Quarterly Operational Update and COVID-19 Update

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Quarterly Operational Update and COVID-19 Update
28 April 2020
Transport technology services company EROAD today released its regular quarterly update for the
three months ended 31 March 2020 and provided an update on the impacts of COVID-19 on its
business. Key points include:
• EROAD is operating effectively under its business continuity plan to support its customers
that are providing essential services;
• EROAD’s expectations for the FY20 financial results remain; and
• EROAD is well positioned and remains in a solid financial position despite the current
uncertain economic environment.
Business operations continue to operate effectively to support essential services
EROAD’s priority during these challenging times is the safety of our staff and supporting our
customers. Operating effectively under its global business continuity plan, EROAD’s products and
services continue to support the supply chain and activities of transport and service providers.
Many of EROAD’s customers provide essential services that are keeping economies running, with
over 30% of New Zealand heavy customer vehicles, over 50% of total Australian customer vehicles
and over 60% of total American customer vehicles continuing to operate despite the restrictions
implemented to stop the spread of COVID-19.
In New Zealand, EROAD was designated an essential service and has continued to operate during the
Level 4 lock-down to support customers that were also classified as essential service providers. With
the transition to Level 3 on Tuesday 28 April, EROAD will return to installing its EHUBO and EROAD
Where products for all its New Zealand customers. We expect, with the return to operations of
freight, civil construction and forestry under Level 3, most of EROAD’s New Zealand customers will
resume operations.
There is some temporary disruption in the manufacturing of EROAD’s EHUBO units, however current
inventory levels will support customers until at least the end of July.
Growth continues in Q4, despite COVID-19
Growth during the final quarter of the 2020 financial year saw 3,951 units being added, resulting in
an annualised growth rate of 14%. This was slightly lower than expected.
In New Zealand we continued to see growth in the Small to Medium Business (SMB) segment across
a range of industries. Some deals were delayed in late March, as the country entered Level 4
lockdown, but it is anticipated that many of these will flow through in the following quarter as
businesses commence fuller operations in Level 3 and lower levels.
Australia saw continued growth in the SMB segment, but some Enterprise customers deferred
buying decisions due to COVID-19. During the quarter a medium sized Trans-Tasman customer fleet
was deployed. This customer was acquired through EROAD’s Australian sales team.

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Unit growth in our North American business was generated from SMB customers in line with prior
quarter’s level but remains slightly below EROAD’s expectations. EROAD continues to build a solid
pipeline for this quarter, mainly in the mid-market fleet segment. COVID-19 lockdown has extended
sales closure timings but has not negatively impacted the overall pipeline at this point. Plans to
release additional functionality in Q1 will help to extend EROAD North America into larger fleet sizes.
EROAD’s Total Contracted Units* as at 31 March 2020 are as follows:

Quarterly Units
Total at
31 Dec 2019

Total at
31 March 2020
Units added in
quarter
% Growth
annualised
Total at
31 Dec 2019
(restated)**
Total Contracted Units 113,219 112,537 116,488 3,951 14%
New Zealand 78,229 78,229 80,366 2,137 11%
North America** 33,307 32,625 34,002 1,377 17%
Australia 1,683 1,683 2,120 437 106%



YTD Units
Total at
31 March 2019
Total at
31 Dec 2019
(restated)**
Total at
31 March 2020
Units added in
12 months
% Growth
annualised
Total Contracted Units* 96,390 96,106 116,488 20,382 21%
New Zealand 70,110 70,110 80,366 10,256 15%
North America** 24,944 24,660 34,002 9,342 38%
Australia 1,336 1,336 2,120 784 59%
* Total Contracted Units is a non-GAAP measure used by EROAD which represents the total units subject to a customer contract and includes
both Units on Depot and units pending instalment.
** North American units have been restated for data cleansing adjustments identified as part of pre and post go live migration work for new
ERP systems implementation. The adjustments relate to the cumulative effect of the misclassification of 284 Ehubo 2.0 units and 682 Ehubo
2.1 units in the Depot platform.
FY20 Outlook Unchanged
EROAD’s expectations for the FY20 financial results remain unchanged as a result of COVID-19.
However, as outlined above, COVID-19 has meant some delay in finalising contracts with customers,
and there has been a short-term impact on new unit growth since tight government restrictions
have been implemented globally. With operations continuing to support essential services, since
27 March EROAD has sold 430 units to essential businesses across New Zealand, North America and
Australia.

EROAD in a solid financial position
EROAD’s Board and Management remain confident that the Company is in a solid financial position,
with $135 million of future contracted income and an average remaining contract length of 2 years.
EROAD’s customer base is diverse across regions, business size and industry.

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A combination of positive contribution to operating cash flow from the New Zealand and North
American businesses, together with the recent increase in banking facilities to $60 million, means
EROAD has sufficient headroom to support anticipated ongoing organic growth.
However, given the evolving COVID-19 situation, EROAD has undertaken a full review and scenario
analysis on future cashflow and expenditure and taken a number of prudent steps to manage its cost
base. These include cessation of short-term recruitment, non-essential travel, external research and
development expenditures as well as deferral of some marketing events and activities. More severe
measures have been identified and can be implemented should some of our worst case scenarios
eventuate. It is considered too early to definitively assess the impact of COVID-19 on incremental
growth for the remainder of FY21.
FY20 Financial Results to be released on 19 June 2020.
EROAD intends to release its Financial Results and Annual Report for the year ended 31 March 2020
on Friday 19 June 2020. This represents a delay of three weeks, using the extension available under
NZX class wavier of Rule 3.5.1, which was included in the NZX and FMA measures announced in
response to the impact of COVID-19. EROAD will not be utilising the extension available under the
wavier of Rule 3.6.1 as it intends to release its Annual Report at the same date as the release of its
financial results.
Ends
Contact: Alex Ball, Chief Financial Officer
Ph +64 29 772 5631 email: alex.ball@eroad.com