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Q-Free ASA
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Welcome to Q-Free's Second Quarter and First Half 2019 Results. My name is Håkon Volldal, I'm the CEO. And with me today, I have our CFO, Tor Eirik Knutsen. I'm going to jump Q-Free at a glance details and move straight to the summary. The highlights for the second quarter included NOK 251 million in revenues, up 11% year-on-year, driven by good growth in tolling and urban. EBITDA, NOK 23 million, 9% margin. That was a significant rebound from a weak first quarter. And we're happy to see that performance normalized in the second quarter, although it's down from NOK 31 million in the second quarter of 2018 based on the rather large software delivery we had in urban last year. Order intake came in at NOK 209 million, several high-margin ALPR/ANPR contracts included and nothing big. Also we announced yesterday a Multi-Lane Free-Flow tolling contract in Australia for NOK 55 million that slipped into the third quarter. With that included, book-to-bill would have been above 1 and now it's 0.85. But 10 days plus/minus, it's not always easy to control that. So it's below what we would expect normally, but we have a head start in the third quarter. So we're not worried about order intake. It's good momentum on the order intake side. That also means that the order backlog is still strong, NOK 1.1 billion, up 6% year-on-year. And we also spent NOK 45 million in the quarter to increase our shareholding in our subsidiary, Intelight, from 53% to 75%. If we look at the first half of 2019, where we had a weak quarter in Q1 and then a better quarter this quarter, we are at NOK 474 million revenues, up 10% versus last year. NOK 31 million in EBITDA, a 7% margin, down from NOK 47 million in the first half of 2018. And it's primarily due to mix effects and temporarily weak tolling project margins. NOK 507 million in order intake, so we're up 11% year-on-year excluding the tolling contract in Australia. More detailed financials. Good revenue growth, but you can see the margin dropped 9.5 percentage points, primarily driven by tolling. I'll get back to that. But there is price pressure on hardware products and significant margin drop on tolling projects. We knew that. It's temporary. If we look at the contracts we have in the backlog and the contracts we are now signing, they have a much more attractive margin structure than what we have been able to generate in the first and second quarter. We expect third quarter to have similar margin on tolling projects as in this quarter. But the fourth quarter, you should see improvements. OpEx is under control, up 0.4%, which is nothing. It's a rounding error. So some of the cost reductions we have done more or less offset inflation and salary adjustments. EBITDA, NOK 23 million versus NOK 31 million. Not satisfied, but we're happy to see that it's a rebound from the first quarter. We have higher margin expectations than 9%. Also on a year-to-year basis, you see the same tendency. We increased revenues, margin is down. Again, we expect that to improve in the second half, especially in the fourth quarter. OpEx is under control. But as a consequence of the margin drop, also EBITDA is then negatively impacted. If you look at the different businesses, we have 5 business areas: tolling, parking, infomobility, urban and inter-urban. And actually, this time around, I'm going to focus a little bit on the different software platforms that we offer within the different segments because we think that there are some potential gold mines in our portfolio that maybe we're not that good at explaining to the outside world, but I'll give it a shot this time. If we start with the numbers on tolling and look at revenues and EBITDA, we are up 18% year-on-year, driven by the tolling project in Denmark, the Great Belt Bridge. We also had very high tag volumes in Europe in the second quarter. EBITDA is up year-on-year. Last year was not fantastic. This year was more normal. We had a high-margin ALPR delivery to the U.S., which positively impacted the numbers. As I said, we still experience price pressure on tags. And we think that will continue, although at a slower pace. But the margins we see on tolling projects will improve. We have gone through our backlog. We look at our pipeline, we look at the contracts we're currently signing. And if you look at the contracts signed in the second quarter, the ALPR contracts in the U.S. and Norway, those are high-margin contracts. The Gothenburg service contract is a good margin contract. And then all the miscellaneous, smaller product service orders are also good margin contracts. And you might ask, "Why does the margin fluctuate that much?" And it depends really on the project. If you have in your portfolio what you need in order to deliver a project, you have a high margin. If you need to develop something new, that has a cost. And then of course, your margin is lower. So it will vary slightly. But I think on the projects that we are now delivering, there's a lot of new development. And going forward, we will benefit from those developments and also the projects in the pipeline will fit better Q-Free's technology portfolio. So that's why we are optimistic that -- or actually positive that the margin on projects will improve. Ferry order backlog is NOK 200 million in Norway. We signed a couple of extension orders in the second quarter. So we've built up NOK 200 million business on ferries alone and expect that to continue to increase. That's a recurring revenue stream over the coming 8 to 10 years. So we're very happy with that. Now one of the software products I would like to mention is what we call Intrada. It's an award-winning, industry-leading ALPR, automatic license plate recognition or automatic number plate recognition as they say in the U.K., software platform. We think it's the best platform for recognizing license plates in the world. We have proprietary processing algorithms, patented analytics. And why? What does that give? Well, it gives unmatched accuracy and read rates. That means we think we have the best solution. We cover 150 states and markets with license plate libraries. We have 50,000 licenses sold. We sell these -- we use them in our own solutions, but we also sell them to camera manufacturers around the world. We do 1 billion transactions per year on this platform and we support any operating system or platform out there. We can offer different versions. You can buy an Intrada ALPR preliminary license to apply on a Sony camera, Huawei camera, JENOPTIK camera. Just buy the software license and we give you the ability to use this software on your camera. Or we can run it as a cloud service, what we call Intrada Synergy Server. Then we use multiple optical character recognition engines. We use fingerprinting techniques. We use business rules and grouping in order to achieve unrivaled read rates. So one thing is to recognize as many transactions as possible. But the other key thing is to make sure that you don't have any false reads that the system will say that, "Yes, I could read this number plate, but actually it's a wrong reading." So our algorithms, the syntax we use and the way we look at number plates with filtering, et cetera, makes sure that we have the best performance in the world. We're happy to take on any competing product and do a side-by-side or benchmark test. So this is important in tolling. But also outside tolling. We use it for video tolling. You can use it in parking for access control. You can use it for border security applications. And wherever you need to a read license plate, you can use Intrada. It's a software that has been developed over many, many years. And because we're able to sell it as a product or a service, Q-Free generates good margins on this business. So whenever you see ALPR or Intrada mentioned in the stock exchange announcement, you should immediately think that this is high-margin revenue. Parking. Second quarter was not a very eventful one on parking. First quarter, we had strong order intake and high sales that partly impacted the second quarter. So I think a better picture of the parking business is the first half of 2019 rather than Q1 or Q2 isolated. It was a slow quarter both in terms of revenues and order intake. But year-to-date figures are still ahead of last year. EBITDA is still not satisfactory. It's improving versus last year. But we need higher sales in order to break even in this business, which we expect to achieve later this year. Infomobility, also a rather slow quarter. It had a very good first quarter, a bit slower this quarter, flat revenues and unchanged revenue mix in terms of geography. EBITDA, negatively impacted by some R&D expenses related to a new SaaS offering and also limited ALPR, high-margin ALPR revenues in the segment. Now when it comes to parking and infomobility, we have developed a software platform called Q-Free HUB. It's a new way to remotely manage sensors and other devices. It's a software platform for anything from parking sensors to cameras to traffic counters and even things that Q-Free cannot offer. It offers data processing, data storage, data security and extensive analytics and machine learning and artificial intelligence capabilities. It's something you can use on Q-Free products, but you can also use it on third-party applications. So we can integrate with hardware from other vendors. And it's built on not even cutting-edge but bleeding-edge cloud technology, as we use the right expression. This is a product that was developed from scratch for the cloud. It's not an adaptive product. It's built over the past, let's say, 18 months to fit the purpose of running in the Azure cloud environment. And it's something that we think enhances the value of our hardware. We, for instance, for the parking sensors, tried to achieve a monthly software fee, recurring fee, on our parking sensors, between $1 and $2 per unit. So this software is key to achieving that. You get the opportunity to get the reports, to get the inventory management, set business rules, basically manage. It's fleet management software, where the fleet is sensors. Urban. Urban had a good second quarter. We were a bit disappointed with the first quarter performance, did not have any big software deliveries in the first quarter. And we said that we expected this to improve in the second quarter and it did. And you can see the results. Revenues include NOK 10 million in pass-through third-party revenues. So we have to include it, even though it would be tempting to leave it out. But my CFO told me that we cannot violate accounting rules. But in my head, I think NOK 48 million versus NOK 46 million last year and then NOK 13 million EBITDA versus NOK 18 million, the difference is that last year, we delivered NOK 2 million software contract in the quarter. And we did not do that this quarter but still had a good share of software revenues. And that's why we are again profitable in urban. Order intake was, I would say, below what we expect in the coming quarters. We're not worried about the pipeline. I think more importantly is that we see a good pipeline of software projects. Hardware is required in order to sell software. But you make the money on software. So software is really the key. And that gives me the opportunity to talk about MAXVIEW, which is our software platform for traffic signal controlling. It's modern. And why do I say modern? Well, a lot of the competing platforms have been built on old technology from the '90s, et cetera. We have built our platform based on new technology. Our stack -- the technology stack is updated. It's based on open standards. It provides complete monitoring and management of all signalized intersections. It can support between 1 and 10,000 devices on a single deployment. It's centrally managed. And then why do you need this? Well, you can optimize signal intersections. But it doesn't really help a situation in a city where you have a grid of intersections. You need to connect these intersections together and manage the flow and throughput in the system as a whole. And that's where MAXVIEW is used to optimize the throughput in a bigger system of intersections. And there's a lot of cool things happening on the intersection side. You would think that intersections are not that interesting. But from a traffic technology point of view, it's probably the most complicated traffic situation, where you have vehicles approaching from 4 different directions. So here, we're talking big data in order to really do predictive analytics and change the signal phasing and timing based on historical patterns. So you know traffic is going to be different on a Tuesday morning than on a Friday afternoon. But if you travel around in the city, you will see that it's the same stupid, static signal phasing and timing. So we're trying to change that. We're using predictive analytics. We're using connected vehicles modules, adaptive technologies to make sure that this is really a system that will enable traffic authorities to optimize, especially urban environments with lots of traffic -- signalized traffic intersections. It's again modular and open. I'm not going to read all the details. But if you want to be a geek and really get down into the details, you can also download more information on our website. It's again something we're really proud of. And I think it's recognized within the industry as the leading software platform. Inter-urban. Nothing special in the quarter, revenues down based on phasing of VDOT project deliveries. So in terms of revenues and EBITDA, it was rather uneventful. But on the order intake side, we signed 2 nice contracts, one with a new customer called IowaDOT. It's a statewide contract, new customer for Q-Free, adds to Virginia and West Virginia and Pennsylvania and Alaska and partly Delaware and some other customers. And we renewed our maintenance contract with West Virginia. So 2 nice contracts wins. And there are also lots of contracts up for grabs in the coming quarters. So we have high hopes that inter-urban will actually be an interesting business going forward, both in terms of order intake momentum and revenues, probably from 2020 and not to forget margins. If you look at historical margins in our inter-urban segment, it's not that impressive. It's actually far below what you will expect from a software business. And why is that? Well, we have fundamentally changed our software platform. We have used the VDOT contract signed in October 2016, I think, to basically develop a new state-of-the-art modular platform. And the more work we do on that platform to deliver additional detailed functionality, et cetera, the less we need to work on new development for upcoming projects. So you will never get to a situation where you can completely resell a platform to a new customer. But instead of starting from scratch, we're having 20% of the functionality. Maybe we have 60% or 70% of the functionality. That means the license fee that you charge will be much more profitable because the number of internal hours spent to deliver the functionality will be less. So we have margins going up because we have less internal costs. The other thing is that there's less risk in terms of delivering the functionality. And your delivery time goes down because you spend fewer hours, which means you can handle more projects. So for the past couple of years, we've been busy doing the VDOT project, one customer. That's why you've had limited revenue growth. That's why you've had low margins. It's basically paid R&D. The alternative to Q-Free would have been to develop it on our own, which would have been rather expensive. But now coming off the VDOT contract and signing up new customers, we believe that's the OpenTMS platform, as we call it, can really be something that will drive revenue and margin expansion in Q-Free. It's a software platform. It's probably the one platform that handles the most devices and traffic scenarios in our portfolio. It's used for traffic management, where traffic authorities have operators sitting in traffic management centers in front of big video walls and they need software to basically help them control traffic on the roads. It's for monitoring and surveilling traffic but is also to proactively manage traffic and to respond to incidents. So if there's an accident, you will very often see that it's remotely managed from a traffic management center. They alert the emergency vehicles. They can send police, they can send other people to the scene of an accident. They can close down tunnels, they can reroute traffic, they can change speed limits. And it's all managed with our software. So this is very complicated, advanced software. We integrate with thousands of devices from third-party manufacturers, cameras, sensors, variable message signs, et cetera. And it's then as an incident-based, scenario-based system, where operators choose based on rules set by the customer. So if you have a situation and you don't want traffic operators to sit for hours and think, "What do we do," they need to make a decision within seconds, maybe minutes, but they need to act fast, then they need preprogrammed scenarios and everything has to be automated. It typically happens through a software like OpenTMS. So this is the software backbone for any traffic authority. And we sell that. So net-net, I think we have lots of exciting software products to offer through Q-Free. It's not only hardware that we offer or complex system integrations on the roadside. We're more than that. We have ALPR software, we have intersection software, we have device management software and we have traffic management software. It's important to remember that. Software is becoming a crucial part of Q-Free and a bigger part of Q-Free and it will only continue. The world is moving towards more software and less hardware. Segment profitability. Tolling, stable, actually a step-up in the second quarter. Infomobility was breakeven. Parking, negative; less negative than in the past. And really, what drives performance now is the improvements we've had in urban over the past few quarters. And you can see the difference between a weak first quarter and a decent second quarter is urban. We had a loss in the first quarter, we had a nice profit in the second quarter. So that's important to us, the timing of the software deliveries. And it's not always like we can manage to do everything perfectly every 3 months. Sometimes, we get a quarter with low software revenues and sometimes we get extraordinarily high software revenues. So it will fluctuate and vary. I think what we focus on is making sure tolling is -- could continue to be a good contributor. And I think tolling will improve based on better project margins. And the other business areas, we have improvement potential both in inter-urban and in parking and infomobility. And we just need to keep urban where it is. And Tor Eirik, maybe you'll do the roundup of the key financials?
Yes. Looking at the numbers, going a little bit deeper into some of the key numbers. Revenue-wise, in the quarter, revenues grew by 11%. It's driven by tolling, 18% growth; and urban, 26%. Remaining segments were a little bit up, a little bit down. But growth is prominently dominated by tolling and urban. Region-wise, it was a very strong quarter in Europe, driven by very strong product sales. APMEA region was up 15%, driven by tags to Thailand. And the American regions was actually quite flat in the quarter. That was, of course, because last quarter was very strong with a software order in urban. And looking at year-to-date. We're up 10%. It's mainly driven by all segments actually are up quite decently: tolling, 8%; parking, 15%; urban, 33%; infomobility is up 14% year-on-year. Region-wise, it's driven by Europe and mainly America. We are up 19% in America year-over-year for the first half. Looking into the pipeline of projects coming in and with an order signed yesterday and communicated yesterday. The APMEA region going forward will be more and more important for Q-Free. Going forward, we expect to see that America and APMEA will dominate over Europe. EBITDA in the quarter was significant improvement compared to the first quarter, 9%. As Håkon has mentioned, last quarter was a little bit dominated by a one-off software contract in urban. That contributed with very strong EBITDA in that quarter. So the quarter, I would say, is clearly back to normal. Last year, we mentioned this OpEx that was flat, around NOK 40 million per month. That has continued. We have taken down the cost base in APMEA region by the closedown of Jakarta. And all the activities around that project has reduced our cost base. I also mentioned that last half year in 2018, we had very hard activity down there. So I expect to see more savings from that measure in the second half. So what really impacts the gross -- the profitability, why are we not growing in EBITDA when revenues are up? It's the margin. And Håkon has mentioned, it is really in the tolling where we have experienced a margin decline, mainly because of tags and projects that are currently unfavorable. And I totally agree with Håkon on that. When I also analyzed the portfolio of projects we have coming in, it looks much better going forward. But we will still struggle in the third quarter with some of the legacy we have in the backlog from that side. When we look at the non-tolling business, we see a trend there where there's a little bit more pass-through revenues. So the underlying technology margins are not really down, it's just that the nature of the contracts we take. The customers requires us to take a little bit broader kind of operational responsibility. So we invoice, and as Håkon mentioned, we have to run some costs through our books that influences the margin. This varies contract-by-contract and quarter-by-quarter. Order intake. The target for the year is 1.1 book-to-bill. We are year-to-date on 1.07. And if Queensland had been signed in June, we would've been at 1.19. And with a backlog we have now of projects and with the pipeline coming in, I'm quite comfortable we will meet our target this year in terms of order intake. And I think also when I see in the portfolio of projects, the quality of the earnings is much more healthy than we have -- saw during 2018 and the projects we took there. Backlog-wise, I can -- now for the third quarter with the Queensland order and with also a very nice contract signed in Norway in the beginning of July, I have a backlog into third quarter of more than NOK 200 million. That's a backlog with, I would say, quite high-quality earnings. There's one order in the third quarter that will have an influence. And that's the parking order we signed in the first quarter, which Håkon mentioned there was -- had a little bit unfavorable margin structure due to high share of pass-through. But the backlog into third quarter looks quite decent. It's a significant improvement compared to last year. Last year, when I was standing here, I had NOK 155 million in backlog for the third quarter, so -- and also for the fourth quarter, it looks quite good compared to the same period last year. So I'm quite happy with that. And if you will include the Queensland order, our backlog is up 14% year-over-year. Cash flow. The cash flow in the quarter was influenced by 2 happenings. It's the Intelight share purchase liability, that for those of you who has followed Q-Free over many years, this has been a challenging liability to communicate. We are now at the final stage. And this liability is now due in May 2020. And as we've written in our report, the remaining liability is now estimated to NOK 48 million to buy out the remaining 25% of the shares. So that was something that influenced our available cash and cash position in the quarter. It was expected. When we consider working capital, I will say half of that effect is really about timing on the 3rd of June, where a lot of invoices was due, was on a Sunday. So if I had the opportunity to postpone the quarter with 3 days, I would have reported a much better working capital development. Saying that, there are in Q-Free quarterly differences and fluctuations in our working capital. And we are, because of especially this VDOT project, yes, we have some projects that has unfavorable working capital structure. Looking into the second half, it looks much more positive. And I expect that the working capital will improve the other direction in the second half. Balance sheet-wise, there's not much to say. As I mentioned in the first quarter, our current assets -- noncurrent assets is influenced by IFRS 16. The same goes on the liability side. And then we have had this Intelight purchase obligation that has been booked both as noncurrent and current liability. Now all this in the current liability as it's due next May in 2020. Our NIBD increased significantly during the quarter. As we mentioned in our annual report, we knew that the Intelight share purchase obligation would have a negative impact on our financials and our financial capacity. So we have been, for over a long period, in proactive dialogue with our bank. And we got a waiver for the second quarter, so we are in compliance with our covenants as of Q2. And we are now in positive proactive dialogue with the bank for the second half of 2019. So our base case is that combination of operations and working capital improvements that we will improve our financial capacity over the second quarter quite significantly through that. As we also mentioned in our quarterly report, we are exploring structural measures. That's mainly driven by the next phase of our strategy, where we now look into how can we further efficient our portfolio and make Q-Free into an easier company to operate, so -- but of course, if we succeed with some of those activities, that will also positively impact our financial capacity. Then Håkon, you will round up with outlook?
Yes. So if we look at financial goals, order intake, revenues and profitability, we have said that we target a book-to-bill above 1.1, we want more than 10% organic growth and we want an EBITDA margin above 10%. Of course, a little bit dependent on the product mix. To give you some flavor on the different goals and where we are, we have NOK 300 million in order intake in the first quarter. We had NOK 200 million in the second quarter. Again, if the cutoff had been a few days later, it would have been quite nice in the second quarter. The way I look at it, so then we have a flying start in the third quarter. We have already oral confirmations and signed contracts that will make Q3 a good quarter in terms of order intake. There are a couple of things we are waiting for in the third quarter. Australia already happened. We signed that yesterday, a contract in Queensland, a Multi-Lane Free-Flow. We are waiting for projects in Thailand, actually several of them. And they are potentially significant. We are waiting for inter-urban contracts in the U.S. and also some larger urban contracts in the U.S., both of a mix of hardware and software. So the third quarter would be important in terms of total order intake but even more importantly 2020. So most of these projects will have a P&L impact in 2019 and 2020. If we can win a couple of those, 2020 will be a very good year, so important months ahead. So pipeline, this is just the 2019 pipeline. 2020 and beyond also looks good. So there's nothing indicating a slowdown or a cool down in the industry as such. That also means revenue momentum is quite good. And I think we have increased our comfort around the 10% organic growth ambition. We are 12% ahead of last year. And if we can win some of the contracts now in the third quarter with revenue impact in 2019, we will be able to deliver on our targets. So order intake, revenue momentum, good. The big question mark, I think, for you and us has been margins. And to give -- be a bit more granular on the margin side, if you look at 2019 margins, gross margin compared to 2018, tolling service and maintenance and operations is stable. Tolling products is significantly down, the same with tolling systems. Parking is also significantly down. Infomobility is slightly up, urban, slightly down, inter-urban, slightly down. So everything is slightly down or significantly down with the exception of tolling and infomobility. The net effect is 10 percentage points down. Now what do we expect for 2020? Well, I mean we're gazing into the crystal ball, so we cannot give any absolute guarantee. But our best guess is that tolling service and maintenance will continue to be stable. These are long-term contracts, usually index-regulated, so there's no need to worry about profitability on the service and maintenance contracts. Products, we think, will continue slightly down. But we also have cost reductions. We have decreased the price, the cost price on tags by 15% over the past 2, 3 years. So we're sort of combating price decreases in the market with COGS reductions on our own. Tolling systems would be significantly up in 2020 compared to 2019. Parking will be moderately up. Infomobility, we expect to be stable. Urban, we actually expect to be moderately up. And inter-urban, we expect to be stable. So next year, let's say, we could increase gross margin by 5 percentage points compared to 2019. But we'll recover some of the margin decrease we'll have in 2019, could potentially recover more, but that depends on the revenue mix. If we do a lot of ALPR and big tolling projects with good margins and we have good software deliveries, we could get back to old levels, but trying to be a bit conservative. I think my main message is that gross margin will improve. What we see now is we're at the bottom of the valley in terms of ongoing project deliveries. So we are positive that second half of 2019 will be better than the first half and even more positive in 2020 based on the backlog composition and the pipeline of opportunities we see will be strong.
Petter from Sparebank 1 Markets. Just a few questions. The first question is, when is the -- can you just remind us when is the next Intelight payment, the date?
May 2020.
And also can you also remind us of the covenant [ that you bear], if you have disclosed it?
It's in your report. Leverage ratio is 3 and equity ratio is 35%.
Okay. And just in terms of order intake, have you seen any changes in the market? Or is it just seasonal variations that has led to book-to-bill below 1 or close to 1, if you include Australia?
No, it's just, I mean, there are 3, 4 contracts we're waiting for signatures on, that have been orally confirmed, but we're waiting for signatures. And those could have happened. So I mean in the first quarter, we were probably a bit high and lucky with the timing. Second quarter, we were a bit unlucky with the timing. But I think net-net, the sum of the first and second quarter is not bad in terms of what we expect on the order intake. We actually expect it to increase in the second half based on the potential wins in Thailand. So first half was good in terms of small- and medium-sized contracts but few large contracts. In the second half, we expect small- and medium-sized contracts to be there still and on top of that, have a couple of big wins to take us to 1.1. So we're not worried about order intake at all.
And then last one, can you just give me some more color on working capital? Is there any payments from VDOT in the second half? Or how conviction do you have that working capital will normalize during -- or normalize more during the second half of the year?
Yes, this VDOT project, I would say, has a nature where you are getting paid by milestones. So we have 1 release happening now that will free up quite a lot.
Q3?
In Q3. But it's the due date. It's again late September. So if we are good, it will end -- it will happen in the third quarter. If we are somewhat unlucky, it could be days into October. So I'm expecting that the inter-urban business, the current business model we have there, is not very working capital favorable. And right now we are a little bit now there where we are, getting access [ except ] for the release and then we will have a significant reduction in this contract asset. We will convert contract assets into a receivable and then collect the money. And then it will be a new quarter or half a year, where you are building up that again before you're cashing it in. I can tell you that all the new projects we signed in the interim has a totally different working capital profile than we see there.
Can you say anything about the size of that payment, the VDOT payment?
It's around $20 million -- NOK 20 million.
You're again mentioning structural, yes, processes. And you just finished a structural process in Q1. How does this structural process differ?
Well, I think we continuously look at our portfolio and how we can further develop that. And you constantly need to ask yourself, "Is Q-Free a good owner of this business?" And the world is not static. So I think in any company, you -- or at least in many companies, you have continuous discussions and dialogues over what should we focus on and what should we not focus on. And there are certain opportunities that pop up in terms of other companies wanting to acquire something from us or it could be possible business combinations involving not the whole of Q-Free but parts of Q-Free. So I think all those discussions are natural discussions to have. And I don't want to dive too much into the details. But it's about portfolio composition. And I think we have previously been quite clear on the fact that managing 5 businesses on all continents with multiple products and services and business models is quite challenging. So to further simplify Q-Free's operations and our portfolio, I think, is something that could also happen through structural processes.
And you see that the platforms, I mean, you had a good run-through of the different software platforms and stacks that you're offering today. I mean, do you feel that those are competitive also with regards to where your competitors in that area are developing and doing their R&D today?
I think the Intrada ALPR platform separately listed with sufficient capital should be a multibillion NOK company. I think some of the parts on that is fantastic. It's just hidden inside the Q-Free corporate maze.
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But that is a true gem. It's not even a diamond in the rough, it's a diamond. And we just need to allow it to shine. The other platforms, I think, on the urban side, very competitive with MAXVIEW. We are competitive with the parking hub. I think it's the best parking software platform in the industry, but competition is not that stellar yet. The challenge is not so much where we are at the moment because we have very competitive offerings and good offerings. But the amount of growth capital you need to invest into these platforms to further develop them and stay ahead. And we're talking about machine learning and artificial intelligence and predictive analytics across multiple fields. And just really be good and excel at what you're doing, you need to focus your energy and investments. And I think that's a little bit of a struggle within Q-Free, the complexity on managing that we are present in 5 different businesses that each requires significant capital in order to grow and then having limited ability to fund that all the time. So I think we're doing really well in terms of the resources we have. But the question is, could we do even better by focusing our investments and letting somebody else take care of other parts? Nothing from the web? Everybody's on vacation? Oh, if we are the only 2 guys standing between you and vacation, then thank you for attending and have a nice summer. See you in October.