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Interview with Infomedia (ASX:IFM) CEO Jens Monsees
November 24, 2022
Infomedia (ASX:IFM) CEO Jens Monsees
We spoke with Infomedia CEO Jens Monsees about the opportunity for Infomedia as it transitions from selling products and services to selling data, and about Jens’ own unique background in digital transformation.
See full transcription below.
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Stuart Roberts: Hello and welcome to “Stocks Down Under.” My name is Stuart Roberts, and I’m one of the co-founders of our publication. And joining me from Sydney, on Wednesday, the 23rd of November is Mr. Jens Monsees, who’s the new CEO of Infomedia, ASX: IFM. Jens, good morning.
Jens Monsees: Hey, Stuart. Good morning. How are you?
Stuart Roberts: Yeah, so the opportunity, Jens, in your new role is a big one. You’ve joined ASX: IFM Infomedia, a company that has been around the market for a long time and grown quite a successful business with the famous electronic parts catalog, which was the foundation business, and also bolted a couple of businesses on top of that. But let’s talk about you first. You first came to Australia to work in a completely different kind of company, as managing director of WPP Australia and New Zealand.
Jens Monsees: Yes, that’s right. It’s a big media company, media and advertising company. But at the end, it’s all the same. It’s all about digital transformation. It’s about the usage of data. It’s about looking at the business, how to accelerate and turn it around and make it better.
Stuart Roberts: WPP UK ended up taking the other 30% of WPP Australia and New Zealand after a bit of a tussle on price. This is your next port of call. And once again, you’re involved in a digital transformation strategy at Infomedia.
Jens Monsees: Yeah, I would not say it’s a transformation, it’s an acceleration. We are sitting on a huge amount of data, more than 1 billion VINs, vehicle identification numbers. And as we know, data is ruling the world. And with our global footprint now in the U.S. and Europe, and also in APEC, we are leading the pack here in driving a data-driven ecosystem for the automotive industry.
Stuart Roberts: Right. And if investors wanted any proof that data was ruling the world, they only have to go visit their local service center for their car, if it’s a reasonably late-model car. And it’s fair to say the service center is probably using one of your services to know everything about you and the vehicle.
Jens Monsees: Yeah, that’s correct. So, we do an end-to-end solution about service, about parts, but also, we just acquired, 18 months ago, the leading e-commerce platform in the U.S. for parts, called SimplePart, and now it’s all about the data, the connected car, the marketing as a service because we are running the dealership from an end-to-end perspective, from online booking, then to inspections, to run around the car, walk around with check-up, what is broken, what is not broken. We send, then, photos or videos to the service people and to the customers who are owning the car, and then we can also make the billing and the guesstimate of what they have to pay. And then, if something was actually not approved by the owner of the car, we then have a campaign, we have a call out. And I’m very excited about this because in the future, we will have a lot more connected cars. And we are already running the BMW practice here in Sydney on the connected cars. So, everything, every conversation, and dialogue between driver, dealership, OE is basically run by our software and our services.
Stuart Roberts: Right. Now, you’re very well placed to build this company because in a previous life, before you left Europe, you had a digital transformation for BMW in Munich. And it’s fair to say that BMW doesn’t want to be left behind, as you’re saying, in this whole connected-car ecosystem that we’re moving into.
Jens Monsees: Well, I think BMW is leading the digital experience. I think the only more advanced OE is Tesla. Tesla had an advantage of a greenfield approach, but BMW was the first who were coming with connected cars, who were offering an app for the driver to interact with the car. And also, now, they are doing the first tests and models of subscription-related payments. So, for example, for seat heating, it is already built-in, and with software over-the-air updates, you can activate it in the wintertime and have a kind of subscription. So, I think they are really ahead of the game. It was exciting. It was my second time with BMW as Chief Digital Officer, digitizing the full dealerships, the full marketing and sales arm of BMW, and it was very exciting times at that point because we were pioneering from that perspective.
Stuart Roberts: Right. Now, fast forward here at Infomedia. If I could summarize the stories that sits at the moment. For a long time, Infomedia has been a provider of services, and you’re now emphasizing that it’s more than just services, it’s data. The whole world is driven by data. Once you’ve got data, you can make good decisions, and data is valuable. And the more data it is, the more valuable it is, and the customers will pay for that. Give us a sense, if you will, of how this shift towards data can play itself out as you grow shareholder value with Infomedia.
Jens Monsees: That’s very simple. I can give you an example with you. So, you might have already a connected car. So, then, we know where basically you are living because your car is sending a last-state call when you are turning off the car in the evening. That’s probably in your garage or next to your house. We would also know, then, when you are working, when you drive to work. Is it 6:30 a.m. Is it 7:00 a.m.? We would know the routing of where you go. We would also know what kind of dealership is preferred for your car, and we would also, then, probably know that your brake pads are down and they need to be in replacement. So, it’s a very, very relevant dialogue that we can have, based on data, with every single user on their specific vehicle status and on their specific routing. So, we would then reach out and say, “Hey, mate, your brake pads are down. You should come in in the next two, three months and we can repair them here at…” What car are you driving?
Stuart Roberts: So, I drive an 18-year-old Honda Accord. So, my car hasn’t quite caught up to the digital revolution yet, but I can assure you the next car I have is going to be well and truly plugged into your ecosystem.
Jens Monsees: Yeah, but that’s a good example. So, normally after a few years, people are dropping out of the branded service and they go to the aftermarket. And then, we can maybe see you, you know, buying a part for your Honda on our e-commerce platform, and then we can reach out to you. We know what car you are driving. We can make a specific offer from the service department, from the dealership next door, and we can call you in again, and maybe you want to trade your car into a new car. And then, they would obviously know a little bit about you, and they would say, “Hey, Stuart, this is what we can do for your car. This is the parts that you need. This is the service you need, but here’s also the wonderful new Honda.” And probably they’d try to make an upsell based, again, on data.
Stuart Roberts: Beautiful. Now, all of this is made for… Guidance for FY ’23 is $127 million to $132 million, was the guidance that was just given at the annual general meeting. So, across the range of businesses within Infomedia, we’re talking about a substantial offering here, and generally high margin. What do you see as the biggest challenge of the next year or so as you start to take this company to the next level?
Jens Monsees: So, the first thing I would like to say is, especially our data services are growing, year over year, by over 24%, which is excellent. We are growing in all products and all regions. We don’t have any debt, we have a continuous track record of growing the company further, and now it’s time for pushing the accelerate button because I see many, many opportunities. So, for example, our businesses in Americas are not yet integrated between the SimplePart business, the new acquisition, and the Infomedia Americas business. So, that’s one point that we’re looking at. Another point is that, over the last years, we had a little bit of complacency on our cost structure, and therefore the cost structure were growing in a way that I don’t like to see. So, we are building the cost structure currently back where it belongs.
And then, there’s a huge opportunity, from my perspective, when we see the market share and the footprint that we have in this small country in Australia. If we have the same market share in IMEA [SP] and the U.S., then we would be already a $2 billion, $3 billion company. So, the opportunity is to take that success and our products more to the world, more into Europe, also into Japan, into China, but then, as I laid out, most importantly into the U.S. because there we are still subscale, and there’s a nice run rate and a nice growth opportunity in that market and in that continent.
Stuart Roberts: Right. Now, very much encouraging investors to attend the Investor Day on the 7th of December, which Infomedia is organizing. It’ll be a chance to hear from Jens and his colleagues in more detail. And I’m expecting that you’ll sketch out some of these growth opportunities, as far as the board is willing, to let you tell us what’s going on.
Jens Monsees: I think the board is very supportive of our new strategy, of our new and more enhanced vision, having data front and center of everything that we do. I’m very excited to see the investors and to also describe the next three to five years’ growth story that we are going to undertake now. And therefore, I’m very much looking forward to see many, many investors or the investor community at the CBD in Sydney on the 7th of December.
Stuart Roberts: All right. So, we’re going to include a link to that meeting. You’re very free to sign up and be there on the day. Jens, let me just conclude with this. It’s been a tough year for the market generally, particularly tech stocks. So, Infomedia stock is worth a lot less now than it was a year ago, but you yourself were in the market recently buying some stock, as was your chairman, Bart Vogel. So, you must see some upside from here.
Jens Monsees: Well, never waste a good crisis. So, we obviously saw, with the high inflation rate, that especially recurring business, and our business is a recurring business, was taking a bit of a hit. So, now, it’s the right time to invest, and this is why I also put my own money into this because from here, we can only grow, as we did in the past, and our outlook looks quite promising at the moment.
Stuart Roberts: All right. Jens Monsees, thanks for joining us at “Stock Down Under,” and we’ll see you on the 7th of December.
Jens Monsees: Stuart, very, very nice talking to you, and thank you very much for the short interview.