EROAD’s Annual Shareholders Meeting Chair and CEO Address

EROAD
Annual Shareholders Meeting 
Safer and more sustainable roads
28 July 2022

IMPORTANT INFORMATION
The information in this presentation is of a general nature and does
not constitute financial product advice, investment advice or any
recommendation. Nothing in this presentation constitutes legal, financial,
tax or other advice.
This presentation may contain projections or forward-looking
statements regarding a variety of items. Such projections or forward-
looking statements are based on current expectations, estimates and
assumptions and are subject to a number of risks, uncertainties
and assumptions.
There is no assurance that results contemplated in any projections or
forward-looking statements in this presentation will be realised. Actual
results may differ materially from those projected in this presentation.
No person is under any obligation to update this presentation at any
time after its release to you or to provide you with further information
about EROAD.
While reasonable care has been taken in compiling this presentation,
none of EROAD nor its subsidiaries, directors, employees, agents
or advisers (to the maximum extent permitted by law) gives any
warranty or representation (express or implied) as to the accuracy,
completeness or reliability of the information contained in it nor takes
any responsibility for it. The information in this presentation has not
been and will not be independently verified or audited.
CORETEX
The Coretex merger completed on 30 November 2021. All finanicals
include 4 months of Coretex.
NON-GAAP MEASURES
EROAD has used non-GAAP measures when discussing financial
performance in this document. The directors and management
believe that these measures provide useful information as they are
used internally to evaluate performance of business units, to establish
operational goals and to allocate resources. Non-GAAP measures are
not prepared in accordance with NZ IFRS (New Zealand International
Financial Reporting Standards) and are not uniformly defined, therefore
the non-GAAP measures reported in this document may not be
comparable with those that other companies report and should not be
viewed in solation or considered as a substitute for measures reported
by EROAD in accordance with NZ IFRS.
The non-GAAP measures are not subject to audit or review. Definitions
can be found in the FY22 Annual Report. 

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1.Chair’s Address 
2.
CEO Address 
3.
Financial Statements
and Auditor’s Report
4.Resolutions 
AGENDA

CHAIR’S
ADDRESS 

SAFER
AND MORE
SUSTAINABLE
ROADS 
KEEP THE
COMMUNITY SAFE
CONSERVE AND
IMPROVE THE
ENVIRONMENT
SUPPORT ECONOMIC
GROWTH 

FY22
AT A GLANCE 
FINANCIAL RESULTS REFLECT INVESTMENT
IN CAPABILITIES FOR FUTURE GROWTH 
SIGNIFICANT PERIOD OF TRANSITION
DESPITE CHALLENGING MACRO-ECONOMIC
CONDITIONS 
WELL POSITIONED TO BUILD GROWTH
MOMENTUM OVER FY23 AND BEYOND 

GRAHAM STUART
Chairman, Independent Director
Appointed January 2018
BARRY EINSIG
Independent Director
Appointed January 2020
TONY GIBSON
Independent Director
Appointed October 2009
SUSAN PATERSON
Independent Director
Appointed March 2019
SARA GIFFORD
Independent Director
Appointed April 2022
SELWYN PELLETT
Executive Director
Appointed December 2021
OUR
BOARD

CEO
SUCCESSION 

BOARD FOCUS
FOR FY23
COMPLETE THE
CORETEX INTEGRATION
ENGAGED CULTURE
ALIGNED TO VISION OF
MERGED COMPANY
KEEP BUILDING
MOMENTUM IN
NORTH AMERICA
STRATEGY REFRESH
HIGH RETENTION RATES
IN NEW ZEALAND AND
AUSTRALIA
IMPROVED OPERATING
LEVERAGE

Mark Heine
Chief Executive Officer
CEO ADDRESS

SAFER AND MORE
SUSTAINABLE
ROADS
REGULATORY
AND SPECIALISED
TELEMATIC
SOLUTIONS
OVER 200,000
CONNECTED
VEHICLES 
STABLE ASSET
RETENTION RATE
GROWING AMRRTARGETING
STRONG GROWTH
OF AT LEAST
$250M BY FY25 
WE ARE
EROAD

PRODUCTIVITYREGULATORY
COMPLIANCE 
ROAD SAFETY 
FOOD SAFETY PROOF OF
SERVICE  
CERTIFICATION
OF QUALITY   
SOLVING
CUSTOMER
PROBLEMS  

IN CAB PROFESSIONAL
TRANSPORT
REFRIGERATED
TRANSPORT
CONSTRUCTION WASTE AND
RECYCLING
SOLVING
CUSTOMER
PROBLEMS
ACROSS 4
INDUSTRIES 

AA ccoommpplleettee,, ccoonnnneecctteedd nneettwwoorrkk tthhaatt wwoorrkkss wwiitthh yyoouurr ssyysstteemmss
Hardware and software alike, design of products focused on ease of use, safety,
flexibility and quality - to deliver accurate insights for customers
OOuurr nneexxtt ggeenneerraattiioonn ooffffeerriinngg
All vehicles. All assets. One platform.
OUR NEXT
GENERATION OFFERING
ALL VEHICLES. ALL ASSETS. ONE PLATFORM
DRIVER DEVICE
ELD & DVIR
Hours of Service
Messaging
Navigation
Job Workfl ow
Supports 3rd Party Apps
(Routeforme)
COREHUB
Wi-Fi Hub
Idle Time
Accelerometer
Engine Fault Codes
MyEROAD / 360 ENTERPRISE
SOLUTION
Analytics
Dashboards
Reporting
Alerting
Mapping
Replay
Action Engine
IFTA
Full Suite of APIs
Qualifi ed Integration Team
Penske Integration
HOS APIs for JJ Keller
IoT TAGS & SENSORS
CAMERAS
HD Video streaming
Incident resolution
Driver Behavior
API

NEW ZEALAND

NORTH AMERICA

AUSTRALIA

FY21FY22
$
(18.6)m
$
(13.1)m
$
(12.8)m
$
(47.9)m
FY18FY19FY20FY21
-
30.0
40.0
20.0
10.0
-
40.0
20.0
80.0
100.0
60.0
120.0
FY18FY19FY20FY22
$
43.8m
$
10.5m
$
15.6m
$
27.1m
$
28.8m
$
21.0m
$
61.4m
$
81.2m
$
114.9m
FY21FY18FY19FY20FY22FY21FY21
-
30.0
40.0
20.0
10.0
$
10.5m
$
15.6m
$
27.1m
$
30.4m
$
27.3m
FY18FY19FY20FY22FY21
$
91.6m
-
25.0
(25.0)
(50.0)
$
5.3m
FY21FY22
$
(18.6)m
$
(13.1)m
$
(12.8)m
$
(47.9)m
FY18FY19FY20FY21
-
30.0
40.0
20.0
10.0
-
40.0
20.0
80.0
100.0
60.0
120.0
FY18FY19FY20FY22
$
43.8m
$
10.5m
$
15.6m
$
27.1m
$
28.8m
$
21.0m
$
61.4m
$
81.2m
$
114.9m
FY21FY18FY19FY20FY22FY21FY21
-
30.0
40.0
20.0
10.0
$
10.5m
$
15.6m
$
27.1m
$
30.4m
$
27.3m
FY18FY19FY20FY22FY21
$
91.6m
-
25.0
(25.0)
(50.0)
$
5.3m
FINANCIAL PERFORMANCE REFLECTS INVESTMENT
IN CAPABILITIES FOR FUTURE GROWTH
+25%-32%
-$53.2
REVENUE
EXCLUDING MERGER
EBITDA
ANNUALISED MONTHLY
RECURRING REVENUE ($M)
FREE CASH FLOWS
-
25.0
50.0
75.0
100.0
125.0
150.0
66.5
84.0
88.4
FY19FY20FY21
134.6
FY22
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
8.3
5.1
13.4
FY19
13.1
8.2
21.3
FY21
23.7
8.0
31.7
FY22
9.6
6.0
15.6
FY20
R&D ExpensedR&D Capitalised
50
100
150
200
FY18FY19FY20FY21FY21
100.5
117.4
134.4
141.9
 
190.2
-

CONTRACTED
UNITS
-
10
20
30
40
50
60
70
FY18FY19FY20FY21
$54.32
$55.08
$58.38 
$58.30
FY22
$55.57
-
20
40
60
80
100
FY18FY19FY20FY21
95.8%
94.4
%
95.2
%
94.9
%
FY22
93.4%
ARPU
EROAD STAND ALONE
ASSET RETENTION RATE
KEY PERFORMANCE METRICS
77,600
96,106
116,488
126,203
208,697
FY18FY19FY20FY21FY22
250000
200000
150000
100000
50000
-

Sales underway with
next generation
platform and hardware
solutions 
Engineering teams now
integrated with focus
on integration of key
platform and products
by end of 2022
Supply chain
integration complete 
Integrated Sales Teams
and aligned go-to-
market strategy
3G to 4G upgrade
programme in North
America largely
complete
Integration of EROAD
and Coretex teams
complete with on-
going change
management to build
an inclusive, diverse and
collaborative culture
CORETEX
INTEGRATION
ON TRACK WITH
SIGNIFICANT
PROGRESS
MADE TO DATE

FY23
PRIORITIES 
Revenue growth momentum in
New Zealand and North America
Maintain an engaged culture aligned to the
vision of the merged company
Deliver key product and platform integration
by the end of CY2022 to enable delivery of
enhanced SaaS products to build growth
momentum further and support retention

Growth momentum
expected to build with
successful conversion of
North American enterprise
pipeline opportunities 
Targeting Revenue of
at least $250 by FY25
Anticipate Revenue between
$150m - $170m in FY23
Expect improved
operating leverage
from FY24 
Targeting normalised
EBIT of between -$5m
to breakeven
FY23
OUTLOOK

QUESTIONS

25
RESOLUTIONS 

VOTES RECEIVED
(AS AT 27 JULY)
42.73% OF VALID
SECURITIES VOTED 
 
Votes
ForAgainstAbstainDiscretion
Resolution 1 
41,236,821562,8666,8572,103,088
Resolution 2 
41,666,7879,212130,5452,103,088
Resolution 3
41,703,49296,1956,8572,103,088
Resolution 4 
37,275,4974,527,0004,0472,103,088
Resolution 5 
37,035,5749 7,1 7 14,660,8992,115,988

RESOLUTION 1 
Election of
Selwyn Pellett
That Selwyn Pellett,
having been appointed
by the Board and only
holding office until the
Annual Shareholders’
Meeting, be elected as
an Executive Director
of EROAD.

RESOLUTION 2 
Election of
Sara Gifford
That Sara Gifford,
having been appointed
by the Board and only
holding office until the
Annual Shareholders’
Meeting, be elected as
a Director of EROAD.

RESOLUTION 3 
Re-election of
Susan Paterson
That Susan Paterson,
having retired in
accordance with NZX
Listing Rule 2.7.1, be
re-elected as a Director
of EROAD.

RESOLUTION 4 
Auditor’s
Remuneration
That the Directors be
authorised to fix the
fees and expenses of
KPMG as auditor
of EROAD.

RESOLUTIONS 5 
Nonbinding Say
on Pay vote 
That EROAD’s
Remuneration Report
for the year ended 31
March 2022, as set out
in the FY22 Annual
Report, be adopted. 

QUESTIONS

---

EROAD Limited
Annual Shareholders Meeting
Chair and CEO Address

28 July 2022

Chair Address

It is a privilege for me to deliver this address as Chairman of your Board. Your Board and
management have worked diligently as your agents through this past year.

EROAD is a purpose led company that aspires to create safer and more sustainable roads.
Sustainability is core to our business; we are beginning on our journey towards our net zero
strategy. We are focusing our efforts not only on reducing our own emissions but also on
developing solutions that will support our customers in their efforts to reduce their
emissions. I encourage you to read our inaugural sustainability report that demonstrates the
work that we are doing in this space and shows our commitment to continued improvement
and advancement.

Over the past year the EROAD share price has fallen by 60% against the benchmark of
technology stocks in general experiencing a 30% drop. Notwithstanding the challenging
macro environment, it is clear that the company has also not met shareholder expectations.
Your board has a sharp focus on improving the company’s performance.

While our New Zealand and Australian businesses had a good year EROAD’s performance in
North America prior to the merger with Coretex fell well short of our expectations, as did
some aspects of our corporate operations. Your board has embarked on a course of positive
changes to ensure that EROAD will perform more consistently and deliver on its growth
strategies.

The appointment of Mark Heine as Chief Executive Officer, is a major step in this regard.
Mark has a deep understanding of the business, and the Board is confident that he has the
capabilities to lead EROAD through its next phase of growth. More on this shortly. The board
has also commenced a process to appoint a new Chief Financial Officer. The merger with
Coretex in the second half of the year provides our North American business with greater
critical mass and importantly fill critical technology gaps with the CoreHub hardware and the
Core360 SaaS platform as well as acquiring critical capabilities for winning and retaining large
enterprise customers.

Despite some challenges there were also some notable achievements in the past year. Our

New Zealand business delivered yet another year of solid growth, not only adding new
customers but also delivering greater value to our existing customers. We never take
customer retention for granted and it was pleasing that several key customers in New
Zealand renewed their relationships with EROAD. In April last year we announced that
essential services supplier Ventia had become a customer in both New Zealand and Australia.
During the year our Australian business passed through the important milestone of breaking
even at the EBITDA level. We also announced partnerships with Phillips Connect in June and
Seeing Machines in August last year. In October we launched EROAD Clarity Solo dash
camera. And in March this year we announced the refinancing of our debt facilities.

By far the most significant activity last year was the merger with Coretex. The merger was
announced in July and brought about a successful equity placement of $64.4 million to our
large and institutional shareholders and a $16.1 million Share Purchase Plan issue to our retail
shareholders. Although we got off to a late start, and the merger occurred at a time when
we experienced unprecedented supply chain and labour market disruptions, the integration
with Coretex is now progressing well. The Coretex merger is a game changer for EROAD. It
represents a doubling down on our North American growth strategy. And it is critical that we
follow this up by sharpening our focus on this market and capitalising on the value we
acquired.

The Board is coming to the end of a three-year phase of renewal. In December Selwyn Pellett
joined the Board as an Executive Director to support EROAD through the initial integration
period with Coretex. Selwyn makes a valuable contribution to the Board and with Steven
Newman’s resignation from the Board, and subject to Selwyn being elected by shareholders,
we will seek to extend this term. At the end of March this year the Board spent a week visiting
EROAD’s North American operations. During that visit we were able to welcome Sara Gifford
to the Board. Sara is our second North American resident director and is well versed in
logistics, transportation, product implementation and sales. The board is conscious of the
need to balance institutional knowledge and continuity with fresh ideas and new
perspectives and will continue to ensure that we have the right mix of skills and experience
around the board table to govern the business and to serve Shareholders’ interests well.

It is often said that the appointment of a CEO is the most consequential decision that Boards
make. As such this has been a key focus for the Board during the past year. The Board worked
hard to ensure the process was rigorous and robust. We commenced a formal search process
in late 2021, with the appointment of the international recruitment firm Caldwell and
Partners. The search was well progressed at the time of Steven Newman's earlier than
expected resignation in April.

When Steven announced his resignations, the Board had no hesitation in appointing Mark
Heine as Acting Chief Executive Officer. It is fair to say, with Steven resigning from both the
CEO and Board positions the Board felt the need to re-examined the skillset required. At the
same time the Board was seeing first-hand the impact Mark's leadership was having on the
business. We were impressed by Mark’s leadership and commercial skills, and he has
breathed fresh air into EROAD. In late May the Board made the decision to ask Mark to join
the process, Mark took time to consider this invitation and then after he had completed a
formal assessment and interview process, the Board selected Mark ahead of the other

candidates for the role.

I would like to take this opportunity to acknowledge Steven Newman’s very significant
contribution to EROAD.

Looking ahead to FY23, we expect growth momentum to build through the year with the
successful conversion of North American enterprise pipeline opportunities. The enterprise
pipeline remains robust with a total of eighteen enterprise customers at the pilot stage across
all the markets, representing some 30,700 in-cab and trailer units. The Board has provided
revenue guidance for FY23 in the range of $150 million to $170 million, the width of the range
reflecting the uncertain timing of achieving larger enterprise sales. We have forecast group
revenue of at least $250 million by the 2025 financial year and we believe we have the
expanded product range and capabilities to get us there.

Quite simply FY23 is a year of delivery. The goals for this year are straightforward. We have
six priorities:

First, we must complete integration with the Coretex business and maximize synergies from
this merger.

Second on the back of the integration we must build momentum in our North American
market, without taking a backward step in New Zealand or Australia.

The Board and management team are conscious that top-line growth without returning
improved operating leverage is not sustainable or conducive to building shareholder value.

In FY23 we will complete building the platform and the business model that will deliver
improved EBIT margins and we will sharpen our focus on the management of costs.

EROAD is undergoing significant change on a number of fronts, and it is vitally important
that we retain the engagement and passion of our talented staff through these changes.

EROAD 2.0 is an initiative that reviews every aspect of our Employee Value Proposition to
ensure that we capitalize on the best of our past as well as what Coretex has brought to the
table.

Chief Executive Officer Address

Hello everyone. I've meet many of you before at previous Annual Shareholders Meetings but
I'm honoured to be standing here today speaking to you as EROAD's Chief Executive Officer.
My three months as Acting Chief Executive Officer has reinforced my view that EROAD is
extremely well positioned with the merger of Coretex, providing an excellent platform for
future growth. I’m delighted to have accepted the role as Chief Executive Officer and to lead
EROAD at a pivotal point in its history.


Let me start by thanking both Steven Newman and the EROAD team for their support as I
transitioned into the Chief Executive role. I know the EROAD team and strategy well, which

has made my transition into this role a seamless one. Our people are crucial to EROAD’s
success so I’m excited to lead such a talented and motivated team. Together, I firmly believe
we can deliver on our strategy and drive this business forward.
Before I discuss the year that was, and the priorities for FY23, it is worth pausing for a
moment to reflect on why EROAD remains a compelling investment proposition.

We are passionate about, and dedicated to, creating safer and more sustainable roads.
We
provide regulatory and specialised telematics services together in a bundle typically with
hardware. We describe ourselves as a hardware enabled SaaS business. We have over 8,000
customers in New Zealand, Australia and North America who between them have over
200,000 connected vehicles. We have an attractive business model. We are growing
recurring revenue. We are growing from both new customers and, of course, an increase in
revenue as a result of products and solutions being sold to existing customers. We maintain
over 90 percent of our customers on contract renewals and with this model we expect to
grow to at least $250m by the end of March 2025.
EROAD employs talented and capable
teams in New Zealand, Australia and North America. Last year we invested significantly in
building capability through research and development and, in the case of inventory, to
ensure a continuity of service in light of global supply chain disruption. We also merged with
Coretex in FY22 and this leaves us well positioned to be a leading player in the Australian,
New Zealand and North American telematics markets.


With our hardware and software solutions EROAD has always, and continues to look to
solve, customer problems. Our customers have a range of problems that they seek to
solve. Productivity is getting more difficult to improve and our customers are struggling to
find more drivers and vehicles. This means that they need to utilise their assets more
effectively and efficiently and for a longer period of time. EROAD can provide customers with
deep insights on how to maximise the use of the assets.


We still have to help our customers meet their regulatory compliance requirements. As our
customers’ drivers are driving more, and need to use their assets further, it is really important
that they operate safely, within the work time rules and comply with their road user charging
obligations.


With more vehicles on the road, road safety gets greater attention. That has led us to develop
our camera solutions and other products which enable our customers to get insight on the
drivers’ activity. These insights help our customers monitor driving behaviour and can be
used to train drivers in order to improve safety outcomes on the road.


With the merger of Coretex, we’ve also unlocked the ability to solve customers’ problems
around food safety. Refrigerated products, as well as other products which need cooling,
such as vaccines, require constant temperature monitoring. Our products enable customers
to monitor and record how these products are being transported, and their core
temperatures, to ensure that there is assurance around the safety of those products when
they reach their destination.


Proof of service is becoming of utmost importance for our customers as well. Our customers
in the civil maintenance or construction, and their customers, want to have a verifiable record
of service, proving delivery of services and the timing of delivery. And our customers can

certify the quality of the products that they are delivering with our solutions.

Our technology is helping solve customer problems across the four verticals that we operate
in. We continue to invest in these verticals because we believe these are key areas of growth
going forward to enable us to reach our growth targets. So, as we continue to grow, we will
continue to invest in these verticals by providing solutions for them.

If we look a bit more deeply into our verticals, there are four main verticals which we are
targeting. EROAD has historically been in the in-cab professional transportation vertical.
EROAD’s regulatory technology complements the more advanced technology stack that
Coretex brings to the table. So, we’re quite excited about getting deeper and broader in
professional trucking.

In terms of refrigerator transportation, we see real opportunity for growth in the US and we
are investing more here. The CoreHub solution helps unlock and enable that market, as well
as the CoreTemp monitoring product that we have launched. EROAD has been historically
strong in construction, particularly in New Zealand. Teaming up with Coretex has helped us
get stronger in the North American market with the range of products we now offer up there,
including the introduction of the waste and recycling product suite.


With the merger of Coretex we obtained access to CoreHub being EROAD’s next generation
product. This is a graphic that shows how CoreHub interacts with the various solutions that
we have. It acts as the heart in the cab. The CoreHub is our next generation IOT device, with
edge-computing power, which enables more to be done in the vehicle and quicker
visualisation and realisation to the driver.

A driver uses the driver device screen to manage their regulatory obligations, whether that’s
around work time with our electronic logging solution, or by ensuring that that vehicle is fit
for purpose with our driver vehicle inspection report. The device also helps drivers
understand routing and navigation to ensure that they are efficient and effective during their
work day.


That IOT hub can then be connected with camera solutions, whether it’s an entry level Core
Vision or the more advanced Clarity Dashcam, which help our customers better understand
the risk to their drivers on the road.


We’ve also added IOT tags and sensors to our product set, and that enables us to reach into
different verticals through the CoreHub. For example, in the civil construction vertical we can
help customers with the quality of concrete that is being poured by helping them understand
the rotations that are happening in the vehicle.

In the refrigeration vertical, our sensors can monitor core temperatures in vehicles to ensure
maintenance of appropriate temperature for the goods. All of that can be visualised back at
the home base on the Core360 software platform.
The Coretex merger unlocks a huge range
of solutions for our customers which deal with the customer problems we’ve talked about
earlier.


Now let's look at the last financial year and the performance across the markets we operate

in. New Zealand had an exceptional year last year. Contracted units grew by 22%. EROAD
alone grew organically to be over 100,000 units. 70% of this growth was generated from our
current customer segments adding additional products and services, such as Clarity
Dashcam, Logbook and BookIt. 30% growth was as a result of new customers. This
demonstrated the continued opportunities we see in New Zealand as we evolve with our
customers.


When it comes to asset retention, we’re still maintaining strong asset retention rates.
Indeed we increased over the course of last year. That includes our continued partnership
with Downer in New Zealand, which we’re particularly happy about, as well as the other
enterprise opportunities that we realised during the year. And customers are also adding on
additional subscriptions, such as to our logbook and our inspect products.


Turning to North America. It’s fair to say North America was challenging and that was driven
by COVID and the uncertainty that it caused to our small and medium customers.

When it came to the renewals, some of our small and medium customers were reducing the
fleet sizes, which had a consequential impact on our churn. These renewal discussions were
driven by the 3G to 4G upgrade programme, which we are coming to the end of.

With Coretex as part of the team now, and their greater focus on enterprise accounts, we’re
actually seeing higher retention rates. That’s helped us regain momentum. Not only by the
fact that Coretex was more established in the enterprise space, but the products and market
fit has also helped us grow and execute on our sales strategy.

Going forward we are talking to customers around the next generation offering and that’s
opened up opportunities for us. We currently have eight Enterprise customer pipeline
opportunities at the pilot stage in North America relating to potential opportunities of
c26,000 units.

And finally Australia.
With Australia we’re satisfied with performance during the course of
last year. Signing up Ventia as a customer was a highlight. We have completed the roll out
with them now. Also, with the merger with Coretex, we brought on further enterprise fleets.
This has enabled us to start establishing credibility with customers in the enterprise side of
the business.


As we continue to develop and integrate our product solution between EROAD and Coretex
during the course of this year, we’ll start seeing those solutions flow down from North
America into Australia. This will further open up opportunities in the construction vertical in
particular. In the meantime, we are focused very much on continuing to talk to our customers
around our EROAD Clarity Dashcam products and the health and safety benefits that product
brings, as well as our asset tracking solutions, EROAD Where and EROAD micro tags.



Looking at our financial performance, revenue grew this year. It is in part to do with Coretex
being there for four months and EROAD for the 12, but it’s also underpinned by the strong
year that New Zealand has had. NZ has had a stellar year. The revenue for that segment grew
by $10 million.
Our reported EBITDA is down 32%. In part that’s to do with the one-off
transaction and integration costs, and some one-off acquisition revenue. When we normalise

for both those elements the drop is 5%. That’s due to the growth in our operating costs, some
of which is Coretex and some is increased spending in areas of investment. We’ve looked at
key teams and lifted our marketing in preparation for growth.
Our annualised monthly recurring revenue, or AMRR, casts forward a 12-month view of
where our recurring revenue sits. For the end of FY22 that metric was over $134m. This is a
significant step up and reflects Coretex’s and EROAD’s recurring customer base for a full
year.
Free cashflows in FY22 was impacted by a combination of the merger of Coretex, R&D
investment and growth in inventory as global supply chain pressures were addressed.

EROAD recently renegotiated a new syndicated debt facility of $90 million to provide future
capacity to grow. Our available liquidity of $72 million, which includes our bank facilities and
cash on hand, will support the R&D and integration investment planned for FY23 and fund
hardware to enable EROAD to pursue Enterprise opportunities
.


As to our KPIs, we reached over 200,000 connected vehicles in FY22 as we focused on
building scale in our markets.
Our growth was made up by two components. The merger
with Coretex added over 66,000 units in growth, predominantly in North America, more than
doubling the size of our presence in that market.
When it comes to organic growth, that was,
in terms of composite growth, over 16,000 units, predominantly in New Zealand. We’re really
impressed by how New Zealand business continues to grow organically and how it grew by
over 11,000 units in the financial year.

ARPU has dropped slightly reflecting Coretex’s historical selling model of outright hardware
sales.
We’ve also seen the mix of in-cab and trailers change with the acquisition of Coretex.
Ultimately our underlying ARPU will grow with the introduction of our complementary
products, our Solo and Connect Clarity Dashcams, Phillips Connect trailer tracking product,
the other add-on products we’re selling. Our asset Retention Rate remained over 90%.

We are making significant progress on the Coretex integration. As mentioned before, a
critical area that we’ve been working on is our supply chain. As we’ve all seen globally, many
companies, including EROAD, are impacted by supply chain challenges. When it comes to
the increase in different types of product sets that we have, that does increase our exposure
and the supply chain risk. We have invested in the team to make sure we’re on top of the risks
in the area and we’re satisfied with the progress we’ve made.


Sales activities are well integrated across our markets as well. There’s been cross-training of
our sales teams and they are very much focussed on their various verticals they are working
on with that training. We are aiming to have our key product and platforms fully integrated
by the end of this year and we’re seeing good progress on that front. And our 3G to 4G
upgrade programme is almost complete. So, the underlying churn we’re seeing from this
should reduce as we finish that swap out programme.


In FY23 EROAD has three priorities. The first is to build growth momentum in both North
America and New Zealand. The merger with Coretex accelerated our growth strategy, and
particularly in North America. As mentioned earlier, the strategy in North America is based
around the four verticals that we operate in, being professional trucking, refrigeration,
construction and waste & recycling.

We have recently launched our Corehub Extreme product in North America which will
support customers in the refrigeration vertical. This product utilizes the edge computing 4G
technology I spoke about earlier and we’re confident it can take on the incumbent suppliers
in this space.

We are also investing in our marketing engine in North America to capitialise on the
opportunities here. Over the first quarter of FY23, EROAD’s share of voice for North
American telematics company was 24% - far larger than the market share of our competitors.
We are also leveraging the greater enterprise sales capability we have brought on through
the merger. This has strengthened our pipeline in North America and provided a greater
span of industries and customer size to serve as reference accounts in this market.

In New Zealand we continue to see opportunities to capitalize on and we target to continue
to grow by 10% year on year. Our market leading sales and customer support teams
consistently unlock sales opportunities as we go about growing our market share.

It was great seeing almost 600 current and potential customers last week at EROAD’s Fleet
Day in Hamilton – an event where we focus on helping our customers have safer and more
sustainable fleets. This event is now about the same size, if not larger, than the other
transport industry events that are held in New Zealand. This reflects the scale and support
EROAD has in New Zealand.

The second priority is to build and maintain an engaged culture that’s aligned to the vision of
the merged company. We refer to this company as ‘EROAD version 2.0.’ We’re doing this in
a time when the competition for talent is as competitive as it’s ever been. However, we
believe we largely have the team in place to deliver. This team is passionate about EROAD,
its purpose and our strategy.

As CEO I have been focused on empowering this team to ensure they can deliver for our
customers. This has been by removing silos in the business and re-aligning teams so
resources can be better targeted to get new product out the door or sales converted.

We found that the dynamic telematics market was moving quicker than EROAD. We have
therefore taken steps to speed up by devolving decision making and empowering our
product managers and engineers by introducing more scalable, customer facing agile
development teams and reshaping our hardware team to deliver product to market quicker.
We have also been focused on stopping things that do not directly deliver on our growth and
the business plan. We are being deliberately focused on our delivery and are reshaping
EROAD to this end.

The third priority is to deliver on the key product and platform integration by the end of this
calendar year. Capitalising on the merger with Coretex we expect to deliver key products and
platform integration that will enable further growth.

This is an important priority for the business. By having a web platform that can visualize
data and insights from both EROAD and Coretex hardware, as well as third parties, enables
a more seamless customer experience. It also allows cross selling and upselling opportunities

to customers including for SasS products.

Finally, our FY23 outlook. We expect that growth momentum will further build through the
year with the successful conversion of our North American and New Zealand pipeline
opportunities.

Underpinning this expectation, across all of our markets, we currently have 18 pilots with
enterprise customers that represent over 30,000 units and 10,000 micro tags. However, as
you would expect, revenue growth in FY23 will reflect the lumpy nature of enterprise sales
and the phasing of them in our hardware and software roll outs. In addition to growing
revenue, there are a number of enterprise customers that will renew their contracts during
the year.

As Graham mentioned earlier, we anticipate our revenue will be between $150 million and
$170 million. This reflects a full year of Coretex contribution, growth across all the markets,
and the realisation of the investments that we made last year and will continue to make this
year.

The last year has been a year of significant investment in capability. This is in preparation for
growth and this investment will continue into FY23. As a result, we’re targeting a normalised
EBIT of between a loss of $5m to break even in the coming year. We expect in the following
year we will start seeing the benefit of operating leverage and that the bottom-line result will
improve.

As mentioned earlier, in the longer term we’re targeting to deliver strong growth in revenue
to at least $250 million by March 2025. We have set these goals knowing that in FY23 we can
do better than we did in FY22. But also being aware that we are operating in more
challenging market conditions.

The competition for talented staff has never been fiercer, the tide has quickly turned in our
capital markets, inflation is at the highest levels this century and in each of our markets
COVID-19, and its aftereffects, continue to disrupt our supply chains and suppress economic
growth.

EROAD’s solutions deliver bankable returns on investment for our customers at a modest
level of capital expenditure for them. This factor alone should ensure that we can navigate
through an economic downturn without losing too much momentum. As fuel prices
increase, and the demand for data and managing assets becomes greater, the case of
installing EROAD becomes more compelling.

The sound investments made over the recent years, and those that will be completed during
FY23, will ensure that we have the people and the technologies to provide winning solutions
to our customers and to deliver on our purpose of providing safer and more sustainable
roads.

We have made significant investment in our capability and now is the time to deliver on that
investment. We will sharpen our focus to ensure delivery on our North American strategy

while retaining focus on our successful New Zealand business and the growth Australia
provides in the medium term.

We know we must execute on what is in front of us and rebuild the credibility with our
shareholders. We are confident we can deliver for you.