savings, & actionable data. Drivers of Change ! Smart devices, but no interconnection between data or services within an entire chain ! Food Safety, visibility, traceability, quality, accountability, within the supply chain ! FSMA – new in the market, no food on wood, Avian Influenza, Salmonella, Listeria are all driving change by USDA and FDA legislation ! Retailers want real competition, CHEP (BXB.AU) has a monopoly in NA pooling ! $15B Market Cap, trading at 10 to 13 x EBDITA multiple on no growth ! Retailers want an alternative to wood, that provides actionable data, more efficient supply chains, faster times to market, lowered inventories The Axios Pallet: Best in Class ! Commercially proven and accepted ! Highest strength to weight ratio of any non exotic material, lightest in its class, not reliant on fossil fuels ! Edge rackable to 2,800 lbs GMA standard FM Global 4996 certified ISO 8611 compliant All material components are FDA compliant Exceeds all phytosanitary standards in washing/ disinfectant process – scheduled for (GFSI approval ISPM 15 compliant-cross border ! Carbon Credits - Only pallet with approved carbon methodology VCS-VM0020 ! Cloud based data/software with RFID, active sensors 2016 ! ! ! ! Market Size ! Cold Chain (perishable foods) 600MM Issuances or Turns available per year ! Current opportunity with a large retailer “Fresh Eggs” 2.5MM Issuances with 42 DC’s ! Because of our technology and logistics, we match industry issuances with a much smaller pallet pool size (less capital) ! Axios averages 12-15 turns or rentals /year– Wood averages 4-5 turns or rentals/year Pallet & Data Flow Egg Produucers Freight to Distribution Centers (DC’s) Retailer DC’s Green Arrows = Data Scanned/Read/ Captured/Sent/Stored Issuance – 1st Invoice Comoldco Plant, Guelph for Assembly Pallets are washed, disinfected and sanitized at an Axios Pallet hub Pallets are Dock Swept at DC and put on Axios Drop Trailers Internal Freight to Axios wash facility Basic Economics ! $80-$85 to manufacture, dropping with volume purchases $73, further reduced by bringing in-house $66 ! Revenue of $6-7 USD per “turn” or issuance, base price before data & dashboard +15% ! 12-15 turns a year per pallet ! 5 Year pooling contracts – Industry first ! 70% -75% Gross Margin ( $6.00 -$1.68) ! Continued proven and demonstrated execution of roll-out Illustrative Financial Model Revenue' $24,000,000& Cost'of'Sales' $&7,800,000& Gross'Margin' $16,200,000& EBITDA' $13,000,000& Net'Income' $8,300,000& ! Avg Pool size 250,000 pallets @ $6.05 plus freight ! Basic = approx. 23MM Capitalization Table Fully'Diluted'Shares'Outstanding' 37,976,095' Basic'Shares'Outstanding' 23,621,027& Debentures'($2,849,807)' 2,849,807& OpQons' 1,612,468& ' Warrants' &&&9,892,793& Who'Owns'Axios?' %' Management'&'Board' 28%& InsQtuQonal' 10%& EMD'(Canadian'Exempt'Mkt'Dealer)' 10%& Friends'and'Family' 10%& Competitive Landscape and Barriers to Entry ! True ‘Poolers’ - CHEP, PECO, iGPS ! True ‘Supply Chain Logistics Software’ – Tradegecko, TrackVia, Ultriva ! True ‘3PL’ Service providers – CH Robinson, Menlo, CEVA, England Logistics ! True ‘Non-Wood’ Pallet manufacturers – Scholler Arca, Orbis, Rehrig ! True ‘Sensor’ device developers – Shockwatch, Thermalogic, Omega Management Team ! Richard MacDonald – President & CEO – Richard was with Magna International Inc. for 23 years in a variety of Executive and International roles. Richard was a Senior Vice President at Tesma International, one of Magna’s publicly traded Groups. Richard also spent time at Decoma, Magna’s plastic exteriors group. Responsibilities included launching high visibility high volume products. Rich also led Magna first Retail product efforts and during that time developed the clek and Marcato retail brands, at this time Rich also started a pallet program at Magna. Rich also spent 4 years in Magna Europe and 3 years at Magna Advanced Technologies. ! Marc Topacio – CFO – Marc has 19 years experience in accounting, including 12 years of public accounting experience as the CFO of the Gyro Creative Group. Marc has experience auditing multiple moulding firms as the lead auditor, including a pallet manufacturer and injection moulders ! Dave Wickwire – President – Axios Logistics – Dave has been involved running both pallet pooling companies and trucking/transport companies for the past 15 years. Dave holds an MBA and a CPA designation. Dave currently manages the Axios Logistics team as he rolls out the pallet pooling operations and implements the pallet scanning, retrieval as well as the freight services and programs for Axios’ clients. ! Bob Burrows – CTO – Bob brings with him 30 years in the Telecom and Automotive connected vehicle industries. Bob’s experience in sensors, software, microprocessors and chip development will serve the Axios Solution set well, as we develop temperature, Shock “G”, and Humidity sensors for our clients pooled applications. Bob’s experience in communications, M2M, and connected devices will keep Axios at the forefront of technology based connected solutions. ! Matt DiDio – VP Sales - Matt has 30 years of sales , marketing and branding management experience. Matt’s career began with Aeroquip Corporation where he was the VP of Sales and led the efforts of the GM Account. Matt was then the Director of Marketing at Magna and its Tier 0.5 Company Symatec group. In 2000 Matt became co-owner of Gyro Creative Group, a Detroit based branding firm. ! Dan Fournier – VP Operations – Dan comes to Axios with 17 years of Plant Operational experience, through many of the Magna Subsidiaries. Dan has had, experience is SQA ( Supplier Quality Assessment) and Purchasing. Dan will be responsible for all incoming materials and compound and the management of all outside molders and suppliers, as well as in-house production and assembly operations Directors ! ! ! ! Richard MacDonald - Director Marc Topacio - Director David Wickwire - Director James Taylor – Chairman - Jim brings to Axios more than 30 years of experience in executive roles at General Motors, including Global President of its Cadillac division and Vehicle Line Executive for the brand during its resurgence. He is a highly qualified leader with significant understanding of the Automotive sector and particularly the logistics channel Jim currently serves as VP of Purchasing and Manufacturing for Fisker Automotive ! Dennis Bausch-Director Dennis serves as a Director and heads up the Compensation Committee at Axios. He is retired from being the Chief Marketing Officer (CMO) at Magna International Inc., and was responsible for the diciplined profitable growth at Magna from when it was $1.5 B to $20B ! Chris Salapoutis – Director – Chris has recently joined the Board, and will serve as Chairman of the Audit Committee, and Chairman of the Advisory Committee. Chris brings more than 30 years of financial services industry experience and has held Senior positions in Macquarie Private Wealth, Macquarie Capital Markets, Orion Securities, Cartier Partners, Merrill Lynch Canada, Midland Walwyn Capital, and Fidelity Investments, Chris is also a CA. Advisory Committee ! Chris Salapoutis –&Chairman&–&Advisory&Commi?ee& ! Ben Shapiro – Ben is a CFA with 8 years of Capital Markets experience, Ben currently works at K2 & Associates Investment Management. Ben currently comanages a Canadian equity and debt portfolio with assets of more than $500 million. ! Rick Leblanc – Rick is a noted authority in the areas of pallet system management. Rick is the co-author of Pallets- A North American Perspective, and has published hundreds of articles pertaining to the selection and management of pallets in supply chains. ! Scott Smith – Scott is the third generation President of JD Smith and Sons Ltd. He is currently Second Vice Chairman of the Canadian Trucking Alliance and is Past Chairman of both the Ontario Trucking Association&and&the&Toronto&Trucking& AssociaEon.& ! Dr. Sylvan Charlebois – Sylvain is a Professor in the College of Business and Economics at the University of Guelph. He is the project lead for the World Ranking Food Safety Performance Report and has authored nearly 200 publications in peer reviewed journals. ! Cecil Patterson - Cecil is a third generation farmer with a comprehensive understanding of “farm to fork” supply, and the best practices within that chain, Cecil has a deep knowledge of perishable goods and food safety. ! Andrew Kocher - Andrew is a shrewd investor with a deep understanding of micro-cap stocks, he has a keen interest finance and was instrumental as the Director of Prosperity at One Credit Union where as member of the Audit Committee was able to oversee two amalgamations with other Credit Unions Objectives Near Term ! ! ! ! ! ! ! ! ! ! Additional listing in the USA OTC:QB Achieve new cleaning certification GFSI Continue to sign “contracts” 2-3 in 3rd Qtr Build pool to 65,000- 75,000 pallets by 12/31/15 Have pallets/pooling at all 42 DC’s Start Sam’s Club egg distribution Roll-out Calmaine eggs Start launch of Sensor program Data services will add to base level contract prices Improve cost & achieve material price reductions Objectives Medium - Long Term ! ! ! ! ! ! ! ! Build additional tools to increase capacity Build compounding line to lower material cost Build pallet pool faster (5 yr target 3.5MM pallets) $250-$300mil Rev Effective fleet of 10 MM pallet pool Service new Retailer’s DC’s (Albertsons, Publix etc) Add on new product verticals such as the Dairy / Produce/ Meat & Poultry Increase pooling density in established lanes Add on pooling approvals at additional Retailers (Kroger) Sustainability Through Intelligent Invention