1 / 13

ITS Lyon Congress 2011 SS 23: EGNOS and Galileo for intelligent mobility

ITS Lyon Congress 2011 SS 23: EGNOS and Galileo for intelligent mobility. GNSS for Innovative Road Applications. Business Plan Analysis. Paolo Cerini (Bain & Company). Service/product flows. Economic flows. Business Model: EETS Service Provider role. EGNOS/GALILEO OPERATING COMPANY.

trey
Download Presentation

ITS Lyon Congress 2011 SS 23: EGNOS and Galileo for intelligent mobility

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. ITS Lyon Congress 2011SS 23: EGNOS and Galileo for intelligent mobility GNSS for Innovative Road Applications Business Plan Analysis Paolo Cerini (Bain & Company)

  2. Service/product flows Economic flows Business Model:EETS Service Provider role EGNOS/GALILEO OPERATING COMPANY TOLL CHARGER 1, 2…N CONTENT PROVIDER TELCO OPERATING COMPANY GNSS SERVICE PROVIDER Toll Collected % Fee on toll collected Payment for usage Payment for usage Guaranteed service Service fee EETS PAN-EUROPEAN SERVICE PROVIDER Servicebundle Add-on Service Fee per Add-on TollCollected Fee per bundle END USER/CUSTOMER (Private + Business) INFRASTRUCURE OWNER PUBLIC INSTITUTIONS 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

  3. Offer Structure Business Private BasicPackage HW Smart OBU without GUI Smart OBU without GUI Services EFC E-CALL EFC E-CALL Add-On HW Wireless GUI Wireless GUI Services Fleet Management/Tracking and Tracing Theft management Traffic info system Navigation services/ active re-routing Theft management Traffic info system Navigation services/ active re-routing • GINA Service Provider offer has been structured as a basic package with a set of add-on services (VAS) that can be purchased separately • Two customer segments have been identified: Business (i.e. commercial vehicles) and Private (i.e. passenger cars)

  4. Addressable end-user market Analysis perimeter: all the countries belonging to EU27. Business Case has analysed last available data relevant to the European market of cars, buses, light commercial vehicles, light, medium and heavy trucks, using CAGR of last 4 years to project data Business Segment Potential Circulating trucks in Europe Private Segment Potential Circulating cars in Europe

  5. Market PenetrationCommercial Strategy • In order to define a progressive penetration plan, fivegeo-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 • 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 Area 3 Area 2 Area 4 Area 1 Area 5

  6. Revenues Generation Potential Business + Private Segment Business Segment Private Segment Price Price Market Share Market Penetration Market Penetration Total Potential Market (Mln) Total Market Penetration (%)

  7. Revenues streams evolution Business + Private (2015-2030) Revenues streams break down User-fee Business Motorway % fee Add-on VAS Business Urban % fee User-fee Private Add-on VAS Private Launch of GINA Offer for private segment End-user fees remain the most important revenues stream accounting for ~65% of total revenues Private segment revenues up to 30% of total revenues

  8. Cost Structure evolutionBusiness + Private (2015-2030) • The cost structure remains approximately constant along the Business Plan horizon • Cost structure at steady-state condition (2030) amounts to ~ 1080 M€ • Telecom costs are the largestcostitems, for~55% of total costs (including VAS)

  9. EBIT at steady-state conditionBusiness + Private (2030) EBIT build-up in 2030 Variable Costs Fixed costs • 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 14% of total revenues

  10. Free cash flow analysisBusiness + Private Operative Free cash flow Launch of GINA Offer for private segment • Operative Free Cash flow positive after 6 years from start-up • Cumulative FCF positive from 2025 (10 years after start-up)

  11. Sensitivity analysisBusiness + Private segments NPV* EBITDA @2030 EBIT@2030 Positive FCF Base Case 485 M€ 257 M€ 212 M€ @2021 Base case plus (+10 % penetr.; +5% price) 729 M€ 309 M€ 264 M€ @2019 Best case (-30% Comm. cost 1.167 M€ 412 M€ 367 M€ @2018 Best case plus (-30% Comm. cost; free OBU from 2021) 1.606 M€ 531 M€ 486 M€ @2018 Low Penetration (-30 % penetr.) 32 M€ 147 M€ 102 M€ @2022 Worst case (-20 % penetr.; -10% price) 29 B€ 161 M€ 116 M€ @ 2022 * Discountedat 8% WACC; EconomicConditions2012

  12. Conclusions • Significant business opportunity with a good profitability in the long term (EBITDA at regime condition about 20% of Revenues) with two major issues: • Long break-even period that requires a significant start-up financial stress (cumulative FCF positive after 10 years) • High Sensitivity to price change • Monthly end-user fees are by far the most important source of revenues: toll chargers % fee have a very limited impact • Largest cost items are Telco costs followed by OBU related costs: • Likely to decrease (best case scenarios very probable) • Alliance with Technology and Telco providers is key • Value Added Services represent a good opportunity to enlarge the business beyond toll collection service

  13. Next Speps • Customizationof the general Business Planconducted so far for a specificpotential service provider • Detailedanalysiswith Service ProvidersofspecificValueAddedServicestobeofferedas a bundle or on demand

More Related