Creating a Game-Changing Premium Motorcycle Brand, Designed and Built in NY. $10m Series A Fund Raise September 2016

Transcription

1 Creating a Game-Changing Premium Motorcycle Brand, Designed and Built in NY $10m Series A Fund Raise September 2016

2 Disclaimer No visuals (besides the cover and last image) of our designs, engineering or prototype are shared in this introductory document We strictly control our communication before we publicly launch our Brand, at the NY Motorcycle Show in Dec 2016 Our designs and prototype are however presented to interested parties in face-to-face meetings Thank You for your understanding 2

3 Premium Motorcycles segment: a gap in the market while the premium car segment is thriving The Premium Car Segment Car Market Penetration: 11% Faster Growth More Profitable Better Resilience Premium Characteristics Design: more considered Innovation: ahead Customer experience: using luxury codes Pricing: +30% Motorcycle market Car market 3

4 Premium segment: a $3bn+ growing opportunity only seized by incumbent manufacturers by souping up existing models 100% 80% 875,000 Rest of the World LatAm Japan Asia Pacific ~100,000 LatAm Japan Asia Pacific Market CAGR 14-20(E) +11% +0% +16% Ducati Diavel Dark $18,295 Ducati Diavel Titanium $27,995 Upgraded components, cosmetics +53% 60% 40% Europe (15) Europe (15) +4% Upgraded engine and power, cosmetics +45% Harley Breakout $18,599 Harley Breakout CVO $26,899 20% 0% US & Canada US & Canada +5% Upgraded engine, power and components +135% Heavyweight* Motorcycles (2014) of which Premium Motorcycles** MV Agusta F4 $19,495 MV Agusta F4 RC $45,995 *Heavyweight motorcycles = on-road motorcycles above 601cc **Premium motorcycle market estimated using premium car penetration % by geographical regions, corrected by motorcycle penetration and acceptance Source : Harley Davidson 10K, BMW Group Annual Report, VW Annual Report, Ibis World Motorcycle Report, Press, FXE Analysis 4

5 We are creating an iconic Premium Motorcycle We have the talent, energy and experience required to make it happen Consultant ( ) Wraith (2006 engineering) Hellcat (2011) Co-founder (1996 sold in 2008) Co-Founder (since 2009) Investor (since 2002) Fighter (2009) Thunderbird Concept for Triumph (2013) Edward Jacobs Motorcycle designer since 2004 Designed, engineered and brought onto the road ground-breaking motorcycles F-X Terny Entrepreneur since 1996 Serial entrepreneur, expert in supply chain and cost optimization, experienced board member and investor in mid-size companies 5

6 Our motorcycle: integration of design and proven technologies Resulting in timeless lines, functional performance and patentable innovations Design Considered, contemporary, bold, utilitarian Our design universe Technology Innovation driven by necessity Frameless design with a structural engine* Unitized crankcase*, integrated exhaust* system with advanced heat shielding, swing arm with shaft-drive and encapsulated rear suspension* Digital dashboard and LED front lights Manufacturing Modular Sub-Assemblies Highly modular design, based on large sub-assemblies*, allowing to reduce assembly time and non-quality costs Modular design and assembly breaks away from traditional small batch assembly, and does not require motorcycle specialized workers Common powertrain platform for 3 motorcycles covering all riding positions in the market Sourcing Proven technologies, pragmatic choices Convincing best-in-class motorcycle component vendors to grant us large volume OEM prices Sourcing from non-motorcycle vendors to use proven technologies from other industries (e.g. aerospace) Applying high-volume production processes to small to medium size volume production to be cost-competitive * Patentable innovation 6

7 Our offer: accessible luxury An iconic brand Designed and Assembled in NY at a $30,000 retail price 50 Price Positioning Starting at $30,000, a premium price yet within the existing market 40 A strong alternative to current premium motorcycles from established manufacturers, offering great value for money Our pricing Branding 30 Honest, Utilitarian, Authentic, Industrial, Contemporary, Innovative and Pure: our branding focuses on the core values of the motorcycle and its design 20 Emphasize the fact that our Motorcycles are Designed and Assembled in New York Marketing 10 Combine traditional marketing strategies based on honest communication (product centered, fact-based, transparent) with experiential and guerrilla marketing Traditional marketing focusing on website, public relations and endorsements 0 Motorcycle retail price ranges ($ 000) Experiential and Guerrilla marketing focusing on low-cost unconventional ideas, integrating our motorcycle in the urban and social environment, and making direct contact with potential customers to let them experience our product 7

8 Access to market: creating a win-win with the best US dealers An image-builder motorcycle giving access to US-brand riders and Premium clientele 100% 314,000 ~7,000 4,500 Our proposition 80% 60% Other Brands Non Adapted 3,850 3,000 2,850 2, to 50 Dealers in the US Covering 70% of the premium motorcycle market in the top 30 North American metropolis Attractive Add-on Brand 40% 20% 0% Heavyweight* Motorcycles US Sales (2014) Multi Brand Exclusive US Powersports Dealerships (2014) Upfront Dealer Commission per Motorcycle (US$) $4,500+ commission Limited floor space (200 to 500 sqft) and set up costs 40+% margin on additional products (helmets, gear, ) Objective of 30+ unit annual sales per dealer *Heavyweight motorcycles = on-road motorcycles above 601cc 8

9 Key milestones 2015 for prototyping, 2016 for pre-orders and dealers, 2017 for production Presentation of Concepts in NY, LA, Paris, London, Chicago, Tokyo, HK Final design and engineering. Signing of OEM contracts Validation of Prototypes begins + Pre-orders and pre-dealers begin Brand launch First Deliveries Founding of FXE Industries First round of financing ( = $1.6m) Filing of Patents Second round of financing ( = $10m) Feedbacks from industry professionals : I am the General Manager and Owner of Ducati Triumph New York. Our dealership has had a relationship with FXE since the Company s founding. We have seen the motorcycle designs and are confident that the new brand has great potential for success in the market. Mototainment looks forward to becoming one of the first dealers to carry the brand. Not only is the brand positioning itself in the growing market for premium motorcycles, but FXE offers an attractive unique design and a Made in New York message. We have a strong inclination that FXE s offering will resonate well with our customers. Steve Radt, Owner, Ducati Triumph Dealership (New York) My name is Jared Zaugg, and I co-founded the Legend of the Motorcycle International Concours d Elegance. I have followed from the very beginning the creation of the concept, philosophy, design, engineering of the FXE Industries motorcycles. What they are producing is truly innovative and I believe the company has the potential to develop a strong foothold in the premium market place. FXE Industries has my full support as they launch the Company, and I believe they will be hugely successful as they are filling a gap in the market where there is a strong demand from discerning riders. Jared Zaugg, Legend of the Motorcycle 9

10 $10m Series A Investment Structure and Use of Funds Offering Terms 12 Use of Funds ($m) 1.8* Series A: $10m Timing: S Structure: Preferred Equity Valuation: [33.3]% of capital 4 Purpose: Production and Market Entry Seed K Capex 16/17 Capex 18 Marketing 16/17 Ops Losses* WC 16/17 Fund Raise Fees Funding Needs Total Funding * Total of $2.3m, of which $0.5m are financed by seed capital and capitalized retainers 10

11 $100m revenue - 3,000 motorcycles by year 6 Capturing a conservative 3% of the premium market Annual Production (units) ,000 Forecast Revenue ($m) , , , Proto Proto

12 EBITDA breakeven with 400 motorcycles EBITDA and Cash positive in 2018/ EBITDA ($m) Cash-Flow * ($m) Pre-Rev Pre-Rev * Unlevered, pre-tax cash flows. No tax anticipated before 2020 given first years operational losses ** Out of which $0.5m are financed by seed capital and capitalized retainers **

13 We look forward to showing you our prototype and detailed strategy Francois-Xavier Terny FXE Industries Claude-Olivier Coutant CEO & co-founder Brooklyn Navy Yard, Building 152 Investor & Adviser to the CEO Cell: Flushing Ave, unit #199 Cell: Brooklyn, NY Main: