Great write-up as always. One quick question: How about liability for accidents that happen despite the technology ? Are there any cases where victims try to sue them (meight be a bigger issue in the US) ?
Thanks! And a very good question. According to the company their "general "conditions" of sale include that it is always possible that an object or pedestrian will not be detected. "In the event of a collision with more or less serious consquences, product liability cannot incurred. However it is not excluded that legal actions may be filed against the company by its customer." So this risk still exists, but according to the company, they have not been the subject of such liability action or other complaint to date.
I agree that it's a risk. But it is worth noting that no industrial vehicle fitted with a Blaxtair has ever been involved in an accident. Hopefully it stays this way!
Great write up! I guess the main theme here is to get the customers to incorporate more of the software services in order to build a moat around switching-costs, right? 🤔
Are there any statistic from the company of how many of the different ”services” are used by the clients? And is this growing?
Thanks! The main objective behind these additional services is to increase the revenue per customer, but of course this will also have some kind of lock-in effect in the longer term, esepcially the more data is analyzed and can be used to optimize the fleet in operation.
We have just a rough revenue breakdown, where the "service" revenue is about 10 % of total revenues and also grew by around 10 % yoy in H1 2024. I think these services are still in its infancy, but with the new generations where they can more easily add these software services with "over-the-air" updates and overall higher adoption of the use of data & digitalization in the industry, the share of service revenues should continue to increase in the longer term
That is obviously great if the additional services will increase the RPC. Will keep an eye in that.
In a blue skies scenario one would hope that could become somewaht like $AXON is in the US.
Providing hardware through the cameras selling these quite cheap and then creating a software ecosystem connecting the different AI-monitoring tools which they seem to be in the forefront with.
Thus creating a wide MOTE and increasing margins through that.
The service products, are they subscription revenues or one time?
I am not sure. I think the basic services currently offered like the checklist solution are not subscriptions. But the more advances solutions regarding some predictive maintenance, optimization scenarios I think these can have some recurring aspects, but that’s just guessing.
If I may add: service revenues refer to the installation of hardware. Management expects software revenues (checklist, zoning, etc.) to grow in the coming years and could eventually account for 30% of total revenues.
Thanks for putting this very interesting company on my radar. One super nitty-griddy question and a super generic one:
- If I understand this right, they integrate into the fork-lift and are able to break when detecting a pedestrian? If so, are they also integrated with the fork itself and are able to know the weight the forklift is carrying? I'm thinking breaking behavior need to be very different if empty vs. full. (just nerding out here :))
- How do you go about researching such a company and not being only dependent on what they give you in the reports? Seems like outside information is going to hard to come by.
ok, so I just watched the linked video after posting this and found the answer to my own question. It's not linked to the breaking system, it only alert the driver so they can take action. So weight doesn't matter.
Blaxtair is definitely integrated into the system of the forklift. The forklift also slows down ( take a look at the zoning feature video for example) So my guess would be that the forklift slows down as much as needed to protect the detected person, but as low as possible
I don‘t have first hand experiences and of course I am relying a lot on what the reports etc say. For outside information I have to trust the few information I was able to get from external associations (like from the BG Bau where Blaxtair was the only mentioned solution) or the multiple prizes the technology has won. But of course there are a lot of information (especially on the technical side) where I don‘t have that much information about
Félicitation Mavix pour cette étude et la precision de celle-ci.
Cette annalyse confirme er conforte mon avis sur arcure qui est une ligne majeur de mon portefeuille.
Je surveille l'avantage competitif en suivant la croissance, la marge brute et nette et leurs evolutions.
Le ROE ET ROA sont en croissance avec des prévisions d'excellente facture.
Une fois que le desendettement de la société sera effectif avec des niveaux inférieures à 50% du Capital Propre, on aura effectivement les critères d'une société avec un profil de multibagger.
La diversification des sources de chiffre d'affaire d'Arcure et de son développement au US et maintenant en Asie et un gage de sécurité dans les revenus.
Je suis actionnaire avec une ligne de 23 000 actions dans mon PEA avec une stratégie buy and hold...
Thank you for another excellent analysis! I would like to hear your thoughts on the capitalization of costs, recorded as 'Capitalized production' included in other operating income item. In my view, the €2M capitalized in both 2023 and 2022 had a significant impact on the P&L and overall profitability
Very good question. Arcure is capitalizing some of their R&D costs for new product versions. The costs include, among others, the salaries of the employees working on these products. There are certain accounting criteria, when a company is allowed to capitalized such costs, instead of recognizing them immediately as costs in the P&L.
Once the new product is released, these capitalized costs are amortized over the next 2-4 years. The amortization for the Origin versions has been around EUR 2.1 million in 2023, so a similar amount like the capitalized costs in 2023.
So by these capitalizations, the company can, from an accounting POV, shift current costs into the future. Unfortunately this is a very common practice for public listed companies, especially in the technology sector. Personally, I don't really like it as it doesn't show right picture for the moment. But the companies are allowed to do this, so they use it. I also own a company that is not doing such things, resulting in lower margins than their competitors (on the surface) but its hidden that they are actually much more profitable than their peers. But in the end, the market is not recognizing and honoring such "good behavior". So I don't like this practice, but its common.
Ideally Arcure will continue to grow in the coming years, & the capitalized costs will have a significantly lower impact on the P&L.
Solid write-up. Can you please expand on their moat? What’s preventing someone from coming up with similar technology? I feel that people detection by camera is a relatively old technology, as any commercial camera can achieve that now. Thanks!
Thanks Michael. First of all, I'm not a technological expert, so these are just assumptions from a financial guy :D Of course people recognition is nothing new. But its different when you use this for example when taking a photo of someone. Then it's nice when the camera already detects all the persons on the photo. But its not so bad when it doesn't work for one of the personsons on the photo. So I thin the key differentiator between industrial usage for safety and private usage is the accuracy of the system. The Blaxtair solution has to be 100% reliable and also has to detect people when they are hiding behind shelf or something. In addition, Blaxtair doesn't stop with people, they can also detect objetcs etc.
Companies that are working an aoutonomous driving of course also use multiple of such detection systems. But these algorithms are mostly based on situations on the street. So the alhorithm is very good in detecting people that are hiding behind a car that is parking on the side. But for a computer algorithm, this is still a different situation than someone who is hiding behind something on an idustrial site. So I thinj the biggest advantage of Arcure is, that they are training their algorithms on data from industrial sites since 2009. So they have a lot of data gathered with a birght variety of different situations that occur on industrial sites. An the more data you have, the better the algorithms can be trained. For a company that is trying to enter the people recognition technology for industrial sites, it is not easy to gather a similar databse like Arcure already has for 13 years. So they start training their algorithms on a smaller database, which could lead to a higher failure rate of the system, resulting in a lower quality product.
Je souhaite aussi un sujet qui n'a pas été abordé.
Comme pour un choix de logiciel, lorsque une entreprise fait le choix d un système comme le Blaxtair d'Arcure qui intègre tous l'environnement logiciel associé (comme la gestion de la flotte d'engins et toute les options proposées), c'est un choix pour de nombreuses années. Les entreprise ne change pas de système tous les 2 ou 3 ans. Et lorsque la société investi dans un système qui lui convient, il y a une recurrence dans ce choix pour avoir une homogénéité. Les nouveaux engins qui rentrent dans le parc de la société seront donc automatiquement équipés du même système.
Cela donne une recurence dans le business d’Arcure dès lors que les entreprises font le choix du Blaxtair, et c'est essentiel dans la réussite d'un business efficace .
Great write-up as always. One quick question: How about liability for accidents that happen despite the technology ? Are there any cases where victims try to sue them (meight be a bigger issue in the US) ?
Thanks! And a very good question. According to the company their "general "conditions" of sale include that it is always possible that an object or pedestrian will not be detected. "In the event of a collision with more or less serious consquences, product liability cannot incurred. However it is not excluded that legal actions may be filed against the company by its customer." So this risk still exists, but according to the company, they have not been the subject of such liability action or other complaint to date.
I agree that it's a risk. But it is worth noting that no industrial vehicle fitted with a Blaxtair has ever been involved in an accident. Hopefully it stays this way!
Great write up! I guess the main theme here is to get the customers to incorporate more of the software services in order to build a moat around switching-costs, right? 🤔
Are there any statistic from the company of how many of the different ”services” are used by the clients? And is this growing?
Thanks! The main objective behind these additional services is to increase the revenue per customer, but of course this will also have some kind of lock-in effect in the longer term, esepcially the more data is analyzed and can be used to optimize the fleet in operation.
We have just a rough revenue breakdown, where the "service" revenue is about 10 % of total revenues and also grew by around 10 % yoy in H1 2024. I think these services are still in its infancy, but with the new generations where they can more easily add these software services with "over-the-air" updates and overall higher adoption of the use of data & digitalization in the industry, the share of service revenues should continue to increase in the longer term
I see, thanks.
That is obviously great if the additional services will increase the RPC. Will keep an eye in that.
In a blue skies scenario one would hope that could become somewaht like $AXON is in the US.
Providing hardware through the cameras selling these quite cheap and then creating a software ecosystem connecting the different AI-monitoring tools which they seem to be in the forefront with.
Thus creating a wide MOTE and increasing margins through that.
The service products, are they subscription revenues or one time?
I am not sure. I think the basic services currently offered like the checklist solution are not subscriptions. But the more advances solutions regarding some predictive maintenance, optimization scenarios I think these can have some recurring aspects, but that’s just guessing.
Got it. I’ll do some digging myself to see if I can find someting about recurring revenue.
The Blaxtair device, how long ”lifespan” does it have? A couple of years then you have to buy a new one? 🤔
it typically has the lifespan of the vehicle it is installed on, so for a forklift probably around 6 years
If I may add: service revenues refer to the installation of hardware. Management expects software revenues (checklist, zoning, etc.) to grow in the coming years and could eventually account for 30% of total revenues.
Thanks for putting this very interesting company on my radar. One super nitty-griddy question and a super generic one:
- If I understand this right, they integrate into the fork-lift and are able to break when detecting a pedestrian? If so, are they also integrated with the fork itself and are able to know the weight the forklift is carrying? I'm thinking breaking behavior need to be very different if empty vs. full. (just nerding out here :))
- How do you go about researching such a company and not being only dependent on what they give you in the reports? Seems like outside information is going to hard to come by.
Thanks again!
ok, so I just watched the linked video after posting this and found the answer to my own question. It's not linked to the breaking system, it only alert the driver so they can take action. So weight doesn't matter.
Blaxtair is definitely integrated into the system of the forklift. The forklift also slows down ( take a look at the zoning feature video for example) So my guess would be that the forklift slows down as much as needed to protect the detected person, but as low as possible
I don‘t have first hand experiences and of course I am relying a lot on what the reports etc say. For outside information I have to trust the few information I was able to get from external associations (like from the BG Bau where Blaxtair was the only mentioned solution) or the multiple prizes the technology has won. But of course there are a lot of information (especially on the technical side) where I don‘t have that much information about
Félicitation Mavix pour cette étude et la precision de celle-ci.
Cette annalyse confirme er conforte mon avis sur arcure qui est une ligne majeur de mon portefeuille.
Je surveille l'avantage competitif en suivant la croissance, la marge brute et nette et leurs evolutions.
Le ROE ET ROA sont en croissance avec des prévisions d'excellente facture.
Une fois que le desendettement de la société sera effectif avec des niveaux inférieures à 50% du Capital Propre, on aura effectivement les critères d'une société avec un profil de multibagger.
La diversification des sources de chiffre d'affaire d'Arcure et de son développement au US et maintenant en Asie et un gage de sécurité dans les revenus.
Je suis actionnaire avec une ligne de 23 000 actions dans mon PEA avec une stratégie buy and hold...
Fred MCD.
Thank you for another excellent analysis! I would like to hear your thoughts on the capitalization of costs, recorded as 'Capitalized production' included in other operating income item. In my view, the €2M capitalized in both 2023 and 2022 had a significant impact on the P&L and overall profitability
Very good question. Arcure is capitalizing some of their R&D costs for new product versions. The costs include, among others, the salaries of the employees working on these products. There are certain accounting criteria, when a company is allowed to capitalized such costs, instead of recognizing them immediately as costs in the P&L.
Once the new product is released, these capitalized costs are amortized over the next 2-4 years. The amortization for the Origin versions has been around EUR 2.1 million in 2023, so a similar amount like the capitalized costs in 2023.
So by these capitalizations, the company can, from an accounting POV, shift current costs into the future. Unfortunately this is a very common practice for public listed companies, especially in the technology sector. Personally, I don't really like it as it doesn't show right picture for the moment. But the companies are allowed to do this, so they use it. I also own a company that is not doing such things, resulting in lower margins than their competitors (on the surface) but its hidden that they are actually much more profitable than their peers. But in the end, the market is not recognizing and honoring such "good behavior". So I don't like this practice, but its common.
Ideally Arcure will continue to grow in the coming years, & the capitalized costs will have a significantly lower impact on the P&L.
Solid write-up. Can you please expand on their moat? What’s preventing someone from coming up with similar technology? I feel that people detection by camera is a relatively old technology, as any commercial camera can achieve that now. Thanks!
Thanks Michael. First of all, I'm not a technological expert, so these are just assumptions from a financial guy :D Of course people recognition is nothing new. But its different when you use this for example when taking a photo of someone. Then it's nice when the camera already detects all the persons on the photo. But its not so bad when it doesn't work for one of the personsons on the photo. So I thin the key differentiator between industrial usage for safety and private usage is the accuracy of the system. The Blaxtair solution has to be 100% reliable and also has to detect people when they are hiding behind shelf or something. In addition, Blaxtair doesn't stop with people, they can also detect objetcs etc.
Companies that are working an aoutonomous driving of course also use multiple of such detection systems. But these algorithms are mostly based on situations on the street. So the alhorithm is very good in detecting people that are hiding behind a car that is parking on the side. But for a computer algorithm, this is still a different situation than someone who is hiding behind something on an idustrial site. So I thinj the biggest advantage of Arcure is, that they are training their algorithms on data from industrial sites since 2009. So they have a lot of data gathered with a birght variety of different situations that occur on industrial sites. An the more data you have, the better the algorithms can be trained. For a company that is trying to enter the people recognition technology for industrial sites, it is not easy to gather a similar databse like Arcure already has for 13 years. So they start training their algorithms on a smaller database, which could lead to a higher failure rate of the system, resulting in a lower quality product.
Je souhaite aussi un sujet qui n'a pas été abordé.
Comme pour un choix de logiciel, lorsque une entreprise fait le choix d un système comme le Blaxtair d'Arcure qui intègre tous l'environnement logiciel associé (comme la gestion de la flotte d'engins et toute les options proposées), c'est un choix pour de nombreuses années. Les entreprise ne change pas de système tous les 2 ou 3 ans. Et lorsque la société investi dans un système qui lui convient, il y a une recurrence dans ce choix pour avoir une homogénéité. Les nouveaux engins qui rentrent dans le parc de la société seront donc automatiquement équipés du même système.
Cela donne une recurence dans le business d’Arcure dès lors que les entreprises font le choix du Blaxtair, et c'est essentiel dans la réussite d'un business efficace .