Seeing Machines Limited – Fleet Update

Seeing Machines Limited (AIM: SEE), the advanced computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety, is pleased to provide a comprehensive update on its Fleet business. 

The success of the Fleet business and its implementation of Guardian 24/7 monitoring services is fundamental to Seeing Machines. At 30 April 2019, more than 1,500 Guardian units have been installed since 31 January 2019, with over 14,500 units now installed in vehicles globally. This recent momentum has strengthened as the Guardian installation rate continues to accelerate with expectations that the Group will reach 16,000 Guardian units connected by 30 June 2019 and approximately 27,000 Guardian units connected by June 2020, which the Group remains on track to achieve.  

The naturalistic driving data collected by monitored vehicles underpins the Seeing Machines’ technology validation and ongoing machine-learning capability with access to over 2.3 billion kilometres of driving data to inform its FOVIO driver monitoring platform with hundreds of thousands of driving-related events and volumes of highly valued, difficult to obtain edge case scenarios. 

Divisional review

Following the internal review of the Fleet division, and under the leadership of SVP & GM Paul McGlone, Seeing Machines has modified its approach to sales, marketing and supply with the following structural changes: 

• Fleet team reduced by over 30% to remove cost and right size the business unit;
• Business development primarily channelled through an expanding distribution network;
• Direct sales pursued with global customers who demand consistency across geographic regions, the majority of whom are passenger transport or sizeable logistics operators such as Coach USA, First Group, Total, Air Liquide and Chevron; and
• Installation of Guardian hardware and hardware servicing increasingly channelled through third parties to accelerate connections and ongoing monitoring services revenue and reduce Seeing Machines’ cost to deliver first-line services. 

Commercial terms with direct clients and distribution partners have been reset to improve near-term cashflow and sustain ongoing monthly service fees for the longer term. These new trading terms include increased wholesale prices, hardware revenue payable on delivery and an introduction of contractually agreed timeframes for installation of Guardian hardware into vehicles, accelerating connections and recurring revenue from the 24/7 Guardian Monitoring Centre services. 

Revenue performance 

Combined Fleet Business Unit (including Guardian, Mining and Rail) revenue to 31 December 2018 increased 22.5% to $8.8 million over the same period last year, resulting in a gross profit of $4.5 million.  Significantly, recurring revenue from Guardian services has doubled while the business focused on an operational turnaround during the first half.

Distribution highlights 

The Group has nine established distribution partners globally and boasts over 340 customers through direct sales and distribution channels, having established an additional 50 customers since January 2019. 

Seeing Machines has recently signed an agreement with UK distributor, The Vehicle Group (“TVG”), to help accelerate sales and installation rates across UK and Ireland. TVG has over 300,000 vehicles across Europe fitted with their technology and is a market leader in Automotive Camera Technology, Vehicle Safety, Telematics and Automation technology. TVG will complement the business development undertaken by the Seeing Machines’ direct business development team and will facilitate accelerated installations across the region. 

Guardian DMS was established in Mexico in 2018. Working closely with a leading Mexican insurer which provides premium incentives to fleets that install Guardian, as well as with insurance brokers, Guardian DMS has been installed over 800 Guardian units since February 2019 and the Group expects to deploy an additional 700 Guardian systems by the end of November 2019. Most recently, Guardian DMS has secured a deal to install 200 units into Corporativo UNNE’s fleet, Mexico’s largest fuel distribution company, and continues to work closely with many of the country’s large commercial fleet organisations.

Seeing Machines continues to have a strong pipeline of opportunities through its existing distribution network, which it also expects to expand throughout 2020 and 2021. 

Paul McGlone, SVP & GM Fleet at Seeing Machines commented: “After analysing the financial performance of each contract we have modified the Fleet business model to bring forward recurring revenue, the biggest driver of value. Sales momentum is building in all our major markets through initiatives to expand geographic footprint with global customers, new distributors and the addition of new channel partners like leading Australian truck insurer, NTI.  

“Combined with improvements in direct costs, hardware simplification and cost reduction, as well as efficiencies in monitoring services, we expect to deliver scale benefits from 2020.”