Guardforce AI Co., Limited (GFAI) 31 Mar 222021 Q4 Earnings call transcript

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Guardforce AI Year-End 2021 Corporate Update Conference Call.

During today’s presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be open for questions. is today, conference XX, This Instructions] being March recorded XXXX. [Operator

historical read get may about to regarding within Guardforce started, securities we the a meaning contain forward-looking of the I addition AI. call Before laws conference will disclaimer federal statements This forward-looking in information statements.

Annual this place such and be to Chairman. company’s and yours. forward-looking risks on actual and future in current Exchange forward-looking then forward-looking with to is turn March in the the to be being statements result subject risks Forward-looking discussed on and different in not that XX, are undue qualified Commission call like company I’d statements realized strategies, than include Report expectations statements. management with uncertainties statements AI’s underlying reliance heading Terence are written are uncertainties and forward-looking these. historical whether plans, not materially about that and performance you statement These statements Yap, the to reflected on may statements expectations caution are Form the SEC. cause are and include on based assumptions those subject Factors XXXX, under on expectations At the cautionary goals, oral the fact. expressly and outcomes may or risks Securities objectives, XX-F events, and time, behalf filed statements these from made to of filings to subsequent uncertainties other All and by to Potential any differ over The such floor Risk these Guardforce that

$XX robotic for this that AI’s has to exciting a been $XX busy, services. of XXXX achieve call. developing for remain announce continuously we our for solutions the beginning you, earnings year million welcome, revenues achieved year, we and year technology. will business and Thank with I what security financial At beginning will as I protect on information between and pleased XXXX. in everyone the focused remained Guardforce to journey yet and to The us in XXXX need evolve it time. and of full to time consistent the protection is am has have that to we million. how million to protect that transform security of and Today, year $XX.X highlighted since

achievements at subsequent We ahead. the some lie capitalizing me highlight growth be to forefront and look this allow notable quickly note, are On year-end. and excited extremely XXXX forward the the of to to many in opportunities this on to our of that

we proceeds of approximately of support million $XX.X further for cash deducting offering partnerships. approximately our end estimated an XX During approximately gross quarter the million Followed the the a accretive agent’s the expenses XXXX, gross to position our fourth of expenses, NASDAQ this capital million $XX new before adds of successfully proceeds and as ordinary of placement $XX.X that at placement pipeline of warrants offering private public expansion other to shares fees stood discounts and of December other with and by offering underwriting to uplifted support our before onto plans. initial market

the GF the Macau Malaysian with Sdn. Macau space. market Hong Second, the Bhd. security into of majority Networking, expansion Robotics and Robotics testing announced market our quarter significant a Handshake a merger also the plan began acquired Kong. of we leading based in we as We Malaysia during Limited stake GF company first and penetration milestone in XXXX, information the subsequently enter A to

addition, our made to a In strategic of to decision corporate HQ announce we the relocation Singapore.

Robot known into announcement Technology China our GFAI acquisition Company formerly Keweien formerly Area as our Guangzhou expansion entry continued we economic Limited, of Company This GFAI as with XXXX, Robot of known of Limited in into one Limited of Shenzhen Greater provided entry regions Robot quarter the with Company first Technology the Kewei the the foothold during has with China. Thirdly, plans Bay a Shenzhen Limited. Company and fastest us Guangzhou Technology Service

AI are with a a our strong. and remained by The will market delivery our North our robotic a drivers to various security increased the information In segments. of business government as partnership COVID-XX entry the market. policies within solutions technology robotics clients for into The research the now based need business provider, the we pandemic, U.S. for on continue drive the on remain automation technology on to and addition, accelerated our service U.S. growing with funding services. American developing respective focusing key as solution We strategic focused for and the

to our will business ask Olivia, maintain to secure please. position now I Thailand. Executive addition, we Officer, update in Chief leadership logistics Olivia an our the within continue In on highlights. provide operational will

Thank you, Terence.

major has XXXX segments. mentioned, results key As our for allow been me year operational an of us, to business highlight incredible

secured Firstly, logistic I’ll cover business.

compared been of appoint subsequently from Bank This Hat made CCC of operator the Association, Commercial decision Cash Thailand. government positioned restrictions XX, notable a measures, in dominant January total. business driving, first this I on in center from logistic in Consolidated leader April Cash AI the our in and authorized impact business We of were to business the provinces Revenues as year outsource US$XX.X operator to a remains Thailand. Thai revenue the million offer Secured the X.X%. started response Khon as in the the We our Thai Thailand. challenges. am face revenue of good several strong in the has authorized business the US$XX.X full a to the of I of with as for operational am covers XXXX the logistic representatives selected for driving work XXXX. situation, for COVID-XX by Consolidated province and Banks period the XXXX. social the year team team CCC secured announced the our in cash Our curfew, Thai Thailand our in Logistics Yai. the Center the which these win in the in of to other had approximately a We Banking economy the from in starting has that city jointly slight pleased Thailand. a represents travel business years and XXXX. division been grateful cash Kaen Thailand five in Center, distancing on of This for pandemic full year seven Guardforce totaled Thailand the of In Secured The million were the of selected And our decrease an Logistics growing

results business. the Solutions Secondly, I would Robotic our talk through of

penetrate note, our deployment strategic us to to for ratings planting educate shelf our continue our to we revenue to the to out This execute opportunities. purpose the allow was verticals. more market and based this – plans one into roll part On we create plan region. of successful within announced further our began industry deployment and And extensively in with than Pacific – X,XXX the flags robots market as of main strategy. will we our greater to free the continued rollout feedbacks, Asia on plans. all We We opt

ICP, announced service to which development value provide to Platform, manage, ability and the clients. of Cloud During monitor remotely the the also our us will year, added the that management is the platform scale we the robotic Intelligent other

be large growth the to revenue shifting towards our As in a revenues, service diversifying as robots work contributor a the we will mix.

Solutions Robotic strategy. represents million US$X.X is X% total currently business group It still our of its segment As approximately as our or revenues.

significant be continue we next confident a our revenue contributor will that it are deployment As group over the years. plan, with for our we two

Security business. acquired XXXX. Information our in by we our Network, Information will the newest quarter Lastly, service, The business cybersecurity Handshake company a is is driven first about had I suit addition of talk to that of Security which the

revenues. As this year first of US$X.X is our or combination represents total of the Information million, X.X% the Security approximately group

Information service significant grow. drivers majority our derived will the globally, to Security that we Logistics currently business Secured are continue of business. the from confident are revenue summary, In With

Security year a development to revenue to we would thank frontline to again, more please. during and Financial to Officer, and highlights, Cynthia like of the expand would Once for continue meaningful Robotics the our mix. we invest As of On globally, contribution Solution generate in note, to will our over presence Chief Information financial I the like challenging our I the XXXX. executives Cynthia, hand provide their services this

listeners, me summarize our allow results year. our to To Olivia. the you, financial for Thank

a about X.X% a slight the suspension of Firstly, decrease of our full ongoing business businesses. represents decrease approximately pandemic, of $XX.X $XX.X the XXXX. The COVID-XX revenue, of challenges despite temporary for the our of the the result closures This year XXXX million client full million. of is revenues of to compared totaled and for revenue year

technology related other growth However, several by GDM X.X% machine the integrated increasing past XX.X% compared which the $X.X XXXX total GDM in year in equally years encouraged to increases the in of or such we deposit by a December in X.X% is as ended the our experienced remote solutions million XXXX. approximately for revenue are as our XX, digit continuous to double cash solutions, Thailand. business,

revenue XX% for revenue of to million the or X.X% Robotics as our For XXXX total compared XXXX. approximately increased AI the solution XX, ended X.X% by December year business in $X.X to

information December XXXX For security million. ended approximately year revenue business our for were $X.X the XX,

was was our for to profit, the year gross our compared XXXX the XXXX, $X.X which gross full profit $X.X million. year for about of of profit Secondly, full gross million

As built in the to expenses rental of XXXX. an primarily margin increase for costs XX.X% XX, revenue, the of XX.X% for due in consumption ended compared XXXX, and percentage December the year year overtime was from reallocation December the which of gross is XXXX cost expenses to operating labor ended XX,

expenses, rental million by operating selling operating increase for professional increase expenses fees, total revenues. in and operating total XXXX the reduction of to of the a and listing $X.X and million. XXXX The a and the an office general having in for our compensation Thai our employee expenses manpower were total which to driven to portion cost due was to for related XXXX primarily in of with due administrative external in in our about of $X.X Thirdly comprised in reallocated was expenses decrease decrease expenses, compared expenses operating which expenses, offset expenses rental fees

on Non-IFRS of compared to same or an XXXX. $X.X million income $X.X This as increase the of in XXXX. XXXX compared Let’s to loss $X.XX per the $X.XX loss non-IFRS was of to compared share was the $X.X period same to Loss million loss measurement, Net the year from EBITDA compared of loss our for move in full of $X.X EBITDA million XXXX. XXXX. in million operations. was was $X.X in net about $X due a period operations to operating of mainly period net per share or to same loss million loss on million $X.X from million was in $X.X talk million expenses.

to our cash XXXX. This assets. our closing depreciation million $X.X I the of as our by XXXX. of to for $XX.X $X by the December team. December count, full-year Chairman, balance As Allow currently due to provided hand as have balance provided my million And basis, ended December appreciation that, the in the mainly would comprised XX, items December $X XXXX With outstanding compared of was million, report. activities $XX.X million full assets of depreciation compared share to fixed amazing XX, diluted depreciation this date finance this for lastly, to ended of you. net and million fully about at add year XX, operating of Terence position, cash totaled approximately cash to of for and Thank the on of mainly which back XX, was amortization XX.X our adjustment remark. like non-cash totaled we me right-of-use highlight to Cash at shares a time XXXX million like

and Olivia. you, Thank Cynthia

confident ahead, business of Looking we the remain our trajectory with growth.

approximately our for a million. compared $XX net reaffirming of guidance $XX to to are This than of growth XXXX XXXX. more represents of XX% revenues We million

companies our We acquired i.e., expect total from revenues. representing of of XXXX be revenues, million during revenues XX% inorganic to $XX approximately

revenues. XX% and approximately the security information evolve related expand adapt non-cash We services our non-cash robotics, total world and $XX.X to to environment. continues to The approximately million. This revenues, to of including post-COVID represents expect other

We will solutions, robotic to continue offerings. on capabilities and focus our developing

us allow penetration. We also geographical will reach and extend market continue via that our will to expand acquisitions smart to

like you the feedback to We part our will And call please market with with focus the solutions I’d on continue go journey. refining and thank and our gentlemen, of and Ladies from questions. to ongoing any being our up partners. Operator, for for improving ahead. open that,

is [Operator with Instructions] Mike EF Our your proceed question. first question Hutton. from Albanese Please with

thanks and Ben for continued Hi. on Mike Congrats progress Yes. Terence. on your taking my is for Hi, today. This questions.

Just couple I if have may. a

to come look on I insight – revenues Difficulty] up these that are [Technical time the to to any know I your roughly have that to from do be there? Robotics First, ramp recent as Any year management comparable, thinking but margin margins? kind some businesses, out take half it’s expected we great. going and it will about how be acquisitions Is it year we get XXXX, the your fiscal insight of integrate what of really the expectation segment. could better see than to an you take like Is it on there business? would profile would be cash the

want are well. One transform. Thank once important It you. very you our also the why thank of we that track question. we is again. one Mike, a as business It’s to constantly within reasons

business. largest thin. [ph] the is actually flow know, As cash secured business business are margins the the rather a we But are cash-in-transit

teens, As and why robotics to lot And margins good teens. go we goes in in teens enter is it low we cybersecurity times have to seen definitely higher. the a the because they sometimes the are high and it’s reason

the XX% U.S. the From those as we are guidance in our secured Margins we seen we up high those even cybersecurity from will not logistics than XX%, are provided very companies though companies as disclosures. position, business cybersecurity, of in the have Some are listed yet, business. and more the comparable have confident the for be are we cash-in-transit definitely robotics that certainly scale as

our in business the still the parts time logistics. So secured is that at dominant of point of fact the this because

will We we We our see that and [indiscernible] to and start grow deliver revenue gross margins. on improvement would range, continue as but to growth. see an the

Thank you, Terence. That was great.

to with a you’ve been then point, distribution job multiple geographies. across So expanding here, if that, doing follow up can channels I that your great

infrastructure, X,XXX And that see about great? any had you you whether out for think through that’s of revenue I’m that unfolding there the robots come I sure of streams you this or is be maybe Pacific. obviously mentioned, coming scale, insight could You as talk economies Asia rolled in more would you but lay to expected leveraging how ICP, additional

robotics before sensor. occasions, As like a I’ve in mentioned several is the

how et Like to us, or flag. data, platform that’s camera, we want important For the a an of the it’s intelligent plant security part the to ICP it And cloud cetera. where plays collects integral can collect and ultimately it, control data it of it, create creating the value the intelligence remotely, manage data, our collect it add and more thereby out because once we we clients. itself, analyze to

as right So security the a where the like we for only meaning now, generating have us, not robots as through to many out of we want robots the except are this analytics, predictions have out revenue as cetera. is it, et pushing collect going solutions capability empower model, dashboard robot that through value in possible just service RaaS to push the model, we to clients a future control to our to actually added but clients whereby from more our data, providing to the the have also a ability cameras, them,

because about whole Asia-Pac a has are automation given only opportunity opportunity globally. it extremely within that revenue and for So presents the excited new but growth need growing been it, we not

you’ve I the future? just on be needs, been mind fleet, great. I’m will What’s of in you the the regarding just armor cash and investing the that That’s of if focused kind going business. out. to seeing more you. are business, need quick and the it robotics It to a strategic Thank what comes management Obviously, this one there? have nice updated near curious, legacy in look forward specific truck one I upcoming needs expenditures. this like seems then acquisitions question capital of kind is really plan capital play may, expanding And like more on to

maintenance also Well, actually are parcel to But thank think you those past be CapEx, business of has and the maintenance XX focused for referring of for certain robotic be will certainly that on question. the are our CapEx, years. and Majority CapEx what and that’s the side there that you solution. really there acquisition the will part been the I

We is not would are any that a planning logistic has within to you business to actually cash system, that year that in got So sense. system do predict whereby capability next see it’s in so. the over especially our we or – upgrade maintenance particular usage increase no What the CapEx a interesting that different cash the pattern. be AI levels, can

through are and AI that automation, those improving logistics further in So terms analytics things business. data we of some are and looking cash even capability for also the management the secure of

your Lei Terence on questions, here. That’s execution congratulations great. and for taking continued again, my and Thanks

you. thank Mike,

Equity. question question. next Diamond is from your Our with with proceed Hunter Diamond Please

Congratulations quarter and everyone. the on the Hi year.

So biggest company misconception is in today? do when you question, GFAI comes the the first view what my to where and marketplace is it the

a us guess of Thank it discovered. under very I very much, you interesting is Hunter. are for question It’s as well. because a truly we lot

following think I of why as well. constantly improve and of of reason about that’s don’t not that’s proactive – such know the and more people that’s in communications yet. lot we to our And a be a big still trying us one terms our with are stakeholders why

communicate year our In believe do this fact, it’s actually stakeholders do the continue well I story. conference for to in efforts to important to communication. And that earlier investor that because our decided will we an improve to understand us we ensure to

lot confusion, business. really that transit second the people assume cash The in well, I are these and a misconception market of is the of that the guess part we past in the a just

and transit. It a beyond just them to business. actually we that start actually is cash logistic understand important are for to secure the We going are

opportunities we XX over have new biggest The asset the adding have a using our years build are opportunity revenue base. relationships advantage we the my We business is actually existing that the the fundamentals on clients. past customer new to with they for gained that have and

For name. has that. the based great professionalism, name XX years, brand past that A relatively is our upon built and a great done a we staff have for job brand credibility

to to into into it go understand for AI, robotics, important are that market we security. the go actually Now go going beyond information is to into to

And we more we progress more or as of hopefully the expansion. business. change why terms start our of far, of of actually was month to over attract to terms reason more the terms so provide so – understand the our to past stakeholders robotics details in attract more thus in strategy in along terms will in deployment, to And go we see market begin that

For time myself, I would and educate to and invest resources more hopefully communicate certainly with the also market.

And Dubai Great. you. you I’m was that’s that and announced much base investor I know have. the appreciated. arose? the opportunity about the question to Was that that expansions. The recently or next always something wanted planning company sure by Australia more an Thank just was

we have that Well, always it planned. was something

the are We have UAE government we the strategic strategic grand innovation place. that – different three in put a opportunity really the is taking a phases. next of plan because and the things in is for years two, Dubai

educated; world. because an should to UAE AI. opportunity population plans this is know, to Dubai in as its development. the City. City it’s mature have may that’s is city you it’s in announce it well. and develop play market As to And island a an I also most robotics innovative one contribute a Australia, hopefully of of a are to And reinventing interesting we the role and be the country innovation also Dubai it’s and terms truly be Smart and to excited think to largest the

lot using now automation, situation, cleaning and and have very, seen labor that whether we cause et of for clients high. of cetera, are the importantly, costs up because solutions, gone pandemic towards also it’s that are going automated whether reception, because the robotics More labor it’s seeing very has we a also markets of

of And that the Asia is we operations And make a besides make well. Australia so opportunity their try can clients think into efficient. that are Pacific use to tap great also trying more I to as technology to

step and everything always is just that a making we time sure are in at that of taking So terms one our phasing that in been out has plan. that It’s place.

won’t the going guess And of acquisition criteria? ideal or anything what along, in topic, Great. I is terms makes that there growth GFAI, an consider for you and your

acquiring have them are important quickly. of on network existing acquisitions for acquisition, because have, that network, really terms should improve a The it’s enter because now, rolling necessary the to companies we market myself to our well really can think right we match base talent, in been reason like of we is ideally customer a about we example, is in why doing network. robots we very that going for way ourselves sales have us distribution have in we Thailand. the the most with best have to going establish distribution And should And

clients easily We we customer all have the door got offices to Thailand, have it more solution. that be And standing guys, would with XX try try Well, that were this encouraging have we on hey talent, new that had in branch you because base than the has factor. have a established knock can relationship that been got our over out. say, to XX. Which really we’ve willing willing of we and long they we

is don’t that important what grow will think also similar into companies I expeditiously us and have other important a markets, the network effectively that an it market of in moving will partners go we so that to distribution as we that therefore identify buy. to And experience allow think or to factor terms is that similar

I startup with are think not a companies we’ll we stick at will, that phase.

really we will security We really distribution so to the our we the not now But interested for we buy, may are look to as space be know. because technology traditional well, expand I But is what at companies, are companies Thailand. never but for easy business, it’s then for transform the an for done tested to network. like have in us that – focus

our that to an worthwhile consider. propel to got clientele will expeditiously existing great relationship allow network, if there growth with companies out clients have good as So us based,

more my you the sense. would And and be, your a feel can last about best-in-class? service robotics for question as guess little Makes talk why are market products Great. you a competitive I perfect company’s

we’re that mainly the Well, from manufacturers. within Asia robotics seeing competition Pacific

Now and manufacturers coming as et it, to say, guys sell it the one do which you sell where they cetera, a what best, a can are at slightly different robotics with we do angle. to robot is that off deal

We are almost if terms, is someone our robotics robots us then quality eventually cloud it buy good ICP good there’s with put platform, the agnostic, platform. provide meaning will onto and intelligent which can who

So I believe the advisors that we have manufacturer. is that we are not a robots

service. We are as robot truly a a

So robots I streams we in a revenue streams prefer that recurring couple we there actually for lease reasons us. flow recurring for service, as monthly out the of love generally cash it, because revenue

nice eventually we a able a robot it’s service, recurring stream build great. So are of revenue then if to

this because really So are, still of focusing a think I to else the going on year don’t anyone selling robots. is lot manufacturers

a a monthly business; onto manned a manned is analogy from providing provider, guarding an robotic model. also on service are Going manned days entire in as guarding basis. we a I my different guards take my

So we for a fee now, right now by robot. monthly guard charge a of but instead it’s replaced a guard,

guarding rest recurring of service robotic And concept to important. similar it. the So – it’s of is the of part security

We are selling not people.

service or technology, whether they in solution model play. selling where or that’s the The service. the the is service a have, robotic it’s operational the maintenance. problem costs it’s Helping the actually to improving that the clients efficiency, rest model really are includes resolve We or whether resolve

advantage not we able things think, selling an we I very in point and really to push out robots. we have at are so And because this are quickly time,

market. as We actually robot a as are a service in doing the

No, makes perfect Great. sense.

congratulations again, questions. So my the results and you on appreciate taking

Thank Hunter. Thank you. you,

Terence now And the the turn closing session. end for the question-and-answer over reached to have We remarks. of I’ll call Yap

gentlemen, that to you look are certainly journey. I achieving you once to growth. very to today. thank our I of the important hard business work It’s us continue in continue and team you plans. our much And in thank of we forward and update for me will strategic to for joining My being remember Ladies progress. on part again for our

So with once you that, again. thank

your time. This Thank for concludes this you lines disconnect today’s and conference participation. may your you at