gina wp 4.2 business and exploitation plan may 3 rd 2011 gnss for innovative road applications
TRANSCRIPT
GINA WP 4.2Business and Exploitation PlanMay 3rd 2011
GNSS for INnovative Road Applications
GNSS for Innovative road Applications
• Company’s
• logo
Content
• Introduction & Business model definition
• Addressable market and market potential
• General Cost Structure
• Business Case Scenarios
• Business Segment stand-alone scenario
• Business + Private Segments scenario
Page 203/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
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• logo
European Commission Push for interoperability and EETS
The European Council and Parliament are developing a strategy for interoperability by establishing the European Electronic Tolling Service (EETS) and supporting pan-
European research projects (i.e. CESARE, RCI) involving major stakeholders
• Interoperability Directive 52/ EC (2004)
• Commission Decision 750/CE (2009)
• CESARE I-IV
• RCI (Road Charging Interoperability)
• GNSS - Satellite positioning (Preferred)
• DSRC - 5.8 GHz microwave technology
• One OBU – One Contract for all EETS Road domains
• Non-discriminatory EETS Provider access to all EETS domains
• No additional toll
• Complementary to actual electronic toll services
• No physical barriers
• Separation of roles between Toll Chargers and Service Providers
Main References
Technologies
EETSKey Elements
Timetable• Mid-2012 for >3,5 tons vehicles (i.e. Trucks, Buses, etc.)
• Mid 2014 for other vehicles (i.e. Cars, Light Commercial Vehicles, etc.)
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Pan-European supporting projects - Cesare IV Framework
Within CESARE project a basic EETS framework has been modelled and the roles of the four main actors (Toll Chargers, EETS Service Provider, EETS Service Users
and Interoperability Management) have been defined
InteroperabilityManagement
- Settlement of disputes- Governance- Establishment and
operation of certification procedures
EETSService Users
- Road user fees payment (via the EETS Provider)
- EETS Service fees payment
EETSService Provider
- Toll payment guarantee- Invoicing (on behalf of
Toll Chargers)- EETS contracts Issuing- OBU Issuing
Toll Chargers
- Transport services provisioning
- Infrastructure maintenance and upgrade
Page 403/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
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GINA EETS Business Model – Service vs Economic Flows
EGNOS/GALILEO OPERATING COMPANY
EETS PAN-EUROPEAN SERVICE PROVIDER
OPERATING COMPANY
GNSS SERVICE PROVIDER
Guaranteed service
END USER/CUSTOMER(Private + Business)
Servicebundle
Service fee
Fee per bundle
TOLL CHARGER1, 2…N
CONTENTPROVIDER
TELCO
% Fee on toll collected
Toll Collected
Payment for usage
Payment for usage
INFRASTRUCURE OWNER
PUBLIC INSTITUTIONS
Service/product flows
Economic flows
Fee per Add-on
Add-onService
TollCollected
The EETS Service Provider has a key role as it is the link between all the players along the Value Chain and it is involved in all economic and service exchanges
Page 503/05/2011GINA D4.4 – Business and exploitation plan
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GINA Offer structure
ConsumerBusiness
BasicPackage
Add-On
H WS
erv
ice
s• Smart OBU without GUI• Smart OBU without GUI
• Wireless GUI• Wireless GUI
• EFC• E-CALL
• EFC• E-CALL• Fleet Management/ Basic
• Fleet Management/Tracking and Tracing
• Theft management• Traffic info system• Navigation services/ active re-routing
H WS
erv
ices
• GINA Service Provider offer has been structured as:- a set of services offered in a bundle solution to maximize service usage and market penetration- a set of add-on services that can be purchased separately
• Two customer segments have been identified: business (i.e. commercial vehicles) and consumer (i.e. passenger cars)
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• Theft management• Traffic info system• Navigation services/ active re-routing
GNSS for Innovative road Applications
• Company’s
• logo
Content
• Introduction & Business model definition
• Addressable market and market potential
• General Cost Structure
• Business Case Scenarios
• Business Segment stand-alone scenario
• Business + Private Segments scenario
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Addressable end-user market
• For the addressable end-user market the Business Case has analysed the last available data relevant to the European market of cars, buses, light commercial vehicles, light, medium and heavy trucks, using CAGR of the last 4 years to project data
• The analysis took into consideration all the countries belonging to EU27.
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0
100
200
€300M
2010
244
2011
249
2012
251
2013
253
2014
255
2015
258
2016
260
2017
262
2018
265
2019
267
2020
270
2021
272
2022
275
2023
278
2024
281
2025
283
2026
286
2027
289
2028
292
2029
295
2030
298
Forecast for circulating cars in Europe (2010-2030)
• EU 27 cars market expected to increase from 244 Mln in the 2010 to 298 Mln in the 2030 with a CAGR around 1%
• Relative weight of the first 7 countries (Germany, Italy, France, GB, Spain, Poland, Netherlands) out of the total EU market is almost constant around 75%
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0
10
20
30
40
€50M
2010
36
2011
37
2012
37
2013
38
2014
38
2015
38
2016
39
2017
39
2018
40
2019
40
2020
41
2021
41
2022
42
2023
42
2024
43
2025
44
2026
45
2027
46
2028
47
2029
48
2030
48
Forecast for circulating LCV, Trucks and Buses in Europe (2010-2030)
• EU 27 commercial vehicles and trucks market expected to increase from 36 Mln in the 2010 to 48 Mln in the 2030 with a CAGR around 1,5%
• Relative weight of the first 7 countries (Germany, Italy, France, GB, Spain, Poland, Netherlands) out of the total EU market is almost constant around 70%
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Actual European toll collection market
Source: ASECAP National Reports
0
20
40
60
80
100%
% of total
revenue (2009 )
European toll
revenue
Central-
Southern
Europe
Others
€22,5B
Central-Southern
Europe
Germany
Italy
France
Portugal
Austria
Spain
€20,3B
• European toll collection market is ~€23B and Western European account for over 90% of the total collection
• Despite that, road pricing schemes are expected to spread rapidly all around EU due to:
- Growing mobility needs- Inability of many government to finance additional road infrastructure- Increasing concerns over the environmental impact of road transport- Need for a better and more efficient use of existing infrastructure
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0
5
10
15
20
25
30
€35B
2010
23
2011
24
2012
24
2013
26
2014
27
2015
28
2016
28
2017
28
2018
29
2019
29
2020
29
2021
31
2022
31
2023
31
2024
31
2025
32
2026
32
2027
32
2028
32
2029
32
2030
33
European toll collection forecast(2010-2030)• Annual toll collection revenues have been projected along the Business Case according to
actual road charging scheme trends and upcoming projects
• All EU27 countries RUC scheme where analysed in depth in order to take into account all country peculiarities
Source: ASECAP National Reports, Toll Road News, Euromonitor, GINA project analysis
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European Electronic Toll Collection (ETC) products and services market
Source: GIA Report, Company Annual Reports, IBTTA, ASECAP
0
500
1.000
€1.500M
Auto
stra
de
205
T-Sy
stem
s
177
Kaps
ch
152
Telven
t
96
Efko
n
67
Siem
ens
67
Euro
toll
66
Indr
a
65
Egis
54
Q-FRE
E
43
GEA
38
SICE
34
Cofir
oute
31
CS
28
Asco
m
27
Tecs
idel
10
Sirit
1
Other
239
Tota
l
239
514
648
1,401
Companies with operations in many geosAnnual ETC revenue (2008)
European Electronic Tolling products and services market is ~€1.4B and highly fragmented
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Prominent European ETC vendors
AlcatelIN Autostrade 260 Italy Ascom 35 France Bouygues France Capita UK Cofiroute 60 Germany, France, US CS 41 France Efkon 100 Several Egis 107 Several Eurotoll 85 France, Spain GEA 60 Primarily France GMV Spain IBM Sweden Kapsch 250 Several Peek Traffic BV Eastern Europe Q-FREE 80 Norway Sanef France Serco UK SICE 60 Spain, S. Africa Siemens AG 120 Several T-Systems 230 Germany Tecsidel 23 Spain Telvent 250 Several Thales France, UK Indra 120 Spain, Latin America
VendorEst. ETC global
revenue ($M)Main location
Lane Maint.
HardwareBack Office
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0,0
1,0
2,0
3,0
€4,0B
2010
0,42
2011
0,43
2012
0,45
2013
1,14
2014
1,22
2015
1,32
2016
1,74
2017
1,83
2018
1,93
2019
2,01
2020
2,09
2021
2,17
2022
2,26
2023
2,35
2024
2,44
2025
2,54
2026
2,64
2027
2,75
2028
2,86
2029
2,97
2030
3,09
Urban Road Charging fee collection estimation (2010-2030)
Introduction of Urban
Road Charging
Scheme in all cities
above 1M inhabitants
Growth of actual
Urban Road Charging Scheme
Progressive Introduction of
Urban Road Charging Scheme in the remaining TOP 50 European
cities
Perpetuity Growth
• Urban Charging fee collection revenues of EU-27 Top-50* cities have been estimated starting from the ones of currently in place UC scheme (i.e. London, Milan, Stockholm) and adjusting them proportionally to population
*EU-27 Top-50 cities have been selected according to population and traffic index (Tom Tom data)
EU-27 Top-50cities URCCollection
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Content
• Introduction & Business model definition
• Addressable market and market potential
• General Cost Structure
• Business Case Scenarios
• Business Segment stand-alone scenario
• Business + Private Segments scenario
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GINA Telecommunication costs- Main assumptions
*General public offers scaled down starting from offers with data allowance as close as possible to the defined communication range (100- 500 MB/month)
Telco Requirements
Costs
FutureTrends
• Telco costs stable along the BP time horizon: cost would not be decrease significantly, rather than maximum data cap would increase rapidly
Roaming
• The communication channel among the OBUs and the Central IT Infrastructure will be done by GPRS/UMTS: RUC data reports will be sent daily to optimizes bandwidth and server usage
• The communication requirement range for the basic package have been assumed around 100 MB/month for both the consumer and the business segment
• International roaming costs declining along the BP time horizon from 5 to 3 times the cost of national services
• Average roaming percentage weight:- Consumer segment: 10%- Business segment: 20%
• Communication prices per country, based on currently offered mobile broadband services*, with a 40% discount achievable thanks to proper negotiation and business agreements
• Further 40% discount for private segment versus business segment
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European mobile broadband services prices
COUNTRY> OPERATOR NAME OF PLAN100 MB
€/MONTHAUSTRIA T-MOBILE FAIRCLICK BASIC 3,0BELGIUM MOBISTAR INTERNET EVERYWHERE MAX 1,5
CZECH REP. T-MOBILE INTERNET BASIC 1,0
FRANCEBOUYGUES TELECOM FORFAIT PC INTERNET MOBILE 4,5
SFR FORFAIT AJUSTABLE 4,9
GERMANYT-MOBILE WEB'N'WALK CONNECT M 8,4
VODAFONE D2 MOBILE CONNECT VOLUME L 6,7O2 MOBILE DATENTARIFE INTERNET PACK 5,0
GREECE PANAFON (VODAFONE) VODAFONE MOBILE BROADBAND VMC250 6,0HUNGARY VODAFONE VODAFONE INTERNET 1G 1,3IRELAND VODAFONE IRELAND VODAFONE MOBILE BROADBAND 1,5
ITALY VODAFONE OMNITEL MOBILE BROADBAND 2,5
NETHERLANDS
T-MOBILE MOBIEL BREEDBAND BUSINESS 3,5VODAFONE LIBERETEL DATA-ABONNEMENTEN NATIONAAL PLUS 4,0
POLANDCENTERTEL (ORANGE) ORANGE FREE STANDARD 1,8POLKOMTEL/PLUS GSM IPLUS PRYWATNIE 60 1,8
PORTUGALTMN (TELEMOVEL) BANDA LARGA LIGHT 2,2
OPTIMUS KANGURU BASIC 2,2
SLOVAK REP.ORANGE SLOVENSKO MOBILNÝ ORANGE INTERNET 1,2T-MOBILE SLOVAKIA RÝCHLY INTERNET 2 1,2
SPAIN
AMENA/ORANGE TARIFA INTERNET EVERYWHERE 2,9
TELEFONICA MOVILES TARIFA PLANA INTERNET 3,5
VODAFONE ESPANA TARIFA NAVEGA MINI 2,2SWEDEN SVENSKA UMTS-NAT MOBILT BRETBAND MIDI 1,0
UKORANGE MOBILE BROADBAND 1,9
T-MOBILE UK MOBILE BROADBAND 1,9VODAFONE MOBILE BROADBAND 1,9
AVERAGE 2,9
Note: data refers to mobile broadband services via USB modem / PCMI card since any add-ons for voice communications is required
Actual mobile broadband costs vary from 1,0 € to 8,4 € across different EU-27 countries, with an average of 2,9€
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BACKUP
GNSS for Innovative road Applications
• Company’s
• logo
GINA OBU related costs- Main assumptions
0
50
100
150
€200
157
137
122
111
103
97
93
89
87
85
84
8382
8281 81
2015 2017 2019 2021 2023 2025 2027 2029
OBU+Install Cost Evolution(Business Segment)
OBU & Installation
Financing
Assistance
• The OBU purchase cost and all the costs related to installation and assistance would be included in the basic package
• OBU cost for business segment, installation included, assumed to be 160€ in 2015 (starting from 220€ in 2012), declining to 80€ in 2030 following an exp-curve:
- Costs are highly affected by scale economies- Installation costs (actually around 50€/OBU) would be drastically reduced in case of
partnership with vehicles manufacturers
• OBU cost for consumer segment, assumed to be 45€ in 2018 (starting from 90€ in 2012), declining to 30€ in 2030 following an exp-curve; installation costs in this case have not been considered since the OBU has been assumed “plug & play” type, much simpler than the business segment type
• OBU + Install costs assumed to be sustained through a “leasing like” purchasing,- 10% interest rate- 5 years leasing duration, after 5 years the OBU would be completely renewed
• Assistance costs for fixing troubles with OBU assumed to be equal to 30% the annual leasing fee
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0
50
100
150
€200
63
54
48
43
40
37
35
34
33
3232
3131 31 30 30
2015 2017 2019 2021 2023 2025 2027 2029
OBU+Install Cost Evolution(Consumer Segment)
GNSS for Innovative road Applications
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GINA Architecture Overview
Central IT Infrastructure
Vehicles
UsersOBU
Content Provider 1
Content Provider 2
Content Provider 3
Content Provider n
RUC & Service Users(e.g. Motorway Companies, Municipalities, Insurances
companies)
GINA Core IT Infrastructure
Service Center 1
Service Center 2
Service Center 3
Service Center n
GINA EETSService Provider
External Entities
• GINA core IT infrastructure is composed by two main blocks:- the Central IT Infrastructure- the Service Centers
• These tow blocks are the key elements for determining both Capital Expenditure profile and Operating Expenses profile
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GINA Opex & Capexprofile estimation• For both Opex and Capex a stepwise evolution profile has been
assumed, reflecting the progressive penetration in different areas
• According to the defined penetration plan three main phases have been identified:
Phase II
Phase III
Phase I
• Investments and operating costs to support the service provision to the business segment in Area 1 (Central Southern Europe)
• Investments and operating costs to support the service provision to business and private segment in Area 4 (Eastern Europe) and Area 5 (Mediterranean Island) in addition to Area 1
• Investments and operating costs to support the service provision in Area 2 and Area 3 (Benelux & Great Britain) (Northern Europe) in addition to Area 1, Area 4 & Area 5
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GINA Opex & Capex- Main Assumptions
Opex
• Launch on the market for Business segment on 2015
• Architecture upgrades driven by penetration plan
• 1 years prior to each architecture upgrade, 50% of the upgraded architecture on-going costs shall be supported to prepare the go-live
• During the launch year for each phase additional launch costs shall be supported
• Opex reduction for the business segment stand-alone scenario equal to 40% (not applied for core IT infrastructure Phase 1)
Depreciation
On-going investment
Launch/ Upgrades
Investment
• Hardware: 5 years • Software: 3 years• Other material: 5 years• Other not material: 15 years
• 33% of investments have to be supported two years ahead GINA SP launch or architecture upgrades, the remaining 66% one year ahead
• Capex reduction for the business segment stand-alone scenario equal to 30%
• Sustaining/maintenance capex are equal to depreciation
Capex
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0
10
20
30
40
€50M
2014
10
2015
36
2016
21
2017
24
2018
33
2019
27
2020
31
2021
40
2022
34
2023
34
2024
34
2025
34
2026
34
2027
34
2028
34
2029
34
2030
34
2,0 2,3 3,2 3,5 3,9 4,3 4,7 5,0 5,3 5,6 5,8 6,10,0 0,7 1,0 1,5 1,8
# Subscribers
Business ( Mln )
GINA Opex profile (2013-2030)- Business segment stand-alone
Pan-EU systemOn-going
Area 1 - 50%
ongoing costs
Opex distribution
Area 1Launch
+ ongoing costs
Area 1 +Area 4&5
50% On-Going
Area 4&5Launch
Area 2&3Launch
Pan-EU system on-going operating expenses equal to ~34M€
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Area 1&4&5 +Area 2&3
50% On-Going
Area 1ongoing
costs
Area 1&4&5on-going
costs
GNSS for Innovative road Applications
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GINA Opex - Details by Phase Business segment stand-alone
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BACKUPPHASE 1: COST ELEMENT MAINTENANCE OPERATIONSOPERATIONSPERSONNELHEADCOUNT
OPERATIONSPERSONNEL
COSTTOTAL
CORE INFRASTRUCTURE -SYSTEM 374.400 362.880 216 12.960.000 13.697.280
CORE INFRASTRUCTURE -APPLICATION 439.056 248.688 116 3.560.000 4.247.744
CORE INFRASTRUCTURE -TOTAL 813.456 611.568 332 16.520.000 17.945.024
SERVICE CENTRES-TOTAL 142.560 32.400 60 2.400.000 2.574.960
TOTAL IT CORE 956.016 643.968 392 18.920.000 20.519.984
ADDITIONAL LAUNCH COSTS (for launch year only) 15.000.000
PHASE 2: COST ELEMENT MAINTENANCE OPERATIONSOPERATIONSPERSONNELHEADCOUNT
OPERATIONSPERSONNEL
COSTTOTAL
CORE INFRASTRUCTURE -SYSTEM 499.200 483.840 287 17.220.000 18.203.040
CORE INFRASTRUCTURE -APPLICATION 585.408 331.584 156 4.790.000 5.706.992
CORE INFRASTRUCTURE -TOTAL 1.084.608 815.424 443 22.010.000 23.910.032
SERVICE CENTRES-TOTAL 190.080 43.200 82 3.280.000 3.513.280
TOTAL IT CORE 1.274.688 858.624 525 25.290.000 27.423.312
ADDITIONAL LAUNCH COSTS (for launch year only) 6.000.000
PHASE 3: COST ELEMENT MAINTENANCE OPERATIONSOPERATIONSPERSONNELHEADCOUNT
OPERATIONSPERSONNEL
COSTTOTAL
CORE INFRASTRUCTURE -SYSTEM 624.000 604.800 360 21.600.000 22.828.800
CORE INFRASTRUCTURE -APPLICATION 731.760 414.480 195 5.990.000 7.136.240
CORE INFRASTRUCTURE -TOTAL 1.355.760 1.019.280 555 27.590.000 29.965.040
SERVICE CENTRES-TOTAL 237.600 54.000 99 3.960.000 4.251.600
TOTAL IT CORE 1.593.360 1.073.280 654 31.550.000 34.216.640
ADDITIONAL LAUNCH COSTS (for launch year only) 6.000.000
GNSS for Innovative road Applications
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0
20
40
60
€80M
2014
10
2015
36
2016
21
2017
33
2018
56
2019
46
2020
51
2021
67
2022
57
2023
57
2024
57
2025
57
2026
57
2027
57
2028
57
2029
57
2030
57
2,0 2,3 3,2 3,5 3,9 4,3 4,7 5,0 5,3 5,6 5,8 6,10,0 0,7 1,0 1,5 1,8
# Subscribers
Business ( Mln )
2,3 2,9 3,8 4,2 4,7 5,1 5,3 5,6 5,8 6,1 6,3 6,50,0 0,0 0,0 0,0 1,8
# Subscribers
Private (Mln )
GINA Opex profile (2013-2030)- Business + Private segments
Pan-EU systemOn-going
Area 1 - 50%
ongoing costs
Opex distribution
Area 1Launch
+ ongoing costs
Area 1 +Area 4&5
50% On-Going
Area 4&5Launch
Area 2&3Launch
Pan-EU system on-going operating expenses equal to ~57M€
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Area 1&4&5 +Area 2&3
50% On-Going
Area 1ongoing
costs
Area 1&4&5on-going
costs
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GINA Opex - Details by Phase Business + Private segments
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BACKUPPHASE 1: COST ELEMENT MAINTENANCE OPERATIONSOPERATIONSPERSONNELHEADCOUNT
OPERATIONSPERSONNEL
COSTTOTAL
CORE INFRASTRUCTURE -SYSTEM 374.400 362.880 216 12.960.000 13.697.280
CORE INFRASTRUCTURE -APPLICATION 439.056 248.688 116 3.560.000 4.247.744
CORE INFRASTRUCTURE -TOTAL 813.456 611.568 332 16.520.000 17.945.024
SERVICE CENTRES-TOTAL 142.560 32.400 60 2.400.000 2.574.960
TOTAL IT CORE 956.016 643.968 392 18.920.000 20.519.984
ADDITIONAL LAUNCH COSTS (for launch year only) 25.000.000
PHASE 2: COST ELEMENT MAINTENANCE OPERATIONSOPERATIONSPERSONNELHEADCOUNT
OPERATIONSPERSONNEL
COSTTOTAL
CORE INFRASTRUCTURE -SYSTEM 832.000 806.400 479 28.740.000 30.378.400
CORE INFRASTRUCTURE -APPLICATION 975.680 552.640 258 7.920.000 9.448.320
CORE INFRASTRUCTURE -TOTAL 1.807.680 1.359.040 737 36.660.000 39.826.720
SERVICE CENTRES-TOTAL 316.800 72.000 135 5.400.000 5.788.800
TOTAL IT CORE 2.124.480 1.431.040 872 42.060.000 45.615.520
ADDITIONAL LAUNCH COSTS (for launch year only) 10.000.000
PHASE 3: COST ELEMENT MAINTENANCE OPERATIONSOPERATIONSPERSONNELHEADCOUNT
OPERATIONSPERSONNEL
COSTTOTAL
CORE INFRASTRUCTURE -SYSTEM 1.040.000 1.008.000 599 35.940.000 37.988.000
CORE INFRASTRUCTURE -APPLICATION 1.219.600 690.800 326 10.010.000 11.920.400
CORE INFRASTRUCTURE -TOTAL 2.259.600 1.698.800 925 45.950.000 49.908.400
SERVICE CENTRES-TOTAL 396.000 90.000 166 6.640.000 7.126.000
TOTAL IT CORE 2.655.600 1.788.800 1.091 52.590.000 57.034.400
ADDITIONAL LAUNCH COSTS (for launch year only) 10.000.000
GNSS for Innovative road Applications
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• logo
GINA Capex profile (2013-2030) –Business segment stand-alone
0
20
40
€60M
2013
26
2014
52
2015
18
2016
31
2017
44
2018
26
2019
39
2020
52
2021
34
2022
34
2023
34
2024
34
2025
34
2026
34
2027
34
2028
34
2029
34
2030
34
2,0 2,3 3,2 3,5 3,9 4,3 4,7 5,0 5,3 5,6
5,8 6,10,0 0,0
0,7 1,0 1,5 1,8
# Subsribers
Business (Mln )
Maintenance
Area 1 system developmentand business
start-upCapex distribution
Area 4&5 system
“Scaling-up”
Overall about 621 Mln € Capex in 17 years
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Area 2&3 system
“Scaling-up”
GNSS for Innovative road Applications
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GINA Capex - Details by Phase Business stand-alone segment
Page 2803/05/2011GINA D4.4 – Business and exploitation plan
BACKUPPHASE 1: COST ELEMENTS HARDWARE SOFTWARE DEVELOPMENT TOTAL
CORE INFRASTRUCTURE -SYSTEM 6.860.000 4.676.000 1.526.000 13.062.000
CORE INFRASTRUCTURE -APPLICATION 5.405.085 2.963.695 5.120.343 13.489.123
CORE INFRASTRUCTURE -TOTAL 12.265.085 7.639.695 6.646.343 26.551.123
SERVICE CENTRES-TOTAL 17.640.000 15.120.000 238.000 32.998.000
TEST ENVIRONMENT 96.250 43.050 42.000 181.300
DEVELOPMENT ENVIRONMENT 70.000 35.000 26.250 131.250
TOTAL -IT CORE 30.071.335 22.837.745 6.952.593 59.861.673
Other Material Costs 14.000.000 Other Non Material Costs 3.500.000
PHASE 2 & 3: COST ELEMENTS HARDWARE SOFTWARE DEVELOPMENT TOTAL
CORE INFRASTRUCTURE -SYSTEM 3.430.000 2.338.000 763.000 6.531.000
CORE INFRASTRUCTURE -APPLICATION 2.702.543 1.481.848 2.560.171 6.744.561
CORE INFRASTRUCTURE -TOTAL 6.132.543 3.819.848 3.323.171 13.275.561
SERVICE CENTRES-TOTAL 8.820.000 7.560.000 119.000 16.499.000
TEST ENVIRONMENT 48.125 21.525 21.000 90.650
DEVELOPMENT ENVIRONMENT 35.000 17.500 13.125 65.625
TOTAL -IT CORE 15.035.668 11.418.873 3.476.296 29.930.836
Other Material Costs 7.000.000 Other Non Material Costs 1.750.000
GNSS for Innovative road Applications
• Company’s
• logo
GINA Capex profile (2013-2030) –Business + Private segments
0
20
40
60
€80M
2013
26
2014
52
2015
18
2016
36
2017
55
2018
29
2019
48
2020
66
2021
40
2022
40
2023
40
2024
40
2025
40
2026
40
2027
40
2028
40
2029
40
2030
40
2,0 2,3 3,2 3,5 3,9 4,3 4,7 5,0 5,3 5,6 5,8 6,10,0 0,0 0,7 1,0 1,5 1,8
4,3 5,2 6,9 7,7 8,6 9,4 10,1 10,6 11,1 11,6 12,2 12,70,0 0,0 0,7 1,0 1,5 3,7
# Subsribers
Business (Mln )
# Subsribers Business
+ Consumer (Mln )
Overall about 731 Mln € Capex in 17 years
Page 2903/05/2011GINA D4.4 – Business and exploitation plan
Capex distribution
Maintenance
Area 1 system developmentand business
start-up
Area 4&5 system
“Scaling-up”
Area 2&3 system
“Scaling-up”
GNSS for Innovative road Applications
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• logo
GINA Capex - Details by Phase Business + Private segments
Page 3003/05/2011GINA D4.4 – Business and exploitation plan
BACKUPPHASE 1: COST ELEMENTS HARDWARE SOFTWARE DEVELOPMENT TOTAL
CORE INFRASTRUCTURE -SYSTEM 6.860.000 4.676.000 1.526.000 13.062.000
CORE INFRASTRUCTURE -APPLICATION 5.405.085 2.963.695 5.120.343 13.489.123
CORE INFRASTRUCTURE -TOTAL 12.265.085 7.639.695 6.646.343 26.551.123
SERVICE CENTRES-TOTAL 17.640.000 15.120.000 238.000 32.998.000
TEST ENVIRONMENT 96.250 43.050 42.000 181.300
DEVELOPMENT ENVIRONMENT 70.000 35.000 26.250 131.250
TOTAL -IT CORE 30.071.335 22.837.745 6.952.593 59.861.673
Other Material Costs 14.000.000 Other Non Material Costs 3.500.000
PHASE 2 & 3: COST ELEMENTS HARDWARE SOFTWARE DEVELOPMENT TOTAL
CORE INFRASTRUCTURE -SYSTEM 4.900.000 3.340.000 1.090.000 9.330.000
CORE INFRASTRUCTURE -APPLICATION 3.860.775 2.116.925 3.657.388 9.635.088
CORE INFRASTRUCTURE -TOTAL 8.760.775 5.456.925 4.747.388 18.965.088
SERVICE CENTRES-TOTAL 12.600.000 10.800.000 170.000 23.570.000
TEST ENVIRONMENT 68.750 30.750 30.000 129.500
DEVELOPMENT ENVIRONMENT 50.000 25.000 18.750 93.750
TOTAL -IT CORE 21.479.525 16.312.675 4.966.138 42.758.338
Other Material Costs 10.000.000 Other Non Material Costs 2.500.000
GNSS for Innovative road Applications
• Company’s
• logo
EGNOS signal and SG&A Costs- Main Assumptions
• Commissions to sales agent (either belonging to third parties or to an own sales force network) equal to 5% of total revenues (based on telecom benchmark where commissions go from 4 to 8% of revenues)
Marketing costs
Administration, Finance &
Control costs
Commercial costs
Other Costs
• 0,9% of the revenues (based on telecom benchmarking) for advertising and promo costs for product launch, customer retention initiatives and brand/product awareness building
• Staff of 300 employees for the pan-European service provider at regime condition costing 80k€ each (2,2% of revenues)
• Rent and other minor costs assumed to be 0,7% of the revenues
• Lost revenues due to claims and frauds have been assumed:• 0,5% of toll collected for Infrastructure operators
• 1% of toll collected for Municipalities
EGNOSSignal Costs
* GIROADS study relevant to EGNOS System operating costs: system operations costs between 30 and 35 million euros per annum (cost allocation for the road domain between 3 and 15 million euros per year)
• Galileo Concessionaire costs for GNSS services included EDAS equal to 1,5 € per annum*
Page 3103/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
Content
• Introduction & Business model definition
• Addressable market and market potential
• General Cost Structure
• Business Case Scenarios
• Business Segment stand-alone scenario
• Business + Private Segments scenario
Page 3203/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
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GINA Penetration Strategy
Area 2
Area 1
Area 3
Area 4
Area 5
• 5 geo-cluster have been identified :- Area 1- Central-Southern EU
(Germany, France, Italy, Spain, Portugal and Austria)
- Area 2 -Benelux & Great Britain(Netherlands, Belgium, Luxemburg, UK, Ireland )
- Area 3 - Northern Europe(Denmark, Sweden, Finland, Latvia, Estonia and Lithuania )
- Area 4 - Eastern Europe(Poland, Czech Rep., Slovakia, Slovenia, Hungary, Romania and Bulgaria )
- Area 5 - Mediterranean Island(Greece, Malta, Cipro)
• For an EETS provider, covering all Europe in a “big bang” fashion seems to be very tough both from an economical and operational point of view and a progressive geographical penetration seems to be the only feasible solution
• In order to define a progressive penetration plan, geo-clusters have been defined using the following criteria:
- Geo-adjacency and Trans European Network (TEN-T) priority axis- Actual Road Charging scheme- Upcoming Road Charging projects
Page 3303/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
GINA Penetration Plan
Central-Southern Europe(Area 1)
Central-Southern Europe(Area 1)
Benelux &Great Britain
(Area 2)
Benelux &Great Britain
(Area 2)
Northern Europe(Area 3)
Northern Europe(Area 3)
Eastern Europe(Area 4)
Eastern Europe(Area 4)
Mediterranean Island(Area 5)
Mediterranean Island(Area 5)
2013 2014 2015 2016 2017 2018 2019 2020 2021 202220122011 2023
Launch of GINA for BUSINESS SEGMENT
AnnualToll Coll.(2009)
Nr.Countries
MainActual
Scheme
Penetration Plan
20,4 M€ 6Toll system
for all vehicles
0,3 M€ 5 Toll free
0,4 M€ 6 Toll free
0,9 M€ 7 Vignette
0,5 M€ 3Toll system
for all vehicles
The implementation plan have been defined with the objective of maximizing penetration and optimizing operational and capital expenditure
Page 3403/05/2011GINA D4.4 – Business and exploitation plan
Launch of GINA for
CONSUMER SEGMENT
Launch of GINA for
CONSUMER + BUSINESS SEGMENT
Launch of GINA for
CONSUMER + BUSINESS SEGMENT
Launch of GINA for
CONSUMER + BUSINESS SEGMENT
Launch of GINA for
CONSUMER + BUSINESS SEGMENT
GNSS for Innovative road Applications
• Company’s
• logo
GINA Market Share
Player 3
15%
Player 2
20%
Other
players
35%
GINA 30%
• The EETS market has been assumed to be characterized by the presence of few big players due to:
- very high capital requirements - institutional restrictions (i.e. certification/ standardization
issues on road charging)
• EETS Service providers may come from different industries, i.e.:
- Oil companies- Banks & financial institutions- Telco operators- Road Operator/Toll Chargers
Competitive Arena &
GINA Market Share
• GINA Service Provider have been assumed to reach a market share around 30% of the EETS market
• GINA market leadership assumption have been driven by:
- GINA SP would be one of the first entrant - GINA SP would have a technological competitive
advantage based on EGNOS/Galileo performance
Page 3503/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
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GINA Business Case Scenarios- Main Assumptions
Business + Private
Segment
Page 3603/05/2011GINA D4.4 – Business and exploitation plan
Business stand-alone
Segment
• EETS Overall Penetration in the Business Segment for each country belonging to the different areas has been supposed 8-10% in the launch year and growing 40% in the first 2 years, 8% for the following 8 years and 2% from the 10th year on
• GINA Market Share 30%
• Price of Base package: from 12 €/month in 2015 to 8,5 €/month in 2030
• Discount for the first submission year: 40%
• % of roaming: 20%
• EETS Overall Penetration in the Private Segment for each country belonging to the different areas has been supposed 3% in the launch year and growing 25% in the first 2 years, 8% for the following 4 years and 2% from the 7th year on
• GINA Market Share 30%
• Price of Base package: from 4 €/month in 2018 to 3 €/month in 2030
• Discount for the first submission year: 40%
• % of roaming: 10%
GNSS for Innovative road Applications
• Company’s
• logo
Content
• Introduction & Business model definition
• Addressable market and market potential
• General Cost Structure
• Business Case Scenarios
• Business Segment stand-alone scenario
• Revenues generation potential
• Cost structure definition
• Profitability analysis
• Business + Private Segments scenario
Page 3703/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
0
10
20
30
40
50
0
10
20
30%
2011
37
2012
37
2013
38
2014
38
2015
38
2016
39
2017
39
2018
40
2019
40
2020
41
2021
41
2022
42
2023
42
2024
43
2025
44
2026
45
2027
46
2028
47
2029
48
2030
48
15% 17% 19% 26% 28% 31% 33% 36% 37% 39% 40% 41% 42%6% 9% 13%EETS Penetration
1,8 2,0 2,3 3,2 3,5 3,9 4,3 4,7 5,0 5,3 5,6 5,8 6,10,7 1,0 1,5# GINA Users ( Mln )
Market potential vs GINA Penetration - Business segment
GINAPenetration (%)
No. of commercial vehiclesin EU27 (Mln)
GINA Service Provider business segment users would pass from 0,7Mln in 2015 to 6Mln in 2030, with a penetration of ~12% on the overall
addressable market at regime condition
Page 3803/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
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GINA Pricing Scheme- Business Segment
Page 3903/05/2011GINA D4.4 – Business and exploitation plan
Business
Service Price
Toll Chargers
Basic
P
ackag
eA
dd
On
• Smart OBU without GUI
• EFC
• E-CALL
• Fleet Management/ Basic
12-8,50€/month
10 €/month
2 €/month
2 €/month
8 €/month
• Fleet Management/ Tracking & tracing
• Theft management
• Traffic info system
• Navigation services/ Dynamic re-routing
• Wireless GUI
End Users
Municipalities
• Percentage on toll collection 2%
• Percentage on toll collection 5%
5
10
€15
12,0
11,2
10,5
10,0
9,5
9,2
8,9
8,5
2015 2017 2019 2021 2023 2025 2027 2029
Price Evolution (€/month)
• In order to maximize penetration and service usage a 40% discount on the first year subscription fee has been assumed
GNSS for Innovative road Applications
• Company’s
• logo
GINA Revenues streams evolution (2015-2030)
0
200
400
600
800
€1.000M
2015
58
32
94
2016
120
48
175
2017
174
72
256
2018
221
88
11
321
2019
247
98
358
2020
269
110
393
2021
336
152
504
2022
393
168
579
2023
427
187
632
2024
463
207
691
2025
502
228
753
2026
530
241
795
2027
550
254
829
2028
572
268
865
2029
593
281
900
2030
614
294
28
936
User-fee Add-on VAS Motorway % fee
Revenues streams break down
• End-user fees are the most important revenues stream accounting for ~66% of total revenues at regime conditions
• VAS fees account for about 31% of total revenues
Page 4003/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
Content
• Introduction & Business model definition
• Addressable market and market potential
• Business Case Scenarios
• General Cost Structure
• Business Segment stand-alone scenario
• Revenues generation potential
• Cost structure definition
• Profitability analysis
• Business + Private Segments scenario
Page 4103/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
GINA Cost structure elements
• The cost structure is referred to the GINA Service Provider intended as the company that sells different ITS service packages to final customers by aggregating inputs of specific service providers
• Main costs element are the following:
Telecommunication costs
VAS Provisioning costs
OBU related costs (Leasing, Installation, Assistance)
Core IT Infrastructure costs ( Central Infrastructure, Service Centers)
EGNOS signal guarantee costs
Lost Revenues
SG&A ( Selling commissions, marketing expenses, administrative and othe costs)
D&A (Depreciation and Amortization relevant to Capital Expenditure)
1
2
43
5
6
8
7
Page 4203/05/2011GINA D4.4 – Business and exploitation plan
9
GNSS for Innovative road Applications
• Company’s
• logo
GINA Cost Structure evolution
0
200
400
600
800
€1.000M
2015
36
28
30
31
167
2016
40
43
45
208
2018
33
34
33
66
73
75
335
2020
37
42
31
67
87
86
374
2022
37
61
34
88
130
117
503
2024
36
73
34
29
103
157
140
584
2026
34
84
34
33
113
182
160
652
2028
38
92
34
36
122
201
174
711
2030
38
99
34
39
132
220
190
768
Cost Structure evolution
7
5
6
4
2
1
3
8
The cost structure remains approximately constant along the Business Plan horizon
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9
GNSS for Innovative road Applications
• Company’s
• logo
GINA Steady state (2030)cost breakdown
0
200
400
600
800
€1.000M
Telco
190
VAS
Costs
220
OBU
132
Assistance
Costs
39
OPEX
34
EGNOS
service
9
Lost
Revenues
7
SG&A
99
D&A
38
TOTAL
768
25% 100%29% 17% 5% 4% 1% 1% 13% 5%25% 100%29% 17% 5% 4% 1% 1% 13% 5%% on tot% on tot
Steady state (2030) cost breakdown
• Cost structure at steady-state condition (2030) amounts to ~ 770 M€
• Telecom costs are the largest cost items, for ~55% of total costs (including VAS)
1
2
34 5 6 7
9
Page 4403/05/2011GINA D4.4 – Business and exploitation plan
8
GNSS for Innovative road Applications
• Company’s
• logo
Content
• Introduction & Business model definition
• Addressable market and market potential
• Business Case Scenarios
• General Cost Structure
• Business Segment stand-alone scenario
• Revenues generation potential
• Cost structure definition
• Profitability analysis
• Business + Private Segments scenario
Page 4503/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
GINA Profitability
-1.000
-500
0
500
1.000
2015
94
-144
2016
175
-180
2017
256
-253
2018
321
-302
2019
358
-318
2020
393
-337
2021
504
-436
2022
579
-465
2023
632
-504
2024
691
-548
2025
753
-593
2026
795
-618
2027
829
-645
2028
865
-673
2029
900
-701
2030
936
-730
-51 142 159 176 184 192 199 206-6 3 18 39 56 68 114 128EBITDA ( Mln € )
-54% 21% 21% 22% 22% 22% 22% 22%-3% 1% 6% 11% 14% 14% 20% 20%% on revenues
EBITDA figures stably positive starting from 2017,growing to 206 M€ in 2030 (22% of revenues)
Mln €
Profitability evolution
Page 4603/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
GINA EBIT formation – Steady-State (2030)
0
200
400
600
800
€1.000M
Revenues
936
Telco
-190
VAS
Costs
-220
OBU
-132
Assistance
Costs
-39
-34
EGNOS
service
-9
Lost
Revenues
-7
SG&A
-99
EBITDA
206
D&A
-38
EBIT
168
100%22% -4% 18%
-20% -23% -14% -4% -4%-1% -1% -11%
% su Revenues 100%22% -4% 18%
-20% -23% -14% -4% -4%-1% -1% -11%
% su Revenues
OPEX
• Steady-State (2030) EBIT is around 18% of total revenues
• Telco costs are the largest cost item accounting for about 43% of total revenues, followed by OBU costs accounting for about 18% of total revenues
Steady State (2028) EBIT formationVariable Costs
Fixed costs
Page 4703/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
GINA Free cash flow analysis
-100
-50
0
50
100
150
2013
-26
2014
-62
2015
-69
2016
-37
2017
-41
2018
-7
2019
-2
2020
-3
2021
23
2022
50
2023
58
2024
66
2025
76
2026
86
2027
91
2028
97
2029
101
2030
105
-243 -247 -224 -174 -116 -50 26 111 202 299 400 505-26 -88 -156 -193 -234 -241
Cumulative
• Unlevered Free Cash flow positive after 6 years from start-up
• Cumulative FCF positive from 2025 (10 years after start-up)
• 2012 NPV is ~ 388 M€ assuming a WACC equal to 8%
Unlevered Free cash flow (Mln €)
Page 4803/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
Content
• Introduction & Business model definition
• Addressable market and market potential
• Business Case Scenarios
• General Cost Structure
• Business Segment stand-alone scenario
• Business + Private Segments scenario
• Revenues generation potential
• Cost structure definition
• Profitability analysis
Page 4903/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
0
100
200
300
2
4
6
8
10%
2011
249
2012
251
2013
254
2014
256
2015
258
2016
261
2017
263
2018
266
2019
268
2020
271
2021
273
2022
276
2023
279
2024
281
2025
284
2026
287
2027
290
2028
293
2029
296
2030
299
2,3% 2,9% 3,6% 4,6% 5,1% 5,6% 6,1% 6,3% 6,5% 6,7% 6,9% 7,1% 7,3%EETS Penetration
1,8 2,3 2,9 3,8 4,2 4,7 5,1 5,3 5,6 5,8 6,1 6,3 6,5# GINA Users ( Mln )
0
Market potential vs GINA Penetration – Private segment
GINAPenetration (%)
No. of cars in EU27 (Mln)
GINA Service Provider private segment users would pass from 1,8 Mln in 2018 to 6,5 Mln in 2028, with a penetration of ~2% on the overall
addressable market at regime condition
Page 5003/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
GINA Pricing Scheme- Private Segment
Page 5103/05/2011GINA D4.4 – Business and exploitation plan
Private
Service Price
Toll Chargers
Basic
P
ackag
eA
dd
On
End Users
Municipalities
• Percentage on toll collection 2%
• Percentage on toll collection 5%
Price Evolution (€/month)
• In order to maximize penetration and service usage a 40% discount on the first year subscription fee has been assumed
• Smart OBU without GUI
• EFC
• E-CALL
4-3€/month
1 €/month
1 €/month
3 €/month
• Theft management
• Traffic info system
• Navigation services/ Dynamic re-routing
• Wireless GUI
2,0
3,0
4,0
€5,0
4,0
3,7
3,5
3,3
3,2
3,1
3,0
2018 2020 2022 2024 2026 2028 2030
GNSS for Innovative road Applications
• Company’s
• logo
GINA Revenues streams evolution Business + Private (2015-2030)
0
500
1.000
€1.500M
2015
58
94
2016
120
48
175
2017
174
72
256
2018
112
274
15
401
2019
129
345
17
491
2020
150
388
19
558
2021
205
484
22
713
2022
229
562
25
817
2023
256
611
27
895
2024
284
661
29
976
2025
310
707
1.051
2026
329
739
1.102
2027
348
764
1.148
2028
368
790
1.196
2029
388
817
1.244
2030
407
843
1.291
User-fee Add-on VAS Motorway % fee Urban % fee
Revenues streams break down
• End-user fees remain the most important revenues stream accounting for ~65% of total revenues
• Fee from municipalities applied to consumer segment only are completely negligible
Page 5203/05/2011GINA D4.4 – Business and exploitation plan
Launch of GINA Offer for private
segment
GNSS for Innovative road Applications
• Company’s
• logo
GINA Revenues streams evolution Business + Private (2015-2030)
0
500
1.000
€1.500M
2015
58
94
2016
48
120
175
2017
72
174
256
2018
15
88
52
221
401
2019
17
98
98
247
491
2020
19
110
119
269
558
2021
22
53
152
148
336
713
2022
25
60
168
169
393
817
2023
27
69
187
184
427
895
2024
29
77
207
198
463
976
2025
82
228
205
502
1.051
2026
88
241
209
530
1.102
2027
94
254
213
550
1.148
2028
100
268
218
572
1.196
2029
107
281
224
593
1.244
2030
113
294
229
614
1.291
30% 29% 29% 29% 29% 29% 28%21% 28% 31% 30% 30% 30%
% Private segment
Revenues on Total
Revenues
User-fee Business Add-on VAS Business Motorway % fee Urban % fee
Revenues streams break down
Private segment revenues up to 30% of total revenues
Page 5303/05/2011GINA D4.4 – Business and exploitation plan
Launch of GINA Offer for private
segment
User-fee Private Add-on VAS Private
*
* Motorway % fee split 50-50 between Business and Private; Urban % fee assigned 100% to Private segment
GNSS for Innovative road Applications
• Company’s
• logo
Content
• Introduction & Business model definition
• Addressable market and market potential
• Business Case Scenarios
• General Cost Structure
• Business Segment stand-alone scenario
• Business + Private Segments scenario
• Revenues generation potential
• Cost structure definition
• Profitability analysis
Page 5403/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
GINA Cost Structure evolution (Business + Private)
0
250
500
750
1.000
€1.250M
2015
28
31
30
46
176
2016
40
45
43
206
2018
86
113
91
56
36
451
2020
99
144
116
51
50
46
545
2022
132
194
171
57
74
45
726
2024
149
42
231
208
57
88
43
840
2026
160
47
256
239
57
99
923
2028
172
51
277
265
57
108
45
1.002
2030
185
55
300
292
57
116
45
1.079
Cost Structure evolution
7
5
6
4
2
1
3
8
The cost structure remains approximately constant along the Business Plan horizon
Page 5503/05/2011GINA D4.4 – Business and exploitation plan
9
GNSS for Innovative road Applications
• Company’s
• logo
GINA Steady state (2030)cost breakdown (Business+Private)
0
250
500
750
1.000
€1.250M
Telco
300
VAS
Costs
292
OBU
185
Assistance
Costs
55
OPEX
57
EGNOS
service
19
Lost
Revenues
10
SG&A
116
D&A
45
TOTAL
1.079
28% 100%27% 17% 5% 5% 2% 1% 11% 4%28% 100%27% 17% 5% 5% 2% 1% 11% 4%% on tot% on tot
Steady state (2030) cost breakdown
• Cost structure at steady-state condition (2030) amounts to ~ 1080 M€
• Telecom costs are the largest cost items, for ~55% of total costs (including VAS)
1
2
34
5 6 7
9
Page 5603/05/2011GINA D4.4 – Business and exploitation plan
8
GNSS for Innovative road Applications
• Company’s
• logo
Content
• Introduction & Business model definition
• Addressable market and market potential
• Business Case Scenarios
• General Cost Structure
• Business Segment stand-alone scenario
• Business + Private Segments scenario
• Revenues generation potential
• Cost structure definition
• Profitability analysis
Page 5703/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
GINA Profitability(Business + Private)
-1.500
-1.000
-500
0
500
1.000
1.500
2015
94
-153
2016
175
-177
2017
256
-258
2018
401
-413
2019
491
-450
2020
558
-499
2021
713
-637
2022
817
-681
2023
895
-736
2024
976
-797
2025
1.051
-849
2026
1.102
-882
2027
1.148
-918
2028
1.196
-957
2029
1.244
-996
2030
1.291
-1.034
-59 179 201 220 229 239 248 257-3 -2 -12 41 59 75 136 159EBITDA ( Bn € )
-63% 18% 19% 20% 20% 20% 20% 20%-2% -1% -3% 8% 11% 11% 17% 18%% on revenues
EBITDA figures stably positive starting from 2019,growing to 257 M€ in 2030 (20% of revenues)
Mln €
Profitability evolution
Page 5803/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
GINA EBIT formation – Steady-State (2030)Business + Private
0
500
1.000
€1.500M
Revenues
1.291
Telco
-300
VAS
Costs
-292
OBU
-185
Assistance
Costs
-55
-57
EGNOS
service
-19
Lost
Revenues
-10
SG&A
-116
EBITDA
257
D&A
-45
EBIT
212
100% 20% -3% 16%-23% -23% -14% -4% -4% -1% -1% -9%% su Revenues 100% 20% -3% 16%-23% -23% -14% -4% -4% -1% -1% -9%% su Revenues
OPEX
• Steady-State (2030) EBIT is around 16% of total revenues
• Telco costs are the largest cost item accounting for about 46% of total revenues, followed by OBU costs accounting for about 18% of total revenues
Steady State (2028) EBIT formationVariable Costs
Fixed costs
Page 5903/05/2011GINA D4.4 – Business and exploitation plan
GNSS for Innovative road Applications
• Company’s
• logo
GINA Free cash flow analysis(Business + Private)
-200
0
200
400
600
2013
-26
2014
-62
2015
-77
2016
-39
2017
-57
2018
-41
2019
-8
2020
-12
2021
24
2022
60
2023
73
2024
85
2025
97
2026
108
2027
113
2028
121
2029
127
2030
132
-115 -38 -298 -239 -165 -81 16 124 237 359 486 618-27 -76 -117 -129 -145 -161
Cumulative
• Unlevered Free Cash flow positive after 6 years from start-up
• Cumulative FCF positive from 2025 (10 years after start-up)
• 2012 NPV is ~ 485 M€ assuming a WACC equal to 8%
Unlevered Free cash flow (Mln €)
Page 6003/05/2011GINA D4.4 – Business and exploitation plan
Launch of GINA Offer for private
segment
GNSS for Innovative road Applications
• Company’s
• logo
Scenarios comparison- Key Figures
# Subscribers in 2030
Revenues in 2030
EBITDA in 2030
EBIT in 2030
NPV (e.c. 2012; WACC 8%)
• 6,1 Mln
Page 6103/05/2011GINA D4.4 – Business and exploitation plan
Scenario 1
(Business)
Scenario 1
(Business + Consumer)
• 936 Mln €
• 206 Mln € (22%)
• 168 Mln € (18%)
• 388 Mln €
• 12,7 Mln
• 1.291 Mln €
• 257 Mln € (19,9%)
• 212 Mln € (16,4%)
• 485 Mln €
Enlargement of business perimeter to Consumer Segment increases overall profitability in absolute terms (EBIT from 168 Mln€ to 212 Mln€),
but penalizes it in relative terms (from 18% to 16,4%)
GNSS for Innovative road Applications
• Company’s
• logo
• Monthly end-user fees are by far the most important source of revenues
• Toll chargers % fee have a very limited impact
Executive Summary
Business Model
Market Potential
Revenues Generation
Cost
Profitability
• Progressive geographical penetration through 5 main EU-27 geo-cluster: covering all Europe in a “big bang” mode not feasible from both financial and operational point of view
• Overall EETS market from ~2M vehicles in 2015 to ~42M vehicles in 2030
• GINA EETS Service Provider market share ~30%, allowing to serve ~6M end-users in 2030 for the business segment and 6,5M end-users in the private segment
• The largest cost items are Telco and VAS costs (about 50% of total costs) followed by OBU related costs (~20%)
• GINA EETS Service Provider intended as the company that sells different ITS services to final customers aggregating inputs from specific content providers
• Two main service fees:- monthly user fee from end-users- percentage fee on toll collected from toll chargers
• Significant business opportunity with a good profitability in the long term(EBITDA at regime condition about 20% of Revenues)
• Two main issues:- Long break-even period that requires a significant start-up stress (cumulative FCF positive after 10 years) - High Sensitivity to price changes
Page 6203/05/2011GINA D4.4 – Business and exploitation plan