STRATEGY UPDATE SESSION 2021 - StrongPoint
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S T R AT E G Y U P D AT E S E S S I O N 2 0 2 1
2020 retail megatrends – demand for grocery retail technology skyrocketed
Focus on grocery retail
Retail Technology
Solutions that increase efficiency, productivity and
improve the shopping experience, in-store and online
We have a focus on the resilient grocery retail sector
with spillover effects to other retail verticals
3
Purpose Our WHY statement builds on
the following logic:
We are a retail technology company and we
believe that retail technology should be
integrated into every shopping experience.
“Retail technology in every In-store and online.
shopping experience for a
smarter and better life”
We know that technology is the key to making
shops smarter, shopping experiences better
and online grocery shopping more efficient.
This will give more time, lower prices, better
service, fresher products, and ultimately, we all
get a better and smarter life.
4
The StrongPoint double opportunity
E-COMMERCE DRIVING...
Trends Opportunity for StrongPoint
1. In-store: Pressure on Technology solutions to increase
brick & mortar retailers’ in-store efficiency
margin
2. E-commerce: Pressure to World-class e-commerce
develop online presence technology for online order
and keep market share picking and last mile solutions
5
In-store: efficiency solutions
Electronic Shelf
Self-Checkout
Labels
1 4
2
Task & Labour
Vensafe 3 Management
5
6
Online Order
Cash
Picking
Management 7 Solution
Click & Collect Lockers
6
E-commerce: logistics solutions
Picking Last mile
6 Picking Solution 7 C&C Lockers
Manual picking in store or darkstore Stationary and mobile grocery lockers
BOT
8 Drive-through
Drive-through grocery pick-up
9 Pick-up in store
Delivery manager for in-store pick-up
10 Route Optimisation 11 Home delivery
Route planning for home delivery Delivery at home
7
AGENDA
StrongPoint at a glance
2025 Strategy
Outlook and priorities
S T R O N G P O I N T AT A G L A N C E
StrongPoint at a glance
Over 450 employees Listed on the Oslo
in Norway, Sweden, Stock Exchange
the Baltics and Spain
Operational revenues of NOK 1.1 bn and
an EBITDA of NOK 99 million in 2020.
Headquartered just Market cap:
outside Oslo, Norway NOK 1.4 billion
10 Own offices Labels Retail technologyStrongPoint Retail Technology Organization
Norway Sweden Baltics Spain Partners
In-Store efficiency
- Self Checkout, Vensafe, Cash management
E-commerce logistics solutions
- Picking solution and last mile including
Click & Collect lockers
Partner Solutions
- Pricer ESL, Digi Scales, Reflexis WFM
Finance & IT
Human resources
Marketing & Communication
Sales, Installation, Service, Support
11Solutions included in our Retail Technology segments
Segments Solutions
In-store productivity
Cash management
Check-out efficiency
E-commerce
Other
12Attractive cashflow profile with solid base of recurring
revenues
Solutions Typical cash flow profile components
In-store productivity
• ESL
• ShopFlow logistics
• Scales
• WFM
E-commerce
• Picking solution
• Last Mile incl C&C lockers
Check-out efficiency
• Self check-out
• Vensafe
Cash management
13A strong revenue mix
Revenue 2020
100% = MNOK 1,127*
Retail Technology
Labels
17%
In-Store Productivity
33%
Other retail technology
9%
9%
E-commerce logistics
12% 19%
Check Out Efficiency Cash Management
14 *Continued operations excl. Cash Security and one-time compensation for Labels NorwayStrong and diverse position in key growth markets
Revenue
2020
Largest countries/solutions (not exhaustive)
Labels 17% Sweden, Norway
Spain/Partners 12% E-commerce solutions, cash management, self checkout, ESL
Baltics Self checkout, Self Scan, POS, ERP, E-commerce solutions,
15% Reflexis/WFM
Retail Sweden 25% ESL, E-commerce solutions, Self Scanning, Scales, Cash
technology Management
Norway 31% ESL, Vensafe, Scales, E-commerce solutions, Cash Management
152 0 2 5 S T R AT E G Y
StrongPoint's financial ambitions for organic growth
NOK 2.5 in 2025
bn
EBITDA 13-15%
17"Retail technology in every shopping experience for
a smarter and better life"
Our T-shaped strategy to create a NOK 2.5 bn Retail Technology company
World-class solutions to selected markets
• E-Commerce Logistics Suite (Picking, Last Mile
Solutions and Click & Collect lockers)
• Self Checkout
• Cash Management
Deep in core markets
• Norway
• Sweden
• Baltics
• Spain
18Build-up of 2025 revenue ambition (as presented 2020)
Revenue
MNOK
Retail technology
Retail technology
1100
2019 Check-out In-store Cash E-commerce Other retail Labels Cash 2025
efficiency productivity management Logistics technology Security
19Build-up of 2025 revenue ambition (events during 2020)
Revenue
MNOK
Retail technology
Retail technology
Pushed-out expansion due
to COVID-19
Divested
1100 Massively accelerated
with COVID-19
Accelerated with
COVID-19
2019 Check-out In-store Cash E-commerce Other retail Labels Cash 2025
efficiency productivity management Logistics technology Security
20Build-up of 2025 revenue ambition
Revenue
MNOK
Retail technology
Retail technology
200 2500
100
550 150
100 50
200
1150*
2020 Check-out In-store Cash E-commerce Other retail Labels Cash 2025
efficiency productivity management Logistics technology Security
21 *Operational revenue, adjusted for Cash Security and one-off compensation related to relocation of Labels production in NorwayE-COMMERCE OFFERING
23 Sources: Financial Times, 2020: “US online grocery shopping jumps as chains rush to add capacity”, Bain & Company, 2020: “The Next Five Years in Online
Grocery: Going Mainstream, Fast”Getting to the addressable market for StrongPoint within
grocery E-commerce logistics
Online grocery sales estimates in
StrongPoint target markets1 Orders processed per technology type Estimated addressable
NOK trillion Billion orders market based
Picking technology
~ 2.2 Pick in store
Pick in dark Software licence market
CAGR CAGR
2,1 +18% store
+15%
~ 1.0 MFC/CFC
1,8
1,6
1,3
1,1 2020 2025
1,0
Delivery technology Home delivery
~ 2.2
0,5 Drive through
CAGR In-store delivery
~ 1.0 +18%
Click & Collect Hardware market
2019 2020 2025 lockers (Click & Collect lockers)
Online grocery 3.4% 6.8% 13.0%
penetration 2020 2025
Source: IGD, StrongPoint analysis 1Norway, Sweden, Baltics, Spain, Denmark, Finland, Italy, UK, Benelux, France, Germany, US
24Large and growing market for software licenses and
grocery lockers within the growing E-commerce logistic market
Addressable market
MNOK pa
Delivery*
Software licenses
Picking*
CAGR
12 500
17%
4 100
Maintaining today's market share,
5 700 StrongPoint would x2 its software license
1 700 8 400 fees and x4-5 its C&C locker sales
4 000
2020 2025
Hardware Investments Ambition to grow market share within both
(C&C lockers) CAGR 3 000
e-commerce logistics software and locker
36% sales market
650
2020 2025
Note: Includes StrongPoint's target markets for its E-commerce logistics solutions
25 * Picking in store and dark store. Delivery including home delivery, in-store delivery and drive through
Source: IGD, StrongPoint analysisStrongPoint Picking Smart
Solution glasses
Pick-by-
Smart watch Arm PDA light
1 Efficient, flexible
& scalable
2 Fast to deploy
Finger
scanner
3 Low CapEx
Portable & wireless scales
26Automation is growing and
StrongPoint can help deliver
on this opportunity
StrongPoint is a natural partner to CFCs
and MFCs
StrongPoint natural partner because of access to
national grocery players in key markets
Hyper-efficient augmented picking solution is
needed to compliment the automated solution
Automation in grocery order fulfilment expected to
grow, but vast majority of fulfilment expected to
remain non-automated
27Why our grocery retail customers choose StrongPoint lockers
Fast Purpose-built Flexible
& Efficient & Reliable & Scalable
Takes on averageTypes of grocery retailer segment for our solutions
Applicable
( ) Potentially applicable
Potential for sale of...
Click & Collect Picking Solution
Grocery retailers: Existing e-commerce offering
( )
Grocery retailers: Newcomers in e-commerce
Pure online player ( )
Platform/online delivery ( )
30Rapidly growing footprint of our Picking
Solution and Click & Collect lockers
Number of Click&Collect
C&C lockers
lockers delivered
C&C lockers location
UK 1 Before 2020 Picking solutions
2020 or later
GREECE 1
US 2
AUSTRIA 3
SW ITZERLAND 3
LITHUANIA 3
ITALY 1 3
NORWAY 3 3
ESTONIA 14
RUSSIA 25
SPAIN 2 26
SW EDEN 63 95
31Glovo chooses StrongPoint as
preferred supplier for its
grocery picking solutions
Customer orders
groceries from platform
• Provides on-demand groceries via its retail grocery
partners which include Walmart, Carrefour and Spar
• Estimated valuation of over USD 1 billion (technology Courier or store personnel picking
unicorn) with StrongPoint picking solutions
• Present in 22 countries around the world
Courier delivers to customer
32Delivery platform players worldwide providing groceries 33
CHECKOUT EFFICIENCY
Checkout technologies
Current technologies being delivered to the market Exploring and doing assessment to add to portfolio
Self-checkouts Self-scanning Smart cart Checkout-free
• In-house software • Integration with SCO enables • Checkout could be done on • No physical checkout at all
• In-house hardware unified self- shopping cart itself • Relies on sensor fusion,
• AI and computer vision add- experience • Assessing tech cooperation computer vision and AI
ons for: • Runs both on dedicated partners • Assessing tech cooperation
• Non-barcoded item devices and smartphones partners
recognition • In-house payment station
• Age verification • Powered by Datema engine
• Fraud detection
Vensafe Dispensing
35Our Self Checkout Solution
Software
Up to 3X faster than other solutions – minimised staff
interventions
Hardware
Scan & Go
Low-touch – AI & ML-powered product recognition
Product dispensing
Automated age checks – integration with Vensafe & Yoti
+ Productivity add-ons
Consulting
36Current deployment and target
geographies for our SCO
Technology installed
Technology installed through partners
Target countries for deployment
of SCO solutions
Malta
37CORE MARKETS
Importance of core
markets
• Proven operational leverage in core markets
Norway, Sweden and the Baltics, and
emerging in Spain
• Market access platform for global
technology providers in selected markets
39ENABLERS, M&A AND DIVIDEND
Profitable growth, cost control and a solid balance sheet
Focus on driving sales, Continuous cost improvements
margins, pricing policies and Investments in products,
supply chain management competence and marketing
Profitable growth Cost control
Strong balance sheet end The company is undertaking
2020 to be used for continued external stakeholder dialogue
growth and investments. and will complete a materiality
assessment in 2021 which will
work as a basis for the
company's sustainability
Balance sheet ESG
reports.
41Contributions from M&A comes in addition to NOK 2.5 bn
ambition in 2025
+
Geographic expansion Technology additions* Strengthening of
(to markets with good core markets
product/market fit)
• UK • E-commerce • Spain
• Denmark • Check-out efficiency • Norway
• Finland • … • Sweden
• US • Baltics
• …
42 *Could also be partnerships/cooperationsDividend at StrongPoint
Dividend
NOK per share
1.50
Ambition from Board of
Directors
1.00 Extraordinary Continue to pay and
increase the dividend
0.70
0.60 forward
0.55
0.45 0.50 0.50
0.35
0.30
0.25
2012 2013 2014 2015 2016 2017 2018 2019 2020*
43 *Subject to approval by Annual General Meeting 2021OUTLOOK & PRIORITIES
Immediate priorities
Capitalize on Deliver on In-store Step up M&A
E-commerce productivity initiatives
logistics market solutions demand
45Summary: Creating a NOK 2.5 billion retail technology
company
2020 2025
Revenue* NOK 1.1 bn NOK 2.5 bn
E-commerce share 9% 25%
EBITDA margin* 8.8% 13-15%
*Revenue and EBITDA margin from continued operations excluding positive effects from compensation from relocation of Labels production in Norway
4647
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