CAMO ASA - a presentation
OSLO 9th June 2000
CAMO ASA
Presentation
Relevant abbreviations
CRM
SFA
DBM
O2O
IRM
DLO
OEM
B2E
B2B
B2C
- Customer Relationship Management
- Sales Force Automation
- Database Marketing
- One to One Marketing
- Internet Relationship Management
- Dynamic Link Optimization (Camo technology for the CRM market)
- Original Equipment Manufacture
- Business to Employee
- Business to Business
- Business to Consumers
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Presentation
TABLE OF CONTENTS
1.
EXECUTIVE SUMMARY ................................................................................................................................. 4
2.
BUSINESS DESCRIPTION ............................................................................................................................... 8
3.
MARKET AND COMPETITION...................................................................................................................20
4.
STRATEGY, EXPANSION AND DEVELOPMENT..................................................................................24
5.
RISK ANALYSIS ...............................................................................................................................................26
6.
FINANCIAL INFORMATION........................................................................................................................27
7.
DEAL STRUCTURE.........................................................................................................................................29
8.
VALUATION, EXIT AND RETURNS...........................................................................................................30
Relevant tickers and web sites
•
•
•
•
•
Camo (CAMO)
Statware
E.piphany (EPNY)
Net Perception (NETP)
Broadvision (BVSN)
www.camo.com
www.statware.com
www.epiphany.com
www.netperception.com
www.broadvision.com
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CAMO ASA
1.
Presentation
EXECUTIVE SUMMARY
Introduction
The purpose of this presentation is to explain the present and future business operation and
strategy of Camo ASA following the acquisition of Statware Inc, whereas Camo Inc, a 100%
subsidiary of Camo ASA, will acquire Statware Inc.
Camo ASA (Camo) is a rapidly growing, international provider of advanced software
technology for IRM (Internet Relationship Management). Camo’s new line of products is
designed for personalized e-commerce and CRM (Customer Relationship Management)
applications, and will allow companies to personalize interactions with customers, and as a
consequence tailor-make the products and services offered to each customer. Camo's
products will improve the quality of the business relationships, such as B2E (business-toemployee), B2B (business-to-business) and B2C (business-to-consumer).
After the merger with Infosense (1999) and the acquisition of Statware Inc, the main markets,
and the majority of Camo's market organization will be located in the US. Camo will
therefore move it 's Headquarter from Norway to the US West Coast this summer (the CEO
will also move). Through this move Camo will strengthen it’s position in the world's largest
economy where the growth of the business intelligence market is the strongest.
Business intelligence is defined as the use of computer software and hardware for business
decision support systems. The root of this emerging market is the growing need for a
company or an institution to efficiently acquire, process and use data to stay competitive.
The size of the business intelligence market was estimated to be USD 2,1 billion in 1998,
- growing at the very high annualized rate of 40%.
The CRM software market was USD 800 mill in 1997 and is projected to grow to USD 4,7
billion by 2001 and USD 10 billion by 2002.
Business description
Camo is the only known provider of dynamic multivariate analysis tools using interactive
web portal solutions for data connectivity and reporting, making Camo an exiting and
potential winner in the Business Intelligence market.
The Internet, intranet and extranet web portal for information is rapidly expanding the
capabilities of enterprises to access data and disseminate information. Few software products
are available with technology to easily access data over the web portal and to apply powerful
predictive algorithms that convert data into information for decision support. This makes
Camo uniquely positioned to capture a significant share of this market.
Through the acquisition of Statware, Camo will gain access to a set of unique web
components and products that will provide for enterprise-wide data access solutions using the
web portal. The historical strength of Camo in model building and processing of real-time
data is combined with this data accessibility technology to deliver powerful, scalable,
customizable and extendible solutions for Business Intelligence.
There are numerous competitors providing traditional statistical solutions for the processing
of large amounts of data. A handful of these also offer multivariate solutions. However,
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Camo offers a range of multivariate solutions including patent pending algorithms that
continuously adapt to today’s dynamic business processes, constantly improving the ability to
provide accurate predictions. The largest opportunity for applications of these new algorithms
is in the prediction of consumer and customer behavior within highly dynamic markets such
as e-commerce. Being algorithm as opposed to database oriented, software applications based
upon these algorithms are true real time prediction tools.
Camo has been a leading business innovator in desktop software tools for the analysis of
complex enterprise data since 1984. The modeling capabilities help the enterprise convert
historical and real-time data into future views of business operational processes. This allows
employees and clients to better understand and manage operational processes for predictable
outcomes that meet optimal levels for quality, consumer satisfaction and profitability.
Camo has developed and patented an exiting new application for e-CRM customer profiling,
the DLO (Dynamic Linked Optimization). One of the DLO products will be applied to
display interactive, dynamic web pages to customers. These web pages will adapt in real
time the content to the predicted needs of the consumer or customer. Since this product is
based upon artificial intelligence that continuously learns, the enterprise can very accurately
classify and, rapidly predict behavior with a very limited amount of information. This makes
it an ideal application for today's highly dynamic commercial markets.
The acquisition of Statware Inc with it’s advanced web based, quality improvement software,
and highly qualified staff, will substantially increase the chance for successful deployment of
DLO based products according to a planned timetable this year.
Business strategy
Camo is planning to maintain and expand traditional operations within the industrial
chemometric with the marketing and sale of existing multivariate data analysis products
( The Unscrambler®).
With the addition of the Statware eQC product line Camo will expand into a growing
customer base for enterprise-wide quality control. Camo will be able to increase sales of eQC
by expanding into European markets through Camo’s established distribution channels.
Further, plans have been established for the rapid integration of The Unscrambler® with eQC.
These strategic moves will greatly strengthen Camo’s position in the B2E market for process
optimization software.
The most important strategic focus for Camo will be to build a network of integrator and
technology partners who will apply Camo’s advanced DLO components and web portal
technology into solutions for B2B and B2C relationship management. Through this network
Camo will build its brand as a leading provider of specialized e-Commerce tools and solution
components.
Summary financial information
Camo's income will be generated from the old and new product lines. Income is generated by
sale of software licenses, training and support and also training of methods and
implementation. The table below shows Camo's actual and forecast profit and loss account for
the period from 1997 until 2002, inclusive of half-year Statware figures for Year 2000
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CAMO ASA
Years to 31 December
Sales
EBIT
EBIT margin
Presentation
1997A
NOKm
7,3
-6,4
1998A
NOKm
13,9
-3,9
1999A
NOKm
19,8
-4,2
2000F
NOKm
42
0
2001F
NOKm
87
4,4
Neg
Neg
Neg
0
4,9 %
2002F
NOKm
172
11,3
6,5 %
(EBIT = Earnings before interest and taxes) Source: Camo ASA:
Market and competition
Following the merger with Statware, Camo will offer two sets of traditional, but sophisticated
software products, and one set of new web based products based upon the DLO technology.
The product portfolios will be offered to three overlapping markets:
•
•
•
The general statistical software market
The B2E process optimization market, including the monitoring and control of
manufacturing, sales and marketing, financial and other company functions
The Business Intelligence market, including B2B and B2C relationship management
(CRM) and the use of customer information for understanding customer needs and to
rapidly respond to those needs.
The largest competitors in the segment for statistical software are the large generalized
statistical software companies. The top seven competitors have revenues in the range of USD
24 to 871 M. These large companies provide a competitive threat to Camo as they offer more
comprehensive analytical capabilities, have broader international distribution networks, and a
stronger brand awareness. The Camo solution is technically superior with a more modern
architecture that uses the web browser and web portal as a universal platform.
Two companies released statistical process control software in 1998, a year ahead of Statware.
However, these competitors have not focused their marketing message on enterprise-wide
solutions, as has Statware. Camo plans to continue this point of difference from these
competitors, and to integrate The Unscrambler® and DLO technology to establish a wider
range of applications for the enterprise.
There are many competitors in the market providing traditional CRM solutions. These
companies are focusing heavily on collection of information and not so much on analysis.
Competitors like E.piphany (EPNY), Net Perception (NETP) and Broadvision (BVSN),
all listed on Nasdaq, are therefore interesting potential partners as well as competitors. Camo
has a superior technical solution, but has yet to develop a strong market position like these
companies.
Investment case
• Camo is a fast growing, internationally oriented solution provider for Business
Intelligence. The combination of Camo's traditional products with sophisticated
dynamic data analysis for process optimization, the web platform made available
through the acquisition of Statware, and the new exiting development and coming
launch of the DLO product re-positions the company as an interesting internet based
CRM solution provider.
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•
The internet, intranet and extranet web portals are rapidly expanding the capabilities of
the company to access and disseminate data. Few software companies have yet to
come to the market with a technology that enables easy access and usage of this data
for various business processes. We believe Camo is now uniquely positioned to
capture a significant share of the Business Intelligence market.
•
The Statware acquisition and the web platform substantially reduce the time to market
for the launching of the new, DLO-based, products into the growing CRM markets.
The move of the company headquarters to the US this summer will position Camo in
the world’s largest economy where the growth of the Business Intelligence market is
the strongest.
•
Camo is an interesting partner for companies operating within the field of
CRM/SFA/Web-consulting for co-operation and/or mergers to further exploit the
international market. Companies the size of Camo operating in the CRM market are
listed on Nasdaq at substantially higher values than companies in Europe
Exit
Based upon the present and planned growth and technical development of Camo, the ambition
is to position the company for a potential IPO in 2001.
An acquisition of Camo by one of the larger, listed, US based CRM or e-commerce software
companies can however not be excluded.
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2.
Presentation
BUSINESS DESCRIPTION
2.1
Introduction
Camo ASA was until recently a Norwegian based software and technology company with
subsidiaries in Sweden and England but limited market activities in the USA. Camo's
traditional operation offered it’s clients advanced software and support for multivariable
statistics and data analysis.
Through strategically important acquisitions and mergers, the sophisticated technological base
of Camo has been substantially supplemented. This now includes the knowledge base that
enabled the development of the DLO, the web-based technology and the establishment of a
strong and growing US business operation.
Today Camo is a rapidly growing, international provider of advanced software technology for
Internet Relationship Management. Camo’s new product line is designed for personalized ecommerce and CRM applications, and will allow companies to personalize interactions with
customers, and as a consequence, tailor-make the products and services offered to each
customer. Camo's products will improve the quality of business-to-employee (B2E),
business-to-business (B2B), business-to-partner (B2P) and business-to-consumer (B2C)
relationship processes.
Through the current acquisition of Statware Inc and the merger with Infosense in 1999 the
main market, and the majority of Camo's market operation will be located in the US. Camo
will therefore move it's Headquarter from Norway to the US west coast this summer (The
CEO will also move). Through this move Camo will strengthen it’s position in the worlds
largest economy where the growth of the business intelligence market is the strongest.
Business intelligence is defined as the use of computer software and hardware for business
decision support systems. The root of this emerging market is the need for an enterprise to
efficiently acquire, process and use data to stay competitive. The businesses are actively
searching for solutions and are willing to invest heavily to stay competitive. The size of the
business intelligence market was estimated at USD 2,1 billion in 1998, - growing at a rate of
40% p.a. The CRM software market was USD 800 mill in 1997 and is projected to grow to
USD 4,7 billion by 2001 and USD 10 billion by 2002.
2.2
Commercial history
Camo was established in 1984 in Trondheim by Prof. Dr. Arne Tyssø from The Norwegian
Technical University. Camo has traditionally been a technology oriented company with more
focus on technology than on sales and marketing. The main focus was multivariate analysis
and experimental design. The software package “The Unscrambler” has become the de facto
industry standard. Camo’s customers representatives typically had PhD’s in chemistry and
used the software for analytical chemistry.
In order to stimulate growth, the company started a co-operation with Tine Norske Meierier
(the largest Norwegian dairy group) and Matforsk (a Norwegian food research company) to
develop a guidance system for experimental design and multivariate analysis for product
development in the food processing industry. This project required substantial resources and
the company invested in the development of the new software package “Guideline”.
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Camo secured NOK 15 mill in funding from about 100 Norwegian investors during the fall of
1996 at NOK 17 per share. The funding was arranged based upon a very ambitious business
plan. The company hired a new CEO late 1996 and started a sales office in Oslo in February
1997. The expected sales growth did not materialize and the shareholders elected a new
Board in June 1997 which subsequently hired Bjorn Skare as CEO in September 1997.
The company intensified it’s focus on completing the “Guideline” software which was
launched in February 1998 and also started the process of changing focus from technology to
sales and marketing. Camo acquired an English company in May 1998 establishing a strong
foothold in the UK market. Group sales doubled in 1998 and the positive trend has continued
since. In May 1999, the company established a subsidiary in Sweden and in June 1999 Camo
merged with Infosense Inc (renamed Camo Inc) a US based company.
The Camo merger with Infosense Inc resulted in both a USA presence for the sale of Camo
software as well as the expansion of services and technology for applications in business
intelligence, specifically consumer and market research. Most of the Infosense customers are
in the packaged goods sector. Most of Camo Inc's customers are Fortune 1000 customers in
the chemical, pharmaceutical and food sector.
In February 2000 an initial round of equity financing was secured from a combination of MVI
partners and shareholders through a rights issue.
In March 2000 Camo ASA signed a letter of intent to acquire Statware Inc for a combination
of cash and Camo ASA shares. This transaction includes the intent to merge the operations of
Camo Inc with Statware Inc, and to move the corporate headquarters from Oslo to the US.
Statware brings to Camo technology to acquire data anywhere in the enterprise accessible
through a web portal. In addition, Statware brings to Camo the Statit product line including
both desktop and web products, and web product components. Also in March 2000 Camo
applied for a US Provisional Patent on new artificial intelligence technology with applications
for Business to Customer solutions
Statware Commercial history
Founded in 1983, Statware Inc is a leading developer of quality improvement software
technologies for the manufacturing and healthcare markets. Statware provides products,
which assists users in understanding and managing processes and their outcomes for optimal
quality, consumer satisfaction, and cost containment.
The work performed by the company to date has been specific to providing quality control
and statistical management software to “early adopters” within the manufacturing and
healthcare markets. During 1998 Statware developed an internet/Microsoft version of its
main product Statit. The Statit-eQC is a dynamic web based application that serves the
customer quality information portal.
Statware has increased its workforce by 50 % in the last 18 months, employed all its free
funds, and has also drawn extensively on credit lines to support the development of the new
web based products.
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CAMO ASA
2.3
Presentation
Legal structure
Camo ASA is a limited company registered in Norway. Camo ASA is both the holding
company of the group subsidiaries in the US, UK and Sweden, and the operating company of
the group activities in Norway. Statware Inc will merge with Camo's US based subsidiary
CAMO ASA
CAMOMETRIC
AB
CAMO Ltd
2.4
CAMO INC
Company organization
CAMO has a total of 46 employees in four countries with a very high level of competence.
The classification of academic background includes 5 PhD's and over 30 Masters degrees.
The following table shows the present and planned increases in staff for the Camo group.
Camo Inc.
Current
Statware
Inc.
Current
Camo Inc.
Merged
12-00
Europe
Current
12-00
Current
12-00
Admin
3
3
7
4
4
10
11
Sales &
Mktg
3
6
10
4
4
13
14
Technical
Support
0
6
6
5
6
11
12
R&D
2
4
13
6
13
Research
Services
4
2
7
6
7
Total
12
21
43
46
57
13
Total
14
2.5 Management
Bjorn Skare, Chief Executive Officer. Skare holds a bachelor degree in management from
Boston University. He worked in management and sales marketing for international
companies for 14 years and as an executive for 12 years, both in the US and Europe. He has
worked with Camo since 1997.
Dr. Dave Lundahl, Chief Technological Officer. Dr. Lundahl has a Ph.D. in Food science.
He worked in the packaged consumer goods industry for many years. He worked in product
development and consumer research/sensory analysis at leading international companies. He
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is currently Adjunct (courtesy) professor at Oregon State University and was previously
President of Camo Inc. He co-founded InfoSense, Inc.
Tom Simas, President American Operations. He has a Master’s degree in Business
Administration. Mr. Simas worked in sales and marketing for many years and has been
President of Statware Inc since 1992.
Calle Bøgh, President European operations. He has a Master’s degree in Business
Administration. He worked with international sales and marketing for 12 years at companies
like Vingcard and LM Ericsson. He has worked with Camo since 98.
Dan Schoeber, Chief Marketing Officer. Mr Schoeber founded a software company that
eventually merged with Statware. He has worked with the founder of Statware (Steve
Fullerton) since the mid 1980’s. He has expertise in both software engineering and in
sales/marketing. He was a lead engineer for the eQC product and later became the Statware
eQC Product Manager.
Steve Fullerton, Chief Software Architect. Mr. Fullerton is the founder of Statware. He has
a MS in Statistics with expertise in automation of data acquisition, conversion and analysis.
He was the Statware Technical Manager.
Kenneth Davidson, Managing Director Camo Ltd. Mr. Davidson is an Electronics
Engineer. He worked in sales and marketing of medical products for 15 years and has worked
with Camo since May 98.
Other key employees
Dr. Rolf Bergmann, Senior consultant Camometri AB. Dr. Bergmann has extensive
industrial experience in the pharmaceutical and chemical industry in Sweden. He has worked
with Camo since March 99.
Dr. Jim Kolsky. Dr. Kolsky has a Ph.D. in statistics and has worked in consumer research for
3 ½ years. He has worked with Camo since June 99 and with Infosense for 3 years.
Shelly Lundahl. Mrs. Lundahl has a MS in Food Science with 20 years experience in
product development and consumer research. She co-founded InfoSense, Inc. with Dr. David
Lundahl.
Gregory Stucky. Mr Stucky has MS in Food Science with an emphasis in sensory and
consumer research and has worked with Camo for 3 ½ years.
Dominique Guyot. Ms Guyot has Masters degree in mathematics. She worked at L’Oreal
and other French companies for 9 years. She has worked with Camo since 95.
Dr. David Plaehn. Dr Plaehn has a PhD in Mathematics with an emphasis in neural network
and artificial intelligence.
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Dr. Tim Fiez. Dr Fiez has PhD in Crop Science and MS in Computer Science. He joined
Camo in March 2000.
New Camo Organisation
Bjørn Skare
CEO
Camo Inc
Tom Simas
Camo Europe
Calle Bøgh
CTO
Dr. Dave Lundahl
CFO
TBD
Marketing
Dan Schober
Camo Ltd
K. Davidson
Camometri AB
Dr. Bergmann
The above organizational chart shows the Camo structure after the acquisition of Statware
Inc.
Board of directors:
Chairman:
Harald Mikkelsen
Partner Business consulting
Dr. Dave Lundahl
Pål Prøitz
Pål Raaum
Truls Sanner
President of Camo Inc, see above
Partner MVI, engineer and equity investor
Partner MVI, MBA, Phd, Financial and CEO positions
Independent business and investment advisor
Members:
2.6
Product Portfolio
Camo has traditionally sold statistical modeling software to customers in R&D and
manufacturing, and services to product development and marketing research functions within
the enterprise. Since 1999, Camo has been shifting its focus from selling software and
services to selling B2E, B2C, and B2B solutions to both traditional brick and mortar and ecommerce enterprises. These solutions are designed to help the enterprise utilize historical
and real time data for the optimization of manufacturing, product development, marketing
research and CRM processes. The underlying theme of Camo solutions is processing data
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into valuable information such that the enterprise can monitor, track and predict the outcome
of business decisions.
Statit Product Line
With the acquisition of Statware, Inc. a platform now exists among Camo products for
acquisition of historical and real time data with is accessible through a web portal (internet,
intranet or extranet). This accessibility to data has positioned Camo to establish itself as a
leader in data processing with its combination of existing process modeling for optimization
of B2E processes and new advanced modeling for optimization of B2B and B2C processes.
Camo solutions are available for users to view reports using a simple web browser. These
reports contain information from analyses on historical and real-time data, as well as from
predictions generated from complex models. This revolutionary web reporting system can
also automatically generate email notifications based on time and data analysis triggered
events.
Basic data analyses come from the Statit engine. This engine has been engineered in part or
in full into three desktop products (Statit Professional QC, Statit Custom QC, and Statit
Express QC), a web product (eQC), and a web component (eServer QC).
The Statware family of quality improvement software products are all in detail described on
the Statware web site www.Statware.com. The Statit group of products all aim to help the
customer to access, process and present quality control feed back in an easy and
understandable way to both internal and external users
Statit e-QC. The enterprise wide solution. A dynamic web based solution that supports
quality improvement at every level of the enterprise. The software will enable the user to pull
together information from a wide array of corporate databases, and bring together all of the
important information and documents into a single, centralized application for decision
making. This info can be accessed from anywhere through the net, and is interactive/online
updated. The different groups within the enterprise are informed through Statit –e QC how
well their processes are performing and meeting established goals and criteria.
Static e – Server QC. For the Value added reseller or Application developer. A software
development kit used to design quality improvement and statistical analysis solutions, and to
integrate them into new or existing applications..
Static Custom QC. For the advanced user or developer. A completely customizable quality
control solution that enables the user to create custom procedures, menus, and dialogs to
match his needs.
Statit Professional QC. For the frequent or intermediate to advanced user. A full-featured
flexible, analysis tool for organizations with continuous quality improvement objectives
Statit Express QC. For occasional or entry-level users. Designed to streamline the process
of analyzing quality improvement data for those working independently
Statware also offers extensive product support both a variety of technical support as well as
solution services for custom programming and consulting and also training and educational
courses
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The Camo Product line.
The Unscrambler: The de facto industry standard for multivariate analysis and experimental
design for industrial applications. The product was first released in 1986. The product has
been sold to 2000 customers in 46 different countries.
The traditional application is spectroscopy, but the number of applications has increased
steadily to other analytical applications with many variables and large amounts of data. Most
of the licensee’s have master degrees or PhD’s in chemistry or statistics. The Unscrambler®
has a market share of about 45 %.
The Unscrambler Designer: This is a new software product for experimental design, a rapidly
growing market. The product will be positioned attractively and will attempt to capitalize on
the Unscrambler brand.
The Guideline+: This is a unique interactive package designed for product development or
process optimization in the food industry. It is based upon experimental design and
multivariate analysis techniques. The software is intended for people who are primarily
engineers. It has an extensive guidance package that helps the user define the problem and
structure the work in order to resolve the defined problem in a structured and object oriented
fashion employing advanced statistical methods.
InfoSense Data Automization: This software package helps automate the analysis part of the
sensory data analysis. The potential customers for this package are companies performing
sensory analysis. This software package was launched during the fall of 1999.
Consumer and sensory research: Camo has a network of food sensory and product testing
companies in the US and internationally who help food consumer products companies test
existing, competitive and new products. The testing often require dedicated facilities and
extensive analysis to maximize the value of the data collected
Statistical analysis: Camo has exceptionally well qualified statisticians on staff who perform
statistical analysis. These services are either provided to end users (mostly consumer product
companies in the food industry) or to sensory testing companies.
Training and consulting: Camo has developed and offers public and in-house training courses
in experimental design, multivariate analysis and statistics. The courses have been
continually improved over many years and have attendees from many countries including
some of the leading companies in their fields.
Web System Solution Components:
Developed models can be used to process real time data into predictions or classifications
using the On-line Unscrambler® Predictor (OLUP) and On-line Unscrambler® Classifier
(OLUC), respectively. A solution has now been prototyped where the eQC product can launch
the Unscrambler® for the user to build models, and for the user to schedule OLUP (see
ePredictor below) and OLUC (see eClassifier below) to predict and classify real time data.
In addition, Camo has been developing a series of artificial intelligence (AI) algorithms that
will allow for building prediction and classification models automatically as data is “fed
through.” These AI algorithms are being engineered into system solution components that
can be controlled by and interfaced to eQC and eServerQC. The value of these AI systems
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and components is that the combined technology can be used to build powerful B2E, B2B and
B2C solutions. A brief description of these components follows:
ePredictor Component
The OLUP technology is being engineered into a web component, which takes the
prediction models generated in the Unscrambler® and predicts the outcome from on-line
(real-time) data. The component has been engineered into a solution prototype using eQC
and ePredictor. The solution allows user to schedule prediction updates from multivariate
data acquired through a web portal (historical or real-time). A solution will be
commercially available by July 2000.
eClassifier Component
The OLUC technology is being engineered into a web component, which takes the
classification models generated in the Unscrambler® and classifies input “objects” on the
basis of multivariate data collected in real-time. The component has been engineered into
a solution prototype using eQC and eClassifier. The solution allows user to schedule
classification updates from multivariate data acquired through a web portal (historical or
real-time). A solution will be commercially available by July 2000.
eDynamic Predictor Component
Using a recursive PLS algorithm, a new AI technology component is under development to
generate PLS models by feeding in dynamic (real-time) data. As each data point is
acquired, the model is updated. Therefore, a model can learn and change dynamically
without having to retain any data. The resulting state of the model can be queried and used
to learn about the data fed through the component. The recursive PLS algorithm can also
“forget” data allowing for the model generated to apply to data fed through the system over
a period of time (rather than just ongoing learning). A solution prototype will be
commercially available by July 2000.
eDynamicClassifier Component
Using a self-organizing algorithm, a new AI technology is under development to generate a
classification model by feeding in dynamic (real-time) data. As each data point is
acquired, the model is updated. Therefore, a model can learn and change dynamically
without having to retain any data. The resulting state of the model can be queried and used
to learn about the system under study. This model can also “forget” as well as learn. ). A
solution prototype will be commercially available by July 2000.
eDynamicOptimizer Component
Camo has applied for a US Provisional Patent Application for the protection of an
innovative AI technology termed Dynamic Linked Optimization (DLO). This technology
has exciting opportunities for B2B and B2C relationship management as well as for other
applications. For B2C solutions, the DLO technology can optimally predict product
features or services that will fit the needs for a customer with a specific profile, or to
determine the optimal target customer profile for with a specific good or services.
This AI technology can both learn and forget, giving it the capability to develop adaptive
models from online data, models that are constantly learning or representative of the state
of consumers within a window of time. By feeding this AI component “web clicks”
through a web portal, e-commerce solutions can be engineered to predict and respond
instantaneously to customer needs. The DLO technology can also be applied to develop a
new generation of personalized, rapid internet search engines.
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This development is currently funded internally and through support by a major
international flavors and fine fragrances corporation in return for limited exclusivity in use
for three years. The first application is scheduled for release in the 3rd quarter of 2000 as
an on-line service.
Competitive technology exists, specifically collaborative filtering and bayesian
collaborative filtering as applied to internet search engines. However, this technology is
based upon segmentation and nearest neighbor associations for choice. The DLO
technology is a learning technology, and can simultaneously model and segment
consumers and the products/solutions that satisfy consumer needs more quickly. The DLO
technology is also a more generalized solution that has a much wider range of applications.
eDynamicWebPageOptimizer Component
Same functionality as the eDynamicOptimizer component except that it provides a call out
to the web server to logically distribute and/or alter web page displays to customers once
they have been classified by the DLO algorithm. The ability to create web pages as
surveys will provide the Consumer and Marketing Research Services group with an
advantage in the selling of unique and powerful new methods. It will also open up
opportunity for web-focused research system solutions to be sold to consumer and
marketing research organizations. This component is scheduled for commercial release by
4th quarter 2000.
2.9 Market related activities
Camo /Statware will position itself as a best-in-class solution provider in its key markets. Camo
will market directly to its target markets, using the following mix of marketing media and
promotions trade shows, road shows, editorial copy and advertising, direct mail, and internet
advertising and strategic placement.
Camo has during the last two years invested in market oriented activities within the following
areas:
• New graphical profile, new packaging of products, brochures, manuals etc.
• CD rom campaign with information on new products to existing and new customers.
• Market-analysis. What do Camo´s customers want from Camo in the future.
• Direct mail, newsletters, seminars.
• Business exhibitions, new web page, the Unscrambler users club.
2.8 Customers
New products
Camo's recently developed a new line of products integrating the DLO technology with the
web based quality control software from Statware is the commercial and technological base
for fast and profitable expansion.
Camo's main customers/partners for this line of products will be CRM and e-commerce
solution providers. Camo's client companies will be market channels for Camo, and will use
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CAMO ASA
Presentation
Camo products of superior technological quality to improve their own products. The typical
end user is larger utility companies, e-commerce sites, telecommunication companies and
financial institutions.
The CRM solution providers like E.piphany, Net Perception, and in Scandinavia, Caesar,
Super Office and Million Handshakes have built their services on the development and
marketing of application software. CRM companies develops products for use in
establishing, maintaining and improving customer relationships across internet and traditional
marketing and distribution channels.
The e-commerce solution providers like Oracle and IBM, traditionally building their product
portfolio on data-bases has developed a strong position in selling e-commerce solutions to ecommerce companies. These giants do represent another interesting partner/customer for
Camo's new products. Another customer group is ERP companies like SAP and BAAN also
focusing large resources on e-commerce applications.
Existing products
Camo has more than 2000 customers in 46 countries of which 1500 are active, the majority
are users of the Unscrambler product. The customers are divided in three groups
Corporate customers are customers who see chemometric as a method for enhancing their
competitive advantage. They have chosen Camo as their partner to help implementing the
methods in their R & D and process optimization functions. Camo typically provides
multiple licenses, training and consulting and have longer term relationships. Clients are
large international chemical, pharmaceutical, food or industrial companies.
Software customers are companies or institutes buying a single user license. The user is
typically a scientist with profound application knowledge, but limited commercial influence
in the organization. Also single users are found in academic institutes. These customers tend
to be in a wide variety of industries and the companies tend to be large, Fortune 1000 type
companies.
The major factor influencing market growth is the training needed to benefit from product
application. The barrier of entry is high and it is time consuming to expand the market.
It is important to train the customers early in the use of the application. Participants on the
training courses are excellent carriers of expanding software sales. Therefore the training
courses are used to increase the number of potential users of the Camo products.
Statware typically establishes long term sales agreements where the prices are set while no
volume commitments are given. The major customers by market segment include:
Consumable goods:
Durable goods:
Electr & Telecom:
Government:
Healthcare:
New Zealand Brewery, Stroh´s Brewery
Black & Decker, Columbia Chemicals, Gallo Glass
HP, Cellular One, Intel, Mitsubishi, Motorola, Sun M, TI..
Honywell, U.S Dep of Defense, U.S Forest service
St Josephs Hospital, Baxter Health Corp
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CAMO ASA
Presentation
Camo intends to focus on cultivating existing customer relationships to i.e. HP and IBM,
expanding the customer relationship to include the new line of products for Business
intelligence.
2.9 Sales and Distribution
Camo will shift its emphasis from direct sales to selling through partners and alliances. In the
sale of B2E solutions for business process optimization, Camo will develop a network of
integration and technology partners. The profile of the integration partners will be highly
specialized.
European Approach
In Europe, Camo will focus on three business categories: The Unscrambler® Product Line,
the B2E Process Optimization solution and the B2C solution. The Unscrambler® Product
Line will focus on keeping our existing business going. However, the relative importance of
this focus will decrease as Camo becomes successful selling other solutions.
For solution sales, Camo will focus on approaching the manufacturing department and /or the
marketing department at a top management level within the companies.
In Scandinavia and the UK, Camo will sell products and solutions direct to customers from
the Camo offices in Oslo, Stockholm and Newmarket.
In Europe Camo will sell through distributors offering solutions, where Camo is supplying
the products and the distributors supplying training, set-up, configuration and technical
support of the solution. Camo will offer non-exclusive agreements and start with existing
distribution network for B2E solutions.
The B2C solutions Camo will sell through distributors, focusing on customers manufacturing
consumer goods (traditional “brick and mortar”companies), who are involved in e-commerce
(“.COM” companies), or who use web portals for accessing and using information available
through a public or private web portal.
In addition, Camo will look for partners that can include our product modules in their
solutions.
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CAMO ASA
Presentation
North American Approach
For the US market, the main focus will be on optimization of B2E processes , between businesses
(B2B), and business to customer (B2C).
Camo will focus on process optimization, while maintaining the current business for The Unscrambler
product line.
Process Optimization
For process optimization sales, the target group is executives and mid-level managers of sales,
marketing, production, and manufacturing departments of Fortune 1000 companies.
Sales Channels
• Direct (Camo will benefit from each of the existing customer bases) and through integrator partners.
Integrator partners will market and sell our complete solutions, and offer consulting and training.
• Components sales to technology partners (technology partners use the Camo components to build
their own solutions).
Unscrambler product line (desk top)
Camo will continue to support the existing product line, through dealer recruitment and direct sales
2.10
Shareholders
Camo ASA have approximately 650 shareholders, among these are 101 MVI partners. The
MVI group and the shareholders resulting from the US mergers are large owners.
Shareholders
MVI Investors (incl option)*
Michelle Lundahl
Dave Lundahl
AIG Private Bank
Sethia London Ltd
Gjensidige Forsikring
Isafe Holding
AVIT Investment Ltd
JARAS Invest AS
Skagen Verdipapirfond
Lincoln Trust Co.
Others
Total
26,9%
10,8%
10,3%
4,5%
1,9%
1,9%
1,5%
1,4%
1,1%
1,0%
0,9%
37,8%
100
Total shares 5,29 mill, options 1,0 mill
* MVI investors have a right to subscribe for 500.000 shares at NOK 10 per share at 01.09.00
19
CAMO ASA
3.
Presentation
MARKET AND COMPETITION
3.1
Market Opportunity
Camo has traditionally served analytical chemistry customers with leading-edge software
tools and services. Much of the technology developed by Camo can be applied to enterprise
information technology needs. The internet is rapidly becoming the standard platform for
enterprise information accessibility and connectivity. This is providing Camo with a huge
opportunity to apply it’s technology to an expanded scope of company information usage
needs. Therefore, Camo is in the process of rapidly changing it’s focus towards internet-based
model building automation with applications to streamline business processes.
3.2
Markets
In addition to the traditional market for Camo and Statware product lines, there are two major
markets of business needs where Camo plans to be prominent: business intelligence and
business process optimization.
Business intelligence includes applications for B2B and B2C Relationship Management such
as the use of customer information for understanding customer needs and to rapidly respond
to those needs through technical development and commercialization of goods and services.
Camo’s superior technology in modeling information can serve both markets given an
appropriate strategy for commercialization of software tools and services.
Business process optimization includes business-to-employee (B2E) processes, including the
monitoring and control of manufacturing, sales and marketing, financial and other enterprise
functions.
Camo Markets Served
Business
Intelligence
Tools
Business
Optimization
Tools &
Services
DLO for
personalization
& CRM
Unscrambler
for Total Quality
Management
B2B
B2C
Instrumentation
Companies
Financial,
Manufacturing,
Engineers
Business intelligence is defined as the use of computer software and hardware for business
decision support systems. The market size was estimated at $2.1 billion market in 1998, and
growing 40%. This includes market research, data mining, R&D, and manufacturing process
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CAMO ASA
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control. The Meta Group estimates the use of computer software and hardware for Customer
Relationship Management (CRM) was $800 million in 1997, can be $4.7 billion in 2001, and
expand to $10 billion by 2002, with an annual growth rate of more than 50%.
This rapid growth is resulting in unprecedented market trading and Market Capitalization’s.
There are examples of companies the size of Camo (in revenues) that are achieving market
capitalization’s in the hundreds of millions of dollars if they can provide solutions to the
enterprise for improving their within business (WB), business-to-business (B2B) and
business-to-customer (B2C) processes.
E-commerce
“High touch, high intimacy” “Software for the customer economy” “Get, Keep, and Grow
customers” “ One – to – one marketing” The idea of getting to know what your customer
wants and needs is not very new. What has happened; however, is that the electronic
business, e-Commerce, has found a unique opportunity through the electronic channel, to use
tools to manage relationships on a more interactive basis. Most customers respond better to a
marketing message that has been uniquely crafted toward them. In fact, the best is the
anticipation of what the customer wants. Software is now being marketed and sold to assist in
this unique marketing channel and is being embraced by the most senior level management.
But why now, why in the electronic area?
In the past a good sales person either in the business-to-business or business-to-consumer area
could overcome ineffective marketing efforts of management, while other good sales people
could enhance a superior program with their skills. Through the electronic channel the text
and feel of the web page must convey much of the warmth of the experience, - without it the
potential consumers are gone (within eight seconds) for perhaps never to return.
As a result, the internet economy has created some opportunities for new forms of software
that facilitates and creates the environment that connects the customer and the product/
service, formerly left to marketing campaigns, sales people, or to experience with the product
(which required time). This new economy has created much beloved brands like AOL,
Amazon, and e-Bay (with an aggregated market capitalization of $200 billion). Powering this
“beloved-ness” are software routines that choreograph and anticipate moves of the
consumer/customer.
In this area lies an opportunity for the new software products being developed by Camo, DLO
– dynamically linked optimization, and the existing suite of optimization tools.
The size of the computer software market is approx. USD 60-70 billion in revenue with a
world wide market capitalization of more than USD 1,100 billion. The largest, US-listed
software companies, “Red Herring 06/2000”). Of this, the current (1999) market size for
customer relationship management sales and services was USD 4.45 billion and is projected
to grow to USD 21.8 billion by 2003. Research suggests that the B2B market turnover with
situations like e-Marketplaces should be about USD 2.7 trillion by 2004. The marketplaces
will be populated with features like auctions, bid systems, and exchanges.
Why is this market perceived to be growing so fast? The technology is promising to
transform the way companies do business. It appears that the early adopters are getting big
rewards. Schwab has managed to dwarf all other brokerage groups. Amazon has won the
first round of the battle with barnesandnoble.com. Anderson Consulting, who is now
fashioning itself as an electronic consultation firm, estimates that with a modest 10%
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CAMO ASA
Presentation
improvement in customer management operations, a USD 1 billion business can reap USD 40
to 50 million a year in pretax profits. Assuming the billion-dollar company utilizes the
information!
Market Trends
The internet market has been growing since 1994 following the development of the browser.
As the ease with which individuals and corporations can navigate the internet become greater,
the opportunity to utilize this new channel expands. There is a lot of talk about the first
mover advantage. First mover means the company that enters the market with a “new” idea
first. While the first mover advantage is important, whom the company moves with, and
whom they have as part of the company, becomes equally important. For example, a
competitor to BroadVision, Open Market, has been a public company in the same sector since
May 1996, yet it had sales of 83 million last year (33.7% growth relative to BroadVision’s
126.9% growth on sales of USD 115.5 million) and a market capitalization of USD 706
million relative to BroadVision’s 12 billion cap. Marketing of the brand and alliances that are
formed with partners, market makers, and directors and their associates appear to play a role.
What is becoming a critical demand is having complete, “integrated”, systems. Nortel is
completing its purchase of Clarify so that it can have a complete solution to a call center.
Basically a plug and go solution – when this happens, Nortel begins to compete with Siebel or
Sapient, or Anderson Consulting.
The need to have the complete solution is leading to partnerships, alliances, and mergers.
This trend will definitely continue as companies try to have the best and most complete tool
chest and have market capitalization to help drive the relationships.
BroadVision has combined the idea of a complete solution with some solid tools. This
company has become the platform for the server applications portion of the
customer/consumer solution.
Target Markets
Camo’s primary market is solution providers who must provide their customers with
effective, flexible and compelling ways to convert data into knowledge. This includes
analysis of historical data as well as using modeling techniques to predict future outcomes.
In Business-to-Employee (B2E) Process Optimization, client prospects will be
manufacturing information system vendors, laboratory information management vendors,
process control system vendors, manufacturers, food and consumer goods companies, data
warehouse vendors and consultants and database OEM's.
In Business-To-Business (B2B) Process Optimization, target clients are supply chain
management vendors, e-manufacturing vendors, service businesses and finance operations
Secondary targets include industrial chemometrics and users of econometrics.
Target Markets, Long Term
Over the longer term, primary Business-To-Customer (B2C) Process Optimization
The target markets will be CRM applications and e-Tailers. Targets for Business-to-Customer
(B2C) Relationship Optimization Processes are CRM Application Service Providers, Data
Warehouse Vendors and Consultants, E-retailers and Database OEM's
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CAMO ASA
Presentation
Industry Participants
The technology industry CAMO is looking at has:
• Consulting firms – both business and internet. Some are integrators; many are also
becoming venture capital companies.
• Software companies – large, small, and in – between. The businesses are both
personalization and technical.
• Hardware companies that are supplying networking and communication devices.
• Diversified service companies with market and business research services
The boundaries between the companies are beginning to blur. Camo’s direction with respect
to software, services, and knowledge management creates an opportunity for it to compete
and/or partner with all of the above industries. It is a broad field, however.
3.3
Partners and Business Relationships
Market analysis indicated importance for selecting and establishing partnerships with key
industry movers. For the B2E process optimization market, Camo will be the number two
mover in SPC software delivered through a web portal. Achieving a distribution network of
at least 12 in the US and at least one in each major country in Europe would help establish a
network on par with the first mover. At least one major strategic partner may be necessary to
quickly build this distribution network. This should be done by aggressively building a
program for display at technical trade shows, and by taking steps for building brand
awareness. As most companies liking the concept for eQC, they will most likely search for at
least two solutions for comparison.. Brand recognition therefore will be critical to being one
of the two. Then Camo can compete on technical superiority.
For B2B and B2C relationship process optimization, it is clear that Camo needs to partner
with integrators or consulting firms that develop the specifications for solutions, and can
provide training. These partners will be critical to Camo’s success in selling solutions.
Developing a program for alliances, technology partners, and business partners is the
foundation of the business propositions of all the advancing e-Commerce companies. Below
is a list of potential key partners for Camo:
•
•
3.4
Technology (OEM) partners – BroadVision, E.piphany, WebTrends, Engage,
Broadbase, IBM, Microsoft, Open Market
Development (Integrator) partner – E.piphany with respect to the eQC initiative;
WebTrends, Microsoft
Competition
The largest competitors in the segment for statistical software are the large generalized
statistical software companies. The top seven competitors have revenues in the range from
USD 24 to 871 M. The large companies have an advantage over Camo by offering more
comprehensive analytical capabilities, broader international distribution, and stronger brand.
The Camo solution is a more modern architecture, using the universal platform, - the web
browser and the web portal.
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CAMO ASA
Presentation
In the B2E market using web portal technology in process control, two companies released
statistical process control software in 1998, a year ahead of Statware. These competitors are
not focusing their marketing message on whole-enterprise solutions, as does Camo.
There are many competitors in the market providing traditional CRM solutions. These
companies are focusing heavily on collection of information and not so much on analysis.
Competitors like E.piphany (EPNY), Net Perception (NETP) and Broadvision (BVSN),
all listed on Nasdaq are therefore interesting potential partners as well as competitors. These
companies have less developed technical solutions for the CRM challenges while they have
developed relatively strong market positions.
4.
STRATEGY, EXPANSION AND DEVELOPMENT
Camo’s vision is to establish a worldwide commercial leadership in the development of
information analysis technology and to dominate commercial applications that help improve
business processes.
Camo has a four-part strategy.
The first focuses on maintaining it’s current market share in industrial chemometrics and to
extend The Unscrambler® brand into different vertical markets. New extensibility features in
The Unscrambler® will empower skilled engineers and scientists in academic, government,
and industrial research organizations, and equipment manufacturers to add value to broader
segments within the enterprise. Camo’s network of highly skilled “power modelers” with
expertise in different vertical markets, can now author advanced applications available only
through The Unscrambler®. These applications are expected to greatly enhance the value of
The Unscrambler® to its users. Camo and its associates of power modelers will educate and
train a new generation of chemometricians.
The second strategy focuses on expanding the Unscrambler business. By marketing to
prospects that will benefit from multivariate data analysis such as econometrics, finance, and
market research, Camo can leverage existing products.
The third strategy focuses on B2E process optimization. With the addition of the eQC
product, Camo now has a powerful, soon-to-be standard platform and a respected and
growing customer base in enterprise-wide quality control. Camo will expand into enterprisewide process optimization markets using eQC, The Unscrambler product line, and new
product modules now under development.
The fourth most important strategy focuses on building a network of integrator and
technology partners who will apply Camo’s advanced DLO components and web portal
technology into solutions for B2P and B2C relationship management. Through this network
Camo will build its brand as a leading provider of e-Commerce tools and solution
components, becoming an attractive partner for CRM and e-commerce solution providers.
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CAMO ASA
Presentation
The concept of CRM has grown strong during the last couple of years, and is not a new
business as such. CRM has to do with co-ordination of events/techniques and methods in
order to create, develop and maintain long-term customer relationships.
CRM can be compared to a business philosophy where attitudes, behavior and employee
cultures are bricks upon which the corporate ability to change is built. What are needed are
practical applications of how customer relations are established and kept alive, and how the
company systemizes the personal and digital information gathered in a client database.
Positioning and marketing strategies
Camo positions itself as the premier technology supplier for business process optimization
and business intelligence components. Camo is a company-wide solution provider and critical
business intelligence/CRM component OEM partner. Camo will differentiate itself from
competitors with it’s sophisticated technologies and awareness of customer needs.
In marketing research and testing, Camo will pursue research efforts in market intelligence,
product improvement, new markets/products and company and product positioning, branding,
and naming,
Business-to-Employee (B2E) Process Optimization
Camo will build market share as rapidly as possible, both in the US and in Europe. Solutions
that help the company achieve increased productivity and efficiency can increase share of the
USD3 billion market expected by 2003. Although the market in the US is larger than
Europe’s, 40 percent of this growth is expected to come from Europe, which is at least a year
behind in technology. Camo can use it’s current recognized brand in Europe to position itself
for rapid growth in these markets.
Business-to-Business (B2B) process optimization for procurement
The natural next step is to expand into system solutions that enhance the suppliermanufacturer relationship. Motivating the manufacturer to require its supplier to purchase
solution components might help expand market share
Business-to-Customer (B2C) relationship optimization processes.
The B2C relationship process optimization is the largest opportunity for CAMO. Critical to
success in this area is partnering with the right companies, earning their respect, and
providing valuable solutions.
The DLO technology being developed is ideally suited to serve as the “central processing
unit” (CPU) of the B2C solution. Camo solutions will be able to provide more than just data
access and display through the web portal to manufacturing; the new system solution will
bring value to marketing and market research. For B2C relationship process optimization,
Camo needs to partner with integrators or consulting firms that develop the specifications for
solutions, and can provide training. Developing a program for alliances, technology partners,
and business partners is a top priority as Camo enters this market.
For partners needing graphical analysis and reporting, Camo will primarily be building
market share, as the Camo CPU will offer a quick-to-market option for compelling data
analysis, reporting and predictive modeling capabilities. Rather than developing analysis
capabilities in-house, solution providers can concentrate their resources on the core
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CAMO ASA
Presentation
application, and integrate the Camo CPU into their applications to provide computational and
reporting needs.
Camo will compete by differentiating its product/service offering, creating unique category
such as the InfoCPU for business process optimization; providing cost-effective and/or
critical technology that cannot be found elsewhere, such as supply technology to CRM
application providers; and supporting technology with services and expertise that create a
partner relationship with customers for mutual long-term benefits.
5.
RISK ANALYSIS
5.1
Risk analysis
Camo is in the middle of a process of change, both with respect to the physical move of head
office, - the new strategic focus on the Business intelligence market, and the implementation
of the different company cultures after the recent mergers and acquisitions. If Camo succeeds
in launching their new DLO products commercially, there is high probability of a strong
growth in turnover and profitability.
Some critical risk factors may be:
• Time to market. Camo must be able to deliver their new product line (DLO) in time
because of the rapid growth of competitors within the business segment Camo is operating.
The acquisition of Statware has substantially reduced the risk by reducing time to market
for the DLO based product line.
• Business strategy. Camo must further develop their business strategy for channeling the
new products and new markets. Camo must be able to determine to whom and how the
new product is to be sold and to further develop its distribution network.
• The organization must be able to adapt to the new products and markets. The
accumulation and build up of competence must develop further and fast. There is a risk
factor involved in having company cultures traditionally focusing on R&D and
manufacturing, while the new group strategy aims at business intelligence
• The launching of the new products into the new markets must be critically analyzed and
planned as to decisions of importance. Target groups, market-mix, marketcommunication and branding are some of many aspects.
• It's is a challenge to keep organizational efficiency and focus on existing clients and
products. There is a great opportunity to expand business to existing clients with new or
further developed products.
• There is always a risk of complications when a company moves its headquarter. In addition
there is an organizational/management challenge to integrate different company cultures
into one.
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CAMO ASA
Presentation
• There is always a risk of loosing key employees in a process of change in relation to a
merger. Camo has however established an employee/management option program
minimizing this risk
Summing up, Camo has considerable opportunities of entering new growth markets with new
products. In addition Camo has a possibility to exploiting and further developing existing
client relationships with existing and modified software-products. There are however a
significant number of risk factors that might defer, reduce or eliminate Camo’s success in
achieving these goals.
6.
FINANCIAL INFORMATION
6.1
Historic and forecast profit and loss
Set out below are the historic and forecast profit and loss accounts of Camo for the years 1996
to 2002. In 2000, it is assumed that revenue from the traditional Camo products would
approximate the amounts included in the 2000 budget. Two additional revenue sources are
projected in addition to the budgeted revenues:
1. With the assumption that the Statware purchase closes near the first of June, sales of
existing Statware products through existing channels would approximate $1.375 million
during the period from June through December 2000.
2. Sales of products based on the combined StatWare and Camo technologies are projected
to approximate $720,000 in 2000, beginning in June.
Actual
1995
NOK
Years to 31 December
Actual
1996
NOK
Actual
1997
NOK
Actual
1998
NOK
Actual
1999
NOK
Forecast
2000
NOK
Sales
Cost of sales
Gross profit
-
6,636.0
256.0
6,380.0
7,251.5
177.9
7,073.6
13,929.0
2,245.0
11,684.0
19,799.0
5,961.0
13,838.0
Overheads
EBITDA
-
8,587.0
(2,207.0)
12,084.4
(5,010.8)
15,568.0
(3,884.0)
17,817.0
(3,979.0)
Depreciation
-
EBIT
-
(3,159.0)
(6,821.0)
(4,334.5)
(5,510.0)
-
Net financial
EBT
-
99.0
(3,060.0)
430.9
(6,390.1)
441.0
(3,893.5)
255.0
(5,255.0)
-
-
(3,060.0)
(6,390.1)
(3,893.5)
-33%
-33.3%
-47.6%
-46.1%
-31.91
9.3%
-69%
-69.1%
-94.1%
-88.1%
-15.83
92.1%
-28%
-27.9%
-31.1%
-28.0%
-9.83
Tax @
EAT
28%
Statistics:
Sales growth
Gross margin
EBITDA margin
EBIT margin
EBT margin
Interest cover (x)
952.0
1,810.2
450.5
Plan
2001
NOK
Plan
2002
NOK
-
42,000.0
9,183.0
32,817.0
87,000.0
15,660.0
71,340.0
172,389.0
33,022.0
139,367.0
-
32,000.0
817.0
64,567.0
6,773.0
124,134.0
15,233.0
854.0
2,500.0
4,000.0
(37.0)
4,273.0
11,233.0
150.0
113.0
150.0
4,423.0
150.0
11,383.0
761.0
(4,494.0)
113.0
4,423.0
11,383.0
42.1%
-20%
-20.1%
-27.8%
-26.5%
-21.61
112.1%
2%
1.9%
-0.1%
0.3%
-0.25
107.1%
8%
7.8%
4.9%
5.1%
28.49
98.1%
9%
8.8%
6.5%
6.6%
74.89
1,531.0
Source: CAMO ASA
27
CAMO ASA
6.2
Presentation
Cash flow
Set out below is the historic cash flows of Camo for the years 1995 to 1999. Camo’s strategy
is to reinvest all the cash earnings and the money from sale of new shares into product
development and market expansion activities. The historical cash flows are as follows:
Years to 31 December
Actual
1995
NOK
Actual
1996
NOK
Actual
1997
NOK
Actual
1998
NOK
Actual
1999
NOK
EBIT
Depreciation
-
(3,159.0)
952.0
(6,821.0)
1,810.2
(4,334.5)
450.5
(5,510.0)
1,531.0
Gross cash flow
-
(2,207.0)
(5,010.8)
(3,884.0)
(3,979.0)
Movement in working capital
Capital expenditure
-
-
(4,937.0)
-
(3,506.7)
-
(3,939.3)
-
Operating cash flow
-
-
(4,937.0)
(3,506.7)
(3,939.3)
Net financials
Tax
-
99.0
-
441.0
-
255.0
761.0
Free cashflow
-
99.0
(3,065.7)
(2,923.3)
430.9
(4,506.1)
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CAMO ASA
6.3
Presentation
Historical balance sheet
Camo ASA’s historical balance sheets for the years 1995 to 1999 are set out below:
(iii) Balance sheet analysis
Years to 31 December
Actual
1995
Actual
1996
NOK
Actual
1997
NOK
Actual
1998
NOK
Actual
1999
NOK
Fixed assets
-
466,0
812,0
5.179,0
7.952,0
Cash
Stocks
Debtors
Other current assets
Toatl current assets
-
15.644,0
1.077,0
128,0
16.849,0
10.634,0
407,4
1.207,8
124,3
12.373,5
5.634,3
407,0
3.521,0
9.562,3
2.986,0
205,0
4.295,0
7.486,0
Total assets
-
17.315,0
13.185,5
14.741,3
15.438,0
Non interest bearing liabilities
Interest bearing liabilities
Other liabilities
Total liabilities
-
1.668,0
1.668,0
2.129,5
2.129,5
2.825,0
430,0
3.255,0
4.688,0
244,0
4.932,0
Net assets
-
15.647,0
11.056,0
11.486,3
10.506,0
Equity
Profit for the year
-
18.707,0
(3.060,0)
17.446,1
(6.390,1)
15.379,8
(3.893,5)
15.000,0
(4.494,0)
Total equity
-
15.647,0
11.056,0
11.486,3
10.506,0
Total liabilities and equity
-
17.315,0
13.185,5
14.741,3
15.438,0
7.
DEAL STRUCTURE
In January 2000 Camo secured USD 1,2 mill in equity financing from a strategic investor,
Merchant Venture Investment (MVI). The Financing was raised to support the development
of commercial market oriented applications of the existing line of product, and funding for
growth and new product development.
MVI is an equity pool of more than 250 senior executives and entrepreneurs investing
together directly, taking active part in the development of the company through board
representation. MVI has two representatives on the board of Camo ASA, and have through
its network of partners been active in assisting management and board in their efforts to
develop the group future strategy.
The owners of Statware Inc will according to the agreement signed 26 May 2000 receive USD
4,3 Mill in cash. The acquisition will be financed by equity through a private placement
towards strategic investors and present shareholders during the summer this year
29
CAMO ASA
8.
VALUATION, EXIT AND RETURNS
8.1
Valuation
Presentation
The shares of Camo are traded on the Norwegian unlisted market. The shares have been
trading in a range of NOK 16 – 85 per share since Year end 1999. The trading of unlisted
shares is of course not as liquid and stable as in the listed markets, both with regards to
volume and interest. The market is vulnerable and sensitive to changes in general market
conditions and fluctuations in the economy, and is not subject to the rules and regulations
restricting insider trading and information.
However, Norwegian institutional investors have positioning themselves as shareholders in
Camo as the market interest for the company and expectations for the future development
started just over Christmas last year.
Of particular interest to the market, is the Camo group new line of products based upon the
sophisticated DLO technology. Camo can potentially be a very tempting acquisition target
for larger listed US-based provider of CRM's or e-commerce software.
The acquisition of Statware was a strategic important move to complete a platform allowing
Camo's new line of product to be accessible through a web portal. The move of HQ to the US
where the CRM, Business intelligence market is maturing the most, increases the possibility
for a substantial increase in the market value of the Camo group.
8.2
Exit
Based upon the present and planned growth and technical development of Camo, the ambition
is to position the company for a potential IPO in 2001.
An acquisition of Camo by one of the larger, listed, US-based, CRM or e-commerce software
companies can however not be exclude.
8.3
Returns
It is very difficult to evaluate the upside in the Camo investment. The traditional business of
the group does not provide for a substantial increase in value of shares. However the change
of strategy for Camo to become a provider of advanced software tools to the fast growing
business intelligence markets has positioned Camo as a potential winner in this market.
If the new line of products coming to the market this fall is well received, the upside for the
shareholders in Camo is considerable. A target pricing of the Camo share in a trade sale
would be substantial. However the potential returns are linked to significant risk factors, both
within and outside Camo.
30